• Saturday, April 20, 2024
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BusinessDay

Nigeria has a budget crisis, but who will tell the state governors?

Bello-Matawalle

A few days ago, Zamfara State governor, Bello Matawalle revealed that his administration will start work on a new airport in Gusau, barely a week after taking office. In an oddly-worded statement that wouldn’t have looked out of place on a North Korean propaganda pamphlet, the state government said, “This is achievement (sic) to the good people of Zamfara, Bello Matawalle will take Zamfara State to greater heights.”

To put this otherwise unremarkable news story into perspective, Zamfara is by some distance Nigeria’s poorest state with the worst Human Development Index figures in the country. It is also the only state government in Nigeria that did not domesticate the N18,000 national minimum wage, citing budget constraints. Nearly two decades after becoming the first state in Nigeria to adopt Sharia law for political reasons, it remains one of the most backward places on the map of Nigeria, with a poverty rate above 90 percent and a government that does not have a functioning official website.

If you are in Bello Matawalle’s shoes, there is a lot of work to do in the areas of security, access to basic education, clean water and modernizing the state’s arcane agricultural industry. You could even push for a sort of emergency resource-control legislation to enable the state collect a percentage of revenues from licensed gold mining activities within its borders. This is after all, a desperately poor state with a 2019 budget of N135 billion for its 3.5 million inhabitants, averaging out at around N41,000 per capita per annum.

What you probably would not do in his situation, is commit scarce funds to build the very whitest of porcelain elephants in the desert. For one thing, Gusau already has an airstrip to take care of the negligible aerial traffic that Zamfara receives. More importantly, there is quite literally no likely scenario where ‘Gusau Airport’ would be a viable concern that could sustain itself and not inevitably become yet another recurrent expenditure line item for this most impoverished of Nigerian states.

The message is not getting through

While a growing number of Nigerians in the economic and political space are becoming aware of the country’s increasingly fraught financial situation which shows no sign of letting up anytime soon, state governors have clearly not received the memo. From Zamfara to Osun via a detour in Jigawa and a stopover in Cross River, the message from state governments is “Long Live the King!” regardless of how insistent the numbers are that said king is dead.

The Magic Money Tree in Abuja is expected to continue footing the bill for another 4 – 8 years of profligate spending, failing which they will just take on more debt. A state like Jigawa, which has practically no significant economic activity taking place bar low-tech agrarian pursuits, now boasts a gleaming “International Conference Centre” and a shiny airport in Dutse (Google it!) standing proudly in the middle of a desert environment where access to water is still one of the biggest problems in life.

The excuse readily given by both Zamfara and Jigawa state governments incidentally, is that “investors” will not come to these places unless they have these shiny structures to attract them, like giant desert honeytraps beckoning seductively at this undefined set of “investors.” Not to be outdone in the profligacy sweepstakes, Cross River state governor Emmanuel Ayade recently revealed that he made the decision to hire over 8,000 “special advisers” and “personal assistants” for the purpose of representing each family in the state. No, I didn’t make that up – here is an actual quote from the governor:

“I committed myself by expanding government to ensure that at least a member of each family was represented in my government to earn salary.”

The Kano State government also gets an honourable mention for its decision to split the Kano Emirate into four separate Emirates, each with their own civil service wage demands, official vehicles and other drains on the state government’s coffers. It is not hard to see why between 2011 and 2018, Nigeria’s sub-national debt profile ballooned a massive 316 percent from N1.2 trillion to over N3.8 trillion and counting.

Dear governors: Please start panicking

While the finances of some state governments are already beyond the debt-ridden, recurrence-filled point of no return, many states still have hope of regaining control over their balance sheets. Some of these states like Ogun and Oyo are now under new management, which gives them a rare window of opportunity to change the trajectory of the past four to eight years.

As always, the problem is that politicians with good intentions are often surrounded by pond life, hucksters, praise singers and snake oil salespeople, which can make it hard for them to maintain a sense of perspective when executing governance. The solution I propose is simple – it is time for state governors who are aware of the disastrous fiscal situation of their jurisdictions to panic. This is not the time to attempt to reward and placate supporters and hangers-on with pointless contracts, jobs-for-the-boys and assorted government pork barrel practices.

These governors need to be strong enough to resist the temptation of populist actions, which almost invariably involve spending money that the state does not have, or adding to its already bloated recurrent expenditure bill. There can be no promises of this stipend, that social intervention, or the other subsidy, easy as it can be to capture the hearts of poor voters with such ill-advised and ineffective programs that maintain them in poverty and waste scare funds.

They must be willing to be perceived as the tight-fisted villain who refuses to open the public purse and “spread the wealth around,” even though that can be politically devastating for their re-election hopes. That is because the next four years will be a defining period for the continued existence and viability of Nigeria’s sub-national governments. It is not about politics this time, but survival.

Dear sirs, it’s time to panic.

 

David Hundeyin