Why you shouldn’t give your governors a free pass

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My column last week was about the first four years of the Buhari regime and how not so great it
was. We often focus our policy critiquing on the presidency but in truth they are not wholly
responsible for everything. The governors as a group are probably almost as important as the
president. Although, to be fair, there are many important policy levers which they have no control over. Take monetary policy for example. Monetary policy is mostly beyond their control and a difficult monetary policy environment is likely to render any policy pushed by governors in their states toothless. The same is true for trade policy. That being said, the governors are not completely powerless.

For starters, most states are relatively large and could be considered “countries” in their own rights. Last month the National Bureau of Statistics released the second set of estimates for state GDP, and many states are comparable to other African countries. Zamfara state, which is one of the smallest states in Nigeria in terms of economic activity, is larger than Guinea Bissau and the Gambia, and almost as large as Liberia. Kano, Ondo, and Anambra are all individually larger than Niger republic.

Akwa-Ibom and Rivers are both individually larger than Mozambique. And although the GDP for
Lagos state was not officially released, back of the envelope calculations put it larger than Ghana and Cameroon. So, the governors are essentially equivalent to presidents in other African countries. Monetary and trade policy are out of their control but that is the same with most European Union member states and their presidents don’t get a free pass.

Then there is the matter of tax revenue. Again, we always focus on the presidency and the federal government’s budget but we forget that states, and local governments who are unfortunately mostly still puppets of the state governors, collect just as much tax revenue as the federal government. According to the revenue allocation formula, states and local governments get over 47 percent of federally collected revenues. So for every N100 the federal government collects, the states and local governments collect almost N90. This is even before you talk about internally generated revenue. Whichever way you cut it, the states and the local governments have almost as much financial power as the federal government. At least if you exclude debt financing.

The impact of governance at the state level is also apparent in some economic outcomes.
Unemployment varies greatly across states and although some factors behind that variation are
exogenous to current state government polices, some are not. Some states, like Lagos and Kebbi,
who have taken job creation much more seriously have shown better performance than others.

The same is true for educational outcomes where states like Anambra, Adamawa, and Taraba, who have taken education seriously, have been able to perform above the average. Whichever way you cut it, states who have been focused on specific issues have demonstrated that improvements are possible irrespective of what the federal government does. Of course there are serious structural issues which limit the potential for state governors.

The elephant in the room is the exclusive list which places limits on states ability to invest in railroads, ports, some roads, and other key infrastructure. However, as has been pointed out by others, airports are also on the exclusive list but governors never seem to find it difficult to get around the exclusive list for that. But perhaps the most important area where governors can make a real difference is in their joint lobbying efforts to influence policy.

The governors’ forum has real potential to influence the presidency in cases where monetary or trade policy is suboptimal. As we saw in the past, with the removal of fuel subsidies under president Jonathan, if the governors are united behind a policy they can get the presidency to act. Of course, President Buhari and President Jonathan are completely different in their capacity to be influenced but still.

The morale of this short story is to shine your eyes and watch your governors. Don’t only look at
president Buhari but look at your governors as well. What are their policies? What do their budgets look like? Are they governing or are they lounging in Abuja and Dubai? Don’t give your governors a free pass. They can make a difference.

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