Nigeria’s dwindling revenues, resulting from the crash in crude oil prices in the global market, and the forecast by experts that the days of higher oil prices might have gone forever, portend prolonged economic hardship for the Federal Government and our 36 states. A report says Nigeria needs oil to trade at just under $123 per barrel to balance its budget, and its economy has lost a whopping $42.5 billion in economic output. But over 90 per cent of the governors depend mostly on monthly revenue allocations from Abuja to exist. Responsible state governors must feel unsettled about the immediate implications of this negative oil shock on the welfare of their people.
Already, the effects are disturbingly noticeable. Just a few months after the oil revenue drop began, a majority of the states can no longer pay salaries. A media report indicated that 11 of the states owed civil servants between three and four months salaries as of December. That 22 states now owe salaries suggests a worsening dilemma.
Graphically, the December 2014 revenue allocations of N580.37 billion, shared barely three weeks ago, among the three tiers of government, which was N108.56 billion lower than the N688.93 billion budgeted, underscores the danger. Instructively, N628.77 billion was shared in November, a picture that depicts a steady monthly fall. But the states have nowhere to go for a bail-out except to look inwards and initiate the right policies.
While increasing their internally-generated revenue should be embraced with vigour, no state governor has, as yet, taken the bull by the horns, by mapping out a well-thought-out and comprehensive survival strategy. Therefore, far-reaching measures and reordering of priorities are imperative. Central to this rescue plan is the reduction of the cost of governance, which includes doing away with the reckless lifestyle of governors, which the country has had to contend with since 1999. The other is for states to make a quick switch of resources into activities that are more dependable for long-term prosperity, especially by building a more productive, sophisticated industrial base.
A starting point should be the reduction of the number of commissioners, advisers and other category of aides. These portfolios, indeed, were creations of political expediency, rather than the need to provide service to the people. In 2010, for instance, Governor Isa Yuguda of Bauchi State allegedly had about 1,000 aides; and this is almost the picture in other states. With overlapping functions of ministries and agencies, and its corollary of bloated bureaucracy and huge wage bills, survival is far-fetched without reforms.
Added to this is the scourge of “ghost workers.” Today, many states face the embarrassing situation of not knowing the exact strength of their workforce. A similar conundrum at Abuja forced the Federal Government to introduce the Integrated Payroll and Personal Information System in 2010, which culminated in the weeding out of 60,000 “ghost workers” as of 2014. The Federal Government is saving N160 billion annually as a result.
We wager that more of this monstrosity prevails in the states; adopting the Abuja IPPIS model to clean up the payrolls is unavoidable now. One state that has successfully blocked this source of leakage in its system is Bayelsa. Aggressively, it reduced the monthly wage bill of N6 billion, which its governor, Seriake Dickson, inherited, to about N3.5 billion. With the Bayelsa State Fraud and Related Offences 2012 law, promulgated to strengthen the reform, payroll fraud is in retreat. A number of states had before now, identified some “ghost workers.” Rivers reportedly had 8,000; Delta 7,000; while Kebbi, had 9,000, among others. The urgency of now dictates that the purge be deepened, so that funds could be freed for developmental initiatives.
Much against the spirit of the 1999 Constitution, many states imitate Abuja in funding pilgrimages either to Jerusalem or Mecca. For instance, Borno State spent N500 million on Hajj in 2014, while Oyo State spent N1.5 billion in the four years to 2014, according to Governor Abiola Ajimobi. This is the time to end this breach. Service delivery would have been enhanced in these states if the funds had been properly utilised.
In spite of the prevailing hard times, most of the governors still move about with long convoys of between 15 and 20 vehicles. Some state governors in the oil-rich South-South region still luxuriate in their private jets at public expense. This is no longer sustainable. It is incredible that a governor in Nigeria who runs his state based on allocations from the centre, keeps a private jet, whereas the British Prime Minister, David Cameron, whose country is one of the seven global economic giants (G7), does not have any.
These excesses explain why over 70 per cent of the annual budgets of states is recurrent expenditure, to the detriment of capital expenditure – which naturally fosters job creation, provides infrastructure and welfare of the people.
Besides reducing the number of aides, reviewing wages paid to political appointees has become absolutely essential. Governors should strive to diversify their resource base. Apart from expanding the industrial base, agriculture, long abandoned because of petro-dollars, should now be put in the front burner as it has the potential to positively change the economic fortunes of the states and provide our youths with jobs.
