Lesson for Nigeria: True federalism is the best route to progress

There is something very strange about public policy discourse in Nigeria. Despite what theory, evidence and history tell us, some people still trivialise politics. To them, all the talks about political restructuring are utter distractions. It is economic restructuring, not political restructuring, that matters, they say!

The truth, though, is that no proper economic restructuring can take place without the right political environment.

At the basic level, we know that political stability is a precondition for economic progress and that the nature of a country’s politico-governance structure and political institutions determines its economic performance. That view, as I said, is established theoretically, evidentially, and historically.

Take the theory first. In their famous book “Why nations fail: The origins of power, prosperity and poverty”, Daron Acemoglu and James Robinson argue that politics and economics interact in either causing poverty or creating prosperity. However, they put politics first because while economics creates the incentives for prosperity, it is politics that determines which economic policy and institutions a nation would adopt or create.

For instance, if a political process produces a socialist or statist leader, no number of articles or editorials would make him enthusiastically embrace market-based policies or reforms. Also, if a political system centralises power, instead of diffusing it, economic management and governance would also be centralised. Yet, only decentralised political and economic governance can unleash dynamism, which produces innovation and economic progress, a point made by the economics Nobel laureate Edmund Phelps in his recent book entitled “Dynamism”. So, the theory tells us that politics and political institutions matter.

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What about the empirical evidence? Well, in an empirical study by the UK Department for International Development, DfiD, they concluded: “The political settlement is central to all development”, and that “political settlements explain the difference in performance between countries with apparently similar endowments or disadvantages.”

In 2017, Chief Emeka Anyaoku, former Secretary-General of the Commonwealth, said that “unless Nigeria goes back to regional governments, it may be embarking on an endless, fruitless search for meaningful development.” He added: “From my over 30 years’ experience of governance in over 50 Commonwealth countries, I believe that, given its history and pluralistic character, a truer federalism is a sine qua non for Nigeria’s achievement of its development potentials and enduring political stability.”

So, from DfiD’s study and Anyaoku’s Commonwealth experience, we know, empirically, that a political settlement, based on having the right politico-governance structure, is a precondition for development and economic progress.

Historically, classical economists like Adam Smith and David Hume were called “political economists”, rather than “economists”. Why? Well, because they were interested in how politics and economics interacted in the running of a country and in shaping public policy. Reading, for instance, Adam Smith’s “The Wealth of Nations” or David Hume’s “On the Balance of Trade”, one gains deep insights into the roles of the state and the market, and how both should interact to create wealth and prosperity for a nation.

My advice to any economics student reading this column is: If your university offers political economy and economic history as options, take them. It would make you a rounded economist. If you want to work in a policy-setting, to influence economic decisions, it will help to have a good knowledge of political economy and economic history! Of course, as a political economist and an economic historian, I would say that, wouldn’t I? But that’s the truth!

All of which brings me to the real focus of this piece: federalism versus centralism. And the key triggers are two recent issues that have received much coverage in the newspapers.

There is no true federal system with nationally controlled policing

The first is the Federal Government’s decision to establish community policing across the country and, controversially, to collapse all state or regional security outfits, such as the South West’s “Operation Amotekun”, within the national scheme. The second issue, which Professor Wole Soyinka has raised vociferously, is the Water Resources Bill, once rejected in 2018 by the National Assembly, but now reportedly brought back. If passed, it would give the Federal Government absolute control over the use of water all over the country.

At the heart of these two issues is the debate about true federalism. What does it really mean? Is Nigeria a true federal system or a quasi-unitary state?

Take the policing issue first. The Federal Government recently approved N13.3bn for community policing in Nigeria. But the money won’t be used to support state or regional security initiatives, such as Amotekun. Rather, it will be used to create nationally controlled community policing structures, under which state or regional security outfits must operate. The Federal Government rejects the idea of standalone regional security operations.

President Buhari’s senior media assistant, Garba Shehu, put it this way: “Whatever name they go by, Amotekun or whatever, they will be streamlined and they will be run in accordance with the structures defined by the Inspector-General of Police.” He added churlishly: “They can choose their own nomenclature, but it doesn’t make a difference.”

This is unbelievable! So, all those laws that the South West state assemblies and governors enacted to give legal backing to Amotekun are utterly worthless – in a supposed federal system!

According to the Encyclopaedia Britannica, the two main characteristics of true federalism are: non-centralisation and local autonomy. Indeed, in a true federal system, the federating units can provide a strong alternative to the policy of the centre.

But hear again what President Buhari’s spokesman said: “So, we are going to have a single type structure community policing across the country and whatever is not in line with this does not have a place in the new scheme of things.”

Really? A “single-type” community policing across Nigeria? That sounds like a unitary system. Sadly, that unitarist view is widely shared in the Presidency, including by President Buhari’s chief of staff, Professor Ibrahim Gambari, who is viscerally opposed to regional security initiatives like Amotekun, and who seems to have provided the intellectual anchor for the Federal Government’s approach.

Speaking in March at an event to mark the 80th birthday of General Domkat Bali, former defence minister, Gambari said we should not look at solutions to the security challenges from a regional perspective but “a national prism”, and condemned any regional initiative “which is not tied to the primacy of the national security apparatus.”

But this is utterly wrong. There is no true federal system with nationally controlled policing. For instance, the Los Angeles or New York Police in the US does not take orders from Washington!

Furthermore, truly federal systems do not have any uniform, national laws on most issues. Again, take the US. Most of the 50 states have different laws on key issues such as abortion, gay marriage, and death penalty. And the US federal government cannot impose a “single type” national system on any of these issues! That’s how a true federal system works! But in Nigeria, everything must be centralised!

Which brings us to the Water Resources Bill. I mean, how could the use of water be subject to licencing? Why do I need a Federal Government’s permit to sink a borehole in my home? And why would the Federal Government cancel my licence if I “fail to make beneficial use of the water”? Yet, these are some of the provisions of the bill. No wonder Professor Wole Soyinka asked rhetorically: “What next for the exclusive list? The rains?” He also alleged that the Water Resources Bill “is a deliberate, flanking move towards RUGA colonisation.”

Well, whatever the rationale behind the centralised community policing scheme and the Water Resources Bill, the truth is that micromanaging Nigeria from Abuja will exacerbate political instability and undermine any chance of economic progress. Only true federalism will unleash Nigeria’s potentials. Which makes political restructuring an imperative!


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