June 18, 2009

Exclusion from oil states: We’ll lose N1b monthly — Gov Imoke

By Judith Ufford, Features Editor
QUITE unexpectedly, Cross Rivers State has suddenly found itself out of the club of oil producing states in the country. Obviously this will have telling effects on the state revenue and by implication, affect governance. In this interview with journalists, Gov Liyel Imoke spoke on efforts to reverse the development and how the state is presently coping. He also spoke on power sector and South-South states. Excerpts:

Your state has been removed  from the list of oil producing states. Would this affect ongoing projects?

It will affect us in many ways. First, it just means that we will not be able to introduce new projects and programmes as quickly as we had hoped to do. But we believe that it is a temporary set back. We believe that with Mr. President’s intervention, all matters relating to oil producing status of the state will be resolved in the next few weeks.

Again, for us, we do not think that the lost will affect ongoing projects. It may delay the completion of some projects, it may not allow us to embark on new ones for now..

How much is the state likely to lose in terms of revenue if the president does not reverse the decision?

It depends on the price of crude oil. Sometimes there is excess crude account that is shared. So we will be affected adversely from both ways, that is from the 13 percent allocation and the account. That is in the region of between N300 million to N500 million monthly.



We are not a big oil producer like Akwa Ibom, Rivers, Bayelsa or Delta states. Ours is just marginal and regrettable, the little margin we would have had, is lost. But again, for us, the impact is significant for two reasons; with the economic meltdown, there is a great reduction in the revenue that is available for sharing at all three tiers of government, secondly, we have a huge debt burden, we pay out about N400 to N500 million every month as debt repayment.

The state will lose over a billion naira every month as a result of the effect of these two things _ exclusion from oil producing state and the low crude oil price.

While awaiting the outcome of the President’s intervention, what other option are you pursuing to make up for the lost revenue?

What do you mean by what other option. We should start printing money? (laughs)

Well, is there a plan to step up the internally generated revenue (IGR) to make up for the monthly loss?

We can only tax the people to the extent that they are taxable. Yes, we can improve on the internally generated revenue and we are doing that already. For us, we are already working on improving our IGR and there has been significant improvement. And our projections are based on those improvements.

Some of the displaced Bakassi people were handed keys to houses where they were expected to be settled but they are yet to move into the buildings. What is responsible?

The buildings are complete. It is just that the local government that is supposed to supervise the allocation has not done that. We are concerned about the right people getting the building.  I think that screening process has been completed, and the Commissioner for Lands told me that all the buildings would be occupied soon.

Back to the issue of removal of the state from oil producing states, you said that the President has agreed to reverse the decision….

(Cuts in)  Mr. President has convened a meeting to address the matter. I think that actually sounds very positive and Mr. President is one who stands for justice and equity not just on this matter but at all times. So to us, the fact that he convened a meeting is positive, an indication that he does see the need for this matter to be resolved. .

How would you assess the progress of all the on-going projects in various parts of the state?

We set out to address certain sectors when we came in as an administration and the key areas of focus were health care delivery, education and  some social welfare programmes or issues while sustaining our programmes on tourism, agriculture and environment.

I am more emphatic about programmes than projects because I don’t think that projects necessarily deliver the solution. Programmes do. If I build a school, I will equip the school and I do not have the approach for administering the school to translate into improved education in the state, then I have achieved nothing.

In terms of our programmes in the education sector, we are pretty much on track; intervention in the schools, the retraining of teachers to improve on the quality of training that is administered to the students. There are programmes to make sure that the children are provided with the necessary learning aids.

In the health sector we have tried over the last couple of years to address challenge of  human capacity development. First we had the challenge of total lack of accreditation of all our training institutions. Our Schools of nursing, College of health technology, none of them had any accreditation. What we have put in as far as infrastructure is concerned has earned these institutions provisional accreditation.

The same goes for our hospitals across the state where we have intervened across the board in terms of infrastructure.

We also have plans to expand the urban renew programme to the not so affluent parts of Calabar. You can see that we have moved into Calabar South comprehensively while at the same time we are sustaining our efforts in Calabar Municipality and in the already more developed urban towns.

We have 29 roads currently under construction across all the local government areas which is a total of 420 kilometres of rural roads been constructed at the same time. And these roads are not designed just to provide access to villages; every road under our rural development programme has significant economic value to the people. It is designed to give people the opportunity to take out the huge agricultural resources we have in Cross River State and get value for that.

We are also addressing the issue of rural water supply, which is critical for us. I think that is significant progress and the beauty of it is that these projects and programmes are not concentrated in the governor’s village or his local government area but across board. We think that as rule, government should start serving those who need to be served the most.

The Role Back Malaria campaign and HIV/AIDS are two important  health issues in the country, how is your government coping?

On the Role Back Malaria programme, recently I met with United Nations special envoy on that programme who visited the state in recognition of the progress of the administration on this issue. I believe that we are the only state in the Federal Republic of Nigerian, which has distributed over 600,000 insecticide treated mosquito net.

Now, this is important because in Cross River State we are about two million people which if you divide 600,000 by two million, it means that literally that every household in the state has a mosquito net. We have created and sustained the office of special adviser on role back malaria. It is a cabinet level position and the special adviser job is to oversee the role back malaria project.

In the area of HIV/AIDS, Cross River State use to depend significantly on donor agencies for support. When I came in, I realised that the State AIDS Control Agency (SACA) rely hundred percent on donors and I don’t think it made sense.

What we did was to provide significant funding, to strengthen SACA in terms of capacity to deliver on its programmes. We are also providing real free health facilities for pregnant women and children who are usually at the risk of all diseases and I think that would go a long way in controlling these diseases.

The MDG (Millennium Development Goals) set a deadline of 2015 and what we have done in Cross River State is that we want to be MDG compliant so that by 2015, we would have met MDG target.

You were a minister of  power and now governor, why has the issue of power remain difficult to solve? Why can’t your state decide to solve its power problem especially in the light of its commitment to the promotion of tourism?

The beauty of Cross River is that a lot of our tourism is ecotourism. It is not power dependent so much. I think that is a niche we have carved for ourselves and Tinapa has its own independent power supply. So when you design your tourism industry, you design infrastructure that will sustain it. That is the way it is done in Cross River.

On the challenge of power supply, it is a challenge that I think can be addressed and I think that we have started the process of addressing them. I know that things are bit difficult now; power supply has declined for a number of reasons.

For a state to invest in power, it means that you have to trade off on a number of things inclusive of healthcare delivery, education, and infrastructure. So, you have to make a decision whether you want to generate electricity or you want to address all of these other challenges.

You recall that every state in Nigeria has contributed centrally to addressing the challenges of power supply and we believe that we should have some confidence in that central government. Having done that, you now take some additional resource of yours to starting improving on power supply.

I think, ideally it will be best if the Federal government complete it ongoing projects, which will go a long way in addressing the current challenges. States may consider embarking on power but I would have advice they do it with the private sector as partners and investors and  that such facility should be operated on concession terms so that it will be sustainable.

If they don’t do it that way, you are going to find out that state governments would continue to invest in power and they do not own for instance the transmission infrastructure. So if I were to invest in power as an administration, by building a power plant, I do not own the transmission line through which the power generated will pass, it belongs the Federal government.

If I generate my power and I cannot pass my power through the grid, which by law would forever be owned by the Federal government; so there are complexities. And if states are to build their own transmission grid to be able to transmit their own electricity, it will be twice the cost of your power stations. So it becomes economically unviable; now, the distribution network also belongs to the Federal government.

If you notice, even when I do rural electrification project, after commissioning, who has to certify it, PHCN (Power Holding Company of Nigeria), and after the certification, who owns it? PHCN. So the regulatory framework is the issue that needs to be addressed. It is not that states cannot embark on this programme working with private sector but the problem is the current regulatory framework that is in place is not going to attract the necessary partnership and investment.

Can we then say that our federation is faulty?

No. Why?

I am saying this because if you can generate, distribute, transmit power on your own…

(Cuts in sharply) There are three levels involved in this process. You generate, you transmit and distribute what you have generated and then you collect, that is marketing. Instead of PHCN collecting the proceeds for you.

I still think there is a fault somewhere and your Excellency I know you understand what I am talking about?

I understand what you are talking about; constitutionally, states can generate, transmit and distribute electricity.  If it has access to the national grid, then it can transmit, if it has access to the distribution network, then it can distribute the electricity. States should not be made to construct a parallel grid either for transmission or for distribution of electricity. That is the real challenge. And the Federal Government is yet to address it.

Recently, you hosted the first South_ South Economic Summit. Is it not possible for South_ South states to come together and jointly tackle this issue of power in the region?

As for the issue of power in South_ South, three states are already generating electricity. They are Rivers, Bayelsa and Akwa Ibom.  Bayelsa. has been generating electricity for years because they were not connected to the national grid until recently. Akwa Ibom has a generating plant in Ikot Abasi and amazingly enough, I used to tell people that this huge facility underutilised..  I had recommended as then power minister, that the company that was buying the smelter should be forced to connect to the grid so that the excess capacity is utilised.

What are you doing to ensure that the aim of Tinapa is realised?

Tinapa is a project, which Cross River State has invested heavily in and having invested so much in it, we have to make it work. The challenge of Tinapa is that, one, it is a project like no other project in the world. Not only is it a free trade zone, it is a retail free trade zone where you can go, shop and come out.

But beyond that a number of things that are critical for Tinapa to succeed are beyond the state government. For instance, the Calabar port which has to be dredged. Margaret Ekpo International Airport has to be expanded to be able to accommodate cargo planes, again that is outside the control of Cross River State.