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| Prince Frank Ukonga Lecture 102: The Rising Debt Profile of the Nigerian States, insolvency and impact on service delivery; Comparative with the Kigali [Rwanda] Experience; an empirical Appraisal |
Frank Ukonga Lecture 102: Rising Debt Profile of Nigerian
States and Sub-Saharan Countries-Deficit Budgeting, Debt Servicing, Insolvency and Impact on Service Delivery;
Comparatives with the Kigali [Rwanda] Experience: An Empirical Appraisal.
The Debt Profile of many of the 36 states of Nigeria and
other countries in Sub Saharan Africa is steadily increasing and put at 40% average of
the Debt /GDP ratio and would soon hit the critical stage of 50% and above if
something is not done urgently to arrest this ugly scenario of the previous century
of the ’80s and ’90s from returning back.
That was when Nigeria and the bulk of Africa Countries and the third
world were wallowing in debt burden, illiquidity, and insolvency. As history
repeats itself we must be proactive to stem the same ugly scenario from
repeating itself.
The classical Maxim of cutting one’s coat according to the
cloth available is fast evaporating being replaced by lofty budgeting addressed
to do more than the available resources can cater for, whence to cover the
deficit the States goes a borrowing accruing huge debt for the next Governor
and the citizens of the state to service and solvent.
Debt Profiles of Some of the States: Currently the debt
profile of some of the States are such that the IGR plus the statutory
allocations can only offset 25% on the average of the huge debts of both domestic
and external debt portfolios.
Recurrent Expenditure Vs Capital Expenditure: The cost of
running a government which comes under recurrent expenditure appears higher in
Nigeria and Sub Saharan Africa than the international standard practice of 25% of GDP and below.
Functional perspectives to Success in governance; a comparative with Rwanda’s Experience:
1] The retinue of Advisers and other hanger-on employed by
Governors to compensate political associates for their loyalty and ghost
workers should be perused critically with a view to downsize and bring down the
cost of personnel involved in service delivery. As such borrowing to implement capital
projects and investments which would yield Returns On Investments [ROI], Create
Jobs and raise the IGR should be the main objectives for borrowing and not
borrowing to pay consumptive recurrent expenditures as this would conform to
classical Keynesian economic theory.
2] ICT Vs Clerical Jobs of Ministries: It is time State
governments begin to employ the postmodern technological innovations of ICT to
run the Ministries. This would help to run the government effectively and
efficiently, cut down wastes and the aspects of the human factor in quality service
delivery and would also downsize the Ministerial appointments and staff which
would impact positively in pruning down the cost of running governments.
3] Corruption: Governors should do more to check corruption
in their governments. The introduction of ICT could help in these aspects.
4] Infrastructural Development Vs Maintenance Culture: Governors are advised to seek new strategies in
the construction of Roads, Bridges, Hospitals, etc with the hindsight of possibly
direct labour methodology and if they must engage contractors the policy of adequate
use of local content input must be in place. Maintenance culture of repairing
roads that are in default due to some failure of some parts of the roads so that
it can be motorable rather than wait until it is completely bad and then issue
contracts to contractors for the reconstruction of the entire road and other
amenities. Governors should step up maintenance culture on infrastructures to
stem infrastructural decay. This would ameliorate the weight of Capital
Expenditures
5] Lifestyles and Social Spending: Governors are advised to
be cautious of spending on personal lifestyles, Commissioners, advisers,
domestics and social spending addressed to prune down the cost of running the government.
6]Foreign Direct Investments [FDI]: Governors are advised to
beef up the investment portfolios in their respective states by an aggressive pursuit
of Foreign Direct Investments and to put in place juicy conditions and packages
to attract investors to their states. This certainly would boost the IGR,
create jobs and wealth.
7] Pro-Active Security Initiatives: Governors are the chief
Security officers of their states, so they should do more to guarantee the safety
of persons and properties by supporting the Police and other security agencies.
This would attract trade and investments to their states.
8] Creating an Atmosphere for business and investment to
thrive: Governors should Endeavour to create an atmosphere for businesses and investments
to thrive in their respective states by providing basic infrastructures of good
roads, hospitals, recreation centers, and other support services.
9] Aids, Grants, and Collaboration with Donor Agencies and
Investors: The earnings of a state can be greatly augmented through Aids,
Grants and collaborative initiatives with donor agencies and investors. These
efforts would ameliorate the stress on Recurrent Expenditures and Social spending
and impact positively on Capital Expenditures from the Schumpeterian
perspective.
10] Support for Small and Medium Scale Industries and mobilization
of the people of the state; most advanced economies of the world made it
through support for small and medium scale industries that dots their towns and
cities in millions. Support for these groups of investors is a sure path to the prosperity of the states. It would create millions of jobs, contribute to the
IGR and create wealth. Whence, numerous industrial incubator initiatives should
be created in all the Local Govt Areas of the state. The people of the State
should also be mobilized for Agricultural, economic and industrial revolution
by campaigns and sensitization.
The Kigali [Rwanda] Experience in modern governance and
quality service delivery; a Comparative:
A close study of Rwanda’s Experience and successes in
modern governance and quality service delivery to the electorate that has
earned Rwanda the nickname of the Singapore of the African Continent as an Emerging
Economic Tiger of Africa revealed that the leaders of Rwanda employed these ten
aforementioned points effectively.
Rwanda is a landlocked agrarian Country in East Africa with
little or no important mineral resources but rich in Casiterites, coltan, and
tin ore. Their main preoccupation is Agriculture specializing in growing
coffee and tea for exports.
Rwanda’s Economic, Industrial and Agricultural Revolution:
the Comparatives: Rwanda has a landmass of 24,000 sq km just about the size
of Edo State 18,000 sq km and a population of 12 million people. With a GNP of $16
billion dollars and Edo state GNP is $14 billion with a population of 7,5 million
peoples by current 2019 estimates. Rwanda has a debt portfolio of $3.5 billion
Dollars which are 35% of GDP considered portable. Whence Edo State and Rwanda
are almost on the same platform in the context of size, GNP and other aspects but
Edo state has more commercial resources than Rwanda which includes limestone, gold,
Petroleum etc and more than 20 states of
Nigeria are bigger than Rwanda in landmass, more endowed in the context of
mineral and human resources. So what were the secrets of Rwanda’s Successes
which the Nigerian States can borrow from?
The secret of Rwanda’s successes is the dedication of
their leaders, the focus of their leaders, and the successful mobilization of
the people, most especially the youth to come out and contribute to the
development of the Country. This is the backbone of the successes of Rwanda.
Next is the prudent management of the human and natural resources
with the successful application of the ten aforementioned points.
Conclusion: If Rwanda can make it to the top as the
Singapore of Africa by the applications of the aforementioned ten points any
Nigerian State can also make it big by applying these points to governance.
Furthermore, the Federal Government and the Senate are
advised to review the constitutional provision on devolution of powers to the
states in the context of resource control and statutory allocations.
If all these are in place we should be able to see some
states of Nigeria becoming the Singapore, Malaysia, and Dubai of Africa within
the next few years.
H.E Prince Frank Ukonga is a Presidential Candidate of Nigeria in the 2019 elections and the National Chairman of the Democratic Alternative Party-DA
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