by Omoh Gabriel
Last week, President-elect, Major-General Muhammadu Buhari (retd) surprised Nigerians when he said that he is currently at a loss on how best to tell Nigerians that his promise of turning the economy around quickly upon assumption of office on May 29 may not be feasible. One would have expected the renowned general to know better. He was swept into office by the propaganda of change. Nigerians bought the slogan line, hook and sinker and voted him to power.
Change, it is said, is the only constant thing and does not come by wishes. It is no news that whenever there is downturn in oil prices, the economy experiences financial stress. The economic circumstance that brought about a military coup that made Buhari head of state in 1983 has not changed. It was the fall in oil prices that made the Shagari-led Federal Government to introduce the very first austerity measure in the country.
Buhari knew what followed during his 18 months in the saddle. It should not be news to him that the economy is down, almost on its knees because there is no money to share at the federal level. APC and Buhari must note that it is by dint of hard work that change comes about. If there was surplus money in the treasury, I am sure Nigerians would not have voted for Buhari.
They voted for him to lead a team that will change the political, as well as the economic situation in the country. Whatever it will take, Nigerians expect Buhari and his APC co-political travellers to find a winning formula to restore the economy and not give lame excuses. Buhari is already looking for excuses to explain possible failure on his part and those of his governors and party in the future.
Buhari premised his fear on the perception that the economy has been battered by the out-going government of the People’s Democratic Party, PDP. This was even as governors elected on the platform of the All Progressives Congress, APC, said empty treasuries may be awaiting them in their respective states. The governors cried out that most state governments had gone bankrupt and, therefore, cannot pay workers’ salaries.
According to them, it was obvious that they were going to inherit huge debts which may delay speedy progress in their respective states. The state governors that went to Buhari were shedding crocodile tears. Governors are the major problem of the economy. They failed in their respective states to build a viable economy, depending totally on proceeds from the federation account shared on monthly basis.
How many of the 36 federating states were able to attract direct foreign investment in their domain in the last four years? How many new factories and industries were established in the states during this period? How have the governors built the economy of the various states? Those who went to Buhari did not tell him that APC states like Lagos, Edo and Osun, are currently the most indebted in the country.
They did not tell the President-elect that Lagos which was run by APC all this while, had an economy where its internally generated revenue has been on the increase. In 2010, Lagos State’s internally generated revenue was N149.966 billion. It rose to N202.761 billion in 2011. It further went up to 219.202 in 2012 and again rose to N384.259 billion in 2013. Figures for 2014 are yet to be made public. If the economy of Lagos was damaged, how come its internally generated revenue had been on the rise?
In the same vein, Kano State governed by APC had internally generated revenue of N6.618 billion in 2010; it was the same for 2011 but rose to N11.051 billion in 2012 and further to N17.142 billion in 2013. Rivers State that was initially PDP but later APC had an internally generated revenue of N49.632 billion in 2011, N52.711 billion in 2011, N66.275 in 2012 and N87.914 in 2013. In Edo State, the internally generated revenue stood at N10.651billion in 2010, N14.764 billion in 2011, N18.88 billion in 2012 and N18.89 billion in 2013.
In all the states sampled, the internally generated revenue was rising rather than falling. It thus suggests that states which took steps to boost their revenue sources had increased revenue profile. Curiously, the external debt profile of states has shown that Lagos State has the highest with a profile of $1.087 billion, followed by Kaduna State with a total of $234 million. Cross River State followed closely with an external debt profile of $131.469 million.
Other states with relatively large external debt are Edo – $123 million, Ogun – $109 million, Bauchi – $87million, Enugu – $62 million, Katsina – $78 million, Osun – $67 million and Oyo State – $72 million. A breakdown of the debt showed that $3.146 billion of the debt owed by states were borrowed from multilateral institutions while $118.9 million were bilateral loans.
Based on the rising debt profiles of state governments, the Federal Government last year directed banks not to grant fresh loans to state governments until they got the relevant approval and clearance from the Federal Ministry of Finance. The Federal Government had defended its decision to dissuade banks from granting unsecured loans to state governments, saying it was to protect the states from excessive accumulation of debts.
States have not done enough to boost their revenue profile. They have relied mostly on federal allocation to survive. If Buhari wants to make a difference, he should begin by implementing true fiscal federalism. The change that brought him to power should embolden him to change the financial anomaly that implements a unitary fiscal policy in a federation.
Whatever line of action the APC-led Federal Government would want to take that is not based on fiscal federalism, the hues and cries about damaged economy will continue whenever there is no money to share. So, APC and Buhari, no excuse for failure, change must be change.
To pitch for editorials, Opinion and Exclusive gists, send to [email protected], we will follow up on the story……
_________________________________________
Article written by Omoh Gabriel and culled from Vanguard Newspaper…..
Disclaimer
It is the policy of NewsWireNGR not to endorse or oppose any opinion expressed by a User or Content provided by a User, Contributor, or other independent party.
Opinion pieces and contributions are the opinions of the writers only and do not represent the opinions of NewsWireNGR.
