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EL-RUFAI ON FRIDAY

Akwa Ibom’s Budget of Infrastructural Development

With Akwa Ibom State, we have finally found a budget that allocates more than 70% to capital expenditure – the recommended minimum to achieve accelerated and meaningful development in an under-developed setting. But is that enough? Or is the quality of spending of the capital budget as important? How about the split between human and physical capital investments? Does that proportionate allocation translate into prudence, enhanced transparency and accountability? And do these guarantee a better quality of life for citizens of the state? We will explore some of these with the analysis of the 1,095-page document titled “Approved Estimates of Akwa Ibom State for 2012.”

Located in Nigeria’s oil-rich South-South zone, Akwa Ibom State was created in 1987 out of the old Cross River State. The state is bordered on the east by Cross River State, on the west by Rivers State, on the South by the Atlantic Ocean and the North by Cross River and Imo States. The state has a population of 3.9 million in 2006 spread over 31 local government areas, and Uyo is its capital. Akwa Ibom is the 14^th most populous state in Nigeria, and is the 3^rd most populous in the South-South zone: Bayelsa has the lowest population of 1.7 million in the zone, and Rivers the highest with 5.1 million people. Its urban centers include Uyo, Eket, Ikot Ekpene, Abak, Ikot Abasi and Oron. The dominant ethnic groups are Ibibio, Anang, Oron, Eket, and Mbo. The main spoken languages are Ibobio, Annang Eket and Oron in addition to English.

According to the Nigeria Governors’ Forum, Akwa Ibom covers a land area of some 6,800 square kilometers, smaller than the federal capital territory of Abuja. However, with an estimated GDP of $11bn in 2010, has an economy larger than at least 30 African countries including Gambia, Mali, Chad, Burkina Faso, Niger, Togo, Sierra Leone, Liberia, and Sao Tome and Principe. Its modest population exceeds that of Botswana, The Gambia, Guinea-Bissau, Liberia, Gabon, and Sao Tome & Principe.

From the arable land of the saline water swamp forests in the South, to the rainforest in the North, most of Akwa Ibom State is naturally endowed with enormous agricultural, mineral and hydrocarbon potentials. Its tropical climate with abundant, year-round rainfall enables the growth of oil palm, cocoa, rubber, cassava, maize, rice, yams and cocoyam. There are large deposits of oil and gas within the land and the waters adjoining the state, and other minerals like limestone, clay, gold, salt, coal, silver nitrate and glass sand exist in commercial quantities.

According to a UNDP survey in 2010, Akwa Ibom has the 3^rd highest poverty rate of 27.1% in the South-South zone after Cross River (31.9%) and Bayelsa (32.5%), but these are better than the nation’s poorest -Yobe’s (58%) and worse than much better Lagos with 14.5%. According to the NBS as at 2010, the state’s unemployment rate is the second highest in the South-South zone with 25.8% while Delta State has the worst (27.2%). On a brighter note, Akwa Ibom leads all states in the zone in the ease of Doing Business 2010 based on a World Bank study with an overall ranking of 20th out 36 states and FCT, with Edo ranked 21st, while Cross River was 33rd.

Tunde Ogbeha was the first governor of the state, with seven other governors succeeding him since 1988. Obong Victor Attah, a distinguished architect was the first governor elected in this republic. He laid the foundations for the future growth of the state through the formulation of deliberate and thoughtful plans and designs for infrastructure, human capital and tourism development. The current governor, Godswill Akpabio was first elected on the platform of the PDP in April 2007 and was re-elected in an atmosphere of violence and arson to contain the challenge of the ACN candidate in the 2011 contest, John Akpanudoedehe. In spite of this Akpabio appears to enjoy the support of his people, and he is adjudged to be performing well above average by development partners, Akwa Ibom citizens and outside observers.

Godswill Akpabio studied Law at the University of Calabar and the Nigerian Law School, Lagos. He first taught at the Afaha Secondary School, Essien Udim for a short period, before joining a law firm in Lagos as an Associate. In 1995 he was employed as Director, Corporate Affairs/Legal Services of EMIS Telecoms, which was a telecoms services provider. His career in public service began in 2002 when he became the state Commissioner for Petroleum and Natural Resources, followed by positions in the Ministry of Local Government and Chieftaincy Affairs and then the Ministry of Lands and Housing in 2006. He was a key member of the Obong Attah cabinet that governed the state between 1999 and 2007.

The 2012 budget for the state is N407.8bn, as against the N419.78bn in 2011. Out of the 2012 figure, N66.244bn (16.2%) is for recurrent expenditure while N341.5bn (83.7%) is earmarked for capital expenditure. This indicates the government’s commitment to achieving real development and improving the living standards for its people. The budget would be financed from federation account (N242bn), internally generated revenues (N21.65bn), local and foreign loans (N65bn), grants (N2bn), an opening balance of N21bn and N100 million from the ecological funds.

Analyzing the recurrent budget further, N33.28bn is earmarked for personnel costs and N13.10bn for overhead costs. The personnel cost budget covers the 20 commissioners, 39 permanent secretaries and equivalent, 6 special advisers, 36 special assistants, Chief of Staff, SSG and Head of Service, 57 chairmen and members of executive bodies and the bureaucracy below them of some 26,000 employees. It is clear that the state’s IGR of N22bn will not cover its personnel cost. The state needs to reduce its dependence on FAAC. In realization of this, the state has completed the construction of 13 new tax offices in various local governments last year, and is actively increasing its equity investments in blue chips through the Ministry of Finance Incorporated (MOFI).

Scrutinizing the capital budget of N197.533bn further indicates that the Economic Sector gets N128.9bn (37%), Social Services get N60.7bn (17.7%), Environment and Regional Development get N52bn (15.2%), and General Administration gets N99.8bn (29%). The capital spending priorities of the 2012 budget reveal carefully thought out and focused expenditure. In a bid to expand the production base of the state which would directly increase IGR and tax collection, N38.1bn have been set aside to establish state-owned industries. This policy initiative would work if carefully designed and well-implemented in partnership with domestic and international private sector management. Agriculture gets an impressive N11bn to build on the efforts started in 2011 when more than 4,000 participants from the 31 local governments were trained and empowered by soft loans of up to N500, 000 to build and operate their farms. In the same year, the government through its Akwa Ibom State Strategic Food Reserve Programme spent about N1.5bn to acquire internal food storage facilities with the capacity for 30,000 tons of grains, 10,000 tons of fish and 50,000 tons of fertilizer, in a bid to improve food security within the state. How these expenditures translate to the life of the citizens is not quite clear yet.

Akwa Ibom is home to the 170,000 metric tonne per annum Aluminium Smelter in Ikot Abasi - which sadly cost over four times the international market price to build and complete. The nation’s first state-owned independent power plant - the 191MW Ibom IPP is a commendable model of state contribution to our electricity shortages. These along with some investments like Ibom Meridien and Golf Course and Tropicana Entertainment Complex in Uyo, next door to Obudu Ctalle Ranch and Tinapa in Cross River State, can create a successful services, leisure and tourism cluster if successfully managed.

The Works and Transport ministry gets N71.8bn from which the second phase of the Ibom International Airport will be completed while work on the Deep Sea Port in Ibaka would commence. In 2011, the government constructed over 300 roads covering a distance of about 200 kilometers, many bridges, underground drainage systems and three flyovers. A commendable and successful initiative the state government has launched is the ‘Operation Zero Pot-Holes’ which aims to eradicate potholes on all township roads in Uyo, Ikot Ekpene and Eket.

The state’s performance in Education, Science and Technology is decent but need continuous improvement. This sub-sector gets N19.6bn in the 2012 budget. The state government has renovated many schools, increased teachers’ pay and fringe benefits, including a year-end bonus and has plans to introduce compulsory boarding in all secondary schools. Primary and secondary education is nearly free – fees of N100 and N300 per pupil payable per term respectively, and the equipping of schools and libraries ramped up rapidly. The state has about 12 institutions of higher learning, and out of the 67,852 who sat for JAMB in 2011, 57,080 pupils achieved and excelled beyond the benchmark of 170, this directly translates as an 84.12% pass rate, which is excellent by any standard. Within the South-South zone, Akwa Ibom has the highest JSS enrollment of 156,761 while Bayelsa has the lowest with 42,638. The 2010 National Literacy Survey also shows that Akwa Ibom has a literacy rate in any language of about 79%.

The state has invested in improving healthcare by providing better working facilities, recruitment of qualified healthcare professionals and incentives. It has renovated more than 100 primary healthcare centers and hospitals. In 2011, five new general hospitals were built and a specialist hospital at Ekim Itam is still under construction. In 2012, a total of N16.9bn was voted out of which N11.3bn is for capital expenditure with new cottage hospitals planned for Ibiono Ibom, Nsit Ibom, Mbo and Obot Akara and completion of the specialist hospital.

Akwa Ibom (like Lagos, Kaduna, Gombe and Nasarawa States,) is one of the few we have come across which has a well detailed and structured budget. Unlike Lagos, Akwa Ibom’s ordinary revenue (IGR) is only a paltry 8% of its total revenue; therefore it is one of those many states that rely on Abuja for monthly survival handouts. The state like most other Nigerian states should learn from Lagos, copy its ‘business- like’ model of operation, and strive to make every parastatal and MDA a significant revenue center capable of funding itself to the extent possible, and then cut the size and cost of its bureaucracy.

Governor Akpabio has the unique opportunity of governing a state with immense revenues at a time when he can put the state on a path of sustainable development. This he has done reasonably well so far, with his noteworthy achievements in the provision of physical infrastructure. Preparing the state for a post oil economy requires more – human capital investments and leveraging on the state’s endowments. That means the paltry N16 million for the scholarship board must be increased. Akwa Ibom should sponsor as many people as possible to acquire masters’ and doctorate degrees in the best universities in the world. The state can afford it.

The level of transparency and accountability in state finances must be enhanced by domesticating the federal fiscal responsibility and public procurement legislations. The current personality cult and ‘hero-worship’ around the state governor must give way to building lasting institutions, depersonalized structures and systems of governance. That way, Mr. Akpabio may end up being another odd-fellow – a truly performing PDP governor leaving behind a sustainable legacy. Our prayers are with him to make the right choices.