Unpaid Salaries: Buhari approves intervention fund to bail out states

Kunle Awosiyan |

President Muhammadu Buhari has  approved a comprehensive relief package to solve the problem of unpaid workers’ salaries by some state governments across the federation.

Hallmark News learnt that about $2.1b (N413.7bn) will be shared in fresh allocation between the states and the federal government. The money is sourced from recent Liquefied Natural Gas (LNG) proceeds to the federation account.

A Central Bank of Nigeria (CBN)-packaged special intervention fund that will offer financing to the states, ranging from between N250bn and N300bn. This would be a soft loan that states could access to pay the backlog of salaries.

Implementing a debt relief programme proposed by the Debt Management Office, DMO, which will help states restructure their commercial loans currently put at more than N660bn, and extend the life span of such loans while reducing their debt-servicing expenditures.

Also, a total of N391 billion from the Excess Crude Account, ECA, will be shared among the three tiers of government, the Accountant-General of the Federation, Ahmed Idris, disclosed yesterday.

With the N413.7 billion LNG proceeds it means the three tiers of government will share a total of N804.7 billion.

By extending the commercial loans of the states, according to the third package, more funds would be made available to the state governments, which otherwise would have been claimed at source by the banks.

According to findings by our correspondent, the plan to rescue the states from unpaid salary crisis was considered at the National Economic Council, NEC, and that President Buhari reviewed and approved the package in his bid to intervene and alleviate the sufferings of workers, some of whom have not been paid for over 10 months.

Contacted, the Special Adviser to the President on Media and Publicity, Mr. Femi Adesina confirmed the development, adding that the President is deeply concerned about the plight of the workers.

While inaugurating the NEC last week, President Buhari asked the council to, as a matter of priority, consider how to liquidate the unpaid salaries of workers across the country, a situation he observed has brought untold hardship to the workers.

While the N413bn LNG proceeds would be shared among the three tiers of government using the revenue allocation formula, the CBN will also make available the special intervention fund to states and then negotiate the terms with individual states.