By Deji
Adeyanju
In about one year of Muhammadu Buhari’s misrule, Nigeria dropped from being the largest economy
in Africa to who-knows-where, as well as the number one investment destination
in Africa to number 13. What a difference one
year can make.
Inflation rate that was below 9% when former President Goodluck
Jonathan handed over to General Buhari on May 29, 2015 is now at 15.6% under
Buhari. In one year, Buhari has taken our inflation rate from single digit to
double digits.
*Buhari |
Our GDP growth rate was at 6.95% under Jonathan, now it is
-0.36%, the worst in Nigeria ’s
history. Officially, our GDP is in ‘recession’. If this is not a sign that
President Buhari has ruined the economy completely in just one year, what is?
In 2013/14, Nigeria
was the 3rd fastest growing economy in the world, now we are 29th in the world.
With the country’s current negative GDP of -0.36, Nigeria is set to be kicked out of
the top 50 economies of the world in no time.
It is important to note that there are only 4 countries with
negative GDP growth in Africa in the last quarter and Nigeria is now
one of them.
The notion that President Buhari met an empty treasury when he
took over is false because President Jonathan handed over $30 billion in
Foreign Reserves, $5 billion in accrued Liquefied Natural Gas dividends, $3
billion in the Excess Crude Account, and around $2.4 billion in the Sovereign
Wealth Fund.
Buhari was handed over a budget of about N4.5 trillion passed by
Jonathan, few weeks before handover. Around N5.3 trillion was received as oil
income in 2015, how was this money squandered by Buhari?
With the landing cost of petrol to the country at N89 per litre given
the drop in price of crude oil, the Buhari’s federal government still increased
fuel price to N145 per litre. Effectively Buhari is making a profit of N56 per
litre of petrol bought by Nigerian. So, why does Buhari keep giving the
impression the country is broke?
With this increased revenue from a new income stream, why hasn’t
the Buhari government this new income? Why can’t states get more money from the
federation account? Why can’t states pay salaries?
There are those blaming governors for their inability to pay
salaries after spending one year under Buhari. They are simply naive or
uneducated.
The federal government of Nigeria
– Abuja – is a
quasi colonialist that controls everything from the states, yet it starves the
states of their own money. When people say governors go to Abuja to beg for funds, I laugh.
What does Abuja
generate? Absolutely NOTHING.
By law, Abuja
doesn’t allow the states to manage their resources. It sits on top of
everybody’s resources, yet some blame the states for inability to “generate
revenue”. But what does the federal government generate? NOTHING.
All the funds come from the states. So this whole argument that
the states are beggars is a big lie.
Only reason why Lagos and Rivers
remain viable is because Lagos
was a former federal capital and naturally continues to enjoy the benefits of
a giant economy. The structures of revenue generation in Lagos
were created by the Nigerian State and not Lagos State .
Rivers is a similar case.
The reason why many of us criticized Governor Rauf Aregbesola
for bankrupting Osun
State back then was that
the economy was booming under former President Goodluck Jonathan. State’s
monthly revenue was far in excess of the wage bill. The states were not being
shortchanged as they are now under President Buhari.
The crisis in Osun
State was purely that of
mismanagement. Osun has no business being bankrupt if not for the financial
mismanagement of Governor Aregbesola and the overbearing dividend-bearing
godfatherism of APC national leader, Bola Tinubu.
But, today, after one year of General Buhari’s rulership, Nigeria ’s
economy has been ruined by his bad economic policies, knee-jerk policy
reversals, and outdated thinking, and all states are in financial trouble.
Nigerian states are not beggars. They are being colonised by a
greedy master. They generate the resources of the nation. But the federal
government takes it all and leaves them with nothing.
A Nigerian state cannot explore mineral deposits or construct a
deep-sea port. The Nigerian law forbids them from doing so.
Those bystanders who keep repeating that states need to generate
income should also remember that states cannot tax their citizens to death.
States cannot tax businesses to death. If they do, they risk businesses closing
down or a relocation of businesses to tax-friendly ones. Both means job losses
in the state and doesn’t in anyway achieve the purpose of increasing
“internally generated revenue”.
There are some faulty arguments which say that only nine states
generate the bulk of the resources shared from federation account which is then
shared between the three arms of the federal government – executive, judiciary,
and legislature and the 36 states and federal capital territory is not true.
All states general some revenue, which the federal government
swoops on. Some states, however, generate more than others. While the
‘almighty’ Abuja
generates nothing.
Why can’t the federal government increase the capacity of a state
like Rivers to generate more income?
Those who attack states for “not generating revenue” should be
more concerned with pressing the federal government to generate revenue because
the federal government is the one to blame for the states going broke.
This is one reason why diversification of the economy should not
just be a talk show but an active policy of the federal government. Shouldn’t
the federal government be more interested in improving the capacity of the
states to generate more revenue because it depends 100% on them?
If the federal government earns N50 billion monthly from Rivers State ,
then gives Rivers back a measly N5 billion, wouldn’t you think the same federal
government should be interested in seeing Rivers increase its revenue to N100
billion monthly? So it can take it all and then Rivers can come “begging” for
N10 billion of its own money?
It is also curious to note that since President Buhari took
office, transparency has been thrown out of the window, state allocations
continue to decline even with the fuel price increase and removal of subsidy,
increase in taxes, and reports of recovery of looted funds.
The federal government needs to stop the current structure of
“sharing all the money”. The government should invest in the capacity of states
to generate more income.
The revenue sharing formula is also faulty. It robs the states
and local governments, who have the bulk of the government responsibility to
the people and gives a lion share, 50%, of the government revenue to the federal
government. That, in itself, is injustice to the Nigerian people.
The time to think and act is now.
*Adeyanju is a commentator on public issues
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