Why LGs should undergo reforms – Gov Ahmed
Kwara State recently marked its 50th anniversary and is still in celebration mood. Governor Abdulfattah Ahmed in this interview to mark the occasion highlights how the state will look in the next two years and proffers solution to the low revenue base of
Daily Trust: What are you celebrating in Kwara at 50? Governor
Abdulfattah Ahmed: A state was created in 1967 from two old provinces, Ilorin and Kabba. Since its creation, we have moved substantially from being provinces to a well develop state. For those who are witnesses to the trajectory of where we were and where we are today, Kwara State has gone through a lot and so we have a cause to celebrate. Looking through the list of past governors that manned the state in the last 50 years, including myself, we are 19. On the average, it means by the turnover a governor does not spend more than two years or a maximum two and a half years in office. The turnover has not allowed for consistency or for any governor to involve in any long term plan. However, Kwara has moved from being a civil service driven environment that it was to an economic hub. Those of us here in the early 90s till sometime in 2003/2004, you could count the number of commercial banks in Ilorin, not to talk of other areas. The incursion of commercial banks tells you that there is a significant increase in the level of bankable businesses in this environment. In terms of infrastructure, you will see that a lot of communities are linked up through our new roads or the rehabilitation of old roads. Looking at the education sector, there is a significant increase in the number of tertiary institutions in the state. Talk of even secondary schools, there is a significant increase in the number of schools far more than we had in those days. And most importantly, you will see the level that our health care system has been brought to, in addition to rehabilitating some key ones in strategic locations, we have been able to touch quite a significant number of rural environments where we have either basic or primary health centres. We have built and renovated a lot of schools and a lot more are coming. In terms of water supply, so many communities are having access to potable water either through boreholes or surface channels. All in all, I would say Kwara State has appreciated tremendously economically, socially, politically and of course in terms of infrastructure. In the area of human capital development we have significantly moved forward at 50 and that signals that we have done what we could within the trajectory of development and a lot more could still be done. These are some of the changes we see and it is worth celebrating as the state clocks 50. Our prayer is that the next 50 years will be strategically approached in way and manner that people’s lives will be better than where we are today.
DT: To what extent are the local governments being carried along?
Gov. Ahmed: First, you see at the local government level, I said this sometime ago. There are about 774 local governments in Nigeria, most of which were created largely based on political exigencies, if you go through the constitution on criteria for creating local governments, you would see that quite a few fit into these criteria. Most of them were created during military administrations. Currently, they are heavily reliant on federal allocation and the same allocation has been dwindling monthly as a result of the dwindling price of crude oil. So you cannot expect to see much from local governments outside Lagos. Lagos is a purely commercial environment and if probably Kwara is also commercial, come to a place like Isin Local Government, what kind of commercial activities go on there? What resources can you raise from that kind of place? What sort of internal revenue can you raise from that place?
And ditto for other local governments in most of the states that are not in commercial environments, so it’s a huge challenge. And that is why even the payment of salaries which is the most critical problem today is not 100 per cent because their capacity to raise revenue is weak and they are presently reliant on the dwindling federal allocation. It is from this allocation that local government workers are serviced, teachers at the basic level are serviced from it, so also are local government pensioners. So it is difficult to see them get hundred per cent of their emoluments. Their emolument is a function of the federal allocation that comes in so between you and me, this is a challenge and there is need for a reform to address the situation. It is either we increase allocation to the local governments or create a level of flexibility that allows a stronger synergy with the states in such a way that they too can tap into what the states are doing to improve their revenues.
DT: What should we expect from your government in the next two years?
Gov. Ahmed: The next two years will see significant improvements in areas of human capital development, increased support for tertiary institutions, secondary institutions and of course primary institutions. We would also see to significant rehabilitation of roads to link up communities, don’t forget that we have acquired an asphalt plant and we are working on a funding window that will see to adequate procurement of materials which will aid in construction of new roads and rehabilitation of old ones. We would see significant improvement in areas of health care delivery, we have some hospitals already slated for completion, some for rehabilitation. Among them we have general hospitals, of course quite a number of them will be brought to completion levelgeneral and basic primary health care levels. We would improve more in water supply in addition to the current reticulation currently going
The next two years will see significant improvements in areas of human capital development, increased support for tertiary institutions, secondary institutions and of course primary institutions
on. We would put in more effort so that we can access more water from underground and surface through water works. Of course in terms of energy we would also see a major shift from the current deployment of transformers to link the national grid, you will see us embrace more of the solar options for lighting up our communities because it is becoming increasingly clear that reliance on the national grid for energy supply is not likely to give us the power needed in the state and it is very unlikely that it will get to the rural communities, now with pockets of solar solutions coming in we would begin to see deployment into our rural environments. God willing, this will soon take shape, we have started with the Light Up Kwara, this is just the beginning. We would complete the ones in Ilorin and then move to the rural environments. And also our vocational institutions would take off fully to the extent that we would serve as an institution that would drive growth of entrepreneurship especially hand sunk , in areas of automobiles, construction, electrification, electrical works, welding, other areas where we expect to see improved manpower development and so on and so forth. These are all areas we hope to move as we approach 2019.
DT: It is believed in some quarters that while some of traditional rulers merit grading, many who merit it were left out. What are you doing to address this?
The issue of grading of Obas has been done largely to help support governance at that level in such a way and manner that our traditional rulers have significant roles to play when it comes to managing our people at the grassroots. So it is on the strength of this that we sought to upgrade some of these traditional rulers. If you recall, towards the end of my first tenure, we upgraded some traditional rulers. Then we set up a committee that reviewed the issues of traditional rulers and subsequently some were upgraded between second class and third class. Don’t forget that these classes of traditional rulers are usually remunerated from the local governments and the drop in the allocation to local governments has not made it easy for us. That is why those who have been graded have not been given their entitlements in terms of staff of office and remunerations, but the ones that are remunerated at the state level, the first class level, are those who we have given their staff of office and carried on their support as due.
DT: What are you doing about retirees at the local government levels?
We need to understand how federal, state and local governments are run, we had cause to explain this times without number, that this is how government is being run. The local government as it were have their allocations sent to them from the federal account and when it gets in it comes into a joint account, owned by the 16 local governments, so the term joint allocation account it is not joint with states but among the 16 local governments. Let it be clearly understood. It is within this platform of joint allocation based on laws put together by the state House of Assembly to guide them on how to allocate resources. This is what the constitution stipulatesthat their money would enter into a joint allocation account (JAAC), so each time the issue of shortfall comes in, the ball is thrown back to the state governments. The state government does not share in that joint allocation, it is within this platform that they decide what goes into what they jointly fund for example, SUBEB, they jointly fund traditional rulers, they jointly fund the Local Government Service Commission. After all these the funds are now appropriated to local government workers, pensioners and of course SUBEB. So each time you hear of shortfall in allocation, it will affect what goes into these local governments and that is why in the last one year, it has been difficult to get 100% of their pay because allocation had dropped significantly and local governments as you may know do not have the capacity to increase what comes in as revenue unlike states that have other financial ways and means of increasing their revenue through revenue generating strategies. You all are aware of what we have done with the internally generated revenue of the state, increasing it from N500m per month to N1bn, N500m per month. That is a significant increase for us at the state level, it is not the same at the local government level, local governments do not have the latitude to do such. This is because their environment is not robust enough to create this kind of revenue base. So it is a major challenge, so each if they have autonomy can they change their revenue profile? So the major challenge is reformation, they need reforms that will enhance their capacity to access finance and increase revenue. That is what local governments need.
Let us face the fact as they are and the fact is that local government allocation is getting smaller and smaller and it cannot service the local government as it were. So that restructuring is the only way out. All these bickering and passing the bulk that we are not paying local governments workers and pensioners are refusing to face the facts as they are and we are being economical with the truth and we are not helping ourselves. Some politicians around are playing politics with the situation as a platform to make the government look bad as if the state is owing local governments, we are not owing local governments, we have never owed them. At the state level we have been able to meet our obligations as and when due. So each time I come out, I will continue to say it that Kwara State government is not owing local government workers. Our pensioners, workers and all those who draw remuneration from the state government cannot say we owe them.
I cannot say same with the issue of local government because I don’t generate the allocation it will be difficult to defend the problem of insufficiency. Since I don’t dictate what comes in, I cannot defend whether it is insufficient. So the reform is what will change the revenue base of local government, we need to get things clear.
DT: Multiple taxes is said to be sending many companies out of Kwara, how do you address this?
There is nothing called multiple taxes in Kwara, we need to understand that in the past, people did not pay taxes, fees were highly compromised, commissions were hardly charged. When we say we moved our revenue from N500m to N1bn, not that we brought new taxes or new laws, all we did was increase efficiency in other words, those who were not paying taxes now begin to pay. Most factories owe ground rents, so when you look into their records some of them owe up to between nine to 10 years. How can you be using a premise and not pay for it? So by the time you calculate and ask them to pay, they would say you are putting them under pressure but the truth is that they are asked to pay what they are owing, they are not new. Some of them came to me and we even gave them waivers like asking them to pay three years out of 10 so that they can move on, yet they are still making noise on it. Those are the challenges, I must be frank and they come to me for waivers. I still have some waiver papers on my table now. On the issue of new taxes to be introduced, it is currently on the table of the state House of Assembly, so there should be no noise about it. It is undergoing public hearing, this is an opportunity for everyone to go and say his bit as a guide to the Assembly on what to do and what not to do. Whether you believe or refuse to believe it Kwara State has a lot more enabling environment than most states you see in the South west. Compared with Lagos, Lagos has more taxes than we have here and their drive for those taxes is uncompromising. How do you think they raise about N26bn every month? Those people who say they are going to Lagos know that they cannot go to Lagos because if they go there they will pay. We are a bit subtle here and we allow them enjoy some holidays. Only some days ago we gave tax holiday to some pioneer SMEs, only pioneers, not all of them, and we will ensure that they get it like that till they get to stability level. After that they will begin to pay expected dues. I am not aware of any manufacturing company that left Kwara because of taxes, there is none and there will be none because in all we do, we draw comparism to what is obtainable in other areas, none has left and none will leave on the bases of tax. Cocacola that left, it was strategic for them to leave. Their biggest challenge is energy, rather than manufacturing in Ilorin, Ibadan and every other place, they chose to concentrate in Ibadan and Ilorin to serve as depot for distribution and you cannot tell them how to run their business. They know where the shoe pinches most so they are not leaving because of tax but energy.
DT: There are insinuations that the state government spent about N2bn on a low key celebration, how much was budgeted for the Kwara at 50 celebrations?
What was budgeted was appropriated, it’s there in the appropriation law, I am working within the budget, those who criticize us need to see the public document, budget, how much we spent was in there, check, you will see whether what we have done is appropriate or short of expectation, go see it. What we spent is less than 10 percent of what people are saying.