The Ministry of Finance says states owing workers’ salary arrears will not benefit from the final tranche of the Paris Club refund of $2.69 billion.
This was made known by the ministry’s Director of Information, Hassan Dodo, in a statement issued on Tuesday.
“The DMO led the reconciliation process under the supervision of the Federal Ministry of Finance. The final approval of 2.69 billion dollars is subject to some conditions,” Dodo stated.
“Salary and staff related arrears must be paid as a priority. Also, commitment to the commencement of the repayment of Budget Support Loans granted in 2016 must be made by all States.”
Dodo stated that states must clear their accounts with regards to the Presidential Fertiliser Initiative, as well as make a commitment to clear matching grants from the Universal Basic Education Commission (UBEC).
“This is in cases where some states have available funds which could be used to improve primary education and learning outcomes,” Dodo clarified.
Osun, Kogi and Benue are some of the states notorious for owing workers’ salaries. Others include Bayelsa, Ekiti, Imo, Oyo, Abia and others.
Brief background
The Paris Club, created in 1956, is a group of officials from major creditor countries whose provide coordinated and sustainable solutions to the payment difficulties experienced by debtor countries.
In 2005, the Club cancelled 60 per cent of Nigeria’s $30 billion debt, following what it considered as the federal government’s far-reaching and focused economic reforms. But before the debt cancellation, the FG had been making deductions from the allocations to state governments to enable it clear the debt.
So when the debt was cancelled, the states asked for a refund from the federal government. The federal government, in December 2016, eventually agreed to refund the states in three tranches.
The first and second tranches have been released, while the third tranche, according to the finance ministry, would soon be disbursed to states that met the criteria.
Credit: International Centre for Investigative Reporting (ICIR)
