Michael Oglegba, Benue State Commissioner for Finance
By TYAV SAM TYAV, Makurdi –
Mr. Michael Oglegba is the Honorable Commissioner for Finance Benue State. In an interview with a select media houses in his office in Makurdi where NATIONAL ACCORD was represented by TYAV SAM TYAV, the finance expert spoke about the challenges hampering the full implementation of the Local Government Autonomy in Benue State. He also bared his mind on the state of Nigerian economy following the removal of fuel subsidy and the floating of the naira. The Commissioner also revealed the position of Benue State government on the Tax Reform Bills and equally considered the breakdown of Benue State 2025 budget of N550bn.
Excerpts
How do you assess the state of Nigeria economy following the removal fuel subsidy and floating of the naira?
The two things you just mentioned, removal of fuel subsidy and floating of naira at exchange rate are necessary things that needed to be done to boost the economy of the country. That is why every Nigerian has been calling for its removal.
If you could remember, during Goodluck Jonathan, attempts were made to remove fuel subsidy but failed as such I applaud president Bola Ahmed Tinubu for the bold step taken to remove fuel subsidy for the subsidy had been going into wrong hands instead of using it for the development of the country, they rather used it for their personal gains.
With this, I support and believe many Nigerians are behind the removal of fuel subsidy even though it has brought hardship on the people but believing it will do more good in a nearest future.
The removal of fuel subsidy increased the cost of consumer goods, since factors such as house rent and transportation which generally have effect on the cost of goods are affected, leading to poor standard of living of Nigerians.
What is the position of Benue State government on the Tax Reform Bills?
The Executive Governor of Benue State His Excellency, Governor Hyacinth Alia has declared support for Tax Reform Bill of President Bola Ahmed Tinubu because, tax Laws are into four (4) different components but the areas that have raised contention from the people is the area of VAT which the Federal Government has proposed that it should be increased to 10% from 7.5%. The Governors opposed insisting it should maintain at 7.5% in consideration of the hardship dwelling on the people in the country.
The Area of Current Income Tax (CIT) which the Federal Government has proposed that it should drop to 25% has also been rejected by the governors insisting that the status scope be maintained just as the area of derivation, where the Federal Government wants to reform at 60%, whatever is derived from VAT should be used within the area at which it is derived has also been maintained by the State Governors. This shall benefit and develop the economic growth of the country.
Governor Hyacinth Alia administration has commenced activities of reviving moribund industries and also building new ones to retain its taxes within the State, the bills should be supported and passed into law to bring governors and local government administrators to perform better in providing for the citizens.
Small business owners would experience some tax reliefs to enable them thrive economically because tax reforms is one of the significant changes in Nigerian legislation that has taken place in recent time.
The four bills; Nigerian Tax Bill, Tax Administration Bill, the Nigerian Revenue Service Bill and the Joint Tax Bill are one of the significant changes in Nigeria’s legislation that has taken place.
If you talk about reforms, this is the real reforms because every reform is to make the process easier, more seamless, better and this is what these four bills have brought to the table.
The controversy about the portion of the bills specifically the Nigerian Tax Administration Bill and the Value Added Tax (VAT) explained that currently as we have it, VAT shares 20 percent on derivation basis and the new tax bills specifically the tax administration bill is proposing 60 percent on derivation and this shift on 60 percent derivation is what is causing all the controversy.
I will say we shouldn’t throw away the baby and the bath water if this derivation is what is causing the controversy. We can rest only that portion of the provision and allow other aspects of the bill pass and then we can come back to them.
The current discussions around the tax reforms is one of the best discussions going on in Nigeria saying we have turned federalism on its head.
The federalism as we copied from the United States is a sub national government. States and Local Government are the centres for economic activities. They generate revenue and send to the centre which is doing common services like defence, foreign policy, issuance of currency among others.
What is the Benue State government take on the implementation of Local Government Autonomy and how is it being implemented?
Benue State Governor, Hyacinth Alia promised Local Government full autonomy even before he became the Governor of the State. Though, its full implementation depends on the Federal Government hence its the one to send monies directly into the accounts of the Local Governments.
The challenges delaying its full implementation are the State Universal Basic Education Board SUBEB, Primary healthcare sectors and pensions Boards as well as primary and secondary schools which are not part of the Local Government systems and the debts owned either by the Local Governments must be cleared to avoid sanctions from quarters promising to adhere to the Supreme Court verdict.
The debt rate of Benue State is currently three hundred and fifty billion naira (#350,000,000,000) which Local Governments share is one hundred and eighty billion naira (#180,000,0000,000) of which more than half of the debts are inherited, and garnish orders placed on the Local Government accounts are a huge threat. But the Benue State Governor said his administration has given full blessings to the autonomy of the 23 Local Government Areas in the state, with adequate plans to open up the rural areas to enable rural economies to thrive.
We have equally mapped out strategic projects and programmes for execution and implementation in all the Local Government Areas by the time the projects and programmes are completed, the chequered history of the rural areas in the state will be completely reversed.
The pivotal role the Local Government system plays in the development process of the Nation to intensify efforts of increasing the internally generated revenue to boost their capacity to provide for the welfare of their people.
Out of the Benue State 2025 budget of N550bn, 90% has been accrued to capital expenditure. May we have the breakdown?
Governor Hyacinth Alia presented the sum of N550.1bn as the 2025 appropriation bill to the Benue State House of Assembly for consideration and passage into law. He told the lawmakers that out of the total budget size, N175.4 billion is for recurrent expenditure while the N374.7 billion is for capital expenditure.
The total estimate represented a 47.5 per cent increment over the 2024 revised and approved figure of N373 billion, the appropriation bill tagged “Budget of Human Capital Development, Food Security, and Digital Economy” was to consolidate the gains made in 2024.
The proposed recurrent expenditure of N175.4 billion was 13.55 per cent higher than the previous year. The budgeted capital expenditure of N374.7 billion represents a 71.5 per cent increment on the 2024 revised capital expenditure.
The budget breakdown indicated that the sum of N212.2 billion, representing 38.52 per cent is for administration; N196.6 billion, representing 35.68 per cent is for the economy; law and justice will take N26.6 billion, representing 4.84 per cent while social welfare will gulp N115.5 billion, representing 20.96 per cent.
We have the vision. We have the will. And most importantly, we have the people ready to work alongside us to turn this vision into reality. Together, we will build a state where every citizen has the opportunity to succeed, where food is plentiful, and where the digital economy opens new frontiers of opportunity for all.
The intention of the government was to stay within the limits of its recurring revenue to build the state without accruing unnecessary debts for generations unborn.
The 2025 budget was a deficit one, it proposed a borrowing plan of a conservative sum of N26bn, representing a modest 4.7 per cent of the proposed aggregate expenditure for 2025. This is lower than the state’s debt-to-GDP ratio of 8.2 per cent which is within the benchmark of the 25 per cent debt sustainability threshold.
Despite these favourable debt ratios, I want to reiterate that borrowing will only be considered as a last resort and for regenerative investment purposes.
The Bureau of International Cooperation and Development has elicited substantial grants from donors, totaling N85bn.
We have seen increased Federal Allocation since last year on the back of exchange rate gains and fuel subsidy removal. How has Benue State Government Utilize this windfall to impact the people?
In the wake of fuel subsidy removal by President Bola Tinubu, the monthly disbursement to the three tiers of government by the Federal Account Allocation Committee (FAAC) increased significantly. Based on statutory sharing formula, the Federal Government receives 52.68 per cent of the total sum while the States and Local Government Areas (LGAs) receive 26.72 per cent and 20.6 per cent respectively.
The monthly allocation, particularly to States and Local Governments, is meant to fast track execution of viable economic and social infrastructure development projects at the grassroots.
The allocation, which is readily available monthly, is expected to cushion the impact of the economic crunch and promote people-oriented programmes to improve overall wellbeing of the people.
In Benue State, we used this great opportunity to clear salary arrears, pensions, and gratuity and as well cleared owed debts that were inherited from the previous administration. Agriculture has greatly improved as a result of a well used of the funds. We also ease the hardship of the people by executing policies such as N-G cares also known as “Alia Cares”
Alia Cares aims to bridge the gap between the rich and the poor, ensuring that every Benue indigene has access to basic needs like food, clothing, and shelter.
The programme’s primary focus is on the most vulnerable members of society, particularly the poorest of the poor. To achieve this, Alia Cares uses the State Operations Coordinating Unit (SOCU) to create a social register, which helps identify and select beneficiaries.
Alia Cares operates in three phases, with three result areas that provide support for livelihood. The first result area, DLI1.1, targets the poorest of the poor who are sick and aged. The second result area, DLI1.2, focuses on individuals between 18-45 years old who can perform tasks like cleaning government offices and community areas for two hours daily. After a certain period, they receive a stipend of ₦10,000 to support their livelihood.
The third result area, DLI1.3, recently provided beneficiaries with ₦150,000. This area focuses on individuals involved in small businesses, such as table-top businesses.
Additionally, DLI1.4 covers basic services, micro-projects, and community development projects. Communities can decide on the projects they need, and Alia Cares executes them. Examples of such projects include drilling boreholes and constructing classroom blocks.
The DLI1.4 provides farm inputs to farmers, enabling them to support their livelihood after harvest. To reduce post-harvest losses, Alia Cares offers processing machines for tomatoes and cassava to produce garri, adding value to farmers’ produce.
Hike in prices of farm products has brought hardship on the people of the state, what policies have the government explored to support the people?
Aside provisions of farm products, distribution of fertilizer for free, seedlings amongst others things, the hike in prices of food and non-food items in Benue State, the state government is seeking ideas to establish a marketing board to regulate the prices of goods in the state.
Significant move to address food insecurity and improve the economic conditions for farmers in Benue State, the Benue Investment and Property Company (BIPC) is set to off-take goods produced by Benue farmers across the state.
The agricultural sector, including the Benue Traders Association and the Benue Farmers and Traders Protection and Development Association, Benue being recognized as the “food basket of the nation,” food prices remain higher than in many neighbouring states. The concern of external buyers depleting local agro commodities, which not only affects cash retention within the state but also diminishes the value farmers receive for their produce.
With the support of local traders, BIPC aims to position the state as a grain hub, facilitating the aggregation and sale of agricultural products to external buyers. We should be able to mop up this produce and sell it directly to traders from outside the state.
The BIPC is to establish dedicated grain hubs where off-takers can purchase directly, ensuring farmers receive value for their money. This initiative will enforce standardized measurements and prompt payments upon delivery.
The introduced Warehouse Receipt System will ensure that these services are accessible throughout the state, guaranteeing that farmers receive fair value for their produce. This will protect our farmers to have value for their money. We want farmers to know how much a unit costs for their produce.
The initiative aims to mitigate the risks farmers face in not receiving adequate compensation for their goods. BIPC also plans to utilize Benue Sacs for agro commodities, allowing for the tracking and management of farm produce.
As this initiative takes shape, stakeholders remain optimistic that it will create a more favourable environment for agricultural trade, benefiting both farmers and the broader community in Benue State. According to a 2024 report by the Food and Agriculture Organization, 33.1 million people are projected to face food insecurity by 2025; hence, BIPC is set to be the hub of agro commodities in the state.
Benue State as an Agrarian state, what has the government done to boost Agricultural activities, especially in the face of the present security threats?
Aside distribution of fertilizer, seedlings amongst others for free to farmers, Benue State Governor, Hyacinth Alia, on Sunday, June 2nd, 2024, commissioned 33 new Tractors, and also disbursed N380,000,000 ($250,000.00) cheques to community interest groups to undertake climate smart agricultural activities in the state, under the Community Revolving Fund (CRF) scheme of the Agro-Climatic Resilience in Semi-Arid Landscapes (ACReSAL) scheme.
Governor Alia, who has already paid One Billion Naira (N1,000,000,000) as counterpart fund for the ACReSAL programme, reaffirmed his administration’s commitment towards providing the needed support for the programme to continue to thrive in Benue for the overall good of the people of the state.
The relentless efforts of ACReSAL in safeguarding the environment, the government is proud to collaborate on a project of such consequence, designed to improve the lives of the people of Benue.
Governor Alia announced the immediate creation of ACReSAL as a new Agency of government in the state for the purpose of knowledge and skills transfer, the governor said Benue like many other states in the country, share numerous challenges such as high poverty rates, a fragile environment, conflicts, degradation of natural resources, low agricultural productivity, climate-related risks, saying addressing such challenges require collective efforts.
Addressing these multifaceted issues necessitated a concerted effort across various sectors. The ACReSAL project is specifically tailored to bolster institutions and implement activities that mitigate the environmental impacts of climate change. This includes supporting efforts aimed at landscape management, improving community livelihoods and resilience, and strengthening institutional frameworks.
I urge the beneficiaries of the Community Revolving Fund (CRF) to exercise diligence and prudence in managing the resources, assuring that the 33 tractors commissioned will benefit over 33,000 households in the state annually.
The team was in the state to assess, support and look at the bottlenecks of the programme in Benue. They discovered no bottlenecks, been an indication the programme has so far recorded great success in the state.
The government of Hyacinth Alia and the ACReSAL team in the state for playing their respective roles, saying Benue stands to gain more from the programme, urging the government to continue to strengthen the needed institutions in order to continue to gain more benefits.
The ACReSAL programme seeks to amongst other things, address the challenges of land degradation and climate change in Northern Nigeria on a multi-dimensional scale, increase agricultural production, reduce poverty and improve standard of living with financing from the World Bank.
The project became effective in June 2022 and will end in March 2028, and it covers 19 Northern States including the FCT, Abuja, the Benue State Government under Rev. Fr. Hyacinth Alia, has paid a counterpart fund of 1 Billion naira, as well as provided a conducive working environment for the team in the state.
The project is aimed at supporting community farmers in the state, being the mandate of the component “B” of the ACReSAL project which is aimed at enhancing the resilience of communities and to improve their livelihoods.
Aside from the commissioning of the 33 tractors, the sum of N380 Million ($250,000.00) was disbursed to different Community Interest Groups (CIGs), to support community/farmer groups to undertake climate smart agriculture related activities in the targeted watersheds in Makurdi and Vandeikya LGAs.
Also, in tackling the security threats affecting agricultural activities in Benue State, Governor, Hyacinth Alia has launched a programme to support internally displaced persons (IDPs) in the state.
The drive which is part of the Action Plan on Durable Solutions, is aimed to foster IDPs safely return to their ancestral homes.
The dry season farm project site located at Gboko Road, is meant to creating sustainable results for over 500,000 displaced persons (IDPs) residing in the state.
The Programme includes the formation of 210 Farmers Cooperatives across all camps in the state, benefiting over 4,200 IDPs. The beneficiaries are expected to receive extensive training in rice, maize, cassava, and vegetable farming, covering all stages of production
The program is expected to provide IDPs with access to land, subsidized inputs, and improved seedlings, as well as increased yields and revenue. The beneficiaries will also have guaranteed market access with government-controlled prices and integration into the larger value chain.
The administration is commitment to restoring stability and dignity to affected communities and the need for collaborative efforts between the government and the international community.
The areas of strain on local resources and social cohesion as host communities struggle to accommodate the displaced population across 23 Local Government Areas (LGAs).
The three-pronged approach to tackle the crisis: RETURN, INTEGRATION, and RESETTLEMENT and the framework aims to strengthen resilience at both individual and community levels.
Before Governor Alia assumed office, his dream was to see a day when every IDP has returned to their ancestral home and he refers to the framing of the Operation Plan as a roadmap for long-term development rooted in the empowerment of displaced individuals.
Key initiatives under the Action Plan include community dialogues to foster peace, land donations from traditional rulers for farming and relocation, and establishing cooperatives to support IDPs as they transit back to their homes.
The Governor also shared success stories, such as the recent completion of the Transit Camp in Guma LGA, which houses over 4,000 dignified emergency shelters, improving living conditions for IDPs.
In a bold commitment to the operationalization of the Action Plan, the Benue State Government has allocated 10% of the state budget for its implementation and called for support from various stakeholders, including the Federal Government, UN agencies, and local organizations, to ensure the plan’s success. I urge all partners to coordinate their efforts through the Benue Durable Solutions Taskforce, reinforcing the need for a unified approach to the crisis.
The Governor has endorsed the State Action Plan for five years, with plans for regular evaluations to adapt to the growing needs of the population. This program will be crucial in addressing the long-term needs of our people.
As earlier mentioned, Benue State debts have acrued to N350bn, monies meant for developmental projects are being used in settling debts such as payments of salaries and gratuities as well as pensions and Local Government debts.
Illegal revenue checks points have seriously affected the financial stability of the state hence buyers run to other states instead of Benue State to transact business. This denied the State the opportunity to grab revenue for development.
Also, another financial challenge of Benue State is the insecurity, Benue Indigenes have been sent out of their ancestral homes. This has led to the drop of Agricultural products and cropped down of business activities which would have boosted the economic growth of the state.
How friendly are the state tax policies to business and companies?
Yes, the Tax policies of the current administration are highly friendly so as to woo investors who are far or near and willing to operate in the state to do so as to provide jobs opportunities for Benue populace. In with this, the government has addressed issues of insecurity to create conducive environment for investors, the administration is equally offering tax holiday to investors who are willing to invest or already doing business in the state.
