Former Governor of Anambra State, Mr. Peter Obi, on Saturday said, state governments can check profligacy by abolishing office of the First Lady which causes confusion and gulps about N72billion yearly, reduce security votes and streamline procurement in order to reduce their entire budget by N1trillion.
Obi said that in view of the current recession and by way of necessity, governors of the 36 states of the federation must reduce their current budget which totaled about N4.1trillion by over 25 per cent if they cut down on the number of bullet proof cars, the size of their convoy and cut down on travelling expenses.
Addressing the theme: “Cutting the Cost of Governance,” at the 2016 edition of ‘The Platform’, organised by the Covenant Christian Centre in Lagos, which has the title “The Economic Value of Nigeria and how Nigeria can be made to Work”, Obi said the problem with the country was the inability of her leaders to cut the cost of governance by deploying the resources of the state responsibly. Obi revealed that all the governors spend over N450billion on security votes and loose procurement pattern, thereby promoting massive wastage and stifling growth and development.
His disclosure came just as the Catholic Arch-Bishop of Sokoto Diocese, Rev. Father Martin Hassan Kukah, lamented that Nigeria is not only hemorrhaging, but its progress is crippled by centripetal forces which must be checked by the electorate through the ballot boxes.
Kukah, who said the Muhammadu Buhari government is currently struggling, decried the hue and cry over proposed sales of Nigeria’s assets, stating that while the citizenry remained the greatest assets the nation possesses, the nation itself has been privatized long ago, since it is held in the jugular by a few leaders.
Obi said he was impeached for prudent management of state funds, by patronising local manufacturers and contractors, especially in the rehabilitation of the bombed Anambra Government House and procurement which enabled him to purchased 1000 vehicles from Innoson Vehicles Manufacturing Company.
Lamenting that the nation is threading a dangerous financial path, Obi said: “This year, our expected revenue is N7.2trillion from both the states and the Federal governments. The expected expenditure is N11.4trillion, giving us a deficit of about N4.3trillion. These are debts that have already been incurred a year ago by the same government. They will tell you today that Nigeria’s debt to GDP is under 20 per cent and it is small.
“The former government provided for debt servicing 38 per cent of their budget of the revenue. Because the revenue they are getting is not enough, half of the year, they used 51 per cent to service the debt and they are borrowing more. You will hear things like “we are going to spend our way out of recession”.
“There is nothing wrong in borrowing, just like we are talking about selling assets, but the question is what are you borrowing for? The only way to come out of recession is to spend for growth either from savings or from borrowing. Since we don’t have savings, you have heard how our savings were squandered (whether it’s excess crude by the governors) everybody was right. The money is gone, but now, in order to spend, we need to borrow.
“Are you borrowing for consumption or production? The fear is that we are borrowing for consumption because we cannot see what we used the past borrowing for or what you sold for and that is the crises we face. It is the critical thing everybody has to watch,” he said.
Obi who said nothing was wrong with borrowing, however cautioned against borrowing to finance consumption.
“When you don’t have savings/reserve and borrow to finance consumption you are heading to disaster.”
He used Japan and Greece as examples, saying “While Japan is the world’s biggest debtor to GDP in percentage, Japan has the highest net assets of any country in the world, also Japan’s 90 per cent debt are held by individuals and corporation in Japan. Debt to GDP = 246/250 per cent compared to Greece 187 per cent, other countries has) but it has over $1.3tr in foreign US treasury bills, while others borrow or build debt without any external reserve.