Why Nigerian States and LGs Cannot Sustain Themselves, By ‘Tope Fasua
…the local governments and states are unable to self-sustain not because the federal government is taking too much from us all (and indeed they are), but because rather than all of us being responsible to our commonwealth, and building this, we are more interested in eating till we drop, while locked in competition with each other…
I was invited as a speaker at the recently held workshop for states and local government functionaries, jointly organised by the Revenue Mobilisation, Allocation and Fiscal Commission and Messrs Switch Consulting Limited in Abuja. The theme was “Alternative Sources of Revenue for Sustainable Development in States and Local Governments/Area Councils in Nigeria”. For me, it was a revealing and very interesting event and I wish to share some learning points here.
My take on the topic was to see how things are being done elsewhere and also look at the usual complaints of states and local governments, that Nigeria’s constitution is suffocating them, and as such their capacity for generating their own funds is close to zero. I also considered the interactions between states and local governments, and we closed off by looking at the different solid minerals available to every state in Nigeria, while not forgetting to point out the fact that those solid minerals were worth a lot more once they were processed outside the country. This we did by researching what most of the minerals were used for; ranging from telecoms, to expensive jewellery, to industrial chemicals, to crude-oil drilling, fertilisers, electronics, animal feed, pharmaceuticals and so on. I urged the states to consider forward integration like other countries have been doing. This means that it is not enough to excavate and sell at the primary market, but to see how industries could be created here to add value to those products.
We discussed the recent IMF tax review for Nigeria, which basically centred around the need for the country to get organised – as if we needed to be told. According to the report, Nigeria is hemorrhaging money from looseness in the environmental sector, through too many tax waivers granted to whomever is powerful enough in the political circles to obtain them, and through sub-par excise duties on ‘sumptuary’ goods like cigarettes and alcohol. States and local governments have jurisdiction over some of the items emphasised by the IMF, so it was interesting to know why they weren’t doing the needful.
The usual flare-up between the states and local governments occurred, when a state functionary justified what is apparently a deliberate emasculation of local governments by the states in Nigeria. Some of the state governors have been positing that only the federal and state governments are known to a federal system of government. They believe that local governments are to be headed by people appointed by fiat, by the governor. They quote sections of the constitution which talk about the ‘Federal and Subnational Governments’. My opinion was that ‘subnational governments’ could mean ‘states and local’, since it is in plural, and also that the same constitution recognises local governments in many parts, leading to a portion of the national revenue being specifically allotted to them. My stronger argument was the empirical evidence that in older, more-advanced democracies and federalisms, the local governments do not exist at the mercy of state governors. In the USA, which is the global reference point in federalism, county (local government) elections still hold and we have mayors and chairmen of such counties. I was with the chairman of the Greenspoint County (now called North Houston County) in September 2014 and his dreams, which he explained to our group in a presentation, was bigger than those of most African leaders. The infrastructure he controlled in that county – which is one of the poorest even in Houston – is larger than want we often fret about in Nigeria.
In Nigeria, we complain about how there is no money to fund anything, but serious countries are being run on some of these taxes and rates which we actively resist. Cigarettes and beer are the cheapest in Nigeria, compared to the rest of Africa, yet we are the largest consumers. Excise duties can easily be increased, yet we refrain from doing this.
I asked the advocates of state domination why in the USA they still conducted council elections, and even elections for sheriffs, which are no more than Police DPOs in Nigeria. Did the Americans come here to take approval from us for deviating from ‘true federalism’ before turning the office of a sheriff into a political one? So who says we cannot have our own variation of federalism? And why have we allowed the governors to cannibalise our system of government for no just reason? Are we trying to teach USA federalism? If the United Kingdom, from whom we obtained independence in 1960, could maintain local governments (boroughs) – in spite of their socioeconomic advancement compared to us here – why would any governor say Nigeria does not need local governments? I recall voting for my local government chairman in Camden Borough, UK in 2005/6 and how orderly it was. We didn’t even have to sit at home. It was a normal, working Tuesday. I think we should be careful in granting more spending powers to state governors who have usurped the local governments and become emperors unto themselves. We cannot solve one illegality by promoting another one. We are in a quandary. How do we proceed from here?
That is however not the kernel of my gist today.
In looking at the various ways our states and local governments could raise money, we considered:
1. Property taxes/tenement rates;
2. Environmental maintenance charges – including deterrence to pollution;
3. Capital Gains Tax – of which states are entitled to the portion payable by individuals.
In Nigeria, we complain about how there is no money to fund anything, but serious countries are being run on some of these taxes and rates which we actively resist. Cigarettes and beer are the cheapest in Nigeria, compared to the rest of Africa, yet we are the largest consumers. Excise duties can easily be increased, yet we refrain from doing this. So, our aim was to know why the resistance.
I performed an experiment.
There were about 500 people in my audience. Most of them looked like they owned property. Many were big men in the civil service. I asked how many would be willing to pay capital gains tax if they made profit from a land sale. We put it to a voice vote. The ‘Nays’ had it overwhelmingly, yet these were people who had at one point or the other sold an asset and made money. I also put the idea of paying property taxes to them with the same result. I then asked, if those who were there, wishing to know how states and local governments could raise money were so unwilling to comply with the taxes which are enshrined in the constitution of the country, who then will comply? Someone in the audience asked why he should pay any tenement rate when he hasn’t seen the impact of government anywhere around where he built his house. He asked if it was a sin that he found a land and built on it. I told him it was a ‘chicken and egg’ scenario. If you don’t pay, government will say they cannot provide those services. But it is also true that when people pay, government spends on needless things, leading to taxpayer distrust. This distrust is further fueled when for example, our Senate, paid monthly by the Nigerian people, says through its spokesman, Sabi Abdullahi, that Nigerians were rude to ask what senators earn. Hubris. So much hubris. This hubris is the death of Nigeria. My people say ‘ise o kin pani, ayo lo n paniyan’. Work, even hard labour, hardly kill. It is hubris, and unnecessary exuberance that destroys.
Our problem, therefore, is not about the constitution, or federalism, or revenue sharing. It is about the injustice that we – each and every one of us – do to ourselves. And it is unfortunate. Beyond taxes, it is getting to a head.
For how can countries like Uganda, Rwanda, Cote D’Ivoire and so on, organise themselves better than us, and their people understand and adhere to their responsibility to their country than we do here? Why are we not showing the right examples? Why do we take everything for granted here? Why is it that the average Nigerian can no longer be controlled or made to conform with modern norms of social interaction? A friend had confessed to me some days back about how he went to Kenya and solicited ladies of easy virtue. The hotel security noticed he was trying to go up with the lady and stopped them. He had to pay an extra 200 Kenyan Shillings to the hotel for the pleasure he was about to enjoy. Why? They told him he booked the hotel room for only himself. Then they ensured they collected the lady’s national ID Card, and did not release that card the next morning until this friend came down to the reception to okay them to do so. Why? They needed to be sure the lady hadn’t killed him in the room. Try that in Nigeria and you start to hear: “DO YOU KNOW WHO I AM? Ehnn?” This “do you know who I am?’ syndrome is the very undoing of Nigeria. I also recall a scene from AY’s movie, 30 Days in Atlanta, where he goes with Ramsay Nouah to a bar, and the lady demands for their ID cards just to be sure they aren’t ‘minors’ too young to buy alcohol. Of course the Nigerian was shocked and left the place in anger. This happened in real life to another friend, Wole, who is over 50 but has boyish looks. There seems to be no law in Nigeria, and the few that there are, are observed in the breach. We should get in touch with ourselves to know exactly where we really got it wrong.
What is more? I recall Nigeria’s former Ambassador to Australia who documented in his book how a Nigerian delegation to the commonwealth meeting in the 1980s swelled from seven to 40, to 80 and eventually to over 150, only for them to arrive and insist on a limousine each. Nigeria’s pathological arrogance has been around for long and it is the reason why we are here today. Even the Bible admonished that we cannot continue in sin and expect grace to abound. If we have laws that are not enforced, and all of us hold our country in disdain – leaders and the led – and refuse to put money into the pot called the commonwealth, what you get is Nigeria. And it will get worse therefore.
So in short, there is absolutely nothing wrong with Nigeria but us.
As at today, the small people no longer see any reason to care for the country. They despoil their own environment like beasts. The big people don’t mind if the poor go to blazes, as they are on the lookout to get more and more. The government who should be the umpire between the big and small people, is populated by big people who don’t think any differently from the crowd. Our problem, therefore, is not about the constitution, or federalism, or revenue sharing. It is about the injustice that we – each and every one of us – do to ourselves. And it is unfortunate. Beyond taxes, it is getting to a head. The fabric of the society is beyond threadbare now. We are now set up for disaster. All these agitations to break up the country are nothing but the culmination of several decades of self-mismanagement.
So in conclusion, the local governments and states are unable to self-sustain not because the federal government is taking too much from us all (and indeed they are), but because rather than all of us being responsible to our commonwealth, and building this, we are more interested in eating till we drop, while locked in competition with each other; in a needless rat-race that even if we win, we shall remain rats. All the laws are there, to make each state and local government prosperous. And even from the exclusive list, states have found how to work with federal government and get projects done e.g. railways, airports and inland waterways. The problem is no one wants to pay, everybody safeguards their corners. The leaders don’t set the right examples themselves. Yet we want the best country in the world.
Now, who will bell the cat?