Workers under the auspices of the National Union of Local Government Employees and state chapters of the National Union of Pensioners have criticized and demanded accountability from State Governments over a lack of transparency as states’ debt to commercial banks rose to N2.2 trillion.
Data from the Central Bank of Nigeria’s (CBN) quarterly statistical bulletin showed that state and Local government’s debt, as of March 2023, had hit N2.21 trillion.
Further investigation reveals that the state government’s debt increased by N240 billion to close at N1.97 trillion.
Following the revelation from the CBN statistical bulletin, the workers’ unions have criticized the state governments over the rising debt and demanded accountability for using these funds, especially as wages have stagnated with the cost of living getting worse.
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In a conversation with PUNCH newspaper, the associations complained bitterly, accusing the governments of not trying to improve workers’ and pensioners’ welfare and living standards through the loans obtained from commercial banks.
Meanwhile, The PUNCH further observed that borrowing by the state governments from banks was about 40.33 per cent of the N5.48 trillion in sub-national debt.
Igbokwe Chukwuma, the Chairman of the Association of Senior Civil Servants of Nigeria, Enugu State Chapter, said such borrowing did not translate to better welfare for workers.
He said, “That comes as a surprise to me. There is no evidence that such funds were used to pay the arrears of workers. States like Abia, Plateau, Benue, etc., are still in arrears of salaries ranging from three to nine months.
“Except the states are still at the preparation stage to use such funds to pay salary arrears, but we are not aware of any arrangements or pronouncements to that effect.”
Bunmi Ogunkolade, the Head of Information of the National Union of Pensioners, who spoke with PUNCH, also backed up Chukwuma. Ogunkolade criticised the governors for poor management, saying the loans had yet to translate into a better life for residents, workers, and pensioners.
She said, “Can anyone of them come out plain to let us know the liabilities they met and the ones they offset? Some states have been doing well; we have released their lists in the past and those of conditions that could be doing better, like the immediate past governors of Benue and Abia. Most of these states have yet to pay pension gratuities since 2010. So if someone borrows and is not disclosing what it is for, that is daylight robbery. They often claim they are funding infrastructures.
“The N30,000 minimum wage has been approved for over six years, yet only about 18 states are paying that rate. Some states have yet to even deliberate on this, and they are going about borrowing money. These facts need to be exposed. Let the CBN always notify the public whenever these states borrow. Let everyone know. We can’t continue like this; we can’t continue complaining while the same thing continues.
“On our own as NUP, we will continue using every opportunity to discuss these issues. We will address a press conference and talk about these issues.”
Hakeem Ambali, the National President of NULGE, said, “It is evident that local governments have not benefited from these loans.”
An economist, Paul Alaje, bittered about the extent to which state governments wasted money and stressed the need for the funds to be investigated appropriately.
He said, “Debts are like a burden, especially when the money collected is not spent on capital expenditures or projects that can create revenue for the government in the future. Most of the governors-elect have a lot of challenges because more than two-thirds of the states take allocations from Abuja and can barely pay salaries. As the value of the naira falls, it worsens for state governments, especially those whose predecessors have borrowed money on their behalf.”
