WHAT THEY DIDN’T WANT YOU TO KNOW
<> Under former Governor Ayodele Fayose’s administration of four solid years (2014 to 2018), the total gratuity paid was N431,589,786.11 to 155 beneficiaries only.
<> That the Governor Kayode Fayemi’s 21 months old administration had paid a total sum of 1,244,824,322.59 to 500 beneficiaries so far.
WHAT THEY WANT YOU TO BELIEVE
▪︎That Ekiti State Government is about to take commercial loan in order to meet outstanding gratuities and pensions liabilities, on the condition that pensioners in the State will be required to forfeit 15% of their entitlements.
WHAT YOU SHOULD KNOW
■ Dr. Kayode Fayemi inherited substantial gratuity- related liabilities from the past administration with outstanding now exceeding N14.5b. Because of his concern and care for our senior citizens, clearing the backlog of the pension liabilities has been one of his priorities.
■Dr Fayemi diligently set aside the sum of N100m per month to pay outstanding gratuities, while also ensuring monthly pensions were paid at the same time as salaries, a clear departure from the previous administration.
■ The fiscal impact of COVID-19 has significantly hampered the State’s resources, therefore the State has not been able to meet the N100 million set aside for gratuity obligations for a few months now. However, pensions are still being paid monthly.
■ Recognising the delicate challenges the State would face in off-setting this liability (balancing the agony of the owed pensioners against lean resources available), the Governor had sought a creative means of paying off these debts, in such a manner that the State is able to achieve other objectives and provide dividends of democracy to all its citizens.
■ This led Ekiti State Government to seek the advice of reputable financial institutions, to devise a means of resolving the problem. The scheme under consideration is one in which the State Government will issue Promissory Notes (a written certificate acknowledging the liability) to pensioners who indicate interest.
The value of these Notes (indicating the gratuity and pension arrears owed) will be paid by the State Government at intervals of 12, 18 and 24 months. This helps the State Government to adequately plan its cash flow to meet the obligations at agreed intervals.
■ The Notes, being a written acknowledgement of obligations by the state, can be discounted voluntarily with the partner financial institution. This will enable the holders of the Notes (Pensioners) receive immediate cash (but a slightly lower amount) for their Notes, while the discounting institution will eventually receive payment from the State Government at the end of the relevant period (i.e. 12, 18 or 24 months, as earlier stated).
■ The financial institution is deploying its own funds to make upfront payments on discounted notes pending when it is reimbursed by the EKSG, such arrangements will have to reflect the cost of funds to them hence the discounting factor.
■ This is a voluntary arrangement with willing pensioners, since the financial institution will only discount the notes of the noteholders that are willing to get cash ahead of the payment date on the face of the promissory notes.
■ As can be seen from the above, only Pensioners who EXPRESS interest in the Scheme will receive the Notes. In addition, the Pensioners will be at liberty to discount the Notes to receive cash as quickly as possible; those who choose to wait until the expiration of the tenor of the Notes will receive their monies in full.
■ Ekiti State Government will NOT be taking a commercial loan for the purpose of paying outstanding gratuities. The Scheme has been designed as a creative means to ensure that the State is able to meet its obligations in a phased manner, such that basic activities in the cycle of governance are not threatened, while the pains of our pensioners are also eased gradually.
■ Disregard any rumour about Ekiti State government taking loans to off set outstanding pensions and gratuities.
Office of the Hon Commissioner for Finance