The Association of Local Governments of Nigeria (ALGON), Delta State chapter, has provided clarification on reports circulating in certain media outlets regarding a borrowed sum of N40 billion intended to pay the accrued rights owed to primary school and local government pensioners in the state.
During a press conference held in Asaba, Hon. Victor Ebonka, the State ALGON Chairman, emphasized that it was not the State Government that borrowed the funds. Flanked by his colleagues, Ebonka stated that the responsibility to pay pensions to retirees, including primary school retirees under the Local Education Authority, falls under the jurisdiction of the Local Governments as a statutory duty.
Ebonka attributed the problem to an error in the enrollment of workers into the contributory pension scheme. He clarified, “In this country, constitutionally, we have three tiers of government: the Federal, the State, and the Local Governments. We all have separate responsibilities. It is our constitutional responsibility to pay the Local Government staff and primary school teachers’ salaries.”
He acknowledged the long-standing issues concerning the pension benefits of Local Government staff and primary school teachers, inherited from previous administrations. These issues stem from errors in the enrollment process into the contributory pension scheme. The outstanding arrears date back to 2016.
Efforts were made by the past administration to address the debt, including grants totaling approximately N5 billion and an increase in statutory contributions. However, the outstanding arrears could not be fully cleared despite these measures. Consequently, a committee was established, comprising the ALGON Chairman, the Head of Service, and other stakeholders, to explore options for resolving the issue.
The committee sought to obtain a facility from the bond market but was unsuccessful due to the high cost of funds. As an alternative, they approached a commercial bank, Zenith Bank, which agreed to provide a facility of N40 billion out of the N51 billion owed to the pensioners.
Ebonka clarified that the State Government did not borrow N40 billion, as reported in some quarters. The role of the State Government was limited to granting approval and forwarding the request to the State Assembly for ratification. He emphasized that it is solely the Local Government Councils that are responsible for borrowing this money, in accordance with the necessary approvals and ratification processes.
Ebonka assured that the entire N40 billion would be used to cover approximately 90% of the accrued rights owed to pensioners, with the funds being disbursed directly to the pensioners. He emphasized that none of the money would go into the coffers of the Local Governments.
He concluded by expressing optimism that pensioners would soon receive their payments, bringing relief to their long-standing concerns.