Prudence in public finance management, the Ogun example

Prudence in public finance management, the Ogun example

Sunday, June 12, 2016 8:37 am


Governor  Ibikunle Amosun

Governor Ibikunle Amosun

Should the Federal Government decide to tie its assistance to the ability of states to improve their IGRs and fiscal discipline, as some experts have suggested, then Ogun State deserves the first consideration among the 36 states of the federation

By Soyombo Opeyemi

In February, 2016, President Muhammadu Buhari visited Ogun State to inaugurate some 40 legacy projects selected out of hundreds to mark the 40th anniversary of the creation of the state. Due to his extremely tight schedule, he could not visit all the senatorial districts of the state to personally unveil some of the projects. As a matter of fact, he arrived at nightfall in Ijebu Ode and was unable to launch those monuments that have created new sights, sounds and taste in the metropolis. State engagements outside the country prevented him from experiencing a cruise along the newly constructed Ota township roads or the longest motorway, which cuts across four local councils, hundreds of villages and hamlets, being constructed in Ogun West.
At the grand reception at the state capital on February 2nd, President Buhari summed up his impression:

“I express my gratitude to the Governor of Ogun State for inviting me and identifying with me on his success. He managed to disorientate me. On my commissioning in January 1963 – I was posted to Abeokuta, where Second Inventory Battalion of the Nigerian Army used to be. I said he managed to disorientate me because if you drop me anywhere in Abeokuta and ask me to find where the barracks is, I assure you I will get missing. I am pleased and happy about your success because I think that whatever I knew about Abeokuta, I have lost it. Your programmes are certainly people-oriented. We have commissioned roads, schools and legal complex headquarters where I met with justices and I made an immediate observation to the governor that there are more lady judges than men… These institutions and the quality of their jobs are going to be very enduring and I’m very pleased that I’m being identified with social infrastructural institutions that will endure.”

The question on the lips of many since the 40th anniversary has not changed. In fact, for those that visited the state before 2016, the experience was a pleasant bewilderment. How did Amosun get the money to transform the state in such a short space of time? How was he able to pull Ogun out of the 17th century and launch it straight into the 21st century? Where did he get the funds to do all these?


The income generated by the Ministry of Commerce suddenly rose from the average of N45 million (forty-five million naira) per annum under the previous government to N550 million (five hundred and fifty million naira) per annum (representing 1,122% increase) within a space of one year of the Amosun administration – all simply by blocking the loopholes in the old system and introducing a cashless policy!

His administration purchased the very latest technology Armoured Personnel Carriers (the first in Nigeria), hundreds of patrol vans fitted with modern communication gadgets and invested massively in the welfare of the security personnel, which dispelled the fog of insecurity upon the state with its debilitating consequences on investments. The Amosun government constructed the first ever flyovers, six-lane international standard highways and 10-lane bridges – the first of such in all the major cities since the creation of Ogun in 1976. It built state-of-the-art model schools that are 21st century compliant, the very first of such in the state.

The administration built model farm estate, farmers’ market and made gargantuan investment in land-clearing equipment, the first of such quantum purchase since 1976. It constructed model comprehensive health centre, a state-of-the-art Radio-Diagnostic Centre and invested heavily in health equipment. The Amosun government constructed the first 10-lane boulevard, model mechanic village and introduced the first luxury buses and brand new taxis on Ogun highways. It built model housing schemes that cut across all strata of the society. His government re-introduced free education with supply of free textbooks since the end of the Second Republic.

The Amosun government pays above the Minimum Wage, and implemented the Wage across board, up to the local councils, thus making it the only government to achieve such a milestone in country… All these landmark achievements rolled into one! Let’s hear some comments of those who saw this turn-around in the fortunes of Ogun State under the current administration.


Recently, the National Bureau of Statistics released its 2015 report on Internally Generated Revenue (IGR) of the federating states. Ogun State comes tops with a 49.42 per cent increase among the 11 out of 36 states that bettered their 2014 records of Internally Generated Revenue performance.

Prof Dora Akunyili (now late), November, 2012: “Ogun State has suddenly become a construction site; what a transformation! This is different from the state I saw a couple of years ago.”

A.A.K. Degun Mitro Estate

A.A.K. Degun Mitro Estate

HRM Dr Adedotun Gbadebo, the Alake of Egbaland, during the inauguration of the first overhead bridge in January, 2013: “Today can be likened to the day electricity, pipe borne water and railway first came to Abeokuta. Amosun has changed the city from the status of 19th century to the 21st century.”
Ex-President Olusegun Obasanjo, June, 2013: “The feat so far achieved by Senator Ibikunle Amosun as the Governor of Ogun State in so short a time is commendable and enviable.”

Prof. Is-aq Oloyede, Secretary General, Nigerian Supreme Council for Islamic Affairs, November, 2013: “From what I have seen in our state, it is very clear that we have a politician with a difference at the helm of affairs. With the on-going infrastructural revolution, many of us who are indigenes even find it difficult to locate our houses and some prominent places each time we come visiting.”

Prof. Anthony Asiwaju, eminent historian and elder statesman, March, 2014: “The Yewa people and by extension, Ogun State have never had it so good since the creation of the state. So we are thanking Senator Ibikunle Amosun for coming to our aid through the construction of a road over 107 kilometres, which cuts across four Local Government Areas in the senatorial district.”
His Royal Majesty Dr Sikiru Kayode Adetona, the Awujale of Ijebu Ode, November, 2013: “Your performance has been beyond the imagination of each and every one of us. You have been able to go round the entire Ogun State (with your infrastructural development) without just concentrating on Abeokuta and leaving the rest of us in the wilderness. You have been able to go round Abeokuta, Ijebu, Remo, Yewa. This is a great thing that has never happened in the state.”


The report of the World Bank, Doing Business in Nigeria 2014, rates Ogun, out of 35 states and FCT, as one of the five states “that made the biggest strides towards the national frontier of good practices.” The same World Bank, in 2008 and 2010 reports, ranked Ogun State as among the lowest overall performers among the 36 states in Nigeria in terms of Ease of Doing Business.

Ambassador Chris Cooter, Canadian High Commissioner to Nigeria, April 14, 2013: “The Governor has been emphasizing that his administration is very particular about hard work. Here we are on a Sunday, I look at the construction going on, definitely, I am impressed. It is going to transform the state, no doubt. Whether it is canal, the road network, health or education, clearly, I can see a demonstration of the ‘can do attitude’. I have not been to a state where people are working quite as hard as this one, and I have been in most of them now…”

Mobalufon-Ibadan Road and Flyover

Mobalufon-Ibadan Road and Flyover


There are also organisations and global institutions that took interest in the development renaissance in Ogun State under the leadership of Governor Ibikunle Amosun. For instance, the leading business newspaper in Nigeria, Business Day, in November, 2013 declared Ogun State as the fastest-growing economy and first choice for industrialists and entrepreneurs among the 36 states in Nigeria. According to the financial newspaper, Ogun won the prestigious award “because it has the highest number of businesses established in its domain and that the government has made the environment more attractive to investors.

Ogun also has the highest positive number of Gross Domestic Product in the last one year, the number of bank branches has increased more than that of other states in the last three years and its financial inclusion, particularly the embrace of cashless economy and use of Automated Teller Machine by residents, has increased tremendously.”

The report of the World Bank, Doing Business in Nigeria 2014, rates Ogun, out of 35 states and FCT, as one of the five states “that made the biggest strides towards the national frontier of good practices.”

The same World Bank, in 2008 and 2010 reports, ranked Ogun State as among the lowest overall performers among the 36 states in Nigeria in terms of Ease of Doing Business.

According to the 2014 Report, “Thanks to a concerted effort across federal and state authorities, and in collaboration with the private sector, Ogun improved on three of the four Doing Business indicators benchmarked. The construction permitting system was radically overhauled, with the state government authorities decentralising the approval system and a new committee monitoring delays. Building permit applications and payments can now be made simultaneously in district offices. Private professionals issue environmental-impact assessments in accordance with the conditions and templates set out in a framework agreement. The certificate of completion is issued on the spot, immediately following the final inspection.”

To begin a business in the current Ogun State, according to World Bank, “entrepreneurs no longer need to travel to Ibadan or Lagos, thanks to the Federal Inland Revenue Service’s new stamp duty office in Abeokuta. In addition, the state Ministry of Commerce and Industry abolished the requirement for a physical inspection of the business premises – today, a proof of company address, such as a utility bill, is sufficient. A business premises permit is issued on the spot upon payment of the fee. Finally, Ogun’s Bureau of Lands digitalised property records with the aim of enabling electronic title searches and making property registration more efficient.”


The Manufacturers Association of Nigeria has in the last two years acknowledged Ogun as the industrial hub of Nigeria by virtue of the massive inflow of investments into the state in the last five years. In 2014 alone, according to MAN, Ogun State attracted N515 billion worth investments!

The Manufacturers Association of Nigeria has in the last two years acknowledged Ogun as the industrial hub of Nigeria by virtue of the massive inflow of investments into the state in the last five years. In 2014 alone, according to MAN, Ogun State attracted N515 billion worth investments! Till date 88 major industries have been inaugurated by the state governor since he mounted the saddle of leadership in 2011. Hundreds of thousands of direct and indirect jobs have been created for our people as a result.

Of course, it is no longer news that Senator Ibikunle Amosun won the prestigious Vanguard Newspapers Governor of the Year 2015 award. So, how was Amosun, a Fellow of the Institute of Chartered Accountants of Nigeria, able to achieve these monumental achievements within a space of five years?

Recently, the National Bureau of Statistics released its 2015 report on Internally Generated Revenue (IGR) of the federating states. Ogun State comes tops with a 49.42 per cent increase among the 11 out of 36 states that bettered their 2014 records of Internally Generated Revenue performance. Now, we have an inkling of how Amosun has been able to perform the wonders the state has witnessed.

Upon the inauguration of Amosun as governor in 2011, one of the major steps taken by the new government was to introduce a single account system and put an end to the proliferation of government bank accounts by the Ministries, Departments and Agencies (MDAs). Electronic payment was equally introduced to ensure that government revenues no longer end in private pockets. In a nut shell, the single most important step that shored up the revenue base of Ogun State under the leadership of Governor Amosun was blocking the loopholes in the system.

For instance, the income generated by the Ministry of Commerce suddenly rose from the average of N45 million (forty-five million naira) per annum under the previous government to N550 million (five hundred and fifty million naira) per annum (representing 1,122% increase) within a space of one year of the Amosun administration – all simply by blocking the loopholes in the old system and introducing a cashless policy! That percentage increase from one ministry alone is staggering! The new government considerably slashed the salaries of political office holders in addition to being among the few states having the lowest number of such office holders. In partnership with the Lagos State Government, the Amosun government pursued the implementation of the Residency Rule in the Personal Income Tax Act, which saw many workers who reside in Ogun but work in Lagos remit their income tax to Ogun as against the past practice of paying the tax to Lagos.

No doubt, Amosun, being a technocrat, brought his wealth of experience in the corporate world into the governance of Ogun State. As the Doing Business Report of the World Bank confirmed, the removal of bottlenecks in the interface between government and the public by the new government resulted in more and more investments in the state. And as more industries were established in Ogun so the revenue of the government increased significantly, before the economic crisis began in the country. Even where the government obtained loans from banks, it succeeded in negotiating rock-bottom interest rates. In Amosun’s government, there is no profligacy; no waste of public funds. The mantra is ‘get value for money’.

Of course, the current financial problem has not spared any state of the federation and if, as it is being suggested by experts in the country, the Federal Government should tie its financial assistance to states on the ability of the states to improve their IGRs, then Ogun State should receive the first consideration among the 36 states because the records speak for themselves.

** Soyombo sent in this piece from Abeokuta via densityshow@yahoo.com

Captions

A.A.K. Degun Mitro Estate

Mobalufon-Ibadan Road and Flyover

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