Perhaps, President Muhammadu Buhari’s recent confirmation that as many as 27 out of the 36 states of the federation have difficulty in paying workers’ salaries may have taken the focus away from Osun State and its governor, Rauf Aregbesola. Both have been used as the scapegoat of the salary problem, if not of everything that is wrong with state governments and governors.
Piggybacking on this negative press came the “mother of negativity” – a sponsored article, written by Adejumo Amzat, the Features Editor of The Guardian, entitled, “State of the Living Springs gasps for breath” (The Guardian, March 13, 2016). Relying on unverified, third-party, documents and statements generated by political opponents and detractors, Amzat recycled numerous false allegations and conjectures, some of which are contradictory and downright illogical.
For example, in two consecutive paragraphs, Amzat debited the Osun State Government with various loans, totalling N764.4bn! He even transmuted a letter of request for a loan into the real loan, even when it did not materialise. Realising that his figures might be unrealistic, he added a caveat: “The Guardian was unable to verify these claims from the mentioned banks before publication”. Classic hatchet journalism.
What is worse, Amzat claimed that he conducted his research for over six months and visited Osun at its commencement in August 2015, but he never came across a state official and no state official saw him. He never inspected any official record; nor did he interview relevant officials to cross-check facts and figures. The closest he came to the government was a single telephone conversation he claimed he had with the Director, Bureau of Communications and Strategy, Semiu Okanlawon, who nevertheless told him that his claims were unfounded.
I visited Osun last week, specifically to inspect financial records and visit project sites, especially roads and schools. I wanted (1) to verify Amzat’s claims vis-a-vis the state’s response and available records; (2) to assess the situation regarding the payment of salaries; and (3) to find out the government’s plans for revenue generation.
Accordingly, I obtained relevant information and records from the governor, the Accountant General, and top officials of the finance ministry, past and present. I also met and inspected documents with the labour leaders, including the serving chairmen of the state chapters of the Nigeria Labour Congress, the National Union of Local Government Employees, and the Joint Public Service Negotiating Council. Moreover, I interviewed five members of the state’s Fund Allocation Committee, chaired by Alhaji Hassan Sunmonu, OON, Nigeria’s first President of the NLC.
I examined records of revenues accruing to the state from various sources from 2010 to date, including statutory revenue allocations to the state; loans and bonds; internally generated revenue; bailout for salaries and loans; payment mandates; payment warrants sent to banks for the processing of payments; and many others. The records I inspected tally with the state’s official response to Amzat’s allegations (see full details in Osun Defender, April 5, 2016, and a graphic annotation available from the Governor’s Office).
Moreover, I was guided through various project sites in Osogbo by Wole Idowu, Head, Project Monitoring, Field Operations and Surveillance Unit, with the state’s Bureau of Social Services, headed by Femi Ifaturoti, with whom I also spoke.
The ongoing projects I visited include the Ring Road around Osogbo; Osogbo-Ikirun-Ila Odo Road; Olaiya-Ita Olookan Road; Oke Oniti junction to Ring road; Islahudeen Junction-Otefun Road; Housing Estate road; and the expansion of the Old Garage Roundabout to synchronise with widened, dualised roads. I also visited three High Schools, where work was ongoing, namely, Osogbo Government High School, Fakunle Unity High School, and Ataoja High School. Finally, I obtained documents on other ongoing projects throughout the state, many of which I had previously visited. While it is true that some projects are temporarily on hold, work is ongoing on many others.
The critical question is: How is this possible in view of the negative financial situation of the state? The truth is that the government has strictly conserved funds meant for projects. They include special loans, conventional and Sukuk bonds, and a concessional projects grant by the Central Bank of Nigeria, which detractors lumped with the salary bailout loan.
The next question is: How are salaries being paid and the government being run since June 2015, when monthly federal allocations to the state have barely been enough even to sustain state services?
The truth, as I point out below, is that Aregbesola has been, and still is, a very prudent manager of resources, especially of scarce resources. Even more importantly, Aregbesola has been forthright with his people. What he did, I observed, was to lay bare the skeleton and flesh of state resources to the workers and other stakeholders in two stages. First, as he was preparing to apply for the bailout, he reached an agreement with workers across the state on July 13, 2015 on the modalities for the payment of the backlog of salaries. The agreement, signed by relevant state officials and major labour leaders, was reaffirmed on July 29, 2015.
When the bailout became available, it was discovered that pension and gratuity arrears were not included, thus bringing the total bailout for salaries to just over N25bn. Moreover, the bailout calculations were made only until May 31, 2015, as required by the Federal Government. Recognising the delay in the availability of the bailout and the acute pain caused by nonpayment of salaries, the governor inaugurated a special committee on the disbursement of the bailout, consisting of government officials and labour leaders and workers’ representatives. By a dint of shrewd financial management, arrears of salaries, pensions, and gratuity were paid in full even until June 2015.
The question was how to move forward in the face of dwindling resources as federal allocations and other state revenue sources continue to fall far below the state’s wage bill. This led to a second step – the formation of the state’s Fund Allocation Committee, headed by Sunmonu, consisting again of appropriate financial officers of the state and representatives of various categories of workers.
The committee agreed that, subject to the availability of funds, all workers on Grade Levels 1 – 7 and pensioners earning up to N20,000 will be paid in full. However, workers on Grade Levels 8 and above and pensioners earning above N20,000 will earn 50 per cent or more of their full salaries or pensions. The alternative to this allocation formula was massive retrenchment, which the workers rejected. With this agreement, all Osun workers have been paid up to January 2016. It is against this agreement that the government reacted the way it did to Osun doctors, who chose to renege on the agreement before they recently recanted.
Clearly, the government’s revenue receipts since the disbursement of the bailout has been grossly inadequate. So, how were salaries sustained till January 2016? The answer lies partly in the agreed allocation formula and partly in the Conservation Fund, which the government set up for the rainy day. Moreover, effort is being put into the generation of funds within the state.
Accordingly, the government has embarked on four related types of legislation to develop a comprehensive framework of public finance management in the state, namely, a Procurement Law, which was enacted in February, 2016, specifically to reduce the cost of governance; the Osun State Land Use Charge Law, enacted on March 31, 2016. Work is ongoing on the third and fourth laws pertaining to revenue administration and fiscal responsibility.
I attended the public presentation of the Land Use Law, whose goal is to replace multiple rates, avoid discriminatory and arbitrary levies, and increase efficiency in collection. These attempts are being supplemented with drives in agriculture and other sectors. It will be most unfortunate if these efforts were drowned in the cesspit of negative press.
PUNCH
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