Why We Created Public Private Partnership Office, Harmony Holdings in Kwara, By Ahmed

Date: 2013-03-17

Kwara State Governor Abdulfatah Ahmed recently fielded questions on a number of issues during the “Governor Explains,” a live monthly interactive session with the people of the state. Here are excerpts from the session as recorded by Hammed Shittu

Recently the Nigeria Meteorological Agency (NIMET) listed Kwara among the states likely to experience heavy rainfall this year. What is the government doing to prevent a reoccurrence of last year’s flooding in some parts of the state?
The flood we experienced last year was at a very high level and it came with its own lessons. Part of the lessons we learnt was that our people were too close to the banks of the river and they were not very conscious of the challenges that usually come with heavy rains and most importantly the discharge of water from the dam. Last year, we went round to our people with the support of the federal government on advocacy level on the need to relocate to safer zones and most importantly that they should recognise that this thing would possibly come on yearly basis, especially with the current global climate situation. On the strength of that we are re-emphasising our advocacy that our people should move from areas that are prone to floods. You will also recollect that part of the funds that came in from the federal government and the state, in addition to making relief materials available, were used for infrastructure, especially roads to enable them move from the current locations to safer environments. So, as a government, we are conducting our advocacy on a very serious level: both at the media level, but most importantly through the traditional rulers to ensure that our people heed to the current threat of flooding as a result of early rains.

We understand that you signed an MOU on the Community Health Insurance Scheme. How important is this to your administration’s healthcare delivery policy?
Basically, looking at our healthcare delivery policy, it could be recalled that in the last administration there were issues of support for the primary health sector and also there was a lot of work that was done under the Millennium Development Goals (MDG) to ensure that our primary health centres were brought to levels that they were usable for our people. Most importantly, we launched the Community Health Insurance Scheme in Shonga where it was pioneered. Coincidentally, the Emir of Shonga, who is a major proponent of primary healthcare, was also very visible in that process. Availability of healthcare services from as low as N300 per annum significantly improves the access to quality healthcare as we saw in Shonga. Against that background, we sought to expand it to Kwara Central and Kwara South.

Of course we did something at Alapa to pioneer what we wanted to do in Central (Senatorial District) and we took it to Kwara South. So the whole concept of the M.O.U is to expand the programme so that more people would be able to access healthcare at a very low rate. We have seen the success of the Shonga Model. We now want to make it state-wide so that a lot more people will have access to healthcare delivery because it is not enough for us to put infrastructure in place. At the inception of this administration, we started putting five general hospitals into shape. The most significant one is the General Hospital in Ilorin that was abandoned by the University Teaching Hospital after they moved to their permanent site. We are trying to form one of the best general hospitals in Nigeria today with modern equipment. We are upgrading the ones in Offa, Omu-Aran, Kaiama and Share to the same level. We will give them the necessary materials –human and equipment-to make them functional. At the same time we need to work on accessibility for our people. It is that leg of accessibility that led us into signing the MOU with this Dutch group that is going to support the health insurance scheme, which will allow our people to access healthcare with as low as N300 to N400.

Why was it necessary to set up a Public Private Partnership Office (PPP) office when we already have Harmony Holdings in the state?
Harmony Holdings is a company that will put together all the small companies that state government has interest in either as a minority or majority shareholder such as Kwara Hotels, Kwara Transport, Kwara Properties and others that the state has invested in but has not been making money from and bring them to profitable levels. So, we decided to put all of them together into one platform and build a strong management that will drive them to profitability.

The whole essence of setting up Harmony Holdings is to be able to earn money to add to the Internally Generated Revenue that will support growth and development. However, you will recognise the fact that development these days is not carried out by government alone. Government needs to partner with investors. These investors will not just enter the state and begin to work. They must see what we have on table, which requires access to information rather than walking from one ministry to the other to find out what information they can get before they can take informed positions on investments. We, therefore, decided to package all the information into one office, which we call the Public Private Partnership office. In this office, they will get all the information they require to take informed decision on the desired level of investment. The PPP office will package the relationship between the state government and the private sector and hand it over to Harmony Holdings. So the PPP office is a packaging office, Harmony Holdings is the management office.

It has been reported that Fitch has withdrawn its rating of Kwara State. Sir, can you clarify the situation?
Fitch is a rating agency and there are a lot of rating agencies, both international and local. Rating agencies do not go to people. It is you who will decide that you want to be rated because you feel that you have done well. You decide to be rated for a purpose. As at the time Kwara State decided to be rated no state in Nigeria had been rated. For you to go out and be rated you must have showcased yourself in certain areas of efficiency– financial management or your accounting system. So when you have been able to benchmark yourself against certain best practices you want to be seen to be doing well. It was premised on this that we as a state decided to invite an international rating agency, despite the existence of a plethora of local rating agencies. It was a major feat for Kwara State because even Nigeria as a country only invited them in 2002. Of course, we have commercial banks that have been inviting them for rating to demonstrate their capabilities to relate with their foreign counterparts and be seen to be benchmarking against best practices.

On the strength of that, we wanted to explore the possibility of not only accessing the capital market but also showcase ourselves to the world as benchmarking against best practices. Hence, we invited Fitch to rate us. We sought to use the rating as further criteria to set standards for borrowing in Nigeria but we found out that it was a little bit herculean as not every state was available for rating. Making it a criteria would have stalled capacity of some states who have not worked up to what we have seen to be able to access credit. Be that as it may, Kwara State became the first state in Nigeria to be subjected to an international rating agency. We all saw the good results of the rating at that time. However, rating is done transitionally. In other words, you do it for a particular transaction. If you want to continue to be rated you continue to pay for it and you continue to submit data which will be analysed. We did it up till last year. We now feel that since we don’t have any major thing we require the rating results for now we can step it down this year. In future, when we require rating for a purpose we will invite them again to rate us. So our withdrawal from Fitch has nothing to do with the state of our economy.

There is this talk that Harmony Holdings is another way of channelling public assets unto private hands. How do you react to this?
I don’t know how people understand ownership of business by private hands because everything under Harmony Holdings is largely government-owned. The only areas that are in private hands are areas where the state has a minority shareholding such in Kwara Furniture, where we are partnering with a South African Company to set up a furniture factory. Another example is Kwara Transport Services Corporation. It just ran on its own. There were times the company accessed loans they could not even pay from their normal course of activity.

Today, Kwara Transport is running profitably. Harmony Holdings is designed to bring efficiency into government owned businesses. By the end of the first quarter of this year, the result of the financial activities of each of these strategic business units encapsulated in the Harmony Holdings Company would be published. You will then see why we have taken over these companies with Harmony Holdings. They have moved from inefficiency to efficiency and what monies we are able to get from them would naturally be reflected as an inflow into our Internally Generated Revenue, which will be captured at our budgeting and be made public. It is not secret. That is one leg of it. The other leg is for you to be able to convert government business to private business you must do what is called private shareholding arrangements. In other words, we must issue I.P.Os – Initial Public Offers. You must register that you want to go public, issue out shares that will be bought by individuals or a core investor. We are not doing any of these things. What we are doing is that we are trying to introduce efficiency into the management system by separating the board from management and allowing management to do its job, create efficiency, generate revenue, and make revenue available to the state government for capital projects.

The Commissioner of Police in Kwara State, Mr. Chinwike Asadu, was shot dead in Enugu recently. What do you think we can do as a people to overcome challenges of insecurity?
Insecurity is one of the major problems that Nigeria is faced with today. Unfortunately, we take security for granted that is why you see perpetration of crime at very high levels. It is a very sad situation. We need to recognize the fact that security is a collective responsibility and not the responsibility of just security agencies. For those of us who have the opportunity of watching how crime is managed in developed countries it could be seen that the citizens have very critical roles to play in helping the security agencies who are not magicians. They require information and it is information that they get they are able to work with to help us solve most of the security challenges. But I am happy that the federal government has decided to take the bull by the horn by ensuring that we have a very strong security system.

We cannot, however, overcome these challenges overnight. It will take time but the most important is that we need to pool resources at the federal, state and local government levels. Also, we need to ensure that we play our own roles by supporting security agencies with information. Where crime has been perpetrated, we should be seen to be helping the police to unravel this situation. We will begin to see a lot more efficient police force and other security agencies. The death of the Commissioner of Police is very sad. It is a reflection of not only inefficient police force but also a reflection of the insensitivity of Nigerians. These crimes are not done in isolation, there are usually people around. When we begin to support security agencies with information results will come. Government too must deploy resources to ensure that security agencies are able to play their roles in curbing crime.

Some weeks back you invited the traditional rulers of Offa and Erin-Ile to a peace meeting. Without prejudice to the Judicial Commission of Enquiry, do you see peace coming soon?
Obviously, that is part of the responsibilities we are there for. We must ensure that we allow peace to reign, not in the short term or medium term only but also in the long term because we cannot afford to allow ourselves to be dragged into communal problems that will serve as drawback for our economic growth. In life we must learn to give and take. You can never get everything exactly the way you want. In any nation building process, you must learn to give and take. Where there are challenges we must understand the fact that violence has never been a solution. Rather, dialogue has always been the solution. That has been what we have been advocating to not only Offa/Erin-Ile communities but all communities that are prone to this kind of problem.

I am happy that by the time we invited the two community leaders they understood this and they also vowed that they will ensure that they leave no stone unturned to continue to embrace peace because it is the only solution. Now there has been destruction of life and property, it hasn’t solved the problem. So the two community leaders have vowed to adhere strictly to terms of peace that will guarantee the security of lives and property because they know that even as traditional rulers, when there is no peace in their domains they cannot effectively discharge their responsibilities.

Hopefully, the judicial commission we have set up will address all the issues that have been carried on these Offa/Erin-Ile communal problems. We want to give it a permanent solution. We also encourage them to recognize the fact that Offa cannot move away from Erin-Ile, Erin-Ile cannot move away from Offa. The only thing that can guarantee safety of lives and property is peaceful co-existence and an integral economic platform that will engage all the youths not only from Offa and Erin-Ile but the complete axis – Ijagbo, Igosun, Ipe, Ojoku etc. Everybody will come together as an integral economic platform so that the youths can be engaged and can be seen to be doing something fruitful as against being involved in communal clashes which is going to leave a bitter taste in their mouths and a bitter taste for coming generations.

Sir, what has been done to ensure that political office holders impact positively on the people at the grassroots and what has been put in place to ensure that 2013 budget is fruitfully implemented?
We have started in very strong terms that all political office holders, either elected or appointed must make themselves available to their various communities so that people begin to understand government policies and feel the impact of government. It is a continuous thing and we want to assure that you will begin to see improvement on how our political office holders and elected officers relate with their people at home. For the budget, it has been broken down into Medium Term Sector Strategy Terms and has been modulated. We have a Price Intelligence Unit and Budget Monitoring Unit that will ensure that all budgetary provisions are adhered to strictly because we won’t allow wastage. Our resources are small. We have never allowed wastage to be part of our business. When you don’t have enough you can’t afford wastage. That is why we articulate everything we want to do clearly in the budget and we have always ensured that we adhere to the budget in terms of our expenditure patterns.

Your administration is setting up mega schools and it is obvious that the schools on ground need attention. Why is this so?
Schools, as it were, cannot be approached from one singular platform. Yes, we have inherited a whole lot of problems from past administrations that have been on ground in the last 20 to 30 years. Our schools have been allowed to undergo major infrastructural decay. So in our desire to support them we have to look for different strategies on how to meet these major challenges. The first one is that we are in the process of making infrastructure available at various schools across the state. But, then, we cannot deploy all the resources we have to all the schools because we don’t have such resources. The essence of forming mega schools is to take advantage of the fact that every school cannot get, for instance, the desired level of laboratory, ICT and other training facilities. So when we create mega schools they will not only create room for more people they will also serve clusters of schools so that we don’t necessarily have to deploy resources. They can also share from that platform. It is just a way of managing our resources to ensure that everybody gets a piece of the action.

What are you doing on regional integration with the South-west and other regions?
It is something we have always looked forward to. Unfortunately, sometimes we find it difficult to separate politics from activities that are not political. What you have said ordinarily is a thing that should have been happening between sister states that are close by. However, because there has been too much partisan colouration to everything that is done you hardly find platform for cooperation. But with this kind of suggestion coming up from people like you meaningful Nigerians we begin to see how to separate partisan colouration from the need to move the society forward. Our economic integration is open to anybody who wants to cooperate with us, especially where we have similar advantages. We will cooperate with anybody that signifies interest to cooperate with us as a state.

I would like to commend you on the expansion of Sango Road (in Ilorin). Should there not be an alternative route that will lead to Apata Yakuba-Oke-Oyi axis? Ilorin is growing into a mega city.
I agree with you perfectly well. There are thousand and one things that are desirable for Ilorin and other parts of the state. If we had all the resources we want, this state will be something else. It will be a mega city beyond our imagination. Unfortunately, we are constrained by resources.


Largely because we had allowed infrastructure to decay over a period of 20 to 30 years, we are faced with the challenges of rehabilitating old roads. If the concern of every administration that comes in is to face new roads, then half of the problems would have been solved. But by the time every administration comes, you have a plethora of roads that have been abandoned. It is herculean to get the resources to get them to the desirable levels. I will give you an example: look at the Kaiama-Kishi road. It is a federal road. To fix that road will cost us a minimum N8billion. That is about 3 months’ federal allocation.

The International Aviation College is a pacesetting institution. It has been said that the state government will nurture the college to profitability and sell off. Is that a fact?
Government has responsibility of creating an enabling environment for development. Government is not in the business of running business. Where you see government involved they are helping to jump start. When you help to jump start you get them to that level, you allow those who know how to do that business to run it. Look at the typical example of Nigeria. How many government-owned businesses have been successful? Look at Nigeria Airways. Look at Jebba Paper Mills. Look at the Bacita Sugar Company and a plethora of others. People have to go back to the history of how governments become involved in businesses. When we came out of colonization, the economic power was low so government had to support people by getting involved in what people ordinarily should be doing. So, when government got them to that level, ordinarily government should have withdrawn and allow the private sector to drive it. It is the private sector that drives it. It is not government. If we get involved, for instance, in running an aviation business it is going to form a kind of diversion for government.

So when we say that we are starting an Aviation College we have seen opportunities in the Aviation Industry and we have accessed funds from the capital market to set up an aviation college. So, for the Aviation College, we are trying to get it to efficiency levels. Once it is there, we will allow it to run professionally. Currently, we fund the school 100 per cent because we want them to learn the ropes. Eventually, we will retain 30 per cent and the remaining 70 per cent will be taken to the capital market. When you go to the market, you either get core investors or a plethora of investors who are in the business and can continue to bring their money. When they buy us out, we can deploy the proceeds to other areas we want to grow.

What is your last word to Kwara State?
I want to thank everyone so much for taking us this far and I want to assure you that God willing, we will continue to ensure that our people get dividends of democracy as we have promised because the only thing that can make us sit on this seat is service delivery. We will continue to ensure that service is fully deployed to our people. Our people will not have any cause to regret making a choice of changing Kwara for the better.

Source

 


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