Fiscal federalism and the National budgeting question

Like the americans would say ‘It’s all about the Benjamins’, in reference to the man on the US $100 bill. In Nigeria as well, all the noise we make, all the quarrels and name-callings, all the anger and mutual distrust and sometimes disdain and hatred, could be traced to the larger contention about who gets […]

Like the americans would say ‘It’s all about the Benjamins’, in reference to the man on the US $100 bill. In Nigeria as well, all the noise we make, all the quarrels and name-callings, all the anger and mutual distrust and sometimes disdain and hatred, could be traced to the larger contention about who gets what. It is all about the money here too.
The first issue is about our budgeting.  By now, Nigerians have read many accounts from people who have worked in government, detailing exactly how each budget is arrived at.  I will recall an article written by Olusegun Adeniyi, in Thisday Newspaper of 28th November 2013, titled “The Illusion of Budget Performance”.  In that article, the one time Special Adviser on Media to an ex-President, succinctly captured the process of budgeting for what it is; you sit down in your office as an executive in government, and you get this memo that asks you to draw up the budget for your department for the next year (usually in the middle of the previous year).  You scratch your temple, thinking about what project to spend on, until someone gives you a bright idea, and pronto! You have a budget that you can defend. It all depends on your whim and current circumstance. And of course many times, on how much money you want to make from the process.
In his own instance, he had made a budget to build a conference centre in the ex-president’s hometown. It was approved but he didn’t eventually spend the money. The president in question, eventually died in office. If he has gone ahead, that project would be sitting there; another ‘white elephant’ as we call them.
This brings up a critical question about the disconnect between those who generate the funds, and those who spend the funds in Nigeria.  More specifically, it calls to question what exactly we spend money on, given the critical challenges on hand.  Just how de we prioritise? And is there a way of really ‘democratising’ our budgets, such that the true will of the people being budgeted for will prevail at each point in time?  This may be a good point for the ongoing conference to ponder about.        
Many Ministries, Departments and Agencies (MDAs), are known to incur particular capital expenses, year in, year out. A lot of our spending goes on things like cars, SUVs and other appurtenances of office to make life easy for the executives. The Adamu Fika Committee on Public Finance, inaugurated by the current administration, submitted a damning verdict; that over N1.13Trillion – 25% of our entire budget, or 40% of the recurrent budget – is being spent on 18,000 top executives in Nigeria. That report is gathering dust somewhere, totally ignored and never to be implemented.  We know the truth. The current conference may even be an overkill. Or a waste of some more precious billions as some have said.  Nigerians quarrel on the streets and call each other names, while it seems certain that we are not ready to make real changes at all.
The contention on the streets, and perhaps the so-called justification for the ongoing conference, quickly boils down to so much bitterness about tribe and religion.  Some Nigerians believe that most of the money is being made from their region, and spent by another region. The rhetoric has gone on for several years, coalescing into hard myths from which the nation can no longer escape. The few voices of reason, who have tried to let Nigerians know, that the real issue is recklessness, and a lack of consensus on the part of elites, and the lack of public orientation in our national spending, have been silenced. It is better to get the argument going on an ignorant level, as it is presently, so that those who have advantage could continue to retain that position, they reckon. Budgeting still continues to be done with the identified disconnect between the people and government, and between MDAs who should cooperate and share services but prefer to exists as silos – each and everyone a fiefdom of the reigning Minister, DG or ES.  It is the Nigerian thing; nobody cooperates.  And monies get wasted even when we are obviously short.
So the critical concern of the current conference becomes Fiscal Federalism. Indeed, no one would even mention the issue about Budgeting, for that also calls to question the fact that the conference itself is a product of that kind of whim I mentioned earlier. The president never believed in the idea of a national conference but woke up one morning and it was the best idea in the world.  That whim will cost Nigeria at least N7billion. Already, some of the delegates are calling for the nation to pay for their aides, assistants and drivers. Nigerians never let an opportunity to ‘max out’ slip them by.
Fiscal Federalism is that idea whereby those communities who produce the resources have total jurisdiction, control and benefit, from and over those resources. But I prefer to split some hairs here, and see things differently. Say, what is the difference between Abuja controlling all the money, and say Uyo, which has no oil, controlling the oil and gas resources of Eket?  I mean, what gives Uyo the right to control Eket’s resources? Are they not distinct entities, one from the other?  In another word, what gives a governor the right to sit a hundred kilometres away, and control resources of communities of which he is not an indigene, if the issue is indigene-ship? What invalidates a president sitting 1,000 kilometres away and doing the same thing?  I mean, is there a distance which invalidates this total and inordinate control of someone else’s resources?
I wager that the issue should not boil down simply to distance.  I humbly proffer instead that we consider the issue of fiscal federalism with a lot more insight; that we think deeply about what exactly we want to achieve with our country.  I urge that we not be propelled to take decisions, based simply on the disdain, the prejudices, the old stories that exist among us.  Indeed, the call for total resource control, is a call to anarchy, as accountable as it may seem on the surface. For it leads to a scenario where within the same country, some ‘states’, or communities have so much money to spend than they known what to do with, while others are forced to raise taxes and pursue their citizens all over the place in the bid to wring out these taxes, just to pay teachers’ salaries.  In fact, it is a call to the impoverishment of some into perpetuity, while others continue to have what they do not know what to do with. As we speak, Akwa Ibom State is on the verge of creating a Snow Resort, after what obtains in Dubai, while some states are struggling to meet up with staff salaries. We have set this country on a deadly path.  Are we really so buoyant as to be importing snow? Are we already as advanced as Dubai? Have we met our people’s basic needs, even in Akwa Ibom, like Dubai?
Yes, this upcoming economic apartheid will make some states think harder but converting vision to bankable projects and into state profits, is a long process.  Agricultural states cannot decide to set prices of food as they like in a bid to maximize profits. If they do, they will cause much anguish to those at the bottom of the ladder.  States where hydroelectric dams exist for example, cannot also block the dams, even though they may be right in demanding for extra income from the country for these resources. On the whole however, we are on the path to creating a dog-eat-dog society, where we all bark at each other in this resource-sharing palaver.
We need to go back and think about what exactly is meant by nationhood, and determine whether we are ready for that phenomenon.  In my own research, part of what constitutes nationhood is the willingness to share, and never complain about it. Before the fiscal federalism thing will work, what needs to first be done, is to abolish tribes and state of origin. If we don’t, we will only create apartheid in our country.  If we are able to abolish tribalism and nepotism, then we would urgently need to teach our people the art of being considerate.  Yes, Nigerians need to be less hurtful to each other.
In the meantime, a critical issue for the conferees, is to determine just how much of the territorial waters of a country is owned by the communities who border the waters of the country.  I believe we should be very cautious about this, even though we should compensate them generously for pollution and environmental distortions.  Another critical issue is for us to determine to curb corruption in public service, and ensure budgets are not flights of fancy, but actually have profound impact on the people. Even the Medium Term Expenditure Frameworks and the fledgling development plans, need another rethink and more scrutiny.