By Rotimi Durojaiye
A recent investigation by an economic intelligence magazine revealed that 15 States may go bankrupt as their Internally Generated Revenues (IGR) in 2015 were far below 10 percent of their Federation Account Allocations (FAA) in one year from June 2015 to May 2016.
The report further indicated that the IGR of Lagos State of N268 billion was higher than that of 32 States combined together excluding Rivers, Delta and Ogun whose IGRs are very impressive. The report noted that 32 other states merely generated a total of N257 billion in 2015.
The magazine had published the total allocation each state in Nigeria received from the Federation Account Allocation (FAA) between June 2015 and May 2016 which signified one year of President Muhammadu Buhari’s administration.
The report provided shocking discovery that indicated that 15 states may go bankrupt and may not stay afloat outside the Federal Account Allocation due to lack of foresight in revenue generation drive coupled with arm-chair governance.
While Lagos State retains its number one position in IGR with a total revenue generation of N268.22 billion in the twelve months of last year, it is followed by Rivers State N82.10 billion, Delta State N40.80 billion, Ogun State N34.59 billion and Edo state N19.11 billion.
The report showed that the IGR of the respective states can improve through aggressive diversifications of the economy to productive sectors rather than relying on the monthly Federation Account revenue that largely come from the oil sector.
It is no news that the dwindling federal allocations caused by the falling prices of crude oil at the international market have deeply affected finances of every state in the federation, Ogun State inclusive.
But for the financial engineering put in place by Governor Ibikunle Amosun, governance at both the state and local government levels would have been grounded.
These pragmatic steps were taken to cushion the effects of the paltry N750 million monthly internally generated revenue (IGR) he inherited in 2011 and N2 billion federal allocation per month to service about N9 billion state’s monthly wage bills apart from meeting other statutory responsibilities.
Oil wealth is receding, incapable of matching fiscal policy while there is a massive pressure on our rulers to sustain the machinery of government and to meet the yearnings of those who enabled their existence in our democratic process. So our leaders and their partners in industry are expected to move with lightning speed and walk away from oil as a base for development. We must think out of the box. Doing so means generating wealth from ideas such as countries without oil are doing and moving their societies into the league of leading nations of the world, far ahead of those with oil weapon which is now proving inadequate.
Lately, we have seen this movement of idea power put to work in Ogun state. Faced with a bleak future for oil revenue and a rush of social and economic migrants from Lagos and other peripheral states, the administration of Governor Amosun has had to initiate creative strategies to raise good money to fund gigantic projects and meet the needs of the state’s burgeoning population. He is beating a retreat from resting on the rickety base of oil economy.
Governor Amosun, had in 2014 set a target of N10 billion as the state’s monthly IGR, up from the then N6 billion.
Amosun while speaking during a Town Hall Meeting on the 2015 budget held at Kuto, Abeokuta, explained that it was the only way the state government could survive the dwindling allocation from the Federation Account.
Amosun, while fielding questions from stakeholders at the event, said the new target would take effect from 2015 and would not in any way inconvenience the people.
He disclosed then that funds from the Federation Account had been dwindling since 2011 and explained that it worsened to the extent that many states found it difficult to pay their workers.
The wage bill of the state, he added, including allowances, had risen to about N9 billion monthly adding that “only Ogun and Lagos states now generate revenue exceeding the allocation from the Federation Account”.
“What the administration is doing is to make Ogun State the economic hub of the nation ahead of Lagos State,” he had said then.
He expressed happiness that the state had begun to take its pride of place in the comity of nations with the recent classification as the industrial capital of Nigeria.
“What we are doing today is to take stock and see how far we have gone and those things we need to do better by further listening to our people.
“Ogun will get to a time when it will be auto-driven, system-driven so that governors will not have difficulty in making things happen, they will not have difficulty in paying salaries and doing all of those and I am happy we are taking our prime position in the comity of nations.
“We are now the industrial capital of Nigeria but what we intend doing is to make Ogun State the economic capital of Nigeria, we want to challenge Lagos.
“The Finance Minister had confirmed that there are challenges in revenue accruing from oil due to oil theft and, as we are speaking, they are yet to pay us, the only way we can pay salaries is to think outside the box and see how we can improve our IGR.
“We are increasing the IGR without unnecessarily inconveniencing our people, the target is N10 billion by next year (2015) because there is no way our wages will exceed N10 billion. With this, we will not rely on the Federal Government again, but we still have a big challenge to pay our salaries,” Amosun had added.
The Amosun administration believes strongly in participatory democracy and has always carried the people along in the process of preparing the state’s annual budget.
According to the 2014 World Bank Report on Doing Business in Nigeria, Ogun State was listed as one of the five most improved states in the country.
The same World Bank in its 2008 and 2010 Reports had ranked the state as one of the lowest performers among the 36 states in Nigeria. No doubt, this is a significant progress.
To increase the revenue of the state, Governor Amosun had constituted a Revenue Committee chaired by the Governor himself where issues on businesses and internally generated revenue are sorted out.
The establishment of One-Stop Shop domiciled in the state Ministry of Commerce and Industry as well as synergy that exists among all ministries, departments and agencies (MDAs) has removed the usual bottlenecks that impede investors’ access to lands, building approval, environmental impact analysis and these have enhanced the ease of doing business in Ogun State.
The usual bottlenecks which government removed from its relationship and partnership with private sector, coupled with massive investment in infrastructure such as roads, bridges, pipe-borne water, education, health and electricity is the magic behind the increased internally generated revenue.
The migration of investors and industries to the state had really helped develop the economy of the state in terms of wealth creation, employment opportunities, internally generated revenue, tax remittance, corporate social responsibilities, among others.
The emergence of Amosun’s administration five years ago marked a new beginning in the state’s effort to once again fulfil the dreams of its Founding Fathers.
Looking back into the last 62 months of the administration coupled with the celebration of the 40 years anniversary of the creation of Ogun State on February 3 this year, Ogun definitely has a lot to roll out the drums for and thank God.
The state has successfully risen to address the critical questions of development in all its ramifications.
The Amosun administration has continued to sustain the drive to attract investors to the State. It is on record that as at today, close to 100 industries have berthed in the State.
It has continued to hold its investors’ forum despite the economic crunch. The third in the series was recently held on May 10 & 11. This has been a veritable platform for investors across all sectors of the nation’s economy to tap into the abundant resources that is prevalent in our State.
The just concluded edition which was tagged, ‘’Emerging Economic Power House,’’ dwelt extensively on Agriculture, Environment and Transportation. The overwhelming advantage from all these fora includes, but not limited to, an opportunity to cross- fertilize ideas with the international community, multilateral agencies, industrialists, eminent personalities and experts from all walks of life.
It has also been a source of feedback mechanism for the state to identify and assess its strengths, weaknesses, and unleash the latent opportunities that abound in Ogun State.
As a corollary of this initiative, Ogun State has remained an investment destination of choice in Nigeria, with almost 100 companies already in full swing and more in the pipelines.
Governor Amosun has not deviated from his responsibilities since he came on board for the second term on May 29, 2015.
His first tenure was, without mincing words, a display of dogged determination, resilience, resoluteness and the unflinching commitment to the Mission to Rebuild Ogun State as envisioned in the Five- Cardinal Programmes of the ruling All Progressives’ Congress (APC).
However, all the achievements would not have been possible without the collective commitment, dedication, perseverance, and endless co-operation of the entire citizens of the state.
Amosun has repeatedly promised not to rest on his oars, as all hands will be on deck to ensure that he delivers on all his electoral promises and continue to spread the dividends of democracy across the State.
The positive impacts from the faithful implementation of his campaign promises have continued to receive accolades from both within and outside the shores of the country.
Recently, the Governor attracted $1.2 billion investment from China to Ogun Guangdong Free Trade Zone and many more like that.
Ogun State has continued to witness tremendous transformations in all aspects of life.
Amosun is unwavering in his resolve to move Ogun State forward in the face of all challenges most especially as the effect of the dwindling allocation from the federation account has continued to bite harder.
Due to prudent husbandry of the scarce resources of the state and his less reliance on the monthly Federal Allocation, Governor Amosun has not defaulted in the payment of salaries.
It is worth noting that the Treasury Single Account (TSA), which the Amosun administration introduced in 2011, has now got nation-wide acceptance and enabled the State to block leakages in the system.
Governor Amosun has changed the fortunes of Ogun State by increasing the level of local and foreign investments coming into the state’s economy.
He has also pursued the development of agriculture in line with the diversification policy of the present federal government. His vision for the state is simply ambitious.
The array of projects and investments created and facilitated by Governor Amosun in the last five years, are capable of transforming and improving investment, industrialisation, finances, commerce, infrastructure and the entire economy of the state on a sustainable level.
––(Durojaiye, a former Editor of Daily Independent Newspaper, Lagos, is Special Adviser on Information and Strategy to Governor Amosun).