States’ bank­ruptcy: Time to em­brace the ‘R’ word?

Daily Trust - - SPORT -

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 op­por­tu­ni­ties 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 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 sta­te­owned 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 will also cre­ate 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 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 gov­ern­ment. 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.

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 and should take de­lib­er­ate mea­sures to en­sure that in 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 of 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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