In part 1 of the above-titled piece, I used the case of Michael Okpara University, Umudike (MOUAU), to clearly distinguish between state or federal parastatals and their Ministries, Departments and Agencies (MDAs). Whether we accept it or not, because of political expediency, it is a fact that neither the federal nor state government is directly responsible for the payment of salary of parastatals’ workers. Definitionally, a parastatal is a company, agency, or intergovernmental organisation, that possesses political clout and is separate from the government, but whose activities serve the state, either directly or indirectly.
In Nigeria, they are marked by some level of financial autonomy that enables them to make revenue, retain it and use it to run their operations without remitting any portion to the state or federal government coffers. Whereas MDAs are required to remit their revenue to the state or federal government’s consolidated revenue account and in return, the state or federal government pays workers in those MDAs.
Having established that those who claim that there is no statutory dichotomy between State MDAs and Parastatals do so out of ignorance associated with lack of public sector management experience permit me to use one of our state parastatals to highlight why some of them are ailing, the difference in approach to problem-solving with federal parastatals and the ongoing reform within the system.
Like the Michael Okpara University of Agriculture, Abia State Polytechnic (Abiapoly) is a parastatal operating within the education sector. While the management, staff and unions of MOUAU were able to overcome months of salary payment challenges, Abiapoly appears to have sunk deeper and deeper into a self-created financial management crisis that now needs clean surgery to dig them out.
Hopefully, with the current reform process started by the management along with the expected support from the state government, in a short while, Abiapoly will pull through as their federal counterparts did.
In August 2015, the management of Abiapoly visited the newly sworn-in Governor Okezie Ikpeazu to discuss how to help the institution clear outstanding wages and reposition its operations in a manner that would enable organic growth within the institution. Among the major challenges highlighted by the institution as a factor militating against its regular payment of salaries was a debilitating N2bn (Two Billion Naira) commercial bank loan which they were servicing with millions of Naira in interest payments every month from their operational earnings. According to them, if the then-nascent administration of Governor Ikpeazu could help them pay off the loan they would be able to run seamlessly without depending on the government’s monthly subventions of N90m to pay workers.
Governor Okezie Ikpeazu graciously paid off their loan of Two Billion Naira. Yet, they continued to have regular salary payment challenges even with the government paying more than 40 months of N90m per month subventions to them since then.
Abia poly suffers from high wage bill of over N170m/month, relative to current earnings. From a previous high of about 25,000 student population, the current student population has dipped drastically and hovers around 10,000 with each student paying about N53,150 per session.
With low student population and high wage bill, even if all the students pay school fees and the Government pays up all its due monthly subventions of N90m/month the school would still not be able to meet its high wage obligations. At the current operation level, they can only survive for 8 months in a year if all the students pay, the government pays all subventions and they spend only on salary.
The drop-in student population was caused by frequent disruptions in academic calendar occasioned by workers’ strikes, competition with private polytechnics who also hire Abiapoly teachers as private practice lecturers with as little as N30,000 allowances/month and unavailability of courses that attract students. In recent months, the management of the school has introduced courses like mass communication to shore up admission numbers. It is important to note that because of the activities of those lecturers, private polytechnics in Aba unexpectedly charge lower school fees than Abiapoly.
Thankfully, the management of the institution has taken the bull by the horn by recently embarking on reforms. The current reform process is aimed at restructuring the institution for improved performance and to ensure regular salary payment.
In April 2019, Abia State Executive Council approved the report of an internal review committee set up by the institution and directed implementation. There are about 1250 workers in the institution out of which only about 350 are teaching staff. National Board For Technical Education (NBTE) recommends a staff ratio of 3:2 teaching staff to non-teaching staff.
Only 258 staff are affected by current disengagement with the majority being non-teaching (administrative) staff. As a concerned administration ABSG is currently looking at options to help those affected beyond payment of severance allowances.
It is important to note that the initial staff verification report prepared by the internal revenue panel had more than 600 names of people with certificate and disciplinary issues but following complaints of alleged witch-hunting and bias the government directed that a review panel be put in place, with organized labour in the state represented by the Chairman of Joint Negotiation Council (JNC) of Nigeria Labour Congress, Comrade Okoro, being a member of the committee to look into the initial report.
The allegation that labour was not involved in the process is therefore untenable as nobody should expect that the same local unions in Abiapoly, with some members of its leadership having fake or forged certificate issues, should be part of the panel. Their interests as labour unions were adequately protected by the involvement of the state JNC leader as per their recommendation.
All those disengaged have received their severance payment immediately upon collection of letters. For affected senior staffers, 3 months salary in-lieu was paid while junior staffers received one month salary as stipulated in the extant conditions of service.
The school currently owes months of salary arrears but all the disengaged staff will still get their salary arrears as and when other staff are receiving theirs, meaning they would not forfeit their due payments.
I understand that uniform parameters and benchmarks were used to arrive at the list of those disengaged:
i. Certificate verification: FSLC, WAEC
ii. Disciplinary records
iii. Those with claims of not seating for FSLC
iv. About to retire staff with doubtful certificate claims.
While the initial panel’s recommendation was for those who claimed to have obtained First School Leaving Certificate (FSLC) at Age 9 to be disengaged, the review committee decided to disengage only those with birth certificates and FSLC that indicated they were 8 years old and below when they finished primary school. Only those with 9 years FSLC and concurrent files with several disciplinary issues were asked to go.
Interestingly, the NLC leadership in the state and indeed the local unions within the institution agree on the need for reforms and accept that individuals with fake or forged certificates should be axed. Moreover, the letters received by the affected staff simply states that their services were no longer required and it is disingenuous to argue that an employer has no right to hire or ease out workers whose services it no longer requires, especially as it has followed such painstakingly rigorous processes to ensure transparency and fairness to all sides.
With the current disengagements, the institution will be saving about N36m monthly, without the overall operations of the school being affected in any way. There are other plans to reduce the wage bill further, save more money monthly and improve IGR. We expect further details to be unveiled by the institution with time as we believe that the ultimate solution is for the institution to grow student population in order to earn enough revenue to sustain its operations.
It is instructive to note that Abiapoly pays one of the highest wages in the south-east region compared to its peers, apple for apple. It is naturally expected that after this initial reform the management and unions would meet to discuss further measures to help the institution.
The Government of Abia State is ready to help the school settle unpaid wages in a graduated manner after the reforms in the institution have been fully implemented. But for now, no responsible government will continue to put scarce money in leaking pockets. If a federal parastatal, MOUAU, can successfully navigate and become operationally more efficient I see no reason state parastatals should also not reform and grow.
*To be continued