13 October 2015, Lagos – Governor Adams Oshiomhole of Edo State, has said the current financial crisis that prevented many states from paying workers’ salaries was beyond the crash in the price of crude oil, saying that states needed to revisit the issue of capital expenditure, recurrent expenditure and the context of the federal character principle.
The governor, who noted that Edo State met its wage obligation to workers monthly, challenged senior public servants in the state to look inwards to ensure that the state continued to initiate and execute fresh capital projects in addition to completing ongoing ones and meeting basic recurrent expenditures in spite of the dwindling resources from the federation account.
Speaking at a 3-day retreat for members of the State Executive Council and Permanent Secretaries holding in Abuja to brainstorm and re-strategise on raising the bar on governance in the state, with the theme,Finishing Well, he observed that a lot still needed to be done to ensure his administration finished stronger than it started almost seven years ago.
He said: “There are still a lot of wastages in our system. From our experience in Edo, without attacking wages, we have cut a couple of things without having to physically carry out retrenchment in the way that some other state governments have done. At $45, I believe it is a high price for crude, but I think the problem is that we have assumed that when the price rose to $140 and stabilised at $108, that became the new ideal level. So, when it dropped to around half of that, we think we are in crisis. When I look at what the number was in 1999, at the beginning of this democracy, it was less than $40, and we still had a fairly balanced budget looking at the ratio of recurrent expenditure vis-à-vis capital expenditure.
“Now if you appreciate that we were doing relatively well at $28 dollars, and that Nigeria met its wage bill when oil crashed to $10 not too long ago, about 1997, the country was not known to be in arrears of salaries.”