Urhobo Voice
Nigeria NewsLatest Nigeria News Update!

State Government Grappling With Workers’ Salaries


State Government Grappling With Workers’ Salaries Despite Bailout Fund
State Government Grappling With Workers’ Salaries Despite Bailout Fund

Enugu State government led by Ifeanyi Ugwuanyi, is one of the first set of governors elected last year to constitute his cabinet and set other processes in motion for governance, it cannot be said that his administration has fully settled down to business eight months after.

Those observant of the manner the administration is being run will readily tell you that things have not really fallen in place, as government’s direction has remained vague. In fact, Enugu State government is still grappling with issues it inherited from the immediate past administration of the state amid lack of finance, as well as huge salary arrears of workers and pensions among others. There have been changes and minor reshuffle here and there, apparently to suit the administration’s desires.

Faced with a litany of salary arrears and pensions incurred by previous administrations, Ugwuanyi had sought and obtained Federal Government’s bailout fund of about N4.207billion.

The money, according to the governor, was to enable his administration settle pension arrears and unpaid workers’ salaries, which he puts at N2 billion. There was another loan of N10billion, which was earmarked for the execution of capital projects in the state.

One of the reasons for seeking the bailout fund was to enable the Enugu State government operate on a clean slate, as well as reduce workers and retirees’ disenchantment in the state. The Guardian gathered that some government agencies and parastatals owed several months of salary arrears. These institutions included the Institute of Management and Technology (IMT), the Enugu State Broadcasting Corporation, the Water Corporation, Rangers Football Club, as well as council workers among others.

From the bailout, government fulfilled the payment of workers’ salaries, especially, those of government parastatals and agencies. But those of council workers are still unpaid, just as that of the state civil service and local governments’ pensioners.

Last week, the tenure of elected state council chairmen expired. The Enugu State government who said they lacked funds to conduct fresh election in the council, had announced and constituted caretaker committees to run the councils’ affairs. But the caretaker committee chairmen, who resumed in their offices on Monday, told several ugly tales following the huge debts, which their predecessors handed to them, that ran into several millions.

None of the 17 councils owed less than N150million, said to have arisen from months of unpaid salary, as well as loans obtained to do white elephant projects.

Inquiries by news agency revealed that these outstanding are a far cry from the money owed pensioners in the local governments said to have piled up since 2002.

A source said: “You really need to blame the local government chairmen for these, because they felt their responsibility towards workers ends the month the person is out of the system. Nobody remembers there is pension that should be paid.”

But those close to the Enugu State government said running local governments with caretaker committee would help government conserve funds to carry out its obligations in the state local governments, especially on the arrears owed pensioners and workers.

What is worrisome, however, is the manner in which the appointment of the caretakers were made with the state leaders in the Peoples Democratic Party (PDP), being called upon to nominate those who could serve in the various councils.

Most institutions and agencies belonging to the Enugu State government currently have new boards. Government has also moved further to set up various committees to look into contentions arising from some of its agencies. There is an economic team, working to chart an alternative revenue source for the state, as well as raise funds for the running of government.

Ugwuanyi has also appointed several executive assistants, acquired and distributed Prado Jeeps to his appointees, as well as presented the 2016 budget proposal of over N80billion to the state House of Assembly. This is despite that the state government has not completed any capital project in its eight months in office.

The  government recently flagged off construction work on some roads in Nsukka and ninth mile areas of the state. The road construction work, which came without time lines, is moving at snail speed. Aside the roads, there is no defined programme for other sectors of the state. A foundation stone laid for a general hospital at Udenu Council, as part of activities to mark the first 100 days in office, has remained at the foundation stage. Civil servants, whom government claimed it helped to acquire houses at the Elim Estate, during the first 100 days anniversary, are yet to occupy the houses for undisclosed reasons.

The international conference centre, started during Dr. Chimaroke Nnamani’s administration, the site of which the present government managed to clear last year, has remained as it is.

With the manner the Enugu State government spoke, when he visited the centre last year, residents thought that by now work should have resumed at the place.

The hope had given way, when the governor visited the Ama Brewery of the Nigeria Breweries Plc, where he pleaded with the company to come and take over the centre and complete it.

This also applies to the Diagnostic Centre, which the Sullivan Chime administration abandoned and which he frowned at during his visit. He had enthused that because of the urgent need for a world class Diagnosis centre, his administration would ensure the completion of the place in record time.

However, till date, there are no signs that anything would happen there soon. It is being speculated that paucity of funds may have affected work on the various roads project the Enugu State government flagged off last year and that the 2016 budget may be implemented to enable the state witness some capital projects under the incumbent administration.

Despite the economic downturn, Governor Abiola Ajimobi of Oyo State is, however, optimistic that the state will rebound. He has continually assured workers that the state government will not retrench its workforce. Although, the government is yet to pay November and December 2015 salaries, Ajimobi has been in constant dialogue with the Labour to arrive at an agreed method of utilising the meagre resources available to the state on monthly basis.

Already, steps are being taken to reduce the level of dependency on the Federal Government in terms of monthly allocation from the Federation Accounts. The Board of Internal Revenue is being restructured for efficiency and effectiveness. The reinvigorated Board will ensure that all leakages are blocked and untapped revenue sources are opened up.

There is also a restructuring of Ministries, Departments, and Agencies (MDAs) to increase revenue generated, as well as address a shortfall of about N45 billion on the state’s wage bill, every year. Oyo’s IGR is N43.6 billion, as against N88 billion required.

The state, he said, could not pay salaries, let alone other running costs.

On a monthly basis, the state’s income is N4.2 billion, inclusive of a Federal allocation of about N3 billion and Internally Generated Revenue of N1.2 billion, whereas salaries alone is about N5.2 billion.

The short and long term IGR targets of the state is an 80 per cent increase of the current from N1.2 billion to a minimum of N2.2 billion by 2016, and a subsequent 50 per cent increase that would amount to N3.6 billion. By 2019, Ajimobi said, the state should boast of a generating ability of N6.1 billion and N7.6 billion by 2020.

The government also wants to concentrate on projects that are for legacy, as well as ensuring absolute transformation of the education sector and infrastructural development. “There will be greater activities in the area of agribusiness. The level of making Oyo State government prepared destination for investors will be improved upon,” he said.

Besides agriculture, the governor announced plans to pay special attention to education, industrial development and environment. Indeed, his administration’s cardinal programmes are to establish a solid superstructure that is fixated on human capital.

The frugal spending of limited resources and effectiveness in Internally Generated Revenue (IGR) is what sustains Edo State government. As at December 2015, salaries of workers in the state employment were paid before 23. Investigations by news agencies showed that the government does not owe any of it works force, including workers of state-owned tertiary institutions.

But in a swift reaction, President of COEASU, Comrade Fred Omonuwa said the government was being economical with the truth. “It is not true, as I have said several times. We didn’t request for bail out. We only said our salaries should be paid. They owe the colleges in the coalition between three and five months.

“The problem started about two years ago, when we began our agitation. At a point, they used the trust fund or cooperative to pay us. After the first tranche of about N89 million they paid in 2014 to bail the school out of the crisis, there has never been any other payment. The government owes us and we are embarrassed.”

However, out of the 18 local councils, only four do not owe salaries, namely Esan South-East, Etsako East, Owan East and Ovia North East. Those on the top list of councils owing include Egor, Oredo, Esan-West, Igueben, Etsako West, Estako Central, Uhunwhonde, Orhionmwon, Ovia South West, Esan Central and Esan North East.

Apart from state civil servants, who had challenges with their recent verification exercise, which led to their not being captured in the automated monthly payment system in the state that is popularly called “oracle”, other categories of state civil servants got their payment alert, which news agencies gathered was paid from the state’s Internally Generated Revenue (IGR), while still expecting allocation from the federation account.

Governor Adams Oshiomhole told news agencies that as a labour leader, he believed workers payday was not negotiable. “We paid our workers their December salary before December 23. This is from our IGR, as we are still expecting allocation from the centre.”

He said even in October, “we paid the salaries of Edo workers on the 22. The previous month, we paid salary before Sallah holiday and before the federation account allocation came, we paid and we will continue to pay because for me, government is value-driven. Yes, there may be financial crisis, but one of the elementary laws of economics is that resources are necessarily scarce in relation to our wants. Therefore, the responsibility of management is to order its priorities.

Personally, I would rather not pay a contractor a billion naira, and so on, than not pay a minimum wage earner of N18, 000 a month. What is at stake for workers is their lives. And they have dependants. Typically, a Nigerian worker doesn’t have a house, because we don’t have a robust mortgage system; so, when you don’t pay their salaries, you expose them to harassment from their landlords. You can buy a car on hire purchase, but you cannot buy tomatoes on hire purchase basis.”

Oshiomhole said despite his priority for workers’ pay, capital projects are still going on in several parts of the state. “Something must give way and that is why I said we have to re-order our priorities. You have to decide whether you want to build a hospital, because you want to provide healthcare and then you are starving people. But even at that, we have not stopped working. Go to the Central Hospital, we have more than 200 people working there, and work is going on in Second East Circular Road, Upper Siluko and others. At the Queen Park Ede, Ekenwan and Auchi erosion sites, contractors are working. Work is also on in various schools. A few weeks ago, we paid about N3.5 billion in certificates to contractors.”

Though, the situation may seem better in Edo, one problem that now runs through most states of the federation is the inability of their governors to pay workers’ salaries. Some of the states must have gone from bad to very bad or even worse. After the infusion of bailout funds by the federal government, nothing has changed. We now have failed states that may lead in no time to a failed federation.

In 1983, the same scenario played out, which technically led to discontentment in the land and eventually the military intervention of December 31. Then, the country had just 19 states.

With the N20 billion loan it took since it came to office in May 2015, excluding the bail out funds granted to all the states to enable them pay their workers’ salary arrears and gratuity, Plateau State has still not found a way out of its mounting debts, which Governor Simon Bako Lalong put at N222 billion. The saving grace is the monthly Federal allocations. The state is largely referred to as the ‘Civil Service State,’ where there are no factories or industries.

However, many have continued to criticise the Edo State government, whom they said, has not done anything that will justify the change ‘mantra’ that brought the government in.

Unlike other states that are still at loggerheads over salary arrears, Taraba is a different case. Salaries are not paid as at when due. Unlike in the past, when workers went home with their pay packages few days to the expiration of the month, they now receive their pay several days after the month’s termination.

The sum of N6 billion out of the N9 billion bailout that entered the state, as gathered by news agencies, was used in settling various Bank debt, which include loans and overdrafts, to mention but a few.

The former Minister of Labour and Productivity, Senator Joel Danlami Ikenya, told news agencies that with the “intervention fund”, the state “is going to have a relief. It is a plus for us, as the government can now settle down and concentrate on making progress.”

He is also of the view that the state should, as a matter of urgency, fashion out ways of improving on its IGR, so as to cease depending solely on funds from the central government.

In spite of the foregoing, the state government, as observed by our correspondent, is leaving no stone unturned to properly utilise the remaining N3billion, as construction work in Jalingo metropolis, Takum council and other parts of the state is on-going.

For a state, whose Internally Generated Revenue (IGR) was barely N600, 000, but jumped to over N1.6billion recently, definitely, the man in the driver’s seat, Rauf Aregbesola, would have to go some extra miles and think out of the box for him to be able to stay afloat in order to meet the monthly wage bill of about N3.5 billion to settle workers.

Osun owed the state workers between five to six months before the N34.9 billion-bailout relief came its way. The release of the fund to qualified states in the federation had raised hope that the nation would witness less noise about inability of states to pay workers, which was a clear signal of failed states. The arrival of the fund was in itself as controversial as its disbursement.

Beginning from July last year, the government had reached an agreement and raised a committee involving key stakeholders, which was saddled with the responsibility of apportioning workers’ salary in accordance to available resources in the state.

The medical doctors in the employment of the state government, however, distanced themselves from the MoU, which later gave birth to the committee insisting that decisions by the committee cannot be binding on them since they are not members of the NLC.

The expectation of the workers, whose attention had been shifted to the bailout fund, was that the government has got the financial strength to pay their outstanding salaries in bulk and in full.

Apparently worried by the negative publicity the retrenchment might create, the state House of Assembly had ordered suspension of the sack letters and commenced investigation of the affected workers to determine if the sack was justified. The union leaders in the affected schools had directed their members not to collect the sack letters and consequently declared a strike to press home their demands and withdrawal of the sack letters.

Up until today, the governor is yet to constitute his cabinet and make other political appointments needed to assist him in governance.

Besides, the administration also recently awarded a multi-million-naira contract for the reconstruction of Olaiya/Asubiaro/ Ita Olookan Road. This also includes the payment of compensation to owners of properties that would be affected by the road construction.

Observers saw the decision to fix the failed road as good and popular one on the part of the government, because road is critical to the facilitation of free flow of traffic and promotion of socio-economic activities in the area.

To shore up revenue and ensure completion of some road infrastructure, which has suffered abandonment since the financial crisis hit the state about three years ago, the government had launched a fresh initiative to enhance payment of taxes. There has been continuous sensitisation of the populace on the need to pay taxes, as part of residents’ obligation to contribute to the development of the Osun project.

Just last week, the Gorvernor told His Imperial Majesty, the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi, to mobilise cocoa farmers in his domain and explain government’s new thinking and policy on agriculture, which would make it possible for farmers to first bring their cocoa to the government for proper grading and assessment before the produce is sold outside the country in order to increase the earning capacity of farmers in the sector.

He said the state government had enumerated all active cocoa trees in Osun amounting to about 60 million trees, which according to him, is capable of generating about $40 billion yearly.

In Imo, it is still not uhuru, as the state still faces salary problems, though it received bailout funds of about N26.4 billion from the Federal Government.

The state government received N5.8 billion (both State and Local Councils allocations) in November. State got over N2 billion, while 27 council areas received over N2 billion. Since there are no elected council officials, Governor Rochas Okorocha manages the allocation.

According to the governor, he spends N4.2 billion on workers’ salary, numbering about 40, 000, in the state, while he receives N2.2 billion. Till date, the issue of gratuity and pensions payments to senior citizens is still a problem.


Rev Francis Waive

Add a Comment

Your email address will not be published.

Comment moderation is enabled. Your comment may take some time to appear.