Huge Wage Bill: Bayelsa Govt Won’t Downsize Workforce – Finance Commissioner

Finance Commissioner
The Commissioner for Finance Bayelsa state, Mr. Maxwell Ebibai.

BEVERLY HILLS, Aprill 03, (THEWILL) – Bayelsa State has assured civil servants that it had no plan to downsize the workforce in view of the huge wage bill it igrappling with.

Rather, it said it would seek alternative sources of revenue to shore up its finances.

The Commissioner for Finance, Mr. Maxwell Ebibai, gave the assurance on Thursday at the transparency briefing for the months of January and February 2021 in Yenagoa, the state capital.

Mr. Ebibai said the state government got N6.8 billion for February as net receipts from the Federation Account after first line deductions as against the huge wage bill and other recurrent expenditures of N7.358 billion.

He noted that the cost of running government had become highly challenging as the state was contending with dwindling federal revenues coupled with low internally generated revenue.

He said: “The state government is not considering rightsizing or downsizing the workforce. Cost cutting is not always the first solution to solving our problems. The first approach is to look for additional income.

“If you consider our salary figures, the cost of running this government is a big challenge. But if you look at the extraordinary figures and capital projects expenditure, you would notice that our government is focused and we are ensuring that such extraordinary funds are dedicated to capital projects.”

Presenting the income and expenditure figures for January, Ebibai said the state received N2.2 billion as statutory allocation, derivation was N5.5 billion, value added tax N1.4 billion, exchange rate gain of N81.9 million and foreign exchange equalisation N158 million. This brought the gross receipts from the federation account to N9.4 billion.

He announced N1.9 billion as total deductions from the Federal Allocation Accounts Committee (FAAC), out of which the state spent N47.7 million for foreign loans, restructuring of N5.4 billion refund of overpayment of revised 13 per cent derivation indices N183.3 million and payment of N940 million to oil producing states as refund of N11.2 billion among other items.

The Finance Commissioner also stated that funds from other receipts include internally generated revenue N890 million, refund of excess crude N9.1 billion and funds from other sources N1 billion amounting to a gross revenue of N19.1 billion.

He explained that out of the N19 billion, government spent N1.2 billion as bank loans and guarantees, civil servants salary N4 billion, salary arrears N310 million, political appointees salary N325 million, gratuities N150 million, grants to tertiary institutions N849 million, minimum wage arrears N50 million among other components.

According to him, total payments came up to N7.358 billion, leaving a balance of N11.8 billion.

He said recurrent and capital expenditure gulped N18.7 billion leaving the state with a deficit of N6.9 billion, which was financed from the N17 billion balance brought forward from the month of December 2020, adding that it had a balance of N10 billion at the end of January.

For the month of February, Ebibai noted that total receipts from the Federation Account stood at N8.8 billion, comprising N2.4 billion as statutory allocation, derivation N4.5 billion and value added tax N1.8 billion.

The Finance Commissioner said the state’s total  deductions gulped N1.94 billion consisting of foreign loans N35.9 million, commercial agricultural credit scheme N95 million, refund of N11.2 billion to oil producing states N940 million and restructured commercial loan N741 million.

He noted that the state got internally generated revenue of N951 million for the month of February, refund from excess crude account N20 billion leaving the state with a net revenue of N27.8 billion.

On deductions, the Finance Commissioner said the state’s total  deductions gulped N1.94 billion consisting foreign loans of N35.9 million, commercial agricultural credit scheme N95 million, refund of N11.2 billion to oil producing states N940 million and restructured commercial loan N741 million.

On gross outflows, he stated that it included bank loans and guarantees N1 billion, civil servants salary N3.99 billion, political appointees N307 million, gratuity N200 million, grants to tertiary institutions N848 million leaving a balance of N20.920 billion.

According to the Finance Commissioner, total expenditure stood at N6.9 billion while government spent N4.1 billion on recurrent payment and N20 billion for capital expenditures.

He further explained that government had an outstanding balance of N10 billion from January but had a deficit of N3.2 billion in February.