So, What Is Fashola Doing Right?
By Austin Avuru

I have consciously restrained myself from writing any praise-signing commentary on the Governor of Lagos State, His Excellency, Babatunde Fashola, for two main reasons. First is my fear that it could get into his head and then he derails. We have all seen what persistent praise-singing and title taking has done to many public officers who start out well. Secondly, I have this nagging fear that one ambitious Presidential Candidate in 2011, desperately in search of credibility for his ticket, will draft Fashola in as running mate and in the process, extricate him from Lagos and start him on a futile journey to nowhere.

So, instead, I keep praying for him quietly that he does not lose his head and does not get carried away into aspiring so soon for much higher office. Back to the point, what is he really doing right as Governor of Lagos State? To be sure, there is a fairly long history of good governance in Lagos State . Alhaji Lateef Jakande, even though with a sense of class and value that is far too modest for today's modern world, was legendary in his administration of the State between 1979 and 1983. In his first three months in office he brought the chaotic, two and three-shift school system under control and re-established the traditional 8 am to 2 pm school period. This meant hurriedly building thousands of classroom blocks and employing a lot more teachers, all in 100 days! His Housing Scheme delivered thousands of flats in several sprawling "Jakande Estates" that can be found all over Lagos today.

For the medium and high income, he created the "Ogudu G.R.A" and for the business community, established the Professional Centre (PC series of plots) that is now the Victoria Island Business District. He did not stop there, the light rail mass transit, which is on the hot burner today was already initiated by Jakande thirty years ago. The contract for the Metro-line, as it was then called, was only cancelled by the intruding Military Administration while searching for justification for their misadventure in 1984. And Marine Transport? Two high capacity vessels (one of them was Baba Kekere) were plying the Mile-2 to Lagos route, each capable of taking 400 passengers. I was living in Festac then and regularly came to work on the Island through those vessels.

And Lagosians have always known and acknowledged their leaders. At re-election time in 1983, Jakande spent more time in Rivers and then Bendel States, campaigning for their UPN Candidates than his own campaign here in Lagos . He did not need to campaign here. He was assured of his place as Governor. And even the massive rigging machinery of NPN which ultimately torpedoed that four-year window of democracy could not throw Jakande out of office.

Twenty years later, in 1999 stepped in Bola Ahmed Tinubu, a pro-democracy activist who spent over four years in exile fighting the Abacha military junta. Some people believe that he did not win the Alliance for Democracy (AD) governorship nomination in 1998. But the man who probably won served during the Abacha Military era and the pro-democracy activists who controlled the AD could not understand how he was allowed to collect the nomination form in the first place, let alone winning! Bola Tibunu was chosen and what a good choice. Bola Tinubu did three things in eight years.

He played "real politik", so sophisticated that he was able to keep away the rampaging PDP machinery from capturing Lagos and reducing her to its low level. That was a huge job, and no wonder that Lagos was the only State left standing in the South when the PDP smoke cleared in 2003. Inspite of the rigours of fighting the PDP machinery and a President that was intent on bringing the State to her knees, he found time, thanks to his world-class cabinet, to prepare the blue print for the transformation of Lagos into a working, modern city. He started the implementation process before leaving office. The third thing he did was to apply good judgment in picking, grooming and installing a successor that not only shares his vision but actually has the discipline and the management capacity to turn the vision into action.

The defining element of the Fashola governance model is what Accountants refer to as sources and application of funds. The first step, in this case, is to establish and optimize the sources of internally generated revenue without too harsh a backlash on the contributors. It is instructive that Lagos State generates about 64% of its total revenue internally whereas other industrial/commercial states like Rivers, Delta and Kano only generate about 15% of their revenue internally. Even more telling is the fact that while Lagos keeps her recurrent expenditure at less than 50% of the total budget, in most other states, recurrent expenditure eats up between 70% and 95%. So it is clear where the difference lies, the serious minded one works very hard to generate sufficient revenue to implement his key capital projects while the clueless one lines up every month to collect his dole in Abuja and spends the bulk of it to pay salaries, allowances and pecks.

Beyond optimising internally generated revenue, prudent and purposeful application of such funds builds trust between Government and the Tax payers, engendering in the latter a stronger willingness to pay. Thus the elaborate security arrangement in Lagos State , which probably gulps up to 2billion Naira annually, is funded largely through private sector donations to a well established Security Trust Fund. Prudent application of funds also means that Government restricts its intervention to the four critical areas of infrastructure, Environment and Security, Health Care and Education while partnering with the Private Sector to move in capital and fund investments in Transportation, Power Supply and even some supplemental infrastructure development. This critical partnership, backed by proper planning and focused budget implementation is what is delivering the magic in Lagos State today.

Perhaps the more appropriate question should then be, "what is everyone else doing so wrong then?" The Federal Government depends entirely on Oil exports and associated (customs duty and VAT) revenues to fund her budget. And because this oil rent is so readily available (even if all Government workers went on strike for one month, provided the Oil companies are working) we continue to pay lip service to agriculture, solid minerals, manufacturing and even tourism as additional sources of revenue.

Worse still, with fifty two Ministers, a retinue of Special Advisers, Special Assistants and Personal Assistants to the Special Assistants, added to the heavy baggage at the National Assembly and the multitude of pecks that go with these offices, we have managed to ensure that eighty percent of our meagre earnings is swallowed by recurrent spending. Meaning that 80% of our total revenue is spent taking care of one million public servants while the rest 139 million Nigerians watch in envy and awe! And what little is left is then spent on such white elephants as refineries, power plants and paying subsidies to those who import petrol for us. Is it any more surprising why the critical areas of transport infrastructure, security, healthcare, education and even electricity remain in the state they are?

And most of the States are caught in the same quagmire. Near total dependence on federally collected oil revenue for funding their budgets, and worse still, spending almost the entire revenue to pay salaries and pecks of public servants that constitute less than five percent of the population and what little is left is then channeled to self-serving white elephant projects like building power plants, buying vehicles for State transport companies or even building modular refineries. In the event, building a guest lodge for a Governor in Abuja is celebrated with fanfare as a major achievement of the State Government while hospitals and schools remain unattended to.

In the end, good governance means proper planning, budgeting and prudent budget implementation. It is no more than the classical "sources and application of funds", with minimal corruption to wit.

Avuru is a company executive in Lagos
SOURCEhttp://www.ngrguardiannews.com/editorial_opinion/article03//indexn2_html?pdate=100110&ptitle=So,%20What%20Is%20Fashola%20Doing%20Right?)

It's been reported by other news outlets too. If the CEO comes out and denies something, his word should be given credence.
So we should believe the CEO?, must you respond?you always end up saying rubbish, no wonder you called 'overhaul' OVERALL,
Posted on: Yesterday at 12:36:48 PM Posted by: Wrex

You amaze me as if you still believe what every Nigerian CEO says. A friend's wife works in a branch of Oceanic in Lagos and she said 7 staff members had to go. What was done to cover the absence was the fact that another branch was closed down and 7 staff members from the closed-down branch brought in. According to her, even the Head of Marketting had to go. This happened this week, the purge of December had already the branch strength from 32 to 15.

To those who keep on complaining about SLS, I would like to find out if they aware that most auto companies work on four-day shifts or lesser and that recruitment is being scaled down besides the lay-offs. If Dangote Flour was to limit production capacity by reducing number of shifts we'll hear no end on NL from all those with racist/tribalistic innuendoes et al to the move.
SLS may have been rash but a cancerous growth or gangrene infection cannot be treated the same way one treats malaria or thypoid!
Can someone please tell me why Zenith has to own branches on half of Ajose Adeogun or why a branch of Oceanic bank on Ikotun road will have 32 staff members before rightsizing its staff strength to 15?

Leadership is a difficult task  and it is said that the buck stops at the highest table in the office. Soludo  did some things right - Consolidation was necessary but
[list]
[li] there should have been a more thorough review of the management team after consolidation. A team managing less than NGN4 billion suddenly finds itself managing more than NGN30 billion and no one asks if the team was competent enough to handle the excess funds moreso when most of the offers were well oversubscribed[/li]

[li] it is a general norm that regulators do not hobnob too freely with those they oversee but Soludo was more a darling of the bankers than not. He became so close that even when CBN decided that a common year-end was in order for the industry, he backed down when most of his banker-CEO friends found fault with it. [/li]

[li] In the light of the dwindling value of the Nigerian Stock Exchange, quite an appreciable number of commentators wondered aloud at the positive reports from the banks given the huge exposure to margin loans yet the CBN under Soludo saw nothing wrong. He even permitted banks to declare their exposures beyond the accounting year. I am not an accountant but I took a basic accounting course and I know that losses/profits must be booked when incurred.[/li]

[li] There is a fundamental problem in the thinking of the management team of most banks else why would Zenith Bank own branches/offices on more than half of Ajose Adeogun. How come we only started having branches in far-flung places like Isolo, Ikotun and Egbeda in the past four years while some streets in the Ikeja or Ikoyi or V.I have two or more branches of the same bank irrespective of the length of the street. UBA has two branches on Idowu Taylor, Oceanic has two branches on Awolowo Road. Come to think of it a friend just told me last night that the Oceanic Bank at Ile-Epo bus stop on Ikotun road had 32 staff and was recently cut down to 15 staff on Monday. In these days of ATM usage, how many people go into the banking hall to withdraw sums or require banking services that will require such a branch have such a huge overhead? Least anyone tell me that the bulk of them were marketers, how much was the bank lending to the depositors to warrant such a huge overhead in the branch?[/li]

[li] If these guys were doing their jobs including CBN, it would have been noticed that the amount lent to SMEs/real sector had reduced compared to the amount of capital available to the banks. I did my masters in UK and could apply for a credit card of GBP500 after six months as a student. In retrospect a family friend with an established business that had been running for upwards of four years needed an overdraft of N100,000.00 and the branch manager asked for N10,000.00 to facilitate the loan approval process.[/li]

[li] Anyone complaining of the take-home pay of the bank workers should consider the hours they put in and the fact that there is no over-time pay in any of the local banks even if you have to come for weekend banking. Infact a friend told me that if she does not get to her office at least 15 minutes before opening time on Saturdays she has to pay NGn1000.00. In UK banks close their doors at the right time and in less than 30 minutes after the branch is locked up, not so in Nigeria here. My grouse is with the improper human capital appraisal process that does not even account for technological adavances and usages. You do not computerise your operations and maintain a structure that was in place when paper filing was the order of the day[/li]
[li] Sanusi might not be the angel - I question some moves of his but we needed the reforms[/li]
[/list]

I agree with the summation provided by GNBohr ,
No wonder, Nigeria is yet to have a corporate behemoth like Toyota, Hyundai, Saipem, Shell, Emirates Airlines, Sony, Samsung, Procter and Gamble, Tata, Huawei, Ericsson, etc. The one that was formed by Obasanjo to give Nigeria the corporate lever in the comity of multinationals, is already on its knees. You all know the story of TRANSCORP.

We can not manage success, no wonder we can not run our refineries, we can not operate our Steel Mills at Ajaokuta, less wonder our PHCN is promoter of darkness. No wonder Concord is dead, African Ocean Line is no more, National Bank went into oblivion, Ibru Fisheries is in the graves, Okada Airline belong to history.

No wonder we heard the story of Bunmi Oni of Cadbury, no wonder almost all multinational corporations in Nigeria replaced all Nigerian MDs with expartriates. When you read comments like those posted you puke at the generic nature of our failures. I wonder if any one posting would allow his/her business to collapse because he want to do father christmas with business by carrying overheads that are not sustainable. Business is simple:

Income>Expenditure = Profit
Income<Expenditure = Loss
Income=Expenditire = Break Even
Income = Sales = Revenue
Expenditure = Overheads + Operation Costs
Overheads = Personnel Costs + Management Costs
Operation Costs = Resource (material/equipment) utilisation costs
[li][/li]
I want you to proffer solution to a situation of LOSS in your business or family finances. If you are faced with a situation of Excessive Expenditure, what measures would you take to keep your business afloat or keep your family finances tidy.

There is no room for sentiments or any BIGOTRY reasoning. Until we take sentiments away and do business plainly and absolutely proper, then we will solve all our problems in all the sectors of the economy.