The Association of Local Governments of Nigeria (ALGON), Delta State chapter, on Monday, clarified reports published in a section of the media concerning the N40 billion loan obtained to settle the outstanding pension rights owed to primary school and local government pensioners in the State.
The State ALGON Chairman, Hon. Victor Ebonka, provided the clarification following a meeting of the Joint Account Allocation Committee (JAAC) in Asaba, emphasizing that it was not the State Government that was responsible for borrowing the funds.
Accompanied by his colleagues, Ebonka explained that it was the mandated responsibility of Local Governments to pay pensions to their retirees, including those from the Local Education Authority (primary school retirees).
He attributed the problem to an error in the enrollment process of the workers into the contributory pension scheme.
In Ebonka’s words, “In this country, constitutionally, we have three tiers of government: the Federal, the State, and the Local Governments. We each have separate responsibilities.”
He further stated, “It is our constitutional duty to pay the salaries of Local Government staff and primary school teachers. We are aware of the persistent issues concerning the pension benefits of Local Government staff and primary school teachers.”
“This problem was inherited from the two previous administrations and is related to an error in the enrollment process for the contributory pension scheme.”
“Due to these shortcomings, we have accumulated unpaid pension rights from 2016 until now. The past administration initiated measures to settle the debt by providing several grants amounting to approximately N5 billion and increasing the statutory contribution from N200 million to N500 million per month.”
“Despite these grants from the State Government, we have been unable to clear the outstanding arrears. Consequently, the immediate past administration established a Committee comprising myself as the ALGON Chairman, the Head of Service, and other stakeholders.”
“The Committee attempted to secure a facility from the bond market but was unsuccessful due to the high cost of funds. Therefore, we approached a commercial bank, and we can confirm that Zenith Bank has agreed to grant us a loan of N40 billion out of the N51 billion owed to the pensioners.”
Ebonka clarified that the State Government did not borrow N40 billion as erroneously reported in certain quarters. He emphasized that the State Government’s sole role was to provide approval and forward it to the State Assembly for ratification.
“So, it is exclusively the Local Government Councils that are borrowing this money. According to the law, we require the approval of the State Government and the ratification of the State Assembly, and we sought and obtained both from the Governor and the State House of Assembly.”
“Consequently, the pensioners will soon receive their dues. We also want to emphasize that not a single penny from the N40 billion will go into the coffers of the Local Governments.”
“We will use this money to cover approximately ninety percent of the outstanding pension rights, and all funds will be directly paid to the pensioners,” he concluded.
Regarding environmental sanitation in the Council areas, the ALGON boss appealed to residents to comply with relevant laws and announced the upcoming establishment of mobile courts to prosecute offenders.