Oshiomhole Speaks: Nigeria Is In A Deep Financial Crisis


Why was Governor Adams Aliyu Oshiomhole of Edo State involved in a solidarity march organized by NLC in in Abuja to protest over minimum wage? He explains, in this chat with Vanguard, the reason, despite being a governor, he kept faith with Labour, his primary constituency. He raises the alarm that the Federal Government is killing states’ economy with irregular Federal Allocations, saying the situation now poses serious danger. Below is Oshiomole’s position: SEE MORE AFTER CUT>>>>

The nation just celebrated its independence anniversary, but many Nigerians believe there is nothing to celebrate. Are they right?

We have a lot to celebrate. I think it is important to celebrate. Those who don’t want to celebrate can at least mark the day because it is important in the life of our nation. For the fact that we have the right to govern ourselves, not to be treated as second class humans who are incapable of presiding over our own affairs, we need to celebrate. I know that there are a lot of deficit because of the situation we found ourselves in. Not celebrate the fact that there is no hunger in the land because there is hunger. Not celebrate the fact that all our young people are gainfully employed, no, many people deserve jobs that are not there. Not celebrate the fact that we have attained all our development potentials, no, there is still a huge gap between the rich and the poor. But as they say, if there is life there is hope. 

In any event, for all those who are disappointed and I am one of them, this occasion also offers us an opportunity to reflect on what is it that we have failed to do, why are we where we are so that we can make the future better. But no matter how you want to talk about our problem, I am one of those who believe that the Nigerian nation is much more than the sub-total of all the problems that we want to talk about. We have cause to celebrate.

We were surprised to see you protesting with NLC in Abuja over minimum wage. Why was Governor Oshiomhole protesting with Labour?The mistake people make in life is to forget where they are coming from. I am conscious of the fact that I coming from the organized Labour, that the asset that I invested in my struggle to reclaim my victory for the governorship of Edo State was my labour struggles and the struggles of my colleagues and comrades in labour. And the promise of democracy is to improve on the quality of lives of the citizens. The primary purpose of all of us, 36 governors and one President is the welfare of Nigerians. If what we do does not translate to welfare, then our legitimacy can be questioned. And the responsibility of government everywhere in the world is to protect the weak from those who are extremely powerful. And the logic of the minimum wage is that for those workers who don’t have the muscle to organize strike, the government, the state should make a law to protect the most brutal employer from violating the basic right of the worker; that guarantees him a manageable pay. 

UK has a national minimum wage although it is hourly rate just like the US. If a government cannot protect the worker, what can it do? So, my point is that I was telling my colleagues that I will never agree with them on that issue and I will not only disagree quietly at the Governors Forum; that I will go publicly to disagree. As we speak, I am hired and employed by the Edo electorate, nobody in Abuja has hand in my election except those who registered here and who came to vote. Yet my salary is not fixed by Edo people even though Edo people pay it. My salary is fixed by the Revenue Mobilization and Fiscal Commission which is a Federal Government agency entrenched in the Constitution. 

So if Abuja fixes the pay of the governor, Abuja fixes the pay of the councilor, Abuja fixes the pay of the commissioner, Abuja fixes the pay of the Chief Judge, Abuja fixes the pay of the House of Assembly members, why should Abuja not fix the pay of the least paid worker? We cannot selectively apply the principle of federalism. If we have become such a federal state, that every state determines its own compensation structure, let’s begin with ourselves. There is no reason I should earn the same pay as Delta because Delta, though younger, is richer than Edo State. I should not earn the same salary as Akwa Ibom, because Akwa Ibom’s revenue, while we are talking about N3-4billion here, is about N35billion monthly. 

So, why should Abuja fix my pay as Akwa Ibom as if we earn the same allocation? Akwa Ibom people should determine what they pay, Edo people should determine what they pay their workers. My point is, this is hypocrisy; you cannot selectively apply the principle of federalism. When it has to do with the ruling class, we invoke federal principle; but when you have to deal with the labourers, the forgotten majority, you now say, ‘let everybody pay according to its ability’. But that should start with government; that should start with the Chief Judge.

The permanent constituency that I can never divorce from is Labour. I can’t be alive in government and be a party to a group that met to remove the gains that Labour had achieved when I was in organized Labour. The point is none of my brother governors will be surprised because I told them I don’t agree with the logic, I do not agree with the argument and that I was going to publicly disassociate myself from that place. Government missed the point, this minimum wage of N18, 000 was not imposed by NLC; every state was represented but the truth is that many states were represented without necessarily consulting with their governors because the governors did not show much interest in the matter.

 If we show as much interest in the issue of minimum wage as we show on the issue of the Federation Account, our own representative would not have gone to make recommendation that we cannot live with. There were states whose representatives were ready to propose N40, 000, some N30, 000 and that was because the person representing the state never discussed with his governor or with his accounts people. But it shows that they did not place much premium on that issue. For me, it is about being consistent but don’t be surprised that there are many other things I will join in the protest if I think the welfare of the people is at stake.

This issue of Federal Allocations, many states today cannot pay salaries to workers. What actually is the problem? Is it that the Federal Government is broke?I don’t know if the Federal Government is broke, but I know there is a serious financial crisis and it is unprecedented in the history of this country. That for the first time since 1999, allocations can no longer come as and when due to states is shocking. I have been involved in trying to understand what the reasons are and I have not seen anything yet. Two years ago, it was about the kind of money we were spending on subsidy. In no time, following series of probes and enquiries by the National Assembly and by the Presidency, they have since discovered the kind of money they stole as regards subsidy, all the people that conspired with them and I believe the EFCC is dealing with that. But just as we are dealing with that, now we begin to hear about the theft of our crude oil such that what is accruing to the Federation Account is not enough to meet budgetary provision. This year’s budget was based on 79 dollars per barrel, and about 2.4, 2.5million barrels per day. 

Now the bad news is that contrary to all the forecast, nothing is getting better. And it is sad that we are not doing enough to change things for the better, the challenge of government in any part of the world is to deal with the issues. If the economy is not doing well, you do certain things differently and recover. Well, it is no more a matter for debate, we are ten months into the year and oil has performed very well, at about one hundred and five, one hundred and ten dollars per barrel throughout 2013. This means that if we have budgetary provision of 79 dollars, we ought to have a surplus of about 30 per cent, which should be in the crude oil account. But rather than having this surplus, we are witnessing a situation where Federal Allocations no longer come as and when due, states can’t pay salaries. In Edo State, like the rest of our 35 states, part of our July allocations has not been paid. About a third of our August allocations have not been paid and nothing has been paid for September allocations. And it is the first time since 1999 that this thing has happened.

NNPC owes us explanation

The explanation by NNPC is completely watery. They collect 455,000 barrels per day for domestic refinery, but they also agreed that the refineries are not working, that at the very best, they cannot refine more than 100,000 barrels per day, so the question is what you are doing with the balance of 355,000? You take 455,000 barrels a day to refine, even when your refineries are not working. So, where is the money? If you multiply one hundred and nine dollars by 455,000 barrels per day, you will imagine the kind of money NNPC ought to be paying into the Federation Account. And from some of the figures that have been thrown around, NNPC is owing the Federation Account over N2.3trillion. And Edo has share of that amount that will run into several billions of naira. Last month, many states could not pay salaries, but in Edo we were able to pay with our IGR. Even the Federal Government could not pay salaries, I think they paid July salaries around the 14th of August. But we paid August salaries in August.

National disaster

Just to say that whether we use the word broke or you deny the word broke, the truth is that there is financial crisis in Nigeria which has very serious national security implication because when we can’t pay salaries, Federal Government can’t pay salaries as and when due, and you can’t pay your contractors and your contractors will begin to retrench their workers, that is a recipe for national disaster. So I am hoping that NNPC should wake up and meet its obligation to the Federation Account, otherwise the integrity of government is at stake. If I can’t keep my promise, Federal Government can’t keep its promise, all other governors can’t keep their promise, the Nigeria electorate will be so disillusioned and it will be a disaster. So, I am hoping that NNPC recognizes that it cannot be business as usual and they have few cases to answer as far as I am concerned.

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