The Cross River State 2014 Appropriation Bill presented by the Governor Liyel Imoke, to the State’s House of Assembly on the 13th was done rather surreptitiously. Just when he got the entire body polity agog with tall tales of who Pope Imoke will anoint as the next Governor, and all the futile unconstitutional speculation of whether the hand picked one will be a Jew or a Gentile, an insider servile poodle or a good Samaritan stranger, he quickly sneaked in his Appropriation Bill to the House. Before the House of Assembly approves this Appropriation, it will be a gross disservice to the good people of Cross River State, if it is not subjected to a critical public debate. Governor Imoke has stylized it a “Budget of Progression”. Thus, in the public spirit, and our patriotic duty as responsible citizens, we have posed the question, for debate, is the Cross River 2014 Appropriation Bill really a “Budget of Progression”? Has Governor Imoke learnt any lessons in presenting bloated and unrealistic budget projections to the State House of Assembly? Is the 2014 Budget a budget of progression or of retrogression?
The 2010 Appropriation Bill presented by Governor Imoke had to be revised downwards, from N118.8bn to N72.3bn. The amendment of the law became necessary following the inability of the state government to meet its projected revenue target for 2010. In a resolution, the House advised MDAs to be realistic and modest in revenue projections during budget preparations.
The lawmakers warned that the MDAs would be held responsible where targets are not fulfilled within acceptable range. Meanwhile, the State Special Adviser, Budget Monitoring and Evaluation, Mr. Peter Oti, stated that the exercise would help to enhance the preparation of subsequent budgets. But it is doubtful if they applied themselves diligently in the preparation of subsequent budgets, as the 2013 Budget also had to revised downwards.
In 2011, Governor Liyel Imoke had to introduce a Supplementary Appropriation Bill to increase the budget size from N101,694,757,075 to N119,280,828,422 an increase of N17,586,071,347 representing 17.29 percent. In 2010 he slashes the budget, and in 2011, he inflates it by 17.29%, even when the internally generated revenue is merely 23% of recurrent expenditure. Was the 17.29 % inflation of budget predicated upon his then political aspiration? It is curiously coincidental, that in the twilight of his regime, as another election year 2015 approaches, Governor Imoke is inflating his budget also by 17 per cent.
Least this budgetary scrutiny is mistaken for a biased criticism of Governor Imoke, I hasten to add, that the 2011 Budget, stylized a Budget of Consolidation, bloated as it were, contained many goodies for poverty alleviation, commitment to MDGs, social welfare and related issues of social justice. Perhaps, the consolidating logic of the budget was an allusion to his then second term aspiration. However, it was a brilliant and persuasive enumeration of a vast array of programmes, projects, and problems to be solved. Which may partly explain why the budget had to be leveraged, to achieve a multitude of political, social and other objectives, besides internally generated revenue.
The 2012 Budget continued the fine rhetoric’s of the 2011 Budget. One of many ants in the ointment, is the allocation of specific land areas for agricultural and industrial estates, that seems to exclude the northern Senatorial district. And in the 2013 Budget, which was also rightly slashed, the increased allocation from N6bn to N8bn to the Calabar Convention Centre stands out like a sore thumb, especially as the 2014 Budget makes further allocation to the Centre. Debt servicing last year was increased from N13bn to N20.4 bn. But this year, it has reduced to N18bn.
Following the forward and backward pattern of his budgeting, the present 2013 Budget was slashed by Governor Imoke in February from its size of N152,418,731,311,73 to N151,087,128,603.04. His reasons? Governor Imoke said, a number of developments which were not contemplated during the budget preparation have arisen, necessitating a revision of the budget size. Though the downward budget revision was said to be demonstrating fiscal discipline, to others it is replicating the old mistakes of unrealistic projections. And in general, while, he was slashing expending on projects like renovation of 40 secondary schools, printing of revised text books, and electricity projects, he was increasing expenditure for his pet project, Calabar International Convention Centre from 6bn to 8bn. The 2014 Budget is epitomized by, Governor Imoke repaying less debts and borrowing more, to finance speculative ventures like a Convention Centre, is taking one step forward, two steps backward. Thus, if this present proposed Budget is not subjected to an exhaustive scrutiny, and revised at this early stage, it would be reproducing the same old bungling giddy projections, causing more socio-economic retrogression in the State.
The nifty footwork and sleight of hand that conjured this 2014 Appropriation Bill reminds us of theatrical magicians putting up a show. Just like their abracadabra performance, so is it with this 2014 budget – the more you look the less you see. It is full of statistics, which says so much, and conceals sensitive secrets. You know what they say about statistics? They are like Bikinis, they reveal so much, but what they conceal is vital.
It is common sense, that when you are in a ditch, you got to stop digging. Cross River State is in a terrible financial quagmire, as a consequence of a misconceived Keynesian development agenda, churning out white elephant projects with little multiplier effect, that has rendered the State potentially bankrupt. The 2014 Appropriation Bill continues that old structurally defective,
lopsided pattern of unsustainable, slash and burn, disequilibrium economics, that creates tiny little Tinapa islands of wealth, surrounded by an ocean of mass poverty.
Where on earth do you increase your expenditure and debt when you are potentially bankrupt? We know economics has its paradoxes. Increasing your debts and spending more on white elephant projects, when you are potentially insolvent, is evidently unwise. As President Obama often reminds the US Republicans, who seem blinkered by their Tea Party neurosis, you can’t keep doing the same thing, and expect a different outcome. Increasing the 2014 budget by 17% on an inefficient neo-liberal “trickle down” assumption is simply extravagant, imprudent and will compound the financial woes of Cross River State.
Of the total budget proposal of N176,310,968,801.07 (One Hundred and Seventy-Six Billion, Three Hundred and Ten Million, Nine Hundred and Sixty-Eight Thousand, Eight Hundred and One Naira, Seven Kobo). About 54% of this whole budget is to be funded from capital receipts. In plain language, capital receipts are government loans raised from the public, borrowings from the Central Bank, foreign bodies, divestment of equity holding in public sector enterprises, special deposits, etc. Which in the context of Cross River State means more debts, or more borrowing. Living above our means, projecting a façade of prosperity, pilling up grievous debt burden and problems for the next generation.
In theory, the 70% capital expenditure and 30% recurrent expenditure ratio of the budget sounds good. But on closer examination, even as we await the budget details and comprehensive breakdown, it is odious. For instance, a staggering sum of N26,348,099,065.70 (Twenty-Six Billion, Three Hundred and Forty-Eight Million, Ninety-nine Thousand, Sixty-five naira, Seventy kobo) has been allocated to complete all Rural Development Agency’s roads, the Rural Access and Mobility Project (RAMP), which is said to be “roads totaling over 1000km in our state.” If we are “to complete” works on rural roads, it suggests work has been going on, that have been budgeted for previously. Which also means, when you divide this N26bn by the “over 1000 km” that is not specified, plus the previous three or seven years of budgetary allocation to the same rural roads, it goes way above the standard benchmark of constructing one kilometer road in Cross River. Making this additional allocation unconscionably imprudent.
Secondly, why are we computing for “over 1,000km” of roads in a relatively small State (ranked 19th has the administration been doing regarding rural roads before now? On the average they have only been working on 400 km of roads. By 2011 we were informed the Rural Development Agency roads are 480 km with 19 bridges. Why budget for “over 1000 km” of roads, in the penultimate year of a second term? Ordinarily that should have been a reason to applaud Governor Imoke, for considering such an exceedingly long stretch of roads to work on. But sadly, the reason for “over 1000 km” of roads at the seventh year budget of his administration is an admission of failure. Either nearly all the previous rural roads constructed by Governor Imoke have all collapsed, or this allocation is a questionable figure. Either way, a substantial part of this gigantic allocation is just going down the drain.
Governor Imoke, has budgeted N2,883,099,952.41 for the Agricultural Sector, N1,086,473,924.79 for Lands and Housing, N2,079,738,443.31 for Forestry, Bio-Diversity and Environment, and N1,137,658,500.12 for Tourism. Thus, for four ministries – Agriculture, Lands and Housing, Forestry, Bio-diversity and Environment, and Tourism, there is a total budget of N7,186,970,820.63 for all of them. And for just one of his pet projects, The Summit Hills Development, Governor Imoke has budgeted a further N10,000,000,000.00 (Ten Billion Naira). Keep in mind that in his 2013 Budget Governor Imoke allocated N8bn to the same project, that’s an aggregate of about N18bn thus far. of the 36 States of Nigeria by land size)? What is this grotesque monstrosity that N18bn is being lavished thereon?
In the words of His Excellency Governor Imoke, “The new Summit Hills development area in the heart of Calabar is designed and developed as a new lifestyle destination for not just Cross Riverians but Nigerians right across the country. It is expected to attract upper-middle class and high net-worth Nigerians desiring an investment in a safe, secure and serene neighborhood. The development is composed of the following… The Calabar International Convention Centre & Access Road… The Convention Centre Hotel…New Calabar Golf Course…The Residential / Golf Estate”. The beneficiaries of this N18bn profligate expenditure are “upper middle class and high net-worth Nigerians”, which of course excludes the working class and the middle class.
It is petty bourgeois, disjointed, neo-liberal economic development projects like this that has so impoverished the people of the State. When Governor Imoke allocates nothing to industrial production, a mere N2.8bn to Agriculture, N1.1bn to Tourism, that are the main stay of our State’s economy, N1.9bn to the Judiciary that constitutes the third arm of Government, with the Governor himself a lawyer, and N10bn to “a new lifestyle destination…for upper-middle class and high networth Nigerians”.
We are wont to ask. How many Cross Riverians are of “upper-middle class and high networth”? That is just about 1% of the population or even less. And what about the pauperized 99% of the population? There is no mention of the working class and middle class in his budget. There is no viable designated poverty alleviation programme. Instead, he is lining up the State’s treasure for “upper-middle class and high networth” citizens of our State and their chummy from other States. Therefore on whose side then is this budget? How do we know? ‘For where your treasure is, there your heart will be also’.
As the legendary Afro beat king Fela Kuti would sing, “water nko, na different matter”, that is the endemic problem of access to clean water is exceptional. With budgetary bias typically, disproportionately favoring the water sector, ordinarily, it would have been hailed as a good thing. But as political matrix subordinates econometrics or the imperative of utility infrastructural provision, the duplicity of the logic becomes even more repugnant. The Cross River State Water Board Limited is an obnoxiously detestable quango that internally generates hundreds of millions of revenue, and externally attracts hundreds of millions of dollars, yet they are the over pampered spoilt sector of the State.
As the Chairman of the Water Board is a chummy of the present Governor, and also of the one before, and together they are notoriously referred to as ‘The Three Musketeers”. Much as this is all common knowledge, the Cross River State Water Board Limited, on their official website hubristically affirms that, “the Company has enjoyed the moral, financial and political support of the State Government”.
The Water Board Limited regularly receives grants / credits from international and local Donor/Development agencies. It is known to have executed a $116m African Development Bank (ADB) assisted CRS Water Supply Project, among others. The Utility is currently implementing a $50m World Bank assisted Urban Water Sector Reform Project. The Water Board is prospecting a credit facility from Hong Kong-Shanghai Banking Corporation (HSBC), which they will use for funding water supply infrastructures in various Local Government Areas. Also in the pipeline is the European Union grant.
Governor Imoke himself would say, “funding has been secured from the World Bank and the African Development Bank to expand and modernize our urban schemes at Ogoja, Itigidi, Ikom and Obudu. The French Development Agency has also provided funds for Okpoma and Obubra Regional Water Schemes. All the affected schemes are expected to be commissioned in 2015”.
Yet, despite all these extravagant sources of funding, the Governor still allocates N9,557,269,721.64 (Nine Billion, Five Hundred and Fifty-Seven Million, Two Hundred and Sixty-nine Thousand, Seven Hundred and Twenty-one naira, Sixty-four kobo) to a private limited water Company. Counter part funding not withstanding, it is nepotistic in essence. And continuing with the legendary Fela Kuti’s satire on Government’s failure to provide the people with clean drinking water, he concludes, “water nko? E no dey?” Meaning the provision of clean drinking water and good sanitation is still not available to the masses. As in the days of Fela Kuti in the late ‘70s and ‘80s of Nigeria, so is it in our contemporary Nigeria, and in Cross River State in particular.
While the masses die of thirst and unsanitary condition, Cross River Water Board Limited, with its Chairman as the buddy of the Governor receives N9.5bn upon the billions it receives from overseas and other sources. Clearly, being one of the “Musketeers” and best friends of Governor Imoke is a highly profitable enterprise. However, what is so good for Mr. Gershom Bassey is toxic for our State treasury and collective well-being as a people. What is profitable for the “Musketeers” aggravates our penury in Cross River State.
Any wonder why Cross River State, that by population is ranked 28th 36 States of Nigeria, is the 3rd States are the two States with more debts. Those two are by far bigger, more industrialized, and richer than Cross River State. Of the N176bn that Governor Imoke has budgeted for 2014, he can only internally generate a paltry N30bn of his own, which is less than 75% of what he hopes to spend. And he aims to raise N92bn from outright borrowing. Of which he has ear marked N18bn to debt serving. That is, he is borrowing more money to repay his debts and squander on unsustainable pet projects. The balance of N50bn deficit in his budget will be doled out to him from the Federation Account.
The Federation Account is stimulating a welfare benefit addiction, which is sustaining bankrupt Nigerian States on an indolent life support machine. It is ironic that some of the highest debtor States – Lagos, Ekiti, Ogun and Oyo States are from the South West geographical area where the cacophony of Nigeria allegedly not being “a true federal” state is loudest. That nonsensical argument that is all over the place is predicated upon the misconception of the meaning of federalism, which is mistaken for confederation. There is a significant difference between the two that most people clamoring for a utopian “true federalism” seem not to have grasped. But the Political Science theory of what is “a true federalism” or “confederation” aside. How many of the 36 constituent States of Nigeria today can be financially independent
without any allocation from the Federation Account? Not more than five states can subsist even for three months without handouts from the Federal Government. And it is heart breaking that Cross River State is in that category highest debtor State? Lagos and Kaduna of acutely impoverished, indolent, backward, financially crippled States. Thus, after we have had the eight years regime of Governor Donald Duke (one of the Musketeers) and now six years of Governor Liyel Imoke (the second Musketeer), and our State is still potentially bankrupt, it would be utterly unwise not to question the set of policies and type of leadership that has so entrenched our poverty, backwardness and suffering.
Just the other day, Governor Liyel Imoke was heard telling members of his Cabinet and others in his inner caucus, that the next Governor of Cross River State will be hand picked from among them. Well, the last we checked, there is nothing in the Nigerian Constitution or even the PDP Constitution that supports such pontification. That is a form of abusive “insider dealing”. Which
in the Stock Market is a criminal offence. And such brazen rigged cronyism is discouraged in civilized political discourse or democracy. It is simply shamelessly illegitimate.
Hand picking a successor, in a democracy is rigging, pure and simple. There is a difference from grooming a leadership that would succeed a person through a free and fair election. Hand picking a person from your so called “inner circle” truncates the political space, and excludes others. And such a botched or rigged democratic process inevitably reproduces a political relationship of irresponsibility, oppression, plundering of the treasury, mass poverty and underdevelopment.
In summing up, as recently as September 2013, the Fiscal Responsibility Commission raised further alarm over the unsustainability of the debts of seven States in Nigeria, including Cross River State as among the top three, worst indebted States. The DMO had said that states’ indebtedness should never rise more than 50 per cent of their annual revenues in the previous 12 months. For Cross River State, the ratio stood at 61.44 per cent on a revenue of N56.92bn and a debt of N34.97bn including about $109,351,503 external debt. This is even based on the FRC Annual Report and Audited Accounts of 2011. The more recent report of domestic debt sustainability analysis undertaken by the DMO, show Cross River State failed the test, and by some computations are rated the 2nd The CBN Governor, Mallam Sanusi Lamido Sanusi was quoted by the Tribune of 8th today at a higher interest rate while leaving the heavy debt burden for our children and grandchildren”. He went on to advise the Federal Government not to allow “present and unborn generations inherit the heavy burden of foreign debt since Nigeria is currently in big danger because of it.”
The Governor Liyel Imoke’s Appropriation Bill of 2014, is based on a revenue projection of N30bn and a further borrowing of N92bn. That is a revenue to debt ratio of 61%, which fails the benchmark ratio standard of 50% set by the DMO. On indebtedness therefore, it is a budget of retrogression and failure. Increasing the budget by 17% from the year before is equally regressive.
We have highlighted many profligacies of the budget like the Summit Hills development area, that’s a “new life style destination” for upper middle class and high network buddies of the Governor. The bonanza that the Cross River Water Board Limited is, among others, has also been analyzed. Noting how the State’s structurally lopsided neo-liberal economic agenda generates tremendous profit for the “Musketeers”, their few inner circle cohorts, and acute poverty for the masses. The last word on the budget is, can this honestly be termed a “Budget of Progression” as Governor Imoke calls it?
Wouldn’t a budget of austerity have been more of progression? Cross River State Budget 2014: progression or retrogression? Res ipsa loquito !! The facts speak for themselves.
Manni Ochugboju Esq is the Principal Partner of Ochugboju & Co Attorneys based at Trinity House, Mabushi, Abuja. He is reachable via manni@ochugboju.com
