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Going to the bond market ‘ll mortgage Abia future – Dr Nto, Finance commissioner

By Clifford Ndujihe

World Bank Consultant and Abia State Finance Commissioner, Dr Phillip Nto, in this interview,   speaks, among other issues, on how the state is coping with dwindling monetary inflows and why Governor Theodore Orji is reluctant to go to the bond market like many other governors.

On the fortunes of the state amid dwindling allocations from the Federation Account

Ordinarily, there is a serious economic problem which is leading to what I may describe as financial meltdown. It is not peculiar to Abia State, it is not also peculiar to Nigeria, it is a global problem.

Dr Phillip Nto
Dr Phillip Nto

Sometime in 2009 there was low growth rate and I think there is a repeat of that in recent time which is leading to decline in price of oil. You know Nigeria is a mono-economy heavily dependent on accrual from oil and the oil is dependent on international market forces. Based on this Nigeria seems to be having little economic challenges.

However, Abia State, being a state whose public expenditure profile is prudent, is managing to survive and doing its best to survive the situation. Our governor, Chief Theodore Orji, is a man that is gifted in financial management. He has been carefully managing the state’s meagre resources.

There is no state now that you can see a second term governor working the way he is doing, still commissioning projects on weekly, if not on daily basis. Despite economic challenges the man is soldiering on, refusing to be distracted by those that have lost their last reserve of shame and integrity.

On why Abia State is reluctant to take bonds like many other states

Ordinarily when you collect bond, you are mortgaging your future because you pay over a long period of time but our governor is one that feels that it is not proper to mortgage the future of the state. Abia State is trying to come out from the mess, the monumental difficulty which it was pushed into in early 2000, so for the state to be mortgaged again means that the state will be declared insolvent.

It is the reason the governor is not enthusiastic about going to the bond market. But what some other states are achieving with their bond money, Governor T.A. Orji is also achieving with the amount he gets from the federation account and the IGR. So as I always say, it is not how much you get that matters but how prudent you are with what you have. And it is that the governor’s prudence that is guiding development in the state.

Even if you get the money from the bond market the money can be embezzled by a greedy governor or it may not be properly managed. The major thing is how prudent you are with the little that you have in the management of resources. And if you ask me, Ochendo is an expert in financial management.

Looking at the purse of the government, what should Abians expect?

I think Ochendo will be concerned and committed to finishing the projects he started and kicking off new ones like the airport and seaport, which he expects his successor to finish. The general objective of the government is to ensure the welfare of her citizenry, so all the projects of this government are geared towards the people’s well-being and happiness.

That is the reason when you go to all local governments and communities you find hospitals and health centres and large number of roads that this government has done. You can see the revolution in the housing and agricultural sectors. You can see that no sector is neglected.

All that Ochendo is doing is to put proper foundation for a good take-off for the next administration. He wants to hand over a clean government institution. The budget we are preparing for 2015 is also targeted at the people. The budget is to make Abia a greater economic vibrant state.

On his tax harmonization programme and why he set up a new committee recently

When I came on board as the Commissioner for Finance, the first thing I did was to look at the situation on ground in terms of multiplicity of taxes and levies. We found out that the state was entrenched in multiple taxation, which is a serious problem to investment.

So, we looked at ways of harmonizing the fees and levies that we concluded through the state revenue summit that was held in July. The whole essence was to put a platform that will ensure that multiple taxation is eliminated in the state. When you eliminate multiple taxation, what next? There must be a mechanism on ground that will ensure that the people are well empowered.

You know that Abia is a home of entrepreneurs and we found out that those entrepreneurs don’t have access to external finance. They cannot access loans from formal financial institutions where the interest rate is a bit reasonable. They were prone to accessing loans from informal sources where they pay almost 100 per cent interest.

So what Abia state now did through my office was to initiate an Exco memo and requested the Exco to approve the setting up of state agency for small and medium scale enterprises. The whole essence is to assist the small and medium scale enterprises to access loans from Bank of Industry, Central Bank of Nigeria (CBN), commercial banks, etc.

Right now, the House of Assembly is trying to put up a law to back it up and once the law is operational, the agency will go into full force to ensure that there is a sustained economic development and empowerment in the state.

The objective of the state revenue summit is to provide an interface between tax payers and the government, it is not like before where the government formulated tax policies and unleashed threw them down on the people. This time the tax payers are part of the tax policy formulation. So, nobody will now say that government is imposing taxes and levies on them because they are part of the decision making process.

 


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