Exorcising ‘Ghost Workers’ Saves Nigerian State Millions of Dollars

(Bloomberg) --

The Nigerian government saved hundreds of millions of naira by centralizing its employee-payment system -- laying hundreds of thousands of ghosts to rest in the process.

Dubbed the Integrated Payroll and Personnel Information System, or IPPIS, the project has exposed the widespread practice of salaries being paid to people who don’t exist, so-called ghost workers, and identified others who have been fraudulently claiming more than one paycheck.

Exorcising ‘Ghost Workers’ Saves Nigerian State Millions of Dollars

The drive to integrate all state personnel into IPPIS is part of President Muhammadu Buhari’s efforts to streamline public spending and boost revenue in Africa’s biggest oil producer, where salaries and pensions are forecast to account for 4.8 trillion naira ($13.4 billion), or 47%, of the state budget in 2020.

Still, the rollout of IPPIS saved the government about 85 billion naira in 2017 and 202 billion naira last year, according to Olufehinti Olusegun, the initiative’s director and a senior official at the Office of the Accountant General.

Numbers Up

Much more remains to be done, though. The number of workers on the system has doubled to around 770,000 since 2017, but an estimated 300,000 are still not covered, according to Olusegun. “We want to ascertain the actual number of physical federal government employees that are drawing salaries,” he said in a Dec. 3 interview in the capital, Abuja.

While ministries and other government departments have been gradually incorporated into IPPIS since its launch 12 years ago, Buhari has pushed its extension and instructed that every federal government worker must be paid through the system, according to Ahmed Idris, Nigeria’s Accountant General. The military, police force and paramilitary agencies account for most of the new enrollments and all are being paid through IPPIS now, he said.

“It’s just a matter of political will and support from the top, which we are now getting,” Idris said in a separate interview in Abuja on Dec. 3. Employees of the country’s 36 state governments are covered by separate systems.

Linked In

IPPIS enables Idris’s office to link individual employees to their bank accounts via a unique biometric identification number issued by the country’s lenders. Previously, state bodies were allocated monthly block sums from the national budget which they then distributed. “Whenever we bring another agency on board, naturally we observe some savings,” Idris said.

When the police force was enrolled last year, 80,000 of the approximately 370,000 salaried staff were found to be ghost workers, according to Joe Abah, who headed Nigeria’s Bureau for Public Sector Reform from 2013 to 2017. Another problem IPPIS has tackled is “situations where a particular public servant was receiving 20 salaries,” he said in a Dec. 4 interview in Abuja.

Among the 300,000 people the Office of the Accountant General believes are still not covered by IPPIS are those working for Nigeria’s higher educational establishments and employed by institutions that don’t rely on the national budget for their funding such as the Central Bank of Nigeria and state-owned companies, Idris said.

Overcoming Resistance

“The resistance is mainly from the university community but they are getting to understand that this is the policy of government and they cannot continue with business as usual,” he said.

Once the academics have been brought on board, attention will turn to the likes of the central bank, the Federal Inland Revenue Service and the Nigerian National Petroleum Corp. “This is going to take a longer discussion,” Idris said.

“The only place I foresee problems with is the NNPC,” Abah said, noting the company often appears “beyond the control of the state.”

©2019 Bloomberg L.P.

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