Amid Dwindling Revenue, Govs Retain Thousands as Advisers, Assistants, Others

In spite of the country’s dwindling revenue and alarming debt profile, many state governors are maintaining huge numbers of political appointees, thereby constituting a huge burden on their states’ lean resources and increasing the cost of governance.

The political appointees, usually with overlapping functions, include commissioners, senior special advisers, special advisers, senior special assistants, special assistants, executive assistants and technical advisers and assistants.

The governors have mostly retained their aides and maintained the high cost of governance despite the drop in revenue from the Federation Account Allocation Committee, which is a product of crude oil theft and subsidy payment by the Nigerian National Petroleum Company Limited.

The Federal Government has repeatedly lamented the dwindling revenue, while the World Bank said a few weeks ago that Nigeria was facing an existential threat due to its low revenue. A few months ago, the Nigerian Governors’ Forum also raised the alarm that remittances to FAAC under the current fiscal regime would continue to shrink, even as reports said the NNPC had expended all its revenues on subsidy payment and had not been remitting funds to the Federation Account.

The NGF, which is the umbrella body for the 36 states governors, noted that most states were already experiencing fiscal stress and that continued decline in their revenue meant their allocations from the federal purse might not be enough to cover salaries or their recurrent expenditures.

In spite of the disturbing economic outlook, however, many governors have refused to cut down on the number of appointments and cost of governance.

Meanwhile, the domestic debt owed by 36 states and the Federal Capital Territory rose to N5.28tn in the second quarter of 2022. The sub-national domestic debt stock was N4.46tn by the end of 2021, which means it rose by N820bn between January and June this year.

Data from the DMO showed that Lagos, Delta and Ogun states are the top three debtors, accounting for about 25 per cent of the total sub-national domestic debt at the end of June 2022.

Lagos State recorded the highest domestic debt stock of N797.31bn as of June 2022, accounting for 15.1 per cent of the total sub-national domestic debt, Delta State recorded a total of N378.88bn as domestic debt stock, accounting for 7.2 per cent of the states’ total domestic debt stock, while Ogun State, with N241.98bn as of June 2022, accounted for 4.6 per cent of the total.

The states with the least domestic debt stock are Jigawa, with N45.14bn; Ebonyi, N59.11bn; and Kebbi, N60.42bn.

In the Nigeria Development Update report, titled, ‘The Continuing Urgency of Business Unusual’, the World Bank said Nigerian states would likely lose N18.8bn in oil and gas revenues in 2022, as worsening revenue collection at the federation level increases budgetary pressures for the states.

According to the lender, the declining revenue from the federation level has put many states in a precarious fiscal position.

The bank warned that many states would be unable to meet up with their expenditures, adding that there was an increase in debt servicing expenditures of states.

“Lower transfers will cause state governments to incur debt or drastically slash discretionary expenditure,” it noted.

Reacting, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the rising debt profile of the government raised serious sustainability concerns.

He said, “The government tends to argue that the condition is not a debt problem, but a revenue challenge; the truth is that debt becomes a problem if the revenue base is not strong enough to service the debt sustainably.

“It invariably becomes a debt problem and possibly a debt crisis. The government’s actual revenue can hardly cover the recurrent budget, which implies that the entire capital budget and part of the recurrent expenditure are being funded from borrowing. This is surely not sustainable.”

A political economist and former presidential candidate, Prof Pat Utomi, urged states to create an environment for wealth creation rather than depend solely on the federal allocations.

He said, “States must focus more on creating the environment for wealth creation. If you go back to the late 50s and early 60s, most of the developments that took place in Nigeria were from the sub-national governments. They collected the revenue and sent 50 per cent of it to the centre, but the military ruined all of that.”

On the several aides appointed by some governors, some economists have said such a practice has a damning consequence on the states’ economy.

The Dean, Business School, American University of Nigeria, Prof Leo Ukpong, said the high number of employees by the governors was creating a deficit in the states’ accounts, thereby encouraging borrowing.

Ukpong stated, “The bloated expenditure paid to the SSAs, SAs and what have you that they don’t need is going to create a deficit on the government side, because they pay more than they are receiving, and that deficit is going to affect the economy negatively.

“Down the line, most of the states will be looking for more loans to borrow, especially the new governors, who are coming in. The old governors, who are leaving, will be borrowing more money now that they will move out. The new governors will be saddled with a lot of debt.”

He further said state assemblies and the judiciary needed to check the excesses of the respective states.

He added, “The state assemblies have to be proactive and let the governors know the limitations. But as we know, members of the state assemblies and the governors are usually from the same parties. Until we have true independent arms of government, then such a situation will not cease. An independent assembly must be an opposition assembly.

“Also, the judiciary; if somebody sues the government that you are creating debt for us, the judiciary must be willing to rule on it. As for the governor, who is the main issue, we must put in people who are fiscally disciplined.”

Another expert, Prof Ayo Dunmoye, said Nigeria’s political economy was terribly distorted, noting that what obtained in Nigeria was a deficit of good governance.

Dunmoye stated, “Most of our political leaders see politics as business, that is why during elections they stake everything, expend a lot of money and they can go all out to win. So, invariably when they win, they want to recruit their supporters. That will now affect governance, democracy, the governed, payment of salaries, payment of pensions, it affects payment of the minimum wage, and they don’t care.

“Some of those people they recruit as SAs are jobless supporters, who they call political militants that they have promised something and so immediately after the election, they have to give them something to keep their support and loyalty and not to allow them to go hungry; and unfortunately, most of them don’t even have offices.

“Honestly, the governors do not care about other statutory functions that they have been elected to do like payment of salaries and other basic essentials of life. It is so unfortunate that even local governments also suffer from the over lordship of governors because there is a limit to how far local government chairmen can go in terms of ensuring that development gets to the grass roots.”

Another expert, Prof Onoh Felix, said the system of governance in Nigeria was too expensive, stressing that the country should adopt the parliamentary system like the United Kingdom.

He added, “Minimum wage is a debt and there is nothing they can do about it. However, it is a misuse of office sometimes to have a very large number of assistants and the money that would have been used in paying civil servants is used in paying these assistants. It’s also postponing the evil day because the workers can take the governors to court, and they will win. But unfortunately, some of them will leave these for future administrations.

“I will say we should not operate this kind of government, but the one that is obtainable in the United Kingdom, which is less expensive. There is no way we can continue to operate this type of government. There is no way you can legislate on the reduction of appointees.”