El-Rufai’s
Broadcast: Some Matters Arising.
On
Wednesday, the 29th of July, 2015, the Executive Governor of Kaduna
State, Mallam Nasir El-Rufai, gave what is a sort of a “State of the State”
broadcast, which he titled “How we met Kaduna State and what we are doing to
change it”, exactly two months after taking over the reins of leadership of the
state.
His
revelations on what he met on ground in the state is not entirely surprising,
but it will amount to dishonesty to say that one did not shudder at some of the
ugly facts reeled out by the governor. But then there should be no need to
dwell on all that as even the governor himself has appeared to have moved on.
The issue here is about what he is doing to change Kaduna state.
El-Rufai
mentioned quite a number of things that his government is doing which include
cutting down overspending, raising the profile of the state internally
generated revenue (IGR), and getting the social infrastructure, like schools
and hospitals, to work for the citizens. He did go into the specifics of what
has been, or is being set, in motion to achieve the above. For the purpose,
however, of this piece today, it is what he is doing on the IGR, by implication
the economy of Kaduna state, that this piece shall intervene on.
The governor
has expressly declared his commitment to seeing to it that the IGR exceeds what
the state receives as allocation from the federation. He has so far outlined
two vehicles upon which to drive this quest. The first is tax discipline. Here,
he has set up a committee, led by Mrs Ifueko Omoigui-Okauru, former Chairman of
the Federal Inland Revenue Service, to review the tax system in the state. The
report of the committee is being awaited.
Of
course, tied to the tax thing is the government’s land reform policy which
shall standardize the process of and formalize land titles in the state. It
goes without saying that ground rent will be taken more seriously in the state
in view of the dearth of funds to run government as it stands now.
The
second is job creation. In this regard, the state government has signed a pact
with UAC Property development Company (UPDC) to build a shopping mall in
Kaduna, deliverable in 2016. The state government is also eying investors who
have indicated interest in building more of such malls and also Five-star
hotels in the state. Add to that is the programme of Kaduna Cabs: the process
of which has long begun with interested applicants already being processed. No
doubt, all of these moves will serve to mop up some good hands from the labour
market, which is good, no matter how few.
The
critical question in the governor’s outlined economic direction so far is the
place of small and medium scale enterprises (SMEs) in this foray. In all of the
most developed economies in the world, SMEs are the mainstay. Their livelihood
is what determines the success of such economies. Right now as it stands, there
are of course many SMEs in the state and most of them quite informal. It would
be of interest to know what plans the government would have in mind to ensure
that their activities are reflected in the economic profile of the state as
that will help in ensuring that they are protected and in fact enhanced when
crafting future policies.
Also,
while the Omoigui-Okauru report is being awaited, the hope is that, in the
government’s drive for IGR, the already existing SMEs will not be stifled to
death as a result. The hope is that the state government will in fact create
enabling environment for more SMEs to spring up by availing entrepreneurs and
venture capitalists attractive policies to join in in creating more jobs and
wealth in the state. It is on record that Nigeria is one country where big and
also foreign investors get more incentives to invest than local and small
investors, like tax breaks and so on.
Finally,
another very important factor is access to credit. Nigeria as a whole has never
been quite the business environment one would point to when talking about
economies that avail entrepreneurs and start-ups with the right credit regime with
which to invest. A major trouble in this regard is our banks. There is hardly a
bank that gives credit facility at an interest rate less the twenty percent. I
can’t mention one off the cuff. Credit is at an interest rate of over thirty
percent. The truth however is that start-ups depend on such conducive accesses
to credit to be able to venture and build businesses into the heights that can
bolster internally generated revenues for states like Kaduna. The governor, in
his broadcast, never mentioned how his government hopes make credit available
for SME investors in the state, which will in turn translate to more jobs
created and more internally generated revenue.
These
are some issues on which Gov El-Rufai needs to shed light. They can determine
how his quest for employment and IGR pan out.
BLUEPRINT Newspaper; Thur. August 6, 2015; p2.
