With the gale of retrenchment sweeping through the private sector, amid falling oil prices that has reduced allocations from the Federation Account by 60%, many states can no longer meet their recurrent expenditures, including salary obligations to workers. The unacceptable anomaly has turned states into beggars. The states have received two bailouts from the federal government to ease the burden. However the situation has not improved, as many states are still broke and unable to offset the rising backlog of wages, even after striking deals to pay just a fraction of the salary. This is a national embarrassment which points to a democracy that is not working. If this seeming state of financial bankruptcy is disgraceful, more shameful is the leadership bankruptcy that exemplifies it. Mr. President found nothing wrong in holidaying abroad while workers are owed months of salary, and others are apprehensive of the likelihood of wage cuts. This is the climax of insensitivity and plainly disgusting.
The statement the other day by Labor and Employment Minister, Chris Ngige directing banks to stop retrenching workers, and that banks which failed to comply may have their licenses revoked, sounded like a bad joke and only confirmed the fact that the government’s concern for workers’ plight is playing to the gallery. Ngige’s flippancy suggests the need to improve on his communication abilities; the lack of which has been the bane of this administration. Ngige’s directive raises certain posers: Is Ngige now the Central Bank of Nigeria (CBN) responsible for banking supervision, issuing and withdrawal of licenses? As the minister is willing to revoke the licenses of banks, how many other companies in other sectors that are laying off workers would he sanction? Since the public sector may also sack workers, who will sanction the government at the Federal, state, and local government levels?
Nigeria’s economy is virtually in a recession, largely as a result of falling commodity prices, which declined by over 70% from its highest point in mid-2014, the lack of oil savings buffer to pursue counter cyclical policies, recent oil production cuts by about a quarter, and delays in passing the 2016 budget. As such, consumer confidence and purchasing power are down, as sales, revenue, and profitability plunge. Businesses are reducing operating costs, slashing investment, and laying off workers. No doubt the unemployment and underemployment rate have climbed to their highest level of 31% in 2016. Public sector workers are groaning under the yoke of unpaid salary arrears running into months.
Bauchi is a state with frozen accounts and hungry workers, who are owed salaries of up to six months, while pensioners are owed five months. The state’s accounts in Skye, UBA and Zenith Bank have been frozen, making it difficult to pay salaries. Kogi is playing hide and seek with workers as the State has been battling with backlog of salaries, especially since the transition from the PDP-led administration of Idris Wada to incumbent, Yahaya Bello of the APC. About five months salary is owed workers. Plateau currently owes workers five months salary arrears. Governor Simon Bako Lalong inherited seven months of arrears and has managed to settle just two. In Osun, workers remain short-changed even after the state slashed the salary of senior civil servants from grade 08 upwards by 40%. In Edo, pensioners and council workers are wallowing in hunger. Though Governor Adams Oshiomhole stunned Nigerians, when he raised the minimum wage from the national benchmark of N18, 000 to N25, 000, workers are stuck in the misery of unpaid salaries. Teachers in Taraba have been at the receiving end of the short stick as Governor Darius Ishaku has failed to meet teachers’ needs and the state is finding it difficult to pay the N18, 000 minimum wage.
Owing workers unjustifiably and for no fault of theirs is indefensible; families should be spared this ordeal. In fact, the change promised so vociferously by the Buhari administration must start with the settlement of the salary commitments as a priority of the states. The multiplier effect of unpaid wages is real. The worker suffers, the immediate family and dependents suffer; society is worse off for harboring stress-filled human beings who are not proud to call themselves citizens. The situation is disaster waiting to happen. In the face of all of these, the governors live in the clouds, and, at the same time, glory in their cluelessness on governance. With the way Nigeria is structured or the states are made to function, there is no economy outside of the public service. If civil servants are not paid, nothing else happens.
Blaming the financial predicaments of their states on falling oil prices is buck-passing and self-righteous indignation, given that many governors have proven time and again to be profligates, lacking in decency of character and wasteful with resources while totally bereft of ideas on how to supplement income from the federation account. While low oil prices may have led to smaller accruals to the states from the federation account, bad governance, laziness and corruption, have compounded these woes. A situation whereby governors and leadership of state assemblies award huge severance packages to themselves amounts to sheer robbery.
It is indeed unfortunate that the same governors who are too quick to plead helplessness and seek understanding on the sliding fortunes of the country’s economy due to falling oil prices have also always found enough to charter private jets for their travels and sustain their conspicuous consumption; no shame, no compunction. In no unmistakable terms, some governors have proven themselves unworthy of their offices. Governors should know that flying around in chartered jets adds no value to governance and is inconsistent with service to people. Mismanaging funds in the guise of security votes or wardrobe allowances, is not only fraudulent, it is an insult to the people a governor is elected to serve. Needless to say unrestrained wastage of states’ resources is criminal. Therefore, such profligacy must end. The country, of course, has enough laws to take care of opportunistic parvenus in high places.
Governors and particularly the President require no reminding that they are constitutionally mandated to pursue sound economic policy options at all times. These difficult times avail Nigeria the chance to embrace the truth, let governance be liberalized in a way that states can be truly federating units. In this regard, the government can ride on the last National Conference’s recommendations to restructure the country for efficiency and prosperity. The lesson from the present debacle is that a bailout, desirable as this one is, and by whatever designation, cannot solve the states’ problems.
A regime of good governance, accountability and prosperity for all can only be created in a well-structured truly federal Nigeria, shorn of laggards in office and rent-seekers in power. Clearly, from the current bankruptcy, the danger now and ahead of Nigeria’s warped federal system is becoming more obvious, calling for the political will to institute a true and balanced federation. As the stress on financially weak states is beginning to take its toll, Nigeria can only continue with national collapse in mind as the final result.
