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Nigerian States, Beyond The Mono Product

Posted: Mar 21, 2016 at 2:00 am   /   by   /   comments (0)

Boniface Chizea

One of the dilemmas we encounter in this country is the fact that so much attention is focused on the centre, to the utter and inexplicable neglect of the states. It seems we forget that this country can never engender the desired level of development if we do not pull the states along. There is, for instance, almost a total lack of media attention regarding critical issues which should concern the states. I have been in the business of discussing and analyzing the Federal Budget for so many years now, but you rarely find anyone ever mindful of analyzing the budget which the states articulate. What is surprising is that this experience is applicable to almost all the states in the Federation including States such as Lagos State and the Federal Capital Territory, which are quite cosmopolitan and, therefore, should have imbibed private sector mindset. And even the media houses owned by such states could not be bothered as even when they pay attention. Such is not as far reaching as one should expect.

Ideally if we are serious in husbanding our resources optimally, such institutions such as the Debt Management Office (DMO), Public Procurement Bureau (PPB), Economic and Financial Crimes Commission (EFCC), Freedom of Information Act and even local content Act and so on, should have long been replicated at the state level. Even the state Houses of Assembly are so beholden to the State Governors that law making and oversight functions are almost observed in the breach.

What the states should do in the wake of cascading oil price which had impacted negatively on the amount of money that accrues to them from the Federal Account is for the state authorities to wake up to the challenge of truly managing, professionally,  the affair of the states which are supposed to be autonomous in a true Federation. The first thing to do will be to build critical institutions almost attempting judiciously to replicate what we have at the level of the Federation.

The Governors must come to terms with the primacy of piloting the affairs of the states through the preparation, approval and deployment of annual budgets as veritable blueprints; and must therefore proceed to facilitate the attainment of capacities for this purpose.

It is also an established fact that each department of government even at the state level must have proven capacity to prepare their respective budgets, based on guidelines issued by the Ministry in charge of Planning. The laudable step which was recently taken at the Centre by bringing the Budget Office under the supervision of the Planning Ministry is recommended, even if it is correct to observe that most states seem to have Budget and Planning already in the same ministry. This, to my mind, is the first necessary steps to ensure that budgeting gets its right bearing.

The states are expected to keep to the dictates of the Fiscal Responsibility Act (FRA), which mandates the preparation of a Medium Term Expenditure Framework (MTEF) which is akin to a three year rolling plan from the content of which the annual budget should be prepared.

The Fiscal Strategy Paper which should detail policies relating to taxation, recurrent (non-debt) expenditure, capital expenditure, borrowings and other liabilities, lending and investments, a complement requirement of this Act, should also be prepared. This Act recommends quarterly progress reports on budget implementation with a full blown half yearly report to be presented by the Executive to the State House of Assembly. If we inculcate the attitude of Monitoring and Evaluation of budget implementation, we would at once begin to tackle the problem of non-implementation of the budget.

The FRA also provides guidelines regarding the incurring of debt obligations. It makes it quite clear that borrowing should be for capital expenditure; and may be for human development and not for consumption as it has been the experience lately at the Federal level.

It goes without saying that the states have the challenge of growing Internally Generated Revenue cut out for them, particularly growing income from tax. As with the Federal Government, we are not here recommending an increase in tax rate but a broadening of the tax base by bring many citizens who, hitherto, do not pay tax to begin to do so through the adoption of many and varied incentives.  Lagos State recent proposal to commence the imposition of taxation on domestic staff and artisans is a case in point.

It is also necessary to emphasize here that expenditure should be preferably skewed in favour of capital expenditure to facilitate the provision of necessary infrastructure which would make the environment enabling for investments. Sectoral allocations should prioritize agriculture, education and health to help provide food security, provide jobs and facilitate overall wellbeing of a generality of the population. And the Constitution should be revisited to remove impediments regarding economic activities which the states are allowed to embark upon; for instance; the restriction regarding mining rights as the exclusive preserve of the Federal Government.

It is also opportune moment to revisit the constitution to streamline the relationship between the state and the local governments, particularly, with regard to the autonomy of the local governments and as it relates to revenue allocation and the assignment of specific responsibilities. Nations that have excelled in the world have been known to have imbibed the following attributes; ethics as a basic principle, integrity, responsibility, respect of laws and rules, respect for human rights, work loving, the drive for savings and investments, demonstrable will to excel and punctuality. I have no doubt that there are some lessons for all of us in this list.