3rd July, 2016
The Oyo State Government is seeking the understanding of workers and pensioners over the N29bn wage deficit representing five months salary arrears, which it blamed on dwindling allocation to the state from the Federation Account and paltry internally generated revenue.
The government, through the Commissioner for Finance and Budget, Mr. Bimbo Adekanmbi, also disclosed that the N14.1b loan the state is seeking to obtain from the Federal Government and which will be paid in tranches of N1.3b monthly for the first three months and N1.1b monthly for the next nine months, would be used to pay salaries.
The commissioner explained that the delay in the payment of salaries and pensions to workers and pensioners in the past five months was not a deliberate action as being circulated in some quarters but due to non-availability of fund.
The commissioner further clarified that only N37.48b accrued to the state between May 2015 and May 2016 as against the N84bn being peddled about, adding that within the same period, N40.48bn was paid directly to the Local Government Account as its share of allocation, part of which was being used to cater for the salaries of primary school teachers and local government employees.
“Oyo State government is not deliberately denying workers their salaries. Such misconception was borne out of ignorance and sometime deliberate mischief by those who can never see anything good in this administration. People have been peddling unfounded rumour that the state received N84bn from the Federation Account from May 2015 to May 2016, which they claimed we have refused to use for the payment of salaries. They made a rough calculation that with such figure, we ought to be having over N7bn monthly.
”The truth however is that we collected only N37.48 billion after all deductions from source from May 2015 to May 2016. The remaining N40.48bn went directly to the LGs and it is even criminal for any state to touch such allocation.”
Between May 2015 and May 2016, he said monthly allocation to the state fluctuated between N2bn and N3bn, while the internally generated revenue stood at N1.2bn monthly, with a constant N5.2bn salaries and pensions monthly.
The commissioner said, “As at May 2016, we have recorded N29bn deficit, which is responsible for the five-month salary arrears. In fact, it was only in three months last year that we accessed any figure up to N3 billion and since then, it has been a downward spiral.
”We must also make something clear to our dear citizens. Oyo State has a population of about nine million people. If we receive an average of N2bn monthly from the federation account and we generate about N1.2bn monthly, it is only fair that we spread it among the workers and the people of the state.
”The governor, Senator Abiola Ajimobi, graciously conceded 100 per cent of allocation from the centre to the payment of salaries and pensions while the IGR is devoted to maintenance of social services like education, health, social welfare, security and infrastructural development”.
The commissioner said that these services would suffer if all the accruals to the state were used to pay salaries of the not more than one hundred thousand workforce in the state.
Adekanmbi said that the N14.1b loan expected from the Federal Government, which the State House of Assembly has just approved, would not even be sufficient in offsetting the backlog of salaries.
Nonetheless, he said that the state was working hard to diversify its economy with the new initiative called Oyo Agric, as well as to expand its tax net to enhance its IGR in the next few months to ease the wage burden.