Ogun State Government Clears 8-Year Pension Backlog
The Ogun State Government has announced the complete clearance of pension and gratuity arrears owed to workers who retired between 2012 and 2020, effectively closing an eight-year backlog that had accumulated under previous administrations.
Finance Commissioner Details Payment Achievement
During a media briefing organized by the Ogun State Ministry of Budget and Planning on Tuesday, February 17, Economic Adviser and Commissioner for Finance Dapo Okubadejo revealed that the state had paid N23.3 billion in gratuities to retirees from the 2012-2020 period. He explained that these arrears were connected to the Defined Benefits Scheme, which the current administration inherited but has consistently maintained pension payments without default since taking office.
"Since the inception of this administration, we have not missed a single month of pension payment. What we inherited were arrears tied to the Defined Benefits Scheme," Okubadejo stated emphatically.
Significant Growth in Pension Obligations
The finance commissioner disclosed that annual pension obligations have increased dramatically in recent years, rising from N6.7 billion in 2019 to N20 billion in 2025. Projections indicate this figure could reach N40 billion by 2029 as the retiree population continues to grow.
Between 2019 and July 2025, the state disbursed N93.26 billion in pensions under the Defined Benefits Scheme and an additional N94.78 billion to local government pensioners. Okubadejo also noted that N32.8 billion in outstanding gratuities for local government retirees was inherited by the current administration.
Additional Support for Recent Retirees
In a show of continued commitment to retiree welfare, the commissioner revealed that over 300 workers who retired in July 2025 are currently receiving six-month palliatives while their pension documentation is being finalized. This interim support ensures financial stability during the transition period.
Major Fiscal Growth and Budget Expansion
Alongside the pension clearance announcement, Okubadejo highlighted substantial fiscal growth for Ogun State. The 2026 budget has increased from N1.054 trillion in 2025 to N1.668 trillion, representing significant expansion in government spending capacity.
The state's economy has grown remarkably from N3.5 trillion in 2019 to N18.96 trillion in 2026, while Internally Generated Revenue has surged from N50 billion to N240 billion within the same period. This revenue growth has enabled the government to address long-standing financial obligations while funding development projects.
Pension Reform and Budget Performance
Okubadejo described the newly approved Additional Pension Benefits as the first of its kind in Nigeria, with plans to pursue amendments to the state's pension law to formally integrate the scheme. This innovative approach aims to provide enhanced security for retirees beyond basic pension payments.
Commissioner for Budget and Planning Olaolu Olabimtan added that the 2026 budget reflects sustained reforms and an 85 percent execution rate recorded in 2024, demonstrating improved fiscal management and implementation efficiency.
Broader Development Context
Other commissioners at the briefing highlighted progress across multiple sectors under Governor Dapo Abiodun's administration, including:
- Substantial improvements in road infrastructure
- Enhanced healthcare facilities and services
- Educational development initiatives
- Advancement of rail projects
- Expansion of housing programs
This comprehensive approach to governance has positioned Ogun State as one of Nigeria's fastest-growing economies while addressing historical obligations to public sector workers.
