By Golu Timothy
Am worried about the future of the country, especially the heavy reliance by the majority of the states on the federation account to run governance and provide for their people. Many states of the federation have no any source of getting meaningful revenue except the one that comes through the Federation Allocation after the sales of the nation’s chief foreign earner.
Whenever the monies come, they are immediately shared according to a table formula and then wait for the next month to get another allocation. Each state gets according to how many daily barrels per day are sold and at what benchmark. If the sales are high, the benefits are equally high but when it is low, the harvest is also low.
So the risk involved in this continuous circle of game is dangerous for a developing and growing nation like Nigeria. The giant of Africa should have a stable source of multiple financial channels so that it is not crippled by waves of recession and lack.
As it is now, only a handful of states can survive if the revenue from the sale of crude dries up because not many have independent sources of getting money.
Even though the matter did not start today, it requires that those running our governments must be more worried as never before on the severe consequences of neglecting to build alternatives for national socio-economic survival.
The price of oil in the international market keeps fluctuating with unpredictable outcomes and at the same time, many countries of the world are also developing their crude potentials, especially those who look up to Nigeria for supply. At the same time, the global utility value of oil keeps diminishing. God forbid, one day and probably soon, most developed nations of the world may not need oil or crude to service their nations and what becomes of our oil or crude, no matter how available.
The question will be, what can Nigeria sell to the outside world, what will be our gross domestic export if what we have is not needed by the world?
Why can’t we diversify in the face of the many natural resources that we have untapped , lying dormant in almost all our communities?
There is no community, local government, and state in Nigeria that is not blessed with natural resources like mineral deposits needed for the manufacture, production and development of products and services across the world. We have a lot of these mineral resources as untapped deposits underneath our soils.
While some few states like Rivers, Delta, Bayelsa, Akwa Ibom, Ondo, Cross River receive more than the others at the end of every month on account of advantage of the derivation principle, such cannot also survive if and when the chief export earner is no longer available.
Except for Lagos state whose major source of money is its huge internally generated revenue from huge business adventures, no other state has this advantage. That’s why the state did not feel any financial pain when the former regime of President Olusegun Obasanjo withheld its eight months subvention running into billions of naira. Lagos boasted of a capacity to borrow the federal government even under that condition.
But can any state of the federation crack this joke? Even states like Rivers, Bayelsa, Akwa Ibom, Cross River, Ondo, Delta with additional funds from the 13 % derivation cannot survive once the sale of oil and crude is hampered. This is because their huge revenues are not internally generated but derived from FAAC.
This is not to sound alarmist, but our nation is sitting on a time bomb as far as revenues needed for development and sustainable development is concerned. The nation was impressed with the discovery and exploitation of gold deposits in Zamfara State. Within a short time, the then leadership of the state moved quickly to commence work on it. For many years both the federal and state governments kept talking about discoveries of oil, gold, columbite, coal, etc in many locations but without action to tap it.
State budgets which are mostly deficit budgets are funded mainly from FAAC sources with little from IGRs. Most other times, the states and even the federal government have no choice but to borrow from banks, other loan capable agencies or international institution like the World Bank, etc.
I remember the fervent appeal of the national assembly to the federal government and those from state assemblies to Governors to quickly explore all minerals available so that the states don’t suffer whenever oil prices crash or the commodity can no longer sustain development and governance.
Since the present administration came to power in 2015, it has been more of sing songs than action concerning this serious issue.
Diversification into other available lucrative economic areas like agriculture, mining, tourism, are long overdue. There is no state in Nigeria that does not have in abundance the mentioned areas of advantage. Many states have borrowed to embezzle instead of borrowing to invest in new areas that can bring more resources and wealth. Many other states have borrowed to settle political patronages and linkages at the expense of development.
The agricultural potentials of Nigeria are countless and limitless. From Sokoto to Maiduguri, Yola to Taraba, Cross River to Ebonyi, Benue to Plateau and Niger to Kebbi, the potentials are legion, but the strong political will to do this is very weak.
Even without the much talked about restructuring, the federating units can take the bull by its horn to launch into the deep. There is nothing sweeter to be self-sufficient and independent, buoyant and strong to cater for yourself and help others in need