Last week, we were greeted with screaming headlines: federal government disburses second tranche of Paris club refund. In the breakdown, Kano State had as much as 10 billion, ahead of Lagos, which had just a little over 8 billion Naira. What Lagos State contributes to the centre, completely dwarfs what Kano contributes. Yet, a certain “magical” almighty formula ensures Kano gets more than Lagos, in this instance. In fact, Katsina State, got almost same amount as Lagos. Let’s move on! If Lagos were a country, it’ll arguably be among the top 10 richest nations in Africa. Lagos and a handful of other states generate most of the Value Added Tax (VAT), realized nationally. VAT is a consumption tax; meaning it is payable for goods and services “consumed”. Curiously, this sum is sucked to the centre, by a ruthless centripetal pull, and shared to the 36 states. This is most absurd. A state generates taxes, and it’s shared to the rest of the states, leaving it with less than enough to cater for the needs of the tax payers. Thus, the state does not have enough to build the needed infrastructure for commerce to thrive, and for the tax payers to enjoy basic social services. This anomalous structure ensures Lagos State does not have enough to build efficient transport systems to link the mega city; leaving the city perpetually trapped in huge gridlock. Imagine what Lagos would be, if the state is free from this stranglehold of the federal government. Clearly, the State would experience a quantum leap, if this absurdity is corrected. Every month, Finance Commissioners or their designates from the 36 states, gather in Abuja to share what is popularly called FAAC allocation. The country is run with such “sharing-philos ophy” that completely discourages growth and healthy competition. A state can just sit and do nothing, and “earn” from the efforts of the other states. In a study by Economic Confidential, only 2 states generated more than they got from the federation account. A State such as Borno State generated only N2.6 Billion internally in 2016, as against N73.8 Billion that they got from FAAC. Looking at this, Borno could just sit and do nothing, yet have enough to run the state and balance their budget. Kano can decide to sit and do nothing, and still earn as much as 112 Billion, extrapolating from their FAAC for 2016. What then is the incentive to be competitive, if you can be idle and earn that much? Restructuring from this unproductive system will stimulate growth and healthy competition amongst the states. Last month, I spent about 4 hours, attempting to cross a 2km stretch, around the Akpajo Junction of the East West road. The road had become a terrible nightmare, due to bad spot that has since deteriorated to a death trap. The road links Rivers State to Akwa Ibom and Cross River. It also links Port Harcourt to Eleme LGA, Tai LGA, Gokana LGA, Khana LGA, Opobo/Nkoro LGA and Andoni LGA, all in Rivers State. From an industrialist’s point of view, the road also leads to two Refinery Plants, One Petrochemical Complex, two Fertilizer Plants, One Sea Port, One Oil and Gas Free Zone, and several other companies. Just in case you didn’t know, it is a federal road. The road leads to another proposed road, the Bodo-Bonny Road, proposed by the Obasanjo government, yet brutally abandoned. That road is expected to connect the main land to Bonny, hosts of one of Nigeria’s most profitable assets, NLNG. At the beginning of this administration, the billions gotten from NLNG were used as bailout to the states, yet the federal government cannot complete this road for over a decade now. The companies linked to that road pay several billions in taxes monthly, which ends up in Abuja, far away from Rivers State where they reside. The Minister of Works is wrapped up in his cozy office in Abuja, and you won’t blame him for not knowing that the road demands serious emergency attention. The FERMA boss is chilling in his office in Abuja, far away from the states that generate the revenue that funds his agency. The Federal Government is too preoccupied with several issues to be bothered by a bad spot on the road. Restructuring should see federal government relieving themselves of such burden, by handing over such roads to the state government. The Federal Government should free up the states from their stranglehold. The states should be allowed to collect VAT, so they can build infrastructure to support the commerce, enterprise and comfort of the tax payers within their domain. Same should be done to the Airports and Sea Ports. Concession them to private partners, or hand over the physical infrastructure to the states. Federal Agents – Immigration, Customs, DSS – can continue to run the airports, but the physical assets be handed over to states who show capacity and a sustainable plan to manage same in line with global best practices. Now, to the oil industry; let’s start from ownership. Against the letters and spirit of the United Nations Rights of Indigenous people, Nigeria has a strange law that strips the indigenous people of ownership of their resources. Since this article is more of development and efficiency, and less of emotion, I will not dwell too much on this, as I have whole articles dedicated to this. From a development point of view, this fundamental anomaly is at the root of the stagnation and corruption in the sector. Political friends and surrogates end up with juicy oil blocs, for no special skill they possess or a superior corporate profile. The result is what we see: corruption. Today, Nigeria exports crude oil, and imports majority of refined products. The 4 refineries owned by the federal government are almost moribund. The powerful central government has burdened the sector with their weight, and has failed to attract the needed investment. What they have failed to do, have haunted them from the underworld. Today, craftsmen from the underworld have built scores of artisanal refineries across the region. What should ordinarily trigger an industrial revolution was mismanaged and criminalized. A restructured Nigeria should see the federal government untie the sector they have asphyxiated for over half a century. Refineries are not such a complex technology; a technology that was existent even during the Biafran war, should not be what the nation cannot afford at a large scale. The unitary government has failed, and will continue to fail to catalyze growth in the sector. The early refineries in United States were in peoples’ “backyards”; they were modular. Growth in the sector has not been exponential, because there is an almighty federal government that stifles things. Control is crowded at the centre; a centre that can no longer hold. A restructured Nigeria should lead to an unbundled and deregulated sector, to stimulated growth, like we have in developed economies. In 2014, there were about 139 operating refineries, in the USA; compare that to Nigeria’s comatose four. The state of Louisiana, with a population of about 4.6 million (less than Rivers State), has about 16 refineries. It’s therefore no surprise that they have a single digit unemployment rate of about 7%. The state of Wyoming, with a population of a little over half a million, has 6 refineries. Would this be the case if there was a complex centre that controlled the entire sector in the USA? No! The truth is, the Petroleum sector will not witness the needed growth and investment reflective of her potentials, until we loosen up the sector. A truly federal structure that allows the indigenous people and the states to own their resources, and prospect and partner as desired, will see a quantum growth of the sector. Apart from guaranteeing growth, it will also solve the problem of insecurity in these oil producing communities In Environment, there was an almighty FEPA, before the NESREA Act effectively replaced that. NESREA, an agency under the Federal Ministry of Environment has their set of regulations that sometimes overlap with others. For example, they have their guide lines for telecommunication Mast; NCC has as well. Some State Ministries of Environment have their regulations as well. The investor is left at the mercy of three conflicting regulatory bodies. Why can’t we just allow states regulate this? We also have a Federal Ministry of Environment that takes on some bogus sets of responsibilitie s. They play host to several agencies such as NOSDRA, NESREA, etc. They ensure compliance to Acts and Environmental Legislations such as the EIA Act; a task they fail terribly at. That’s because they are too far away from the areas of study. The State Ministries of Environment should be allowed to take full charge of compliance monitoring, as they are closer to the people and the environment, and they understand the dynamics and interplay, better. In the Petroleum sector, DPR oversees all aspects of the environmental activities and processes. The document that regulates the environment in the oil and gas sector, the EGASPIN, was authored by DPR. The DPR office is far away from where you have the oil spills, and so they don’t fully understand the condition of the people. NOSDRA, the body saddled with the responsibility for detection and first level response, in case of oil spill, maintains a corporate head office in cozy Abuja. They are far from the spill incidences, and the manager in their Port Harcourt office will have to wait for approval from Abuja Office to deploy to the spill site, 10km away. Even when such approvals are given, the manager is without the logistics to deploy to site; he depends on the polluter to provide for him. The State Ministry of Environment are not allowed to come anywhere near the petroleum sector. They are not even allowed near oil facilities to take basic air quality readings; the federal agency allowed to do so are chilling in Abuja. The State Ministries of Environment are reduced to collecting stipends for effluent discharge, and organizing monthly sanitations. This is a key reason why the Niger Delta is the one of the most polluted regions of the world. A restructured nation, with federalism in the true sense of the word, will see some of these critical functions, devolved to the state. We have a system that centralizes even power. We have a central grid that, as time has proved, can no longer hold. The Power Holding Company could not hold any further, so they privatized the sector. Yet, this central grid defeats the very essence of the privatization. Power is generated from say Afam Power Plant in Rivers State, and it gets pulled to the central grid, and shared just like FAAC allocation. We share power just as we share money. The community that hosts the power plant, and endures all the unmitigated risks of hosting such a plant, does not enjoy decent 10 hour electricity per day; yet the noise of the turbine can be heard 24 hours. Before the power assets in Rivers State were sold by the last administration, we were told the state has installed generating capacity that is enough to power the state, yet the state cannot directly power itself; they are forced to pump this to the national grid, and have it “shared”. A restructured nation should break up such behemoths like this central grid. States should be allowed to partner or build their power plants, and sign transmission and distribution agreements with their preferred partners. It’s time to swap this elephant for a smart stallion. The intervention agencies are not left out. We have a regional intervention agency like the NDDC, whose budget is approved by a national assembly that has senators who does not know the issues. The “Ayes” of the 27 Niger Delta Senators will be dwarfed by the thunderous “nays” of the other 82 non-Niger Delta Senators. You can’t understand the budget items for a region you know nothing about. A restructured country will see the scrapping of such bogus and ambiguous agencies, freeing up more resources, for the states to directly develop itself. Finally, Security. Security is key to every sector. We have a system that everything with respect to security is also centralized. The Governor of a State is called the Chief Security Officer, yet he does not command any security unit; not even Civil Defense. The Commissioner of Police takes instruction from the Inspector General of Police, not the Governor, yet the Governor is expected to provide logistical support. The last administration in Rivers State invested a lot, sending Police Officers to Israel for training. Sadly, and expected, those officers have been posted out of Rivers State; so that investment was a waste. The current administration donated an surveillance helicopter (bought by the last administration) to the Federal Government. You can be sure this will not be used in the state; another loss to the people of the State. Why then do we call the Governor the Chief Security Officer, when his role is reduced to providing logistics to a strange Police Force that does not report to him? And we truly expect things to work with such unworkable relationship? Let me end by saying this: One of the fallacies out there is that there are certain states without potentials; that is not correct. Every single state in Nigeria, has some kind of mineral resources; but that is not where our strength lies. Most of the poorest states are in the north; that should not be. From our basic economics, we know the factors of production to be land, labour, capital andEnterprise. The north has vast land mass (LAND), and their large population gives them access to LABOUR. If their states can issue COE’s efficiently, then more business can be more bankable; that would guarantee access to cash (CAPITAL). So, all we need to do is to restructure in a way that promotes efficiency and stimulates ENTERPRISE. Nigeria spends more than a trillion Naira importing food. Imagine if 5 states in Nigeria, with comparative sectoral advantage, make it a target to meet up this demand in the next 5 years? It’s possible, but not with the current structure. If we stop giving free money, states will unleash their true potentials. If we stop this “sharing mentality”, there will be a healthy competition amongst the states. This current structure CANNOT WORK, and we mustn’t continue postponing dooms day. Like I always ask, if Nigeria was a company, and you were the CEO, with equal stakes in all the states, would you rather we continued with such a system that stifles growth? I’m “No” would be your answer. Think efficiency; think productivity; think prosperity; think federalism. It’s not about Politics!



Written by Engr. R. Tombari Sibe, an Engiineer and Development Strategist. @rsibe

Get Cheap Data : Glo, 9mobile ,MTN and Airtel
.
We Sell Data Bundles.

1gb MTN DATA @ N599*.

1gb ETISALAT/9Mobile @ N699*.
.
1gb Airtel @N450*
.

To buy via airtime transfer;.
.
Call : 07014257070
.
==Buy via bank transfer/deposit== .
Account Name; EMEKA HOPE
.
Bank: DIAMOND BANK
.
Account number: 9992766427

I wish I can be patient enough to read through all this epistle,But I haven't eaten dinner yet

A very succinct analysis of our problems, but I guess those that shot down the devolution of power to states kite know better.

Thanks for this well articulated piece. Let's hope that our quota system compatriots will receive sense and know that they have potential that can be properly harnessed to prosper them. A restructured Nigeria will favor all. There is more to life than depending on a lopsided quota system.