In my last piece on this column, I reckoned how COVID-19 pandemic impacted negatively on the economy of Kano state due to the sharp fall in statutory allocation from the federation account. However, I come to terms with the reality of the situation when Governor Abdullahi Umar Ganduje painted a gloomier picture of the state of affairs during his interaction with the media as part of a week-long stakeholders’ sensitization meetings on the second wave of COVID-19 in the state.
Even the thought Governor Ganduje was more economical with statistics in the course of his remarks at the meeting, due to the fact that the state currently lacks quantitative data to estimate the actual cost of the impact of the pandemic on the state’s economy, he, however, indicated that the pecuniary cost could be put at several billions of naira, and was particular on how the effects are most obvious in the reduction of the quantum of financial resources available for effective governance in the state.
Kano’s population is put at over 10 million, making it the most populous state in the federation and army of unemployed particularly the youth. With an economy driven largely by service, commerce, manufacturing and subsistence agriculture-the dominant activity, inhabitants of the cosmopolitan city are mostly engaged in trading relying on daily activities for sustenance.
For now, the Ganduje administration is not considering the imposition of another lockdown so long as the public adhere to the prevention protocols. The imposition of lockdown during the first wave of the COVID-19 pandemic, while essential, had negative ripple effects across all sectors and segments of the society. The macro effects on the economy have been documented, ranging from a fall in both cumulative supply and demand, rise in overall government spending, and the effects on the people who are the first to bear the brunt of the impact, that is, individuals, micro and small enterprises, and daily wage earners operating in the informal sector.
Many citizens had lost their livelihoods with many businesses shut down. Virtually all the sectors were badly hit and the few that could be said to be operational did not perform optimally. As a result, consumers are having low purchasing power as some small businesses have been affected due to low turnout of sales and reduced economic activities.
It is understood that over 80% of working people are employed in the informal sector. This is signifying that the impact of the lockdown, which is still being felt, would be skewed toward those who perform urban informal sector economic activities in the city. Such activities include (but is not limited to) street trading and vending, micro and small scale manufacturing, repair and service provision, home-based enterprises, informal employees of formal enterprises (making daily/weekly wages).
For the vast majority of people engaged in these economic activities, they are daily-wage earners who either rely on income generated from going to work at a physical location on a daily basis/weekly basis, be it as an employee for someone, or as a micro/small entrepreneur.
People in this population belong to the category of people who are most vulnerable to the negative economic shocks surrounding the COVID-19 pandemic. Their income-generating activities are more closely tied to the daily whims of the market. To wit, for this category of people, their ability to meet their immediate basic needs such as access to food, shelter, and health services, predicated on daily access to face-to-face interactions and customer flow.
That was why the government of Kano state, after taking the necessary proactive measures to contain the pandemic, also instituted plans to mitigate its social and economic impact on the population. State and federal government-procured palliatives were shared to vulnerable households in the 484 political wards in the 44 local governments in the state.
The fight against the novel COVID-19 even impacted negatively on the state approved estimated budget of N206.2billion for the 2020 fiscal year, considering that the outbreak of coronavirus was reported just a few weeks to the signing the annual estimates. The challenge posed by the noble disease is compelling spending outside the appropriation, while the economy has been shut down due to the lockdown imposed on the state with near zero revenue generation except the federal government allocation which has also been shrinking. It was based on the same reason that the 2021 fiscal estimate has to be lower than that of 2020.
Given the recent negative trend in the nation’s economy, the consequences of the halt in economic activities in the face of the pandemic, the state is generating meager revenue. Additionally, remittances from the federation account have fallen, and therefore, it will be impossible to continue wealth distribution if there are no economic activities yielding revenue for the government.
While the government of Kano state has made it clear that it is not in any way contemplating on initiating new infrastructure development projects due the prevailing economic situation, and remain committed to the completion of all ongoing projects in both urban and rural areas of the state, the burden of other governance responsibility still remain despite the prevailing financial situation.
Another issue that weighs on the economy of the state is the payment of the monthly wage bill. With a total number of 55, 505 workers in the mainstream civil service as at December 31, 2020, including all state Ministries, Department and Agencies (MDAs) as well as all tertiary institutions (excluding Maitama Sule University and Kano State University of Science and Technology, Wudil, the state government monthly wage bill stands at N10, 497, 523, 918.87 billion.
A breakdown of this figure indicates that monthly state salary stands at N4, 869, 189, 804.29 billion; salary related N824, 251, 581.18; local government N2, 000, 598, 258.71 billion and state Universal Basic Education (SUBEB) N2, 803, 489, 284.69 billion. In spite of this huge salary bill, which was more than some three states combined, the state had never failed to pay the salaries monthly.
Kano has the highest number of civil servants in the federation, yet it has been able to settle the monthly commitment since assuming office in 2015. This obligation, which hitherto would not have been seen as an achievement but now it is because many states are unable to fulfil this important responsibility.
This is happening at a time when some states are owing workers’ salaries for months, due to small allocation from the government as a result of the country’s economic situation, while others did not make public announcements about their struggle to pay salaries of workers.
Despite the huge burden, the Ganduje administration was one of the first to implement the new minimum wage by complying with the provisions of the National Minimum Wage Act. Second, and the Collective Bargaining Agreement (CBA) reached with workers on the payment of consequential salary adjustment based on the new national minimum wage.
On a general note the Ganduje administration has, since inception, implemented a comprehensive policy framework that has ensured increased job opportunities for the youth, policies on strengthening entrepreneurship development and ease of doing business all with the intention of boosting the economy of the people.
Most importantly, these economic policies are geared towards ensuring future resilience, economic diversification, inclusive growth and sustainable development. More than ever before, it is evident that the public and private sector will need to collaborate with the government to resolve the social and economic challenges being posed by COVID-19.
Garba is the commissioner for Information, Kano state
