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Why I Sympathize With Governor Timipre Sylva!

Source: huhuonline.com

One of the principal macroeconomic goals of any government is to create job opportunities, wealth creation and poverty alleviation. These goals are usually encapsulated in the budget, which is a statement of estimated income and expenditure in a fiscal year. Practical experience in governance demonstrates that, in developing economies, revenue flows most often fall short of estimates, thereby giving rise to deficit financing and governments inability to fulfil the social contract. The original intention of government was to establish industries in the real sectors of the economy to create job opportunities and improve the delivery of social services.

In the month of February, I perused the monies allocated to the States and discovered that there is a slight improvement. This in my opinion, is due largely to the fact that increase in crude oil production arising from reduced militant activities. Nigeria's current quota of oil production hovers around 2.4 to 2.5 million barrels per/day. Nigeria is now basking in the euphoria of increased revenue regime due to uninterrupted oil production in the Niger Delta Region. However, the increased revenues have not translated to improved financial position of most of the States. This is mostly pronounced in the Niger Delta States.

Without any benefit of analytical rigours, the cash flow to the State for the past two years was negatively affected by the activities of militants. Bayelsa State relies almost entirely on crude oil and any reduction in the quota of oil production affects the revenue inflow to the State. At the height of militant activities, the State spent lots of money on the release of hostages, as there were more than 100 militant camps in Bayelsa State. Formally and informally, so much money was spent in the maintenance of the Bayelsa Volunteers to protect oil installations in the creeks and the release of hostages. The implication is that budgeted and anticipated of revenues fell far too short of real monies that accrued to the State. Already, Bayelsa State has very low Internally Generated Revenue profile due largely to lack of industrialization and lack of federal presence. These were the circumstances that prompted the State to resort of taking loans to finance heavy infrastructure such as roads.

Since Bond Financing is not new, the State also resorted to the Bond Market, which up till date has not yielded any tangible dividend in terms of investment. The Bond Committee Report was prepared by selected technocrats and the thrust of the report demonstrates that the Timipre Sylva administration is desirous of completing some of the projects initiated by his predecessor along with projects initiated by the present administration. Some of these projects involve colossal capital outlay and their implementation would require extra-budgetary sources. Such projects include: the Judiciary Complex, the Kolo Creek Gas Turbine at Imiringi, the proposed International Passenger /Cargo Airport, Tower Hotel and International Conference Centre, Okaka - all in the Yenagoa metropolis. These are projects that would stand the test of time. The bond would be also be used to complete the Glory Drive, East-West Igbogene Road, the Peace Park, Isaac Boro Square, Melford Okilo Memorial General Hospital and the Cottage Hospital, Opolo. All these are heavy infrastructural projects.

A glance at the February, 2010 cash flow into the State demonstrates that the cash flow profile of the State seems to have improved but this has not significantly affected the financial position of the economy of the State. In February, the Statutory Allocation including Value Added Tax stood at N4, 864. 93 billion. Whereas this figure represents the total and net inflow of the month, personnel cost and overhead alone stood at N2, 585.06 billion- that is more than half of the allocation. Other deductions and debt servicing including ispo infonics stood at N2. 209.50 billion, while statutory transfers to the 32 Local Governments and the 8 old LGAs was N291.20 million.

It should be noted that the State has a lot of obligations in terms of capital expenditure. Such obligations include the construction of the Senatorial Model Secondary Schools, the Senatorial Roads and the completion of several on-going projects.

The sub-total of all recurrent expenditure stood at N6, 598.78 billion. In summation, the total revenue less total receipt is minus -N1,733.85 billion. Invariably, the total Federal Account Revenue less the total receipt is ­- N1, 983.85 and the Net position of the total ISPO net account is minus N1, 893.12. The implication is that in the month of February, Bayelsa State received a total of N 4,864.93 billion with a total expenditure of N6,598.78 running a deficit of minus N1, 983.85. From all indications, the State would be running this deficit for the better part of 2010 if the bond financing initiative is scuttled by those who believe that politics should be elevated above development.

My sympathy for Governor Sylva stems from three main sources. First, it does appear that the State is determined to implement a Budget of Impact with the strategic goal of facilitating the concession of certain public services to competent private sector participants with proven track-records for delivering of quality service. The aim is to boost Internally Generated Revenue and allow the Government to focus its resources on the delivery of social services to Bayelsa people. But this goal may not be achieved if Bayelsa people do not change their attitude towards the payment of taxes. What Governor Sylva would do and how would he accommodate the ghost workers invented by the Due Process Bureau. How to absorb the real and ghost workers is a huge challenge to the administration.

Secondly, there is need for the Bayelsa State Government to push for the implementation of the N50 billion bond, which is a critical component of the State's 2010 budget. The Bond has the potential of opening more windows of investment opportunities to jump-start the real sectors of the economy. In addition, it would to help diversify the States revenue base through the attraction of Foreign Direct Investments to the State. Already, the Federal Government has set the pace for States to follow by enacting the fiscal responsibility Act and the Due Process template in order to entrench good governance. Other States like Lagos, Kwara, Cross River and other States.


Thirdly, I really sympathize with Governor Sylva for the poor Internally Generated Revenue (IGR) profile of the State, There should be concerted efforts to reposition the State by boosting the Internally Generated Revenue base of the State, and until the crude oil dependency syndrome is broken and the economy diversified, the implementation of the 2010 budget will be threatened. The 2010 budget has therefore earmarked some government parastatals to evolve into commercially viable and financially autonomous entities to become self-funding and revenue generating. These parastatals shall be granted full financial autonomy with necessary legal backing. Some of these parastatals include Bayelsa Palm Limited, Bayelsa State Transport Company, Bayelsa State Housing and Property Development Authority, among others.

Now, government has introduced the Personal Income Tax (PIT) is in line with the fundamental canons of taxation especially the equity principle of Pay As You Earn (PAYE) system. Besides, the process of collection is in accordance with the principles of accuracy, simplicity and efficiency. The PIT is also administered in a transparent manner such that tax payers know how, when and why they are being taxed. The cost of collecting such taxes must be reduced to the barest minimum. There are two advantages of this procedure. First is to ensure equity in taxing depending on the cadre of grade level of the worker. Second, is to minimize the tax evasion syndrome, which has plagued the Nigerian system and diminished the (IGR) profile of many States. The poor IGR profile of the should be reversed through industrialization.

My sympathy for Sylva is also predicated on the fact that most of the people around him are sycophants who have refused to tell him the truth. Good governance does not thrive on sycophancy, neither does policy implementation succeeds on the basis of falsehood. A State Governor is like a pilot, who needs the assistance of engineers and other crewmen. The pilot cannot do everything. Sadly, however, there are too many politicians rather than technocrats in the Cabinet hence they do not add value to governance. More technocrats with integrity should be injected into the Cabinet. Lack of political structure or fear of political opposition should not compel Governor Timipre Sylva to condone misconduct and corruption in his Cabinet.

I sympathize with Sylva because most of his Commissioners who claim to have resigned to wear the toga of patriotism were the same people who shut him out of wise counsel. They have looted the treasury with impunity and now, they have jumped ship. There are three mortal enemies Governor Timipre Sylva must identify and put under surveillance. The Due Process has rendered the Sylva administration very unpopular. The sycophants are equally of nuisance value and Governor Sylva thinks otherwise. The State House of Assembly has been turned into a money sharing house, as the it has abandoned its statutory functions of law making for full time thievery. Until these institutions are put in check efforts at good governance may be vitiated. They would certainly rob Governor Timipre Sylva of his Second Tenure.

Again, since the recurrent expenditure is on the increase amidst near zero IGR. To address this challenge, government should capitalize on agriculture and leverage on fisheries and rice cultivation where the State has comparative advantage, to create employment and reduce poverty. Governor Sylva should get the Legislature to carry out its oversight functions in reviewing, monitoring, evaluating and supervision of the government programmes to ensure organizational, financial, operational and ethical accountability.

I gravely sympathize with Governor Sylva because with his experience in politics, he stands a chance to bequeath a legacy to posterity, and it is not too late for him to achieve that feat if he makes a U-turn and abandon wasteful programmes like hosting the African Movie Academy Award (AMAA), stop the unnecessary patronage of the House of Assembly and implement people-oriented programmes. AMAA has not conferred any direct positive socio-economic benefits on the State. AMAA – the Nathan Egba honey pot is a drain on the State's lean coffers. Governor Sylva's continued endorsement of AMAA is defies any logic. Under a period of severe economic recession, programmes that are not economically rewarding should not be given priority attention.

When the Local Government Council elections are conducted in April 2010, the Councils should be adequately funded so that the pressure on the State would be reduced. A major challenge facing Bayelsa State is the tendency of Bayelsan to get social services free of charge. If Governor Sylva begins to implement change and mend fences with all political factions, he would not negotiate for a second tenure because it is the record of performance that would guarantee his second tenure. The Governor should make good his promise of attracting foreign investors to industrialize the State. And I sincerely believe there is still time for the Governor to implement change in Bayelsa State. This however may not be possible if he does not infuse new blood into his cabinet. But even from the faintly optimistic point of view, when change is implemented, Bayelsa State can only get better in the delivery of democracy dividends.

Engr. Telema Timitimi, wrote from Warri, Delta State

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