Is Borrowing From The Bank To Pay Benue Workers The Solution? By Bemdoo Hulugh
On Thursday the Benue house of assembly gave governor Ortom the go ahead to borrow N10billion from the bank to offset workers’ salary arrears. This didn’t come as a surprise. In a meeting with activists, students and opinion leaders when Mr Ortom came into office,he said the debt he inherited from his predecessor is N90billion-N50billion for ongoing contracts, N18billion for certified ones, N10billion for bonds and bank loans and N12billion for salaries and arrears. He went ahead to say that for him to at least pay one month salary across board and “ensure the take-off of the executive and legislative arms” he needs to borrow and that he has received offers from some banks. when it was all over the news that the Benue state house of assembly has approved the request of the executive to borrow, many people especially on social media wondered aloud if borrowing to offset debt is the way to go.
Borrowing from the bank to pay Benue workers is a very popular decision. Benue workers want to get paid. They deserve to be paid. They have incurred so much debt as a result of non-payment of salaries for close to six(6) months. I heard schools don’t even send children home for not paying school fees because they understand it won’t make any difference. Doing anything humanly possible to pay at least a month’s salary will receive the support of almost everybody, but not everything that is popular is the right thing.
I don’t understand the wisdom behind incurring debt to discharge debt. If the people’s governor inherited N90billion debt and is still going ahead to borrow N10billion to offset some of it and get government going,is he not increasing the debt? Come to think of it,which generation will finally carry the burden of paying back? The usual question is where will Governor Ortom get the money to pay workers if he doesn’t borrow and some have supported the idea by lecturing whoever cares to listen about “refinancing”.
I understand that borrowing is not a bad idea but borrowing to pay salaries is a bad idea. Government all over the world borrow money for different reasons but under normal circumstances it is more wise for government to borrow money to increase production capacity and economic growth. I know the circumstances in Benue are not normal, they are more abnormal given that even in our days of plenty we were borrowing and we are still borrowing in these difficult times. Let’s think about this,if borrowing from banks to pay salaries was the solution, why are other governors not doing so to pay salaries?
Governor Rauf Aregbesola of Osun who is owing workers for up to eight(8) months said he began finding it difficult to pay salaries in 2013 when the Federal allocation of Osun state reduced by 40%. He also noted that in his effort to pay workers and carry out his responsibilities, he has exhausted the state’s reserve and also incurred debt of N12billion. He also said he will not mind collecting bank loans to pay workers but banks are refusing to grant him more loans. If what the governor of the state of Osun said is true, then borrowing N10billion to pay salaries and get government running is good in the short-term but a disaster in the long run.
Note that governor Ortom intends to pay just one(1) month across board and ensure the take-off of government activities. Mind you workers haven’t been paid for five(5) months, so how will the remaining arrears be settled? I just hope he won’t be going to the bank to borrow another billions. If we can learn anything from the Osun experience, then we must know that time will come when banks will no longer be willing to give loans. Governor Ortom must find another way out.
The Benue state Secretary to the State Government(SSG) also spoke on channels TV about some options the government was looking at exploring to generate revenue to take care of the salary problem like increasing internally generated revenue and cutting cost of governance. They must also do more by investing in areas that will increase production capacity and economic growth. There are countries that are smaller and less endowed than Benue State but are prosperous independent countries, so there is no reason for us to be stranded because of poor federal allocation. I always tell whoever care to listen that Benue state is not an ordinary State but it has remained so because ordinary people have been leading us for a long time.
I understand that the task before the people’s governor is not easy. It takes little effort and time to destroy but the opposite is the case when trying to build. So much has been destroyed but it is in difficulties that greatness is revealed. These are unusual times that demand thinking outside the box. If we must borrow money, let’s borrow not just to take care of the needs of Benue workers who are just about 20,000 people; let’s borrow to harness our potentials to benefit the over 4million people in Benue state. That is the only way we can one day pay these accumulated debts. I understand that governor Ortom has an economic team and my opinion may be considered as the opinion of an ignorant small boy that didn’t even study economics or accounting but I decided to lend my voice as an ordinary citizen who is always at the receiving end of every government decision and also as someone who believe in the power of learning from the experiences of others. Before governor Ortom borrow billions to pay Benue workers, he should give a thought on the experience of the state of Osun.
Bemdoo Hulugh is an active citizen and he writes from Makurdi
You can also interact with him on tweeter @bumy04