THE PARIS – LONDON REFUND APPLICATION IN ABIA STATE by Governor Ikpeazu

The essence of this presentation is to highlight the utilization of Intervention funds since the inception of the present administration. These include;
• The Federal Government bailout fund
• The first tranche of Paris Club refund
• The second tranche of Paris Club refund.
INTRODUCTION
The present administration was heralded with volatility and instability in the international crude oil market that saw theprice of Oil nosedived to an all time low ofabout $28 per barrel.
The implication is the reduction of the federal allocation from a five year averageof about N600b per month to as low as N296b, with the attendant adverse effect experienced by Nigerians.
This state of affairs affected the standard of living of most Nigerians, adversely. There was dissatisfaction all over the land, which lead to noticeable drop in socio – economicwell being of the nation and (by implication) the people.
Stemming from the above, most States were challenged with:
• Domestic loans which made them to go negative on receipt of their allocation as their monthly repayments were deducted at source.
• Backlog of salaries/pensioners allowances
• Lack of meaningful Infrastructural development.
STRATEGIES EMPLOYED
Therefore to ameliorate this situation, the Federal Government came up with the following:
• Policy on restructuring the State loans to a single digit interest rate of 9% p.a for 20 years. This strategy allowed some states to have some funds to go home with after each monthly allocation.
• Socio-economic and monetary arrangements to stimulate the economy and assist States with salary and pension arrears.
THE NEED TO STIMULATE THE ECONOMY
The need to stimulate the economy cannot be overemphasized, as it is most important to relieve Nigerians from the harsh effects of the recession. The strategies used include but was not limited to:
• Payment of salaries/salary arrears
• Support for infrastructural Development
The multiplier effects of the above strategies include enhanced purchasing powers arising from paid salaries and increased capital expenditure on infrastructural developments. The increased expenditure permeated and affected all spheres of the economy positively.
RECEIPT OF INTERVENTION FUNDS INABIA STATE
The receipt of the intervention funds has become a source of concern to some analyst, pundits, social critics and political commentators. Some comments have been made in the print and social media which were half truths and sometimes outright lies. May I use this opportunity to briefly state the facts.
Interestingly, Abia State government received the following intervention funds from FG:
1. Bailout fund N14.2b
2. Paris refund (tranche 1) N10.6b
3. Paris refund (tranche 2) N5.7b
In line with the transparency approach to governance of the current administration, after the receipt of the first intervention (Bailout) fund, the Abia state government constituted a committee made up of the different labour Union leaders; namely NLC, TUC, NULGE, NUP, NUT and Joint Negotiating Council. The committee took charge of the disbursement of the funds to various areas of greater needs and exigencies.
Indeed, the exercise was conducted devoid of government intervention as 100% of funds received were expended in the services of workers’ payments. Thisexercise was (by all known standards) transparent and applauded by ICPC, who singled out Abia and two other States for their transparency in the disbursement and utilization of the fund.
There was also an express advice from the Federal Ministry of Finance for 50% of the first tranche of the Paris Refund to be dedicated to the payment of workers’salaries and wages. In addition to committing 50% as advised, the present administration disbursed an additional N600m to the payment of workers’ salaries and wages. Thus a total of N5.9b was spent therein.
The second tranche of the Paris refund received by Abia state was 100% spent on workers’ salaries and pensions. This has greatly curtailed the salary arrearsand responsibilities of the government.
Overall, Abia received a total sum of N16.3B from the Paris Club refund and deployed N11.6B to service workers/pensioners wage bill. This translates to a commitment of more than 71% of total receipt to service workers’ salaries and pension.
CHALLENGES
The challenge has remained that while trying to clear the backlog of salaries, they keep piling as most of us can testify. This is as a result of the fact that allocations from the center and the IGR have not been enough to carry the monthly wage bill and other responsibilities.
ADDRESSING THE FUNDAMENTAL ISSUES
With the introduction of the verification and biometric exercises some issues such as ‘ghost worker’ salaries, padding of salaries, multiplicity of people receiving salaries from various units of the government has been addressed. This has assisted the State greatly, as the monthly wage bill has been reduced from an average of N2.8b to N2.1b. Thus from this alone a savings ofabout N600m monthly has been achieved. When extrapolated in 34 months this amounts to about N16b that would have ordinarily gone into some individuals’accounts.
PENSION
Hitherto there were 19 Sub-treasuries through which Pensioners were paid. These sub-treasuries determined when and how to pay the pensioners. This brought about sharp practices in the system. The government therefore decided to abolish the sub-treasuries system.
To address this issue the State embankedon Pensioners Verification Exercise (PVE). This has helped the State to identify non-retirees in the system. Thereafter, the e-payment system was adopted. This led to the simultaneous payment of all pensioners through their banks. Today, pensioners receive their pay at the comfort of their respective homes.
Through the verifications, about 131 teachers who were supposed to have retired were identified. From the original date of their retirement till the date of the discovery, the government had paid them a total sum of N496m. The government is determined to convert the monies paid them as either pension or gratuity due them in future.
CONCLUSION
The State Government has brought about transparency and decency in the system. We have built more confidence on the relationship between the labour unions and the government. This can be attested to by the trade unions leaders and their membersin the State. Currently Abia State government is up to date with MDAs salaries.
In essence, these are the painstaking reforms we have carried out since the inception of this administration.
This analysis does not (in anyway)suggests that Abia is not owing some outstanding salaries. The State has some challenges among the parastatals. Whereas some parastatals are up to date as a result of prudence and transparency, others are not. For example ABSU today is a role model and the benchmark used to monitor other parastatals. ABIAPOLY has followed suit. We are also working hard to cover the gap with the backlog of teachers’salaries.
Above all, while the State continues with these detailed and painstaking efforts to revamp and revitalize every aspect of the State socio-economic status as well as put smiles on the faces of the people once again, we encourage every citizen to remain steadfast and supportive of this visionary, virile and vibrant administration so that all the above stated gains can further be consolidated.
Thank you.
Enyinnaya Appolos
Chief Press Secretary to
the Governor of Abia state