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Experts say states bound to pay salary arrears with bailout funds

15 September 2015, 20:37

Lagos - Some financial experts say the state governments that benefited from the Federal Government’s bailout funds have the obligation to pay their workers salaries.

The experts told the News Agency of Nigeria (NAN) on Tuesday in Lagos that the indebtedness to workers was the moral burden that compelled the federal government to intervene.

They spoke against the backdrop of allegations that some of the state have refused to pay their workers with the fund.

Mr Titus Okurounmu, a former Central Bank of Nigeria (CBN) Director, Research Department, said states that received the bailout funds should pay the backlog of salaries they owed their workers.

Okurounmu added that the inability of any of the indebted states to pay would have a negative effect on the economy.

According to him, the governments’ refusal to pay on time could also erode the workers’ confidence in government.

The economist also said that another side effect of the poor disbursement of funds could be depression among the affected workers.

Also read: Tambuwal orders payment of July salaries to Sokoto workers

Contributing, Mr Okeowo Oderinde, a former Chairman, Institute of Chartered Accountants of Nigeria (ICAN), Ikeja District, said the affected states should appreciate the federal government’s assistance by meeting their workers salary needs.

Oderinde said that the states should endevour to pay on time because of the legal and social contract between the various governments and their workers.

The accountant also urged the states to pay workers outstanding salaries before auditing their workforce.

NAN reports that some states had embarked on staff audit following their arguments that the fund was not enough to meet the workers’ salaries profile.

NAN also recalls that President Muhammadu Buhari, had in July directed the CBN to offer states loans that would enable them pay the backlog of salaries owed workers.

The CBN, it would also be recalled packaged a Special Intervention Fund ranging from N250 billion to N300 billion for 27 states with low interests.

The CBN facility is one of the three-pronged reliefs designed by the Federal Government to help financially troubled states.

The other two are sharing of the 2.1 billion dollar (about N414 billion) 2014 Income Tax/Education Tax and dividends paid into the federation account.

The dividends are through the Federal Inland Revenue Service (FIRS) and the Nigerian Liquefied Natural Gas (NLNG) Ltd.

The decision on the N300 billion relief packages was agreed at the end of last National Economic Council (NEC) meeting, chaired by Vice President, Yemi Osinbajo in Abuja. 




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