Enugu and Utilisation of Paris Club Refund

Chineme Okafor investigates the allegation that Enugu State did not utilise the Paris Club refund for the purpose for which the funds were released and found the allegation to be untrue

When the finance ministry released a full list of how much each of the 36 states had received so far from the federal government, as their share of the refund of Paris/London Club debt repayments between 1995 and 2002, Enugu’s share of the repayment was about N10.723 billion from the entire N516.38 billion that has been released so far.

Beyond the receipt of the refund which the federal government said was specifically targeted at offsetting the salaries, pensions, and other entitlements of workers in the states, most states reportedly used the funds other than the purpose for which they were meant for. Many are still owing their workers salaries, thus prompting lots of condemnation from both civil society groups and labour unions in the country.

But as was disclosed by the commissioner for information in Enugu state, Mr. Ogbuagu Anikwe, that practice was alien to the state which he said had made it a convention to pay its workers’ salaries in good time.

Speaking recently on the controversy that surrounded the state’s receipt and disbursement of its share of the Paris/London refund, Anikwe, explained that the state had always fulfilled its monthly obligations to its staff and never relied on the refund to pay its wages.

He said long before the refund came, Enugu paid its workers’ salaries before the 25th of each months, but eventually moved the payday forward to the 23rd day of each month.

Anikwe said that within the Nigerian body polity, Enugu was the first state in Nigeria to pay its salaries regularly despite its quite disadvantageous financial ranking as compared to other states that are way ahead of her in the leader-board.

Faulting claims that the state was indebted to its workers despite claiming over N10 billion from the Paris/London refund, Anikwe, said: “This claim was based on a News Agency of Nigeria (NAN) survey which listed Enugu as one of the states in Nigeria yet to utilise their share of the second tranche of the Paris/London Clubs refunds.”

He however noted that the report appeared to have concluded that since the state was yet to utilise its second tranche and since the federal government had asked that a lion share of the refund be used to offset salary and pension arrears, Enugu state must therefore be owing salary and pension arrears.

“We regret this unfortunate conclusion which could have been avoided with a little fact-checking. For the avoidance of doubt, no civil servant in Enugu state is being owed a kobo as salaries or arrears of salaries since the assumption of office of Governor Ifeanyi Ugwuanyi,” said Anikwe.

Clarifying the status of the state’s salaries obligation to its workers, Anikwe explained: “Enugu state public workers’ salaries used to be paid promptly on the 25th day of each month. However, beginning from three months ago, the governor ordered the accountant general to move forward the payday for civil servants and they are now being paid on the 23rd of the month.”

He further noted: “By this executive stroke, Enugu state has become the first state in Nigeria to pay its workers, with effect from three months ago. It must be pointed out that Enugu state sits fifth from the bottom of the table on share of monthly federal allocations.

“However, through prudent management of its resources and an aggressive internally generated revenue drive, the Ugwuanyi administration has been able to fully discharge its obligations to workers and still embark on massive projects to promote its agenda of employment generation, development of the rural areas, provision and maintenance of social services, and management of security and peace.”

How the Paris/London refund was used
Providing an insight into how the state managed its share of the refund so far gotten from the federal government, Anikwe said with a creative consultative mechanism, the governor had been able to carry everybody along on the disbursement of the refund.

Anikwe said that so far, Enugu had not utilised the second tranche of the refund because it had no need to use any part of it now.

“Enugu has yet to utilise its share of the second tranche of the refunds because the state does not have a pressing need to immediately utilise the funds, since it is not indebted in any way to her workers and pensioners,” said Anikwe.

He gave details of the fund’s management mechanism, saying: “What the state does each time it receives her share of the refunds is to immediately call for a meeting of the stakeholders – the two labour unions (NLC and TUC), representatives of pensioners, leaders of traditional institutions and community based associations, and development experts – to decide how best to utilise the refund.

“It is also at this meeting that a sharing formula is established between the states and local councils. The portion reserved for salary and pensions payments is kept aside and used to pay workers and pensioners as and when due.”

Anikwe said the governor’s approach to the fund’s disbursement has worked very well for the state and ought to be commended.
The Economic and Financial Crimes Commission had claimed it was investigating some states governors for allegedly diverting the Paris Club debt refunds. But the governors denied the allegation and challenged the commission to come out with its report to prove the allegation that funds were diverted.

The Nigerian Governors’ Forum (NGF), said the states would await the report of the EFCC investigation.

Speculation had been rife that some states allegedly diverted the refunds made to them from the Paris Club debt deductions, prompting the investigation by the EFCC.
Some states were also alleged to have used fictitious consultants to divert some of the money from the Paris Club refunds.
Worried by the development, the presidency reportedly ordered a full-scale investigation into the disbursement of the funds.
But the chairman of the NGF and Zamfara State governor, Abdulaziz Yari, while defending his colleagues said the governors were ready for the probe.
He expressed the governors’ support for the present administration’s war against corruption, but said that they would wait for the outcome of the EFCC investigation.
The presidency reportedly ordered the investigation because it was disappointed that what was meant to be a goodwill gesture was compromised by selfish interests.
A presidency source said that the federal government was worried that its efforts to ensure the settlement of pension and salaries owed to workers in the states were being sabotaged through the likely diversion of the funds earmarked for the purpose.

It expressed its determination to get to the bottom of the matter and consequently ordered the relevant agencies to carry out a full-scale probe to unravel any abuse of the funds.
Since the directive, the governors have reportedly been spoiling for war with the acting chairman of the EFCC, Ibrahim Magu, over the investigation of the alleged diversion of the funds.

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Even before the refund came, Enugu had always paid its workers’ salaries before the 25th of each months, but eventually moved the payday forward to the 23rd day of each month.

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The federal government was worried that its efforts to ensure the settlement of pension and salaries owed to workers in the states were being sabotaged through the likely diversion of the funds.