A MUST READ: Politicking With Economy In Face Of Hunger, No Jobs

The federal monthly allocation to states for sometimes now has nosedived. Consequently, serious political discussion on the implication of it on the welfare, and economic development of the nation is on-going. The governors for a very long time become victims of this very unusual anomaly. Even in war time, between 1966 and 1970 the situation…”
Ademola Iginla
November 6, 2014 7:52 pm
Minister-of-Finance-Dr-Ngozi-Okonjo-Iweala-360x225

Minister of Finance Dr. Ngozi Okonjo-Iweala

The federal monthly allocation to states for sometimes now has nosedived. Consequently, serious political discussion on the implication of it on the welfare, and economic development of the nation is on-going. The governors for a very long time become victims of this very unusual anomaly. Even in war time, between 1966 and 1970 the situation was not this horrendous. Some states could no longer pay workers salaries; others are choked up with accumulated loans
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To worsen the situation, the Debt Management Office (DMO) recently issued an advisory letter to banks not to grant short -term loans to states. The Nigerian economic situation has a knock-on effect not only on the economy, but also on virtually all sectors of human life. From the look of things it appears Nigeria has been brought back to the National Party of Nigeria (NPN) days when the Shehu Shagari main interest was only on the retention of power at the expense of the economy and the wellbeing of the citizens. Despite the warning by Chief Obafemi Awolowo, the leader of the Unity Party of Nigeria (UPN), that the ship of the economy was fast approaching shipwreck, but the ruling party ignored the warning, that led to economic collapse.

The failure to meet the nation cash-call obligations in upstream joint ventures has compounded the financial challenge of the Federal government. Nigeria that used to produce 2.5 million barrels a day is merely turning out 80, 000 barrels per day in a deficit of over $60 billion. Major oil company that was formerly producing 2.5 million barrels has merely produced 80, 000 barrels per day confirmed that all is not well with our economy. Despite the falling oil prices, the federal government kept on frivolous expenditure.

The economic managers kept painting the economy as healthy, yet the reality on the ground is economic depression. Economic experts have argued that the situation in Nigeria today is not as a result of oil theft, but mismanagement of the resources Nigeria solely relies on. This mono product is killing all of us and we seem not to be bothered about it. Before the military intervention, regions were financially independent and strong enough to earn enough to manage and run their individual administration. Each region was developed at its pace.

The current centralisation of revenue has weakened the states and turned even the rich states to mere beggars. . Given the differences in the capacity of each state to generate revenue to meet each state needs, the constitution has provided a mechanism for the redistribution of resources from those with excesses to those with little or no internal revenues. If this mechanism is adhered to, this will ensure equity and fairness amongst the federating entities and encourage equal development and foster cordiality.

The return of the civilian administration to the running of government since 1999 has further compounded the financial challenges confronting various states in the country. The fierce battle to control the central government has been identified as the struggle for economics control. The central purse gave the Federal government the latitude to sit over the national wealth. It also encourage profligates by the ruling class at the expense of the welfare of the majority of the people that are daily dying of hunger and starvation, ill health without opportunity to good health care services.

The current revenue sharing formula has been critically criticised by several bodies. The federal government allotted 52.68% to itself, paid 13% derivation to oil producing states and gave 26.72% to the states and 20.6 to Local Government Councils. The federal government has continued to enjoy its own share of the allocation but has developed a carrot and stick method of sharing the 26.72% of the states allocation. What kind of federalism are we operating?

A situation where the federal government dictates who gets what is unacceptable. What exactly does the FG spend its 52.68% allocation on?   For instance, Rivers state monthly allocation has since been reduced from N26 billion per month to N12 billion without any rational explanation.   Osun has its revenue slashed from N4.6 billion to N2.3 billion for no just cause. Let s look at this slashed allocation. Osun pays N 3million to his workers monthly and 600 million to his pensioners. That is without other obligatory expenditure monthly. So, how does Osun survive with N 2.3 billion monthly. But for his sagacity and economic wizardry, Rauf Aregbesola would have been unable to cope.
The dependence on oil wealth no doubt made the drive for Internally Generated Revenue (IGR) less important.

National Bureau of Statistics (NBS) revealed that N16.07 billion IGR was generated by other states with the exception of Lagos in 2012; Lagos alone generated 38% of total IGR in the country. In Osun within three and half years of Aregbesola’s administration he increased Internally Generated Revenue from 300 million naira to 1.6 billion naira without increasing tax. IGR seems to be the last resort for few state governments who do not want to be necessarily waiting for allocation that may not be available in the nearest foreseeable future. Unfortunately, most of our leaders hardly pay tax. They only rush to tax office when and where such tax receipts are required for election purposes. Even when they pay, they under-pay and cheat the nation, an offence that carry imprisonment in other clime.

The Federal government has not deemed it necessary to re-strategise over the danger posed by the current dwindling of revenue acquiring to the nation due to recent drop in the world oil price that has fallen to 83 dollars the lowest in four years. While the states are grumbling for shortfalls in the monthly allocation, the Federal government is jetting out of the country in private jets with millions of dollars of oil money for one reason or the other. The Minister of Finance Dr. Ngozi Okonjo-Iweala kept telling the nation that our economy is buoyant. Who cares whether economy is buoyant or not if it does not impact on the lives of the people? Economic buoyancy is only within the top echelon of the political elites especially those in government in Abuja.

The door of our tertiary institutions were shut for over six months this year over poor funding, and yet the institutions of learning are still awaiting the promised or agreement reached before the industrial strikes were called off. The buoyancy of the economy has not translated to good condition of services to the Nigerian Medical Association (NMA). Our hospitals have continued to be mere consulting clinics. If Lagos state and Rivers states have not risen to the occasion, Ebola virus epidemic would have killed several people in Nigeria.
What is the way out for the states?

The governor of state of Osun opined that the whole fund for the nation per annum is about 4 trillion. This amount he said cannot improve the lot of the people. However, he strategically stated that if people of working age can be gainfully engaged to earn at least 20, 000 naira per month for a year, and that by so doing the working class will be able to earn 16.4 trillion naira per annum, instead of the 4trillion naira that all of us are dying over. In line with Aregbesola’s opinion, it is pertinent to note that Section 17 sub section 3(a) of the 1999 Nigeria Constitution provided that the government in the nation should provided enabling environment for the people to be gainfully employed.

Although it is impossible for the government to employ all jobless people, some basic steps that a reasonable government can take is to provide vast arable lands, modern farming equipment for the youths and able bodied interested in farming. Agriculture can reduce poverty, hunger and penury among our populace if properly organised, before the discovery of oil in Nigeria we have survived and runs our regions with farm produces.

The Western region produced cocoa and coffee that earned the state substantive income, the North lived and developed through groundnut pyramid, the East made a lot from palm oil. The states can also motivate others to go into fishery, poultry, and piggery. The artisans should be mobilised to update their knowledge in their various trade and arts. Financial assistance should also be granted as the Osun government has done for its people. Market women and men should also be assisted financially in terms of short term loans to enlarge their trade.

• Obaditan wrote in from Osogbo, State of Osun.

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