Regional economic corridor and fiscal federalism

Dr. Olaopa is executive vice-chairman, Ibadan School of Government & Public Policy (ISGPP).

In recent times, the vocal vote in support of national restructuring has gained momentum. And the support has not come from any mean sources. No less a statesman than Chief Emeka Anyaoku, at the inaugural Conference of the Ibadan School of Government and Public Policy (ISGPP) led the recent vociferous call for restructuring. The central question around which the Conference revolved was simple but fundamental: What are the fundamental structures, institutional deficits, issues, processes and dynamics of government that have made attainment of all-inclusive development in governance, economy and democracy difficult in a manner conducive to peace and social justice in Nigeria? In his keynote remark, Chief Anyaoku asserted categorically that “the burden of my remarks is that if the country is to tackle more effectively the challenges confronting it, it would need to restructure its present governance architecture.”

The call for restructuring is not just one of those Nigerian national fads that the government of the day should ever hope would fade away when the agitators grow hoarse from shouting. On the contrary, it has a valid historical premise.And this derived from the tragic amalgamation of the Nigerian political spaces by the colonialists. Amalgamation was a really complex calculation involving geography, politics and economics that goes beyond merely bringing together the Northern and Southern Protectorates. Its complexity involves some high-level disarticulation of internal dynamics and trajectories in ways that already compromised the postcolonial governance architecture. The burden of that historical disequilibrium stayed with Nigerian, even till today. And the mistakes keep multiplying. Only one critical instance suffices: in 1966, the military administration of General Johnson Thomas Umunakwe Aguiyi-Ironsi imposed a unitary structure on the federal dynamics of Nigeria. The country has not stopped reeling from the effect of that historical blunder. As a consequence, the Constitution became complicit in an unfortunate legal narrative that invested the President of Nigeria with a surfeit of power. The federal-state-local government responsibility ratio, as mediated by the executive-concurrent and residual list truly made the local government the meager residue of power, even in a democracy where grassroots remains the focus of democratic mobilization and empowerment.

Restructuring is therefore a serious national business. In fact, the future survival of Nigeria as one political entity depends on it. That is a fact. But there is another fact. And this is that restructuring requires a balanced blend of cautiousness and urgency that will ensure that we do not place the wrong foot ahead of the right one. Nigeria is too plural, and hence delicate, for any rushed process of restructuring. In this sense, one can understand government’s reluctance about attending the multiple concerns about restructuring Nigeria. But what we cannot understand or even excuse is government’s lackadaisical reluctance to undertake significant reform and follow it to its logical conclusion. One such fundamental commitment would be the joint issues that concern both the federal and state governments. In the initial key drivers of change series, I tackle the issue of land reform. This is one critical dynamics that impinges on national development, and touches on the executive/concurrent list, especially with regard to the land use act of 1978. While that issue in itself is volatile, its volatility cannot be compared with the possible gains that will accrue to the Nigerian government if some initial reform steps could be taken. For instance, cadastral mapping of all lands gives the government at both levels a huge statistical and data advantage that impacts directly on economic matters.

Nigeria is a joint responsibility between the three tiers of government. Without mincing words, the local government areas are mere democratic decoration in a federal structure. They amount to nothing except allocation sharing points. On the other hand, the federal government is a complex amalgam of several interests, negative and positive. It is therefore immune to almost all sincere reform efforts, except those that seem important but cosmetic. However, it is the state that straddles both the federal and local governments. Why is this significant as a template for national development? The idea of fiscal federalism makes the state a significant reform juncture which the federal government could count on for an all-encompassing transformation. The current economic situation in Nigeria, founded on the mono-cultural fixation on crude oil, makes both the state federal and state governments captive to a poor ad crippling fiscal framework that generates immense crisis. On the one hand, the crisis for the federal government comes from the fluctuation in the global oil market. On the other hand, the state governments are thrown into crisis when global oil fluctuations affect monthly allocation of oil revenues.

The fiscal crisis is therefore driven by the bail-out mentality whereby state governments expect allocation at the end of each month. This expectedly undermines the fiscal discipline that comes from the responsibility of generating IGR.

The federal and the state governments however have one reform stone that could kill two births, and form the foundation of a new fiscal federalism in Nigeria. That reform stone is regionalism. While fiscal federalism is based on the assumption that it will create the incentive for both governments to achieve concrete performance in terms of service delivery to the citizens, it is regionalism that facilitates such an efficient and effective performance. On one side, regionalism gives the federal government the much-needed breather to concentrate on core federal legislations and policies. On the other side, it enables the state government become the engine of national development. Regionalism is not a new idea.

While it is fast becoming the considered development strategy across the globe and especially in plural states, it has serious historical antecedent in Nigeria. The Republican Constitution of 1963 was founded on a regional structure for Nigeria. This is very sound because the regional structure is the best that could backstop Nigeria’s federalism. That constitutional provision instigated a regional economic competitiveness around cocoa (southwest), coal (southeast) and groundnut (north). Chief Anyaoku, as well as other well-meaning Nigerians, has seen the significance of this early regional arrangement.

A good example that will never cease to be exemplary is the South West. Through a delicate but articulated relationship between the politicians and the civil servants, the South West became a significant example in innovation and service delivery. The old Western region was noted not only for its political notoriety, but also for its administrative acumen. We celebrate today in the public administration literature in Nigeria the Awolowo-Adebo model of governance collaboration that transformed the Western Region into a noted hub for technological and economic development, especially in terms of infrastructural abundance. Agriculture was booming and cocoa was its mainstay. The story that has not been unraveled is the extent to which these regional arrangements in the 60s factored into the economic prosperity and strengthening of the newly independent Nigerian state. We can begin to factor that story into the new regional arrangement that can become the new economic strategy for rescuing Nigeria from its current economic impasse.

Regionalism in Nigeria will be based on two correlated reforms, political and economic. On the one hand, the political dimension will involve translating the six geo-political zones into regions comprising the states in each zone. Thus, there will now be six regions replacing the three in the 60s. The second interesting reform, the economic, will involve establishing a regional economic corridor around which a sound economic reform would be initiated. The economic corridor reform will be founded on the principle of comparative advantage of the states that make up a particular region. For instance, while agricultural can be leveraged across the regions as a common denominator (and of course with regional difference like the savanna factor in the north), each region can then be allowed to develop its regional advantage. Apart from agriculture, each region will extensively leverage its strength in terms of the economic exploitation and development of its mineral resources. It is clear today that the mining of mineral resources is one significant aspect of Nigeria’s economy that has been seriously neglected. There are still countless minerals in the ground left unattended to. The idea of comparative advantage is sufficient enough to instigate other regions to develop their corridor when the others are amassing wealth through conscientious exploitation. This already happened in the 60s.

The third dimension of the regional economic corridor principle is very critical. It involves a distinct regional public service architecture that is professionally capacitated and functional in achieving an enviable productivity level that will overflow into the national productivity profile. The infrastructural achievements of the old Western region would have been impossible, I dare say, without the professionalism and patriotic commitment of the public service institutions. It is a sufficiently capacitated public service that is institutionally mandated to deliver the goods and services. Thus, while the politicians in the regions will be committed to generating sound policy agenda that would not be undermined by politics, the civil service will be properly instigated to interpret and implement the agenda with professional vigour. I have written so many things about the reform of the public service that cannot be repeated here, but suffice is to say that the most critical reform is anchored on capacitating the institution through professionalisation. The sum of it is simple: You cannot be a public servant if you are not competent.

The economic corridor principle is advantageous first as a viable means of restoring Nigeria’s federalism through a solid fiscal arrangement. This becomes a story of the economy rescuing politics so that the political can find a back door to achieve what seems difficult. Nigeria is a federal state because federalism is the only constitutional answer to our diversity as a nation. The strange unitary federalism we imported into our constitution has debilitated our progress for too long. It is time to expunge it economically. On the other hand, the idea of regionalism and the regional economic corridor is urgent because it restores to each region a significant measure of fiscal buffer and discipline that will undermine the helplessness that comes from the beggar mentality fostered by running to Abuja every month end for allocations that barely suffices even for recurrent expenditures. Why is this significant? In democratic terms, the “federal” is too abstract for the people to relate with in economic terms. The state, as an intermediate political and economic unit, becomes a feeder point that devolves into the grassroots where the people are. Thus, when the states morph into regions and the regions transform into fiscally significant economic centers, then Nigeria achieves a legitimate profile in the eyes of Nigerians by the logic of the whole being the sum of its parts.

Regionalism cannot be wished away. If it has worked before and within our home historical antecedents, then it becomes a cruel political insensitivity not to at least give it a trial.

Dr. Olaopa is executive vice-chairman, Ibadan School of Government & Public Policy (ISGPP).

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