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Akwa Ibom and the challenge of funding N153bn budget
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Out of this amount, the governor wants to pay salaries with N18Bn, take care of overhead costs with N8.48Bn, and charge N9.83bn to consolidated account where such matters as pension, gratuities and public debts can be taken care of. This will make up the recurrent expenditure of N36.33bn.
This would leave Akpabio with a whopping N117.2bn for capital projects and programmes. Capital budgets often give a hint to the character of a leader. The ratio of recurrent to capital, 23: 77 per cent has been hailed. The FG 2008 budget is lopsided against capital vote.
Promises made at soap boxes mean nothing except the budget of the man who made the promises is out. Akpabio, in his first full budget, seems to justify his stance. A man who has so far signed up to N75bn road projects, the governor has set aside the highest allocation of N42.3bn for roads, housing and urban development.
This agrees with his policy of lifting Akwa Ibom from where it is today to a state of first class infrastructure to create an environment capable of incubating any business.
Already, the governor is laying infrastructural bedrocks and aesthetics to attract investors by constructing 260 kilometres of roads and 100 electricity projects. Most of them have been completed. Now, Akpabio says; “The State will experience a new lease of life as government will ensure that all the local government headquarters in the state can enjoy uninterrupted power supply from the power expected to be generated from the Ibom Power Plant when completed. More housing estates shall be constructed. Government shall also provide strategic rural and urban road network to link every local government area in the State”.
The next sector where Akpabio wants to mount huge campaign is tourism. Now, the government says he is bent on completing the much cherished Ibom L’e Meridien Hotel and Golf Resort at Nwaniba, the International Airport at Okobo and the Independent Power project at Ikot Abasi. This is all about fulfilling effort to turn the state into an investment and tourism haven.
Nothing would please the new governor other than seeing a re-direction of national tourism traffic from elsewhere to Uyo. In 2008, the government is stepping up this competition with huge capital support. “To showcase the tourism potentials of our State, we are determined to put in place tourist attractions that will encourage and facilitate the influx of tourists into our State as a one-stop destination with the award of contract for the construction of a Tropicana Galleria with Amusement Park in Uyo”.
Akpabio declared readiness to pump N28.6bn to construct and establish a petroleum products depot and petroleum products Mega Service Stations. In addition to these, the Ibaka Deep Sea Port/Free trade zone (FTZ) project and Tank farm/floating station project shall be executed in 2008.
Education is a key component of the new vision. For this, the governor is ready to pump N18bn into construction hobs, while about N8Bn would be for recurrent needs in the sector.
Much was accomplished in 2007, but the governor said 2008 would witness the rehabilitation of 310 secondary and primary schools in the state.
Programmes
More hospitals will be built in the state. A state that is putting in so much for industrial promotion should be considered wise to put aside over N7.7bn to build new hospitals and clinics.
“And in the spirit of Public Private Partnership in the development and provision of social amenities to our people, a memorandum of understanding will soon be signed with a private firm based in the United States of America for the building of two new hospitals at Eastern Obolo, and Ibeno at a cost of about 55 million US dollars”, the governor stated.
One of the areas where experts frowned at in terms of resource allocation is agriculture. Government said it was spending a mere N2.47bn in 2008. The Akwa Ibom State Chamber of Commerce and Industry, according to the secretary, Ime Etuk, is eager to sea ports, garri processing plants, and huge agro-based schemes at the local council level. There is the need to create a boost in employment.
Concern for massive job creation was also supported by egg-heads in the federal university of Uyo, where the dean of Business administration, Bassey Akpakpan, called for skill acquisition schemes to save graduating students.
The governor however has stated his intention to rebuild the College of Agriculture, Obio Akpa and well funded to enable the institution get accreditation for programmes relevant to the requirement for its development as centre of excellence in agricultural studies.
Also, in a determined effort to transform the rural areas, a number of people-oriented projects shall be executed in all the 31 local government areas of the State in 2008. These projects include electricity, potable water, rural feeder roads, farm roads, bridges and, classrooms.
In essence, the administration plans to successfully implement its 2008 budget with the following strategies; Completion of ongoing supportive infrastructural facilities especially roads and power, and promotion of economically productive enterprises; Application of resources in a prudent manner to accelerate the transformation of the State for the attainment of “A Greater Akwa Ibom State” in keeping with the broad goals of this Administration; Investment in revenue yielding projects in oil and gas and tourism related activities; Expansion and diversification of the internal revenue generation base and plugging loopholes to stop leakages; Implementation of wealth creation and poverty alleviation programmes through core ministerial mandates and other donor-funded programmes in the State; etc.
The governor admitted that by September 2007, the total revenue accruals to Akwa Ibom was N87.766Bn or about 77 per cent of revenue expectation within the period pro-rata. This raises doubts on ability of the 2008 budget to perform successfully on the supply side.
The administration seems to expect the internal revenue account which fetched a mere N6.44bn last year to perform magic and jump to N11.23Bn, or for federation account that was a mere N11Bn to jump to N23bn in 2008.
The toughest expectation is the capital receipt account which was about N30m in 2007 to bring in almost N43bn. The governor talked about raising N22bn from the Stock Exchange but there was no indication where the other N20bn would come from.
Also, the budget was hinged on federation allocation that itself relies on oil revenue from the international market. The state budget said it was hinging this on Nigeria netting daily export of 2.45mbpd. Going by the fact that Nigeria never made up to 2mbpd (hovered at about 1.8Bn at best in 2007), and with increasing resort to violence in the Niger Delta, experts viewed the calculation as very optimistic.
Favourable Wind
There are factors however that show that the planners of the budget were no pinheads. The budget was predicated on $53.83 per barrel but the National Assembly has eventually convinced the presidency to shift the benchmark to $59, which is still a far cry from the $100 per barrel that is more the reality. This means excess crude oil account may come to the rescue of the Akwa Ibom State budget planers. Also, Nigeria has crossed to about 2.1mbpd in January crude oil supplies. This may inch up to the expected target, except that the militants have called off their peace negotiations with the FG.
Also, according to the governor’s Senior Special Adviser on Media and Public Affairs, Udeme Nana, the new measures on accountability and transparency in internal revenue application must have good tidings within.
Now, he said, the companies and corporations are to pay into the state treasury directly. Another aspect where transparency may come to the rescue of the Akpabio administration in the success of the 2008 budget is at the federal level.
Other strict measures that may help the state to trap its revenues more accurately include:
Land rents currently collected by APICO on Government land will be paid directly into the Treasury; A new tax regime shall be introduced which shall include progressive review of tax, fees and fine rates in the State to conform with prevailing circumstances in other states in the South-South region of the country; We will ensure an effective and efficient monitoring of all revenue generating ministries by Revenue Inspectors to align performance with set targets. Henceforth, Government will promptly prosecute those who evade tax”, the governor threatened just like any other debt/tax collector anywhere in the world. The snag here is that hash taxation hardly woos investors.
For these reasons, the governor may after all find the money to execute his ambitious programme of creating a new Dubai in Africa.
Akpabio has reason to push and heave for the sake of the success of his first real budget.
“Mr. Speaker and Honourable members, the 2008 Budget is very important for this administration as it is the foundation on which we hope to build and implement policies and programmes of this administration. My intention is to optimize it for the continuation and completion of projects already enunciated in the 2007 Revised Budget in our determined effort to transform the State into a tourist resort and an investor’s haven”.
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The State will experience a new lease of life as government will ensure that all the local government headquarters in the state can enjoy uninterrupted power supply from the power expected to be generated from the Ibom Power Plant when completed
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