States bank on PPP projects as cash crunch bites harder

Many state governments have started reducing their overhead costs as part of measures aimed at addressing the dwindling funds from the federation account.

State officials, who disclosed this in separate interviews with The PUNCH on Sunday, ruled out sacking workers or slashing salaries in order to reduce the states’ wage bills.

Some of them also said that the governments had embarked on the private-public partnership to finance capital projects that had the potential of yielding revenue.

The officials said states that had yet to start the PPP, were also planning to embrace it to finance projects.

They confided in our correspondents that no matter how tight the finances of their states were, governors would not contemplate sacking workers because of the possible political backlash.

Recall that the Nigerian National Petroleum Corporation, in a  letter dated April 26, 2021, informed federal and state governments about its dwindling contribution to the federation account as a result of the bloated fuel subsidy.

The corporation also indicated that it would not make any remittance for the April and May Federal Account Allocation Committee after paying fuel subsidy from its revenue.

As a solution to the dwindling revenue, the Nigeria Governors’ Forum, at its meeting on May 20, called for immediate removal of fuel subsidy and suggested that the pump price of petrol should be  N385 per litre.

Despite the governors’ recommendation, the Group General Manager, Group Public Affairs Division of the NNPC, Kennie Obateru, in an interview with The PUNCH on Monday last week, ruled out the removal of fuel subsidy until  the conclusion of negotiations with the organised labour.

To compound the woes of the states, the Central Bank of  Nigeria Governor, Godwin Emefiele, after the CBN’s monetary policy committee meeting in Abuja on Tuesday,  insisted that the bank  would start deducting budget support loans given to states.

At the National Economic Council meeting in April, the governors had requested that the repayment of the loans borrowed from the CBN, which ought to start this month, be deferred.

On Sunday, a top official of the Nigeria Governors’ Forum, who confided in one of our correspondents, said, “Except for a governor like El-Rufai (of Kaduna State), who is courageous enough to take decisions without thinking about the political implications for himself or his party, no governor will contemplate laying off workers less than  two years to the 2023 elections.

“Recall that one of the major causes of Chief Bisi Akande’s failure to win second term in 2003 was the reform that he carried out in the civil service as well as the teaching service. Some teachers were laid off because of the relevance of their subjects. Some civil servants lost their jobs because their certificates were not genuine.

“Although the old man is a good manager of people and resources, he lost the 2003 election partly because of the reform, which was in the overall interest of the state.”

We’re financing projects through PPP, IGR – Bauchi

The Bauchi State Commissioner of Budget and Economic Planning, Dr Aminu Gamawa, in a text message sent to one of our correspondents, said the state government would not sack workers.

He,  however, said the state government would continue fishing out ghost workers in the payroll.

The commissioner stated, “The economies of Nigeria and Bauchi State are not in good shape. That is why some states are reducing their workers.  In Bauchi, we are approaching the problem in a creative manner.

“Instead of sacking  workers, we are focusing on ensuring that the payroll and the nominal roll of the state are sanitised to prevent fraud and corruption.  This will ensure that ghost workers and unproductive workers who are not adding value are fished out. This will enable the state to make some savings.

“We are also taking proactive and creative measures to increase our internally generated revenue.  This will provide the state with more resources to implement projects. Most of the projects that we are currently implementing in Bauchi are financed through the internally generated revenue and other creative ways like the private public partnership.

“We also believe that the role of the government is not to make people dependent on the government for handouts.  The role of the government is to create enabling environment for entrepreneurs and businesses to prosper, and create jobs, wealth and fight poverty.

“We will ensure that workers are paid their legitimate salaries on time, but we will also ensure that the government gets value for the money it is spending.”

On his part, the Enugu  State Commissioner for Information,  Mr Chidi Aroh, said the state was working hard to cut down overheads.

Aroh stated, “He (the state governor) is also working hard to see how he will cut overheads in the state.

“ I am sure in a couple of weeks or so we are going to come out with a new principle to cut down a lot of  overheads in the state because the economy is bad and government must take the primary responsibility of   providing security and welfare of the people.”

In Sokoto State, Governor Aminu Tambuwal also said the state government was not considering sacking workers.

He stated, , “Instead an agreement would be brokered, when the need arises, to source for funds, we  will  tax elected officials and political appointees.

“Such funds and taxes would be used  to pay the civil servants pending when the situation improves and the deductions made would be repaid.

“We give priority to prompt payment of salaries and pensions. The state government is doing its best in addressing the challenges of gratuity as well as other allowances to the workers.”

Also, the Kogi State Government  said that it had no plan to either sack  workers or reduce salaries of its workforce.

The Commissioner for Information and Communication Strategy, Kingsley Fanwo told one of our correspondents on the telephone on Sunday that the state government was still committed to its agreement with the state organised labour.

PPP has taken Ekiti this far in development – Commissioner

In Ekiti State, the  Commissioner for Information, Mr Akinbowale Omole, said  private public participation in projects execution had produced a lot for the state in terms of development.

Omole, who said that Ekiti was resolute not to sack workers despite the present dwindling resources, said the state was, however, reviewing the financial situation with a view to determine the way forward.

He said, “We are doing the PPP already. There are some projects that the World Bank is financing. There are some that the European Union is financing. We are doing that already and that is why we have been able to go this far in our developmental feat in the state.

“We are still reviewing the financial situation that we are going through now, there is still no indication that it will continue for long period of time. We are still looking at it whether it will be a short-term problem or long term.

“If it is short term, I want to believe that we will still weather it. But if it extends too long, then we will sit back again and review the situation to see what will be done,” he said, while speaking on sustainability of the projects and as well meeting obligations to workers.

On efforts already taken by the state to address the situation, Omole said, “We run a serious government here and we set our priorities. There was a stakeholders’ meeting involving every stakeholder – the organised labour, the two state-owned universities, the political appointees and various groups that participate in revenue generation and share out of the revenue.

“We have looked at everything together and we have put some things before the stakeholders. The advice of various groups is coming in as per what the government should do in the circumstance and it is only a collation of these suggestions that will now determine the way forward. As I speak with you, we are still getting feedback from various groups,” the commissioner said.

We hope we won’t get to the level of retrenchment – Osun

Also, the Osun State Commissioner for Works, Remi Omowaiye, expressed hope that poor state of finances would not degenerate further and reach the level that the administration would consider sacking workers.

Omowaiye, who declared that because of repayment of loans taken by the previous administrations, the state received the least amount from the federation account.

He  further said the administration had been performing its statutory obligations because of the financial ingenuity of the governor.

When contacted, Osun State  Nigeria Labour Congress Chairman, Jacob Adekomi, simply replied, “When we get to the bridge, we know how to cross it. Our national headquarters usually take decision on such issues.”

PPP is at the heart of all we do – Ogun govt

The Ogun State Government said that it would not drop any capital project, neither would it sack works despite the dwindling allocation from the Federal Government .

The Chief Press Secretary to the governor, Kunle Somorin, who stated this in an interview with one of our correspondents on Sunday, said  the state government was creatively allocating resources to meet the developmental needs.

Somorin added that public private  partnership would be prioritised to ensure the needs were  met .

He said “The PPP is at the heart of all we do. No capital project will be dropped. We are creatively allocating resources to meet our developmental needs. Ogun won’t slash workers salaries.

“Ogun is solvent. We won’t sack for lack of funds. The people are the essence of governance. Anybody sacked must have undergone a fair and due process after committing  service infractions.”

Recall that there was a crisis in Kaduna State, two weeks ago, when workers embarked on a strike because of the decision of the state government to sack workers in order to improve its finances.

PUNCH

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