A Review of the Nigerian Energy Industry

FG moves against unhealthy economic fallouts of power asset sales

PHCN13 August 2013, Abuja – The federal government has further justified its decision to adopt a sequential process in the payment of statutory severance benefits accrued to employees of defunct state power firm, the Power Holding Company of Nigeria, PHCN.

According to the Minister of Power, Prof. Chinedu Nebo, who confirmed that the government through the Office of the Accountant General of the Federation (OAGF) has commenced payment of the accrued severance benefits to workers of PHCN in Abuja, the adoption of a batch-by-batch payment process was to amongst other things avoid possible unhealthy effects of the process on the economy.

Nebo in a telephone conversation with THISDAY, stated the payment process would be concluded within weeks albeit with on-the-process audit to ensure transparent and accountable payment to every legally recognised staff of PHCN.
The total severance package is approximately N384 billion, standing as full payment of all outstanding benefits that have been agreed on by both government and labour.

The minister noted government had taken care to avoid a repeat of the unhealthy economic fallouts from the “1974 Udoji Awards”, adding that possibilities of inflationary reactions from the severance payment had been taken into consideration, hence, the proactive batch-by-batch payment method.

“There is no way a once release of such amount of money will not impact on the economy. Government is careful not to ruffle the economy, we want to as much as possible avoid increase in inflationary rates and not to see a repeat of the 1974 Udoji award that is why we have decided to adopt the batch-by-batch payment.

We are also making sure that the process is been audited as we pay off the workers so that no one will be left out in the process, every worker that has been biometrically captured will be paid within weeks, the fund to take care of this is not in doubt,” Nebo said.
The “Udoji Award” was a decision made by the Yakubu Gowon’s federal government to award civil servants unprecedented salary increases in 1974/1975 following the recommendations made by a panel headed by Jerome Udoji.

It will be recalled that in September 1974, President Gowon accepted the report of the Jerome Oputa Udoji panel on public service organisation, management and remuneration but when the report became operational in January 1975, only the salary component of the report was implemented by the government who allegedly ignored it other components.

It was also reported that the commission made recommendations such as an increase in the salaries of public servants, civil servants training, a unified and integrated administrative structure, as well as elimination of waste and removal of inefficient departments and introduction of an efficient civil service on the basis of management by objective. It equally recommended the establishment of an Ombudsman in the country

Suffice is to add that when workers received the salary increment, Nigeria reportedly went into a celebratory mood, this thus, marked the beginning of acquisition of various household electronics and gadgets as well as non-stop weekend street parties.
Civil servants were seen spending lot of money on luxury goods considering their enormous cash reserves and lacked good financial management.

– Chineme Okafor, This Day

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