By Juliet Ezeh
A sharp rise in internally generated revenue and economic expansion has enabled the Ogun State Government to clear long-standing pension and gratuity arrears, marking a major fiscal turnaround for the state.
At a media parley organised by the Ministry of Budget and Planning, the Economic Adviser and Commissioner for Finance, Dapo Okubadejo, disclosed that the administration has significantly reduced inherited liabilities tied to the Defined Benefits Scheme while maintaining consistent monthly pension payments.
According to the commissioner, annual pension payments have risen from ₦6.7 billion in 2019 to ₦20 billion in 2025, with projections suggesting the figure could double by 2029. Between 2019 and July 2, 2025, the state disbursed ₦93.26 billion under the Defined Benefits Scheme and ₦94.78 billion to local government pensioners.
Beyond regular payments, the government has also cleared ₦23.3 billion in gratuities owed to retirees who left service between 2012 and 2020. In addition, ₦32.8 billion in outstanding gratuities inherited from previous administrations has been paid to local government retirees.
Officials attribute the improved capacity to settle obligations to strong revenue growth and broader economic gains. Internally Generated Revenue has expanded from ₦50 billion in 2019 to ₦240 billion in 2025, with projections indicating it could reach ₦512 billion this year.
The state’s overall economic output has also recorded remarkable growth, rising from ₦3.5 trillion in 2019 to ₦18.96 trillion in 2026. Meanwhile, the 2026 budget increased to ₦1.668 trillion from ₦1.054 trillion in 2025, reflecting expanded fiscal space.
While most legacy arrears have now been addressed, over 300 workers who retired in July 2025 are currently receiving six-month palliative payments pending the completion of their pension documentation.
The commissioner assured that remaining obligations would be settled progressively as revenue performance continues to strengthen, signalling what officials describe as a shift from backlog management to long-term fiscal sustainability.
The development positions Ogun as one of the subnational governments leveraging revenue reforms and economic growth to stabilise public finances and restore confidence among retirees.
Juliet Ezeh is the founder and chief reporter at Westbridge Reporters with over 7 years of experience in journalism. She covers crime, industry, policy, and social developments, delivering timely and accurate reporting.