Succour is on the way for federal, state and local government workers owed several months of unpaid salaries as President Muhammadu Buhari has approved a comprehensive relief package worth N713.7bn to bail out cash-strapped states.
The package as approved by Buhari, informed Presidency sources told one of our correspondents on Monday, included the sharing of about $2.1bn (N413.7bn) between the federal and state governments from the $1.6bn dividend and $500m tax paid by the Nigerian Liquefied Natural Gas Limited to the Federal Government.
According to Presidency sources, the package also includes a Central Bank of Nigeria special intervention fund that will offer between N250bn and N300bn as a soft loan to enable the states to pay the backlog of salaries.
It was further gathered that the President had also approved a debt relief programme proposed by the Debt Management Office, which would help the states to restructure their commercial loans with banks currently put at over N660bn.
This arrangement will extend the life span of such loans, while reducing the states’ debt servicing expenditures.
Extending the tenor of the commercial loans, the sources explained, would make available more funds to the state governments, which otherwise would have been removed at source by the banks.
“The Federal Government will use its influence to guarantee the elongation of the loans for the benefit of the states,” one of the sources said.
Officials, who spoke to one of our correspondents on the development, explained that Buhari’s intervention was because of his resolve to put an end to the lingering crisis of unpaid workers’ salaries in the country, especially in several states of the federation.
They explained that the package, which was considered at the meeting of the National Economic Council last week, was designed specifically for the workers.
“President Buhari has now reviewed and approved the package in his bid to intervene and alleviate the sufferings of the workers, some of whom have not been paid for over 10 months,” one of the officials said.
When contacted on the development, the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina, confirmed that indeed a special package was on the way for the workers.
He added that the President was deeply concerned about the plight of the workers who had been unpaid for many months.
In his speech while inaugurating the NEC last week, Buhari had asked the council, which is a constitutional advisory body to him, to, as a matter of priority, consider how to solve the problem of unpaid workers’ salaries across the country.
Our correspondent gathered that the N413.7bn NLNG funds would be shared among the 36 states of the federation using the present revenue allocation formula, while the CBN would make available the special intervention fund but negotiate the terms with the individual states.
The package is expected to come into effect this week as the President is said to have directed the release of the funds as soon as possible to assuage the plight of thousands of Nigerian workers at the federal and state levels.
At the NEC meeting, the relief measures were said to have been extensively discussed by the state governors and top officials of the Federal Government, including the CBN Governor, Mr. Godwin Emefiele, and the Permanent Secretaries of the ministries of Finance and Petroleum Resources. Other agencies that were actively involved in the process included the DMO and officials from the Office of the Accountant General of the Federation.
No fewer than 12 of the 36 states of the federation are facing difficult times and are unable to pay the salaries of their workers for several months, with about 10 of them owing well over N110bn.
The affected states are Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue and Bauchi.
However, sources close to the development said the Finance ministry and the CBN might have pegged the amount needed to settle all the outstanding federal and state public workers’ salaries at about N250bn.
Shortly after a meeting between Buhari and Permanent Secretaries of federal ministries on Monday to debrief the President on the true state of the ministries, the Accountant General of the Federation said the Federation Account Allocation Committee would meet later in the day (Monday) to share the remaining money in the Excess Crude Account as agreed and directed during the last NEC meeting.
Idris said the agreement was that they would share the balance they met in the account, which he said was between $1.6bn and $1.7bn.
He added that the money would be shared among the three tiers of government based on the approved revenue sharing formula.
Idris said, “Mr. President has a clear direction, which we all have to fall in line with, which is prudent management of resources and identification of alternative ways of generating revenue.
“We are set to do just this and to manage the meagre resources we found on ground very efficiently and effectively for the betterment of the economy.”
The President met separately with teams from the Ministry of Finance and Ministry of Agriculture and Rural Development.
The Permanent Secretary, Ministry of Finance, Mrs. Anastasia
Nwaobia, led her ministry’s team, while her counterpart in the Ministry of Agriculture and Rural Development, Mr. Sunday Enocho, led his team to the closed-door sessions.
Nwobia confirmed to State House correspondents that she and members of her team were at the Presidential Villa to brief the President of the ministry’s activities.
She said although the economy was facing challenges, including the drop in revenue, the nation’s finance was in good condition.
She promised that her ministry would continue to work out ways to shore up the revenue in order to meet expenditure.
Nwobia said, “The state of Nigerian finances is okay; our finances are still okay, though we are still going through the challenge of dwindling revenue stream to the government. This you know obviously is from the oil shock; the price of oil that has dropped.
“It has significantly reduced the revenue stream to the government, but we are working on other ways to see how we can shore up the revenue so that we will be able to meet our expenditure.”(Punch)
