By Charles Soludo
On May 19, 2022, I was here to present the draft revised 2022 budget entitled “Taking Off from the Blocks”, which this honourable House of Assembly scrutinized and graciously passed into law. Barely seven months since Ndi Anambra employed me as the chief servant, I am honoured to be here again to present another budget— the draft 2023 budget estimates.
Let us pause at this moment to remember our fallen colleagues and great sons of Anambra. Over the past six months, this House has lost two of its members and illustrious sons of Anambra state namely: Hon Okechukwu Okoye (and his assistant, Mr. Cyril Chiegboka) and Hon (Dr) Nnamdi Okafor (Majority Leader). Anambra grieves with the House, and may their souls have eternal rest. We remember also our gallant security officers who paid the supreme sacrifice in the battle to take back our state from criminals. We must forge ahead to ensure that their sacrifice will never be in vain.
Let me also use this opportunity to thank this Honourable House for its partnership and cooperation in pursuit of the Anambra agenda. We will never take the cordial relationship among the three arms of government for granted. I wish also to thank Umu nne m Ndi Anambra and all other stakeholders in the Anambra project– the federal government, our international development partners, the security agencies, our neighbouring states, our friends and well wishers — for the massive support and cooperation so far.
Mr. Speaker, Honourable members, I am presenting this draft budget in the context of a very bumpy national and international order. The war in Ukraine has caused global supply disruptions with immense consequences. Nigeria is undergoing a potentially consequential political transition; the nation is reeling under the economic challenges of unsustainable macroeconomic framework especially increasing fiscal insolvency, high inflation, poverty and youth unemployment, exchange rate shocks, disruptions and declining oil production, etc. More recently, a huge national emergency occurred, triggered by unprecedented flooding which engulfed more than 50% of Anambra’s land mass, dislocating hundreds of thousands of families and destroying lives, farms, assets and livelihoods. Given Anambra’s status as the gully erosion capital of Africa (if not the world), the massive flooding exacerbated an already terrible situation with massive land slides (with villages sinking) and roads and bridges swept away. As the floods recede, we are faced with the huge challenges of resettling residents of the seven local governments sacked by flood, rebuilding the damaged infrastructure and addressing the existential threats of pervasive gully erosion. All these add to the existing challenges of insecurity and criminality, road and traffic crisis, impunity and lawlessness (especially touting), waste management and air pollution, urban blight, low fiscal revenue, etc.
Daunting as the above may seem, we remain resolute and with our eyes firmly focused on the ball. As you are aware, we promised our people disruptive changes that will put us on the long term path of sustainable transformation as embodied in our Manifesto, the “Soludo Solution: A People’s Manifesto”. Our goal is to transform Anambra into a livable and prosperous smart megacity that is the preferred destination to live, invest, learn, work and relax/enjoy. Every one of the five pillars of our agenda is receiving systematic attention: security, law and order; robust economic transformation from an informal economy into a new industrial-tech- leisure hub; a comprehensive social agenda for a human capital bank that is productive at home and exportable abroad and leaves no one behind; transparent, prudent and accountable governance underpinned by a new value system; and a sustainable environment through clean, green, planned and sustainable communities, markets, and cities.
Over the past seven months, we have been moving at frenetic speed, addressing head-on some of the foundational issues. Today is not the day for presentation of our score card: we shall do so in a few months’ time during our first year anniversary. Suffice it to say however that so far, so good. Just two or three examples suffice. On security, we launched the citizen-security partnership to “take back our State” and today, the eight local governments that were literally under the occupation of the criminals when we assumed office have been liberated. The criminals now know that Anambra has zero tolerance for criminality. Of course, it took years for them to take root, and given the lucrative nature of kidnapping, we don’t expect them to disappear completely over-night. But our resolve to completely rid Anambra of these criminals is total, and we thank all the federal security forces, our state vigilante service, the citizens’ “if you see something, say something” initiative, the donors to Anambra security trust fund, etc for their unflinching commitment. Anambra is winning and no doubt one of the safest states in Nigeria today! We have also declared zero tolerance for touting (agberos), and offered to help them transit into more productive ventures. Our various enforcement teams to ensure law and order are getting better by the day.
To address our road and traffic crises, we promised to declare a state of emergency on roads and transform Anambra into one large construction site once the dry season begins. As at today, we have awarded a total of 206 kilometres and on target to end the year at about 250 kilometres touching all the 21 local governments (above our target of 220 kilometres)— and expected to be delivered before our 24th month in office. Ours are not just ordinary roads: they are designed and in most cases guaranteed by the contractors for 20 years. The Anambra Traffic Management Agency (ATMA) is being rejuvenated to address the traffic chaos on our roads. In the next few days, we will end the era of schools without teachers and hospitals without doctors/nurses by handing out employment letters to at least 5,000 new teachers for our primary and secondary schools, and 244 doctors/consultants, nurses, pharmacists and other medical officers for our general hospitals. By the way, it is important to note that Anambra schools and teachers continue to tower at the national level. Two months ago, Anambra won five out of the fifteen presidential awards for teachers and schools in Nigeria, and our students won both the national junior and senior secondary schools’ quiz competitions in science and essay writing. Despite the disruptions of exams in parts of the state due to insecurity then, our state continues to post outstanding performance in WAEC results. Power supply is improving, de-silting and cleaning up major drainage ways in progress; successfully battled the flooding crisis; one million trees per annum and one million palm and coconut new economy ongoing; acquired massive pieces of land for Anambra’s next axis of industrialization, commerce and entertainment/leisure; evolving a culture of transparent, prudent and accountable governance; reforming and digitizing our tax and land administration; addressing the cost of doing business, etc.
Mr. Speaker, Honourable Members, it is evident that true to the title of the 2022 revised budget, we have indeed taken off from the blocks and there is no looking back. Ours is an agenda with a deadline and there will be no excuses. Given the needs of our people and our promises, the draft 2023 budget (entitled: “Budget of Acceleration …”) embodies our single-minded focus and determination to continue to press the accelerator pedals in spite of the risky bumps on the way.
We are here to present to you a draft budget of about 259.0 billion naira (compared to the revised 2022 budget of 170 billion naira), with the capital budget of 163.5 billion naira accounting for 63.1% while the recurrent expenditure of 95.5 billion naira accounts for 36.9%. It has a deficit of 13.0 billion naira. Mr. Speaker, this House approved for us to borrow 100 billion naira to part-finance the revised 2022 budget. So far we have not borrowed a kobo. We have however applied for 90 billion naira out of the approved 100 billion naira, and when it comes (we expect so in a few weeks’ time), we plan to roll it over as part of the 2023 financing.
As a reflection of our people’s priority needs, about 91.8 billion naira or 56% of the total capital expenditure is devoted to roads, transport, power and urban regeneration that the average citizen can feel, see, or use and which have the highest developmental impact within the shortest possible time. Education, health, youths, and women/vulnerable groups have their capital votes more than doubled. We appropriately budgeted for counterpart funding to catalyze resource inflows from our partners. Expenditure on security remains barely unchanged in spite of increased challenges, although some enforcements for law and order will receive increased spending. We will count on the continued support of our people to augment. We plan to complete the building of the Anambra Airport within the 2023 fiscal year. A major emphasis is placed on the environment (erosion control, de-silting, tree planting, beautification, urban regeneration, preparations for emergency responses, etc). We will soon come back to you with a draft legislation to engender collective action to addressing the systemic threat of gully erosion. Our palm and coconut revolution continues to receive priority. The budget makes very bold statements towards Anambra as an industrial, entertainment/leisure hub, as well as in mainstreaming sports development and “everything technology and technology everywhere”. We are re-inventing government towards E-governance. The judiciary is a critical arm of government and rule of law/ speedy dispensation of justice constitute fundamental drivers of our transformation agenda. Of course, our House of Assembly is appropriately prioritized.
Critical productive partnerships will be important to execute the 2023 budget and maximize value for our people. The partnership of the federal government/agencies, international development partners, the private sector, Ndi Anambra everywhere, the House of Assembly, Judiciary as well as the local government and community administrations in the state will be imperative. A major policy thrust of this administration is to seek and promote active partnership with local governments and communities. Attempting to transform the state from Awka alone without exploiting the fullest potentials of local administrations is akin to clapping with one hand. In partnership with local governments, more responsibilities and resources are being devolved to them, to enable them strengthen institutions for service delivery. Their operations are also being restructured, and soon we will be bringing for your consideration, amendments to the State Independent Electoral Commission Law, 2007 as part of the preparations towards credible local government elections.
At the foundation of the Igbo society is the local community. We are committed to a fundamental transformation of the community governance institution as the true 4th tier of government. A draft community government bill will be presented to you soon, and the 2023 budget provides for matching grants scheme to incentivize communities for optimum service delivery.
Mr. Speaker, Honourable members!
We will not end this speech without mentioning and challenging all of us to reinvent our fiscal regime towards viability and sustainability. At the heart of Nigeria’s fiscal crisis is its poor capacity to extract tax revenues besides oil rents. During the first republic (as everywhere else in the world) regional and national governments depended almost solely upon taxation to deliver development. The Eastern Region built the cities of Onitsha, Enugu, Aba, Calabar, PortHarcourt, Uyo, and Umuahia with electricity and pipe borne water as well as industrial corridors, University of Nigeria with three campuses, etc with taxes collected from peasant farmers. Easy rents from oil created a rentier culture, and destroyed the incentives and institutions for taxation. Consequently, there are about two generations of Nigerians who largely don’t make direct connections between government spending and their personal wallets. Being manna from heaven, oil money (government money) was treated as ‘free’ money: those in government helped themselves to it, while the public cared little to hold them accountable. The social contract between citizens and government where the citizens employ (choose) their leaders and surrender tax revenues to enable them provide public goods (security, infrastructure, social services, etc) as well as hold them accountable largely broke down. Government officers became “bosses” while the citizens largely “refuse” or neglect to pay taxes because they don’t trust the government. A vicious cycle has ensued. Now that oil money is on its way out, and Nigeria increasingly has little choice but to rely on taxes to provide services to the citizens, there is the fundamental challenge of how to appropriately tax generations who do not know taxes as “duty” nor trust the government to use it well.
In most developing countries, including ones much poorer than Nigeria, tax revenue to income (GDP) is about 15% – 28%. In Nigeria, it is about 8%. Anambra state is probably one of the worst in Nigeria. With estimated state GDP of about 5.5 trillion naira, our projected internally generated revenue (IGR) for 2023 is 48 billion naira (or 0.87% of GDP). At 0.87% of our income (GDP), Anambra state is probably one of the locations in the world with least tax revenue as a proportion of income. Note that this 48 billion naira is about 100% increase from current and historical levels. For comparison, Lagos state projects to generate 1.1 trillion naira from IGR in 2023 (almost 100 billion naira per month and 64% of its 1.7 trillion naira 2023 budget). Anambra’s IGR for 2023 will be barely 4.4% of Lagos state’s IGR. If Anambra generates just 5% of its GDP as IGR in 2023, it would be 275 billion naira —far higher than our total budget. Yes, just five percent. Think about this. As a people, we need to have a serious conversation on how best to fund our aspiration for a livable and prosperous homeland for an itinerant people. With our people scattered all over the world but with dual residences — permanent home addresses in Anambra where they are buried at death (expecting government to protect them and provide infrastructure to access such), what should be our civic duties to the homeland? A prominent Onye Anambra who lives outside the state but pays a significant tax to the state told me recently that whenever anyone asks me to construct a road or demand for public services, I should ask him or her how much tax he/she paid to the state. In other words, good roads, schools and hospitals, security, water and electricity, clean and planned environment etc must be paid for. I am glad that the conversation is beginning.
On our part, our contract with Ndi Anambra is that every tax revenue entrusted to us will be fully and transparently accounted for. On the other hand, we enjoin everyone to be a responsible citizen, discharging his/her civic duties. Every government project now advertises the fact that it is your tax money that is at work. It is not Governor’s money, not anonymous government money, but your tax. Our target is to gradually raise our IGR with a target of 3- 5% of GDP over the medium term. We are reforming and digitizing our tax system and kicking out the tax merchants and touts who, for decades, collected government revenue for themselves. We are simplifying and harmonizing taxes to minimize multiple taxation, as well as eliminating or reducing taxes for the poorest segments of society. Ours is a government that cares deeply about the poor. That informed our massive investments in Okpoko to lift up the nearly one million poor people trapped in despicable urban squalor. We have consequently banned collection of taxes from vulcanizers, hawkers, and barrow/truck pushers, among others. We expect the rich and the middle class everywhere to pay their fair share. That is how it works everywhere. That is how it worked during the days of our founding fathers. Perhaps, as we transit into a new world without oil, our future might as well learn a lot from our past. Let the conversation continue.
Mr. Speaker, Honourable members!
Let me now conclude. The draft 2023 budget will be our first full year budget in office. The size may be small relative to our needs and size of Anambra’s economy but we are determined to ensure full value for money for our people. We are constrained by the need to take measured steps to create value while ensuring fiscal sustainability. It is possible that the key macro economic assumptions underpinning the budget might change after the 2023 elections. If the changes are significant, we may have to come back with a revised budget.
Under any scenario, our 2023 budget sign-posts our strategic direction and key deliverables as we march towards a livable and prosperous homeland. Yes, the road ahead is bumpy but Anambra is winning. We are taking back our state from criminals; mapping and planning out our industrial and leisure/entertainment cities; modernizing our cities and transport systems including water transportation; orchestrating mass access to high speed internet as foundation to creating our digital tribe and investing in our human capital. Scores of investors are lining up, and many already on ground. Our 2023 budget appropriately prioritizes several structured programmes to empower our youths, women and vulnerable groups. These critical demographics constitute our today and our tomorrow.
What we need is to continue to bond together as a patriotic team for development. We shall defeat evil together. We shall lift our homeland up, together. In our State Anthem, the only line repeated thrice is: “Lift the spirit of Anambra— State we love”! As an itinerant people with an undying love for our homeland, this is now the time to translate our homeland consciousness and love into action. Everyday, each of us, wherever you may be must ask himself what you have done today to make Anambra livable and prosperous. With God on our side, and with all our feet together on the accelerator pedal, Anambra will soar beyond imagination.
Let’s do it, together!
@views exclusive rights: Professor Charles Chukwuma Soludo, CFR
Governor, AN ADDRESS TO THE ANAMBRA STATE HOUSE OF ASSEMBLY ON THE OCCASION OF THE PRESENTATION OF THE DRAFT 2023 Budget, 10th November, 2022.