Thursday, 17 May 2012

Nigeria: FG faces major cash squeeze – civil servants unpaid

The Federal Government appears to be facing a cash squeeze amid revelations it has not paid some civil servants their monthly wages and that the National Youth Service Corps (NYSC) members have been owed allowances since March. It has also been revealed that the monthly Federation Account Allocation Committee (FAAC) meeting has been stalled because there is no cash to disburse to the government tiers funded by the Federation Account.

FAAC meetings are held every month to determine the distribution of allocations from the proceeds to the Federation Account to the Federal, State and Local Governments. Minister for Youths Bolaji Abdullahi sought to explain the reason for the delay in the payment of federal civil staff wages and NYSC allowances by stating that it was due to some glitches in the salary payment software of the Federal Civil Service.

Sources have disclosed, however, that the cash crunch has been developing for some time because the government has been struggling with liquidity issues since November 2011. It has been revealed that December salaries, which are usually paid before the Christmas holiday, were not paid till the middle of January 2012.

It was also stated that some of the Federal Government's Ministries, Departments and Agencies were only able to pay March salaries in

April because they rely on warrants being cash-backed. Apparently, no employees have yet been paid their April salaries. It has also been disclosed that the FAAC allocations for March were only settled in part and that, in some cases, only about 30% of what was owned was paid.

For more news and expert analysis about Nigeria, please see Nigeria Focus and Nigeria Politics & Security.

© 2012 Menas Associates

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