Before outlining his five-point agenda – Wealth Creation, Economic and Political Inclusion, Poverty Alleviation, Infrastructural Consolidation and Expansion and Job Creation – Mr Emmanuel had told a crowd of supporters at the Godswill Akpabio International stadium that they came “not to celebrate the triumph of a party, but to celebrate the victory of hope.”
His message of hope was easily bought by many because he was considered a technocrat, having worked for decades in various blue chip companies including Zenith Bank where he served as an executive director before resigning in 2013 to take up an appointment as Secretary to the State Government, Akwa Ibom State.
In his second term manifesto, christened “Completion Agenda”, Governor Emmanuel expanded his five-point agenda to eight – Industrialization, Aviation Development, Security, Infrastructure, Small and Medium Scale Enterprises, Human Capacity Development, Agriculture, and Rural and Riverine Area Development.
Mr Emmanuel said in his second-term inaugural speech on 29 May 2019 that he had achieved a lot for the people.
“We came determined to rapidly industrialise this state and create employment opportunities for our teeming youths. On that score, we have achieved a lot and are rearing to do more. To date, we have established over 16 industries, most are fully operational, while others are at various stages of completion.
“Our youths have been gainfully employed in those industries and the value chain has ensured steady income to our people. Our State remains the destination of choice for foreign investors and comes second, only after Lagos in attracting the most Foreign Direct Investments” he said.
With data obtained from Nigeria’s data bank, National Bureau of Statistics (NBS), Akwa Ibom State Audit Report and BudgIT, PREMIUM TIMES explores how the state has fared in some fundamental sectors of the economy under the eight years of Governor Emmanuel.
GDP, IGR, fiscal sustainability
Akwa Ibom is the leading producer of crude oil in Nigeria with about 504, 000 barrels per day (BPD) accounting for 32 per cent of the country’s production output. Unfortunately, the state has no oil infrastructure except pipelines running across the length and breadth of its land.
Akwa Ibom wholly owns Ibom Air, established about three years ago, which is gradually dominating the country’s sky.
Akwa Ibom is the third largest economy in Nigeria with an estimated Gross Domestic Product (GDP) of N7.8 trillion, after Lagos and Rivers states in first and second position respectively.
However, the state IGR does not reflect its status as the largest oil producer and its ranking as the third largest economy in the country as it still falls far behind non-oil producing states in the country.
A key indicator of how a state is faring economically is its IGR. The IGR of a state demonstrates its fiscal strength and ability to meet financial obligations without depending on federally shared allocations.
According to the Akwa Ibom State Audit Report, the state generated N18.7 billion as IGR in 2015 – the year Mr Emmanuel came to power as governor.
In 2016, the state IGR dipped to N16.3 billion as against the previous year’s N18.7 billion. The state generated N19.5 billion in 2017. The state generated N28.2 billion in 2018, and N35.5 billion in 2019.
The IGR, however, dropped in 2020 to N30.7 billion, a development the state government attributed to the global lockdown caused by the COVID-19 pandemic.
Based on available data from the state audit report, Akwa Ibom recorded its highest-ever IGR in 2021 where it generated N38 billion. The Udom Emmanuel administration thus increased the state’s IGR from N18.7 billion in 2015 to N38 billion in 2021.
Despite the increase, however, Akwa Ibom, in 2021, was ranked 11th among Nigeria’s 36 states in respect of IGR. In 2021, the state’s IGR per capita stood at N4,832 while the capital expenditure per capita stood at N23,567 according to data from the not-for-profit, BudgIT.
Akwa Ibom has remained stagnant in fiscal performance ranking in the last two years, occupying 24th position among the 36 states in the country in 2021 and 2022. The state is ranked below Abia, Sokoto, Bauchi and other states.
The ranking shows the state has poor IGR growth and therefore depended on federal allocations to fund its projects.
Depending on statutory allocations from Abuja is regarded as a risky fiscal strategy, particularly considering the volatility of the crude oil price on which a sizable chunk of federally distributed revenue depends.
Akwa Ibom is ranked 31st out of 36, with regards to states that are less dependent on federal allocation and 33rd out of 36 (in the red line) among states that have significantly grown their IGR.
BudgIT’s fiscal sustainability index examined the country’s 36 states’ fiscal performance using several indicators. The report used four metrics to measure fiscal sustenance including the ability of states to meet operating expenses and loan repayment without resorting to borrowing.
Other key indicators are fiscal power to borrow more given a low debt burden vis-à-vis how much is generated a year and prioritisation of capital over recurrent expenditures.
Akwa Ibom’s debt profile has witnessed a steady rise under Governor Emmanuel since 1999. BudgIT recorded the total (domestic and foreign) debt profile of the state at N157.9 billion in 2015.
According to data obtained from the Debt Management Office (DMO), the debt profile of the state stood at N168.2 billion in 2016 and between 2016 and 2021 the total debt profile of the state was up by 38.9 per cent.
For instance, in 2017 the debt profile of the state had increased to N202.7 billion. By 2018, the figure went up to N212.6 billion and in 2019 the state debt burden stood at above one-quarter of a trillion naira – N252 billion.
It, however, recorded a marginal decrease in 2020, dropping to N249 billion and further dropping to N233.6 billion in 2021 representing a 6.1 per cent decrease.
The DMO is yet to produce data for the debt profile of states in 2022.
Akwa Ibom relies greatly on borrowing and was ranked the 7th most indebted state in the country in 2021. The state occupied third place in the debt sustainability index and some of its composition were as follows; debt as a percentage of revenue stood at 69.9 per cent, and debt as a percentage of GDP was three per cent.
According to BudgIT, Akwa Ibom State in 2021 had a total revenue of N334.36 billion out of which N43.26 billion representing 12.9 per cent was spent on debt servicing.
Revenue structure and spending priorities
The gross revenue from the Federal Account Allocation Committee (FAAC) in 2021 contributed 83.6 per cent to the total recurrent revenue of N190.8 billion. The same was experienced in 2020 with 83.9 dependence on gross FAAC by the state.
According to BudgIT, Akwa Ibom has to improve its revenue sourcing range and diversify its income stream; only then will it get itself out of this desperately stiff situation.
For instance, in 2020 the state IGR stood at N30.7 billion and contributed 16.12 per cent to the revenue while gross FAAC stood at N159.7 billion and contributed 83.88 per cent to the revenue in the said year.
On spending priority – the state spent N91.45 billion representing 45.7 per cent on capital expenditure while N108.8 billion representing 54.3 per cent was spent as recurrent expenditure in 2020.
It was a similar situation in 2021, Akwa Ibom recorded an IGR of N31.4 billion which is 16.6 per cent of the state’s total revenue for that year while the largest chunk of revenue came from the gross FAAC of N159.4 billion representing 83.55 per cent.
Again, considering spending priorities, Akwa Ibom’s recurrent expenditure was higher than capital expenditure in 2021 – N153 billion representing 49.6 per cent was for capital expenditure while N155.4 billion, representing 50.4 per cent, was for recurrent expenditure.
Governor Emmanuel, in keeping with his inaugural address, attracted several industries to Akwa Ibom, much more than any previous administration in the state, where many of the youth have been employed.
But the data from the NBS shows that the state is among the top states in Nigeria with a high unemployment rate.
When Mr Emmanuel became the governor in 2015, the national unemployment rate stood at 10.4 per cent while the figure for Akwa Ibom was not available.
Later, in 2018, Akwa Ibom State recorded a 37.7 per cent unemployment rate, the highest in the South-south region, followed by Rivers (36.4 per cent) and Bayelsa (32.6 per cent) while Edo State (25.1 per cent) was at the bottom in the region.
In 2020, the unemployment rate in Akwa Ibom increased to 45.2 per cent, the second-largest unemployment rate in the country. Imo State, with 48.7 per cent, occupied the first position and Rivers State, with 43.7 per cent, stood at the 3rd position.
Akwa Ibom State, under Mr Emmanuel, has one of the lowest poverty headcount ratios. According to NBS, the state currently has a poverty rate of 26.8 per cent, falling below the national average of 52.1 per cent.
The state is ranked 27th on the national poverty rate ladder released by the NBS in 2019. The agency has not released new data on the state poverty rate since it was last published.
The National poverty headcount in 2019 was 70 per cent; by 2020 it had increased to 72.32 per cent according to the United Nations (UN) Sustainable Development Goals (SDGs).
Ease of doing business ranking
A survey by BudgIT ranked Akwa Ibom as the 4th on the ease of doing business ranking in 2022 among the 36 states and the FCT. The state is ranked first among the southern states in the country but ranked behind Gombe, Sokoto, and Jigawa, which were first, second and third respectively.
Akwa Ibom has occupied the same position on the ease of doing business ranking since 2021 indicating a favourable investment climate for businesses and foreign direct investment.
Akwa Ibom is ranked second among the states with the largest number of out-of-school children in the country according to a report by the NBS in 2020.
With 581,800 out-of-school children, Akwa Ibom is behind Kano State (989, 234), which occupies the first position while Kaduna State (524, 670) is the third state with the largest number of out-of-school children in the country.
Akwa Ibom occupies the first position in the country in terms of the number of out-of-school children that are girls. It is followed by Sokoto, Katsina and Niger states in the second, third and fourth positions respectively.
On the other hand, Ebonyi, Ondo, and Delta States have the lowest number of out-of-school children in the country according to the NBS report.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.Donate
TEXT AD: Call Willie - +2348098788999