Niger State government went to the capital market to secure bonds for some projects in the state. In this interview with ABU NMODU, the Commissioner of Finance, Muazu Mohammed Bawa, explains the government's reason for the move, saying that bond-funded projects have fast-tracked development in the state.
How does the state cope with many demands in the face of lean resources?
Every year, as the tradition, we prepare our budget based on our expectations. The budget is financed from three to four sources: allocation from federation account, capital receipts from agencies, internally generated revenue and to a certain some extent capital market. So we ensure that we implement our budget based on available resources because it is paramount - it guides our expenditure; in essence, we cut our coat according to what is available. We spend based on our income, and ensure discipline in our expenditure in line with the governor's vision. You know, he is a seasoned administrator; we ensure efficient management of our resources.
What effort are you making to increase internally generated revenue of the state?
First of all, we discovered that we must overhaul the entire revenue generation system and we discovered also that capacity was one of the areas that we must start with, so we improved the capacity of the state revenue board and also injected new hands into the system to make sure the know-how was not a problem.
What is the revenue generation capacity of the state today?
On average, we collect about N300 million monthly; it used to be between N70 million and N100 million, but in the 2013 budget we have estimated about N600 million as internally generated revenue monthly, and that would be achieved by the grace of God
What are the variables that boost revenue generation?
Revenue collection depends on the income of the state, and depends on the economic activities of the state. If the state is a manufacturing state where there are a lot of factories and industries, there will be the possibility for more revenue and, invariably, the size of the budget, that is, the spending of the government. So, gradually, if you look at the history of revenue in the state, it started from as low as N17 million to where we are now. You can see that we are getting to a better place every day.
Recently, the executive sent a Bill to the state Assembly to change some of the revenue laws; what is the move meant to achieve?
Our revenue laws are obsolete; some of the laws were passed in 1981-1982 and they are overdue for review, especially as they affect the rate of collection. Some rates were as low as N2, and where you have to collect more the law says N2, and you cannot do anything. So we are reviewing the laws to be up to date with present realities.
What have you done to block revenue leakages in the state?
We have automated the system; it used to be manual. If it is manual, people touch cash as a result of direct collection, and once people are allowed to handle cash, there is the possibility of temptation. So, we have created a system that rules out 80 percent of leakages. That has given us a lot of faith. And you are also aware that federal government is introducing Tax Identification Number (TIN) people would use wherever you go in Nigeria.
The state sourced for bond; what informed the decision?
You see, bond has become a global sourcing for less interest fund because it is cheaper to repay and has longer period of repayment. Any government that go for must be government of accountability you cannot take bond and start to divert it elsewhere you were there last time when experts talked about it last time. There are organisations that were involved before securing bond; these include Securities and Exchange Comission (SEC) and Debt Management Office (DMO) who monitor to make sure that you strictly applied the bond you take. You have to state clearly where you are applying the funds so they will know where the money would be spent. So it is very difficult for any state which has taken bond to spend it anyhow.
How far has it helped in the development of the state?
You see, instead of going to the bank, it is better you go to capital market, where it is cheaper and has a longer period of payment.You see, the N6 billion we have taken was spent on vital roads. We have constructed the roads - you can go and see them. So the success recorded with the N6 billion bond was the reason why N9 billion was given after we registered for N30 billion in trenches, starting from N9 billion which we have taken. You can see the progress of N9 billion bond projects started, no kobo is being diverted. In fact, bonds fast-track development and enhance accountability.
Are you people going to carry over the remaining trenches to next year's budget?
Yes. Already, it is in 2013 budget. By next year, we would finish paying the N6 billion and now we have paid N3 billion from N9 billion. So you can see we are making progress in paying the bond money we are collecting. Taking the bond is never a burden on the state but a way of complementing the available resources to fast-track development.
Do you anticipate next year's budget to be an improvement on this year's budget in terms of implementation?
Yes, because we have resolved to prepare and produce a reliable and realistic budget that matches the income and resources of the state.Realistic and achievable budget is what we always do in Niger State.
With lean resources and projects everywhere, how does your ministry prioritise?
Already we have existing projects going on: Lapai Gulu road; Kontagora dualisation, Agaie township road, Bida dualisation - all are existing projects and we want to run them over in 2013 when we expect to finish them. Already we have made provision to ensure that these projects are completed by 2013; and don't forget, we still have some projects that would come up early next year, in the city centre. Then we have the stadium, then also the three arms zones. We will ensure efficient management of the resources to achieve all these.
Do you look at other alternative sources of funds for the government?
If you look at the time - we have spent almost six years, we have been trying to manage the meagre resources we have to a certain extent. At a point, we felt we should go to the capital market - which we did, and we are making progress in terms of repayment and we are able to publish our own statement of account. We do not have any bank loan pending. We have not taken any foreign loan; we took a local loan but we have repaid it.
How far has public-private partnership (PPP) helped the government?
You know, PPP is a new concept in Africa and there are challenges here and there, depending on how you are able to manage the challenges. For us it is so far, so good; you can see the result: it was with PPP that we were able to get the MI Wushishi Housing Estate and also started the Kontagora and Bida Housing Estates and many more projects on the line.
Do you see some of the finances at your disposal completing some of the projects initiated?
As a government, you inherit and leave projects - government is continuous. On financing, by the grace of God, we will continue to efficiently manage the little we have to deliver the best for the people.
What is the government doing to implement the N18,000 minimum wage fully to workers?
I believe if we do not get excellent, we should get a very good mark as regards payment of salary. With regard to payment of salaries and other benefits of civil servants, we have not failed and you are also aware that we pay salary on or before the 25th of every month. The governor was a renown civil servant and he knows all about civil service; he pays civil servants bonuses like the one he paid them during the last sallah.
It is the responsibility of the ministry of finance to disburse funds, how do you monitor the MDAs?
We have a unit under planning commission whose responsibility it is to monitor the projects and advise the Ministry of Finance regarding the payment. The payment must be commensurate with the level of work done, so before you are paid, they must clear you and this clearance helps us to know how far the money released have been expended and the need to release more or not.
When this administration came, there was a loan taken to settle gratituities; how far about the repayment?
That was long time ago and that has been settled about two to three years ago. We don't joke with repayment of loan or our statutory obligations for that matter. We gave irrevocable payment order. We paid on monthly basis so we have paid the loan and have even forgotten about that.
What machinery are you putting in place to make sure that those who are retiring are not left out?
Now we have the old and new scheme. So far we have finished with the old one; in the new scheme, if you retire, you go to your pension fund administrator (PFA) to access your money under the new scheme and the government is making up to date contributions to the fund.