A Sad Affair at the States

For most workers in Nigeria there is no calendar period more important than the end of the month. That is when they get rewarded for work done. But for workers in many states of the country the end of the month is now associated with more desolation than elation, because they are not getting paid as at when due.

Families who usually depend on their breadwinners’ checks to manage their day-to-day lives are now running on empty stomach. Instead of paychecks they are getting promissory notes that keep piling up.

At the last count in June, workers in at least 18 states of the federation were being owed salaries, gratuities and pension arrears ranging anywhere from one to eight months.

The situation had become so bad in some states like Osun that churches and charity organisations are now embarking on campaigns to donate food to hunger-stricken civil servants. At one point Rauf Aregbesola, Osun State governor, even admitted to the situation being beyond his control: “It is extremely painful that I cannot pay salaries. It is painful that I have to be in this condition,” he said recently.

Aregbesola’s helplessness, as in the case of some of his gubernatorial colleagues, is not by happenstance. He is said to have borrowed excessively since he took office in 2010 and invested in white elephant projects such as a helicopter, which remains grounded. Another example of this wasteful trend is in Bauchi State where more than 20 cars were seized from the wives of Isa Yuguda, former state governor.

This profligacy and wanton waste is symptomatic of a general trend across each state where unpaid salaries are a problem. This sad state of affairs is simply due to mismanagement and financial recklessness, which has led to many states incurring debts beyond the capacity of their revenue sources and accruals from the Federation Account.

A significant decline in oil revenue proceeds, which laid bare the structural deficiencies in the nation’s revenue allocation system, should have been enough warning for state administrators who can’t pay salaries to curb their excesses. Instead they continued on their exorbitant ways by incurring more debt and not being creative enough in diversifying the base for internally generated revenue.

According to reports, Nigeria’s 36 states have accumulated debts in excess of $3.3 billion, which has resulted in dire consequences, including unpaid salaries, for most of the states.

With President Muhammadu Buhari declaring last month that he virtually met an empty treasury on assumption of office, the issue of unpaid salaries is bound to continue for some time. At his first meeting with the governors, the president warned them to be ready for a period of hardship as he strives to recover funds stolen by government officials.

This means there is no end in sight for many state workers whose lives have been drastically altered. What this sad situation does is diminish the pre-eminent status that civil servants once had. It is brutalizing to their psyche, damaging to their self esteem and is the worst kind of advertisement for each state that is behind on this constitutional obligation to its civil servants.

To seek a solution to the matter the state governors recently met with President Buhari and Vice President Yemi Osinbajo during which the federal government and the states sought to reach common ground on the funding crisis.

Areas that the governors sought a compromise on to clear the backlog of unpaid salaries, was the refund of money spent on federal infrastructure projects, allowing banks to extend loans to states for up to 20 years, and sharing revenue from the Excess Crude Account.

At the end of their meeting the predominant message from the president, was that they should be ready for tough times ahead as his government attempts to recover stolen funds and plug systemic leakages that plagued the last administration.

“There are financial and administrative instructions in every government parastatal and agency, but all these were thrown to the dogs in the past. Honestly, our problems are great, but we will do our best to surmount them. The next three months may be hard, but billions of dollars can be recovered, and we will do our best,’’ Buhari told the governors in their first parley.

Despite reaching out for help from the federal government, the indications are that huge debt profiles will force many of the states to remain in this financial quagmire for quite some time.

Take the case of Delta where the Governor Ifeanyi Okowa was upfront with the state legislature. He informed them last week that debt and contractual obligations exceeding N636 billion would result in monthly deductions of N4.60 billion between this June and March 2017. This means the state will only be left with a shortfall of N3.4 billion, out of its federation account allocation of approximately N 8.03 billion, to cope with its monthly wage bill, overhead costs and the financing of capital projects.

If this is the financial hurdle that faces Okowa you can then imagine what his colleagues are facing in the other states, with less allocation, that are grappling with salary backlogs.