January 02, (THEWILL) – There are concerns that Nigeria’s worsening revenue challenge may escalate into a financial implosion, with the 36 states and the Federal Capital Territory (sub-nationals), being the worst hit. The situation is aggravated by the nation’s escalating public debt stock (now over N35 trillion). The debt stock comprises domestic and external loan obligations of the Federal Government and the sub-nationals.
With over 70 percent of the nation’s revenue committed to debt servicing annually, governments at all levels are struggling to survive. There is little left for capital budget, pay salaries and undertake other priorities to grow the economy. Moreover, there is a limit to which the people and corporates could be taxed. Yet, profligacy and waste take the centre of our governance space while frugality assumes the back seat.
As such, the sub-nationals are hemorrhaging huge resources in paying salaries and other emoluments of a bloated bureaucracy. To survive, they are urged to diversify their revenue base, embark on aggressive internally generated revenue (IGR) and depend less on the shrinking federal allocations.
The purpose of State of the States project, is to present evidence-based alternatives. These include avenues for the sub-nationals to become more viable and less dependent on the Federal Accounts Allocation Committee (FAAC) – referred to as Abuja handout.
State of the States, a bi-weekly publication, features two states per edition. It endeavours to unearth hidden treasures in each state and ascertain, through consultations and evidence-based survey, areas of comparative advantages and economies of scale. The publication will show-case, in no exaggerated terms, the socio-economic status of each state and highlight the opportunities and threats.
Furthermore, State of the States will examine existing realities that hinge on sector-specific areas of competitive advantage – Agriculture, Tourism, Transportation, Education and Skill Acquisition, Wellbeing and MSMEs. Ultimately, the project seeks to create the desired spotlight on the sub-nationals to motivate them to venture into something different for better results.
We have featured Lagos and Ogun, Kwara and Kogi, Anambra and Enugu, Benue and Taraba, Kebbi and Sokoto, Cross River and Akwa Ibom, Ekiti and Osun, Bauchi and Gombe, Rivers and Bayelsa, Kano and Jigawa, Imo and Abia.
This week periscopes Borno and Yobe.
BORNO STATE
Borno is a state in the north-east of Nigeria. It shares boundaries with Yobe to the west, Gombe to the southwest and Adamawa to the south. While its eastern border forms part of the national border with Cameroon, its northern border forms part of the national border with Niger Republic. Similarly, its north-eastern border forms all of the national border with Chad. It is the only Nigerian state to border three foreign countries.
The state was formed in 1976 when the former North-Eastern State. Its capital, Maiduguri, is the biggest major trading hub in the state and the entire North-East geopolitical zone.
Maiduguri lies at the end of a railway route connecting Port Harcourt, Aba, Enugu, Makurdi, Kafanchan, Kuru and Bauchi. Its economy is largely based on services and trade with a small share of manufacturing.
According to Property Market, a publication on real estate and mortgage business, aside Abuja and Lagos, Maiduguri is rated the third most expensive city for buying and renting in properties. The city has always been a place of refuge for rural-urban immigrants from neighbouring countries, including Chad, Central African Republic, Sudan, Niger and Cameroon.
Borno State is endowed with a climate that is comparatively conducive for agricultural production. Varieties of food and cash crops, such as cowpeas, groundnuts and soya beans grow there. Maize, millet, sorghum, rice, wheat and bambara nuts are also grown there. Fruits commonly found in the state are orange, lemon, mango and guava. Vegetables that are available in commercial quantities include tomatoes, pepper, onions, okra, pumpkin and melon.
Tubers, such as yam, cassava and sweet potato are grown in large quantity, together with Gum Arabic and ginger. Fishing is a major occupation of the residents, together with the rearing of cattle, sheep, goats, pigs, poultry and rabbits. Thus the economy of the state is driven largely by agriculture and trading.
Natural Mineral Resources
The state is blessed with natural mineral resources, including limestone, kaolin, clay, iron ore, quartz, uranium, magnesite and mica.
Tourist Sites
Biu Plateau – formed by dormant spews from a volcano, Chad Basin National Park, Mandara Mountains, Borno State museum, Lake Tilla, Rabeh’s Fort, Shehu of Borno’s Palace, Sanda Kyarimi Park, National Gallery of Arts, Maiduguri, Jarry Falls and Lake Chad.
Agriculture and Industrial Development
Liaising with the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), the state government is driving agricultural and rural development with utmost zeal enunciated in strategic policies and programmes. To revive dormant small and medium enterprises (SMEs), the government received N4.6 million from the agency, which has been channeled toward the development of various projects. The scheme is executed through approved co-operative societies.
The fund is shared among 16 co-operative societies, with each receiving N288,750 to reactivate and improve small-scale agricultural enterprise in their respective communities.
For effective results, members of the beneficiary co-operative societies have undergone training and counseling, prior to disbursing the funds. This is to ensure the judicious utilisation of the grant to boost productivity and improve the livelihood of the communities. The scheme is anchored on the state’s Agri-business Development and Empowerment Programme (ADEP) aimed at improving rural industrialisation at the grassroots.
The Nigerian Agricultural Insurance Corporation (NAIC) said the grants would help to reinvigorate small businesses affected by violent attacks carried out by Boko Haram insurgents in parts of the state.
FACT-FILE:
LGA: 27
Land Area: 7.782 sq mi.
Registered businesses: 144
Public primary schools: 1,670 circa
Public secondary schools: 113
University (3): Federal – 1, military – 1, state – 1
Polytechnic: State – 1
College of Education: State – 3
College of Agriculture (3): Federal-1, state-2
Nursing/Health Science (4): Federal-1, state- 3
Technical school (3): Federal – 1, state – 2
College of Business Management (2): Federal -1, state-1
Total Revenue: N49.07bn @ 2020
Total Tax: N10.27bn
Total IGR: N11.57bn @ 2020 (16.16% of total revenue)
FAAC: N32.892bn @ 2020 (67.02% of total revenue)
Domestic Debt: N189.04bn @ 2020
External Debt: $20.806m @ 2020
Unemployment rate: 40.80% @ 2020
Airport: Maiduguri International Airport.
Borno Working Towards Post-Insurgency Economy
After years of devastating attacks by Boko Haram insurgents operating in the North-East, with Borno as the epicentre, the Borno State Government appears to be determined to rehabilitate the people and to rebuild the battered economy. To this end, it has received the support of the North-East Development Commission (NEDC), the agency created by the Federal Government to manage the reconstruction of the region devastated by insurgency.
The state government is redoubling its efforts to boost agriculture, particularly production of cash crops, in order to create employment and enhance food security. The adverse effects of insurgency on fishing, one of the primary occupations of the people, is receiving due attention from the government and donor agencies. The government is eyeing post-insurgency reconstruction for lasting economic development.
The state is partnering with Sudan in the production of wheat, gum Arabic and livestock in the Lake Chad basin.
At a recent forum attended by the Sudanese Experts in Agriculture and Livestock (SEAL) in Maiduguri, the state government disclosed that the Arab Bank for Economic Development in Africa (BADEA) had earmarked $500,000 (about N2.5 billion) for the execution of projects in the agricultural sector of the economy.
It noted that Borno and Sudan share about the same ‘climatic and soil conditions’ for the production of wheat and gum Arabic, as they have comparative advantages over other African countries. It said the agricultural and livestock projects would be extended to the rural areas to restore the people’s livelihood destroyed during the years of insurgency.
The chairman of the Borno State Partnership Committee and former Minister of State for Agriculture, BukarTijjani, acknowleged that the state was the epicentre of terrorism in the North-East and it was devastated since July 2009.
According to him, many farmers and herders lost their means of livelihood and took refuge in various Internally Displaced Persons (IDPs) camps across the state.
“As peace gradually returns to the state, all hands must be on deck over stabilisation and recovery process to restore livelihoods for economic growth and development.
Tijjani noted that as Sudan is one of the leading producers of gum Arabic and wheat, and the partnership would be adopted to implement the 25-year development plan and 10-year transformation strategy of Governor Babagana Zulum.
Meanwhile, the state government is to establish Rural Urban Grazing Areas (RUGAs) for herders displaced by Boko Haram insurgency in the state.
The establishment of the grazing areas is supported by the Federal Government intervention of N4 billion in the state’s 25-year development plan.
The project is built on 250 hectares of land, comprising various infrastructural facilities, including 1.5-km perimeter fencing, closely monitored by the government.
Challenging Factors: Insecurity, declining soil fertility, water shortage, poor infrastructure, adverse weather conditions and sandstorm.
*** BY SAM DIALA & OLAYEMI SHABA
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
