BEFORE General Muhammadu Buhari, the presidential candidate of All Progressives Congress (APC) and winner of the 2015 presidential poll was sworn into office on May 29, there were several disclosures that the country’s financial status was not healthy.

The disclosures at a time pitched the APC Transition Committee members against their PDP counterparts. The development nearly marred the compilation of the handover note. Though, it was later handled carefully.

As Buhari was about to settle down in office, majority of the governors, especially the newly elected ones complained of financial constraints in the face of the backlog of workers’ salary, and debts they inherited from their predecessors.

They rushed to President Buhari begging him to come to their rescue through arranging bailout fund. This was to enable them clear workers’ salaries and attend to other states’ financial obligations. Initially, the federal government was reluctant in arranging the bailout package. Some Nigerians, especially financial experts kicked against it, accusing the governors of financial profligacy.

On their part, the governors attributed the problem to the reduced monthly takings from the Federation Account. There is no doubt that the impact of empty treasuries in the states manifested in states owing arrears of salaries to workers and stoppage execution of capital project.

In July, the Federal Government following consistent pressure from the state governors and looming industrial crisis arranged a palliative measure at rescuing the states by pulling out N359.4 billion tranche from NLNG 2015 tax which was shared with the states.

According to the Ministry of Finance, the federal government took N189,318,410,534.03, representing 52.68 per cent, while the states got N96,024,827,818.35, representing 26.72 per cent.

The local governments got N74,031,117,255.16 representing 20.60 per cent. But even with this, the state government could not make much progress either in the area of salary payment or capital project. A development that has continued to pitch the state governments against her civil servants who are yet to receive the backlog of salaries which the government owed them.

Speaking on the issue, governor, Central Bank of Nigeria (CBN) Mr. Godwin Emefiele disclosed that the inability of most states to pay salaries was due to huge debt over-hang, noting that most states took short-term loans for long-term projects and servicing their monthly obligations to the banks, hampered liquidity in the states. He directed the affected states to submit to the CBN, on or before July 8, the list of their loan obligations and other indebtedness to enable the government bank assist them restructure the loan to long tenure. This, the states did, which enabled the federal government convert the loans to long tenure bonds.

To further stem the free-fall of the economies of the affected states, and to specifically enable them pay the mounting arrears of salaries of their workers, and pensions of retirees, President Buhari authorised a bailout fund of about N338 billion for all the states that were in dire financial straits. 27 states applied in relation to the magnitude of their financial incapacitations.

These are: Abia (N14.152b), Adamawa (N2.378b), Bauchi (N8.60b), Bayelsa (N1.285b), Benue (N28.013b), Borno (N7.680b), Cross River (N7.856b), Delta (N10.036b), Ebonyi (N4.063b), Edo (N3.167b), Ekiti (N9.604b), Enugu (N4.207b), Gombe (N16.459b) and Imo (N26.806b). Others are: Kastina (N3.304b), Kebbi (N0.690b), Kogi (N50.842b), Kwara (N4.320b), Nasarawa (N8.317b), Niger (N4.306b), Ogun (N18.9.00b), Ondo (N14.686b), Osun (N34.988b), Oyo (N26.606b), Plateau (N5.357b), Sokoto (N10.093b) and Zamfara (N10.020b).

Findings reveal that more than 20 of the states have so far benefited from the fund, while others are being processed. States that have received the fund include Kwara, Zamfara, Osun, Niger, Bauchi, Gombe, Abia, Adamawa, Ondo, Kebbi, Ekiti, Imo, Ebonyi, Ogun, Plateau, Nassarawa, Sokoto, Edo, Oyo and others. It was revealed that all the states settled for the 20-year tenure, except Ogun, which opted for a 10-year tenure. The fund which was taken out of the Federation Account was not free. It is repayable over a 20-year time frame at nine per cent interest rate.

There are only two fundamental conditions for accessing the bailout fund. One is that the applicant’s state assembly must pass a resolution to give a legal backing for the state government’s loan application. Second is that the applicant state must present a verifiable debt profile of the state, in terms of salary and pension payment defaults, backed with vouchers.

Investigation reveals that since the collection of the bailout fund, some state governments have refused to clear the backlog of salaries and arrears they owed workers. Some of them have not stated clear reason why they have failed to so, considering the fact that the fund was specifically tied to workers’ salaries and retirees’ pension.

Some civil servants have accused government of planning to divert the fund for another thing. Some have even protested openly against the shoddy disbursement of the fund. While others have embarked on strike to show their grievances. Opposition and prominent Nigerians have joined the fray expressing concern on how state governors are managing the fund.

Sharing the fears of Nigerians over the handling of the fund, The Independent Corrupt Practices and Other Related Offences Commission (ICPC) has recently warned state governments not to tamper with the bailout funds released to their respective states by the Federal Government for immediate payment of workers salaries.

The anti-graft Commission said it would consistently monitor the funds and how they were dispensed in all the states that benefitted.

It said its interest in the disbursement of the funds was for the good of workers, which he said had been owed by their respective states for several months. It vowed to ensure that the bailout funds are released for the purpose for which the Federal Government offered them.

The Chairman of ICPC, Ekpo Nta, made this known at the Commission’s headquarters in Abuja recently while handing over different sums of monies totalling almost one billion naira, looted in the Federal Ministry of Environment and some schools in Ogun State to the appropriate owners.

Ekpo Nta said the warnings he gave to state governors emanated from reports that the bailout funds released to their respective states were not being properly channelled.

He said the bailout funds belonged to the Federal Government; no state government had the right to misappropriate it, while not directly using it to pay the backlog of workers salaries they owed.

He said, “We understood that the bailout funds released to states by the Federal Government have not been going towards the proper channel. It is important to state that the bailout is from the Federal Government to the states to assist them in paying the salaries of workers.

“We will from now on be following how the funds are disbursed in different states to ensure that they get to the appropriate beneficiaries. This is because it is government funds.”

Also in its 55th Independence anniversary recently, the leadership of the Nigeria Labour Congress, (NLC) accused some governors of diverting the bailout funds from the Federal Government which is meant to pay workers’ salaries and pensions, into fixed deposit accounts to yield interests for them.

Stressing that such action was unacceptable and would be resisted, President of the Congress, Comrade Ayuba Wabba stressed that the NLC was already working with the Independent Corrupt Practices and Other Related Offences Commission (ICPC) to track such funds and take appropriate actions.

He hailed the National Council of State and President Muhammadu Buhari for paying the backlog of salaries, but regretted that their enthusiasm and commitment on the matter had not been replicated in some states.

The labour leader claimed that rather than pay salaries and pensions, some governors “have elected to play politics with the welfare of their workers with some of them quoted as saying that they reserve the right to do what they like with the intervention fund from the federal government since it is a loan.

“We note particularly that payment of pensions at state and local governments is a major problem because they operate defined benefit pension system which often times is not funded. And even when it is funded, the governors and their cohorts help themselves to these funds because they are exposed.

“We condemn this attitude and strongly warn that henceforth, any state that defaults in the regular payment of salaries and pensions will face the wrath of the workers. Salaries and pensions are inalienable rights of workers and retirees and not privileges. We also call for pension reforms at state and local government levels to enhance the security of pension funds and regular payments.

“We would want to sound a note of caution to the governors who have fixed the intervention funds in banks for pecuniary benefits. It is totally unacceptable. The Nigeria Labour Congress is working with ICPC to track the fixed funds for the purpose of taking appropriate action,” Wabba said.