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.thisdaylive.com)