Abia govt demands release of last tranche of Paris Club refund
By Yolamchi Ukaga, Umuahia
The Abia state government has appealed to the federal government to release its last tranche of the Paris Club Refund to enable it clear outstanding salary arrears of its workers.
The state’s commissioner for Information, Chief John Okiyi Kalu, who made the appeal during an interview with Orient Daily, however urged Abians to disregard insinuations that the State Government has deployed the fund to road construction, rather than payment of salary, which the fund is meant for.
Abia workers were worried that the Paris Club refund may have been expended on road construction and other sundries, rather than payment of their outstanding salaries, as stipulated by the federal government.
Those owed are secondary school teachers, staff of Abia State Polytechnic, Aba, Abia State University Teaching Hospital and staff of College of Education, Arochukwu.
Secondary school teachers in the state recently called off an indefinite strike, which they embarked upon on June 2, 2019, to press for the release of their outstanding arrears of salaries and other entitlements, likewise staff of Abia State University Teaching Hospital, Aba, who are owed 11 months arrears of salaries.
Okiyi-Kalu, explained that the state government would use the fund to clear outstanding workers’ salaries, especially salaries of secondary school teachers, as soon as the money hits the state account.
Goodluck Ibem, a social commentator, observed that the last tranche of the Paris Club refund offers the state a good opportunity to clear all outstanding arrears of salaries and appealed to the state government to deploy the said fund wholly to salaries.
According to him, it will reduce the huge burden on the State and allow the present administration in the State to invest in other things that would yield revenue to it. For Orji Ogba, a trader, “Using the fund to clear salaries, would increase money in circulation, as civil servants would have money to buy things as well as refund monies they borrowed, while waiting for their salaries”.
The federal government approved the release of N649.43bn, as the final tranche of the Paris Club refund to state governments. The immediate past minister of finance, Zainab Ahmed, gave the figure in Abuja, during a media briefing on the activities of her ministry.
The finance ministry said the amount had already been verified by the ministry as the outstanding balance to be refunded to the state governments.
Ahmed said the refund would be made to the state governments in due course.
According to the finance ministry, “the final phase of the Paris Club debts refunds, the total sum of N649.434bn was verified by the ministry as the outstanding balance to be refunded to the state governments.
One of the conditions the states must meet to qualify for the payment of the balance of $2.69 billion (about N823.5 billion at N306.25/$1) Paris Club loan refund include payment of workers’ salaries and staff related arrears in the utilisation of the refund.
The federal ministry of finance said in a statement issued by its spokesperson, Hassan Dodo that the conditions, include that states must undertake to give priority to payment of workers’ salaries and staff related areas in the utilisation of the refund.
Other conditions include a commitment by all states to the commencement of the repayment of budget support loans granted by the federal government in 2016, and commitment to clear all amounts, due to the Presidential Fertiliser Initiative (PFI).
Also, the states are to show commitment to clear matching grants from the Universal Basic Education Commission (UBEC).
The Paris Club loan over-deduction is a dispute between the federal and the state governments between 1995 and 2002. On assumption of office, President Muhammadu Buhari directed that the claims of over-deduction be reconciled formally and individually, by the DMO.
The reconciliation exercise commenced in November 2016, when the finance ministry confirmed the country’s economy had already relapsed into technical recession.
To help the states cushion the negative impact of the recession, the president approved the payment of 50 percent of the amounts, claimed by states as an interim measure to help them alleviate the financial challenges.
The release of the amount was based on the conditions that the state governments would utilise a large part of it for the payment of their workers salary and pension arrears.
Consequently, the payments were released to the states between December 1, 2016 and September 29, 2017 as part of the federal government’s fiscal stimulus to ensure the financial health of the states and local governments.
The last tranche of the fund was approved for the states in May 2019, by President Muhammadu Buhari.