The state of the states Our rank­ing of Nige­ria’s 36 states shows their per­for­mance on fight­ing poverty, pro­vid­ing elec­tric­ity and rais­ing rev­enue

Ahead of elec­tions planned for 2019, The Africa Re­port presents its first rank­ing of Nige­ria’s 36 states, show­ing what is work­ing and what is not. We also fea­ture a de­bate be­tween heavy­weights about the coun­try’s cur­rent di­rec­tion

The Africa Report - - CONTENTS - By Eromo Eg­be­jule

Pres­i­dent Muham­madu Buhari’s gov­ern­ment and its op­po­nents agree on one thing: that Nige­ria’s sys­tem of fed­eral gov­ern­ment is bro­ken. Although the cen­tral gov­ern­ment al­lo­cates just less than half of na­tional rev­enue to the state and lo­cal gov­ern­ments – far more than any other sys­tem of de­volved power in Africa – this has not re­sulted in good public ser­vices or more ac­count­abil­ity. Our rank­ing of Nige­ria’s states (see page 24) – with La­gos at the top and Yobe at the bot­tom – high­lights which states are fight­ing poverty, pro­vid­ing ac­cess to elec­tric­ity, fa­cil­i­tat­ing busi­ness and rais­ing lo­cal rev­enue. In fact, few of them are do­ing any of these things. Although states and lo­cal gov­ern­ments are re­spon­si­ble for pri­mary and sec­ondary ed­u­ca­tion, ba­sic healthcare, wa­ter and san­i­ta­tion, and feeder roads, the stan­dards of these ser­vices are fall­ing. More peo­ple are stretch­ing their bud­gets to send their chil­dren to pri­vate schools and clin­ics. Two-thirds of

the 36 states have been un­able to pay their em­ploy­ees on time. Nei­ther has fed­er­al­ism opened the door to more open or ac­count­able gov­ern­ment. Most state gov­ern­ments are at least three years be­hind with their au­dited ac­counts; most also refuse to an­swer ques­tions about how they are spend­ing public funds. To­day’s divi­sion of labour be­tween the fed­eral, state and lo­cal gov­ern­ment dates back to the 1999 con­sti­tu­tion. Ev­ery gov­ern­ment since then has promised to re­write it but failed to get a con­sen­sus for change. The two main par­ties – the All Pro­gres­sives Congress (APC) and the Peo­ple’s Demo­cratic Party (PDP) – fight­ing the 2019 election say they want true fed­er­al­ism. At the min­i­mum, this would give states that pro­duce oil, gas and min­er­als a greater share of the rev­enue they pro­duce. That is some­thing that makes most politi­cians in Abuja ner­vous, what­ever they say at election time. The big­gest fight will be over money and who con­trols it. Two years ago, 24 state gov­ern­ments ap­pealed to the fed­eral gov­ern­ment in Abuja for a bailout be­cause they could not pay civil ser­vant salaries. Al­most as many state gov­ern­ments were un­able to ser­vice their debts, owed mainly to lo­cal com­mer­cial banks. Although the im­me­di­ate cause of the cri­sis was the crash in the oil price, which halved Nige­ria’s ex­port rev­enue, the big­ger causes are struc­tural. Like the fed­eral gov­ern­ment, state gov­ern­ments are crit­i­cally de­pen­dent on oil rev­enue. But states are even less ac­count­able than the fed­eral gov­ern­ment.

SPEND­ING THE BAILOUT

Like the pres­i­dent, gov­er­nors en­joy im­mu­nity from pros­e­cu­tion while in power. The na­tional assem­bly can pro­vide checks and bal­ances, even when the pres­i­dent’s party has a clear ma­jor­ity in both cham­bers. Gov­er­nors typ­i­cally rule supreme in their do­main. In most cases, they dom­i­nate the election process, en­sur­ing that state houses of assem­bly and lo­cal gov­ern­ment au­thor­i­ties are filled with their own al­lies, con­trol­ling them with pa­tron­age from public funds. Faced with de­mands for a bailout from the in­di­gent state gov­ern­ments in 2016, fi­nance min­is­ter Kemi Adeo­sun of­fered a pack­age worth N1.75trn ($4.8bn). Adeo­sun said that there was an agree­ment with the gov­er­nors that at least 50% of the first tranche would be used to pay ar­rears on salaries and pen­sions. Within days, seven gov­er­nors were said to have used the funds for other pur­poses. The bailout did not help much ei­ther. Ac­cord­ing to Budgit, a civil so­ci­ety mon­i­tor­ing group, the cu­mu­la­tive do­mes­tic debt of the 36 states rose by N1.64trn be­tween De­cem­ber 2014 and De­cem­ber 2017. For the coun­try’s in­for­ma­tion min­is­ter, Lai Mo­hammed (see page 30), this gets to the heart of the clash be­tween the cen­tre and the states: “The con­sti­tu­tion al­lows al­lo­ca­tions to the states, but there are no con­straints on how they spend the rev­enues.” Un­der the 1999 con­sti­tu­tion, the fed­eral gov­ern­ment gets 52.68% of the fed­er­a­tion ac­count – which is funded by a mix of oil and gas rev­enue and na­tional tax­a­tion – and it has ex­clu­sive pow­ers over for­eign pol­icy, de­fence, the cen­tral bank and debt man­age­ment, cus­toms, air trans­port and sea­ports. The states get 26.72%. Lo­cal gov­ern­ments are meant to get 20.6% via the state gov­ern­ments. To­gether, they are re­spon­si­ble for ed­u­ca­tion, ba­sic healthcare, wa­ter and agri­cul­tural ser­vices. Some of in­for­ma­tion min­is­ter Mo­hammed’s col­leagues want the strict rules on spend­ing and debt that ap­ply to the fed­eral gov­ern­ment to be ex­tended to states in a new ver­sion of the Fis­cal Re­spon­si­bil­ity Act. They want tougher rules on dis­clo­sure and spend­ing, and au­dits on state-owned en­ter­prises. But most state gov­er­nors push back hard at such moves. Don­ald Duke (see page 30), a former gov­er­nor of Cross River State and a pres­i­den­tial con­tender in the 2019 elec­tions, whole­heart­edly sup­ports con­sti­tu­tional re­struc­tur­ing that would give more fi­nan­cial power to the states. The re­source-rich states, such as his own oil-pro­duc­ing state, would keep most of their own rev­enues, but he ar­gues that states with­out nat­u­ral re­sources can find so­lu­tions: “Look at what Kebbi is do­ing with rice. If all Kebbi did was fo­cus on rice […] Kebbi alone can fill half of Nige­ria’s rice needs, and the state will be rich.” Kelechi Udeogu, an aide in the Rivers State gov­er­nor’s of­fice, is also a fan of

States are crit­i­cally de­pen­dent on oil rev­enue – but even less ac­count­able than the fed­eral gov­ern­ment

La­gos: an econ­omy the size of a coun­try de­spite the tan­gles of red tape

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