BENIN CITY – Following President Muhammadu Buhari’s approval of N804.7bn lifeline Comprehensive Package to State Governors last week, to enable them settle months of unpaid salaries to workers in several states of the federation, experts in Benin City and other parts of the Country have continued to spell out the implication of the bailout and the way forward for the economy and the states.
Speaking exclusively with the NIGERIAN OBSERVER on the issue on Monday, a Microfinance expert and the Managing Director, LAPO Microfinance Bank Ltd (LMFB), Dr. Godwin Ehigiamusoe, while commending the Federal Government for the step taken to cushion the effect of the financial crunch in several states, however, advocated a long-term measure that will be able to stabilize the states on a sustainable basis.
According to Ehigiamusoe: “Yes, the bailout package by President Buhari, is no doubt, a well-thought out and a pragmatic step to Mitigate the impact of the non-payment of salaries by the State Governors, arising from the dwindling financial fortunes of the states, which is occasioned by the fall in oil revenue Nigeria’s mainstay.
“However, this bail-out is certainly not going to be on a sustainable basis, as the term implies; it suggests simply that the measure is a short-term one designed to arrest the precarious financial crisis at the state levels.
“Therefore, what it means, and the implication arising from that reality, is that, yes as a major employer of labour, Government do not really have a choice not to pay salaries to its workers; failure to do this will lead to a situation where the nation and the economy as well as its workers will be in danger, which is what the federal government obviously attempted to cure.
“Having said that, I think what the bail-out suggests is that all state governments have to device measures to keep afloat after the bail-out; particularly on long term basis inorder to ensure stability of the economy. That, for me, is real challenge which the state governments must rise up to. They do not necessarily need to be compelled by any means to comply to the Fiscal Responsibility Act, as some persons may have suggested-At their own levels they need to device means to enhance or shore up their revenue base internally, to meet their financial obligation to their workers. This is critical. There are various government instruments to do this, particularly in blocking financial leakages. That for me, is what these state governors must begin to look at quickly, because after the bail-out, they need to rise up to the real challenge”. Ehigiamusoe declared.
On her part, a University Don, Prof. Agatha Eguavoen of the Department of Sociology, Ambrose Alli University, (AAU) Ekpoma, posited that the Bail-out measure has three angles to it, from which it must be critically examined. “Firstly”, she asked “why are some state governors able to pay their workers salaries, in the face of the same harsh economic conditions as dictated by the dwindling oil revenue from the federation account, while others are unable to pay? It means that something has gone wrong fundamentally, which needs to be addressed quickly.
“Secondly, state governors have no moral obligation not to pay workers’ salaries. Given their huge take home pay, their gargantuan and omnibus security votes, running into hundreds of millions of naira, it is a huge injustice and embarrassment to the toiling masses. The way out, to me, is that they should forfeit their huge allowances and security votes to meet their obligation to their workers.
“Thirdly, I think the Federal Government was too hasty to provide a bail-out to the states which were owing salaries to their workers. These Governors should have been made to vacate their positions. They have failed. They just do not have any business remaining in their offices as Governor, if they could not pay workers their salaries. That, to me, is an impeachable offence; and the federal government was only charitable in bailing them out”. Prof. Eguavoen enthused.
It will be recalled that drop in oil price, the main source of revenue for the federal government had adversely affected some state governments ability to pay workers salaries until last week’s Bail-Out package by President Buhari.
Also speaking on the bail-out, Prof. Pat Utomi of the Lagos Business School, himself an economist and social commentator described the bail out for states as imperative for the economic survival of the country.
“It is important to recongnise, first of all, that without such bailout, the economy will be in danger as there will be no spending going on while those offering services will be unable to offer anything. The bailout is very important for the economy.
“However, this development should now make governments to impose conditionality that will stop mismanagement and unnecessary spending” Utomi suggested.
