Iyke

 

By Ikechukwu Amaechi

Published: November 1, 2011

IS NIGERIA really broke? That is the all-important question that is concentrating the minds of not a few right now. Those who ought to know answer in the affirmative, insisting the country is tottering on the brink of bankruptcy.

They have the statistics to back up their claim. A few years after the administration of President Olusegun Obasanjo brought the country out of the Paris and London Clubs’ debt peonage, they assert, the country’s debt profile today stands at $39.72 billion, which is the equivalent of N6.02 trillion. 

While the external element of this debt stands at $5.398, we are told the domestic debt stock is  $34.322 billion. When Nigeria exited the debt peonage in 2005, the total external debt stock, which stood at $35.94 billion, crashed to $3.54 billion. Many Nigerians complained then that it was unwise to part with almost $18 billion of our national patrimony, more so, when most of the debts were questionable.

But we were assured that it was in our interest to exit, so as to free the money used in servicing the debt over-hang for sundry developmental projects. We were told that never again would Nigeria be so burdened with such collosal debt.
And, indeed, there was no reason to crawl back to the debt sewage because crude oil has, ever since, sold at twice our budget benchmark. But the stark reality is that  even with the mouth-watering revenue profile, the country is still borrowing. Between 2006 when we were assured that never again will the country be classified as a debtor nation and now, those superintending over the affairs of Nigeria have borrowed $1.85 billion on our behalf.
Chairman of the Senate Committee on Local and Foreign Debts, Ehigie Edobor Uzamere, on Thursday said the huge debt profile was “unsettling and called for concern.”
Uzamere insinuated that a significant percentage of the borrowed money was used in financing gaps in budgets that are largely recurrent rather than projects with self-repaying capacity and job creation.
As if these figures are not scary enough, senators also revealed last week that only four states (Abia, Akwa Ibom, Jigawa and Anambra), out of the 36 states in the federation are healthy. While five others are said to be in tolerable financial health, the others are said to be in different stages of financial distress.

Following a motion on the “Looming danger of bankruptcy in states: The need for fiscal evaluation,” sponsored by Senator Olubunmi Adetunmbi, the senators agreed that steps should be taken urgently to address the precarious fiscal condition of states, in the interest of the country.

It is interesting that while Adetunmbi said he got the statistics to back up the claim that states face the looming danger of insolvency and bankruptcy from a recent research by the Nigerian Governors’ Forum, many of the state governors have disclaimed his position. But the Central Bank of Nigeria Governor, Lamido Sanusi, put a lie to such disclaimers when he re-echoed Adetunmbi’s claims that most of the states and local governments in the country are unviable.

Speaking at a book presentation in Kaduna during the celebration of the 80th birthday of Prof. Adamu Baike, Sanusi said the time has come when the nation needs to take the difficult step of overhauling political structures which have ensured that states spend about 96  percent of their resources paying salaries and allowances.
“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
“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,” he said.
Sanusi went on to alert Nigerians that “70 percent of the revenue of the federal government is spent paying salaries and overhead; leaving the rest 30 percent for 150 million Nigerians.”
What to do? Some senators think that the only way out of the quagmire is to throw any idea about creating new states into the dustbin of history. Some others proffer a more drastic solution; merging of the existing states. The healthier states should acquire the less viable ones as it is done in the banking industry, they contend.
Granted, Nigeria faces the danger of going bust like the mess some European countries are in right now. But the country’s financial crisis is not a consequence of too many states. The country is going bust because of our inability to exorcise the monster of corruption and unbridled profligacy.


As a people, we are inebriated on the vodka of licentiousness. With an estimated population of 150 million people, even 40 states will not be unwieldy for the purpose of administrative convenience. But the cost of governance is the issue. For instance, it has been said that Nigerian lawmakers earn higher than their colleagues in rich countries such as the United States of America and Britain.


It is also said that the CBN Governor is paid about $10,000 as estacode any day he spends outside Nigeria. How much does his counterparts in other countries collect? A minister goes about in a convoy of at least 10 cars when you hardly notice the convoy of even Presidents of other countries.

Why is it that our delegation to any international event is always the largest? How much, for instance, did Nigeria spend on the Commonwealth Heads of State meeting (CHOGM) that just ended in Australia with a delegation of over 120 people? Did we need that crowd?

The answer to our financial crisis is to run a lean government and wage a decisive war against corruption. The call for merger of states is diversionary. It is a deliberate ploy to blunt the sharp edges of the agitation for an additional state in the region brazenly shortchanged by the military.

The clamour for more states, particularly in the Southeast is a call for equity, which should not be sacrificed at the altar of hypocrisy. The zone remains the only one with five states when the Northwest has seven and the others six states each. If the other states were created without using economic health as a yardstick, why must it be the case now?

The implication of leaving the Southeast with only five states in a country where state is everything is that the zone gets the least from the Federation Account. It has the least number of local governments and lawmakers in the National Assembly, with only 15 senators when every other zone has at least 18.

There are only 94 local government councils in the Southeast (Abia 18, Anambra 21, Ebonyi 12, Enugu 16 and Imo 27), out of the 774 local governments in the country. Kano State alone has 45 councils. Added to Jigawa’s 26, the two states that used to be one have 71 councils, almost the number in the whole Southeast.

With only 42 people  (Abia 8, Anambra 11, Ebonyi 6, Enugu 7 and Imo 10), Southeast has the least number of lawmakers in the House of Representatives where the Southsouth has 65 and Southwest 73. I am not talking about the North where Kano State alone has 26 lawmakers in the lower chamber of the National Assembly.

All these amount to gross injustice and marginalization. It is even more so when the issue of non-viability is used as a smokescreen to deny the zone what they rightly deserve. The way to stop states from going bankrupt is not by merging them but by introducing real fiscal federalism, which will ensure that states eat what they kill.

Agitation for creation of more states cannot stop until there is equity. And that can only be when the injustice meted out to the Southeast is redressed.

 

            


Posted by ikechukwu on November 2, 2011 at 10:30 pm
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