South-South States need more bailout funds

South-South States need more bailout funds

October 24, 2015
FROM PAUL OBASUYI, JUDEX OKORO, FEMI FOLARANMI, TONY OSAUZO, TONY JOHN
Like Oliver Twist, some Niger Del­ta states require more bailout funds to meet their financial ob­ligations after the exhaustion of the recent federal government bailout.
Delta State is a beneficiary of a total sum of N20.9 billion bailout. This has how­ever been exhausted without the problems being solved. As a result, the state govern­ment is already requesting for more N30 billion bailout loan, to settle salaries of local government staff and pension arrears.
Unlike in some other states, where civil servants went on strike over unpaid sala­ries, it was only Council workers that em­barked on strike in May this year. The in­dustrial action was, however suspended in July, after funds were released for the pay­ment of three months arrears.
Saturday Sun learnt that it was the usu­al practice in the oil rich state, particular­ly during the previous administrations, to approach commercial banks for overdraft facility for payment of workers salary, a development that has compounded the debt profile of the state.
With a workforce of over 60,000 work­ers in the State Civil Service which gulps a monthly wage of N7,437,940,015.38 in­clusive of the monthly support to the lo­cal government councils to enable them pay primary school teachers’ salaries, the future looks bleak.
But the Chief Press Secretary to Gover­nor Ifeanyi Okowa, Mr. Charles Aniagwu has allayed fears that the administration will resort to workers retrenchment to cut down on personnel cost.
While not ruling out a comprehensive au­dit of the system, to weed out ghost work­ers and those who were illegally sneaked in, Mr. Aniagwu also ruled out the possibil­ity of reducing the wages of civil servants.
He said: “At the moment, cutting down on the service, wages or stagnation of em­ployment is not an option because, we do not want to worsen an already bad situ­ation. What is bad, however, is that most of these persons are actually idle because, they were engaged without thinking of what job they were going to do.
“We are hoping that, with the policy put in place by this administration we will be­gin to expand the economy, which will lead to more hands to add to the Gross Domes­tic Product. In the first instance, we are not likely going to employ new people, we will maximize the hands that we already have in form of deployment.”
Governor Ben Ayade of Cross River State, on assumption of office had lofty dreams of taking the state to the next level, enviable one at that, by putting food on the table of every Cross River person, create more jobs and provide enabling environ­ment for economic activities to thrive.
However, like many other states in the country, Professor Ayade’s administration is faced with economic challenges, rang­ing from fall in revenue allocation from the federal government, and Internally Generated Revenue (IGR), huge debt pro­file, increase in monthly wage bill and how to finance some projects , even when the state had received the bail out from the federal government.
Investigation by Saturday Sun revealed that a bail out of about N7bn recently re­ceived by the state was not enough to offset the arrears of four months salaries owed to workers.
The governor had on assumption bor­rowed from banks to pay up and imme­diately he received the bailout, he paid back some of the loans borrowed from the banks. As at the time of this report, the state had cleared backlog of salaries.
Despite the fact that the state has cleared the backlog of salaries, the administration is still grappling with pension and gratu­ities of retired workers, as most of the pen­sioners are still owed up to nine months, with the huge debt profile of about N124 billion, inherited from the past administra­tion.
Besides, the drastic fall in monthly fed­eral allocation to the states is said to be a source of concern to the governor. It was learnt that the state receives an average of N1.8 billion and N2.4 billion monthly, compared to state’s monthly wage bill of N2.6billion, thereby putting the state on deficit.
Therefore, to meet up with salaries and other emoluments of political appointees, the state is said to be borrowing from the banks every month.
On Internally Generated Revenue, Satur­day Sun investigation further revealed that the state generates between N600 million and N1.2 billion monthly.
The challenges, according to a Govern­ment House source , has led to the gov­ernor adopting some fiscal policies, to save cost of governance and curb excessive wastages in Ministries and MDAs.
One of the policies, the source disclosed, is the adoption of centralised payment sys­tem in the state. By this policy, the gover­nor directed the banks to seek confirmation from him, before making payments, there­by becoming the last approving officer in any transaction involving cash.
Though, this method is aimed at con­trolling movements of state’s funds, it is said to be slowing down the process of governance.
The source also said that due to the state’s lean resources, the governor has suspended the payment of imprest to MDAs, which, unfortunately, has made it difficult for them to carry out basic func­tions expected of them.
Another source told Saturday Sun that delay in appointment of commissioners is also attributable to paucity of funds, add­ing that the new administration is in serious economic strait.
Speaking on the issue of salary, the state chairman of NLC, Comrade John Ushie, confirmed that the state was not owing workers, but admitted that they are passing through some economic hardships, occa­sioned by some fiscal measures adopted by government in order to save cost.
With the dwindling oil revenue , re­sulting in drastic drop in federal alloca­tion to states, Bayelsa State government, under Governor Henry Seriake Dick­son, has been practically struggling to keep governance afloat; by ensur­ing that civil servants are paid their monthly salaries and other obligations of the state met.
This is, however, without some con­sequences: all capital projects in the state have been suspended.
Speaking recently on the precarious financial situation in the state, Dickson appealed for calm, from Bayelsans as the state revenue further dropped in September.
He had said: “The last report we got was that our allocation has dropped from N6.2 billion, last month, to about N5.6 billion for this month(September). This shows the challenges that our state is grappling with. But, we are not alone. Whereas, many states cannot even meet their basic obliga­tions, we, in this state are still carrying on. As a matter of fact, I have again, instructed that salaries be paid.”
Governor Dickson is, however, lucky to have an ‘understanding; labour unions in his state, what is actually lacking in some states.
Labour unions in Bayelsa are said to be showing some understanding with the government, especially after they real­ised that the governor is putting more ef­forts to pay staff salaries.
The Chairman of the Nigerian Labour Congress (NLC), Bayelsa chapter, Com­rade, Bieapre Ndiomu in an interview with Saturday Sun said civil servants in Bayelsa have no problem, as the state government has been up and doing in the area of pay­ment of salaries.
However, if the civil servants are not having problem over salaries, the same cannot be said of the local government workers, who are being owed several months, due to inability of the council chairmen to properly manage the finances of the councils.
Out of the eight local government coun­cils in the state, it is only Brass local government council that is not owning workers salaries. The remaining seven are owning at least, three months salaries.
His counterpart in the Nigeria Union of Local Government Employees (NULGE), Akpos Ekiyah, explained that the local government workers were being patient, having been aware of the financial situa­tion in the state, which of course, is not the making of the state government.
Ekiyah, who acknowledged that salaries were being owed to the local government staff, however, said that the union was not considering the option of strike, as its leadership is already aware of the prob­lems being faced by the state government.
The Bayelsa State Commissioner for Information, Mr. Dan Esueme Kikile, in an interview said since inception, Dick­son government has prided itself as prudent and accountable, one of the re­sults of which had been the regular pay­ment of civil servants’ salary.
He described Bayelsa as a civil service state and government. He described reduc­tion in workforce or cut in salaries as an­ti-people.
On the bailout funds, Kikile claimed that Bayelsa state had not accessed the funds, as it has no problem of payment of salaries. But he added that because of the backlog of local government workers’ sal­aries, it has applied for the bailout, to be able to clear their salaries.
“ The bailout funds is for states that are having problem in paying civil servants salaries, Bayelsa does not have much problems. However, because of the fi­nancial situation of the local government councils, with some of them not being able to pay salaries for three months, the House of Assembly recently passed a res­olution, directing the state government to access the bailout funds, to assist the local government councils.”
In Edo State, the government has so far managed to meet its obligations to its workforce, especially payment of monthly salaries.
For instance, workers in Edo State got their September salary on Sep­tember 23rd. As some state government are thinking of laying off some staff to ease the burden placed on them by salary payment, the Edo state government is not seeing it as solution to the cash crunch facing the states. This position was also corroborat­ed by the State Commissioner of Infor­mation and Orientation, Mr. Louis Odion. While admitting that the dwindling re­sources affect the state’s capital projects, the Commissioner said the state govern­ment had been prioritizing execution of projects.
He explained that the support the state government was getting from the World Bank would help it to cushion the short­fall in allocation from Abuja.
The State Government’s recent decision to borrow the sum of 225 million U.S dollars, from the World Bank to finance some projects generated controver­sies across the country.
Besides, the State House of Assem­bly recently approved the decision by the state government to obtain a N10 billion loan from the Central Bank, to finance some of the ongoing projects.
When the State Chairman of the Ni­geria Labour Congress(NLC), Comrade Emmanuel Ademokun was contacted to ascertain if the state government was owing the workers, he told Saturday Sun that the state government was liv­ing up to its responsibilities as it concerns payment of salaries.
“Our Comrade Governor is paying as at when due. We do not expect government to downsize workforce, our workers are very few. We expect government to employ more, especially members of Edo Youth Employment Scheme, who were laid off. The Governor promised to absorb those of them that are qualified, into the State Civil Service,” Ademokun said.
In Rivers State, the government has re­fused to apply for any bailout fund from the federal government. The development has made it difficult to pay accumulated workers’ salaries.
This was the view of the State Com­missioner for Housing, Emma Okah, during an interview with Saturday Sun in Port Harcourt.
Okah, however, explained that the state was able to pay workers’ salaries through the loans Governor Nyesom Wike’s administration took from a bank at inception.
He pointed out that the current government inherited huge debts of un­paid salaries, which he said the govern­ment had been able to clear. Also, he add­ed that the state had no intention to retrench civil servants.
While a section of the workers claimed that the state government had paid their sal­aries up to September, others, especially in the health sector said they were being owed 11 months salaries. Just last Mon­day, October 19, the workers staged a peaceful protest, to vent their anger over their 11 months unpaid salaries.
The man, who led the protesters to the State Government House Port Harcourt, Allwell Wali, threatened that the health workers would shut down the Braithwaite Memorial Special Hospital, owned by the state government, if nothing was done to pay them their arrears within seven days.
According to him, their employer (gov­ernment) had earlier threatened to sack them, if they went ahead to stage a protest.
Wali explained that the health workers had earlier written letters to the relevant authorities in the state, to look into their predicament.
Also lamenting the nonpayment of two months salaries, the local government staff decried a situation whereby, their counter­parts in the state service had been paid up to September while they are being owed for two months. They appealed to the gov­ernor to also have interest in the pay­ment of salaries of local council staff.
There are some projects initiated by the immediate past administration of Hon Chibuike Rotimi Amaechi, which were not completed because of lack of funds. It would be recalled that before he left office, Amaechi had complained bit­terly about the dwindling allocation from the Federal Government. Some of the road projects were not completed by Amaechi, but the current governor, Wike said he would complete only the projects that have ‘direct impact on the people’.
However, one capital project that is likely to be abandoned, at least, for now, is the controversial Monorail, which was conceptualized by former governor Amaechi.
The monorail project had so far gulped over N30 billion. The figure was based on the recent revelation at the just con­cluded Justice George Omereji-led Ju­dicial Commission of Inquiry, set up by Wike to probe the Sale of State Valued  Assets and Other Related Matters by the former governor.

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