Saturday, 9 July 2016

OPinion: States’ Bankruptcy: Time to embrace the ‘R’ word?



The Chinese are said to use two brush strokes to write the word, ‘crisis’. It is said that for them one brush stroke stands for danger while the other stands for opportunity. The critical question here is: what opportunity does the current economic crisis present to the country? I am using the virtual bankruptcy of our states to epitomize the current economic crisis.


Declining revenue from oil and consequently smaller receipts from the Federation Account is often blamed for the current economic crisis. For instance while the N305 billion shared by the three tiers of government in May 2016 was higher than the N281.5 billion of the preceding month, the marginal increase hardly improved the states’ balance sheets. Also though the state governments may get more money with the flotation and consequent depreciation in the value of the Naira, their receipts are unlikely to be enough to solve their cash problems, especially as inflation continues to gallop to the high heaves. Unemployment, says the National Bureau of Statistics, grew from 10.4 per cent to 12.1 per cent in the first quarter of 2016, a figure that does not take into consideration underemployment and disguised unemployment


The bankruptcy of the states is further reflected in the fact that 27 of our 36 states are currently unable to pay the salary of their workers – arguably the most basic of their functions. In some states, workers are owed more than twelve months’ salaries. For instance lecturers at the Tai Solarin College of Education, Omu Ijebu in Ogun state are said to be owed 13 months’ salaries as at the end of June 2016. Across the country, teachers and lecturers in several state-owned institutions are owed months of salary. And students who paid tuition in such institutions naturally feel angry that they are not getting value for money – if they are lucky for their institutions to be open and running skeletal services. Other state employees are not faring better.
The unviability of our current states has other far-reaching implications: for instance can we really have the moral unction to preach anti-corruption gospel to workers who have not been paid for months and who have families to feed? This is why we argue that corruption is not just caused by moral lapse but is largely systemic. It is another way of arguing that states’ inability to meet their basic obligations to their employees undermines loyalty and legitimizes corruption in the eyes of such workers. And add to the mix other problems created by the bankruptcy of the states – inability to pay contractors, high indebtedness of the states, lack of employment opportunities and inability to provide basic development infrastructure. The bankruptcy of the states also creates legitimacy crisis for the federal government – despite its penchant for blaming all the current challenges on the past government. For many people, the failure of the sub states is the same as failure of the Buhari government because the buck stops at his table.
The above are among the reasons why I feel it has become urgent for the government to find a lasting solution to the current problem of the bankruptcy of most of our states. Bailouts, even on generous terms, are at best palliative measures that are in themselves unsustainable and a sharp reminder of the unviability of those states queuing to meet the conditions for accessing them. And it is unrealistic to keep hoping that revenues from oil would bounce back to the levels they were two or three years ago. This is unlikely to happen soon – unless there are unexpected major crises in key oil producing countries.
The truth is that oil revenue on which the country depends for some 80 per cent of its revenue has for long masked the unviability of our 36- state system and the structure of the country on which it rests. So in many ways it is good, as the Igbo would say, for the wind to blow harshly so that the anus of the fowl would be exposed. We need to see in the crisis the opportunity to finally admit to ourselves that the current structure has failed.
I know that the ‘R’ word conjures different emotions among different people in our highly polarized and emotionally charged environment.  I have in fact read about people who threaten that any talk about restructuring the country is an invitation for war or for the dismemberment of the country. Threats like these – age-old bargaining strategies by the different regional factions of the elite – now sound passé given the economic challenges facing the country. The irony with these threats though is that quite often those issuing them do not look strong enough to give anyone a good slap.
It has in my opinion become imperative to seriously consider a structure of the country in which fewer units will partake in sharing revenue from the Federation Account. I will align myself with the proposal that the current six geopolitical zones should replace the current 36-state system. Under this arrangement each zone will be at liberty to create as many states and local governments as it wants without these partaking in sharing the revenue from the federation account.
With the six geopolitical zones as the only units to share revenues with the federal government, there will be reduction in the number of bureaucracies in each zone and concomitantly reduction in the cost of governance.  Perhaps with this sort of arrangement, the various geopolitical zones will be in a better position to provide infrastructure, invest in development projects and turn the country into a ‘federation of economies’ or what some people inappropriately call ‘true federalism’. This system will also be in a better position to promote national integration. For instance, with larger markets in each zone, if the cocoa produced in the south-west is used in the manufacture of chocolate in the North-west, the people from the two zones will increasingly over time come to appreciate their economic interdependence. Economic linkages and interdependencies among the different geopolitical zones will in turn attenuate the anarchic nature of our politics.
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The President should look into allegations of ‘northernisation’ policy
The social media is awash with reports of how the Buhari government has been favouring the North, especially Northern Muslims, in its appointments. Internet warriors and social media activists revel in such stories. Mistakes in this regard – whether of the head or of the heart – will only amount to giving ammunition to the government’s critics with which they will happily take pot shots at the regime.
While every regime in the country has had to face similar allegations of favouritism in various degrees since ‘ethnic/religious watching’ became part of our political culture, the Buhari government should recognize that perception is everything  in politics and should therefore take deliberate measures to ensure that instances of proven imbalance are addressed as quickly as possible.
The President should remember what happened during his First Coming. His coup was so popular that the late Dele Giwa recommended that all the politicians being tried for corruption should simply be given the ‘Rawlings treatment’. Ironically, a few months after, the activities of the ‘ethnic/regional and religious watchers’ ‘convinced’ a significant portion of Nigerians from the southern part of the country that the regime was discriminating against them and favouring the Muslims from the North.  With time, virtually every action of that government was analysed in the southern part of the country using the prism of ethnicity, regionalism and religion. The result was legitimacy crisis which paved the way for the Babangida coup. The politicians from the south who were jailed for corruption all came out as heroes and heroines.
Certainly the Buhari government does not need these distractions. It already has a plateful of these. Therefore it needs to do all it can to avoid getting entangled in further distractions.

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