If there is any iota of truth in the media report that a conditional budget support facility to provide financial relief to state governments is being finalised by the federal government, we are really in for very, very hard times; not the distant future, but henceforth. In other words, a fresh round of bailouts is on the card for the states.
According to some media reports quoting the Federal Ministry of Finance, the proposed facility, aimed at providing support to overcome the current financial challenges, would be subject to states meeting a stringent 22-point reform agenda called the Fiscal Sustainability Plan, FSP.
It added that the FSP was unanimously agreed by state governors during a National Economic Council meeting held last May 19. The plan encompasses a framework of reform measures, including the requirement to publish audited financial statements and budgets, the Bank Verification Number payroll review exercises to sanitise payroll costs, and limits on recurrent expenditure levels. Furthermore, state governments are expected to meet specific targets to enhance their Internally Generated Revenues, IGRs.
Such targets include the establishment of the Efficiency Units to reduce overhead costs, privatisation of state-owned enterprises, domestication of the Fiscal Responsibility Act, and limit on the amount of bank loans that could be further secured.
The ministry, the report also stated, said the federal government had agreed to develop the International Public Sector Accounting Standards-compliant software for states to use, as well as agreeing to develop new bond issuance guidelines to ease access to the capital market for states wishing to fund developmental projects.
Emphatically, the disbursements of the fund will be conditional upon states meeting the agreed targets, and will be subject to monitoring and evaluation by independent monitoring agents, and that failure of any state to meet agreed reform targets will be excluded from further funding, according to the statement.
Nice development and very well commendable. But I have problem with the entire matter; and it has to do with the impunity and executive deceits that currently thrive in the states that have since left everybody broke; at the mercy of the crumbs from the government houses across the states.
My position is premised on the incontrovertible fact that from the records of the Central Bank of Nigeria, CBN, three-quarter of the states of the federation got bailout funds to pay workers’ salaries that were heavily in areas all over. Thus, states like Kwara, Zamfara, Osun, Niger, Bauchi, Gombe, Abia, Adamawa, Ondo, and Kebbi, the CBN states, Ekiti, Imo, Ebonyi, Ogun, Plateau, Nasarawa, Sokoto, Edo and Oyo among others got bailed out from the embarrassment that the workers pay arrears was to the country as a whole. And by the way, the salary bailout package has a 20-year repayment tenor for all states, except Ogun State which opted for a 10-year tenor.
Lying state governors
Good as the intention of the governors were, at least, they must be seen to be working for the well-being of workers in their respective states. But little did we all realise that we were being sold some sophisticated dummy by each of the governors.
For instance, a recent analysis carried out by the Independent Corrupt Practices and other Related Offences Commission, ICPC, in conjunction with the Nigeria Labour Congress, NLC, revealed that many of the states deliberately lied that they were owing their workers huge debts when the reverse was the case. A major feature of the analysis released by the ICPC and signed by its Commissioner for Public Enlightenment, indicated that many of the states failed to apply the amount received from the federal government to settle their indebtedness to their workers, leaving them enmeshed in huge arrears of salaries to the staff despite collecting the bailout cash.
A breakdown of the analysis indicated that of the 27 states that applied for the fund, only 23 had been paid by the Central Bank of Nigeria as at the end of December 2015. The benefiting states were Adamawa, Bauchi, Benue, Cross River, Ekiti, Katsina, Gombe, Kogi, Nasarawa, Niger, Ondo, Osun, Ogun, Plateau, Sokoto, Kwara, Bayelsa, Imo, Enugu, Oyo, Delta, Kebbi and Zamfara.
Of particular concern to the ICPC was the case of Zamfara, which applied for N32.5billion. As at the time of collecting N10 billion from the federal government for workers’ arrears, the state was reportedly not indebted to any of its workers. But after receiving the cash, the state government made overtures to its House of Assembly to approve the use of the money for the settlement of indebtedness to contractors and other purposes.
But till date, Jigawa State still owes contractors and sundry other creditors. The same goes for Ekiti, Osun, Edo, Katsina, Benue, Kogi, Ondo and Imo States among others as at today.
Instructively, inferences drawn from a new report indicate that not less than N2,8trillion was shared by the 36 states and 774 council areas in the country in the last one year.
According to intelligence economic magazine, Economic Confidential, the total figure was payment made to the two tiers of government between June 2015 and May 2016 at the monthly meeting of the Federation Account Allocation Committee.
In the report, Lagos State is ranked first as the highest recipient of gross allocation with a total sum of N178billion in the 12 months. It is followed by Akwa Ibom with N173billion, Delta – N144billion, Kano – N117billion, Bayelsa – N95billion, Katsina – N88bn, Oyo – N84billion, Kaduna -N83billion, Borno – N78billion, Gombe and Ebonyi States – N49billion each; Ekiti and Nasarawa States – N50billion each and Kwara N52billion.
Edo and Ondo which are oil-producing states got N66billion and N71billion respectively while Cross River received N59billion.
As usual, factors that influence allocations to states and local government councils from the federation account include population, derivation, landmass, terrain, revenue effort, school enrolments, health facilities, water supply and equality of the beneficiaries.
After the jumbo take-home allocations and bailouts, the state of the states today is nothing to write home about. And that is as much as it remains to be seen what each of them has used the monies collected for.
Till date, workers in Osun State remain opposed to every position of Governor Aregbesola who, perhaps, now holds the national record of unfaithfulness to state employees. He cannot explain convincingly what he did with all the monies plus bailouts he collected till date. The same goes for Benue State’s Samuel Ortom. As for Ekiti’s Ayodele Peter Fayose, he battles to assure protesting state workers that he means well and had not frittered away resources meant to take care of them.
While in Imo State the workers have since taken their fate with some unspoken philosophical calmness, it is not the same in Edo and related states where workers continue to protest. Characteristic of Katsina State governor, he did not mince words recently in declaring that his state is broke. Some other governors have summoned the courage to so declare too. But it does not remove from the fact that individually and collectively, they are killing the states rapidly.
Thus, these fallouts leave a very sour taste in the mouths of keen and dispassionate observers of developments in the states. And with rising inflation recently ballooning to over 15 percent alongside a looming devaluation of the naira as envisaged under the coming flexible foreign exchange regime courtesy the CBN, workers in the states and, indeed, every paid worker in the land will soon be staring at the bitter reality of our economic truth. And that will be the fact that we all must turn to God for redemption and healing of the land from our collective failures that have turned the face of the Jehovah el-Shaddai from our dear country, her leaders and the people.