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
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