WADA: Managing Kogi in a depressed economy

The recent revelation as published in section of the media that eighteen of the thirty six states of the federation are technically bankrupt brings to mind the financial management and ingenuity brought to bear by the incumbent governor of Kogi State, Capt Idris Wada. The  efforts have been described as laudable by experts, a feat they say has no doubt greatly helped to stabilized the state economically.

The bankrupt states it was revealed are owing salaries ranging from two months to eleven months.  Abia, Akwa-Ibom, Bauchi, Benue, Cross Rivers, Ekiti, Imo, Ondo, Jigawa, Kano. Osun, Plateau, Rivers and Zamfara are some States owing their workers more than a months salary.

Findings revealed that these States have mortgaged their federation account allocations to contractors by signing irrevocable payment orders with various banks.  As a result, payment to contractors and
other debt instruments are deducted at source and have become first line charge on their lean resources.

Unfortunately, the internally generated revenues of these states mentioned are also not enough to meet their obligations so they owe workers several months of unpaid salaries.

In Kogi State and not until the global fall in oil price, which saw the drastic drop in the states allocation by 40%, the state pays salaries by the 25th of every month.

The delayed salaries in the state began in April, when the state received the sum of N2.7billion as against the N3.5billion it normally receives.  The monthly wage bill of the state is put at N3.2 billion.

Most states of the federation, it was also discovered in an attempt to undertake projects they have no financial capacity to carry result to heavy borrowing. In most cases the projects are most times left uncompleted due to cash squeeze. Thus, the infrastructures in place cannot be under join to the debts.

In situation, where states are facing challenges, Moonir Gwarzo, Director General, securities and exchange commission, says states are advised to take the advantage of equities, bonds or mortgage bond securities in the capital market to develop their states’ infrastructure.

It was in realization of the above challenge and opportunities and prospects that Captain Idris Wada in his wisdom, approached the capital market for a bond of N20billion to explore the opportunities to deliver infrastructural development to the People, believing that it is better to borrow to meet infrastructural needs than to be content with relying on the statutory allocation to pay salaries. So far only N8billion has so far been accessed.

Since 2012 when the present administration came on board, it is important to place on record that the federation account accruing to the state hovers between N3.5billion to N3.7billion. On assumption of office, the Governor met an internally generated revenue of N150 million. Today, it has risen to about N600 million monthly.

The increase in Internally Generated Revenue was done through innovation, and looking at other alternative sources of generating revenue by the Wada administration.

Kogi State is described by many as a civil service state. The labour workforce is about 22,000. The teachers are about 33,000 and local government workers are put at 26,000. This no doubt puts pressure on the federation allocation and expected pressure on government finances.

The persistent low crude oil prices lives the state in perilous state, if not for the financial prudence and wizardry of Captain Wada.  The state governor since coming on board has made payment of workers salary a priority.  The governor aside cutting down on governance, blocking leakages, is not flamboyant, preferring to use the meager resources available for the development of the state.

The total IGR of the state in 2013 for example was put at N4.5 billion. This amount come majorly from Pay As You Earn (PAYE), direct assessment and other revenue but with PAYE accounting for the highest amount of about 85%.

Towards ensuring that the state does not rely on allocation from the federation account, the state government has in the last three years encouraged public private partnership.  At the last count over eighteen Memoranda of understanding has been signed with reputable national and international organization in developing critical infrastructures and sectors of the state.

Finding it difficult to finance their infrastructural programs, some state governors have resorted to borrowing, thus mortgaging their states in the name of working, carrying out infrastructural development and an attempt to please the electorate. For example,  Lagos State is indebted to the tune of 500billion, Bauchi to the tune of N125billion, Plateau N104billion, Niger N56billion, Kano N380 billion, Benue N90 billion, Kebbi State N84 billion just to mention but a few states.

Kogi state is one of the least indebted states with just N7billion to its credit.  This money according to the DMO was even owed before the present administration came on board.

What is however interesting in Kogi State is that amidst the financial crunch hitting states of the federation, the state governor’s prudent approach has not only led to regular and in few case delayed payment of salaries, pension and gratuity is a constant priority in the administration’s activities.

In terms of infrastructures, and counting the achievements of the Wada led administration amidst resources, mention must be made of the on-going construction of a University Teaching Hospital in Ayingba, Remodeling of Kogi Hotels, Lokoja while a modern trailer and motor park is underway in Felele.

Similarly, the administration is building 500 houses for civil servants.  The 250 bed cottage hospital at Odu-gboyega is also on-going.

Presently, all General Hospitals in the state are being upgraded to an improved standard. The state presently has four Zonal hospitals with state of the art facilities.

The present administration has completed 58 roads across the state. Township roads in Dekina, Mopa, Kabba, Isanlu, Egbe, Iyara, Lokoja and Koton-Karfe are all under going construction.

In the area of water, the administration is spending N1.8billion to reticulate the greater Lokoja Water Project to some adjoining towns in Lokoja.  The administration has equally spent about N400million in protecting the water project with an embankment.  Furthermore, the administration is working on 35 water schemes across the state, this is after it has completed the payment for the greater Lokoja water project.

The Wada administration is equally spending about N2billion on the embankment work at Kabawa, and is also building a seventeen storey building at the cost of N2.2billion in Abuja, a Diagnostic and imaging centre as well as opening up a new Lokoja town through the construction of a 16km Ganaja- Otokiti bye pass road and another one commencing from the welcome to Lokoja, down to the new market road. The roads when completed will be fitted with sidewalks, street lights and well connected drainages.

All of these achievements and others too numerous to mention are coming at a time when states have
resorted to heavy borrowing to finance projects at the expense of the welfare of its workers and citizens. But in Kogi’s case, there is a balance between project and human development yet the state is not indebted as others.

Furthermore, the Kogi State scenario under the present leadership is a case of prudent management of resources to improve the well-being of the people, and a balance in human and infrastructural development while also ensuring that the future of the state for generations yet unborn is not mortgaged.