For federal and state governments, the month of March would herald a new low on their fiscal calendar. With a total N299.75 billion available to be shared for the month – the lowest allocation in more than five years – the fiscal crisis had clearly gone beyond pelting showers of rain to an overwhelming deluge.
With 27 states in arrears of between three to five months, and with the piggy bank showing no signs of imminent recovery (the figures for January and February were N370.4 billion and N345 billion respectively), we may have finally arrived at that proverbial tipping point.
Here is what I wrote on the looming wage crisis nearly a year ago: “Somehow, everyone seems to imagine that a bailout therapy would do some magic. Here, the argument goes that the Federal Government, as lender of last resort, can always get the Central Bank of Nigeria to use the traditional tool – ways and means – to fix the problem in the short term. So what happens in the medium to long term? Put the affected states on the life support until things get better? And how far can we go in the use of the ways and means instrument which is basically about printing new notes without going the way of Zimbabwe where you require a glistening one hundred trillion dollar bill to pay for a lunch pack for two?”
That was before Bailout 1.0 which came via the Central Bank of Nigeria (CBN) special intervention fund of N300 billion to help the states to defray their backlog of salaries; also in that package was a debt relief programme coupled by the Debt Management Office to help the states restructure their commercial loans put at over N660 billion.
Unlike the first package which involved cash handouts, Bailout 2.0 came vide a ‘gracious approval’ by President Muhammadu Buhari of the recommendation of the 66th meeting of the National Economic Council, NEC for the suspension of the deductions from the allocation for March. The gesture, expected to pool some N10.9 billion into the states’ coffers would give the states a breather of sorts to enable them grapple with the crisis fostered by dwindling oil revenues.
As Minister of Finance, Kemi Adeosun would explain: “We (federal government) are not able to guarantee that all states will be able to meet their salary obligations, as each state’s situation is dependent on its own cost profile and other obligations it may have; but this initiative is to better position them to do so.”
While letting it be known that there are ‘conditionalities’ attached, subsequent deferrals of loan repayment obligations, according to the minister “would be subject to the agreement of a Fiscal Restructuring Plan to be prepared by each state with clear measurable objectives”. Underlying this is “Enhanced financial transparency by the publication of audited accounts and submission of debt profile…”
I have argued that bailouts, in the circumstance in which the nation has found itself, is sensible and pragmatic. The alternative is to let the states drown in the fiscal crisis and hence risk street riots. For while we can make all the fancy arguments about the fiscal recklessness of some of the governors as being substantially responsible for the crisis, the pervasive air of despondency accross the states is such that makes doing nothing impracticable. This is even more so for a federal government sworn to reflate the economy, and to get things working again. At the moment, the choice is unenviable: most certainly, it cannot afford to have 27 out of 36 states locked in the current fiscal mode without risking the collapse of the economy; but then, it cannot be seen to reward the club of errant governors whose bad decisions threw the states into crisis. There is a third reason why the government cannot afford inaction. It is the farce – the cespit of corruption – that the public service has become.
I understand that any talk of rationalisation of the workforce would be regarded as satanic at this time. The reality however is that the number of active-ghosts on our payroll are perhaps as just as many as the number of on-duty workers. Of course, this is as true in the federal bureaucracy as it is of the states. Across the board, the story is the same of ghost workers, ghost pensioners and perhaps ghost parastatals – all of them drawing their sustenance from the public till.
Some examples would suffice. Today, it is public knowledge that the verification in the federal civil service yielded 312,000 ghost workers! Yes, the same federal government currently imposing conditionalities on the states!
Another interesting example comes from the first round of the bailout. Some states, according to reports, for obvious reasons, were alleged to have padded their payrolls perhaps to get more of the bailout fund.
And then this from Kogi State, which has just concluded a verification of the workforce ordered by its interim governor, Yahya Bello. Although I have not verified, I am told, that the exercise yielded 973 fake schools spread accross 20 out of 21 local governments. One local government alone is said to have generated 142 fake schools! All of these schools, I presume have principals, vice principals, teachers, messengers/cleaners etc. That in a state with miserable internally generated revenue. That obviously is the level to which our public service has sunk.
Having brought the situation on themselves, the states deserve to swallow any bitter pill that the federal government may deem fit to impose. Harsh? May be!
Still want to know the way out? A good start is to determine those who claim to be working for us as against the ghosts sucking our blood. That should not require rocket science.
NATION
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