How we met Kaduna State and what we are doing to change it – By Nasir El-Rufai

Malam Nasir El-Rufai, Kaduna State Governor

Malam Nasir El-Rufai, Kaduna State Governor

Dear good people of Kaduna State,

It has been exactly two months since I took the oath of office as your governor, a position of responsibility that you bestowed on my humble self with your votes.

In my inaugural address, I outlined our vision for Kaduna State and mentioned some of the things our administration will accord priority. Today, I am pleased to state that we have begun to put in place some of the things we promised to do.

A few days to our inauguration, we announced the appointment of some key staff of the administration. The deciding factor was not ethnicity or religion, but the education, experience and capacity to get things done for the benefit of the state. We therefore selected and appointed capable and competent Nigerians that we trust to work selflessly for the people of Kaduna State. It may be early days yet, but I can assure you that we are already benefiting from their tremendous wealth of experience in various sectors.

We took seriously the importance of setting the tone of our administration early, and this is opening windows of opportunity for Kaduna State. Permit me to again express my gratitude at the choice you have made to vote for the APC, and to reassure you that my party, team members and I are totally dedicated to doing the work that you have elected us to do.

However, we must be under no illusion that the task at hand would be an easy one. Without over-flogging the issue, it must be stated that the level of decay we inherited was far worse than we imagined. Immediately we assumed office, we devoted our first week to receiving briefings from the ministries, departments and agencies of the government.

This set the stage for the Transition Committee, which we established a day after we were declared elected in April, to resume work on a final report which has now been completed and submitted. I want to thank all the decent, hardworking men and women that worked round the clock pro bono as members of the

Transition Committee to produce the excellent interim and final reports that have guided our government so far.

Thanks to these three months of fact-finding efforts, we now have a clearer picture of the state of affairs we inherited, and it is not a pretty picture.

While we will never use the poor condition in which we met the state as an excuse, it is our belief that we owe the people of this state the duty to let
them know the reality on the ground.

I will share some of this information with you to enable everyone have a clearer picture of what we met on ground.

How we met Kaduna State

Kaduna State was left prostrate by the last administration. Our first shock after preliminary analysis of the finances indicated that even after combining receipts from the Federation Account and internally generated revenue, the previous government could not settle personnel and overhead costs of the State and Local Governments without monthly borrowing.

In simple terms, the former Kaduna State government and its local governments existed only to pay salaries, and they borrowed monies monthly to keep the governments running. The civil servants and the political appointees – that is, the servants of the 8 million people of Kaduna – were consuming over 100% of the income of the state, leaving nothing for the development of education, healthcare, agriculture, roads, and water supply. We all will agree that there is no family that will accept spending even 90% of its income on the house-help, security man and the cook. Yet that is what the former state government and all the local governments were clearly doing.

The state therefore became highly indebted. The total indebtedness of the State as at 31st May 2015 stood at N74.297bn, comprising N28.840bn in domestic debt, and N45.44bn in foreign debt. The state government alone has unsettled liabilities to contractors, consultants and suppliers of about N25bn and shortfalls in pension contributions of N8.371bn. The extent of bank debts and contractor liabilities of the 23 local governments is still being collated.

These state debts need to be serviced, and the high debt service cost is weighing heavily on the state and adversely affecting capital expenditure flexibility. For instance, the 2015 budget earmarked N10.8bn as the cost of servicing existing debt. We are considering our options for responsibly managing the debt burden we inherited.

Aside from the huge debt, the new administration also inherited cash deficits and poor liquidity. As at 31 May 2015, the Kaduna State Government had only N228,333,371.67 available in the bank as money that the government can actually spend. The previous administration also incurred outstanding liabilities of N370m by May 2015, effectively leaving the state in red as the working capital of slightly over N228m was less than the liability incurred.

In an effort to obscure the deficit they had placed the state in, the previous government resorted to pretending that committed funds were available to be spent. Committed funds are monies that cannot be spent by the government because they are already earmarked as counterpart and reserve funds for specific purposes such as MDGs, SUBEB, Sure-P and pension contributions. These committed funds amounted to about N8.56 billion as at 31 May 2015.

In the past couple of years, at least 80% of state revenues were spent on running the government and satisfying the wants of a few that had been elected or appointed into office. Sometimes, all of the resources, with some extra borrowing, were consumed by this few people in power and those they favored. Little wonder that the former leadership did not advance healthcare, education, agriculture, infrastructure and job creation.

We have taken the time to explain the details of the state’s finances to enable every citizen to get the true picture of what we met on ground. However, we have a duty to tackle the untidy mess that the state finances have been. We have taken steps to curtail our expenditure, and devote more of it to development.

Our immediate response

It was obvious that running Kaduna the old way is a recipe for disaster. One of the steps we took was to cut overheads spending by 60 per cent. I therefore directed the state Accountant General to release only 40% of budgeted overheads as we strive to improve liquidity and prioritize spending for public goods. However, our efforts in this regard are not on the expenditure side alone. As we cut costs, plug leakages and reduce waste, we need to grow our revenues and have more realistic budgeting in the state. We are therefore focusing on strategies to rapidly increase our internally generated revenue.

We are conscious of the fact that as things stand today, Kaduna State relies on federal allocation to be able to pay salaries. The state simply does not collect enough internally-generated revenue (IGR). In the last five years, IGR has been able to finance only about 15 per cent of the budget. We are committed to improving IGR, and thus reduce our dependence on federal allocations. The committee we set up to review our tax system in the state, led by the former Chairman of the Federal Inland Revenue Service, Mrs Ifueko Omoigui-Okauru, is about to complete its work. We shall promptly act on its recommendations to improve revenue generation and collection.

We have also decided to make the budget conform to the state’s financial reality. Over the years, the Kaduna budget became a process to justify spending, not a mechanism to achieve results, structure economic development and improve social cohesion. Even with that, less than 40 per cent of the budget has been implemented since 2008. Actual capital spending stood at just 26 per cent in 2013. In the same year, health sector implementation was just 14 per cent of planned expenditure, while that for town, urban and regional development was just 1 per cent.

When a budget is so disconnected from reality, and the same unrealistic figures are increased every year, development cannot be realized. We will henceforth rigorously match realistic expenditures to sustainable revenues. Therefore budgeting in Kaduna State will henceforth be based on the zero-based budgeting system. This means that every expenditure item will have to be justified both in terms of its necessity, cost and availability of funds vis-à-vis other competing needs before it can be included in the state budget. There is no reason to legislate N200bn as annual budget when the realistic revenue and expenditure capacity is less than N100bn.
As we noted during the campaign, our schools and hospitals are in poor shapes. We are outraged that about 50 per cent of our primary school pupils sit on bare floors, often in facilities that lack water, toilets, windows or even roofs. Many schools do not have enough teachers, and a lot of the teachers themselves need further training to enable them truly educate our children. Our healthcare system is similarly challenged by capacity failures and shortage of tools and equipment that are often mitigated by dedicated personnel. As governor, I have had cause to take a child to a public hospital at 5am where I saw a doctor on call along with other busy health workers, but the pharmacy had no drugs.
What we have done so far

The work of change that you have charged us to do requires a commitment to sacrifice, cooperation and hard work by all. So far, we have started taking the necessary decisions to set a new direction for the state and make the government an enabler of development rather than a guzzler of revenues.

We have made clear our intention to devote a larger chunk of the state’s resources to providing public services. We have signaled that a government elected by majority vote should serve the majority.

Governance:
Cost-cutting: We have reduced ministries to 13, from 19. This has enabled us to reduce the number of permanent secretaries to 18, from the previous 35. As stated earlier, we have slashed overheads by 60% across board as we seek to do more with less. Our deputy governor and I have tried to set an example by taking a 50% cut in our salaries and allowances. Your government has also decided to save the monies hitherto spent on feeding, gifts and pilgrimage. In 2014, over 2,000 pilgrims were sponsored to the Hajj by the Kaduna State Government and the 23 local government areas. Out of the 810 Christian pilgrims, 800 were sponsored by the same governments. All these cost the governments nearly N1.5 billion in just one year. Our state simply cannot afford this expense any longer.

Biometric verification: Our government has concluded the first phase of the biometric verification of its employees. We again condole the families of our workers who were victims of the bomb blast at the Dogarawa secretariat of the Sabon-Gari local government council. I pay tribute to the civil servants for their understanding and commitment to the success of the verification project. It is in the interest of every responsible citizen to eliminate ghost workers from the state’s payroll. We have saved nearly N120 million so far, and are reviewing the figures from the exercise, and we will apply the lessons learnt in subsequent phases. We are determined to weed out ghost workers from the state and local government payrolls and we will introduce additional measures in the coming weeks to apprehend and prosecute those involved in this fraud.

Tax Reforms: We are studying the options to improve our internally generated revenue and reduce our dependence on federal allocations. Our deputy governor and I are committed to not drawing our full pay until our IGR exceeds federation account allocations for at least three consecutive months.

Transparency: Your government has decided to domesticate the Freedom of Information Act in Kaduna State. We have forwarded the bill to the House of Assembly for passage. We have also signed up to Open Budget, a web-based tool that enables you to track what we are doing with your money.

Health:

• Kaduna State has signed a Memorandum of Understanding with General Electric Healthcare to modernise our primary health centres and public hospitals. Both parties have committed to identifying the specific needs of the centres and hospitals, so that modern equipment can be installed to improve the diagnosis and management of patients.

• We shall sharpen our focus on primary healthcare by full implementation of Primary Healthcare Under One Roof (PHCUOR). We have therefore sent this framework as our first Executive Bill to the State House of Assembly. This focus includes a project to fully equip at least one primary health care centre in each of the 255 wards in the state, and at least one general hospital in each of the three senatorial districts. In addition to providing better facilities, we would be recruiting more doctors, nurses, midwives and technologists for our improved hospitals.

• We have signed the 2015 Kaduna State-UNICEF 2015 work-plan. The state government is ready with its counterpart funding for the agreed initiatives in healthcare, nutrition, HIV/AIDS, water, sanitation and child protection.

• We have installed two dialysis machines and have repaired three dialysis equipment at Barau Dikko Hospital. We hope to take delivery of four other dialysis machines to be installed at our general hospitals in Kafanchan and Zaria within weeks. Arrangements are being made to purchase consumables for the next 12 months so that dialysis will be affordable to Kaduna citizens needing it.

Security:

• Collaborative Security operations: Security forces are now executing the comprehensive security plans agreed by the governors of Kaduna, Sokoto, Zamfara, Katsina, Kebbi and Niger States to address the serious security challenges in the forest ranges of Kamuku and Kuyambana that stride our respective States. The security operations have commenced, and several camps of the criminal gangs have been destroyed and thousands of stolen cattle recovered. We are grateful to the Federal Government for deploying its security assets in the ongoing operations to make our six states safer and more secure.

• Agwai Peace Committee: A fact-finding and community engagement committee, chaired by the respected General Martin Luther Agwai, is working to identify the causes of conflict and insecurity in Southern Kaduna and thereafter recommend ways of tackling the problem. The committee has been in active engagement and tours round the Kaduna South senatorial district and we are confident that it will make far-reaching recommendations to bring peaceful coexistence back to our state as a whole. The committee will submit its report early in August by God’s Grace.

• Demilitarisation: Your government has made efforts to boost the confidence levels of citizens and encouraging increased vigilance, without reliance on roadblocks. More public roles are being undertaken by the civil police as we encourage our security forces to deepen their access to proactive intelligence.

• Traditional Rulers’ Network: We are empowering our traditional institutions to restore their security and intelligence networks that served our communities so well in the past. A high-powered committee chaired by the Amir of Birnin Gwari is working round the clock to assist the government in this effort.

Job creation

• Shopping Mall: We have signed an agreement with UAC Property Development Company (UPDC) to build a shopping mall in Kaduna. The mall is scheduled for commissioning by December 2016. A number of other investors have also indicated interest in building additional malls and 5-star hotels which would create jobs and make Kaduna a centre for domestic tourism, and an outstanding venue for national and international conferences and other events.

• Kaduna Cabs: We have initiated a scheme to revive taxi services in our major urban centres, starting with 200 branded, air-conditioned cabs in Kaduna. Prospective owner-drivers are expected to deposit about 10% of the discounted price of the vehicles and pay the balance in installments over a period of four years. Hundreds of our youths have now been short-listed for training with a view to empowering them as owner-drivers in due course.

Local Government Reforms

• We have appointed interim management committees for all the 23 local government councils in our state. As we pledged during the campaign, we have announced that the state government will not touch a kobo of local government money. Rather, when federal allocations for the local governments arrive in the joint account, we will add 10% of the state’s IGR to it and give it to the local government councils. We expect that this financial autonomy will be used to accelerate development at the grassroots.

• Therefore local government councils must also cut costs and take concrete steps to reverse the monthly deficit of N700m that they jointly incur. We will insist that every local government must live within its means. We have stopped the practice of using funds from largely rural local governments to subsidize the salary bills of urban local councils that tend to be overstaffed. Local government councils will not be allowed to spend more than 50% of their revenues on recurrent expenses, and they have been guided on the capital projects that their communities expect.

Land Recovery

• Public institutions: Your government has demonstrated its resolve to protect the integrity of the land on which public institutions such as schools and hospitals are sited. We are reversing the impunity that led important personalities to conclude that they could take school or hospital land for private purposes.

• Government is therefore recovering such lands to preserve the security of such institutions, and safeguard their ability to expand, which are the reasons they were allotted such size of the land in the first place. Appropriate notices have been issued to people who have built on such plots. We thank the public for the widespread support they are giving to these recovery moves.

Infrastructure

• Zaria Water Project: We have briefed and secured the support of our lenders and development partners for accelerated completion of this project by early 2018. We are negotiating a sustainable payment plan to clear the contractor arrears. We are also working on plans for a Kaduna Water Expansion Project, as well as the rehabilitation of other small town water schemes across the state.

• Rural and community development: Under the leadership of our Deputy Governor, we shall be mainstreaming the Pampaida Millennium Village as a viable model across our rural communities. It will have components to improve education, healthcare, rural roads and the farming activities that engage most of our rural residents.

• Textile Revival: We have the support of Mr. President to work on policies and schemes that will revive this sector as viable and sustainable employer of labour. We are collaborating with the Federal Government, current and potential textile investors, and the states of Zamfara, Katsina and Kano on a package that stimulates the value-chain from cotton farming to textiles production and garmenting.

What we intend to do

Based on our manifesto and campaign pledges, your government will be implementing the following measures to improve the welfare of our people:

• Land Reform: Your government will assist land owners to have security and be able to unlock the wealth in their land by formalising and registering their titles. We will computerize all the land records and implement the Kaduna Geographic Information System starting with Kaduna, Zaria and Kafanchan metropolitan areas. This is to ensure that our people get Certificates of Occupancy for all their plots of land and improve security of their landholdings.

• Urban Development: At the moment, the three major cities in Kaduna State – Kaduna, Zaria and Kafanchan are no more than glorified local government headquarters. This administration is developing a master-plan to transform these cities into modern urban centres with every conceivable facility like improved transportation, traffic management, leisure and shopping facilities, recreational and neighborhood centres. This process will involve the creation of thousands of jobs in several sectors.

• Clean Kaduna: We are starting a campaign to keep Kaduna State clean. This entails public enlightenment as well as enforcement measures and an improved system of public waste management.

• Education: We are committed to make our public schools safe environments for learning by commencing the comprehensive repairs of schools, and the provision of furniture, water, toilets and other facilities. We shall also be training our teachers to remedy the skills gaps revealed by the teacher audit. Your government will be recruiting more teachers in the core subjects of Mathematics, English, the Sciences and information technology. These are the steps that will inject quality into our pledge to provide free education up to junior secondary level.

• School Feeding: We have taken a firm decision to vastly improve the feeding of students in our boarding schools, starting from this September. We will start with boarding secondary schools for which we have requested the State House of Assembly to approve a virement of N1 billion.

• Pensioners: It is unacceptable that retired people should face pension headaches after a lifetime of work. We shall take steps to resolve this matter, ensure that pensions are properly-funded and pass an updated law to make pensions a sustainable undertaking by committing the state to an improved contributory pension scheme consistent with Pensions Reform Act 2014.

• Physically-challenged persons and the destitute: We have a responsibility to every section of our society, including the physically-challenged. Our duty is to train every willing person to acquire the skills that can help them be productively engaged. We neither believe that destitution is a profession nor will we condemn anyone to the misery of begging. Rather all our rehabilitation centres will be retooled to impart viable skills and we shall have a microcredit scheme to assist people to start-up their small businesses after undergoing training. We have had to effect some emergency measures to take beggars and hawkers off the streets in response to the recent security issues, but we shall abide by the commitments we made during the campaign. We have this week named a Special Assistant on Persons with Disability to drive this component of our agenda.

• Township Roads and Street Lights: neighborhood and township roads in our major urban centres are being earmarked for upgrading to the extent we can within this rainy season. More extensive work will begin as soon as the rains are over in all the local government headquarters in the state. We consider it intolerable that Kaduna has become a city of darkness. We shall provide street lights, brighten up our city and thereby help deter crime.

• Transport: our multilayer transport architecture will be executed over the next four years by God’s Grace. That includes preparations, studies and projects to put in place:
the new Cabs scheme and expanding the project to Zaria and Kafanchan, a BRT system for mass transit starting with Kaduna metropolitan area, a major project to establish Kaduna-Zaria rapid transit system between Shika, Samaru and Zaria through and within the Kaduna Metropolis and up to the Refinery, and  new bus and truck terminals in Kaduna, Tafa, Mararaban Jos, Kafanchan and Zaria.
• Direct Youth Employment: Our drive to recruit 50 youths per ward in the next four years to work in some government agencies – as traffic, environmental and sanitary inspectors will commence this year with about 10 persons per ward. We have reconstituted the board and leadership of KASTELEA to enable this process to start soon. These job openings are being advertised soon.

Dear people of Kaduna State, we ask for your support and understanding as we do the work that you elected us to do. There is so much to do, with fewer resources. We are working to do things that improve public welfare and that empower people to make the best use of their talents. We do not regard poverty as something to be exploited.

Rather we understand that governance imposes on us a duty to tackle poverty, fight its causes and empower the citizens to rise above the ravages of circumstances.

We are irrevocably committed to a leaner, less expensive government, with well-motivated civil servants, teachers and health care workers. We need an efficient public service to be able to deliver public goods, and we shall get it. As we make political appointments to help drive our development agenda, we are seeking people who have capacity to do the job in a way that benefits all of society rather than the appointee or the patrons of the appointees. Good governance requires that we select the best persons to serve the public. The notion that public offices are meant to be distributed without attention to quality has seen the elevation of unsuitable persons into such positions, with disastrous consequences for our state and our country.

We have sent the signals that change really means placing the needs of the people as our priority. Not for us surrender to vested interests and their desire to preserve their privileges at the expense of our people. Those that used to corner fertilizers, grains and other items or infect our civil service with ghost workers or inflate and abandon contracts will certainly be unhappy. But we shall not be distracted from our priorities to deliver public services to our people.

At the end of our tenure, you will judge whether we did our best for peace and security, whether we built and repaired the schools and hospitals we promised, whether we recruited and trained more teachers, whether we got more doctors and nurses into our hospitals, whether we promoted jobs and skills for our youths.

My fellow citizens of Kaduna State, we were not elected to pander to the desires of a minority. We were elected by majority vote to serve the many, and so shall we. We will continue to interact with you, the citizens of this state through our monthly town hall meetings, and weekly briefings by Commissioners and heads of each Ministry, Department and Agency on their respective activities and results achieved in the service of our people.

We have made some difficult choices, and shall make even more in the future. But all our decisions are geared towards improving our state. We will listen and make adjustments if we err, but we will never shy way from taking painful decisions today that secure the future of our children tomorrow. Hope was invested in us to perform.

And we will not deliver despair. We shall remain worthy of that hope in your service.

God bless Kaduna State. God bless the Federal Republic of Nigeria.

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