Imperatives of Technocrats for Economic Development

For 8 years now, I have sojourned in Britain and there are three facts I have established. First is the fact that taxes provide the locomotive of the economy of Britain. Secondly, there is a correlation between systemic efficiency in service delivery and the attitude of the people towards taxation, as in all working societies. Thirdly, when taxes are paid the tax payers have the right to find out how the revenues are being expended, that is transparency and accountability- all rolled together in the macroeconomic and fiscal policies of government. In Britain, public spending is expenditure incurred by the "public sector" in the course of its activities. The public sector is the sum of those parts of the economy formally under the control of or responsible to the State at all levels of government.

In the United Kingdom, emphasis is also placed on fiscal policies. Fiscal policy is an instrument by the government to influence aggregate demand in the economy. If government spending increases aggregate demand is expected to increase because it is an injection into the economy. It is aimed at achieving price stability, full employment and growth. The fiscal policy could also be viewed as the overall effect of the budget outcome on the economic activities in the country. It may be an expansionary policy, in which case the stance of the policy will evolve a net increase government spending, that is, government spending will be in excess of government revenue. The policy could be concessionary, that is, where government spending is reduced either via higher tax revenue or less spending and injection into the economy. The last in the line of fiscal policies is the adoption of a neutral policy or balanced budget, in which case, the government spending will be equal to expected revenue.

The UK's public spending framework is based on four key principles: consistency with a long-term, prudent and transparent regime for managing the public finances as a whole; the judgement of success by policy outcomes rather than resource inputs; strong incentives for departments and their partners in service delivery to plan over several years and plan together where necessary; and the proper costing and management of capital assets to provide the right incentives for public investment." This is a sharp contrast in Nigeria, where budgeting and fiscal policy are merely honorific.

As a man from Bayelsa State in Diaspora, I should like to dwell on fiscal the policies and transparency initiatives of Bayelsa State since May 27, 2007. I have not had any personal contact with neither Governor Sylva nor any of his henchmen in government, but in December, 2009, I stumbled on the 2010 budget online. I had also obtained information on the efforts made by the administration to achieve transparency and accountability through the budgeting process and other mechanisms that can entrench transparency and curb corruption in official businesses. I came to the realization that one of the most critical challenges of democratization in Nigeria and indeed Africa and is financial discipline and fiscal responsibility. At almost all levels of government, Nigeria wrestles with fiscal responsibility and discipline as pre-requisites for transparency.

I was not satisfied. I navigated the official website of Bayelsa State and found that the finance and budget Commissioner is Dr. Charles-Opuala. I exuded immense confidence that Bayelsa State is in good hands. I know him as an ingenious, innovative banker in the 1990's when he excelled in almost every responsibility entrusted to him to the admiration of his contemporaries. Bayelsa State was on track, I muttered, if only he is given the free hands to manage the finances without undue political interference. In my view, it is technocrats that build any economy and not politicians.

I make bold to describe him as an admirer of the Keynesian school of thought (though I am a leftist), which holds that prudentially adjusting government spending and the introduction of tax rates are veritable ways of stimulating aggregate demand. Opuala, a fellow of many professional bodies, is one economist who is aware that the economies of most States in Nigeria are running below capacity with attendant high level of cyclical unemployment hence there is now a need to boost the aggregate demand through the implementation of an expansionary policy, that is, to spend more than the anticipated revenue, to create employment opportunities, attract Foreign Direct Investment and grow the real sectors of the economy. Dr. Charles Opuala is one technocrat I know in the present administration, who is not only young, vibrant and ingenious but who believes in lifting financial management to the light of public scrutiny hence his knack for transparency, vigorous pursuit of prudence and swift response to matters pertaining to accountability. He adds value to good governance through the preparation of Medium Term Sector Strategy (MTSS) for the various MDAs to meet the goals and expectations of government. The MTSS serve as a working document for all the MDAs with specific targets and indicators to track progress along the road to change.

Analysis of the responsibilities of his Ministry indicates it is saddled with enormous responsibilities to function as the engine room of government. The main statutory responsibility of the Ministry is the effective and prudent management of the financial resources of the State. It is also to ensure an improvement of the Internally Generated Revenue of the State to put the government on a sound pedestal to rise effectively to the challenge of development of the state. The Ministry is responsible for efficiently managing and harnessing government resources for optimum productivity, in addition to exploring strategies for revenue generation such as aids from foreign and local donors.

He contributed immensely and brought his expertise to bear on the passage into law by the Bayelsa State House of Assembly of the Fiscal Responsibility Law and the Public Procurement Law. The Ministry of Finance had adopted a very dynamic and purposeful budgeting paradigm. For the first time since 1999, the State government held a budget retreat at the instance of the Ministry of Finance. During that retreat, which was held in November 2008 Budget Retreat, held in Port Harcourt, the Bayelsa State Ministry of Finance put in place a Medium-Term Expenditure Framework and assembled experts to deliver incisive talks on the mechanisms of budget implementation. Now, the Ministry has entrenched the participatory, bottom-up budget making process- which is widely commended by experts in budgeting.

Recognizing that transparency is one of the taproots of good governance, the Commissioner in conjunction with the other parastatals under his ministry began to planted the seeds of transparency by helping to establish the Bayelsa Expenditure and Transparency Initiative (BEITI). The BEITI itself is an initiative of The Revenue Watch Institute - an independent, non-partisan, not-for-profit organization devoted to fostering transparent and accountable management of extractive sector resources. In Bayelsa State Revenue Watch plays an advisory role to the Bayelsa Expenditure and Transparency Initiative with an established multi-stakeholder steering committee to track expenditure and evaluating impact of budget implementation. In addition, it will play the role of capacity building to enhance community and civil society participation in the State's planning and budgeting process. It can be stated unequivocally, that Bayelsa State has one of the most sustainable budget implementation templates in the Nigeria.

The establishment of BEITI was predicated on the fact that hitherto the haphazard management oil revenues were managed was capable of undermining economic stability, reduce accountability and increase conflict. BEITI represents a major opportunity to open the policy dialogue and involve civil society and communities in the management of oil and gas revenues. The establishment of BEITI is pivotal to improving transparency in public services and reducing conflict in oil-rich States like Bayelsa State. Today, there seems to be synergy between government bureaucrats, the State House of Assembly and other stakeholders in monitoring and auditing public expenditures at the State government level. There is however a lacuna at the Local Government level where accountability seems to have been deleted from the statute books. This may improve with the swearing-in of elected Chairmen.

The world over, transparency and accountability are identified as two keys that can unlock the door to foreign investment. In recognition of this fact government's policy thrust is to partner with foreign investors to grow the real sectors of the economy. In 2009, the Bayelsa State Government strategically put in place 3 Special Purpose Vehicles (SPVs) for the establishment of 3 functional and result-oriented companies in the Ministry of Agriculture. These include: The Nigerdelta Seafoods Ltd, Bayelsa Farms Ltd and Bayelsa Oil Palm Ltd. These are areas with which Government intends to galvanize the economy of the State in terms of job/wealth creation and poverty reduction. The involvement of local and international partners in the agriculture sector would attract robust FDI. By encouraging FDI, the administration would have garnered enormous goodwill from major global financial institutions to catalyze the local economy and increase her competitive edge in capital investments. This is feasible because, already, government has concluded arrangements with the World Bank to provide support in planning critical sectors of the economy as well as educate principal officers on financial management based on well tested participatory, all-inclusive principles.

The hospitality industry is another sector where the budget has set out to attract FDI. In the 2010 budget, the State over the medium term has pledged to intensify the completion of existing projects nearing completion and existing projects with high commercial viability for private sector participation. In this regard, the Senatorial roads, Cargo Airport, Tower Hotel and Conference Centre will be accorded priority. Other projects include the construction of Yenagoa Gateway Guardian Angel Project, the works yard in Yenagoa and the maintenance of public buildings in the State. Government seems to be doggedly determined to complete the massive infrastructures such as the Judiciary Complex, the Kolo Creek Gas Turbine at Imiringi, the Musa Yar'Adua International Passenger/Cargo Airport, Tower Hotel and International Conference Centre, Okaka in Yenagoa City.

It is an established fact that the cost of starting a business in developing economies is very high. This is due largely to infrastructural deficit hence the real sector of the State's economy has not witnesses any astronomical growth. It was to overcome these challenges that prompted the State Government to consolidate on the gains made in 2009 and open windows for new economic initiatives that would promote growth on the long run. Realization that improvement in revenue generation is not so much about overtaxing citizens but rather realizing that revenues can be generated from an increase in services provided and generated through an expansion of the tax base, a review of fees, charges and interest income.

No doubt, the 2010 Budget of Bayelsa State was specifically designed to promote fiscal discipline and responsibility. Accordingly, the underpinning principles of the 2010 seek to direct government resources at existing viable ongoing projects that are targeted at achieving the developmental priorities of the State Government and enlist the active participation of the private sector in the infrastructural development of the State particularly in Agriculture and real sectors of the economy. The budget also seeks public/private partnership (PPP) arrangements, as this initiative would have huge potentials for employment generation and improve the general standard of living of Bayelsa people.

Spending and tax in Bayelsa State are decisions that must be both fiscally responsible and fair to our working class. Fiscal responsibility is a sure way to create prosperity. They expect us to return to the pay-as-you-go budget rules that we had enacted in the past that helped us establish a surplus. This Budget reflects a choice - not an easy choice, but the right choice. And when you think about it, the only choice. The choice to take the responsible, prudent path to fiscal stability, economic growth and opportunity

Even the idea that Bayelsa should go to the Bond market is underscored by the objective of growing the real sectors of the economy. The projects tied to the bond in the 2010 budget will open the entire State to economic activities thus enhancing quality of life of our people. Analysts believe that the Bond will be used to clean out current exposures in the commercial banks with high interest rates and this will save the State about N11 Billion. With the N50 billion bond, the State would be liberated from the stranglehold debt service burden and open-up boundless opportunities for economic growth. Again, the seven years repayment period would give government ample opportunity to recoup. Certainly, this Bond with a moratorium of seven years cannot enslave any generation as earlier perceived by some analysts. There is no doubt that Bond has the potential of emancipating the youths by creating a united, secure and prosperous Bayelsa State where investment would thrive. The Bond will be used for the provision of economically viable projects especially in the area of infrastructure, which is the barometer to measure the success of any administration.

I had watched during the Obasanjo days when people like Dr. Ngozi Okonjo Iweala, Oby Ezekwesili and other technocrats made enormous sacrifice for the politicians. Technocrats are usually guided by high ethical standards in the transaction of government businesses. In the case of Bayelsa State, the long term goal of the push for reform is to strengthen existing government accountability mechanism by reducing the incidence of corruption and waste with a view to ensuring that public spending is reasonably responsive to local needs. With a strict accountability and transparency regime, Investors, banks and international institutions would be attracted because of the investment-friendly climate that now exists in the post-amnesty era.

Baring other bureaucratic challenges immanent in the system, it could be said that the Ministry of finance and budget is using three basic instruments to restore the confidence of Bayelsans that the much talked about quantum-leap is possible. These are the aggressive pursuit of FDI, strategies to boost IGR and the bottom-up philosophy of budgeting for optimal stakeholders' participation. I am optimistic that the injection of more technocrats into the all critical sectors of Bayelsa State would address the capacity challenge in the State. This is a sine qua non for accomplishing the dreams and aspirations of the founding fathers of the State. Government should take initiatives that would unleash the creative potentials of stakeholders to contribute to the development of the State.

Bryan-Joe Ekperi, contributed this piece from Central London

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