 |
| Governor Ihedioha with Prof Uwaleke during his Appointment |
AN INTERVIEW WITH IMO STATE COMMISSIONER OF FINANCE TO KNOW THE LONG AND SHORT TERM DEVELOPMENTAL PLAN OF THE IMO STATE GOVERNMENT IN NIGERIA
An encounter Between Prof. Uwaleke with Binnabook Reporter in Owerri Imo State;Nigeria.
Binnabook Reporter: May we know you Sir. Your background, previous positions held before your present appointment.
Prof: My name is Uche Joe Uwaleke. I hail from Amainyi in Ihitte Uboma LGA of Imo State. I am a financial Economist and a Professor of Finance and Capital Markets. To the Glory of God, I am also a Chartered Banker, Chartered Stockbroker and a Fellow of the Institute of Chartered Accountants of Nigeria.
I am currently on leave of absence from Nasarawa State University Keffi where I was overseeing the department of Banking and Finance. Prior to my appointment as the Hon Commissioner for Finance by His Excellency, Rt Hon Emeka Ihedioha, I was the Chief Economist and Director of Research at the Securities and Exchange Commission Abuja.
Binnabook R: The primary duty of the finance Ministry is to ensure that public finance is sound. Compare and contrast the type of public finance you inherited and what is obtainable now.
Prof:Sadly, I met a Ministry of Finance that was of little or no value to the financial responsibilities of the State and literally stripped of its functions. This did not come as a surprise given that due process was completely jettisoned for many years in the State. For instance, the procurement department, the Loans and Investment department and many others existed only in Name. No activity went on there for years because their functions were taken over by the 'Governor's Office'. The result is better imagined: low staff morale, zero human capital development, absence of vital records and so forth.
The Accountant General's office appears worst hit because accounting records were not up to date and the State could not publish audited accounts in line with best practices. Today, all that is gradually changing. The Governor's commitment to due process and good governance has enabled the reviving of the procurement department.
We are also positioning the Debt Management Department to perform its functions more effectively. Currently, we are working towards producing and publishing financial reports consistent with International Public Sector Accounting Standards. By so doing, we promote transparency and accountability and endear the State to donor Agencies.
Binnabook R: In what ways are you making sure that government spending plans are prudent and can be afforded within the expected revenues accruable from federal allocations and Internally Generated Revenue.
Prof: When we came into Office, we found out that Recurrent expenditure (largely personnel costs and overheads) constitute about 85% of revenues from the Federation Account. Of course you know that the bulk of the State's revenue comes from FAAC.
To address the issue of high personnel costs without jeopardizing the commitment of the government to the prompt payment of 100% Salary to State workers, we have concluded arrangements to clean up our payroll using the Integrated Payroll and Personnel Information System (IPPIS).
Similarly, to address the huge and avoidable running costs which we inherited, the State Exco recently approved my memo to establish an 'Efficiency Unit' in the Ministry of Finance. May I equally point out that the commendable decision of the Governor to trim the size of government by reducing the number of Commissioners/Ministries from an unwieldy 31 to a manageable 18 has gone a long way in cutting the cost of governance.
Binnabook R: Government debt evaluation is critical to financial planning. What is the debt exposure of the Imo State government as you came on board. How burdensome is this debt to your growth plans.
Prof: To be honest, the biggest headache this administration is facing now is how to confront the huge Infrastructure deficit in the State occasioned by the misuse of loans procured by the previous government. I mentioned to you earlier that because the Department of Loans in the Ministry of Finance was not allowed to function, proper records were not kept. The State's debt, domestic and external, is over 100 billion naira.
When you factor in Judgement debts and contractors' obligations, not to mention pension arrears, the figure becomes staggering. Every month, about One billion naira is netted off at source from our FAAC allocation to service our loans some of which were Federal Government bail-out funds that we still cannot trace what they were used for. Going forward at the Ministry of Finance, we have resolved to deal with these including through restructuring and refinancing arrangements.
Never again will the State deploy loans to other uses or mismatch funds. We shall stick to the provisions of the Fiscal Responsibility Act by ensuring that we seek for concessional and long term loan when it becomes necessary only for capital projects. The new debt management department is saddled with the responsibility of developing a medium-term debt management strategy for the State as a guide to future borrowing.
Binnabook R: Reforming government agencies and there processes and practices is very difficult. Recently you talked about establishing the EFFICIENCY UNIT to save cost. What exactly is it all about.
Prof: Oh yes, we had to establish an Efficiency Unit in order to minimize waste and cut down the day to day cost of running government. This department, usually domiciled in the Ministry of Finance, has helped to save billions of naira at the federal level since it was introduced in 2016 by the federal government.
It has also proven to be a success in Kaduna State. We think domesticating it in Imo State will result in some savings and also free-up funds for critical capital projects. One of the first things I did when I was appointment to oversee the Finance Ministry was to analyse expenditure pattern of the government in the last three years.
The finding was disturbing: overhead spending was nearly 65% of total Recurrent expenditure with the bulk being accounted for by things like stationery, computer consummables, fuel and travel costs. With proper planning and management, these costs can come down and our MDAs can be made more efficient. I am glad to note that that the DG of the State Bureau for Public Procurement and Price Intelligence is also a member of the Steering Committee of the State's Efficiency Unit and we are closely working together on this.
Binnabook R: Today, Imo State is implementing the Treasury Single Account, the TSA. Why was it necessary to adopt this policy. What system was on ground before now, and what are the new benefits derivable from TSA.
Prof: The truth is that if we go by the practice at the federal level as well as in some States of the Federation including Kaduna and Benue, the Treasury Single Account (TSA) has been used to engender sanity in revenue administration. It is one measure which has helped to plug leakages and curb corruption. Before this administration came into Office, there were over 300 different accounts in several banks.
This gave room for all manner of sharp practices by State officials in collusion with the banks. So, the State was seriously being shortchanged. This explains why the Governor, Rt Hon Emeka Ihedioha, was quick to issue Executive Order 005 on Treasury Single Account which mandates the consolidation of all government accounts into a Single account with a lead Bank. For this purpose, Access Bank is currently playing that role. Unlike before, it is now possible to see at a glance the total revenue that accrues to the State on a particular day. You will agree with me that this makes for transparency.
Binnabook R: Preparation and management of the Imo annual budget is at the core of government appropriations.
Is Imo State cooking a budget this time around?
Prof:The Budget process in Imo State is primarily under the supervision of the Ministry of Budget and Planning. Having said that, I am in close touch with the Hon Commissioner for Budget and I can tell you that for the first time in many years in Imo State, the Budget will serve as a major policy instrument for transparency. Before May 2019, the Budget process was at best opaque. The good news is that Imo State is now a signatory to the Open Government partnership with emphasis on participatory budget.
Binnabook R:We now have a period of low revenue earnings from crude oil. What other avenues are out there to shore-up and bolster Imo revenue earnings. Where do we go from here.
Prof:Admittedly, the drop in Oil revenue is a major concern for many. Imo State, like virtually all the States in the federation, depend on Oil revenue for survival. Relative to 2019 budget, the lowering of the benchmarks for the 2020 Budget by the federal government with respect to oil price and output points to one fact: oil revenue will likely go down next year.
The way forward is to continue to strive to ramp up Internally Generated Revenue (IGR). In Imo State, this challenge is currently being addressed including through automation and widening the tax net. From a paltry 250 million naira IGR base in May, we have been able to shore it up to close to 1 billion as of September 2019. Our target is to take it to a level where it is able to take care of the State's Recurrent spending of about N3.5 billion monthly.
When this happens, whatever we get from from the Federation account can be used exclusively for capital projects. The State government is prioritising infrastructure especially power and roads because we recognise that a conducive environment is a necessary condition for businesses to thrive and in turn contribute to the Treasury. As I mentioned earlier, any borrowing done to finance budget deficit will exclusively be for development projects. May I also add that the right policies are currently being put in place to attract private capital.
Binnabook R:The last administration in Imo State received large amounts of Bailout funds which are repayable. How exposed is Imo State and what is our present repayment liabilities to the federal government.
Prof: It is common knowledge that the State is heavily exposed to the federal government. Evidence of this is in the huge value of Irrevocable Standing Payment Order which was issued by the previous government to the Accountant General of the Federation. As I mentioned earlier, about one billion of our money is taken off every month by the federal government to service loans procured by previous governments. The sad part is that no one can say exactly what the loans, especially the bailout funds, were used for in the State. So we are stuck with it but the present administration, under a focused leader, remains undaunted and will not waiver in its determination to dispense democracy dividends to the good people of imo State.
Binnabook R: Finally, the United States Agency for International Development ( USAID) is here in the water sector, and the World Bank is here on the Newmap Erosion Control project. What was the magic in bringing them to Imo state. Are we expecting other foreign agencies.
Prof:You don't need to look very far to see why. Bees are naturally attracted to honey. The Holy Book says where the carcass is, there go the vultures.
The former represents opportunities while the latter can mean investors and donor Agencies. So, if development partners, be they World Bank, USAID, DFID, are flocking into Imo State, it is because they now have good reason to do so. They are attracted by a demonstrable political will on the part of the new administration to deliver good governance, due process, accountability and Transparency- conditions which were in short supply in the previous era. In the coming months, Imo holds a lot of promise of becoming the toast of Investors from China, US, France UK and indeed all over the world. To God be the Glory.
Binnabook R: Sir thank you for your time with us today and for the great insight on what is happening around the Imo State Government we appreciate.
Prof: You are welcome Binnabook keep it up and God bless you.
An encounter Between Prof. Uwaleke with Binnabook Reporter in Owerri Imo State;Nigeria.
BINNABOOK PUBLISHERS
Reporting from Owerri Imo State Nigeria
0 Comments:
Post a Comment
Your Views are needed.Thanks!