By Bola Bolawole
President Muhammadu Buhari recently disclosed that not less than 27 states of the federation had problems paying workers’ salaries. That was after the Federal Government had arranged a bailout for the states to offset a backlog of salary arrears. It was an admission that the bailout did not go far and many had thought it also was evidence that another round of bailout was on the way for the States. This was not to be because the Federal Government itself is not in good financial health; it runs from pillar to post and from China to the IMF\World Bank searching for where to get bailout.
The financial health of the states had since worsened. Not more than a couple of them are not owing salary arrears; and only a few still manage to pay salaries and pensions as at when due. Even in such states, all manner of ingenious attempts are made to yank off deductions from salaries in brazen efforts to reduce the wage bill. Were the states individuals and private businesses, they should have declared bankruptcy.
According to Vice-President Yemi Osinbajo, the country is broke. The reasons are not far to fetch. Apart from the oft-repeated allegations that PDP\Goodluck Jonathan mismanaged the country as well as stole the country blind, there are the reasons of falling crude oil prices and the glut in the international oil market, as a result of which the country finds it difficult to sell enough crude to earn foreign exchange. Adding to that headache is the renewed insurgency in the Niger Delta by a group calling itself the Niger Delta Avengers, which is sabotaging oil facilities and making it impossible for the country to meet its allocated quota of crude oil sales. From 2.2 million barrels per day, the country is said to have lost as much as a whopping one million barrels per day to the insurgency. And the insurgency is growing!
The result is that less money comes into the government’s coffers. This translates into less money for the three tiers of government to share. The problem is further compounded by the debt over-hang of many of the states, which have taken all manner of dubious loans that were either siphoned or misapplied to projects that are not yielding anything in return. There was a time when bond became so fashionable that every state rushed to the capital market to collect bonds. As my people would say, to eat pork meat procured on credit is not the problem; having to pay back the debt is what is. Now is pay-back time for the states! When deductions are made from the statutory allocations of such states, they return home with peanuts.
The other day, a state received a paltry six million Naira after deductions were made! Elementary wisdom dictates that when revenue dips, expenditure should likewise be reviewed downwards; not so Nigeria! The governments remain as profligate as ever; hoping against hope that the dire financial situation would soon pass and that they would return to the happy old days again. But that may not be any time soon.
The prognosis is not cheery and the arithmetic is not adding up; respite may not come any time soon except another act of God brings another Gulf War oil windfall and the insurgency in the Niger Delta dissolves and the country is able to sell its allocated quota of crude oil at premium price over a long period of time. For now, however, the situation grows worse by the day and previous patch-patch that worked a few months ago is no longer working today. Paying half salaries to workers; paying only basic salaries and ignoring the allowances; skipping one or two months and paying the next; paying a category of civil servants and leaving out the others – are not working again because the quantum of the reduction in federal allocations coming to the states is so massive that there is no abracadabra anyone could do about it again.
Governor Ayodele Fayose of Ekiti state last week painted a graphic picture of the dire straits the states have found (brought?) themselves. Ekiti workers had embarked on strike to protest the non-payment of five months’ salaries. The state, whose share from the federation account used to be above N3 billion monthly, got only N751 million in May. Bills exceed N2.5 billion monthly; not to talk of subventions and other first-line charges. Whereas the initial agreement with Labour was that two allocations would be pooled to pay a month’s salary; now three or four monthly allocations would be needed for the same purpose in view of the steep drop in federal allocations.
Internally-generated revenues that should have come in handy in these austere times remain paltry as a result of a combination of factors: over-reliance of the states on the monthly hand-outs from Abuja; the level of poverty in the states necessitates that you must be careful not to over-tax the people and stir a revolt; and the unscrupulousness of tax collectors who print their own receipts and divert a sizeable chunk of monies collected into their own pockets. Fayose disclosed that some tax collectors who were apprehended by the state were cooling their heels in gaol.
Ekiti has 51, 000 workers in a population of about three million; it is this less than three percent of the population that whacks virtually all the resources of the state. Not a dime is left for capital development. Now, even 100 percent of the resources of the state cannot pay the salaries of this microscopic few. Yet, Labour insists they must be paid – and the workforce must not be reduced! Exasperated, Fayose himself declared he was going on strike! But anytime governor and workers return from their strike, they will still have to sit down to untie this Gordian knot.
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