The Nation Newspaper

Tag: States

  • NLC to Fed. Govt: reimburse states for projects

    NLC to Fed. Govt: reimburse states for projects

    The Nigeria Labour Congress (NLC) has urged the Federal Government to reimburse states for repair of some federal roads.

    The refund will enable the states to pay salaries, pensions and contractors’ debts, NLC president Ayuba Wabba told The Nation.

    Wabba said the reimbursement of the states would stimulate the economy.

    He said the government should devise palliative measures to help Nigerians who now have  to pay more for goods and services without a comensurate rise in salaries, pen sions and other earnings.

    Wabba urged Nigerians to use the  Eid-el-Fitri celebration to reflect on the state of the nation in order to confront its challenges.

    “I have no doubt that with discipline, piety, humility, scholarship, good neighbourliness or a sense of consideration for others and renewal of our faith in God, we shall prevail.

    “Eid-el-Fitr avails us an opportunity to deepen our faith in our country and our belief in ourselves to fight the vices that divide us as well as stifle national development such as corruption, social injustice, inequity, discrimination, politics of exclusion and other vices. It also avails us an opportunity to experience the pains and pangs of hunger of the poor, the deprived and the excluded,” he said.

    In another development, the NLC has donated N1 million to the family of rights activist, Chima Ubani, who died in a road accident on September 25, 2005.

    Ayuba, who promised to sustain the gesture for five years, said the fund would support the tuition fee and other expenses of Ubani’s children.

    He praised the late Ubani for his impact in the labour struggle, adding that his effort would be documented.

    Meanwhile, members of the civil liberties organisations, who attended the meeting between the family and NLC, urged Wabba to unite the NLC, saying division among its members would hinder it’s development. Ubani’s widow, Ochuwa collected the cheque on behalf of the family.

  • ‘16 states abandoned 221 constituency projects’

    More than 221 constituency projects were abandoned in 16 states in 2015, a civic technology organisation, BudgIT Nigeria, has said.

    Of the 436 projects tracked in the 16 states, about 145 projects were completed, while 77 of the projects are ongoing, the organisation said.

    The states tracked by BudgIT include: Lagos, Edo, Ondo, Delta, Jigawa, Niger, Kebbi, Kano, Kaduna, Gombe, Kogi, Ogun, Imo, Anambra, Cross River and Oyo.

    Every year, the Federal Government budgets huge amounts on constituency projects across the country.

    The government budgeted N100 billion for the same projects in the N6.6 trillion budget this year.

    BudgIT’s Team Leader/Founder Oluseun Onigbinde explained that contract inflation by contractors was one reason constituency projects are abandoned.

    Onigbinde, who said this in Abuja at the weekend at the launch of 2015 constituency project report, said one of the challenges to development was the lack of access to information about projects in communities by citizens.

    “The unusual cost of construction in the country compared to its peers worldwide is mindboggling, thereby making contractors the biggest beneficiaries of developmental projects rather than the people,” he said.

    Onigbinde said most citizens are not aware of the existence of constituency projects in their communities because of secrecy in the preparation, enactment and lack of transparency to show that such project exists.

    He said: “We have 221 abandoned projects, 145 were completed, and 77 are ongoing. The number tracked was 436 in 16 focus states. One of the challenges to development is the lack of access to information about projects in communities.

    “Public projects, such as the construction of rural roads, schools, clinics and religious houses are often phrased in technical jargons, making it difficult for citizens to comprehend the budgetary information.

    “Citizens are not aware of the budgetary provisions for constituency projects. Secrecy in the preparation, enactment, and implementation of the budget, as well as a pervasive lack of transparency conspires to keep citizens in the dark as to what their government owes them.

    “Many projects were signed off and contractors were paid, with little or no follow-up reporting and assessment by government authorities. A corollary effect is that citizens are often restricted from asking questions due to the absence of information on project stipulations and status. Lack of an effective monitoring and evaluation body to verify project implementation and standards budget or project tracking is a vital aspect of the budget implementation process.

    “Certain projects in the budget are brazenly not executed as specified in the budget. There are several instances where the actual work done does not match the description of the budget provision. An example is the N20 million construction of two units of two blocks of three classrooms at Dakata and Tudun Murtala wards in Nasarawa Local Government in Kano State, where only one block of  two classrooms was built, despite an awareness of the authorities that this project was being tracked.”

    He, therefore, called on government to ensure that constituency projects are effectively monitored to ensure proper implementation.

    “Effective monitoring of awarded projects eliminates the opportunity for corruption; the use of substandard products; ensures the durability of project structures; enhances citizens’ trust in government and safeguards innocent lives from untimely death and needless injury,” he added.

  • Bankrupt states

    •How we can avoid the catastrophe of failed states

    Keen analysts must have reckoned it would be a difficult time ahead as Nigeria’s mono-economic structure went into default about two years ago: crude oil prices suddenly went on a downward spiral. But not many would have envisaged that it would reach such catastrophic level when component states of the federation would become insolvent to the level of bankruptcy.

    An economic intelligence magazine – Economic Confidential, reported last week that 15 out of 36 states appear to be on the verge of bankruptcy. It also noted rather poignantly, that the ability of states to generate revenues internally is so weak to the point that Lagos State generates more revenues than 32 states put together.

    While Lagos generated N268 billion in 2015, 32 other states could only muster N257 billion. Only Rivers, Delta, Ogun, Edo, Enugu, Oyo, Anambra, Akwa Ibom and Kano states had what may be described as sustainable Internally Generated Revenue (IGR) last year. Some cases are rather dire: Yobe reported N2.2 billion IGR while it got a total of N57.4 billion from the federation account in 2015; Zamfara made N2.7 billion; Ekiti made N3.2 billion and Borno N3.5 billion.

    The outlook is uglier viewed in terms of percentage of states’ IGR against federal allocation. It would mean that at least 15 states would fail the instant federal allocation is withdrawn as their IGR is far less than 10 percent of the revenues from the Federal Government.

    It is indeed a rather telling situation, if not scary. The report from Economic Confidential portentous as it is if subjected to critical analysis, the bottom line is how to avoid the looming catastrophe of multiple failed states. This indeed is the challenge for the Federal Government and all Nigerians of goodwill.

    We proffer a few remedies: First, every state government that seeks to survive these times must learn a trick or two from the Lagos State model. Yes, it may be argued that Lagos is a peculiar economy buoyed by providential geography; but the fact of it is that geography is only half the story.

    Before the emergence of Asiwaju Bola Tinubu as Governor of Lagos State, the state’s revenue was as meagre and lacklustre as any other state’s. Tinubu it was who changed the game and remodelled the template of revenue mobilisation and collection in the state. Since then succeeding helmsmen in Lagos have built on it.

    Apart from adopting modern methods of collecting state revenues as introduced by Tinubu in Lagos, transparency and accountability are key to harnessing any state’s maximum possible revenues. For instance, it is implausible that Borno, caught in the throes of vicious terrorism war and social upheaval is posting more IGR than many states even in the south. Another odd scenario is one in which an oil producing state reports less revenues than non-oil states. In other words, accountability is key; therefore, states must institute collection processes that capture revenues accurately and eliminate leakages at all levels.

    Most importantly, there is no alternative to running even a state like a business enterprise, subjecting every fiscal decision to technical efficiency and opportunity costs. It is a misplacement of priorities for any state government to embark on such huge capital project like building an airport or superhighway in a state where there are hardly any industries functioning.

    There must be a carefully planned effort by governments in all the states to unleash the potentials inherent in all parts of the country. We must always remind ourselves that many countries around the world still earn the bulk of their national revenues from such agricultural produce like cocoa, cotton, palm oil, rubber, and groundnuts, among various others. All these are richly available and cultivable in parts of the country.

    It is still not late to avert what seems like an impending doom. Leaders, especially governors, must resolve to do things differently. 

  • Transparency in states

    •Nigeria’s federating units must be more accountable

    Minister of Finance, Mrs. Kemi Adeosun’s reiteration of the necessity for all states of the federation to publish their accounts at the end of every financial year emphasises the radical change in prevailing attitudes that is vital if the economy is to improve.

    Pointing out that the Federal Government had been leading by example on issues of fiscal responsibility, the minister argued that “it is about improving accountability and transparency, increasing public revenue, effective expenditure, improving public financial management and managing debt sustainably.”

    Any state that is genuinely committed to ensuring renewed economic growth and greater financial autonomy will find nothing extraordinary in this assertion. The seriousness of Nigeria’s current economic predicament has manifested itself in the states’ inability to finance essential services and execute development projects, and in the non-payment of the salaries of civil servants, teachers and other state employees.

    The ensuing labour unrest has taken its toll on industrial harmony across the country, with several workers’ unions embarking on strike and protests to demand the payment of what is rightfully theirs. The hollowness of the country’s so-called “feeding-bottle federalism,” in which almost all the nation’s states are entirely dependent on monthly federal allocations, has been exposed for the unsustainable fiscal arrangement that it is.

    It is in this regard that Mrs. Adeosun’s warning assumes even greater relevance. She has not told state governments anything they do not already know. Indeed, her argument is spelt out in even greater detail in the Buhari administration’s Fiscal Sustainability Programme (FSP) which was agreed to by state governors at the National Economic Council (NEC) meeting held in May.

    The FSP commits the federal and state governments to a set of five strategic objectives and 22 recommended action points aimed at improving fiscal behaviour, and thus synchronising their short and long-term sustainability objectives.

    Under the programme, states are required to publish audited annual financial statements within six months of the end of the financial year. Annual budgets are to be published online, as well as quarterly budget performance reports, which will be published online as from next March. All parties are to attain and comply with International Public Sector Accounting Standards (IPSAS).

    Adherence to the FSP is also the main criterion for accessing the Federal Government’s new N90 billion lifeline. Apparently no state has as yet been able to meet the required conditions. While this is tragic in itself, the real worry is in the fact that a majority of states are unable or unwilling to attain fiscal requirements which are essential for their own long-term development, rather than merely being a condition for obtaining soft loans.

    It seems that most of Nigeria’s states are only interested in obtaining the funds with which to settle their bills, as opposed to reconfiguring their financial architecture in ways that can guarantee sustained growth. Such short-sightedness bodes ill for the states concerned, because it betrays not only the inability to withstand economic adversity; it also demonstrates a profound ignorance of what capable financial management is.

    Publishing state accounts is a particularly relevant policy which serves to achieve several progressive ends simultaneously. It underscores the notion of representative government. It proves a commitment to transparency and accountability. It makes for better monitoring of budget expenditure. It is the clearest indicator of the efficiency or otherwise with which an economy is being run.

    The need for an extensive overhaul of the way the federal and state governments make and spend money is not a partisan issue; it is fundamental to the nation’s very survival. Nigeria simply cannot continue to administer its economic affairs the way it used to. Its inability to manage its wealth properly has inevitably led to a situation in which it has no choice other than to manage its poverty competently.

  • Fed Govt, states, councils share N305.128b

    • Workers force minister to trek

    The three tiers of government heaved a sigh of relief as they shared N305.128 billion at the end of the May Federation Account Allocation Committee (FAAC) meeting in Abuja as against N281.5 billion shared in previous month.

    The slight improvement in revenue was as a result increased accruals into the Federation Account from non-oil and mineral revenue sources in May.

    Minster of Finance, Mrs. Kemi Adeosun told reporters at the end of the meeting that   statutory allocation and Value Added Tax (VAT) also recorded slight improvements during the month under review.

    According to the finance minister, N237.466 billion was available for statutory allocation compared to N213.817 billion realised last month, while VAT improved slightly to N62.649 billion compared to N62.511 billion shared last month.

    Mrs. Adeosun announced that a gross statutory revenue of N237.566 billion was received for the month, which was higher than the N213.817 billion received in the previous month by N23.649 billion.

    According her, “Companies Income Tax( CIT) recorded a marginal increase even as the time for companies to file their returns is yet to fall due.”

    Of the net statutory allocation of N230.9 billion approved for sharing, the Federal Government got N122.830 billion, states  N57.229 billion; Local governemnt councils  N44.121 billion while oil producing states received N16.738 billion representing their share of 13 per cent derivation.

    The balance in Excess crude account remained unchanged at $2.261 billion.

    Meanwhile, the protesting staff of the Finance ministry have given the minister a seven- day ultimatum to meet their demand for improved welfare or face another protest.

    A source privy to the meeting between the minister and aggrieved staff told reporters that “the staff gave the notice at a brief meeting convened yesterday morning by the minister. The Minister having listened to our complaints told the staff that, there was no money to implement their demand and she urged them to be patient for the economy to improve, but we would have none of her excuse”.

  • States and free meals

    States and free meals

    •A great idea that should not be left to the states alone

    Ironically, what is popularly acclaimed by citizens as a laudable social welfare programme to reduce mass hunger among school children, improve nutrition, enhance learning abilities of pupils, increase enrollment and retention in school, while fuelling agricultural activities and creating jobs may be at risk, on account of complaints from many states that they are not financially able to participate in one of the ruling party’s cardinal programmes.

    However, if not properly managed, announcements by several states governed by the two major parties of their inability to provide free school meals for the fourth year while the Federal Government takes care of the first three years may threaten the efficiency and effectiveness of provision of free meals for pupils as from September, 2016.

    That many states have indicated their inability to provide meals for one year out of the four years scheduled for the first phase of free school meals programme may sound surprising. But in the context of circumstances of the 36 states in the last one-and-a-half years, the fear of many states to embark on the scheme may make sense. All the states received bailouts to pay salary arrears early this year and many still owe back salaries after that. A few days after release of prerequisites for states to take N90 billion naira to meet their statutory obligations, most states are already struggling to meet the stringent conditions, an illustration of desperation of most states for extraordinary assistance from the Federal Government. The circumstances appear too desperate for states to even be concerned with efforts by the central government to act as a superordinate rather than coordinate government in a federation.

    We know that some states may want to argue that since it is a project of the ruling party, they are not under any obligation to join in funding it. To some extent, they are right. But the overriding consideration should be the benefits that would accrue to the pupils and the country at large through the free meal project.

    Given the fact that Osun State has managed to sustain its school meals scheme in spite of the precarious financial position of the state since the sudden fall in oil revenue, it should be possible for other states to borrow the Osun model for just one out of four years of a worthy social welfare programme for children. For example, with regular release of local government funds sent to joint state/local governments accounts, which most often are hardly released in full and on time to local governments in many states, feeding of fourth grade students should be doable if states and local governments are willing to split the bill for the fourth year of free meals for the most vulnerable group in the population.

    In view of the raised expectations of students and their parents about free meals with effect from September, this is not the most opportune time for the Federal Government to take any chance with the take-off of the scheme. It should, therefore, fund this project for a start with the proviso that once the economy of the states rebounds, both states and local governments will share the cost of provision of free meals to students in the fourth year. This should be doable for a Federal Government that funds over 100 Unity Schools and runs National Youth Service Corps on account of national unity. Free school meals funded by the Federal Government until the economy of states improves also has the capacity to enhance national unity among students and their parents.

    But implementation of the programme must not be left solely in the hands of states that are already overstretched financially nor in another huge bureaucracy that may increase the risk of compromising the success of the initiative. The Federal Government should therefore, dedicate an agency to manage the programme while involving states, local governments, parents/teachers associations in each state, as well as credible NGOs in constant monitoring of the implementation of the programme.

     

  • Akwa Ibom ready for Fed Govt’s N90b loan to states

    The Akwa Ibom State Government yesterday said the state will be among those to enjoy the Federal Government’s N90 billion loan facility.

    The government said it had met the “sustainability analysis” required to qualify for the loan.

    Finance Commissioner Akan Okon addressed reporters in Uyo, the state capital, on the loan facility and related matters.

    Okon, in company of Local Government and Chieftaincy Affairs Commissioner Victor Antai, spoke on the economy under Governor Udom Emmanuel and the management of local government finances.

    The commissioner said the government would avail itself of the window the new loan facility offered in view of the dwindling revenue and huge financial burden facing the government.

    According to him, the state received N5.3 billion as allocation from the Federation Account in May, while its wage bill was N4.8 billion, making it difficult for the state to meet its financial obligations.

    Okon said: “I want to state that in May, we received N5.3 billion and the wage bill was N4.8 billion. With this, you can see that government is in a very tight situation.

    “With the dwindling finances experienced in the state, the government has to key into the window of the new loan facility being offered by the Federal Government.”

    The commissioner said money that came from the Federation Account to the local governments was not sufficient to pay teachers’ salaries and local government employees, much less the pensioners in the local government.

    He said the state would abide by the conditions to qualify for the loan, adding that it would enable the state to meet its financial obligations.

    Okon recalled that between June, last year, and last month, the state’s Internally Generated Revenue (IGR) was only N15 billion, adding that this was not good enough in an economic recession.

    The commissioner said as part of efforts to increase the IGR, the government had introduced e-receipt payment into its business.

    He added that electronic receipt payment would eliminate or reduce leakages in government revenue.

    Okon said the electronic receipt was a strategy to enhance the collection of the IGR.

    According to him, the e-receipt was government’s initiative to block leakages in the current manual receipt issuance to tax payers and other government transactions.

    Okon said: “Funds that sometimes get lost in the labyrinth of bureaucracy will be made available to government to provide services to the people.”

    Akwa Ibom did not apply for the first phase of bailout loan given to states last year.

    The state said it was not necessary then.

  • Five states meet N90b loan conditions

    Five states meet N90b loan conditions

    • Disbursement starts next FAAC meeting

    Five states  have completed the process for obtaining the N90 billion budget support  facility being provided by the Federal Government to state governments while one state has opted out of the  loan scheme.

    Akwa Ibom State governor, Udom Emmanuel,  told State House correspondents at the end of the 68th National Economic Council (NEC) meeting chaired by Acting President Yemi Osinbajo.

    He was accompanied to the briefing by the Kaduna State Deputy Governor, Bala Bantex, Minister of Trade and Investment, Okey Enelamah, Special Adviser to the President on Social Investments, Mrs Maryam Uwais.

    The Federal Government had earlier given 22 stringent conditions for the states to satisfy before accessing the loan.

    Emmanuel, who declined to list the five successful states and the one that opted out, said the disbursement of the loan will begin during the next Federation Account Allocation Committee (FAAC) meeting.

    He said: “The Minister of Finance, Kemi Adeosun, also briefed the Council on the Federal Government’s N90 billion budget support loan facility for states at a per cent interest rate.

    “Five states have already completed the process for borrowing from the Presidential Budget Support Facility for States, which will help states to pay salaries and other pertinent emoluments. Others states are expected to proceed to tap from the facility.

    “Though I am not the Minister, I can throw more light on the question. The N90 billion is the same thing as I have mentioned. I wouldn’t want you to call it a bail out. I want to call it the exact name that it is.

    “What the minister explained was that first tranche of N50 billion bond will be issued and the N40 billion will follow to make N90 billion. It is just to make this available; it is not compulsory, what is important is can people have access to a lifeline? You see what is happening today is not peculiar to Nigeria as a country, you know the impact of the fall in crude oil price that has actually got to oil producing countries like Nigeria.

    “What we are looking at is what are the solutions, we must provide a lifeline for people to survive and to move on, I don’t think its too much.”

    On the five states that have scaled through and the one that opterd out, he said: “As at today, this window just opened; we don’t know how many will decline at the end of it. So I think we cannot actually answer that question prematurely so that we give you the actual fact but let me explain as the minister did here the other time. There is a reconstruction going on.

    “It doesn’t actually mean that states which will take this money does not have something acruable also from the Federal Government, pending the time we reconcile our book, the Federal Government may have some balances to settle the state government but in the meantime while we are awaiting for those reconciliation to be concluded, can we open up the window so we can have access to liquidity and implement our 2016 budget, I think that is the whole idea.”

    He also disclosed that the Minister of Finance reported to the Council that the balance in the Excess Crude Account (ECA) as at June 15 this year was $2.261 billion.

    The governor also said Council was informed that work was ongoing on the forensic audit with respect to ECA payment into Federation Account and Revenue Generating Agencies (RGAs).

  • On more bailout funds for the insolvent states

    The federal government has announced that it is giving the financially insolvent states fresh bailout loans of N90 billion. It will be the third time in less than a year that the Buhari APC federal government has been constrained, against its better judgment, to come to the rescue of these 27 insolvent states with huge bail- out funds. As expected, the two previous financial bailouts did not solve the deep-seated financial problems of the states. The funds were merely used by the insolvent states to clear up part of their outstanding salary arrears. After that, new arrears of salary piled up with the affected states not being able to do anything about it. What they currently receive monthly from the federation accounts is not enough to meet their current basic monthly wage bill. And, predictably, they have not been able to generate new funds internally to fill this gap in their revenue.

    But after receiving billions of naira in previous bailouts, the report of a federal financial investigation team into the disbursement of the federal bailout funds showed that many of the governors of the insolvent states simply diverted the bailout funds to personal and other non productive purposes. The question now arises whether these federal financial bailouts provide a final solution to the worsening financial plight of the insolvent states. In other words should the federal government continue to bail out these insolvent states? Is this financially sustainable?

    I do not think so. Even if these bailouts are sustainable, it is a negation of the federal system of government for the federal government to continue to hand the state governments financial bailouts. It is tantamount to rewarding incompetent and corrupt state governments. Except in emergency situations the federal government is not under any constitutional obligation to give the states financial handouts. It derogates from the financial autonomy of the states which demands that, in a truly federal system of government, the states should generate the financial resources required by them to run their respective governments. If they are not able to do so, then they are obviously not financially viable and should be scrapped. Handing them bailouts, which have to be repaid, is an intolerable financial burden on our country and tax payers.

    These insolvent states were created during the long period of military rule in Nigeria without any thought being given to their financial viability. After independence in 1960, only the then Mid-West region was created constitutionally from the then Western Region during the Balewa civilian federal government. And this was made possible only by the 1962 internal crisis in the AG, the ruling party in the Western Region. The creation later of so many new states was a major political blunder of military rule in our country. It made military rule popular, but it did not fully consider the economic implications involved in the creation of such a large number of new states. The creation of these states was certainly politically motivated. In May, 1967, General Gowon first divided the country into 12 states. This was after Ironsi’s Unification Decree 34 of May 24, 1966, that purportedly dissolved the existing four regions into provincial administrations. The decree was unpopular in the country and led to the military ouster of Ironsi from power.  Gowon’s purpose in creating the 12 new states was to undermine Ojukwu’s bid for the secession of the so-called Biafra from Nigeria, and to legitimise his military government. The decision was popular with the ethnic minorities in the old Eastern Region that had been agitating for years for a separate state of their own; in much the same way as the minorities in the old Western Region had also been demanding the creation of a separate Mid-West state from the old Western Region. Since then, under military rule, the number of new states has increased to 36 now. The surge in oil revenues masked the fact that, without the oil revenues, most of these new states were not financially viable. With so many unviable states the centre became stronger and more financially dominant. What now pass as states were, in fact, administrative provinces inherited during colonial rule. This was why our federal system of government at independence was based on only three regions, not the multiplicity of states that we now have. The departing colonial power had refused to create new states.

    In their defence of financial bail outs, the states argue that it is the fall in their share of revenue from the federation account that is responsible for the financial mess in which they now find themselves. But the source of their financial plight goes beyond that. The truth of the matter is that they have just been as financially profligate and reckless as the federal governments we have had to put up with for a long time. Many of the state governors are under investigation by the EFCC for massive corruption. Examples of these corrupt and convicted state governors include Ibori of Delta and Alam of Bayelsa. If the state governors are thoroughly investigated as they should be, I have absolutely no doubt that the findings of such investigations will be just as shocking as the current revelations regarding the vast scale of corruption under the Jonathan PDP federal government.

    My second reason for objecting to the indefinite bail out of the states is that the federal government itself is, as we have seen, in an equally deplorable and shocking financial situation. It is desperately short of funds too and is having to put on hold many critical infrastructure capital projects. It is currently running a huge deficit budget of roughly 50 per cent and is hoping to borrow half of this year’s budget from external sources. But external lenders generally refrain from lending for budgetary support, as is the case now in our country. So, from where will the federal government get the bailout funds for the financially ailing states? The answer is that it will have to resort to more borrowing from the CBN. In other words, new money will be created to fund these insolvent states. This will have the predictable effect of crowding out borrowing by the private sector, and of undermining stability in our macro economy. Our domestic debt, already bigger than our external debt, will increase further.

    The media reported further that the federal government intends to impose some stringent financial conditions on the states being bailed out. But these conditions will not work and will not deter the governors of the states concerned from continuing with their financial profligacy in the belief that they will be bailed out again by the federal government. At that point it will be difficult for the federal government to cut them off from the bailout funds on which they will have become utterly dependent. One of the arguments advanced by the military in support of the creation of new states was that it would spread economic development in the new states to the grass roots. But that has not proved to be the case. Apart from such symbolic projects as flyovers in the states capitals, new official residence for the governors, new states assemblies, a few model colleges, and sub-standard state universities, the poor in the states cannot be said to have really benefitted from the creation of states, where the political elite continue, with unabated vigour, to cream off revenues accruing to the states. The real beneficiaries of the financial bailouts are the rich, not the poor. In fact, the poor are worse off now than ever before. We are a poor country and we cannot expect to build a prosperous economy on handouts to insurgents and militants, or on subsidies and bailouts to insolvent states. A few years ago hefty financial bailouts were given to the commercial banks. Are they healthier or more efficient now? Many of them are already in distress.

    The long term solution to this lingering financial mess in the states is to device the constitutional means of reducing the number of states to not more than 12. It is even better to collapse them into six regions. This is what the call for the restructuring of Nigeria’s federalism should be about. It is far easier and more economical to manage six or twelve states than the existing 36 with all the paraphernalia of pseudo governments that cannot inherently carry out their basic financial obligations. Obviously, this will be politically difficult. The only alternative is for the federal government’s share of the national revenue to be reduced and distributed among the states. But while the existing 50 per cent share of the federal government in the national revenue is too large, due care should be taken in this regard. We cannot afford to have a weak federal government that is placed in such an invidious financial situation that it cannot carry out its basic responsibilities to the nation in defence, national security, and external affairs, Already the corporate existence of our country is being threatened by several centrifugal forces. We need a strong federal government and institutions to hold our fragile country together.