Sunday, 3rd December 2023

Bailout for states and other matters: What BudgIT is not saying

By Abdulrazaque Bello-Barkindo
24 May 2017   |   2:23 am
This assessment is erroneous, to say the least. BudgIT colour-coded all sorts of intolerable scenarios and blamed their consequences on Nigeria’s subnational government.

BudgIT’s co-founder Olusegun Onigbinde

A term report credited to BudgIT, which appeared on the front page of The Guardian of Wednesday May 3, concluded that the non-functional budget system at the states level, coupled with several other ills and non-implementation of development plans will derail the country’s Vision 20-2020 blueprint.
This assessment is erroneous, to say the least. BudgIT colour-coded all sorts of intolerable scenarios and blamed their consequences on Nigeria’s subnational government.
To state that little was known, as BudgIT’s co-founder Olusegun Onigbinde had done, on how the bailouts and Paris Club refunds were spent is, indeed, most economical with the truth. Moreover, it is most uncharitable, if not ignorant, to allege that governors were just waiting for a discovery or refund before proceeding with frivolities. Such generalisations are not only intemperate, they expose BudgIT’s organisational deficiency.

Onigbinde demonised all the states. Not even Rivers or Lagos states, which all agree are working were left out, but at the end Onigbinde failed to proffer any new solution that is better than the ones already being implemented by most states.
The co-founder of BudgIT said many states lack the capacity to regenerate economically to service their debt. This is untrue. Also, the allegation that the bailouts to states were diverted still remain in the realms of speculation.
Nothing in the BudgIT report tallies with reality. There are indications, in the report, that show that either the report is doctored to spite elected officials at the subnational level or its disreputable picture is to influence those funding BudgIT to release more money.
If the essential value of any report is towards a cleaner, safer and more secure society, economically and all, the BudgIT report has done a disservice to that context. That BudgIT report was scare-mongering. It was spreading misery, especially to mischievously create the impression that ground-no-level in states.
That is far from the true situation. More often than not, non-governmental and non-profit organisations are not entirely fair to Nigeria, in their bid to impress their financiers. How is it that they miss the point that, despite the recession, Internally Generated Revenue, IGR, among states, has risen to approximately 20 per cent, on the average, according to the records of the Joint Tax Board (JTB). IGR had declined to 2.9 per cent in the period preceding the recession. Why is NGOs BudgIT not reflecting this?
There are many things BudgIT is not saying in its report. For example, governors are already embracing the Open Government Partnership, OGP, an initiative of the World Bank that advocates transparency, and there are glorious examples of states that already operate within parameters of the initiative.
Take Abia State for example. Governor Ikpeazu invited the labour union in the state to administer the bailouts and the Paris Club refunds to pay workers without interference. What is more transparent than that? BudgIT either does not know or refuses to acknowledge that in its report.
In states like Osun, apart from publishing up-to-date budget performance reports, they continue to sustain people-oriented programmes, including feeding school children throughout the state, despite the current fiscal crisis. Kaduna State has launched an ICT hub and citizen engagement portal to facilitate citizens monitoring and evaluation of progress of government’s projects. Evidence from states such as Rivers, Delta and Kano among others, show that biometric exercises have uncovered more than 7,000 ghost workers, figures which hitherto overburden their wage bill. Sokoto is constructing a thousand low-income houses, apart from creating jobs; Bauchi is creating 5000 jobs and providing 53 megawatts of electricity. Is that not worth reporting?
Without prejudice to other sectors, or being the devil’s advocate, states received the least lifeline from the Federal Government, when compared to other beneficiaries of Federal Government’s golden handshakes.
A cursory look at the Nigeria National Petroleum Corporation, NNPC, shows that it frittered away N7 trillion which was supposed to be paid to the Federation account while the banking sector was bailed out with N3trillion, almost 150 per cent, more than states received.
Several economists have argued that the strategic importance of the banking sector, as the pulse of the economy, had forced government to rescue it with 22 interventions during its distress.
If government had allowed the distress to linger, some economists insist, depositors might have had to lose part of their deposits. The curious aspect is, however, that despite all that turbulence in the sector, the emoluments and perks for banks’ executives remained unaffected.
What is more, banks are still unwilling to liberalise their policies to allow people access to loans. This makes one to wonder what else Nigerian banks do, if they do not impact the lives of the citizenry in a most pragmatic fashion. If the paramount objective for money-making is to uplift the welfare and security of the citizenry as enshrined in the constitution, then the breach is not restricted to the subnational governments. The banking sector, with only about 50,000 workers, but which receives much, must also be more closely scrutinised. To whom much is given, much is expected.
But it is unprofitable to join issues with banks. At the risk of calling this BudgIT report jaundiced, most people know why outfits like BudgIT are cooking reports on state governments; to seek attention and justify their inflows.
Nigeria’s political and economic landscape is today replete with dedicated governors whose ideas are manifesting in the reform packages they institute across the landscape. 

In Kwara State, the Kwara Infrastructure Development Fund (IF-K), is funded from a N500 million fixed deduction from the state’s monthly IGR, and it’s used as a guarantee to assure contractors that they will be paid upon project completion.
It is unfair to condemn governors altogether. Two-thirds of them are first-termers. The remaining one-third survived the change storm because of their political sagacity, dexterity, resilience and performance. BudgIT may need to know that Nigerian politics is evolving and those who profit from its previous docility must reinvent themselves.

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