The past few months have witnessed critical and growing press attention to the crippling insolvency of twenty three of Nigeria’s thirty six state Governments, a situation that became public knowledge after several states had failed to pay workers’ salaries for upwards of six months.
This distress has not discriminated against the States in any discernible pattern- by political party affiliation, geographical location, ethnic composition, etc, the usual culprit factors that political commentators often latch on to. Financial distress as grave as this was last experienced thirty two years ago (in 1983) during the reckless Second Republic government led by President ShehuShagari when most of the then nineteen states of the Nigerian Federation ran their economies aground by depleting the dwindling federal allocations that all had depended on without exception.
The reasons for the 1983 salary crises at the State and Federal levels were: drastic fall in the price of Crude Oil in the international market, profligate spending, and white-elephant projects executed with little attention to financial and schedule discipline, and outright theft of state resources. The states, then as now, were heavily dependent on the tempting but unreliable income from Nigeria’s Oil export, which experiences cyclical glut and price fluctuations with the boom-and-bust cycle of the world economy, a systemic problem only occasionally ameliorated when the shock of war jacks up Oil prices in key oil supply markets.
Ironically, it was MuhammaduBuhari, (President of the APC-led Federal Government), then a serving army General who led the military coup that swept away the foundering democratic regime of President ShehuShagari on the 31st of December, 1983, to the relief of many Nigerians who were tired of the politicians and economic difficulties they plunged the country into. We have returned to that terrible past of insolvency and economic stagnation, with some distinct differences.
The country’s population has more than doubled from 68million people in 1985 to 174million today, while the number of states has also almost doubled as if on a cue. Nigeria is now unique in being perhaps the most over-governed but under-administered territories in the world where most of the wealth is arrested from circulation or cornered by officials past and present, leaving over 50% of the sprawling country’s population illiterate, and over 70% of the population in grinding poverty and governments inefficient and the society in decay. And the country has not managed to construct a viable economic foundation since the 1982/83 crash.
Of the twenty three State governments affected by the salary crisis, Governor Aregbesola’s administration has been singled out for a most severe attention about which Ogbeni (as he is fondly called), has agonised in public and in private. The crisis and its virtual grounding of the State’s economy and the resulting harsh situation have left an overwhelming number of government pay-dependent families without alternative income in serious financial and emotional distress.
The strong feelings brought on by months of waiting for salaries the payment of which government workers had long taken for granted has soured the governor’s once excellent relations with labour in the state; however, the generality of the citizenry has shown understanding for Aregbesola’s predicament and still support him. All that will help now is rescue by every means available.
No argument, no matter how logical, will assuage the strong feelings of workers who find themselves stranded and helpless ‘for no fault of theirs’. The Federal government’s immediate financial rescue can forestallturning workers’ frustration into open antagonism, the possibility ofsuch an outcome is being constantly explored by the OsunPDP‘s warlord politicians who are stoking civil conflict with all manners of provocative publications and discredited allegations.
The situation has created a feasting frenzy for faceless hack writers, paid jobbers and ‘critics’ of Governor Aregbesola who churn out damning commentary based on inaccurate data and ill-educated, and coloured observations about the State government’s policies and thestate of things in OsunAregbesola’s often brilliant and biting insights on the political-economic state of Nigeria and his hard extempore jibes unsettle many without a doubt, and they want a pound of his flesh.
Some of the anti-Aregbe opinionates may benefit from informed responses so that the reading public is not misled by the critics’ biases. We are in a season when contract writers resurrect once dead journals for tempting profits in the spirit of capitalistic amoral adventurism, when the sworn enemies of labour and do-gooders primed in the art of exploitation of the disadvantaged swear by mammon that they love the Osun government workers more than Ogbeni, because of this salary palaver.
One reason that Aregbe has been singled out for this hash treatment is because he is seen as the arrow-head of the ‘APC Change Movement’. I ask the critics to not forget thatthe salary payment default contagion actually involves twenty three state governments or nearly two-thirds of the States, as well as the Federal Government of Nigeria, and more States will likely follow unless some drastic measures are taken now to increase available resources, expand government’s revenue base, cut wages, or lay-off workers, or do all four. I shall argue here for the option of shifting or transfer of labour to sectors where they are most needed.
All of these four actions may in fact be needed to get States out of the logjam. It should be borne in mind that Nigeria is a free enterprise mixed economy, and no question about it, at some point we must take that bitter pill.
The wide-spread nature of the salary default tells us that something fundamental is amiss; it is not enough to make a bogeyman out ofAregbesola, whose strength of character and uncommon political vision and coherent theory of governance are only matched in this dispensation by another Comrade, Adams Oshiomhole, Governor of Edo, with some distinct differences. This is not a coincidence but the result of their backgrounds, deep self-learning and immersion for decades in practical matters of delivering public goods. This is what informs the level of social consciousness and astuteness noticeable in their governance styles and their ability to mobilize public opinion with ease. These are the formidable huddles that desperadoes who want to bring Aregbe down face. It is an aberration to pretend to govern a people without passion or a coherent theory. (I shall come back to this point later).
Causes of the 2015 salary default backlog in Osun
•Drastic drop in funds allocated to States from the FederationAccounts
•Direct impact of the 2011 across-the-board pay rise for Government workers
•Large investments in economic infrastructure and social services
•Low IGR
•Effects of the brutal 2014 Osun Governorship electioneering
All of the above factors have combined to create the backlog of unpaid salaries and the general lack of development in most of Nigeria’s states. Aregbesola, easily one of the most communicative State governors in Nigeria, has taken the pain to explain over and over again that the seeds of today’s problem were sown by the astronomic rise in the wage bill due to the compulsory implementation of the new minimum wage set by the federal government in January, 2011, barely two months intohis administration. Osun government employees had insisted at the time on an across-the-board wage increase to reflect the new N18, 000minimum wage, and to drive home their demand theyembarked on a crippling strike action that lasted for several months.
The new government of Aregbesola, compelled to accede to the across-the-board pay rise had lamented that the increase meant that its financial burden rose by three hundred per cent (from N1.4billion to N3.5billion per month!) and that this was unsustainable and would have consequences sometime in the future for the state’s development. But nobody listened or took him seriously.
Late in 2013, there was a sudden drop in funds allocated to the State from Federation Accounts beyond all rational expectationswith the situation becoming worse in 2014.But Nigeria earned $92.752b as excess crude revenue from January to December 2014 (from crude oil sold above the Government’s budget reference price of $65 per barrel),a contradiction of the reason for the drop in allocation.
The cut in allocation made it virtually impossible to fund or sustain government’s commitments. Another factor is the relatively low level of internally generated revenue of the State government, which had actually doubled from N600million in 2011 to N1.2billion per month in 2013. It should be noted that Aregbesola was elected with a mandate to implement major social and infrastructural change in the State as enunciated his green book- “My Pact with the People of Osun” and was duty-bound to fulfill this mandate in best interest of the State.
Aregbesola’s Osun development blueprint and strategy
The Aregbesola administration came in with an Agenda styled the Six-Point Integral Action Plan designed to banish poverty, unemployment and hunger, and restore communal peace and progress and finally to promote functional education as the bases upon which to build a thriving society in Osun.
Bearing in mind that without a strategic initiative to increase its limited IGR,Osun would remain a rural backwater state continuing along the well-worn path of arrested its development, government embarked on a major change project. This involved new infrastructure at various levels, agricultural development and provision of social services and employment generation as the means of building a viable alternative economic base in Osun in place of going cap in hand to Abuja every month.
With the understanding that providing an attractive environment and the right tools for human capacity development will aid productivity improvement, the Aregbesola government pursued key projects and programmeswith three to five-year horizons toward this end.
These have laid astrong foundation for sustainable development in Osun, a notable departurefrom the entrenched preference for short-term goals and high recurrent expenditure of the past.Of course, major infrastructure projects absorb a lot of finance and they do not yield direct revenue to the state’s coffers in the short term, but they impact economic activities far into the future by attracting investors to the state.
A state enjoys a sub-sovereign status as a going concern with longevity, like a nation, and it makes sense to embark on infrastructure development early because inflation is ever on the move, and if one delays, project cost doubles within eight years with inflation at 10% per annum; time makes all the difference.
The quality of infrastructure and efficiency of the services it renders are the keys to economic development and growth, and through their multiplier and knock-on effects businesses will thrive and government’s tax revenue will grow.
The bitterly fought August 9th 2014 Osun governorship elections
Another factor in the financial crisis in the State was the bitterly fought governorship elections and the strains of campaign expenditure in the face of low level state revenue. It was widely reported that PDP in its determination to wrest power by all means from APC in Osun pumped some N15billion into the elections, giving free Kerosene, Rice and cash for votes. Fifteen billion naira is equivalent to five months’ revenue for the State, and this is approximately the amount which had been cut from the state’s federal allocation between January and July in the months preceding the elections! One can imagine the financial demand that a meaningful, if asymmetrical response to this kind of challenge would have imposed on the APC government. The impractical alternative of folding the arms and resigning to fate in the face of the desperate and overawing onslaught by the irresponsible Osun PDP and the PDP Federal Government could not even be contemplated by a seriousAPC government. Ironically, the group of electorates most courted by the PDP during the electioneeringwasgovernment workers and some had gladly lapped up PDP’S inducement largesse – the consequence of which is today’s predicament for all. PDP had believed that it could exploit workers’ grievances to thwartAregbesola’s re-election as was done to Chief BisiAkande’s second-term election bid in 2003. For this reason, the solution to the salary crisis must include a campaign funds reform, eradication of pervasive poverty, abhorring greed and opportunism (andembracing ethical maturity) on the part of the citizenry so as to prevent the corrupt use of money infuture elections.
To survive,the states must face down their wages overburden
Governor Aregbesola had argued strongly back in 2011 that salaries could not be uniform across the country in a Federation, since no two states had the same quantum of resources or cost of living.
He also argued that salaries should not be adjusted across the board in tandem with the new minimum wagesince doing so would increase the gap between the poorest paid and the highest paid, thus eroding the intent of the pay rise and leading the State into insolvency and as well as stalling the its development projects.
During the emotionally-heated debate on the effects of implementing the new minimum wage by the state, Governor Aregbesola in presenting the difficult choices before the new government and people of the state had made it clear to the Unions that if workers’ emoluments outstripped available revenue, government would have no choice than to retrench workers since it could not borrow perpetually just to pay salaries, whilst neglecting the core reason for having a government.
It was noted that State’s revenue could not fully augment the new wage bill if there was a shortfall in federal allocation. Thus, assuaging workers’ demands for across-the-board wage rise by spending all of the state’s earnings on emoluments means leaving nothing for the future, and trusting the future to chance,postponing the evil day.
The governor had also reminded all back then to bear in mind that the Federal allocation to the state was meant for all of the state’s 3.2million residents (now 3.5million), and not the exclusive entitlement of the 40,000 or so State employees and political appointees. This was not a popular position to take at the time, but it was, and still is the plain truth.It was decided instead to work harder to generate more internal revenue for the State, until it could not cope in the months before the August 9th, 2014 governorship elections, and ever since, things have remained difficult.
the euphoria of better pay for as long as it lasted from 2011 to 2013, but it was not long after that the Federation accounts allocation to Osun dropped dramatically from a high of N5billion (Five billion naira) in 2012, to as low as N400m (Four hundred million naira) per month in April 2015. With this, the salary crisis had become an emergency: workers could no longer be paid, and the banks which had been extending credit to government to bridge the ever-widening gap in its obligations stopped extending credit to the State. This effectively brought all activities, including on-going capital projects in the state to a halt. As things stand now, the State’s entire Federal Allocation is exclusively for the benefit of government and its workers;we are operating an unsustainable welfare state that will sooner anger the excluded 98% of the population who fend for themselves. The States and Federal governments owe collectively close to a trillion naira debts for salaries, pensions, bank charges, contractors’ bills, etc without payment of which their economies will remain in a state of paralysis. The injection of cash from the Public Sector through payment of workers’ wages and contractors’ bills provides disposable income that translates intoincome for businesses, traders, transporters, artisans, food vendors, etc, and tax revenue for government. The absence from circulation of this important cash for over six months is deeply felt in the local economy. The cash –flow of a modern State ought not to be so tied to one risky source; this is not good for the future of labour, government or businesses.
UNDERLYING REASON FOR STATES’ LOW IGR AND FEDERAL DEPENDENCY STATUS
The underlying conditions that triggered 2014/2015 salary crisis are a repeat of the conditions leading up to Nigeria’s economic disaster of 1982 because we have not taken to heart the lessons from that era. Like the federal government, most of the States failed to anticipate and prepare themselves to cope with the scale of the financial down-turn again this time because we found ourselves somewhat insulated from the 2008 financial melt-down in the leading industrial economies. Nigeria’s governments after the First Republic have been propped up with Oil income and government organs have been multiplying like mushrooms in theforest and in effect loss-making ventures where budgets reflect neither true costs nor benefits for the citizens.The inability of Nigeria’s dependent States to generate an impactful level of internal revenue is rooted in the absence of a genuine local economy based on industries that are not tied to Government’s Oil revenue and the importation syndrome. Industry is the biggest source of IGR in a normal developing economy.Nigeria’s so-called neo-liberal macro-economic policy centred on importation of foreign goods (in effect exporting Nigerianjobs abroad), and entrenchment of inefficient municipal services, corruption, etc, are all leading to de-industrialization and ever deeperdependency and underdevelopment. This is the result of Nigeria’s so-called development strategy: import substitution turned to import dependency and trickle-down development. If Nigeria’s fortune is to change for the better, this recession gives us the opportunity to confront the realities of our weak and shallow economy. States’ lack of sizeable internal revenue is an indictment of Nigeria’s lopsided federalism whereby the states are mere adjuncts incapable of making any fundamental changes to macro-economic policy, and this makes both State and Federal Governments weak and vulnerable to manipulation by foreign interests. The states are guilty of fickleness, juvenile dependency behaviour and lack of creativity, intuitive initiative and the discipline to follow through good ideas for the longer term benefit of their people because of bad politics- the right things never get done out of fear of losing an election, an all-too-real fear. The great diversity of Nigerian States, cultures and climatic conditions, the bases of complementarity and means of positive competition, two critical ingredients for national economic virility and success have remained unharnessed. This makes Nigeria hostage to a neo-colonial and subordinate mindset of waiting for ‘ideas from abroad’ in a world of developmental competition anchored by a strong sense of national identity, initiative and creativity.
It is time to formulate a thorough-going economic strategy for the country and its component regions with which we can build without further delay a lasting foundation for a vibrant economy and finally change the culture of entitlement and sharing of booty that has become ‘Public Service’ in Nigeria. For example, why should Federal allocation be for payment of government salaries? Federal allocation belongs to the entire population of a state and should be invested primarily in capital formation projects and activities, such as critical infrastructure and direct business opportunities that enhance growth, create jobs and expand revenue), thus enabling the economy of a state to grow. When contractors handling visible construction works that help to create a future for the children of today’s government workers don’t get paid, their workers don’t get paid. Let us treat all workers equally, government and contractors’. A State’s government’s workforce should be paid from the state’s internally generated revenue, and thisshould in turn determine the size of the workforce. No business employs more workers than it can reasonably pay from its earnings, not from donations. We are not in a war-torn zone where disruption of normal life makes charitable donations the only lifeline available. It should be mandatory for government to pay its employees based on performance as it is done in the rest of the economy,rather than continue in the indulgence that is ruining many lives unknown to most of them.
The high cost of generating alternative power with diesel-electric sets has forced many manufacturing companies to move their operations outside of Nigeria while manufactured goods are smuggled in. It is such that even IT and mobile telephone service companies touted as models of growth now prefer to locate their core activities in territories with dependable and cheap power supply. Another serious problem is extortion and collusion by government agents and officials who facilitate the exporting of capital that is badly needed for development at home. The number of manufacturing companies in an economy that is the biggest consumer of imported goods in Africa is not unexpectedly small for all these reasons. Until there is a change from this economic policy and the negative operating environment, Nigerian states will continue to generate very low levels of IGR and attract only a handful of desperate ‘businessmen’, not genuine investors and manufacturers. A trickle-down economy works like the filter blocking the passage of the solidsin a stream (such as targeted investmentsin resource utility maximization and talent development) the building blocks of a production and manufacturing economy; this means that the pivot on which our IGR hope hingeswill be built only when we have a different kind of development policy.States’ IGR breakdown shows that they are dictated by Nigeria’s importation-centred economic policy which kills industries and bloats up the bureaucracy- the reasons why the States are unable to grow their IGR substantially. The absence of industries has meant that most of the states depend on Government workers’ PAYE tax for fully 50% of their IGR, a great irony whose meaning is better understood now that government is unable to pay its workers. It is an absurd kind of economy. Other sources such as licensing fees (vehicles, radio, TV, etc), real estate land charges, tenement rates, markets rates and rents, and the least of these, Private Sector small businesses’ taxes, (including PAYE) in a healthy and diverse economy should be contributing at least 60% of the IGR.A few states Lagos, Anambra and Osunhave managed to invest in construction and industrial manufacturing ventures. Anambra has no debts primarily because the state under Governor Peter Obi failed to embark on any long-term vision-driven project, typical of a former banker who fearsto take the pill they shove down the throat of borrowers. But the future will come sooner and Anambra will find itself ill-prepared to deal with its infrastructural bottlenecks.Infrastructure-led development, investing in Agriculture,industrial entrepreneurship and human capital development and tools, not patching up what we have today, are the keys to long-term competitiveness.
CONFRONTING THE REALITIES OF NIGERIA’S WEAK AND SHALLOW ECONOMY
‘A weak system breeds a weak ethos and makes a cynical society’
Nigeria’s economy is truly an irrational one. It is a fact that corporations are more efficient than countries, and it is important to know why. The main reason is focus on objectives, resource concentration, efficient organization design, lean management, more hands at the coal face, systems, processes, standards, effective mission controls, performance management, fairness to all, caring for their greatest assets (human capital), etc. Let us have some perspective on Nigeria’s true status in the world. The world’s biggest company is a retailer(Wal-Mart)operates in 11,495 locationsand employing 2.2million people it earned revenue of $486billion in 2014, meaning that each employee contributed or (is worth) $1.434million. Toyota, the world’s biggest manufacturer employs 338,875workers and earned revenue of $252billionin 2014, meaning each employee contributed (or is worth) $743, 637. These corporations have run their businesses profitably for generations and they are growing stronger. These businesses spend no more than 15 to 20% of their revenue on administration and you can see the work done, compare this to Nigerian governments that spend 70% of their budgets on salaries and nobody can point to work done anywhere!The total output of Nigeria’s 176million peoplewith‘rebased’ 2014 GDP is $594billion dollars, meaning each Nigerian contributed (or is worth) not more than $3, 375 or N675, 000. If you ask the average Nigerian,that is ‘big money’ and he/she will gladly ask to be given that N675, 000 as their share, now!This is really the way we are and itmeans thatany Nigerian, no matter how ‘big’ we may consider him/her to be,is seen in the eyes of the world to be worth no more than just that. And it is one reason the world treats us shabbily. We produce next to nothingbuthave a high taste for the goods that others produce and we import, if possible, steal them. Our dependency is both external and internal, for example, most southern States depend on the northern States for at least 50 per cent of their food consumption. We import and burn N3.5trillion on diesel and petrol for standby generators and automotive cars, trucks and trains annually, whilst also flaring all the gas we could have used to generate the electricity needed to save ourselves from this wastage. Besides the capital cost of generator imports, self-generated power costs ten times as much as grid power! It is like buying one item and paying for ten without knowing. This way of life fuels inflation, extortion, ever rising demand for wages by the unions, pilfering, treasury lifting and all manners of fraud just to ‘meet up’, and everybody puts everyone else they can under pressure. It has institutionalized wickedness as the way of life in Nigeria. In the midst of all this the main reason we have government is forgotten: the security and welfare of the citizens (i.e. empowerment to grow and prosper in safety and security). The States and Local Governments simply complete the circle of Nigeria’s irrational economy.
Those who work for our governments (from the President, State Governors, Senators, Representatives, Justices of the Supreme, High and Low Courts at the Federal, State or Local Governments), are addicted to this system of guaranteed personal income, whether work gets done or not, relevant quality or not, and efficient or not. It has created a State in name but not in character. Also common to the state and federal civil services is the absence of a genuine performance management system, meaning that workers get paid whether they perform and deliver results or not, because there are no performance standards (tasks and targets, qualitative and quantitative) to hold workers up against. Yet there is an annual performance appraisal system which is merely a bluster and blackmail instrument. Everybody scores 90% and above!
Many activities of government lack rigorous monitoring and control because of a cultivated mind-set that prevails among government employees as State dependents that live on the assumption that a seat is all it takes to own the budget and one’s monthly pay is assured without a question. It has also cultivated a cynical citizenry who believe that those inside our governments are simply salting away money, and on this account do not trust them.
But we have progressed somewhat: from reckless sharing of money without any development worth its name to overleveraging what little there is because there is not enough left after salaries. This leads to heavy indebtedness to local contractors on account of which many projects are executed in fits and starts with consequent price escalation from accumulated interest on bank loans, the cost of rework of projects damaged by rains such as unprotected earthworks, vandalism and the effect of inflation on prices. This situation calls for careful selection and balancing of project portfolios and tightly disciplined cost and schedule management that is not a strength of government.
OSUN REVENUE: FACTS AND FICTION
Between November 2010 and December 2014, Osun received a total statutory allocation of N108.3billion, and if we add Osun’s receipts from January to April 2015 of N7.04billion, this makes a total of N115.34billion. Osun expenditure on salaries alone from November 2010 to December 2014 was N120.4billion. This left the state with a deficit of N12billion. If we add other emoluments, Osun’s total recurrent expenditure comes to N206billion, compared to its statutory allocation of N108.3billion. If we add other accruals from Abuja, the grand total of all receipts from Abuja is N204billion. Yet a newspaper published the unverified claim made by the politically interested former Head of Service of Osun and candidate of SDP at the last governorship election that Osun received “over N350billion” in federal allocation since Aregbesola’s inception as governor! He also made other unverified allegations to the effect that N436billion in statutory allocation was made to Osun’s thirty Local Governments in the same period. To put things into perspective, in 2011, allocation from Federation Account to Osun was an average of N4billion per month, this level held steady until it fell to N2.6billion in July 2013, from when it began a downward slide to N466million in April 2015! At first the downward slide was thought to be temporary, but alas, it became a collapse! Osun’s internal revenue grew remarkably from N600million in 2011 to a peak of N1.6billion in 2013 as a result of Government’s revenue drive but it is not sufficient to meet its obligations to the citizens. When Aregbesola mounted the saddle on November 26th, 2010, the total monthly salaries and emoluments bill was N1.4billion, (including N200million for pensions). In 2015 Osun workers’ emolument was N3.6billion, and Pensions: N530million, and since workers’ salaries are adjusted every six months these will jump up to N4billion in December! In January 2015, net statutory allocation to Osun was N1.25billion; February N1.12b; March N624m; April N466m. If we add to these other accruals, such as VAT, SURE-P, Excess Crude, Exchange Rate differential, total allocation for January is N1.99billion; February: N2.05b; March: N1.61b; April: N1.39b. About N700million is deducted for repayment of Osun’s loan liability every month. However, from July 2013, just as the IGR milestone achievement was being commended, there was a sharp drop in federally allocated funds to Osun; this drop became very pronounced from January 2014. With the knowledge that the longer one delays, inflation escalates project cost and renders a project less effective and less attractive, contracts for various major projects had been awarded in earnest in 2011 by the government based on its long-term finance plan and scenarios. There is also the matter of mass exit of older experienced staff at the end of 2012 in order to beat the deadline for the introduction of the mandatory contributory pension scheme (PENCOM) that was to take effect from January 2013, to replace the traditional government pension payment system. This mass exit has also led to a big rise in the State’s commitment to payment of gratuities and pensions to historically high levels and added to the financial shocks the state is contending with. New workers recruited to fill the vacancies created by the retiring staff lack the experience to deal with issues that call for systemic knowledge and this has also created some challenges.
LABOUR AND AREGBESOLA’S ECONOMIC DEVELOPMENT STRATEGY
Nigeria is a country at the ‘food stage’ of development and badly in need of industries that produce what people need and want to pay for: food, clothing, consumer goods needs, including shelter and household needs, that’s where surplus labour should be shifted to as rapidly as we can. These cannot be provided by the multiplication of layers of government bureaucratic jobs as we have been doing until now. It will take rare courage on the part of the governors to make the initially disruptive shift of labour to productive economic activities where many hands are needed to wean Nigeria from the consumption of imported goods. With the understanding that people always move where the money is, it should be possible with some competitive inducement to persuade the state’s labour force to make the transition to productive areaswhere more hands are needed to help turn around the state’s fortune.I believe that this step will prove to be a blessing in a couple of years to many. Agricultural production and processing, and production of goods currently being imported will absorb hundreds of thousands of workers (more than the State government’s current labour force), relieving the State of its debt burden of salaries for sinecure jobs. Labour, Capital and Technology must move to the markets where the needs and opportunities are, or atrophy.The 2015 salary crisis, a repeat of the 1982/83 experience is an object lesson by first-hand experience that the neo-colonial state was not designed to bring about sustainable development and cannot always pay its workers. Only a productive and vibrant economy has such a chance in today’s world of free enterprise mixed economy and competition, we owe it to ourselves to create one; and the earlier, the better. This means that the State and Federal governments must make major macro-economic policy changes: ban or place prohibitive tariff and administrative, regulatory restrictions or huddles on imported items that can be produced in Nigeria from the land and natural resources. Federal and State governments should enable ventures processing into finished goods and enforce standards for local consumption and support demand and market supply chain. This will grow the States’ IGR through a wider and more realistic tax net.
AREGBESOLA’s VISION, ECONOMIC DEVELOPMENT STRATEGY AND PROJECTS
Anyone who came to Osun before the advent of Aregbesolain 2010 will have taken it for granted that it is a prototype rural state where everythingshould look like it wasin mediaeval times. It was, and still is a place where opinions are strong and tend to be fixed and the people are very politically astute. Aregbesola inherited a State of sprawling rust, dust, decay and chaos, where there were no social services or institutions worth its name to talk about, and to cap it all, with an empty treasury and a mountain of debts for projects with little economic foundation or possibility of positive returns. This is the tradition of Nigerian governance for which our misbegotten elites are to blame. The people copy whatever the elites do.
From the beginning, Governor Aregbesola demonstrated an uncommon and penetrating insight into the condition of Osun, the economy, the land and the people as shown by his in-depth and engaging discourses and legendary consultations with people. On the bases of these, he came up with an intuitive strategy and intelligent and inclusive solutions to issues, always taking the long view of the development of Osun, never held down by the pedestrian limitations. Aregbesola is audacious and not a novice when it comes to state governance and administration, he has been deliberately cautious in the handling of issues affecting various political interests and constituencies in the state whilst keeping his gaze fixed on the long-term objective: making Osun the number one State in Nigeria in all important indices of development, human, social and economic. While acknowledging his predecessors in office, especially the highly disciplined and irrepressible Chief AdebisiAkande, he has been careful and strategic in his selection of projects, the likes of which had never been attempted in the state while implementing his vision for a great State. His first project was to work to change the mindset of the people and how the state was perceived.He did this by creating a new brand identity-IpinleOmoluabi, the State of Osun, Nigeria. He next faced the thorny issue of youth unemployment and disorienatation by setting up the OYES (Osun Youth Empowerment Scheme), a scheme that has drawn many curious delegations to visit the state. OYES engaged 40,000 youths in the first four –year term of Aregbesola. OYES was recommended for adoption/adapataion as a model job creation and youth enegagement scheme by the World Bank who styled theirs YESO.Ogbeni as he is fondly called came up with his well-publicised Five –Point Integral Action Plan for the total transformation from mediaeval city to a modern society, a hub of Commerce, Industry, Culture and Tourism. He pioneered several unique and far-reaching programmes and projects, like the super highways from Gbogan junction to Osogbo, Osogbo-Ila-Odo, the East Bypass (Oni Aderemi Road), and the MoshoodAbiola Airport, besides over 600kilometres of asphaltic roads Roads (within townships, intercity and inter-state), (fifteen kilometers in every town and Local Government), besides the special attention to Osogbo. The remodeling of the Osogbo Railway Station and the rail corridor into a beautiful avenue is now noticeable and it triggered a directive by President Jonathan’s government to the Nigerian Railway Corporation to beautify the Rail terminuses across the country.
Osun has embarked on a number of far-reaching economic and social infrastructure projects and programmes, some of which have received international and local acclaim and have been adopted as national programmes by the APC Federal government of President Buhari because of their high impact multiplier effects and potentials. For example the O’Meals Elementary School free lunch programme has raised primary school enrolment in Osun to the highest level in Nigeria, developed commercial scale food vendors and created a vibrant agriculture and agro-processing sector in the state. These social change programmes include: Osun Youth Empowerment Scheme (OYES), the community service volunteer scheme that has trained 40,000 youths in various skills and re-oriented them toward rendering selfless service. Others are Schools infrastructure reconstruction and upgrade, O’Meals Elementary Schools’ Lunch and Health programme, Opon Imo (Computer Tablet), Omoluabi Scholar buses, the schools’ uniform project that has now attracted industrial tailoring a major growth industry to the state, schools calisthenics programme (teaching pupils orderly behaviour, organization, situation awareness, team work and coordination). He invested the state’s resources in rural economic infrastructures: extension of electricity and roads to many rural farming communities, to make the industrialization of the rural economy possible in a few years through the commercialization of Agriculture. He created countless innovative and far-reachingprogrammes in Agriculture for farmers for livestock breeding and multiplication: O, Bops (broiler), O’Fops (Fish), O’Beef, O’Honey, and for arable farmers, all targeting the Schools feeding programme. Not to be ignored are the new security infrastructure, and social services introduced in the state: network of Police Patrol, armoured protective vehicles located near Banks and strategic spots, emergency ambulance service, township door-to-door garbage collection service, channelization and de-silting of streams and rivers that has put an end to perennial flood disasters, and environmental beautification projects visible in Osogbo and the Ibadan-Ilesa Expressway.
The leveraging of state funds for financing major capital projects has enabled some States to raise long-term funds, in particular, bonds from the capital market for major infrastructure, such as Dual Carriage ways, flyover bridges, etc. These projects are expected to stimulate economic activities and trigger businesses to invest in the states, and increase State revenue from taxes and levies paid by businesses from which the state will pay back the long-term funds (bonds) in reasonable time. One impact of Aregbesola’s developmental efforts is the jump in the population of Osun 3.2m in 2010 to 3.6m in 2014.
Osun now needs a deluge of direct investments in key commercial, industrial, agro-processing, mining and tourism in order to begin to reap the benefits of Aregbe’s first term investments as they get completed one after the other over in the months ahead.Osun has a great potential in Tourism because of its history, culture, abundance of vibrant community festivals and nature sites that draw hundreds of thousands of people even with little or no publicity and certainly few facilities, if any. Before the immediate past Federal government wrecked the security of the country and its economy to boot, Osun had been a major internal educational tourist state attracting pupils from as far away as the Niger Delta and the Eastern part of Nigeria; the fair number of highly reputed private Secondary schools in the state attests to this fact. Today, Osun has been restored to one of Nigeria’s most peaceful and most secure states by Aregbesola’s regime. Thus investments in Schools, health facilities, roads agricultures and in an International Airport are coherent and fore-sighted initiatives designed to complement and enhance the State’s endowments. Soon investors, businessmen and tourists will begin to respond positively to these developmental strides. It is called infrastructure, human capital and services-led development.
It has been argued by some that a number of these projects are sheer ego trip but at the bottom, some of it is sound economics. Inflation of course, will double the cost of any project in Nigeria in less than eight years, so the earlier you embark on a key economic or social infrastructure project in Nigeria, the better you are. The only proviso is that it must be able to attract and secure economic returns on the invested funds over time. Of course, uncompleted projects do not give people any beneficial service but they can create a whole cascade of troubles.
We are in a state of economic emergency in Nigeria today precisely because nobody had bothered to create an alternative economy based on regional comparative advantage and complementarities since the last massive economic down –turn that lasted from 1982-1999. We have no choice but to wean ourselves (politicians, importers, retirees, workers, unemployed and students) from the psychosis of the dependent economy and the juvenile mindset and disposition it has engendered in Nigerians. The world will not wait for us and they don’t owe us a meal.
To the credit of RaufAregbesola who inherited a State deep into debt overhang from projects of doubtful economic or social value for a hinterland state (five stadia at a go!), given Osun’s lack of a meaningful economy. He worked out or engineered a financing strategy that enabled the state to embark on major game-changing and face-changing projects for Osun, that had been marooned in rural obscurity where even its principal city, Osogbo was simply a rustic backwater glorified with the label of State Capital, had nothing capital about it and little trace of Stately existence. As far as some cynical citizens who work for government are concerned, as long as money can be found to pay salaries the state can remain in this depressed condition for ever. Everybody takes it for granted that their grown-up children and wards must go to Lagos or travel abroad as economic refugees elsewhere and then come back home to build houses they will live in for a few days in a year while on holiday. Resignation and self-condemnation to hopelessness in the face of this level of decay tells us more about ourselves than would anything else. The people who constantly undermine their best this way have no self-confidence and I doubt that God will help such.
Although Aregbesola’s physical infrastructure projects are yet to be completed, even his worst critics give him credit for daring to transform the state from its mediaeval look to a worthy place in the modern world. He has been criticized for looking too far ahead in his frenzied drive to secure for the state a future commensurate with its historical and cultural potential. His massive and well-targeted infrastructural change projects have been carefully prioritized to make the desired impact. Beginning with roads in the most populous residential areas of nine major towns and cities of Osun and its thirty Local Government headquarters, the State Government did 10 kilolmetres of high standard asphalted roads with reinforced concrete drains and road markings to enhance safety, the LGAs also did 5kilometres of roads to a similar standard, to give the entire territory a total of 295 roads and the state at least 450kilometres of good roads. At the same time, he embarked on rural access roads (non-asphalted) totaling about 250 kilometres with good drainage to ensure that farmers have access to farms and ease evacuation of produce to the markets. He has also constructed over 60 brand new schools to a standard that only the best Private Schools have and offered free lunch to elementary school pupils attract and to keep them focused on their future.
Aregbesola has been implementing his big and bold vision for Osunelucidated in the green book ‘My Pact with the People of Osun’and he has never hidden the fact that a state of well-being for all citizens that he has envisioned can be made possible only through the devotion of the greater part of the resources of the country to empowerment of the citizenry for the development of a viable economic base and a positive and vibrant societal ethos. As the widespread problem of state insolvency has revealed, we have only multiplied the problems of thirty two years ago, and have found no solutions. Except for Lagos (and for exceptional reasons), our thirty six State governments are infantile. The Stateseach with its Civil Service executive bureaucracy, legislative and judicial arms, and a total of 774 Local Government administrations, and Federal government altogether employ about four million workers between them and gulp down enormous resources but with none of them, Federal, State or Local Government having any viable internal economic activities to turn to for succor. They are the results of a presumptuous, even reckless convenience, naïve and adolescent mindset, not of necessity.This situation calls for a fundamental review of the entire gamut of the Nigerian State, its philosophy, activities and departments to align them with what ought to be the essence of a modern independent state- empowerment of the people as the source of strength of the State. A population of 176million people divided into 774 Local Government Areas works out as an average of 225,000 persons per LGA per State.The question has been asked time without number: Do we really need to have 36 State governments, 36 Houses of Assembly, 36 Arms of the Judiciary and 36 Civil Service bureaucracies and Federal government as large as we have today? Each one of these competes for the right to salaries and other emoluments and pensions that cannot be rationalized on the basis of productive output, or available resources.An apt question to ask is what does each member produce? How do they live and what do they really wish their lives to be like, say in 5, 10, 15 or 20 years compared to what it was twenty or thirty years ago? Collective answers to these questions should be formulated into Communal, Local Government Area, State and National Development Master Plans, (instituting a bottom-up approach to planning and entrenching a truly grass-roots democratic culture) which should become the reference document, (MOU or Social Compact)with each territory and people-thus setting an agenda that matches means-and- ends, sets the right priorityand addresses the core issues of politics and governance in each territory. It is from this Compact, based on the Master Plan for Local Community, Area and State that should be aggregated astheNational Development Plan from which Political Parties should derive their Manifestoes and Agenda for canvassing for the support of the electorate. This will provide the ultimate solution to the unsteady progress of the Nigerian state under Presidents, Governors and LGA Chair persons with widely different inspirations and motivations and bring an end to the culture of wastage, abandonment and frustration common in government. The proper role of Political Aspirants willbe that of mobilizers and leaders of the effort to implement society’s agreed and documented vision and skillful motivators and managers of the process of putting into effect the collective will. Ideally, our governments should operate like PLCs where the LGA Chairman, Governor and President are the CEOs and report to us the Shareholders yearly or twice yearly for evaluation of their performance score cards, based on the concrete tasks and targets we set for them. This is the crux of the matter and kind of thought thatAregbesola has consistently championed. It is the source of his good troubles for being an advocate of CHANGE!
‘The cut in allocation made it virtually impossible to fund or sustain government’s commitments. Another factor is the relatively low level of internally generated revenue of the State government, which had actually doubled from N600million in 2011 to N1.2billion per month in 2013’
13th July, 2015
