CRS: PFN threatens legal action against FG

ABUJA—Minister of Finance, Mrs. Kemi Adeosun, said yesterday that the Federal Government would set tougher conditions for states in respect of payment of second tranche of London-Paris Club loan refund, which would be released soon.

According to her, government will insist that at least 70 percent of the funds be used to settle arrears of salaries and pensions, against the 50 percent set for the first tranche.

Adeosun, who disclosed this in Abuja, said her ministry was still working with the Presidency to determine the terms and conditions that would guide the disbursement of the funds.

She said:  “It’s not ready yet.  Before the payment of the first tranche of the funds, the President directed the states to use 50 per cent for the payment of arrears of salaries, gratuity and pensions to their workers.

“A lot of the states complied with the directive. When we are ready, part of the guidelines for disbursement will be that the states use 70 per cent of the payment for the same purpose,” she said.

However, the minister did not say why most of the states were still owing huge backlog of salaries to their workers.

The minister was apparently reacting to claims of Nigeria Union of Local Government Employees, NULGE, that about 23 states of the federation currently owed local government workers’ arrears of salary, ranging from one to 16 months.

Following the approval of the payment of the refund in the first tranche of disbursement, a total of N516.38 billion was paid to the 36 states and the FCT.

On November 21, 2016, President Muhammadu Buhari had approved the partial refund of long standing claims by state governments in respect of over-deductions from their Federation Account Allocation Committee, FAAC, allocation for external debt service between 1995 and 2002.

The debt service deductions were in respect of the Paris Club, London Club and Multilateral debts of the Federal and State governments, which Nigeria reached a final agreement for debt relief with the Paris Club in October 2005.

Apart from the refund meant to assist the state governments sort out the huge arrears of salaries to their workers, and alleviate the challenges workers were facing, the President said the funds were part of his government’s efforts to stimulate the economy.

Consequently, the disbursements were premised on the condition that a minimum of 50 per cent would be applied for the payment of workers’ salaries and pensions.

A senior Ministry of Finance official familiar with the issue told online portal, Premium Times, that the payment of the second tranche of payment was delayed because the government was to review the report of the impact of the releases on the effort of the states government to defray their arrears to the workers.

‘’The impact analysis report is being compiled by the Federal Ministry of Finance for onward submission to the Acting President, Yemi Osinbajo, as part of the process for approval for the release of the second tranche of payment,” the official said.

 

 

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