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Cost of Governance: Gov. Umo Eno has failed to learn from Mistakes of Last Administration – Policy Alert

Cost of Governance: Gov. Umo Eno has failed to learn from Mistakes of Last Administration – Policy Alert

Executive Director of Policy Alert making his intervention during the public consultation of the 2024-2026 MTEF

By Ekemini Simon

Policy Alert, a Civil Society Organisation that promotes fiscal and ecological justice in the Niger Delta has said that the administration of Governor Umo Eno has failed to learn from the mistakes of the last administration in terms of its cost of governance.

Policy Alert said the current administration appears to have towed the path of its predecessor by recruiting over 300 personal assistants, in addition to other advisers and aides to the governor, which the organization said only create a bloated payroll that does not really add any value other than the political. 

Policy Alert made this known through its Executive Director, Tijah Bolton-Akpan while making interventions during the Akwa Ibom State Medium Term Expenditure Framework (MTEF) 2024-2026 Consultation.

The organization noted that the cost of governance in the State as seen in the trend of the State recurrent expenditure as being unduly bloated has continued to give reason for concern.

Policy Alert pointed out that as of 2022, data from the National Bureau of Statistics (NBS) indicated that 71.3 percent or seven in every ten persons in Akwa Ibom State were multidimensionally poor while 45.2 percent were unemployed. 

The organization noted that the naira redesign crunch, the removal of fuel subsidy, and the foreign exchange crisis have further raised inflation rates and deepened social vulnerability between last year and now, so it goes to reason that government policies at this time should be targeted at re-purposing resources from areas where they do not really make much of a difference to areas where they are urgently needed by the poorest of the poor. 

Policy Alert recalled that in 2020 the Prof Akpan Ekpo-led Post Covid-19 Committee had recommended a drastic reduction in the cost of governance but the last administration paid no heed.

On the source of funding for the budget, Policy Alert said the draft MTEF 2024 – 2026 document indicates that a huge share of the budget deficit for the three fiscal years will come from debt, mainly non-concessional domestic loans.

The organization added “It appears that the state government is following in the error of the federal government by planning around an illusive debt sustainability threshold that is based on the debt-to-GDP ratio, rather than using the debt-to-revenue ratio that gives a more realistic picture of how healthy an economy is to absorb further debt.

” In any case, basing debt sustainability for this MTEF on GDP would be misleading because the last available GDP data for the state is for 2017. Our position as an organisation is that Akwa Ibom State is not in a good place in terms of debt. In 2022, the State government spent N54.3bn repaying loans (both principal and interest rates), while it acquired new loans of N64.7bn during the year. The Debt Management Office (DMO) says that the state’s domestic debt stock stood at N199.6bn as at June 2023.

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Policy Alert stated that by delaying the presentation of the MTEF 2024-2026 to the State House of Assembly, the state government is violating the provisions of the Akwa Ibom State Fiscal Responsibility Law 2020. 

The organization said without timely presentation of the MTEF, the legislature is unable to locate its appropriation functions within the context of the multi-year budget framework.

Policy Alert called on the government of Akwa Ibom State to make budgets based on the State’s capacity to actually spend, especially on capital items. 

The organization said Section 16(1) of the Akwa Ibom State Fiscal Responsibility Law 2020 provides that the House of Assembly should not appropriate more than the aggregate expenditure for the previous year plus a deficit of no more than three percent of the previous year’s aggregate. 

“Our 2023 budget deficit exceeds the 2022 aggregate expenditure of N453bn by 1,191 percent and if you add the N150bn supplementary budget, that deficit would be further expanded. Going by this MTEF document, it does not seem that the 2024-2026 MTEF cycle will deviate from the budget credibility issues we have witnessed in the last few years”, Policy Alert said.

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