We Are Making Abuja a Smart City – Bala Mohammed, Minister, Federal Capital Territory, FCT

By Anayochukwu Agbo and Tajudeen Suleiman

Bala-Mohammed,-FCT-Minister

Bala Mohammed, FCT Minister

You have been the Minister of FCT for over three years. For you what are the high points of your administration?

The high point for me is the institutional firming up. We have deviated from the period when things are personalised, done unilaterally and casually to a period where we are doing things through the institutions, building the bureaucracy and deepening it for sustainability. For example, the taxi scheme is a bankable project. Of course government gave seed money. All the taxis we had in the past have all phased out because there was no knowledge behind it; it was just driven by someone who believed he could replicate something he saw in London or other places here. But in our own case, we had collaboration; we deepened stake-holding in a manner that we came up with a model where the partakers would have to give guarantee through his banker or his sponsors to pay 10 per cent cost of the taxi. It is no longer a patronage where you bring your brother or sister and we give him a taxi.

Again we have removed some buses from the streets and given them opportunity to be car owners. We are also establishing the Abuja Revenue Board. We never had this before. The board can float bonds and we will be able to generate huge resources like N500 billion that we require, just like any state. We can mortgage our revenue streams within a period to be able to defray it. Hitherto we don’t have it. So we’re moving towards a threshold where we want to put Abuja on viability and growth levels that would be self-sustaining. We have a private sector initiative to maintain and sustain the Abuja master plan without violation, and to make sure we improve the quality of life by building a middle class that can afford whatever we’re bringing to the territory. We’re making sure that we bring affordable housing that [is] completely absent in our plan.

Hitherto the satellite towns were not given due attention. We recreated, through the support of Mr. President, the Satellite Towns Development Agency where we are bringing in money, either through multilateral or the budgeting system, to put infrastructure in the satellite towns to bring them at par with the city. And then create a transport system that would make sure we bring people to and fro to reduce the pressure on the city. We’re building the light rail, we’re bringing high capacity buses and people would be encouraged to park their vehicles in the satellite towns and come to the city to do their work and go back without the transport gridlock that we used to experience.

The Centenary City is a very ambitious project. What are the guarantees that it will be fully realised?

The Centenary City is another epochal initiative of Mr. President to make sure we institutionalise this epoch-making occasion. The city is private sector driven. About N2 trillion will be spent to develop the Centenary City without a dime coming from FCT. We only provided the land. The equity structure of the Centenary City is such that it is framed up in a manner that the FCT is as an equity participator. We have five per cent of whatever will come up as a developed centenary city. We have monetised our own development control charges and the premium. That means the future is bright and we have a lot of hope in terms of revenue generation. We have brought a lot of investments into the country under President Jonathan. FCT is now placed in a position of viability and sustainability financially, to even reach a level where we exit from normal budgetary allocation and provide infrastructure and services and still have surplus for the federal government. This is the only time when we are seeing the FCT being encouraged to develop institutions and initiatives that are private sector driven that would enhance the development of the city from where it had been, a 100 per cent emphasis on government funding. We have reached almost 50 per cent private sector funding, but we want to get to the level where we would be 100 per cent private sector funding because we have the capacity and all that it takes for us to do that.

Abuja appears to be growing faster than the infrastructure development.

We have come up with policies and programmes that will reduce the infrastructural gaps, service gaps and housing gaps. We have 17 million housing deficit in Nigeria. FCT takes about five million of this. Everybody now moves to Abuja because it is a land of opportunity simply because we have enhanced security, the quality of life and people’s micro-economic indices have risen. So that is why we have to come up with affordable housing. And that is why we came up with the land swap scheme. We are developing 11 districts. When Abuja was created 35 years ago, it was structured for phased development and it is supposed to have 79 districts and two sector areas – Wuse and Garki. But we have only been able to develop 11 districts through the paltry budgetary system. We are supposed to have a 3.5 million population when the city is fully developed but we have five million people in the city already and we have only developed 11 districts. So something revolutionary had to be done to arrest the situation. That was why we came up with the land swap framework where we leverage on private capital to develop primary infrastructure. These 11 districts will cost about N600 billion and the secondary investments will run into trillions because we are going to build houses, hospitals, schools and other offices all over the districts and we will reduce the deficit.

Some critics argue there is no room for the poor in Abuja. What is in the city for the lower rung of the society?

We approached government and came up with two districts – Namosa and Wasa – where we want to build affordable districts. We have already structured it in such a manner that the private sector is given the land to build something that is affordable to common Nigerians; something that would not go beyond N1.6 million within the framework of our own urban master plan. Already the lands have been distributed and contracts awarded for the development of the districts. Government would do these because we want to build the houses that would be on the threshold of affordability and we are not asking anybody to pay premium, that’s another thing. Everything is private sector driven. We are doing a lot other things to create a smart city.

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Bala Mohammed

You need a lot of money to do all these and corruption is still a major issue in public service. What measures are you taking to block leakages in the system?

When we came in, our budget was high. But now because of contending needs, the budget has been dwindling. So we realised government has invested so much seed money in FCT and that it was time for us to free federal government resources and for us to look inwards. As you said, there have been a lot of leakages, so we brought e-payment in our revenue profile. That is why we are able to augment our internally generated revenue, IGR, about 300 per cent. We are now generating up to N150 billion in the FCT within a year. In the past they were only generating N45 billion or N20 billion. Our water rate up till now is open to corruption with connivance and compromise by the system. We are bringing metering and it is the meter that will stop all these. But it is not easy fighting beneficiaries of the system because it had been there for a long time.

Also, there were ghost workers in the system. We were paying about N4 billion in salaries but now we have reduced it to N3.5 billion. This is because we brought e-payment and biometrics into the system to make sure we reduce the gaps. But essentially, we have to open new revenue areas. Our regulatory charges, violations, and parking charges have brought up our revenue. But today our revenue is still not where we want to be. But by the time we bring property tax, we envisage we would be getting up to N400 billion per annum. And it is not an area where the common man is charged, it is for the ‘big men’. We would do it together with the area councils and share it on a percentage that is agreeable. That will reduce our indebtedness and we will be able to do a lot of things.

About N400 billion to N500 billion per annum is huge revenue that we are not collecting so far. And all these cannot be possible without a revenue board that will be able to superintend, supervise and administer all these. IBM is giving us multilateral support to be able to build capacity for our revenue generation. They are ready to give us about $500,000 which is to show that they recognise what we are doing. They would come and look at our revenue streams and make sure they provide required revenue administration that is being done all over the world. The Lord Mayor of London came to Abuja and pledged to help us in revenue generation in transportation. That is why we are developing the high capacity buses and the light rail and the monorail. Certainly, we are turning Abuja into one of the smart cities of the world.

Bala-Mohammed

Bala Mohammed

You have the Abuja World Trade Centre growing at an astronomical rate and also the Millennium Tower. What do these mega projects mean to you?

The Millennium Tower is a cultural centre we are building on behalf of the Ministry of Culture so that we have a cultural cluster in the city where you can work and play. You have museums, studios, hotels, parking lots and a revolving restaurant where you do a lot of things. It is being built for about N54 billion. It started in 2008 and we have only done about 20 per cent and I was the one who pushed it to that level. But with the way we are going, it will take two or three tenures to complete it. The President agreed that we could bring in investors to complete it within two years because it is a bankable business. Already, some South Africans have approached us.

In the same manner, we are looking at some of the projects which required huge capital outlay to complete, like the Airport Road, for concession. And because we have learnt from other concessions that have failed, we built our road corridors in a manner that you create service lanes. At the time we came, the World Trade Centre was just a supermarket. So I asked Mr. President, ‘why can’t we make this business grow and blossom?’ And he agreed. They got accreditation of the World Trade Centre in the United States and they are bringing five towers with convention centres and hotels. They are building it with $1.2 billion, completely private sector investments. All we did was to give them the land.

The second and bigger private sector driven initiative that we are doing is the Abuja Town Centre which is similar to the World Trade Centre. That one will cost $2.7 billion. We just signed the agreement last year and it is structured in a manner that we have equity participation. Abuja will have five per cent equity because that is the most valuable land in Africa. It is within the vicinity of the Federal Secretariat where a square metre of land at commercial value is hitting the roof. But at the premium it is about N3 billion to N5 billion. At the commercial value it will be up to N50 billion. So we discussed as businessmen, not as government giving out land based on patronage. We are giving you our land, and we know the premium is about N3 to 4 billion but if we give it to you, you will go and sell it for N50 billion. So what we need is 30 per cent of your investment, and we will now agree on five per cent, which is 10 times the premium.

So Abuja Investment is going to hold it for us in trust. We are doing it within the time frame of five years and we are using Nigerian companies. So if you look at the World Trade Centre, the Abuja Town Centre and the land swap, we have brought investments to the tune of $68 billion, and the secondary investment in that is unimaginable. It will create wealth, opportunities for employment and so on and so forth. Abuja is the destination for everybody. We are mindful of this and that is why we are doing everything to ensure security of lives and property. We are building capacity for our security agencies, and we are continuously giving them assistance. Every month we give them assistance to the tune of about N60 million apart from the vehicles we give and maintain.

How are you dealing with the challenges of the Land Swap Initiative?

There are community-related issues, and it is not peculiar to Abuja. Any time you are coming with something revolutionary, there is bound to be fears and apprehension. There are those that are mischievous and treacherous that would bring issues that are not related to it. Of course, since the beginning of Abuja as a project, we have not been able to live up to our resettlement and compensation responsibilities. You go to Guzape, you see the villages are still there. You go to Jabi, Utako, everywhere, even Garki village. We have not been able to settle them. So when we came with such a high intensity programme of developing 11 districts in two years, it was something unimaginable. But it is the district development that we used to do through government funding that we now do through private funding. We give the private sector a percentage of the district to develop the roads, drainage, electricity and everything you require in a district like Maitama. And then we will cost the infrastructure at commercial rate and then take a percentage of land in the district to defray the cost. That is the only difference. And the remaining land, may be about 30 per cent, would revert back to FCT for us to allocate.

We are bringing something that is the model all over the world. We developed this framework here with our own people. We have agreed to resettle the villagers through integration or resettle them outside the districts. And the investor is going to bear the cost of resettlement and compensation. It is embedded in the original cost of the project. It would not be like Garki where the government did not embed resettlement and compensation in the general cost of the infrastructure. It is the same with Jabi and Utako. But this time around, when the investor comes, we say this is the cost of the infrastructure and this is the cost of resettlement and compensation. The model is agreed with the villagers. They are happy we are doing this. It is a World Bank model.

What have you done to improve the welfare of residents?

People are coming from all the states of the federation, from all local government areas. People are telling me that some states have collapsed in such a manner that you begin to wonder whether local governments in some states are living up to their responsibilities. Here, all the money we get from the Federation Account we give to our local governments, and I think Lagos and some few other states are doing it. But where the local government is under lock and key, you discover that people are moving, and they are coming to Abuja. Even though we take some of them back, they are always coming. When we discovered they would keep coming, we had to use the avenue of SURE-P to create jobs for them. We have employed about 4,000 so far. We are opening training and skill acquisition centres in all local governments because most of the people coming are unskilled, they are only carrying digger on their backs. We have to do what we need to do to rescue residents from these people because desperation can cause criminality, and we don’t want a situation where we will make the city unsafe. Today, if you do anything in the city, we can easily find you out through the CCTV cameras. We have also set up task forces to make sure the city is clean and safe.

Is SURE-P really useful in the development paradigm of FCT?

Yes, especially now that we have been admitted into the national priority projects of SURE-P. Our light rail is getting augmentation of N10 billion from the SURE-P secretariat. We have been given N13 billion to do all these things for the satellite towns. SURE-P has come in handy to really give us some alternative funding. They are also giving us counterpart funding for the light rail.

You are getting visible results. What is your style of governance?

My style is to run an all-inclusive administration and the development of a robust cash flow where there is justice and equity with transparency. We carry the bureaucracy along. All contractors are carried along, irrespective of the fact that we gave them contract or we inherited the contract. So we have deepened transparency and got the confidence of the contractors in a manner of dynamism and continuity in governance. Most of the projects that are almost completed, we met them at the ground breaking level. But we are continuing with them as if we awarded them, and we are paying them pro-rata. We are indebted up to the tune of N470 billion now. Everyone is treated fairly and justly.

How are you coping with corruption within the system?

Corruption is a very serious problem especially in a place where you do projects and programmes. You award contract and give land, and the premium system is such that it is 1,000 per cent removed from the reality of the value, you are bound to have corruption. You are bound to have human factors that will determine allocation, you are bound to have arbitrariness, and you are bound to have conmen. The major area of corruption is land. People are so gullible, including high-level Nigerians, that they fall prey to conmen. We hear some of them pay N50 million to these unscrupulous officials who give them wrong corridors, because all the corridors are given numbers. But we have become more transparent and credible.

There are always issues about the quality of government contracts. How do you guarantee the quality of your projects?

We are the best in the country in terms of engineering standard and competitiveness of our contracts. You can see the quality of our roads. After 35 years, we are resurfacing the roads in Wuse because we said we must do something transformational that has not been done by any administration. And we are doing it very cheaply. The whole of Wuse is being resurfaced for N2.5 billion. When I told someone that the road was built with about N100 million and we are using N2.5 billion to resurface it, he was surprised. We are bringing pricing and competitiveness to a level where it is at par with anywhere in the world. ICPC and EFCC are all helping us here; they have offices here. We are still not corruption free, because some in our bureaucracy are neck deep in corruption. But essentially most of them are trying. I want to seize this opportunity to say thank you to our bureaucracy, our civil servants in the FCT, because we are taking them on a race they are not used to. We are bringing initiatives and innovations that are not normal in the civil service, and yet they are doing very well.

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