If oil price crashes, governors flying jets’ll resort to ‘okada’ – Delegate

National conference09 July 2014, Abuja – A delegate representing the South West Geo- Political Zone of the country, Yinka Odunmakin told other delegates yesterday that if the price of oil crashes today, governors who he alleged to be going round the world with private jets, will look for motorcycles, known as Okada to ride.

Contributing to debate on report of the devolution of power Committee yesterday, Odunmakin also said that if no oil, only Lagos state out of the 36 states of the country would be able to use its Internally Generated Revenue, IGR to pay workers’ salaries.

He said, “The recommendations of the Devolution Committee to use 4.5 % of our annual budget to develop  other mineral resources outside oil is the most apt thing to do now to get out of the sharing culture that is holding Nigeria down.We are engaged in one of Ghandi’s identified 7 Social Deadly Sins-Wealth Without Work.If oil prices should crash today,all our states would collapse and the governors flying jets all over the place will look for okada to ride.

“The grim reality below shows that we must embrace wealth flowing from work by going under the soil in our various states to diversify the economy.”

On IGR and States’ wages, the delegate said, “Only one of the 36 states can afford to pay workers’ salaries with internally generated revenues,
The remaining 35 states generate only a fraction of funds they require to settle their wage bills annually. This means that without federal funds, these states cannot even afford salaries payment, not to talk of executing any projects

“Information  on states’ wage bills comparisons with data on their internally generated revenues (IGR), published by the National Bureau of Statistics. The result showed that only Lagos  State can pay salaries of its workers by solely relying on revenues generated internally.

“None of the 19 Northern states has this much financial muscle. They all depend on federally-allocated subventions, mainly made up of funds generated from sales of crude oil that is extracted down south.

“Other components of the federal allocation, shared between the three tiers of government on monthly basis, include taxes collected by the Nigerian Customs Service and the Federal Inland Revenue Service.

“The data published by the statistics bureau showed that in 2010 and 2011, only seven states had IGR in two-digit billions. Lagos is the only one with a three-digit figure, while the remaining states had single digits.
In 2012, the situation improved slightly with 12 states recording double-digit figures in billions while Lagos remained the only with three-digit figures.

“The implication of the low revenue generation by the states is that most of them can barely sustain themselves without recourse to monthly federal subventions.
Most states have had to take short-term bank loans to settle wages whenever there were delays in the monthly disbursements by the Federation Accounts Allocation Committee (FAAC).

“Lagos generated N219 billion in 2012, three times its annual wage bill of N76.5 billion. States that generated more than N10 billion in 2012 are Kano, Kaduna, Oyo, Ondo, Ogun, Enugu, Edo, Delta, Cross River and Akwa Ibom.
Among states with fairly strong revenue bases are Rivers, which generates the second highest IGR of N66.2 billion in 2012, but has an annual wages bill of N96 billion.

“Edo made N18.9 billion revenue but is weighed down by a salaries bill of N28 billion yearly, while Cross River generated N12.7 billion though it pays N22 billion wages annually.

Even though Kano has the highest IGR in the North, the N24 billion it generated in 2012 is not enough to pay salaries of its workers, which is N36 billion yearly. Kaduna, the second internal revenue earner in the North, garnered N11.5 billion but which is less than half its N27.4 billion annual wage bill.

“The situation with the remaining states is worse, as their annual wage bills are several times larger than their internally generated revenues.
For instance, Zamfara’s internally generated revenue is N2.5 billion in 2012, while its annual wage bill is N13.2 billion; Yobe generated N1.7 billion, and has a yearly salaries bill of N18 billion; while Adamawa’s N23 billion wage bill is five times higher than its IGR of N4.6 billion.
Even oil-rich Bayelsa State generated only N3 billion in 2011, but pays N48 billion in salaries yearly.

“Nasarawa made N4.1 billion in 2012 but spends N24 billion yearly in salaries; Sokoto generated N3.8 billion in 2010 and spends N16.8 billion on annual wages; and Kogi got N3.1 billion in 2012 but it is workforce soaks up N44 billion yearly.

“Kwara  (salaries, N11 billion; revenue, N7.2 billion), Benue (revenue, N8.4 billion; salaries, N34.8 billion), Katsina (salaries, N14.4 billion; revenue, N5 billion), Bauchi (salaries, 26 billion; revenue, N4.1 billion), Ondo (revenue, N10.1 billion; salaries, N48 billion), Plateau (revenue, N7 billion; salaries, N20.7 billion), Kebbi (revenue, N5.4 billion; salaries N12 billion), Niger (revenue, N3.7 billion; salaries N31.2 billion), and Gombe (salaries, N14.4; revenue, N3.7 billion).

“Others are Abia (salaries, N30 billion; revenue, N3 billion), Akwa Ibom (salaries, N33.2 billion; revenue, N13.5 billion), Anambra (revenue, N6.1 billion; salaries, N16.3 billion), Borno (salaries, N20.7 billion; revenue, N2.4 billion), Delta (revenue, N45.5 billion; salaries, N85.2 billion) and Ebonyi (salaries, N16.8 billion; revenue, N14 billion).

“There are also Ekiti (salaries N24 billion, revenue N3.8 billion), Imo (revenue N6.8 billion, salaries N22.8 billion), Jigawa (salaries N33.5 billion, revenues N1.4 billion), Osun (salaries N22.8 billion, revenue N5 billion), Oyo (salaries N49 billion, revenue N14 billion), Taraba (revenue N3.4 billion, salaries N21.6 billion).”



– Henry Umoru, Vanguard

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