Unpaid Salaries: Hope Dims For Workers

Posted by Bola Badmus, Kola Oyelere, Biola Azeez, Babajide Johnson, Yinka Olukoya, Isaac Shobayo and Wole Ige


HOPE of millions of workers in most of the 36 states of the federation that the state will overcome their inability to meet workers’ welfare and other statutory obligations appears forlorn, Sunday Tribune investigation has revealed.

The conundrum of mounting salary and pension arrears is deep-rooted in four main factors, which none of the states is willing to demonstrate the political will to tackle squarely.

Available statistics showed a bleak future, as almost all the states are gasping for breath under the yoke of meeting huge financial obligations in the face of steady decline in internally generated revenue (IGR).

The major encumberances of the states include abysmally IGR, which is largely due to lack of resourcefulness and weak machinery; bloated workforce; heavy debt profile and declining allocation from the federal account.

Checks revealed that most states still maintain area offices, coupled with a retinue of aides and political appointees, who have no direct bearing to the actual running of government.

Indicators from the National Bureau of Statistics showed states with the lowest debt profile as generating a paltry sum with a monthly wage of N billion to 50,000 civil servants.

The figure does not include the army of political aides, most of whom loaf around the corridors of power.

Despite two bailouts from the Federal Government to states, the latter had remained in dire straits because of months of unpaid salaries and pension arrears,
The two tranches of the Paris Club refund have also not brought remarkable succour to the states, even though there are reports of diversion of part of the fund meant for the payment of salaries and resuscitation of decayed infrastructure.

Some states have tried to shed weight by flushing out ghost workers, whose number was put at about 56,000 in the federal civil service, thus saving the government of a whopping N2 billion per month.

Lagos is believed to have a total workforce of 150,000 workers, followed by Kano which is said to have a similar figure.

The workforce for Benue is said to be about 17,090, whereas its wage bill ranges between N4.3 billion and N4.8 billion monthly, just as it gets between N3.2 billion and N3.7 billion from the federal pool.

Kano is also said to spend monthly on salaries N7.85 billion, while its IGR is over N 2 billion monthly.

The Ondo State government, before now, owed six months’ salary with the workforce put at about 56,760 , while the wage bill is about N3.9billion monthly.

The figure includes the salaries of political office holders, while the Federal Allocation in recent times ranges from N2.9 billion to N4.7billion, just as the state’sIGR is between N450million and N700million monthly.

With a workforce of about 29,000, Akwa Ibom State rakes in about N2 billion monthly as IGR, while Rivers State falls in the same bracket with Lagos and Kano State in terms of high IGR index.

Kogi State, which hitherto generated between N250 million and N300 million monthly as IGR, is believed to have raised the figure to about N1 billion.

Nassarawa State is said to be targeting N7 billion as IGR in the current year, while Jigawa has set a target of N12billion.
In its budget for 2017, the Ekiti State government is hoping to get N93.5 billion from federal allocations, IGR and other sources.

Reports from our correspondents showed that aside Lagos, Rivers and Kano that are able to rise above their peers in IGR and Value Added Tax (VAT), the financial status of others states might remain precarious for long because of bloated workforce and weak IGR to sustain wage bills continues.

It was discovered that the states may have to depend on bailouts from the centre for days ahead because of large workforce without commensurate resources.

States are currently seeking a third tranche of Paris Club refund, as the ones released twice could not offset the entire arrears of workers’ salaries and pensions to pensioners.

Though they have initiated a number of measures to shore up their IGR, the efforts seem to have having no salutary effects because of bloated workforce, unnecessary retinue of political aides coupled with leakages in the system.

However, the breakdown of the debt portfolio of many states remained a top secret thereby giving room for speculation on the actual figures.

Most of the states live on goldmines but they have been made hamstrung because of law regarding the prospecting solid minerals in the country.

There are indications that the months ahead could be more problematic for many states if bailouts do not readily come handy, because of unpredictable price of crude oil in the international market.

While some states, mostly in the North have high hopes of cushioning the effect from incomes from agriculture having encouraged mass production of grains, their counterparts in the South are yet to fully tap into their areas of comparative advantage in the sector.

Findings showed that Lagos has about N6.5billion monthly wage bill, while it sometimes collects N9.3billion as monthly Federal Allocation last January.

However, concerning the number of political aides and political appointees, a credible source, who could not volunteer the actual figure, maintained that number is less than it was under immediate past administration.

“The number has been far reduced. It is not up to what we used to have before. It is not much, but I can’t give you the figure now,” said the source who spoke on condition of anonymity.

Some sources of IGR for the state include: Business Premise Tax and Shop/Kiosk Levy which has led to some taxpayers paying to both State and Local Government on the same business premises.

Consumption Tax (which is a tax of 5 per cent on goods and services consumed in Hotels, Restaurants and Event Centres) collectible by the State Governments and ‘on’, and ‘off’ Liquor License Fee collectible by Local Government Authorities (which is a charge for permit to sell alcohol beverages and Wrong Parking Charges collectible by Local Governments as well as being collected by the Lagos State Traffic Management Authority (LASTMA) for the State.

Some Local Government Authorities in Lagos State still print emblems and stickers for sale to motorists in spite of the ban placed on such by the Joint Tax Board (JTB).

The Local Government Areas collect Radio and Television Permit ranging from N50,000 to N200,000 per annum; Parking Permit ranging from N100,000 to N500,000 per annum; Plastic Waste Basket Permit for truck, Jeeps and Commercial Vehicle ranging from N7,000 to N9,000, among others.

There are also Remote Gaming Permit, tax on winnings, vehicle licence and Road Worthiness, signage and Mobile Advertisement, Street Naming and Numbering. Land use Charge/Tenement Rate, among others.