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Inflation erodes entitlements of Nigeria Airways' retirees



The late releases of $74 million to pay retirees of defunct Nigeria Airways  after 15 years has eroded the value of the money.
 
Stakeholders have expressed diverse reactions to the late release of the money.
 
The experts posited that the inflation rate in 2018 is higher than that of 2003 when their pension was supposed to have been paid.
 
The Minister of Finance , Mrs Zainab Ahmed, on Sept. 24 announced that the Federal government had approved N22.68 billion for the payment of the retirees
 
Ahmed announced that President Muhammadu Buhari approved the fund as part pension payment for the retirees.
 
She explained that the total retirement benefits due to the ex-workers of the former national carrier, based on their submission, amounted to $255 million.
 
The airline which started operations in August 1958, got liquidated by former President Olusegun Obasanjo’s administration in May 2003 with the workers unpaid.
 
“The retirees according to the pension administration in the country fell under Defined Benefit Scheme (DBS) and managed by Pension Transitional Arrangement Directorate (PTAD)
 
A former director, Budgetary Department, Central Bank of Nigeria (CBN), Dr Titus Okunronmu, said the inflation rate was 2.28 per cent in 2003 when the National Carrier got liquidated.
 
He said the inflation rose to 2.66 per cent in 2004, 3.39 per cent in 2005, till it hits 11.23 per cent in Aug. 2018.
 
“2.66 to 11.23 per cent is almost six per cent increase, meaning the prices of goods and commodities’ shot up 6 times, the fund has lost its real value.
 
“The money cannot buy the same basket of goods it could buy in 2003 when they retired , the purchasing power has dropped .” he said.
 
However, a request to the federal government to pay the accrued benefits according to inflation rate would be injurious, as the government is in crisis itself.
 
“In the 2018 budget, the government budgeted a high deficit, so inflation is inevitable.
 
” Also, if a country is financing a deficit with money borrowed from banking sector it would be more inflationary.” he stressed
 
Okunronmu, however, commended President Mohammadu Buhari for releasing the benefits to the retirees of defunct National Carrier.
 
Comrade Joseph Dele, Chairman, Nigeria Union o Federal Pensioners (NFP),l Lagos branch, posited that the payment is a welcome development.
 
He said ” Though, NUP branch felt bad that the Federal government was just releasing the money after 15 years.
 
He said some of the pensioners would have died.
 
“I also believe that it is because politics is around the corner the Federal government is settling its debts gradually.”
 
Comrade Rasaq Ogbe, Chairman, Federal Airport Authority of Nigeria (FAAN) retirees, however, commended the presidency on pension benefits though struggle to retrieve the arrears kicked off long time ago.
 
“The payment will elongate the retirees’ life, no matter how small .” he said.
 
The chairman of NAL retirees, Comrade Sam Nzene, commenting on the issue said the retirees are happy that the Federal government gave respite, though, after 15 years.
 
“When the money is paid, we will use it to put our lives together, however, we are not totally happy that the money was over delayed and incomplete. ” he said.
 
Nzene explained that the total pension benefits due to retirees of  NAL is N78 billion.
 
“However, N45 billion was approved by the Federal Executive Council (FEC), in September 2017, now President approved N22.66 billion out of N45 billion approved by FEC.
 
“We appealed to the President to release the pending benefits for us before the 2019 general elections.”  he said