Tuesday, 11 January 2011

Working with the Ohakim’s 2011 budget

Joachim Ezeji
The primary objective of the Imo State 2011 budget proposal as recently enunciated by the state governor includes job creation, education and eradication of extreme poverty. Captioned ‘’Budget of consolidation and continuity’’, the budget had an 8 point policy direction, which consists of embargo on new projects; scaling down , continuation and/or completion of on-going projects; massive road rehabilitation in the 27 local government areas of the state; good governance, transparency, accountability, efficiency and training in the teaching and civil service and total automation of processes; total confrontation of the security problem in the state; job creation/ mass recruitment into government service; and finally, enhanced internally generated revenue.
Ambitious as the 2011 budget is, it offers negligible enthusiasm amongst the people for who it was drafted. This stems from past experiences, particularly, previous budgets which has failed repeatedly with little effort to learn from such failures. For example, the 2011 Imo budget in most aspects is similar to that of 2010. In 2010 the Imo State Government had a total budget estimate of N127, 260, 577, 253. The revenue component of that budget was estimated at 55.5% of the total budget while the capital receipt on the other hand was 44.4% of the total budget. Conversely, the recurrent expenditure constituted 41.6% while Capital expenditure was 58.3% of the total budget.
However, as at end of September 2010 the scorecard of the budget showed that only 50.04% of the estimated recurrent revenue of N70,705,678,311 was achieved while the capital receipts, a mere N18,581,787,844 of the projected sum of N56,554,898,942 i.e. less than 35% of the projected was generated. At 50.04% and 35% ratings, these components of the budget i.e. the revenue cannot be said to have done well in view of the huge expectations and development needs of the state.
On the other hand, the recurrent expenditure as at end of September 2010 stood at 56.8% of the total recurrent expenditure of N52,962,600,572 while the capital expenditure as at end of September 2010 was N36,324,865,583 representing 48.8% of total capital expenditure projection of N74, 297,976, 681. Again, at both 56.8% and 48.8% ratings these components of the budget does not inspire anybody.
In 2011, the governor has proposed a whopping budget of N124,475,132,834. The total recurrent revenue stands at N72,148,781,892 while the total recurrent expenditure stands at N60,675,238,007. The capital receipts this time is estimated at N52,326,350,942 or about 43% of the total budget while the recurrent revenue stands at N72,148,782,892 or 57%.
It is clear that the amount proposed for 2011 is a little less than that of 2010. It remains to be understood why this is so, could it be an adjustment to guide against failure as seen in the preceding year’s budget or a signal that little development would be pursued in the current year? Whatever it is, a coterie of questions still emerge, and some of these are: Why is the state government so much dependent on capital receipts knowing fully how precarious and unreliable it could be? Meeting the capital receipts components of any government budget would certainly require a lot of work which includes immense networking, diplomacy, good governance and transparency amongst others. Unlike recurrent revenue, they are not statutory.
The recurrent expenditure projections and profile of the government is neither plausible nor salutary. It smacks of anything but prudence in resource management for a government to expend 56.8% of its total projected recurrent expenditure at a time when it was merely generating 50.04% of the projected revenue. The amount expended on capital expenditure as at the end of September 2010 was not stated in the 2011 budget review of expenditure events of 2010. It remains to be understood if this omission was deliberate or intentional. Relevant questions should be asked at the follow up sessions on the budget at the House of Assembly.
It remains to be seen how the governor intends to achieve the lofty objectives of the 2011 budget with a fragile revenue base. Top on this objective is poverty alleviation and job creation. According to the governor, the poverty index in Imo State in 1996 was 56% but today it has dropped drastically to 48%. The governor had quoted the United Nations Human Development Index Report without dating the reference document to buttress this assertion. He argued that at 48%, that the poverty index in Imo is clearly above the Federal Government index of 72%, and that the reduction stems from the opportunities created by the massive investments in infrastructure, micro-credit as well as Human Development. He also argued that the establishment of a poverty alleviation bureau has tackled poverty in a multi-faceted manner, from skills acquisition to transportation as well as micro-credit schemes. The governor also revealed that his government had recently set up a committee to fish out the poorest of the poor in Imo State for proper documentation and adequate empowerment in 2011.
Poverty alleviation in Imo state should actually begin with the prompt payment of salaries and pensions. This is not intended to portray a superiority of these statutory payments over other state needs; but they can easily be monitored and measured unlike the so called claims of skills acquisition to transportation as well as micro-credit schemes by the government. Delays and protracted payments of statutory bills does not inspire confidence on the government, no matter what it claims to the contrary. Also, budgets that allocates over 40% of recurrent expenditure on overhead and personnel cost will certainly struggle to do well. This was the case in 2009, 2010 and sadly again in 2011.
What is the security vote of the governor? This important component of the budget is neither obvious nor clear from the wordings of the budget. I need to be shown where it is located and its subhead. However, is it the truth that the speaker of the Imo State House of Assembly has a security vote of N500 million, the secretary to the state government N250million, and the deputy speaker N200million? However, the budget 2011 had shown that the capital projects of the Imo State House of Assembly including its constituency projects is the sum of N470million, without any breakdown of what these are.
Government should be reminded that insensitive allocation of public funds to public office holders stirs envy and bad blood in the polity. It sounds so unreasonable to allocate as much as 40% of recurrent expenditure on top office holders be they members or part of the executive, legislature or judiciary. High level criminality such as kidnapping, armed robbery, contract inflation, graft and greed will remain eternal consequence of such allocations. Prudency should start from the top of the pyramid where the bulk of the resources are manipulated.
On education, the governor claims that as part of his effort to ensure the realisation of functional and qualitative education in the state, it released the sum of N18million for the procurement of science equipment, chemicals and reagents for the 2010 May/June NECO and SSCE practical examinations for the 31No public secondary schools in the state. He further claimed that his government has released the sum of N150million out of the N250million approved for the accreditation of all courses in the college of engineering of the Imo State University. He also asserted that has successfully returned forty-five secondary schools to the Missions, while discussions are on-going with voluntary agencies/private proprietors that have indicated interest to take back their schools. He further revealed that his government has instituted a special overseas postgraduate scholarship scheme for Imo indigenes. And that candidates with first class or second class upper degrees would be encouraged to enrol in the Ivy League Universities in the world. The purpose of this, according to the governor is to produce well trained first class graduates who would be future leaders of the state and are well equipped to play leadership roles.
The happenings in the educational sector of the state is nothing to cheer about. It defies common sense to return forty-five secondary schools to private organisations and missions, and then have government withdraw apposite responsibility just after 2 years of offsetting staff salaries. What does government intend to achieve? What is the primary objective of that action? Is it merely to offload government financial responsibility thereto and have the now accruing government revenue saved? What happens to it, will it be looted, frittered or prudently reinvested into governance? I think that the wholesale returning of schools to missions or private organisations is utterly a bad idea. The simple reason is that these missions lack the capacity to make these schools competitive. Missions may struggle to meet the requisite funding required to run them. Running of schools is another important public service that needs to be preserved and nourished. Investment in school infrastructure is as important as teacher motivation. Trying to save funds in the face of competing educational needs amounts to self destruction.
The revelation on the institution of a special overseas postgraduate scholarship scheme for Imo indigenes is a welcome development, though overdue. We need to have the modalities for this published with the relevant bureau set up. However, the issue of Ivy league universities as the centre point of the policy is outlandish and neither here nor there. People need to be supported to train abroad in various spheres where Imo lack skills. It must not necessarily be an Ivy league university. Moreover, there are just about 10 Ivy league universities and all of them are located in the USA hence limiting this policy on Ivy league universities smacks of utopian targets. As an international environmental scholar at Brown University, one of the Ivy league universities, I can humbly assert that there are many other great universities in the USA as well as other parts of the world in the likes of Oxford, Cambridge, Loughborough and even KTH in Sweden. Great leaders of the state in the future who are well equipped to play leadership roles can emerge from even modest schools. Tell me, what school did the greatest leader Imo State has ever i.e. Late Sam Mbakwe attend?
Relocating Imo State University and designating and developing a location for the new School of Engineering campus of the university needs to be reprioritized. I shudder to query the worthwhileness of these two major capital projects in the same budget timeline. Since the university currently have a campus in Owerri, efforts should rather be exerted to first develop a new School of Engineering campus of the university instead. Anything other than this will further weaken the budget.
The government’s proposals on the economic sector of the state ; consisting of agriculture, commerce, industry, works, transport, housing, petroleum , environment, public utilities and rural development are very salutary and needs commendation. Government capacity to generate jobs for the teeming unemployed is very possible provided utmost good fate is deployed. However, I am pained that the government is mute about the implication of climate change on the economic sector if ignored. This therefore calls to mind the imperativeness of adopting a policy stand on how to go about economic development in the state. In view of the uncertainties involved with climate change, it is important to identify low-cost, no-regret responses that enhance the choices available in the future. For example, economic cost-benefit analysis – which could include environmental values – would suffice if decisions are made primarily based on economic efficiency. If, however, sustainable development is a leading policy objective, developments of today would also have to be evaluated based on their effects on intergenerational and intragenerational equity, and should include consideration of environmental impacts.
Tourism in the state could also be made to transit to eco-tourism in order to safeguard the environment. In this regards the government should once again reappraise its position on the ‘disvirgining’ of the Oguta lake. There is a lot the government could learn from the civil society , particularly NGOs working on sustainable development in the state. Isolating NGOs or treating them with suspicion undermines sustainability.
Till the house reconvenes to deliberate on the budget, I join the governor to chorus that Imo is in the hands of God.

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