On October 20, 2014, Dr. Ifeanyi Okowa formally announced his intention to run for Governor of Delta State on the Peoples Democratic Party (PDP) platform.
His ambitions for the people and the state included, among other things, wealth creation, youth employment, and economic diversification, especially in agriculture. He also spoke up on health and education, promising to create effective policies to improve both.
Fast forward to April 13, 2015, the Independent National Electoral Commission (INEC) declared him the winner of the governorship election, having polled a total of 724,680 votes to defeat his closest contender, Great Ogboru of the Labour Party (LP), who secured 130,028 votes.
On May 29, 2015, Okowa was administered the oath of office by the then Chief Judge of the state, Justice Marshall Umukoro, at the state’s capital, marking the beginning of his administration as the 12th Executive Governor of the oil-producing state in Nigeria.
He was re-elected Governor of Delta State in 2019, and by June 12, 2023, Okowa would have completed his second term as the 12th Governor of Delta state. If his political party, the PDP, wins the 2023 presidential election, he will become the Vice President of Nigeria as he is on the ticket as the vice presidential candidate alongside his principal, Atiku Abubakar.
How well did Delta State do under his leadership? Let’s look at some of the critical socio-economic indicators under his administration and how the state fared.
Why? It is a performance review for a potential vice president who will be in charge of more than one state.
But more importantly, to spotlight important issues that directly impact citizens of the state and should influence the electorates’ decision of who they give the state’s mandate to.
Deltans, as you listen to or read manifestoes of the governorship candidates, pay attention to the following as we head into the 2023 polls.
GDP, IGR & Fiscal Strength
GDP
Based on available data, Delta state has an estimated Gross Domestic Product (GDP) of $14.8 billion. Although it is difficult to estimate the actual GDP growth rate under the Okowa-led administration due to a lack of data, the chief economic adviser to the governor of Delta State, Dr. Kingsley Emu, however, claimed that there was over a 50% growth rate.
He claimed that between 2015 and 2019, the state’s GDP increased from N2.961 trillion to N4.471 trillion. Using the average exchange rate of $306.64 for the year, this comes to $14.580 billion.
Based on the figure provided by the governor’s chief economic adviser, it could be said that the state’s GDP increased by 51% from 2015 to 2019.
GDP simply refers to the total monetary or market value of all the finished goods and services produced within a country’s borders (in this respect, Delta state) in a specific period.
IGR
One of the ways to evaluate a state’s capacity to drive long-term economic activity, like boosting employment and offering effective public services, is through the level of independent revenue it can generate. The Internally Generated Revenue (IGR) of a state demonstrates its financial strength and ability to function independently of the allocation from the federation account.
Even though Delta state’s internal revenue increased annually during the review period, it is clear from our analysis that the state is mainly dependent on allocations from the Federation Account Allocation Committee (FAAC).
From 2016 to 2019, the IGR of Delta state grew steadily. But in 2020, it dipped by 7.65%, bringing the total IGR for 2020 to N59.73 billion from 64.68 billion in 2019. This drop may be attributed to the impact of the coronavirus that resulted in the shutdown of major economic activities in the country and globally.
Although the 2021 full-year data is not published yet, the half-year data provided by the NBS shows that the state generated N41.93 billion internally between January and June, bringing the total internal revenue generated by the state between 2016 to 2021 half year to N380.46 billion.
Its FAAC allocation, on the other hand, was N802.89 billion from 2016 to 2020, indicating a heavy dependence on FAAC allocation, a condition that Dataphyte had identified in a previous report as worrisome, especially as the federal government struggles with revenue issues.
Apart from heavy dependence on FAAC allocation, a review of the state’s budget performance report for the same period under review reveals that the actual IGR — the amount generated at the end of the fiscal year — has always been less than the projected amount. Except for 2020, Delta State has never met its internal revenue projections.
In 2016, the Delta state government projected to generate N75.40 billion internally as part of the revenue to fund its budget for that year. However, at the end of the year, it generated only N44.06 billion, representing 58.43% of IGR performance.
The following year, the projected internal revenue dropped to N70.17 billion, and the state could only generate N51.89 billion. This shows 73.95% internal revenue performance.
The projected IGR increased in 2018 and 2019, and the two-year total revenue also did. The IGR performance stood at 81.89% and 88.11%, respectively.
In 2020 however, the state generated more than its projected internal revenue. The IGR performance for the year was 121.27%.
It is important to emphasise that the 2020 budget revision, which reduced projected revenue to N49.26 billion from the initial N71.01 billion as a result of the negative impact of the coronavirus on the economy, played a significant role in the 2020 IGR performance.
Overall, the state has always fallen short in its targeted internal revenue. Whoever emerges as the state’s next governor must have clear plans to achieve the internal revenue generation plans and targets.
FISCAL SUSTAINABILITY
For fiscal sustainability, Delta state ranks poorly. BudgIT’s State of the States ranks the fiscal sustainability of the 36 states using 4 indexes. The indexes used include the ability of states to meet their operating expenses; the ability to meet operating expenses and loan repayment without having to borrow; fiscal power to borrow more given low debt burden vis-à-vis how much is generated in a year, and prioritisation of capital over recurrent expenditures to determine the health of states.
According to the 2021 ranking, Delta State placed 31st, down from its previous position of 23rd in the 2020 ranking, demonstrating poor performance. The state’s poor performance in 2021 was attributed, among other things, to its low prioritisation of capital expenditures and growing debt-to-revenue ratio.
In 2016, the state had a total domestic debt of N241 billion. This dropped to N228 billion the following year; then, it picked up again in 2018 and grew to N248 billion in 2020. By December 2021, Delta state domestic debt dropped to N155 billion, making it the 7th most indebted state in the country.
While on external debt, Delta state ranked as the 10th state in Nigeria with the highest external debt with a total of $61.14 million as of December 2021. Except in 2020 and 2021, Delta state recorded an increase in its external debt every fiscal year.
Unemployment rate
When Okowa took office in 2015, he declared that his administration would work with multinational corporations in the state to enhance job opportunities for the residents of the state.
To this end, the Okowa-led administration established the Office of the Chief Job Creation Officer (OCJCO) to carry out its pledge to create jobs for the people of the state.
Despite the establishment of the OCJCO and the jobs the state government said were created through various programmes such as the Graduate Employment Enhancement Programme (GEEP), Skills Training and Entrepreneurship Programme (STEP), and YAGEP, the state’s unemployment rate has been continually increasing.
The most recent labour force statistics by the National Bureau of Statistics (NBS) put the unemployment rate in the state at 43.3%.
A 43.3% unemployment rate in 2020 means that at least 4 out of every 10 Deltans are unemployed. In the preceding years, the unemployment figures were lower, which indicates an increase in the unemployment rate in the state.
This should be an area of focus for the electorates and governorship candidates in the upcoming election.
Poverty rate
One of the many challenges of Nigeria today is the increasing poverty rate. According to 2019 NBS data, Delta State has the second-lowest poverty rate in the nation; however, the 2019 6.02% poverty rate may have gone up because the national poverty rate has significantly increased due to the COVID-19 crisis’s effects, population growth, and a “galloping trend” of inflation.
By the end of this year, the World Bank has projected that the number of persons living in poverty in Nigeria may hit 95.1 million, almost half of the country’s population. In 2020 it was 40%. With increase in the national poverty rate, the sub-nationals will also experience a corresponding increase which therefore calls for a clear plan from all gubernatorial candidates in the state on how they intend to tackle this issue.
Budgetary Allocation to Key Sectors – Education, Health & Agriculture
An analysis of the budgetary allocation to the education, health, and agricultural sector in the past 6 years shows that Delta state has never met the recommended benchmarks for expenditure on health and agriculture. However, it has always surpassed the minimum benchmark for education.
The United Nations Educational Scientific and Cultural Organization (UNESCO) recommends that governments should allocate 15% to 20% of their total public spending for the fiscal year to education.
According to an analysis of Delta State’s education budget from 2017, the state has consistently allocated at least 17% of its annual budget to education. The budgetary allocation for education in 2019 even went above the UNESCO recommended 20%.
However, the state’s fiscal commitments to agriculture and health have never met the recommended benchmarks. An agreement reached in Abuja in 2001, popularly known as the Abuja Declaration, stipulated that the government should set aside 15% of its annual budget to improve the health sector.
A review of the state’s allocation to the health sector shows that the state has never met that 15% mark. Its yearly health spending has consistently been 6% of total spending, hitting 9% only in 2020.
This increase in 2020 could be attributed to the coronavirus outbreak as the share of annual spending on health quickly fell back to 6% in 2021 and 2022.
In a similar vein, Maputo’s recommended allocation for agriculture has not been met. According to the declaration, governments are required to allocate at least 10% of their public spending to agricultural and rural development. Yet, the Delta state government has never allocated up to 1.5% of its public expenditure to the sector. The highest share of its annual budget to the agriculture sector since 2017 was 1.2%, far below the recommended 10%.
As nations begin to imagine a future beyond oil, other sectors like agriculture prove to be viable options. However, to maximise the sector’s full potential, more investments need to be made, particularly the type that will enhance the sector’s productivity. This should therefore form a significant part of the campaign promises of the governorship candidates of the states for the upcoming election.
Number of Out-of-School Children
One of the building blocks of any society is education. The United Nations regards it as a key to escaping poverty.
According to data from NBS, there are 145,996 out-of-school children in Delta state as of 2018. This figure places the state among the 10 out of the 36 states with the lowest number of out-of-school children in the country.
However, the electorates will have to look out for the candidate with a robust plan to improve access to education in the state, particularly for the boy-child, as they account for 97.5% of the total number of out-of-school children in the state. The quality of learning, school infrastructure, and teachers’ welfare is also critical.
Ease of Doing Business Ranking
A conducive business environment is one of the prerequisites for economic growth and poverty reduction. A primary factor that attracts local and international investment to a country is the business environment. Unfortunately, Delta state ranks really low on this.
Delta ranks 35th out of the 36 states and the Federal Capital Territory (FCT) on the subnational ease of doing business ranking done by the Presidential Enabling Business Environment Council (PEBEC).
The state scored only 4.32 out of the 10 score indexes, which were assessed on four thematic areas — Infrastructure and Security, Transparency and Access to Information, Regulatory Environment, and Workforce Readiness.
To attract investment to the state, which will create more job opportunities for the people, and further boost the IGR, improving the business environment should form a critical part of the plan of the governorship candidates in the state.
Under-5 Mortality Rate & Access to Health
The under-five mortality rate in Delta state is estimated at 53 deaths per 1,000 live births. The state is the third out of 36 states, and FCT with the lowest under-five mortality rate. However, commitment to reducing mortality rates and improving access to healthcare in the state, especially for children, women, and vulnerable groups, must be clearly spelt out in manifestos and agendas, especially in light of the state’s healthcare budgeting which is low and far beneath accepted benchmarks.
While there are many other socio-economic indicators, these few provide templates to assess the agendas of guber candidates and the capacity of a potential vice president of the country.