By Omoniyi Salaudeen

The Governor of Bauchi State, Bala Muhammed, in his continued opposition to some reform policies of President Bola Ahmed Tinubu, recently made a remark that underscored the vulnerability of the North.

Giving reasons for his vociferous criticism of the administration’s effort to retool the economy, he argued that the harsh policy reforms, if not reversed, would put the region under strain, as most northern states rely largely on federal allocations to survive.

 

Adeniyi

 

OBADARA

 

“The North, unfortunately, heavily relies on federal allocation to survive. The reforms he is proposing will put the region under strain. He does not agree that this is a situation that will put we northerners and all Nigerians at a disadvantage,” he argued.

The North is not alone in this dependency syndrome. According to the 2022 Annual States Viability Index Report recently presented by the Economic Confidential, a subsidiary of PR Nigeria, only seven states, including Lagos, Ogun, Rivers, Kaduna, Kwara, Oyo, and Edo are economically viable in Nigeria.

 

 

Kaka

 

The remaining 29 states remain weak, parasitic, and economically insolvent, surviving largely on the handout by the Federal Government.

The report, compiled from figures released by the Nigerian Bureau of Statistics, and the Federal Account Allocation Committee, considered the revenue-generating capacity and investment drive by states, among other things, as the basic parametres for determining economic viability. 

In doing so, it expectedly put Lagos State on top of the chart, noting that its Internally Generated Revenue (IGR) is higher than that of 30 states put together.

“The report further indicates that the IGR of Lagos State of N651bn is higher than that of 30 other states put together whose Internally Generated Revenues are extremely low and poor, compared to their allocations from the Federation Account,” it stated.

A breakdown of the report showed that Lagos received N370 billion from FAAC in addition to the N651 billion IGR, while Ogun State recorded N120.5 billion IGR and received N113 billion during the period under review. Rivers received N363.4 billion and generated N172 billion; Kaduna received N155 billion in federal allocation, and generated N58bn; Kwara received N99bn and generated N35.7bn; Oyo received N181bn and generated N62bn; and Edo received N147bn in federal allocation, and generated N47.4bn.

The summary of the document reads: “A total Internally Generated Revenue of N1.5trn from the seven most viable states in 2022 was almost twice the total IGR of 29 states together that merely generated about N650bn.”

It capped it all by saying that only states that can generate up to 10 per cent of the total allocation received from the federal account will be able to stay afloat.

This implies that only the seven listed states have the financial viability to be less dependent on the federal government, while the rest precariously took towards handouts from the centre to survive. 

And unless a deliberate effort is made to change the present economic trajectory, development at the grassroots will remain largely stalled, as it is the direct responsibility of the states to drive productivity as a factor of growth.

On the contrary, attention has always been on the Federal Government while the states shy away from the responsibility of initiating aggressive diversification of the economy toward productive sectors. Rather, they rely on the monthly federation account revenues that largely come from the oil sector. 

It is worth noting that some state governors in the South have taken some bold steps to widen their tax net to shore up their revenue-generating capacity.

However, the same cannot be said of their counterparts in the North, who prefer to blame the vulnerability of the region on the policies of the Federal Government.

The poor performance of the region’s economy has been further accentuated by insurgency, kidnapping, armed banditry, among others, making it impossible to attract investments.

The big question now is: For how long will the states remain a sick baby of the Federal Government? By the provision of the 1999 constitution, the states control the most critical factor of production: land. Chapter 5, section 1 of the Land Use Act clearly states: “Subject to the provisions of this Act, all land comprised in the territory of each state in the Federation is hereby vested in the governor of that state, and such land shall be held in trust and administered for the use and common benefit of all Nigerians by the provisions of this Act.

“All other lands shall, subject to this Act, shall be under the control and management of the local government within the area of jurisdiction of which the land is situated.”

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If only the state governors would stop playing politics and leverage the oceanic plentitude of land and human resources available at their disposal, Nigeria’s potential for food self-sufficiency would be enormous to end dependency on foreign importation.

President Bola Ahmed Tinubu rightly hit the nail on the head during a recent meeting with Vice President Kashim Shettima and governors in Lagos, saying governors were critical to driving Nigeria’s development, growth, and economic prosperity.

He said the leadership at the sub-national level was central to achieving food security, economic prosperity, and rapid national growth.

A statement by his Special Adviser on Information and Strategy, Bayo Onanuga, quoted Tinubu as saying: “You are the most important link to Nigeria’s prosperity and development. The Federal Government accounts for about 30 to 35 per cent of the allocated revenue; the rest comes to you. The agricultural value chain depends on you. You own the land, and the job is in your hands.”

This is the crux of the matter surrounding the lingering controversy between the Federal Government and the state governors over the autonomy of local government in the country. Instead of allowing power devolution to the local councils, the Nigeria Governors’ Forum has been playing the ostrich, making a frantic effort to block the enforcement of the ruling of the Supreme Court judgment which granted full financial autonomy to local government.

Senator Anthony Adeniyi, while reacting to the seeming complacence of most governors who rely heavily on allocation from FACC to function, noted the peculiarity of each state and the potential for resource mobilization to grow the economy, saying the tax reform bills would compel a change of the status quo.

He said in a telephone interview with Sunday Sun: “The states should look for the avenue to develop their revenue-generating capacity. In the first place, the land belongs to the states. So, the governors should use the land in their domains to generate revenue to develop their respective states rather than relying on sharing the national cake.

“In my Ekiti home state, for instance, we have developed our revenue-generating capacity from what it used to be to something better. Each state has resources that can be developed to generate more revenue. But it is rather unfortunate that the governors are looking at money from FAAC.

“When the new tax bills are passed into law, they will be able to widen their tax net to generate more IGR.”

Senator Gbenga Obadara also shared the same view, urging the governors to heed the President’s advice and think out of the box.

“The President is right directing the governors to take responsibility for the development of their states. We have come to a time when state governors should stop being spoon-fed. They have to think outside of the box. No state doesn’t have resources to develop and generate revenue. It is all about the failure of the governors. The earlier they develop capacity for revenue generation, the better for the states and the country,” Obadara declared. 

Senator Kaka Gbenga, in his submission, however, identified some impediments that needed to be tackled to unlock the economic potential of the states.

According to him, one of such critical factors is energy. To overcome the challenge, he advised contiguous states to cooperate and form synergy for electricity generation to attract investors and stimulate economic growth.

He said: “Power is a critical factor for enhancing productivity. However, because states have other socio-economic challenges, they cannot on their own generate electricity for developmental purposes. So, if six states, for instance, can come together and cooperate, they can generate their electricity to make things work better.

“Unfortunately, we have this fragmentation and a lack of cooperation among the states. If there is cooperation, I don’t see anything wrong in contiguous states joining hands together to build road connectivity. If there is cooperation and synergy, Mr President will not need to remind them of their responsibilities.”

While charging the governors to initiate reform that will enable them to break loose from the current dependency syndrome, he also urged the Federal Government to divest itself of certain responsibilities that were within the purview of the states.

“The Federal Government will also have to stop the bogus employment at the federal level. We have to make them realize that somebody can’t stay in Abuja and think that he can monitor what is going on in Sokoto. Even the cost of transportation has made such movement impossible. This is why we must devolve power to the state and local governments.

“When states have more responsibility and the desired authority, things will move better than they are currently. All excessive hands at the federal level warming the seats under the AC should be redeployed to the states and different zones to go and work there. The majority of workers at the federal level have no work to do. Yet, they continue to swell the recurrent expenditure. At the end of the day, it is the society that suffers.

“Let me state this, the viability of those states perceived to be economically viable is not directly a function of their administrative setup, it is due largely to the advantages of their geographical locations.

“Lagos State, for instance, is the main entrance into the country. Everything coming in through the waters has to be cleared from Lagos. So, its economic activities will continue to blossom. Ogun State and Oyo states are also contiguous to Lagos. As Lagos becomes congested, naturally, there will be spillover effects in those two states.

“If you take Ogun State, the Agbara axis, the Ojodu Abiodun axis, the Lagos Ibadan axis, and the Agijo and Ikorodu axis, you discover that the spillover of the advantage of proximity to Lagos has become quite enormous. Under the circumstances, the justification for having our airport becomes desirable.

“Again, we have been told that the deepest water today in Nigeria could be found in Odeobi in Ogun water side. We narrowly missed the opportunity of the Dangote refinery and petrochemical. But the potential is still there. We can develop the waterfront for tourism potential to attract tourists from Africa and other parts of the world. Ogun State is potentially great and it is going to continue to be great once we have good people at the helm of affairs.

“If you go to Port Harcourt, it is a similar story. The administration may energise the process but the process is already there. For example, in Borno State, Governor Babangida Zulum is being praised by everybody because he is doing something unusual in his administration. Others will have to learn from him.”

Every part of the country has a comparative advantage in one area or the other.

However, what has been essentially lacking is the inability of the leadership to harness the available human and material resources for greatness.

Some of the reform initiatives of the present administration aim to ginger authorities at different levels for the onerous task of leading sustainable economic growth.