Towards a new Nigeria: From federal fatherism to a commonwealth
Your Excellency, Governor Akeredolu, like an athlete on the fourth and final lap of a 400-metre race, you must now run for the home stretch with your eyes fixed at the finish line, which is ahead of you.
It is a race for Legacy; for you and for the people of Ondo state. You stand today as governor of Ondo state for a second time by the grace of God, be the instrument to change things more radically.
Make your second term one of double blessings for the people, make growth more inclusive, harness the dynamism and entrepreneurship of the youth and the power of the industrious women of Ondo state. This is the time to consolidate, this is the time to readjust, this is the time to move at a faster pace than you ever have.
Now there is always a tendency for complacency during a second term with the pressure of running for re-election no longer a factor. In such situations, the sense of urgency can easily evaporate, therefore with an eye on history this is the time to reignite your vision. When the pages of history are turned let them be turned to remember you for the exceptional good that you have done for the people of Ondo state.
Your excellencies, ladies and gentlemen, as Ondo state and all other state thrive and prosper, Nigeria will thrive and prosper. As a minister of Agriculture in Nigeria, I had a great opportunity to work with all the state governors and state governments when I launched the agricultural transformation agenda that revolutionized Nigeria’s agriculture and food security and we turned agriculture into a business.
I recognise that success required that I work very closely with all state governments of the federation regardless of party affiliation. I am reminded that we are all members of the same body, the eye cannot say to the mouth that I have no need of you, the hand cannot say to the head, well I have no need of it, all members of the body are important and indeed we give great attention to our weakest parts.
Without a state there will be no Nigeria, therefore Nigeria can only be as strong as its constituent States. Ondo state is rich in resources. Nigeria has the second largest deposit of bitumen in the world with an estimated 37 billion barrels of bitumen reserves, the bulk of which is found in Ondo state.
This vital resource remains untapped in Nigeria. Given its vast resources in bitumen, Ondo state should have the best roads in Nigeria, wouldn’t you think? But several of its roads are barely tarred with bitumen.
Your Excellencies, this is the irony of Nigeria, it imports what it has in abundance and leaves it own resources untapped. The total value of bitumen reserves in Nigeria is worth up to $1.5 trillion with an estimated 16 billion barrels in Ondo state, a potential state wealth from bitumen alone could be worth $657 billion according to a state of states report. The paradox however is that Nigeria has spent over N300 billion importing bitumen.
The publication of the state of state 2018 shows that the vast deposits of bitumen can help Ondo state to break into the asphalt shingles market estimated to be worth $10 billion globally by 2022. It could become a leading exporter of bitumen into Africa through the Africa Continental Free Trade Area.
Ondo state also has abundant deposits of metals, minerals such as granite, gold, marbles, gemstones, lignite and theorite. The state has one of the largest gas deposit in the world, it could also become a leading exporter and processor of cocoa and earn at least $1 billion per year according to the state of states 2018 report.
Ondo state’s wealth is not seen, it’s locked underground, the state ranks number 13 out of the top 20 States in Nigeria in terms of its GDP estimated at $8.4 billion, now that is the irony of Nigeria States. They are poor in the midst of plenty, they do not maximally explore or leverage what they already have in abundance.
The federal system of monthly grants has simply paralyzed them with stupendous resources all concentrated at the centre, the states are ever dependent on the centre. With the magnetic field of federal revenue allocation, states are constantly pulled powerlessly into perennial dependency. State governors now spend more time in Abuja than they actually do in their own state seeking the monthly federal manna. This financial privilege creates a sense of helplessness and overdependence on the centre.
Like a pendulum, ever moving from side to side in constant motion, so too has this unfortunate dependency become seemingly unstoppable. The truth however is that to survive and thrive States must become financially independent of the centre in Abuja.
The United States of America from which Nigeria derived its federal system is essentially a coercive federalism. The federal government uses conditional grants to the States to mainly support social infrastructure and insurance programs, essentially these carrots together stays to do whatever the centre expects.
Nigeria system is essentially a revenue-sharing system, it is less restricted compared to the US federal system, however in the United States whose political system we have borrowed, most of the resources of the state come from taxes, personal income taxes, corporate taxes, property taxes and consumption taxes as well as administrative fees.
Federal grants account for only a small fraction of the resources of the State now the opposite is the case in Nigeria, where federal revenue allocations are the lifeline of state governments, cut it off and 92 percent of Nigerian states will fail.
To be clear only three states in Nigeria can survive without a federal revenue allocation. This is a federalism of physical dependency, it is a federalism that is physically unhealthy for the state and the federal government because Nigeria depends on oil for over 70 percent of government revenues and a decline in the price of oil creates fiscal and economic volatilities that reverberate across the states.
What is needed is greater economic and fiscal autonomy for the states, the issue is less about state or regional autonomy but financial and economic viability of Nigeria’s constituent states.
Now if Nigeria were to be a conglomerate Firm, as a firm, it will not be economically viable because 92 percent of its constituent subsidiary companies are not viable without the support of the Holding Company.
Nigeria’s federalism does not grow its constituent entities it simply makes them perpetually dependent, the Nigerian system is therefore not federalism but fatherism. The agitation for decentralization can be understood when viewed in the light of the craving for greater autonomy, well let us face it political autonomy is meaningless unless it is backed by greater fiscal self reliance at the state level which tend to copy systems that are not well suited to our context.
The United States that we copied from does not control resources at the state level, instead the states generate the bulk of their income from taxes, this is not the case in Nigeria you can only tax people that have liveable income and that is not the reality.
Nigeria has an estimated 87 million people living in extreme poverty; you cannot tax people who can barely afford to eat. This debilitating poverty makes the country highly vulnerable to social and political risks and it provides for anti-social behaviour and recruitment by insurgents and terrorists. Poverty provides a supermarket for terrorists.
Your Excellencies, ladies and gentlemen the level of indebtedness of Nigeria is extremely high at N22 trillion, the debt stock of states is over N4.1 trillion. The three states with the highest revenues also have the highest levels of debt. Without incomes and rising debt, many states are essentially not viable.
Nigeria’s inequality is also extreme with over 50 percent of the youth not having jobs; rural areas are now zones of economic misery with high rates of poverty and extremely high birth rates.
Now this double whammy continues to perpetuate an intergenerational transfer of poverty. Poverty comingled with high levels of unemployment and underemployment has led to an astonishing rise in crime, banditry and kidnappings.
To extricate ourselves from this quagmire, Nigeria must seriously tackle problems of extreme rural poverty, hopelessness, the unemployment and underemployment of its largely youthful population.
Now it is impossible to keep the lid on a kettle that is boiling. When the kettle boils, you need to lift the lid and let the heat out. For stable government, the people must be allowed space to express themselves. If nations and states are about people, then people’s hopes and aspirations, demand and sometimes their complaints must be heard. We are all leaders and sometimes leaders think all is well when actually it is not.
One of the great dangers of leadership is to rely on others to tell you what is going on, effective leaders must connect themselves. You can delegate tasks but you cannot delegate your vision and responsibility. Effective leaders must listen, they must respect, they must feel, they must communicate, and they must act in the best interest of all.