Benue’s Alia, Abia’s Otti to battle months of unpaid salaries, pensions
The 17 newly-elected governors face an uphill task to stimulate the economies of their respective states as they will inherit at least N2.1tn in domestic debts and $1.9bn in external debts from their predecessors.
Investigations by Saturday PUNCH showed that some of the first term governors-elect would also be confronted by many months of unpaid workers’ salaries and mounting pension liabilities amidst agitation for the implementation of the nationally agreed minimum wage, rising inflation, escalating prices of goods and services, and dwindling purchasing power.
Following the governorship election that was conducted in 28 out of the 36 states of the federation on March 18, 2023, a total of 16 governors-elect emerged to take over from their predecessors, who will complete their constitutionally approved second term in office, while a first time governor lost his re-election bid to the candidate of an opposition party.
As of September 30, 2022, the Debt Management Office put the country’s total domestic indebtedness at N21,551,924,507,448, while foreign creditors were owed $39.66bn.
In Abia State, Dr Alex Otti, who emerged as the only governor-elect of the Labour Party, will take over from Dr Okezie Ikpeazu of the Peoples Democratic Party on May 29 and will inherit total domestic debt of N104,573,334,025.73 and external debt of $95,632,239.04. Health workers and teachers in the state are currently owed between 10 months and 27 months’ salaries.
Akwa Ibom State Governor, Udom Emmanuel, will be leaving behind for his anointed successor, Umo Eno (both of them are of the PDP), N219,617,660,991.63 in domestic debt and $46,569,647.22 in external debt, provided no new debt is accumulated between September 2022 and May 28, 2023.
In Benue State, apart from unpaid salaries of between eight and 15 months, Rev Fr Hyacinth Alia of the All Progressives Congress will take over from Governor Samuel Ortom of the PDP N143,368,150,982.89 in domestic debt and $30,472,977.14 obligations to foreign creditors.
Bassey Otu, the incoming governor of Cross River State governor, will have to carry the burden of N175,198,799,155.96 and $215,754,975.33 that his predecessor, Prof Ben Ayade, will be leaving behind. Both belong to the APC.
Governor Ifeanyi Okowa of Delta State will be bequeathing to his successor, Sheriff Oborevwori, N272,612,510,528.95 total domestic debt and $60,046,972.41 foreign debt. Okowa was the vice-presidential candidate of the PDP in the February 25 presidential election, while Oborevwori is the Speaker of the state House of Assembly.
Francis Nwifuru of the APC will take over the rein Ebonyi State from his party man, David Umahi, and inherit N67,060,019,562.44 and $59,841,539.37 as domestic and external debts, respectively.
A similar scenario will play out in Enugu State as the outgoing governor, Ifeanyi Ugwuanyi, will hand over to his preferred successor from the PDP, Peter Mbah, total domestic debt of N89,887,652,914.75 and external debt of $123,024,888.67.
When the governor-elect of Jigawa State, Malam Umar Namadi of the APC, takes over from Governor Muhammad Badaru Abubakar, also of the same party, he will have his work cut out with N44,406,862,432.83 owed domestic creditors and $27,611,046.36 in external debt.
Still smarting from his narrow victory in the Kaduna State governorship election, the APC’s Uba Sani will inherit from the outgoing governor, Nasir El-Rufai, domestic debt of N86,863,069,011.79, while the external debt profile of the state stood at $586,776,219.18 as of September 30, 2022.
As high as the enthusiasm and jubilation that greeted the emergence of Abba Kabir of the New Nigeria People’s Party as Kano State governor-elect are the state’s debt profile. Kabir will inherit from Governor Abdullahi Ganduje of the APC N125,186,662,228.72 and $109,422,176.85 owed domestic and external creditors, respectively.
In Katsina State, the transition between Governor Aminu Masari and Dr Dikko Radda should be smooth as both men belong to the ruling APC. However, the incoming governor will inherit domestic debts adding up to N62,374,809,154.32, and liabilities to foreign creditors amounting to $55,824,330.35.
While the Independent National Electoral Commission declared the Kebbi State governorship election inconclusive, what is in no doubt is the debt profile being left behind by Governor Atiku Bagudu of the APC. The state owes local contractors and others N60,131,306,074.57 and has foreign obligations totalling $42,403,327.93.
Niger State Governor, Abubakar Bello, will bequeath to his fellow APC man and successor, Umar Bago, N98,262,195,557.88 and $69,266,186.30 in domestic and external debts, respectively.
The Director-General of the APC Presidential Campaign Council and Plateau State Governor, Simon Lalong, will not only hand over the reins of government to Mr Caleb Mutfwang of the opposition PDP, he will be leaving behind N151,903,415,543.09 in domestic debts and $33,735,927.81 in liabilities to foreign creditors.
The leader of the aggrieved PDP governors, otherwise called G5, Nyesom Wike, will hand over to his anointed successor, Siminialayi Fubara, as Rivers State governor domestic debt running into N225,505,011,356.00, while the DMO puts the external debt of the oil rich state at $140,177,828.95.
The Chairman of the Nigeria Governors’ Forum, Aminu Tambuwal, who will complete his eight-year two-term tenure under the PDP on May 28, will hand over Sokoto State to Ahmed Aliyu of the APC a total of N85,584,818,029.23 in domestic debt and $37,127,361.58 foreign debt.
Taraba State Governor, Darius Ishaku, will hand over to his fellow PDP man, Kefas Agbu, domestic debt of N90,807,647,838.11 and external debt of $22,280,666.87.
Cumulatively, the 17 states, where new chief executive officers will take over on May 29, 2023 owe domestic contractors and other creditors N2,103,343,925,388.89 and foreign creditors $1,755,968,311.36.
Salary arrears
Some of the governors-elect will also contend with unhappy workers and pensioners due to the failure of their predecessors to pay as of when due.
In Abia State, the Chairman of the Nigeria Labour Congress, Uchenna Obigwe, said, “The state ministry workers are not being owed. Those owed include workers of the Abia State University Teaching Hospital, Aba; Health Management Board, Umuahia; Abia State Polytechnic, Aba; College of Education (Technical), Arochukwu; secondary school teachers and the Abia State Universal Basic Education Board, as well as pensioners.
“None of them is owed less than 10 months, particularly Abia Poly, Arochukwu Technical, ABSUTH and HMB workers. Some are owed more than 20 months.”
Obigwe expressed doubt that the Ikpeazu administration would be able to pay the outstanding liabilities before leaving office, stating, “If the administration has the intention to do something, it would have done it before the election to appeal to the workers to vote for the ruling party’s candidates.
“That would have been the time they would have done that. But they didn’t do it. Even the leave allowance, they didn’t pay it.
“So, what we are hoping for is the promise by the governor-elect that within one year, he will clear the arrears.”
The Chairman, the HMB branch of the Nigeria Union of Allied Health Professionals, Dave Otuiheneme, said workers were being owed 14 months’ salaries.
According to the HMB Chairperson of the Medical and Health Workers Union, Chidinma Wokoma, March 31 will make it 15 months that the workers are being owed.
The outgoing PDP administration in Benue is leaving behind a backlog of salary arrears.
Some workers, who spoke to Saturday PUNCH, said that the arrears were between nine and 13 months.
It was gathered that aside from the five months’ salary arrears of 2017, the Ortom’s administration owed the state workers four months salaries as of March, 2023.
A civil servant in one of the ministries, who identified himself simply as Daniel, said, “State civil servants were owed five months salary arrears in 2017 and apart from that, what we were paid early this month (March) was November’s salary.
“So now, the government owes the state workers another four months’ salaries, making a total of nine months.”
It was a similar situation for local government workers, as they were said to be owed 11 months’ salaries.
“The local government workers were owed seven months’ salaries in 2017 and if we add another four months from December 2022 to March 2023, it is now 11 months,” Joshua Terna, a local government employee said.
Primary School teachers are said to be the worst hit as they are owed between 14 and 15 months’ salaries, while their counterparts in secondary schools are allegedly owed eight to 10 months’ salaries.
A primary school teacher, who simply identified herself as Doshima, said, “In 2017, we were paid just two months and owed for 10 months. Then for 2021, they owed me September salary, while for others, it is different. For 2022, we are owed December salary; then this year, they have not paid us since January and we don’t know when we will be paid.”
Pensioners are not left out as local government retirees are said to be owed 72 months’ pension allowances, while state pensioners are owed 36 months allowances.
When contacted, the immediate past Chairman of the NLC in the state, Godwin Anya, said the situation had not changed.
Anya stated, “Though I left office just two weeks ago as the NLC chairman, the situation has not changed at all.
“The salary paid in early March was for November 2022 and those arrears of 2017 are still there, except that the government before the election released N150m to defray the 2017 arrears, which is meaningless, and N100m to settle the arrears of local government workers’ salaries for 2017.”
Meanwhile, the governor-elect, Alia, has promised to clear the backlog of salary arrears when he assumes office.
He said, “Our state, Benue, needs a total reset! Governance in our state has hit a historic low. This election is a mandate to reform and recalibrate governance in Benue.
“We need all hands, all good and ready hands, to be on the deck. We need men and women whom the spoils of office cannot buy. We need all who believe that a new Benue is possible.
“I believe that there is an even greater obligation on me, in fact on us all, to tell the Benue people very clearly the difficult choices and challenges that we face and how we will work our way through them.
“We will clear the backlog of arrears of salaries, pensions and gratuities; resettle our IDPs in their ancestral homes; address persistent insecurity challenges and set the stage for a prosperous Benue.”
Cut costs – Economists
A former General Manager, Large Scale Industries, Bank of Industry, Joseph Babatunde, said though the new governors would face some challenges with the debt burden, such could be minimised if strong economic and financial teams were put in place.
He also stated that if the outgoing governments invested the loans in productive investments and projects, the states would be able to generate funds to service the debts and fund other projects.
Babatunde stated, “On the issue of debt in any economy, whether federal or state, usually affects the capacity of the state to generate enough funds. However it depends on the exposure of both the governors and economic team members that they put in place.
“There are so many steps you can take; debts can be renegotiated; you can ask for a little more moratorium or maybe an extension of tenor, depending on the nature of the source of loan. There are also cases, whether the debt is local or foreign, you can talk about the possibility of a debt swap, or maybe some long term bonds to at list be able to generate enough resources.
“And more importantly, it depends on what the loans had been used for; some governors have borrowed and invested in key infrastructure and projects. If the investment is productive, it will assist the state to be able to also generate reasonable funds to be able to repay such facilities
“What I expect is for every state to raise a team of experts knowledgeable in economics and finance so that they can sit with the creditors and negotiate some of the terms where that is feasible.”
He added, “One of the problems we have in our society is that people make promises without getting facts and figures. Ideally, I also expect that before making promises, you want to first know what is the revenue profile that you are expecting both in terms of federal and internally generated revenue, that’s why so many times people have been disappointed because when promises are made and by the time they get fact and figures, they find it very difficult to fulfil their promises.
“Yes, salary payment is important, but it’s not only about payment of salary, because if you don’t deliver in the area of infrastructure, people will be more apprehensive because they believe so much in what they can see.
“For example, you take Kwara State, one thing stood out for the government; they succeeded in ensuring they kept on paying salaries as and when due, however, the arrears they met, they couldn’t just clear immediately, but they had to enter into negotiation and I think they have been paying over a period. I think by the time the Abia State governor-elect is sworn in, he has a very clear picture of the revenue profile of the state, and that to a large extent can determine how far governors can go because you still have to service whatever debt is on the ground.”
An economist and Chief Executive Officer, Cowry Asset Management Limited, Johnson Chukwu, said, “If someone goes into government with the mindset that he will meet huge resources and he gets there and there are no resources, clearly there will be challenges, but I believe that anybody who is serious and was ready for office in this last election that does not know that the finances have dwindled is seriously not a realistic person.
“That’s why some of them were making promises without sound knowledge of economic issues, but the reality is that Nigeria’s economy has dwindled and has been on life support for a long time. We know that several states owe salaries and even some of those that you may think are financially viable have been borrowing heavily.
“There is no basis for anybody when he gets to office to say he is disappointed with the finances, it simply means you are not prepared for the office.”
He advised the incoming governors to cut down on running costs and support private sector players to expand the economy and grow the Gross Domestic Product.
Another economist, Paul Alaje, said the situation would be tough for all the incoming governors because of the huge debts their predecessors accrued.
He noted that loans collected by state governments and the projects the governors spent the money on should be properly investigated.
He said, “Debts are like a burden, especially when the money collected is not spent on capital expenditure or projects that can create revenue for the government in the future. Most of the governors-elect have a lot of challenges because more than two-third of the states take allocations from Abuja and can barely pay salaries. As the value of the naira falls, it becomes worse for state governments, especially those whose predecessors have borrowed money on their behalf.
“It is one thing for them to promise during campaigns to help their people, the important thing is how they are going to make the money. In Osun State, for instance, Gboyega Oyetola’s administration met a huge debt from his principal, Rauf Aregbesola; and when Aregbesola left, Oyetola started struggling all through not to borrow more money and these were from the same party. Very few of the new governors will not have the capacity to borrow more, because lenders will also consider their ability to pay.
“Unfortunately, the situation we are in now, the ability to pay remains a major concern. When the new governors resume, it is really going to be difficult for them and borrowing will be very difficult for them too. I think we should start investigating why the state governments borrow and we need to know what these funds are used for. The situation now is that many states will not function if they do not receive allocations from the Federal Government for three months. The debts are deducted from the money they have raised through bonds and they pay back with the IGR. That is the reality that will dawn on those new governors within their first 100 days in office.”
