Akwa Ibom`s Budget of Infrastructural Development
10 Jul 2012: Nasir Ahmad el-Rufai
With Akwa Ibom State, we have finally found a budget that allocates more than 70 per cent to capital expenditure – the recommended minimum to achieve accelerated and meaningful development in an underdeveloped setting. We will analyse the 1,095-page document titled “Approved Estimates of Akwa Ibom State for 2012.”
Located in Nigeria’s oil-rich South-south zone, Akwa Ibom State was created in 1987 out of the old Cross River State. The state is bordered on the east by Cross River State, on the west by Rivers State, on the South by the Atlantic Ocean and the North by Cross River and Imo States. The state has a population of 3.9 million in 2006 spread over 31 local government areas, and Uyo is its capital. Akwa Ibom is the 14th most populous state in Nigeria, and is the third most populous in the South-south zone. Its urban centres include Uyo, Eket, Ikot Ekpene, Abak, Ikot Abasi and Oron. The dominant ethnic groups are Ibibio, Anang, Oron, Eket, and Mbo. The main spoken languages are Ibobio, Annang Eket and Oron in addition to English.
According to the Nigeria Governors’ Forum, Akwa Ibom covers a land area of some 6,800 square kilometres. However, with an estimated GDP of $11 billion in 2010, has an economy larger than at least 30 African countries including Gambia, Mali, Chad, Burkina Faso, Niger, Togo, Sierra Leone, Liberia, and Sao Tome and Principe.
From the arable land of the saline water swamp forests in the South, to the rainforest in the North, most of Akwa Ibom State is naturally endowed with enormous agricultural, mineral and hydrocarbon potentials. Its tropical climate with abundant, year-round rainfall enables the growth of oil palm, cocoa, rubber, cassava, maize, rice, yams and cocoyam. There are large deposits of oil and gas within the land and the waters adjoining the state, and other minerals like limestone, clay, gold, salt, coal, silver nitrate and glass sand exist in commercial quantities.
According to a UNDP survey in 2010, Akwa Ibom had the third highest poverty rate of 27.1 per cent in the South-south zone after Cross River (31.9%) and Bayelsa (32.5%). According to the NBS as at 2010, the state’s unemployment rate was the second highest in the zone with 25.8 per cent, while Delta State had the worst (27.2%). On a brighter note, Akwa Ibom leads all states in the zone in the ease of Doing Business 2010 based on a World Bank study with an overall ranking of 20th out 36 states and FCT.
Obong Victor Attah, a distinguished architect was the first governor elected in this republic. He laid the foundations for the future growth of the state through the formulation of deliberate and thoughtful plans and designs for infrastructure, human capital and tourism development. The current governor, Godswill Akpabio, was first elected on the platform of the PDP in April 2007 and was re-elected in 2011.
Akpabio studied Law at the University of Calabar and the Nigerian Law School, Lagos. He was a key member of the Attah cabinet that governed the state between 1999 and 2007.
The 2012 budget for the state is N407.8 billion, as against the N419.78 billion in 2011. Out of the 2012 figure, N66.244 billion (16.2%) is for recurrent expenditure, while N341.5 billion (83.7%) is earmarked for capital expenditure. The budget would be financed from the federation account (N242bn), internally generated revenue (N21.65bn), local and foreign loans (N65bn), grants (N2bn), an opening balance of N21 billion and N100 million from the ecological funds.
The recurrent budget of N33.28 billion is earmarked for personnel costs and N13.10 billion for overhead costs. The personnel cost budget covers the 20 commissioners, 39 permanent secretaries and equivalent six special advisers, 36 special assistants, Chief of Staff, SSG and Head of Service, 57 chairmen and members of executive bodies and the bureaucracy below them of some 26,000 employees. It is clear that the state’s IGR of N22 billion will not cover its personnel cost. In realisation of this, the state last year completed the construction of 13 new tax offices in various local governments, and is actively increasing its equity investments in blue chips through the Ministry of Finance Incorporated (MOFI).
Scrutinising the capital budget of N197.533 billion further indicates that the economic sector gets N128.9 billion (37%), Social Services get N60.7 billion (17.7%), Environment and Regional Development get N52 billion (15.2%), and General Administration gets N99.8 billion (29%). The capital spending priorities of the 2012 budget reveal carefully thought out and focused expenditure. In a bid to expand the production base of the state which would directly increase IGR and tax collection, N38.1 billion have been set aside to establish state-owned industries.
This policy initiative would work if carefully designed and well-implemented in partnership with domestic and international private sector management. Agriculture gets N11 billion to build on the efforts started in 2011 when more than 4,000 participants from the 31 local governments were trained and empowered with soft loans of up to N500,000 to build and operate their farms. In the same year, the government through the state Strategic Food Reserve Programme spent about N1.5 billion to acquire internal food storage facilities with the capacity for 30,000 tonnes of grains, 10,000 tonnes of fish and 50,000 tonnes of fertilizer, in a bid to improve food security within the state.
The state is home to the 170,000 metric-tonne per-annum Aluminium Smelter in Ikot Abasi. The nation’s first state-owned independent power plant, the 191MW Ibom IPP, is a commendable model of state contribution to our electricity shortages.
The Works and Transport Ministry gets N71.8 billion from which the second phase of the Ibom International Airport will be completed, while work on the Deep Sea Port in Ibaka would commence. In 2011, the government constructed over 300 roads covering a distance of about 200 kilometres, many bridges, underground drainage systems and three flyovers. A commendable and successful initiative the state government has launched is the ‘Operation Zero Pot-Holes’ which aims to eradicate potholes on all township roads in Uyo, Ikot Ekpene and Eket.
This Education, Science and Technology sub-sector gets N19.6 billion in the budget. The state government has renovated many schools, increased teachers’ pay and fringe benefits, including a year-end bonus and has plans to introduce compulsory boarding in all secondary schools. Primary and secondary education is nearly free – fees of N100 and N300 per pupil payable per term respectively, and the equipping of schools and libraries ramped up rapidly. Within the zone, Akwa Ibom has the highest JSS enrolment of 156,761. The 2010 National Literacy Survey also showed that it has a literacy rate in any language of about 79 per cent.
The state has invested in improving healthcare by providing better working facilities, recruitment of qualified healthcare professionals and incentives. It has renovated more than 100 primary healthcare centres and hospitals. In 2011, five new general hospitals were built and a specialist hospital at Ekim Itam is still under construction. In 2012, a total of N16.9 billion was voted out of which N11.3 billion is for capital expenditure with new cottage hospitals planned for Ibiono Ibom, Nsit Ibom, Mbo and Obot Akara and completion of the specialist hospital.
Akwa Ibom is one of the few we have come across which has a well detailed and structured budget. Akwa Ibom’s ordinary revenue (IGR) is only a paltry 8 per cent of its total revenue. The state like most other Nigerian states should learn from Lagos, copy its ‘business-like’ model of operation, and strive to make every parastatal and MDA a significant revenue centre capable of funding itself to the extent possible, and then cut the size and cost of its bureaucracy.