It is no news that Nigeria like other countries is facing an economic down turn. Recent pronouncements by the President have pointed towards cutting down the salaries of political office holders including the President and his staff. This appears to be a welcome idea and a good judgment by the President in the current dispensation. It should however be understood that the economic meltdown will affect lower paid workers much more that the highly paid political employees. The economy of Nigeria has for long not favoured the lower paid workers in the country and we have many of them!

Given that the Nigerian political sector is wildly overpaid as the highest paid one in the West African sub region, pay is a logical place for cuts needed to balance the massive, unsustainable budgetary deficits. Recently, it was in the news that the National Assembly had already concluded an upward review of the President’s basic annual salary from N1.405 million to a whopping N3, 514,705. This figure did not include other allowances which would have brought the total remuneration package of the President in a year to N10, 899 million. According to the new salaries and allowances prepared by the RMAFC in 2007, a member of the House of Representative is on annual basic salary of N1, 985,212.50 and N29, 280,684.22 as allowances. The allowances include accommodation, vehicle loan, furniture, ward robe, vehicle maintenance, entertainment, recess, constituency, personal assistant, domestic staff, utility, severance, newspaper, and house maintenance. Each member is also entitled to N21, 000 duty tour allowance and $550 estacode per night. Reports also indicate that each senator takes an annual basic salary of N2, 026,400.00 and allowances amounting to N35, 462,000.00. A senator is also entitled to N23, 000 duty tour and estacode of $600 per night. The principal officers of both houses earn more. No wonder, politics is a do or die affair!

Cutting political sector pay would seemingly reduce the need for present and future tax increases on lower paid public sector workers to balance the budget. This can be considered a fair and rational approach i.e. transfer of income from high paid to lower paid workers occurring outside of the tax system. This income transfers occur when taxes are raised on high incomes, cut on low incomes, cut on regressive taxes like VAT which hit low income earners the hardest and when taxes are used to boost spending on social welfare and pensions. It would be argued that pay cuts are of course fairer than job cuts and therefore we should see this as a laudable objective.

However, I have my doubts. I do not want to be seen as doubting the genuineness of the President’s action. My worry is that knowing Nigeria, political office holders do not depend on their salaries. If there are wastes in the system, they do not come from the salaries documented.  Take for instance; did the 2.3 billion spent on legislators’ cars come from salaries? What is the amount of estacode collected by office holders compared to their basic taxable salaries? Will there be embargo on such spending by way of reduction in foreign travels? What about sitting allowances for legislators? We all know that all legislators belong to as many committees as possible to enable them collect allowances for sitting. Will there be a limitation on the number of committees a legislator sits on?  I have also wondered what they do with constituency votes when state governments and local governments are charged with development in the various localities. If you ask bulk of the populace these legislators represent, they do not know what constituency votes are. I think this should be scrapped.

 Security votes allocated and spent without accounts are a major source of expenditure in the system. I do not think security votes are ever under spent and returned. I would advocate massive investments in solving security problems in-order to create enabling environments for local and foreign businesses. I also suggest that there should be a legislation to curb violence and religious riots threatening security. This should include holding state governors who say they are the chief security officers and spend the security votes the way the like accountable. The law should make it appropriate to hold them responsible and accountable and possibly look at such cases of violence eruption as an impeachable offence. Since no state governor will like to be impeached, I believe they will do all that is possible to maintain peace in their states.

There are therefore many areas that need to be considered when looking for how to reduce expenditure apart from cutting pay. Government should consider also increasing taxes for very the highly paid. What of green initiatives around the various offices like use of emails rather than papers for communication?. Don’t ask me if there is power because I will refuse to answer the question. These are however a source of savable expenditure and should embrace such initiatives. The whole idea around these suggestions is that we must address long term problems in-order to solve these short term financial issues. This will enable government to connect appropriately with the people.

So when will it begin? How do we know it is done? I believe a comprehensive pay cut which should be transparent for the public to see and know about is what we need. It is not just about declaration and announcements. In Nigeria implementation is the issue. It is possible for the President to direct and it will take many months before anything could be done on the directive. After all, there are still ghost workers on salaries in various parts of the country. The dead are still on pay rolls. It will therefore be useful in the next 3-4 months for Nigerians to be told how much we have saved and what the money will be used for.

The President and Governors’ cabinets are massive. I do not advocate that some of the political office holders should be dropped as this may be the source of their livelihood. My suggestion to the President and the Governors and their economic teams therefore is to consider other methodologies like performance related pay schemes, introduction of green initiatives around the office and cutting back on staff benefits. I am particularly interested in the performance related pay schemes because, most political offices have no criteria for judging the performance of the office holders. In the past and recently, political office holders who have not performed and were removed from their posts have been brought back to occupy more sensitive positions. In recent times, even the President has said that he wants his ministers to perform and so it would be useful to see this starting with them at the federal, state and local government levels.

Robot  # 1 | 25.02.2009 11:55

It is no news that Nigeria like other countries is facing an economic down turn. Recent pronouncements by the President have pointed towards cutting down the salaries of political office holders including the President and his staff. ...Read the full article.