Kogi governor drowns state in debts as workers remain unpaid for months

Kogi State Governor, Yahaya Bello [Photo Credit: The News Nigeria]
Kogi State Governor, Yahaya Bello [Photo Credit: The News Nigeria]

Despite several bailouts from the Federal Government, the Kogi State government has continued on the path of borrowing from commercial banks to purportedly pay salaries and run other recurrent expenditures, PREMIUM TIMES can report today.

According to documents obtained by our reporter, the state has borrowed about N30billion from commercial banks since January 2018.

How the state utilized the bailout funds, close to N50billion, remain unclear. Although critics say a huge chunk of it was either misappropriated or diverted.

The new debts are being amassed despite the Debt Management Office (DMO) listing the state as one of the nation’s most indebted.

The DMO put the state’s debt liability at N102.4billion, as at December 31, 2017. That possibly excludes the several billions the Governor Yahaya Bello’s administration is owing contractors, civil servants and pensioners.

The state government has for long been in arrears in the payment of workers’ salaries. It cleared four months salary liability in December 2017, courtesy of the N1.2billion second tranche of the Paris Club refunds and a N10billion bank loan.

The staggering salary backlogs, spanning between seven to 25 months, suggest the huge borrowing by the state are hardly used for payment of workers’ salaries as the government usually claim in loan requests to banks.

According to the Kogi State chapter of the Nigeria Labour Congress, workers had not been paid since March. Even before then, several months of arrears had accumulated and remained unpaid.

In December 2017, the Commissioner for Finance, Idris Asiru, claimed the state government needed N30billion extra to clear arrears of salaries. The state’s internally generated revenue averages N1.2billion monthly.

An Irrevocable Standing Payment Order (ISPO) issued by the state government on March 20 to Zenith Bank for the deduction of principal and interest indicated a N3.5billion loan secured from Fidelity Bank.

The ISPO, signed by Mr Asiru, the finance commissioner and Momoh Jibrin, the accountant general of the state, followed the granting of the loan by the bank.

The state government had applied for the loan on October 30, 2017 purportedly for offsetting salaries of civil servants.

The application went further to state that the loan would be repaid within three years through the expected inflow of funds from the Paris Club refund of 21.2billion; refund of N14billion capital projects executed on behalf of the federal government; and expected N30billion revenue from the implementation of a GIS project.

Revenues to the tune of N75 billion are also being expected from the sales of Kogi State Liaison Office in Lagos, Kogi House in Abuja, and Kogi International Market and others. The government said that inflow would be used to liquidate the loan.

The Kogi State House of Assembly also on December 5, 2017 approved another loan request by Governor Bello.

The money – N1.29billion – is to be used as counterpart funding for a grant from the Universal Basic Education Commission, the governor said.

The loan was eventually secured from Fidelity Bank, with the state offering to repay using its “internally generated revenue for a period of 12 months, from 26 October 2017 to 26 October 2018.”

PREMIUM TIMES also gathered that on January 31, 2018, the state government made another request of N3.5billion loan also from Fidelity Bank purportedly for the payment of salaries.

This is beside a N12billion Local Contractor Receivable(Promissory Notes) with United Capital.

Not done with borrowing, the finance commissioner via a memo dated January 31, 2018, called the attention of the state government to the dwindling financial fortunes of the state, and requested a N12 billion loan to be jointly provided by four participating banks with each supplying N3billion, for the payment of salaries.

The state executive council approved the proposal with Zenith, Access, Union and Fidelity Banks tapped as participating banks.

Recall also that Kogi had in 2015 requested bailout worth N50.8billion from the Federal Government to enable it settle its outstanding arrears of workers salaries.

PREMIUM TIMES gathered that the monthly wage bill of the state at the time was N2.7billion. Workers were owed two months in arrears, amounting to N5.4billion.

The balance of N45.4billion, it was gathered, was supposed to be used to pay the arrears of local government workers and primary school teachers. But the state government said it only got N20billion. It is unclear if the state later received the balance of N30.8billion or not.

The state government also received funds from the Paris Club refund worth over N20billion, which was also meant to offset salaries.

Onu Edoka is the chairman of the Kogi State chapter of the Nigerian Labour Congress (NLC). He told PREMIUM TIMES that workers are in the dark regarding the loans and how they were utilised.

He said it was difficult for labour to determine whether the loans obtained were actually used for offsetting workers’ salaries as claimed by the government.

“I cannot categorically say state government took loans to pay salaries, because I was not in the picture of any loan they took to pay salaries, and government has not told us categorically that it took loans to pay so and so category of arrears of salaries,” Mr Edoka said.

“I am only aware that when the bailout came, it was meant to clear salary arrears.

“We demanded for a committee to be put in place so we can be in the picture, but the government said it was not for us to dictate to them, that they can pay the money.”

He also lamented the condition of the workers, whom he said were suffering, particularly local government workers and primary school teachers who are receiving as low as 25 per cent of their monthly salaries in the last two years.

“They would say they have paid salaries at the local government level up to April, but what is paid at that level is in percentage. We have been on percentage payment of salaries since the assumption of this government at the local government and primary school levels,” Mr Edoka said.

“The percentage is as worse as 25per cent. That is to say if your salary is supposed to be N18,000, the 25 percent of that salary is N4,500. That is what local government workers and teachers earn at the end of the day.”

The Executive Director, Centre for Human Rights and Conflict Resolution, Idris Maliki, who spoke to PREMIUM TIMES on the development, said despite the huge allocations to the state running up to N200billion in the last two years, the state government was yet to commission any road or housing project.

He also complained of lack of transparency when the state government seeks for loans, adding that the state assembly was also complicit in the shrouding of the process in secrecy.

“When the government is seeking a loan and writes to the state assembly, such letters are not read on the floor of the house,” said Mr Maliki.

“For nine years I have been working with the state assembly, and I have attended 90 per cent of the sittings of the state assembly, yet letters of request for loans are not known to us.

“A lot of people in Kogi State do not even know that loans are continuously being taken on behalf of the state. What is the rationale for loan taken? The House of Assembly is not even querying the loans because it has turned itself into department or a unit of the Government House. Unfortunately such letters are not read on the floor of the assembly.”

Mr Maliki added, “We have a government in Kogi State that did screening for 14 months and the outcome of that screening has not assisted the state. The payroll is still the same thing,” he said.

“So what is the reason for continuous borrowing. It is unfortunate, it is regrettable. The state government has continued borrowing and nobody knows what it is doing with the money.”

The Director General of the Kogi State Bureau of Information, Abdulkareem Abdulmalik, would not respond to enquiries by PREMIUM TIMES.

When contacted, he said he would not speak to our reporter on the telephone.


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