Cash Crunch: Rivers, Cross River, Gombe, Others Unveil Plans To Boost IGR
WITH the current economic crunch orchestrated by dwindling fortunes from the oil and gas sector, governments at all levels are beginning to adjust their expenditure profile, while looking for other sources of income to run their states.
State’s monthly allocation from the federation account has dropped and money had since stopped trickling in as before. Even the Sovereign Wealth Fund (SWF), which should have rescued the situation, was emptied long ago because the savings was shared between the states and Federal Government when the impact of free fall in oil price was beginning to be apparent at both level of government.
Many states have started to unfold plans aimed at improving their internal generated revenue (IGR). While some are planning to exploit mineral resources available within their domain, others are looking forward to attract direct investment to their agricultural and tourism sectors.
THE Rivers State is not looking up to the time when the falling oil price and reduced allocation from the federation account will stop. It has therefore planed to generate N10 billion monthly from internal sources
The state, which prides itself as the second largest domestic economy in the country, has had its allocation from federation account slashed from N23 billion per month in 2007 to N6 billion in April 2015, hence its inability to cope with the monthly wage bill of about N9.2 billion.
The government held a meeting with staff of the Board of Internal Revenue (BIR) in Port Harcourt and tasked them to shore-up the state’s IGR base to at least N10 billion per month.
“We shall leave no stone unturned to ensure that those who do business in our state pay their taxes. We really need to raise money to provide services for our people,” the state’s commissioner of Finance, Fred Kpakol told the workers during the meeting.
Worried by the high revenue leakages in the state, the workers at the Board Of Internal revenue (BIR) had petitioned the Speaker of the Rivers State House of Assembly, Ikuinyiowaji Ibani, alleging high level corruption and structural problems that requires urgent attention for the state to maximize its IGR potentials.
They alleged that the former board had successfully collapsed the internal audit department and the enforcement unit, making it impossible to carry out checks on the records. According to them, some workers were deployed to strategic departments to make fraudulent adjustments on tax claims, while the difference were paid through back door. They also claimed that the integrated computerized system of the board was hacked and funds fraudulently transferred from the Pay direct server to a secret account.
To boost the state’s IGR, the workers demanded the reconstitution of the board to be made up of seasoned tax administrators and practitioners.
Governor Nyesom Wike is confident that the state’s economic prospect is bright considering the fact that Rivers has two sea ports, an international airport, two refineries, a petrochemical plant, a Liquefied Natural Gas (LNG) company, a fertilizer company, numerous oil and gas companies and activities, a dynamic population and vibrant labour force.
“No doubt, Rivers State has the geographical advantage and resource endowments to attract serious investors in order to diversify the economy of the State. We will therefore deliberately create the enabling environment to attract local and foreign investors into Rivers State by tackling the challenges of multiple taxation, irregular power supply and insecurity.”
GOVERNOR Simon Bako Lalong has said that Plateau State under his government will try as much as possible to avoid a situation where
the state will go cap in hand begging for a bailout.
To be able to raise fund internally, the first thing to do, according to him is to ensure peace, security and good governance, human capital development and social welfare needed to focus on agriculture, entrepreneurship and industrialization, among others, to boost IGR in the state.
Lalong, who spoke to The Guardian, said, “we shall create economic opportunities to support growth in all sectors, create wealth and jobs by boosting the tourism potentials of the state as well as the restoration of confidence and trust in governance processes, both in perception and reality.”
According to him, “As a deliberate entrepreneurship strategy, government will be committed to a three E–dimensional development strategy, namely, employment, empowerment and engagement. The sole aim of this strategy is job creation and poverty reduction. As a demonstration of our promise, government will refocus and strengthen the Plateau Investment and Property Development Company (PIPDC) and other agencies involved in industrial and commercial promotions. This is to ensure that they achieve the objectives for which they were established.
“In addition, we will establish a Micro – Enterprise Fund from where our micro and small enterprises will access credit and relevant business support services.”
To ensure that the state is financially viable and not a debtor state, the government said will increase its drive for Internal Generated Revenue (IGR), adding that government heavily relies on the IGR to be productive without having to go begging for rescue.
IN Cross River State, the Governor, Senator Ben Ayade promises to diversify the state’s economy so as to reduce over dependency on federation account. The state planned to increase its monthly IGR to N2billion, from the current N1.2 billion. His predecessor, Senator Liyel Imoke had raised the IGR from about N300 million a month to about N 1.2 billion
To achieve this, the governor plans to attract investment to the state for the exploitation of available resources. He said the state is set to bring in investors from the U.S to do business in Cross River State with $600million.
Giving a rundown of his vision and plans for the state, Ayade, who is a professor of Micro biology said, “we have a team coming from the U.S to do asset assessment and to look at the resource base of Cross River state, so that they can take over $600 million loan, that is about N120 billion and to free us from the burden of running an interest regime of over 26 percent”.
He explained that “the foreign investors coming are third parties, (Morgan Stanley), huge financial dealers, who hold private equity and look for where they can invest. So if they take off $600 million loan from a bank that Cross River State is paying 26 percent without some default rates in addition, and making 6 percent kill as they have our forest of over one million hectres for the production of ply-boards and veneer for export, with a condition of planting three trees for everyone they fell and they see that this forest is the second thickest forest to the amazon in the entire world, they will come in.”
The state also plans to join the real sector by going into ownership of companies, as it disagreed with those who believe that government should have nothing to do with business.
“Our country is a country that has put so much emphasis on private sector with little emphasis on the public sector. We are still too young a country to put so much emphasis on the private sector that is still too small and too young to sustain the economy. It then means that state governments must recognise themselves as organs of integration and development. Government must do business. We have come to a point when Cross River State must reconstruct her means of production, redefine her values and of course take full advantage of her resources. We have a proven reserve of over 1.6 million standard cubic feet of gas that is totally unexploited.
I could imagine that if Cross River State sets up a Cross River State oil and gas company and obtains federal licence to start the exploration of gas, build our own LNG, do gas to power or picture where we can utilise the full downstream optimisation of gas. So if we have our fertilizer blending plants, methanol plant, our petro-chemicals running, you will definitely find a completely new economy in the state.
“So we cannot continue to sit back and wait for allocation. We must reinvent ourselves. We produce perhaps the highest amount of rice in Nigeria, same thing with our cocoa, which is graded in Lagos and exported as Ondo cocoa. It is only a primitive man that will chew a mango and throw away the seed. In today’s world, value addition is the concept.
“We have something that oil cannot do. We have the highest deposit of limestone, about 98 percent purity. Why can’t we have our own Cross River State company? We can set up feed mills using our large landmass for the cultivation of maize. We sit back and watch a state that is so rich, yet the people are so poor.
“We can do about $1.8b annually of banana, about N24b a month, which means in Cross River, we can export banana worth about N24b monthly.”
Within a month in office, the government, in collaboration with the private sector, is about to float a multi-million naira garment factory in Calabar. It would be completed in two months. Other commercial ventures to be put in place by the government are in collaboration with investors from Spain and Germany and China.
GOVERNOR Darius Dickson Ishaku had declared during his inauguration that, “ I have a vision that in ten years, Taraba State will be
the leading economy in the North-East Sub-region.” Today, the state is planning to be self-sufficient in terms of income generation to reduce over dependency on federal allocation.
In its bid to raise the state’s IGR, the government has asked revenue-generating agencies to double their efforts, besides blocking loopholes for revenue leakages.
The state intends to tap into its tourism potentials that abound in order to boost the revenue generation.
Specifically, the state has developed a “ blue print” for the growth of the sector through investment to make them commercially viable.
According to the government, the Gashaka Gumpti Park, one of the largest parks in West Africa, and the Mambilla Plateau, would be developed to attract tourists. Besides tourism, the state is also planning to revive the comatose transport sector in the renewed attempt to generate revenue internally.
The Agriculture sector has also been penciled as one area for income generation as farm imputes are now being distributed to enhance their earning and by extension increase the revenue of the state,
IN Gombe State, government has set up a committee to improve its IGR. The committee is made up of professionals, who were asked to come out with modalities to expand revenue collection in the state.
The Chairman of the Board of Internal Revenue, Alhaji Atiku Mu’azu disclosed this to The Guardian that the state government is considering different sources of income to boost its revenue base.
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