Background

The Monetisation of Fringe Benefits in the Nigerian Public Sector was carried in 2003 to cut the cost of governance and entrench efficiency in the allocation of resources. Residential accommodation, utility allowance, motor loan, transport allowance, medical allowance, leave grants, medical subsidy, and entertainment allowances, included all that were monetised, as applicable to the annual basic salary of each worker.

Past Reform and Achievements

After calculation of the monetisation costs revealed costs between ₦300 and ₦500 billion, the government chose to spread the monetised benefits over the 12 calendar months of a year, instead of an earlier decision to pay it lump sum. Workers who desired vehicle loans were directed to get them from commercial banks, and of their own accord. Government parastatals that were self-financing e.g. NMA, NNPC, and CBN were directed to pay the monetisation of benefits of their own staff. Workers at the lowest grades, including gardeners, cleaners, drivers, and clerical assistants, were mass retrenched. Workers at Grade Levels 08 and above who had consistently failed promotion examinations and those who had had disciplinary issues were also mass retrenched.

All of these reduced the cost of governance (compared to what it was before). The consolidated salaries enhanced the personal emolument of workers, and possibly reduced the need for increasing meagre salaries through corruption. The reform further curbed the excesses of public officers in the use of government resources for private comfort; encouraged efficient allocation of resources and equity in the provision of amenities for public officers; encouraged public servants to plan for a more realistic post-service life in terms of living within their means; strengthened and improved the delivery of basic services through the outsourcing of services such as gardeners, cleaners, drivers, and security; and stopped the culture of waste in the guise of maintaining government housing estates.

Challenges and Next Steps

The policy in terms of housing near office needs to be reviewed for such workers as doctors, nurses, and officials of the emergency services who need to respond quickly and at the earliest convenience to work. Government should develop a preferential mortgage scheme for public servants that would make it possible for them to own houses in, or near, the city at discounted mortgage rates; thus allowing workers to be able to come early to work and stay late also. As many workers still do not receive enough to be able to afford their own cars, the policy on official vehicles should be reviewed to allow the purchase of vehicles for official purposes and for the use of all staff and not just the executives. Efforts to improve public transportation, for instance, through the use of rail transport, should also be intensified.