FAILED FISCAL SYSTEM AND POLITICAL BEGGARY

 FAILED FISCAL SYSTEM AND POLITICAL BEGGARY

By Kay Aderibigbe

The nexus between state and economy in Nigeria is such an inertial type which is why both institutions are antithetical. This is because there is rarely a meeting point between government prioritized endeavours and the needs of our people. Over the years, Nigeria has solely depended on fossil fuel and eschewed all other meaningful commercial alternative avenues that could provide as much as we earn from oil today. The resultant effect being that all the 36 states of the federation draw their yearly budgets based on the allocations from Federation Account. Ancillary palliative measures to budgetary provisions like internal/external loans, bi-lateral grants from abroad and 'federal bailout' e.g. the recent intervention fund approved by president Buhari are "occasional Jesus Christ that may or may not attend the wedding ceremony of our poor states and turn their water to wine".

 

A flashback into the era of regionalism will show how unashamed, unscrupulous  and unintelligent political administrators in this country are. Before the proliferation of states, regions are specialists in various agricultural products which served as veritable sources of income. Regional governments are the Landlords that contributed taxes/quotas to the federation which actually weakened central monopoly of power, encouraged competitive developments and enhanced our terms/balance of trade and payment in favour of Naira as a currency.

 

Fiscal system during the period of regionalism does not allow uncountable retinue of aides for state governors and parliamentarians alike. There were lesser unnecessary and non-performing ministries. Agriculture made government the largest employer of labour not fraudulent and opaque NNPC. Civils service contained ingenuous and industrious individuals with job roles not ghost workers that do nothing and earn tax payers' money.

 

Initially, multiplication of states was borne out of the calculations of military government [Gowon/Murtala] to reduce the negative effects of tribalism and ethnic chauvinism; while Babangida and Abacha created seventeen more states as political rewards, ' economic pots of soup' for their godfather loyalists. In all, state creation since 1967 does not afford vestigial states the kind of regional economic platform that could enable them exist in commensalism with federal government. More so, many state governors are thieves, foolish and too greedy that they loot through any imaginary means they could fathom. Since most of these state governors lacked creative mentalities that could serve as alternative to oil revenue, they must look up to federal government for survival and retain their second class statuses.

 

As undismayed with decadence in state management as state governors remain, they still take after federal method of politicking such as creating avalanche of ministries with uncountable political appointments that are surplus to requirement. Collapse in oil price mete out an attendant effect  on Nigeria and states have fallen into financial crisis. federal government and states are all indebted. Almost 24 states are owing their workers between 5 and 16 months.

 

The wage bill of these states is almost 75% of their monthly allocations; little wonder they couldn't embark on any meaningful developmental projects, but borrow from anywhere possible even, to pay salaries. This national embarrassment prompted Buhari to approve a sum of #713.7 billion bailout for the federal and states governments to offset workers' salaries. Out of which #413 is an intervention fund while #300 is a soft loan from CBN.

 

 The important questions are the following [i] for how long will this ‘political babihanla’ continue on the part of the states? [ii] when will state governments in Nigeria develop their internal capacities to generating wealth? [iii] for how long would oil crisis degenerate into financial crises for Nigeria? [iv] what is the plan of the current federal government on economic diversification? [v] must state governments employ/appoint so many people that contribute nothing to the economic development of the state but receive salaries in the name of carrying files? [vi] what happens to these backward-thinking states after bailout? [vii] since the dwindling oil price is still nose-diving would Buhari continue to source from the proceeds of NLNG to fund states with dysfunctional economies?

 

My submission is that fiscal federalism would go a long way to put to rest the case of dearth/shortage of finance and financial impropriety; economic imbalance; weeding out of non-performing sections of the civil service; promote internal competition among states; create job opportunities; enhance mass market; diversify the economy; silence or reduce the ubiquity of federal character principle and also promote state-centred against nation-centred federalism.

 

In a simple language, different states have mineral resources; they should be constitutionally empowered to put those into industrialization, and remit taxes to federal government. States with little or no resource(s) can resort to pure agriculture or energy-based production. Against this backdrop, federal politics will be less chaotic; since there is no much goodies to suck, as a result, the centre will be administrative-driven, purposeful and rule-oriented. The reliance on oil revenue will reduce drastically. Moreover, financial problem will not warrant ‘political babihanla’ that will continue to encourage ineptitudeness, dormancy, over-reliant on federal government and external loan which will only add to the backward movement of the Nigerian economy.

 

Without this, failure of public policies will not be seen as a setback but rather, as a propellant for government functionaries to arise and stereotyped Nigerians as refugees in their own country despite the volume of illegitimate largesse enjoyed by political office holders in the midst of fiscal imbalance that pervaded the country.