Monitoring the bailout funds

THE present government under President Muhammadu Buhari came into office at a time when many states in the country were experiencing serious financial problems to such an extent that many of them could not pay the salaries of their workers for many months. The workers were becoming restive and the new government took a decision to offer the states loans through the Central Bank of Nigeria (CBN), in addition to substantial sharing of funds accruing from dividends paid to the government.
About 27 states were reported to have benefited from the bailout funds, with the expectation that the funds would be used to offset salary arrears in the respective states. While there were comments as to the propriety or otherwise of using loans with a repayable period of twenty years to pay workers salaries by the states, the overriding concern was the need to ensure that workers were paid until more structural steps would be taken to address the shortfalls being experienced by the states.
Not many people could fault the Federal Government’s concern with prioritising the welfare and living conditions of workers in the different states with the expectation that the bailout funds would help the states to clear the backlog of salaries. It is therefore surprising that many months after the announcement of the offer of the bailout by the Federal Government, many states are still to pay their workers, while the agony of unpaid salaries continues to characterise life in such states. And this is not just with respect to salaries for new months, as workers in some states are still complaining about the non-payment of the backlog of salaries.
Evidently the processes of the utilisation of the bailout funds have to be looked into in order to come to terms with how the states have expended the funds. The President of the Nigerian Labour Congress (NLC), Comrade Ayuba Wabba, has accused many state governors of diverting the bailout funds to other ends. Indeed, there are accusations that some state governments have deliberately kept the bailout funds in interest-bearing accounts in banks in order to generate some further funds instead of using the funds to quickly settle the salary arrears. And in all these, the state governments have been stingy with reactions and explanations, preferring to keep silent, leaving workers to continue to agitate for the payment of their salary arrears.
The only exception perhaps is the Kogi State government which has come out to state that it has not yet received the bailout funds from the CBN. Given that the Federal Government announced the release of the bailout funds to the states more than two months ago, it is surprising that Kogi State has not received its share since then. The CBN has to quickly come out to explain why this is so, especially since no other state has complained of not receiving the funds. We hope there is nothing untoward responsible for this delay.
Furthermore, the CBN should be interested in how the funds already released to the states have been utilised given that it has the structure and wherewithal to monitor such utilisation. It would also be important that security and investigative agencies are involved to bring out the truth about the expenditure of the bailout funds. It would not be enough for the Federal Government to just release the bailout funds to the states and not be concerned about its utilisation. In any case, the reason the Federal Government intervened with the bailout was because of the negative effect of the persistent non-payment of workers’ salaries by the states on the national economy and we would think that the Federal Government would thus want to ensure that the objective of the bailout is met.
Without advocating the Federal Government becoming a supervisor for state governments, it is still important to realise that the bailout is some sort of loan from the Federal Government to the state governments and it is not unusual for lenders to monitor how borrowings are utilised in order to ensure that borrowers keep to the borrowing terms. If the state governments were therefore given the bailout on the understanding that it would be used to offset salary arrears, it should be the concern of the Federal Government that it is utilised as planned. Fortunately this is a government that has promised transparency and accountability in the running of government such that it should also nudge the state governments along that line, especially in this instance where funds from the Federal Government are involved.
It should be made clear to the state governments that in the spirit of the new positive change envisioned for the country, they have to be transparent and above board in their utilisation of the bailout funds and that all Nigerians would hold them accountable for such utilisation even as the investigative agencies would be fully monitoring the disbursement.