Time to restructure the Nigerian federation

It is no longer secret that most of Nigeria’s 36 states are totally bankrupt and unable to meet their obligations, prominent among which is the payment of staff salaries. Even the series of bailouts extended to them to help clear the backlog of staff salaries hasn’t solved the problem.

Last week, the Niger state governor, Abubakar Sani Bello, openly admitted that he could no longer continue to pay salaries of workers in his state because the money is just not there. “We’ve laid the cards on the table. We’re not hiding anything; we’re very transparent as much as we can. “But the truth of the matter is that I cannot give what we don’t have. I wish I had. Personally, if I had, I would have paid (salaries) from my pocket, but I can’t,”

The governor revealed that he had been borrowing to pay salaries. He said he had incurred a debt of N3 billion since January. He said the debt could get to N10 billion by December if he did not stop borrowing to pay salaries. ““Niger State has a population of over 4 million, civil service strength of about 40,000, we get N1.5bn from federation account, and even with that, we still have to borrow to pay 40,000 people against over 3 million people we need to cater for‎.

The problem is by no means restricted to Niger. It is the prevalent situation among Nigeria’s 36 states with one or two examples. Most of the states now pay half salary, quarter salary or no salary at all. Their receipts from federal action is often not enough to settle salaries of civil servants not to talk about doing any other thing for the 99 percent of inhabitants of the states who are not civil servants.

But most of the states are the architect of their problems. Even before the crash of oil prices and the consequent decline in the federally distributable revenues, most states had been on a borrowing spree and usually sign irrevocable payment orders with banks such that the debts are serviced from their federal allocations at source. With their huge debt burdens and rapidly shrinking federal allocations, most of the states are no longer capable of justifying their existence as governments in their own rights.

But the governors have remained bullish. They still walk about with considerable swagger and have shown no appetite, like the president, for curbing spending, running leaner governments, exploring and utilizing constitutionally guaranteed non-oil revenue sources or developing new ones.

This is almost inevitable since the states were largely economically unviable units created mainly as conduits for the dissemination of federal resources to the diverse ethnic and cultural formations in the country and rely almost exclusively on proceeds from the sale of crude oil to finance their governments.

It is unjustifiable that state governors have to borrow to pay staff salaries raking up huge debts for future generations to pay. Besides, except if the prices of oil recovers, there is no way the states could be able to meet its salary obligations not to talk about fulfilling all the humungous promises the governors made to their various electorates.

If things continue this way, it will not be long before the credit lines to states are cut off. The acute financial situation could then lead to governance collapse in most of the states. The social chaos that will ensue is better imagined than experienced.

Luckily, prominent political figures like the former Vice Atiku Abubakar are joining the call for the urgent restructuring of the Nigerian federation. According to Atiku, the current structure hasn’t served Nigeria well and even more particularly, the North. “The call for restructuring is even more relevant today in light of the governance and economic challenges facing us… our current structure and the practices have been a major impediment to the economic and political development of our country.”

We hope that the Nigerian political class and particularly, the government of the day will be proactive enough to redefine and restructure the Nigerian federation now along regional or sustainable lines to prevent a future catastrophe.