Political leaders, historians and policy makers would not forget the years between 2007 and 2009 in a hurry. The global recession that spread across the world during this period resulted in a sharp drop in international trade, rising unemployment and slumping commodity prices. Many multi-national companies were unfortunately swept away by the depressive economic gale.
Across the world, economic theorists warned sternly that recovery might not appear until 2011 and that the recession would be the worst since the Great Depression of the 1930s. One of such economists of this century, Paul Krugman, in his comment on the economic downturn described it as “seemingly the beginning of a second Great Depression.” Expectedly, governments and central banks in Europe and America responded with both fiscal and monetary policies to stimulate national economies and reduce financial system risks.
In its findings on the cause of the meltdown, the report of the U.S. Financial Crisis Inquiry Commission, in January 2011 described the crisis as avoidable. The Commission listed some of the causes to include among others: widespread failures in financial regulation; dramatic breakdowns in corporate governance, including too many financial firms acting recklessly and taking on too much risk; key policy makers ill prepared for the crisis, lacking a full understanding of the financial system they oversaw and systemic breaches in accountability and ethics at all levels.
Nigeria and indeed African countries were, to some extent, so lucky the depression wind did not blow across the black continent. We escaped the economic downturn. This however, is not to say that African countries and in particular Nigeria, did not taste the sourness of the economic downturn.
Everyone thought Nigeria would learn from the global crisis. Today, the economic reality pointed otherwise. The operators of the country’s politics, monetary and economic policies have told the nation that they are either incompetent to run the nation or are too greedy and self-centred to run people-oriented government.
Today, the economic crisis has left many states paralysed due to what many tagged the Federal Government’s financial recklessness and twin factors of corruption and poor economic policies. Workers across the 36 states have been groaning under this economic hardship owing to backlog of unpaid salaries, arrears as well as pensions.
The situation in Osun is however slightly different as workers have been paid up to November while in some states worker are owed up to six months salaries. Osun is a different kettle of fish in the sense that the Governor, Rauf Aregbesola, was foresighted enough to prepare for a situation that the whole country currently found itself. On the federation account – Osun is actually in the 34th position on the rung of allocation ladder – collecting between N2bn to N4bn. And the state has a monthly salary wage of N3.6 billion to fulfill.
Despite this huge bill and low allocation, the state under Aregbesola had always paid it’s workers’ salary as and when due, mostly between 24th and 26th of every month. Besides, it was during his tenure that the monthly pension to retirees jumped from N150 million to over N650 million, which the pensioners also collected promptly monthly. Not only this, workers also enjoyed thirteenth month salaries, first, half of their basic and in subsequent year, full basic salary.
This smooth and orderly arrangement began to suffer mid July 2013 when allocation from the Federal Government abruptly nosedived. Allocation coming to Osun significantly reduced from N4 billion plus to about N2.5 billion. Federal Government blamed this reduction first, on theft of crude oil to the tune of 400, 000 barrel per day; but later attributed the dwindling fortunes to decline in oil price at the international market.
Before Federal Government came out with these reason, Aregbesola and his Edo State counterpart, Adams Oshiohmole, had raised the alarm over the continuous reduction in states’ monthly allocation by the Federal Government. It got to a stage that some states, Benue for example, contemplated slashing workers’ salary so as to be able to meet its monthly financial obligation to workers. This was vehemently rejected. It led to workers been owed up to eight month salaries.
Amidst this reversal in the fortune of the states, Osun was able to meet its financial commitments to its workers. This was made possible by Aregbesola’s prudence and foresight. When he assumed leadership in Osun, oil price was as it’s all time high and so extra fund was dripping from excess crude account. Aregbesola did not fritter this excess fund. He opened Omoluabi Conservative Fund and kept saving the accruing excess crude fund.
As if he knew that after a period of surplus economic hardship would follow. When eventually sources of the excess crude oil suddenly dried up, Aregbesola had something to fall back on. For the next six months – that is well into mid 2014 – when most of the states could no longer meet their monthly statutory obligation, Aregbesola was drawing from his Omoluabi Conservative fund to augment the now significantly reduced allocation to pay salary.
Rather than abate, the economic crisis showed no sign of abatement, forcing many states to economic stagnation. Yet Osun trudged on until the reserved fund emptied. Why Osun’s case is manageable today was as a result of financial prudence of the Aregbesola administration. The present predicament in Osun is not peculiar to the state; other states are affected. In some states, the situation is even worse.
Osun debt profile has nothing to do with the prevalent economic conditions. The situation, brought about by Federal Government’s uncontrollable financial misappropriation unleashed this hardship on all states, both PDP and APC controlled. Like any other state in the federation, Osun went to the capital market for bond. The state did not however bite more that it could chew. Its debt profile is within its economic capacity. In terms of solvency, Osun is solid. For the avoidance of doubt and to expose the wanton lies of opposition, it is germane to refer to what the Director General of the Debt Management Office (DMO) in the Presidency, Dr. Abraham Nwankwo, said last year shortly before the August 9 governorship election.
As usual, the opposition party had gone to town on its campaign of calumny that the state was indebted to the tune of N350 billion. But the DMO, shortly after, revealed that the state is one of the best states in the federation with public debt management. He also noted that his office recognised Osun as the first to take the Sukuk, the Islamic bond. The state later won an award for this in Dubai, the United Arab Emirate. Nwankwo said at that forum: “We want to make sure that all segments of the society is captured in the bond market (Sukuk) because there are some groups of people or individuals who do not want to participate in ordinary bond because of interest. “Our office, DMO, and others are working hard to introduce Sukuk in Nigeria. We are delighted that Osun took the initiative and helped in introducing it in Nigeria. So, by that, Osun is one of the best states in public debt management.”
The workers in Osun know that the governor is deeply concerned about their welfare. In fact, he is one of, if not the best, worker- friendly governor around. It thus stands to reason that in this adverse time, the workers would be standing firmly behind the governor so that they can jointly swim across the present murky economic water.
•Owolabi, a journalist is a final year Law student at LASU, Ojoo.
