The Im­per­a­tive of Re­struc­tur­ing

The need for re­struc­tur­ing the fed­er­a­tion is ur­gent, writes Abio­dun Olu­sanya


Agov­ern­ment is judged by how much wealth and other in­dices of eco­nomic and hu­man de­vel­op­ment it can cre­ate for its peo­ple while in of­fice. Here we are not talk­ing about stom­ach in­fra­struc­ture or in­deed, any of those vague/deroga­tory terms our politi­cians de­ploy to de­ceive our peo­ple. It is about cre­at­ing wealth that lifts ev­ery­one’s for­tune and makes all res­i­dents proud. Good roads, world class hos­pi­tals, high qual­ity pub­lic ed­u­ca­tion for chil­dren and youths, em­ploy­ment, good se­cu­rity and gen­er­ally lift­ing the well­be­ing of res­i­dents. The prob­lem now is that there’s in­suf­fi­cient re­source to do these lofty projects. To worsen our pe­cu­liar sit­u­a­tion, we are not cre­at­ing wealth but rather we are a con­sum­ing na­tion. The Amer­i­cans, for in­stance, are proud of their coun­try be­cause they are cre­at­ing wealth, and this wealth im­pacts one way or the other on ev­ery Amer­i­can. That is what we need in Nige­ria. As it stands to­day, a sit­u­a­tion where a tiny per­cent­age of the pop­u­la­tion are get­ting wealth­ier; some hav­ing in­ex­pli­ca­bly hu­mon­gous wealth while the ma­jor­ity are lan­guish­ing in ab­ject poverty is not sus­tain­able. We are not cre­at­ing suf­fi­cient wealth that can lift up our econ­omy. What’s more, our un­par­don­able de­pen­dence on the price of crude oil fur­ther com­pli­cates our sit­u­a­tion. Such that when crude price rises, we make more money and sud­denly feel bet­ter and when it goes down­wards, we are thrown into a panic mood. Sim­ply put, we are merely a con­sum­ing na­tion, pro­duc­ing next to noth­ing

Ii is on this ba­sis that I will try to ex­plain in ev­ery day’s lan­guage why our need for re­struc­tur­ing is not only ur­gent but im­per­a­tive and why the clam­our de­serves more than a cur­sory at­ten­tion. A sys­tem where only four or five states out of 36 can sur­vive if the Fed­eral al­lo­ca­tion of money is de­layed or stopped is not sus­tain­able. Ef­forts of suc­ces­sive gov­ern­ments both now and in the past, have had lim­ited im­pact on the eco­nomic well­be­ing of the ma­jor­ity. It has only ben­e­fit­ted a very tiny pro­por­tion of the pop­u­la­tion mostly through rent-seek­ing and opaque favours that some had been priv­i­leged to en­joy from those man­ag­ing our re­sources.

When you look at the 2018 bud­gets of some states: Bayelsa, N295bn; Benue, N178bn; Bauchi, N167bn; and with Cross River hav­ing the high­est of N1.3tril­lion, while Yobe has the low­est of N92.2bn. The ques­tion you want to ask is, what ex­actly were these monies be­ing used for if the res­i­dents hardly feel the im­pact and how come peo­ple are get­ting poorer and poorer? And what of the damn­ing re­port that Nige­ria may be the poor­est na­tion on earth by 2050 if we con­tinue at this rate! Very scary in­deed. What­ever it is we are prac­tis­ing, is not work­ing. Most of these bud­gets are tied ei­ther to very long-term de­vel­op­men­tal projects or a large per­cent- age of it is not tied to projects that have sig­nif­i­cant im­pact on the res­i­dents. Or per­haps still, the bud­gets are too small to make any mean­ing­ful im­pact on the well­be­ing of cit­i­zens. And so, bud­gets come and go but noth­ing sig­nif­i­cant can be seen or felt.

We need a com­plete change of ap­proach and sys­tem of de­ter­min­ing re­source al­lo­ca­tion at both state and fed­eral lev­els. An ap­proach that cre­ates sig­nif­i­cant wealth must be adopted to re­verse the grow­ing trend of eco­nomic de­pri­va­tion, and we need to trans­form Nige­ria from be­ing seen and clas­si­fied as a poor coun­try to a rich one. Now we need to start cre­at­ing wealth for our na­tion to turn things around.

There is a need to clas­sify our states or re­gions by eco­nomic ac­tiv­i­ties. For in­stance, each state or re­gion is suited for one or two ma­jor eco­nomic ac­tiv­i­ties. And, we all know this sim­ple eco­nom­ics – the the­ory of com­pet­i­tive ad­van­tage. When re­sources are tar­geted at the eco­nomic po­ten­tial of a state, the state will start to grow again. There has to be a bal­ance be­tween in­vest­ing in long term de­vel­op­ment projects like build­ing high­ways and in­vest­ing in hu­man cap­i­tal de­vel­op­ment and other projects that im­me­di­ately im­pact on the peo­ple. There is a dis­con­nect be­tween the nat­u­ral en­dow­ments of our states and the eco­nomic ac­tiv­i­ties tak­ing place there. That is why we are not cre­at­ing wealth. At this point in our de­vel­op­men­tal his­tory, we all need to look in­wards and use our God-given re­sources to cre­ate wealth for our peo­ple. It’s like ev­ery state or re­gion has to be run like an in­dus­try, us­ing our com­pet­i­tive ad­van­tage to cre­ate wealth, oth­er­wise things are go­ing to re­main the same or get worse in the years to come.

Let us look at some states in United States for ex­am­ple and see what de­ter­mine their wealth and level of eco­nomic ac­tiv­i­ties. Here are a few ex­am­ples; Ne­braska and Iowa are agri­cul­tural states. This is what de­fines their sus­te­nance. This is their pri­mary in­dus­try. Most other ac­tiv­i­ties cen­tre around or evolve from agri­cul­ture, the main stay. As ex­pected, agri­cul­ture is their largest source of em­ploy­ment and rev­enue. Like­wise, other states have dif­fer­ent and unique eco­nomic main stay: Michi­gan – au­to­mo­bile man­u­fac­tur­ing, Maine – ex­port of lob­sters to the whole world; North Dakota – do­mes­tic oil in­dus­try, shale pro­duc­tion and re­finer­ies; Wy­oming; min­ing; Hawai – beau­ti­ful beaches and tourism; Texas – oil; Ne­vada – gaming and tourism, etc.

Here in Nige­ria, we have not even mapped the eco­nomic ac­tiv­i­ties that each state should fo­cus on for its de­vel­op­ment. In­stead we are all look­ing at the oil in the Niger Delta. The only thing we hear and read about is that cer­tain amount, may be N620bn, was shared among the states in one month or the other. Once it is ready, ev­ery gover­nor quickly dis­patches some­one to Abuja to run af­ter his state’s share, spend the money and wait for the next call. We have done this since we aban­doned the pre-1966 re­gional sys­tem when re­gions suc­cess­fully pro­duced and re­lied on dif­fer­ent agri­cul­tural pro­duce for their de­vel­op­ment. It is clear that the cur­rent sys­tem is not tak­ing us any­where. The young peo­ple, grad­u­ates et al all over the coun­try whose for­tunes and wel­fare are sup­posed to be tied to the for­tunes of their states are nowhere in the equa­tion. How many of them can the few banks, ho­tels, in­sur­ance com­pa­nies or even state and fed­eral gov­ern­ments en­gage?

Let’s take Edo State for ex­am­ple. Its for­tune should be de­rived from Rub­ber and Oil Palm as its main­stay. If you know how many man­u­fac­tur­ing and ser­vice in­dus­tries will evolve in that area if this is well man­aged, even the state will not be able to meet the hu­man labour de­mand of the sec­tor, and will need to at­tract other states to come and live in Edo. Then more peo­ple, more houses, more roads, more cars, etc., will be­come very vis­i­ble there. That is real de­vel­op­ment. Then hos­pi­tals will have to be built to cater for the ris­ing pop­u­la­tion there, and cities will spring up. That is real de­vel­op­ment. If Bauchi’s main stay is live­stock, that will be its main source of rev­enue. Ev­ery state will pay fed­eral taxes de­pen­dent on their out­put to the fed­eral gov­ern­ment. And guess who will pay the high­est taxes? The mineral pro­duc­ing states be­cause of the value of their out­put. These fed­eral in­comes will be used to man­age our de­fence, im­mi­gra­tion and cus­toms, for­eign af­fairs, na­tional se­cu­rity and for fur­ther in­ter­ven­tion for the weaker states.

Now con­sider that Nige­ria has the world’s best qual­ity in many nat­u­ral and agri­cul­tural re­sources like ma­hogany, bi­tu­men. lime­stone, iron ore, tin, crude oil, oil palm, shrimps (I once read we have the best shrimps qual­ity in the whole world!) We also have the best qual­ity of iron ore, crude oil, tin and bi­tu­men in the world. Re­struc­tur­ing is just about re­or­gan­is­ing our­selves along the line of our pro­duc­tive ca­pac­i­ties. We are one of the coun­tries of the world that should be self-suf­fi­cient in ev­ery­thing and ex­port all things that the whole world needs!

Ev­ery state is blessed, ei­ther with nat­u­ral re­source or agri­cul­ture pro­duce or both, and that is the start­ing point. Let ev­ery state go and recog­nise just two of what their great­est re­sources are (I call it their main­stay) and de­velop a com­pre­hen­sive plan on how to de­velop these po­ten­tial­i­ties to be­come the main source of their rev­enues and economies.

–– Olu­sanya wrote from the United States.

(See con­clud­ing part on www.this­

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