Editorial

Loans Refund: Need For Prudence

Published

9 years ago

January 20, 2017

Towards the end of November last year, President Muhammadu Buhari, took another bold step to provide direct stimulus to cash-strapped states groaning under harsh economic conditions occasioned by the crushing recession in the country by approving a total of N522.74billion disbursement to states as reimbursement for over-deductions on external debt service. Earlier in the administration, the President had rolled out bailout funds in government spending to enable no less than 28 States settle arrears of outstanding salaries of civil servants and allowances of pensioners, who were being owed between four and 14 months of their entitlements.
A statement by the Minister of Finance, Mrs. Kemi Adeosun, said the debt service deductions amounting to some $4billion were in respect of the Paris Club, London Club and multilateral debts of the federal and state governments. Signed by the media aide to the minister, Mr. Festus Akanbi, November 21, 2016, the government said the reimbursements would be effected in tranches.
It would be recalled that the Federal Government reached a final agreement for debt relief with the Paris Club in October, 2005, during the Presidency of Chief Olusegun Obasanjo. The former Minister of Finance, Dr Ngozi Okonjo-Iweala, was said to have overpaid the financial institutions when Nigeria cleared debts owed the foreign creditors in 2005. But before then, accounts of some States had already been overcharged.
Following the realisation, some state governments had last year submitted to the Federal Government, claims of over-deductions for external debt service between 1995 and 2002 as a result of allocations on First Line Charge deductions from the Federation Account Allocation Committee (FAAC). In response to the request for refund, Buhari directed that the claims be subjected to verification by the Debt Management Office.
Consequently, a team was established and given the mandate to scrutinise the claims and reconcile them with available records. The committee, having reached the conclusion of over-deductions in the accounts of aggrieved states, the President convened a meeting with governors of the states on December 2, 2016, during which an agreement was reached to pay 25 per cent, over the next 12 months, after due diligence and thorough scrutiny, the amounts claimed subject to a cap of N14.5 billion to any given state. The President also promised that balances due any state thereafter would be revisited whenever fiscal conditions improved. On account of that, the first and second tranches amounting to N388.304billion have already been credited to 35 States as at December 27, 2016, with the balance of N134.44 billion soon to be accessed.
Given the experiences in the past when extra-budgetary funds released to stimulate the economy, including the bailout funds to the states were diverted without regard for accountability and the due process, Buhari’s predication of the present disbursements on a viable structure, is indeed, commendable. Under the current structure, the President told the governors that his overriding concern is the welfare of the Nigerian people, considering the fact that many states are owing salaries and pensions, thereby causing considerable hardship on the populace.
He, therefore, directed that releases must be credited to an auditable, especially BVN-linked and verifiable accounts, from which payments to individual creditors would be made. He also pleaded with the governors to ensure that a minimum of 50 per cent of any amount disbursed be dedicated to payment of salaries and pensions while the remaining 50 per cent can be expended on pro-people projects and programmes.
And since the reconciliation process is still on-going with the final outcome likely to show an under or overstatement of claims, the Federal Government got the governors to sign undertaking, with a declaration that in the event that the amount already paid exceeds the verified claim, the surplus would be deducted directly from affected states’ monthly FAAC allocations.
Having taken such proactive steps, we urge the Federal Government not to see the current arrangement as a mere gentleman’s agreement but to monitor its implementation to the letter. We agree that as a federation, the Federal Government is not expected to interfere in the affairs of the states; however, nothing stops it from seeking to ensure that the released funds are not frittered away by state governments.
Now that more than half of the refund has been released, we demand that any state government that still fails to comply with the gentleman’s agreement should be denied the last tranche of the disbursements. The Tide also urges the leaderships of Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to take special interest in the terms of agreements guiding the disbursements, and ensure they assist state governments to achieve judicious utilisation of the refunds.
In addition, we appeal to the state governments to utilize the reimbursements for over-deductions on external debt service as agreed, and not squander same as free money to fund unrealistic projects initiated to massage political egos of ruling parties and politicians. We agree that paying the salaries of civil servants and allowances of pensioners will enhance their spending power and lubricate the economy, thus, cushioning the effects of the recession on the entire citizenry.
We further advise the state governments to monitor the projects on which 50 per cent of the released funds will be expended very diligently. If for nothing, majority of Nigerians whose confidence in government is already fading are bound to respond positively to projects with direct bearing on their lives. We also urge state governors to shun the temptation of initiating unviable projects while ignoring those initiated by their predecessors for political reasons.
Governance is a continuum and the times demand patriotism and focus, not grandstanding. This is why we expect high level of transparency and accountability on the part of state governors, on what they intend to do or have already utilised the money on, simply because they owe the general public a duty to account for all their activities while they superintend the affairs of the states. This is our take!

Editorial

No To Political Office Holders’ Salary Hike

Published

20 hours ago

September 22, 2025

Uchechukwu Okwum

Nigeria’s Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has unveiled a gratuitous proposal to increase the salaries of political and public office holders in the country. This plan seeks to fatten the pay packets of the president, vice-president, governors, deputy governors, and members of the National and State Assemblies. At a time when the nation is struggling to steady its economy, the suggestion that political leaders should be rewarded with more money is not only misplaced but insulting to the sensibilities of the ordinary Nigerian.

What makes the proposal even more opprobrious is the dire economic condition under which citizens currently live. The cost of living crisis has worsened, inflation has eroded the purchasing power of workers, and the naira continues to tumble against foreign currencies. The majority of Nigerians are living hand to mouth, with many unable to afford basic foodstuffs, medical care, and education. Against this backdrop, political office holders, who already enjoy obscene allowances, perks, and privileges, should not even contemplate a salary increase.

It is, therefore, not surprising that the Socio-Economic Rights and Accountability Project (SERAP) has stepped in to challenge this development. SERAP has filed a lawsuit against the RMAFC to halt the implementation of this salary increment. This resolute move represents a voice of reason and accountability at a time when public anger against political insensitivity is palpable. The group is rightly insisting that the law must serve as a bulwark against impunity.

According to a statement issued by SERAP’s Deputy Director, Kolawole Oluwadare, the commission has been dragged before the Federal High Court in Abuja. Although a hearing date remains unconfirmed, the momentous step of seeking judicial redress reflects a determination to hold those in power accountable. SERAP has once again positioned itself as a guardian of public interest by challenging an elite-centric policy.

The case, registered as suit number FHC/ABJ/CS/1834/2025, specifically asks the court to determine “whether RMAFC’s proposed salary hike for the president, vice-president, governors and their deputies, and lawmakers in Nigeria is not unlawful, unconstitutional and inconsistent with the rule of law.” This formidable question goes to the very heart of democratic governance: can those entrusted with public resources decide their own pay rises without violating the constitution and moral order?

In its pleadings, SERAP argues that the proposed hike runs foul of both the 1999 Nigerian Constitution and the RMAFC Act. By seeking a judicial declaration that such a move is unlawful, unconstitutional, and inconsistent with the rule of law, the group has placed a spotlight on the tension between self-serving leadership and constitutionalism. To trivialise such an issue would be harum-scarum, for the constitution remains the supreme authority guiding governance.

We wholeheartedly commend SERAP for standing firm, while we roundly condemn RMAFC’s selfish proposal. Political office should never be an avenue for financial aggrandisement. Since our leaders often pontificate sacrifice to citizens, urging them to tighten their belts in the face of economic turbulence, the same leaders must embody sacrifice themselves. Anything short of this amounts to double standards and betrayal of trust.

The Nigerian economy is not buoyant enough to shoulder the additional cost of a salary increase for political leaders. Already, lawmakers and executives enjoy allowances that are grossly disproportionate to the national average income. These earnings are sufficient not only for their needs but also their unchecked greed. To even consider further increments under present circumstances is egregious, a slap in the face of ordinary workers whose minimum wage remains grossly insufficient.

Resources earmarked for such frivolities should instead be channelled towards alleviating the suffering of citizens and improving the nation’s productive capacity. According to United Nations statistics, about 62.9 per cent of Nigerians were living in multidimensional poverty in 2021, compared to 53.7 per cent in 2017. Similarly, nearly 30.9 per cent of the population lives below the international poverty line of US$2.15 per day. These figures paint a stark picture: Nigeria is a poor country by all measurable standards, and any extra naira diverted to elite pockets deepens this misery.

Besides, the timing of this proposal could not be more inappropriate. At a period when unemployment is soaring, inflation is crippling households, and insecurity continues to devastate communities, the RMAFC has chosen to pursue elite enrichment. It is widely known that Nigeria’s economy is in a parlous state, and public resources should be conserved and wisely invested. Political leaders must show prudence, not profligacy.

Another critical dimension is the national debt profile. According to the Debt Management Office, Nigeria’s total public debt as of March 2025 stood at a staggering N149.39 trillion. External debt obligations also remain heavy, with about US$43 billion outstanding by September 2024. In such a climate of debt-servicing and borrowing to fund budgets, it is irresponsible for political leaders to even table the idea of inflating their salaries further. Debt repayment, not self-reward, should occupy their minds.

This ignoble proposal is insensitive, unnecessary, and profoundly reckless. It should be discarded without further delay. Public office is a trust, not an entitlement to wealth accumulation. Nigerians deserve leaders who will share in their suffering, lead by example, and prioritise the common good over self-indulgence. Anything less represents betrayal of the social contract and undermines the fragile democracy we are striving to build.

Editorial

No To Political Office Holders’ Salary Hike

Published

21 hours ago

September 22, 2025

The Tide

Editorial

Rivers’ Retirees: Matters Arising

Published

2 weeks ago

September 8, 2025

The Tide

The Rivers State Government deserves commendation for the manner in which it conducted the last biometric exercise for pensioners in the state. For the first time in many years, the verification process was not only efficient but also humane, a development that has brought relief to a category of citizens that often bears the brunt of neglect.

Unlike previous verification exercises that left pensioners exhausted and unattended, the latest exercise set a refreshing precedent. Retirees were given proper and sumptuous meals, and in addition, the government paid the sum of N10,000 into their accounts to cushion their transportation costs. Such gestures go a long way in demonstrating that those who had laboured for the state are not forgotten in their twilight years.

The measure was particularly necessary given that some pensioners had to travel long distances to reach their verification centres. For elderly men and women, such journeys come with physical and financial strain. By recognising these realities and easing the burden, the government has shown that pensioners deserve dignity, not disdain.

Beyond this laudable act of consideration, the authorities must reflect on the very structure of pension verification. The era of compelling retirees to be physically present for routine verification should be reconsidered. With digital tools and innovation, the government can adopt systems that capture and confirm data without the stress of physical assembly. This is crucial for pensioners residing in other states or even abroad.

While we acknowledge the importance of verification in cleaning up pension records, we cannot ignore the darker side of the matter. It is regrettable that some allowances continue to be paid to deceased pensioners, with relatives fraudulently collecting the funds. The latest biometrics, thankfully, exposed some of these sharp practices. The exercise, therefore, is not only about order but also about justice.

We urge families of deceased pensioners to be patriotic enough to inform the government of the deaths of their loved ones. It is deeply shameful that in some instances, individuals attempted to impersonate late pensioners during the biometrics. Such behaviour undermines the spirit of honesty and deprives genuine retirees of their due entitlements.

The exercise also revealed another important area of concern: the health of pensioners. It is reassuring to learn that the state government has reportedly promised to take over the medical treatment of some retirees who arrived for the biometrics in critical condition. This is a step in the right direction. Elderly citizens, after years of service, should have access to special health care facilities in the state. Setting aside hospitals or designated centres for the aged is not just desirable but necessary.

While pension payments in Rivers State have remained consistent, attention must now be directed towards gratuities. Senior citizens deserve to receive their retirement benefits without the bureaucratic hitches that have often marred the process. After years of loyal service, nothing is more demoralising than to see retirees languish for want of their gratuities. Every worker, as Scripture reminds us, is worthy of his wage.

Retirement, in any civilised society, should not be reduced to a sentence of suffering. In dealing with pensioners, government must consistently wear a human face. The humane manner displayed during this verification exercise should not be a one-off. It must become the norm in all dealings with retirees. Measures must continually be put in place to ensure that they do not feel abandoned by the state they served.

One welcome innovation has already been introduced. The Sole Administrator of Rivers State, Vice Admiral (Rtd) Ibok-Ete Ekwe Ibas, has altered the method of gratuity payment. Pensioners now receive their monies directly into their bank accounts, eliminating the cheque-based system that for years served as fertile ground for corruption. This reform is both pragmatic and forward-looking. Similarly, the implementation of the N32,000 pension harmonisation is also commendable.

Direct payments gratuities ensure transparency and drastically reduce the possibility of diversion of funds. More importantly, they restore confidence in the system and assure pensioners that their entitlements will reach them without interference. In this way, the government has not only safeguarded the process but also upheld the principle of accountability.

Seamless gratuity payment has a ripple effect on the workforce as a whole. When workers are confident that retirement will not plunge them into hardship, the temptation to falsify age in order to remain in service is eliminated. Such reforms, therefore, enhance efficiency, honesty, and productivity in the public service.

In sum, the Rivers State Government has struck a refreshing chord in its handling of pension verification. It has shown empathy, innovation, and accountability. However, the momentum must be sustained, and the focus must shift towards modernising verification methods and prioritising retirees’ welfare in health, gratuity, and dignity.

When retirees are treated with compassion and fairness, the message to those still in service is clear: faithful service to the state will not go unrewarded. The humane verification exercise, though a single event, offers a hopeful glimpse of what governance can look like when people, especially the elderly, are placed at the heart of policy.