How states can raise IGR

By Lekan Sote

Many Nigerians argue that the Nigerian Constitution is loaded
too much in favour of the Federal Government, and it becomes
extremely difficult for sub-national governments – states and the
local governments – to be economically viable.

A recent National Bureau of Statistics report indicates that
whereas 21 states were able to attract $14.31bn in the first half
of 2019, 15 others, namely, Abia, Bayelsa, Ebonyi, Ekiti, Gombe,
Jigawa, Enugu, Kebbi, Kogi, Osun, Plateau, Sokoto, Taraba, Yobe and
Zamfara, could not.

And the Edo State Governor Godwin Obaseki complains: “I just
could not understand why the Oredo Local Government Area… on a
monthly basis cannot earn more than N5m as tax (revenue).”

Lagos State’s capacity for relatively higher internally
generated revenue comes from hosting the biggest ports in an
export-oriented economy.

Vice President Yemi Osinbajo, who appears to acknowledge the
plight of sub-national governments, suggests that states can raise
their IGRs by: strategic planning; taking advantage of their
comparative advantage in agriculture; and encouraging
entrepreneurships.

Atedo Peterside of the StanbicIBTC Bank has observed that the
dearth of Foreign Direct Investment in Nigeria is attributable to
structural imbalances in the system. To correct that, he suggests
that (Nigeria must)… enact laws that provide clarity and reduce
uncertainty for investors.”

The place to kick-start this is via a review of the constitution
to enable state and local governments to initiate mechanisms that
will provide an enabling environment to improve their domestic
economies and shore up their internal revenues.

In expressing his idea of restructuring in Nigeria, Jerry Agada,
a former Minister of State for Education, says: “The centre should
not be too powerful, so that all the federating units can have
their own self-actualisation that would augur well for their own
system.”

Peter Omonua, a Nigerian, resident in Canada, who is probably
sympathetic to the cause of the Indigenous People of Biafra
separatist movement, observes that, “There is so much hunger in the
people of the (Nigerian) South collectively, to break forth and set
the stage for the emancipation of (themselves) and the Black race
as a whole.”

Omonua quotes the late Olanihun Ajayi, an apostle of Obafemi
Awolowo, first Premier of Western Nigeria, who said: “The best
thing for (Nigeria) is to concretise (its) six geopolitical
regions. Each region (will) manage its own affairs, with little
(interference from) the Federal (Government).” Diversity should
thrive within democracies.

Dare Babarinsa, renowned journalist of the defunct Newswatch
magazine fame, regrets that the Federal Government is unable to
complete the rehabilitation of the Lagos-Ibadan Expressway in 19
long years! He suggests a South-West Development Authority charged
with infrastructure development throughout the Yoruba land.

He also suggests six- or 10-lane roads linking state capitals
throughout the South-West, Kogi and Kwara states. He also thinks
the region should develop a cadre of youths with very much needed
“competence in plumbing, carpentry, automobile mechanics, and other
trades.”

Other zones should identify their needs.

Senator Banji Akintoye, who declared, at the Yoruba World
Congress that, “It is (either) restructuring (some say,
decentralisation), or dissolution,” was not threatening
insurrection. He was merely alerting those who insist on
maintaining the country’s current precarious state of affairs.

Now that Shehu Garba, Senior Special Assistant to the President
on Media and Publicity, says, “If the (National Assembly) says
(restructuring) is the way to go, President (Buhari) will consider
it,” maybe, all the states should instruct their representatives at
the National Assembly to go for it immediately!

The presidential Economic Advisory Council should interrogate
Section 16(3 and 4) of the constitution, to review ownership and
control of business enterprises that have been declared as major
sectors of the economy.

But Gen. Alabi Isama (retd.), who argues that “Awolowo (ignored
constitutional stumbling blocks and) went to look for what was
better for (the Yoruba),” queries, in his lilting English, “What
stops (Oyo State from) owning its own airline?”

Isama wonders why Oyo State could not apply its tax revenue to
providing pipe-borne water for its citizens, or apply for an oil
well to shore up its revenue, noting that government has given oil
blocs to individuals.

Governor Nyesom Wike just announced Rivers State’s acquisition
of 45 per cent in the Shell Petroleum Development Company’s Oil
Mining Lease in Eleme Local Government Area. That is the way to
go!

It would have been more appropriate if the intention of the
United Arab Emirates investors to establish a 300-mega watts
renewable energy generating plant in Lagos State was discussed with
the state government, instead of the Federal Government.

After all, Section 14(a,b and c) of the constitution provides:
“A (State) House of Assembly may make laws for the State with
respect to: electricity and the establishment in that state of
electric power stations; (and) the generation, transmission and
distribution of electricity (in that state.)”

With such a provision in the Concurrent Legislative List of the
constitution, the Lagos State Government should not wait to be
propositioned by the Minister for Power, before giving a licence to
the UAE investors, who are interested in generation, transmission
and distribution of electricity.

Openings are likely in that sector soon. An advertorial hints
that the Nigerian Electricity Regulatory Commission may revoke the
licences of the eight electricity distribution companies, and Ikeja
Electricity Distribution Company, which supplies electricity to the
Lagos metropolis, is one of them.

Lagos State should further activate its electricity board that
was established in 1980 “to establish in-state electric power
stations; (and) generate, transmit and distribute electricity to
areas not covered by the national (electricity) grid,” among other
things.

Records indicate that the board has inaugurated four power
plants, namely, Island, Alausa, Mainland and Pennisula and one
transformer factory. With all these in place, and a constitutional
backing, one wonders why Lagos State, and other states, continue to
complain that the Exclusive Legislative List, and its
understandable ouster clauses that make federal laws superior to
state laws, are holding back their hands.

At least, no one has held back the hands of the Imo State
Government that built the Sam Mbakwe Airport or Akwa Ibom State
that established Ibom Air despite the fact that aviation is on the
Exclusive List.

Certainly, state governments cannot truthfully sustain the alibi
that the Exclusive List prevents them from reviving their cocoa,
groundnut, palm oil, rubber, cotton and hides and skins production
and export businesses.

If private businesses can play in the oil, aviation,
telecommunications, electricity, and foreign exchange businesses,
nothing stops states from receiving part of their monthly
Federation Account Allocations in hard currencies as some governors
are suggesting.

If the Federal Government continues to give excuses like
inadequate funds, finds ways to scupper states’ development, and
fails to invest in infrastructure to grow the economies and IGR of
states, the state governments must seize the initiative.

When, for instance, former Governor Ibikunle Amosun told the
Ijebu people of Ogun State East Senatorial District that he would
scrap Tai Solarin University of Education, they told him to steer
clear, and demonstrated readiness to fund and operate the
university.

It’s the same way many missions are taking back their schools
from government, and old students’ associations are intervening in
rehabilitating their old schools for the benefit of the current
students.

Now is the time to interrogate the constitution to find out how
much constitutional leeway states have to grow their economies and
IGRs.

– Twitter @lekansote