Sunday, August 13, 2017 10:41 am
The World Bank does not have free money. It puts its money where its mouth is. It does not do business with just any government. A government has to demonstrate capacity for results before it can gain the attention of the global institution for any financial transaction. The World Bank budget support facility is not an all comers’ affair. It is for governments that have a track record of a system-driven development. You have to prove your mettle in financial transparency, revenue generation, social services such as education, health, among others.
The phenomenal growth of Ogun State’s Internally Generated Revenue as a result of financial engineering introduced by the current government would, no doubt, have impressed the global financial institution.
In its Doing Business in Nigeria 2014 report, the Word Bank, rated Ogun, out of 35 states and FCT, as one of the five states “that made the biggest strides towards the national frontier of good practices.” It put Ogun in the exclusive club of the top reforming states in Nigeria.
The same World Bank, in 2008 and 2010 reports, ranked Ogun State as one of the lowest overall performers among the 36 states in Nigeria in terms of ease of doing business. In other words, the state was then not conducive to business investment.
“Thanks to a concerted effort across federal and state authorities, and in collaboration with the private sector, Ogun improved on three of the four Doing Business indicators benchmarked,” the 2014 World Bank report said.
It observed further that in Ogun State, “The construction permitting system was radically overhauled, with the state government authorities decentralising the approval system and a new committee monitoring delays. Building permit applications and payments can now be made simultaneously in district offices. Private professionals issue environmental-impact assessments in accordance with the conditions and templates set out in a framework agreement. The certificate of completion is issued on the spot, immediately following the final inspection.”
To begin a business in the current Ogun State, according to the World Bank, “entrepreneurs no longer need to travel to Ibadan or Lagos, thanks to the Federal Inland Revenue Service’s new stamp duty office in Abeokuta. In addition, the state Ministry of Commerce and Industry abolished the requirement for a physical inspection of the business premises – today, a proof of company address, such as a utility bill, is sufficient.
“A business premises permit is issued on the spot upon payment of the fee. Finally, Ogun’s Bureau of Lands digitalised property records with the aim of enabling electronic title searches and making property registration more efficient.”
It is worth recalling that before the global development institution released its report, the Management and Board of Editors of Nigeria’s leading business newspaper, Business Day, had in 2013 declared Ogun State the fastest-growing economy and first choice for industrialists and entrepreneurs among the 36 states in Nigeria. The state won the prestigious award “because it has the highest number of businesses established in its domain and that the government has made the environment more attractive to investors. Ogun also has the highest positive number of Gross Domestic Product in the last one year, the number of bank branches has increased more than that of other states in the last three years and its financial inclusion, particularly the embrace of cashless economy and use of Automated Teller Machine by residents had increased tremendously.”
The Manufacturers Association of Nigeria has in recent years acknowledged Ogun as the industrial hub of Nigeria by virtue of the massive inflow of investments into the state. This is a product of the enabling environment created for business growth by the present government.
Only a few months ago,
the British Deputy High Commissioner to Nigeria, Laure Beaufils, declared that Ogun State alone attracted 75 per cent of the Foreign Direct Investment into Nigeria.
It is, therefore, natural for a global institution that is committed to poverty reduction to partner a state that has demonstrated enough capacity for results and is committed to the welfare of its citizens.
Just as the Ogun State Commissioner for Budget and Planning, Ms Denrele Adesina, said at a recent press conference in Abeokuta, “The World Bank budget support is for states that have demonstrated ability for proven results. The leap of Ogun State from 35th position in 2010 to one of the best five in 2014 in terms of Ease of Doing Business, transparency, growth in IGR, among others, has impressed the global institution, and is ever willing to partner with our government.”
Contrary to speculations by some mischief makers especially on social media, the World Bank will not credit the account of the state government with $350m in one fell swoop. At best, the current government can only get about 20 or 25 per cent of the facility while subsequent governments will be the major beneficiaries.
The $350 facility being sought by the state government is concessionary, offered at a rock bottom interest of two per cent with a five-year moratorium and redeemable over a period of 25 years.
The revered government of Chief Olabisi Onabanjo was able to secure such a facility because it met the required benchmarks. Why will another government that met the same criteria not obtain such a facility to further boost the economy of the state?
If my memory has not failed me, a neighbouring state obtained the same budget support facility of about $600m from the World Bank many years ago. The release of the money has stretched up to the current government.
To quote Denrele once more, “The World Bank is concerned about the welfare of the people of Ogun State. It is interested in capacity building through education, development of agriculture, improved health care delivery and infrastructural development. The Amosun administration has met the benchmarks on these. The World Bank looks forward to partnering with such states to achieve its global objectives of development.”
In sum, the reality is that the global financial institution is impressed by the giants made by the Ibikunle Amosun administration and is pleased to partner with it in order to improve the lot of the masses of Ogun State.
* Soyombo sent this piece from Abeokuta via [email protected]