The hallmark transition of Nigeria from one democratically elected administration to another is a thing worth celebrating but this celebration of “CHANGE” has been tainted by the salary palaver. For, regardless of the rising democratic profile of our great country which has earned her no mean admiration from the rest of the world, her economic prospect at the moment are probably at its lowest ebb in the history of her existence.
Last count, arrears of unpaid wage bills across the 36 states of the federation plus the federal government itself was reportedly put at over N150 billion while the construction industry alone is being owed over N600 billion for jobs already completed. A tale of getting and spending gone wrong?
If we must refresh our memory, the global economic meltdown between 2008 and 2010 had an adverse effect on our economy. The demand for our crude oil, our main source of foreign exchange till date fell. The price of crude in the international market also fell as low as US$38 per barrel. This meant that states were receiving less money from the federal allocation.
Between 2011 to 2014 however, Nigeria entered into another cycle of oil boom like we had between 1970 – 77. The price of crude within this period averaged US$105 per barrel. On sighting the oil boom, many of our political leaders at the state level started doubling the size of their government houses, town halls and conference centres. Some commenced the building of general hospitals in every electoral ward. Cost-centred projects along highways sprang up like mushroom. The organized labour took it from there and commenced the usual struggle leading to massive increase in salary of workers across the country.
Today, none of the states is able to pay salary of workers. So, what happened? The answer is simple; we mismanaged the boom that was witnessed between 2011 and 2014. We forgot Keynes’s central dictum which admonishes us that: “The boom, not the slump, is the time for austerity”. We failed to save during that period. Instead, we went on spending spree on mostly populist projects without economic value in order to earn “groundless applause” from the people. To put it in a more familiar parlance, nobody thought of the rainy day. For example, most of the states that cannot pay salaries today were only a few months ago showcasing their numerous “achievements” on national TV. Now the bubble has burst.
In addition to non-payment of salaries, contractors are not being paid, leading to the on-going layoff of more than 60% of construction industry workers. A polity that has more than 50% of its youths unemployed but with their parents now without salary is not only a time bomb; it is also a harmattan fire. When it starts, it spares no one. It destroys everything it casts its glance on.
It is a fact that cannot be over-laboured that most state treasuries are lean due to reasons we need not go into here. Some stakeholders have chosen to characterize the situation with the phrase “empty treasury”. But my view is that we should downplay that ascription because both in content and form, the phrase “empty treasury” does not portray a true understanding of fiscal practice in a democracy.
Even where an outgoing administration leaves behind some money, it does not amount to free money to be spent because ideally, such funds are already committed to ongoing projects. And the moment the new administration puts such funds into something else, there is a big problem.
Let me illustrate this with a personal experience. My administration as governor of Imo State, for example, left the sum of over N26.6 billion by the time we handed over in May 29, 2011. Of this amount, N13.3 billion was the balance from Imo Development Bond which was earmarked for projects that were ongoing by the time we left office. Unfortunately, the new administration saw the N26.6 billion as money that was there for spending and went on a binge: it embarked mostly on cost-centred projects such as first lady’s office complex, new multi-purpose hall, new exco chambers, new international conference centre, over 80 road projects, 27 brand new general hospitals and the building of squares and roundabouts, etc while abandoning the uncompleted projects left by us. The result today is that in most cases, neither the new projects nor the old ones for which those funds were initially earmarked have been completed.
It is this penchant for mismatching funds that has led to non-payment of salaries and abandonment of projects which has become the rule rather than the exception. In my view, it is high time we took deliberate steps to tackle the issue of abandonment of projects started by previous administrations by new ones. It is evil and it is a major root cause of our economic calamity. It leads to nothing but wasting of resources.
Abandoning projects started by a preceding administration is a product of the “what did you achieve mentality”. This mentality makes it almost impossible for a new administration to think rationally. Instead of completing projects that will have huge multiplier effects, new administrations merely go for quick wins by duplicating mini road, electricity, water projects, brick and mortar structures etc which it can quickly complete in order to earn immediate applause from the people who are not in position to understand the tragedy of such idiosyncrasies. According to Talmud: “It is not up to you to finish the work. But you are not free to desist from it”.
If we do not act fast, non-payment of salaries may assume the status of official policy. It is something that we must stand up against in Nigeria. It leads to economic and social calamity. I call on the legislature to come up with a bill stipulating that salaries not paid as at when due should attract interest on prevailing bank rate until paid. Salaries should be a first line charge for both the federal, state and local governments.
Quite often, you would hear some state governors pride themselves for not borrowing money from banks, even while they owe their civil servants several months of arrears of salaries in addition to non-payment to contractors for jobs duly done. By not paying workers and contractors, the government is indirectly borrowing from them without paying interest.
This notwithstanding, I do not agree with the view that only the state governments are responsible for the current crisis. Let me also state that it is not also true that state governors merely cart away the funds into their private pockets. Such a blanket view is dangerous because it makes it difficult, if not impossible, for us to look at the issue through the proper political prism.
There are suggestions to the effect that government should embark on austerity measures and even sack workers. This is dangerous. On the contrary, what we need is more spending that would arise from a well-articulated economic stimulus package for the states and local governments. But since the federal governments itself is also in a financial distress, it means that the country should source for funds externally once the necessary caution is applied. The funds so sourced will then be directed at stimulating economic activities through increase spending.
Now is the time for the government to spend more, not less, until such a time that the private sector will be in the position to stimulate the economy. On the whole, there is something we cannot run away from: The arrears of salaries owed civil servants across the states must not only be paid but also measures put in place to make non-payment of salaries a thing of the past. It is evil and it needs no emphasis to state that non-payment of salaries poses the biggest threat to our democracy.
‘There is something we cannot run away from: The arrears of salaries owed civil servants across the states must not only be paid but also measures put in place to make non-payment of salaries a thing of the past’
