THE NEW AKWA IBOM AGENDA
As the new government settles into office all stakeholders in the Akwa Ibom project should contribute to fashioning a new agenda for the rapid development of the state. This obligation for all citizens and those who wish our state well, whether or not they are active players in government. The state can commence a new era depending on the course that the government chooses to take, but the options are not easy, because they involve altering deep rooted structures and institutions in the state.
If anything must be granted to the previous government, it is that it firmly established Akwa Ibom state as a significant economic and political destination in Nigeria. Its 8 year tenure coincided with a tremendous leap in Federally distributed revenue accruable to the state, becoming the highest earner in the Federation. According to the previous Minister of Finance Ngozi Okonjo-Iweala, the state earned an average of N260Billion per annum in the last four years totaling over N1Thrillion in federal allocations alone. We also earned the princely sum of N265.07Billion from the notorious Excess Crude Accounts (ECA) between 2011 and 2014. This equates to a staggering $2Billion per annum (@ the prevailing N150-$1) in the period 2011-2014 alone (discounting revenue earned from 2007-2011), in Federally collected revenue alone, discounting IGR and income from other investments. This figure is exceeds the annual budget of Benin ($1.47Billion) and is over 4 times the budget of Liberia ($433million). The impact of this huge inflow can be seen in massive investments in infrastructure such as roads and highways, the airport, 2 new luxury hotels, a magnificent stadium, the Tropicana Project, new Government House and the international hospital. etc. The windfall triggered an “Uncommon Transformation” program that has propelled national interest in the state, in a season of re-appraisals of the performance of governments especially at the Federal and state levels following the 2015 elections.
However there has been a significant change in the financial portfolio of the state, which will impact on the developmental agenda of the present government. Indications are that monthly collectable revenue from the Federation will average below N12Billion/month compared to N20-22Billion/ month during the last government which was augmented by N260Billion earned from the ECA. If we are to go by the often repeated mantra of the past Government that Akwa Ibom state had a 80-20% ratio of Capital –Recurrent expenditure then we can safely provide for a recurrent profile of N5Billion/month. The challenge lies in capital expenditure which has shrunk from over N15Billion ($100Million at the old rate of $1-N150) to probably less than N5Billion/month. Now if you were to present this portfolio to majority of the 36 governors in the Federation they would be asking, so where is the problem? Over 75% of the states cannot provide for recurrent, yet we may still have N5Billion after recurrent. Well, the much touted uncommon transformation was driven by an expenditure profile that was clearly unsustainable, and probably generated a huge and yet undisclosed debt portfolio (details of the transition/hand-over documentation are yet to be made public). A significant portion of the outstanding commitments and debts will be to contractors and project partners as opposed to banks and financial institutions, so hopefully we may not be dealing with a strangulating interest regime. Therefore government will have to devise an efficient mechanism to verify and restructure these commitments.
Akwa Ibom presently has a staff strength of about 13,057 civil servants (socio-cultural perception and gender disparity in civil service employment in Akwa Ibom state, by David Ukpong 2013), and there is an urgent need to right-size the structure of government in Akwa-Ibom state. We need human capacity development strategies that engage a considerable no of our unemployed populace in social jobs including environmental preservation, traffic maintenance, law, order and security and public works schemes as opposed to being redundant. The state of the national economy demands that the top bureaucracy which delivers less productivity needs to be downsized. Can we take another look at the need for 20 Commissioners?
We need to build a database of our human and material resources. Our population is estimated at 5 million based on the 2006 census figures of 3,902,051, but we need to urgently implement an identity management program for the purposes of acquiring resource that would aid socio-economic planning and development. We also need to gather near accurate data on our physical and material assets, especially land and other public immovable and movable assets. The goal is to grow the revenue available to the state, and deemphasize the collection of monthly rent from the FAAC, while seeking to grow IGR and other less susceptible sources of revenue. If reports that the monthly collectible revenue for the state for April and May 2015 was below N10billion are true, then our financial position must be approaching the critical levels. We must prune the costs of governance starting from the top, introduce property taxes, and reform the PIT system to cover the informal sector. The operation of a single account for the state treasury into which all collectible revenue must be domiciled, should be enforced rather than agencies maintaining several accounts,. Government must end the yearly junketing of all manner of people on state funds to the USA, for the Akwa Ibom summit and Jerusalem for Christian pilgrimage as these constitute a waste of state funds. Reduce the no of aides and policemen attached to government officials, and their travel costs, and evolve pragmatic strategies to dis-entangle the state from the burden of retaining the executive jet. The establishment of an Akwa Ibom Diaspora Fund (AIDF) could leverage on the financial capacities of the thousands of indigenes abroad who are keen to contribute to the development of the state, while we could establish a special office for International Cooperation to engage with Multilateral and Bilateral agencies that may wish to support state programs. Finally we should consider the establishment of a Akwa Ibom State Reserve Fund backed by law. Imagine the benefits of saving just 10% of the average state revenue between 2011 and 2015, (which would translate to over N120Billion today, minus interest and investment benefits.
An audit of the cost profile of most on-going infrastructure projects will trim our liabilities, if we re-negotiate the terms and funding structure and explore the options of PPP and BOT (Build Operate and Transfer), or completely terminate the unviable projects. We need to evaluate the benefits of constructing of a 2nd runway at Uyo airport which services barely 8 commercial flights per day, when Murtala Mohammed airport, arguably the busiest airport in Africa, has managed on 1 runway with well over 200 flights a day! The Uyo stadium is a fantastic facility, but why do you spend big on an outdoor facility which can only handle 2 sports, football and track and field, in a state which enjoys considerable rainfall for close to 8 months of the year! We could have invested in indoor sports halls, which handle maybe 12-15 sports, and at a fraction of the cost of that stadium.
ECONOMY & INDUSTRIALIZATION
Government's commitment to the Ibaka seaport project is commendable, as our industrialization program must be tailored to take advantage of our comparative economic advantages. Maybe we should investigate why the two $billion Federal Industrial investments in Akwa Ibom State, i.e. the NNMC, Oku Iboku and ALSCON have failed. This is in spite the fact that these two firms enjoy a near absolute monopoly from local competition in their economic sectors. In the case of NNMC, major newsprint importers scuttled efforts at its take-off, combined with a shortage of low fiber pulp locally. Interestingly these trees can be cultivated in Nigeria and a few plantations actually commenced, yet 30 years on, the plant is still lies comatose in Itu, enmeshed in a muddled BPE transaction. ALSON is currently embroiled in a tussle between the worst possible adversaries, the Russians and Americans (currently under International Arbitration between RUSAL and BFIG group following a Supreme Court Ruling). The minimum I expect from the AKSG is to find a way to get involved in these processes. If we can get them to work, we will certainly earn premium benefits including employment, taxes and growth in local business, so we need to pull strings behind the Federal Government.
At the state level, close to 10 industries established under the Clement Isong administration lie abandoned. The Governor has visited Peacock Paints and has promised to set up a committee to bring it back into operation. Interestingly, it was one of the highly rated paint brands in Nigeria, and Mobil Producing Unlimited specified that product for all paint jobs in that company. The key technical personnel are still around and after years of illegal production under the brand name, and constant harassment from the NIS, they have established the local brands which service our state construction industry. To bring Peacock Paints back on stream, lets engage with the local paint manufacturers in Akwa Ibom state, and guarantee them preferred supplier status on all Government projects. Imagine the volume of paint requirement for the Stadium, Luxury Hotels, Tropicana, Hospital, Government House project etc. all of which could have been produced at that factory! The same probably goes for Sunshine Batteries were Government can guarantee investors that all public vehicles in Akwa Ibom state shall be powered by batteries from the plant with replacement within 2 years. We can also explore the possibility of working with emerging local vehicle assemblers under the new auto policy in addition to the open market.
However our key areas of strength will come from growing the local economy by creating value, improving standards and infrastructure. Oron for example, presents an excellent opportunity to create a hub for the fish industry. This includes providing ultra-modern fishing and ferry terminals with cold storage, developing a modern pier, reviving the museum, and developing fish based cuisines that can attract tourists, tied it up in one bundle that includes entertainment and water sports. Support this with rugged maritime security, and improved road and marine transport infrastructure and there will be spin-offs for the local economy in Hotels and other activities that will boost employment and government revenue. On the other end Ikot Ekpene must earn profit from its proximity to the commercial city of Aba. The road through Ukanafun actually leads straight to the great Ariaria market, and if put in top shape, it's a 30 minute connection. Provide serviced industrial layouts with adequate infrastructure, and I believe it is viable to sell the concept of manufacturing in Ikot Ekpene and selling in Aba. This could eventually translate to living in the much more hospitable Ikot Ekpene and doing business in Aba, as is increasingly the case for many who live in Asaba and do business in Onitcha. Ikot Ekpene certainly offers better security and a better standard of living compared to Aba, and who knows, the guys can even pop in and have a bier at the 4 Points.
In summary Government is not always about grand and “Uncommon” projects, especially when you are dealing with people with simple needs. It is also about the basic houses and schools, simple yet effective hospitals and a social infrastructure that allows the citizens to access them. How many citizens of our state will be able to access healthcare at the centenary hospital? I keep asking why there is not a single cemetery in Akwa Ibom State? All it takes is for Government to ensure that Local Governments Councils secure and fence a minimum of 5000sqm in their council areas. That can't be such a big deal! Consider how this will considerably reduce the costs of funerals and actually provide income for the Local Governments Councils. The bright side is that the economic challenges before us are surmountable, especially if we adopt new strategies and think out of the box. Whether that will be, is left to be seen.
Written by Vincent Umo Essien.