Prepare for tough time, NGF tells governors
• Yari warns of another round of recession
• FG urges focus on boosting internal revenue
• Osinbajo puts nation’s deficit at N2trillion
The Nigeria Governors Forum (NGF) yesterday advised both the returning and newly elected state chief executive officers to prepare for tough times in governing their domains, warning that there may be another cycle of recession from mid-2020 to the third quarter of 2021.
The chairman of the group and governor of Zamfara State, Abdulaziz Yari, gave the advice at the induction programme organised for the old and new governors at the NGF Secretariat, State House Conference Center, Abuja yesterday.
Nigeria had officially entered a recession, for the first time in more than two decades, in August 2016, according to figures that showed that the economy had contracted for a second consecutive quarter.
According to the Nigerian Bureau of Statistics (NBS), the nation’s Gross Domestic Product (GDP) contracted by 2.06 per cent in the second quarter. The GDP shrunk by 0.36 per cent in the first quarter, amid low oil prices and the country slashed production due to insurgency in the Niger Delta.
Yari, who said the outgoing governors agreed that borrowing was never a reliable alternative to solving the nation’s economic problems, urged the incoming ones and leaders of other ties of government to boost revenue generation so as to change the course of doing government business for the betterment of the people.
The NGF chairman told his colleagues that it would not be a smooth ride when they begin a new administration in their states. He noted that the crude oil price that hit over $100 per barrel from 2011 to 2015 nosedived to less than 75 per cent from 2015, leading to recession.
“On our part, we made a lot of achievement in infrastructural development and provision of social services because we enjoyed a relatively high oil price of about $100 to $114 per barrel between 2001 and the middle of 2014.
“However, by the mid-2014, the price of crude oil, which is sadly the main driving force of government’s expenditure, dropped to $75 per barrel. It, therefore, became very difficult for many states to even pay salaries of their workers.
“This scenario is a wake-up call for all of you to be prepared to face this kind of challenge, especially since there is the possibility of another cycle of recession by mid-2020 and which may last up to the third quarter of 2021. Your good spirit of stewardship will make you contain the situation should there be one. Also, as members of the National Economic Council (NEC), you must work hand-in- hand to boost the economy in tandem with the global best practices.
“Experience, they say, is the best teacher. Ours has been a challenging experience of managing state economies that are totally dependent on accruals from the federation account rather than exploring viable alternatives to run the economy. For most of the states, internally generated revenues are nothing to write home about. You must, therefore, look inward by boosting your revenue generation and also utilize them effectively for execution of projects that will touch the lives of your people. You must not forget the high expectations of our people from us; now that the democracy is maturing daily, the challenges of governance and service delivery are more demanding,” Yari said:
“Borrowing is never a reliable alternative to solving our economic problems. Key revenue agencies like the Nigeria National Petroleum Corporation (NNPC), Federal Inland Revenue Service (FIRS) and the Nigeria Custom Service must be made to work more effectively now that Mr. President has signed the much awaited national minimum wage law, pegging the minimum workers salary at N30,000 per month.”
He urged the incoming governors to strengthen tax laws to encourage Nigerians to pay.
At the event, President Muhammadu Buhari urged political leaders across party lines to assist government at all levels to deliver quality services for improvement in the lives of Nigerians.
Vice President Yemi Osinbajo, who represented Buhari, said the nation would face monumental challenges as from 29th May, especially in the areas of human capacity development as well as education, healthcare and jobs for the youths.
“I have the president’s mandate to say that the Federal Government stands ready to embark on this historic all-party cooperation to better the lives of all our citizens.”
Osinbajo explained that to be able to achieve significant progress in terms of development, both the states and the Federal Government must see themselves as one in delivering services to the people.
“Our people in every state want the same things and suffer the same deprivations, they really don’t care who puts food on the table, just put the food on the table,” he said.
The vice president noted that the issue of insecurity, including opportunistic attacks by Boko Haram in the North East part of the country, and farmers/herders clashes remained top on the agenda of the current government. Osinbajo lamented that the unfortunate security problems had overstretched relevant law enforcement agencies considerably.
According to him, the Federal Government is committed to recruiting more men and women into all security agencies in order to improve their capabilities to maintain law and order.
Osinbajo told the governors that they belonged to what he described as the elite club who were privileged to have been elected by the people to serve. According to him, such a privilege also comes with a huge responsibility and sacrifice on their part.
“This tremendous privilege which leadership thrusts upon us, also comes with grave responsibilities. Those responsibilities are multiplied by the fact that most of our people are extremely poor. Large numbers are unable to afford good healthcare and malnutrition remains a major problem. Children in many of our states run the risk of being permanently mentally stunted because they are malnourished.
“Illiteracy is still significantly high and the number of out of school children is an embarrassment. Yet in all these, our population continues to grow at over three percent per annum. We will by current projections move from 200 million to 400 million people in the next three decades. And then we will become the third most populous nation in the world.
“Most of that population will be young people under 25 looking for jobs. Every one of these people, except a few living in Abuja, will live in the states, your states, where you govern. They will seek schools in your states, health services in your states, food in your states and jobs in your states,” he stressed.
The vice president charged the governors to think outside the box in increasing internally generated revenues and Value Added Tax (VAT).
Osinbajo put the country’s deficit at N2trillion while debt service to revenue is somewhere in the order of 54 percent,
He said: “States must in the next few years earn more in IGR. We must move effectively to collect VAT and increase our agricultural output, work with the Federal Government to make broadband infrastructure available all over the country, so our young people anywhere in Nigeria can do jobs anywhere in the world from their villages in any corner of our nation.”
According to him, “If a state is charging for right of way from communications companies and is hindering the laying of cables and other broadband infrastructure as an IGR measure, permit me to say that that will be penny wise pound foolish.
“To tap into the millions of jobs in technology and other services that a country like India has tapped into requires broadband infrastructure across the country, “ Osinbajo noted.