Restructuring Nigeria: Osinbajo is wrong again!

In 2016, I wrote a piece titled “Restructuring Nigeria: Osinbajo has gone native” (BusinessDay, 25 July 2016). In the article, I took issue with Vice President Yemi Osinbajo’s well-publicised comment that Nigeria did not need political restructuring, but economic diversification, and that the country must not be restructured “along ethnic lines”. I argued that the vice president’s comments betrayed a failure to recognise the centrality of political settlement to economic development, and an ignorance ofthe nature of the political restructuring of multi-ethnic states around the world. I stressed that Nigeria, as a multi-ethnic state, a fragile one for that matter, could not defy the global trends in political restructuring and, thus, for its unity and progress, must be restructured!

Well, I am constrained to take issue with the vice president again on the same subject because, recently, he repeated the hackneyed view on political restructuring. Speaking at a town hall event in the US, he said: “The problem with our country is not a matter of restructuring and we must not allow ourselves to be drawn into the argument that our problems stem from some geographical restructuring. It is about managing resources properly and providing for the people properly, that is what it is all about”.

In the first instance, if you take that statement, leaving aside its specificity to Nigeria, it seems strange that anyone would focus on human behaviours and actions– “managing resources”, “providing for the people” etc – and ignore how institutional and governance structures can shape or incentivise those behaviours and actions. Then,when you add the Nigeria context, it is doubly strange – isn’t it? – that any perceptive Nigerian leader would blithely dismiss political restructuring the way Osinbajo did.

Unsurprisingly, the vice president’s comments provoked spontaneous reactions. The most hard-hitting salvo came from his “illustrious” predecessor, Atiku Abubakar, who accused Osinbajo of demonstrating “a lack of appreciation of the core tenets of the concept” of restructuring, adding that he “failed to appreciate the connection between Nigeria’s defective structure and its underperformance”. Osinbajo hit back, describing Atiku’s concept of restructuring as “understandably vague” while clarifying his own position. Nigeria, he said, needed fiscal federalism and strong states, including state police, but not geographical restructuring. He listed his legal victories at the Supreme Court, as attorney general of Lagos state, which resulted in the repatriation of some powers to the states. “I have been an advocate of fiscal federalism and stronger state governments”, he said. Atiku replied, taking exception to the description of his concept of restructuring as “vague”, and setting out his own version of restructuring, which included “devolution of powers and resources to the states”. Restructuring, Atiku declared, “is a necessity, not an option”!

Truth is, Atiku is right. Restructuring is a defining issue for Nigeria, and when a country faces such a defining issue, it must be laser-focused on it. For instance, the defining issue for Britain today is Brexit, and if there is a general election in Britain tomorrow, it would be dominated by Brexit. In a recent article titled “2019 elections are meaningless if not about restructuring Nigeria”, I argued next year’s elections must be defined by debate on restructuring. All other issues – the economy, corruption, insecurity – that would feature in the elections are rooted in the flawed politico-governance structure of Nigeria, so the country must be restructured.

Think of it. All over the world, nations are regularly restructuring and creating new constitutional or political settlements.For instance, a few years ago, Sri Lanka decided that its presidential system wasn’t working and reverted to the parliamentary system. In 1997, the UK concluded that in order to safeguard its union, it must devolve powers to the nations and, so, after different referenda, regional governments were created in Scotland, Wales and Northern Ireland, with significant powers devolved to them. Britain also decided that, based on the principle of separation of powers,it was wrong for judges to sit in the House of Lords, a legislative arm; and, thus, it established a stand-alone Supreme Court. And, in the US, the American federalism has evolved from the early centralisation to dual federalism or what some call “interdependence and cooperative federalism”.

My point is that political settlements and restructuring are common features of the modern nation-states.The phrase “reform or die” is often applied to corporate organisations, but, in truth, a version of it, “restructure or stagnate or disintegrate” can also apply to countries. Unfortunately, Nigeria continues to resist the need to negotiate a political settlement and rejig its governance structure, despite its obvious defects.

Which brings us to Vice President Osinbajo’s views on restructuring. Essentially, Osinbajo is saying yes to fiscal federalism, strong and autonomous state governments, and state police,but no to “geographical restructuring”. But do these views stand up to scrutiny? Well, no; they lack internal coherence.

Let’s come back to what the vice president is against – “geographical restructuring” – and focus, for now, on what he supports – fiscal federalism, state police and “strong and autonomous state governments”. First question: How on earth would Osinbajo achieve all these without political restructuring? If fiscal federalism, state police and autonomous state governments do not currently exist in any country, one would think that they can only be created through a political and constitutional settlement, through restructuring. So, what exactly, then, does the vice president mean by repeatedly saying “Nigeria’s problem is not restructuring” or “Nigeria doesn’t need political restructuring”?

Take fiscal federalism. It would be churlish to say that Osinbajo, a professor and constitutional lawyer, doesn’t know what it means. But if, as I believe, he does, then he has to accept that it can’t be achieved, in its proper sense, without restructuring Nigeria. According to the German-born American economist Richard Musgrave, who introduced the concept, fiscal federalism means that the federal government, given its general oversight role, should be responsible for economic stabilisation and income redistribution, i.e. ensuring all states are treated fairly, while state and local governments should be responsible for the allocation of resources on the basis that they are best able to meet the needs of the people. Thus, at its core, fiscal federalism means significant devolution of functions and resources to the states. But what do we have in Nigeria?

The federal government takes 48.5% of all revenues accruing to the country, with 26.72% going to the states and 20.6% to the local governments. Is there any wonder, with such a large federal government share, that some states are mere appendages of the federal government is a supposedly federal system? Most state governments in Nigeria are relying heavily on regressive taxation, borrowing or handouts from the federal government. Surely, the revenue-sharing formula flies in the face of Musgrave’s concept of fiscal federalism.

But fiscal federalism is only a subset of federalism, which is about the independence and political autonomy of subnational governments. So, you can’t have deep fiscal federalism without, first of all, having true federalism. Yet, the Nigerian constitution, with a very long “exclusive legislative list”, effectively mandates uniformity by giving so much powers to the federal government. To be sure, the federal government is too powerful, with a behemothic presidency, sheltered in opulence in Aso Rock, and more than 500 overlapping parastatals and agencies, purportedly meeting the needs of nearly 200m people in a huge multi-ethnic, multi-national country. It is a joke, and if Vice President Osinbajo thinks this is just about fiscal federalism, then he misses the point.

Which brings me to the vice president’s antipathy to what he calls “geographical restructuring”. To be honest, it is not clear why he constantly bashes this concept. The truth is that Nigeria already operates, albeit informally, a geopolitical system. Everyone recognises the six geopolitical zones, on the basis of which political considerations, including allocation of political offices, are made. If that’s not some “geographical restructuring”, what else is it? What those of us, led by the elder statesman, Chief Emeka Anyaoku, who advocate a return to regionalism are saying is that the six geopolitical zones, or expanded to 8, as the Middle Belt leaders recently called for, should become the federating units of the country, with political and economic powers and resources devolved to the zones.

The vice president says he wants “strong and autonomous state governments”, but only a handful of the current 36 states can be strong and autonomous. He also wants state police, but does he really think that Nigeria can afford 36 state police forces, even with fiscal federalism? But devolving powers to the geopolitical zones could create six, eight or even ten really strong and autonomous regional governments, with equivalent regional police forces.

Economic logic and political imperative do not support the present federal and state structures. Of course, the theory of externalities supports having a federal government that can deal with spill-overs and national coordination problems, but the logic of economic efficiency and economies of scale fully support having a competitive federalism, consisting of strong and autonomous regions that can pull their internal resources together, exploit their comparative advantages and healthily compete with and emulate each other, as the regions did in the 1960s. Politically, of course, there is increasing agitation for political restructuring along geopolitical zones, a growing trend across the world too, and it is sheer folly to suggest any form of Nigerian exceptionalism.

As vice president, Osinbajo is a product of geographical zoning and political considerations. His constant bashing of political restructuring, therefore, sounds hypocritical and unconvincing. What’s more, he cannot on the one hand favour “deep fiscal federalism” and “strong and autonomous” subnational units and on the other reject political restructuring, even his bugbear, “geographical restructuring”. Vice President Osinbajo is an intelligent leader, but he needs to be more consistent and coherent on the issue of political restructuring. Currently, his arguments can’t withstand proper scrutiny!

Olu Fasan