Kaduna State Government

Index of Economic Activities in Kaduna State

Ministry of Economic Planning April 2010

Supported by SPARC 1

Content

Abbreviations and Acronyms ........................................................................................... 4 Section One

Introduction ............................................................................................... 5

Section Two

The Present Situation in Nigeria.............................................................. 8

Section Three The Kaduna State Accounts .................................................................... 9 Section Four

Methodological Issues ........................................................................... 10

Section Five

Kaduna State Gross Domestic Product ................................................ 13

Section Six

Performance of the State ...................................................................... 17

Section Seven Conclusions and Recommendations .................................................... 28 Section Eight References .............................................................................................. 30

List of Tables Table 1: SNA’93 Major Industrial Groups ....................................................................... 10 Table 2: Kaduna State Coefficients for the 33 categories of Activities ........................ 11 Table 5: Zonal Share of Population and GDP ................................................................ 17 Table 7: GDP and KSGDP (Real) and Rates ................................................................... 20 Table 8: STRUCTURE OF ECONOMIC ACTIVITIES IN KADUNA STATE ...................... 22 Table 9: STRUCTURE OF THE SERVICES SUB-SECTOR ............................................. 23 Table 10: KADUNA STATE REVENUE AND OTHER RECEIPTS .................................... 24 Table 11: KADUNA STATE EXPENDITURE AND TRANSFERS (Billion Naira) ............ 25 Table 12: BUDGET INDICATORS:KADUNA STATE AND FEDERAL (Billions) ............. 25 Table 13: KADUNA STATE BALANCE AND FINANCING (Billion Naira) ....................... 26

List of Figures Abbreviations and Acronyms ........................................................................................... 4 Section One

Introduction ............................................................................................... 5

Section Two

The Present Situation in Nigeria.............................................................. 8

Section Three The Kaduna State Accounts .................................................................... 9 Section Four

Methodological Issues ........................................................................... 10

Table 1: SNA’93 Major Industrial Groups ....................................................................... 10 Table 2: Kaduna State Coefficients for the 33 categories of Activities ........................ 11 Section Five

Kaduna State Gross Domestic Product ................................................ 13

Section Six

Performance of the State ...................................................................... 17 Table 5

17 2

Zonal Share of Population and GDP ............................................................................... 17 Fig. 1 Sectors with Highest Coefficients in Kaduna State............................................. 20 Table 7: GDP and KSGDP (Real) and Rates ................................................................... 20 Fig. 2

GDP Growth Rate for Nigeria and Kaduna State .................................. 21

Table 8: STRUCTURE OF ECONOMIC ACTIVITIES IN KADUNA STATE (current Prices) % of Total 22 Fig. 3: Structure of Kaduna State Economy ................................................................... 23 Table 9

23

STRUCTURE OF THE SERVICES SUB-SECTOR (PERCENTAGE) ............................... 23 Table 10: KADUNA STATE REVENUE AND OTHER RECEIPTS .................................... 24 Table 11: KADUNA STATE EXPENDITURE AND TRANSFERS (Billion Naira) ............. 25 Table 12: BUDGET INDICATORS: KADUNA STATE AND FEDERAL (Billions) ............ 25 Table 13: KADUNA STATE BALANCE AND FINANCING (Billion Naira) ....................... 26 Section Seven Conclusions and Recommendations .................................................... 28 Section Eight References .............................................................................................. 30 Appendix One:

Nigerian Real GDP (at 1990 base prices) ........................................ 31

Appendix Two State Population and GDP Statistics (2007) ........................................ 36

3

Abbreviations and Acronyms DFID

–

Department for International Development (UK)

FCT

–

Federal Capital Territory

GDP

–

Gross Domestic Product

HDI

–

Human Development Index

IGR

–

Internally Generated Revenue

KSDP

–

Kaduna State Development Plan

KSGDP –

Kaduna State Gross Domestic Product

NBS

–

National Bureau of Statistics

SAS

–

State Accounting System

SPARC –

State Partnership for Accountability, Responsiveness and Capability

SSA

–

State Statistical Agency

UNDP

–

United Nations Development Programme

UNSNA -

United Nations System of National Accounts

4

Section One

Introduction

The need to enhance the policy space at the lower levels of governance in Nigeria has raised the important issue of data and information at these levels. Data and information are critical for sound policies. It has become imperative in Nigeria to generate data and produce relevant information, at the state and local government areas, on which evidence based policy choices can be made. The reform of the governance structure since the return to democratic governance and the various efforts at economy reforms since the 1980s require that policy decisions are based on rigorous analysis which requires credible data and information. One of the major lessons of the economic reforms embarked upon in Nigeria since the return to civilian rule in 1999 is the realization that the economy’s response to traditional policy prescriptions has not met expectations. An open, liberal, market economy requires a lot of quality information to guide economic decisions. The challenges of data and the capacity to use information effectively to manage the economy, particularly at the lower tiers of government must be addressed if scarce and limited resources that are channelled through these levels are to be effectively put to use. Democracy cannot be deepened in Nigeria if governments are not held accountable for their management of the economy. If governments are to be held accountable there must be indicators at all levels to assess the performance of policy. For decade it has been difficult to quantify progress made in different sectors of the economy. Data has been generally unreliable. Output data of some critical sectors of the economy are still considered suspect. Yet reliable data is important for the assessment of policy impact. The National Bureau of Statistics (NBS) has made tremendous progress in the last few years in upgrading the statistical information system in the country. It has improved on the quality of data and extended its scope of coverage. It has however concentrated on providing data at the national level. The challenge of providing data at the sub-national level is still present in the country. Efforts to generate data and growth indicators have made progress in some states of the federation but most states have relied on data collected at the federal which they often are not happy with. Virtually all states collect administrative data and have systems of accounting for public expenditure. Most state can provide information on a number of social indicators and participate in the collection of such information by federal agencies and international organizations. The greater challenge has been in providing data on the performance of state economies. Providing some measure of the level of economic activities at the state level is a critical first step in improving on the policy process at the state level. The most comprehensive index at the national level and in many countries at sub-national levels is the Gross Domestic Product (GDP). The challenge in Nigeria today is to produce GDP figures at the state level. This exercise attempts at providing the Gross Domestic Product for Kaduna State. There are a number of challenges. In the first place all states must adopt the same methodology in compiling their state GDP if they should be ant comparability between states and the federal figures. It means that states and the NBS must agree on the methodology and process of data collection and compilation of statistics. For this exercise we have simply adopted the lead of the NBS. The initiatives of the National Bureau of Statistics and the United Nations Development Programme (UNDP) that just published state based GDP in its Human Development Report inform the method used in calculating Kaduna state GDP contained in this report. The figures generated by this exercise, though to be considered tentative, could be used for a number of purposes. In the past few years the question of strategic intervention by the state to redirect the economy and make it better respond to the growing complexities of a rapidly changing global economy has focused some attention at the state level. It is obvious that given the amount of resources allocated to states from the federation account they can 5

make a definitive contribution and a difference in economic management in Nigeria. States now control a sizeable amount of resources and the efficacy of their spending impacts on the national economy. Efforts to improve on the decision making process at the state level have to be premised on improved quality of information available for policy making. Since independence in 1960, the overarching goal of Nigeria's economic development has been to achieve stability, material prosperity, peace and social progress. The early development plans sought a balanced and equitable growth from which the majority of the Nigerian people were to derive sustainable income. With the reforms of the 1980s which focused on markets and the privatization of the economy the spatial imbalance in Nigeria was aggravated. It was clear that those states and zones with greater accumulation of wealth were able to take advantage of the privatization policy. With different initial endowments states were not on the same footing in facing the reforms of the 1980s. The economic gap between states and zones in the country widened following reforms. The implication was that the level of poverty also widened between states and zones. One of the objectives of public sector leadership before reforms was to ensure some form of spatial economic equilibrium. A variety of internal problems, however, persisted in slowing down the country's attainment of this objective despite the modest progress made. The Human Development Index (HDI) since 2004 shows that Nigeria has been making steady progress in improving her HDI. The trend of the HDI rate of growth from 0.490 through 0.494 to 0.499 and 0.513 (NBS) in 2004, 2005, 2006 and 2008, respectively, has placed Nigeria in the lead of low HDIs in the global UNDP HDI ranking. More achievements in growth should push Nigeria into the medium HDI countries. On the country level, Nigeria is placed at the top of the low HDI countries but some zones and the states in them are still at the level of the Less Developed Countries of the world. The point is that there is an urgent need in Nigeria to focus on the spatial dimension of economic growth. This is particularly the case for efforts at reducing the level of poverty in the country. The actions of state and local governments are critical in supplementing federal efforts in this regard. The current administration in Nigeria has given renewed attention to planning in light of the performance of the economy since economic reforms of the 1980s. The imperative of planning at the state level has made the compilation of basic statistics at the state level very important. States should be able to monitor impact of both federal and state policies on their states. At present the National accounts is the only comprehensive framework that takes accounts of both states and federal activities. Planning must be made important at the state and local government levels in Nigeria, in the light of the performance of the national economy since reforms in the 1980s, and particularly as it reflects on the spatial imbalance generated by economic growth and development in the country. Despite the moderate gains made since reforms, some states and local governments and some geographic zones in the country have persistently lagged behind both in absolute and relative terms in economic growth and development. The result has been that these states and local governments have consistently accounted for the bulk of the absolute poor in the country. Given the dominant presence of government in these states and the reliance of states generally in Nigeria on centrally collected and shared resources the question of the efficiency of state utilization of these resources particularly in these poor states have of recent attracted some attention. The growth rate in the past ten years has been relatively high but this high growth rates do not seem to have translated into equitable distribution of wealth nor has it been spatially balanced. The government has been quite concerned with the poor outcomes of reform efforts of the past three decades and recent policy initiatives have intensifies efforts at broader poverty reduction, social protection and human development agenda. The focus has been at the federal level with little attention paid to the states and local governments. The fact remains that without corresponding efforts at the state and local government 6

levels the maximum effects would not be had. Policy makers at these levels need information and data to assist tailor their policies to the specific challenges faced by them. On the whole, the country faces challenges such as inadequate human development, primitive agricultural practices, poor infrastructure, and uninspiring growth of the manufacturing sector, a poor policy and regulatory environment and mismanagement and misuse of resources. The intensity of these challenges varies from zone to zone of the country. Although most of these challenges are national and are common among states some zones face some peculiar challenges. This means that policy makers at the zonal level must understand the peculiar nature of the challenges they face and be able to design policies to meet them. The constraints facing states differ in their intensity amongst states. The lessons of the past ten years is that states cannot just mimic federal economic policies but need to articulate state policies that would leverage federal presence to address the most pressing challenges to the state. With their increased involvement in the generation of statistics, the states would appreciate that such data can serve as tools for designing programmes to improve the welfare of their people. National Accounts give the total picture of the economy for a given period. The exercise is focused on calculating State Gross Domestic Product (SGDP) because it is often the lead indicator in measuring the performance of an economy. Countries are compared on the basis of the volume of goods and services they produce in absolute terms and per capita. The GDP is an economic aggregate that provides the quantum of economic activities within a legally well defined administrative area usually a country within a time frame, usually a year. It could also be compiled at sub-national levels. Indeed the imperatives of effective management of state economies demand that they are compiled.

7

Section Two

The Present Situation in Nigeria

Statutorily, it is the responsibility of the National Statistics Offices of any nation to compile and publish estimates of Gross Domestic Products either at the national and sub-national levels of administration. In Nigeria, the NBS is charged with that responsibility. Countries are encouraged to compile statistics according to the guidelines of the United Nations System of National Accounts 1993 (SNA’93). This system of national accounts provides a comprehensive and systematic framework for the collection, presentation, and analysis of macroeconomic statistics. It is important that each country follows the same guidelines to ensure international comparability of estimates. The idea of entrusting the responsibility of compiling these estimates to the national body is to make sure that the sub-national GDPs add-up to the national GDP. Presently, NBS computes GDP at the national level only on annual and quarterly bases. These computations are however based on information collected from the states. The bureau has offices in all the states of the federation and the Federal Capital territory (Abuja). What is published as national data is an aggregation of what is obtained from the states. There is however an ongoing effort to compile state GDP within the framework of the National accounts. At present there is a steering committee on the computation of the SGDP for Nigeria set up by the Minister of National Planning in May 2009 and chaired by the Director of Statistics National Bureau of Statistics with a work programme that would produce SGDPs by the end of 2010. The challenge of compiling credible data on the nation’s economy has plagued the nation since independence. The reliability of data has been of major concerns and has been said to undermine planning and economic policies. The restructured National Bureau of Statistics has made tremendous progress in addressing the concerns on national data for economic management in Nigeria. The situation at the state level is still precarious. Many states do not still have credible mechanism for extensive data collection on state activities. Units responsible for this are often poorly funded, poorly manned and poorly equipped. The progress made at the national level though largely based on development partner financing will have to be replicated at the state level. A closer working relationship needs to be cultivated between both levels in data collection.

8

Section Three

The Kaduna State Accounts

Kaduna State occupies part of the central area of the Northern part of Nigeria (with Kaduna as its capital). It is the third largest State in the country. As the capital of the former Northern Nigeria it was and remains a focal point of Northern politics and economy. To the South-West, the State shares a border with the FCT, Abuja which has witnessed fast growth in the past few decades. The global location of the State is between longitude of 30’’ east of the Greenwich meridian and also between latitude 0900 and 11 30’’ North of the equator. The State occupies an area of approximately 48,473.2 square kilometres and has a population of more than 6 million. Kaduna state is one of the older States in the federation. Located in the Savannah woodlands of the country the State has the potential of becoming one of the leading States economically in the country. Its history and its attraction to a wide segment of Nigerians place it in a position of being able to influence the economic life of the nation. To meet its potential, it is necessary to put in place policies that mobilize the entire population and channel their energy into productive ventures. Information is required to do so. The State would need to intensify efforts at developing a credible data base on the State that would inform policies. It should prepare on a regular basis State accounts. At present, the State collects data at various points. Various ministries, agencies and departments collect and store data on various aspects of the State. Although no systematic reporting of activities in a format that would inform a State account exists, some data are available that could be assembled to give a crude picture of the trend of activities in the state. The challenge in the state today is to put in place a system of data collection that would lead to the preparation of a State account. This account would present a mass of detailed information about the working of the Kaduna state economy and the interactions between different economic agents both federal and state within the state. The accounts would provide information on the production and usage of goods and services within the state. It will indicate the level of productive assets. It would also provide information on the incomes generated by that production and those earned from the ownership of assets. The accounts would give the picture of the distributional pattern of income within the state. The accounts would trace the capital and financial flows that take place within the state. Basically modelled along the lines of the National Accounts, the State Accounts would provide a comprehensive picture of the different type of economic activities in the state on local government bases. Each local government would be required to keep the type of records required to prepare the state accounts. Central to these accounts would be determination of the GDP for the state. The compilation of detailed indicators on the state will assist out- of- state and foreign investors to take decisions on investments in the state.

9

Section Four

Methodological Issues

The nature of the end use of data and information often influence how it is collected and stored. At the state level, information are collected and stored to aid policies and research into various challenges faced by society. To get the true picture of all the goods and services produced in a given state the ideal is to take a census of all activities in the state. A record of all economic activities and various forms of outcomes should be kept and updated every year. Planners have always recognized the use of this exercise. The planner must know what he is planning for and the extent to which decisions taken are reflected in outcomes that are targets of the plan. The level of success of the plan is strictly judged by the convergence of outcomes with set targets. It is essential to have this information for all activities covered by the plan. Under an indicative planning framework this detail is not really required. The plan in general provided the direction that economic agents within the system are expected to follow. State plan activities pointed to the overall direction that economic agents were expected to follow. Since planning was jettisoned in the 1980s there has not been the urge to estimate indicators previously required for planning. The states generally relied on whatever data was generated at the national level. While the interest on state planning has resurfaced, the need to compile state data has become again a priority. For the compilation of SGDP three methodologies are possible: the Expenditure, Income and Production Approaches. States cannot however engage in complete census of economic activities on a sustainable basis due to the cost and manpower constraints. The most plausible effort today is to derive state GDP from the national GDP. The Production Approach is applied since that is the basis on which the national data used was compiled. The methodology to be used was in the compilation of the KSGDP would be as presented by the Director of the National Bureau of Statistics (Akiyosoye 2008) and used by the Human Development Report of the UNDP 2008-2009. For consistency, the classification used by the NBS would be adopted although Kaduna state does not contribute to all categories under this classification. The National Bureau of Statistics following the SNA’93 has classified the Nigerian economy into thirty-three (33) major industrial groups. These grouping are as follows: Table 1: SNA’93 Major Industrial Groups 1.Crop Production

12. Electricity

23. Post

2. Livestock

13. Water

24. Financial Institutions

3. Forestry

14. Building and Construction

25.Insurance

4. Fishing

15. Wholesale & Retail Trade

26. Real Estate

5. Coal Mining

16. Hotel & Restaurant

27. Business Services (Not Health or Education)

6. Crude Petroleum and Gas

17. Road Transport

28. Public Administration

7. Metal Ore

18. Rail Transport and Pipeline

29. Education

8. Quarrying & Other Mining

19. Water Transport

30. Health

9. Oil Refining

20. Air Transport

31 Private Non-Profit Organization

10. Cement

21. Transport Services

32. Other Services

11. Other Manufacturing

22. Telecommunications

33. Broadcasting

10

As explained by both sources of our methodology state, shares of the various industrial sectors were determined and state contributions calculated from them. Our first task is to generate for Kaduna state for each sector a coefficient that represents its share of total production of that sector

 11 

q11 37

q j 1

37

q j 1

j1

Gives the total output of crop production for all states while q11 represents

j1

output of crop production in Kaduna State alone.

 Represents indicator for crop production

Table 2: Kaduna State Coefficients for the 33 categories of Activities 1

Crop production

7.297706

18

Other Transport Services

0.789964

2

Livestock

0.031076

19

Telecommunications

0.78996

3

Forestry

0.000

20

Post

0.789678

4

Fishing

0.155886

21

Electricity

0.000

5

Crude petroleum & natural gas

0.000

22

Water

0.79012

6

Coal mining

0.000

23

Hotel & Restaurant

0.789957

7

Metal ores

0.408315

24

Financial Institutions

2.998695

8

Quarrying and other mining

0.789956

25

Insurance

27.85299

9

Oil refining

7.770189

26

Real Estate

4.333149

10

Cement

0.000

27

Business Services

0.789965

11

Other manufacturing

0.789959

28

Public Administration

0.78996

12

Building and construction

0.789968

29

Education

3.705773

13

Wholesale & Retail Trade

0.789958

30

Health

5.507899

31

Private non- Profit

14 Road Transport

3.583728

15

Rail Transport & Pipeline

20.000

16

Water Transport

0.000

17

Air Transport

0.380928

GDP for all industries Q =

0.788557

32

Other Services

0.789959

33

Broadcasting

0.789853

33

 i 1

Where

Organizations

i

 represents GDP for the nation 11

 1 = GDP for crop production

 2 = GDP for livestock production :

 33 = GDP for Broadcasting Deriving GDP for state for each industry



Kaduna

11

1



12

2



13

3

……



1,33

 33

33

 i 1

Where

33

 i 1

1i

1i

i

 i = Total GDP for all Industries for Kaduna State

12

Section Five

Kaduna State Gross Domestic Product

The result of this compilation and calculation are the two tables of Kaduna State GDP at current market basic price 2002 -2008 and Kaduna State Real GDP 2002 – 2008. Table 3 KADUNA STATE GROSS DOMESTIC PRODUCT AT CURRENT MARKET BASIC PRICE 2002 – 2008 2002

2003

2004

2005

2006

2007

2008

Agriculture

228,432.02

245,482.75

261,603.21

318,567.15

398,241.73

453,469.42

492,957.60

Crop Production

222,597.80

239,031.19

253,821.24

308,567.59

386,166.79

439,641.60

477,603.51

6,285.60

7,579.13

9,734.74

-

-

-

11,768.70 -

13,491.85 -

14,982.14 -

165.97

202.83

264.82

306.24

335.97

371.96

3,518.24

4,386.76

5,356.55

6517.09

7,132.02

4,129.00

-

-

-

-

-

-

Livestock 5,693.26 Forestry Fishing

140.97

Industry 2,862.43 Crude Petroleum & Natural Gas Solid Minerals

55.78

Coal Mining Metal Ores

103.05

136.62

215.44

248.37

278.00

66.41 -

-

-

-

-

-

0.05

0.05

0.06

0.09

0.11

0.13

0.05

Quarrying & Other Mining Manufacturing

55.74 2,806.65

66.37 3,451.82

102.99 4,283.71

136.55 5,219.94

215.35 6,301.65

248.26 6,883.65

277.86 3,851.00

Oil Refining

1,072.92

1,349.46

1,744.92

2,256.27

2,910.56

3,213.42

349.43

-

-

-

-

-

-

-

1,733.73

2,102.37

2,538.79

2,963.67

3,391.09

3,670.23

3,501.57

379.07

465.33

1,311.97

1,704.64

1,977.54

2,103.40

2,311.29

Cement Other Manufacturing Building & Construction

13

Wholesale & Retail Trade

6,101.93

7,284.60

11,726.31

14,758.40

21,659.02

27,555.15

20,692.70

25,721.91

46,095.01

51,464.22

65,181.19

24,052.43 74,133.83

Transport

5,885.53

7,513.06

12,506.93

13,155.64

15,095.61

16,145.93

17,146.13

Road Transport

5,758.33

7,380.21

12,360.74

12,994.79

14,916.92

15,947.23

16,932.95

Rail Transport & Pipelines Water Transport

1.08

1.18 -

1.28 -

1.38 -

1.50 -

1.92 -

2.36 -

Air Transport

9.60

10.51

11.46

12.51

15.33

17.40

19.29

116.52 77.54

121.16 104.32

133.44 170.70

146.96 312.13

161.86 1,307.57

179.38 1,923.95

191.53 2,068.65

69.01

96.33

161.58

301.72

1,295.69

1,910.24

2,052.71

Post

8.53

7.99

9.12

10.42

11.88

13.71

15.94

Utilities

8.34

9.19

10.39

11.71

12.96

15.47

18.75

-

-

-

-

-

-

8.34

9.19

10.39

11.71

12.96

15.47

18.75

76.39

90.22

278.46

364.01

455.11

575.40

706.17

Finance & Insurance

2,994.86

2,990.24

3,852.99

4,969.90

10,966.05

12,729.57

13,732.57

Financial Institutions Insurance

2,307.51 687.36

2,363.93 626.30

2,994.87 858.12

3,794.20 1,175.70

8,647.68 2,318.37

9,920.35 2,809.22

10,644.53 3,088.03

Real Estate & Business Services Real Estate

9,518.10 9,488.16

12,621.87 12,586.40

19,415.57 19,269.01

29,752.82 29,499.68

33,499.21 33,156.59

38,193.13 37,766.34

43,570.87 43,089.47

29.94

35.47

146.56

253.14

342.61

426.79 2,912.87

481.40

1,598.58

1,762.60

1,974.26

2,250.80

2,566.08

644.12 686.98

712.59 755.75

798.16 846.51

909.96 965.08

1,037.45 1,100.24

1,195.45 1,236.12

1,296.55 1,367.31

267.48

294.26

329.59

375.76

428.39

481.30

509.52

533.36

630.41

7,885.71

1,011.22

1,278.61

1,637.50

1,766.86

1.12 525.05

1.15 620.49

1.18 7,873.40

1.22 996.24

1.25 1,260.34

1.29 1,615.08

1.33 1,740.61

7.20

8.77

11.13

13.76

17.01

21.13

24.92

Services

Other Transport Services Communication Telecommunications

Electricity Water Hotel & Restaurant

Business Administration Producers of Govt. Services Public Administration Education Health Comm., Social & Pers. Services Private non-Profit Organizations Other Services Broadcasting

Kaduna State GDP

82,183.37

3,173.38

58468.15 282472.82 325123.25 392214.97 493576.58 560891.00 609136.41

14

Table 4 KADUNA STATE GDP (at 1990 constant basic prices) (N million) 2002

2003

2004

2005

2006

2007

2008

Agriculture

123564.6496

132674.357

140885.0827

150931.6857

162234.5135

173991.791

185340.4335

(a)crop production

123170.5971

132263.7916

140447.6083

150464.7033

161735.3399

173458.0748

184769.9439

384.122362

400.2323431

426.2463577

455.0789975

486.4909746

520.1994941

556.0802506

©forestry

-

-

-

-

-

-

-

(d)fishing

9.930087272

10.33305231

11.22799322

11.90344679

12.68256449

13.5167099

14.40931252

2. Industry

172.3357074

183.4981177

205.1597456

225.0048919

254.3723547

270.6576236

296.6080756

(a)crude petroleum

-

-

-

-

-

(b) solid minerals

8.759884799

9.237781457

10.86912045

11.90564931

13.12822613

14.80148614

16.69160238

Coal mining

-

-

-

-

-

-

-

Metal ores

0.026132146

0.025315516

0.027765405

0.031031923

0.034706756

0.038789903

0.043281366

Quarrying and other

8.733752653

9.212465941

10.84135505

11.87461739

13.09351938

14.76269624

16.64832102

©manufacturing

163.5758226

174.2603363

194.2906251

213.0992426

241.2441286

255.8561375

279.9164732

Oil refining

40.28066056

44.10359362

48.50929087

53.36565909

58.71154923

64.63243336

71.09723074

Cement

-

-

-

-

-

Other

123.2951621

130.1567427

145.7813343

159.7335835

182.5325793

191.2237041

208.8192425

59.39689683

64.59409567

60.21530358

67.49880766

76.26982131

86.20603763

97.46229031

372.1396605

393.5751666

537.8254186

610.5039101

703.6565289

810.6239305

924.1471923

1565.76062

1485.884038

1751.031463

1876.145192

2037.907893

2217.354843

2424.537245

(a)Transport

290.7938813

294.2337844

458.6965322

488.0189795

522.0020285

555.3112187

597.2393344

Road Transport

283.4836397

286.8308416

450.8544906

479.7142526

513.1719376

545.9236282

587.831744

0.28

0.3

0.32

0.34

0.36

0.38

0.4

(b)livestock

-

-

& natural gas

mining

-

-

manufacturing 3. Building and construction 4. Wholesale & Retail Trade 5. Services

Rail Transport & Pipeline Water Transport

-

-

-

-

-

-

-

Air Transport

1.007555076

1.081836074

1.145451082

1.212113517

1.303536283

1.401815758

1.508094724

Other Transport

6.022686565

6.021106637

6.376590498

6.752613426

7.166554633

7.605774692

8.075013388

Services

15

(b) communication

25.82929331

31.98314463

49.82825211

64.58065895

86.31550907

115.8433002

154.8103065

23.5652856

29.90392163

47.52318112

62.02525993

83.48214329

112.7019599

151.3262458

Post

2.264007718

2.079222993

2.30507099

2.555399015

2.833365781

3.141340322

3.484060709

© Utilities

4.145760574

4.48630237

4.9730164

5.494495717

6.094196932

6.760268242

7.498240489

Electricity

-

-

-

-

-

Water

4.145760574

4.48630237

4.9730164

5.494495717

6.094196932

6.760268242

7.498240489

(d) Hotel &

6.034479677

6.314124369

15.41600614

17.02672797

19.22438767

21.71433137

24.53131717

873.8603626

772.9625018

805.7852356

841.5553791

894.6614102

952.1428573

1012.327773

673.2910134

611.0530966

626.3284494

642.629356

673.2580277

705.6439348

737.9758654

Insurance

200.5693493

161.9094053

179.4567862

198.9260231

221.4033825

246.4989225

274.3519081

(f) Real Estate &

273.2878377

281.548936

311.7419713

346.0324588

386.1756839

431.1661927

481.6425382

Real Estate

268.7115684

276.7712255

306.799948

340.8281671

380.6238074

425.2422426

475.3204454

Business Services

4.576269296

4.777710461

4.942023255

5.204291752

5.551876508

5.92395019

6.322092728

(g) Producers of

65.29932892

67.41900599

74.73221464

80.51248467

87.07836512

94.26705209

102.1411403

28.13285424

28.13285424

31.18526063

32.43260786

33.87586523

35.38547926

36.96855959

Education

27.25225736

29.1681422

32.33287265

35.74218416

39.59248269

43.86153361

48.5938062

Health

9.914217313

10.11800956

11.21408136

12.33769266

13.61001721

15.02003923

16.57877451

(h) Comm. Social &

26.50967588

26.93623834

29.85823473

32.9240072

36.35631159

40.14962248

44.34659441

0.117494957

0.117494957

0.130111865

0.144305887

0.160865579

0.178213827

0.197927746

Other Services

23.77381693

24.08506079

26.69824525

29.50101988

32.6316275

36.09717776

39.93558867

Broadcasting

2.618363998

2.733682593

3.029877616

3.278681435

3.563818509

3.874230893

4.213077998

Telecommunications

-

-

Restaurant (e) Finance & Insurance Financial Institutions

Business Services

Govt. Services Public Administration

Pers. Services Private non- Profit Organizations

Kaduna State

14,880.6 15,764.34

17,036.3 18,292.43 19,744.72 21,264.16 22,790.60

GDP

16

Section Six

Performance of the State

Tables 3 and 4 are derived from the National Accounts in annex 1. And the UNDP SGDP for 2007 complied in their Human Development Report 2008 in annex 2. From the 2007 SGDP it is clear that there is a high dispersion in state GDPs and in per capita income across the 36 states of the federation. According to the UNDP the high performers in terms of per capita income included the FCT ($10,208), Bayelsa ($5,388), Rivers ($5,210), Akwa Ibom ($3,813), Lagos ($2,554) and Delta ($2,325) while the low performing states were Taraba ($141), Kogi ($147), Anambra ($163), Bauchi ($166), Osun ($183) and Plateau ($194). Kaduna falls somewhere in between at $707. Rivers had the largest economy with GDP at N3,333,607.68 million (population 5,084,192) followed by Lagos with GDP of N2,935,693.30 million (population 9,131,112), Akwa Ibom N1,843,218.56 million (population 3,841,712), Bayelsa N1,212,867.01 million (population 1,788,957) and Delta N1,208,594.31 million (population 4,130,791). The smallest economies are those of Taraba N43,020.00 (population 2,411,186), Ebonyi N57,656.38 (population 2,317,922), Kogi N63,348.75 million (population 3,424,637) and Yobe N73,308.50 million (population 2,232,186). Kaduna has the 15th largest economy with GDP of N558,386.52 (population 6,276,729).

Table 5 Zonal Share of Population and GDP Zone

Population (2007)

GDP in Million Naira (2007)

South East

17180206

642552.1

South West

25386723

4184482.81

South- South

17515914

7972873.05

North Central

12206399

2916489.71

North East

15626588

675183.65

North West

36540399

4266096.33

Total

124456229

20657677.65

Percentage share of Zones in Total South East

13.80421546

3.110475974

South West

20.39811362

20.256308

South- South

14.07395527

38.59520506

North Central

9.807784711

14.11818772

North East

12.55589063

3.268439277

North West

29.36004031

20.65138397

Table 5 indicates that in 2007 the North West zone was the most populous in Nigeria with 29.3 percent of the country’s population and it accounted for 20.6 percent of the nation’s GDP. This zone was followed by South West with 20.3 percent of the county’s population and 17

accounting for 20.2 percent of GDP and South-South with 14 percent of the county’s population and accounting for the largest share of GDP with 38.5 percent. They were followed by South East with 13.8 percent but accounting for only 3.1 percent of GDP, North East with 12.5 percent of the population and accounting for 3.2 percent of GDP and North Central with 9.8 percent of the population accounting for 14.1 percent of GDP. It is understandable that the South–South contributed the most to GDP given that it is the source of the country’s oil. This zone is followed by the North West in terms of contribution to GDP. The picture that emerges is that there is a wide gap between states and zones in the country. The evidence shows that the levels of economic performance vary widely amongst states and zones in the country. Table 6: Incidence of Poverty by Sector and Zones, 2004

National

Urban

Rural

South/South

South East

South West

North Central

North East

North West

1980

1985

1992

1996

2004

Total poor

28.1

46.3

42.7

65.6

54.4

Core poor

6.2

12.1

13.9

29.3

22.0

Total poor

17.2

37.8

37.5

58.2

43.2

Core poor

3.0

7.5

10.7

25.2

15.7

Total poor

28.3

51.4

66.0

69.3

63.3

Core poor

6.5

14.8

15.8

31.6

27.1

Total poor

13.2

45.7

40.8

58.2

35.1

Core poor

3.3

9.3

13.0

23.4

17.0

Total poor

12.9

30.4

41.0

53.5

26.7

Core poor

2.4

9.0

15.7

18.2

7.8

Total poor

13.4

38.6

43.1

60.9

43.0

Core poor

2.1

9.0

15.7

27.5

18.9

Total poor

32.2

50.8

46.0

64.7

67.0

Core poor

5.7

16.4

14.8

28.0

29.8

Total poor

35.6

54.9

54.0

70.1

71.2

Core poor

11.8

16.4

18.5

34.4

27.9

Total poor

37.7

52.1

36.5

77.2

71.2

Core poor

8.3

14.2

9.0

37.3

26.8

17.7

34.7

39.2

67.1

68.7

Total Population in Poverty (million)

Source: NBS, 2005, Poverty Profile for Nigeria, 1980-2004 (as reported in UNDP Human Development Report 2008 P. 64)

The ability to compile state GDP has enabled us to connect the level of economic activities to various indicators of development at state level. Estimates of the level of economic activities and income at the state and local government areas will be very useful in tracing the 18

differential impact of policies on different parts of the country. One major indicator of particular interest is the level of poverty across the various zones of the country. Nigeria through a series of surveys has been able to provide evidence on the level of poverty at the state and zonal levels. The NBS has conducted a series of surveys that has allowed for the painting of the picture of the spread of poverty across Nigeria. The data available however is limited to 2004. Assuming that not much change, in the relative levels of poverty between zones has occurred since 2004, we can relate the GDPs of the various states in 2007 to the incidence of poverty in the zones reported in table 6. The table shows that the total poor in Nigeria increased from 28.1 percent in 1980 to 54.4 percent in 2004. Between the surveys in 1996 and 2004 the incidence of poverty has declined from 65.5 to 54.4. The return to civilian administration following the 1999 elections was accompanied by a more determined effort at poverty reduction in the country. This has been reflected in the gradual improvement of the poverty status of the country. Table 6 indicates that core poverty in the country increased from 6.2 percent in 1980 to 22.0 percent in 2004. The rural bias of poverty is also reflected in the table. In relating the information on table 5 to that on table 6 a number of interesting observations can be made. In 2004 the zone with the best incidence of poverty - the South East zone has the lowest contribution to GDP in 2007. The South – South with the greatest contribution to GDP has the next best incidence of poverty. The contribution of the Northern States to GDP is not reflected in their ranking in the incidence of poverty. North West and North East had incidence of over 70 percent each in 2007. North West with its large population and second highest contribution to GDP has not done well on the issue of poverty. Core poverty in the zone was 26.8 which is not far from other zones but a total poverty index of 71 must be worrisome to policy makers and planners. Table 6 confirms that a substantial proportion of Nigerians still live on less than N20, 000.00 a year. It shows that poverty levels have more than doubled in some cases in Nigeria between 1980 and 2004. But what is more interesting is that the spatial distribution of poverty shows sharp contrasts among zones. The compilation of State GDP has enabled greater insight into the published poverty incidence in Nigeria. For effective policy making at the state level we need more than the poverty incidence. We need to know the volume of economic activities in the state, income generated from these activities and their distribution. The generation of the State GDP figures 2002 to 2008 can facilitate some analyses of economic activities in the state and suggestions of how public policies, particularly budgetary policies could be influenced by this information. The information, first of all, estimates the GDP of the state over the period which can facilitate impact analysis of policies on the state economy. The information gives the structure of the state economy and those sectors that account for its growth. Table 4 indicates that Kaduna State contributes to all but six sectors of the economy. The areas of strength and weakness of the state can be easily identified as contributions to the various sectors of the economy have been quantified.

19

Fig. 1 Sectors with Highest Coefficients in Kaduna State.

Figure 1 shows those sectors that have the highest coefficient in Kaduna State. They include Crop Production, Oil Refining, Road Transport, Rail Transport and Pipeline, Financial Institutions, Insurance, Real Estate, Education and Health. Those sectors that are not represented in Kaduna state include Forestry, Crude Oil and Natural Gas, Coal Mining, Cement, Water Transport and Electricity. On the average, a state should contribute 2.7 percent of sectoral output given that there are 37 units accounting for national output in each sector. For all those sectors that the state coefficient is greater than 2.7, the state is performing above average and for those below 2.7 it is below the average. As would be expected, economic activities across the country cannot be at the same level in each state of the federation. Zones have their comparative advantage in certain areas either due to location factors or history of economic development. New states had found that taking off was harder than expected especially those with limited natural resources. In the case of Kaduna as shown on table 1 and Fig.1 nine sectors had coefficients above 2.7, while eight had coefficients of zero. For 24 sectors, the state contributed in each, less than 1 percent of production. The two largest were insurance and rail transport and pipeline but they do not contribute much to the national GDP. The largest contributor to Kaduna GDP is agriculture. With a coefficient of 7.29 it is certainly above average of a sector that contributes over 30 percent of GDP. It is evident that the state has the advantage in the production of agricultural products. By closely examining the state contributions to the various sectors of the economy, the prospects and challenges would become evident to planners and policy makers.

Table 7: GDP and KSGDP (Real) and Rates

GDP KSGDP KSGDP/ GDP % (Real) KSGDP/GDP % (Nominal)

2002

2003

2004

2005

2006

2007

2008

433203.5

477533.0

527576.0

561931.4

595821.6

634251.1

674889.0

14880.6

15764.34

17036.3

18292.43

19744.72

21264.16

22790.60

3.435

3.301

3.229

3.255

3.313

3.352

3.376

3.73

3.33

2.85

2.69

2.66

2.72

2.55

20

Growth rate of KSGDP (Real)

5.938

8.068

7.373

7.939

7.695

7.178

Growth rate of KSGDP (Nominal)

9.29

15.10

20.64

25.84

13.64

8.60

9.6

6.6

6.5

6.0

6.5

6.4

GDP (real National)

3.48

Table 7 shows the relationship between the National GDP and Kaduna State GDP. The share of KDGDP remained relatively stable during the period. In real terms Kaduna contributed on the average about 3.3 percent of the country’s GDP. This is higher than the average of 2.7 that would be expected if all states and Abuja contributed equally to GDP. In nominal terms the rate is lower declining to below 2.7 in some years. The real growth rate of the state has been stable over the years and has remained above the growth rate of the Nigerian economy. In the seven years covered in the tables the national GDP growth rate has averaged about 6 percent. The federal government is targeting growing the economy at double digit to meet the objective of vision 20/2020. To meet these targets, the state would have to also aim at increasing their growth rate and diversify their economic base. The promotion of non-oil GDP can best be achieved when states know what areas they have comparative advantage and intensify production in such areas. Kaduna state would have to diversify her economy and take advantage of her infrastructure to encourage out of state and foreign investment. A major challenge for the state would be to increase her contribution to the nation’s GDP from the average of 3.3 percent in the years covered by the table to a higher level. Fig. 2 GDP Growth Rate for Nigeria and Kaduna State

Fig. 2 shows that Kaduna State has maintained a stable and positive growth rate since 2002. It has closely followed the national trend and had remained above the national rate. Kaduna state during this period has not been one of the states that are a drag on national GDP growth. To continue to contribute to the GDP of the country the state would have to closely examine the structure of economic activities in the state and increase efforts in those areas it has made minimal contributions.

21

Table 8: STRUCTURE OF ECONOMIC ACTIVITIES IN KADUNA STATE (current Prices) % of Total 2002

2003

2004

2005

2006

2007

2008

Agriculture

88.379

86.904

80.462

81.222

80.684

80.848

80.927

Crop

86.121

78.803

78.069

78.673

78.238

78.382

78.406

Industry

1.107

1.245

1.349

1.365

1.320

1.271

0.677

Manufacturing

1.085

0.993

1.317

1.330

1.276

1.227

0.632

Building and

0.146

0.164

0.403

0.434

0.401

0.375

0.379

W/R trade

2.360

2.160

3.606

3.762

4.388

4.288

4.523

Services

8.005

9.105

14.177

13.121

13.205

13.217

13.491

Construction

Looking at the five major sectors of the state economy in 2008 as shown on table 8 it is observed that Agriculture was dominant, accounting for 80.927 percent of economic activities in the state. The next to it is services which accounted for 13.49 percent of activities. It was followed by Whole and Retail Trade which accounted for 4.52 percent of state activities and industry which accounted for 0.677 percent of state activities. At the bottom is Building and Construction which accounted for 0.379 percent of state activities. Agriculture is the mainstay of the economy of Kaduna State. As shown on table 8, it accounts for over 80 percent of state GDP over the period. In this sector, crop production dominates. Indeed crop production accounts consistently for 78 percent of Kaduna State GDP over the period. Livestock and fisheries make up the balance of agricultural production. The state does not contribute to forestry. The potential for livestock and fisheries is high in the state and can be promoted to increase the contribution to state and national GDP. The performance of the state as compared to other non-oil producing state has been enhanced by the growing strength of agriculture in the recent past. The declining share of agriculture in national GDP since the mid 1970s has been reversed since 1999. Agriculture’s share of GDP rose from 30 percent in 1981 to 36 percent in 2000 and 42 percent in 2007. Agricultural States like Kaduna benefited from the improved performance of agriculture. The share of oil in GDP also rose during the period to about 24 percent in 2007. The oil producing states benefited from this increase. In contrast, manufacturing sector has been relatively stagnant and losing its share of GDP from 6 percent in 1985 to a range of between 4 and 5 percent during the 1990-2007 period. Today, industry accounts for less than 2 percent of Kaduna State GDP. Industrial sector contribution to Kaduna GDP is lower than is expected given that Kaduna was the capital of Northern Nigeria and thus had a head start on other states in the northern part of the country. Kaduna town was once part of the Northern Industrial Triangle. Most activities in the sector are in manufacturing. The stagnation of the industrial sector in the country manifests in the state as gradual demise of industries particularly since reforms and opening up of the economy. The challenges of the textiles industry, for example, highlight the difficulties of the industrial sector. The harsh economic environment has had a major effect on manufacturing in the state. It is instructive that electricity is one of the sectors the state did not contribute to national GDP. Like other states 22

the energy deficiency has been a major limiting factor to development. Building and Construction also accounts for an insignificant part of Kaduna GDP. Investment in this sector is always considered important for a dynamic economy. Nigeria needs to create the condition for improvements in this sector. Indeed it consistently contributed less than 0.5 percent of State GDP. Fig. 3: Structure of Kaduna State Economy

Wholesale and Retail trade contributed over 4.5 percent of state GDP in 2008. Its share of Kaduna GDP increased steadily from 2.3 percent in 2002 to its present contribution. Most non-farm activities in Nigeria revolve around trading thus it is not unexpected that as the economy maintains a stable growth rate this sector of the economy would continue to improve. The final major sector in the structure of the state economy is services. Globally, the expectation is that as the economy grows the role of services will increase. The expected structural shift in a modern dynamic economy is expected to move towards services.

Table 9 STRUCTURE OF THE SERVICES SUB-SECTOR (PERCENTAGE) 2007

2008

Transport

21.7794391

20.86325507

Communications

2.59523964

2.5171176

Utilities

0.02086735

0.02281525

Hotel & Restaurant

0.77616357

0.859259483

Finance & Insurance

17.1710727

16.70966565

Real Estate & Business Services

51.5191664

53.01664445

3.9292079

3.861342732

2.20884341

2.149899763

Producer of Govt. Services Comm. Social & Pers. Services

Table 9 gives the structure of the services sub-sector of Kaduna state. The service sector grew in Kaduna State during this period from 8 percent of State GDP in 2002 to 13.9 percent 23

in 2008. The sector was driven by the Real Estate and Business Services which accounts for more than 50 percent in both 2007 and 2008 as shown in table 9. Transport sector, particularly road transportation, account for the second major driver of services in the state with over 20 percent of total services in both 2007 and 2008. Finance and Insurance follows with over 16 percent of total services in both years. Communications, Production of Government Service each accounts for less than 4 percent in each of both years, while Utilities account for less than 1 percent in both years. The potentials of enhancing the contributions of the various areas of the service sector are high in Kaduna state and can lead to further diversification of the state economy. Information of this nature is important for policy makers and planners at the state levels. Knowledge of the various elements of the sub-sectors of the economy is necessary for targeted policies that can promote growth and poverty alleviation. The compilation of state GDP is also of particular interest in the management of the public sector. It is generally argued that states in Nigeria must increase the effectiveness of their expenditures if the country is to attain its set objectives. Information on state GDP would enhance planning and policy making at the state level and enhance economic development at the State level as it can be used to measure the effectiveness of the government spending and effectively indicate the level of sectoral linkages in the States.

Table 10: KADUNA STATE REVENUE AND OTHER RECEIPTS 2007

2008

25.57

31.72

-

6.64

Share of excess oil revenue

5.53

4.05

VAT

4.23

5.57

Internally Gen. Rev. (IGR)

6.01

8.7

Grants

36.29

-

Stabilization fund and others

-

-

Others

-

-

TOTAL

77.65

56.7

Gross Statutory Allocation Distribution from excess crude A/C as augmentation of State Allocation

Source: Central Bank of Nigeria Annual Report and Financial Statements

The revenue structure shown on table 10 indicates that the major source of revenue to the state is from statutory allocations. This dependence on a source of revenue that the state does not directly control can pose a problem for planning. The availability of the state GDP figures allows for better appreciation of the various magnitudes of the revenue items. The most important is the IGR/GDP ratio. For the two years covered by table 10, IGR of Kaduna state was 7.7 percent and 15.3 percent of state total revenue respectively. This is certainly very low. Ordinarily one would expect a positive correlation between the IGR and the state GDP. A buoyant revenue structure would witness this ratio increasing with increases in GDP over time. The compilation of state GDP has provided the information that should encourage 24

more government action in improving on internally generated revenue. The VAT/ GDP ratio is also of interest. The ratio of VAT to total state revenue was 5.83 in 2007 and 9.82 in 2008.

Table 11: KADUNA STATE EXPENDITURE AND TRANSFERS (Billion Naira) 2007

2008

Personnel cost

14.52

10.5

Overhead cost

15.73

13.1

-

4.9

Others

28.74

1.2

SUB-TOTAL

58.99

29.7

Capital

51.51

11.8

EXTRA-BUDGETARY EXPENDITURE

1.05

1.2

111.56

42.7

Transfers

TOTAL EXPENDITURE

Source: Central Bank of Nigeria Annual Report and Financial Statements

The stimulative effect of public expenditure can be examined by the impact of state public expenditure on state GDP. Although in a federation it is difficult to isolate the impact of state from those of federal government, the trend of capital expenditure in relation to that of the state GDP can be a useful indication of the growth orientation of the state government. The ratio of recurrent expenditure to state GDP and its growth over time is also of particular interest to the managers of the state economy. With estimates of the state GDP the analysis necessary to inform proper budgeting in the state is now available. The structure of the capital budget in terms of the allocation to the various sectors needs to be articulated within the context of the structure of production in the state and the major growth drivers. Without a credible statistical base it is difficult to identify the major growth drivers and the most productive sectors of the state economy. From the structure of the Kaduna state economy it is clear that crop production is the leading contributor to GDP. Policies to enhance this sub-sector should be reflected in the budget. An analysis of capital allocation and budget outcomes over the years if undertaken would reveal how they reflect the structure of the economy particularly in enhancing the growth drivers of the state. Table 11 shows that recurrent expenditure was 52.87 of total expenditure in 2007 and 69.55 percent of total expenditure in 2008. Capital expenditure was 46.17 percent of total expenditure in 2007 and 27.63 percent in 2008. This is comparable with the federal government with recurrent expenditure of 64.84 percent of total expenditure in 2007 and 65.33 percent in 2008. Federal government capital expenditure was 30.98 percent of total expenditure in 2007 and 29.6 percent in 2008.

Table 12: BUDGET INDICATORS: KADUNA STATE AND FEDERAL (Billions) STATE GDP VAT

2007

2008

560.89

609.13

4.53

5.57

2007

2008

Percentage of State GDP 0.807645

0.914419 25

IGR

6.01

8.7

1.071511

1.428267

Total Rev

77.65

56.7

13.84407

9.308358

Recurrent

58.99

29.7

10.51721

4.875806

Capital

51.51

11.8

9.183619

1.937189

111.56

42.7

19.88982

7.009998

33.91

14

6.045749

2.29836

2007

2008

2007

2008

20657.32

23842.16

Rev.

5715.5

7866.6

27.66816

32.99449

Expenditure

2450.9

3240.8

11.86456

13.59273

Recurrent

1589.3

2117.4

7.693641

8.880907

Capital

759.3

960.9

3.675695

4.030256

Overall Balance

117.2

47.4

0.567353

0.198807

Total Expend Overall Balance

GDP (Current Prices)

Percentage of Nations GDP

Source: Calculated from CBN data

Table 12 shows that the Kaduna state share of VAT was 0.8 percent of state GDP in 2007 and 0.9 percent in 2008. The Internally generated revenue (IGR) was 1.07 percent of state GDP in 2007 and 1.4 percent in 2008. Apart from the statutory allocation to states which is outside the control of the state this is an area the state government would have to pay particular attention. Total revenue of the state as percentage of state GDP was 13.8 in 2007 and 9.3 in 2008. This can be compared to the federal government which recorded total revenue as percentage of GDP of 27.66 in 2007 and 32.99 in 2008. Total Kaduna state expenditure as percentage of state GDP was 19.8 in 2007 and 7.0 in 2008. When compared with the federal government we notice that total federal government expenditure was 11.8 percent of GDP in 2007 and 13.5 percent in 2008. State capital expenditure was 9.1 percent of state GDP in 2007 and 1.9 percent in 2008. Compared with the federal government which had capital expenditure as percentage of GDP of 3.6 in 2007 and 4.0 in 2008 the state did relatively well in 2007 but declined in 2008. Ordinarily we expect that the capital expenditure would expand the productive capacity of the economy and drive growth better than recurrent expenditure but we continue to find at both the federal and state levels low capital expenditure compared to recurrent expenditure. Policy makers in the state might want to take a critical look at government spending structure to ascertain how best to increase public sector capital expenditure.

Table 13: KADUNA STATE BALANCE AND FINANCING (Billion Naira) 2007

2008

18.66

27.0

Overall Balance

(33.91)

14.0

Internal (Loans)

-

-

Current

26

External (Loans)

-

3.5

Sub-Total (Loans)

-

3.5

33.91

(17.5)

(33.91)

(14.0)

OTHER FUNDS Total

Source: Central Bank of Nigeria Annual Report and Financial Statements

The availability of state GDP helps put into better perspective the budget balance and financing strategy of the state. The overall balance of the state in 2007 was negative (33.91). State revenue that year was N77.68 billion while expenditure amounted to N111.56 billion. This resulted in the deficit of N33.91 billion. With information in the state real GDP for 2007 put at N21,264.16 and N22,790.60 for 2008 we can better appreciate the magnitude of the deficit in 2007 and surplus in 2008. The state deficit was 6 percent of GDP in 2007. This could be considered too high for a state like Kaduna. In 2008 the total revenue of the state amounted to N56.5 billion and total expenditure stood at N42.7 billion resulting in a surplus of N14.0 billion. The overall deficit of 14.0 billion naira still resulted in 2008 as shown on table 13.

27

Section Seven

Conclusions and Recommendations

Conclusions This attempt to derive the Kaduna State GDP as an approximation of economic activities in the state has been based on an initiative already underway in the National Bureau of Statistics. The methodology has followed the thrust already articulated by the bureau. There are obvious limitations in extending the structure of the economy in 2007 to the period covered by this exercise. Given the interest in generating state data this can serve as a good starting point for the state as it puts in place the mechanism for articulating a more robust State Accounts. The state is desirous of such estimates that would enable it make policy choices that would benefit its citizens. Based on the information derived, so far the state can carry out an independent census of economic activities in the state through a State Statistical agency. NBS is however now prepared to start computing SGDP to complement the annual and quarterly GDP on a routine basis. This, it is hoped, will be addressed in such a way that State Statistical Agencies (SSAs) will be involved to claim ownership of the exercise. As an immediate step the state might want to look closely at sectors it feels are not properly represented in the present accounting framework and also try to validate the figures contained in the current calculations. The States in Nigeria need a state-wide integrated system of economic statistics. They need State Accounts. State Accounts would provide the framework for the compilation of a state GDP. Kaduna State should put in place a State Accounting System (SAS). The SGDP will be an important aggregate in the SAS. The SGDP estimate can be used as a veritable tool by policy makers in decision making and policy formulation. It could be used as a guide in resource allocation as well as a tool for effective planning and administrative management. To fully account for the impact of its own policies, state governments should have basic state statistics that would assist in assessment of policies. This information is not generally available in most states of the federation. State Statistical Agencies have been engaged in collecting some information, while administrative statistics can also be found in all states of the federation. A major challenge in states however has been the ability to measure the aggregate performance of the state economy. States would want to know the value of total production in the state during a given period. They would want to know the level of income generated by the state during a given period. This is important if planning at the state level is expected to make significant impact on the lives of the people. It is also critical for the attainment of state objectives of economic growth and poverty alleviation. Planning has become very important at the state and local government levels in Nigeria in the light of the performance of the national economy since reforms in the 1980 particularly as it reflects on the spatial imbalance in economic growth and development in the country. Despite the moderate gains made since reforms, some states and local governments and some geographic zones in the country have persistently lagged behind both in absolute and relative terms in economic growth and development. This has encouraged more serious efforts in these states to improve on economic performance and in reducing poverty. As they make these efforts, they are confronted with lack of quality and adequate information and the relevant indicators that would point to progress or lack of it in the state. Calculating the state GDP has become an imperative in many states of Nigeria. Recommendations 

Kaduna State should strengthen the statistical division of the Ministry of Economic Planning and all such bodies charged with the responsibility of data collection in the 28

state. Various line ministries have responsibility for data relation. They have mandate to collect and store data in their areas of operation. They should be strengthened to be able to collect credible information and data. Agriculture accounts for the major share of KSDP. It is important for a detailed account of this subsector to be prepared. The ministry of agriculture and other relevant agencies should be mobilized to collect accurate data on the productivity of agriculture in Kaduna state and income generated. This also applies to all the 33 sectors in the framework for National and State accounts. 

The state should start producing, on an annual basis, state accounts that documents production in all sectors of the economy from which the SGDP would be derived. From production, income is derived, thus a state income account would be necessary. Information on savings and investments would be needed.



The state should enhance the ability of staff in the statistical divisions of the various ministries and in particular the Ministry of Economic Planning. Necessary equipments and training should be provided and the units properly staffed and funded. The general attitude towards data and information has to change and policy makers should be desirous of good and quality data to aid policy. Evidenced based decision making is today critical for the success of economic policies and States can no long ignore the facts in taking decisions.



The state should work closely with the NBS. Close collaboration with NBS State officers would be necessary to ensure that both parties are on the same page in data collection in the State.



The methodology adapted by the States and the NBS should eventually guide the articulation of KSGDP since the NBS has the statutory responsibility of producing these data.



The state should strengthen the information base on the informal sectors. This is an area the NBS might appreciate leadership from the states. The informal sector is often difficult to handle if their confidence is not cultivated. This is better done by local and state agencies.



NBS is ready to start producing state GDP statistics and would need the collaboration of the states to achieve this target. They need the states to take ownership of the process of producing these statistics which must be harmonized within the same framework and the same methodology across the States. Without this, the information from the State levels will not be comparable and will not tally with national aggregates. Kaduna State should collaborate in this exercise.



The State however needs more than the State GDP statistics for a wide range of policy concerns.

29

Section Eight

References

Akinyosoye, V. O. Framework for the compilation of State Gross Domestic Product (SGDP)

Paper presented at the Meeting of the Joint Planning Board (JPB) and National Council on Development (NCDP) organized by the National Planning Commission at Shiroro Hotel, Minna, Niger State, Nigeria, October 27 – 28, 2008.

Central Bank of Nigeria Annual Report and Financial Statement 2007 and 2008 National Bureau of Statistics Annual Abstract of Statistics. Various Issues National Bureau of Statistics Poverty Profile of Nigeria 2005 UNDP Human Development Report 2008 – 2009 Achieving growth with equity

30

Appendix One: Nigerian Real GDP (at 1990 base prices) Real GDP (at 1990 constant basic prices) – NIGERIA Million Naira 2002

2003

2004

2005

2006

2007

2008

1. Agriculture

190,133.40

203,409.90

216,208.50

231,463.60

248,599.00

266,477.20

283,913.10

(a)crop production

168,777.90

181,238.10

192,452.20

206,178.40

221,622.30

237,685.70

253,186.10

(b)livestock

12,360.60

12,879.00

13,716.10

14,643.90

15,654.70

16,739.40

17,894.00

(c) forestry

2,624.90

2,664.30

2,837.40

3,005.40

3,186.20

3,381.30

3,589.40

(d) fishing

6,370.10

6,628.60

7,202.70

7,636.00

8,135.80

8,670.90

9,243.50

2. Industry

123,553.50

149,878.70

156,486.80

159,161.40

155,165.50

151,699.10

145,390.70

(a)crude petroleum

106,002.10

131,336.60

135,670.70

136,345.50

130,193.60

124,285.10

118,367.30

1,112.10

1,172.50

1,379.30

1,510.80

1,666.10

1,878.50

2,118.30

Coal mining

0.10

0.10

0.10

0.10

0.10

0.20

0.20

Metal ores

6.40

6.20

6.80

7.60

8.50

9.50

10.60

1,105.60

1,166.20

1,372.40

1,503.20

1,657.50

1,868.80

2,107.50

16,439.40

17,369.60

19,436.80

21,305.10

23,305.90

25,535.50

27,905.00

Oil refining

518.40

567.60

624.30

686.80

755.60

831.80

915.00

Cement

313.20

325.60

358.20

397.80

443.70

497.00

555.90

15,607.80

16,476.40

18,454.30

20,220.50

23,106.60

24,206.80

26,434.20

7,518.90

8,176.80

7,622.50

8,544.50

9,654.80

10,912.60

12,337.50

47,108.80

49,822.30

68,082.80

77,283.10

89,075.20

102,616.10

116,986.90

64,888.90

66,245.40

79,175.40

85,478.80

93,327.10

102,546.20

113,260.80

(a)Transport

9,226.40

9,338.00

13,993.70

14,882.10

15,911.50

17,017.60

18,206.30

Road Transport

7,910.30

8,003.70

12,580.60

13,385.90

14,319.50

15,233.40

16,402.80

1.40

1.50

1.60

1.70

1.80

1.90

2.00

287.90

286.70

303.60

321.50

340.90

361.50

383.40

& natural gas (b) solid minerals

Quarrying and other mining ©manufacturing

Other manufacturing 3. Building and construction 4. Wholesale & Retail Trade 5. Services

Rail Transport & Pipeline Water Transport

31

Air Transport

264.50

284.00

300.70

318.20

342.20

368.00

395.90

Other Transport

762.40

762.20

807.20

854.80

907.20

962.80

1,022.20

(b) communication

3,269.80

4,048.80

6,307.80

8175.20

10,926.70

14,624.60

19,587.40

Telecommunications

2,983.10

3,785.50

6,015.90

7,851.70

10,567.90

14,266.80

19,156.20

286.70

263.30

291.90

323.60

358.80

397.80

441.20

© Utilities

13,842.70

16,166.60

18,881.90

20,135.30

21,115.80

22,156.60

23,081.00

Electricity

13,318.10

15,598.80

18,252.50

19,439.90

20,344.40

21,301.00

22,132.00

Water

524.70

567.80

629.40

695.40

771.30

855.60

949.00

(d) Hotel &

763.90

799.30

1,951.50

2,155.40

2,433.60

2,748.80

3,105.40

23,172.90

20,958.60

21,531.00

22,144.50

23,246.70

24,416.70

25,595.00

22,452.80

20,377.30

20,886.70

21,430.30

22,451.70

23,531.70

24,609.90

720.10

581.30

644.30

714.20

794.90

885.00

985.00

6,780.60

6,992.20

7,705.90

8,524.40

9,486.80

10,563.60

11,769.80

6,201.30

6,387.30

7,080.30

7,865.60

8,784.00

9,813.70

10,969.40

579.30

604.80

625.60

658.80

702.80

749.90

800.30

4,476.70

4,532.10

5,023.80

5,294.10

5,603.90

5,935.30

6,292.10

3,561.30

3,561.30

3,947.70

4,105.60

4,288.30

4,479.40

4,679.80

Education

735.40

787.10

872.50

964.50

1,068.40

1,183.60

1,311.30

Health

180.00

183.70

203.60

224.00

247.10

272.70

301.00

3,355.90

3,409.90

3,779.80

4,167.90

4,602.30

5,082.70

5,613.80

14.90

14.90

16.50

18.30

20.40

22.60

25.10

3,009.50

3,048.90

3,379.70

3,734.50

4,130.80

4,569.50

5,055.40

Broadcasting

331.50

346.10

383.60

415.10

451.20

490.50

533.40

TOTAL (GDP)

433,203.50

477,533.00

527,576.00

561,931.40

595,821.60

634,251.10

674,889.00

Services

Post

Restaurant (e) Finance & Insurance Financial Institutions Insurance (f) Real Estate & Business Services Real Estate Business Services (g) Producers of Govt. Services Public Administration

(h) Comm. Social & Pers. Services Private non- Profit Organizations Other Services

Source: NBS

32

GROSS DOMESTIC PRODUCT AT CURRENT BASIC PRICES: 2002 – 2008 – NIGERIA Million Naira 2002

2003

2004

2005

2006

2007

2008

3,357,062.90

3,624,579.50

3,903,758.70

4,773,198.40

5,940,237.00

6,757,867.70

7,359,558.30

3,050,243.50

3,275,429.20

3,478,096.40

4,228,282.20

5,291,619.10

6,024,381.00

6,544,570.60

183,202.20

202,263.10

243,887.50

313,252.30

378,702.60

434,151.70

482,107.30

33,186.10

40,421.10

51,658.30

61,785.80

73,461.10

83,812.00

9,272.20

90,431.20

106,466.10

130,116.50

169,878.00

196,454.20

215,523.00

238,608.40

2,042,716.40

3,037,706.30

4,610,083.70

6,094,891.30

7,488,743.50

8,085,380.00

9,941,325.20

1,798,823.40

2,741,553.90

4,247,716.10

5,664,883.20

6,982,935.40

7,533,042.60

9,299,524.80

7,067.50

8,413.10

13,061.30

17,301.50

27,284.00

31,454.40

36,207.10

0.30

0.30

0.40

0.30

0.30

0.40

0.50

11.50

11.40

13.00

14.90

22.20

26.90

32.90

7,055.70

8,401.30

13,037.90

17,286.40

27,261.50

31,427.10

35,174.50

236,825.50

287,739.40

349,316.30

412,706.60

478,524.10

520,883.00

605,592.60

13,808.10

17,367.10

22,456.60

29,037.50

37,458.00

41,355.80

4,497.10

3,546.30

4,236.00

5,477.40

8,501.80

11,791.60

14,916.90

18,036.10

219,471.10

266,136.30

321,382.40

375,167.30

429,274.50

464,610.40

443,259.40

47,985.40

58,905.40

166,078.50

215,786.10

250,332.30

266,264.00

292,580.50

Agriculture

Crop Production Livestock

Forestry

Fishing

Industry

Crude Petroleum & Natural Gas Solid Minerals

Coal Mining

Metal Ores

Quarrying & Other Mining Manufacturing

Oil Refining

Cement

Other Manufacturing Building & Construction

33

Wholesale & Retail Trade

772,436.90

922,149.90

1,484,422.40

1,868,251.30

2,741,794.50

3,044,773.90

3,488,180.30

692,179.50

843,690.50

1,246,723.70

1,620,112.00

2,143,487.40

2,502,832.00

276,526.50

178,783.70

224,881.20

365,730.60

385,481.60

441,822.30

473,445.40

503,068.10

160,679.90

205,936.70

344,913.00

362,605.30

416,240.30

444,990.00

472,495.30

5.40

5.90

6.40

6.90

7.50

9.60

11.80

829.30

842.40

909.90

982.90

1,061.30

1,170.70

1,252.00

2,519.20

2,759.20

3,009.60

3,282.80

4,023.90

4,567.80

5,063.30

14,749.90

15,337.00

16,891.60

18,603.70

20,489.40

22,707.40

24,245.70

9,816.50

13,206.70

21,609.50

39,513.20

165,524.10

243,551.00

261,868.80

8,736.20

12,194.70

20,454.10

38,194.00

164,019.90

241,814.90

259,849.80

1,080.30

1,012.00

1,155.40

1,319.20

1,504.20

1,736.20

2,019.00

18,824.70

22,397.40

26,829.70

29,387.40

42,614.80

45,778.40

50,352.10

17,769.40

21,234.90

25,515.20

27,905.90

40,974.20

43,820.50

47,989.00

1,055.30

1,162.50

1,314.40

1,481.50

1,640.60

1,957.90

2,373.10

9,670.00

11,421.50

35,249.80

46,080.00

57,611.90

72,839.40

89,393.30

79,418.20

81,080.80

102,953.30

130,749.50

296,704.90

340,908.10

366,059.10

76,950.40

78,832.10

99,872.40

126,528.40

288,381.30

330,822.20

354,972.20

Services

Transport

Road Transport

Rail Transport & Pipelines Water Transport Air Transport

Other Transport Services Communication

Telecoms

Post

Utilities

Electricity

Water

Hotel & Restaurant Finance & Insurance Financial Institutions Insurance

34

2,467.80

2,248.60

3,080.90

4,221.10

8,323.60

10,085.90

11,086.90

222,756.40

294,957.90

463,241.50

712,835.30

808,555.20

925,594.40

1,055,353.50

218,966.90

290,467.70

444,688.30

680,790.80

765,184.70

871,568.00

994,414.70

3,789.50

4,490.30

18,553.20

32,044.50

43,370.50

54,026.40

60,938.80

105,538.10

115,942.30

129,865.60

148,055.50

168,796.70

193,425.40

210,276.10

81,538.10

90,206.00

101,038.60

115,190.80

131,329.00

151,330.40

164,128.60

18,538.10

20,393.90

22,842.90

26,042.50

29,689.90

33,356.60

36,896.80

4,856.30

5,342.50

5,984.00

6,822.20

7,777.80

8,738.40

9,250.70

67,518.00

79,802.70

101,243.90

128,009.50

161,857.60

207,289.90

224,165.60

141.40

145.60

150.00

154.50

158.80

163.60

168.50

66,464.90

78,546.90

996,684.90

126,112.80

159,545.30

204,451.10

220,341.50

911.70

1,110.20

1,409.00

1,742.20

2,153.60

2,675.20

3,155.50

6,912,381.30

8,487,031.60

11,411,066.90

14,572,239.10

18,564,594.70

20,657,317.70

23,842,170.70

Real Estate & Business Services Real Estate

Business Administration Producers of Govt. Services Public Administration Education

Health

Comm., Social & Pers. Services Private nonProfit Organizations Other Services

Broadcasting

TOTAL (GDP)

Source NBS

35

Appendix Two State Population and GDP Statistics (2007) The UNDP in the 2008-2009 Nigerian Human Development Report provided state wise statistical information for Nigeria. The report estimates among others, state GDP. Population, GDP & Per Capita by Zones in Nigeria 2007 STATES

POPULATION

GDP in Million Naira

GDP Per Capita in Million Naira

GDP per capita in US $

Abia

3,051,841

156,581.86

51,307.34

407.75

Anambra

4,459,236

91,536.69

20,527.44

163.14

Ebonyi

2,317,922

57,656.38

24,874.17

197.68

Enugu

3,388,168

131,168.00

38,713.55

307.67

Imo

3,963,039

205,609.17

51,881.69

412.32

Total

17,180,206.00

642,552,10

37,400.72

297.20

Ekiti

2,449,007

97,551.83

39,833.22

316.56

Lagos

9,131,112

2,935,593.30

321,493.52

2,544.98

Ogun

3,721,345

115,791.01

31,115.37

247.28

Ondo

3,587,265

762,093.19

212,444.07

1,688.34

Osun

3,441,186

79,271.30

23,036.04

183.07

Oyo

5,505,815

194,182.18

35,268.56

280.29

Total

25,386,723.00

4,184,482.81

164,829.58

1,309.94

Akwa Ibom

3,841,712

1,843,218.56

479,790.93

3,813.01

Bayelsa

1,788,957

1,212,867.01

677,974.38

5,388.02

Cross River

3,048,375

321,901,19

76.073.71

604.58

Delta

4,130,761

1,208,594.31

292,583.94

2,235.23

Edo

3,463,629

142,784.30

41,223.90

327.62

Rivers

5,084,192

3,333,507.68

655,661.25

5,210.69

Total

17,515,914.00

7,972,873.05

455,178.82

3,617.41

Benue

4,390,184

792,405.51

180,494.83

1,434.43

Kogi

3,424,637

63,348.75

18,497.95

147.01

Kwara

2,469,200

99,490.24

40,292.50

320.21

Nasarawa

1,926,153

297,301.17

154349.72

1,226.65

Niger

3,862,030

820,194.99

212374.06

1,687.57

Plateau

3,356,070

82,165.65

24,482.70

194.57

FCT Abuja

592,886

761,583.40

1,284,535.97

10,208.50

Total

12,206,399.00

2,916,489.71

238,932.39

1,898.85

South East

SouthWest

South South

North Central

36

North East Adamawa

3,352,085

88,296.94

26,340.90

209.34

Bauchi

4,563,897

95,798.53

20,990.51

166.82

Borno

4,044,366

269,473.62

66.629.39

529.52

Gombe

2,374,698

105,286.06

44,336.61

352.35

Taraba

2,411,441

43,020.00

17,839.95

141.78

Yobe

2,232,186

73,308.50

32,841.58

261.00

Total

15,626,588.00

675,183.65

43,207.36

343.38

Jigawa

4,585,695

574,713.28

125,327.41

996.01

Kaduna

6,276,729

558,386.58

88,961.40

707.00

Kano

9,266,314

797,251.26

86,037.58

683.76

Katsina

5,984,866

748,767.07

125,110.08

994.28

Kebbi

3,298,579

211,057.04

63,984.23

508.50

Sokoto

3,822,365

716,514.16

187,358.92

1,488.98

Zamfara

3,305,551

657,406.94

179,466.63

1,585,01

Total

36,540,399

4266096.33

688,887.33

6963.74

North West

Source: NBS, Human Development Indicators, 2008

Table 5.4 of the 2008-2009 NHDR

37

Rank of States and Zones by Population, GDP & Per Capita in Nigeria 2007

STATES

POPULATION

GDP in Million

GDP per capita in

Naira

US $

South East Abia

27

22

21

Anambra

9

30

35

Ebonyi

33

36

31

Enugu

22

24

26

Imo

13

20

19

Ekiti

30

28

25

Lagos

2

2

5

Ogun

17

25

29

Ondo

18

9

7

Osun

20

33

33

Oyo

5

21

27

Akwa Ibom

15

3

4

Bayelsa

36

4

2

Cross River

28

16

17

Delta

11

5

6

Edo

19

23

23

Rivers

6

1

3

Benue

10

8

11

Kogi

21

35

36

SouthWest

South South

North Central

38

Kwara

29

27

24

Nasarawa

35

17

12

Niger

14

6

8

Plateau

23

32

32

FCT Abuja

37

10

1

Adamawa

24

31

30

Bauchi

8

29

34

Borno

12

18

18

Gombe

32

26

22

Taraba

31

37

37

Yobe

34

34

28

Jigawa

7

14

13

Kaduna

3

15

15

Kano

1

7

16

Katsina

4

11

14

Kebbi

26

19

19

Sokoto

16

12

10

Zamfara

25

13

9

North East

North West

39