‘It is incredible to imagine that we have this much stolen from us and we are going cap in hand to the World Bank for loans. How can we be washing our hands with saliva by the riverbank?’
Samuel Awoyinfa, Femi Asu and Raphael Ede
The Nigeria Labour Congress on Tuesday berated the Federal Government over an additional loan it was seeking from the World Bank.
The NLC said rather than getting more loans, the Federal Government should focus on the recovery of more than $100bn the international oil companies owed the country.
The NLC President, Ayuba Wabba, who said this at the opening of the congress’ 2019 national leadership retreat in Enugu, also called for a review of the country’s taxation system so that the rich would be compelled to pay more taxes.
The labour leader, who urged government to cut down the cost of governance, was backed by an expert and Nigeria Employers Consultative Association, which cautioned the Federal Government against continuous borrowing.
Wabba made the call barely two days after the World Bank approved Nigeria’s request for $3bn loan for the expansion of the power transmission and distribution networks.
According to the Debt Management Office, the nation’s total public debt rose by N3.32tn in one year to N25.7tn as of the end of June 2019.
The Federal Government owed N20.42tn as of June 30, 2019, while 36 states and the Federal Capital Territory had a total debt portfolio of N5.28tn.
In 2017, the revenue target was N5.08tn out of which N2.7tn was realised. The Federal Government’s revenue projection for 2018 was N7.16tn out of which only N3.96tn was achieved. In 2019, the Federal Government’s projected revenue was put at N6.98tn. As of June this year, about N2.04tn had been realised.
A quarter (N2.5trn)of the N10.3trn 2020 budget will be spent on debt servicing, while non-debt recurrent expenditure will gulp N4.88trn. Only N2.14trn was allocated for capital projects in spite of the huge infrastructural deficit in the country.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had on Thursday at the World Bank/International Monetary Fund meeting in the United States, admitted that the country was finding it difficult to service its debts.
Ahmed spoke 24 hours after the IMF advised Nigeria to increase tax to raise more revenue, saying the country needed a comprehensive reform to hike non-oil tax so as to get funds to build infrastructure.
A human rights lawyer, Femi Falana, had on Sunday asked the Federal Government not to accept additional loans from the World Bank, but recover money IOCs were owing Nigeria.
At the NLC retreat in Enugu, Wabba backed Falana, saying the Federal Government’s request for additional loans was unjustifiable.
He stated, “A few days ago, Femi Falana urged the Federal Government to reject an additional loan from the World Bank and instead pursue the payment of funds accruable to Nigeria from periodic adjustments in remittances by the International Oil Companies subject to increases in the price of crude oil above $US20 per barrel. Nigerian government officials failed to activate this clause for more than 20 years thus allowing the IOCs to stash away more than $US100 billion in unpaid royalties to Nigeria. It is incredible to imagine that we have this much stolen from us and we are going cap in hand to the World Bank for loans. How can we be washing our hands with saliva by the riverbank?”
The NLC president said the Federal Government should not only recover the $100bn, but also ensure the prosecution of officials responsible for the unpaid royalties by the IOCs.
The rich must be compelled to pay tax – NLC
He stated, “We call on the Federal Government not to rest on its laurels until it recovers every kobo owed us by the IOCs. Government officials behind this criminal neglect must be prosecuted to the fullest extent of the law. We call for a tax system that captures many businesses and rich people and compel them to pay more taxes in commensuration to their incomes.”
Also, Wabba said the government could not complain about lack of funds to pay workers’ wages and invest in public infrastructure and social services when it had a lot of public funds in private pockets.
Govt financial crisis caused by bad governance – Workers
He said, “It is no longer discussed in hushed tones that the government is struggling with liquidity. As we know, this crisis is rooted in bad governance. Two things define bad governance in this respect – institutionalisation of corruption in public expenditure and weaknesses cum sabotage in internal revenues accruable to government. On corruption in public expenditure, the issue of humongous salaries and allowances paid to elected public officials and contract inflation top the list of our concerns.
“On the other hand, the loss in government revenue due to internal sabotage by unpatriotic public officials is very alarming and worrisome.”
We will compel all states to pay N30,000 minimum wage – NLC
Wabba also said labour would use all necessary options to enforce an effective implementation of the new N30,000 National Minimum Wage Act once the issue of consequential adjustments had been settled with states.
He said with the signing of the new minimum wage, any state that violated its provisions would be sued.
Wabba lamented the era when Nigerian workers were forced to beg for their salaries, running into arrears.
He said other countries had fully accommodated and automated the process of minimum wage adjustments, adding that they focused on living wages.
Wabba stated, “We are faced with a situation where we are forced to bargain too hard and wait for too long for meagre increases in the minimum wage and adjustments in salaries.”
He said that the new minimum wage had become a law that could be enforced in a court of law if it was breached or violated by a government or a private person.
The NLC president stated, “Let me also inform you that there is a difference between the law we have and the law that had existed from 1981 till date. In 1981, when the first minimum wage was enacted, there were no provisions for sanctions.
“In this one we negotiated, there are provisions for sanctions because it is already a law. Any state or person that violates the provisions of the law, there are three ways to address it: one is that the worker can report to his union.
“Once you report, we can look at the means and avenues including a court to enforce the provisions of the law. So now there is a clout to enforce the provisions of the law. So clearly speaking, once there is an understanding or an agreement on the issue of consequential adjustments, the issue is settled and where there is an issue of none respect for the law, it can be enforced legally in a court of law.”
The NLC president criticised employers, who were reluctant to allow their workers to join unions. This, he said, had exposed millions of workers to indecent conditions of casual work status, “slave wages, long hours of work without due compensation, and denial of social security cover.”
He expressed appreciation to the Enugu State Government for its support for the success of the retreat and for being such an excellent host.
Declaring the retreat open, the state Governor, Ifeanyi Ugwuanyi, commended the labour, adding that workers had been pivotal in the implementation of government policies and programmes.
While he promised that his administration would prioritise workers’ welfare, Ugwuanyi said, “Enugu State workers will get a better deal in the implementation of consequential adjustments of the minimum wage.”
In a welcome address, the state chairman of the NLC, Virginus Nwobodo, expressed optimism that all the state governments would comply with all the provisions of the new minimum wage law and consequential adjustments.
NECA, expert caution against continuous borrowing
Meanwhile, an economist and Chief Executive Officer, Cowry Asset Management Ltd, Mr Johnson Chukwu, said the country might be plunged into a debt crisis if the current borrowing trend continued.
He said, “What the NLC has said is in tandem with the number of opinions from informed individuals and multilateral agencies.
“A number of Nigerians have actually been pushing that the Federal Government must moderate the rate at which it is borrowing because we are now dealing with an interest expense-to-government revenue of close to 60 per cent. A number of Nigerians are concerned that should the current borrowing trend continue, Nigeria might go into a debt crisis.”
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On its part, NECA supported the call by the NLC for the Federal Government to recover the amount being owed by the IOCs instead of getting fresh loans.
The association spoke through its Director-General, Mr Timothy Olawale, in a telephone interview with one of our correspondents.
He said, “We are in support of the government recovering the money due to it, especially the deductions from the IOCs. We have always spoken against government’s continuous borrowing.
“Again, NECA will further advise that the government must cut down the cost of governance. A situation in which the budget proposal for 2020 was skewed in favour of recurrent expenditure and debt servicing does not augur well for the development of the country. What about the capital expenditure?
“The government must consider the Oronsaye Report which had made it clear that the government must streamline the ministries, departments and agencies.”