Sunday, 22 September 2013

Article: Socio-Economic Consequences Of Industrial Disputes In Nigeria(Part Two)




By Intersociety 

This is the continuation of our Public Information, dated 21st of September, 2013, on the smokescreen nature of the ASUU-Federal Government Agreement of 2009 as a solution to the battered standard of higher education in Nigeria. Our main concern is to expose and bring to the attention of the world how less than 5% of the Nigeria’s estimated population of 170 million, made up of 17, 500 top public office holders in Nigeria and public industrial unions and their members such as ASUU, NMA, NUT, TUC, NLC, etc, have continued to corner and pocket close to 80% of the country’s annual public finances at the monumental expense of other 170 million Nigerians. This they do by allocating to themselves scandalous sums in the form of “allowances” and “overheads”, using the instruments of “Appropriation Acts of the Federation”, “Appropriation Laws of the States” and “Industrial Actions or Strikes”.

The socioeconomic consequences of the forgoing are totally incalculable. Since 1997 when Nigeria recorded her last budget surplus, it had been budget deficits all through. Simply put, budget is in deficit when its expenditure is greater than its generated revenues and money is borrowed in cash or in kind to finance it. It is over-bloated when it is premised on excess consumption and swollen governmental running costs. It is sizable when it is predicated on core and needy budgetary items including human and capital developments. It is balanced when its expenditure equals its generated revenues. It is surplus when its expenditure is lower than its generated revenues. It is visionary when its makers go successfully beyond its traditional financing boundaries in the form of “decentralization”, “diversification” and creation of “new wealth”. It is positively supplementary when more needy areas are captured and attended to on the basis of excess revenue accruals. And it is negatively supplementary when more items both needy and frivolous are captured and attended to, on the strength of further borrowings and revenue downturn.

Further, budget is traditionally divided into “recurrent” and “capital”. Recurrent budget is further divided into “personnel” and “overhead” costs. Capital budget takes care of provision of social services including key public infrastructures as well as human and material wealth creation. As a matter of fact, the fundamental basis upon which government exists is for the creation and execution of “capital budgets or projects”.  Personnel costs of a budget take care of the payment of public workers’ salaries, allowances and other wage entitlements including pensions of the retired workforce. Overhead costs of a budget are for the maintenance of government machineries like buildings, office equipment, vehicular and other vital instruments. Nigeria now has a four-tier budget of “budget capital”, “recurrent personnel”, “recurrent overheads” and “budget debts servicing”.

Following from the foregoing, therefore, Nigerian budgets since 1999 have been deeply debt-ridden and consumptive. They are also static and highly centralized. Between June 1999 and now (2013), the Federal Government of Nigeria had budgeted a total of N37, 665trillion (about $221Billion using N160.00 per $USD), out of which, N21, 7 trillion went for recurrent expenditures; N4,5trillion or about $28Billion went for debts servicing; and only N11.3trillion or about $70Billion went for capital expenditures. Implementation and execution of capital budgets in Nigeria have been marred by “white-collar criminality” such as fraud, over-invoicing, embezzlement, kick-backs, white-elephant project execution, etc.

Also, between June 1999 and December, 2012, a total of N80 trillion or about $500Billion was shared by Nigeria’s three tiers of government-Federal, States and LGAs from the country’s Federation Account (Intersociety 2012). Nigeria’s total domestic and external debts including those owed by States, LGAs and government parastatals and ministries have skyrocketed since May 2007, from about $18Billion including $6Billion of foreign and N1.8trillion of domestic debts; to about $100Billion or N16trillion in 2013 with a staggering difference of $88Billion borrowed locally and internationally by relevant public borrowing establishments. In 2012 alone, Nigeria paid a whopping sum of N699Billion or about $4.4Billion to banks and other lending institutions within and outside the country in the form of “debts or loans’ interests”(Ezekwesili 2013).

A critical look at the foregoing clearly indicates that close to 80% of such huge expenditures and loans were expended and borrowed to service 17,500 Nigerian top public office holders and members and leaders of public industrial unions such as ASUU, under the guise of “allowances” and “overheads”. The major challenge facing the growth and development of the Nigerian economy is institutionalization with reckless abandon, of spurious allowances and overheads.

As we have earlier stated, out of N592Billion spent annually to service the wage entitlements of 12,788 LGAs’ executives and councilors in Nigeria, N550Billion goes into payment of allowances. Only N42Billion is spent on their salaries. Out of N300Billion spent on about 2,664 States’ executives in the 36 States of Nigeria, N272Billion is spent on allowances and only N28Billion is spent on salaries. Out of N60.4Billion spent on 469 federal lawmakers in Nigeria annually, N54.2Billion is spent on allowances and only N6.1Billion is spent on salaries.

Out of N92.3Billion spent annually on 472 federal executives in the country, N89.7Billion is for allowances and only N8.6Billion is for their salaries. Out of N40.9Billion spent on 1,152 State lawmakers in Nigeria, N35.8Billion is spent on allowances and only N5.09Billion is spent on their salaries. Out of N18.5Billion spent on 792 State Judges in the country, N15.4Billion is spent on allowances and only N3.1Billion is spent on their salaries; and out of N14.8Billion spent on 142 federal judges annually, N13.1Billion is spent on allowances and only N1.7Billion is spent on their salaries (Intersociety 2012 and the revised Salaries & Allowances for Top Public Office Holders Act of 2008).  The forgoing does not capture spurious overheads and extraneous allowances annually smuggled into the Appropriation Acts of the Federation and the Appropriation Laws of the 36 States in the country.

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