BusinessDay

Governors support disengagement of 12,000 federal workers to save N450bn

About 11,926 federal government’s workers may soon say goodbye to the federal service should the Nigerian federal government go ahead to implement one of the recommendations made by the 36 governors of the federation as published recently by the Premium Times.

The 36 Nigerian governors recommended to the federal government that federal workers aged 50 years and above should be retired and given a one-off retirement package to exit the service as this is expected to reduce the ballooning personnel costs of the federal government, the online medium said.

The governors also suggested that in their replacement, lower-cost, more ICT-compliant youths and women graduates should be employed.

The above recommendations are parts of the 33 far-reaching recommendations made by the governors to the federal government towards preventing the nation from economic collapse, as both the federal and sub national governments improvise to manage the declining revenue generation amid rising expenditure in the country.

However, this recommendation will come at a cost to the federal civil service due to the disengagement of mostly the crème de la crème of the nation’s civil servants, some of whom had undergone many training programmes to prepare them for managerial task.

“To drive efficiency in public operations, the government has trained over 35,000 public sector staff on the use of computers and over 9,000 civil servants in other capacity-building areas,” the National Development Plan:2021-2025, stated.

BusinessDay has estimated that the total number of the federal workers that are likely to be affected at 11, 926, and this was derived from the fact that workers aged 50 years and above constitute 13.4 percent of the nation’s labour force. Applying this ratio to the 89,000 federal civil workers resulted in 11,926 federal workers that are likely to be disengaged from service.

Read also: Nigerian workers and retirement woes

Further analysis by BusinessDay showed that the implementation of this recommendation will reduce the federal government’s annual personnel cost at the current level by N449.78 billion, which comes to N37.71 million on the average per federal employee.

The rising governments’ recurrent expenditures, especially personnel costs at the state and federal levels have been at the centre of national discourse in recent times due to the rising fiscal deficit in the face of disappointing revenue generation.

It should be recalled that between 2015 and 2021, Nigeria’s total revenue rose by 24.2 percent from N3.43 trillion to N4.26 trillion, according to public sector data extracted from the reports published by the Central Bank of Nigeria(CBN).

During the same review period, the total expenditure skyrocketed by 141.9 percent from N4.99 trillion in 2015 to N12.069 trillion in 2021, implying that the fiscal deficit soared from N1.56 trillion to N7.80 trillion during the review period.

The personnel cost of the federal government rose by 79.6 percent from N1.869 trillion in 2015 to N3.36 trillion in 2021. This as the revenue of the federal government maintained a steady decline.

Meanwhile, between January and April 2022, the Nigerian government realised just N1.23 trillion instead of N3.12 trillion projected for the period in the 2022 Appropriation Act. Expenditure for the period stood at N4.72 trillion, resulting in a deficit of N3.09 trillion, according to the budget performance data provided by Zainab Ahmed, the minister of finance, budget and national planning.

The implementation of this recommendation is not likely to be a smooth sailing following the way Nigerian labour unions have handled incidences like this in the past.

“Why can’t they reduce the salaries of political office holders instead? The salary they pay an average federal civil servant is too small in the first place. Anyway, the FG should be prepared to pay any worker to be disengaged a minimum of N50 million,” a federal civil servant, who wanted anonymity, said.

Get real time updates directly on you device, subscribe now.