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1.1     Background to the Study

The long military rule in Nigeria, few years after independence in 1960, left its toll on almost every aspect of the Nigerian life, such that social infrastructures, economy, public services, rural development, etc. were adversely affected hence, there was total infrastructural decay, and the economy was comatosed, as the public service was inefficient and corrupt, leading to wastages in government (Onu, 2007).

But an array of hope came in 1999 with the arrival of new democratic government when, in reaction to the general hash prevailing conditions in the country, the then Obasanjo’s administration embraced reforms in all sectors of the economy; and such reforms included the local government’s reform, re-capitalization of banks, trade liberalization, private sector development, anti-corruption, institutional reforms, and the public sector reforms. According to Suleiman (2009), the civil service is the first component of the public sector followed by the bureaucracy.

However, of all the reforms, the public sector reform was the centre of attraction as it was the major instrument used by government to implement its policies. This notion of centrality of the public sector reform is based on the consciousness of the nature and importance of the public service as a determinant of success or failure of the administration in power, by the administration.  Thus, on the realisation of the centrality of the strategic role of increased and enhanced performance of the public sector, the monetisation of fringe benefit policy was made as an enviable public sector reform (Okoye, et al, 2012).

Much as it is obvious that incentive structures propel enhanced improvements in management and performance of the public sector, monetization of fringe benefits in the nation’s public sector became a necessity due to the rising cost of governance and pressure on national resources arising mostly from the benefits-in-kind that the various tiers of government have to provide to the civil servants.

This policy seeks to replace fringe benefits that were previously provided in kind with monetary allowances, and the consequent withdrawal of government from the maintenance cost obligation that attended these benefits in line with current global trend in private and public sectors of the modern government (Okwuosa, 2004).

Historically, these fringe benefits were carryover from the colonial era, when the colonial government provided the colonial administrators residential accommodation, transportation facilities, gardeners, medical services, etc, which they did not have to pay for because they were entitled to hazard allowances by their home government, but then, they were fewer in number such that their total package was negligible when compared to the income which they extracted in favour of their home government (Aluko, 2005).

However, after the independence in 1960, the indigenous high cadre public servants who took over the reins of office from them also inherited these fringe benefits, but as time went on, coupled with the astronomical increase in the number of public sector employees due to Nigerianisation policy, the cost of providing these fringe benefits became unbearable to the government; as little was left for funding capital projects by the government. But, the problem assumed higher level of complexity when it became obvious that these benefits were not provided prudently, as it was largely abused by the public servants and their wards. For instance, instead of having one official car, some public servants had up to three official cars attached to them whose drivers are paid by the government and whose fuelling and maintenance costs are taken care of by the government. Again, officers on transfer, say, from Lagos to Abuja still kept their official quarters in Lagos. More so, telephones that were maintained by government were abused by the wards of these officials (Okoye, et al, 2012).

Thus, the provisions of fringe benefits to civil servants continued to consume enormous resources from the public purse and as such impacted negatively on the national economy (Izueke, 2008:3). What is more worrisome is the fact that although the civil servants constitute about 20% of the population of Nigeria, it takes up to 60-70% of the annual national budget expenditure to maintain them (Aluko, 2005:2). The burden having exacerbated until 2002, the then president, Olusegun Obasanjo, in his 2003 inaugural address stated “the cost of running government at all levels currently gulps a disproportionate amount of our revenue”. And in reaction to the identified wastage made manifest in high cost of administration and in search of efficiency, the government opted for monetisation of those fringe benefits hitherto enjoyed by public sector employees at various strata because the monetization policy was intended to minimize waste, misuse and abuse of public facilities, and achieve efficiency of government. The monetization policy was given legal backing by the political, public and judicial office holders Salaries and Allowances Act of 2002, which was extended to the civil servants, from 1st July, 2003.

A decade after the inauguration of such lofty government policy by the Obasanjo-led government, the need arises to critically assess the effect such policy has had on the economy and the civil servants, especially those in the ministry of education whose pattern of office-related benefits were replaced with monetary stipends, especially on their job performance and enrichment as well as on their socio-economic needs as social and economic beings. This need could be looked at from the standpoint of the perennial face-off between the government and the academic unions in the country such as the Academic Staff Union of Nigerian Universities (ASUU), Non Academic staff of Nigerian Universities (NASU), Senior Staff Association of Nigerian Universities (SSANU), and Academic staff Union of Nigerian Polytechnics (ASUP) etc.


  • Statement of the Problem


On the basis of trimming down the cost of governance and reducing unnecessary pressure on national resources, as well as giving the government the ample opportunity to attend, maximally, to capital projects, the monetization of fringe benefits policy becomes plausible, hence evidences have shown that a large quantum of resources have been lost to wastages, misuse and abuse of public facilities in the country, arising mostly from providing such basic amenities free of charge such as residential accommodation, transport facilities, medical services, electricity and telephone, among others, as the cost of maintaining these facilities has grown astronomically over the years to the extent that they have outweighed the amount going into salaries and wages.

The dire need to reverse the trend informed the setting up of the Committee on the Monetization of Fringe Benefits in the Public Service of the Federation in November 11, 2002, especially when heed is paid to its theoretical promises such as insuring of transparency in the disbursement of remunerations and fringe benefits from employers to employees; curbing excesses of public fringe benefits; correcting the wrong public perception of government utilities (use without caution); halting the practice of providing and furnishing official accommodation for public servants; ensuring equity in the allocation of scarce resources; developing and imbibing the culture of discipline and frugal use of public utilities; encouraging public servants to own their own cars and houses and eliminating the trauma of transition from public life to private when retired, but astute civil servants (experts in public services) have called for its recall and review as they termed it anti-public servants.

For instance, Ambassador, Ahmed Al Gazali, the former chairman of the Federal Civil Service Commission (FCSC) has noted that the monetization of fringe benefit policy has turned out to be a curse for civil servants in the federation as it has pauperized many civil servants.

Again, some authors have had reasons based on researches carried out, to criticize the implementation of this policy, necessitating the calls for its review with respect to its implementation and effects whose palliative measures never worked.

Because of these dangling views, this study seeks answers to the following questions:

  1. Does the monetization of fringe benefits meet the socio-economic needs of the Nigerian Civil Servants?
  2. How has the monetization of fringe benefits impacted on the job performance of the Nigerian Civil Servants?
  3. Has the monetization of fringe benefits policy actually reduced the cost of governance and unnecessary pressure on national resources?


1.3 Objectives of the Study

The general objective of this study is to critically assess the effects of monetization of fringe benefits of the Nigerian public servants on the Nigerian economy, vis-à-vis their input in their works and on their socio-economic needs.

To achieve this lofty objective, the following specific objectives become imperative:

  1. To find out if the monetization of fringe benefits has met the socio-economic needs of the Nigerian Civil Servants
  2. To examine the impact of monetization of fringe benefits on the job performance of the Nigerian Civil Servants
  3. To ascertain whether the monetization of fringe benefits policy actually reduced cost of governance and unnecessary pressure on national resources.



1.4     Significance of the Study

          This research work has both theoretical and empirical significances.

Theoretically, this research work adds to literature on monetization of fringe benefits as an elite rational choice. In analyzing the study, the importance of the policy to the elites was revealed by the elite theory, within which the flaws inherent in the policy were also revealed and possible way outs advanced.

Empirically, the findings of this research vis-à-vis the examination of the relationship between monetization of these benefits with actual job performance; and the relationship between this policy and current cost of governance in Nigeria, shall be of immense value to policy-makers and political leaders who come face-to-face daily with issues of national concerns that bother on cutting cost and ensuring administrative efficiency. The recommendations of this study if applied or adhered to, will bring out the potentials of the monetization policy on the Nigerian economy.


1.5     Scope and Limitation of the Study

The scope of this study is the Nigerian civil services but the ministry of Education Abuja shall be used as our study area or focus to enable easy data generation and analysis and ensure reliability and validity. It is in this ministry that our sample shall be drawn for questionnaire administration. But in the secondary data sourcing, the entire civil service space shall be explored for wider consultations and consideration to accommodate the generalization of the data to be collected from the ministry of education as a core Civil Service Ministry.

On the limitation of the study, the haphazard implementation of the monetization of fringe benefits policy among civil servants across the nation which did not allow for uniform opinion on the effects/impacts of the policy on the people and the economy stood as a limiting factor to the success of this work, but the choice of the ministry of education which is a core civil service that has witnessed full implementation of the policy in good time helped in ameliorating this constraint.

Another limiting factor is the non-accessibility of the minister of education for the purpose of interview, but information generated online from the internet serve as a resort.

Lastly, the fact that the ministers of the relevant ministries as well as the director of the civil service commission then when the policy was adopted are no longer the ones in office now also served as a limiting factor to this study. Regrettably, some of these officers do not have any useful information as regards the position of the effects of this policy on the job performance of their workers and the impact of such policy on the need of the workers, but data generated from the online materials was enough to offset any shadow of misinformation and dearth of direct information as there are enormous information on the internet, newspapers, journals, bulletins etc. All these limitations notwithstanding, this study satisfactorily meets the objectives it was set out to achieve.