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Comment, Opinion

Osun State, Metaphor For Unpaid Salaries

Posted: Jun 30, 2015 at 5:00 am   /   by   /   comments (0)

By Bolanle Oke


About two months ago, a female retiree of the Osun State public service called to complain about unpaid workers’ salaries, and wanted this writer to wade in, as an advocate of the masses. After another caller came up with the same issue, it became imperative to find out what was going on in Osun State. Osun State truly owes about six months’ salary backlog, and the workers have become restive as a result.     

Osun State Governor, Ogbeni Rauf Aregbesola, attributes the unpaid salaries to Osun State’s dwindling revenue. For instance, he revealed, revenue from all sources in 2012, including the Federation Account; internally generated revenue; and other accruals, like value added tax, from the Federal Government, yielded N28.4 billion, whereas total wage bill only was N31.6 billion, leaving a deficit of N3.2 billion. The same scenario was repeated in 2013, with a deficit of N10.4 billion.

It turned out also that dwindling oil revenue has made it difficult for the Federal Government, and 24 (some say 28) of Nigeria’s 36 states, to pay staff salaries. The initial cause of the palaver was the increase of minimum wage to N18,000, unilaterally entered into by the President Goodluck Jonathan Government with the labour unions. It became a kerfuffle when the price of crude oil plummeted, and reduced the revenue that accrued to the nation.

The Nigerian Governors’ Forum, led by former Rivers State Governor, Rotimi Amaechi, alleged that another cause of the problem was the Federal Government’s squandering of funds due to the states from the Excess Crude Account. But former Minister of Finance, and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, countered that the money was actually paid to states. She asked Governors who are in doubt to ask their Commissioners for Finance for the whereabouts of their allocation.

Some argue that some Nigerian governments embarked on ambitious projects. The governments, they argued, had thought that the higher revenue that accompanied increased demand for crude oil by China and other countries would continue forever. Most states, they added, became complacent, and failed to explore alternative sources for revenue.

But you see, government is about providing services to the people—and paying some cadres of the citizenry to perform it. And there are some services that the people didn’t ask for, but must be provided nonetheless: You don’t ask for the military or police forces to protect you, before government provides them anyway.

But the sudden drop of oil revenue scuppered the whole thing, bringing unpaid wages in its wake. Because the problem of unpaid wages of government workers is a universal phenomenon in Nigeria, many suggest down-sizing of staff. That fails to recognize that employment of workers is also a legitimate social service expected of every government.

That explains why the salaries of civil servants are usually lower than those of private sector employees; and that the guarantee of tenure, gratuity and pension, are their compensations for accepting lower wages. It’s the same reason that it takes a longer time and more rigorous procedure to fire civil servants.

This then brings up the argument that is making the rounds; namely, that states governments must be allowed to independently negotiate minimum wages with the labour unions. If the Federal Government will not pay the salary bills of states, it should not negotiate wages on their behalf. Allowing each state the autonomy to negotiate its minimum wage with labour goes by the name, ‘fiscal federalism.’

But really the Federal Government is too big, to the detriment of states and (especially) local governments. The real interface between the state and the citizens is more at the local government level. Shouldn’t the revenue allocation formula be restructured to the advantage of local government councils?

But more to the point: State governments that owe salaries must certainly demonstrate the will to pay. They could restructure payment schedules (the way bankers do), and then seek to re-negotiate more realistic minimum wage regime with labour. This way, accrued wage bills are settled, and a future without financial booby-traps charted.

And yes, it is not enough to simply blame the governments for unpaid salaries, and leave it at that. The Federal Government may have to immediately initiate a rescue plan to pay the salary arrears, to stem the human sufferings, before asking the state governments to go and sin no more.