Born on 29 May 1960, Dapo Abiodun is the 4th democratically elected governor of Ogun state, elected in 2019. Although his journey, particularly getting the ticket of his party and eventually winning the gubernatorial election, wasn’t an easy ride for him, by May 2023, Dapo would complete his tenure as the state governor.
According to him, his “love” for Ogun state and its people and his interest to further serve is why on April 28, 2022, he declared his intention for a second term in office, stating that he wants to sustain the quality governance he started about four years ago.
As Dapo Abiodun and the other governorship candidates in the race continue to prepare for the state governorship election scheduled for next year, in this article, Dataphyte examines certain important socioeconomic indicators in the state, particularly assessing how they fared under the leadership of Dapo Abiodun, who has been at the helm of affairs of the state from since 2019.
What has Governor Abiodun’s “love” earned the residents of the state?
GDP, IGR & Fiscal Sustainability
GDP
Gross Domestic Product (GDP) refers to the total monetary or market value of all the finished goods and services produced within a specific area over a period of time. The GDP of a state gives information about the size of the economy of the state and how the economy is performing.
The most recent Gross Domestic Product (GDP) data by the National Bureau of Statistics (NBS) was in 2012. The GDP of Ogun state was put at $10.47 billion and ranked as the 9th state in Nigeria with the highest GDP. Since then, no subnational GDP data has been published. As a result, we are unable to evaluate the state’s GDP growth rate under the Abiodun administration due to the lack of data.
However, in a recent report published by BudgIT, the state is said to have an estimated GDP of N5.03 trillion, placing it the third state in the South-West region and eighth in the country with the highest GDP.
IGR
Another metric to assess how a state is faring economically is the amount of Internally Generated Revenue (IGR) it is able to generate.
The IGR of a state demonstrates its financial strength and its capacity to drive long-term economic activity, like boosting employment and offering effective public services. A state’s ability to function independently without undue reliance on a monthly allocation from the federation account is also shown by the amount of internal revenue it can generate. Therefore, it is important in this evaluation.
So far, under the Abiodun-led administration, Ogun state has fared relatively well, except for the sharp decrease in IGR recorded in 2020. When the administration assumed power in 2019, it generated N81.42 billion in IGR, a drop from the 2018 IGR of N84.55 billion.
In 2020, the state’s IGR dipped by 37.9 percent to N50.56 billion, placing it among the 18 states in the country that were not resilient enough to withstand the fiscal shock brought on by the deadly coronavirus. Nevertheless, it still had the 5th largest IGR in the country and the 2nd largest in the South West region, only behind Lagos.
In 2021, the state recovered from the impact of COVID-19 and demonstrated its financial sturdiness, reaching an all-time high IGR of N100.73 billion.
This puts the state among the top four states in Nigeria that generated the highest IGR. This state’s year-on-year growth rate of 99.23 percent was the highest among the 36 states and Federal Capital Territory (FCT).
Analysed on a per capita basis, Ogun state’s IGR in 2021 stood at N16,370, the second highest among the 36 states. Compared to the national average of N7,944 in 2021, the state’s IGR per capita is two times higher.
In addition to the annual positive IGR growth the current administration has recorded, the state has also maintained its status of continually generating more internal revenue than its FAAC allocation, showing some degree of independence.
Monthly, the Federation Account Allocation Committee (FAAC) disburses funds among Nigeria’s three tiers of government. The disbursed funds are a collection of the government revenue generated from tax, oil sales, and other statutory sources in the previous month.
Because their IGR is always lower than their FAAC disbursement, many states in Nigeria depend heavily on FAAC disbursement for survival. However, Ogun state stands out in this aspect as it has constantly generated more internal revenue than the amount it receives as FAAC allocation, as shown in the chart above.
In the period under review, Ogun state received N120.16 billion as FAAC disbursement, while it generated N232.17 billion as IGR. This shows the state’s ability to function independently of the allocation from the federation account, one of the only 2 states in Nigeria that have recorded this feat in the period under review.
While this is commendable, whoever emerges as the winner in the 2023 election will need to consolidate these gains and devise means to increase the state’s internal revenue further, as data suggest that the revenue the state generates cannot cater to all its needs, which may be responsible for its high borrowings in recent times.
FISCAL SUSTAINABILITY
In 2021, BudgIT assessed the fiscal sustainability of the 36 states in Nigeria’s using four indexes which include the ability of a state to cover its operating costs, and loan repayments without borrowing, its fiscal capacity to borrow more, given its low debt burden relative to its annual revenue, and the prioritisation of capital over recurrent expenditures.
From the 2021 fiscal performance ranking, Ogun state came in 19th place, a drop from its 3rd position in the previous ranking. The drop in the 2021 ranking was attributed to the state’s sharp IGR decline in 2020.
Following its bounce back and increase in its 2021 IGR, Ogun state emerged in 10th position in the 2022 fiscal ranking, indicating an improvement in its fiscal sustainability. However, this improvement did not extend to its debt profile, as data shows that the state has been on a continuous borrowing spree under the Abiodun-led administration.
According to the data from the Debt Management Office (DMO), at the end of 2018, Ogun state had a total domestic debt of N98.72 billion. By December 2019, the debt had increased by 44.13 percent to N142.29 billion.
A further increase was recorded in 2020. This continued in 2021, bringing the total domestic debt to N232.26 billion, and making it the second state in Nigeria with the highest domestic debt as at the end of 2021. To put this in context, Ogun state increased its domestic debt by 63.49 percent between 2019 and 2021.
The state’s foreign liability also increased. From $100.61 million in 2019, it grew to $120.29 million in 2021, ranking as the 9th state in Nigeria with the highest external debt.
The state’s voracious appetite for borrowing is something to worry about, especially as the state ranks low on its debt sustainability in the BudgIT’s 2022 state of states report. Plans to repay these liabilities and drastically cut down borrowing should be one of the top agendas of whoever emerges as the next chief executive officer of the state.
Unemployment rate
Before Abiodun’s election, the unemployment rate in the state was 16.4 percent, and it ranked as the 5th state with the lowest unemployment rate in the South-West region and 6th among the 36 states.
Addressing unemployment was one of his many promises for the state. So, on the assumption into office, the Abiodun-led government created the Ogun Job Portal to tackle the scourge of unemployment. Still, in the quest for job creation, Abiodun sent a Local Content Bill to the state House of Assembly. The Bill was to compel companies operating in the state to consider the state indigenes in employment before any other people. The state also launched the FADAMA Graduate Unemployed Youths Scheme (FADAMA GUYS) programme to tackle the issue of youth unemployment in the state.
These various initiatives by the government may not have yielded the intended results as the Q4 2020 labour force statistics released by the National Bureau of Statistics (NBS) show that the state unemployment rate has risen to 27.3 percent and ranks as the 4th state with the lowest unemployment rate in the country. There are worries that this may have further increased, given that there haven’t been any new unemployment statistics published since the first quarter of 2021. Whoever emerges as the winner in the 2023 governorship election will need to develop strategies to create jobs and reduce unemployment in the state.
Poverty rate
Another key indicator to consider is the state’s poverty headcount ratio. In 2019, using an actual per capita expenditure of N137,430 per year (or N376.50 per day) as the basis of their poverty rate measurement, NBS put Ogun state’s poverty headcount at 9.32 percent — ranking as the 4th state with the lowest poverty headcount in Nigeria.
In 2020, the state’s governor restated his administration’s commitment to lifting the people of the state out of poverty. Matching actions with words, the state government set up several poverty alleviation initiatives, one of which is the Ogun State Public Works Agency (OGPWA).
The government also keyed into the Federal Government Social Investment Programmes such as Home-GrownSchool Feeding Programme; N-Power; Government Enterprise and Empowerment Programme (GEEP); and Cash Transfer Programme, which are aimed at creating jobs and poverty alleviation.
These initiatives may not have yielded the intended results as the latest National Multidimensional Poverty Index report released by NBS on November 18 reveals that the state now has a poverty rate of 68.1 percent. It is essential to highlight that NBS used the real per capita expenditure of N137,430 to measure the 2019 poverty rate. The 2022 multidimensional poverty index indicators are health, education and living standards, and work and shocks.
With a 68.1 percent poverty headcount ratio, Ogun state now has the largest population of people who are multidimensionally poor in the South-West region. This should be a significant concern for the candidates in the governorship race in the state.
Budgetary Allocation to Key Sectors – Education, Health & Agriculture
Investment in education and health is crucial to the socioeconomic development of every society. The United Nations Educational Scientific and Cultural Organization (UNESCO) recommendation urges governments to allocate 15 percent to 20 percent of their total public spending for the fiscal year to education. For a similar reason, the Abuja Declaration recommends allocating 15 percent of annual government spending to the health sector.
An analysis of the Ogun state government budgetary allocation to the education and health sector under this current administration shows that the state has consistently met the minimum benchmark for education, allocating as high as 22.13 percent to education in 2019. However, this figure has dropped in subsequent years.
On the other hand, allocation to the health sector has always been below the 15 percent recommended benchmark except for once in 2020. The 2020 allocation to health is the highest share of the state’s budget that has gone to the health sector in the period under review.
Similarly, the state’s share of budgetary allocation to the agricultural sector has been below the advised benchmark. According to the Maputo declaration, governments are required to allocate at least 10 percent of their public spending to agricultural and rural development.
Although the Ogun state government recognises the importance of agriculture and indeed keyed into some agricultural initiatives such as the Central Bank of Nigeria’s Anchor Borrowers’ Programme (ABP) to maximise the state’s agricultural potential,, its financial commitment to the sector has been little.
So far, under his administration, the government has never allocated up to 5 percent of its annual spending to agriculture.
The state’s highest share of annual spending on the agriculture sector was in 2019, just 4.36 percent, far below the 10 percent recommended benchmark.
Ogun state has a vast (about 74 percent) arable land, which is optimal for agricultural activities. The state also has vast rubber plantations in commercial quantities estimated at 500 hectares. With adequate investment/financial commitment, the state could earn considerable revenue from the sector, which will boost its economy. This should be an area of concern for the candidates in the upcoming election, with plans to increase investment in the sector to maximise its vast potential.
Number of Out-of-School Children
According to data from NBS, about 10.19 million children (5-14 years) are estimated to be out of school in Nigeria. Of this figure, Ogun state houses 244,426, with boys accounting for 64.21 percent and girls 35.79 percent.
To encourage school attendance/enrolment in the state, the Abiodun-led government promised to set up various incentives to encourage attendance, in addition to the Ogun Home Grown School Feeding Program.
While no new out-of-school children data has been released under this administration to assess the impact of the various initiatives adopted by the government to reduce the number of out-of-school children in the state, the current figure of out-of-school children places the state as the 19th state that houses the most number of out of school children in the country. Plans to reduce the numbers should be top of the agenda of the candidates in the race, especially now that UNESCO stated in its new report that the number of out-of-school children in Nigeria has risen to 20 million.
Ease of Doing Business Ranking
A conducive business environment plays a crucial role in attracting investments to a state. It is one of the primary factors investors consider before choosing an investment destination.
Hence, in 2019 when the current administration assumed office, the governor stated that one of the cardinal economic visions of his administration would be to create an enhanced business environment that would enable the state to sustain the existing industries in the state and attract new ones.
While there is no data to have a sense of what the business environment was before the current administration came into office, the most recent subnational data on the ease of doing business ranked the state 19th out of the 36 states and Federal Capital Territory (FCT). The state had an overall score of 5.28 out of a total index score of 10.
The ranking is based on the Ease of Doing Business survey conducted by the Presidential Enabling Business Environment Council (PEBEC) and published in 2021. The 36 states and FCT were assessed on four thematic areas — Infrastructure and Security, Transparency and Access to Information, Regulatory Environment, and Workforce Readiness.
The state’s score is slightly above average but more needs to be done to improve the business environment. Thus, it should be a point of concern for the candidates.
Under-5 Mortality Rate & Access to Health
The final indicator, perhaps the most important in the appraisal, is the under-five mortality rate in the state. Under-five mortality is the probability of a child dying before his/her fifth birthday.
According to data from NBS, Ogun state has the lowest under-five mortality rate in the country — 30 deaths per 1,000 live births. This is far below the estimated national average of 132 per 1,000 live births and the 62 deaths per 1,000 live births in Lower-Middle-Income Countries in Sub-Saharan Africa.
It is important to point out that the NBS data is as far back as 2018, before the Abiodun administration came into office. Since then, no data has since been released on this indicator by the NBS. Thus, we cannot assess his performance. Nevertheless, using the 2018 data, the state’s under-five mortality rate is higher than the Sustainable Development Goals (SDGs) target of 20 per 1,000 live births. Commitment to reducing the mortality rates and improving access to healthcare in the state, especially for children, women, and vulnerable groups, should also be an important agenda of the state’s next governor.
Subnational Audit Efficacy Index
The Paradigm Leadership Support Initiative (PLSI) assessed the level of transparency and accountability in the management and utilization of public funds in the 36 states through the lens of public audit and ranked them accordingly.
The assessment of the 36 states was done on 6 scoring criteria: the audit legal framework; audit mandate; type of audit document produced and published; type of audit conducted; citizens’ participation in the audit process; and the effectiveness of Public Accounts Committees (PAC).
In the 2021 ranking, Ogun state came 19th place with an overall score of 64%. Although the state dropped from its previous 18th position, it recorded higher scores in the latest ranking. Among the 6 states in the South-West region, Ogun state ranked as the 3rd best. Nonetheless, there is still more to be done by the government in being transparent and accountable with its management of public finances.
Open Data Compliance
The States Fiscal Transparency, Accountability, and Sustainability (SFTAS) project is designed to incentivize open governments. The project provides grants to states based on indices that include the openness of fiscal transparency and accountability data, like procurement, audit reports, budgets, implementation of e-procurement systems to improve their procurement laws, among other things. The project aims to foster a culture of transparency, accountability, and sustainability in public procurement practices.
According to Open Contracting Partnership (OCP), as of October 2021, 26 states in Nigeria now have open contracting portals where they publish some form of contracting data to foster transparency.
Ogun is among the states in Nigeria that have created its procurement portal. Checks by Dataphyte show that the open contracting portal is active, with information posted regularly for scrutiny by the public. Their budget and budget performance reports is also published on their website.
As the people of Ogun state head to the polls to decide who will be their next governor for another four years on March 11, 2023, these critical indices should be front and centre in their minds. The mandate should be given to the candidate that can build on the gains and turn around the losses.