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Buhari approves N 713 . 7 b for states to pay workers

CASH- STRAPPED states got a breather yesterday .

President Muhammadu Buhari approved the release
of N 713. 7 billion intervention funds for them to pay
workers ’ salaries.

The bailout is part of a three - pronged relief package
that will end the workers’ plight .

In the package are N413. 7 billion special intervention
funds and the balance of about N 250billion to
N 300billion , which is a soft loan to states.

Also , N 413. 7b ( $2 . 1 b ) is sourced from the recent
LNG proceeds and the remaining N 300b is a Central
Bank - packaged special intervention fund .

The Debt Management Office(DMO ) is expected to
assist states to restructure over N 660billion
commercial loans .

With the development , President Buhari has stopped
deductions from monthly allocations to states at
source .

Instead , the Federal Government will “ use its
influence to guarantee the elongation of the loans for
the benefit of the states” .

The beneficiaries of the relief package include
workers in Federal Ministries , Departments and
Agencies ( MDAs ) who have remained unpaid for
many months .

According to sources , the President took the decision
to boost the purchasing power of Nigerians,
especially average and low - income earners , and to
reflate the economy .

The sources said : “ In his resolve to put an end to the
lingering crisis of unpaid workers’ salaries in the
country especially in many states, President
Muhammadu Buhari has approved a comprehensive
relief package designed to save the situation .

“ Specifically, the President has okayed a three -
pronged relief package that will end the workers’
plight .

These are :
• The sharing of about $ 2 . 1 b (N 413. 7 bn ) in fresh
allocation between the states and the Federal
Government . The money is sourced from recent LNG
proceeds to the federation account, and its release
okayed by the President ;

• A Central Bank - packaged special intervention fund
that will offer financing to the states , ranging from
between N 250b to N 300b . This would be a soft loan
available to states to access for the purposes of
paying backlog of salaries; and
• A debt relief programme proposed by the Debt
Management Office ( DMO) , which will help states
restructure their commercial loans currently put at
over N 660B , and extend the life span of such loans
while reducing their debt - servicing expenditures .

The sources said the bailout will take immediate
effect from this week to ensure stability in all the
states of the Federation and the Federal Capital
Territory ( FCT ).

The sources said : “ While the over $2 b , which is
sourced from LNG proceeds to the federation
account would be shared among the states, 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.

“ The packages that have now been approved by
President Buhari is expected to go into effect this
week as the President is said to have directed that
release of the funds should be made as soon as
possible to assuage the plight of thousands of
Nigerian workers in the federal and state
governments. ”

The sources said with the rescheduling of states’ s
debts , their allocations will no longer be deducted at
source by commercial banks .

The sources added: “ This third option , by extending
the commercial loans of the states, would therefore
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. ”

Government sources explained at the weekend that
this package , which was considered at the National
Economic Council ( NEC ) last week , had been
designed specifically for workers.

“ Furthermore , President Buhari has now reviewed
and approved the package in his bid to intervene and
alleviate the suffering of workers some of whom have
not been paid for over ten months , ” the sources said .

The bailout will be extended to workers in Federal
Ministries , Departments and Agencies .

“ There are also workers in the Federal Government ’ s
employ whose salaries have been unpaid for months .
This package is expected to address those cases
also , ” one of the sources added.

The Special Adviser to the President on Media and
Publicity , Mr . Femi Adesina, confirmed that indeed a
special package was on the way for workers.

He added that the president is deeply concerned
about the plight of the workers who have been unpaid
for many months .

During the inauguration of NEC last week , President
Buhari asked the Council , which is a constitutional
advisory body to him, 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. ”

“ At the NEC meeting, the relief measures were
extensively discussed between the state governors
and top officials of the Federal Government , including
the CBN Governor , and the permanent secretaries
from Ministries of Finance and Petroleum Resources .

Other agencies that were actively involved in the
process include the DMO and officials from the Office
of the Accountant- General of the Federation . ”

Media reports last month indicated that about 12 of
the 36 states of the federation owed their workers
about N 110b
They are : Rivers , Oyo, Ekiti , Kwara , Kogi , Ondo , Osun ,
Plateau , Benue and Bauchi states.

However , informed sources said the Finance Ministry
and the CBN may have pegged the amount needed to
settle all the outstanding public workers salaries at
about N 250billion .

It was , however , gathered that President Buhari
advised governors at the NEC session to be prudent
in managing state resources .

A governor said : “ The President has done his best to
assist us to take off properly . The ball is in our court
to abide by his counsel to be prudent.

“ Some of the measures we are looking at include
appreciable reduction of security votes , stoppage of
chartered flights and pegging the high cost of
maintaining Government House to a low benchmark.

“ With our experience in the last one month , we do not
need a soothsayer to teach us to cut our coat
according to our size . ”

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Posted By bobricky On 09:56 Tue, 07 Jul 2015

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