President Muhammadu Buhari is a generous man. He has been pretty generous to the jolly band of impecunious states. Shortly after he assumed office in 2015, one of the first challenges he took on in a bid to bring change to the country was the impoverished state of the states. Twenty-seven of them were unable to pay the salaries of their civil servants as well as the stipends of their pensioners, some of whom were standing at the door to the other world. The accumulated salary and pension arrears almost rivalled Mountain Kilimanjaro. Well, in a manner of moderated exaggeration, that is.
The president saw where this would lead the country and the deleterious effect it would have on his administration and his quest for change in how we do things in the country. He decided to lend the states a hand. He gave them a generous bail-out fund to clear the salary and pension arrears and impress on themselves the prudent management of their lean resources to avoid further scandals that bordered on callousness and insensitivity. It was what the newspapers called a windfall for the affected states. Sadly, the civil servants and the pensioners for whom the bail-out fund was primarily meant, did not smile to the banks. Government contractors did. This was not a secret. The blind saw it; the deaf heard it.
In 2017, the president again gave the states more money from the refund from the Paris Club. This time it placed a condition for the release of the funds to ensure that it did not miss its way into the bank accounts of contractors, absent of the tattered pockets of civil servants and pensioners. The federal ministry of finance said in a press release that “the releases (of the fund) were conditional upon a minimum of 75 per cent being applied to the payment of workers’ salaries and pension for states that owe salaries and pension.”
The ministry was in no position to monitor how the money was spent by the state governors. It lacks the authority to look over their shoulders. It turned out that nothing changed. The situation has now worsened in those states. Salary and pension arrears are hitting the sky. Some civil servants and teachers who retired four or five years ago have never received their gratuity, let alone their pension. The bail-out fund only bailed out contractors and left the civil servants and pensioners in the lurch. This scandal continues to follow this nation like a shadow. It tempts civil servants to set aside a nest egg into which they deposit their illegitimate earnings from government treasuries. Thus, corruption continues to smirk at the anti-corruption forces.
The bail-out funds are now due for repayment. Again the president, aware of the financial pain this would cause the insolvent states, has intervened to make life easier for them. He has approved N656.1 billion bail-out for them over the next six months as a bridging facility so that they do not feel the effect of the repayment.
The president means well. However, there is no evidence the governors will change their profligate ways with public funds. The impecunious state of the 27 states is a national disgrace. It is a scandal that cannot but rub off on the country and its economic husbandry. That 27 of the 36 states cannot meet their elementary obligations of paying their workers and pensioners points to a clear danger here. The states are being sucked into a vicious circle. None of them can break out of it because none of them can appreciably improve their internally generated revenue.
We have two option for tackling what is clearly a fundamental problem in the nature and practice of our federal system of government. They are fiscal federalism and restructuring. Both have been on the front burner of our national discourse for a very long time. Both are contentious. And both have strong proponents and strong opponents. But something must give if the states are to break out of this vicious circle and free themselves from becoming almajirai permanently. This would defeat the fundamental objectives of state creation.
The first option canvasses for the rights of the states to own the wealth peculiar to them in the best practices of a federal system of government. This would challenge the states to be their own keepers financially. You cannot have 811 governments depending on a single source of revenue, such as crude oil, without expecting a distribution of poverty among them.
The El-Rufai committee on true federalism set up by APC recommended “state control of resources and (to) pay tax to FG.” It also recommended an upward review of the revenue allocation formula in favour of the states; and that such a review must take cognisance of its recommendation for the devolution of power to the states.
Mum is the official word from either the party or the federal government. This argument must not be allowed to drag on for much longer. Its resolution will not end the generally poor management of our resources but it would be one step out of the current lurch.
The uniformity imposed on the country is both unfair and unreasonable. Lagos State is the fourth largest economy in Africa. Is it fair that Benue State should pay its civil servants and political appointees the same salaries and allowances with Lagos State?
The second option is the restructuring of the country to make our federal system fully serve our needs as a people. This is not politics; it is at the root of the issues critical to our unity and national development. The current conflation of two systems of government – a unitary system super-imposed on a weak federal system – stifles our country. Nation-building being a work in progress, it should not be difficult for us to see the necessity of taking periodic steps to free the country from being hostage to what served us in the past but has become an obstacle to our progress.
The creation of states was a sensible formula for nation-building. But the multiplicity of states by the generals to satisfy political interests now stands the wisdom of General Yakubu Gowon’s twelve-state structure on its head. Chief Obafemi Awolowo once rightly described the states as “glorified local governments.” The local governments have become village councils. This set up is not serving our national and developmental interests. Let’s find the courage to restructure the country physically and administratively to help cure some of its glaring ills. And set the country on the true path of becoming a great nation.
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