The Federal Government’s inability to improve the Federation Account has continued to affect state governments negatively. It has affected salaries’ payment in some and slowed down implementation of projects in others
It started last year. Not many expected it will last this long. But, the way things are, state governments may have to devise new means of meeting their financial needs. There are no signs that the Federation Account is going to improve any time soon.
The effects of the sorry state of the Federation Account, which has been blamed on oil theft and illegal bunkering, are diverse, depending on each state’s cushioning capacity. In some states, it has affected prompt payment of salaries and other emoluments. In others, it has affected projects’ implementation.
The situation is bad in Benue State, where workers are being owed two months salaries as at the time of this report. Investigation by The Nation revealed that why some ministries have paid, others are still waiting for their salaries.
A staff of the ministry of Agriculture, Peter Aondona, told The Nation that of the two months salaries (May and June), he received bank alert for May salary last week.
Another staff of Government House, Makurdi, Ukeyima Uma said even though he works in the Governor’s Office getting his monthly salary is difficult. He said it has been so since last year.
The Commissioner of Finance, Omadachi Oklobia and the Special Adviser on Local Government and Chieftaincy Affairs, Prince Solomon Wombo, attributed the delay to what they called shortfalls from the Federation Account.
Wombo told The Nation that government cannot borrow to pay salaries and has resorted to rotating payment among ministries.
For workers in Cross River State in the employ of the state and local governments, these are not best of times. Findings revealed that though they get paid, it is usually towards the end of the following month.
The situation is actually a departure from what they are used to. Salaries before now used to be paid before the end of the month or, at worst, the first couple of days into the next.
A source at the office of the Attorney-General with a wage bill of about N1.8 billion and an inflow of approximately N3 billion, the state is not finding things easy.
The source, who begged not to be named, admitted that the dwindling inflow from the Federation Account has worsened.
He said: “All I can tell you that the drop in the past couple of months is substantial and it is affecting us in no little way. As I am talking to you, we have not been able to pay salaries.
“Despite the fact that the Federation Account has been dwindling, we started having our problems before the recent dwindling of the inflow. Our problems actually started when Bakassi was taken from us. We have found it difficult to be breaking even, especially given the number of capital projects the state government had embarked on due to the inflow it had at that time. Contractual obligations became difficult but we cannot revoke what we started halfway.
“The IGR has increased but cannot meet the drop in Federal Allocation. We are facing a lot of challenges. Projects are not going on the way they are supposed to be going on. Only the ones loans have been taken for are on-going, but the ones that are not on loan are suffering. Payment is not going on as supposed to be. We even owe gratuity. For pensions we are paying as soon as we pay salaries.
“Besides our wage bill, we have subvention to the Cross River University of technology to the tune of about N170 million, State Universal Education Board (SUBEB) to about 30miliion and Local government Pension board to about 25miliion. Even then, this is not enough for them. These are all difficult for us now.
“It is going to be tough from what we are seeing with the drop in the inflow. With debts being deducted from the statutory monthly allocation to the state from the federations account it is not easy for us.”
For a state like Cross River where every sector mostly depends on the government, the situation has taken its toll on almost every facet of life.
A teacher in a government secondary school in Akpabuyo, Mr Fidelis Odey, said the situation has been hellish for him.
“Even when they were paying on time, the money was barely enough to take care of myself and my family, but now that they owe us almost to the end of the next month, life has been hell. To be honest, sometimes I don’t even have transport to go to the school. As I’m talking to you now, I am up to my neck in debt and I don’t even know where to go again. I pray something gets done urgently, before the situation becomes something else,” Odey said.
A trader at the Watt Market, who gave his name as Obinna, said business has been poor in the past month.
“My brother, our business has dropped. We are no more making sales as we used to and we understand it has to do with government that has not paid workers. Please something should be done. It is really affecting us badly,” he said.
Acting chairman of the State Internal Revenue Service, Dr Peter Oti, said there has been an improvement in the IGR.
Oti, who doubles as the Special Adviser on Budget, said: “There has been some improvement but we are not satisfied with what we have. We have not been able to meet set targets but we are trying our best.”
Oti, in the presentation of a budget breakdown in Calabar, said the IGR target for this fiscal year is N30.9 billion, which represents an 18 per cent increase above the 2013 target of N26.3 billion.
In Kogi, local government workers seem to be the ones bearing the brunt more. Governor Idris Wada last week had to order local government chairmen to pay their workers.
Workers in the 21 local government areas of the state have been on half-salary or less as a result of shortfall in statutory allocation.
While some of the councils workers are being owed over nine months’ salary, workers in some other councils have had to do with as low as 30 per cent salary payment. Workers in Kabba/Bunu for example are being owed over nine months’ salary arrears
Wada gave the directive in Ogori-Magongo Local Government Area, during a thank-you visit to the people of the area.
The governor said federal allocation to the state for the July is more than what was received in previous months and ordered council chairmen to pay full salary for July.
His words: “Let me tell you that the federal allocation to the state has been increased and what will come in July will be okay to meet workers’ salary.”
State government workers are lucky. Special Adviser to the Governor on Media and Strategy, Mr. Jacob Edi, said no civil servant is being owed salary.
His words: “No Kogi civil servant is owed salary. In fact, they have paid the salary of June already and they did not pay it in July, it was paid in June. To the best of my knowledge, salaries are paid as at when due.”
A source close to the Government House said: “I have already received my salary alert. That was yesterday (1st July). It is some of the banks that may be delaying in distribution of such, but by first week of the following month latest, workers are paid their salary. As of today, government is not owing any workers’ salary.”
Jigawa State has been able to pay all categories of workers. Its Commissioner of Finance, Alhaji Nasiru Umar Roni, said the drop in federal allocation did not affect salaries and wages.
Umar said: “I don’t know other states. I only know my state. Here in Jigawa, we have a mandatory arrangement of reserving our workers salary in any previous month.
“At times, we used to have two months’ salaries in advance. You are in this state, you know it yourself that we have already paid our workers since last week. Since the inception of Governor Sule Lamido in 2007, there is not a month that salaries are not paid.”
The Chairman, Nigeria Labour Congress (NLC), Suleman Adamu Kiyawa, said: “As far as we are concerned, we don’t know there is shortfall or not. Our concern is that our entitlement is taken cared of. Frankly, we appreciate the state government’s effort for paying our members at when due.”
Anambra State has also found a way around the shortfall. The State chairman of the Nigeria Labour Congress (NLC), Patrick Obianyo, told the Nation that the government pays them before the end of each month.
However, a level 10 officer at the Government House, Awka said: “We have not experienced that since Obiano assumed Office, rather, what happens is that they pay us late instead of at the end of the month. As we are talking now, the June salary has not come and we do not know when it will come, and that of May was paid to us in mid-June.”
The Nation could not speak with the Commissioner for Finance, Greg Obi, and his local government colleague, Lady Azuka Enemo. Obi’s phone was switched off. Mrs Enemo refused to answer her call.
The situation in Rivers State seems to be the same as Anambra. Many of the civil servants, who spoke to The Nation on grounds of anonymity, said the state government does not owe them salaries.
The only thing they complained of is that “of recent, the salary comes late. This started just a few months ago. Like that of May was paid about three weeks ago. But as we speak the government is not owing workers’ salaries.”
The Nation also gathered from some of the civil servants that as of July 2 “ we have started receiving alert for June salary.”
With its huge Internally Generated Revenue (IGR), Lagos State should not be affected by the fall in the Federation Account. Unfortunately, it is not. While the situation has not affected the payment of salaries of workers, it has resulted in projects’ funding.
Lagos State Commissioner for Economic Planning and Budget Mr. Ben Akabueze, who spoke with The Nation, said considering the burden that the state bears, resources, both IGR and federal transfers, are not adequate to meet the demand for development.
“Therefore, any shortfall in our revenue whether it is Federal transfer or Internally Generated Revenue (IGR) will affect our programmes, especially this year that we have not made provision for net funding from debt in our budget,” he said.
The commissioner said the situation was worrisome considering that oil prices continue to rise above the budget reference for the year. He said there was no clear reason for the shortfall.
He said: “If there was a clear and discernable reason for the shortfall in revenue everybody will understand, but what make this painful is the fact that oil prices are keeping strong above the budget reference from what we gathered, even adjusting from crude oil theft, production is also growing. But when we look our national reserve and external reserve are not growing and we are not seeing revenue being distributed equally. So, the question is what exactly is happening.”
Also, the Special Adviser to Governor Babatunde Fashola on Information and Strategy, Mr. Lateef Raji, who also spoke on the development, said the situation did not affect payment of staff salary because the government places priority on the welfare of its workers.
According to him, “Many bills due to be paid to contractors have not been paid but the government has not allowed it to affect payment of workers’ salaries. Generally, like every state is affected, we are affected but we have been able to manage it because of our diligence; that is why many people have not noticed the situation in the state. What is happening to Federation Account is mismanagement of funds, and it’s quite unfortunate.”
In Ogun State, Governor Ibikunle Amosun said despite the progressive dwindling allocations from the Federal Government, his administration has been paying civil servants salaries regularly.
Amosun said since May 29, 2011, the government has not owed any of its staff salary arrears.
The governor, who spoke at the Oba Complex, Oke-Mosan Governor’s Office, Abeokuta, while inaugurating the Chairman of the state’s Council of Obas, the Akarigbo of Remoland, Oba Adeniyi Sonarinwo, last Monday, ascribed that feat to the “financial ingenuity” of his team which led to a significantly improved Internally Generated Revenue (IGR).
According to him, whatever salary arrears and allowances being complained of by some people, especially those in the state-owned educational institutions were part of the crippling debt burden left by the previous administration.
He said the state received about N4billion from federal allocation in June, of which Irrevocable Payment Order signed by the previous administration with creditors ensured that about substantial amount is deducted from the source, leaving the state with little above N3billion.
He said the state also generated about N4.6 billion in June as IGR, expressing confidence that soon, Ogun State would not have to wait for what comes from Abuja before paying salaries or carrying out its projects.
Amosun said: “Despite the dwindling allocation from the federal, purse, we have been ingenious in making sure that we turned the finances of our state around. And we thank God that we have good report to say that today in Ogun, we are moving to that threshold where we’ll tell you confidently that we do not need to waite for whatever comes from Abuja.
“And that is the only way to go. It may be a difficult task, but that must be the way. People are accusing me that I owe them backlog of salaries arrears, some say 13 months, 26 months, 29 month and others 32 months. They are what someone left behind, but I have been clearing it. They accused me of defaulting with pension and I said which pension?
“Somebody squandered about N11 billion pension and you want me to pay it in one day but I have cleared over N5billion of it. Since I have been on board, I have not owed anybody; no civil servant is being owed even for one month.
“Since we came on board, we have been used to being paid as at when due. I told them that on my honour I will not owe. All of a sudden, what we were expecting from Abuja dropped. When we came on board, we were number twenty eight in terms of what we generate internally and what we get from Abuja.
“Today, we are second to Lagos; we are now two states in Nigeria that generate more than what we collect from the Federal Government. We received about N3.9 billion to N4 billion last month.”
•Reports by Miriam Ekene-Okoro, Clarice Azuatalam, Port Harcourt, Nwanosike Onu, Awka, Ahmed Rufa’I, Dutse, James Azania, Lokoja, Ernest Nwokolo, Abeokuta, Uja Emmanuel, Makurdi and Nicholas Kalu, Calabar
