Ilorin - Federal Government’s five billion naira bailout loan is meant for the payment of salary arrears and allowances to primary school teachers and local government workers.
This explanation is contained in a statement by Dr. Muideen Akorede, Senior Special Assistant on Media to Kwara State Governor in Ilorin on Sunday.
"The bailout loan is the cheapest and most efficient means of paying accumulated arrears of those workers."
It will be recalled that Peoples Democratic Party had challenged Governor Ahmed to justify the need to borrow the money.
PDP spokesman, Chief Rex Olawoye, argued that the N3.5 billion federal allocation to the 16 local governments in June was enough to offset backlog of salaries.
However, Akorede said the federal allocations coming to the state were currently inadequate to meet salary, pension and gratuity obligations to the staff at state and local government levels.
The governor’s aide added that the N3.6billion combined June and July allocation to the 16 local government councils was inadequate to meet the current and outstanding salary and pension arrears, let alone development projects.
He added that as at July 2015, salary arrears for Local Government workers stood at N2. 012 billion, while salary arrears for primary school teachers stood at N2.143.
"Total LG Pension arrears stood at N523.160 billion while arrears for LG’s Statutory Contribution to Kwara State University (KWASU) are N70.464 billion.
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"Outstanding payments for sundry services were put at N267.806," he said.
The aide expressed confidence that the loan will clear all outstanding arrears.
"It will also provide the local government councils with affordable repayments so that they will continue to meet future salary, pension and project obligations."
The statement pointed out that the State Government did not interfere with local government council funds.
It said all allocations due the local governments were released to the councils after statutory deductions for teachers’ salaries, pensions and gratuities, teaching service allowance, statutory contributions to KWASU, training, and sundry support services.
It said that bank charges and loan repayments of the local governments were deducted at source by banks.
It commended the House of Assembly for its speedy approval of governor’s request to convert the five billion naira arrears into a Federal Government bailout loan.
It expressed belief that the intervention would make salary and pension arrears at Local Councils an issue of the past.
"The government’s renewed revenue drive will augment any future shortfalls in allocations from the Federal Government," it added.
The statement called on the citizens and residents of the state to support the initiative of the state government for it to be successful.