Benue’s Opaque Budget

Posted: April 27, 2012 in Uncategorized

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By Nasir Ahmad El-Rufai
We continue our analysis of the budgets of the state governments with the North-Central State of Benue. Bordered by Nasarawa state to the north, Taraba state to the East, Ebonyi and Cross River states to the south, and Kogi state to the west, Benue state was created in February 1976, when Benue-Plateau State was separated into Benue and Plateau states by the Murtala-Obasanjo administration.

Benue state is acclaimed to be the nation’s food basket because of its rich and diverse agricultural endowments which include yam, rice, beans, cassava, potatoes, soybeans, sorghum, millet and coco yam.

The state produces over 70% of Nigeria’s Soya-beans and is home to one of the longest river systems in the country – River Benue, which has the potential for viable fishing and tourism industries complete with festivals similar to the one in Argungu. The river has the potential to generate electricity, to support dry season farming through irrigation and improved transportation through inland waterways. There are also proven reserves of solid minerals like Limestone, Gypsum, Anhydride, Kaolin, Salt, Lead and Zinc, Clay, Coal, Calcite, Gemstones and Magnetite. The Benue Basin has proven quantities of natural gas and there is the likelihood of crude oil as well. The state has many tourism assets like Ushongo Hills, Ikwe Holiday Resort, Enemabia Warm Springs, Dajo Pottery,mTiv Anger Weavers and many traditional festivals. The traditional music and dances of the state attract thousands of Nigerians and foreigners, with potentials for significant development.

With a land mass of 34,059 sq km, Benue State had a population of 4,223,641 in 2006 – now estimated at nearly five million – a little above the population of Congo and more than twice the population of Botswana. Abdullahi Shelleng was the first military governor of the state (March-1976-July 1978). Aper Aku was the first democratically elected governor under the National Party of Nigeria and served from October 1979 to December 1983. More recent governors are George Akume (May 1999- May 2007) and Gabriel Suswan. Suswan holds  an LL.B from the university of Lagos, a masters degrees in Law from the University of Jos, and in public administration from the University of Abuja. He was a two-time member of the House of Representatives, and began his first term as governor in May 2007.

According to the NBS poverty profile 2012 based on data up to 2010, of the population of the North Central zone, 61.9% is relatively poor, 57.4% is absolutely poor, 38.6% is food poor – an irony indeed for a zone with such generous agricultural endowments. Benue’s poverty incidence is high at 36%, which means that more than one out of every three persons is poor: as opposed to one in seven for Lagos, and more than half – 58% in Yobe state. Benue’s unemployed population is a whopping 25.4 % or more than one in every four working age person is unemployed, as opposed to neighboring Plateau’s 14% and FCT’s 13%, and above the national average of 21.1%. Benue States has one of the highest incidences of HIV infections in the country, accounting for about one out of every eight infections nationally.

So what should Benue State be doing in the face of these endowments and challenges?

Education is one of the key indices to measure state government effectiveness. It should be investing a large percentage of its budget on improving public education. The government must deliver affordable and quality healthcare. It should also invest in key infrastructure to attract investors to its agricultural, fishing, tourism and mining sectors. It should address the needs of its farmers for title to land, rural roads, storage facilities and Argo-processing capacity. Are the authorities doing that?

We were unable to obtain the detailed budget of Benue State anywhere. Even members of state assembly contacted were reluctant to provide more than sectoral summaries. Gabriel Suswan had on the 22nd December 2011 presented a budget of N105.5 billion to the state house of assembly for the 2012 fiscal year. The budget would be financed with N59.9 billion from FAAC, N15.2 billion as IGR and N30.3 billion from other sources – meaning loans and grants-in-aid. Typically Benue received about N40 billion every year from FAAC, so the amount expected this year is a bit optimistic. However, after review by the house of assembly, the budget figure was scaled up by N7 billion, bringing the total figure to N112 billion. In terms of federal allocations between 1999 and 2008, of the total N3.7 trillion allocation that has been distributed amongst the 19 Northern states, Benue received N203.4 billion, making it the 6th largest beneficiary.

Of the total budget sum, N58 billion amounting to 52% is earmarked for recurrent expenditure, and N54 billion, about 48% is set aside for capital expenditure. This means that this rural state is spending much more on running the government than securing the future of its citizens. It should scale capital investment to closer to 70%, and reduce recurrent spending accordingly.

The sectoral breakdown of the budget shows the following structure; N34,406,400,000 (30.72%) for the Works and Transport, N14,336,000,000 (12.8 %) for the Finance ministry pay of loans and set up effective revenue generation mechanisms; 4.82% or N5,376,000,000 for Agriculture, Water Resources got 9.1% or N10,192,000,000. The Rural Development ministry was allocated N11,670,400,000 or 10.42%, and the Health allocated N4,592,000,000 or 4.01%. Judging from the distribution if the budget, these figures alone, one is inclined to question the spending priorities of the Suswan administration.

The largest allocation of N34,406,400,000 or 30.72% of the budget is set aside for the works and transport. In addition, the state house of assembly approved a Fixed Rate Development Bond Issue 2011/2016 of N13 billion for the state. Listed in March 2011, the five-year, 14% coupon rate bond proceeds are for the completion of roads and other projects like water supply in Markurdi, Otobi and Katsina-Ala. Questions remain though – how much of the N34.4 billion is from the proceeds of the N13 billion bond that will be need to be paid back over a five year period? How much of the N13 billion bond was spent so far, and what was it spent on? Venue citizens probably know these answers.

It is indeed a paradox that while Benue state is endowed with one of Nigeria’s biggest rivers with very good water traffic, the citizens live in perpetual water shortage. Regarding River Benue, one would wonder why the state isn’t exploring its hydro tourism/hydro electric potentials; starting up cruises or exploiting its reputation as a major Nigerian river towards developing water transport or building a whole sporting industry, water games and all. Looking at the figure of N10,192,000,000 (9.1%) allocated to Water Resources, the first question that should come to mind is, how much of the N13 billion bond was specifically spent on water projects?. How much of these funds are directed into the areas listed?

As a state with abundant agricultural potentials – land that is very fertile and about 80% of the state’s population is involved directly or indirectly in sustenance farming, wholistic ficus on agricultural production is the key to the state’s future. Sadly, Benue has a reputation for wasteful agriculture as the state lacks basic storage infrastructure. Agriculture is not yet mechanized beyond sustenance such that it will amount significantly upon the states IGR. A careful state endowment and value chain study, with investments in key areas will enable Benue feed most of Nigeria’s population. That is one area for the attention of the authorities

On the bright side, doing business in Benue is relatively easy. Amongst the 36 states and the FCT, Benue was ranked 10 in the ease of doing business, with 8 procedures that will span a minimum of 36 days, 6 places behind its Plateau counterpart. Plateau State’s doing business ranking is number 4, with 8 procedures over a 31 day period. This relatively easy business climate is doing well for Benue, considering that in 2010 the states combined IGR was N6.8 billion, in 2011 it increased to N11 billion, and in 2012, there is an IGR projection of N15.2 billion.

The state deserves some credit on its attractiveness to investors, in 2010, the Benue Cement Company merged into the Dangote group, thereby increasing its capacity in cement production, in 2011, the Transnational Corporation of Nigeria (TRANSCORP) subsidiary, Terago Limited, leased, renovated and recommissioned the Benue Pioneer Fruit Juice Concentrates Company for 10 years at the cost of N1 billion. Also in 2011, an MoU for the revitalization and management of the near moribund Taraku Oil Mills was signed. Interestingly all these industries were established during the life of the earlier administration of Governor Aper Aku.

Educationally, Benue is a disadvantaged state. In the 2008 academic year, 41,410 Benue students sat for WAEC, and only 1,879 or 4.5% scored 5 credits including Maths and English, the same year, only 389 students from Benue State were admitted to Nigerian Universities, compared with 3,569 and 4,030 for Edo and Enugu states – the leading performers.  This trend should be of concern, especially in a times such as this, when a core focus of government should be to reduce its unemployed population so they do not constitute a threat to society.

Another worrisome aspect of the budget is the allocation to health: an allocation of 4% or N4.5 billion of the entire budget sum when health should be a priority sector for the state. The  special adviser to the Benue state governor on HIV/AIDS and other communicable diseases said that there are no fewer than 400,000 persons in the state who are carriers of the disease, out of three million infected Nigerians. Considering this situation, does Benue aim to safeguard the health of its citizens with this level of spending? Maybe, laudable is the fact that the state government renovated all general hospitals in the state, has partnered with Essential Pharma to curb the menace of fake drugs within the state, and is one of the few states to upgrade its Action Committee on Aids to an Aids Control Agency. There is need to do more in both preventive and curative healthcare provisions.

Benue’s recurrent budget is more than three times its IGR. It is therefore incapable of standing on it own and is one of the “parastatal states” that rely on monthly FAAC hand-outs to exist. Interestingly, in spite of this, there is a strong movement for the creation of another state out of Benue for the benefit of the political elite Idoma ethnic group! The government is doing much better on the IGR front than most states in the country, but must scale down the size and cost of its administration. It is investing aggressively in transport infrastructure and that is commendable but more investments are needed in education, healthcare and agriculture. Tourism, mining and hydroelectricity are all areas that Benue can focus to deepen its comparative advantages within the Nigerian nation. Until these are addressed and urgently too, the people of Benue should be looking at voting differently in the next election.

Two Sad Events
This week started with a depressing note for me, and got worse yesterday with the bombing of ThisDay’s offices in Abuja and Kaduna. On Monday, the sensibilities of Nigerians were challenged by a motley crowd of hired thugs protesting AGAINST the excellent report of the Farouk Lawan Committee on Fuel Subsidy. I was depressed. Have we become this bad that people can shamelessly support what is wrong? Do these protesters have parents? Have we lost all our values to illicit money and now ruled completely by corruption?

As I was struggling with these, learning that Boko Haram has targeted the offices of ThisDay worsened my state of mind. How can those that report news be the problem or the target of anyone? How can anyone justify the killing of another? Where is our sense of community? thee attacks must be condemned by all well-meaning Nigerians. We call on the authorities to rise up beyond the usual platitudes and speeches and protect the lives and property of our citizens. May the souls of the departed rest in peace. Amen.

 

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