Economic Confidential, April 2007

Cover

JUMBO SALARY FOR OFFICERS

AT EXECUTIVE AND JUDICIAL ARMS

By Stella Udobong

Recently, the President, Commander-in-chief of the Armed Forces, Chief Olusegun Obasanjo submitted to the National Assembly a report on new salary structure for public office holders in the federation which is intended to come into effect from January this year. The salary proposal which is subject to approval of respective legislative houses at the federal and state levels has provisions for President, Vice President, Governors, their deputies, Local Government chairmen, their deputies, Chief Justice and other judicial officers. It is a recommendation from the Revenue Mobilisation Allocation and Fiscal omission (RMAFC). It is coming after the last report of 2000. For the Salary and Allowances of legislators in Nigeria, please click on Remuneration for Legislators.

There is an increase of about 150% over the salary recommended in 2000’s report. There is also an introduction of new allowances and upward reviews of some old ones. For instance, there was no provision for duty tour allowance in the old remuneration package. In the new recommendation, a minister will receive US $1000 and a Permanent Secretary US$ 600 as against US $500 and US $ 450 respectively approved by the President in a circular No SWC/S/4/s.308/1 dated 18 January 2007 from the office of the National Salaries, Incomes and Wages Commission.

In the proposed salary package the President will receive N3,514,705.00, Vice President N3, 031,572.50, Minister N2, 026, 400.00, Minister of State N1, 957, 580.00, Special Adviser N1, 942, 875.00 while Auditor General/ Permanent Secretary will receive N1, 925, 865.00. The highest basic salary in the judiciary will go to the Chief Justice of the Nigeria with N3, 363, 972.50 followed by Justice of the Supreme Court and President of the Court of Appeal with annual basic salary of N2, 477, 110.00. These new packages are subject to the approval of the National Assembly. At the State level, a governor will receive an annual basic salary of N2, 223, 705.00 while his deputy will receive N2, 112, 215.00. The Chairman of Local Government Council will receive an annual salary of N908, 312.00 and the Vice Chairman will receive N853, 056.00

(See details of the new salary packages for Executive and Judicial officers at all tiers in tables in subsequent pages. There is also the old structure for comparison)

The new remuneration package, referred to as the Consolidated Top federal Public Office Holders Salary Structure (contopsal) is coming seven years after the last recommended remuneration package designed by the Revenue Mobilization Allocation and Fiscal Commission and which was passed into law by the National and State Houses of Assembly.

Following the maiden remuneration report presented in 2000, which became effective from May 1999, the Commission said it was compelled to review the existing remuneration package following various political, social and economic changes and development that the country has been through since May 1999 to date and in fulfillment of section 70 and 111 of the 1999 constitution.

To arrive at the review of the existing remuneration package under the present democratic dispensation, the RMAFC said it held wide consultations with stakeholders at the three tiers and arms of government i.e the Executive, legislative and judicial arms of Federal, states and local government councils

Due to changes in the basic fundamentals of the Nigerian economy, external reserves, GDP growth rate, rate of inflation, the Commission said it felt the need to modify old salaries and allowances and introduce new allowances that were not included in the old package. The review was also to correct placement of some categories of office holders that were wrongly placed in the old package. The need for a living wage to ensure honesty and dignity of the office holders as well as the need to ensure compliance with the provisions of the constitution, according to the report submitted, made it clear that the remuneration package was over due for a review.

The new package contains increase in the annual basic salaries and some allowances for the office holders, the items consolidated with the basic salary are transport allowances, meal subsidy, utility allowances, leave grant, furniture allowance, domestic servant allowance, drivers allowance, security allowances, motor vehicle loan/maintenance allowance, duty tour allowance, entertainment allowance, constituency allowance, monitoring and Field allowance, Hardship allowance, outfit/robe allowance and sitting allowance. Newly introduced allowances are the newspapers/periodicals allowance, and special assistant/personal assistant allowances.

Some existing allowances have also been modified. They include Medical, Security, Severance Gratuity and Accommodation. The accommodation allowance has been segregated based on differences in cost of living in various locations in the country. However, rent allowance has not been consolidated with the rest of the allowances in the emolument package, as it is payable where an officer is not provided accommodation at government expenses.

Other allowances recommended for passage by the legislature are Duty Tour and Estacode allowances payable to top government functionaries for traveling expenses within the country or abroad on duty respectively.

Given the current realities of the Nigerian economy, the Commission said the 100% of the annual basic salary which was recommended in the existing remuneration packages, is inadequate to provide suitable accommodation for public officers in some parts of the country, as such in the new structure, the proportion of basic salary to be set aside as accommodation allowance is between 45% to 200% range, with the most expensive zones in the country e.g. Abuja getting 200% and the least expensive getting 45%. Consequently, annual accommodation allowances are to be paid en-bloc due to pressure from most landlords who demand annual payment.

However, in recognition of the very sensitive nature of their offices, the President, Vice President, State Governors and Deputy Governors, Chief Justice of Nigeria, Chief Judge of the FCT and Chief Judges of a state, would continue to retain their respective modes of accommodation in government quarters and shall not be paid the housing allowance.

Motor vehicle loan has been reviewed upwards to 400% of the annual basic salary, while the vehicle maintenance allowance has been reviewed upwards from 30% to 75%.

In recognition of the need for Special Assistants, it has been recommended that Special Assistants should be provided from within the service and should be within the grade levels 12 and 14, while the existing 25% of annual salary is recommended to enable the office holders to employ Personal Assistants of their choice. Domestic staff allowance which is meant for four staff (steward, gardener, cook and housekeeper), 75% of the basic salary is recommended monthly.

Furniture allowance which is subject to replacement every four years is to be paid at 300% of the basic salary. Entertainment allowance has been reviewed from 10% to 45% of the annual basic salary. On the other hand, utility allowance applicable to electricity, water, gas, telephone and refuge collection charges has been reviewed from 20% to 30% of the annual basic salary.

Constituency allowance, recommended for elected political office holders to enable them establish and maintain offices in their respective constituencies, has been recommended at the following rates: President 250%, Vice President 250%, Governor 200%, deputy governor 200%,Chairman (LGC), 25% Vice Chairman (LGC) 25%.

Hardship allowance has also been recommended at 50% of respective annual basic salaries of the President, Vice President, Chief Justice of Nigeria, Chief Judge of State/FCT, all Judicial Officers, Governors and Deputy Governors.

 Judicial officers at both the federal and state levels are to be provided 25% of their annual basic salary as Outfit/Robe Allowance instead being supplied by the government in the past remuneration package.

In recognition of the need to keep officers abreast and well informed about local and international developments, a new allowance known as the Newspapers/periodicals allowance has been approved at 15% of the annual basic salary, for the provision of one weekly periodical and three dailies.

A new Monitoring and Field Allowance is introduced to be paid monthly for members of Commissions involved in field work/monitoring at the rate of 20%. Sitting allowance is also recommended for part-time members of Federal Executive Bodies and members of non-permanent federal bodies at the rate of N500,000.00 per sitting, but not exceeding six sittings in a year.

The contentious severance gratuity is maintained at 300% of the annual basic salary enjoyable by elected and appointed political/public and judicial office holders at all tiers of government after the successful completion of each tenure. The report added that any officer who has served a minimum of 2 years of the period of tenure would be deemed due for the payment of severance gratuity on a pro rata basis.  Non-career Ambassadors are included for this allowance.

Non career ambassadors are to henceforth enjoy the severance gratuity at 300% of the annual basic salary enjoyable by elected and appointed political/public ad judicial office holders at all tiers of government after the successful completion of at least two years period of tenure would be deemed due for the payment of severance gratuity on a pro-rate basis.

Annual Basic Salaries of the Executive

Annual Basic Salaries of the Judiciary

Recommended Duty Tour Allowance

recommended estacode

EXISTING REMUNERATION PACKAGES

AS RECOMMENDED BY RMAFC IN 2000

BASIC SALARY

FEDERAL EXECUTIVE ARM

JUDICIARY

EXECUTIVE AT STATE

JUDICIARY AT STATE