In 2014, there were conflicting reports about some missing oil funds. The federal government has since ordered an audit of the Nigerian National Petroleum Corporation (NNPC) accounts, but the audit report is yet to be released. What is really happening?
First of all, the fundamental issue is public accounting and accountability. At least, we have a fair idea of how much per quota of oil production and sale as a member of OPEC. So, it is not difficult when the price of oil is disclosed to know how much is sold and how much is accounted for. The story about missing money did not come from out of the federal government. It came from within the government. One department of government said another department had not remitted what it was supposed to remit. This tells us how dysfunctional things may be. In the aftermath, we first had $49.8 billion. We later had $10 billion.
The latest figure is $20billion. The real issue is: should one cent be missing if there is accountability and transparency? If they cannot agree, it raises issue of public trust and capacity. Already, an audit is being conducted. Normally, that is what should be done in the case of financial impropriety. Allegations are often made really and they need to be investigated to see if there is substance in it. But there is a loud silence about the outcome of the audit. We heard the report has been submitted. Just like you, I wait to hear what happened and it will be pleasing to know what the report of the audit is.
The state government has been into building different public institutions like LASTMA, LASRRA and LASPARK among others. How sustainable are these institutions?
I have said before that we have been fortunate to have a lot of ‘action governors’ in Lagos State. We must move away from the idea of action governors to action governance, where institutions are in charge rather than individuals. The fact that you recognise them by name means they are already doing the job. They are institutions. They have their budgets. They go to the House of Assembly. So, you know who to hold responsible if the parks are not green anymore. If you want to cut trees, you know who to call.
You know who to call if your roads need to be repaired. You know who to call if your street light is down. If your traffic light is not working, you know it is LASTMA. That is the way a government should work. I am proud that we can achieve that. In terms of how to sustain it, it is your vote that will sustain these public institutions. It is clear that we can maintain it.
So, keep us there because we decided it, implemented it and have the plan of keeping it. At the end of the day, it shows the quality of men and women who have done well. If the institutions do well, it is the men and women that have done well. If they do not do well, it is the men and women that do not do well.
When you presented the 2015 budget, you said it would run on zero deficit to enable the incoming administration start on a good footing. At the same time, your successor will inherit a huge debt profile. Don’t you think this will inhibit his takeoff?
The difference between 2008 and 2014 budgets was that the 2014 budget had deficit reduction. From the beginning, we had a debt issuance programme of N275billion, which we announced publicly. It would be raised in tranches. We have paid the first tranche. It is going to be difficult to assume that any government will not borrow. It is possible. But it means that if we do not want to borrow, we must then reduce our demand for services.
The finances of this state are studied and the next governor only needs to maintain the revenue level to pay off the debt and even borrow more if he wishes. Not all states can borrow money. Those who borrowed us money understand the economic viability of this state. Our Internally Generated Revenue (IGR) has dropped to N18billion monthly and if you multiply that by 12, it will assume to N216 billion. If that is all we get from taxes, really, maybe with N10billion and N144billion from FAAC, if we do not want to borrow, we just must reduce the budget to N370 billion.
But we have a budget of N489 billion. Of course, we also project that we will earn more. If we expect a smaller budget, we must ask for a reduced service. But the Lagos government responds to the totality of the demands that it received. It is about people. That is why we are a megacity. It is not because we want to be mega. It is about our number. In some states where one maternal care centre will be enough, we have delivered eight and two more are under construction.
So, we are going to have ten. Some states are okay with one. Some states have a Bus Rapid Transit (BRT) only on a single lane. We have extended BRT corridor from Ikorodu road to Epe. Once the Badagry expressway is completed, it is going there. It is in part of Alimosho like Iyana-Ipaja, Egbeda and Ikotun. In some states, only one ferry terminal will be okay.
But we have three big ferry terminals. We have opened small ones. In the city of Dubai, they have only one mono-railway. But we are building the first of seven. If we do not want to borrow, we should moderate our number. We must also moderate our demands. Until the last day, we will be working. People are still asking for service up till date. But we are already transiting.
We are careful in the manner we do things so that we do not create unnecessary problems for my successor. Inevitably, if he is going to meet deficit, it must be the deficit that he plans and he can see in the same way I started my administration with N275 billion borrowing plan. I met debt too. Do not forget that our opponent said Asiwaju Bola Tinubu has mortgaged Lagos State for fifty years because he took a N15 billion bond out of the N25 billion debt plan.
I paid it within one year because the financing of the state is steady, reliable and robust. We are the only state that has International Fitch rating of AA+ in the stable output for the future. Of the N275 billion we borrowed, we have paid N50 billion. The next tranche will mature in 2017. By the time we paid this tranche, we had N87.5 billion in our Consolidated Debt Service Account just to pay N50 billion. You will wonder how that happened.
When we took the bond at that time, there was a lot of opposition to it just like Asiwaju’s time. The state pledged that it would pay 15 percent of its IGR every month to the account of the trustees that lent us the money. At that time, our IGR was N2.2 billion. So, nobody saw IGR of N20 billion at that time. So, we are still paying 15 percent of N18 billion, N19 billion or N20 billion every month under the account and management of the trustees. The finances of this are solid.
The next governor only needs to maintain the revenue level to pay off the debt and even borrow more if he wishes. So, that is the plan. Nobody should have anything to worry about in that regard. Look at the people that are lending us money. They are seasoned financial experts. They lent us money in the year of my administration. That is a vote of confidence and they know that their money is safe. Don’t you think they will have looked at our books? It is not all states that cannot borrow money. That is the reality. If you are a banker, will you lend money to someone who cannot pay back?
About one fortnight ago, Vice-President Namadi Sambo remarked that Lagos residents were leaving the state in droves due to what he ascribed to heavy tax regime. Is this true?
I sincerely want to believe that the vice-president was misquoted. If it was true, it was a display of ignorance because how did he justify the perception that people are leaving Lagos. Is the VAT collected from Lagos being reduced compared to other states? Is the air traffic into Lagos reducing? Or have you seen a significant reduction in Lagos traffic? Has the water demand in Lagos reduced? Or has the demand for hospital services reduced? More hotels are being built in Lagos. Companies are licensing and operating in Lagos. Displaced persons from other parts of the federation are moving to Lagos. It is a very grave statement to make.
That is why I hope he was misquoted because that is the Chairman of the National Economic Council. If he misunderstands what is happening in the economic capital of the country, it may be a revealing index into their understanding of the country’s economy. It may also confirm to you some of the things you heard from the president that he received contradictory advice. Maybe, this is part of it. That is a very dangerous statement to make. It is either ignorant or diabolical. Either ways, it is not good because it tells you why the economy is not functioning if the Chairman of National Economic Council made such a statement.
Nigeria is currently facing hard times, especially economic crisis. The challenges became graver with the sharp decline in the price of crude oil and the consequent devaluation of naira. What do you see ahead?
There is, truly, hard times. It is, perhaps, self-inflicted. It is a function of the way we have managed our economy. If we could not generate power and provide the basic things, we cannot grow beyond the size of our infrastructure. No nation has done it. It is the infrastructure that measures the growth that happens. When we had crude oil selling at over $100 per barrel, what are we doing? We could not record how much we were making. We were fighting who had the accurate records. So, that is why I said it was self-inflicted pains.
If they could not build roads and generate power at $100 per barrel, what magic can you expect when the price is $56 per barrel? Some challenging times are ahead. But it is a time for us to be imaginative and creative. Do they have that creative capacity? We saw these days coming. One of the interesting things is that every dime we collected under Excess Crude Account went into infrastructure development. I documented it because this day was coming and because that is what will define how well we will grow our investment in infrastructure.
The federal government recently rolled out austerity measures, wherein it plans to increase VAT following the sharp decline in oil price. Do the states support the plan?
The money we kept yesterday has lost its value. While that debate was raging, you are living witness to it. I said let us spend this money. I argued that let us spend this money, but tie it down to life-defining projects like roads, bridges, schools or electricity. They said it was sovereign wealth fund. Where is the money now? That is the question of how imaginative we will be going forward. What are they recommending now? They are trimming off pennies and ceilings and leave the real issues. They are already saying they want to increase VAT.
What it means is that you and I are going to pay more for their mismanagement. They are coming to taxes that the vice president was alleging that we are over-taxing. So, who is right? Who is wrong? We will be affected but we will survive. The reason is that we never based our economy on oil. Our economy was based on people that this is a commonwealth. But we will create jobs.
If we create jobs and you earn income, you will contribute to the economy because if it is going to be commonwealth, let us build it by common contribution. Our tax base started growing. We cannot continue to tax the same people. We must increase the number of people, who contribute. The only way to do that is to give them work – every person, who wakes up in the morning and goes to work must contribute to the commonwealth.
Jimi Agbaje is the candidate of the Peoples Democratic Party (PDP) in Lagos State. A lot of people see him as a threat to the candidate of the All Progressives Congress (APC), Mr. Akinwunmi Ambode. What’s your take on the February 28 governorship election?
Jimi Agbaje is not a threat to us. Let us go and check the result of the 2007 election. He only got 3 per cent of the vote cast. Even his party, we have defeated PDP in all elections done since 1999. Ambode is going to defeat Agbaje with your support. This is not the place to experiment. One needs a lot of experience to achieve what we have done in Lagos. When you look at what their party has done with the country, for instance, there are missing funds, non-functioning rail, epileptic power supply and others. Do you want that to happen in Lagos?
But the Independent National Electoral Commission (INEC) must learn to do things right. We all saw what happened during the distribution of permanent voter’s cards. It is the part of the electoral process. For me, the real head of INEC should be a statistician and not a Professor or Academic. It is not about theory, it is about practical. People who should also do this job should be those who have managed distribution activities in the country. It is not a judicial work, but logistics.
The domestic economy of Nigeria was rebased last year. But what is the impact of that?
What was the rebasing all about? The best way I can describe this is to use this illustration. I continue to employ people without keeping their records. After about four years, I came up with a report that I have about one thousand people working with me. I then called you to a party to celebrate that I am the best employer, simply because I am doing today what I should have done from the first day. We are simply updating records we omitted to have updated. That was what the rebasing was all about. Since 2008, Lagos State Government has been updating its GDP performance. If you visit our website, you’ll see it there. We have updated up till 2012.
Perhaps, that is what woke up the national government from its slumber. We are monitoring, recording and keeping data of our gross domestic products and output of Lagos economy because we needed to do so. We are always under national and international scrutiny. We have international agencies doing business with us. So, we could not go to them and say we did not know our GDP. When I received French Minister for Trade and Investment, the first question he asked me after we had handshake was the size of Lagos GDP. That was 2010. I told him instantly. I assumed that if I did not know then, our meeting was off.
For me, I always have it in mind that we need to measure what we want to manage. That brings us to the impact of the rebasing. Now, we are the biggest economy in Africa. Why do smaller economies have electricity and we do not have? Okay, we are the biggest. Why is it that smaller economies have fuel supply? We are the biggest. Why are we going to the smaller economies to purchase arms in order secure ourselves? We are the biggest, yet we are importing food. As a citizen, I will be more interested in the quality of my life than the size of our economy.
Left with a few months to go, what’s your plan after office?
What I plan to do after my tenure? Honestly, I want to rest first and then I will think of other things after my rest. But I will still be in politics. For all clarity, I will remain in politics. Right now, it is campaigning. But I just want to rest after my tenure expires. It has been 12 years, 17 hours a day. I just need to stand back a little and catch my breath. But it has been wonderful.