Osun State, metaphor for unpaid salaries

Gov. Aregbesola

Gov. Aregbesola

ABOUT two months ago, a female retiree of the Osun State public service called to complain about unpaid workers’ salaries, and wanted this writer to wade in, as an advocate of the masses.

After another caller came up with the same issue, it became imperative to find out what was going on in Osun State. The state truly owes about six months’ salary backlog, and the workers have become restive as a result.

The Governor, Ogbeni Rauf Aregbesola, attributes the unpaid salaries to the state’s dwindling revenue. For instance, he revealed, revenue from all sources in 2012, including the Federation Account; internally generated revenue; and other accruals, like value added tax, from the Federal Government, yielded N28.4 billion, whereas total wage bill only was N31.6 billion, leaving a deficit of N3.2 billion. The same scenario was repeated in 2013, with a deficit of N10.4 billion.

It turned out also that dwindling oil revenue has made it difficult for the Federal Government, and 24 (some say 28) of Nigeria’s 36 states, to pay staff salaries. The initial cause of the palaver was the increase of minimum wage to N18,000, unilaterally entered into by the President Goodluck Jonathan Government with the labour unions. It became a kerfuffle when the price of crude oil plummeted, and reduced the revenue that accrued to the nation.

The Nigerian Governors’ Forum, led by former Rivers State Governor, Rotimi Amaechi, alleged that another cause of the problem was the Federal Government’s squandering of funds due to the states from the Excess Crude Account. But former Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, countered that the money was actually paid to states.

Things have gotten so bad that the Nigerian National Petroleum Corporation (NNPC) is unable to meet $2 billion cash call obligations to its joint-venture international oil corporation partners. Indeed an IOC source alleges that the Federal Government totally mismanaged available crude oil revenue, and misappropriated money meant to execute projects and activities that were not included in budgets approved by the National Assembly.

Some argue that some state governments embarked on ambitious projects.

But government is about providing services to the people – and paying some cadres of the citizenry to perform it. And there are some services that the people didn’t ask for, but must be provided nonetheless: You don’t ask for the military or police forces to protect you, before government provides them anyway.

The same goes for social services like hospitals, schools, and traffic control that will have adverse effect on society if not discharged. You will have a hard time faulting an Osun State Government that fulfills its electoral promises by feeding about 254,000 pupils daily, and providing jobs for about 3,000 cooks, and giving farming and agribusiness a shot in the arm, through the ‘O’ MEALS Elementary School Feeding and Health Programme.

Neither can you really fight a plan to refurbish the old Osogbo Aerodrome, to provide a hub to freight agricultural cargo from Osun and adjoining states. The airport comes with a repairs hanger where military, private operators and commercial airlines can repair their aircraft. The network of roads around the airport also makes for easy flight connections for passengers and farming cargoes.

But the sudden drop of oil revenue scuppered the whole thing, bringing unpaid wages in its wake. Because the problem of unpaid wages of government workers is a universal phenomenon in Nigeria, many suggest downsizing of staff. That fails to recognise that employment of workers is also a legitimate social service expected of every government.

This then brings up the argument that state governments must be allowed to independently negotiate minimum wages with labour unions. If the Federal Government will not pay the salary bills of states, it should not negotiate wages on their behalf. Allowing each state the autonomy to negotiate its minimum wage with labour goes by the name, ‘fiscal federalism.’

But the Federal Government is too big, to the detriment of states and (especially) local governments. The real interface between the state and the citizens is more at the local government level. Shouldn’t the revenue allocation formula be restructured to the advantage of local councils?

Indeed, the day of argument for fiscal federalism is here. It is imperative for the Nigerian state to recognise that those who provide the resources must be first partakers in its yield. That must explain why the Niger Delta, whose soil provides the oil and gas that have provided the major source of revenue for the country, complain about being schemed out of the returns from the petroleum resources.

The Ijaw have therefore expressed a desire for self-determination, having noted that the treaty of 1914, between the Ijaw and the British colonial powers, lapsed in 2014. Fair-minded Nigerian patriots must not ignore this heart cry of the Ijaw – or other nationalities for that matter. All people of goodwill must strive to achieve a more honest interpretation and implementation of the protocols of democratic and federal governance in Nigeria.

More to the point: State governments that owe salaries must certainly demonstrate the will to pay. They could restructure payment schedules (the way bankers do), and then seek to re-negotiate more realistic minimum wage regime with labour. This way, accrued wage bills are settled, and a future without financial booby-traps, charted.

And it is not enough to blame the states for unpaid salaries. The Federal Government may have to immediately initiate a rescue plan to pay the salary arrears, to stem the human suffering, before asking the state governments to go and sin no more.

•Oke works for the Osun State government.

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4 Comments
  • Omo Owa Omo Ekun

    Well written and well argued

  • Dejandon

    Was enjoying until the Ijaw self determination angle got spliced in. What has that got to do with the rest of the article?

  • LagLon

    its very funny… but not logical.
    1. min wage
    okonjo iwela was against the min wage hike.
    how can a state make a budget ..if its salaries can be determined in abuja?
    how did the law get passed at fed level?
    this is where a restructuring needs to be implemented.

    2. states and ECA
    the states got the cash. they blew it.
    i would like to introduce the ‘governors’ to a new invention called the computer and a miracle system called a spreadsheet. if they bothered hiring a qualified accountant or financial whizz (nee genius) they might have been able to build a prediction system within an excel spreadsheet.. yes a ‘excel spread sheet’ ..(spread sheet being different from what your house staff does in your bedroom everyday)
    and run magical things call budget ‘scenarios’.. i repeat ‘scenarios’ (not the new italian striker at a top european club that you covet).. …that might have allowed them to defeat the wicked ways of earth and the evil federal govt and those naughty foreigners – in moving the oil price up and down (like it has moved since oil was discovered!)

    3. NNPC
    nnpc has never (not recently – never) met its cash calls and this is illogical. even whilst subsidiaries are withholding funds for other purposes!! see neiti report ..see pwc report ..see all reports!
    golden goose ..not feeding.

    Summary:
    stop the soft stuff. governors are idiots. unfortunately theyre on seat.

    how do we get out this mess with an idiot on seat. tis tricky. a bit of honesty might help… but in the absence of that this is what is going to happen.

    1. bailout no pain – push all debt to fed govt balance sheet. moral hazard set in. govs borrow again. nigeria to zimbabwe. rich states demand income in USD. people resort to barter.
    2. bailout some pain – move governors to being realistic. private sector can step in. requires subtle control and rational governors. ngn survives.
    3. no bailout – riots. forced removal governors/ reduced security. naira weakens.

  • Lekan Babalola

    Surely Oke “works”for the Osun State Government!

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