from Africa in Transition

Nigeria’s President Moves to Pay Civil Service Salaries

July 9, 2015

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Sub-Saharan Africa

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Nigeria

Heads of State and Government

Budget, Debt, and Deficits

Reflecting a drop in government revenue caused by the fall in international petroleum prices, many Nigerian federal and state civil servants have not been paid their salaries, in some cases for up to ten months. To alleviate the hardship, President Muhammadu Buhari has approved what the Nigerian media calls a three-pronged relief package.

This package freshly distributes petroleum and liquefied natural gas revenue to the federal government and the states. According to the Nigerian media, the total amount is N804.7 billion (USD 4.05 billion). In addition, the Central Bank of Nigeria will offer financing in the range of N250 billion to N300 billion (USD  1.26 to 1.51 billion) to the states specifically to pay back salaries. The Debt Management Office of the federal government will also help the states restructure their commercial loans, which total an estimated N660 billion (USD 3.32 billion).

According to the Nigerian press, twelve of the thirty-six states owe their workers more than N110 billion (USD 550 million). They are: Osun, Rivers, Oyo, Ekiti, Kwara, Kogi, Ondo, Plateau, Benue, and Bauchi.

Civil service pay arrears is an old song in Nigeria, and contributes to poor morale and inefficiency. Here, the concern must be that the funds made available by this relief package are actually used to pay civil servants and are not diverted to other purposes by governors. Still, the Buhari-mandated package is a positive step forward.

More on:

Sub-Saharan Africa

Financial Markets

Nigeria

Heads of State and Government

Budget, Debt, and Deficits

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