Looming Crisis over Unpaid Salaries

Fri, May 8, 2015
By publisher

BREAKING NEWS, Cover, Featured


As the new central government comes in on May 29, one of the crisis that is likely to get its attention is unpaid salaries and pensions which has been causing agitations in many states of the federation

By Olu Ojewale  |  May 18, 2015 @ 01:00 GMT  |

THE message is clear and unambiguous to everyone: Nigeria’s economy is seriously floundering. In the past few months, the media is awash with information that state governments have not paid their workers’ salaries, from one month to six months in some of the states. They all blame it on the economy and the dwindling revenue coming to the states from the federation Allocation Accounts Committee.

The reality of the whole scenario was made manifest on Tuesday, May 5, when Ngozi Okonjo-Iweala, minister of finance and coordinating minister for economy, informed the nation that the federal government had to borrow as much as N473 billion to fulfil its budgetary obligations, pay salaries and overheads. Okonjo-Iweala disclosed that the late passage of the budget was responsible as the N4.493 trillion approved budget for 2015 was yet to be signed by President Goodluck Jonathan.

The Senate passed the N4.493 trillion budget on Tuesday, April 28, after the House of Representatives had approved a lower budget of N4.425 trillion for the government. Nevertheless, the finance minister informed the nation that the drop in oil revenue, which began in 2014 and lasted up to the first quarter of this year, had impacted negatively on the gross federally collectible revenue. For instance, she said the country experienced 50 percent cut in revenue caused by drop in oil prices coupled with low revenue receipts from non-oil sources as most companies had yet to file in their tax returns in the first quarter of the year.


This, she said, forced the government to resort to borrowing the sum of N473billion out of the N882billion provided for borrowing in the 2015 budget, to enable the government to meet its financial obligations to its workforce.

As the economic outlook continues to look gloomy, the debtor states are also becoming agitated about the whole situation. Perhaps, fearing that there might be any form of restiveness among the civil servants in their respective states, the All Progressives Congress, APC, governors and governors-elect, on Tuesday, May 4, had a meeting with General Muhammadu Buhari, being the president-elect, on what the incoming administration could do to bail out states when he comes in May 29. They told Buhari that the economy was in a very bad shape, requiring his urgent attention and the need for them to ensure regular payment of workers’ salaries.  The governors met Buhari at the Defence House in Abuja, for more than one hour, urging him to do everything humanly possible to bail out the states.

Governor Rochas Okorocha of Imo State and chairman of the APC Governors Forum, APCGF, told reporters at the end of the meeting that they came to congratulate Buhari and also inform him about the challenges ahead in view of the steep in the economy and what could be done immediately so that government workers would no longer be owed salaries. “As it stands today, most states of the federation have not been able to pay salaries and even the federal government has not paid April salaries. That is very worrisome and by May and June, that will be cumulative of about three months and we wondered that with the huge expectations from Nigerians and people who voted us into power, we are hoping that the president-elect will do all the things that are humanly possible to bring about a bailout, not only on the part of the states, but also the federal government so that people can get their salaries and turn around the economy,” Okorocha said.


Buhari, who praised the governors for the visit, told them that he was aware of the high expectations from Nigerians. “I have started nervously to explain to people that Rome was not built in a day.” He, therefore, urged Nigerians to give the incoming government a chance to reposition the economy and be in a position to pay salaries. Buhari said while security remained first on his agenda because if there was no security, there would be no development, when he assumed office, he promised to appeal to Nigerians to “give us a chance to stabilise the security.” He lamented what he called the destruction of social infrastructure, especially in education, but assured that he would do everything within his power to ensure every part of the country was safe.

Indeed, some of the states are owing between one month and six months salary arrears. The catalogue of states includes Osun, which is in arrears of four months; Benue and Plateau have five months to pay; Oyo is owing three months; Rivers and Imo, two months; Bauchi and Ekiti are owing one month.

Contrary to media report that Rivers State was owing two months workers salaries, Ibim Semenitari, state’s commissioner for information and communication, said in an interview the state was owing only April salary which would be paid soon. She disclosed that the state government had been able to sustain itself on its internally generated revenue, which increased recently from N2 billion to more than N7 billion naira monthly. “I can beat my chest to say that we are the only state aside Lagos that has paid salaries up-to-date. We have paid up to March and we plan to pay April salaries from next week.


Semenitari could not give the same assurance about pensioners who are being owed four months of pension arrears, even when Realnews called and sent a message to her to react on the matter. However, the pensioners, who addressed the press on Sunday, April 19, under the aegis of the Nigerian Union of Pensioners, Rivers State chapter, lamented that the state government had not paid pensioners since January this year. A statement signed by Edward Festus-Abibo, state chairman of the NUP, and Joseph Agbo, secretary, said it was disheartened that members of the union had been suffering untold hardship as a result of the unpaid arrears.

“We are suffering untold hardship in the midst of plenty. This kind of ugly situation has never occurred in the history of Rivers State. It is unbelievable that Rivers State government owes pensioners when politicians and other workers have been paid up to March 2015. What evil have we committed that warrants this type of punishment? Before we were paid December 2014, we protested twice and lost two of our members during the protest,” the statement said.

In Osun State, Rauf Aregbesola, governor of the state, blamed the state development on the dwindling monthly allocations to the state. Aregbesola, in a statement he made through Semiu Okanlawon, his media aide, said: “Either at the federal or at the state level, where is it that workers are being paid as and when due? We thought this situation would not last long. That was why we used our strategic reserve to augment salaries for one year. All our savings were spent on augmentation of salaries.”


The governor himself at a state function in March, alleged that the federal allocation to the state had been reduced by 40 percent since 2013, thereby making it difficult for government to meet up its responsibilities. Aregbesola said the situation became so bad at a time that he resorted to the state’s reserves and exhausted it on payment of salaries, while it also accumulated N12 billion debt. He said that he would not mind to borrow more “just to ensure that workers were paid but the banks would not grant more loans,” he said.

The governor said that he was able to meet the wage of more than N3.6 billion with N4.6 billion federal allocation until July 2013, when the federal government announced a reduction of about 40 percent allocation to states. This left the state with only N2.6 billion. “Since then, Osun has had to augment salaries by sometimes N1 billion, sometimes N1.6 billion,” he said.

Governor Gabriel Suswam of Benue State also had to borrow additional N200 million to pay the state workforce in January. Suswan said it had become imperative to borrow to pay workers who were owed for several months. He disclosed this while addressing some members of the Nigeria Union of Teachers, NUT, on Monday, January 26, defended his government, saying that the non-payment of workers’ salaries was a global issue and not peculiar to Benue State alone. He said the shortfall resulted from the fall in oil prices. According to the governor, the state has 29,000 workers with a very high wage bill. The total wage bill of the state quarterly was put N3.1 billion.

Facing the same problem of paying workers’ salaries, Muazu Babangida Aliyu of Niger State lamented that the financial crisis facing the states in the country required urgent steps. Otherwise, he said, the states would collapse in the next three months.

Painting the same scenario recently was Oyo State, where workers are still being owed three months salaries. According to Festus Adedayo, special adviser to Governor Abiola Ajimobi of Oyo State, on media, the state has a wage bill of N4.9 billion, whereas its federal allocation has been oscillating between N2.9billion and N3.1billion in the last few months.


The states such as Kogi, Benue, Abia, Ekiti, Niger and Plateau are not immune too. There are various degree of non-payment of salaries in the local governments, parastatals and the main civil service. Perhaps, the worst hit are the local government workers in Plateau State who have not been paid for about seven months.

The Nigeria Labour Congress, NLC, on December 31, 2014, said that 11 states owed workers salaries and therefore, directed its state chapters to furnish it with actual state of affairs in connection with the salary arrears. The union said it was criminal for any government to owe workers their salaries. Peter Ozo-Eson, general secretary of the Congress, stated recently that the NLC was working assiduously to ensure that workers were given their dues. He stated that payment of workers’ salaries should be made a priority.

He said: “For us, it is criminal for any government not to pay workers’ salaries, accumulate them over months while the governors and other political office holders take their own salaries. Such is criminal. We are also aware that even the federal government is owing some categories of civil servants their salaries for over three months. This is extremely unacceptable. Whatever is the reason for that!”

Ozo-Eson lamented that the NLC chapters in various states had failed to inform the national body early enough and allow the salaries to accumulate. “If you owe a worker salary for a month, you have no moral obligation to expect workers to come and render any service. So, to hear that there are states and large number of them that are owing workers for two or three months is completely unacceptable,” NLC secretary said.

The NLC had on April 28, insisted that state governors must pay outstanding salaries before the May 29 handover date. Peters Adeyemi, factional deputy president of the Congress, said at the ninth National Delegates conference of the Medical and Health Workers Union of Nigeria in Abuja, that workers had commenced the campaign to prevail on the governors to pay outstanding salaries before May 29. Adeyemi said that workers should not be made to bear the brunt of the mismanagement of the economy as they were not part of those who looted the treasury.


Issa Aremu, another factional deputy NLC president and secretary general of the National Union of Textile Garment and Tailoring Workers of Nigeria, NUTGTWN, on his part, described non-payment of workers’ salaries as a wage theft, wage robbery and economic crime. “We see that delay in payment of salaries as wage theft, wage robbery. It is actually an economic crime because Nigeria Labour law says thou shall pay the worker as and when due. In fact by 22nd of every month you must have paid the workers fully,” Aremu said.

On Wednesday, May 6, Okonjo-Iweala tried to absolve federal government of the blame of non-payment of workers’ salaries, saying the governors were told through the Federation Accounts Allocation Committee to make the issue of wage a priority. In a statement issued by Paul Nwabuikwu, her special adviser on communications, the minister said that despite the 50 percent drop in gross federally collectible revenue, the federal government had made the issue of workers’ salaries a top priority in order to ensure that the “people do not feel the negative impact of the revenue drop on the economy.” Besides, she said contrary to the “misinformation being put forward by certain governors to the effect that federal workers are being owed, staff salaries at the federal level are up-to-date.” But the minister did not address the issue of unpaid pensions, which Realnews learnt, has run into about six months in some cases.

Okonjo-Iweala, however, said the statement was necessitated by the All Progressives Congress governors’ claim that the negative manner the outgoing Goodluck Jonathan administration was running the economy had made it difficult for them to pay salaries regularly. “Regarding difficulties in salary payments, certain governors are trying to blame the federal government for their predicament. This is wrong. They had been told through the FAAC to prioritise salaries but they chose not to do so, hence the backlog that some states are experiencing,” the minister said further.

Indeed, during a phone-in radio programme, Samara, a caller from London, Britain, said that two weeks ago, two governors from South-South and South-East, visited London, and he was amazed and disgusted with the way they were spending money recklessly. “So, I am not surprised that they cannot pay their workers salaries because they are so insensitive to the plight of the state workers and only interested in their own wellbeing,” Samara.

That notwithstanding, Alex Wilcott, an accountant and public commentator, said it was time for state governors to look inward and tap various resources in their states to develop themselves. He advised the incoming administration to work with manageable workforce and develop programmes that would create jobs for the teeming population.

“I say it is a thing of shame to observe that the federal government borrowed N473 billion to pay salaries and nothing has been released for capital projects which will be beneficial to the public. I am very disappointed that they are just thinking about salaries where are the projects for you and I to benefit from? No water, no light, no good roads. Let us hope that the incoming Buhari, is not the messiah, will be a sanitiser who will help us clean all the ruts in this country,” Wilcott said.

Onyekachi Ubani, lawyer and former chairman of the Nigerian Bar Association, said that apart from blaming the penchant of Nigerian political office holders to exploit the situation to amass wealth, he also pointed alleged that a lot of government funds would have been channelled towards the prosecution of the recent general elections. “If you dig deep, you will be amazed how these political office holders have emptied the treasury in order to finance the just concluded elections. We heard that the campaign team of the president spent billion of Naira. I also agree that most state governors are also guilty. But if you recall that it was this minister (Okonjo-Iweala) who assured the nation that there was no crisis in our economy and she is now the one turning around blaming the state governors for being careless and not heeding to government warning. There is no way she can claim to be innocent of entire problems facing the country,” Ubani said.

That notwithstanding, how the incoming Buhari administration is able to deal with the issue without allowing it to snowball into a major crisis is probably what will determine how fairly the new government is likely to perform. For now, the optimism has to be matched with the real action. Nigerians are waiting.