How Abia Disbursed Bailout, Refunds

As controversies continue to swirl over the utilisation of the bailout and Paris Club refunds ‎by states, Abia State governor, Dr Okezie Ikpeazu explains that his state disbursed the funds in transparent manner, writes Eyinnaya Appolos
There is nothing as cheering as when a leader is open and transparent in the handling of the affairs of those whose mandate he holds in trust.
The Nigerian Governors’ Forum (NGF) Media Conference for Chief Press Secretaries and Commissioners of Information of the 36 states of the federation, offered the Abia State Governor, Dr Okezie Ikpeazu, the opportunity to once again, give updates on how his state managed the bailout and the Paris Club debt refunds for payment of backlog of salaries, pensions and gratuitties as well as improvement of the infrastructure capital of the state.
Speaking at the conference, Ikpeazu, who was represented by his deputy, Sir Udo Oko Chukwu, said that the state under his watch had enshrined transparency as a cardinal governance principle. He also explained that it was to promote transparency that he regularly briefed and inter acted with the people of Abia State.
While making a presentation on the topic, ‘Application of the Paris Club Refund to State’, the governor said: “The receipt of the intervention funds has become a source of concern to some analysts, 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: Bailout fund of N14.2b, first tranche of Paris Club debt refund of N10.6b and the second tranche of he Paris refund  of 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 per ennt of funds received were expended in the services of workers’ payments. This exercise was (by all known standards) transparent and applauded by the Independent Corrupt Practices and other related Offences Commission (ICPC), who singled out Abia and two other states for their transparency in the disbursement and utilization of the funds.
“50 per cent of the first tranche of the Paris Club Debt Refund to be dedicated to the payment of workers’salaries and wages. We also disbursed an additional N600m to augment the payment of workers’ salaries and wages. Thus a total of N5.9b was spent therein.
“The second tranche of the refund received by Abia state was 100 per cent spent on workers’ salaries and pensions. This has greatly curtailed the salary arrears and responsibilities of the government.”
He said that in all, Abia received a total sum of N16.3 billion from the Paris Club refund and deployed N11.6 billion to service workers/pensioners wage bill. This, he said translated to a commitment of more than 71 per cent of total receipt to service workers’ salaries and pension.
Ikpeazu who commended the Federal Government for supporting the states at such a critical time, said that despite the efforts, challenges remain.
He said: “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 centre and Internally Generated Revenue (IGR: have not been enough to carry the monthly wage bill and other responsibilities. “
The governor also spoke on the efforts he made to block wastages and linkages from the system. Such fiscal responsibility measures included the introduction of verification and biometric exercise to weed out ghost workers. These measures, he explained, helped in no small measure to ensure that workers get paid as at when due.
“With the introduction of the verification and biometric exercises some issues such as ghost workers salaries, padding of salaries, and 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 N2.8 billion to N2.1 billion. Thus from this alone a saving of about N600m monthly has been achieved. When extrapolated in 34 months this amounts to about N16 billion that would have ordinarily gone into some individuals’ accounts,” he added.
On the issue of pensions, he said: “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 embarked on a 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 to them as either their pension or gratuity in future.”
Speaking on how the state was able to achieve the laudable feat in the application of scarce funds, the governor said: “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 members in the state.”
He explained that Abia State government was up to date in payment of salaries saying, “in essence, these are the painstaking reforms we have carried out since the inception of this administration.”
He nevertheless stated that the state was still owing some outstanding salaries.
He said: “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.”
It is crucial to note that the organizers of the conference selected Ikpeazu to make this presentation because, as stated by one of them, “he is one governor that transparently managed the extra inflows and bailout funds as expected by the federal government, labour unions and civil society organisations”.
The All Progressives Grand Alliance’s governorship candidate in Abia State during the 2015 general elections, Alex Otti had earlier accused the Abia State Government of lack of transparency in the disbursement of the funds. However, the state quickly countered the allegation by releasing to the public details of how the funds were disbursed.
The state government even invited anti-corruption agencies to investigate it to further prove that it had nothing to hide.
It was not on Abia State that had been accused of not utilising the funds for the purpose for which they were released.
The Economic and Financial Crimes Commission had also claimed it was investigating some states governors for allegedly diverting the funds. The governors however, denied the allegation and challenged the commission to prove the allegation that the 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.