Anambra State. To be or not to be

We present two sides to the economic statistic coin in Anambra state.  Is Anambra state getting its budget priorities right? Two erudite personalities and one task. Arguing against will be Mallam El-Rufai an economic icon in his own right. Since graduating with a first class in Architecture he has worked nationally and internationally including as minister of the Federal Capital and before that overseeing Nigeria's privatisation exercise as DG Bureau of Public Enterprises. On the other side of the coin is Dr Okey Ikechukwu a media consultant with experience spanning The Guardian, Comet Newspaper and later on Examiner. He is a former special assistant to the minister of transport and later foreign affairs, Ojo Maduekwe and author of two books, "The philosophy of Philosophy" and "The Voice of the Oracle".

El Rufai is on the right (with fellow ministers)

ANAMBRA BUDGET is faulty

We continue our budgetary analysis with the South-eastern state of Anambra, with a view to analyse how the state’s budget plans to address development challenges within the state. The state is bounded by Delta to the West, Imo to the South, Enugu to the East, and Kogi to the North. It has a total land mass of 4,416 sq km, situated on the eastern side of the River Niger and has 21 local government areas. Its major towns are Awka, its capital city, the commercial town of Onitsha, and the industrial city of Nnewi.  Anambra has a population of 4.2 million and is the nineth most populous nationwide. Most of Anambra’s population is rural. However, as is with every major state, rural-urban migration poses serious burdens for the state’s resources. This pressure is evident in Onitsha where amenities like decent housing, potable water and electricity are in short supply. 

Old Anambra State was created in 1976 from part of the East-central state, and its capital was Enugu. Following further state creation in 1991, it was divided into two new states, Anambra and Enugu. Anambra now has its capital in Awka.  Governor Peter Obi of the All Progressives Grand Alliance (APGA) resumed office in March 2006, after the removal of Dr. Chris Ngige by a Court of Appeal judgment in Enugu which ruled that Ngige’s election in 2003 was defective.  Obi was impeached in November 2006, but was reinstated in February 2007 after the impeachment was overturned. Although a fresh election was held in April 2007, he returned to office in June 2007 after a court ruling decided that he should be allowed to complete his four-year term. He was re-elected for a second term in 6 February 2010.

Obi has a BA degree in Philosophy from the University of Nigeria, Nsukka (1984) and enjoys the title of being the youngest Chairman of Fidelity Bank. Considering Obi’s career achievements, and the fact that he has been to the Supreme Court successfully three times to reclaim his electoral mandate, the people had high hopes that he would improve on the stellar performance of Ngige, sadly, this has not been the case, as his administration has seen increasing crime rate, infrastructure deficits, a number of strikes over minimum wage, higher tax burdens, and exodus of elite, among other challenges.

Unemployment rate in Anambra is among the highest in the South-east zone, at 21.3 per cent, it is higher than the national average of 21.1 per cent.  Imo’s unemployment rate is 29.9 per cent and Enugu is 15 per cent. The state has tried to reduce unemployment through its Anambra Integrated Development Strategy (ANIDS) and the Anambra Youth Reorientation and Empowerment Program (ANSYREP), but the problem with these programmes is that they contribute very little to the production base of the state.

The incidence of poverty in the state is very high – actually disappointing. The South-east has a food poor incidence of 41.0 per cent of which 60.9 per cent is absolutely poor, while 66.5 per cent is relatively poor and 56.8 per cent live under a dollar a day. Anambra has a poverty index of 22.8 per cent, the third highest in the zone, and shares the sixth lowest position in Nigeria with Rivers State which also has 22.8 per cent.  About 47.6 per cent of the state’s population is core poor, 45.0 per cent is moderately poor and only 7.4 per cent of the state’s population is classified as none poor. Income inequality as measured by changes in Gini co-efficient between 2003 and 2010 increased slightly by 7.6 per cent as against 18.1 per cent for Ebonyi and Enugu States 7.5 per cent increase.

The people of Anambra State are known to be brilliant, enterprising and resourceful. Most of Nigera's brightest professors, writers, public servants and politicians hailed from the state. One would expect that given this enterprising spirit, the state would create conditions conducive to innovation, business and development. This is not the case, out of the five South-eastern states, Anambra has the fourth lowest ranking for ease of doing business; it was at a distant 35th position out of the 36 states and FCT in 2010. Starting a business involves nine procedures that may span 39 days. Enugu with the best doing business ranking in the zone, takes the 30th position of the 36 states, while Imo is ranked 36, as the most difficult state to do business both in the South-east and nationally.

Anambra State is not much endowed with mineral resources and the few known to exist are not exploited. For example, Tungsten at Oba, and large deposits of lignite in Onitsha, Idemili, and Nnewi councils are yet to be exploited. Kaolin is mined in the Ukpor lhembosi axis for the ceramic industry at Umuahia in Abia State; while the deposits at Afuleri are not exploited. Sandstones of Ameke Formation are quarried in several places, particularly at Abagana and Nsugbe for construction purposes. Natural gas has been discovered at Ebenebe Ridge, southeast of Ebenebe town, and preliminary prospecting indicates that crude oil exists in commercial quantities in the state. Cash crops in the state include coco yam, cassava, rice, maize and oil palm.

The 2012 budget for the state is N82.5 billion as against N66.9 billion in 2011, representing a 23.2 per cent increase. N46.8 billion (57%) is apportioned for capital expenditure, and N35.7 billion (43%) is for recurrent expenditure. Analysing the recurrent budget further, N9.2 billion or (26%) is set aside for Consolidated Revenue Fund Charges, N16.3 billion (45%) for personnel costs, N7.4 billion (21%) for overhead costs and N2.8 billion (8%) as subvention to parastatals/ tertiary institutions. Anambra’s total IGR for 2012 is projected at N12 billion, the same figure as was projected in 2011. This means, while its expenditure has increased, the state has not enhanced its capacity to collect or expand its tax base.

The two major contributors to IGR in 2012 will be N6.7 billion from taxes and about N4 billion from fines and fees. If this IGR is measured against the states projected personnel costs of N16.3 billion, Anambra cannot pay its staff salaries without reliance on federal allocation; this means it is one of those ‘dependent’ states and is not economically viable for independent existence.
The 2012 budget will be funded by projected capital receipts of N47 billion, N12 billion as IGR and N36 billion as FAAC allocations, bringing total revenues to N95 billion, out of which N12.3 billion would be transferred to Capital Development Fund.  In sectoral terms, N28.2 billion (34.2%) is allocated to the economic sector, N24.2 billion (29.4%) to the social sector, N9.7 billion (11.82%) for the environmental sector and N20.2 billion (24.52%) for general administration.

The education sub sector is allocated N10.99 billion. The state has a longstanding reputation of being an educationally advanced state: it has at least nine institutions of higher learning, its literacy rate is comparatively high, in a 2010 NBS literacy survey, youth literacy in the state was said to be 92.9 per cent and adult literacy at 74.0%. However, compared to its South-east neighbours, the state has the third lowest adult literacy amongst the five states, Abia has 78.2 per cent, Imo 80.8 per cent, Enugu with 64.6 per cent and Ebonyi with 69.8 per cent. This means that in education terms, Anambra is performing poorer than most other states in its region. From this regional perspective, it means investment in education urgently needs attention and ought to be ramped up.

A meagre N1.4 billion is budgeted for health, and considering that health should be the core focus of any state government, this amount is barely adequate. From this sum, it is evident that the government has misplaced priorities, apportioning only 1.7 per cent of the entire budget to a sector that directly affects the livelihood of all of its populace.

Another major problem of the state is roads and soil erosion. In a bid to tackle this, the government apportioned N10 billion to continue the construction of several intra-state highways and bridges, targeting the completion of about 100km of roads this fiscal year. However, only N1.696 billion is allocated for drainage, erosion control and sewerage. This we believe would not address the challenges in that area.
Water supply which also is a major problem will get only N800 millio: of this sum, it is hoped that expansion works on major water schemes would be carried out, and new ones built. This sum is little, and may not amount to much improvement in water supply in the state.

Agriculture is apportioned N1.4 billion, an evidence of misplaced priorities: with figures like these, it is no surprise that unemployment in the state is high. How can a state government allocate only 1.7 per cent of its entire budget to agriculture in a rural state? Unemployment can be tackled effectively with agriculture if the value chain challenges in food and cash crops production are tackled.
The housing sub sector will get N1.8 billion, the government plans to partner the private sector in providing more residential accommodation, a core focus will be on completing all existing projects. This is commendable.

What is clear from this analysis is that the state like most states of the federation is not allocating funds to adequately address the key social challenges that confront its people. It should slim down the size and cost if its government, learn to prioritise its budget allocations, expand its revenue base from taxes by attracting Federal Government and private sector participation in mineral exploration, improve its business climate by easing the starting and running of a business.

The state like other South-east states must address the security challenges arising from violent crimes and kidnapping that has scared the elite and investors from the state. The state should leverage its human resources by refocusing the priorities of government on SME and industrial development, investing in infrastructure, agriculture and human capital. It needs to capitalise on the enterprising nature of its people by tackling unemployment, poverty and infrastructure deficits. Until that time, it will remain a state with big prospects and very little growth. 

Dr Okey Ikechukwu

ANAMBRA BUDGET IS "Correct"....

Mallam Nasir el-Rufa’i’s analysis of Anambra State’s 2012 budget lacked the objectivity and attention to available evidence needed for believable conclusions. He certainly got some data on physical and human geography and capped it with random and recondite statistics. This is all right where the targeting audience is foreign, especially if el-Rufa’i wants to later assemble the episodes in a book; as one suspects that he will eventually do. It will then be the seminal work of a good governance minded African – in principle at least.

El-Rufa’i’s claims about poverty in Anambra State is the exact opposite of the truth. This is evident in the Poverty Profile Report of the National Bureau of Statistics, published in the Punch Newspaper of February 14, 2012. Corroboration can be found in the congruence of government efforts and the self reliance driving the state’s economy. Dr. Magnus Kpakol, as head of the national poverty eradication programme, said as much on December 31, 2010. This was during the flag-off of the payment of the Poverty Reduction Accelerator Investment and second phase of the Care of the People (COPE) programme, when he urged other state governors to emulate Anambra.

El-Rufa’i used faulty data which had been officially brought to the attention  of the Minister of National Planning, Minister of Finance, the Vice-President and the National Economic Council. Is it not curious that the source of El-Rufa’i’s statistics shows Anambra to be poorer than Yobe, Taraba and Sokoto States?

At the governor’s meeting of May 22, 2012, with the Manufacturers Association of Nigeria (MAN), Anambra, Enugu and Ebonyi Chapters, the Chairman, Dr. Chile Obidigbo, confirmed that the state had performed beyond their expectations in its promise to encourage and empower indigenous manufactures.  Mr. Peter Obi is the only governor who meets regularly with them.

Anambra has special funds in the Bank of Industry (BoI) for manufacturers. Obi laid the foundation stone for the construction of Innoson Motor Manufacturing Company, built the road leading to the factory and invited President Goodluck Jonathan to inaugurate it. Cutic cable in Nnewi has a related story and there is close interface with firms like Chikason, Orange Drugs and other manufacturing companies in the state says a lot more than can be gleaned from El-Rufa’i’s analysis.

The second largest brewer in the world with the market capitalisation of close to 50 billion pounds and which is twice bigger than MTN, BA Miller, will commence production in Anambra; with the state investing N2 billion. Anambra State has more bank branches than the entire South-east put together and the numbers doubled under Obi’s tenure. Whereas Anambra State had about three really good hotels in 2006, today there are over 30 of them.

The Ambassadors of the USA, Russia, EU, China, Denmark, Canada and South Africa, among others, have visited the state; each concluding some investment conversation before leaving. Development partners have quadrupled their interventions in the state. Anambra is a reprioritisation economically impactful road networks and targeting roads that will enable farmers get their goods to the market; and link communities needing economies of scale by leveraging their areas of strength. Local governments like Anambra East, Anambra West, Ogbaru and Ayamelum got roads for the first time under Obi. On record today, there are over 600 kms of physically measurable major (and interconnecting) roads, built within the last six years.

El-Rufa’i set out to educate people about the Anambra State Youth Reorientation and Empowerment Programme (ANSYREP), but without first informing himself. The funding of the remaining beneficiaries will be concluded next month. More new and thriving fish farms and poultry houses will merge to empty their yield into the market at considerable profit. New trained floor tilers, electricians, painters, hairdressers and barbers, as well as roofing and ceiling P.O.P service providers, tailors, confectioners, etc are the deliverable from the programme. Many beneficiaries of the programme are now employers of labour and others used the ANSYREP leverage to better prepare themselves for the WIN programme of the Federal Government; and some of whom got up to N20 million from the Federal Government for their respective businesses.

A more diligent writer would have gone beyond the generalisations supplied by paid researchers to note that there has been no bank robbery in Anambra State for the better half of a year now. The state chose to equip the police, which has so far got over 300 vehicles, communication gadgets and offered other forms of logistical support. The data on crime rate exists for reference. Only last month the community-police parole initiative was announced to be facilitated with security vehicles for each of the 177 communities in the state. Every community gets regular security funds of N500,000.

Anambra is among the very few states actually paying the new national minimum wage and was the first to pay it in the South-east. But the state did not accept demands for pay hike based on workers’ comparative assessment of what their ‘professional colleagues’ were earning in other states with higher revenue base. The government showed its receipts and asked how their demands would be accommodated. The strikes were eventually called off, without the pay rise. But attention was focused on ‘the fact’ of a strike and not on its underpinnings and final resolution.

A state that hosts the most non-indigenes in the South-east, in which the Northern community now has a traditional ruler tells a story: The logic of settlement is that people flock to places of higher economic value. The 1000 housing units making up the second phase of Ngozika Estate have all been completely bought; with the state government under pressure to build 10,000 more. This is poverty, per excellence!
Its youth empowerment programmes always have values reorientation components. As for the state doing nothing about then crude oil deposit in the state Orient Petroleum was formed in 2001 and only got energised under Obi; for which the chairman of the company, Chief Emeka Anyaoku, made his appreciation public. In addition to constructing the road leading to the facility for over N! billion, the state government has invested N4 billion in the project.

In education, Anambra State had a celebrated school handover to their former church owners last year, along with money for equipment and rehabilitation. There is N6 billion in the bank, for the four years’ salaries of the teachers.

This is in addition to a public apology for the rude takeover of the schools without compensation 40 year ago and an open admission that government’s takeover of schools is responsible for the collapse of morals and standards. Anambra has consistently remained among the first three states with the highest number of JAMB applicants and the performance of Anambra students in national and international academic competitions give the lie to el-Rufai’s analysis.

It is true that the health sector got N1.4 billion in the 2012 budget, but that is because there are multiples of that amount being expended in the health sector by development partners. Before the current government, no health institution in the state was accredited, but two modern hospitals are now accredited.

The following have also been accredited: College of Heath Technology, Obosi; College of Nursing and Midwifery, Nkpor; and School of Nursing, Iyienu, among others. Hospitals have been built and rehabilitated, hospital equipment have been procured, various health programmes are implemented.

The state is funding 10 hostels in various missionary-owned hospitals this year, while a new maternity complex at Waterside is under construction.  Borromeo hospital at Iyienu and Adazi got over N500 million attracted by government from development partners.  

This scenario is also applicable in the water sector, where Anambra is working on many water projects with support from development partners, like the EU, UNICEF and MDGs. This year alone, the MDGs will deliver eight major town water schemes and UNICEF will provide water to 30 communities in Ogbaru, etc.

Agricultural sector is private-sector focused and the state recently secured N1 billion loan for farmers. Close to N1 billion is committed to the FADAMA project and Anambra’s FADAMA III is regarded as the best in the country by the World Bank. But el-Rufai does not know any of these. He also does not know that the state is working on over 27 erosion sites. In the usual delusional language of a presumed economic crusader, he advised the government of Obi to cut down on the size  and cost of government, not knowing that the cut down on all costs is already 40.

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