Librating Edo State from economic paralysis was not child’s play, but Governor Adams Oshiomhole has succeeded against the odds. His strategy was to trim the state’s overheads and especially personnel costs which some erroneously regard as salaries.
Today, Edo State civil ser¬vants are top on the priority list of the governor as he’s owing them no arrears of salaries. Not only that , he also does not plan to retrench workers. In this interview with Sunday Sun, he elaborates on his winning formula and had a word or two to say on why federal governments of the past were wasteful and reiterated his confidence in the government of President Muhammadu Buhari. Excerpts:
Why is Edo State not as broke as other states of the federation?
I am really proud about it. First, I came from a labour union where I was not used to managing big money. While I was president of NLC, the highest income we received in 12 months was N133 million which translates to approximately N11 million a month.Sometimes we organized nationwide strikes which cost N10,000 per state. We just told them that their business is to get the strike on and if it does not succeed, the person is gone because we cannot tell people that for whatever reason the decision we have taken cannot be implemented.
Also, I grew up the hard way when things were very tough. When I assumed office, oil prices crashed from $140pb to about $34pb and my projection for Edo State was based on revenue of about $140pb but by the time we fought through the curves, we managed the situation. Just like today, the earnings of the state from the federation account is not enough to pay salaries and our internally generated revenue was an average of N280 million. From that revenue, about 25 per cent was paid to the so called private revenue collectors, leaving us with a net of about N250 million to about N255 million.As soon as I appointed commissioners and they were sworn in, I decided to come up with a winning formula. I didn’t want Edo workers to continue without salaries like my predecessors.
My task was to do something different because my obligations to the workers must be satiated as well as my commitment to the electorate. We held a marathon state executive council meeting which started at 9.00am and ended at 7.00am the next morning. I told the exco members that nobody could take any break and neither could we close until we found solutions to problems of the state. In our determination to get Edo working, we had to look at every taxable item in the book, reviewing what they charged previously and what we are supposed to charge. How did we arrive at this figure and what was the basis?While some were subjective others were objective but in the course of that review, we discovered that there were some companies in the state that were not remitting their taxes. I drove to one or two companies and asked them to open the books, ordering them to remit their taxes that day.
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They never expected that the governor could come to their firms and the rest is now history. But I just want to emphasize that we just had to look inward, review all the taxable items of private schools where our kids pay as much as N250,000 a year while the school only pays a paltry N10,000 to the Edo State government. Even with pay as you earn, some people paid as low as 5% whereas they should pay 25% of their incomes. Under two years, we improved our Internally Generated Revenue from the average or net of N285 million to N2.1b a month or N24 billion a year. It’s still small but when you look at where we were coming from it’s a lot.
The second is that Edo State’s recurrent expenditure by 2008 was about 80% and 20% was capital expenditure but we consciously decided to revise the picture to 60% and 40% in favour of capital expenditure. How did we achieve that? You know people look at wages and raise the alarm about salaries. It’s not salaries that’s burdensome but the non-wage elements associated with personnel, overheads, travels, conferences and seminars at home and abroad and trade fairs. We simply decided to minimize these and saved about N5 billion in the first year from the cost of running the bureaucracy without retrenching any-body.
We never sacked anyone but we simply blocked all the leakages and deepened our Internally Generated Revenues (IGR).Of course, you need political will to get big people to pay taxes. We have taken everybody that matters in Edo State to court because the laws are there but what is lacking most times is the will. To show that they are powerful, they must disobey the law. That was why we charged many to court and sealed off their premises and businesses and they ended up paying.Even federal agencies with a superiority complex of claiming federal institution and not paying tax had to comply by the time we sent one or two General Managers to prison, the rest didn’t need to wait. Eventually, federal agencies recognized that they have to pay taxes.
There was one airport case where we charged them to court and they decided to seal off the airport just for effect but it did not stop anything and by the time the General Manager saw himself in prison nobody told them to comply. They begged us that they would pay and with interest.So, for us to remain where we are today, we had to look inward and block loopholes. The secret is first to cut costs and there are always costs to cut because even as human beings, we all go to the gym to shed some fat to live longer. We all know the more burden you carry the less your life span.We were able to pay salaries promptly and in fact, last month, I told commissioners that we must ensure that every Edo State worker on the payroll of Edo State government gets paid on May 28 latest. We cannot be celebrating democracy day for the political leadership while the people are hungry.It just does not add up,because democracy ought to impact the ordinary man and that was done. Last month was extremely bad, however we are up to date with our salaries but we had to stop and review our overhead costs including at the governor’s office across board.
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Now, this is one area I think the media often misses the point. The challenge of running the country today goes beyond symbolism. People always criticize fat salaries of governors but in the real sense, governors are underpaid. If I cut my salary by 50%, it cannot deliver two additional blocks or pay three additional workers’ salary. I don’t know about others but in Edo State, the governor does not earn up to N700,000 monthly.Every other thing is provided. I eat very well even though the space is small and government pays for it. I don’t drink too much but if I do, government will also provide for it. It’s the same with the car I drive and the fuelling but the actual pay is under N700,000 monthly.
So, if I part with half of that, it does not translate to anything.It’s obvious that the media don’t consult their own previous reports otherwise, they could have known that President Umar Yar’Adua cut federal pay by 25% and there has never been an announcement that the money has been restored. When President Jonathan faced another crisis arising from oil pump price, he further announced another 25% salary cut.So, ideally, people are already at 50% and I wonder what they are cutting again. If the media is following up their reports, they ought to know that we have gone through this cycle before. The real cut we need is not from salaries of civil servants because they are underpaid. What I mean is the actual salary on the table. You cannot suggest to me that as somebody running a state of four million people my wages of N600,000 monthly which is less than $3000 is too much. As I said earlier, it’s not the pay but the wastage we had to tackle.
The wastage is not the wage base but the invisibles that are not regulated and that have no limit at the discretion of every executive.When you look at the costs structure of government, you have to separate personnel costs from recurrent expenditure because often people think that recurrent expenditure is synonymous with personnel costs or that personnel costs are synonymous with wages and salaries.Personnel costs include the cost of moving one person from one location to the other because in his employment contract, it is part of the cost of maintaining him. What we typically find in government is that if I want to help anyone, I will put him among the 20 or 30-man delegation to Geneva like when I used to be at the NLC and each of them will earn between $300 to $500 a day depending on the grade level.
When you look at what you earn for one or two days, it will be more than the salary you earn monthly.So, if I want to help you, I will put you on a trip two or three times a year, which will make you get more than enough. However, if I stopped you from traveling, maintaining or even increasing your salary, the overall cost of keeping you will be less. This issue is often played down.People talk about National Assembly wage bill, but it’s not the normal pay known to the Fiscal Mobilization Commission that is the issue. If a senator decides to travel every quarter and assuming that the destination is USA, with a N3m ticket built into it, you can sustain his pay which is actually small and withdraw him from a permanent suite at the British Airways.
If you do that, you will find out that one trip which costs N3m alone is worth more than the actual salary of a senator. So, when people say cut their pay, it’s actually not the pay but personnel costs. Incidentally, the actual pay is the one that’s taxable while these other ones are not. In Edo State, we simply had to cut what we could cut including overhead costs, because we have to keep our contractors at the site and as we speak now, they are working at the Inede erosion site, Upper Lawani, Upper Siluko construction sites and others are still going on including Ekenwa road and the Benin City Water Store Master Plan. We also have the 100 feet we are working on at the Abudu internal road and the Second Circular work is equally going on. People are extremely excited with that, because we are transforming to four lanes.We are building schools in Edo north and across the state, we are equally building hospitals and by the time we complete them, people will be happy.
We have no business designing something that will be archaic next tomorrow.We have to look at the future. So, we just have to cut costs, do away with what we have to do away with and continue to keep the workforce. We have no plans to retrench and will not retrench.Our legislators have been very helpful in recognizing the real financial obligations because we told them that other people are in government because they rig election, we are in government because we have won election. And the only one formula to continue to win is to continue to work. Working to free resources from ourselves to the people.
APC is grappling with serious controversy at the National Assembly. What’s your position on this?
I think the only thing that is strange is the fact that the minority party has ended up producing the Deputy Senate President. Otherwise, we have not broken any record. In terms of what the leadership of the party wanted and what has happened on the floor of the house, it is an old incident or a repeat of an old incident. I think the shock therapy as I will call it, is that we have to manage our success. Democracy is a beast, which can thrive freely but must also be managed so that it does not go astray.
I guess everybody is doing what they have to do at the national level to have a deep conversation within the APC family so that these issues are quietly resolved and I am sure they are already being resolved.But you know that for a party that is democratic, like the contestation that happened between the Labour Party in UK compared to the Conservatives, you will find out that the voices are louder within the Labour Party.It’s part of the hallmark of any party based on social democracy, internal democracy, a good and problematic world. For me, the important thing is that we must remain focused on whatever are the internal challenges. It must not be such as to slow the pace of progress or in any way obstruct the commitment of the president to deliver on change. For now, I don’t think we need to worry as such and I believe the party leadership is on top of the situation.
You claimed that the federal government falsely or wrongly accused state governments of mis-managing their resources. Were you justifying the recklessness of state governments?
I was not justifying it but it’s just to say that if an armed robber is pointing at a thief, it makes sense to say that he is an armed robber and he’s not the one to taunt a thief. That in terms of morality, he is not the person to cast the first stone since he is an armed robber.There is too much confusion among us and everybody is misled to focusing on the activities of the cricket ignoring the devastation caused by the elephant. Sometimes, the elephant misleads the public to focus on the activities of the cricket.
So, when Okonjo-Iweala makes so much noise about states, she knows that a lot of looting was on under her watch.To be specific, she first came up with the theory of the rainy day and told the governors to save for the rainy day, but if the governors did not listen, where is your own saving? For every one dollar we shared from excess crude, the governors took away 26 cents while the federal government took away 52.6 cents .Where is your savings? If you mismanage 52.6%, no matter how every other person behaves, we will certainly fail. The current revenue allocation formula puts at the door of the federal government 52.6% of federal revenue that is declared. All the 36 states and FCT share 26% and whatever we have done in Edo State is our share of the 26% divided by 36 states and the FCT.
We have told them to show us the Edo share of the 52% in the state that the federal government managed on our behalf for the past 16 years. All the projects we execute come from our share of the 26%.In other words, for every one kilometer of road I did in Edo, the federal government ought to have done two because they are managing on our behalf while I am managing on behalf of the Edo people. Logically, if I build one classroom, federal government ought to build two. If I build a one-bed hospital, they are supposed to build a two-bed hospital.
They maintain the federal bureaucracy and I maintain state bureaucracy. They have few lecturers in the universities, I have thousands of teachers in the primary, junior and senior secondary schools and colleges of education. If you look at it, the real waste manager or wasteful spend-er has been the federal government over the years. It remained the weak link in the Nigeria economic chain but this point is often ignored in our national discourse.
There was a day, I asked Farida Waziri, the former EFCC chairman, assuming without conceding, that all the 36 states were angels and they managed prudently every single kobo we had proportionately, we will transform the country by scoring 26%, any day by the standard of any institution and that percentage will be an F10 failure.By the same logic, if the states become very reckless and the federal government manages responsibly proportionate to our share of the national revenue, Nigeria will score 52.6%, which even by Oxford standard will be a good pass. So, it’s not about celebrating that one person has failed but putting the blame where it should be.But when there is confusion in the house, I accuse my child of being irresponsible by asking him to look at how much he is eating when I told him to save it for tomorrow and I forgot that my own share in his mother’s pot is two times bigger.
I have said that since May 2013, not one dollar was shared from the excess crude account yet nobody asked what happened to the money since then. She practically stopped it and diverted the money to SURE-P even when the money is not meant for that.If you consult the proclamation of SURE-P, it’s meant to be funded from revenue accruing from the increases in the price of petroleum products. But President Jonathan said that the increase must not be wasted and set up a special scheme where the difference between the old and new prices should be kept as reinvestment and that was why they called it reinvestment.
The question now is why should she fund it from the excess crude funds? Was that the promise and in a democracy do you spend money that was not previously appropriated? Was the excess crude funds captured in the Appropriation Act of the National Assembly?Excess crude funds belong to the three tiers of government, but why should one tier of government spend that money without consulting the other two tiers? Since we stopped sharing, what did you do with it?Yet the money is not there as I speak to you because the total we found there was under $2.5 billion even when there was no sharing since May 2013. It’s not about excusing one’s recklessness but hard facts. It’s not for me to make a blanket or sweeping generalization for every objective analysis. It’s wrong to claim that all the governors have done very well, just as it is wrong to claim that all the governors are reckless.
What happened to President Goodluck Jonathan’s government? Was it a case of bad advisers, bad managers or weak leadership?
I think President Jonathan was not prepared for governance. He assumed that he could be president without the responsibilities. So, he surrendered the crown. The early warning indicators were there when he appointed someone as minister and gave her an additional responsibility to coordinate the economy.If the president does not by himself coordinate the economy and assigned that to somebody, he has already surrendered the crown. For me that was the end of discussion.The beauty of the Nigerian president is that he has the power to hire and fire. The rule number one in leadership, which is also a basic common sense rule is that you should not hire anyone you cannot fire.
So, let nobody tell me about bad advisers, because they are not nominees or traditional chiefs that the new king inherited from his forefathers and there was nothing he could do about them because the ancestors put them there.Since they are his creations, they should be there for as long as they advise well. Every president must take responsibility for his performance or non-performance of his government.It is also the same thing for governors. I cannot come out to claim that I wanted to do this or that but for one thing or the other, I couldn’t. I have to do my work and take responsibility for the governance of my people.
But if a leader can’t motivate his followers and instill a bit of fear in them that if they don’t perform to standard they’ll be sanctioned he’s bound to fail.I know that at a time, the media gave up , because I cannot have a minister who uses a private consultancy firm to solicit and collect cash from tens and thousands of unemployed youths across the country in the name of recruitment into Immigration Services and when he has made millions of Naira, he told them to go the stadium for recruitment.Where on this planet has employment be conducted at the stadium? People died and the president did not have the gut to fire the minister.
Somebody needed to lose his/her job at least for the blood that was shed to show that he did not approve of what they did even if he consented to it.Let us even look at the debate about the governor of CBN saying that an amount of money was missing but the minister refuted it initially that it was not $40b but $10.8 billion. We were equally told that a forensic audit would be conducted which means that as a matter of routine the minister has not been doing his auditing that he needed a CBN to embarrass him this way.Somebody ought to lose her job. As they say the president does not do bad but his aides do. There were a lot of things that went wrong , because he surrendered the crown allowing smaller leaders to feast on it.
How realistic is the claim by somebody to anoint the next governor of Edo State?
I think the first thing is to establish where the anointing oil will come from. Well, to know whether your sins are forgiven or not or whether the Holy Spirit takes control or whether you are covered with the blood of Jesus; when the pastor brings the anointing oil, it will depend on the quality of the oil.If it is not a holy one, it will not deliver the possessed from sin. I know for sure that Edo cannot return to the PDP era because too much has changed. I can tell you straight away that the assumption is true that we have disbanded the three ruling families in Edo.On March 28, we finally nailed their coffins forever. They cannot resurrect because they died in sin and it is only him who died like Christ that can resurrect but the Bible said that if you die in sin, resurrection cannot be your portion. Mark my word, by next year we will find out.
You know they did manipulate by using a combination of religion, stolen money, primordial sentiments and all sorts of things in the last election. But as you can see, once they were not in a position to use religion and those primordial sentiments and it was based on you and I in the last election on April 11, APC won in 16 local governments out of 18.In Esan land, we have driven the godfather to his hole and restricted him to his senatorial zone. We penetrated his senatorial area and collected three out of five local governments, thereby reducing him to his village. The question should be where are they going to come from?In matters of tradition, the ancestors can have a small tot of gin, but in politics, once you are dead you are dead. I don’t see how PDP can pos-sibly dream of coming back. Edo people will chose the next governor but I know it will not be a PDP person. However, we welcome them because it will be boring if we become unopposed.
We like contestation and I like to see how PDP will contest election without misusing the armed forces and police, giving orders to the IGP and without taking money from NNPC. Don’t forget that according to President Muhammadu Buhari, PDP merged with NNPC and the armed forces and that merger has been broken. They are now alone. Since 2003, PDP does not know how to win election without using public funds, without deploying the Nigeria Police and the Nigerian Army. They even deployed the Immigration in this last one and I can show you photographs. Now they will be fighting as a party completely demoralized and morally bankrupt. By the time this president begins to open up on the kind of thing PDP did, whenever Nigerians hear P before they say D, they will chase them out. I don’t see PDP coming back in Edo and certainly not even at the federal level.
What’s your take on the removal of fuel subsidy?
What I think is on the table is the fraud people perpetrate in the guise of subsidy where fake importers have emerged such that by 2010, the numbers had increased. The total annual subsidy for Nigeria was under N200 billion a year. Right now, it has climbed to about N1.5 trillion in one year.We are no more deal¬ing with subsidy but with fraud. What the last government did was to deregulate fraud in the oil sector. So, what they could not get through direct crude we started hearing of crude oil theft but at which point did crude oil theft assume banner headlines in our national conversation?We used to hear of bunkering of 5000 or 10000 bunkering and illegal refinery here and there, since then what has happened to the Nigerian Navy? We ended up giving security contracts to some individuals as if we don’t have armed forces.
Those are the issues to discuss as stealing under any guise.Look at the number of importers prior to 2010 and 2011. The number of people who were players or so called major and independent marketers were not up to 30 put together, there is no registered player in the sector but now we have more than 200 people who purport to be “importing” and collecting payment called subsidy. I don’t think you want to ask me if we want to ask those fake ones.The good news is that President Buhari more than most people is more knowledgeable in the inner workings of the oil sector having been a minister of petroleum.In his days, they looked inward because it was in their time that these local refineries were fully operational and at a time, Nigeria was even ex¬porting petroleum products out¬side the country and importing crude from Venezuela to feed a section of the Kaduna Refinery.
So, we have a new president who will not depend on ‘what is the matter?.’ During our meeting with him, the president reminded us that as Minister of Petroleum when he had to go to Vienna, he was obliged to raise a memo for the cost of the trip to the Federal Executive Council for approval.Then NNPC was a parastatal under the federal government but as at today, Nigeria has become a parastatal under the NNPC. He told us that in his days they had two accounts like the foreign account where they paid proceeds from whatever they exported into the account, and local account into which they paid proceeds from what¬ever they refined locally . He said that every kobo was easy to trace then but today ask the chief accountant of NNPC depending on who you talk to, they don’t know how many accounts they have. This is coming from a president who has superintended that sector before.
So, I think my joy this time is that we no longer have a president who one lady will just come and tell oil price or oil theft and he would ask what we can do and meanwhile it was the devil at work.I think for now, I am confident that over the next couple of weeks, just by stopping the stealing and blocking the leakages here and there, getting NNPC to behave responsibly, getting some people to vomit what they have to vomit or excrete what cannot be vomited, we will certainly see some changes.I have said earlier that the responsibility of a leader is to elicit confidence and trust. Look at Abuja where virtually all the streetlights were dead just few weeks back, they are now working well.
There is no FCT minister yet. Those crooks collecting money without executing projects have suddenly realized that Buhari will jail them.Everybody is trying to sit up. I read that Port Harcourt refinery will soon start operation just like the Warri refinery and the question is how and what happened that they have to resume operation and those stories they used to tell?. When the righteous rules, the people rejoice but when the wicked take over governance, the people suffer and that is the story of the Nigerian state.
Why should Bendel Insurance FC of Benin be living in its past glory?
To be honest, I love football and I have a lot of hopes as to what we can do for Bendel Insurance but I soon found that round leader thing in Nigeria is gulping money.We spent some money in fixing the Ogbemudia Stadium to make it attractive and provided some sporting facilities but the kind of resources that the club expects from government is not sustainable. I think the drop in funding partially affected their performance.However, we have gone back to the drawing board and reviewed the system now, putting the players on government payroll. What it means is that we have moved away from the era of the players complaining about non-payment of salaries and allowances for three to four months resulting in protests.
They are now paid monthly. They may encounter any other problem but not non-payment of their salaries. I am hopeful that with this new approach, all other things being equal, the club should be on its way back.I am genuinely concerned about it but you know the honest truth is that when you face the kind of cash crunch we face today and you go back to the issue of priorities, a simple innocent but problematic word becomes a big problem.At some point we like sports, but when you have a Naira and workers are demanding for their salaries, I would rather lose the match than not pay workers’ salaries. They are hard choices you have to make but it’s not an excuse for not doing too well for the club. I have to admit that I have not done too well in that area and I won’t score myself a pass mark at all but I am determined that we will do something about it before the end of my tenure.
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