Stop Giving Bailouts to States, Okupe Tells FG

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  • Says govs forced Jonathan to deplete ECA

Gboyega Akinsanmi
Former Senior Special Assistant to ex-President Goodluck Jonathan on Public Affairs, Dr. Doyin Okupe, monday asked the federal government to stop giving bailouts to the state governments.

Okupe also asked the federal government to tell all the states of the federation to reduce their workforce, noting that virtually all state governments in the federation “have over bloated civil service.”

He canvassed the position in a statement he personally signed monday, arguing that the country did not need a soothsayer or an economic guru to foretell that this is unsustainable.

The former aide lamented that it was state governors who forced the hand of President Jonathan to share and more or less deplete the savings in the Excess Crude Account (ECA).

He added that it had become clearer and more certain daily that unless a miracle happens, many states would be unable to meet up with their financial obligations and might actually face imminent bankruptcy if the economic situation in the country worsens.

The special assistant cited the case of Ogun State, which according to the figure he presented, received N2 billion monthly from the federation account and paid out N1.8 billion as staff salaries, wages and overhead costs at some points between 2008 and 2009.

He added that the state’s total staff strength “was about 50,000 while the population of the state was about 5,000,000. An obvious socio-economic absurdity and incongruity therefore existed where 10 per cent of the population was consuming 90 per cent of the wealth of the state.

“We do not need a soothsayer or an economic guru to foretell that this is unsustainable. In many states, the percentage of the resources of the state that is consumed by the civil service ranges between 70 per cent to 80 per cent by not more than 10 percent of its population.

“A basic economic dictum says if expenditure cannot be controlled, then internal demands must be curtailed. Without doubt, therefore, all state governments must immediately start the process of downsizing their workforce with reasonable cushions for those who will be affected.”

Okupe canvassed an immediate 20-30 percent cut in staff strength “is imperative, with provision of say, upfront payment of three years salaries for affected members of staff. If this is what the federal government will give as loans or bailouts to the states to be repaid over a period of 10 years, it will make a better economic sense than what has been done to date.”
He said the exercise of downsizing should be continued at an annual rate of about 10 percent for about five years, arguing that the exercise, if adopted, would definitely create space for a controlled employment of new youthful and better trained civil servants.

He explained that all elected politicians wanted “to build roads and improve infrastructural facilities in their states. The voters also judge performance by level of infrastructural improvement embarked upon by elected public officers.
“In this period of economic downturn, therefore, we cannot expect that governors will be satisfied with just paying salaries. This is why many governors will rather award contracts for roads, bridges, schools e.t.c and owe salaries for several months,” Okupe explained.

The former senior special assistant urged the federal government “to create a National Infrastructural Fund, to be managed by national and international experts. Both states and federal government can approach such agency for developmental funding at single digit interest rates.

“The federal government may deploy money from the pension funds, as already suggested by the Minister for Works, Power and Housing, Mr. Babatunde Fashola. Multilateral agencies can also be mobilised to commit to such funds especially if the federal government backs such requests with sovereign guarantees.”