By Ifeanyi Afuba
Nigeria’s 36 states find
themselves in a predicament today as centres of development without the
requisite empowerment for driving economic growth. In theory, Nigeria is a
federal state composed of coordinate central and provincial governments but in
reality, the states are inferior entities to the federal government. By fiat of
military decrees, the states became divested of ownership of the mineral
resources in their territories, thus making the country an oddity of a federal
state. Hangover from military rule has not afforded the political class
recognition of the urgency for fiscal federalism. It is a measure of our
unitary mindset that in 16 years of democracy since 1999, the country still
operates a feudal revenue formula that allocates 52 percent of national revenue
to the federal government at the expense of 36 states. The marginalisation of
states in revenue allocation is however compounded by the volatility of other
contending socio - economic forces.
From ancient to modern
times, governments have had to contend with the vagaries of economic recession.
The ability to predict and weather the storm of recession is one that demands a
high level of competence in political economy. The depression which set into
Nigeria’s economy in 2014 has now matured with grave consequences. Traceable to oil glut and lower prices,
corruption and the massive deployment of public funds in the 2015 electoral
contest, the resulting insolvency especially among states of the federation has
necessitated an emergency bailout plan.
A breakdown of the N338
billion intervention fund courtesy of the federal government and the Central
Bank of Nigeria for 27 distressed states show that four of the five south –
eastern states will draw over N48 billion credit facilities. The name
conspicuously missing on the loan list is Anambra State, which is also the
exception to the problem of indebtedness to workers, thus prompting legitimate
interest on the secrets of Anambra’s fiscal stability.
There is every likelihood
that the orchestrated $75 billion cash and investment portfolio said to have
been handed over to the administration of Governor Willie Obiano by his
predecessor, Peter Obi, will be cited as the source of the state’s financial
health. This tendency is all the more
probable given the perceived reluctance of the state government to join issues
with the past administration on disputed areas of the handover note. Public policy analysts familiar with
government expenditure patterns have faulted the handover notes for glossing
over the issue of liabilities especially in the area of domestic debts. A closer look however at the state’s current
profile indicates that management rather than inheritance underlies the state’s
economy’s rating.
Although not yet an oil –
producing state nor in the premier league of federation account recipients list
like Kano and Sokoto states, Anambra State has proved to be fiscally resilient
from the Peter Obi years to the one and
half years of Obiano’s administration. Against the backdrop of the prevailing
illiquidity in the country, the fiscal stability achieved by the current
Anambra state government even while recording extensive infrastructural
projects is remarkable. In just one
year, Governor Obiano awarded contracts for no less than 250 kilometres of
roads, a record unrivalled by any previous regime – military or civilian. Work is also in progress on three flyovers
and other landscape – changing projects in the capital city, Awka. The Obiano
regime increased workers’ salaries by 15 percent in its seventh month even as it is up to date in
the counterpart funding of ventures with international development agencies.
The first insight into the
secret of Anambra’s fiscal resourcefulness is in the area of blocking of
leakages that would have allowed government funds to end up in private pockets.
An auditor of repute, Obiano has brought his rich experience in corporate
management to bear in the running of the state’s financial system. So much has
been said and written about the role of corruption in Nigeria’s
underdevelopment that it is mind – boggling many Nigerians are resigned to the
scourge. Between the greedy public and civil servants in vantage positions on
the one hand and the powerful political manipulators otherwise known as
godfathers on the other, lies the threat to the system. However as the Anambra
experience shows, with the application of monitoring and control mechanisms,
the window of fraud is considerably narrowed. The effectiveness of this model
is believed to have earned Anambra State lead rating in International Public
Accounting System [IPSAS] survey of Nigeria’s most transparent and accountable
state in 2015. In the assessment, the Obiano administration scored over 80
percent fiscal merit, the highest ranking in the south – east.
Planning is seen to
constitute another major plank of the Anambra story. As public expectations of
state governments continue to rise with 16 years of uninterrupted democracy, it
becomes imperative for states to reappraise the opportunities for achieving
sustainable development. Planning would not serve its purpose except anchored
on priorities and alternatives for actualisation. In the light of the
disruptions to development programmes by our mono oil economy, it is interesting to see how proactive
management has stood Ananbra State on balance. The insight is provided by the
Governor himself: ‘We analysed the Nigerian economy and foresaw that oil prices
would crash to about $55 a barrel in less than one year. We foresaw that if oil
prices crashed, it would bring down our revenue by 50 percent. Having figured
that out, we began to work on improving our IGR by restructuring our revenue
sources.’ It remains only to add that
this economic intelligence is achievable given the supply and demand volatility
of the international oil scene.
From the above, it is easy
to see that the by – product of fiscal discipline and planned restructuring is
increased internal revenue. Diversification of revenue sources, ordinarily a
common sense demand, assumes greater urgency for the states in the face of the
deliberate politicization of fiscal federalism in the country. The undue advantages
to ethno – regional interests from the present distortions in the system
indicate that there will be no meaningful shift to federal revenue principles
in the near future.
With its commitment to
continuity and completion of inherited projects, the Willie Obiano regime has
saved Anambra State losses associated with policy inconsistency. It is a grim
reality that projects are sometimes discontinued for new ones by new
administrations for the lure of taking political credit. The spectre of abandoned work sites is also
about contractors absconding from site after collecting hefty payment sums. As
it were, without completion on schedule, government contracts are vulnerable to
manipulation to the detriment of the society. Delays in public works execution
are maximally exploited by contractors and other vested interests in pressing
for contract review and variations. The
policy of project continuity thus becomes a veritable tool both for cutting
costs and getting good value for public money.
It is perhaps no longer news that Governor
Willie Obiano has attracted $2.4 billion worth of investment to the state till
date. A glance at the investment sheet
shows that a broad range of critical sectors from agriculture, manufacturing,
hospitality and tourism to power generation are beneficiaries of the capital
inflow. In various stages of development, the chain value of the agro – allied
enterprises offer soothing economic and social potentials in the face of
unemployment concerns. What is striking
in these partnerships is the evidence that they are not ad hoc but in pursuit
of the administration’s inaugural objectives to make Anambra State a leading
producer in rice, cassava, garri, palm oil and fish. The other outstanding legs
of the investment bang are the $100m natural gas project being undertaken by
Falcon Corporation Limited and the $50m vehicle assembly plant by Richbon Nig
Ltd. The strategic importance of these ventures in the quest for an
industrialized economy cannot be over – emphasized. It goes without saying that
the investment rain has potential for reflating the state economy and freeing
up government funds for intervention in other sectors.
However, the foundation of
these gains remains the solid investment in the security of lives and property.
In the second week of his inauguration Governor Obiano had convened a security
summit in obvious recognition of its key role as catalyst for development.
Stability subsequently ushered in a favourable rating that investors could not
ignore. Thus, with a keen appreciation of the ripple effects of good security,
the Anambra State Government initiated and in August, 2015, hosted a South –
East/Delta States Security Conference. Obiano captured the mission of the
Conference: ‘…our freedom over crime will remain incomplete so long as the
armed robbers and kidnappers we drive away from Anambra can find safety
anywhere….Posterity looks on us to build a befitting economy in this region….We
must all rise to wage a successful war on insecurity as a precursor to economic
prosperity.’
The lesson from the country’s
present economic difficulties is to the effect that while marginalisation of
states in revenue sharing should be discontinued, huge revenue earnings by
itself does not guarantee financial health as much as creative management, as
Obiano’s Anambra demonstrates.