President Muhammadu Buhari has requested Governors to pay at least 25 percent of the refunds made to them from excess deductions for external debt service, to be used to settle outstanding workers’ entitlements.
The President approved the sum of N552.74 billion to be paid in batches to all the states that are owed, but they are expected to receive 25% of their approved sums in the first instance before this week runs out. There are about 33 states in this bracket.
The refunds arose following the claims by them that they had been overcharged in deductions for external debt service between 1995 and 2002.
In a directive through the Minister of Finance, Kemi Adeosun, President Buhari said that the issue of workers benefits, particularly salary and pensions musn’t be allowed to continue as a national problem and should be tackled with all the urgency that can be summoned.
When he assumed office last year, the President declared an emergency over unpaid salaries, following the discovery that 27 out of the country’s 36 states had fallen behind in the payments to their workers, in some cases for up to a year.
Following this, a bailout loan was issued to the states twice with a first batch of about N300 billion given to them in 2015 in the form of soft loans.
The administration also got the Debt Management Office, DMO to restructure their commercial loans of over N660 billion and extended the life span of the loans.
Because this did not succeed in pulling many of the states out of distress, the Federal government this year gave out a further N90 billion to 22 states as yet another bailout loans under very stringent conditions.
President Buhari has expressed the opinion all the time that the payment of salaries and pensions must be given priority to save both serving and retired workers and their families from distress.
Senior Special Assistant to President (Media & Publicity)