Kwara Govt Explains Reason For FG’s N5b Bailout Loan

The Kwara State Government has shed light on its decision to take the Federal Government bailout loan of N5 billion.

According to a statement issued in Ilorin by the Senior Special Assistant on Media and Communications to the Kwara State Governor, Dr Muideen Akorede, the loan was requested for to pay accumulated arrears of salaries and allowances owed to primary school teachers and other local government employees.

It was further explained that the loan also covers arrears of pensions and gratuities owed to retired local government workers, some of which go back several years.

Akorede also disclosed in the statement that the “N5b loan, when received, will bring relief to local councils, their staff and retirees as federal allocations are currently inadequate to meet salary, pension and gratuity obligations at state and local government levels.”

According to the statement, a “breakdown of the N5b liability shows that as at July 2015, the total salary arrears for Local Government workers was N2, 012, 999, 522.40, while salary arrears for primary school teachers stood at N2, 143, 414, 338.55.

“Total LG Pension arrears stood at N523, 160, 259.38 while arrears for LG’s Statutory Contribution to Kwara State University (KWASU) is N70, 464, 259.89 Outstanding payments for sundry services was put at N267, 806, 538.40.”

Providing further clarification, the state government said it is clear from the figures that the N3.6b combined June and July allocation to the 16 local government councils was inadequate to meet current and outstanding salary and pension arrears not to talk of development projects.

“The N5b loan bailout will clear all outstanding arrears and provide the local government councils with affordable repayments so that they will continue to meet future salary, pension and project obligations,” the statement said.

It was further stressed that “the State Government does not interfere with local government council funds as all due allocations are released after statutory deductions for teachers’ salaries, pensions and gratuities, teaching service allowance, statutory contributions to KWASU, training, and sundry support services. It also stressed that bank charges and loan repayments are deducted at source by banks.

Meanwhile, the state government has hailed the “House of Assembly for its speedy approval of Governor Abdulfatah Ahmed’s request to convert the N5b arrears into a Federal Government bailout loan and expressed the optimism that the intervention will make salary and pension arrears at Local Councils an issue of the past.”

It said the government’s renewed IGR drive will augment any future shortfalls in allocations from the Federal Government and therefore solicited the support of all citizens and residents of the state to initiative’s success.