Subsidy Deductions Hit States Hard, Govs Owe Salaries, Workers Lament

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Subsidy Deductions Hit States Hard, Govs Owe Salaries, Workers Lament

State workers and pensioners on Sunday lamented they were carrying the burden of a cash crunch in the country with many state governments failing to ensure regular payment of salaries, gratuities and other entitlements.

Labour leaders, who spoke separately with our correspondents in Ekiti, Benue, Ogun, Ondo, Rivers, Abia, Ondo, Edo and Kano states, noted that pensioners were worst hit by the failure of governors to perform their responsibilities.

Findings by our correspondents showed that deductions by the Nigerian National Petroleum Company Limited from the Federation Account Allocation Committee had continued to deplete the funds being shared by the three tiers of government at FAAC meetings.

The NNPC had explained that its deductions from FAAC were due to the humongous subsidy spending it shouldered.

No FAAC remittance from NNPC in Q1, subsidy gulps N675.93bn – Reports

Since the beginning of the year, the NNPC has not been able to make remittances to the Federation Account due to its huge subsidy spending on petrol.

Figures obtained from the NNPC in Abuja showed that the oil firm spent N210.38bn, N219.78bn and N245.77bn as subsidies on petrol in January, February and March 2022 respectively, translating to N675.93bn during the three-month period.

On Wednesday, FAAC shared N725.57bn among the three tiers of government, as allocation for March 2022.

But instead of contributing to what was shared, the NNPC informed FAAC that it would deduct or recover N671.88bn from April 2022 proceed due for sharing at the May 2022 FAAC meeting.

The NNPC described the N671.88bn as value shortfall it incurred as it remained the sole importer of petrol into Nigeria and had been subsidising the commodity using billions of naira monthly.

The N725.57bn shared by the three tiers of government was from statutory revenue of N521.16bn and Value Added Tax of N204.4bn.

Investigations by The PUNCH showed that in most states, workers and pensioners were the ones bearing the brunt of subsidy deductions as states reneged on regular payment of salaries and gratuities.

Labour leaders in Benue State respectively lamented the plight of workers following the cash crunch affecting the state government.

Speaking to one of our correspondents on the phone, the state Chairman of the Nigeria Labour Congress, Godwin Anya, said that state and local government workers in the state were groaning due to staggered payment of salaries.