Unpaid Salaries: Governors Change Tactics

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Yari

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Bedevilled by unpaid salaries and sorry state of economy, state governor have devised new means of solving their problems

By Olu Ojewale  | Jun 29, 2015 @ 01:00 GMT  |

THESE are not the best of times for Nigerian governors. Keeping aside their political differences, the governors got together in Abuja, on Wednesday, June 17, to find solution to the economic crunch responsible for mountains of unpaid salaries in their respective states.

Rising from their meeting, the governors seemed to have jettisoned  the idea of looking to the federal government for a bailout as earlier prescribed by the governors elected under the  ruling All Progressives Congress, APC.

Governor Abdul’aziz Yari of Zamfara State and elected chairman, Nigeria Governors Forum, NGF, who read the communiqué of the meeting, said the governors resolved to ask the federal government to pay for the various federal projects executed by the states to boost liquidity.

According to Yari, the governors would meet with the President Muhammadu Buhari, next week to ask that the states owed by the federal government be paid and also submit their economic plans.

Zamfara State Governor Abdul’aziz Yari told reporters that they resolved that the federal government should pay for the various federal projects executed by the states.

“Instead of asking for a bailout, let us look for how the federal government can settle that backlog for us so that we can move forward. Nearly all the states are being owed by the federal government. Some of the states are being owed about N10 billion, some N20 billion, with a state like Lagos being owed more than N50 billion. So, if we can get that done, then most of the issues can be resolved in earnest,” Yari said.

While lamenting the poor state of the nation’s economy, the governors noted that the problem of unpaid workers’ salaries was not peculiar to the states only, but also extended to some federal government agencies.

“It is the problem of the entire nation. We are going to work in synergy with the federal government to overcome the challenge. We will meet with the president next week so that we can get a lasting solution to this problem,” Yari said.

Oshiomhole
Oshiomhole

At the last count, 18 states of the federation were still owing workers’ salaries. To avert future occurrence, the governors advocated for an urgent review of the revenue formula and address the problems precipitated by the economic problems.

In their recommendations, the governors, while agreeing that the federal government should have 52 percent allocation of the national resources, they would want states to share 36 percent to enable them concentrate on the development of their various states.

The current revenue formula gives the federal government 52.68 percent; 26.72 percent to states and 20.60 percent to local governments.

Apart from that, the governors also resolved to set up inquiries to help them unearth where their predecessors “hid the resources accruing to the states from the federation account.”

Governor Adams Oshiomhole of Edo State, who also spoke to the press after the meeting, called on President Buhari to block all the leakages and then go after those allegedly stole the country’s money and force them to return their loots to the national purse.

He said: “I think the media is not being accurate, the country is bankrupt, not just the states. The Federal Government’s finances are even worse, considering that it borrowed over N4 trillion. The entire funds for pension scheme have been drawn down by the federal government. It is because it borrows at will that you can’t seem to see that the government is also bankrupt. So, when we talk of bankruptcy, we should be talking about serious national economic crisis that is not limited to states.”

On the way forward, the governor said corruption must stop and those in position of power should stop stealing. “So stop the bleeding, stop the stealing and get those who have taken to vomit. For example, if you say you have $2.6 billion in excess crude account, we know that by May 2013 you had more than $10.5 billion in the excess crude account and now there has been no distribution to states.

“We expect that the excess crude must have appreciated. So, why has it gone down to $2.5billion, when and for what? You recognise as media people that oil dropped to $9 under Gen. Abdulsalami Abubakar, but salaries were being paid. So, it is not about price, it is about very huge theft of public funds. In Edo State, we are up to date in the payment of salaries… so, we are paying not because we are rich, but I do appreciate that they have worked and deserve their pay. The payment of salaries is a legal obligation,” Oshiomhole said.

Emmanuel
Emmanuel

But the Edo State governor did not say anything about his former and present fellow governors whose ostentatious lifestyles have put their states in trouble.   For instance, Governor Udom Emmanuel of Akwa Ibom State was recently reported to be feeling uncomfortable with state private jet bought by former Governor Godswill Akpabaio. Consequently, Emmanuel was said to be contemplating selling the aircraft, while he travels on chartered helicopters when necessary. The governor was particularly concerned that the cost of fuelling and maintaining the aircraft was too burdensome for the state. The source could, however, not disclose the cost of fuelling and maintaining the jet, but insisted: “Governor Emmanuel is not comfortable with the idea of sustaining the ownership of the jet and is contemplating selling it, more so, because of the slash in states’ allocations and the high cost of aviation fuel.

Akwa Ibom State is said to be owing at least one month salary. But the state is not alone. Rivers State, which is owing about six months in workers’ salaries, also has a jet for the state executive, while Osun State, which owes about seven months, has a helicopter.

In recent days, many indigenes of Osun State have called on Governor Rauf Aregbesola to sell the helicopter and use the money to offset unpaid salaries. But the governor assured that he would pay before end of the month.

If the state governors are looking for sympathy because of their situation, they are not likely to get any from Ebongabasi Ekpe-Juda, security expert and an indigene of Akwa Ibom State, who felt embarrassed because his state is among those owing salaries. “I am very embarrassed that with all the money that the state has been collecting, it is still owing workers and contractors. This is state that collects about N4 billion every month; still it cannot pay salaries and contractors. I understand that Julius Berger (construction company) has almost moved out of Akwa Ibom State because of debts of about N50 or N60 billion.

“Ironically, the government spent some billions of Naira to host what they called Christmas Concert. But workers were not paid salaries. The government spent money bringing in singers flying first class from all over the world to sing for one night. Yet, workers were not paid their salaries. It is criminal,” he said. Ekpe-Juda said there should be no bailout for any state government by the federal government. In fact, he said all the states owing salaries should be queried on what they have done with the federal allocation coming to their states. He said the state governors should be asked whether they paid themselves and their political aides. “For instance, in my state where the governor is now a senator, did he not get all his entitlements? But he did not pay workers who served him and the state. It is criminal. They should go and look for money to pay workers’ salaries in their states; they were given money for that purpose. The federal government will be encouraging corruption if they are given another money for them to go and pay salaries,” Ekpe-Juda argued.

Aregbesola
Aregbesola

According to him, all the states could be self-sustainable if they were serious about stimulating economy and through internal generated revenue. Ekpe-Juda recalled that when the accountant-general of Akwa Ibom State was arrested sometimes ago for misappropriation of the internally generated revenue, IGR, he disclosed that all internally generated revenue was not going to the state government but was being shared by people in the state, including some former commissioners. “So, if the governments were sincere, they should be able to generate enough to sustain their states. Every state in this country is viable to take care of itself.”

Lending credence to that, Oyekachi Ubani, lawyer and former chairman, Nigerian Bar Association, Ikeja branch, said it had, indeed, been discovered that there were some persons in the government who were siphoning the government revenue into private pockets. Ubani, however, blamed civil servants for the diversion of IGR. He said private investigations had showed that parastals and other government agencies had perfected the system of diverting government money to their pockets. “Do you know that we can run this country efficiently without any external borrowing. We have so much money in this country. The little we are getting from oil and internally generated money from parastatals, they are not paying this money into the treasury. What they do is that they use the money to buy house abroad. That is why they can buy a house in Banana Island for N1.5 billion. Civil servants are the most corrupt, more than political elite,” Ubani said.

Nevertheless, the human rights activist believes that if the states could be able to monitor their IGRs and use the money judiciously they would not have problems of paying their workers. Besides, he blamed many of the governors for embarking on gigantic projects that would not be of immediate benefit to their states. He cited the case of Akwa State where there is the immediate past governor built an Olympic standard stadium and a state like Jigawa which has an international airport, whereas a journey from Kano to Dutse, capital of Jigawa State, is only an hour and half. “I can understand, big contract is where politicians make money. They have to get their cut, but they are not thinking of the use of these projects in their state. Enough of these wastes,” he said.

Indeed, the National Bureau of Statistics, NBS, on Wednesday, June 17, published a report showing that the affected states have not been able to grow their internally generated revenue, IGR, significantly enough in recent years thereby causing adverse budgetary performance in 2014.

Ekpe-Juda
Ekpe-Juda

Besides, statutory allocations to all the tiers of government had fallen by over 30 percent in 2014 because of sharp drops in revenue accruing to the federation account as a result of decline in the price of crude oil, Nigeria’s main source of public revenue.

With more than 30 percent decline in statutory allocations coming against marginal or no increase in IGR and coupled with sustained overheads on political office holders, the states found themselves in negative cash flow.

Most economy observers believed that government finances were destabilised due to undiversified revenue sources, especially weak performances of the states in IGR.

Consequently, the states’ workers are left with the fall out as their salaries are in arrears for between two and seven months in 18 states.

With exception of Ekiti which was the best performing in terms of increase in IGR in 2014 at over 58 per cent rise from N2.33 billion in 2013 to N3.46 billion in 2014, and two other states, all the other 15 states had either marginal increases or outright decline in their IGR performance in 2014.

The other two states with significant increases in their IGR according to NBS report are Kogi and Osun states. In 2014 Kogi increased its IGR by more than 25 per cent to N6.56 billion from N5.02 billion in 2013 while Osun though has one of the worst cases of salary arrears, increased its IGR to N8.51 billion from N7.28 billion in 2013.

Ten of the salary owing states managed to increase their IGR by a paltry 1.2 to 2.3 per cent against over 30 per cent decline in their statutory allocations. Some of the states, according to the NBS statistics, include Akwa Ibom, Imo, Oyo and Rivers States. Akwa Ibom and Rivers which are amongst top 10 beneficiaries of statutory allocations could only increase IGR by paltry 1.8 and 1.2 percent, respectively, while Imo and Oyo managed to do about 7.0 percent increases.

Some of the states in outright negative performance in their 2014 IGR, according to the NBS report, includes Bauchi and Benue states.

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