States: How Kwara Avoids Bankruptcy, By Moses Akogun
Hitherto, the economic recession that absorbed Nigeria palpably since the day President Muhammadu Buhari announced, “Nigeria is broke” has yet not released the populace from the growing despair and hardship the economic situation has brought upon individuals and businesses in the country.
Today, the story of the hardship expunging the roots of individual joy in Nigeria needs not an eloquent author to narrate. Some Infant babies would do that well. Be that as it may, the most embittering shock is the news of certain states going bankrupt following their sheer inability to fix financial responsibilities, particularly workers salaries.
Sometime in June, a report by the Economic Confidential forecasted fifteen (15) states that might go bankrupt soon. The report portended doom days for the country.
It was of course ascribed to the drastic decline in the Internally Generated Revenues (IGR) of the states, which have fallen far below 10% of their Federation Account Allocations (FAA) in one year from June 2015 to May 2016. Needless to stress, that the IGR of Lagos State exceeds that of other 32 States (combined together) really tells the imperativeness of aggressive diversification by the ‘sinking’ states.
The Presidency had also expressed concern over the inability of about 27 states of the federation to pay salaries of their workers despite the bail-out funds provided to them by the federal government. In different states, delay in payment of salaries to workers has been a recurring scenario since last year. In fact, some state governors have in recent time declared their states financially broke, saying that they cannot pay workers’ salaries.
Putting Kwara State in the spotlight, one would be amazed that a state that has been labeled all sort of names by dissidents of the State government was not captured in the bankruptcy report by the Economic Confidential. Despite, the prevailing economic situation, the State government under the leadership of Dr. Abdulfatah Ahmed has been able to keep the state afloat.
As it is today, no worker under the employ of the Kwara State government is owed salary. This has been made possible through prudent management of the State financial resources and its renewed internal revenue drive, which has improved significantly.
The same can, however, not be said of local governments in the State as LG workers are being owed up to six-month salary arrears. This situation has been attributed to the persistent drop in federal allocations accruing to the 16 LGs. All the 16 LGs in Kwara require about N2.5billion monthly to pay their respective workers and pensioners, but now get less than less N1.5b every month as federal allocation.
The present situation calls for a collaborative effort among the state government, local councils, labour unions and other stakeholders in the State to fashion out means of resolving the lingering salary crisis facing the LGs. No amount of demonstrations will solve the challenge.
Beckons of hope:
The proposed resolution by the government to take over the funding of Junior Secondary education is a viable step to curtail salary crisis at the basic education level, in view of reducing the salary load on the local government councils.
The full assumption of duty by the Kwara State Internal Revenue Service, KWIRS, to take over the 21 revenue lines of collection for the local governments in the state makes an assurance of improved IGR that will leverage on the federal allocations to meet rising needs.
Yes! Our fears and hopes are at different horizons. Going forward nonetheless, efforts when concerted and geared towards the over-felt areas by the federal and state governments shall bring about a positive turnaround.