Recent events in the governance of the Niger Delta States show clearly the Governors’ preference for consultation with stakeholders before taking major steps in the governance of these States. Related to these actions is an unmistakable preference for Transparency in Financial Management. Governor Chibuike Amaechi of Rivers State kicked off his tenure by holding summits on crucial issues and the outcomes were publicized, documented and formed his vision of development. Earlier, Governor Timipre Sylva of Bayelsa State went through similar steps while also engaging expert planners to develop his financial architecture, what Bayelsans know today as the ‘Powerful’ Due Process and e-government Bureau’. However, especially in the case of Bayelsa State , these elaborate schemes have become the target of critics who cannot understand why the strategy. This article will attempt to reassess transparency as a strategy of sustainable development.
Even before now many scholars have been uncomfortable about what they see as government’s tendency to take directives from outside in economic matters. Some see this transparency issue as a way for governors to catch attention of their electorate for second term in 2011 while others believe it is a way to help them monopolize all the money by tightening the noose on finance for others while they live profligate lifestyles. On the other hand many analysts have recommended fiscal responsibility as a way of attracting the much needed foreign investment to develop Niger Delta arguing that the expertise and level of funding needed to overcome her environmental situation cannot but come from the outside beneficiaries of this plunder. These scholars cite her acute poverty, high youth unemployment, and environmental degradation, political and social instability to buttress their point.
What is fiscal responsibility? Some have defined it as expenditure of resources within the scope of conventional budgetary discipline. It implies that government resources are spent in a transparent and accountable manner on planned projects under the watchful eyes of the citizens. Don’t bother to go deeper if you cannot grasp it just know that global patterns have been established to remove the threat of corruption and impunity in the process of handling pubic finance. These are your due process with step ladders in procurement, award of contracts, approval, policy implementation, withdrawals and review. This seemingly cumbersome process may delay things but surely has proved effective in saving government funds while ensuring performance.
The Niger Delta like much of Nigeria has been funded by global bodies in a disproportionate manner in comparison with her output into global market. This truth has been recognized by the World Bank and other finance bodies that are always eager for a chance to help out in her development. But there is a cache here. Who will prepare the environment for these funds to flow in? Who understands the new global economic other, as to understand that the investor must have confidence in an economy to invest? Who can take the political risk of pursuing transparency in fiscal matters in Nigeria ? Who will assure the international community of good governance in a polity that is riddled with deceit and corruption? But in line with the Natural law, brave leaders will reap bounty for their people if they persevere.
Well the federal government has set the pace for States to follow by enacting the fiscal responsibility Act and the Due Process scheme thereby entrenching Transparency in governance. Other States like Lagos , Kwara, Cross River , etc have begun to develop their systems of transparency. Don’t ask this writer about implementation of these visions but suffice it to say that the tendency goes far enough. Others can build on these foundations in future. So it is clear that this line of thought did not start with the present Niger Delta Governors, they only built on them.
The major question remains as to why fiscal responsibility singled out by these governments. The answer has been partially given but needs elaboration here. The secret lies in the requirements of the on going State economic Empowerment and development strategy [SEEDS] benchmarking exercise which has assumed a regulator of States performance watched over closely by the international community. What happens is that States put down their vision and goals as well as targets for each year through which their performance against major benchmarks such as financial management, service delivery etc are judged annually to enable investors and donors as well as other partners to know how to key in their support and funds.
As you may have deduced already, every player in the international scene has a condition for his output into the whole. It is a fundamental right of nations, firms and individuals to give conditions for their contributions while Nigeria gave conditions for lifting of her crude from the ports and placed them on payment of the dollar, an equivalent amount per barrel, the buying international community, desirous of balancing terms of trade saying they are willing to allow investment and inflow of money into Nigeria if we can become transparent in the employment of these moneys for sustainable development of the areas affected, so they can also be guaranteed of further oil.
So you can see where transparency came into the picture. Before 1999, this demand was not a condition. By 1979 it was democratize your government, but they didn’t know that democracies could differ, and the Nigerian democracy of the Second Republic only exploited the ready foreign direct investment to heavily indebt the country and states. You know how President Obasanjo cleaned the stable through the industry of Dr. Okonjo Iweala, the current World Bank Managing Director who was then Finance Minister. It was her credibility in part that saw the trust and gave impression of transparency that got Nigeria debt relief.
So this time around, fiscal responsibility was firmly demanded. With due process the missing regulations were also being demanded in government processes and a peer review mechanism took off in 2005 known as the benchmarking exercise that saw states peer reviewing their own performance in such critical areas as:
§ Budget and fiscal management
§ Private sector growth
§ Service delivery etc.
In 2005 only two states obtained from the Bench Marking process including a Niger Delta State , Bayelsa State . For this reason, foreign direct investment was extended only to high performing states like Enugu and Lagos , while Bayelsa was given the image of a free spending state under a governor that soon became vilified in a corruption trial after a money laundering accusation in London .
In 2006, Bayelsa State participated in the Bench Marking exercise for the first time and performed not too well, the critical areas of complaint for Rivers and Bayelsa were in the area of budget and fiscal management where both states scored abysmally. In 2007 there was transition in governance and no bench marking was held.
Why trace all these facts. First it is to establish the reason for the seemingly excessive stress by Niger Delta States of Rivers and Bayelsa on fiscal transparency. Also to indicate vaguely why the pendulum of power swung to those who could perform these critical tasks, I mean Governor Chibuike Amaechi (Rivers) and Governor Timipre Sylva (Bayelsa).
Note that in Rivers, Governor Amaechi kicked off with an unprecedented emphasis on consultations in summits on every issue of governance. This was not just a style but a requirement by the benchmarking process. On the other hand, the Bayelsa State Governor, kicked off with a Budget retreat at Presidential Hotel, Port Harcourt . Working as if in understanding the Niger Delta Governors cut their teeth in Budgeting and utilized stakeholder support in arriving at a vision for their governments
Particularly for Bayelsa, a new era was emerging, which effectively took off when the Vice President, Dr. Good Luck Jonathan was briefly governor of the state. This new era saw the emphasis on documentation, due process, consultation and policy making as crucial to the determination of government vision, mission, targets and policies. Everything was geared towards Openness and transparency so that foreign and local partners can feel free to come in and support development of the State.
Let us focus more on Bayelsa State here because of
the recent uproar concerning the States’ move to
issue a N50 billion bond which would effectively make the
government to be indebted for 7 years period to bond holders while
the money is tied to completion of vital projects in the
State.
Critics have denounced the move as a way of mortgaging the future of the State through unnecessary debt burden. The foregoing shows that the governor was not playing out any hidden agenda but a process that is maturing after time to help diversify the States revenue base through the attraction of Foreign Direct Investments to the State.
Bayelsa State has done so much to implements its documented vision to the extent that the most powerful nation on earth, the United States of America working through USAID is willing to partner with it. The World Bank is also coming into the picture because, Bayelsa State had articulated its vision professionally in the document known as the Bayelsa State sustainable Development Strategy (BSSDS) a document that replaces its rather watery 2005 BYSEEDS document and promises to catapult the state to an international player status in the global financial arena.
To match words with action, as the State website claims:
§
BEITI Working Group – Bayelsa Expenditure and Income
Transparency Initiative developed in collaboration with Revenue
watch institute, to improve transparency and good governance. The
BEITI comprises of representatives from civil society, govt. and
the private sector working with the state to review accounting and
financial practices including full disclosure of state income and
expenditures. The due process mechanism has also been strengthened
by BEITI resulting in savings representing 24% of the 2008 capital
budget – approximately (N18.315 billion)
§ To clean up corrupt past in government, the state has instituted civil service reforms such as audit of human resources to eliminate ghost workers.
§ The E-government initiative has streamlined Government expenditure and reduced waste while employing modern technology to make operations more transparent and efficient.
§
The State has gotten endorsement of stakeholders to issue
N50 billion bond maturing in seven years
at an interest of 4%.
The money will be tied to completion of vital infrastructural
projects in the state.
Believe it or not, borrowing has become an imperative in the new global economic environment. Borrowing helps to expand economic activity through liquidity stability and Bayelsa State is just on the brink of reaping from consistent upbuilding which with the Federal Government Amnesty, has reassured investors about the capacity of the State to properly manage Foreign Direct and Local investment funds into the State’s economy.
Nwokedi Nworisara, wrote from Port Harcourt
