Daily Trust (Abuja)

27 December 2013

Nigeria: 35 States Can't Pay Salaries Without Federal Funds

Only one of the 36 states can afford to pay workers' salaries with internally generated revenues, Daily Trust investigations revealed--underscoring the level of dependence of the federating units on the central government.

The remaining 35 states generate only a fraction of funds they require to settle their wage bills annually. This means that without federal funds, these states cannot even afford salaries payment, not to talk of executing any projects.

Daily Trust obtained information on states' wage bills and drew comparisons with data on their internally generated revenues (IGR), published by the National Bureau of Statistics. The result showed that onlyLagos State can pay salaries of its workers by solely relying on revenues generated internally.

None of the 19 Northern states has this much financial muscle. They all depend on federally-allocated subventions, mainly made up of funds generated from sales of crude oil that is extracted down south.

Other components of the federal allocation, shared between the three tiers of government on monthly basis, include taxes collected by the Nigerian Customs Service and the Federal Inland Revenue Service.

The data published by the statistics bureau showed that in 2010 and 2011, only seven states had IGR in two-digit billions. Lagos is the only one with a three-digit figure, while the remaining states had single digits.

In 2012, the situation improved slightly with 12 states recording double-digit figures in billions while Lagos remained the only with three-digit figures.

The implication of the low revenue generation by the states is that most of them can barely sustain themselves without recourse to monthly federal subventions.

Most states have had to take short-term bank loans to settle wages whenever there were delays in the monthly disbursements by the Federation Accounts Allocation Committee (FAAC).

Speaking to Daily Trust on this, a revenue advocate said the state governments are simply too lazy to generate revenues internally because of the oil money they receive from Abuja every month.

Mr Dauda Garuba, coordinator of the Revenue Watch Institute, said "because of the oil revenue they collect monthly, state governors are no longer serious in making money for their states."

High wage bills, low IGRs

Daily Trust investigations show that each of the 36 states pays yearly salaries in two-digit billions, but most of them generate IGR in single-digit billions annually.

Lagos generated N219 billion in 2012, three times its annual wage bill of N76.5 billion.

States that generated more than N10 billion in 2012 are Kano, Kaduna, Oyo, Ondo, Ogun, Enugu, Edo, Delta, Cross River and Akwa Ibom.

Among states with fairly strong revenue bases are Rivers, which generates the second highest IGR of N66.2 billion in 2012, but has an annual wages bill of N96 billion.

Edo made N18.9 billion revenue but is weighed down by a salaries bill of N28 billion yearly, while Cross River generated N12.7 billion though it pays N22 billion wages annually.

Even though Kano has the highest IGR in the North, the N24 billion it generated in 2012 is not enough to pay salaries of its workers, which is N36 billion yearly.

Kaduna, the second internal revenue earner in the North, garnered N11.5 billion but which is less than half its N27.4 billion annual wage bill.

The situation with the remaining states is worse, as their annual wage bills are several times larger than their internally generated revenues.

For instance, Zamfara's internally generated revenue is N2.5 billion in 2012, while its annual wage bill is N13.2 billion; Yobe generated N1.7 billion, and has a yearly salaries bill of N18 billion; while Adamawa's N23 billion wage bill is five times higher than its IGR of N4.6 billion.

Even oil-rich Bayelsa State generated only N3 billion in 2011, but pays N48 billion in salaries yearly.

Nasarawa made N4.1 billion in 2012 but spends N24 billion yearly in salaries; Sokoto generated N3.8 billion in 2010 and spends N16.8 billion on annual wages; and Kogi got N3.1 billion in 2012 but it is workforce soaks up N44 billion yearly.

Kwara (salaries, N11 billion; revenue, N7.2 billion), Benue (revenue, N8.4 billion; salaries, N34.8 billion), Katsina (salaries, N14.4 billion; revenue, N5 billion), Bauchi (salaries, 26 billion; revenue, N4.1 billion), Ondo (revenue, N10.1 billion; salaries, N48 billion), Plateau (revenue, N7 billion; salaries, N20.7 billion), Kebbi (revenue, N5.4 billion; salaries N12 billion), Niger (revenue, N3.7 billion; salaries N31.2 billion), and Gombe (salaries, N14.4; revenue, N3.7 billion).

Others are Abia (salaries, N30 billion; revenue, N3 billion), Akwa Ibom (salaries, N33.2 billion; revenue, N13.5 billion), Anambra (revenue, N6.1 billion; salaries, N16.3 billion), Borno (salaries, N20.7 billion; revenue, N2.4 billion), Delta (revenue, N45.5 billion; salaries, N85.2 billion) and Ebonyi (salaries, N16.8 billion; revenue, N14 billion).

There are also Ekiti (salaries N24 billion, revenue N3.8 billion), Imo (revenue N6.8 billion, salaries N22.8 billion), Jigawa (salaries N33.5 billion, revenues N1.4 billion), Osun (salaries N22.8 billion, revenue N5 billion), Oyo (salaries N49 billion, revenue N14 billion), Taraba (revenue N3.4 billion, salaries N21.6 billion).

'States are lazy'

Revenue Watch Institute coordinator Garuba said described the situation whereby states depend heavily on federal subventions as unfortunate because each state has the potential to sustain itself.

"It is unfortunate that the governors, particularly in the North abandoned agriculture. Every state has the potential to be self-sufficient only if the chief executive knows what he is doing," he said.

"I still wonder why Niger and Nasarawa states can't utilise their proximity to Abuja by creating mega cities in Zuba and Mararaba respectively. These places, if well planned, can rake in billions for the two states. But, go there, what you find is terribly unorganised slums," Garuba added.

He said that a recent report shows that "Yobe state alone can produce beans enough to supply the needs of West Africa. But look at it today, the state is engulfed in conflicts."

{Additional reporting from Misbahu Bashir (Kaduna), Ismail Mudashir (Kano), Adamu Saleh (Gombe), Hope Abah (Makurdi), Lami Sadiq (Jos), Garba Muhammed (Birnin Kebbi), Shehu Umar (Gusau), Kabir Anwar (Yola), Rakiya Muhammed (Sokoto), Abdulkadir Badsha Mukhtar (Dutse), Hir Joseph (Lafia), Hamisu Kabir Matazu (Damaturu), Usman Bello (Lokoja), Aliyu Hamagam (Minna), Abdullateef Aliyu (Ilorin), Victor Edozie (Port Harcourt), Patrick Odey (Uyo), Bola Ojuola (Akure), Kehinde Akinyemi (Abeokuta), Chris Eze (Yenegoa), Femi Akinola (Lagos) & Hamisu Muhammad.}

Ads by Google

Copyright © 2013 Daily Trust. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.