Benue As Seen In The Eye of El-Rufai

Benue’s Opaque Budget
Posted: 14 May 2012 11:50 PM PDT

We continue our analysis of the budgets of the state governments with the
North-Central State of Benue.  Bordered by Nasarawa state to the north, Taraba state
to the East, Ebonyi and Cross River states to the south, and Kogi state to the west,
Benue state was created in February 1976, when Benue-Plateau State was separated
into Benue and Plateau states by the Murtala-Obasanjo administration. Benue state is
acclaimed to be the nation’s food basket because of its rich and diverse
agricultural endowments which include yam, rice, beans, cassava, potatoes, soybeans,
sorghum, millet and coco yam.

The state produces over 70% of Nigeria’s Soya-beans and is home to one of the
longest river systems in the country – River Benue, which has the potential for
viable fishing and tourism industries complete with festivals similar to the one in
Argungu. The river has the potential to generate electricity, to support dry season
farming through irrigation and improved transportation through inland waterways.
There are also proven reserves of solid minerals like Limestone, Gypsum, Anhydride,
Kaolin, Salt, Lead and Zinc, Clay, Coal, Calcite, Gemstones and Magnetite. The Benue
Basin has proven quantities of natural gas and there is the likelihood of crude oil
as well. The state has many tourism assets like Ushongo Hills, Ikwe Holiday Resort,
Enemabia Warm Springs, Dajo Pottery,mTiv Anger Weavers and many traditional
festivals. The traditional music and dances of the state attract thousands of
Nigerians and foreigners, with potentials for significant
development.

With a land mass of 34,059 sq km, Benue State had a population of 4,223,641 in 2006
– now estimated at nearly five million – a little above the population of Congo and
more than twice the population of Botswana. Abdullahi Shelleng was the first
military governor of the state (March-1976-July 1978). Aper Aku was the first
democratically elected governor under the National Party of Nigeria and served from
October 1979 to December 1983. More recent governors are George Akume (May 1999- May
2007) and Gabriel Suswan. Suswan holds  an LL.B from the university of Lagos, a
masters degrees in Law from the University of Jos, and in public administration from
the University of Abuja. He was a two-time member of the House of Representatives,
and began his first term as governor in May 2007.
According to the NBS poverty profile 2012 based on data up to 2010, of the
population of the North Central zone, 61.9% is relatively poor, 57.4% is absolutely
poor, 38.6% is food poor – an irony indeed for a zone with such generous
agricultural endowments. Benue’s poverty incidence is high at 36%, which means that
more than one out of every three persons is poor: as opposed to one in seven for
Lagos, and more than half – 58% in Yobe state. Benue’s unemployed population is a
whopping 25.4 % or more than one in every four working age person is unemployed, as
opposed to neighboring Plateau’s 14% and FCT’s 13%, and above the national average
of 21.1%. Benue States has one of the highest incidences of HIV infections in the
country, accounting for about one out of every eight infections nationally.
So what should Benue State be doing in the face of these endowments and challenges?
Education is one of the key indices to measure state government effectiveness. It
should be investing a large percentage of its budget on improving public education.
The government must deliver affordable and quality healthcare. It should also invest
in key infrastructure to attract investors to its agricultural, fishing, tourism and
mining sectors. It should address the needs of its farmers for title to land, rural
roads, storage facilities and Argo-processing capacity. Are the authorities doing
that?
We were unable to obtain the detailed budget of Benue State anywhere. Even members
of state assembly contacted were reluctant to provide more than sectoral summaries.
Gabriel Suswan had on the 22nd December 2011 presented a budget of N105.5 billion to
the state house of assembly for the 2012 fiscal year. The budget would be financed
with N59.9 billion from FAAC, N15.2 billion as IGR and N30.3 billion from other
sources – meaning loans and grants-in-aid. Typically Benue received about N40
billion every year from FAAC, so the amount expected this year is a bit optimistic.
However, after review by the house of assembly, the budget figure was scaled up by
N7 billion, bringing the total figure to N112 billion. In terms of federal
allocations between 1999 and 2008, of the total N3.7 trillion allocation that has
been distributed amongst the 19 Northern states, Benue received N203.4 billion,
making it the 6th largest beneficiary.
Of the total budget sum, N58 billion amounting to 52% is earmarked for recurrent
expenditure, and N54 billion, about 48% is set aside for capital expenditure. This
means that this rural state is spending much more on running the government than
securing the future of its citizens. It should scale capital investment to closer to
70%, and reduce recurrent spending accordingly.
The sectoral breakdown of the budget shows the following structure; N34,406,400,000
(30.72%) for the Works and Transport, N14,336,000,000 (12.8 %) for the Finance
ministry pay of loans and set up effective revenue generation mechanisms; 4.82% or
N5,376,000,000 for Agriculture, Water Resources got 9.1% or N10,192,000,000. The
Rural Development ministry was allocated N11,670,400,000 or 10.42%, and the Health
allocated N4,592,000,000 or 4.01%. Judging from the distribution if the budget,
these figures alone, one is inclined to question the spending priorities of the
Suswan administration.
The largest allocation of N34,406,400,000 or 30.72% of the budget is set aside for
the works and transport. In addition, the state house of assembly approved a Fixed
Rate Development Bond Issue 2011/2016 of N13 billion for the state. Listed in March
2011, the five-year, 14% coupon rate bond proceeds are for the completion of roads
and other projects like water supply in Markurdi, Otobi and Katsina-Ala. Questions
remain though – how much of the N34.4 billion is from the proceeds of the N13
billion bond that will be need to be paid back over a five year period? How much of
the N13 billion bond was spent so far, and what was it spent on? Venue citizens
probably know these answers.
It is indeed a paradox that while Benue state is endowed with one of Nigeria’s
biggest rivers with very good water traffic, the citizens live in perpetual water
shortage. Regarding River Benue, one would wonder why the state isn’t exploring its
hydro tourism/hydro electric potentials; starting up cruises or exploiting its
reputation as a major Nigerian river towards developing water transport or building
a whole sporting industry, water games and all. Looking at the figure of
N10,192,000,000 (9.1%) allocated to Water Resources, the first question that should
come to mind is, how much of the N13 billion bond was specifically spent on water
projects?. How much of these funds are directed into the areas listed?
As a state with abundant agricultural potentials – land that is very fertile and
about 80% of the state’s population is involved directly or indirectly in sustenance
farming, wholistic ficus on agricultural production is the key to the state’s
future. Sadly, Benue has a reputation for wasteful agriculture as the state lacks
basic storage infrastructure. Agriculture is not yet mechanized beyond sustenance
such that it will amount significantly upon the states IGR. A careful state
endowment and value chain study, with investments in key areas will enable Benue
feed most of Nigeria’s population. That is one area for the attention of the
authorities
On the bright side, doing business in Benue is relatively easy. Amongst the 36
states and the FCT, Benue was ranked 10 in the ease of doing business, with 8
procedures that will span a minimum of 36 days, 6 places behind its Plateau
counterpart. Plateau State’s doing business ranking is number 4, with 8 procedures
over a 31 day period. This relatively easy business climate is doing well for Benue,
considering that in 2010 the states combined IGR was N6.8 billion, in 2011 it
increased to N11 billion, and in 2012, there is an IGR projection of N15.2 billion.
The state deserves some credit on its attractiveness to investors, in 2010, the
Benue Cement Company merged into the Dangote group, thereby increasing its capacity
in cement production, in 2011, the Transnational Corporation of Nigeria (TRANSCORP)
subsidiary, Terago Limited, leased, renovated and recommissioned the Benue Pioneer
Fruit Juice Concentrates Company for 10 years at the cost of N1 billion. Also in
2011, an MoU for the revitalization and management of the near moribund Taraku Oil
Mills was signed. Interestingly all these industries were established during the
life of the earlier administration of Governor Aper Aku.
Educationally, Benue is a disadvantaged state. In the 2008 academic year, 41,410
Benue students sat for WAEC, and only 1,879 or 4.5% scored 5 credits including Maths
and English, the same year, only 389 students from Benue State were admitted to
Nigerian Universities, compared with 3,569 and 4,030 for Edo and Enugu states – the
leading performers.  This trend should be of concern, especially in a times such as
this, when a core focus of government should be to reduce its unemployed population
so they do not constitute a threat to society.
Another worrisome aspect of the budget is the allocation to health: an allocation of
4% or N4.5 billion of the entire budget sum when health should be a priority sector
for the state. The  special adviser to the Benue state governor on HIV/AIDS and
other communicable diseases said that there are no fewer than 400,000 persons in the
state who are carriers of the disease, out of three million infected Nigerians.
Considering this situation, does Benue aim to safeguard the health of its citizens
with this level of spending? Maybe, laudable is the fact that the state government
renovated all general hospitals in the state, has partnered with Essential Pharma to
curb the menace of fake drugs within the state, and is one of the few states to
upgrade its Action Committee on Aids to an Aids Control Agency. There is need to do
more in both preventive and curative healthcare provisions.
Benue’s recurrent budget is more than three times its IGR. It is therefore incapable
of standing on it own and is one of the “parastatal states” that rely on monthly
FAAC hand-outs to exist. Interestingly, in spite of this, there is a strong movement
for the creation of another state out of Benue for the benefit of the political
elite Idoma ethnic group! The government is doing much better on the IGR front than
most states in the country, but must scale down the size and cost of its
administration. It is investing aggressively in transport infrastructure and that is
commendable but more investments are needed in education, healthcare and
agriculture. Tourism, mining and hydroelectricity are all areas that Benue can focus
to deepen its comparative advantages within the Nigerian nation. Until these are
addressed and urgently too, the people of Benue should be looking at voting
differently in the next election.