Good Governance through Effective Debt Management in Kogi
Asiru Idris writes about specific debt management policies put in place by the administration of Governor Yahaya Bello towards sustaining good governance in Kogi state.
Governance is a system that provides a framework for managing organizations. Governance consists of the written and unwritten rules by which governments exercise their authority, including their capacity to formulate and implement sound policies and preserve adherence to the rule of law.
The main purpose of governance is to ensure everyone in an organization follows appropriate and transparent decision-making processes and that the interests of all stakeholders are protected.
The key words in this presentation are debt, debt burden, transparency, accountability, and success story.
Debt refers to the sum of money that is owed either by an individual, business or government. Debt burden, on the other hand, is a large amount of money that a country or organization owes to another and which it finds very difficult to pay.
As we know, the massive debt burden of our country, Nigeria, has significantly slowed down growth and development. The more a country services debt, the less resources are available to drive economic growth and development. This will, no doubt, increase unemployment, inflation, and poverty.
Transparency in government context, refers to the State of being open and honest in the governance process. While this is most pronounced in the government procurement process, it is, however, a concept that is applicable to every government activity and business. All government business must be open for scrutiny with a view to improving the quality-of-service delivery. Corporate governance and best practices require public disclosure of all relevant information so that others can make informed decisions.
Transparency is widely recognised as a core principle of good governance. Transparency means sharing information and acting in an open manner. Free access to information is a key element in promoting transparency. The quality of being open and without secret is transparency in action.
Accountability: This is a situation in which Government create the right conditions to be answerable to the people it governs. It refers to a state of giving accounts of stewardship. Transparency in governance is the instruments through which the people can hold government accountable. A government that isn’t transparent can’t be accountable because the grounds upon which such government can be held accountable are non-existent. It is only when people know and can scrutinize what government is doing that, they can be equipped with the tools to hold such government accountable. Kogi State Government takes transparency and accountability very seriously.
The success story
Since the inception of the administration of Alhaji Yahaya Bello, the Governor of Kogi State on January 27th, 2016, His Excellency has put in place, deliberate policies to entrench good governance in the state through transparency and accountability and reduction in the debt burden of the state.
The debt reduction strategies adopted by the administration include:
•Establishment of Treasury Single Account (TSA) to reduce states reliance on Commercial Bank Loans
•Creating proper budgetary procedure
•Offset of State’s most expensive Loan
•Good Debt Management Strategy
•Debt consolidation or debt buy back
•Reduction of Expenditure
•Debt restructuring; reducing the interest rates and extending the tenor.
•Arrears clearance framework; prioritizing of Arrears
•Upgrading the government financial management information systems and
•Improved revenue generation through blocking all revenue linkages to improve the State capacity to repay debt.
The State government through the above stated economic policy, has improved the debt management and debt transparency. The effective debt reduction strategies adopted by this administration, has made possible the restructuring of the state Bond Facility in 2018 and spread the repayment process to ease the burden on the state’s monthly allocation.
The State also established Debt Arrears Clearance Framework (ACF) in 2020. Another success story was the Debt Buy Back Exercise with Zenith Bank PLC and United Bank for Africa (UBA) PLC in 2021.
The State received the sum of $6 Million from the SFTAS on Debt reporting, improved debt sustainability and arrears of clearance framework. The Debt Management Office was upgraded, and a pioneer Director General was appointed.
The State is doing a lot in the following areas, to grow the economy and improve our capacity to pay our debts:
i. Encouragement of foreign direct investment
ii. Establishment of skills development/building of the Confluence University of Science and Technology (CUSTECH), Osara
iii. Increased investment in infrastructure: road and health, etc
iv. Improved security system
v. Establishment of Kogi State Fiscal Responsibility Commission to promote a planned and balanced economic development.
The Government of Alhaji Yahaya Bello, has put in place the following to improve transparency and accountability in governance: Town Hall Meetings on Annual Budget. The State Government, in 2018, initiated Senatorial town Hall meetings on Annual Budget. This hasn’t only ensured openness in the budget process but has significantly improved stakeholders’ participation in the budget process and management. This has earned the State several awards, to God be the glory. The State received $300,000 USD annually for four years on participatory preparation of the annual budget.
The Citizens Budget. In the last five years, the State has remained committed to the preparation of the citizens’ budget, which is published in English language as well as the three major local languages of Igala, Ebira and Yoruba. The citizen’s budget is a simplified version of the Budget that the ordinary people can easily access and relate with. This document is available on the State website.
Preparation and publication of Quarterly Budget performance. The State Government has been consisted on the quarterly review and publication of the annual budget. This is aimed at deepening transparency and accountability as well as feedback from the people. The State received a cash award of $300,000 USD annually for four years.
Improved Procurement process. The State Procurement process has been reformed in line with best practices. As you know, we have established the Bureau for Public Procurement (BPP) and other related structures. We have also put in place, the Revised Procurement Law (2020). The State has developed and put to use, procurement guidelines on goods, works and services. All these documents are publicly available on the State website.
The State procurement process follows the principles of competitiveness, consistency, effectiveness, value for money, fair dealing, and integrity. This feat enhanced the rating of the State as evidenced in the SFTAS performance. Kogi State emerged one of the best States on World Bank supported SFTAS, PforR.
Timely preparation and publication of Audited Financial Statements. As we speak, the 2022 Audited Financial Statement has been published and it is publicly available on the State website. This good progress projected the State in good light, as the State successfully received the grants allocated to this DLI in the SFTAS PforR. The State received $1.5m USD annually over four years on this DLI.
The State was awarded the best performing state in the North Central Zone on budget transparency and accountability by Socio Economic Research and Development Centre (SERDEC) in 2020 and 2022.
The then State Director, Budget and presently Permanent Secretary, Budget and Economic Planning, Mr. Olajide Samuel, was awarded National Productivity Award in the year 2020 and Award of Excellence by the Sub National Budget Transparency Forum in 2023.
To enhance transparency and accountability, the Monitoring and Evaluation Unit of the Ministry of Finance, Budget and Economic Planning was upgraded to a full-fledged department. The department is responsible for regular monitoring of government projects/programs; ensure jobs are executed to specifications to ensure value for money.
Kogi State Government has commenced preparation of the 32 years Development Plan. The State Development Plan (SDP) is a perspective document that is critical to the realization of His Excellency’s vision of all round development of the state. The document mirror’s the state on a long-term basis, from where the medium and the short-term initiatives, such as the New Direction Blueprint, Medium Term Expenditure Framework (MTEF), Medium Term Sector Strategies (MTSS) and the Annual Budget are derived.
The State Development Plan when completed would be a focal document, for Development partners’ interventions, given its inclusive preparation process and depth of Information /Data.
-Idris is Kogi State commissioner for finance, budget and planning
