Looming Disaster over Salary

A statement credited to Niger State Governor Abubakar Sani Bello that his state government can no longer pay workers’ salaries sent shock waves not only in Niger State and in labour circles but throughout the country. Bello, who spoke in Abuja soon after he met with President Muhammadu Buhari, was asked about a report in […]

A statement credited to Niger State Governor Abubakar Sani Bello that his state government can no longer pay workers’ salaries sent shock waves not only in Niger State and in labour circles but throughout the country. Bello, who spoke in Abuja soon after he met with President Muhammadu Buhari, was asked about a report in a national newspaper saying he was about to cut his state’s workers’ salaries by 70 percent.
Bello denied the report but he then dropped an even bigger bombshell, saying Niger State Government borrowed N3 billion from commercial banks since January this year in order to make up for shortfalls in its wage bill. He said this debt could reach N10 billion by December if the state government continues to borrow at the same rate. He added, “Niger State has a population of over 4 million. Civil service strength is about 40,000. We get N1.5bn from the Federation Account and even with that, we still have to borrow to pay 40,000 people against over 3 million people we need to cater forý.” He said he had met with labour union leaders in the state and laid all his cards on the table.
Even though salary payment by state governments all over the country has been epileptic for some time, this was the first time that a state governor flatly declared that he can no longer pay salaries given the very sharp drop in earnings. This was occasioned by both the sharp drop in international oil prices and the steep drop in Nigeria’s oil output due to the resurgent activities of militant groups in the oil producing Niger Delta region. At the last count, 27 state governments are having trouble paying their workers despite a federal bailout late last year.
Already, workers in several states including Ondo, Ekiti and Kwara are on indefinite strike for not being paid for at least five months. Ekiti State workers began an indefinite strike on Thursday last week over the state government’s inability to pay five months’ salary arrears and for failing to refund deductions made from their December 2015 salaries. Governor Ayo Fayose, always known for his nasty tongue, responded with a broadcast in which he said the state only got N751million from the Federation Account last month. He said, “I can only deploy what I receive from the federation account. If workers want to go on strike, I sympathise with them but we will be here waiting till when they come back. I can’t sell myself to pay workers. Even the government house where I live does not have diesel to power generator at times.”
In neighbouring Ondo State too, workers have gone on strike over five months’ unpaid salaries. While APC in the state blamed the PDP-led state government of squandering the N15 billion special intervention bailout funds it got from the Federal Government last year, the state’s Commissioner for Information said it is the APC-controlled Federal Government’s policies that ruined the economy and made states unable to pay salaries. Clearly, there is a lot of room for partisan bickering and cross fertilisation of blames in this matter, but that is not what Nigerians deserve at this time.
The way things are going, more and more states are likely to fall behind in the payment of workers’ salaries. This will translate into a national disaster probably worse than the insecurity episodes we have been battling with all these years. It is time for national soul searching and for political leaders at all levels, especially the President of the Federal Republic, to come up with a solution that will avert this calamity.
Some states are already acting according to the first rule of holes, which is that if you are in one, stop digging.  Niger State Governor Bello said, for instance, that his appointees and himself have taken a pay cut and the Minna Government House’s operational expenses have been cut from N150 million to N25 million a week. Funds misappropriated by past regimes are also being recovered, he said. These are good first steps which every state government should emulate but they are not enough to meet the current challenges.
Borrowing from banks is a good option but it has its limits. One cannot go on borrowing forever and even bank vaults are not bottomless. Besides, the more a state borrows, the deeper will be the cut in its next Federation Account allocation. Retrenchment of workers is another option but it is a totally repugnant one in the current circumstances when the national unemployment rate is so high. Mass sacking of state workers at this time could stretch the social fabric to breaking point, since salary earners subsidise the rest of the population that does not earn salaries.
Yet another option is a cut in workers’ salaries. This too is a very undesirable option, at a time when labour unions are pushing for a salary increase due to the rise in fuel and power prices, sharp depreciation of the naira and high inflation rate.
The last remaining option is for the Federal Government and Central Bank of Nigeria [CBN] to work out another bailout plan, this time a longer, more sustained one until the economy rebounds. It might seem costly to do so, but the costliest of all options is not to do so.