THE GROWING BANKRUPTCY IN STATES

The smartest policy choice out of the problem is to restructure the federation

According to a recent report by BudgIT, a civil society organisation, out of the 36 states, only Lagos, Rivers, Katsina and Kano were considered solvent enough to meet their obligations “without resorting to borrowing or tapping donor funds and other extra-budgetary revenue sources.” The situation was so dreary that for some states, their average monthly revenue could not even take care of half their needs. Yet, with the decline in the oil revenues being shared every month in Abuja, the reversal of the looming catastrophe would require not only transparency and accountability but also fiscal and monetary creativity.

Meanwhile, inbuilt in the history of the states is a tragic ambiguity: created by federal might but not necessarily sustainable as federating units, none of them negotiated the terms of its sub-sovereignty. Literally, they were absent at their own birth since all the states were decreed into existence by military fiat without any bottom-up democratic process. This is in sharp contrast to the federalism practiced in other countries, especially the United States, where the states created the federal government and each negotiated the terms of its entry into the union.

To compound the situation, the sub-sovereign status of the states as enshrined in the constitution makes them indissoluble except by another overarching political development that sets the constitution aside, although there is also a mitigating factor. While their creator, the federal authority largely sustains majority of these states through the monthly Abuja FAAC cheques, they have the latitude to create their own revenue survival kits through taxes, sensible investments and prudent management. The challenge of the moment is that this is not happening and is not likely to happen, essentially due to the nature of our politics.

Ordinarily, decentralisation presupposes that the nearer government is to the people the better they are served. Unfortunately, that has not been our experience in the country. With 36 states and 774 Local Government Areas (and countless development centres created by the governors), the real beneficiaries have been politicians, not the people. Indeed, from what has transpired in the last 18 years of democracy, the mechanism for accountability diminishes the farther away government is from the centre. For instance, the travel budget of a state governor is in most cases far bigger than the education budget of their state even when the schools within their jurisdictions operate under trees or are at best rag-tag enclosures with squalid infrastructure.

What the foregoing suggests very clearly is that something has to give. There have been several suggestions, including merging groups of consenting states but that is difficult in a political situation where the states have since become centres of political action and consciousness. It does seem that the only face saving window left is contained in restructuring the federation. That is because the rationale for many of the states was that our contending national elites wanted small enclaves to plunder and control. The military gave them the states to engineer their own legitimacy. But the elite never thought up a business plan to make the manors sustainable.

At practically all levels, there seems to be a misconception about what governance is all about. The tragedy of that misconception could be seen in the score-cards of public officials who celebrate the building of statues, distribution of foodstuff during festivities and donation of vehicles to traditional rulers as landmark achievements. Yet good governance is that which is focused on the people, their safety and welfare; the optimal allocation of scarce resources and the effective implementation of policies for service delivery.

Given the foregoing, it is understandable that the nation is now at a crossroads. By focusing only on payment of salaries to workers in the public sector that are largely unproductive at the expense of much needed social infrastructure like schools, hospitals and reliable institutions, poverty is being reinforced across the country. That is the critical challenge that must be addressed not only by all critical stakeholders as we seek to enthrone a federal structure that can work for the people and not just a few.