Inside Kogi State’s request for Bailout

Of the N338 billion Federal Government’s bailout loan to 27 states, Kogi is going for N50 billion, almost as much as the sums of two other high borrowers: Imo (N26.8 billion) and Oyo (26.6 billion) put together, prompting questions from people who cannot rationalize Kogi’s move
The Federal Government, in its bid to address the challenge of backlog of salary arrears owed workers across the states, directed the Central Bank of Nigeria (CBN) to disburse special intervention fund totalling N338 billion to 27 states of the federation. The fund is a soft loan solely for the purpose of paying outstanding salaries.
The conditions for accessing the facility include resolutions of the respective state executive councils (SECs) authorising the borrowing and state Houses of Assembly consenting to the loan, as well as issuance of Irrevocable Standing Payment Orders (ISPOs) to ensure timely repayment at source from the states’ Federation Account allocations.
Already, the fund has been disbursed to Kwara, Zamfara and Osun states with Kwara taking N4.320 billion, Osun getting N34.988 billion and Zamfara receiving N10.020 billion.
States that have got the approval of the CBN to access the special intervention fund include Delta which is to receive N10.036 billion; Ebonyi – N4.063 billion; Edo – N3.167 billion; Ekiti – N9.604 billion; Enugu – 4.207 billion; Gombe – N16.459 billion; Imo – N26.806 billion; Katsina – N3.304 billion; Kebbi – N0.690 billion and Kogi – N50.842 billion. Nasarawa is expected to get N8.317 billion, while Niger will receive a total of N4.306 billion; Ogun – N20.00 billion; Ondo – N14.686 billion; Oyo – N26.606 billion; Plateau – N5.357 billion and Sokoto — N10.093 billion.
The loan is repayable at nine percent interest over 20 years.
A breakdown of the amounts being sought by the various states shows that Kogi is seeking the largest amount of N50.842 billion. This sum is generating mixed reactions from stakeholders in the state.
While some see it as a welcome development, others feel that taking such huge amount of bond which would attract interest for the next 20 years would amount to jeopardizing the future of unborn children. Fears are also being expressed in some quarters that the loan could be diverted into funding electioneering campaigns given the fact that the state is bracing up for governorship election come November 21.
An opinion leader and former Director of Programme, Radio Kogi, Alhaji Abdulkarim Bello questioned the rationale behind the ‘huge loan’ being sought by the state government and urged it to tell the public how much it is indebted to workers. He said he was shocked when he juxtaposed the amount approved for Kogi state vis-a-vis those being sought by other states of the federation.
“When I looked through the list, I discovered that Kogi state is far ahead of other states. Kogi is not the highest salary-owing state government, why should it be asking for the highest loan? The general belief is that Kogi is asking for such huge loan because of the election coming up in November. If the government is honest, it should come out with details of what it wants to spend such huge amount on,” he said.
Also speaking, a senior Political Science lecturer at the Kogi State University, Anyigba, Prof Sam Egwu said, “In Nigeria’s evolving federal system where the national government takes a lion share of revenues generated from oil because of the reality of centralization of power, bail out to help states meet urgent and immediate needs is normal. What is important is that citizens and labour unions who are fully informed about the amount involved and the purpose for which this bridgehead loan is provided are expected to monitor its disbursement to ensure that they meet expected needs. Demand for transparent handling of the funds is just in their own interest. But more importantly, this country needs to face the urgent task of re-federalizing, namely, to move in the direction of devolution of powers to transfer more responsibilities and resources to the states as federating units, while matching that with more statutory transfers.
“At the same time, states will need to work harder to generate more internal revenues which, as the experience of Lagos State shows, means that states should perform in terms of service delivery to encourage citizens to pay taxes as means of creating alternative to the present trend of “feeding bottle” federalism in which states are fiscal appendages of the federal government.”
For chairman of the Nigeria Union of Teachers (NUT) in Kogi state, Comrade Suleiman  Abdullahi, the amount being sought by the government is not ‘outrageous’ considering the arrears of salaries and allowances being owed workers in the state.
Abdullahi, who is also the vice chairman of Nigeria Labour Congress in the state, said going by the computations being made as to what government owe workers in the state, the N50.8 billion might not be adequate.
“As Basic Education staff, we did our computations of what government is owing us between December 2011 and July 2015 and we have about N37 billion arrears not paid to us. If you look at the bailout which is N50.8 billion, if you are taking N37 billion for teachers alone, you know what it means, it means you have N13 billion left. On our part as labour, the NLC has commenced computation of all the debts owed workers across board including those of teachers, local government staff, polytechnic staff, university staff, college of education staff, the judiciary staff and other core civil servants in the state. By the time all these collations are added up, you will discover that the 50 billion is not adequate”, he said.
While urging workers to be patient and optimistic as regards the disbursement of bailout funds, Abdullahi expressed the confidence that Governor Idris Wada would tamper with funds meant to defray salary arrears of workers.
For his part, the chairman of Nigeria Labour Congress in the state, Onuh Edoka has equally advised government against the temptation of diverting the funds into other projects, insisting it must be judiciously utilized. Edoka who said the N50.8 billion might be dangerous for the future generation of the state if not properly used, added that the bailout is justifiable since it is meant to address genuine cause of workers.
“The indebtedness may not be fair to the future of the state on one leg, but on the other leg, those workers that are being owed deserve to be paid. Do we now allow these workers and their families to die because of the long-term impact the bond will have on the future generation? As long as the bailout fund is utilized for the purpose it is meant for, I see it as a genuine cause for the workers,” he said.
Edoka added that the NLC is equally trying to identify the indebtedness of government to lecturers of the state university, polytechnic, college of education, pensioners and core state civil servants with a view to harmonizing everything before presenting a common front to the government. He said they have set up a committee that would harmonize all outstanding debts owed workers for onward transmission to the governor.
“The committee is made up of very intelligent labour leaders that would come out with a report and the letter would be forwarded to the Governor to ensure that when the fund hits the government’s account, no Kobo of it would be diverted,” he said.
Edoka observed that the huge indebtedness of the state to workers was largely due to several months of non-payment of salaries and part payment of salaries to workers, especially local government staff and teachers.
He said the situation was made worse by dwindling revenue allocation accruing to the state from the federation account, adding that government had been regular in paying staff salaries until the revenue accruing to the state began to plummet.
Since Governor Wada assumed office in 2012, the state had been receiving averagely between N3.5billion to N3.7billion as monthly allocation before the oil price crash and reduced allocation to the state while the monthly wage bill of the state is put at N3.2billion.
Presently, the staff strength of teachers in the state is put at 33,000 with an expected wage bill of N1.3 billion. More than that amount is however required to pay the N18,000 minimum wage implemented for workers at the twilight of the regime of former Governor Ibrahim Idris. Similarly, the total staff strength of the entire Kogi State Council workers stands at 26,542 as at March end. The expected monthly wage bill needed to offset the workers’ salaries at that level of government is put at about N1.6billion.
Observers believe that some of the financial predicaments facing governor Wada’s administration today are a result of some of the policies and liabilities he inherited from his predecessor.
The governor on realizing that the monthly allocation to the state was dwindling, put in place measures that have seen increase in the state’s internally generated revenue from N150 million to between N500 million and N600 million monthly.
Wada is said to have committed substantial amounts of the allocations accruing to the state into completing projects inherited from his predecessor, Ibrahim Idris.
“The administration has since assumption of office ensured that funds are committed to the completion of inherited projects. At the last count, the administration has completed payment for the Greater Lokoja Water Project, the Confluence Stadium, the phase two of the state secretariat, Confluence Beach and several road projects it inherited have been completed.  For the record, the Capt Wada administration has so far completed 58 road projects across the state. Others are still on-going”, Mike Abu, one of the media aides to the governor said.
Wada equally embarked on other projects such as the Lokoja Trailer Park terminal, Kogi Hotels,16 km Ganaja- Otokiti dual carriage bye-pass road project, 500 Housing Units in Ganaja, about 35 water schemes across the state,  seventeen-storeys Kogi House project in Abuja, amongst others which are near completion.
When contacted, Kogi State Commissioner for Information, Zainab Okino, said she would not want to join issues with those reading political undertones to the bailout funds being sought by government.
According to her, the bailout fund is yet to be released to the state and as such, it would be too early for anyone to begin to raise alarm over handling of the fund.
On his part, the state deputy governor, Arc. Yomi Awoniyi had recently assured workers in the state that their outstanding salaries and entitlements will be cleared once government takes delivery of the bailout funds being sought.
Awoniyi who gave the assurance during his tour across some local government areas in the state, praised the workers for their resilience and keeping faith with government in the face of its present financial challenges.