FG Ends Bailout Payments to States, Urges Financial Independence
The Federal Government has announced it will no longer cover the unpaid liabilities of state governments, marking the end of bailout payments for salaries, pensions, and other financial obligations.
Accountant General of the Federation (AGoF), Dr. Oluwatoyin Madein, disclosed this policy shift during a visit to the Federal Pay Office in Kano on Wednesday. She urged states to strengthen their internal revenue generation and block financial leakages, as the Federal Government will no longer bear the burden of their debts.
“This will ensure that state governments receive their revenues as and when due, and the Federal Government will not be burdened by unpaid liabilities,” she said in a statement by Bawa Mokwa, Director of Press and Public Relations at the Accountant General’s Office.
For years, the Federal Government provided financial assistance to states struggling to pay workers’ salaries, pensions, and contractor debts. Between 2015 and 2023, 31 states reportedly owed the Central Bank of Nigeria (CBN) a total of N339.9 billion in salary bailout loans.The controversial Paris Club refund was another form of federal intervention.
Madein emphasized the need for financial discipline and reform within government agencies, directing Federal Pay Officers (FPOs) to ensure compliance with public financial management initiatives.
In a move towards modernizing financial operations, Madein revealed that her office has begun implementing an Enterprise Concept Management System to fully digitize financial activities, including those of FPOs.
“The use of manual processes in carrying out financial activities will soon be over. The use of modern technology in the accounting profession is key and vital,” she stated.
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She further encouraged FPOs to embrace a performance management system that will replace the traditional Annual Performance Evaluation Report (APER).
“This system will involve all staff members and serve as a tool for measuring management performance,” Madein added, urging officers to become proficient in digital financial tools.
Aminu Umar, Chairman of the Committee of FPOs, expressed appreciation for Madein’s visit, describing it as a “pace-setter for the incoming Accountant General.”
With this policy shift, state governments will now bear full responsibility for managing their financial obligations, signaling a new era of fiscal accountability and self-sufficiency.
