Recession: Governors Adopt Desperate Measures To Stay Afloat

From outright cut in the number of political appointees to reduction in their salaries and allowances and reforms of internally generated revenue system, state governors have adopted various measures to cut the cost of governance.

The economic recession, brought about by the drastic fall in the price of crude oil, seems to have succeeded in imposing the long sought fiscal discipline on state governors, according to investigation conducted by The Nation across the country.

At the last count, as many as 27 of the states are said to be finding it difficult to pay the monthly salary of civil servants.

It took Governor Abiola Ajimobi of Oyo State almost one year to constitute his cabinet after winning re-election last year, just to save money.

He only picked his media team and waited until he felt the treasury could absorb the emoluments of the cabinet members.

Besides, the governor slashed the number of ministries from 23 to 13.

The implication is fewer commissioners, special advisers and assistants.

The state government also decided to use public private partnership (PPP) in the execution of some of its projects.

These include the Lakeside Estate at Elenusonso, which is in partnership with HCP Architectire and Engineering Nig. Ltd and Olive Court at Agodi GRA, which was built by UAC Nigeria.

The PPP is in use for refuse collection and disposal in the capital city.

Similarly government embarked on the verification, authentication and certification of the workforce to block loopholes in the wage bill, Information, Culture and Tourism Commissioner Toye Arulogun said.

Overseas training for the work force was also stopped while subvention to the state-owned tertiary institutions was cut by 75 per cent.

The Abia State government is not adding to its pool of official vehicles for now, leaving many political appointees and aides without official vehicles.

The salary and allowances of the governor, deputy governor and other political office holders were reduced by half.

Governor Okezie Ikpeazu’s chief spokesman, Enyinnaya Appolos, said his principal “foresaw what is happening now months back which made him to cut his salary and his travelling allowance by 50 per cent, including those of his appointees.”

The state government saw in the commercial city of Aba a potential cash cow and is investing there as part of the effort to boost internally generated revenue.

Appolos said: “This position made the governor to say that he was going to live in

Aba for six months to help in fast tracking the development of that

city, but he ended up living there for over a year with development

structures springing up there”.

“Abia has a wage bill of over N2 billion and we get less than that. So

people should ask how we have been able to move the state forward in

the infrastructure sector.

“Most of the road constructions we are doing have been done with an

understanding with the contractors on how they are going to be paid

whenever the funds are available, and we have been keeping to that

bargain, which is why the construction sites are working.”

Governor Willie Obiano of Anambra State is also credited with foreseeing the recession and prepared for it in his own way, according to his Senior Special Adviser on Media, Mr. James Eze Anambra.

Eze said before the recession, the governor organised two retreats where experts predicted the oil price crash and advised the government to adopt cost saving measures immediately.

It consequently adopted the slogan ‘Doing more with less’.

“You can see that Obiano envisaged it, plugging the loopholes in the state, fishing out 800 ghost workers and also, it led to the prioritisation of projects government wanted to execute because of the lean resources,” Eze said.

The Internally Generated Revenue (IGR) system was restructured to make for efficiency in revenue collection,while overseas travels were drastically reduced.

Eze cited himself as an example of the prudence of the government.

“I do not have an official vehicle. I share a vehicle with the protocol staff and at times security men. But the previous administrations gave official vehicles to people in my position” Eze said.

Governor Samuel Ortom of Benue State reduced the number of ministries from 17 to 13, Special Advisers from 28 to 20, and special assistants from 500 to 150.

He has also reduced his travel allowances and those of his deputy.

The governor’s Special Adviser on Media and ICT, Tahav Agerzua, said the governor also involves labour leaders in disbursement of funds and has deployed ICT and other forms of technology to reduce expenditure .

The Ganduje administration in Kano State,according to Information Commission Muhammad Garba, has embarked on the radical reform of the state Internally Revenue Generated Revenue Board, in addition to cutting the salary of political appointees by 50 per cent, down-sizing the number of ministries and parastatals, as well as ensuring prudent management of resources.

“We looked at what was going on in the Civil Service in terms of curbing the menace of ghost workers. This idea paid off because we were able to discover over 7, 629 ghost workers on the payroll of the state government; and we were able to save over N283, 580, 848.44 monthly,” Garba said.

On internally generated revenue,he said: “for us in Kano state, our projection for 2016 budget, when we had our retreat was to generate from N4 to N10 Billion Naira monthly.

“When we came in, what we met on ground in respect of IGR by the immediate-past administration was between N650 to N700 million per month; but we have been able to increase it gradually to about N1.5 billion. This is as a result of the re-organisation of the Kano state Board of Internal Revenue.

“The Board of Internally Generated Revenue is now independent as part of the reforms. These guys are now generating between N2.2 to N2.5 billion per month, and every month, we are seeing an increment in millions of naira.”

The situation differs slightly in Ebonyi State where Governor David Umahi staggers payment for services rendered to the state over a period of time.

“Prudence and careful planning have become the watchword in this administration,” Chief Press Secretary Emma Anya told The Nation.

“When government awards a contract, the contractor will be paid per the kilometres he completes. This way the payment is staggered and it is not too cumbersome for the state government to handle.

“Same thing is being done in respect of purchase of heavy equipment used in the works ministery and also for cars being bought for commissioners, House of Assembly members and other aides.

“The state government has also adopted direct labour in road construction. This way you go to the market and buy at the market price the materials needed to do such works and that saves a lot of money.

“The engineers and other workers working on such projects are in the employ of the ministry of works and earn their monthly salary and get little additional allowances.”

“This way, the cost of construction is reduced and the money saved is used for other pressing matters”

Anya said government has also been able to plug loopholes which some unscrupulous civil servants and other government officials were exploiting to steal public funds.

The Chief press Secretary said the governor’s fiscal policies are paying off as the state is witnessing unprecedented development despite the economic recession the country is going through.

The Cross River State government’s approach is to create employment opportunities for as many people as possible.

Thus, it has established the Calabar Garment Factory which employs mainly women, particularly widows and other vulnerable persons .

Governor Ben Ayade said the idea was to rely less on allocation from the federal government.

“As a government, we must at all levels, take necessary actions to stem the situation if we must avoid the catastrophe of other challenges that may arise from the unemployment situation,” he said.

Other projects are the new deep seaport, the 260km superhighway and the rice city.

Also speaking, Commerce and Investment Commisioner, Peter Egba, said, “If you check what is happening in the world today, especially for nations that have oil as their major foreign exchange earner like Nigeria, you’ll discover that the price of the product is going south by the day and therefore we cannot continue to rely on it else our economy would suffer.

“ And because of that, in Cross River, as soon as this administration came on board, we saw that as a challenge and think outside the box. And thinking outside the box, the government of Prof Ben Ayade decided to go into massive industrialization of the state.”

“The garment factory is enough to generate the revenue to take this state out of the woods, when it is completed. With this, you see we have a departure already from the federal allocation.”

Interestingly, the governor who already has over 800 aides, plans to appoint more. This, according to him, is to ensure money is shared to as many people as possible to check poverty.

His words: “Everyday in my life I only think about the salaries of my people. That is all I do. If that is all I can achieve, let me achieve that.

“In my own inauguration, I said no person should go to bed on an empty stomach, so that is why I focus on salary. That small insignificant salary despite our allocation seeps down to the grassroots.”

The Kwara State Government prefers to adopt zero budgeting as its own strategy to and the aim is to cut the cost of governance by 40 percent.

Senior Special Assistant on Media and Communications to Governor Abdulfatah Ahmed, Dr Muyideen Akorede said that consequently, government has placed restriction on the number of political appointees compared to Governor Ahmed’s first tenure.

He said: “None of the parastatals in the state has a board yet. The state governor has also limited foreign travels to cut cost. A reform of revenue collection under the new Kwara state Internal Revenue Service (KW-IRS) has led to 300 percent IGR increase.

“This has led to the creation of the innovative Kwara state Infrastructure Development Fund (IF-K) which is funded from IGR without reliance on federation account.

“The state government has equally cancelled sponsorship pilgrims to Mecca and Jerusalem; ditto distribution of rams at Ileya festivals.”

The Osun State Government on Thursday introduced Economic Development Levy (EDL), to be paid by business owners.

Mr Dayo Oyebamiji, Acting Chairman, Osun Internal Revenue Service (OIRS), told reporters in Osogbo that the EDL was introduced by the Federal Government last year, permitting all the states across the federation to increase their Internally Generated Revenue as part of the efforts to find lasting solution to the current economic meltdown.

He said the state officially launched the level programme on Wednesday to expand its revenue base.

He said the agency had recruited well-trained officers that would be moving round the state with Point of Sales (PoS), machines to fast track quick collection of levies so as to curb multiple and unlawful levy payment.

Governor Abubakar Sani Bello of Niger State slashed the salary of political appointees by 30 per cent and minimized official trips.

There are no longer elaborate government functions. All such are now low key.

The use of local contents for projects is actively encouraged to keep as many youths as possible engaged.

Like Governors Obiano of Anambra State and Ikpeazu of Abia ,Governor Kashim Shettima of Borno State is also said to have anticipated the fall in the oil price and prepared for it.

His Special Adviser on Communication and Strategy, Mallam Isa Gusau said: “Gov. Shettima has already saved enough, planned and anticipated it. So it did not come as a surprise to him.”

He said government currently saves between N500 and N600 million in a month following its war on ghost workers..

Gusau also said government has zero tolerance for unnecessary trips.

He said:”Gov. Shettima’s has never embarked on any frivolous trip. Most of his travels are strategic and are aimed at bringing benefits to the state. Gov. Shetimma has at no time travelling out to go and rest.

“If it is rest, Shettima has more time to rest in Maiduguri than Abuja or any other place because he controls the environment here. But he cannot control that when he is outside the state.”

In neighbouring Yobe State, Abdullahi Bego, Director of Press and Information Affairs to Governor Ibrahim Gaidam said that apart from reducing the number of ministries and commissioners, budgetary spending has been slashed by as much as 50 per cent.

His words: “Yobe is one of the hardest hit states by the economic recession because recession set in as Boko Haram was easing out after devastating the state for nearly five years.

“Boko Haram had wrought so much destruction and the state government had to devote a lot of resources to rebuild and help victims recover.

“To cope with the recession, therefore, the Yobe State Government had to adopt a number of cost cutting and other proactive measures to balance its finances and ensure that it keeps afloat.

“First, the number of ministries was reduced from 21 to 15, saving several millions of naira in salaries and allowances to commissioners and other political appointees. The measure also ensured that projects and programmes and prioritised and those not needed or duplicative are excised.

“Second, the State Government had also put on hold several political appointments, including those of over 200 senior special assistants and special assistants to the governor. The number of special advisers to the governor was also pegged at 10 even though the state assembly had given clearance for the appointment of 15. All of this had saved the state over N250 million annually in salaries and allowances.

“The State Government, to cope with the recession, had also cut down on unnecessary expenditure in order to allocate resources more sensibly to areas where they are most needed.

“Running costs of ministries, departments and agencies were also slashed by 50 percent on a monthly basis. This is not only designed to save money but also to ensure that MDAs can function effectively by using resources with much more circumspection.

In Bauchi State,Governor Mohammed Abubakar reduced the number of ministries from 24 to 16.

To run them are 16 commissioners and 18 permanent secretaries.

The govenor’s spokesman, Mallam Abubakar Sadiq said political aides are no more than 100 compared to the over 2000 in the last dispensation.

“Apart from members of the State House of Assembly for whom the government bought new,all other government officials are using old cars retrieved from operatives of the last administration headed by then Gov.Isa Yuguda,” he said.

“Local government chairmen and their councillors will now be paid their salaries from the revenue they will internally generate.That is not all,as a result of the economic recession,Bauchi state government is diligently pursuing vigorously the Verification exercise,to save cost from the ghost workers and this exercise has started yielding good results”