Osun Modulated Salary: What Is New? What Has Changed? Why It Matters? By Inwalomhe Donald

With the gale of retrenchment sweeping through the private sector, public workers were not smiling either, as they were variously owed months of salary, while others were apprehensive of the likelihood of wage cuts.

Many states were facing a hard time meeting salary obligations since the slide in oil prices, a development that led to about 60 per cent cut in allocations from the Federation Account.

Osun embarked on modulated salary of 28 percent of its workforce to prevent mass retrenchment of its workers. Modulated salary saved Osun workers from mass retrenchment, a policy put together by Governor Aregbesola as a kind of rescue package.

Aregbesola used modulated salary to show his commitment to his contract and the future of Osun workers. He used modulated salary to save jobs in Osun and help the workers instead of reducing the workforce.
The Osun government used modulated salary to save jobs and pay wages of workers that would have be sacked.

The government used modulated salary to get a settlement and a guarantee of wages of the workforce in Osun. Modulated salary was the policy instrument that saved the workers’ jobs in Osun. Modulated salary was not half salary.

The report by some groups in Osun is a clear attempt to malign Governor Rauf Aregbesola and paint the state government as deliberately paying Half Salary. It is only a section of workers on grade level 13 and above that receives painfully 50 per cent of their salaries based on agreement between the government and the labour unions. Outside that category of workers on grade level 13 and above, no other receives half of his or her salaries and the workers in this category are just about 20 per cent of the state’s workforce. Workers on levels 8-12 receive 75 percent of their salaries while officers on levels 7 and below receive their full pay.

Only 28 per cent of the state’s total workforce received modulated salary, and that the remaining 72 per cent of the workers have been earning their full salary and are not being owed any outstanding salaries. 28 per cent of Osun civil servants have endured modulated salaries. These are the 20 per cent who earn 75 per cent of their monthly pay and the eight per cent who collect 50 per cent of their salary.

“The remaining 72 per cent, as you all know, have been earning their full pay and are not being owed any outstanding salaries, irrespective of the spin being given to this by our traducers. Even at that, we must thank everyone for the sacrifice you have all made in other areas.

28 percent of civil servants in Osun State in the employment of the state government under the leadership of Governor Rauf Aregbesola began to receive payment of full salary for the month of December 2017.

Government workers and their dependents in the State of Osun constitutes only 3 per cent of the entire population adding that governance should not be reduced to paying salaries. The percentage of the civil servants is 1 percent and their dependants are 2 per cent of the population of the State.

So, if you also consider the 97 percent of the society, Aregbesola administration has succeeded amazingly.”

The society is the totality of the people, civil servants and the large population. “The roads constructed by the government will be enjoyed by all, civil servants inclusive. The drainages being constructed will equally save civil servants and many from troubles, the security system we are improving upon to ensure that lives and properties are protected will also be enjoy from it.

Do not reduce governance to paying salaries.” “No reasonable government will like to make life miserable for anybody. The essence of government is compassion not for a group but for all. Government primary goal is to be concern about the well-being of the people.”

Within the seven years of the government of Rauf Aregbesola, a whopping N200 billion was spent on payments of salaries, allowances and pensions while a relatively paltry sum of N60billion naira went into infrastructure, or what we call capital projects.

This translates to 77 per cent to 23 per cent respectively. The reverse should have been the case. No nation develops this way and it is so sad. So, when people falsely declare that Osun government is building infrastructures to the detriment of workers’ welfare, it is laughable.

The modulated salary structure adopted by the State of Osun became a child of necessity in July 2015. It is a survival strategy for a State that had been long neglected in infrastructure development but recently took a deliberate decision to rapidly develop the State.

Well, soon the reality of the bad economic situation and some not well thought through policies crept in on everyone in the second half of 2015. Prior to this period however, the administration of Ogbeni Rauf Aregbesola had introduced and paid the 13th month bonus to workers for the first time in the history of the State as a gesture to motivate the public service workers and make them partners in the development of the State.

Let us examine the facts:

1. *GL 1-7* constitute *72%* of the workforce.

2. These *72%* are paid *100%* of their salaries and have been paid up till November 2017. _*Not a dime
is owed this group which are the most vulnerable in any society.*_

3. *GL 8-12* constitute *20%* of the workforce.

4. These *20%* are paid *75%* of their salaries and have been paid up till November 2017.

5. *GL 13* and above constitute *8%* of the workforce.

6. These *8%* are paid *50%* of their salaries and have been paid up till November 2017. _*These are the
leaders in the State.*_ _*Please note that in this category are ALL political appointees.*_

It is important to highlight that *28% of the workforce account for more than 50% of the wagebill.* This
is however understandable when you plot that against the Pareto principle.

Modulated salary structure became a painful child of necessity in *July 2015.* Up until then full salaries were paid to all categories of workers, leave bonuses were paid promptly and pensions were never delayed.

Now, lets look at these figures which were captured in nearest absolute decimal numbers:

Prior to November 2010 when Ogbeni Rauf became Governor, the *average IGR was less than N400m.

The implication of this is that wage bill alone in the period under review constitutes *85.85% of Gross Total Revenue.*

The massive investment in infrastructure is a strategy towards jump starting the economy of the state.
There is no doubt that the workers of the State have made huge sacrifice towards the huge transformation going on across the State. History will be kind to them. It’s been tough for the administration of Ogbeni Rauf.

He’s been able to make omelette without breaking an egg with the support of workers. It is important that this support is sustained in the interest of the State. We are almost there. The darkest part of the night is just before dawn.

This is not the time for labour unrest in the State on something that is a compromise the Government had to make against the more rational option of cutting its coat according to the size of its cloth.

Inwalomhe Donald writes from Okpella, Edo State [email protected]

Osun Workers Rejoice After Receipt Of Full December Salary

There was a positive change of mood among the categories of civil servants in the service of the Osun government who have been receiving Modulated Salaries since 2016 on Wednesday, as they began to receive payment of full salary for the month of December 2018.

This was in pursuance to the agreement the state government reached with the Nigeria Labour Congress (NLC), Trade Union Congress (TUC) and Joint Negotiation Council (JNC) prior to the suspension of the strike action workers embarked on in late December.

Some of the workers were sighted jubilating and commending the state government, particularly the Governor, Rauf Aregbesola for standing by the agreement with the labour unions and fulfilling the promise to pay full salary for the month of December 2017.

The workers confirmed the receipt of bank alerts for their full salary’s payment.

It would be recalled that since the economic crisis that hit the states of the federation began, workers on level 1-7 have been receiving full payment, level 8-10 receiving 75 per cent, while level 12 and above as well as political office holders have been receiving 50 per cent of their pay.

The modulated salary arrangement was in line with the agreement with the labour unions as a viable alternative to the retrenchment of workers in the state employment.

The state Commissioner for Finance, Mr Bola Oyebamiji confirmed that the state government has paid full salaries to all categories of workers for the month of December 2017.

Noting that the administration of Governor Rauf Aregbesola is a government that is committed to the welfare of workers, he said the government was ready to stand by the agreement reached with the workers on the payment of salaries, pensions and allowances.

Osun Workers Jubilate As Government Pays Full December Salary

There was jubilation among civil servants in Osogbo, Osun State, on Tuesday evening as workers in the employment of the state government under the leadership of Governor Rauf Aregbesola began to receive payment of full salary for the month of December 2017.

The development was the fallout of agreement the state government reached with the top hierarchy of the state chapter of the Nigeria Labour Congress (NLC), Trade Union Congress ( TUC) and Joint Negotiation Council (JNC) shortly before they suspended industrial action workers embarked in late December to denounce payment of modulated salary, non remittance of contributory pension, amongst other issues.

Cross section of civil servants, who spoke to the Nigerian Tribune exuded joy as they lauded the state government for fulfilling its promise to pay full salary for the month of December 2018, just as they confirmed that the receipt of bank alerts for their salaries.

Though there were pockets of complaints that few of the civics servants received bank alerts of half salary for December, our correspondent reliably gathered such categories of workers may have obtained loans, through cooperative societies, hence the receipt of alert for modulated salary.

Confirming the payment of December 2018 salary to the workforce during a telephone chat with the Nigerian Tribune on Wednesday morning, Osun State Commissioner for Finance, Mr Bola Oyebamiji stated that ” it is not possible for any worker to claim that he received a modulated salary for December because we paid all of them full salaries.

If they have any issue, tell them to come to my ministry. They should come and see my Permanent Secretary immediately. But, I don’t think so because of all of us, I mean everyone of us received the full salary”.

He continued, “by the time deduct tax from their salaries and those who obtained loans may think they were paid half salary.

There was nothing like that, all of them got alerts for full December salary”.

Facts Behind The Figures On Modulated Salary Structure In Osun STRUCTURE IN OSUN

The modulated salary structure adopted by the State of Osun became a child of necessity in July 2015. It is a survival strategy for a State that had been long negleted in infrastructure development but recently took a deliberate decision to rapidly develop the State. The survival strategy became necessary when revenue projections of the State got distorted as a result of the economic terrorism inflicted on the nation by the administration of Goodluck Jonathan which led to consequences, some of which the country is still grappling with today and may have to grapple with for a long time. The dire consequences of this on many States of the Federation was made worse by some of the earlier decisions the country took including the 2011 minimum wage increase, which from all indications is unsustainable for most states of the federation considering the huge size of the public service of many of them, low productivity and high level of waste. Yes, the workers deserve a living wage, welfare and the best post retirement lifestyle. But do the States need the size of the public service workforce we currently carry? Can the States survive with the low level of productivity of the public service? _*Could their have been a balance between living wage for the workers and the right size and efficiency of the public service?*_

Well, soon the reality of the bad economic situation and some not well thought through policies crept in on everyone in the second half of 2015. Prior to this period however, the administration of Ogbeni Rauf Aregbesola had introduced and paid the 13th month bonus to workers for the first time in the history of the State as a gesture to motivate the public service workers and make them partners in the development of the State. Workers were paid their leave bonus promptly on the dates freely chosen by the workers, either on their birthdays or the anniversary of joining the service. The Governor recognised the critical role of workers in governance and development, he wants the best for workers. The various infrastructure development in the state are to further enhance the welfare of government workers in particular: quality and affordable schools for their children, affordable medicare, good neighborhoods to live in, good roads to drive on without the frequent wear and tear on their vehicles. So, for a Governor who showed so much faith with workers and gave priority to their welfare when the economy was good and there was surplus cash flow to now adopt modulated salary structure must have left him with a very painful choice. Indeed, it was a most painful choice.

*The Figures*

Let us examine the facts behind the figures in the State of Osun. Let us attempt to see if there are justifiable reasons not to pay full salaries to all workers.

1. *GL 1-7* constitute *72%* of the workforce.

2. These *72%* are paid *100%* of their salaries and have been paid up till November 2017. _*Not a dime is owed this group which are the most vulnerable in any society.*_

3. *GL 8-12* constitute *20%* of the workforce.

4. These *20%* are paid *75%* of their salaries and have been paid up till November 2017. _*These are the middle level management who will be in charge in no distant time.*_

5. *GL 13* and above constitute *8%* of the workforce.

6. These *8%* are paid *50%* of their salaries and have been paid up till November 2017. _*These are the leaders in the State.*_ _*Please note that in this category are ALL political appointees.*_

It is important to highlight that *28% of the workforce account for more than 50% of the wagebill.* This is however understandable when you plot that against the Pareto principle.

Modulated salary structure became a painful child of necessity in *July 2015.* Up until then full salaries were paid to all categories of workers, leave bonuses were paid promptly and pensions were never delayed. Now, lets look at these figures which were captured in nearest absolute decimal numbers:

7. *July to Dec 2017* Gross FAAC Allocation: *N15.5billion*

8. *July to Dec 2015* Total Deductions: *N11.9billion*

9. *Net Revenue* from FAAC July to Dec 2015: *N4.5billion*

10. *Jan to Dec 2016* Gross FAAC Allocation: *N31.2billion*

11. *2016* Total Deductions: *N26.1billion*

12. *Net Revenue* 2016: *N5.09billion*

13. *Jan to Nov 2017* Gross FAAC Allocation: *N31.3billion*

14. *2017* Total Deductions: *N21.3billion*

15. *Net Revenue* 2017: *N12.5billion*

16. *Gross Total* of FAAC Allocation July 2015 to Nov 2017: *N82.08billion*

17. *Gross Total* *Deductions* July 2015 to Nov 2017: *N59.8billion*

18. *Gross Total Net Revenue* July 2015 to Nov 2017: *N22.2billion*

The above are figures of the State’s commonwealth from the Federal Government. Of course the State has it’s own *Internally Generated Revenue.* Prior to November 2010 when Ogbeni Rauf became Governor, the *average IGR was less than N400m.* The reason is not far fetched. Osun was a sleepy town, commercial activities ended at 7pm or earlier if darkness came earlier than 7pm. The infrastructure was at a pedestal level, rents were very low because demand was low, GDP was low. It was obvious that for the IGR to get a lift, there must be a near crazy ambition to develop infrastructure. Development and infrastructure have become siamese twins. Unfortunately, both are joined in the head. Difficult to separate one from another. For IGR to increase there must be visible change in the State, workers must be committed to its collection.

_*Let’s look at the IGR figures:*_

19. *July to Dec 2015 Total IGR: N5.3billion* . This is an average of N883million monthly.

20. *2016 Total IGR: N8.9billion.* Average of N742million monthly.

21. *Jan to Nov 2017 Total IGR: N7.1billion.* Average of N645million monthly.

22. *Total IGR Jan 2015 to Nov 2017: N21.3billion.* This is an average of N734million monthly.

By some providence of fate, like manna from heaven came in the *Paris Club Refund.* This was clearly an extraordinary revenue, not planned for and not projected for. It came in at a critical period when most states were almost belly up. It’s best imagined what would have become of many States in Nigeria without it.

*Let’s look at the impact of the Paris Club Refund on Osun figures.*

23. *Total Paris Club Refund: N18.05billion.* That’s a decent number in the life of a State like Osun as in most States. *That’s almost 85% of the State’s total IGR for 29 months.* It shows clearly that without it things would have been extremely difficult for *ALL* stakeholders in the State including the workers. It also shows that the *IGR receipt could be qualified as abysmally low* especially when you look at the month on month average and you look at how significant the extraordinary revenue is when compared with IGR. *IGR collection is an indicator of the level of productivity of any government. Some countries live on this solely.* Under normal circumstances, the IGR should cover the entire wage bill of a State and still leave room for other uses. If consistently the IGR averages at N800million it can be argued that the State does not need a workforce whose wage bill will exceed N800million. Revenues from FAAC and other extraordinary revenue should go into development of infrastructure because that is a State’s share of a common patrimony and infrastructure development is the basis of competition. The public service has no influence on what comes to the State as FAAC, neither does the government. The people do and they do so with their numbers. It is therefore a disaster, travesty of justice and equity that many states use their entire FAAC allocation and even the Paris Club Refund to pay salaries. The only way a State has to repay the people therefore is through higher productivity of the public service and development.
What therefore is the relationship between all these revenue heads: *FAAC, IGR and Paris Club Refund?*

24. *Gross Total Revenue July 2015 to Nov 2017 (18+22+23): N61.7billion*

Here’s the interesting part of the story. Recall the statement in the first paragraph on past decisions that was predicted to come to haunt us, minimum living wage without optimal size of the public service. Let’s look at some of the symptoms of this ailment which has become epidemic among most states of the federation using Osun as a case study.

25. *Total Wage Bill (Modulated) July 2015 to Nov 2017: N63.9billion*

Even if one cannot understand the implication of all other factual figures one would notice that *ALL* the *revenues in 29 months* are not sufficient to pay even the entire modulated salary. Yes, you got it. It couldn’t pay the modulated salary. There’s a *N2.2billion hole* the State has to fill even after factoring all sources of revenue. Who constitutes the State, the public officers, elected office holders and political appointees. This means there must be a deliberate decision among these stakeholders to either *cut the body to size or work harder to raise IGR.*

Let’s take this a step further and come up with some assumptions. Let’s assume that the State did not face the burden of deductions of revenue from source and the child of necessity called Modulated Salary was not given birth to painfully.

26. *Gross Total Revenue Without Deductions July 2015 to Nov 2017: N121.6billion*

27. *Total Wage Bill Without Modulated Structure: N104.4billion*

The implication of this is that wage bill alone in the period under review constitutes *85.85% of Gross Total Revenue.*

28. Osun has a *population* of about *4million people* which includes infants, children and adult. It therefore means that what belongs to almost 4 million people including children, infants and generations yet unborn will be used to service less *70,000 100% adults who constitute the public service.* That’s an *ethical* choice that we all have to make and one which will define the quality of leadership.

As at 2010 when Ogbeni assumed office, it was obvious that the State of Osun required extra ordinary push. The world was leaving it’s source behind. There was just no incentive for any investor to come to Osun, no incentive for Osun people in diaspora to come home. The choices of what should be done were limited. One of it was to rightsize the workforce and make it optimal to save money. But there was an assumption that as *Omoluabis* Osun people are cultured to bend backwards for each other, we lose something in order for us all to gain something or survive. We are cultured to make sacrifice for a collective interest. Therefore, the painful child of necessity called *Modulated Salary Structure* did not come as a surprise. The interesting and comforting part of this is that the deductions are not lost. They remain IOUs in the books of government. They will be paid when the cash flow improves, assures Mr Governor. It has therefore become in our collective interest that the cash flow improves. The aspect of the various revenue heads that the State has control over is IGR. With *taxable adults estimated at 1million and the massive infrastructure development which has translated to capital gains for many individuals and businesses there is nothing stopping the State from averaging N3billion monthly IGR.*

The massive investment in infrastructure is a strategy towards jump starting the economy of the state. There is no doubt that the workers of the State have made huge sacrifice towards the huge transformation going on across the State. History will be kind to them. It’s been tough for the administration of Ogbeni Rauf. He’s been able to make omelette without breaking an egg with the support of workers. It is important that this support is sustained in the interest of the State. We are almost there. The darkest part of the night is just before dawn. This is not the time for labour unrest in the State on something that is a compromise the Government had to make against the more rational option of cutting its coat according to the size of its cloth.

The big question to the critics are:

1. what else could the government of Ogbeni Rauf have done in the circumstances the State finds itself?

2. What solution do the labour leaders have that will be fair and beneficial to the 4 million people of Osun?

This is the time to borrow each other some common sense. Osun does not deserve any labour unrest at this time.

Osun a dara si o!

Aregbesola Pleads With Workers To Persevere For Little Time

Governor of the State of Osun, Ogbeni Rauf Aregbesola has urged workers in the state to persevere a little more in weathering the financial storm that has been facing the state for quite some time.

The governor at a meeting held with labour leaders in the state on Monday night, expressed the conviction that the end to the financial problem of the state would soon be over and normalcy will return to governance in the state.

Aregbesola who acknowledged the cooperation, support and perseverance of the workforce since the financial problem came through no fault of his government; said history would judge them well as having made immense contributions to the growth and development of the state.

The Governor made it clear that it is impossible for him to deliberately make life difficult for the workers he has invested so much compassion on, saying what is happening is inevitable.

Speaking on payment of November salary, Aregbesola said it is coming late as a result of late release of allocation from the federation account and lack of sufficient Internally Generated Revenue.

He said his government has always strove to get the modulated salary formula paid monthly and promptly so that workers and pensioners will have some money to live with.

This, he said has been consistent in comparison with what is obtainable in surrounding states where workers were owed several months of salary.

Aregbesola who noted that the present pattern of modulated salary payment cannot be altered for now due to obvious lack of fund to so do, however said workers would begin to receive bank alert for the payment of November salary any moment.

He expressed pains at the plight of contributory pensioners, assuring them that his government is doing all in its powers to get them relieved of the undeserved burden of not been paid their dues on time.

The governor who noted that but for the Nigerian system, promotion should be a matter of merit as it is in other land, said government does not have the financial means should it decided to do it the usual way.

Aregbesola stated that it does not make sense to promote workers in the time of financial crisis when it was difficult to pay even the modulated salary currently being paid.

He called for a new orientation within the workforce whereby every worker will see him or herself as tax marshals so as to raise enough revenue for the running of government and without expectations of fund from anywhere else, saying most developed countries rely on tax in running their government.

Emphasizing the need for the new orientation in view of the development in the world, whereby the relevance of oil which Nigeria relied upon so much is getting reduced,

Aregbesola added that there is no alternative to generating revenue internally for the running of governments.

The labour leaders turned down the dinner prepared for them even with pleadings from the head of Service, Dr Gboyega Oyebade who was once a leading light in the state labour movement.

The workers reminded that both the first and second tranche of the Paris Club Refund were used to pay salary and pensions, disclosing that a huge sum of money was added to the first tranche to pay three months salaries to the workers.

About 95 per cent of the second tranche of the paris club refund, according to the Commissioner for Information and Strategy, Adelani Baderinwa was used to pay workers salary, arrears and pension in July this year.

Baderinwa said the third tranche of the refund would also be committed to payment of salary pension and other financial commitment as might be decided by the Comrade Hassan Sumonu led Apportionment Committee.

We Are Not Paying Half Salary – Osun Govt

 
The State Government of Osun on Tuesday restated that it is not paying half salary to its entire workforce.
 
It said rather than half salaries, the government is paying based on the modulated salary structure agreed by government and labour when financial tsunami hit all tiers of government across the country.
 
A statement by the Commissioner for Information and Strategy, Mr Adelani Baderinwa in Osogbo, said contrary to a report on a national daily, with the modulated salary structure, the State Government is not indebted to any worker.
 
Baderinwa said “We have been saying it loud and clear and we will not be tired of saying it until the mischief makers succumb to fact and reality; it is only a section of workers on grade level 13 and above that receives painfully 50 per cent of their salaries based on agreement between the government and the labour unions.”
 
“Outside that category of workers on grade level 13 and above, no other receives half of his or her salaries and the workers in this category are just about 20 per cent of the state’s workforce.”
 
“Workers on levels 8-12 receive 75 percent of their salaries while officers on levels 7 and below receive their full pay.”
 
Stressing that all workers in the state have received their salaries up to October this year, the Osun Commissioner for Information said the same modulated salary structure is also used for the pensioners.
 
Baderinwa stated that “The only outstanding payment to pensioners is the gratuity and this is due to workers who choose not to participate in the Contributory Pension Scheme and therefore left service in 2011/2012.”
 
“We recall that workers on levels 8 and above received the July and August arrears when the government paid in July this after receiving the second tranche of the Paris Club Loan Refund.”
 
The State Government of Osun however reiterated that the government will fully fulfill its obligations to the entire workforce when the state’s economy improves.
 
He contended that the report by the national newspaper is a clear attempt to malign Governor Rauf Aregbesola and paint the state government as deliberately paying “Half Salary.”