. As Elumelu tasks governors on youth entrepreneurship
The Director-General, World Trade Organisation (WTO), Dr. Ngozi Okonjo-Iweala, yesterday, cautioned the 36 state governors against excessive borrowing.
Okonjo-Iweala gave the advice at the opening of the 2023 induction for re-elected and elected governors themed: “Governing for Impact (Building Sub-national Governance),” organised by the Nigeria Governors Forum (NGF).
This is even as the chairman, Heirs Holdings, Tony Elumelu, advised governors to place high priority on promoting youth entrepreneurship for self-employment.
Rather than going a-borrowing, Okonjo-Iweala challenged the state chief executives to improve on their Internally Generated Revenue (IGR) and ensure transparency in the management of resources.
She said: “Nigeria’s gross debt level has climbed from N19.3 trillion in 2015 to N91.6 trillion in 2023. The debt-to-GDP ratio has almost doubled from 20 to 39% over that period.
“While the debt-to-GDP ratio may not look so alarming as revenues decline, the burden of debt servicing has increased dramatically.
“The debt service-to-revenue ratio is certainly alarming at 83.2% in 2021 and 96.3% in 2022, according to the World Bank.
“This means that at the federal level after servicing our debt, there is little room to pay for recurrent expenditures let alone investment.”
Okonjo-Iweala also noted that it would be difficult for the incoming administration to address the fiscal deficit with an oil subsidy bill of N3.36 trillion, now exacerbated by revenue losses from oil theft.
States must figure out ways to increase IGR. This goes hand in hand with using your 48% share of federal allocations more transparently, efficiently, and effectively.
She continued: “On the revenue side, states have a substantial responsibility. Too few states are raising internally generated revenue of any significance.
“Data from the National Bureau of Statistics and State Audited Financial Statements by the civic-tech group BudgIT indicated that 33 states relied on federal transfers for the majority of their revenues.
“For 13 of these states, monthly Federation Accounts Allocation Committee (FAAC) allocations accounted for over 70% of revenue.
“Aggregated IGR from the 36 states did rise from N1.2 trillion in 2020 to N1.61 trillion in 2021 – but this pales in comparison to FAAC allocations to states of N2.23 trillion in 2020, N2.42 trillion in 2021 (and N3.16 trillion in 2022).
“While I commend those states that have made additional efforts, governors need to do much more. States must figure out ways to increase IGR.
“This goes hand in hand with using your 48% share of federal allocations more transparently, efficiently, and effectively.
“You must share with your state citizens how much FAAC allocation you receive each month, how much IGR you collect, and how you spend it.
“We used to publish this information routinely during my time as finance minister under Presidents Obasanjo and Jonathan. We must resume this practice so your citizens can hold you accountable.
“Please watch your debt profiles, and keep careful control of expenditures, even as you invest in infrastructure, education, and basic health systems.
“Please endeavour to pay teachers, health workers, and others their salaries, and retirees their pensions.”
We know politics sees many interest groups and stakeholders, competing, jostling – but your success will mean prioritising the largest stakeholders group in your states, our youth.
Youth entrepreneurship
Elumelu, who also spoke at the Forum, urged the governors to take advantage of Nigeria’s youthful population.
He said: “We know politics sees many interest groups and stakeholders, competing, jostling – but your success will mean prioritising the largest stakeholders group in your states, our youth. I urge you all to prioritise youth engagement,” he said.
Elumelu, also the Chairman, United Bank for Africa (UBA), and Transcorp Group, noted that through investments in the youth, governors would create the most impact and catalyse socio-economic development and growth in their respective states and Nigeria at large.
He also advised them to partner with the private sector in the development of the country by creating the right environment for states to grow businesses and increase the country’s Gross Domestic Product (GDP).
“Look at Singapore, a country with six million people. In 1965, the country’s GDP per capita stood at $500. In 1991 per capita GDP stood at $14,500. Today their per capita GDP stands at $55,000 making the country one of the most developed and thriving countries in the world. This can be your state’s story too.
“Singapore is a city-state with no oil, no abundance of natural resources, just human resources and purposeful leadership,” adding that their success is all thanks to the focused leadership of the country’s post-independence leader, Lee Kuan Yew.
He noted that sound financial and economic policy coupled with a corruption-free environment and technological advancement led to massive increase in the standard of living of the people and a reduction in poverty.
Elumelu stressed that youth engagement is crucial for the development of any society, while entrepreneurship plays a significant role in driving engagement.
He continued: “Each of the governors here has a responsibility and should commit to creating favourable policies that ensure these businesses thrive.
“It is crucial for leaders to create an enabling environment that empowers and supports our young people to harness their potential and create wealth for our nation.”
Against this backdrop, he advised governors to address challenges facing the Small and Medium Scales Enterprises (SMEs) space, and also invest in infrastructure to promote entrepreneurship, especially among youth.
On her part, the Deputy Secretary-General of the United Nations, Amina Mohammed, tasked the governors to deliver better governance to regain public trust for a more cohesive nation.
She said: “When we fail to deliver for people on their rights and their futures, we erode their faith in power, in politics, in the state.
“That results in a loss of trust, in resentment between generations and towards elites; and in greater tensions between groups, cultures, ethnicities and religions.” (NAN)
