By Dan Onwukwe
Few issues have touched such a raw nerve as the present inability of many state governors to discharge their financial obligations especially to their citizens. Sometime last year, former Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, challenged Nigerians to hold state governors and local council administrators accountable on how they manage the finances accruing to the states from the Federation Account. She raised alarm that many state governors have become so reckless with the resources of their states as if they were their personal estates.
She therefore warned that it was high time the citizens began to ask questions about what goes on in their respective states.Dr. Okonjo-Iweala made this well-taken observation at the convocation ceremony of Babcock University in Ilisan Ogun State. There is no doubt that her advice was unheeded. And the result has started to show, as many states are groaning under heavy financial crunch, with months of unpaid salaries for workers and pensioners, for periods ranging from one to eleven months. This is in spite of huge allocations they have received from the Federation Account before the prices of crude oil began to tumble.
It has therefore become necessary to ask these baseline questions: why do our governors seek public office? Is it for good governance, the welfare of the people, or for self-aggrandisement? It is even sadder as ten top gainers of the Federal allocation are owing their workers. Many of them have incurred huge debts, and are asking for financial stimulus from the Federal government.
Only if the state have been saving for the “rainy day”, perhaps they wouldn’t have been in this mess. And now, the rainy day is here. It’s interesting to see how much the ten top gainers received in 2013. Akwa Ibom was the highest gainer from the Federal allocation with N260bn, and Rivers N230bn, Lagos N168bn. Other states, according to figures sourced from the Federal Ministry of Finance are Kano (N140bn), Katsina N103bn, Oyo state N100bn, Kaduna N97bn and Borno N94bn. These financial receipts exclude Internally Generated Revenue (IGR) which is huge in some states like Lagos, Rivers, Delta and Akwa Ibom States.
Indeed, figures show that amount of money received by some of the states are higher than the annual budgets of neighbouring countries such as Ghana, Benin Republic, Liberia and Gambia. These facts are not from me. They are unassailable facts from the Federal Ministry of Finance.
And it leads inexorably to these questions: why are the states broke? Why are they seeking for bail-out? Why are many of them unable to discharge their statutory responsibilities – for instance, workers’ salaries, pensions or retirees, etc?. Although many of the governors have given the lame excuse that the dwindling revenue from the Federation Account is largely responsible, indeed, the truth is that many of the governors have been reckless with the resources of their states, feathering their own nests rather than rendering good governance. This fiscal recklessness is seen in their huge allocations to security votes, that nebulous, unaccounted bottomless pit, and jumbo allowances, uncecessary political appointments, and sundry overheads.
That’s how about 22 states’ out of the 36 states are owing workers and pensioners arrears of salaries and pensions. The delinquent states include Abia (8 months), Osun (7 months), Ogun (8 months), Oyo (4 months), Bauchi (3 months, Rivers (3 months), Ekiti (2 months), Imo (3 months) and Akwa Ibom (1month). A close look shows the indebted states are mainly the states controlled by the ruling All Progressives Congress(APC). The situation in Osun got so bad last week that pensioners in the had to carry placards. Can the state governor, Rauf Aregbesola fulfill his promise to clear the arrears of salaries this month? Osun’s case is a paradox of sort. Governor Aregbesola, a teacher of fiscal prudence has become a practitioner of fiscal recklessness.
All of this leads us to remember one man who has made remarkable difference in fiscal management of the state’s resources. He is Mr. Peter Obi, immediate past governor of Anambra State. That Anambra remains perhaps the only state in the country that is not owing its workers or pensioners, nor indebted to any financial institution in the country or abroad, is something Obi must be remembered for.
Why is this man different? Why other states are groaning under heavy indebtedness, Anambra has long pulled away from that debt cycle. Such was Obi’s remarkable feat in good governance that in 2011, the Debt Management Office (DMO), the nation’s custodian of national debts, credited him to have run the most “fiscally responsible and debt-free administration in the country”. DMO knows better. And it is not for nothing. Obi is a model for financial discipline.
Obi’s most worthy legacy is in financial matters. It is an area that all spend-rift governors must learn from, and how he did it. Before he became governor, schools in Anambra were shut for several months, teachers were owed salaries, pension and gratuity arrears hit the rooftops. He cleared all that within a short period of time. Today, workers are not owed salaries and pensioners are not in pains, because their entitlements are paid up. The Elderlies have a welfare scheme for their upkeep. Money was set aside for this purpose for years to come.
Most exemplary is the amount he left for his successor, over N75bn in both local and foreign investments as well as Certified State/MDAs balances and Federal Government Approved Refund. This, as contained in Obi’s handover Report to Governor Obiano, dated March 17,2014, has become a “tool for consolidating and moving forward the administration and governance structures in Anambra”. Some of the investments are held in trust for the state by Access Bank, Diamond Bank and Fidelity Bank.
That Governor Obiano is running the affairs of Anambra state today with little or no financial encumbrances is attributed to Obi’s financial discipline. Sadly, Obi’s successor is yet to give him the required credit. It doesn’t matter. What matters is that Anambra is today relatively secure financially (provided Obiano manages the funds prudently).
The lesson is that while most states are in deep red, it took a clear vision of one man, proper planning and frugal management of the state resources to put Anambra in fine, financial fettle. States currently in debt overhang need a lot to learn from Obi’s legacy in Anambra state. That’s one sure way our democracy can succeed.
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