MINIMUM WAGE PALAVER: Fashola Slams Austerity Measures

Gov. Raji Fashola

Gov. Raji Fashola

To overcome the economic challenges that would result from the introduction of the new minimum wage law recently passed by President Goodluck Jonathan, Governor Babatunde Fashola of Lagos State has slammed wide-ranging austerity measures to cut the increasing cost of governance in the state.

Gov. Raji Fashola

Consequently, provision of TV sets, Cable TV decoders, overseas trips and training by government officials, money spent on frills and jamborees, T-shirts, caps, food, the usual paraphernalia of typical launches in the state, have been knifed by the governor. The measures were contained in an executive order, which sources close to the Governor’s Office, said the governor signed on 12 July. According to the document, Governor Fashola warned that the belt-tightening measures being introduced are the first in the series.

Governor Fashola said it has become expedient for the state government to strictly monitor the way money is spent on governance as the impact of the minimum wage would no longer permit excessive spending by the government.

Governor Fashola, in the order sent to the Head of Service, government ministries, departments and agencies, said the minimum wage has further depleted the fund available to the government for social services by N2 billion every month. From all computations, the Lagos Government will need between N5.5billion and N7billion to pay its over 50,000 workers and political appointees. Against a monthly revenue profile of between N18billion and 20billion, salaries will gobble about 40 per cent of the state’s expenditure.

Observers said the N2 billion rise in salary bill, may just be a tip of the financial nightmare that the Lagos Government may face, if it implements the new salary structure across board, as being demanded by the unions.

Governor Fashola lamenting the impact of the minimum wage law and the new economic reality said: “The overall impact is that government spending on wages and emoluments has increased by about N2 billion monthly. The implications are that government is deprived of financial resources that were hitherto deployed to the funding of social services such as schools, water supply, waste management, security and such other amenities which help to improve the lives of citizens.”

He, therefore, ordered the suspension of recommendations and grants of support for private or individual problems and sponsorship except for very deserving educational and medical causes.

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The governor, who, however said the suspension does not affect the policy on payment of bursary and scholarships to deserving students, also warned that conscious efforts must be made to manage the cost of training personnel both locally and internationally.

Governor Fashola said: “While it will be necessary from time to time for us to commission projects, there must be a conscious effort to reduce cost related thereto by absolutely cutting down on frills, tee-shirts, caps and souvenirs and managing the cost of refreshment for guests in a justifiable manner.

“All ministries, departments and agencies must pay more diligent attention to the cost, management and audit of products such as fuel for vehicles and generators, including the cost of maintenance and repairs of vehicles.”

He also warned that government would not be responsible for the cost of procuring television and installation of cable TV decoders in offices.

While warning that the order must be strictly followed, the governor said he would continue to reel out more ways to cut cost in the future and added that “cost of telephone, long distance calls and utilities are some of the areas where we must improve our cost efficiency.”

—Kazeem Ugbodaga & Eromosele Ebhomele

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