ORDINARILY, this is expected to be a good time for states in the country following the jump in their statutory allocations from the Federation Account because of the removal of subsidy on petrol. This pushed up the amount shared by the three tiers of government in 2023 to N10.14 trillion.
The Nigeria Extractive Industries Transparency Initiative, in its latest report on the Federation Account revenue allocations for the year 2023, showed that the amount shared by the federal, state, and local governments increased by N1.93 trillion last year. President Bola Tinubu had on May 29, 2023, declared during his inauguration that “subsidy is gone.”
The rise in the Federal Account Allocation Committee disbursements to the three tiers of government followed the removal of petrol subsidy and currency reforms of the current administration. The reforms have reportedly led to a 40 per cent boost in income.
Despite this windfall, most of the states have been struggling to pay their workers’ salaries, even as agitation for more increased pay by impoverished employees continues to ring loudly following the attendant inflationary trend that followed the subsidy removal.
Thirty of the 36 states are reported not to be paying the equivalent of the N35,000 wage award announced by Tinubu in October for federal workers to cushion the hardship.
A Central Bank of Nigeria document showed that the states collectively borrowed N457.17 billion to pay salaries. It said 31 state governments owed the Bank N339.9 billion obtained to pay workers’ salaries between 2015 and 2023. The document stated that the sub-nationals had yet to pay an outstanding of N339.97 billion.
The fund was facilitated through the Salary Bailout Facility, a strategic intervention by the CBN. It was aimed at alleviating the fiscal pressures faced by the states, and was part of the over N10.3 trillion intervention fund made available by the Bank under the immediate former governor, Godwin Emefiele.
The inability of the states to perform their primary obligation to their workforce has been a front-burner issue in recent times amidst clamour by labour unions to increase the minimum wage from the current N30,000. Last year, states borrowed about N46.17 billion from three banks to pay salaries between January and June.
The PUNCH reported the inability of 24 states to pay workers’ salaries this year without having to wait for federal allocations despite improved federal allocations. This arose as the respective wage bills of the affected states surpassed their internally generated revenues. This raised concerns about workers’ productivity and state governments’ efficiency in internal revenue generation.
Apart from this, the states also got COVID-19 support loans. A new report said 13 new governors borrowed N226.8 billion to stay afloat.
It is no longer news that most governors have abandoned their primary responsibilities to the people they govern, citing paucity of funds. Apart from default in salary payment, primary health care is comatose in most states.
Social amenities and basic infrastructural facilities are almost absent and where they exist, they are in a decrepit state. The roads are largely pothole-ridden, while almost all the states of the federation battle with devastating floods yearly due to poor or non-existent drainage networks. Water provision is more of a mirage and electricity provision is abysmal.
Nigerian governors are reckless in their spending habits. Some of the borrowed funds are spent on frivolities and non-productive ventures like feeding people during religious fasts and sponsoring many on pilgrimages while awarding themselves obscene perks and jumbo pensions when leaving office. That many of the ex-governors are currently under probe, some jailed and others being prosecuted for graft while in office speaks volumes of their profligacy.
True fiscal federalism is certainly the way to curb the mindless rape of the states.
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