OLASUNKANMI AKONI
Fashola
Just after the state Commissioner
for Economic Planning and
Budget, Pastor Ben Akabueze
made his 2-hour presentation, Mr.
Quasim Akinreti, a United
Kingdom trained on-line media
expert, sought answers to why
some contractors executed some
of the state projects halfway
within a fiscal year and how many
contractors have been sanctioned
so far for what he allegedly
described “dereliction of duties or
breach of contracts”.
Before Akabueze responded, Mr.
Peter Ajayi, a federal media
agency representative, also asked
a set of questions mainly
“ bordering on the value of
unspent funds returned to the
state coffers each fiscal year since
2007; whether the Fashola
administration will adopt the
minimum wage standard of the
federal government; and if
inadequate resource was
responsible for why some capital
projects have not been completed
in the last fiscal year. ”
Quite a number of participants
sought answers to a barrage of
questions on the state budget
financing, debt management and
servicing since the inception of
administration of Fashola.
At last, Akabueze, who is the state
chief budget manager,
responded to diverse questions,
to which a wide spectrum of his
audience (basically from the
media and civil society) wanted
clarifications one after the other.
His method was quite empirical
and logical considering the
manner the state budget
manager freely referred to facts,
figures and policies explained the
state government business and
operation in the last four years.
For clearer understanding,
Akabueze offered insight into the
state of Lagos economy prior to
when Governor Fashola took
over from former Governor Bola
Ahmed Tinubu, which he said,
laid down a robust road map to
confront the socio-economic
challenges of Africa ’s emerging
model megacity. He simply put
that the “preceding purposeful
administration set foundation for
today ’s Lagos economic
breakthrough”.
The basis for Tinubu’s
foundational roles was captured
in various socio-economic
strategies and policy initiatives,
which Akabueze said Tinubu ’s
administration put together to
transform Lagos from slums to
model city. Without a solid socio-
economic foundation, which he
said the last administration laid
down, Akabueze, who was in
company of Special Adviser on
Revenue and Taxation, Mr.
Adeola Ipaiye and his Economic
Planning and Budget counterpart,
Mrs. Florence Oguntuase Fashola ’s
administration could have faced
herculean task.
Akabueze therefore cited Ten-
Point Agenda (TPA), Millennium
Development Goals (MDGs), Lagos
State Economic Empowerment
and Development Strategy
(LASEEDS), resolutions of Lagos
Economic Summits, global
computerization programme,
revenue diversification and
deepening, and enhanced
transparency and accountability
relating to internally generated
revenue (IGR) as key policy
documents and initiatives
currently being implemented to
achieve high budget performance
since 2007 and transform Lagos
to a desired city.
However, Akabueze quickly
rolled out a number of
challenges, which he said,
Fashola administration
confronted in the face of
numerous opportunities. He thus
mentioned poor resource
profiles, huge infrastructural
gaps, high crime rates, growing
unemployment rates, inadequate
institutional capacities, influx of
immigrants from neighbouring
states, prevalent poverty and
socio-economic problems as key
challenges, all of which he said,
constituted disincentives to
investments and threat to
perceived opportunities.
Taking cognisance of these
challenges, Akabueze put the
budget projection of the state at
about $50 billion to be spent
within a period of 10 years.
Studies carried out by the present
administration in 2007, according
to him, shows that Lagos
infrastructure funding gaps will
gulp $50 billion. As indicated in
the studies, water development
requires $3 billion; road &
drainage needs $20 billion;
power will also gulps $10 billion;
ICT needs $5 billion,
transportation requires N9.3
billion and water & sewage will
require $2.7 billion.
But the commissioner
acknowledged the deployment of
broad socio-economic strategies
“ to achieve the change agenda.
This includes revenue
diversification and deepening;
enhanced transparency and
accountability; efficient allocation
of resources across sectors;
tighter operating expenditure
control, quarterly review of
budget performance; more
effective project monitoring as
well as pegging capital and
recurrent expenditure ratio at
60:40. This approach has proved
effective and efficient in the state
fiscal management ”.
This is precisely what Akabueze
said was responsible “for the
state exponential improvement in
its budget performance from
2007 to 2010. About 70 percent
was recorded in 2007, 71 percent
in 2008; 73 percent in 2009; and
80 percent. In this light, Lagos
State has since 2007 been
recording best budget
performances across all the states
of federation, and by extension,
other states in West African sub-
region within the period under
study”.
When compared with the Federal
Government, its 2010 budget
only recorded a performance of
21 per cent in terms of the capital
expenditure, according to the
Minister for Finance, Mr. Olusegun
Aganga.
But the minister acknowledged
almost 100 percent
implementation of the recurrent
expenditure during the same
fiscal year. Lagos success story
therefore paint some good
lessons, from which budget
experts believe the federal
government can learn.
Also, during the period under
review, Akabueze stressed the
international standard 9-sector
classification of functions of
government (COFOG) was
introduced in 2008 to replace
previous 4-sector classification.
Away from the 4-sector
classification, the commissioner
attributed the state budget
performances to the new
standard, which he said
specifically place more emphasis
on such sectors as infrastructural
development, social protection,
education, environmental
protection, health, general
services, public order and safety.
Akabueze, said the key outputs
of the budgets “include increased
internally generated revenue
(IGR) from N85bn to N176bn (i.e.
N7bn to N15bn monthly)
anchored on Medium Term
Sectoral Strategy (MTSS), Medium
Term Expenditure Framework
(MTEF), Medium Term Budget
Framework (MTBF) applied to
strengthen public expenditure
management. The state ’s MDAs
now have functional ICT units
statewide Implementation of
Electronic Document Management
System (EDMS) improved staff
competence ”.
Sectoral reviews by the
commissioner showed graphic
performances of the state
budgets between 2007 and
2010. He thus cited the public
order and safety sector, which he
said, had witnessed an optimal
decline in term of crime rates. He
attributed the decline “to the
establishment of the State Security
Trust Fund (LSSTF), two
helicopters purchased for security
and emergency management,
Central Security Surveillance (CSS),
500 patrol vehicles, 18 Armoured
Personnel Carriers (APCs); arms
and ammunition purchased for
the police command.
“The key outcomes were armed
robbery incidents and stolen
vehicles decreased by 89 percent
in 2008 and 54 percent in 2009
respectively. Murder cases fell
from 221 cases in 2007 to 94
incidents in 2010, representing
about 75 percent decline. For
every 10 cars stolen in 2009 at
least 9 were recovered in the
same year, and quicker
disposition of cases (in term of
judgement delivered in criminal
charges filed in the state)
improved by 61 percent,
especially those related to
criminal cases tried in 2010 from
13 percent in 2007 ”.
He also reviewed how the budget
implementation helped the state
government improve food
security in the last four years. This
is what the commissioner
accounted for an improved and
increased local food crop
production “from 1.452 million
metric tons in 2007 to 2.103
million metric tons in 2010),
increased livestock from 1.765
million metric tons in 2007 to
2.005m metric tons in 2010,
increased aggregate fisheries
production from 0.249m metric
tons in 2007 to 0.255m metric
tons in 2010, and beneficiaries
from the state Agricultural Youth
Empowerment Scheme (Agric-
YES) Project has improved from
300 in 2007 to 1,500 in 2010”.
Quoting the United Nations
Development Programme (UNDP)
report, Akabueze ’s presentation
showed a downward movement
of unemployment rate to 20
percent. This does not include
undergraduates engaged in
Enterprise Registration &
Identification Development
Agency (ENTRIDA) Project,
partnership with Messrs Elsewedy
Electric Nigeria Limited on the
production of transformers and
cables; 70 persons employed at
take off in 2010, commencement
of physical development of Lekki
Free Trade Zone (LFTZ) and
deployment of 1,273 high
capacity buses to enhance public
transportation all parts of the
Lagos metropolis.
Having set this background,
Akabueze thus addressed key
questions raised at the briefing
one after the other. On the
unspent funds, Akabueze simply
said the state “does not run the
silos kind of accounting system
whereby funds are allocated to
MDAs to prosecute their projects
and retire whatever is unspent at
the end of the fiscal year to the
treasury office as it is done at the
national level. The state MDAs are
encouraged to go to the treasury
for cash backing when they are
ready to pay contractors for
projects they want to implement ”.
His clarification on the
uncompleted projects pointed the
fact that the state “adopts the
medium term expenditure
framework (MTEF) with a basic
principle that budgetary plan
spans beyond one fiscal year ”.
Under this framework, he said,
some projects were not designed
to be completed within a budget
cycle as many might be designed
to last about three years to
complete. What is incorporated in
each budget for such projects
lasting longer would be estimated
cost value of jobs to be
accomplished within such a fiscal
year ”.
On the wage increase, Akabueze
held that the fixed amount was
what “was arrived at by the
Salaries and Wages Commission
established by the state
government with the probability
that it could even arrive at a figure
higher than the federal
government minimum wage. The
category of workers that earn
minimum wage are no longer in
the state public service. So, the
minimum wage was not relevant
in the state wage context
because the state government
now outsources the services of
staff members that earn minimum
wage ”.
On this note, the commissioner
said impressive budget
performance “is not a rocket
science, though requires effective
project preparation, monitoring
and implementation. We ensure
that pre-contract preparations
like drawing and other issues
have been done. If you release
money before that is done, the
money might have been spent ”
before actual site work is ready to
take off. He also harped on
stringent project monitoring to
ensure the contractor is not
defaulting at any stage of project
implementation.
According to him, it is difficult for
any contractor of Lagos State to
abscond because cash
disbursement is tied to project
need. In the cases where advance
payment is issued, the contractor
must provide advance payment
guarantee from a reputable
financial institution. So if the
contractor runs, we can always
hold the guarantor responsible.
So, the success of any budget is
dependent on the preparing as
well as monitoring of project
which remains pivotal for budget
performance. If you do not
monitor the projects, it would
never happen.
In the light of Akabueze’s
presentation, both Executive
Director of Public Policy Initiative
Network of Nigeria (PPINN) Dr.
Remi E. Aiyede and Chief
Executive Officer of Economic
Associates, Dr. Ayo Teriba offered
a bird’s eye view on the
performance of the state budgets
between 2007 and 2010. In his
analysis, Aiyede said it would be
difficult to determine the state
budget performance based on
the expenditure of funds
allocated to specific projects
approved for implementation
within a particular fiscal year.
Aiyede, who lectures public
administration at the University of
Ibadan, said it would not be
objective enough to assess
“ budget performance based on
how much of the allocations
spent on approved projects.
Objectively, budget performance
is best determined by actual
concrete targets of the budget
and level of performance of the
targets. Such performance can be
measured using budget targets
and the level of performance of
the expenditure ”
www.vanguardngr.com/2011/02/fashola’s-performance-under-scrutiny-in-lagos/

Give it up already!

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