Against the backdrop of several political and
socio-economic problems facing the Nigeria economy, government decided to
fashion out a way to curtail the excessive expenditures that is characterized
with the paper service.
In the words of Ekaette, (2003), in
a paper presented on waste control, discipline and monetization of fringe
benefit, the immediate past government under the leadership of president
Olusegun Obasanjo has come to realize that public officers had been extravagant
in the spending of public funds. It has been discovered that such funds they
usually spent are in the provision of enormous task of contending leaves little
for capital project. However, it realizes that no government can function
properly without a bureaucratic system of carrying out government activities in
place.
Since public service is inevitable,
government decided to seek for a possible means of reducing unnecessary rising
cost of running government business.
It was the realization of this goals
that prompted government to introduce the issue of monetization policy.
THE
CONCEPT OF MONETIZATION
Monetization generally according to
wikipedia the free encydopedia (2002) is the process of converting or
establishing something into legal tender. It usually refers to the printing of
bank notes by central banks, but things such as gold, silver, diamonds can also
be monetized.
Though there are many types of
monetization which includes debt monetization, business monetization, but the
one applicable to Nigeria is the monetization of allowance and fringe benefits.
Monetization of benefit according to
Ekaette (2003) entails the reduction of all non-monetary allowances or fringe
benefits, such as accommodation, cars, furnitures to eligible officers, some
predetermined sum of money, regarded as the equivalent to such benefits are
paid tot eh officers in lieu of such benefits.
In the words of Adeyemi (2004:31) I
have a problem of whether this agenda of monetization could be part of the
imported idea from the world bank and IMF as an agenda because, I also believe,
never mind all that has be said”. He further stated that, I am convinced that
our economic polices are being dictated from the world bank and LUF.
Agu (2003) observed that the country
was not ripe for such a policy because of lack of effective mortgage system in
the country. He was of the opinion that government should be very careful in
borrowing a system that woks in developed countries where houses and
infrastructures were already in place.
Freddy (2004) viewed the
monetization policy as a move to reduce the cost of running government. As far
he knew, the monetization policy would introduce elimination of wastages of
government owned property, the huge cost on hotel accommodations. He further
state that the monetization policy was vital in effecting changes in the entire
structure of the development of Nigeria public service, human resources and the
general economy.
According to Onu (2006),
monetization policy is the process of converting fringe benefit attached to
workers salaries into cash incentives. It is the quantification in money terms
of those fringe benefits which government used to provide for its workers as
part of their conditions of service, such as utility allowances, leave
allowances, motor vehicle allowances, accommodation allowances, medical,
furniture and domestic servants allowances etc.
Eke (2007), noted that monetization
is a policy which trice to minimize waste, missus and abuse of public
facilities, corrupt practices was an endemic problem in the public service,
which were also perpetrated through over-invoicing and submission of spurious
bill, high maintenances cost, outright money laundry and general absence of
accountability and probity.
2.3 AIMS
AND OBJECTIVES OF MONETIZATION
Over the years, the cost of government has continued
to rise, partly because of the in-kind benefits the government provides to
public servants. These benefits largely a carryover from the colonial era
include highly subsidized has electricity, water and telephone facilities
transport facilities, free medical services, has become so large that little is
left for capital projects. To check spring cost of providing these benefits for
all categories of public servants the new policy was designed to stem the over
rising annual out lag on benefits.
According to Njoku (2003), the
monetization policy is aimed at cutting down cost and wastages and equally
minimize the rate of careless use of public facilities. He further stated that
with the new policy, there will be equitable computation of rights and
privileges, with government faithfully rendering to each that is his or her
due, in a manner that ensures that none is discriminated against for whatever
reasons.
Making his own submission concerning
the aims and objectives of monetization policy, Idonor (2003) assert that the
policy will expose rent scan especially in cities where government rent private
building as government quarters. He went further by re-asserting the bark drop
against which the policy (monetization) was initiated by stating thus:-
“Investigation have also revealed
the more painful is the fact that over 80% of all privately owned houses
presently being occupied by bubble (civil) servants actually belong to top
civil servants in the rank of directors and permanent secretaries either
serving or retired”. Still commenting on the negative effect of monetization,
he further stated that these crop of public officers have continued to use
their proximity to the corridors of power to encourage government to rent such
houses a government quarters. It is also pertinent to state here that not all
those monies paid by government actually go to the land-lords, the approving
public officers have a share in the dubious deals.
Okolo (2003) posited that there are
other factors/forces other than monetization that will determine the prices of
land/rents. He further stated that monetization policy as a factor the rental
in cities.
Aluko (2003) in his own view on the
aims and objectives of monetization involves a systematic and immediate
replacement of workers benefits with each payment. He furher stated that there
are several reasons for the idea of monetization of fringe benefits. If
considered writhing the framework of state policy. According to him these
include:-
1.
Equitable
provision of amenities
2.
Efficiency in
resources allocation
3.
Independence of
beneficiaries
4.
Increased
productivity
5.
Save of
administrative cost
6.
Stability of
capital and budget
7.
Non-misuse of
government facilities.
Based on the above premise, the
monetization policy aimed at having net effect of reducing the cost of and
enhancing financial prudence in government of the federation then, monetization
will minimize waste, misuse and abuse of public facilities all these, he said
we agree is a legitimate ransom d’ebre for monetization policy.