The insistence by the Federal Government to deduct at source, about N35 billion, bailout and other loans owed by states may see some of them not paying workers’ salaries till next year.
The Federal Government made funds available as bailouts to 29 of the 36 states, late last year and part of this year, to offset salary arrears, but deducting it directly from the Federation Accounts Allocation is now generating bad blood.
While the states are asking for more time, the government at the centre is arguing that the deficit in the 2016 budget, makes it impossible accepting further delay.
A source said it is more disturbing as eight of the affected states will have their workers’ salaries and pensions running for between six to seven months in arrears unsettled till next year.
It was learnt that some of the affected states including Osun, Bayelsa, Imo, Ekiti and Abia had separately initiated some moves to challenge a situation that will see them run into deficits after the deductions.
A specific instruction was said to have been issued by the Presidency to the Debt Management Office, in conjunction with the Ministry of Finance, to ensure that the deductions are carried out from the month of April.
Thus, Osun, with N2.391 billion allocation is to bear a deduction of N2.030 billion, leaving it with about N361 million, while Bayelsa will have a total deduction of N3.207 billion out of an allocation of N4.812 billion.
Others are: Cross River with a deduction of N1.405 billion out of its N2.510billion allocation; Ogun, N1.185 billion from N2.346 billion; Plateau, N1.248 from N2.562 billion and Ekiti is to pay N1.067 billion out of N2. 334 billion within the period under review.
Among other debts to be deducted are those owed AMCON, commercial Agric credit scheme, the bond issuance programme and other contractual obligations.
Only seven states and the Federal Capital Territory have no deductions for bailout and they are: Akwa Ibom, Anambra, Jigawa, Kogi, Lagos, Rivers, Yobe, but they have other statutory commitments to pay for.
By Emma Eke …
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