Anambra’s budget of misplaced priorities – Nasir el-Rufai
We continue our budgetary analysis with the South Eastern state of Anambra, with a view to analyze how the state’s budget plans to address development challenges within the state. The state is bounded by Delta to the west, Imo to the South, Enugu to the east, and Kogi to the North. It has a total land mass of 4,416 sq km, is situated on the eastern side of the River Niger and has 21 local government areas, its major towns are Awka its capital city, the commercial town of Onitsha, and the industrial city of Nnewi. Anambra has a population of 4.2m and is the 9th most populous nationwide. Most of Anambra’s population is rural. However, as is with every major state, rural-urban migration poses serious burdens for the state’s resources. This pressure is evident in the commercial city of Onitsha where amenities like decent housing, potable water and electricity are in short supply.
Old Anambra state was created in 1976 from part of the East Central State, and its capital was Enugu. Following further state creation in 1991, it was divided into two new states, Anambra and Enugu. Anambra now has its capital in Awka. Mr. Peter Obi (APGA) is the current governor of the state, who resumed office in March 2006, after the removal of Dr Ngige by a Court of Appeal judgment in Enugu after it ruled that Ngige’s election in 2003 was defective. Obi was impeached in November 2006, but was reinstated in February 2007 after the impeachment was overturned. Although a fresh election was held in April 2007, he returned to office in June 2007 after a court ruling decided that he should be allowed to complete a four year term. He was re-elected for a second term on 6 February 2010.
Peter Obi has a BA degree in Philosophy from the University of Nigeria Nsukka (1984) and enjoys the title of being the youngest Chairman of Fidelity Bank. Considering Mr. Obi’s career achievements, and the fact that he has been to the Supreme Court successfully three times to reclaim his electoral mandate, the people had high hopes that he would improve on the stellar performance of Dr. Chris Ngige, sadly, this has not been the case, as his administration has seen increasing crime rate, infrastructure deficits, a number of strike actions over minimum wage, higher tax burdens, and exodus of elites, among other challenges.
Unemployment rate in Anambra is among the highest in the South East zone, at 21.3%, it is higher than the national average of 21.1%. Imo’s unemployment rate is 29.9% and Enugu is 15%. The state has tried to reduce unemployment through its Anambra Integrated Development Strategy (ANIDS) and the Anambra Youth Reorientation and Empowerment Program (ANSYREP), but the problem with these programs is that they contribute very little to the production base of the state.
The incidence of poverty in the state is very high – actually disappointing. The South East has a food poor incidence of 41.0% of which 60.9% is absolutely poor, while 66.5% is relatively poor and 56.8% live under a dollar a day. Anambra has a poverty index of 22.8%, the third highest in the South East, and shares the 6th lowest position in Nigeria with Rivers State which also has 22.8%. About 47.6% of the state’s population is core poor, 45.0% is moderately poor and only 7.4% of the state’s population is classified as none poor. Income inequality as measured by changes in Gini co-efficient between 2003 and 2010 increased slightly by 7.6% as against 18.1% for Ebonyi and Enugu states 7.5% increase.
The people of Anambra state are known to be brilliant, enterprising and resourceful. Most of Nigera’s brightest professors, writers, public servants and politicians hailed from the state. One would expect that given this enterprising spirit, the state would create conditions conducive to innovation, business and development. This is not the case, out of the five South Eastern states, Anambra has the fourth lowest ranking for ease of doing business; it was at a distant 35th position out of the 36 states and FCT in 2010. Starting a business involves nine procedures that may span 39 days. Enugu with the best doing business ranking in the zone takes the 30th position of the 36 states, while Imo is ranked 36, as the most difficult state to do business both in the South East and nationally.
Anambra State is not much endowed with mineral resources and the few known to exist are not exploited. For example, Tungsten at Oba, and large deposits of lignite in Onitsha, Idemili, and Nnewi LGAs are yet to be exploited. Kaolin is mined in the Ukpor lhembosi axis for the ceramic industry at Umuahia in Abia State; while the deposits at Afuleri are not exploited. Sandstones of Ameke Formation are quarried in several places, particularly at Abagana and Nsugbe for construction purposes. Natural gas has been discovered at Ebenebe Ridge, southeast of Ebenebe town, and preliminary prospecting indicates that crude oil exists in commercial quantities in the state. Cash Crops in the state include coco yam, cassava, rice, maize and oil palm.
The 2012 budget for the state is N82.5bn as against N66.9bn in 2011, representing a 23.2% increase. N46.8bn (57%) is apportioned for capital expenditure, and N35.7bn (43%) is for recurrent expenditure. Analyzing the recurrent budget further, N9.2bn or (26%) is set aside for Consolidated Revenue Fund Charges, N16.3bn (45%) for personnel costs, N7.4bn (21%) for overhead costs and N2.8bn (8%) as subvention to parastatals/ tertiary institutions. Anambra’s total IGR for 2012 is projected at N12bn, the same figure as was projected in 2011. This means, while its expenditure has increased, the state has not enhanced its capacity to collect or expand its tax base.
The two major contributors to IGR in 2012 will be N6.7bn from taxes and about N4bn from fines and fees. If this IGR is measured against the states projected personnel costs of N16.3bn, Anambra cannot pay its staff salaries without reliance on federal allocation; this means it is one of those ‘dependent’ states and is not economically viable for independent existence.
The 2012 budget will be funded by projected capital receipts of N47bn, N12bn as IGR and N36bn as FAAC allocations, bringing total revenues to a sum of N95bn, out of which N12.3bn would be transferred to Capital Development Fund. In sectoral terms, N28.2bn (34.2%) is allocated to the economic sector, N24.2 bn (29.4%) to the social sector, N9.7bn (11.82%) for the environmental sector and N20.2bn (24.52%) for general administration.
The education sub sector is allocated N10.99bn. Anambra state has a longstanding reputation of being an educationally advanced state: it has at least 9 institutions of higher learning, its literacy rate is comparatively high, in a 2010 NBS literacy survey, youth literacy in the state was said to be 92.9%, adult literacy at 74.0%. However, compared to its South East Neighbors, the state has the third lowest adult literacy amongst the 5 states, Abia has 78.2%, Imo 80.8%, Enugu with 64.6% and Ebonyi with 69.8%, this means that in education terms, Anambra is performing poorer than most other states in its region. From this regional perspective, it means investment in education urgently needs attention and ought to be ramped up.
A meager N1.4 billion is budgeted for health, and considering that health should be the core focus of any state government, this amount is barely adequate. From this sum, it is evident that the government has misplaced priorities, apportioning only 1.7% of the entire budget to a sector that directly affects the livelihood of all of its populace.
Another major problem of the state is roads and soil erosion. In a bid to tackle this, the government apportioned N10bn to continue the construction of several intra-state highways and bridges, targeting the completion of about 100km of roads this fiscal year. However, only N1.696bn is allocated for drainage, erosion control and sewerage. This we believe would not address the challenges in that area.
Water supply which also is a major problem will get only N800m: of this sum, it is hoped that expansion works on major water schemes would be carried out, and new ones built. This sum is little, and may not amount to much improvement in water supply in the state.
Agriculture is apportioned N1.4bn, an evidence of misplaced priorities: with figures like these, it is no surprise that unemployment in the state is high. How can a state government allocate only 1.7% of its entire budget to agriculture in a rural state?Unemployment can be tackled effectively with agriculture if the value chain challenges in food and cash crops production are tackled.
The housing sub sector will get N1.8bn, the government plans to partner with the private sector in providing more residential accommodation, a core focus will be on completing all existing projects. This is commendable.
What is clear from this analysis is that Anambra state like most states of the federation is not allocating funds to adequately address the key social challenges that confront its people. Anambra state should slim down the size and cost if its government, learn to prioritize its budget allocations, expand its revenue base from taxes by attracting federal government and private sector participation in mineral exploration, improve its business climate by easing the starting and running of a business
Anambra state like other south-east states must address the security challenges arising from violent crimes and kidnapping that have scared the elites and investors from the state. The state should leverage its human resources by refocusing the priorities of government on SME and industrial development, investing in infrastructure, agriculture and human capital. Anambra needs to capitalize on the enterprising nature of its people by tackling unemployment, poverty and infrastructure deficits. Until that time, Anambra will remain a state with big prospects and very little growth.
I wish to join fellow country men and women in commiserating with all those that lost loved one, friends and family members in the Dana Air plane crash of Sunday 3rd June. I knew some of the deceased very well. Shehu Sa’ad was a year my junior in Barewa College, an accomplished banker and perfect gentleman. Falmata Mohammed, sister to my Barewa class monitor, Group Captain Aliyu Mohammed (Retired) was a kind and gentle soul. Mrs. Fatima Abubakar, a colleague of mine since the days I worked in the BPE lost her daughter, while another Barewa Old Boy and elder brother Shehu Kaikai lost his daughter. Dr. Usman Bugaje’s brother Idris lost two daughters. May their souls rest in perfect peace, Amen. We hope that this disaster amounts to a wake-up call for strengthening regulatory oversight in our aviation sector. Out of every N25,000 we pay for our air tickets, at least N11,000 goes to government coffers – which funds ought to be used to ensure safe skies for Nigerians. Sadly, it is contracts-and-patronage galore with little attention to passenger convenience and safety. This must change.
…..and Joyful Friday….
As you read this, we will be joining many elders, leaders, friends and well-wishers in witnessing the turbaning of my friend, brother and one that can-do-no-wrong in my eyes – Sanusi Lamido Sanusi – as the new Dan-Maje of Kano. It is a title for princes, reserved only for sons and grandsons of deceased Emirs of Kano, and cannot be acquired in any other way. We are grateful to His Royal Highness, Sarkin Kano Alhaji Ado Bayero for honoring one of our own, one of the best and brightest of our generation, and without doubt the best-performing public servant in the otherwise incompetent Jonathan administration. May Allah continue to Protect the highly respected Emir of Kano, his Dan-Maje and the Emirate Council for Sanusi’s recognition, and guide them all to achieve greater heights for Kano and Nigeria.
Written by Mallam Nasir Ahmed el-Rufai