The report that President Muhammadu Buhari has approved the release of N713.7 billion intervention funds for the federal and state governments to pay workers’ salaries should bring relief to civil servants who have been bearing the burden of a drastic fall in oil revenues for some time now. But the bailout should be seen as a palliative; the harsh forces of economics demand that government at all levels learn how to live within their means. The package contains N413.7 billion from special intervention funds and about N250 billion to N300 billion to be advanced as a soft loan to states by the Central Bank of Nigeria. Also, the Debt Management Office will assist the insolvent states to reschedule their over N660 billion bank loans.
So far, no fewer than 24 states have failed to pay salaries, some with a backlog stretching up to 10 months. How the workers are surviving under such a condition cannot cease to marvel. But no state chief executive has been able to capture the stark realities of the situation in as vivid a manner as the Osun State Governor, Rauf Aregbesola. In an address to declare open the sixth Assembly of the state, the governor painted a picture of total gloom and helplessness. Aregbesola said he met a wage bill of N1.4 billion, upon assuming the mantle of leadership in 2010. But, egged on by an unprecedented financial windfall, fuelled by unparalleled boom in the oil trade, the wage bill shot up to N3.5 billion by the end of 2012. At the same time, the statutory allocation to the state from Abuja only recorded a marginal increase of about N400 million, from N2.1 billion to N2.5 billion.
The Osun State scenario is not by any means peculiar; it actually offers an insight into what obtains in states across the country. In his comments at the Adegoke Adelabu Memorial Lecture in Ibadan last year, the Oyo State Governor, Abiola Ajimobi, said the state’s wage bill of N2 billion he inherited had more than doubled to N4.6 billion. Today, it stands at about N5.2 billion, while the monthly allocation of N4 billion collected last year has plummeted in line with the current dwindling oil revenues. In Rivers State, where the wage bill has ballooned from N2.5 billion to N9.2 billion in the last eight years, former governor Rotimi Amaechi said the monthly allocation had reduced by 50 per cent.
Most of the governors have blamed their dire financial situation on the minimum wage increase of 2011; but not many have been honest enough to admit that the entities they preside over are mere cost centres that cannot deliver development. At the slightest opportunity – as was evident during the last National Conference – a motley group of agitators demand the creation of new states. None of them ever gives a thought to the viability of such states. So, rather than play the role of agents of development, states now encourage laziness, and wait, arms folded, for manna to fall from Abuja.
Perhaps, the time has come for a reappraisal of the states as they are currently structured. As the immediate past Lagos State Governor, Babatunde Fashola, said recently, there is the need to merge states that are not viable so that the burden borne by one state can be evenly sustained when two or more are bonded together. This makes a lot of sense given that the country fared much better when there were just three or four regions – salaries were more readily paid and development delivered effortlessly. Some of the landmark achievements in the South-West, such as the establishment of the first television station in Africa, creation of industrial estates, the building of the Cocoa House and a network of roads, among others, were products of a period when the current five states were just one entity, the Western Region.
By then, the federating units – Western, Eastern, Northern and Mid-Western regions – were run as a business, producing their resources and paying tax to the centre. Today, our states have become beggarly, surviving mainly on hydro-carbon revenues.
The public finance approach of running government as a business should be re-introduced in our national life. Contiguous states have to pool resources and work towards self-sustenance in the true spirit of federalism. They should review their fiscal management style in tune with the current realities. For instance, how many of them have taken a look at the staff strength of their civil service within the period that their wage bill had been ballooning? How many of them have done a biometric audit of their staff to weed out “ghost” workers?
At the level of the governors and their retinue of aides, it is important to note that the pressure they put on wages is out of proportion to their relevance. Apart from the need to cut down on the number of commissioners and other aides, reviewing their bloated remunerations has become imperative. The same goes for House of Assembly members. The time has come to see politics as an opportunity to render service; not to amass wealth. The newly-elected Governor of Kaduna State, Nasir el-Rufai, Ajimobi and a few others have already taken the right step by cutting the number of their commissioners.
These are short-term measures. Fiscal repair will not come overnight; it requires serious planning and a strong political will to take difficult decisions. In the long run, states should work assiduously for a constitutional review that will enable them to explore and exploit minerals within their territories. That is exactly what federalism is all about.
