EL-RUFAI ON
FRIDAY
Kaduna's Not So Disappointing Budget
By
Nasir Ahmad El-Rufai
nelrufai@yahoo.com
Over the last few weeks, we
have analyzed budgets from four of the six
geopolitical zones in the
country: Bauchi from the North East, Lagos from the South West, Benue from the
North Central, Edo in the South South, and now, the North Western State of
Kaduna. Kaduna state is located at the center of Northern Nigeria and shares
boundaries with Niger state to the West, Zamfara state, Katsina and Kano states
to the North, Bauchi and Plateau states to the East and FCT and Nasarawa state
to the South. Kaduna state occupies a land mass of 46,053 square kilometers and
had a population of 6,113,503 people in 2006 distributed amongst 23 local
government areas, with some of the major ethnic groups being the Hausa, Fulani,
Bajju, Ham, Gbagyi, and Koro.
The state was birthed from the
Northern region of Nigeria, which had
its capital in Kaduna. In 1967
the north was split into six states,
one of which was the North
Central state, its name was changed to
Kaduna state in 1976 by the
Murtala-Obasanjo administration. Kaduna
became a separate state in
1991, when Katsina province was carved out
to form the present Katsina
State. Since Nigeria’s return to democracy
in May 1999, Governor Ahmed
Markarfi governed the state for eight
years, and was successful in
uniting the disparate ethnic and
religious groups to live
together in relative harmony. Makarfi also
registered significant strides
in infrastructure development
particularly the construction
of intra-state roads.
Makarfi was succeeded by
Namadi Sambo who governed the state from May
2007 until May 2010, when he
was nominated and confirmed as
Vice-President. Many citizens
of Kaduna State believe that Namadi's
tenure was peaceful but
uneventful with unconfirmed rumors of huge
borrowings. Patrick Yakowa
succeeded him as governor of Kaduna state
and initially registered
improved transparency in governance. Under a
virtual military occupation
that facilitated massive rigging of
elections, Yakowa was returned
as governor on the PDP platform in
April 2011. Yakowa is a decent
man with sound education and record of
successful civil service
career spanning state and federal governments
where he rose to cabinet
minister and afterwards, federal permanent
secretary. Expectations were
therefore high that Yakowa would perform
much better than his
predecessor in office.
Kaduna is one of those older
states that should have an advantage over
others, or at least over all
states in its zone. The fact is that in
1981, Nigeria's first inland
petroleum refinery in the North was built
in Kaduna, the state has
various textile mills, and the Peugeot
automobile assembly plant,
amongst other existing industries. The
political significance of
being the administrative headquarters of the
Northern region during
Nigeria’s colonial and immediate
post-independence era, and its
reputation as a leading educational,
industrial, and military
center in Africa are additional advantages.
Kaduna State is also blessed
with an array of mineral resources which
include, Kyanite, Kaolin,
Columbite, Gold, Quartz, Mica, Clay,
Asbestos, and Graphite. It has
ample arable land which traverses the
Sahel Savannah region among
its agricultural endowments. The state
produces huge quantities of
Yam, Cotton, Groundnut, Tobacco, Maize,
Beans, Guinea corn, Millet,
Ginger, Rice and Cassava. The State has
numerous tourist attractions
like the Nok Culture, Arewa House and
Museums; and comfortable large
and boutique hotels like Hamdala Hotel,
Crystal Garden and Asaa Hotels
in Kaduna, Kongo Conference and Zaria
Hotels in Zaria.
In spite of these, the results
on the ground are disappointing. Kaduna
state has an unemployment rate
of 25.7% well above the national
average of 23.9%, as against
Kebbi state with 17.6%, Kano with 25.7%,
Katsina and Sokoto with 27%,
Jigawa with 28.6% and Zamfara with 33.4%.
In the North-West zone, 51.8%
of the citizens are food poor, 70.6%
absolutely poor, while 67.4%
live on less than a dollar a day. Kaduna
State has 52.4% as core poor
and 38.2% as moderately poor, the second
highest incidence of poverty
in the zone just behind Zamfara State.
Income inequality as measured
by changes in Gini coefficient between
2003 and 2010 is also
increasing moderately by 9.2% in Kaduna relative
to other states in the zone,
behind the worst cases in Kano (25.1%)
and Jigawa (18.1%).
The Kaduna state government
has prepared ‘2012-2014 draft multi-year
estimates' that hopes to drive
economic and social development of the
state through sound financial
planning. However, the 272-page document
falls short of boldly facing
the real developmental challenges of the
state as the capital
expenditure plans for 2012 to 2014 are not up to
the developing country target
of assigning 70% of total budget. It is
this statement of the
government’s intentions that we will take
analyze.
The 2012 budget for the state
is N154,331,452,763, an increase of
13.01% or N17.7bn over 2011’s
budget of N136,564,380,343. The 2012
budget has N85bn or 55% as
capital expenditure, and N69.3bn or 45% as
recurrent expenditure.
Analyzing the recurrent budget further, N29.5bn
or 19% of the total budget is
for personnel costs, N26.5bn or 17% of
the total budget is for
overheads, while N8bn or 5% set aside for to
service the state's public
debt left behind by earlier
administrations. The State has
budgeted N950 million as the revenue
contribution to local
government councils, as required by law. Kaduna
is the only state whose budget
specifically provided for this.
Governor Yakowa is also said
to be the only governor of the state ever
that does not divert local
government allocations, and if true, should
be strongly commended.
Kaduna’s IGR estimate for 2012
is N35.7bn, an increase of N22.9bn as
against the states IGR of
N12.8bn in 2011. Looking at the details of
the budget, while it is not
clear what factors will be responsible for
this huge leap, a contributor
might be the revenue from the ministry
of lands and survey which is
projected to increase from N409.9 million
in 2011 to N6bn in 2012, and
the state's Board of Internal Revenue
which hopes to raise inflows
from N9.4bn in 2011 to N24bn in 2012. The
budgeted personnel costs of
N29.5bn as against its IGR of N35.7bn
demonstrates that Kaduna is
capable of paying its staff salaries even
without monthly federal
allocations, so is not one of the "parastatal
states", but with only N6.2bn
left for overhead costs, it needs to
slim down the size and cost of
government and learn to live within its
means.
The budget would be financed
from N35.7bn as IGR, N48bn from
federation account, N8bn as
VAT, N500 million as privatization
proceeds, and nearly N3bn from
land related levies and other sundry
sources. Kaduna State plans to
borrow a total of N14bn from domestic
and external lenders this
year, and expects another N13.7bn as
grants-in-aid from abroad and
federal agencies like UBEC and ETF.
Kaduna has enjoyed significant
federation account allocations in the
past: N39.5bn in 2011, and an
estimated N48bn in 2012. Indeed over a
period of 9 years from 1999 to
2008, Kaduna state received the second
highest FAAC transfers of
N232.49bn, amongst the states in the North.
This is substantial and could
yield results if prudently managed and
well-spent.
The sectoral summary of the
budget shows that capital expenditure
budget apportioned the
economic sector N30.2bn or 36%, the social
sector N24bn or 28%, Regional
Development got N16bn or 18% and General
Administration assigned
N14.7bn or 17%. The State Government needs to
revisit these ratios to assign
more money for the social sector -
particularly health, education
and scholarships for citizens of the
state studying in higher
institutions.
Kaduna state should quite
easily lead all states in the North Western
region in educational
attainment; after all, the state is referred to as the ‘Center of Learning’, and
it is. There are at least 20 institutions of higher learning and research in the
state, including three premier military training institutions. The state has
N10.9bn budgeted for education in 2012, as opposed to N11.1bn in the previous
year including N500m for the expansion and rehabilitation of existing schools, a
pathetic N94 million for Almajiri and CAN schools, a low N96 million for
teachers' quarters and NYSC orientation camp improvement, paltry N5million for
expanding libraries, and N967 million for the construction of 136 units of
classrooms. According to the NBS 2010 National Literacy Survey, Kaduna has a
youth literacy rate of 67.3% as opposed to Sokoto’s 33.1% and Kebbi’s 50.2%, an
adult literacy rate of 53.5% as opposed to Sokoto’s 22.1% and Kebbi’s 29.1%.
According to this survey, the North Central has the highest adult literacy
levels with 56.4%, followed by the North East with 42%, and the North West with
31.7%.
Kaduna has budgeted N6.7bn for
health in 2012 as opposed to N5.5bn in
2011. The health sector is
relatively stable in the sense that the state has no cases of major outbreaks of
infectious diseases, but tuberculosis, malaria, HIV/AIDS remain challenges. So
there is a provision N441 million for Kaduna’s HIV/AIDS control program, N113.7m
is budgeted for the purchase of medical equipment, and a paltry N21m for the
construction of hospitals in Zangon Kataf and Sabon Tasha. And there’s the
state-of-the-art 300 bed specialist hospital that is being built via public
private partnership at Kaduna Millennium City. In a bid to tackle maternal
mortality, the state government also has a provision of N1.5bn for free medical
services to pregnant women and children under five years.
For a state that recently has been rocked
by attacks from Boko Haram,
Kaduna State's security vote of N1.64bn is
modest and just 35% of Edo
State's, and only 9% of Bauchi's massive
N17.6bn. According to the
World Bank Doing Business rankings 2010,
of the North Western states,
Katsina now ranks first as the easiest for
enforcing a contract, Kebbi
comes in 2nd, then Jigawa, with Kaduna as
4th, Zamfara 5th, Sokoto 6th
and Kano 7th with the most difficulty in
enforcing a contract. Overall
Kaduna ranks 22 amongst Nigeria’s 36
states and FCT in the ease of
doing business. On average, it takes 31
days and about 9 procedures to
start a business in Kaduna, and this
discourages start-up of small and
medium enterprises. In 2007, Kaduna ranked
first in Nigeria on ease of
doing business with the FCT being a very
close second. Yakowa should
investigate what went wrong under Namadi's
watch to fall from first to
near the bottom third.
Agriculture is the mainstay of
Kaduna’s economy, with about 80% of its
population actively engaged in
farming. The sum of N8.62bn is allocated to agriculture, with N1.1bn to be spent
on tractor purchases and N164.4m spent in support of the National Fadama 3
programme. The state reportedly produces over 180,000 tonnes of groundnut
annually, and is the leading producer nationwide of cotton and the reason why
ginneries are located in Zaria and several textile mills in Kaduna. Sadly, these
industries have suffered decline due to infrastructure challenges, neglect and
improper management. Governor Yakowa recently launched a commendable drive to
seek federal assistance in restoring these industries to full employment and
production.
The Kaduna State 2012 budget
is at best average. The spending ratios
can be enhanced in favor of
capital projects. The state remains
heavily dependent on Federal
allocations and has numerous
underdeveloped or neglected
sectors that can drive its IGR rapidly
upwards particularly
agriculture, solid minerals, education, real
estate and tourism. Lowering
the cost of doing business will attract
SMEs back to Kaduna from
neighboring states and the FCT. Addressing
the current security
challenges more ingeniously without
militarization could restore
Kaduna's diminished glory. Governor
Yakowa has a unique
opportunity to improve security and social
cohesion, security,
transparency and deliver better governance. He has
the experience, capacity and
resources to do so, and the state has
potentials for much more. If
he fails, he would let many of us down
that think him a perfect
gentleman in the wrong political party.
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