Badaru: We Weathered a Bad Financial Storm

The Gubernatorial Interview


In marking his first year in office, the Jigawa State Governor, Alhaji Muhammadu Badaru Abubakar did not roll out the drums but spent time with different stakeholders, giving a situation report. In an interview with journalists, the governor told the story of the journey so far. Gboyega Akinsanmi presents the excerpts:  

How has it been in the last one year?
I feel relatively fulfilled coming after the shock and bewilderment that we were after the swearing-in. You know, we made some discoveries during the transition period. But it was only after we took over that we realised the extent of the financial mess that we inherited. We had to quickly revert to survival mode. Even the previous administration was counting the days till we crash-landed from the enormity of the financial burden because they knew what they left behind. But we thank God for his mercies. We weathered the storm. We have put the state on a reasonable, solid and sustainable expenditure framework relative to our present earnings. We are hoping for better days ahead.
How are you coping with the harsh economic realities given sharp decline in federal allocation?
Like I said earlier, we switched to survival mode. In May 2015, we had less than N17 million in the treasury. I am talking about the total amount of cash that was available to the state. We had salaries to pay, scholarship arrears and exam fees owed to WAEC and NECO. The Hajj operation preparations had started in earnest. After trying unsuccessfully to “borrow” from the contributory pension fund, the previous administration simply achieved this through the back door by refusing to pay the state’s own contribution for almost 11 months.
To compound issues, contractors started demanding payment of their liabilities which amounted to over N14 billion in vouchers awaiting cash backing in the treasury and close to N100 billion in ongoing projects. I had to call major stakeholders and lay bare the financial situation to them and said gentlemen, this is our situation. I believe I have the capacity to deal with this. But it will not be easy or painless. I got the mandate I needed and immediately started a massive cost cutting exercise starting from the Government House.
If I say I am cutting my salary and that of the deputy governor in half it would translate to about N12 million annually and our deficit is in nine figures. So, that will not help our case. We had to look at holistically reducing the cost of doing government business. It was not difficult to find areas because the previous regime was living in a fool’s paradise, just increasing recurrent spending exponentially in direct proportion to the windfall from the federation account.
In specifics, how did you confront these challenges?
Certainly, protocol expenditure in Government House was slashed by 88.6 per cent from N325,395,536 in the last 11 months of the previous administration to N37,035,187 of the same time frame in our tenure. Likewise, security and related expenditure dropped by 87.9 per cent from N1,825,866,274 to N220,251,850. The Government House expenses dropped by 60.7 per cent from N1,524,115,320 to 598,194,408 while that of the Deputy Governor’s office was reduced by 56.6 per cent from N456,400,00 toN198,000,000. Overhead expenses for the civil service was also reduced by 47.55 per cent from N1,661,202,000 to N871,253,000 in consultation with heads of MDAs.
I am giving you figures so any one doubting can verify. These are public funds and we are not running a secret society. Also, all government service agreements were renegotiated with facility management contracts for the federal secretariat and other assets reduced by 50 per cent, with the same contractors agreeing to provide the same level of service at half the cost. We also undertook the 2015 Hajj exercise, adjudged to be one of the most successful and incident free at the cost of N280 million compared to N780 million spent in the 2014 exercise.
The list goes on. Anywhere we can find a cheaper way of doing things without losing quality or value, we go for it. That is why they call me “Mr. Calculator.” I do not mind because I am applying the same principles of prudence and accountability for the state that I apply in my own business, go and investigate the lifestyles of some of these people out of government. Are they spending their own money with the same profligacy and recklessness that they applied to public funds? I hope you are also aware that we did all this without the benefit of a salary bailout, even though I wish we had collected it because when the federal government suspended deduction of debts for two months now, including the salary bailout, most states got over N2 billion in deductions suspended, my deductions are just about N100 million, so that alleviation did not have any impact on our bottom line.
With these realities, are you able to implement new projects and programmes since you assumed office?
As soon as we saw the positive results of our cost realignment strategy working, we decided that since we were able to meet our recurrent expenditure, we should prioritise the ongoing projects accordingly. That was very difficult politically because the penchant is for supporters to say: ‘let us abandon the projects the previous administration started and start our own projects’. So, I had to be very firm. Some politicians personalise public works to the extent of chastising citizens for failure to show appreciation for projects sited in their vicinity, can you imagine?
It hurts me when I see people hiring buses at great expense to go and thank a governor they elected because he built a road, or school or provided water. It is their money and their mandate. It is the least a governor can do. Otherwise you have no business in Government House. I had to explain to supporters that the previous government’s projects were started with Jigawa funds. It would be irresponsible for me to abandon them and waste public money in starting new ones.
So, a committee verified the projects and we prioritised them in order of public impact and the stage reached. We threw out some that were hurriedly and improperly awarded to friends and families. I then called the contractors personally and explained our situation to them. Nigeria is broke. There may not be jobs for any of you for some time. But I am willing to assure you continuity and prompt payment if you will give Jigawa a discount. It was very tough, and I had to assure them that they have my protection. I am not expecting a percentage from anyone neither is any of my children, commissioners or government officials. If that happens they have my direct line. This was how we got an average of 17 per cent discount amounting to almost N5 Billion for projects awarded as far back as 2013 in some cases.
Can you give some specific instances?
I can give you a summary. We inherited a total of 332.04 kilometers of regional roads with a total contract sum of N36.4 billion out of which the previous government had paid N16.775 billion leaving an unpaid balance of N19.625 billion. We have negotiated a discount of N2.902 billion and paid out N8.619 billion leaving a balance of N8.506 billion to complete. We also inherited a total of 98.75 kilometers of township roads with a contract sum of N14.675 billion out of which only N3.273 billion was settled by the previous government leaving an unpaid balance of N11.402 billion. The sum of N1.996 billion was discounted and we have so far paid out N897.268 million leaving a balance of 8.509 billion.
Apart from these projects, all feeder roads with a total length of 97.4 kilometers at a contract cost of N1.652 billion were also taken over, out of which N1.06 billion was settled by the past government leaving a balance of N571 million. A discount of N91.613 million was obtained and we paid N94.658 million, leaving a balance of N385 million to complete. The sum of N81.742 million has also been paid on existing road rehabilitation and emergency repairs using the Jigawa State Road Repair Agency (JIRMA). In summary, we are presently working on 528 kilometers of various road types, and have spent a total of N9.7 Billion to get contractors back to site and working. You can get a list of specific roads from the Ministry of works section of the state’s web portal.

But what has your administration done in other sectors apart from road infrastructure?
We are not abandoning any sector. Our focus is human development in all ramifications with the ultimate aim of reducing the poverty level. That is why I told you that even the roads we are continuing were selected based on public impact, opening up communities, providing access to markets for their farm produce and linking major towns and communities. The other critical sectors in this chain are health and education. We must educate our people. As the saying goes, health is wealth. In the health sector, we have reverted to a focus on primary healthcare delivery to devolve smaller facilities spread out at the grassroots level as opposed to mega hospitals that are costly and very inefficient since all cases irrespective of severity are handled at that level.
Typically, close to 80 per cent of patients can be handled at the primary level for malaria, antenatal e.t.c with only serious cases referred to the hospitals. Most importantly, we can now achieve eligibility in accessing funds from the National Health Fund to augment our efforts at the state level. To strengthen this basic level, we have commenced construction of 27 basic health clinics in each local government at the cost of N424.98 million and 27 units of midwives’ quarters in hard-to-reach Primary And Basic Healthcare Centres at the cost of N203.257 million.
We have also embarked on renovation and improvement of hospitals in Gwaram and Birniwa with the provision of an operating theatre at the total cost of N194.918 million as well as several smaller facility interventions in Sarawa, Majeri, Kununu and Katsinawa and renovation of 25 health facilities worth N25 million in Birnin Kudu, Garki, Gwaram, Jahun and Maigatari Local Government Areas.
Within this period, drugs worth N612.738 million were procured under the drug revolving scheme. The construction of the Birnin Kudu General Hospital is also being continued as well as the construction of the main gate and perimeter fence for the new Hadejia General Hospital and the conversion works on the proposed second school of nursing, Hadejia, which has reached completion stage. 
What’s going on in education?
I am coming to education. This was a sector I believe was also neglected perhaps because of the adage ‘you cannot value what you do not have’. Immediately after we were sworn in, I was amazed to find out that counterpart funding for SUBEB and UBE were unpaid for two years, which meant the last time primary school structures received any decent attention was in early 2013. This government had to pay up counterpart funding for the 3rd and 4th quarter of 2013, the 1st, 2nd, 3rd and 4th quarters of 2014 resulting in the injection of N3.1 billion into the basic education sector within a period of 11 months.
This translated into the provision of 16,599 sets of classroom furniture and the construction and renovation of 1,793 classrooms. We had to also clear a backlog of scholarship payments from the 2014/2015 academic year, totaling N500 million. We spent money on data acquisition relating to the quality and number of students, teachers and facilities in conjunction with the DFID ESSPIN programme to enable us address problems in the sector in a targeted and specific approach instead of ploughing money in an uncoordinated and erratic manner with no results.
To ensure students welfare and provide much needed support, we paid out the sum of N882,425,839 within the last 11 months in scholarship funds, and introduced an e-platform to eliminate delays in future payments. We are also testing and deploying various e-learning initiatives to address the issue of serious deficit we have in quality teaching at the basic level. Jigawa, like most other states, is in serious need of qualified teachers that are simply not available due to the systemic collapse of teacher education and training nationwide and the simultaneous demand by private schools that continue to grow at an exponential level to fill the educational void.
I believe technology holds the key to maximizing teaching resource availability through distant learning, visual and electronic teaching aids as well as networking of schools to avail them concurrent use of electronic educational material to augment conventional methods. To support these and other tech dependent initiatives, we have reinvested in resurrecting Galaxy ITT, the state owned internet provision and IT services firm. 
The company is currently testing a city wide wireless network covering the whole of Dutse, and with the renewal of their national ISP license, will begin to provide quality internet service provision to all our major towns and indeed beyond the state’s boundaries on a commercial basis. So, as you can see, we haven’t abandoned education for roads!
What are you doing in Agriculture in view of the need for food sufficiency in the country?
We have no option because it is the only sector, where we have a comparative advantage at the moment. I will focus on attracting large scale agricultural investment because we must leapfrog and catch up with global best practices. If you have a look at our statistics, we are at the bottom of almost every yield table for our major crops despite intervention from the government and development partners for years.
The only game changer I can see is private sector involvement. If we do not begin to look at agriculture from a business perspective, we cannot be competitive and no amount of government control or protection can help a farmer producing 2.5 tons a hectare against his counterpart in Thailand or Brazil producing 10 tons per hectare twice a year.
There is simply no contest. In pursuit of this, we have adopted the International principles of large scale agricultural investment (RAI) and developed a State Land Acquisition and Resettlement Framework (LARF) to achieve a balance between the investors need for large scale land and the citizens’ right to minimal disruption of lifestyle and livelihood. This has resulted in the adoption of out-grower scheme models involving small-scale farmers in all our major large scale agricultural partnerships which include the Dangote Rice Project that will eventually cover about 30,000 hectares and The Lee Group Sugar Project covering about 12,000 hectares.
The out-grower scheme has commenced in earnest even before the development of the commercial farms, and farmers have already started benefitting from the advantage of an organised cluster approach with pooled resources and input provision. Recently, during the recent fuel shortage, which saw many individual farmers abandoning their cultivation due to lack of fuel for irrigation, the members of the out-grower cooperatives, had the protection of group logistic dynamics that guaranteed all inputs including fuel as part of the agreement.
As we speak, a large percentage of rice cultivation in the affected areas is only evident on farms that are part of the scheme because individual farmers could not afford fuel for irrigation at the black market price. We have also adopted the same approach for other farmers outside the out-grower framework by clustering small holder farmers in all 287 wards into 50 Hectare clusters per ward with a maximum of 3 groups per cluster to accord them the same benefits and advantages of the out-grower programme under a state-organised initiative.
For effective and uninterrupted supply of inputs, we are recapitalising JASCO to the tune of N200 Million to strengthen its capacity to provide quality consumables at affordable prices to the cluster groups, and 450 motorcycles have been provided to extension workers that are currently undergoing training by NIRSAL to improve their mobility and capacity to provide extension services.
Over N100 Million is being spent to rehabilitate about 87 tractors spread over 27 local governments to provide mechanisation. We are also expanding the SLTR programme, which will simplify acquisition of title to land and focus on small holder farmers to enable them unlock the capital potential of their landholding at an affordable price.
One area you promised during your inauguration was to create an enabling environment for investors. What have you achieved in this respect?
I believe we have and it was not easy. We had to go the extra mile in attracting the right kind of investment in Jigawa because we are surrounded by states like Kano that have a comparative advantage in terms of infrastructure and a ready market. I have already mentioned our giant strides in the agricultural sector with conglomerates moving in to give impetus to our goal of large scale production.
In the last 11months alone, we have also fast tracked the development of Solar energy with Nova Scotia power and Pan Africa solar taking advantage of the LARF policy to fast-track land acquisition and compensation process to commence 80MW solar plant in Dutse and another 100MW divided between the Hadejia and Dutse substations. Erisco Foods and Dangote Farms are establishing tomato paste factories covering a combined 5,500 hectares.
Additionally, following the successful opening of the Lee Group Kijawal factory in Ringim Local Government Area, the company has expressed its desire to expand with production lines and the state government has decided to establish an Industrial park in the same vicinity to take full advantage of the location. The Park will provide incentives and the provision of common services including infrastructure, serviced industrial plots, and warehouses as well as ancillary business and production support like group security, weigh bridges etc. 
Here in Dutse, we just commissioned a granite and marble tile production factory that has the capacity to cater for both domestic and international demands for granite finished products. By sheer dint of relentless focus on investor requirement and promotion, we were able to achieve a concept to production cycle of just six months following my first trip to China, and today, branded “Jigawa Granite” is rolling off the production line in Kachi and making inroads into the building material market.
This is the same dedicated approach we intend to use in ensuring the gradual industrialisation of Jigawa State notwithstanding the prevalent economic challenges, using the full complement of my office as Chief Investment Promoter, and our supporting agencies which are being strengthened for greater service delivery, I am a business man turned politician and not the other way round.
More so, we are working on the moribund Maigatari EPZ. Our plan is to re-organise it to actualise the Zinder-Daura-Jigawa-Kano trade corridor to encourage seamless ECOWAS trade relations and divert trade traffic to land locked Niger Republic through the Maigatari border. I am sure you will agree with our promotion slogan, “Jigawa is open for business”