The outgoing People’s Democratic Party (PDP) administration in Edo state, under the leadership of Governor Godwin Obaseki, is incapable of fulfilling its promise of a substantial wage increase for its less than 2000 workers. The reason why the workers cannot get the ₦70,000 is due to the state’s dire financial straits.
For years, Edo state has been ensnared in a web of financial mismanagement, characterised by the illegal appropriation of local government allocations and internally generated revenues (IGRs). This dubious practice has stymied the financial autonomy of local governments and hampered their ability to meet the needs of their constituents effectively.
A significant contributor to the state’s financial quagmire is the reliance on borrowing, particularly from the Central Bank of Nigeria (CBN), to cover recurrent expenditures such as salaries. This short-term fix has only exacerbated the state’s debt burden, plunging it deeper into a cycle of indebtedness and financial instability.
The removal of substantial sums to service both local and external debts under the regime further exacerbated the state’s fiscal woes. The diversion of huge funds meant for developmental projects into feasibility for MoUs, partnerships and debt servicing underscores a lack of prudent financial management and foresight on the part of the outgoing administration.
Moreover, the rampant issuance of Irrevocable Standing Payment Orders (ISPOs) has drained the statutory allocation, coupled with funds diversion away from essential public services and infrastructure projects. These binding commitments to pay a portion of the state’s revenue directly to creditors have shackled the government’s ability to allocate resources effectively and meet its obligations to workers.
The actual internally generated revenue (IGR) has been hyped. Between the government and the Sterling Bank, it’s tax collectors, the state’s revenue is a huge scam. Despite the potential for robust revenue generation through taxation and other means, the lack of transparency and accountability in revenue collection has resulted in significant leakages and embezzlement, further exacerbating the state’s financial woes.
As Governor Obaseki’s tenure draws to a close, the stark reality of the state’s financial mismanagement looms large, casting doubt on the feasibility of his promises to workers. The failure to implement sustainable fiscal policies and address systemic issues of corruption and mismanagement has left Edo State in a precarious financial position, with little room for maneuvering.
The incoming APC administration with Senator Monday Okpebholo as Governor plan to prioritize fiscal responsibility and adopt measures to address the root causes of the state’s self inflicted financial woes. The Senator believes that it is only through prudent financial management and a commitment to transparency that Edo State hope to emerge from its current fiscal quagmire and fulfill its obligations to its workers and citizens alike and he is committed to this cause.
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ABOUT THE AUTHOR
Osehobo Victor Ofure is a political analyst and lives in Edo State
