Kwara: Raising the bar of governance through private participation

Date: 2016-03-28

It is no longer news to say that most states in Nigeria rely heavily on the monthly federal allocation to execute its developmental and social obligations to the citizens. It is equally safe to say that since the fall in price of crude oil leading to a corresponding decrease in federal allocation, things have looked down in most states, visibly translated in complaints over delayed salaries, pensions or outright inability to pay salaries.

Today, many state governors have found a comfort zone in pointing the people to the shortfall in crude oil price and explaining away perceived delay or outright failure in fulfilling campaign promises.

Good news, however, is that some ingeniously gifted governors are already going into their reservoir of leadership skills to seek ways of augmenting the shortfall in order to meet increasing expectations from the people. In Kwara State, for instance, the challenges are not different from what obtain in other states in the federation, except that Kwara counts among states whose allocation has deepened below two billion monthly.

This is, surely, a huge challenge considering the increasing expectation from the people. Only recently, after a thorough study of avenues to raise the Internally Generated Revenue (IGR), collection process and the high expectations from the people, the Kwara State Governor, Dr Ahmed Abdulfatah, set a monthly revenue targets of between N3 to N5 billion naira.

The process, he explained during his monthly Stakeholders Meeting, would involve initiating a new process of revenue collection and generation bearing in mind unforeseen exigencies of governance that might arise as government pursued its lofty programmes.

One of such premium initiatives by the administration is the TSA; a financial management technique that fosters financial discipline, accountability, probity, financial prudence as well as effective and efficient administration of the public sector.

Unlike past financial system, TSA allows for the understanding of how revenue flows into the state and how it is appropriated. It also ensures that at every given period, everyone in charge of revenue management knows the revenue level in the state, but most importantly, which government department or agency has withdrawn or received any form of money and for what purpose. Interestingly, too, this has helped government in prioritizing its programmes and aligning them to the volume of money at its disposal rather than initiating a project that would meet with challenges and thereby get abandoned.

Instructively in Kwara State as in most states of the federation, relying exclusively on the state IGR would not be in the interest of the state or help in speedily executing priority programmes. This understanding explains why state governors are looking outside taxing the citizens. With the rising interest on bank loans, many state governors have found solace in bonds, which derives from project target-setting before approval.

The bond, over the years has proven a reliable source of project funding, particularly capital projects. Although Governor Abdulfatah has signed the 2016 Budget into law, it remains to be seen how the state can fare given fact that signing a budget is not an end in itself. Unfortunately, not many know that the budget document is simply a document of intent that if and when money comes, this and that are what government plans to do. So, one might ask: what happens to project targets where there is no money to execute them?

This, perhaps, explains why rather than wait and rely wholly on the IGR, state governors have taken to the bond, which is predicated on the ability and capacity to repay. Unfortunately for most states this capacity has been largely weakened due to fall in the monthly federal allocation to states.

For Kwara, which is taking a N20 billion bond, the governor explained that it was in his bid to ensure that any bond taken is repaid that his administration reviewed the revenue target and collection processes. According to him, the review would prove strategic to repaying the bond, especially as all loopholes through which revenues take flight had been closed, even as the state has set a target of N3 billion monthly and a possible N5 billion before the end of his tenure.

However, Governor Abdulfatah pointed out, rather regrettably, that the state's revenue target had not been fully met as the new process is still in the study and, therefore, rather than go for the N20b bond, the state was considering N10b bond instead. As always, since he made the disclosure some incurable pessimists have aimed at the bond again, saying it was intended to put the state into debt, but pitiably failed to proffer alternative solutions to the dearth of funds facing the state in the face of high project targets.

But a glimmer of hope seems to rise for developmental projects in the state as reports show that with the revenue currently accruing to government, the state can conveniently repay the bond. "So hopefully, all other things being equal, we are looking at accessing the bond by the end of April or early May. We should have finished all the necessary documentations because all the other issue that requires accessing the bond are exogenous factors. That is, they are not within our control. They are within the control of regulatory authorities and the Federal Ministry of Finance. The ministry dictates the pace at this material time. And, with the bond, we can at least hazard a guess as to when things will get back into shape.We have done our cash flow, worked out our capacity to pay and have now taken it to them for review to see how they can quickly enable us to go straight to the market to raise the money and drive our projects," the governor had explained.

Indeed, for the first time in the history of Kwara State, government has made it a point of duty to explain everything happening in the state to the people whose trust they enjoy. This, more than anything else, counts among the far-reaching and people-centered policy decisions that have combined in no small measure to endear Governor Abdulfatah to the people. The forum, which comes up every end of the month has since inception, provided opportunity for people, labour unions and stakeholders in the state to ask questions regarding how the state is run and the challenges and expectations from government.

In Kwara State, it would be safe to say that more than the dearth of funds to execute developmental projects, the administration is equally confronted by the activities of people who see nothing good in government efforts at repositioning the state and so are seemingly determined to call the state and its leadership a bad name like the proverbial dog, just to hang it.

One of the controversial issues that have looked the state, especially the administration of Dr Abdulfatah, is his relationship with the Senate President and former governor of the state, Dr Bukola Saraki. But more importantly, the ownership of such agencies and firms as Harmony Holding and Shonga Farm project.

The Shonga Farm is one of the state government's premium and premier project that promotes public-private-partnership arrangement and funded through a debt equity structure. Instructively, though government has used every forum to explain its set up, the Shonga Farm has remained one controversial establishment that has refused to give way.

Fielding questions from journalists on the farm, Governor Abdulfatah explained that although the farm is owned by some group of white Zimbabwean farmers, the Kwara State government still has a stake in its ownership through contributions in site and services, as the project is also partly owned by banks that provided the debt and equity.

Divided into three consortiums largely – Poultry, Mixed cropping and Dairy - the Kwara Chief Security Officer, described the initiative as good-thinking particularly as the larger part of the chicken eaten in the country are imported thereby making growing chicken in Shonga a natural fit for the nation's chicken market and needs.

Over the years, Shonga Farm has since grown into an octopus of an establishment, setting up hatchery that has the potential of producing half a million day-old chicken weekly and capable of churning out a million chickens every six weeks.

With the volume of farming work at the farm, there is no doubt that Shonga farm is poised to becoming one of the biggest poultry farms in Nigeria. Indeed, things are looking up as the Zimbabweans have been able to pay back their debts and allowed a South African Company to further firm up its operations by buying 40% of their business. But it is not all sweet for its operators. Like every other businesses, Shonga Farm has its own challenges.

Today, Shonga Farm is doing fantastically well in Dairy business, even as they are also diversifying into other areas. Perhaps, what could possibly pass for a low point is their inability to access irrigation for the production of mixed crops. And, the reason is simple. Irrigation equipment are very expensive.

By and large, Shonga Farm has achieved the dual purposes for which it was set up - encouraging commercial farming - and, fostering a private partnership system which is still ongoing in Kwara State. But more importantly, to point the way to best practices and benchmark against them.

Oba is Chief Press Secretary to the Kwara State Governor.

Source

 

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