States and efforts to exit recession in 2017
Increasingly, the spotlight is being beamed on states across the federation; with a view to understanding what exact steps they are adopting to make 2017 a better year for citizens. A retrospective view of 2016 activates fresh memories of how Nigerians in several states groaned endlessly in the face of the down turn in the economy. In many states, the payment of salaries became the barometer for measuring the presence or absence of good governance. In many more, workers salaries were not forthcoming, resulting in various forms of social unrest. The more crude oil prices took a dive in the international market, the more Nigerians across the states suffered untold hardships.
The woes in the economy triggered an honest assessment of Nigeria’s overall governance structure, with citizens demanding an immediate response from the political elites. Before recession became the buzzword to explain the difficulties faced by Nigeria’s cash-crunched economy, the tendency was to place all hopes on the outsized federal structure in Abuja for solution to every governance challenge. The over-centralized Nigerian federation, which left too much powers and resources in the control of political actors at the centre, had blunted a real scrutiny of what the states can do to better the lot of their people.
At the time the national coffers overflowed, the political elites controlling national resources had no qualms instituting a system of handouts. They also helped themselves generously from the national till, as would be seen in the billions that have been recovered from several past public office holders. As a routine, states troop to Abuja on monthly basis to collect their share of federal allocation from the Federal Government. Now, the resort to handouts from the Federal Government is proving ineffective as a sustainable solution to the challenge of governance in the states. With the constraints imposed by the economic down turn resulting in severe revenue shortages, Abuja is no longer in a position to dole out as much as it used to.
Necessity, the well-recognised mother of invention, is pushing some states to reinvent themselves in order to beat the current fund scarcity affecting the system. Across the six geo-political zones, some states are making valiant efforts to change the narrative of over-dependence on funds from the centre for their survival. They are doing so, by making a bold return to agricultural activities and trade.
To succeed, they need to put in place policies to encourage manufacturing in their domain and prioritize initiatives that would boost economic activities within their states. Increased economic activities would mean the creation of direct and indirect jobs, and that would result in increased revenues in form of taxes. The hope of majority of citizens, especially in the states is that governance would work in a manner, which would evolve self-reliant revenue sources. This would mean taking steps towards implementing the right policies, which would in turn end the hopeless dependence by the states on the Federal Government for revenue.
Good enough, a few states are already showing the way to go in terms of diversifying their revenue base, and ending the monthly trips to Abuja.
IF there is one state, which looks impregnable when it comes to being far beyond the effects of the economic recession, Lagos is it. With an IGR base that outstrips what is generated by scores of other states of put together, Lagos has however not rested on its oars. Although it would have been easy to leave Lagos to run on its natural strengths without tweaking things too much, the Lagos State helmsman has harped on the need to create, and spread more wealth for the teeming population of the state.
This thinking is apparently the motivation behind the efforts by the administration of Governor Akinwunmi Ambode, to innovate with the goal of making Lagos wealthier. This quick thinking and economic problem solving ability have propelled Lagos to show the way in terms of how productive partnerships could be built across the country to address the economic challenges currently confronting Nigeria. This was put on display recently with the successful launch of the innovative LAKE Rice project. The LAKE rice is the result of a partnership with Kebbi State in the North West geo-political zone. The project, which saw Lagos and Kebbi pulling resources together on the basis of comparative advantage, is another model demonstrates the benefits of Pan-Nigerian cooperation. It has also offered Nigerians an alternative in the face of the galloping rise in the price of rice. This innovation, if sustained would create impacts in terms of jobs and raise the incomes across the value chains both in Lagos and in Kebbi.
IN the face of vanishing federal allocation, Nigeria’s most populous state has blazed the trail by taking steps towards the path of sustainability and self-reliance. Although it has refrained from blowing its own trumpet, the state is emerging as a case study for others on how to look inwards to generate funding to meet the needs of governance, even at a time of severe cash crunch in the national economy.
Despite the drastic drop in revenue from the centre, Kano has not had to grapple with the challenge of being unable to meet up with salary obligations to its workforce. As the centre of commerce in Nigeria’s northern belt, Kano State is also leveraging its advantages to revamp agriculture, trade and manufacturing.
In agriculture for instance, the government is pushing the frontiers in rice and wheat farming. The administration of Governor Abdullahi Umar Ganduje is putting in place policies focused on creating incentives for farmers through the provision of interest free loans to boost agricultural production. The government also recently engaged 1,200 agriculture extension workers to assist farmers across the 44 Local Government Areas (LGAs) achieve better results from their efforts to till the land. On the whole, Kano state attempts to project the view that the task at hand is not just to deal with the monster of recession. There is effort to evolve a governance template that places emphasis on the need to build a sustainable and prosperous future for the state.
The current governing elite in the state appears to have reached a consensus on those serious efforts at diversifying the economy and putting an end to dependence on federal allocation as the way to go, if the state is to have a stable and sustainable financial future. This thinking is certainly a factor in the fact that the state is also beginning to pull its weight again in the area of, Internally Generated Revenue (IGR). The IGR, which nosedived to about N700 million in 2015, has now rebounded to around N3.5billion monthly. Although the government’s IGR target on a monthly basis is way higher, there is the belief that the ongoing restructuring to revamp the revenue generating model of the state would bring in more monies to its coffers. Nonetheless, from what it has been generating internally so far, the government has been able to implement several infrastructure and youth empowerment projects. If it continues on this path without relapsing, Kano State could get to a point of real sustainability.
ANAMBRA State in the South East has equally emerged as one state that has been making efforts to use agriculture as a weapon to address the challenge of dwindling revenue. In 2016, the state announced that it had been able to achieve self-sufficiency in rice production. The state’s target of 210,000 metric tons was surpassed with the production of 236,000 metric tons of rice. The milestone was the result of an aggressive implementation of an agricultural policy by the administration of Governor Willie Obiano, which involved the organization of farmers into cooperative societies and thrift forums. Such groupings ensured better and sustainable financing and input distribution, which later translated to the results achieved.
IN 2017, Nigerians would be waiting for other states to begin to follow the examples above by giving more attention to agriculture and other activities that would alleviate the poverty in the land. With the recent slight rebound of oil price, the tendency would naturally be for states to relax and wait for improvement in oil revenue. As the crunch in 2016 has shown, states must do all within their power to break the viscous cycle of over-dependence on oil money from the centre. They must be ready to think of and imagine a future without oil. That invariably points the way to agriculture, and overall steps to diversify the economy.
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