Uche Usim; Adewale Sanyaolu The Director General of the Bureau of Public Enterprises (BPE), Mr. Alex Okoh, has raised the alarm that about 37 percent of privatised firms are non- performing. Okoh, stated this when he received members of the House of Representatives Committee on Privatisation, led by its Chairman, Alhaji Ahmed Yerima, who were on…
The above question arose in my mind and got me thinking a long time ago when my State, Osun, was in the news on its account. The question elicited criticisms of the state governor, Rauf Aregbesola, among civil servants, not only in Osun but all over. Osun soon became the poster boy for states that were not up to date in salary payments. The criticisms were rife and unjustified, as states which we all know could not pay salaries for eighteen months or two years weren’t noticed in the media as Osun, which probably owed just a couple of months of modulated salary arrears.
Sometime last year, I had to engage a very popular radio On-Air Personality based in Lagos on the true situation of things in Osun. He was hitherto fond of using Osun as an example of what he termed “bad governance” until he, according to him, found out the truth. He profusely apologised on national radio to “this man, Aregbesola, whom we have all unfairly disparaged”. What was the reason forthis misrepresentation? It was not for lack of adequate information from the state government’s information handlers, but the penchant for morbid stereotypical reasoning which our media has not, even till date, corrected or condemned.
Thank goodness, Osun has finally gotten out of the mess of inability to pay salaries, allowances and pensions up to date. The modulated salary payments agreed to by labour and government have also ended as Osun has commenced paying full salaries to all categories of staff in its employment, and is up-to-date. But, this is not the crux of this essay.
Few weeks back, a prominent national daily, in its editorial comments asked a similar question as headlined above. The editorial board was of the opinion that payment of salaries by government should just be one of several other responsibilities of government. That explains why budgets are oftentimes segregated into two broad areas: capital and recurrent expenditures.
One is for real development like educational infrastructure, roads, health infrastructure and others while the recurrent is mainly to pay wages, salaries, pensions and other costs of running government. But, because over the years, citizens see government as the big father, almost everyone sees it as the indisputable provider of livelihood. This is not unconnected with the fact that we have all failed to see an alternative to government as provider, even though better alternatives in entrepreneurship, creative thinking as well as trade, continue to stare us in the face.
For example, going to school to obtain degrees and diplomas is meant to equip us adequately to be self-reliant. But, over the years, we’ve been made to believe that going to school is a certificate for a free meal from government. You can say anything concerning our brothers in the Southeast but one thing that distinguishes them from the rest of us is their spirit of self-reliance. They probably are aware, maybe through experience or instinctually, that the Nigerian educational system does not really prepare one for self reliance, hence they are wont to jettison it and go straight into trading or other vocations. That’s probably why many of them make it at a relatively younger age than their contemporaries who have quite a very long period of conventional schooling in other parts of the country.
Now, according to the board of editors of the national tabloid referred to earlier, “Governor Rauf Aregbesola exposed the precariousness of the current template by his admission that personnel costs alone amounted to over 85 per cent of the total revenue that accrued to Osun State between July 2015 and November 2017.
This is typical of most other states and the message must be rammed home that apart from the primary role of protecting life and property, governments exist to galvanise the people for productive activities. “The 36 states and 774 local government councils must understand that they are not constituted only to pay salaries and pensions”.
The editorial cited a Canadian government policy document which states that regional or state governments are a geographically larger level of government over existing municipalities to provide area-wide municipal functions more economically and to establish a tax base sufficient to undertake necessary new services. If this is the case states exist mainly to provide services and infrastructure as well as generate funds through taxation to provide the aforementioned.
Unfortunately, incompetent governance, dishonesty, fear of public opinion and a misunderstanding of what government stands for have combined to make us believe that governments are in office to pay salaries only.
This self-destructive model must give way to a more rational public finance management system. The solution must begin with a proper diagnosis of what went wrong: the overthrow of fiscal federalism. It is a slide rich in irony; for when Nigeria first codified the federal principle through the 1954 Macpherson Constitution, it “provided fiscal autonomy to its three regions both over expenditure decisions and over a local revenue base (consisting primarily of mining rents, personal income tax and receipts from licences). Centrally collected revenues, primarily from export, import and excise duties, were distributed to the regions based on the derivation principle,” according to a World Bank report. This allowed vibrant, self-sustaining regions and LGs that competed fiercely and ran successful administrations. But the violent intrusion of over-centralising military rule since 1966 gradually eroded fiscal autonomy with multiple new states and LGs completing the descent that has turned today’s states and LGs into beggars.
According to this board of editors, and which I absolutely agree to, there is no alternative to radical reform; funds are simply no longer there to waste. The World Bank reports that, globally, regional governments are increasingly deploying Information Communication Technology to increase accountability, sustainability and quality of service. The about 600 federal ministries, departments and agencies should be pruned with similar cost-cutting at the states and LGs.
Governments should downsize their outsized bureaucracies but deploy staff and school leavers to more productive ventures in agriculture, trades and vocations as office works are better automated than use of men in order to free resources for rural infrastructure and make their states magnets for investments in agriculture, mining and SMEs.
Akinola is development analyst