The burden of states’ new helmsmen
The razzmatazz of victory and inauguration should by now be over for most state governors as they have begun to assess the assets and liabilities inherited from their predecessors, just as second term state chief executives are groaning over perennial challenges, report BIOLA AZEEZ, BOLA BADMUS, KOLA OYELERE, ISHOLA MICHAEL, BIODUN KAYODE; ATTAHIRU AHMED, GODWIN ENNA, TOM GARBA and BABAJIDE JOHNSON.
PEHARPS, there is no human endeavour where the aphorism-success has many fathers, while failure is an orphan- than the Nigerian political environment. Like magnet attracts metal and bee comb attracts ants, the winner of an electoral contest is regarded as an instant hero with infectious goodwill and amazing eddies. Since the governorship poll of March 9, 2019, in many states, the new governors have become instant heroes, with the high and the low shifting alliance and loyalty from the out-gone governors, even weeks before they seized being in the corridors of power.
Beyond the euphoria of the moment for the new state chief executives, however, are huge multifaceted challenges, especially for first time governors or where incumbents suffered a major electoral setback. States are tied to the apron string of the centre, collecting handouts to live from hand to mouth. In spite of bailouts and other special interventions from the centre in monetary terms in the last dispensation, issues such as payment of workers’ salaries; size of workforce; paying the N30, 000 new national minimum wage; security matters; near collapsed infrastructure; huge debts; among others stare the new state administrations in the face.
So far, only three states: Lagos, Rivers and Kano are believed to pay their workers regularly. Besides Lagos, Rivers, Ogun and Kano states, all the other states are not able to generate internal revenues sufficient to cover overhead and other monthly obligations. The extra burden of the governors is the challenge of paying the recently approved new national minimum wage of N30, 000, even when quite a number of the states could not pay the hitherto N18, 000 minimum wage to their workers.
This is not necessary due to lack of capacity but because of the feeding bottle federal arrangement in the country. According to the Debt Management Office (DMO), Lagos State has the highest foreign debt portfolio US $1.45 billion with Edo State occupying distant second with $279 million. Others are Kaduna, 232.9 million dollars; Cross River, $193.7 million; Bauchi, $134.9 million and Enugu, $127.9 million. The other top debtors are Anambra, which is owing $107.4 million; Oyo, $106.34 million; Ogun, $105.3 million; Osun, $101.5 million and Abia with $100.2 million.
The woes of most of the governors is worsened by the low level of Internally Generated Revenue (IGR), with the exception of Lagos, Rivers, Ogun and Kano states, whose IGRs are relatively encouraging. Coupled with the problem is the issue of unemployment, especially among the youths, many of whom are roaming the streets after leaving higher institutions or had been forced out of practice as artisans and other skilled individuals because of erratic power supply. Most frightening, however, is the surge in violent crimes, including banditry, insurgency and kidnapping, with the ripple effects of social disequilibrium in the larger society.
In its Labour Force Statistics – Volume 2: Unemployment and Underemployment by State,” for Third Quarter, 2018, the NBS gave a grim picture of the rate of unemployment across the 36 states and the Federal Capital Territory (FCT). According to the bureau, the top five states with the highest unemployed population are: Rivers (1,673,991), Akwa Ibom (1,357,754), Kano (1,257,130), Lagos (1,088,352) and Kaduna with (940,480). The reported noted that among these five states with the highest unemployed population, Lagos reported the lowest rate of 14.6 per cent during the quarter, just as the bureau said Katsina State, Jigawa, Kaduna State and Yobe recorded the highest underemployment rates of 39.5, 38.1, 31.0 and 30.0 per cent, while, the national unemployment rate for the quarter was 23.1 per cent with the underemployment rate of 20.1 per cent.
The report said between third quarter, 2017 and the third quarter of 2018, only nine states recorded a reduction in their unemployment rates despite an increase in the national unemployment rate. The states included: Akwa Ibom, Enugu, Imo, Kaduna, Kogi, Lagos, Nasarawa, Ondo and Rivers; the same states recorded reduction in their combined unemployment and underemployment rates.
After savouring their victory at the polls and taking their oaths of office and allegiance, how have the new governors been taking stocks in terms of assets and liabilities inherited?
The governor of Bauchi State, Bala Mohammed, after his swearing-in ceremony on Wednesday lamented that he inherited a debt of N96 billion from the previous administrations. He claimed that the immediate past administration incurred additional N40 billion to bring the figure to N136 billion. “The unfortunate impact of this is that debt servicing will now significantly encroach on funds and short-change our cash flow. It means we shall be compelled to seek financial support for ambitious economic recovery plan; the difference, however, is that for every naira we attract, there shall be commensurate return on investment,” Mohammed said.
He promised that under his watch, civil servants’ salaries would be on first line charge. The governor said steps would be taken through a committee of all stakeholders to devise ways and means of ensuring regular payment of gratuities of workers and settle arrears. Mohammed, a former senator and FCT minister, said his administration would focus on completing on-going projects as well as executing news ones. He pledged to involve technocrats and professionals across party lines and labour leaders to draw up agenda that would jump start the economic transformation plan of his administration.
Gombe state governor-elect Alhaji Inuwa Yahya has said all is not well with governance in the state, particularly the state civil service as the outgone administration failed to summit their handing over notes to the Transition committee. Alhaji Yahya stated this while speaking during the presentation of the committee report in Gombe on Saturday. He assured that the incoming administration will employ all means necessary to forestall total collapse of government services.
“The outgoing administration did not render to the sectoral committee the desired cooperation and assistance where it was needed most in terms of allowing them to have direct interaction and interface with relevant government functionaries in order to have first-hand information and data for use by them. Most sectoral committee had to rely on inter personal relationship with government functionaries, their past experience, their personal knowledge to prevailing circumstances, among other things, to produce their respective sectorial reports, he said.
The chairman, Gombe state transition committee, Muhammad Kabir Ahmad had said the debt profile of the was N110 billion as at December last year. This, he noted, posed a challenge to the new state administration in its huge task of addressing the problems in such critical areas like education, civil service, water supply and youth empowerment. He said 65 per cent of teachers in the state were unqualified, adding that seventy- seven percent of primary school age children are out of school.
While the state government has tried to keep up payment of salaries, same thing cannot be said of local government councils, which owe about five months or more in salary arrears. The debt portfolio of Kwara State stands at N30.2b with a monthly repayment of N496.3m According to the immediate past state Commissioner for Finance, Alhaji Demola Banu, the debt stood at N31.4b in 2017 and N30.7 at the end of 2018, contrary to social media speculation of N50.2 billion debt overhang. Giving a breakdown of the current indebtedness, Banu explained that the N30.2 billion included N15.3 billion as the balance of the Federal Government’s restructured loan, N4 billion as salary bail out, excess crude account loan outstanding of N9.3 billion and vehicle loan balance of N128.916 million. Others are the Commercial Agriculture Credit Scheme (CACS) and Anchor Borrowers Programme (ABP) Agriculture Scheme with respective balances of N646 million and N679 million.13 as well as International Aviation College loan balance of N96 million.
While clarifying that the repayment of N496m is deducted from the state’s monthly federal allocation, Banu added that the figure includes a monthly deduction of N39.6m as repayment for foreign loans obtained by the government in the 1970s.
On IGR, the chairman, Kwara State Internal Revenue Service (KWIRS), Professor Muritala Awodun, said that the state was still far behind in achieving its projected monthly revenue target of N5billion, even as he declared that it raked in N23billion for 2018. “We know we are not there yet, our potential IGR projection in 2015 is N5 billion monthly. If we are just at N2billion, we are not there yet,” he said. He noted though the agency had graduated the state’s IGR from N6 million monthly which it inherited in 2015 to N2 billion, the service was still hoping to hit its target of N5billion monthly.
The challenge before Ihedioha in Imo
The National Bureau of Statistics said Imo State’s debt profile stands at N103.4 billion, making it one of the most indebted states in the Federation. Of the over N103.4 billion, N80.7 billion is domestic debt, while $62.8 million, which, when converted at exchange rate of 359.999 naira to a dollar, amounts to over N22.6 billion, is foreign debt. It was gleaned from the report that the state raked in N6.8b as IGR and collected N38.1b from the federation account in 2017.
But in spite of this challenge, the outgone governor, Rochas Okorocha, said he left N42.5b in the coffers, money said to be enough to give the new governor a good take off. Okorochad had explained that N8.1 billion had been set aside for payment of salaries and for capital projects, while the sum of N5.2 billion was earmarked for payment of pension arrears. He also stated that N7.6 billion had been set aside for renovation of schools across the state and N21.6 billion for the construction of rural roads.
The new governor, in response, claimed that Okorocha had destroyed the state, while promising a new dawn for people of Imo. “The outgoing administration degraded and destroyed most of our institutions and values. The legislature, the judiciary and the civil service, all suffered grievous assaults, with the House of Assembly made redundant and court orders routinely disregarded. But Imo State will, as always, endure. Imo will revive and prosper again. We urge you to be courageous in this conviction, for we are not captives of fear. Imo shall rise again,” said Ihedioha.
Governor Samuel Ortom had to operate in a seeing theatre of war with state operatives on one hand and herders and bandits on another. Aside from advocating a Middle Belt Development Commission, the governor said such body was imperative because of insecurity in his Middle Belt of the country. Speaking against the background of the establishment of the North Central Development Commission, Ortom said the killings in the North-Central outstripped those witnessed in the North-East. He said: “In Benue for instance, for close to two years now, no child in the affected areas can go to school. The insurgency has not ended because there are still pockets of attack going on in our villages. There are many IDPs in the camp. Many people cannot go back to their homes because they are attacked anytime they attempt to do so. The makeshift schools provided in the IDPs’ camps are not enough because of the high number of children displaced. These schools and homes need to be rebuilt if the IDPs must return.” Ortom, who described the current trend of cattle roaming about in the name of grazing as archaic, called for change of system. He accused the federal authorities of double standard in running the affairs of the country. “You hear the Federal Government talk about giving of N100 billion to herdsmen, they will simply use that money to buy arms and kill us.
There are more than 20,000 workers in the state civil service. The workers are still being owed several months of salary arrears. According to the available data, workers in the state civil service are owed five months’ salary arrears while local government workers are owed nine months. The state is said to depend solely on the federal allocation to keep the machinery of government running, as its IGR is between N350m and N450m per month.
The state is well endowed with such mineral resources like limestone, gypsum, Kaoline anhydride among others. But realising the agrarian nature and the level of poverty of the state, Governor Samuel Ortom on assumption of office encouraged the people of the state to embark on farming activities with the declaration of every Friday as work free day. This was to enable civil servants to engage in farming, this policy, according to Terhile, was the only panacea to get out of the hunger in 2015 and 2016. Terhile who is a civil servants, said, “Since that policy was introduced, many of us civil servants have keyed into it, though, many could no longer do serious farming but we have started channelling our resources to farming instead of frivolity that workers were engaged in before. We hope, Ortom will be able to continue with this policy in his second term in office.
Way back in April, 2019, outgone Lagos State governor, Akinwunmi Ambode, had tactically absolved his administration from the huge debts of the state, saying his four-year administration did not obtain foreign loans. He said this was in spite of the pressure on the state’s Internally Generated Revenue (IGR) due to massive infrastructure projects embarked on by his administration. According to Ambode, although the foreign component of the state’s debts hovers around $1.43 billion, his administration committed itself to servicing what it inherited from the previous administrations.
Details from the Debt Management Office (DMO) show Lagos State’s total external debt stock as at 31 December, 2018 stood at $1.43 billion. The external debt comprised $1.28 billion from multilateral source and $143.83 million was bilateral, sourced from the African Development Bank. The state’s total domestic debt stock was N530.24 billion as at December last year. Ambode was quoted as saying: “Talking about Lagos State having the highest amount in terms of foreign loans, truth is that I have it on record that in my four years, I never took any foreign loan. So, whatever it is that they are saying about having $1.43 billion is an accumulation of loans that have been taken by successive governments.
“Remember also, these facilities that we call loans were taken at an exchange rate that was lower than N150. But again, this government that has not taken any of these facilities would pay back and has been paying back in the last four years on the new exchange rate which is like N360 because government is a continuum. That has immense pressure on the internally generated revenue. And when you have this pressure on the IGR that you are using to service these facilities without complaining, it means that you have been financially prudent to be able to use the remaining resources to do what you have outside there in terms of infrastructure development.”
But Ambode believed there was no fear over the financial condition of the state, as his administration leveraged on the Lagos Development Plan 2012-2023 and took specific steps to improve the IGR to enable it deliver on the development plan. “When we came in, the revenue that was generated on a monthly basis was about N12 billion and then it moved to almost like N20 billion. Today, we are having an average of N30 billion to N35 billion a month but it is not as if the expansion is based on increase in rates or taxes. What has been done is just improvement in collection machinery and then expanding the tax net and the ability to put people together and run an efficient civil service system that was able to tap into those things; and then more importantly, investing in technology to be able to carry out some of these collections. Yes, revenue has improved tremendously but obviously it is based on focus, and it is based on the ability to match those needs in terms of development and economic growth with how to fund it. Lagos is also favoured by the fact that because of the dynamics that we have, we are likely to be more attractive to the capital market and also more attractive to commercial banks and the ability to pay back would always give you more resources to be able to get funding for most of these projects that we have done,” the governor said.
On federal transfers, he said since Lagos joined the league of oil-producing state, the government had received a total of N327 million revenue, comprising N197 million and N130 million received in 2017 and first quarter of 2018 respectively. “Furthermore, we are in ongoing discussions with the Federal Government towards obtaining a refund for expenditure totalling N51billion that was incurred by the State Government on behalf of the Federal Government for infrastructure projects developments in the state.
On the state’s debt profile, Ambode said the government’s debt stock, comprising 48 per cent local debt and 52 per cent foreign debt, currently stood at N874.38 billion at the end of 2017 while the debt service charge to total revenue ratio which stood at 17.61 per cent was still within the World Bank threshold of 30 per cent.
During his inauguration for another term in office, the governor of Jigawa State, Abubakar Badaru, said he huge debts and uncompleted capital projects worth N31.3 billion in the state in 2015. Badaru said the efficient way he employed in managing public treasury has earned him so many foes even within his party (APC). He said this has not deterred him from delivering his campaign promises. “With the little resources available, I have been able to complete 90 per cent of the inherited capital projects and commenced new ones,” he said. He said the austerity measure his administration embarked upon was to prevent the state from backlog of salaries and pensions, adding that, the approach has successfully negotiated a discount of over N11 billion on inherited projects. He said he ploughed the savings into new projects.
“Prior to my swearing in, the opposition PDP dug a hole for the incoming administration to fall. They left only N16 million in the treasury thinking that we can’t even pay salary. However, with prudence and God willing, Jigawa is among the states paying workers salary unfailingly on 25 of every month and now paying leave grant.
At the threshold of the recent general election the erstwhile governor of the state, Senator Abiola Ajimobi dismissed the clam that the state was indebted to the tune of N150 billion, saying that the debt profile of the state was not beyond N4.8 billion. He stated that the state government received an average of N2.6 billion as monthly federal allocation, unlike the N5.2 billion it was receiving when his administration came on board in 2011. Ajimobi said: “The state receives N2.6 billion monthly federal allocations and generates between N2.2 billion to N2.5 billion as Internally Generated Revenue to take care of N4.5 billion wage bill.”
However, reports of the NBS showed that Oyo owes $105 million foreign debt. Unpaid pension, as of the time the Ajimobi government left the saddle, stood at N60b. In fact, the pensioners had to drag the Ajimobi government to court to make the government agree it was initially owing pensioners N42b, before the money grew to N60b.
At the twilight of his administration, Senator Ibikunle Amosun said investors were running away from the state because of the high level of insecurity before his advent. The state is ranked 4th on the list of State with the ease of doing business. According to Amosun, “as at the last count, our activities as a government has attracted 473 mega companies which some investing as much as N2billion. Not only that, we took the IGR of the state from the paltry sum of N700million to N7billion per month.”
By October 2018, the former Commissioner for Finance, Adewale Osinowo, said of the N106 billion debt burden, N14.5 billion was reportedly incurred from the bailout funds, while its monthly average Internally Generated Revenue (IGR) is also N7 billion. The past Commissioner for Finance, Adewale Osinowo, said of the N106 billion debt burden, N14.5 billion was reportedly incurred from the bailout funds. He said the Amosun administration paid all the state and local government pensioners till date. Oshinowo reiterated that the previous bailout funds were used to offset cooperative deductions and other arrears of all categories workers in the state public service. Listing the amount so far received, the commissioner said the state got N10.6 billion as first tranche; N5.7 billion for the second tranche and another N5.7 billion as the third tranche of the bailouts from the Federal Government.
Amosun bowed out of power, inaugurating a number of multimillion naira projects executed by his administration. A highly elated former state chief executive officer remarked of his team: “We came, we saw and to a reasonable extent, we have conquered. We are leaving Ogun State better than we met it.” He added: “My joy knows no bound because I am not the first governor of Ogun State and you people [journalists] know Ogun State more than I do because we are like soldiers and they will say; soldier comes soldier go, barracks remain. Clearly, you [journalists] have seen even the military amongst others.”
As of October 2018, Ogun’s debt portfolio was put at N106b, despite it generating N7b monthly as IGR. The then Finance Commissioner, Wale Osinowo, said N14.5b of the amount was incurred from bailout funds. In addition to this, the state civil servants are being owed deductions from their cooperatives societies, leave bonuses and promotion arrears, among other outstanding indebtedness. Recently, the workers charged the new governor, Prince Dapo Abiodun, to lighten their burden by clearing all arrears left unsettled by Amosun.
Borno, Zulum and insurgency
Chief among the huge challenges confronting the new governor of Borno State is insecurity. It comes in various forms and shades across the state. The governor, Professor Babagana Zulum, has vowed to crack down on hooliganism in the state. The Professor of water engineering is not happy with the phenomenon,which has become institutionalised with the young ones as the arrowheads. The practice, which he referred to the ‘ECOMOG’ among the people, was deployed by past political figures to ride to power. The governor said that the era when thuggery held sway was over. “I will put an end to the culture of thuggery also known as ECOMOG. Negative vices like drug addictions and other excesses which serve as set back to the progress of young people will soon be done away with,” he said.
The total workforce of Kano State stands at 181,000, while wage bill of the entire civil servants is about N9.6 billion monthly. However, the state remains one if the states in the federation that are not defaulting in the payment of salary and pension. Kano State Head of Civil Service, Alhaji Muhammed Awwal Na›iya, said: ”If you are talking about states that have never defaulted in term of paying Civil Servants salary, I can beat my chest ,that my state -Kano State must be one of them; you can investigate on your own and fault me on this point.” Also speaking, chairman, Nigeria Labour Congress (NLC), Kano State chapter, Comrade Ado Minjibir, said that, «Since assumption of office, Governor.Abdullahi Umar Ganduje, has never owed us (civil servants) any salary.” But will such scenario persist with the new national minimum wage? Will the workers continue to receive bank alert on salaries on the 25th of every month?
MORE than 20 years after the creation of Zamfara State, the state’s IGR is a little over N22 million. The state government believes 60 per cent of the mineral deposits in Zamfara remained untapped. Some of the natural endowments include gold, copper, iron ore, tantalite and manganese, which could turn around its IGR if harnessed. However, the major challenge facing the state now is insecurity, which has made a few local council areas almost ungovernable. The new governor, Alhaji Muktar Shehu Idris, has promised to dedicate himself to the service of people, right from his first day in office. “I take this new challenge with every sense of responsibility and devotion. I also assured the entire people of the state that I will live up to your bidding and expectations, promised that insha Allah, I will work tirelessly and selflessly to give Zamfara State of your dream,» he stated.
Fintri, Bindo differ over Adamawa debt
The camps of both the new Adamawa State governor, Honourable Umar Fintiri and his predecessor, Muhammadu Umaru Bindo difer on the alleged N115 billion debt profile incurred by the Bindo led administration. The immediate past Commissioner of Finance, Alhaji Manhood Sali Inusa, had told members of the state House of Assembly when he appeared to explain the nonpayment of April salaries that it was not true the administration incurred N115 billion debt for the state. Sali said the loan profile under Bindo’s administration and other past administrations stood at N44 billion only. “These loans are accumulated over a long period of time; successive administrations in the state took loans based on due process, and any government that comes to power must service the loans. Other administrations took loans and left office without paying; the Bindo government serviced the loans because they- loans- followed due process,’’ Sali said.
As Sule takes over in Nasarawa
Abdulahi Sule, an engineer, of the All Progressives Congress (APC) is the fourth elected governor of the state since1999, and already expectations are high among the citizens on how he will form his cabinet to implement his campaign promises. Coming from the private sector background, Nasarawa people are highly waiting patiently to see how he would deploy his wealth of experience to create jobs and boost economic activities in the state.
During electioneering, he had promised to collaborate with both foreign and local investors to for the industrialisation of the state. But, some pundits viewed his statement as political, as they raised the issue of months of unpaid salaries and balance of the percentage paid to the local government staff for the past two years which the labour union has been pressing for. Or did the former governor settle the backlog of over N43 billion gratuities of the pensioners? There are many questions that need answers that know whether he meant well for the new governor.” Analysts also posited that the new governor should however know that there are a lot of challenges to be addressed.
Also, the citizens are also curious about the pragmatic measures to resuscitate government enterprises, which had become moribund over the years. Some them include the Nasarawa Transport Service; Lafia City Hall, Youth Centre; Nasarawa Property Investment Development; Nasarawa Fertilizer Blending Company, among others, which if revived, could boost the state’s IGR, tackle unemployment and check the rate of insecurity.