Monday, 10 August 2015

El-Rufai’s Broadcast: Some Matters Arising.

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.

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