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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