Nigerians In The Diaspora, Others Query Spending On Lawmakers

Posted by admin Headlines, House, Legislature, Senate Sunday, December 19th, 2010

ALTHOUGH Nigeria spends about 25 per cent of its national expenditure on the National Assembly, official sources within the US government has put the cost of running the entire US congress, including salaries of senators and representatives, at 0.2 per cent of all federal spending.

Recently, a statement credited to the Governor of the Central Bank of Nigeria (CBN), to the effect that more than 25 per cent of Federal Government overheads is spent on the National Assembly, created controversy, which is yet to abate. Already, the 2011 Appropriation Bill is constructed to prune down the expenditure of the Legislature by, at leas, N40 billion. Lawmakers say they hope that the executive arm would also cut down on emoluments of its officers.

A senior United Nations official actually queried why “less than 500 people (the legislators) should be receiving one-fifth of the nation’s recurrent expenditure? For the US’ 2010 fiscal year, the total federal spending on the US Congress — Senate and House of Representatives — came to $5.42billion and only $126 million of that figure went to salaries and benefits of the senators and representatives. And in all, the $5.42 billion represented only 0.2 per cent of all US federal spending. While the average Nigerian Senator receives an equivalent of $1.7million total package in a year and the federal representative collects the equivalent of $1.45 million a year, the average US congressman, whether in the senate or the house of representatives receives only about $174,000, according to US government figures, based on increases made this year.

Also, unlike in Nigeria, where senators and representatives are paid severance packages at the end of a term, in the US, representatives can only receive lifetime benefits after two and a half terms. But it is the Congress in the US that determines its own pay, although the US constitution in its 27th amendment prohibits a change of salary from taking effect until after the next general election, except it is merely a cost of living adjustment.

US congress also adopts an annual adjustment procedure to increase its members’ annual pay based on a 2.8 per cent adjustment. But in 2008, that rate was cut to 2.5 per cent, because US Congressmen cannot receive an increase greater than the increase of other federal employees in the US.

But at no time in the US history has the salaries of its congressmen and woman come near anything what Nigeria’s National Assembly members are being paid, nor would it ever come that far in the future, according to US sources and government record. Records also indicate that there have been occasions when the Congress passed annual rate increases without the Congress voting to appropriate the funds to implement the raise.

Besides, based on the costs and standard of living indicators supplied by the World Bank between Nigeria and the United States, members of the National Assembly in Nigeria are far better paid than their colleagues in America even though the US is richer.

World Bank and United Nations officials and economists who collaborated with The Guardian on this story on condition of anonymity because the matter is deemed Nigeria’s domestic issue, however, used different economic measures to show how far better the Nigerian federal legislators is paid than in the United States, as well as how unreasonable it could be.

Based on what the economists called the Purchasing Power Parity (PPP) for instance, the real purchasing power of $1 in Nigeria is not the formal exchange rate of about N150, but about N102 according to the World Bank 2010 African Development Indicators. Also economists say it is well known that going by both countries’ Gross Domestic Products, US is a far richer country than Nigeria.

Interpreting the figures, Prof Nimi Wariboko, a US-based economist and former World Bank consultant said: “it is like a market woman in Lagos, paying her house help a better salary than what US billionaire Bill Gates pays his own house help in the US. The National Assembly salaries are that unreasonable.”

This means that the salaries of the National Assembly members in Nigeria is not only greater than their US counterparts about 10 times for the senator and just a little less for the representatives, they also have greater purchasing power. For instance, if a US Senator brings his dollar to Nigeria, his dollar will get a purchasing power of N102 not the N150 exchange rate.

However, for a Nigerian Senator to get a purchasing power value for a $1, it will cost him less than the N150 formal exchange rate.
Economists and international development officials say the PPP is used because in order to measure and compare the standard of living between both countries accurately, using the formal currency exchange rate may not suffice.
They disclosed that it was in order to arrive at a more accurate cost of living comparison that economists developed the Purchasing Power Parity measurement, which accounts for differences in the purchasing power of the dollar in different countries, which the GDP does not envisage.

Another UN official said when based on the United Nations Human Development Index (HDI) Nigeria’s GDP per capita is still far lower to that of the US, making the National Assembly salary “scandalous and unsustainable.”

He said the HDI, which measures additional factors than the normal GDP still rates Nigeria’s per capita at $2,156 to US’ $47,094 based on the 2008 figures.

The UN official noted that as it stands, Nigerian federal lawmakers earn more than four times what the US President earns, adding that the implications are stark because there is no way Nigeria would be able to sustain such a pay.
According to him, the Excess Crude Account is already depleted and is now less than $1bilion, in a country where non-oil revenue is merely about 15 per cent.

The UN official said, at best, Nigeria’s federal legislators ought to be paid just

about four times the country’s GDP per capita, which is about $2,300, concluding that the average Nigerian federal legislator should be earning a total of about $10,000 to $12,000 per annum.

Economists added that even after the high cost of living in Nigeria has been factored into the picture, it is still too excessive to pay the senators and representatives as high as they are collecting now.

Another US- based Nigerian banker, Bukola Oreofe observed, “It is obvious that the Nigerian assembly is an albatross on the Nigerian economy. Evidently, the practice of paying legislators constituency project allowance is a corrupt practice that is wrapped with disgrace.”

According to Oreofe, “we have also witnessed the sale of houses to principal officers and federal legislators that are grossly undervalued. United States lawmakers are responsible for their accommodation in Washington DC, they pay for their accommodation from their pay cheques. Nigeria needs to cleanse the stench oozing from the National assembly through these allowances, salaries, and so on.”

Instead of receiving such fat salaries, he proposed a reasonable pay that is drawn from the civil service scale, adding “this would also allow them to appreciate the living conditions of the Nigerian worker and thus make laws to change the fortune of Nigerians. The affluent life that the lawmakers live in Abuja is indeed repugnant and Nigerians should rise up to demand an immediate downward review of these unwarranted payments”

Also, Chief Executive Officer of Domino Information Company, Mr. Uzochukwu Nduka, who called for a drastic reduction, said the lawmakers should not use their privileged positions to legitimize what is wrong.

In the same vein, Akintola Williams of the Akintola Williams Deloite described what Nigerian lawmakers earn as unjustifiable, just as the Coordinator of the Society of Analytical Economics, Nigeria, Godwin Owoh, said the country needed to consider productivity before fixing salaries of public officers.

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