The Delta Chairman of the Association of Local Governments of Nigeria, Victor Ebonka, has said that local councils in the state have secured a N40 billion loan to settle pension arrears owed retirees from 2016 to date.
Ebonka also explained that contrary to insinuations, the loan was secured by the LGCs, not the State Government.
The ALGON Chairman made the clarification while speaking with newsmen on Monday in Asaba after a meeting of the state government and LGAs Joint Account Allocation Committee.
He said: “The state government did not borrow N40 billion as reported in some quarters.
“The only role played by the state government was to give approval and forward the same to the State Assembly for ratification.
“So, it is exclusively the Local Government Councils that are borrowing this money.”
According to Ebonka, the LGCs are by law expected to get the approval of the State Government and the ratification of the State Assembly before securing any loan.
He said: “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 90 per cent of the accrued rights from this money, all of the monies will be paid directly to the pensioners.”
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Ebonka said that the pensioners include primary school teachers and other retired local government workers.
According to him, the retirees were not paid their entitlements over the years due to error in their enrollment into the state contributory pension scheme.
He added: “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 shortcoming, 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.”
Ebonka however said in spite of the interventions by the state government, it had been difficult to clear the outstanding arrears.
He said: “This made the immediate past administration to set up a committee consisting 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 offer us N40 billion out of the N51 billion we are indebted to the pensioners.”
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