Democratic Socialist Movement

For Struggle, Solidarity and Socialism in Nigeria

By - DSM




For tens of thousands of workers and pensioners in about 20 states across the federation who have gone hungry for as much as 7 months and above, the federal government’s bailout is nothing but a welcome relief. This approved bailout package of N713 billion by the Muhammadu Buhari-led government is meant to settle the unpaid salaries of workers and pensioners who are being owed for multiple months by state governments across the federation. Now, at least, they expect to get a month or so of salaries to offset a few debts and maybe meet some basic needs. The Democratic Socialist Movement (DSM) calls on the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) to monitor the bailout funds and ensure that no state government diverts any portion of it to other areas other than payment of salaries of workers and allowances of pensioners.

Unfortunately, the bailout will only be a temporary relief since the underlying causes of the bankruptcy of the states remain unaddressed. The source of the bailout is $2.1 billion (N413 billion) from the Liquefied Natural Gas proceeds to be shared between the federal and state governments; the Central Bank of Nigeria (CBN) is to also make available an intervention funds of between N250 billion and N300 billion as a soft loan to enable the states to pay outstanding salaries; the Debt Management Office is to help the states to restructure their commercial loans with banks which is currently put at N660 billion so as to extend the lifespan of the loans and make it easier to pay.

This bailout does not solve everything

But despite this bailout’s apparent size it is not only too little. At best it can only meet a few months of pay, while some states like Osun have defaulted on salary payment by up to 7 months. Also the bailout can obviously not resolve the problems associated with failure of the capitalist state to meet the aspiration of the working masses in terms of sustainable payment of living wage and pension, provision of jobs and basic infrastructure and industrialization. The politicians who are earning outrageous jumbo allowances and salaries will continue to use the dwindling revenue as an excuse to owe workers.

About 12 states owe workers several months of salaries while virtually all the states and the federal government owe pensioners. Some of the states that are indebted to workers are Osun, Rivers, Ekiti, Oyo, Kwara, Ondo, Benue, Plateau, Kogi and Bauchi. For instance, Osun State owes at least 6 months salaries.

It is true that one of the key causes of the crisis is that revenue accruing to the governments at different levels has reduced given the collapse in crude oil prices internationally. So bad is the economic crisis caused by the crash in crude oil price that reportedly even the Federal government has had to obtain loans to pay salaries of the federal civil servants. Despite expansion of the services sector over the years notably through investment in the telecom industry, retail and wholesale trade, crude oil exports still account for about 70% of government revenue and 95% of foreign exchange earnings.

It is also true that mismanagement of public resources, waste as well as neo-liberal agenda that allows corrupt capitalist politicians and bureaucrats to profit from public projects and investment over the years and still ongoing is responsible for the present crisis. Aside the alleged $20 billion dollars missing fund at the Nigerian National Petroleum Corporation (NNPC), over $143.5 billion was reportedly earned from the oil and gas sector between 2007 and 2011 and yet there is almost next to nothing to show for it in terms of infrastructural development and peoples living standards. Meanwhile within the same period, the power sector went moribund with power generation recently dropping to 1, 327 megawatts for a population of over 170 million people.

For instance, in Osun State – the poster boy of the present crisis, the Aregbesola government sunk enormous billions of naira on many populist and white elephant projects which had no real bearing on peoples live but instead apparently were meant as conduit pipe to satisfy the interests of the financiers of his election. One of such populist project called “Opon Imo” meant to provide tablet computers for secondary school students gulped N15 billion. Despite this, Osun State came woefully 22nd in the West African Examination Council (WAEC) failure rate in 2014. Also the Governor woke up one day and decided to change and unify school uniforms in the State even when there was no justifiable reason for it. For this, the state handed out over N1 billion naira to a private garment factory (allegedly owned by one of the Governor’s financier) to sew free school uniforms for all students. None of these projects addressed the fundamental crisis of public education in Osun state some of which are lack of access, decaying facilities and high teacher: pupil ratio.

Capitalism, neo-colonialism and corruption blocks development

On the whole, what the present financial crisis has exposed is the fundamental weakness of neo-colonial capitalism in Nigeria and particularly its inability to ensure a permanent respite for working people. While the global capitalist financial institutions praise to high heaven the high GDP growth rates that Nigeria and other raw material-exporting countries were posting, they fail to point out that this growth were narrow and were not based on manufacturing, industry and other productive sectors that could ensure an enduring economy that could guarantee employment and an improved living standards for the vast majority. This is not a mistake. Rather it is a conscious imperialist agenda – to which the corrupt ruling elite in Nigeria and other third world countries timidly acquiesce – to guarantee a market for industries and companies in the West by making Nigeria and others exporters of raw materials, mineral resources, agricultural products and unprocessed goods and net importers of finished, or sometimes semi-finished, goods like electronics, automobiles etc. The implication of this however is that, except Lagos being a port city and economic hub and few other areas, virtually all the states of the federation currently have no viable large-scale economic or industrial activity that could bring in revenue independent of allocation from crude oil sale revenue from Abuja.

Therefore for as long as the present crude oil price decline continues, many states will continue to experience difficulty paying salaries. This is especially so since many of the states have accumulated enormous debt (put at N660 million) as a result of their financial recklessness over the years and which they must continue to service from their declining monthly allocations. To be sure, it is nothing but class bias for the capitalist state to ensure the commercial banks to which the states are indebted are paid as at when due despite declining allocations while workers who create this wealth are owed backlog of salaries. Moreso, the debt owed the commercial banks mostly benefited the few privileged class. The web of interest connecting the bankers and politicians explains why the ruling class feels more obligated to the commercial banks while the working class is abandoned. While they obtained these loans for purposes of infrastructural development like road construction, building of schools etc., most of these went into the pockets of politicians and their business friends through overpricing of contracts etc.

So, workers must not be made to pay for this crisis. Rather the corrupt politicians and the capitalist system should be made to pay for it. Hence, we demand an open probe by a democratic probe committee composed by elected representatives of workers, unions, communities and pro-labour organizations. This is needed to unravel how public resources was mismanaged and to what extent as well as recovering all stolen public funds with the aim of reinvesting it into pro-working masses programs.

Cancel corrupt and exploitative debts

We also hold that the so-called debts of the states must be probed! The working people cannot continue to accept responsibility for servicing debts that were accumulated not for their own benefit but for the benefits of politicians! There are lots of shady practices going on in the banking industry. Often the commercial banks do not ask appropriate questions before giving out loans to government and big business. Meanwhile it is difficult for small business owners and ordinary to obtain a loan from banks because of the numerous obstacles created. The result is that many loans have become a conduit pipe for diverting public funds into few hands while putting the burden for repayment on ordinary people. While the attempt by the CBN to renegotiate the tenure of the loans will bring some respite no doubt. Yet even this would still mean that a portion of the states’ monthly allocation that should go to paying salaries and funding social services will continue to be used to service these debts most of which the people did not benefit from.

The DSM calls for an independent probe by committee of elected representatives of trade unions and working peoples organizations to unravel the details of the debt and the evidence of their use for the purposes for which they were obtained. It is only through this that the corrupt politicians and bureaucrats will be made to pay for the economic crisis caused by them through forfeiture of ill-gotten assets/funds and be punished accordingly. All corrupt and exploitative debts must be cancelled with compensation only given on the basis of genuine need. The banks must be nationalized in order to provide financial services in the interests of the majority of the population and the development of the entire country.

There should be well-funded, transparent and democratically managed public corporations in all industries should be set up and built to replace the corrupt contract system and other private interest as well as the nationalization of the commanding heights of the economy and placed under democratic management and control of the working people. This is in order to guarantee the provision of infrastructures and basic needs for the benefit of the vast majority of the people. Also, salaries and allowances of political office holders must be reduced to an average wage of a skilled civil servant in order to free more resources to be reinvested into social programs. This pro-working people programme is the only way to begin to salvage the dying economy and guarantee development on a sustainable basis. However, only the replacement of capitalism with a democratic socialist system can ensure that Nigeria’s wealth and economy is planned to work for the interest of the working people.

Labour must act seriously

We call on the trade union leaders to fully intervene in this struggle by mobilizing for sustained mass actions and strike that will demand the immediate payment of all salaries/pensions of workers and pensioners without loss of jobs or wage. The mass movement should also struggle for an upward review of the present N18, 000 minimum wage to an acceptable living wage since the present wage structure is not only grossly inadequate, but has been largely undermined by the growing cost of living and inflation. Alongside this working people should also demand a downward review of the outrageous salaries and allowances of political office holders to an average of a skilled civil servant.

We call on the leadership of labour movement to convene a conference of trade unions, socialists and activists to begin discussion on the formation of a mass working people party with a socialist programme as it is not possible to achieve the real change in the economy and standard of living for the vast majority of Nigerians under the Buhari/APC government and its neo-liberal capitalist program.

Segun Sango
General Secretary