FG Begins Payment of N18bn Severance Benefits to 2,700 Defunct Nigeria Airways Workers 

Ndubuisi Francis in Abuja 

The Federal Government has announced the commencement of payment of N18 billion, being outstanding severance benefits to 2,700 ex-workers of the defunct national air carrier, Nigeria Airways.

The airline was liquidated in 2005 by the administration of former President Olusegun Obasanjo contrary to the recommendation of the International Finance Corporation (IFC), the private sector arm of the World Bank Group, for a privatisation option.

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who briefed journalists in Abuja, Friday, disclosed that 2,100 former employees had been paid.

Another 600 beneficiaries in batches eight and nine had been cleared for payment, he said, adding that: “Altogether, this represents N18 billion in benefits for 2,700 former workers.”

The minister explained that payments were being made in batches to avoid already verified beneficiaries to continue waiting while outstanding claims were being validated.

The benefits, he added, covered different categories of former Nigeria Airways employees, devoid of distinction between junior and senior workers.

On beneficiaries, who died before receiving their entitlements, the minister said payments would be made to their documented next of kin or other beneficiaries after the required legal processes had been completed.

According to Oyedele, some of the affected workers were already old while waiting for their benefits, while others had died, leaving their families to pursue the outstanding entitlements.

He stated: “For more than two decades, following the liquidation of Nigeria Airways, many former employees have waited for their outstanding severance benefits. Some have grown old waiting. Some have sadly passed away, leaving their families to pursue what was legitimately due to them.”

The minister attributed the payment to a directive by President Bola Ahmed Tinubu to resolve the long-standing obligation.

He noted that although the severance benefits could not compensate for the over two decades-long waiting endured by the beneficiaries, the Federal Government considered it necessary to resolve inherited obligations rather than allow them to linger.

“We recognise that no payment today can fully compensate for more than two decades of waiting, but it is important that government confronts these long-standing obligations rather than allowing them to remain unresolved for another generation,” he said.

The minister apologised to the former employees of the defunct air carrier for the long delay before their entitlements were settled, noting that the payments were entitlements rather than favours from the government.

He further explained that the settlement was part of the government’s broader efforts to clear verified inherited obligations, including outstanding payments to pensioners and indigenous contractors.

Oyedele stated that the payment to the defunct airline employees was preceded by extensive verification, including biometric capture and validation of personal and banking information, to prevent fraudulent claims.

According to him, further verification would be undertaken to address cases involving outdated information, incorrect bank details and deceased beneficiaries whose next of kin or estates were required to complete the relevant processes.

But the minister noted that the government was settling the obligations based on the amounts documented and verified, in response to a question on whether or not the payments had been adjusted to factor in the current inflation after over 20 years.

Inflation, he admitted, had substantially shrunk the value of money over the period, but explained that there was no provision for inflationary adjustments in the settlement.

On indigenous contractors, he also disclosed that the Federal Government had paid outstanding obligations to over 12,000 of them as part of efforts to clear accumulated debts.

The government, he disclosed, initially prioritised smaller contractors owed N50 million or less before those with verified claims of up to N100 million.

Larger claims running into billions of naira could be addressed separately through negotiations and instruments such as promissory notes, he stated, adding that the approach was designed to prioritise small businesses that required the payments to meet salaries and other immediate obligations.

He warned contractors against paying commissions or inducements to government officials to facilitate payment of verified claims, describing such demands as illegal.

The minister said efforts were being made by the government to prevent another accumulation of unpaid obligations by making the budget more realistic and ensuring that capital expenditure commitments were backed by identifiable funding sources.