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Nigeria’s Senators and Their Jumbo Pay

Nigeria’s Senators and Their Jumbo Pay

No. 7-8, Sep.-Dec. 2017 » Bridging News

Pursuant the revelations of Senator Shehu Sani on BBC, Nigerian senators are entitled to monthly expenses of N13.5 million ($37,500), in addition to their monthly salaries of N750,000 ($2,088). With a minimum wage of N18,000 ($50), it would take the average Nigerian worker 792 years to earn the annual salary of a Nigerian senator.

Taking the salary and expenses together and using an Assistant Superintendent of Police (ASP) on Grade 08, Step 01(a new graduate from the police academy) as benchmark, this might give us an insight into how graduate salaries compare to those of a senator in Nigeria. At N1.53 million ($4,250) annual salary for a graduate, it would take a senator 7 hours and 10 minutes to receive what an ASP of police earns in one month. Meanwhile, it would take the ASP approximately 102 years to earn a senator's annual income (including expenses). So, he or she would need to have worked continuously from the year 1916 until July 2018 to receive what a senator earns in a year.

If we are to use rice as an index to measure the cost of living in Nigeria, since it is the most stably priced staple food of the country, then, at ₦15,000 ($41.76) for a 50-kilogram bag, a senator's monthly income could buy 866 bags while the ASP’s monthly salary could only afford 8 bags of rice.

The questions most peoples are not asking are:

  • How profitable is a Nigerian senator’s seat?
  • How is a Nigerian senator’s salary compared to their counterpart in other countries?
  • Why are people always on the edge when there is a discussion on salary?

These questions are not fanciful. Let us start from 1980 when the country’s foreign exchange rate was N0.57 to a dollar and the government revenue was $69.94 billion. This is an equivalent of $18.1 trillion when adjusted with current exchange rate. The federal government’s per capita spending in 1980 is equivalent to the spending on 641 persons in 2016. Therefore, it is not surprising that Nigerians are always on the edge whenever the discussion of salary comes up, because they do not even have sufficient money. Hence, they get worried when they hear that a senator goes home with as much as N14.25 million ($39,672) per month. 

Burden on the Government 

In a press briefing, the country’s Minister of Finance claims that with N1million ($2,784), the government was able to provide food for 14,200 children as part of the school feeding program across the country.  So, the Senator Shehu Sani revelation simply means that the take home pay (salary + monthly expenses) of a senator can provide food for 202,350 children every month. This number of children will fill the Wembley Stadium, Camp Nou, and the O2 Arena put together.

This is a burden and indeed unsustainable for the government, since the  government was only able to raise a revenue of N3.2 trillion ($8.2 billion) in 2017, while the recurrent budget for salaries and basic expenditures was N2.98 trillion ($7.59 billion). Thus, the government has only been able to cover its recurrent expenditures for Ministries, Departments, and Agencies from its revenue, thereby increasing its budget deficit to cover capital expenditure, statutory transfers, and debt servicing.

Even with the provision for additional expenses, the return on investment of a Nigerian senator is still significantly higher. In fact, there is no sector in the Nigerian economy that can easily give a return of over 142% per year.

Meanwhile, the National Assembly might be right if they argue that they only account for a fraction (1.71%) of the N7.3 trillion ($20.32 billion) budget; however, given that Nigerian politicians are always quick to compare the country’s system of government with that of the United States, it would be in-line for this study to compare both countries’ senator’s salaries. 

A United States senator earns $174,000 (N62.5 million) a year, while his Nigerian counterpart earns $476,058 (N171 million). Not only do Nigerian senators earn more in absolute figure, they also earn much more as a percentage of the country’s revenue. The United States generated a revenue of $3.2 trillion in 2017, and a senator was only entitled to 0.000005% of the revenue. Meanwhile, even though Nigeria was only able to generate 0.61% of the United States revenue ($20.32 billion or N7.3 trillion) a senator was still able to go home with 0.002% of the revenue. In a simple sense, a Nigerian senator’s salary is 194 times that of the president and 447 times that of a senator in the United States. 

Return on Investment 

With N171 million ($475,000) potential revenue in the first year alone, while taking cognizance of the provision of Section 91 of the Electoral Act as amended in 2018, which stated that a senate candidate should not spend more than N40 million ($111,359) in the electoral process, the potential Gross Profit for a senate seat becomes N131 million ($364,699) in the first year alone. Meanwhile, publicity and image management are a pivotal part of any electioneering, and the Independent National Electoral Commission is often unable to realistically audit the election expense of each candidate. Let us assume or give such senatorial candidates a leeway by providing for indirect cost (Other Expenses) for publicity and image management outside the stipulated N40 million. The average cost of television advertisement in Lagos and Abuja is N677,875 ($1,883). Add that to a minimum average of N5,000 ($13.89) per agent to monitor the voting process on election day, on behalf of the senatorial candidate at the 4,100 polling units across each senatorial district in Lagos as a case study. The agents’ observation fee will add up to N20.5 million ($56,945). Hence, other expenses will add up to N21,177,875 ($58,828). Let us also assume that the sum was borrowed from a bank at 30% interest rate (this is Nigeria’s commercial banks rate), and would mature in 12 months – the candidate will be paying N12 million as interest on its Short-Term Borrowings. 

Even with the provision for additional expenses, the return on investment of a Nigerian senator is still significantly higher. In fact, there is no sector in the Nigerian economy that can easily give a return of over 142% per year. With zero investment in the second to fourth year, the return on investment is expected to be equal to 76% of the Revenue. It is therefore not surprising that the senate seat has become very competitive – of the current 109 senators in the senate chamber, only 13 senators have managed to keep their seat in the last three election circle (2007, 2011, & 2015).

Evidence has shown that an investment in the senate seat is the wisest one. And as long as the senatorial seat remains lucrative, the elite class will do everything possible to make sure that competition for the seat is a zero-sum game, without taking into consideration the people they swore to serve.

 
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