Nigeria: 35 States Can't Pay Salaries Without
Federal Funds
27 December 2013 , By Nuruddeen M. Abdallah,
Source: Daily Trust
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.}


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