What North­ern states can learn from La­gos

Weekly Trust - - Front Page - Chris Agabi

Eco­nomic ex­perts as­sert that none of the states in the North, ex­cept Kano, is eco­nom­i­cally self-sus­tain­ing, es­pe­cially with the cur­rent re­duced fund­ing from fed­eral rev­enue sources. Only Kano re­cently passed the sol­vency state, ac­cord­ing to an­a­lysts. Only Kano is ca­pa­ble of gen­er­at­ing rel­a­tively suf­fi­cient In­ter­nally Gen­er­ated Rev­enue (IGR) to fi­nance its wage bills and some de­vel­op­ment projects.

Other states’ monthly IGR can­not even pay 50 per­cent of their monthly wage bills. Kano no doubt has an ad­van­tage. It is the com­mer­cial cap­i­tal of North­ern Nige­ria and is the sec­ond most pop­u­lous city in Nige­ria, and by this sta­tus, at­tracts sig­nif­i­cant fed­eral al­lo­ca­tions. But even Kano is half as vi­able as it should have been, if only it sus­tained the eco­nomic tempo of the 1980s.

Un­til the com­ing of the oil econ­omy, Kano was the ma­jor cen­tre for the pro­duc­tion and ex­port of agri­cul­tural prod­ucts like hides and skins, peanuts, leather, tex­tiles, grains and cot­ton. In terms of in­dus­tri­al­iza­tion, Kano and Kaduna used to have a sig­nif­i­cant num­ber of in­dus­trial

out­fits mak­ing them truly vi­brant in those days.

The Cen­tral Bank of Nige­ria (CBN) gov­er­nor, Mr. God­win Eme­fiele while meet­ing with the Cot­ton, Tex­tiles and Gar­ments In­dus­try man­u­fac­tur­ers re­cently, said the tex­tile in­dus­try alone once sup­ported over one mil­lion di­rect and in­di­rect jobs from over 150 fac­to­ries, most of them in Kano and Kaduna in the 80’s. Ex­pert opin­ion

Mr. Ris­lanudeen Muham­mad, the Senior Fel­low and Mon­e­tary Pol­icy Lead at the In­sti­tute for Fis­cal Stud­ies, Nige­ria (NIFS), said over 50,000 small and medium in­dus­tries had died over the past 20 years in Kano and Kaduna alone. Bom­pai, Challawa and Sharada in Kano and Kaduna South in­dus­trial es­tates are now ghosts of their old selves, he noted.

He said: “Af­ter in­de­pen­dence in 1960, the econ­omy of North­ern Nige­ria started on a tra­jec­tory of sound, self­sus­tain­able de­vel­op­ment with mas­sive in­vest­ment in agri­cul­ture and for­ward in­te­gra­tion to man­u­fac­tur­ing, both large scale and in the area of mi­cro-econ­omy.”

Ac­cord­ing to him, there were strong ef­forts to­wards strength­en­ing in­sti­tu­tions for de­vel­op­ment of ed­u­ca­tion and hu­man cap­i­tal. Un­for­tu­nately, the so called ‘Dutch Dis­ease’ that caught up with most oil ex­port­ing economies did more harm to the North­ern Nige­rian econ­omy as the par­a­sitic style of gov­er­nance took root.

“Agri­cul­ture, which used to be the main­stay of the North­ern Nige­rian econ­omy, was rel­e­gated to the back­ground and with the oil price de­cline shock in the early 1980’s, man­u­fac­tur­ing in­dus­trial es­tates, es­pe­cially in Kano and Kaduna, be­gan to be­come ghosts of their old selves. Un­em­ploy­ment be­gan to creep up and what de­vel­op­ment econ­o­mists call street econ­omy, un­der­em­ploy­ment, as well as crime, be­gan to be­come en­demic all over. Oil econ­omy made the tech­nocrats lazy and heav­ily re­liant on monthly FAAC al­lo­ca­tion,” he noted.

This loss can be largely at­trib­uted to bad poli­cies, cor­rup­tion and ev­ery­thing between. Now, the North is liv­ing in the stark re­al­ity of poor rev­enue base and a bit­ing re­ces­sion, largely in­duced by the fall in oil price and drop in oil pro­duc­tion due to

at­tacks on oil fa­cil­i­ties in the Niger Delta. There is no IGR to hedge the drop in rev­enue.

But rather than the North throw­ing their hands up in de­spair, ex­perts say if de­lib­er­ate eco­nomic plan­ning laced with suf­fi­cient po­lit­i­cal will is de­ployed, the North­ern states can still rise above the poor fi­nan­cial base to a fi­nan­cial pow­er­house like La­gos. Mr. Muham­mad, an an­a­lyst at NIFS, said the North should in­vest heav­ily in ed­u­ca­tion and agri­cul­ture to get its peo­ple out of poverty. Se­cu­rity too is crit­i­cal, he said.

“With a con­ducive at­mos­phere for peace, in­vestors can be at­tracted to ar­eas of agribusi­ness, in­fra­struc­ture, min­ing and de­vel­op­ment of small-scale in­dus­tries. North­ern states should har­ness the abun­dant op­por­tu­ni­ties in those ar­eas and be­gin to think of life away from monthly hand­outs from oil. If agri­cul­ture and min­ing op­por­tu­ni­ties are taken se­ri­ously, that will im­prove the lives of the peo­ple, re­duce poverty, un­em­ploy­ment and crime and rev­enue gen­er­ated from the new vi­brant econ­omy can be de­ployed to other crit­i­cal sec­tors like health, ed­u­ca­tion and in­fra­struc­ture. This re­quires vi­sion­ary lead­er­ship and I be­lieve it can be done,” he said.

Agema Glo­ria, the Head of Pro­grams, Global Aware­ness for De­vel­op­ment Ini­tia­tive, said the North­ern states should con­sciously adopt stan­dard best prac­tices, curb the en­vi­ron­men­tal/nat­u­ral haz­ards through adap­ta­tion mea­sures for the front­line states. Morocco and Is­rael are good ex­am­ples of a con­scious ef­fort to in­vest heav­ily in ru­ral de­vel­op­ment pro­grammes through large scale com­mer­cial mech­a­nized farming of any pro­duce in­dige­nous to a par­tic­u­lar state with value chain pro­cess­ing, she said.

She also noted that the power sec­tor must be ad­dressed to en­sure sta­ble growth and progress. “In this case, re­new­able en­ergy must be adopted, par­tic­u­larly so­lar and wind en­ergy. It is a clean, cost ef­fec­tive and re­li­able source of en­ergy,” she added. Transportation na­tion

“It is im­por­tant to link the north­ern states through the rail­way sys­tem. I can also imag­ine the ben­e­fits of cargo air­ports,” she noted.

Also com­ment­ing, Mr. Kasimu Garba Kurfi, the Man­ag­ing Di­rec­tor/CEO of La­gos-based Apt Se­cu­ri­ties and Funds Lim­ited, said the North can­not achieve much with­out the req­ui­site ex­per­tise.

“You sim­ply can’t give what you do not have. So most North­ern states are suf­fer­ing from ca­pac­ity gap. How many of the gov­er­nors have ap­pointed com­mis­sion­ers in their ar­eas of ex­per­tise? For in­stance, the Com­mis­sioner for Fi­nance in Katisna State stud­ied Physics. What’s the cor­re­la­tion and how do you ex­pect sound fi­nan­cial ad­vice from a physi­cist?” he asked.

Ac­cord­ing to him, when Tin­ubu started his re­forms in La­gos, he even em­ployed an ex-bank man­ag­ing di­rec­tor and most of his com­mis­sion­ers where ex­perts in their re­spec­tive of­fices. He noted that the North’s IGR ca­pa­bil­ity is too poor to garner re­sources for mean­ing­ful de­vel­op­ment.

“Kano gen­er­ates about N2­bil­lion monthly from IGR. That was be­cause the then Gov­er­nor Rabiu Musa Kwankwaso moved it from N500 mil­lion. Now Gov­er­nor Gan­duje has moved it from N1bn to N2bn but Kano can do more with its size and pop­u­la­tion,” he said.

Ac­cord­ing to him, most of the states in the North gen­er­ate less than N500mil­lion monthly from taxes. He noted that a lot of taxes are not paid in the North, un­like La­gos that col­lects taxes on vir­tu­ally ev­ery­thing. He ad­vised the North­ern states to de­ploy tech­nol­ogy in rev­enue drive and rev­enue col­lec­tion, adding that land is­sues must be com­put­er­ized like Abuja.

“The North­ern states shouldn’t just sit and wait for fed­eral al­lo­ca­tion. When I was grow­ing up, we paid taxes on a lot of things. We paid for a bi­cy­cle li­cense, ev­ery cow, goat, sheep, etc. was taxed. Now the states don’t even know the num­ber of herds of cow in their states, let alone tax them. The value chains on agri­cul­ture are not tapped in the North. A lot of farm pro­duce still gets wasted be­cause of the ab­sence of pro­cess­ing fa­cil­i­ties, let alone ex­port. The North must tap the value chains on agri­cul­tural pro­duce. Also, dry sea­son farming is crit­i­cal. The North must in­vest in farming all year round,” he said.

“It’s also crit­i­cal that the North main­tains syn­ergy with other states with­out agri­cul­tural value chain. For in­stance, the Mid­dle Belt states pro­duce a lot of tu­ber crops but not enough of grains com­pared to the South. The states can lever­age on each other’s’ com­pe­ten­cies like what Kebbi and La­gos states have done. Though col­lab­o­ra­tion is good, cer­tain times, you need to do it alone as that breeds com­pe­ti­tion which is healthy for growth,” he said.

Ac­cord­ing to Kurfi, the North also needs to in­vest in fi­nan­cial in­sti­tu­tions that can give them ac­cess to more credit to do busi­ness, es­pe­cially agribusi­ness. The in­vest­ment ex­pert also said the re­gion must mine its solid min­er­als. “Most of the Mid­dle Belt and North-East states have solid min­eral de­posits in com­mer­cial quan­ti­ties, how many of the states are tap­ping into them? Those are huge re­sources, yet un­tapped,” he added.

Basil Jev, a re­tired Global Oil and Gas con­sul­tant from Wuese, Gaav, Benue State, said there is no coun­try that thrives well in an at­mos­phere of un­cer­tainty to life and prop­erty.

“For the huge po­ten­tials of the north­ern re­gion to be fully re­al­ized, we need a safe en­vi­ron­ment to live, work and carry out en­tre­pre­neur­ial ac­tiv­i­ties with­out the fear of busi­nesses get­ting de­stroyed overnight by hood­lums parad­ing ei­ther as po­lit­i­cal thugs, re­li­gious fa­nat­ics, herds­men or misguided in­sur­gents claim­ing land rights. If this is as­sured, the peo­ple’s cre­ativ­ity and in­ge­nu­ity can ex­press it­self more abun­dantly and at­tract more in­vest­ments and there­fore cre­ate bet­ter jobs in a sus­tain­able man­ner. Take a look at La­gos State, prob­a­bly the only space in Nige­ria not se­ri­ously threat­ened by a high in­se­cu­rity in­dex. And they have been grow­ing steadily since 1960. Peo­ple need peace and se­cu­rity to think cre­atively and act cre­atively with con­vic­tion for a long sus­tain­able fu­ture” he said.

Dr. Son Gyoh, a de­vel­op­ment ex­pert based in Ire­land, said as many that would do solid min­er­als or agri­cul­ture busi­ness, they should think col­lab­o­ra­tive ini­tia­tives in the face of cap­i­tal crunch. They should think col­lab­o­ra­tion to im­prove se­cu­rity that can pro­vide con­di­tions for in­vest­ment, he noted.

“For those strong in solid min­er­als, a joint ap­proach that can at­tract in­vest­ment/R&D should be spelt out. For agric, they should think of pro­duc­tion process and stor­age as in­te­grated chain and think pi­lot ex­port scheme. A re­new­able en­ergy agro-pol­icy should guide this col­lab­o­ra­tion to at­tract donors and for­eign grant op­por­tu­ni­ties. River Basin author­i­ties should re­form and re­po­si­tion for ob­serv­able im­pact and se­lec­tion of man­agers com­pet­i­tively. Also, a time­frame for achiev­ing var­i­ous steps to these should be laid out with fol­low-up re­views,” he said.

“The Emir of Kano, Al­haji Sanusi Lamido Sanusi should be in­vited to give them a good talk on strate­gies to achieve syn­ergy and lever­age. But there must be a shift from the pa­tron­age of ‘elite houses’ or tribes should be re­placed with the hunt for highly skilled pro­fes­sion­als and con­sum­mate busi­ness­men,” he added.

Of­fi­cials of La­gos State Emer­gency Ser­vice stage a cru­cial sim­u­la­tion ex­er­cise

Lekki toll gate in La­gos

La­gos State light rail project

La­gos State Gov­er­nor, Mr. Ak­in­wunmi Am­bode (left); At­tor­ney Gen­eral & Com­mis­sioner for Jus­tice, Mr. Adeniji Kazeem (mid­dle) and Per­ma­nent Sec­re­tary, Min­istry of Agri­cul­ture, Dr. Shakirudeen Olayi­wola (right) dur­ing the gov­er­nor’s in­spec­tion of the Agric-YES (Song­hai Model Farm) at Avia-Ig­boro­sun in Bada­gry, La­gos

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