Why states can’t pay workers’ salaries

Governor Aregbesola

Huge expenditures on capital projects and sundry overhead have been identified as part of the reasons many state governments in Nigeria are unable to pay their workers’ salaries for many months now, Vanguard investigations have revealed.

About 18 state governments in the country currently owe their workers salaries for periods ranging from two to 11 months as at the end of May, 2015.
States and indebtedness

Some of the effected states include Abia, Akwa Ibom, Bauchi, Benue, Cross River, Ekiti, Imo, Katsina, Kogi, Ogun, Ondo, Osun, Oyo, Plateau, Rivers and Zamfara.

Vanguard also gathered that the states have mortgaged their federation account allocations to contractors executing various capital projects by signing irrevocable payment orders with various banks. As a result, payments to contractors and other debt instruments are deducted at source and have become first line charge on their lean resources.

To compound the states’ woes, their internally generated revenues are not growing concurrently to match their exposures to these revenue outflows.

In addition to these funds mismatch, the states have had to prioritise sundry overheads especially those relating to services and to political office holders above salary obligations to their workers. See details in Financial Vanguard.

Resign now, Omisore tells Aregbesola In the light of the crisis, the former Chairman, Senate Committee on Finance and Appropriation, Senator Iyiola Omisore, has called on Governor Rauf Aregbesola to immediately resign his position and allow more competent hands to run the affairs of the state before it is grounded.
Speaking with newsmen in Osogbo, Omisore argued that for Aregbesola to have admitted that the problem of Osun State was beyond his capacity, he expected him to have thereafter communicated this to the state House of Assembly and honourably resigned.

His words: “Osun is now a failed state because of the financial recklessness of the governor. I really appreciate the fact that he confessed the present state of Osun affairs is beyond him, and he should immediately throw in the towel.

“Nearly all commercial banks in Osun are being owed one form of loan or the other. The matter has reached a stage that the committee of bankers in the state at their meeting resolved that no bank should loan this government any more money. They are also waiting for remittances into state’s coffers.

“As soon as money comes in, they withdraw it. The situation calls for sober reflections, and we will also look at ways we are going to help our people in a manner that will not ridicule them.”

Commenting further, Omisore said the immediate past federal administration did not owe Osun or any state statutory allocation or any other funds due to it, and alleged that, apart from inflated contracts, Aregbesola also spent a huge sum on the presidential project of the All Progressive Congress, APC, and was among the five highest donating states.

You are not an alternative, Aregbesola retorts
However, in a quick response, Aregbesola said: ”I will reply Omisore the way Yoruba people will put it, that ‘Tóju akata balewo, enu adie ko laotigbo, meaning: Omisore is not competent to comment about alleged miss-governance by Aregbesola.

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