Lamentation To save Nigeria from bankruptcy 

EARN MONEY: I Use QUIZBANGO To Take Quiz And They Pay Me Per Day. CLICK TO JOIN,

Supported Countries Include: Nigeria 🇳🇬, Ghana 🇬🇭, Kenya 🇰🇪, South Africa 🇿🇦, Uganda 🇺🇬, Tanzania 🇹🇿, Rwanda 🇷🇼

You Too Can Make Money Online Taking Quiz

CLICK TO JOIN NOW and GET PAID TO TAKE QUIZ


Various stakeholders have once again expressed grave concern about the current faulty and virtually unsustainable structure the country operates and only restructuring can save the state from the brink of bankruptcy.  In a recent webinar organised by some stakeholders on the mitigation of the economic impact of and the path to recovery for the Nigerian economy, the immediate-past Emir of Kano and former Governor of the Central Bank of Nigeria, Muhammadu Sanusi, expressed serious concern that the current governance structure could lead the country to an avoidable bankruptcy.

The lamentation, which focused largely on the economic sustainability of the current Nigerian federation, presents us all an opportunity to revisit the discussion on the future direction of the country. For example, a clear indication of the unsustainability of the current governance structure in Nigeria is the recent spate of public borrowings. The key question is whether sustainability of the economy can be guaranteed if the current governance structure is maintained. Although the Federal Government, in apparent concern in this regard, set up the Economic Sustainability Committee under the headship of the Vice President, Yemi Osinbajo. The terms of reference did appear to have addressed the core issues about the country’s sustainability in the long term. Its findings, as reflected in their report indicate that lots of challenges exist in virtually every sector, which must be addressed frontally for the country to have any hope of long-term sustainability. It, however, did not envisage or suggest a change in the political governance structure of Nigeria.

Currently, the country invariably operates a unitary system of government, though on the surface, it is a federation. The framers of this structure probably did not take into account the viability of the various components or sub national governments in coming out with what is currently being operated. The country has 36 state governments and 774 local governments and majority of these are not viable and must go cap in hand to the Federal Government every month to obtain their means of sustenance. The structure is therefore too expensive and unsustainable. The question that many, including the former emir of Kano, have asked is for how long can this unsustainable structure be maintained. For example, the level of internally generated revenue by most of these sub national governments across the country is virtually paltry thus calling to the fore the need to redesign the country’s governance structure to enhance sustainability. This proposed redesign should not only be economic but has to be political also. The advent of has laid bare the fragility of the current structure and it is feared in many circles that many state governments would not be able to pay salaries in the foreseeable future, if the current structure persists.

ALSO READ >>  CBN, Bankers Committee takes over National Theatre for renovation

The economy has been going through the cycle of booms and burst, particularly since the country adopted the unitary system of governance and it is becoming evident as the days go by, that Nigeria needs a paradigm shift. The current economic structure and rigmarole simply cannot be sustained. The volatility of the global oil market indicates clearly that the country’s economic prospects appear dim. Even recently, the country’s economic outlook has been downgraded by Fitch international rating agency. Economic diversification as widely articulated in the government’s Economic Recovery and Growth Plan, (ERGP) has not yielded the desired results and the country still depends on oil as its main source of foreign exchange earnings. Inflow of remittances has dwindled, the naira exchange rate has depreciated significantly, foreign reserves are falling by the day and the inflation rate is on the increase and funds available for sharing at the Federation Accounts Allocation Committee meetings have been dwindling over time.  All these are outcomes of running a faulty governance structure.

ALSO READ >>  4 Common Cybersecurity Problems Plaguing Financial Firms

The response to this challenge by the Buhari administration has been less than inspiring. For instance, instead of drastically reducing its budget size for 2020, despite the serious downturn in the oil sector, it simply resorted to unbridled excessive borrowing, which has jeopardised not only the fortunes of the future generation but also that of the present. Lots of questions arise in this regard. Why is the government finding it difficult to reduce the size of the budget? Why is the country still operating a bi-cameral legislature when it is becoming clearer by the day that the country can hardly sustain it financially? Why is the President still maintaining a large number of aircraft in the Presidential Fleet, at very high cost to the tax payer, when the streams of national income are dwindling? Indications from the global economy as evidenced by a recent World Bank report predict that the pandemic will cause the worst global recession since World War II, with global unemployment rising to its highest level since 1965. It also predicts that the output of emerging and developing economies is expected to contract for the first time in at least 60 years. If that is the case, what will happen to Nigeria, which is currently struggling, if this prediction comes true?

Now is the time to make hay while the sun shines. The current governance needs to be restructured lest it will lead the country into bankruptcy. It is either we learn the appropriate lessons now and restructure or wait until the Nigerian project crashes, with the inherent grave consequences for all.  Following from these, eminent Nigerians from various groups such as the Yoruba Council of Elders, the Ohanaeze Ndigbo, the Pan Niger Delta Forum, PANDEF of the Nigeria Delta Region and the Middle Belt Forum have once again called attention to the need for the country to see the current economic challenge as a great opportunity to make the sub national governments the engine of economic growth. Even the manifesto of the ruling political party, the All Progressives Congress, APC, supports the restructuring of the country.  So many issues need to be addressed as this newspaper has regularly pointed out.

ALSO READ >>  FIRS orders tenants to pay stamp duty on rents to bank

First, there’s the need for a continuation of the constitution review, which the federal legislature had begun before the advent of . The country needs fiscal federalism now. In the First Republic, it was the federating units that exploited their resources and paid a royalty to the Federal Government. There was no federal allocation for the regions that would necessitate going to the centre to collect money based on a specific percentage. At a stage, it was 50/50 implying that the regions kept 50% and remitted 50% to be shared with 20% to the Federal Government and 30% shared among the regions.

Finally, the core issue is to evaluate the above concerns within the context of fiscal federalism. Are the governors who are used to waiting for month’s end to collect allocations from the Federation Accounts Allocation Committee meetings ready for disruptive restructuring to prevent bankruptcy? Is the ruling party ready to go the whole hog of restructuring of the convoluted structure of the federation? The President has a key role to play in all these. Is the President ready to commit ‘‘class suicide’’ in public interest? Will Buhari leave office in 2023 without a constitutional amendment that will do the right thing? He needs to do something to guarantee the sustainability of the Nigerian project. Nigeria needs to be rescued from an imminent bankruptcy, in the interest of the current and future generations.

Share This post
EARN MONEY: I Use QUIZBANGO To Take Quiz And They Pay Me Per Day. CLICK TO JOIN,

Supported Countries Include: Nigeria 🇳🇬, Ghana 🇬🇭, Kenya 🇰🇪, South Africa 🇿🇦, Uganda 🇺🇬, Tanzania 🇹🇿, Rwanda 🇷🇼

You Too Can Make Money Online Taking Quiz

CLICK TO JOIN NOW and GET PAID TO TAKE QUIZ

Leave a Reply

Your email address will not be published. Required fields are marked *