Paris Club Refund and Ugwuanyi as Shining Exemplar

Few weeks ago, there was a groundswell of indignation over a press statement issued by the Governors’ Forum indicating that its members intend to use the second tranche of the Paris Club debt refund to states to pay outstanding arrears of salaries and pensions. The gripe was that the performance of a statutory obligation has seemingly been made contingent on the release of the refund. Even if unstated, you could imagine many asking, “what have they done with the initial installment?” – a question reinforced by the erroneous impression the payments were simply a product of the Federal Government’s magnanimity, which they certainly are not. The payments are nothing more than refunds for excess deductions from monthly allocations to state drawn at source over the years, a point clearly defined by Nigeria’s finance minister, Mrs. Kemi Adeosun. According to her, the deductions were made to service external debts. “These debt service deductions are in respect of the Paris Club, London Club and multilateral debts of the federal government and states. While Nigeria reached a final agreement for debt relief with the Paris Club in October 2005, some states had already been overcharged.”

So, what exactly have governors done with the initial reimbursement from the Paris Club refund? It’s difficult to say how each state had spent their share of the refund, but in Enugu State they were scrupulously deployed towards offsetting outstanding arrears of salaries and pension of local government workers and retirees, a gesture that has earned Governor Ifeanyi Ugwuanyi a huge acclaim from workers and leaders of councils in the state. “It is gratifying that the councils received the entire N3.9b of our Paris Club refund to settle outstanding salaries and pension,” the state’s chair of the Association of Local Government of Nigeria (ALGON), Mr. Cornelius Nnaji, announced at a seminar organised by the Trade Union Congress in Enugu. The fact the federal government had actually recommended that 50 percent of the funds be spent on wage obligations to workers and retirees is a point that underscores the significance of the Enugu State governor’s decision. With media reports alleging a breach of the presumed understanding as apparent in the arrears of as yet unpaid salaries and pension in some states, Ugwuanyi’s action stands as a true exemplar in accountability in public expenditure. The governor’s action was no appeal to populism. He had earlier set a very high watermark in accountability with the handling of the federal government bailout funds approved last year to help states solve pressing recurrent obligations for which many states (with exception of a few including Enugu) had been in default for months. Such transparency and prudence drew commendation from members of the Senate Committee on State and Local Government Administration who described Governor Ugwuanyi as the most outstanding governor in the utilization of the bailout funds. “We have gone through the books,” said the committee’s chairman, Senator Abdullahi Gumel, after rounding off legislative oversight visit to Enugu State few months ago. “And as far as the bailout funds are concerned, everything is in order. In fact, Enugu State has even gone further because we haven’t seen this in any other states. We are not saying it because he was our colleague (Governor Ugwuanyi was a three-time member of the House of Representatives); we are doing it because we have seen with our eyes. This is an innovation and we are reflecting it in our report. We are proud of him.” The commendation from the Senate committee is just one of several other plaudits the governor had earned for his remarkable governance record whose scale hardly reflects the fact that Enugu is among states that receive the least allocation from the federation account. Indeed, the positive socio-economic indices seen in Enugu State in the last two years which have been a particularly challenging one for Nigerian states, is testament to the tenacious vision of the governor. With the country’s economy severely buffeted by steep decline in oil price, revenue accruing to states from the federal purse has been anything but cheering. The unfailing resolve to put the welfare of workers above everything else has brought tremendous goodwill to the governor. Even in the absence of industrial dispute, the relationship between labour unions and governments – either at the state or federal level – is seldom a rosy one. Such an ambivalent situation can only be further strained by default in payment of wages, as evident in some states where civil servants and pensioners have either been on strike or are threatening to do so. The contrasting scenarios that played out last Workers Day across the states serves as an illustrative point. Whereas workers in some states shunned the traditional May Day rallies and railed against their employers over unpaid arrears of salaries and pensions, it was a festive mood in Enugu with workers conferring an award on Governor Ugwuanyi as the “Most Labour-Friendly Governor in the History of Enugu”. But the commitment to the payment of civil servants and retirees’ wages has even deeper socio-economic roots. The governor understands that being a largely civil service state and the fact that each worker often has a number of dependants, salaries can actually serve as economic spur and when delayed or unpaid could have some catastrophic consequences. The governor alluded to this in his speech during the May Day celebrations in the state.

“Enugu State is peaceful and secure. We are, against all odds, paying salaries as at when due; we are enjoying industrial harmony and we are carrying out massive infrastructural and other development in all parts of the state for the benefit of our people,” he told the jubilant crowd. So what Governor Ugwuanyi seeks to enthrone is a vision that is enduring, one that ushers in a new work ethic where workers understand that employment in the public service comes with a commensurate degree of responsibilities. “As we celebrate this May Day with workers in Enugu State,” he enjoined the workers, “we urge you to remain true to your obligations and to approach your duties with greater zeal and commitment so that collectively, we can achieve the higher levels of efficiency and productivity that will fast track the socio-economic development of our dear state.” At the heart of all this is the governor’s conviction that public officers should be accountable to the public and always demonstrate actions which accord with the highest standards of good governance. The transparency that underlined the deployment of the bailout fund and Paris Club refund is reflective of this ideal, and an assurance that there is a sufficient will to be so inclined as states await the second tranche of federal government’s refund of excess deductions from statutory allocations to states.