President Goodluck Jonathan
THIS DAY
Simon Kolawole Live!
Email: simon.kolawole@thisdaylive.com
Did you know? If oil money were to dry up today (maybe crude prices drop to uneconomic levels or we are unable to export), only one state in the entire federation would be able to settle its wage bill. You guessed right: Lagos.
This statistic may shock you, but only Lagos generates enough internal revenue to pay its workers. To meet wage obligations, the rest of Nigeria depends on federal allocation—which is anything between 70-90 per cent from oil. Let me quickly make a point before I move on: Rivers State also generates significant IGR, but it is mainly from oil activities. And since my fundamental assumption here is that oil dries up, Rivers’ IGR would thus be massively depleted.
Lagos is a secondary beneficiary of oil activities, of course, but because of its industrial base and unique position as the commercial and financial capital of Nigeria, the state will still generate sufficient IGR to take care of its wage bills. Let’s put things in proper perspective.
Speaking sometime last year, the chairperson of the Federal Inland Revenue Service (FIRS), Mrs. Ifueko Omoigui-Okaru, said most states hardly generate up to three per cent of their total income. She said beside Lagos and Sokoto which generated 60 per cent and 46 per cent IGR respectively in 2008 (obviously the latest statistics she had access to),others depended on federal allocation for the bulk of their income. I quote her:
“Some states have IGR-to-total revenue percentage that is as low as three per cent. Only two states had an IGR ratio above 40 per cent. For most states, the federal allocation ratio is above 80 per cent. This went down slightly to 70 per cent in 2009. States whose IGR are about 20 per cent or a little more in 2008/2009 include Borno, Gombe, Rivers, Osun, Oyo, Ogun and Abia States. Most states did less than 20 per cent. A state managed only three per cent.”
I don’t like bombarding readers with excessive figures, but I have gone to this extent for just one reason: to emphasise that we are living a false life in Nigeria. Many commentators and analysts have been saying this for years, but it always falls on blocked ears and stone hearts. So every day, there is a fresh demand for state creation. Every local government wants to become a state. There is political agitation, but no economic viability plan. Everybody wants to eat from the national cake. Everybody wants a fiefdom with which they would go to FAAC meeting every month to collect their share of the oil-fuelled federation account.
Nobody has said: Come, Ladies and Gentlemen, can we pay our bills without FAAC? The reason for this mentality is simple: it is because we run a “unitary federalism”, where the resources of parts of the country are pooled into a central pot and shared to the rest of the country.
Last week, I did argue that the clamour for “equitable” sharing of federal allocation is faulty. The argument, really, should be how states can begin to gain financial independence from the centre so that federal allocation can become “pocket money” or something to be saved for future generations.
The story of Nigeria is like that of a father who has 36 children. He takes the income of his wealthy children to a central port and distributes it among his 36 children. A good father will encourage all his children to be creative and hardworking so that they can make the money to sustain themselves. A bad father will ignore the larger picture of every child being self- sustaining and insist on redistributing his children’s wealth. The ultimate danger is that you will have children who are extremely lazy and unwilling to make good use of their talents and gifts. Every month, they will go to “papa” to give them their own share of the other children’s wealth. It will now reach a stage that they will start complaining that the money is not enough to buy the limousine of their dream.
I understand a bit of the logic of natural resources. The oil in the Niger Delta is a gift of nature, many will argue, since the people played no role in putting it under the ground. So let’s share it—it belongs to all. But so also can we say of human beings—we are not gifted the same way! Michael Jackson could sing better than his brothers and sisters. But it would be wrong to compel Michael to bring his income to the table so that his father could share it among all the Jacksons. If that were the case, Janet or Jermaine or LaToya would have no reason to do any work at all. They would all be waiting for the month to end to collect their own FAAC. But Janet honed her skills and became a success in her own right as an artiste. She may not be anywhere near the success of Michael, but she is certainly a success. The Jacksons can have a common purse where they can contribute resources for the common cause of the family. There is nothing wrong with that. But to make a policy of taking from one Jackson to sustain another Jackson is illogical.
There is no state in Nigeria that cannot sustain itself if the governors understand the art and science of development. If it is natural resources, every state has them. If it is value-added agriculture, every state can become an industrial host. These are the things that can generate employment, generate economic activities, generate tax revenue and shore up the incomes of the states. The real challenge for the governors is: how can they use what they’ve got to get what they need? How can they put the right policies in place to attract the needed investment? How do they spend wisely to make state economies viable? These are the questions they should be asking.
But because of the ease of travelling to Abuja for federal allocation cheques every month, forward planning and critical thinking are no longer part of governance. The eternal reliance on oil revenue has done a lot of damage to the federation. Every day now, we hear the Niger Delta people say “our oil, our oil”.During the petrol price hike crisis in January, some Niger Delta person, trying to suggest that the protests were unjustly aimed at President Goodluck Jonathan, said something like: “If our son is not good enough to be president of Nigeria, then our oil is not good enough for Nigeria.”
This warped logic—which tends to paint oil as the solution to all human problems —defies the fact that the most advanced countries in the world do not rely on oil revenue. Even Norway, the poster boy of successful management of oil revenue, survives on tax. Their oil money is saved largely for the rainy day. But do you blame us? Why do we need to stretch our brain to dream of building our own Microsoft and Apple when we can look up to Abuja for the flow of petrodollars every month? Why should Bauchi bother to tap its tourism potential? Why should Bayelsa dream of feeding Africa with its FADAMA rice when there is a fat FAAC cheque to be collected in Abuja monthly? Why should we quicken Ajaokuta so that the fourth biggest steel company in the world can begin to operate fully and spice up the economy? Why should Aba be developed into our own Taiwan or Japan?
There is no such incentive. The only incentive I can see in Nigeria is federation account. It wouldn’t even matter if we are utilising federal allocations to develop the most important resource at our disposal: the human capital. Oil is not the real deal, no matter how dominant it has become in our lives. It was human beings that designed cars and made petrol as important as it is today. Human beings are now designing cars that run on bio- fuels, electricity and solar energy. By the time the cars become popularly accepted, the demand for oil could drop. It may not happen in the next 50 years but it would happen someday. So the wise person does
not keep emphasising on oil and ignoring human capital.
The wise person thinks about a future where our lives will no longer depend on oil but on the quality of the brain. It was human beings that invented aeroplanes, computers and phones, etc. If we are wise now, our energies should be devoted to getting out of this oil trap. I wish we could discuss these issues honestly without trading insult and threat. The quality of public debate is very poor in Nigeria. We have a real problem in our hands but instead of engaging in fruitful debates to chart the way forward, we specialise in name-calling and blackmail as if that would solve our problem. Those of us who have no interest in politics or politicking will continue to make our point.
During the course of these past 36 hours on this blog, BEEGEAGLE wrote as follows:
EXCERPTS:
QUOTE
” Concerning the impoverishment of the North, a lot of that in itself is attributable to endless years of manipulation by minions of the region who controlled power for decades but used same to feather their own nests and those of their cronies. No structures for sustainable livelihoods were put in place, money was just shared out to a privileged few. It did not matter to the masses in the North, as long as the other side was kept away from the corridors of power. Those politicians who grabbed power in the name of the region but exercised power for the benefit of a greedy, narrow clique while using ethnoreligious cleavages to keep the rest of the country divided, bear the greatest responsibility for the impoverishment of the North. It is strange that people are glossing over the casus belli and now throwing tantrums because an “outsider” is President.
The Arewa Consultative Forum need to be told that the proliferation of states which its leading lights masterminded with a view to weakening the federating units whilst allowing for the emergence of an all-powerful Federal Government which they thought they would control ad infinitum is the PROBLEM.
As a result of the fact that today’s 13% derivation largesse to the oil-bearing states did not exist pre-1999 when landmass was one of the parameters used for allocating shares to the federating units, states and local governments were created to favour that region and ultimately to claim the largest share of revenues accruing to the Federation Account.
Those states and local governments which were created with a view to having some sections of the country undone have now become a burden since they are unproductive entities which are not worthy of statehood but have commitments such as running the machinery of these states.
The states need to be merged to allow for a lean structure of six to eight federating regions. At the moment, three-quarters of Nigerian states are mere salary-paying contraptions which add nothing to the country’s GDP but rather have been obstacles to development insofar as 70% of the revenues handed down from the Federation Account end up getting spent on recurrent expenditure, chiefly on fanfare and first ladyship, wailing sirens and other trappings of folly and vanity which have come to be associated with holders of political office in Nigeria.
There has to be a minimum which the Northern political establishment has to concede. You cannot hold on to contrived privileges while expecting others to make concessions. It is not going to happen.
The nation needs to move towards a lean political structure so that savings accruing from the efforts at right-sizing governmental structures can be channeled into job-creating development projects. If that does not make sense, then the Niger Delta should hold onto their 13% boon as well until more people come to their senses and do the right thing.”
END OF QUOTE
2.
QUOTE
“My brother Ken, I read you five-by-five.
I was nurtured to be IRREVOCABLY committed to the unity of Nigeria BUT I also happen to be sold on the idea that weak and impotent little states and nations mostly have no place in the contemporary world – whether those be nations such as Guinea Bissau or Nigerian states such as Ebonyi, Gombe or Ekiti.
It is on account of those same reasons that we want to see the merger of some of these states which factually constitute unproductive drains on the nation’s exchequer…..
Yet Nigeria has a massive 72.5 million hectares of arable land but not enough funding for commercial agriculture which would transform lives. We have 37 solid minerals available in commercial quantities which are said to have the potential of spinning further US$40 billion annually for the nation.
In a properly structured Nigeria of six regions where government is lean, economies of scale shall ensure that all governments have enough clout to undertake major agricultural schemes – just as the Rivers State Govt is providing $100m as counterpart funding in a $140m joint venture 3,000 hectare farming scheme.
When all the regions have billions of dollars accruing to them from the Federation Account and the right to bring in foreign partners to undertake joint venture mining projects without recourse to an overbearing FG, the North Central region where today’s Kogi State alone boasts 29 solid minerals, would be able to produce coal,tantalite,bauxite,gold,gypsum,limestone etc for export and pay royalties and taxes to the FG.
In the Northwest where Greater Sokoto(Sokoto,Kebbi and Zamfara states)sits on the Kalambaina limestone formation which holds billions of tonnes in reserves, they can set up more cement plants and produce for export to Benin,Burkina Faso,Niger and Mali. In that same corner, they have gold and uranium reserves waiting to be tapped yet everyone is lusting after petrodollars and chasing shadows even while their local endowments are glossed over.
May God grant Nigerians the courage to do the needful. ”
END OF QUOTE
3.
QUOTE
” Less than 30 minutes ago, NTA News revealed that a staff audit of the 22,151 LG council workers f in Nasarawa State revealed that 9,000 ghost workers are on the payroll (about 40% of the total number). The audit of the state civil service revealed a further 5,000 ghost workers.
That is to say that some truly decadent compatriots have been fleecing the cash-strapped state government of the salaries of 14,000 persons, even as there are hundreds of thousands of unemployed people in that state. So the state was created to feather the nests of a few well-positioned rotten fellows.
IF that state had not been created and the funds which are being handed down for it to eke out an indifferent existence were spent on farm settlements, agricultural credit schemes and extractive industries in a Nasarawa which has 22 solid minerals under her soil, many more jobs than these civil service charades would have been created in a more efficient private sector-led job creation exercise. Alas we are in Nigeria where many people see blue and call it black.
Let us assume that during her fifteen-year existence, Nasarawa have spent $3bn on recurrent expenditure. As an area of a North Central Region, that same $3bn spent on joint venture farming settlements with Israeli and Chinese investors would put 30,000 hectares under cultivation and probably employ 100,000 farmers – for an outlay of $1bn.
With the balance of $2bn and assuming that the regional government invested $200m each in Public-Private Partnership ventures for the extraction of the ten most abundantly available mineral resources, how many more people would those provide jobs for?
At the very least, five times the number of bureacrats on the payroll of Nasarawa State today (ghost workers included) would have been guaranteed sustainable livelihoods.
But this is Nigeria where people go in through in the wrong door and expect to arrive at the right destination. Everyone wants to move around with wailing sirens in tow, so rather than scrap the glorified local governments they would rather pretend that the problem lies elsewhere.”
END OF QUOTE
source
beegeagle.wordpress.com/2012/03/05/top-us-official-pledges-security-help-for-nigeria/
This is a wonderful piece. I have always been an admirer of Simon Kolawale and its because of his column that i buy Thisday every Sunday(My wife also likes the Fashion Magazine that comes with it). Beeg, until we get things right in Government we would continue to have conflicts. I am an ICT Consultant (I have various Industry certifications) i majored in Psychology in the University of Lagos but i have an undying love for Agriculture. My dream is to own a large mechanized farm in Nigeria not because of the money that would arue to me(That would naturally follow) but beause i believe that 70% of Man’s problem is food related. If every Ctate in Nigeria were to set aside enough monies for Agricultural projects we would be exporting raw and processed food to other countries and Continents in no time. Thereby creating another source of wealth for our Country. Our lands are well suited for Mechanized farming and practically don’t need much work on them to get them going. This thing is not ROCKET SCIENCE…..All we need is just FOCUS….Shift focus from Oil as Simon and Beeg rightly said to other areas.
I was opportuned to carry out some ICT projects in Taraba state and was amazed at the expanse (sorry LARGE expanse) of land i saw there. Beeg, i saw tractors of varying sizes rotting away at the State House of Assembly and the House of Assemble quarters.What are they doing there…Someone must have bidded for that contract of suplying them and atually won it(Only God knows how much they paid for it). These tractors if put to proper use would help aid the local farmers who still use hoes to increase food output in that state. As i was pondering over this another thought crept into my mind…..If the Northern States who get a lower allocation than the Southern states can buy this number of Tractors….what have the Southern Governors been doing?…Its ‘s a shame that with all the money they collect we still have to depend on purchase of food products from states like Benue and kwara. There are lot of farmers in Israel(For goodness sake these people(Jews) practically turned the desert to Greenland).who they can form PPP arrangements with just like the Rivers State Governor has done. If Israel is too far we can turn to the “rejected” White farmers from Zimbabwe. We need to de-emphasise the dependence on Oil. God help us when we do the right thing!!!!!!!
Nice ripostes, gentlemen. See Ken..Akokite like me!
Let me say something to add to thr rotting tractors which you saw in Taraba. Going into the 2011 polls and while we discussed prospects for attitudinal change, two close friends of mine who come from Numan(Adamawa) and Karim Lamido(Taraba) respectively,assured me that in their home local councils, the only time that there is a full house and a flurry of activities is when the allocation for the month kicks in.
They just split the bulk of the money among local potentates and godfathers and thereafter, the parade gets disbanded. I am telling you what they said to me themselves – of their own native lands.
Once upon a time on this blog, we asked what, beyond indolently hankering after handed-down allocations, was being done about tapping the phenomenal endowment of the Mambilla Plateau – a strip of land equal in size to The Gambia.
Using the template provided by Cross River State with the world-class Obudu Mountain Race which was transformed with help from the Protea Hotels Group, we would have thought that Taraba, with her larger tracts of pristine mountain territory would have taken a cue from that.
Indeed, whereas Obudu Mts boast an altitude of 1524m-1819m, the Mambilla Mts average 1,830m-2,419m. The Chappal Waddi is the highest point in all of West Africa. On account of montane vegetation and temperate weather (same reason why there are so many Western NGO workers and missionaries on the centrally located Jos Plateau), it is incontrovertible that everything which is cultivable on the Obudu Mts and MORE can also be produced on the much larger and higher altitude Mambilla Mts.
In addition to having a hydroelectric power potential which is able to provide electricity for all of West Africa on account of fast-flowing and deep plunging rivers, highland tea, highland cattle, highland rice, apples, Irish potatoes, radishes, grapes, olives etc can be cultivated in an area of lush grasslands and high forest with cold season temperatures of 6-15 degrees Celsius depending on the time of day.
Whereas Cross River, a marginal(negligible really) oil producing state has developed the Obudu into a world-class resort and venue of the world’s richest mountain race during the course of these past seven years, “na siddon look wey we brodas dem dey for Taraba” WHY?
All that fabulous potential in the Mambilla covers a huge tract of 1 MILLION HECTARES – one-fifth of the land area of that stunningly beautiful state which is equal in size to Rwanda and Burundi combined. What is being done about all that potential – like what we read about that is said to be in the works in Rivers State?
You really do not want to know the quantum of limestone, coal, uranium and bauxite reserves which exists in that state. What is this oil-fixation everywhere all about?
OBUDU MOUNTAIN RESORT
(Transformed by MAN)
DEVIL’S ELBOW, OBUDU MTS
OBUDU – MOUNTAIN MIST
Yes oooh Beeg…GREATEST OF THE GREATEST AKOKITES…Guys to address the issues of Poor Leadership we can either change the leadership or cause an attitudinal change in them. I’ll prefer the latter as it would be less hazardous and would not overheat the already heated polity.Let’s start in anyways we can to sensitise our leaders on what it entails to be a visionary leadership. Lets offer our support in any way we can to help them achieve their mandates. Lets all stand up and e counted. Its time for action peeps!!
Nothing more to be said on this. Covers all points succinctly
But unfortunately we are led by people who are unfit to tend barnyard animals so this will all go to naught.
The President does not get to see reports like this nor will anyone in the Presidency dare to smuggle it through to his table, or one run the risk of losing his/her job. This is common sense enough for one and all to understand and yet the political psyche of this nation’s leaders tends to swim into wormholes. One needs to take a close look at numerous political party manifestos vis-à-vis this thread and suffer high blood pressure one hundred times a day.
Simon ur simple unigue. Keep up d good work
You’re simply unigue. Naija i weep for you.
THE NATION
8 March, 2012
• Move to prune Federal Government
agencies and cut redundancies salutary
The news that the astoundingly large
agencies and parastatals of the Federal
Government may be drastically reduced is quite a cheery one and we urge
government to do it post-haste.
Following the recommendations of the Presidential Advisory Committee, the President had last year, set up a committee on the restructuring and rationalisation of Federal Government parastatals.
The committee, headed by veteran civil
servant and former Head of Civil Service of the Federation, Mr Steve Oronsaye, is
said to be set to tip the applecart of
bureaucracy with its report. The committee, which had eight weeks to
do its work, is yet to submit any report
after about eight months. The reason,
according to report, is that it is under
intense pressure from powerful interests to tone down its recommendations.
The committee is said to have identified
about 541 parastatals and agencies which it has recommended to be reduced drastically to an active and manageable 168. The objective is to cut redundancies and overlap of functions as well as wastages. This exercise would involve mergers of similar agencies and outright scrapping of some.
The immediate result of this, should the
recommendation be put to effect, would
be loss of jobs by directors-general and
executive secretaries of affected
agencies which could be as many as 750.
There is no doubt that if the report of the committee is eventually submitted and implemented, it would be a major
breakthrough in the attempt to
restructure and reform the federal civil
service.
Apart from removing the wedge of
crippling bureaucracy that impedes
efficiency in the civil service, the move
will improve the effectiveness of the
remaining agencies and most
importantly, cut cost of running government.
Recently, there was uproar over recurrent expenditure in the federal
budget which has risen to 75 percent
against 25 per cent for capital
expenditure. This is unsustainable in the
face of crying need for infrastructure upgrading and renewal. There is need to
reverse the ratio in favour of the latter.
For instance, in the energy sector, there
are too many agencies under the ambit of the Nigerian National Petroleum
Corporation (NNPC). What does the
National Petroleum Investment
Management Service, (NAPIMS) do? What about the Defence Intelligence Agency (DIA) and the Directorate of Military Intelligence, (DMI)?
The examples are numerous. A number of these agencies have simply outlived the purpose for which they were specifically set up, while others are existing merely for the subvention they get from government; and not for the value they create or add to the chain.
The financial implication of sustaining
541 parastatals and agencies must be
enormous. There is also the question of
carrying redundant and unproductive
workforce. These workers are better off
retrained and deployed to areas where they will find fulfillment by adding value.
We urge the government to shun lobbyists and press on with its agenda to reform the civil service and make it more efficient and value-driven. Indeed, it must not stop at the parastatals only, it must look into every aspect of the service in order to save it from its debilitating inertia and lack of productivity; this is the only way government’s policies will translate from mere paper work to concrete developmental projects.
Let redundant agencies and parastatals be done away with without further ado.