Abia state allocates N10bn to clear 20-year gratuity backlog for retirees

The Abia State Government has earmarked over N10 billion in its 2026 budget to begin clearing more than two decades of unpaid gratuities owed to retired workers, signalling a renewed push to resolve long-standing labour liabilities.

Governor Alex Otti disclosed the plan during the 2026 Workers’ Day celebration in Umuahia, where he was represented by his deputy, Ikechukwu Emetu. The announcement comes amid ongoing scrutiny of the state’s handling of pension obligations inherited from previous administrations.

According to the governor, disbursement will commence in the coming weeks for verified beneficiaries, with modalities for phased payments already finalised. Verification of outstanding claims, he added, is still ongoing to ensure accuracy and transparency in the process.

The move marks a significant policy shift following controversy in 2025 over a Memorandum of Agreement between the state and the Nigeria Union of Pensioners. The agreement required retirees to forfeit a portion of their gratuities in exchange for the clearance of pension arrears, a decision that drew widespread criticism from labour groups and the public.

At the event, Otti acknowledged the role of workers in shaping the state’s economy, describing them as central to Abia’s growth and development. However, labour leaders used the platform to highlight broader concerns.

Chairman of the Nigeria Labour Congress in the state, Ogbonnaya Okoro, warned that worsening insecurity and economic hardship are eroding workers’ welfare across the country, describing the situation as increasingly dire.

The gratuity payment plan is part of a wider effort by the administration to address inherited financial obligations. Otti previously revealed that his government inherited pension arrears estimated at N30 billion, alongside significant unpaid gratuities.

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In recent months, the state has taken additional steps to restructure its finances, including plans to settle salary arrears owed to former local government councillors and the abolition of pension benefits for ex-governors and their deputies.

Officials say these reforms are aimed at freeing up fiscal space, restoring trust in public finance management, and prioritising the welfare of workers and retirees who have long awaited compensation.