Unless drastic action is taken, the inability of Osun State to pay workers for the past six months may continue for the next one year, according to information obtained from the Ministry of Finance.
The state received a net allocation of N111.3 billion between 2010 and 2014. However, salaries and other allowances gulped N113.62 billion in the same period.
Osun, a largely agrarian state, has a population of four million. But only 1 per cent takes 102 per cent of the state’s allocation through its 40,000 civil service workforce.
The government may not be able to pay salaries for a long time unless there is an increase in allocation from Abuja, reduction in staff salary or in the workforce.
International oil price has fallen below $50 per barrel (pb), the lowest in seven years, which affects Nigeria’s crude oil earnings and reduces federal allocation to states.
It is not yet clear how Osun will fund the wage bill deficit, but a source said it may have to borrow to pay back its lenders.
The source told The Paradigm, an online publication, that “although the state has recorded progress in augmenting its income base with a robust internally generated revenue (IGR) drive, it is insufficient for funding the civil service.”
The wage bill increase has been driven by arbitrary demand for salary increase by unions.