FAAC Crisis: 14 Governors Can’t Pay Salaries

Agency ReporterJuly 9, 2018

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Some states’ inability to meet vital financial obligations without allocation from the Federal Government is becoming clearer by the day following the deadlock in the Federal Account Allocation Committee (FAAC) meeting. As at today, not less than 14 states currently owe workers’ salaries for June, following a delay in disbursement of funds from the centre.

The situation has also been made worse by poor internal revenue generation (IGR) mechanism and over-bloated civil service structure put in place by some of the governors.

New Telegraph’s survey across states revealed that while a few are up to date in salary payment from their IGR and possible surplus from federal allocation, some others resort to short-term loan facilities from banks to meet the same obligation.

A FAAC source confirmed this to one of our correspondents, saying that states that managed to pay June salary to civil service workers under the current circumstance did so with bank loans. According to the source, “Few states paid while the deadlock persists.

They took loans from banks. I don’t have the number of states, but I spoke with the Chairman of Commissioners for Finance Forum, Mr. Mahmoud Yunusa, on phone yesterday and he told me states that paid did so with facility from banks.

“Banks will readily lend funds to any state that approaches them for a loan knowing that over N600 billion is being awaited from FAAC.” The current development is a reaffirmation of Vice President Yemi Osinbajo’s position in May that without monthly allocations from FAAC, it would be difficult for most states of the federation to survive. Some of the states currently plunged into this dilemma include Ondo, Ogun, Taraba, Kwara, Abia, Borno, Osun, Imo, Rivers, Oyo, Ekiti, Kogi, Benue, and Nasarawa.

The matter has also been made worse by recent spat between the state governors and the Nigerian National Petroleum Corporation (NNPC) over an allegation that the state-owned oil firm failed to remit full amount to the entire joint venture proceeds from the sale of crude oil to the Federation Account for five years.

While reacting to the situation, some top officials of the affected states, who spoke with New Telegraph, blamed the situation on delay in the disbursement of allocation by FAAC. In Ondo State, for instance, the Commissioner for Information, Mr. Yemi Olowolabi, confirmed the development, saying that the June salaries were being delayed due to non-receipt of allocation from the federation account.

The amount accruing to the state government from the federation account is between N4.8 billion and N5 billion on monthly basis, and the amount paid as salary to civil servants at the state level is N4.8 billion while workers at local governments get N2.8 billion. In Taraba State, a senior civil servant in the state’s Ministry of Finance attributed the delay to the deadlock at the last FAAC meeting. He put the salary and pension bills of the state at N2.1 billion monthly.

Also in Kwara, which has a wage of the bill of about N2.4 billion monthly, Senior Special Assistant (Media and Communication) to Governor Abdulfattah Ahmed, Dr. Muiden Akorede, said the government was exploring alternative means to ensure payment while expressing hope that the delay from FAAC would be handled without much delay. “The government is exploring alternative funds for payment of salaries pending the release of allocation in the interest of workers’ welfare.

Meanwhile, we are hopeful that the FAAC issue will be resolved soon,” he said. In Abia State, the Commissioner for Finance, Mr. Obinna Oriaku, also attributed the delay to non-disbursement of allocation from the federation account.

According to the commissioner, who put the state’s monthly wage bill at about N2.3 billion, “the state government has not paid June salary because of the face-off between the Federal Ministry of Finance and the NNPC. “The problem is not peculiar to Abia. It’s all over the federation, including the Federal Government. Even the Federal Government has not paid.” In Ogun State, the Ibikunle Amosun-led administration has yet to pay the June salary of its workforce.

Although the state had always paid salaries as and when due, the current delay may not be unconnected with the disagreement between state governors and NNPC over remittances to the Federation Account. Many civil and public servants who spoke with our correspondent in Abeodence Kuta said the state government has not paid them for last month. They cited the logjam over federal allocation to states as the reason given by the authorities.

The state’s monthly wage bill is reportedly in the region of N9 billion, consisting of state and local government salaries and allowances as well as subventions to state-owned tertiary institutions. In Borno, the Chairman of the state’s chapter of Nigeria Labour Congress (NLC), Comrade Titus Ali Abana, blamed the nonpayment on the FAAC quandary.

Osun State, with a wage bill of N3.5 billion, has also not paid its workers for June. When contacted, Secretary, NLC, Osun State chapter, Mr. Rufus Adeyemi, said the delay in receipt of federal allocation was having negative effects on workers in the state. Adeyemi said: “We implore all those involved in the imbroglio to resolve it.

Nothing should affect our salary. We really hope this matter is resolved soonest.” The situation is the same in Imo State. Speaking to New Telegraph, the Chairman of Imo State chapter of NLC, Comrade Austin Chilakpu, categorically stated that no civil servant in the state had been paid salary for the month of June.

He said: “The excuse we got was that the Accountant General has been going to FAAC meetings, but the state has not received any fund yet due to the FAAC stalemate.” The state has a monthly wage bill in the neighbourhood of N2.5 billion.

The non-disbursement of allocation has also affected River State, which is known for not owing workers. A source put the state’s monthly wage bill close to N7 billion, including pension. On his part, the Commissioner for Information, Oyo State, Mr. Toye Arulogun, said even the May salary had not been paid owing to the delay in the release of federal allocation.

His words: “As you are aware, the Oyo State Government deploys 110% of its federal allocation to the payment of salaries in line with its agreement with labour. The FAAC impasse is obviously the cause of the delay of the payment of May salary.

Governor Abiola Ajimobi has approved the payment of May salaries and it will be disbursed immediately the government gets the funds to make up the total.” Oyo State’s wage bill is currently about N4.5 billion.

On the part of Ekiti, the Commissioner for Finance, Chief Niyi Ojo, said the state had not received a federal allocation to offset the state’s monthly wage bill, which stands at N1.7 billion, noting the figure would move up to N2.4 billion if cooperative deductions, gratuities, pensions and sundry allowances were added.

In Kogi State, Commissioner for Finance, Hon. Idris Asiru said the Yahaya Bello administration was putting machinery in motion to create more revenue sources that will free the state on over dependant on federal allocation.

According to him, the state will soon get to the stage of other states that pay salaries without dependence on federal allocation. In Benue, Governor Samuel Ortom, who currently owes workers over 10 months salaries, is also a victim of the current federation allocation deadlock.

Apart from the current dilemma facing all the states, the governor had said that the increasing wage bill of the state, which now stands at over N7.8 billion was responsible for his inability to pay salaries. The Nasarawa State Chairman of NLC, Comrade Abdullahi Adeka, also blamed the delay on non-receipt of funds from FAAC.

However, while the affected states are keeping their fingers crossed until the matter is resolved at the federal level, some other states with strong IGR base have long paid June salaries and moved ahead. States in this region are Cross River, Delta, Edo, Bayelsa, Kano, Kaduna, Zamfara, and Sokoto. Others are Bauchi, Adamawa, Enugu, Niger, Akwa Ibom, Lagos, Plateau, Ebonyi, Yobe, Katsina, Jigawa, Anambra, Gombe, and Kebbi.