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| Tolu's Caricature |
This week I promised to focus on Nigeria’s state governments, the second most powerful nodes of political power in Nigeria’s federal system, after the hugely powerful centre. It is a testament to the clout of Nigeria’s Governors that, since 1999, only one of the five men who have held presidential and vice presidential power has never been a Governor. Governors are also more likely, than any other section of the political class, to end up as Federal Ministers and Senators.
The power of Nigeria’s state governors comes mainly from the oil wealth that gets shared to them monthly, from the federal government. There’s a complicated formula that guides this sharing. 52.68 percent of everything that goes into the Federation Account – oil earnings up to the benchmark price, less the 13 percent derivation that goes to oil producing states; Customs revenues less the cost of collection; and Company Income and Value Added Taxes less the cost of collection – goes to the Federal Government, leaving the states and local governments to share the remaining. It is this Federation Account allocation that state commissioners of finance travel monthly to Abuja to collect. Oil producing states, as I mentioned earlier, also get to share a derivation fund that is 13 percent of oil revenues based on the benchmark price fixed annually by the Ministry of Finance. To augment Abuja’s monthly allocation the states depend on internally generated revenues – mainly taxes, including PAYE, and land use charges.
In 2013 the states that got the biggest chunks of Abuja oil money were, in this order: Akwa Ibom, Rivers, Delta, Bayelsa, Lagos, Kano, Katsina, Oyo, Kaduna, and Borno. Wide gaps exist between the states, so that Akwa Ibom in 2013 received almost three times as much as Borno, tenth on the list. States like Ekiti and Ebonyi, belonging to the bottom of the list, receive only a fraction of what the richer states get. Take June 2013 for example: that month, while Akwa Ibom collected 30 billion naira, Rivers, 25 billion, and Lagos 16 billion, Ekiti got 6.9 billion, while Ebonyi got 6.4 billion.
First it is important to note that, because of the meagerness of their internally generated revenues, most of Nigeria’s states are almost wholly dependent on the monthly cheques from Abuja. Cut that supply and, as I said last week, they would be comatose entities, unable to pay workers’ salaries, or build roads and schools and hospitals. Of the handful of independent states, Lagos lies at the top – at least two-thirds of its budget is funded from internally generated revenues, and it is the state most likely to survive the steep drop in Abuja allocations that will define 2015.
Now, what do state governments do with the monies they receive, from Abuja and from internally generated revenues? For many states, most of it is used to pay salaries. Public service jobs, researcher Olly Owen recently pointed out to me, “are in effect social security in Nigeria, the only direct cash transfer citizens get.” I very much agree. The civil service is the closest thing we have to a social security system. It is the largest safety net in the country, allowing millions of people to earn a living that is not in any way tied to productivity.
At the beginning of this year Osun State publicly lamented the state of its finances. In a statement, the government noted that its share of Abuja’s oil wealth has gone down from 4.6 billion naira, to 1.1 billion naira. The state’s monthly wage bill: 3.6 billion naira. Osun is not alone. Governor Suswam of Benue says that the state civil service – an estimated 29,000 people – consumes 3.1 billion naira monthly in salaries and wages. Now it doesn’t even get that much in monthly allocations, and is now one of several states owing salaries. With all these states struggling to even pay salaries, there is no chance of having any money to invest in infrastructure. Even wealthy states like Akwa Ibom are feeling the pinch. In 2014 the state put out a budget of 498.4 billion. At the end of the year it didn’t even receive up to half of that; it ended up spending only 221.4 billion naira, according to Governor Akpabio.
It’s only going to get worse. As the oil price slump continues, state governments will have to ask themselves tough questions about their spending patterns, and revenue generation ambitions. One thing is not in doubt: that the personal appetites of governors for state funds will have to reined in. Governors will need to, in these times of austerity, trim their patronage machines.
There’s a Bible verse that for Nigerians justifies the view that public officials are allowed to reasonably partake of the abundance of public office. “You know that those who work in the temple get their food from the temple and that those who serve at the altar get their share of its offerings, don’t you?” the Apostle Paul says in 1st Corinthians 9:13. It’s the same point that Mr. Diepreye Alamieyesigha was making, when he said, in an interview while he was still Governor of Bayelsa (I got the quote from the book, A Paradise of Maggots, by academic and journalist Wale Adebanwi), that “there is no person in this world that works in the exalted position of a governor or president that would say he is a perfect human being, that depends solely on his salary! Nobody is a saint. My salary is 74,000 naira.” The problem, many would say, was that he went overboard in his erasure of the line between private and public money. He paid a steep price for it, a price that not even his recent rehabilitation by President Jonathan will be able to compensate him for. James Ibori was just as unlucky; unlucky because there are many other Governors who were as corrupt as they were but got away with their antics.
Now, in these days of austerity, governors will need to realize that eating from the altar should not at any time cross over into eating the altar. One place to start cutting down on the appetites for state funds is the security votes, the special allocations that governors and the president get, to fund the maintenance of peace and security in their jurisdictions, and for which they do not have to seek appropriation or make account. The sums vary from state to state, usually running into hundreds of millions of naira every month, and are almost always a state secret. When Rochas Okorocha became Governor of Imo State in 2011, he announced that he was slashing his security vote from 6.5 billion naira per annum, to 2.5 billion, to enable him fund the state’s free education programme. Now I have no idea if that was simply one of those promises politicians make, but have no intentions of keeping, or if indeed he has kept it.
There is at least one NGO that is campaigning for the abolition of security votes across Nigeria, citing the propensity of governors for looting it. Knowing Nigeria, security votes will be with us for some time to come. But state governors will have to start realizing that when un-curtailed appetites meet diminishing resources, disaster is certain to happen. Citizens and civil society also ought to realize that state governors deserve to be placed under the harsh light of determined public scrutiny, to the same extent to which we are learning to put the almighty federal government. Our state governors are getting away with delivering too little value compared to the size of the resources entrusted to their care.
In 2013 the states that got the biggest chunks of Abuja oil money were, in this order: Akwa Ibom, Rivers, Delta, Bayelsa, Lagos, Kano, Katsina, Oyo, Kaduna, and Borno. Wide gaps exist between the states, so that Akwa Ibom in 2013 received almost three times as much as Borno, tenth on the list. States like Ekiti and Ebonyi, belonging to the bottom of the list, receive only a fraction of what the richer states get. Take June 2013 for example: that month, while Akwa Ibom collected 30 billion naira, Rivers, 25 billion, and Lagos 16 billion, Ekiti got 6.9 billion, while Ebonyi got 6.4 billion.
First it is important to note that, because of the meagerness of their internally generated revenues, most of Nigeria’s states are almost wholly dependent on the monthly cheques from Abuja. Cut that supply and, as I said last week, they would be comatose entities, unable to pay workers’ salaries, or build roads and schools and hospitals. Of the handful of independent states, Lagos lies at the top – at least two-thirds of its budget is funded from internally generated revenues, and it is the state most likely to survive the steep drop in Abuja allocations that will define 2015.
Now, what do state governments do with the monies they receive, from Abuja and from internally generated revenues? For many states, most of it is used to pay salaries. Public service jobs, researcher Olly Owen recently pointed out to me, “are in effect social security in Nigeria, the only direct cash transfer citizens get.” I very much agree. The civil service is the closest thing we have to a social security system. It is the largest safety net in the country, allowing millions of people to earn a living that is not in any way tied to productivity.
At the beginning of this year Osun State publicly lamented the state of its finances. In a statement, the government noted that its share of Abuja’s oil wealth has gone down from 4.6 billion naira, to 1.1 billion naira. The state’s monthly wage bill: 3.6 billion naira. Osun is not alone. Governor Suswam of Benue says that the state civil service – an estimated 29,000 people – consumes 3.1 billion naira monthly in salaries and wages. Now it doesn’t even get that much in monthly allocations, and is now one of several states owing salaries. With all these states struggling to even pay salaries, there is no chance of having any money to invest in infrastructure. Even wealthy states like Akwa Ibom are feeling the pinch. In 2014 the state put out a budget of 498.4 billion. At the end of the year it didn’t even receive up to half of that; it ended up spending only 221.4 billion naira, according to Governor Akpabio.
It’s only going to get worse. As the oil price slump continues, state governments will have to ask themselves tough questions about their spending patterns, and revenue generation ambitions. One thing is not in doubt: that the personal appetites of governors for state funds will have to reined in. Governors will need to, in these times of austerity, trim their patronage machines.
There’s a Bible verse that for Nigerians justifies the view that public officials are allowed to reasonably partake of the abundance of public office. “You know that those who work in the temple get their food from the temple and that those who serve at the altar get their share of its offerings, don’t you?” the Apostle Paul says in 1st Corinthians 9:13. It’s the same point that Mr. Diepreye Alamieyesigha was making, when he said, in an interview while he was still Governor of Bayelsa (I got the quote from the book, A Paradise of Maggots, by academic and journalist Wale Adebanwi), that “there is no person in this world that works in the exalted position of a governor or president that would say he is a perfect human being, that depends solely on his salary! Nobody is a saint. My salary is 74,000 naira.” The problem, many would say, was that he went overboard in his erasure of the line between private and public money. He paid a steep price for it, a price that not even his recent rehabilitation by President Jonathan will be able to compensate him for. James Ibori was just as unlucky; unlucky because there are many other Governors who were as corrupt as they were but got away with their antics.
Now, in these days of austerity, governors will need to realize that eating from the altar should not at any time cross over into eating the altar. One place to start cutting down on the appetites for state funds is the security votes, the special allocations that governors and the president get, to fund the maintenance of peace and security in their jurisdictions, and for which they do not have to seek appropriation or make account. The sums vary from state to state, usually running into hundreds of millions of naira every month, and are almost always a state secret. When Rochas Okorocha became Governor of Imo State in 2011, he announced that he was slashing his security vote from 6.5 billion naira per annum, to 2.5 billion, to enable him fund the state’s free education programme. Now I have no idea if that was simply one of those promises politicians make, but have no intentions of keeping, or if indeed he has kept it.
There is at least one NGO that is campaigning for the abolition of security votes across Nigeria, citing the propensity of governors for looting it. Knowing Nigeria, security votes will be with us for some time to come. But state governors will have to start realizing that when un-curtailed appetites meet diminishing resources, disaster is certain to happen. Citizens and civil society also ought to realize that state governors deserve to be placed under the harsh light of determined public scrutiny, to the same extent to which we are learning to put the almighty federal government. Our state governors are getting away with delivering too little value compared to the size of the resources entrusted to their care.
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