SUNDAY MUSING: On the Matter of Presidential Slashing of Salary – by Bolaji Aluko

No Comments » July 12th, 2015 posted by // Categories: Essays



 

REVISED VERSION

July 14, 2015




  

SUNDAY MUSING:  On the Matter of Presidential Slashing of Salary

 

by

 

Mobolaji E. Aluko, PhD

alukome@gmail.com

 

Sunday, July 12, 2015



______

 

PROLOGUE 

The three hot topics of the day in Nigeria – outside of Boko Haram –  are (1) the inability of several states to pay their workers – not commendable; (2) the stimulating bailout of such states by the Federal Government by a combination of early FAAC allocation, CBN soft loan and DMO re-structuring strategies  – very commendable and (3) the voluntary slashing of their own salaries by certain state governors (eg Kaduna’s El-Rufai and Abia’s Ikpeazu) and the top Presidency pair (President Buhari and Vice-President Osinbajo) – a developing issue.

It is the slashing by half of the President’s “salary” that I wish to concentrate on in this essay.

Please come with me and read very carefully….because I am somehow involved on this salaries matter, no pun intended 🙂

 

 

THE TOTAL EMOLUMENT – BEFORE THE SLASH

 

The total presidential statutory package is approximately, in easy, round figures, is given in Table 1 below:

 

TABLE 1:  Presidential Salary Table In Round Figures       

S/N

Presidential

Salary Category

Annual Amount 

(Million Naira)

1

Basic Salary

3.5

2

Allowances

10.9

3

Total Emolument

14.4

 

This total emolument of N14.4 million is now allegedly to be voluntarily slashed by half to N7.2 million.  Actually, the EXACT statutory annual basic salary of the President is N3,514,705.00 (in today’s N230 to $1, that is US$15,281 per year, or $1,273 per month) while mine as Vice-Chancellor (VC) is N1,925,865 annually ($8,373 per annum, or US$698 per month.)    See  Figure 1 and Table 2 below for full information for ALL political and public officers.

 

To put things in some context, at the lower workers’ scale,  in the United States,  as of July 2009, its federal government mandated a nationwide minimum wage level of $7.25 per hour, below which workers generally must not be paid as specified by either the federal, state, or local government.  [President Obama is currently pushing to increase this to $10.10 per hour, and has actually  signed an Executive Order to raise the minimum wage to $10.10 for the individuals working on new federal service contracts.  See https://www.whitehouse.gov/raise-the-wage   With a 40-hour-week, 4-week-month calculation, that $7.25 comes to  $1,160 per month – slightly lower than the Nigerian Presidential basic monthly salary (which is $1,273, at N230 to $1), much higher than the Nigerian VC basic package ( which is $698), and.about a whopping fifteen (15) times higher than the monthly minimum wage of N18,000 (which is $78) of the Nigerian worker.

Moving on…

Now, for both the President and other public and political officials, there are 19 different allowances and fringe benefits statutorily listed against our positions as Political and Public Officers in the Federal Executive.  These are (1) Accommodation (2) Utilities (3) Domestic Staff (4) Entertainment (5) Medical (6) Security (7) Furniture (8) Personal Assistant (9) Motor Vehicle Loan (10) Fuel, Maintenance (11) Severance (12) Leave (13) Contingency (14) Hardship (15) Special Duty (16) Newspaper (17) Duty Tour (18) Estacode and (19) Monitoring.  For the President, thirteen (13) of them are “To be provided” by government (no precise monetary value attached accruable directly to the President), two (2) of them are “Not Applicable“ (Motor vehicle loan and Monitoring Allowance), and the remaining four (4) of them (Severance gratuity (300%), Leave Allowance (10%), Constituency Allowance (250%) and Hardship Allowance(50%)) are indexed to that basic salary to a total tune of 610%, 310% of which he gets while on duty, and 300% as severance gratuity when he leaves.  That is why N3.5 million times 3.1 equals N10.9 million of allowances while the President is on duty, on the job  – or a total exact emolument of N14,410,290.50, and why, by some quirk of calculations and allowances, the Vice-President, at N12,429,447.25 earns the LEAST total emolument of the officers listed in Figure 1 and Table 2!

 

Before moving on, what does the POTUS (President of the United States) earn?  According to Wikipedia

 

QUOTE

Since 2001, the [United States] President has earned a $400,000 annual salary, along with a $50,000 annual expense account, a $100,000 nontaxable travel account, and $19,000 for entertainment. The most recent raise in salary was approved by Congress and President Bill Clinton in 1999 and went into effect in 2001.  The White House in Washington, D.C., serves as the official place of residence for the president; he is entitled to use its staff and facilities, including medical care, recreation, housekeeping, and security services. The government pays for state dinners and other official functions, but the president pays for dry cleaning and food that he, his family, and personal guests consume; the high food bill often amazes new residents. Naval Support Facility Thurmont, popularly known as Camp David, is a mountain-based military camp in Frederick County, Maryland, used as a country retreat and for high alert protection of the president and his guests. Blair House, located next to the Eisenhower Executive Office Building at the White House Complex and Lafayette Park, is a complex of four connected townhouses exceeding 70,000 square feet (6,500 m2) of floor space which serves as the president’s official guest house and as a secondary residence for the president if needed. For ground travel, the president uses the presidential state car, which is an armored limousine built on a heavily modified Cadillac-based chassis. One of two identical Boeing VC-25 aircraft, which are extensively modified versions of Boeing 747-200B airliners, serve as long distance travel for the president and are referred to as Air Force One while the president is on board (although any U.S. Air Force aircraft the President is aboard is designated as “Air Force One” for the duration of the flight). In-country trips are typically handled with just one of the two planes while overseas trips are handled with both, one primary and one backup. Any civilian aircraft the President is aboard is designated Executive One for the flight. The president also has a fleet of thirty-five U.S. Marine Corps helicopters at his disposal of varying models, designated Marine One when the president is aboard any particular one in the fleet. Flights are typically handled with as many as five helicopters all flying together and frequently swapping positions as to disguise which helicopter the President is actually aboard to any would-be threats.

 

UNQUOTE

An emolument of $569,000 per annum (N130,870,000) for the POTUS Obama, nine times that of POFRON (President of Federal Republic of Nigeria) of N14,410,290.50 ?  Not bad at all…presidential democracy is expensive….but that should be contrasted with the US minimum-wage worker earning fifteen times that of his Nigerian counterpart, discounting any differences in worker productivity.

For another comparison, for Vice-Chancellors, (VCs), out of the 19 different allowances, four (4) are listed against us as “Not Applicable” (Motor vehicle loan, Monitoring Allowance, Constituency Allowance and Hardship Allowance), three (3) of which are “To Be Provided by Government” (Medical Allowance, Security, no precise monetary value attached), and the remaining twelve (13) add up to 550%. So for a VC, approximately in easy, round figures, this is given in Table 3:

 

TABLE 3:  VC Salary Table In Round Figures                          

S/N

Vice-Chancellor

Salary Category

Annual Amount 

(Million Naira)

1

Basic Salary

1.9

2

Allowances

10.5

3

Total Emolument

12.4

                           

The exact figure is N12,518,122.50 per year (or $54,426) or  N 1,043,176.88 per month (or $4,536 per month) – my Diaspora friends take note…but that is for another day.

 

SLASHING THE PRESIDENTIAL EMOLUMENT BY HALF – THE IMPLICATION

Now suppose the President does indeed slash his total emolument, not just his salary,  by half – from N14.4 million per year to N7.2 million?  Note that since this is higher than his basic salary of N3.5 million, the following table can be constructed  for the same slashing WITHOUT touching that basic salary:

                           

TABLE 4:  Slashing Presidential Salary – An Implication

S/N

President

Salary Category

Amount Amount 

(Million Naira)

1

Basic Salary

3.5

2

Allowance being accepted by him

3.7

3

Package being accepted

7.2

4

Allowances being forgone

7.2

5

Total Emolument

14.4

 

For example, if the President COMPLETELY forgoes the two Leave and Hardship Allowances – saving 60% of the salary – and slashes the Constituency allowance from 250% to 100% –  saving a further 150% of salary –  so that the total allowances that he accepts are roughly only 100% of the basic salary, then we can start being completely transparent.  Alternatively, he can leave the Leave and Hardship allowances in place, but slash the Constituency allowance from 250% to 40%.

 

Having accepted the above, he should then indicate that he is going to seek PERMANENT LAW across the board to enforce the allowances FORGONE  for all public officials – and possibly other allowances too – because he thinks that they are unnecessary and/or excessive, and so EVERYBODY should forgo them STATUTORILY, and not VOLUNTARILY as he has just done.Otherwise, what has been done would be symbolically insignificant.

 

I believe that most Nigerian citizens will be prepared to live with that.

 

Moving on, because there are other problems…..

 

A NECESSARY DIGRESSION: THE CLASH OF SALARY/ALLOWANCES REGULATORY BODIES

I have been living in Nigeria since 2011,  deliberately to work and intimately learn about the system WITHOUT being consumed by it, or slip on its many “banana peels.”  I have since been earning (top Nigerian) salary and allowances (sigh!) here as a Vice-Chancellor as stated above, whose salaries and allowances are set STATUTORILY equal to that of Director-Generals, Executive Secretaries, Inec Resident Electoral Commissioners, CEO of Parastatals, Agencies and Government Companies, etc. (see Figure 1 and Table 2) .  As a result, I am now VERY CLEAR as to why there is so much confusion about salaries and allowances in the country,   because there are four groups or agencies all established by Law, who set these salaries and allowances, and they don’t necessarily coordinate – or agree.  These bodies are:

    (1)  the RMAFC [the Revenue Mobilization Allocation and Fiscal  Commission; see http://www.rmafc.gov.ng/ ] ; it sets salaries,wages and some allowances, but is best known for its prominent presence at the table during monthly FAAC  (Federation Accounts Allocation Committee) meetings in Abuja;

(2)  the NSIWC   [the National Salaries, Income and Wages Commission; see http://nsiwc.gov.ng/ ]; it sets (most often revises) salaries, wages and some allowances;

   (3) the particular Councils or Governing Bodies of various Institutions  or even government-owned companies [eg University Council, Board of Directors, etc.]; they too set some allowances peculiar to their institutions;

   (4)  Workers’ Unions (eg NLC, ASUU, NASU, SSANU, NAATS, NMA, SSATHURAI, etc.), who episodically negotiate salaries and wages and allowances with Government, to which Government agrees for peace sake.

What often then happens is that when NSIWC revises some salaries, RMAFC sometimes complains that is their domain that is being trampled upon.   However,  after some bickering, either NSIWC or RMAFC waits and then pops up its full objections only when there is a controversy. Ditto when the Workers’ Unions negotiate some allowances, oftentimes they are not CAST into law, but Government directs that they start being paid for the sake of peace, and over-rule RMAFC/NSWC objections, but when some controversy arises – or a new government comes in – RMAFC or NSIWC suddenly pops up to state their objections ( A case in point is the ongoing dispute between NSWC and SSANU over Staff Primary School Teachers in Universities.)  Ditto University Councils, who for example are AUTHORIZED by law to set some allowances for University Vice-Chancellors and other University officials. 

It is probably this seeming clash or overlap of responsibilities, particularly between NSIWC and RMAFC, that led the 2012 Oronsaye Report to make the following recommendations

 

QUOTE

 

http://www.thenationonlineng.net/2011/index.php/news/47413-orosanye-full-list-of-endangered-agencies-out.html  …..Orosanye: Full list of endangered agencies out

“The Fiscal Responsibility Commission (FRC) should be abolished and its enabling law repealed. The enabling law of the National Salaries, Income and Wages Commission (NSIWC) should be repealed while its functions are subsumed under the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC).   “The enabling law of RMAFC should be amended to accommodate the functions of FRC as well as those of NSIWC.

UNQUOTE

Two years later, in April 2014, the Jonathan Administration published a White paper rejecting a number of Oronsaye’s recommendations, but accepting others – including the above on FRC, NSIWC and RMAFC, –  a document which I reviewed in tabular form in:

 

   https://www.nigerianmuse.com/20140409023513zg/nigeria-watch/star-federal-decision-oronsaye-report-federal-government-white-paper-response/STAR FEDERAL DECISION: On Oronsaye Report and Federal Government White Paper Response To IT

See Accepted Recommendations #18 and 19 in the table, showing that NSIWC is indeed one of the endangered agencies, and that their recent public jostlings may not be unconnected with survivalist instincts.

It is most likely that the new Buhari Administration will revisit these Oronsaye Recommendations very soon.

 

A CLASH OF BUDGET HEADS 

In addition to the clashes between statutory bodies is controversy over the BUDGET HEAD from which salaries and allowances should be paid.  When the Government budgets for an Institution, it does so under the three broad headings of Personnel, Overhead and Capital, with the Personnel being split into Salary and Allowances (including Pension, Medical, NSITF, miscellaneous).  What RMAFC and NSIWC expect is that is while some allowances should be paid from PERSONNEL budget (particularly the one STATUTORILY approved), others (if legally approved by some other bodies other than RMAFC or NSIWC) should be from Overhead (Overhead is  also used for other operating costs).  But while Personnel budgets are invariably generous, Overhead budgets from the Government are invariably very skimpy, and Capital Budget, even skimpier, and never fully paid by the end of the year.  For example FU Otuoke’s FGN-approved-and-signed 2015 budget is N2,154,532,413 Personnel, N66,015,453 Overhead and N53,693,149 Capital (total budget is N2,247,241,015)  which is a 94.7 : 2.9 : 2.4  Personnel-Overhead-Capital ratios.  [Table 5 shows the 2015 Budgets for all twelve new Federal Universities – that the world may know.]

So episodically LEGAL allowances for Staff HAVE to be paid from Personnel budget.

 

EPILOGUE

Bottom line is that under a “Change” government of President Buhari, the issue of salaries and allowances MUST be COMPREHENSIVELY ironed out between RMAFC, NSIWC, institutional Councils and Workers’ Unions, so that the episodic controversies do not cause embarrassment either to the Government or to the persons concerned, or cause new workers’ disharmony and lead to new rounds of strikes.   Furthermore, budgets should also be properly apportioned between Personnel, Overhead and Capital items, and released in a timely and comprehensive manner, and as faithful to the passed budget as possible.

 

In closing, slashing compensation by half may be popular – or populist –  but it does not fully address the underlying issues or problems.  We must also be sure what we are slashing – salaries or allowances – because not all citizens, many of who are barely surviving below living wages already, can survive the slashing of their salaries or even some or all of their allowances.

 

And there you have it.

 

 

Bolaji Aluko

A Vice-Chancellor

 

PS1:  I have provided below in Figure 1 and Table 2 below information on the  Allowances and Fringe Benefits  of Political and Public Officers  – that the world may know.   

 

 

FIGURE 1:  Schedule of Allowances and Fringe Benefits for Certain Political and Public Officers in the Executive (Federal)

 

 

 

TABLE 2:  Annual Basic Salaries for Certain Political and Public Officers in the Executive (Federal) in Nigeria (Prepared from Figure 1)

Legend: NA – Allowances Not Applicable; PVG – Allowances Provided by Government; IOBS – Allowances Indexed on Basic Salary; TNA – Total Number of Allowances;  ATPIOBS – Annual Total Percentage (of Allowances) Indexed on Basic Salary (includes 300% Furniture Allowance for Categories 3-7 below, spread over four years,  at 75% annually), EMOTJ – Emolument on the Job.  “Upon Exit” is a Gratuity provision.

S/N  Category

Annual Basic Salary (Naira)

#NA

#PVG

#IOBS

TNA

 

ATPIOBS

EMOTJ

(Naira)

1 President

3,514,705.00

2

13

4

19

 

300% upon exit;

310% on the job

14,410,290.50

2 Vice-President

3,031,572.50

2

13

4

19

 

300% upon exit;

310% on the job

12,429,447.25

3 COS to President, Ministers, SGF, HCSF

2,026,400.00

2

3

14

19

 

300% upon exit;

550% on the job;

400% Motor Vehicle Loan

 

13,171,600.00

4 Chairman of CCB, INEC, FCSC, NPC (Population), FJSC, NPC (Police),

RMAFC, FCC,NJC, CCT, ICPC, PSC, NASC, EFCC, PCC,

NHRC, JSC (FCT), and such other Commissions as may

Be established by an Act of the National Assembly

2,026,400.00

2

3

14

19

 

300% upon exit;

550% on the job;

400% Motor Vehicle Loan

 

13,171,600.00

5 Members boards and commissions mentioned in #4 above

1,957,580.00

2

3

14

19

 

300% upon exit;

550% on the job;

12,724,270.00

6 Special Adviser to the President

1,942,875.00

4

3

12

19

 

300% upon exit;

550% on the job;

12,628,687.50

7 AuGF, Permanent Secretaries, DGs, ESs, CEOs of Parastatals, Agencies and Government Companies, INEC-RECs

1,925,865.00

3

3

13

19

 

300% upon exit;

550% on the job;

12,518,122.50

 

 

 

 

  

TABLE 5: NEW NIGERIAN FEDERAL UNIVERSITIES –  2015 APPROVED BUDGETS

 

Source: 2015 Appropriation Act FGN Budget Vol. 2

 

S/N

UNIVERSITY

Personnel

Overhead

Total Recurrent

Capital

Total

             

1

Dutse

2,154,532,413

85,480,388

2,240,012,801

203,693,149

2,443,705,950

2

Dutsin-Ma

1,991,345,504

74,301,284

2,065,646,788

53,693,149

2,119,339,937

3

Kashere

2,313,847,842

77,900,398

2,391,748,240

53,693,149

2,445,441,389

4

Lafia

1,534,956,716

78,700,400

1,613,657,116

53,693,149

1,667,350,265

5

Lokoja

1,866,697,540

81,103,526

1,947,801,066

53,693,149

2,001,494,215

6

Ndufu-Alike-Ikwo

2,178,628,663

73,515,975

2,252,144,638

53,693,149

2,305,837,787

7

Otuoke

2,154,532,413

66,015,453

2,220,547,866

53,693,149

2,274,241,015

8

Oye

2,154,532,413

78,865,361

2,233,397,774

53,693,149

2,287,090,923

9

Wukari

2,854,403,955

80,448,185

2,934,852,140

73,693,149

3,008,545,289

10

Birnin-Kebbi

1,257,320,039

146,131,174

1,403,451,213

140,965,867

1,544,417,080

11

Gashua

926,177,686

109,131,174

1,035,308,860

53,693,149

1,089,002,009

12

Gusau

1,216,938,288

146,131,174

1,363,069,462

53,693,149

1,416,762,611

 

TOTAL

22,603,913,472

1,097,724,492

23,701,637,964

901,590,506

24,603,228,470

           

 

—————————————–

—————————————–

Vanguard

Buhari to earn N28.12m in four years, N7m a year

on july 11, 2015  


Buhari, Osinbajo slash salaries by 50 per cent

By Clifford Ndujihe & Levinus Nwabughiogu

AS part of his plans to actualise his campaign promise of reducing the huge cost of governance to free funds for the delivery of democracy dividends, President Muhammadu Buhari and his deputy, Professor Yemi Osinbajo have slashed their salaries by 50 per cent.

 

With this Buhari and Osinbajo will earn half of what former President Goodluck Jonathan and former Vice President Namadi Sambo, earned.

The current annual remuneration of the President of Nigeria as published by the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, is N14,058,820.00.

This means Buhari, henceforth, will earn N7,029,410 a year or N28,117,640 in four years.

To formalize the process, the leaders have written to the office of the Secretary to the.

According to a statement by the Senior Special Assistant, SSA, to the President on Media and Publicity, Mallam Garba Shehu, the letter detailing the presidential decision was delivered by the Permanent  Secretary of the State House, Mr. Nebolisa Emodi.

With reference number PRES/81/SGF/17, Emodi in the letter said, “I write to forward the completed IPPIS registration form of Mr. President and to draw your kind attention to Mr. President’s directive that only 50 per cent of his salary be paid to him”.

The move is expected to be emulated by a host of Nigerian leaders in due course.
Abia State Governor, Dr. Okezie Ikpeazu, penultimate week slashed his remunerations by 50 per cent in view of the dwindling economic fortunes of the country.

Ebonyi State Governor, Dave Umahi, last Thursday ordered that the salaries of political office holders in the state should be suspended until civil servants have been paid.

Last week, President Buhari directed the release of about N414 billion as bailout to states to pay the backlog of salaries they were owing civil servants.

Before electing to slash his salary by 50 per cent, President Buhari had earlier rejected a proposal from the Aso Rock bureaucracy to approve the purchase of five customised armoured Mercedes Benz S-600 (V222) cars at the cost of N400 million.

Instead of buying new cars, the president, it was gathered said he would stick to the vehicles he inherited from the former President Jonathan administration.

 


 

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