It is almost two years since you started managing Ekiti’s finances. How has it been?
It is very challenging in the sense that the money is not just there and we have a tall ambition to rapidly organise and develop Ekiti to a state that is respected in the Southwest and in Nigeria.
What are the challenges you are facing?
One of the key challenges here is the issue of our revenue, just like any other state in Nigeria. Our own is peculiar. Ekiti is landlocked. Ekiti has no industry. Ekiti has a low internally generated revenue (IGR) base. Majority of the people are teachers. They pay only Pay As You Earn (PAYE) and the level of IGR is low. It has one of the least revenue from the Federation Account and the level of poverty, the level of underdevelopment is the same with other parts of the country. You have more issues to combat, such as erosion, flooding, urban renewal, even security. It is more of a headache trying to balance the figures and compared to other states that are bigger and richer, I will say we thank God.
What reforms have you carried out?
As a responsive government, the first reform you have to do is to make sure there is transparency and accountability in government. We have had to ensure that the little fund that we have is judiciously spent and that has to do with ensuring credibility in the contract process. The contract value is commensurate with the amount you are going to pay and you are not paying for services not delivered and then again you need to look inward. One of the major focuses of the governor is governance; improving governance, improving accountability, improving processes in the system and in finance, especially. Part of our own concern in that area is trying to ensure that the payment and revenue generation processes are improved upon. One of the first steps we took was to make sure we set up an integrative payroll application system, where our payroll is now fully computerised with biometric applications. That has enabled us to know those that are working for us. We have concluded the phase one of that activity and we are moving to phase two. By and large, it has been successful. Today, Ekiti is the only state that does direct payment. So, many states have started the integrated human resources application system but they still make payments through their ministries. They just use this system to generate salaries, but in the case of Ekiti, we pay all our workers online, real time.
One other reform we have had to carry out is in the area of revenue generation. We have started what we call e-revenue, electronic revenue system, whereby all payments into the coffers of the government are done through the bank and we have signed off consultants, who are handling this for us. That has helped us. The average IGR when we came on board was N121 million. At a time, it moved to about N600 million. For the reform of the tax system in the country, we are on average of about N400 million now. We are also working more with development partners and the capital market to develop our infrastructure.
Have you encountered any problem working with civil servants in carrying out these reforms?
I won’t call it problem, per se. There have been issues that came up when some of these reforms came on board, particularly the bifurcation of the finance and account departments. Most issues when better handled, the civil servants are very sincere, but if these reforms come on board and they are not well-articulated, there is bound to be resistance. You cannot rule out pockets of dissents or self-interests, but when the overwhelming facts are there, then there is no problem that our people will just let go.
An average Nigerian politician is known for cutting corners. Being a chartered accountant, trained to ensure no one cuts corner, have you had any problem with the governor in terms of managing finances?
The post of the Commissioner for Finance is not a post where you want to please everybody, not even yourself. You want to please the situation; you want to please the fact. So, even when the issue affects your wife, your children or your brother, you have to face the facts. If somebody close to me brings a transaction and I don’t believe in it, I will tell him ‘this can’t fly’. Most times the governor passes transactions to the Ministry of Finance for review. I hold court with my people here and advise Mr. Governor objectively.
To a large extent, like begets like. The governor’s values and orientation are well-known in the country. The governor is highly transparent. He listens. It does not take him time to agree once you have your facts and figures. If you are presenting anything to him, you have to get your facts right. By and large, I have been guided by my professional calling in performing my task as commissioner.
Why is the state taking bonds?
Bond is a form of financing for long-term at a cheaper cost. This is better than financing through the banks, which has an interest rate of between 20 and 23 per cent in Nigeria today. If you go to the bond, you might be getting a rate of about 15 per cent. Normally, it should be lower than this but the peculiar situation of Nigeria has made it difficult. Borrowing from bond is like building a house today and paying over time. There is a benefit. The benefit is that you will have the house and pay the same amount over 10 years, instead of continuing to pay rent. It is about being creative financially. Do we need new roads now? Do we need to bring investors to Ekiti State? If we need to do all these, what does it take? Do we need to bring back Ikogosi Warm Spring? Do we need to bring back Burnt Brick Factory? So, if the funding that required to bring all these things back is let’s say N10 million and we can only pay N1 million every year, that means we will not be able to bring back Ikogosi until the next 10 years. We will not be able to bring the Burnt Brick Factory back until the next 10 years. But knowing fully that if you do all those things and you can plough your savings back to repay, other investors will come to Ekiti State. I think the decision to take is let’s do it now and that is what we have done by taking bonds.
Does that not amount to mortgaging the future of the state?
If we delay the Burnt Brick, there are 300 people that will be denied employment in the next 10 years. Some of them would have even died. The company will expand and make money beyond what we are seeing today. I don’t know how that amounts to mortgaging the future of the state. Then, Ikogosi Warm Spring, which was a forest, will employ people. Income will come and it will attract more investors. Really, taking bonds does not amount to mortgaging the future. We are not mortgaging the future, but mortgaging for the future. We should thank the governor for his foresight. When you say you are mortgaging, are you mortgaging for value? That is the question we need to answer. You can’t run Ekiti State without borrowing because the money is not just there. We are not borrowing to acquire vehicles; we are not borrowing to pay salaries. To those who say taking bonds amount to mortgaging the future of the state, I want to challenge them to a debate on the benefits of bond financing. Most of the major projects done in this state in the past were through borrowing. Ero Dam was built with a loan. Egbe Dam also. We are still repaying. If these projects had not been done, how would the people have coped? It is long-term loan. If those dams have not been built with World Bank loan, are we going to have Ero Dam or Egbe Dam? Ilorin-Offa-Ado Road was built with a World Bank loan by the Federal Government. If they didn’t build it, how would it have happened? The only thing you need to look at when you are borrowing is, can you carry it? Do you have the capacity? What is the purpose of the loan? And that happens even at individual to community, corporate and state levels.
What do you think of the current internal and external borrowings of federal and state governments? Some think we are piling up debts again.
I think we have a mismatch in the sense that some of the borrowings that are taking place, are being used for things we do not really require; borrowing for recurrent expenditures and white elephant projects and borrowing without using it to stimulate the local economy. If you borrow and use it to stimulate the local economy, fine. There is nothing wrong with borrowing. It must just be purpose-driven. It must be used to achieve the purpose it was acquired, make sure you get result and make sure it stimulates the economy such that it can create jobs. But, if you borrow and it is financing manufacturing in other countries, then there is a big issue on our hands. When we borrow from another country and the borrowing is tied to buy our products, employ our engineers, bring our people into your country, even if you borrow $10 billion and it is used for factories in other countries, then it is a challenge. We go to China to borrow today. We go to America to borrow. These are the same countries keeping our reserves. They keep our reserves at 2-3 per cent, they give us loan at 5-7 per cent. Obviously, they are recycling our reserves.
How can we stimulate the economy?
What we have done in Ekiti and which, I expect a reasonable country to do, is to tell some of these multinationals, ‘I am going to patronise you but whatever I am going to buy from you must be assembled in Nigeria’. We can do it. This country can stop the importation of rice. If we don’t eat foreign rice, there is nothing that will happen. If we don’t eat anything foreign, nothing will happen. But, the challenge we have in this country today is the taste of everybody, myself inclusive. You can’ run your economy by opening your doors for every Tom, Dick and Harry to just dump things here. We buy imported tooth picks in this country. We buy imported tissue papers. All the garments, all the ankara, none is manufactured in this country. Why can’t we examine our brains and wake up. We are the biggest economy in Africa and the moment you tell these people ‘if the factory is not here I am not buying’, they will relocate here. They start exporting from here, but most of our leaders here are not focused. My governor pays social security to the elderly here to stimulate the economy. These people don’t buy foreign stuffs. They buy from the local market. They buy from farmers. They buy pepper, gari and so on from the local markets.
We need to spend our money on the local economy. Some of our leaders put their money abroad and the money is working abroad. It becomes easier for that economy to have money to borrow us at higher rate. They now insist we must employ their engineers, buy equipment from their country, which their engineers must operate. We are the loser. The economy of Nigeria is not such that should take anybody one year to build, with the right quality leadership, with the right direction. The foreign contractors we bring here, what do they do that our people can’t? This country can work.
Let’s look at the accounting profession in Nigeria, there seems to be some bad eggs…
For every profession, there are bad eggs. It is normal in every profession. These are isolated cases that should not be allowed to dent the real professionals with character.
How can we stop corruption?
Corruption, to me, is a thing of the mind of the individual, the community and the country. Over time, if you allow it to grow, it will continue to damage the system. It is more of our societal values and orientation. We need to look back at the days of Omoluabi as we call it in the West. An Omoluabi is somebody who will do the right thing at the right time whether people are there or not. Corruption can destroy a country. When people know that if you don’t work and you make money and the society will worship you, they tend to tilt towards fraudulent means of acquiring wealth. The law should be strict about that. That is why I like what the CBN governor is doing about electronic payment. It helps reduce corruption. I hope it succeeds. What value do you get from making too much money? There are too many poor people around you. We need to get our values right. People just acquire wealth that they don’t need. Being corrupt as a country is what has led us to where we are today. The moment you can remove corruption things will move well. We should all think about the country and what values are we adding to the country. The level of corruption in Nigeria is more driven by misplacement of priorities.
