Pastor Emmanuel Igbasan is the Ondo State Commissioner for Budget and Planning. He spoke with Line Editors on what 2018, 2019 budget hold for the people of the state.
What role has your ministry been playing as an engine of economic growth in the state?
Thank you very much. It is my delight to be here in the midst of knowledgeable people who are ready to throw out questions and answers from us. We will try to do our best to ensure that we supply the correct answers
The Ministry of Budget and Planning happens to be the coordinating ministry for other ministries for the state. We highlight development policies and physical strategies for us to meet those aspirations of the government. We also ascertain the quantum of revenue or cash inflow available to the government within a time frame and try our hands on optimal allocation of those resources to permit greater impact on the wellbeing and welfare of the citizenry. So, by and large, the ministry has been playing pivotal role in the economic development of the state by allocating optimally resources to every sector of the economy that will permit them to develop.
Almost two years into the current administration, how will you access the growth of the state economically and the effect on the masses?
Speaking basically and professionally now, I think the growth has been moderate and sustainable. Number one, the effect on the masses comes from the fact that the Governor made a promise that the salaries of workers will be paid as and when due. Recall to mind that when we came on board, the workers were owed about seven months salary arrears including that of February 2017 and right now those arrears have been defrayed even to the last one month and since the inception of this administration about two years ago, he has not owed anybody including the leave allowances.
Now, what is the ripple effect on the economy? It shows that a market woman will be able to sell, the fashion designers will be able to design something because if workers get their salaries as and when due, they will be able to pay their children’s school fees thereby affecting those ones in public and private enterprises of the state getting their school fees as and when due. The market women, those that want to build houses, everything in a short sentence, has helped to stabilise and rejig the economy by regular payment of salaries.
Two, When you look at the level of infrastructural development that this administration has embarked upon so far, we have completed more than 50 kilometres of road within the state. And what does that show us? it shows that the money used for road construction are for our own people. The people that will sell cement, the ones that will sell iron rods, those that will sell planks, everything comes within.
So, basically speaking, the effort so far has helped to stabilize our economy, promote the welfare and well-being of our people and rejig the state economy and we are on the right path of growth, so to speak.
Government has no business in business but the business of government in business is the creation of the right environment for businesses to thrive and that is what this government has been doing. Now, how do we achieve that is by partnership. In rice production, it is not as if the government is setting up factories or factories are owned by the state, it is public-private partnership.
And we ensured that most of the masses of unemployed youths are brought on board and we did our calculation and we discovered that the greatest cost when going into agriculture is the terrain in which they have to operate. In other words, we’ve been able to discover that more than 74% of the cost of agriculture goes into land clearing and government said let us intervene in this area. Let us get some lands and clear them for people’s use and then allocate them. That is creating the enabling environment, government is not paying salary to those people that are producing this rice. They are just allocated lands when government has helped them to carry the cost of land clearing.
For example in the northern area, you can hire a tractor and clear several hectares of land but here, because of the vegetation and the rain forest we have here, you can hardly clear one acre in a day.
So, government has taken it upon itself to ensure that our people are taken out of the valley of poverty by removing the obstacles that hinder their progress.
Thank you so much, last year 2018 budget was N180.23 billion and this year we projected about N190 billion and we did not just arrive at that estimate because it has not been passed by the House so I wouldn’t want to refer to it as a budget yet but the estimate we submitted to the house is about N190 billion and we’ve taken into consideration all the parameters and we have used every physical instrument to estimate accurately the quantum of cash inflow that we reasonably expect to crystallize within the physical year.
Now, there are various components that make that amount of N190 billion. We have the federation account in which we rightly estimated using physical instruments like five year moving average, four year moving average, three year weighted average without outliers and everything and we have taken the most likely figure that will come in from the federation account.
We have also looked at our internally generated revenue and projected to the best of our ability what we are likely to earn within our resources as a state. Other basic component also is loan. This loan, you will call to mind that the previous administration had about the N50 billion bond and they were only able to access 27 billion out of it, leaving a kind of balance there. But the time frame has lapsed for us to access the balance, so we intend, with the level and the quantum of infrastructural development, want to go to the capital market. So to say, there is no government that can grow without recourse to the capital market. So, we have estimated these resources and also from development partners. We put everything together and God willing, reasonably, we will attain that mark of N190 billion, irrespective of what we have.
More specifically, what is the summation, what is the vision of this year budget? What does it seek to achieve?
Like our action governor has christened it to be a budget of advancement, it is to leverage on the moderate grades of 2018 budget. In 2018, being the first budget proposal by this administration, we attempted and succeeded to a large extent to lay a solid foundation for sustainable economic growth of the state and in every strata. This we did by having five cardinal points which we want to tackle, which include job creation through agric, entrepreneurship and industrialisation, massive infrastructure development, promotion of functional education and technology growth, provision of qualitative health rural development and all the rest.
Now from the governor’s speech, we will see that we highlighted the landmark achievements in each of these basic cardinal points. For example, it is on record that there is no government in Ondo state that has constructed the number of roads in four years to eight years what Arakunrin has constructed within two years.
And one thing that is also gladdening is that it is well spread. It is not limited to just one area. As development is going on at the Southern Senatorial zone, you have it in the Northern Senatorial zone and Central Senatorial zone.
Also let’s look at health. This government inherited two Mother and Child hospitals which were centred in the central zone of the state. Now we added another five that take maternal and child health care to all our people in the nooks and crannies of the state. We can go on and on. The first education summit happened under this administration and we are talking of education endowment fund that will enable the indigent ones to access education.
We have passed bill on health insurance that will allow the aged, the vulnerable, the mother and child under five years old to access quality healthcare. Not only that, he has also gone to USA to import medical equipment worth more than N2billion that we are expecting to land. The consignment is expected within the state in the next few weeks which will be distributed across the Mother and Child hospitals.
So you see that on each of the trajectory, he has set for himself a scoring point. So, we used 2018 to lay this solid foundation for sustainable and inclusive growth for the state. Now, 2019 budget, christened budget of advancement is to take it much higher than what we are now investing on all fronts on the moderate things that we have achieved in 2018. So essentially, it is for us to build on the successes and the solid foundation that has been laid in 2018 budget.
The percentage of capital expenditure in the 2019 budget is increased by 3% and government has continually been saying there is paucity of fund. How were you able to get this done and what do you intend to achieve with this slight increment?
Like I said, if we approach the capital market, to get loan, it is not for us to fund our consumption or gratify our wants which the economists will say are insatiable.
For us to engage in practical, sustainable and growth oriented projects that will, in terms of infrastructure; roads, water, light and everything that will create the enabling environment for businesses to thrive and for economic activities to pick up in the state, it’s reasonably expected that if we go to the capital market to bring in this fund, then our capital expenditure should also equally increase. But not only that, it will also be able to rein in some of our escalating overheads within the government which refers to the fact that we are attempting to attain efficiency in governance by cutting off some of those unnecessary funds that are being fretted away due to bureaucracy or inefficiencies in government administration.
We also intend to harvest the benefit of the first development partner summit that we had in the state late last year and put the programmes of Ondo state into their consciousness and we will be having positive feedbacks and many of them have even come to hold meetings with us on how to partner with the state to take us to a higher level.
What is the level of achievement of the 2018 budget?
When we look at the achievement of the 2018 budget, it is still ongoing, we are still operating it but I can tell you that in 2018 budget, we have not attained that mark that we desire. For us, recurrent is still a bit higher than what we expected and the capital expenditure is still a bit lower. Having said that, that does not hinder the administration from moving forward. For example, you will see in all our schools, about 599 SUBEB projects have come on board, our public schools are wearing new looks now across the state. That cost us about N7 to N7.5 billion.
Now, out of 1,278 public primary schools that we have, about 523 have been impacted. And we are still going forward this year by also focusing attention on how to increase the function of our public primary schools across the state. We have awarded almost N60 billion road contracts. What you see in the account is the actual payment right now the governor is not owing any contractor and he has a creative way of getting to work because people can take his integrity to the bank. When you said we have work to do and he said ok we are ready to work. If you are ready to work there is a radical departure from the past where people collect 30% mobilization fee and disappeared into thin air but now you go and work we will pay you. People have been working now and we are seeing the evidence everywhere.
So, when we aggregate the quantum of works done, I can also tell you that the 2018 budget has performed creditably well because on road construction alone, more than $60 billion worth of road has been awarded now more than N10 to N12 billion has been paid out of this and according to the level of work done, no contractor is being owed anything. We as planners, we do not factor in what we have not paid; we factor in what we have paid. At the end of the day when all these figures will crystallize and these projects will materialise, you will discover that 2018 budget has performed creditably well.
What if money from the federal government and the donours are not forthcoming?
Yes, you left out the loan element; which is certain. So like I said the state will approach the bond market very soon and those ones will be deployed in the real sectors: specifically infrastructure and to rejig the economy.
The bond you are talking about is it the remaining unaccessed N30billion?
It is going to be a fresh issue. This is because that time has lapsed and it will go through the House of Assembly. We are going for a fresh issue. Arrangement is in top gear so that we can access it and complete these projects.
For example, there are so many catalytic projects which are called the ripple projects that will provide the ripple of economic growth and prosperity across the state. Number one is our port in the Southern Senatorial District. The feasibility study has been completed. By next year, they will likely commence. It is not a short-term thing but luckily for us, a journey of 1000 years will start with a first step and we have taken the right step, not only the first step but the right step in the right direction.
And for us to get the feasibility from credible partners, they came from Netherlands and they’ve almost finished their designs and everything is ready. So from the governor’s speech, you will discover that bitumen will commence this next year. We are working silently.
Before the governor says something, he must have done 60%. I know of some companies that have even fabricated their machines and signed the C of O and they have been allocated blocks.
So within a few months, you will see them on site and this will help to boost the economy of the state. Not only that, you will discover that governor said we will leverage on technology to drive IGR. The IGR we inherited was about N600 to N700million today we are moving ahead of N1.2 billion and we are still going higher. We have a target of about 25 billion for the year, we will meet it.
On fluctuating oil price and Militant attacks in the Niger Delta?
It is a factor that every planner must put into focus when crafting a budget. You will see that the federal government is talking about zero oil economy in the next 10 years which is now 9 years because we started since last year. And not only that, the federal government came up with economic recovery and growth plan which tends to diversify our economy away from oil. So, we are not relying solely on oil.
As a state also, you will see that we have rekindled the interest of our youths in agriculture. This administration, let me say, has what we called “The Youth on The Ridges in which we said at least a thousand youths from all the LGAs must be engaged in productive agricultural practice that will promote their own well-being. Not only that, FADAMA is there lending money to farmers to enhance their capacity.
At Ore, we have industrial park there, about five industries are almost taking off. We have the ones that will do cassava ethanol, paper mill, fertilizer company, we have them. So this is an attempt to diversify, to look away from federal allocation and look away from oil but it is a journey that will start gradually.
On insecurity, what role do you think social security can play?
It will help in no small measure. Ondo state is doing its own because you will recall that we are the first state to pass the social protection bill. In the whole country, we are the first state. This shows that this administration, holds to a high esteem, the quality of life that each of us will enjoy.
But for me, I tend to be a little different because I believe it is not hunger that makes a thief to become a thief. In the days when we were going to school, we have this Yoruba adage that says kaka kin jale, ma kuku deru. Which shows that even a slave has more value than a thief. Those people that are kidnapping, stealing, profile them: they are not poor people so to say and why is it that they cannot even labour. Lincoln wrote to his son in school that the teacher should teach him that a dullard hand is better than 10 fond.
What I am trying to say is that the moral fabric of our society has been eroded such that the youth we have today, they are not ready to sacrifice, they want to take the shortcut to wealth. They want to hammer so that they can buy hummer. The sure way to the top is always through the stairway, every shortcut will cut the people short.
I think for us as a state and as a nation for us to get things right we have to go back to the tender years when the heart of these children can still be tendered to let them know the value of hard work, to know the value of moral uprightness and to know the value of honesty. Evans that was caught as the kingpin of kidnappers, somebody that takes one million dollars. He is not a small boy, he has houses in Magodo.
This is the issue that the government should take seriously especially national orientation, there is erosion of our moral standing. The moral fabric of the society must be looked at critically so that we do not lose the next generation.
On ASUU strike. Will the state concur with whatever the FG agrees with ASUU?
If it is a general agreement, that I can assure you that the Ondo state will not be different but from the benefit of information and figures at my disposal as a planner, I know that it will be very difficult if not impossible for any state to meet these agitations as everything being equal. So if most states in the federation will meet these demands including the minimum wage, including the demand of ASUU, there must be a change in the allocation formula revenue allocation formula. The federal government will need to give out something more because actually development springs from the local and the state government and not from the federal.