PORT HARCOURT— Governor Chibuike Amaechi of Rivers State has scored yet another point as the state got a reaffirmed B+ credit rating by International Rating and Financial Services Agency, Fitch, after a thorough review of the state’s financial activities in 2010.
According to Fitch’s assessment the financial outlook of Rivers State remains stable with a strong liquidity status.
Fitch had in October reviewed the outlook for Nigeria from Stable to Negative due to macro-economic uncertainties and rapid decline in amount of the Excess Crude Account but hinted that improving operations in Rivers State may trigger an upgrade of the country’s rating, as long as debt burden remains low with strong operating margins.
So far, Rivers State budgetary performance has remained largely in line with Fitch Ratings expectations despite larger-than-expected fall in oil revenue by 33% (forecast was 25%) to about N190 billion in 2010.
Fitch is enthused and pleased by the Amaechi administration’s commitment to maintain high ratio of capital expenditure to overall budget, as it continues to invest in infrastructural expansion of schools, healthcare centers, roads/transportation assets and urban renewal.
The state envisages issuing bonds in near future but thus far, debts remain below earlier Fitch projections.
Fitch also views quite positively the state’s commitment to develop local tax revenue. Although the new Social Services Contributory Levy of 3% on both employed and self employed persons in the State may not significantly boost Internally Generated Revenue (IGR), the effort will ultimately enlarge the tax-payer base in the state.
Fitch further stated that upon completion of tax-payer registration, IGR could grow above N50 billion collected in 2010 and double in 2012. That will almost cover recurrent expenditures including interest.
David Iyofor, the senior adviser to Governor Amaechi on media and publicity described the current Fitch rating and subsequent remarks on the growing IGR of the State as a welcome development.
Iyofor reiterated that the Amaechi administration will continually uphold transparency in its affairs and give the State a sound economic base and outlook.
In another development, Vice President Namadi Sambo has commended Rivers State Governor Chibuike Amaechi on the level of development in the State saying he is shocked by the amount of quality brought in by the Amaechi administration in less than four years.
The Vice president made the commendation after taking a tour of projects during his visit to Rivers State Sambo stated that the schools he saw in Rivers State are the best in West Africa and assured the governor that the Federal Government is fully behind him. The VP further then endorsed Amaechi to return as governor of the State in next year’s elections.
Among projects toured by the Vice President is the Afam Power plant where the Amaechi administration is in the process of generating 180 mega watts of electricity; new Model Primary Schools, Secondary School; and Health Centres.