States owing N4tr in domestic debts
• Lagos (N542.231b), Delta (N223.442b), Rivers (N225.592b)
• Jigawa (N38.227b), Anambra (N33.490b), Yobe (N26.990b)
Domestic indebtedness of the 36 states and the Federal Capital Territory (FCT) as at the end of March 2019 was N3.972 trillion, the Debt Management Office (DMO) has disclosed.
The debt profile includes the more than N600 billion bailout fund which President Muhammadu Buhari gave to states in 2016 in the wake of falling oil prices at the international market. The states had complained that they were unable to pay salaries and meet operational costs.
Although Lagos is one of the few states that never accessed the fund, it leads the pack of heavy domestic debtors with N542.231 billion. It is followed by three oil-rich states: Rivers, N225.592 billion; Delta, N223.442 billion; and Akwa Ibom, N199.768 billion.
FCT has N163.518 billion, Cross River, N167.252 billion; Osun, N147.702 billion; Bayelsa, N133.339 billion; Ekiti, N118.0113 billion; and Kano, the most indebted northern state, N121.305 billion.
The states with the least debts include Yobe, N26.990 billion; Anambra, N33.490 billion; Jigawa, N38.227 billion; Ebonyi, N55.597 billion; and Kebbi, N67.037 billion.
On July 27, 2015, about two months after he assumed office, Buhari had introduced the rescue initiative with a view to reflating the economy, especially at the state level where the basic elements of governance were collapsing. What became of the funds, however, has raised questions about the governors’ prudence.
A source at the Central Bank of Nigeria (CBN) told The Guardian that the state governors took advantage of the plan and presented “very bogus” claims of amounts owed their workers in a bid to rake in huge gains.
The development is generating bad blood between the governors and trade unions in some states where workers have remained unpaid or partly paid.
Ironically, some governors have begun setting up committees to ‘manage’ the funds which, according to the CBN, should have been credited directly into workers’ salary accounts.
In states like Cross River, Abia and Imo, workers are challenging their governors for attempting to divert the funds to “other purposes” besides the settlement of salary arrears.
A CBN source said: “Some of these governors are crooks. Do you know that they padded the salaries claims of their workers to draw money from the bailout fund? In fact, one state, I think, Kogi, presented over N50 billion in claim. You can ask yourself, what has the state and others like it been doing with the monthly allocations from the Federation Account?
“It tells you that something is fishy. That is why, according to our monitoring of the implementation of the disbursement of the fund, we have found out that the governors that padded the amount required are now sifting the wheat from the chaff before they can effect the payment to the authentic workers while they keep the difference. That would also explain the reason for the setting up of committees in these affected states for the management of the funds.”
In addition to the direct cash bailout for salaries payment, Buhari’s stimulus package also included the sharing of about $2.1 billion (N413.7 billion) in fresh allocation between the states and the Federal Government, as revenue from the Nigeria Liquefied Natural Gas (NLNG) project.
There was also a relief programme proposed by the DMO which will help the states restructure their commercial loans and extend the tenure to 15 years, thus reducing the burden of their debt servicing.
Investigations by The Guardian revealed that while states like Ebonyi, Enugu, Imo and Abia applied for and received the loans issued at a repayable interest rate of nine per cent, surprisingly none of them reflected the funds on their websites
Don Adinuba, Commissioner for Information and Strategy, said Anambra State did not collect the funds because it did not need it.
Enugu, Ebonyi, Imo and Abia states, which received various sums, said the money was used to settle the backlog of salaries and pensions inherited when their governors came to power in 2015.
Records show that Enugu State Governor Ifeanyi Ugwuanyi secured the approval of the House of Assembly to apply for the loan. The state was granted about N4.063 billion in the first tranche that was disbursed in 2015.
Efforts to get details of what the state got in subsequent years proved abortive as there was no record of such in its government’s website. The non-appointment of commissioners also compounded efforts to get official comments on whether the state received more money afterwards and how it intends to repay.
But the executive secretary of the Local Government Service Commission, Nana Ogbodo, said the money was deployed in the payment of salaries, gratuities and pensions. He said the government cleared all outstanding salaries of local government workers and their leave allowances as well as other developmental needs of the state.
He, nevertheless, clarified that some pensioners were still being owed. He blamed the backlog of arrears which the incumbent administration inherited. He added that the arrears of gratuity had accumulated since 2001.
Abia received about N14.152billion. Sources, however, said workers are owed several months of salaries and arrears. Pensioners are owed about 19 to 23 months.
Uchenna Obigwe, the state chairman of the Nigeria Labour Congress (NLC), said he could not recall the last time gratuity was paid. “Not in this administration,” he stressed.
But an official who spoke anonymously said the government used part of the funds for the development of the state.
Ebonyi State government received N4.063 billion in 2015. Further investigation showed that the state benefitted in two other tranches.
The chief press secretary to the governor, Emma Uzor, said the state government is ready to refund the Federal Government. According to him, “We are insisting that if they want us to refund, we will refund. But we have to sit and know how they will settle the N33 billion they owe to us. All the jobs we did in the state that are federal were documented. We secured approval before doing them. If they want us to refund, then we will ask them to check their records. I am sure that in the end, there will still be something left for the Federal Government to refund to us.”
With N20.806 billion, Imo State received the largest bailout in the zone. While many residents said the money was mismanaged, given the huge arrears of pensions, gratuities and salaries owed, the immediate past governor, Rochas Okorocha, maintained that he used the money to settle the backlog of pensioners’ entitlements.
The former governor, who is believed to have received the large sum because of his membership of the ruling All Progressives Congress (APC), also said he raised a committee to handle the funds.
No comments yet