Borrowing to pay civil servants - Flatimes

Monday, 25 July 2016

Borrowing to pay civil servants

Written by the Editorial board of The Guardian Newspaper

It is worrisome that Nigeria’s financial condition has been so bad that salaries and allowances of federal workers can no longer be guaranteed regularly without recourse to credit facilities from the money market.

Specifically, Minister of Finance, Mrs. Kemi Adeosun who met with protesting workers of her ministry the other day said with fast declining revenue, the Federal Government could be faced with the prospect of borrowing to meet the monthly civil service wage bill of N165 billion.

The minister, facing another kind of wage bill challenge (overtime unpaid allowances) had also noted that she did not have any power to pay N1.2 billion worth of ad-hoc allowances, which was not captured in the 2016 budget of her ministry. Workers in the public sector, therefore, may not fare better than their counterparts in the shrinking private sector as they face very bleak prospects in the current fiscal year.

The minister also explained that she had put all government departments to a real financial squeeze as the country has to grapple with the financial crisis inherited from the previous administration. Her submission that many people across the country are currently struggling to find work, with some losing theirs, even as most civil servants in many states could not be paid their salaries is true.
Even so, now is the time to ask questions on the creativity of the government in managing what it has and optimizing the benefits therefrom. There are constant claims by the government that it has recovered a lot of funds from men of yesterday, saved money through the Treasury Single Account (TSA), plugged leakages by shutting out ghost workers and made some more through the flexible foreign exchange policy. So, there should be a full disclosure of details of all these receipts into the federation or dedicated accounts for Nigerians to appreciate how dire their situation is.

It is extremely disheartening that Nigeria has to contemplate borrowing money for consumption when there is a rising demand for investment in critical infrastructure!

With the state of the economy so parlous, why should government continue to keep redundant workers it cannot pay? While recourse to mass retrenchment is not an option, a re-tooling of the governance engine for operational efficiency may not be popular but is desirable.These are extra-ordinary times in need of truthfulness and boldness. It is unacceptable for any government to borrow billions to pay its workers especially when the productivity level of many of those workers is questionable. Doing so is not part of the imaginative governance required at this time of economic downturn in the country.

Sadly, there has been no creativity on the part of government as this borrowing to augment salaries actually surfaced in 2014 when oil revenue started dwindling. A report from the office of the Accountant-General of the Federation indicated that N763.64 billion was spent from February to April this year on salaries and pensions. Sadly too, another analysis showed that while N181,52 billion and N182.7 billion were spent in February and March respectively on salaries, the figure jumped mysteriously to N268.28 billion in April.

Curiously, even previous governments have said so much about dubious payroll system and consequent ghost workers without dealing with the monster. Specifically, the Obasanjo administration began the much touted salary fraud stopper called Integrated Payroll and Personnel Information System (IPPIS) reform. From 2010 to the first quarter of 2015, the scheme detected 600,000 “ghost” workers on the payroll. The then Minister of Finance, Ngozi Okonjo-Iweala, then reported that government had saved N160 billion yearly through the electronic detective (IPPIS).

Even the current administration of President Muhammadu Buhari has been reported as saying it had also discovered more than 60, 000 “ghost workers”. According to Adeosun, the IPPIS inherited by the new government had been found to be defective as the powerful cartel behind the scam had devised new strategies to frustrate the system.

But what has been missing from the detection of “ghost” workers is that not one officer in the syndicate has been arrested for prosecution. This is a shame.

Certainly, borrowing to augment salaries is a heavy yoke the nation cannot afford to continue to bear, lest the nation collapses under it. Specifically, making the civil service more efficient and worthy of every kobo spent on it is the essence of the Steve Oronsaye Report and White Paper on rationalisation of civil service structure, which began with the last administration and is being reviewed by the incumbent one. This is the time to implement all such government reports and white papers that have dealt with the urgency of reducing cost of governance at all levels and in all spheres.

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