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Insolvency: Is merger of states a solution?

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BY EMMANUEL AZIKEN, Political Editor

The silence of the Governor of the Central Bank of Nigeria, CBN, Mallam Lamido Sanusi in recent times may have put him away from the many controversies that have dogged his stewardship of the money market.

However, when he resumed last Saturday at the presentation of a book in honour of Prof. Adamu Baike, erstwhile vice-chancellor of the University of Benin, he undoubtedly touched a raw nerve that is at the centre of what some believe is the root of the country’s problems.

Noting the oppressive amount expended in maintaining the country’s 36-state structure, he asked:

“Do we need 36 states? Do we need the number of ministries that we have? Is an economy where states spend 96 percent of their revenue paying civil servants an economy that is likely to grow in the long run? These are difficult questions that we need to ask,” Sanusi posed.

“We have created states and local governments and ministries as structures that are economically unviable and the result is that we do not have funding for infrastructure, we do not have funding for education; we do not have funding for health”

Continuing, the CBN Governor said:

“Although there are no comprehensive data on the number of Nigerian students abroad, recent data have shown that there are about 71,000 Nigerian students in Ghana paying about N155 billion annually as tuition fees as against the annual budget of N121 billion for all federal universities.

“In other words, the tuition paid by Nigerian students studying in Ghana with a better organised system is more than the annual budget of all federal universities in the country.”

The issues articulated by the CBN Governor were a day earlier, on October 27, raised during debate on a motion in the Senate on the economic challenges of the states arising from the economic stress facing many of the states.

Presenting the motion, the sponsor Senator Olubunmi Adetunmbi ACN, Ekiti North made copious references to a report produced by the Nigeria Governors’ Forum which noted the pending bankruptcy of at least 20 states on account of the wage bills they are faced with every month.

According to Senator Adetunmbi at least six states were at the point of financial distress while another fourteen were facing critical economic situations.

Debate on the Adetunmbi motion is inevitably leading to further discussion on the relevance of sustaining the states as they are. Indeed, the first comment on the need to merge some of the states have now been made.

The weight of the personnel wage bill has no doubt stretched the public treasury to a breaking limit. As was revealed by both Sanusi and during the Senate debate more than 90% of government revenue is now expended on sustaining the infrastructure of government leaving little or nothing for public infrastructure.

Remarkably, even those outside of government have weighed in to propose solutions to the seeming distress facing the states.

Not too long ago eminent Lagos lawyer, Chief Olisa Agbakoba, SAN at a press conference in Lagos unfolded a bill directed at addressing the perceived financial stress of the states which is equally aimed at reapportioning the present duties of the federal and State Governments.

Agbakoba noting what he described as the present inflated federal system that has made the cost of governance burdensome on the citizenry in his bill with the long title “An Act To Alter The Constitution Of The Federal Republic Of Nigeria 1999 By Creation Of The State Court Of Appeal, Introduction Of State Legislative List And Adjustments/Modifications Of Legislative Powers Of Government Between The Federal And State Governments” has proposed that some duties presently undertaken by the Federal Government be transferred to the states.

There is, however, an ambiguity over the proposal for the recognition of the present zones as he does not make any specific proposal to abrogate the states as they are presently known.

A statement by Agbakoba’s office detailing the intent of the bill reads in part:

“The Bill substituted the ‘Exclusive Legislative List’ with ‘Federal Legislative List’ in relation to powers exclusive to the Federal Government and introduced ‘State Legislative List’ for powers exclusive to the State Governments. Powers recommended to be devolved to the States by the Bill include: natural and mineral resources, excluding petroleum and gas, agriculture and Micro Finance Banks.

“Others include municipal police, State Appeal Courts, solemnization of marriages, incorporation of business enterprises with state objects, taxes on income and profits within the state other than income and profits of companies, regulation of labour and industrial relations at state level including prescription of minimum wage for the state, evidence etc. The proposed Bill also seeks Constitutional recognition of the 6 Geo-Political Zones of the country.”

“The presentation of the Bill by Mr. Agbakoba follows agitation by the states of the federation for increased allocation of funds by the Federal Government to enable states pay the new minimum wage of eighteen thousand naira prescribed by the Federal Government.

“Mr. Agbakoba is of the view that most of Nigeria’s 36 states are financially unviable and that a way out is to devolve and allocate more responsibility to states rather than just more federally distributed funds that make states corrupt and unaccountable. Mr. Agbakoba is astonished that a state Governor “donated” about three billion out of his seven billion naira security votes.

“If Governors are empowered by more responsibility under the Constitution, Mr. Agbakoba suggests that they may be more accountable. The 36 States and 774 Local government structure, is too weak to support any claim for true federalism and impoverished to undertake any meaningful development.”

It is reflective of the leakages in the system that some may have pointed to news reports on the woes of the PDP in Imo State last week. In a report carried by many newspapers the state chairman of the PDP Mr. Eze Duruiheoma, was quoted as saying that the denial of funds from the State Government had crippled the activities of the party. That, he told the national chairman of the party, Alhaji Kawu Baraje during a courtesy call is because of the enthronement of the All Progressive Grand Alliance, APGA government in Owerri.

“Another problem we want to share with you is that because we have no access to the Government House in Imo State, the funding of the party is very, very poor.” Pitiably, the Baraje was mute on the issue. It was perhaps a silent admission of the fact of the burden the political class have put on the rest of the citizenry.

 

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