Why We Took N40bn Loan For Pension, Delta ALGON Explains

The Association of Local Governments of Nigeria (ALGON), Delta State chapter, on Monday, clarified reports published in a section of the media as regards the N40 billion borrowed to pay accrued rights owed primary school and local government pensioners in the State.

The State ALGON Chairman, Hon. Victor Ebonka, who gave the clarification after a meeting of the Joint Account Allocation Committee (JAAC) in Asaba, said it was not the State Government that was borrowing the funds.

Flanked by his colleagues, Ebonka said it was the statutory duty of Local Governments to pay pensions to its retirees as well as Local Education Authority (primary school retirees).

He said the problem arose due to error in the enrollment of the workers into the contributory pension scheme.

According to Ebonka, “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.

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“And we are not unmindful of the lingering problems that we have with regards to the pension benefits of the Local Government staff and that of the primary school teachers.

“This problem was inherited from the two previous administrations and it has to do with an error in the enrollment into the contributory pension scheme.

“And for this short comings, we have found ourselves owing their accrued rights from 2016 to date. The past administration set a machinery in motion and has tried to ensure that the debt is liquidated by giving several grants totaling about N5 billion and increased statutory contribution from N200 million a month to N500 million.

“Despite all these grants from the State Government, we have not been able to clear the outstanding arrears and this made the immediate past administration to set up a Committee comprising of myself the ALGON Chairman, the Head of Service and other stakeholders.

“The Committee went to the bond market to get a facility but was not successful because the cost of funds was quite expensive. So we approached the commercial bank to get the facility and we can say that Zenith Bank has agreed to afford us N40 billion out of the N51 billion indebted to the pensioners”.

He said the State Government did not borrow N40 billion as reported in some quarters, adding that the only role played by the State Government was to give approval and forward same to the State Assembly for ratification.

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“So it is exclusively the Local Government Councils that are borrowing this money. You know that by law, we need the approval of the State Government and the ratification of the State Assembly and that was sort for and it was granted by the Governor and approved by the State House of Assembly.

“So any moment from now, the pensioners will smile home. We also want to state that no penny from the N40 billion is going to the coffers of the Local Governments.

“We are going to cover about ninety percent of the accrued rights from this money, all of the monies will be paid directly to the pensioners,” he said.

On environmental sanitation across the Council areas, the ALGON boss appealed to residents to abide by relevant laws, adding that mobile courts would soon be set up to try offenders.