The little time left before fiscal crises consumes Nigeria – by Caleb Onyeabor

Newsie Events Media: #OPINION

The cumulative effects of running a mono-economy and keeping unproductive political units as states have been showing forth since the last 6 years. The fiscal health of Nigeria, its federal government and states is worsening and weakening every new year. Years of failing to diversify the economy and restructure the country to ensure states become productive and profitable have finally caught up with this nation and is dealing several blows on multiple fronts.

Nigeria’s decades of dependence on oil despite its unreliability and vulnerability to international fluctuations amidst several calls by experts that the country would not be impervious when the chicken comes home to roost. Now the chicken has come home to roost. Federal Government’s revenue from oil has been affected by low oil prices and demand being inspired by the global push to renewables. While the federal government is battling with balancing its financial books, with lower revenues, it had resorted to massive and unparallel accumulation of debts for which it spends a chunk of the meagre revenue it get in debt servicing at the expense of investment in critical sectors of an already ailing economy. We are operating a system where a federal government with meagre revenue, not enough to pursue its ambitions and pay its bills, now heavily indebted, is depended upon by more than two third of the country’s 36 states who will have to go home with the crumbs and leftovers of the meagre revenue the Federal government is currently making.

With weaker mechanisms for internal revenue generation, states now have very little and one of the first indication of this institutional poverty is the inability of some of these states to pay salaries. By now, we have been inudated with government sacking and relieving large numbers of workers due to their inability to continue sustained payment of large salary bills. The investment in various sectors both at federal and state level has dwindled to the detriment of economic growth and development. These are tough times. Times where 70% of government budget is dedicated to debt servicing. Times when government can declare that it is broke and means it.

Tough times like this call for the right response. In my opinion, tough times require the application of right responses aggressively.

To be fair, the economic conundrum and fiscal crises Nigeria is in today is a joint effort of the previous governments and the current one. However, this is not the time to play the blame game. Government finances is getting poorer and poorer and if this continues, more persons will lose their jobs and malnourishment the economy is suffering today will continue. This is the time for ideas and here are a few:

The advocacy for diversification of the economy has been over flogged. The obvious way out of this mess is to diversify the economy as have been reiterated over the years. Now is the time to demonstrate the political will that will ensure this happens. The plans, policies and programs that will diversify the country’s economy are already on the government desk. It’s time to pursue their implementation aggressively as a matter of national emergency.

Elected representatives from the Federal down to State level will have to lead by example and make verifiable sacrifices so that the people can key into whatever steps that would be taken. It is contradictory to complain that government now has small resources and then sack workers while the paychecks and allowances of elected representatives continue to burgeon. The President, his ministers, state governors and federal legislators must come out to announce pay cuts and suspension of most of its unjustifiable allowances. Genuine efforts should be made to reduce the cost of governance and combat financial recklessness and corruption. These are hard times, resources are small, it would make no sense if the existing culture of wastage and misuse of public funds continue on this meagre resources. That will be another sure way to sink Nigeria completely. When leaders make these sacrifices, they can now have the moral standing to ask the people to make sacrifices too.

More than ever, Government at all levels should be more serious with revenue generation. The tax base should be expanded. Tax evasion should be checked, leakages in government finances should be blocked. The amount of money government officials siphone in government ministries, agencies and department is enough to fund budgets. State governments should review and reexamined its tax base and look into the many channels through which her revenue is lost. Again, the political will is needed.

Government need to open the economy for investments by partnering and creating opportunities for the private sector through policy. States can engage in productive ventures with export capacity through public private partnerships. For instance, Plantation estates and farm settlements can be established for massive production of cash crops by private players through the government support. Many unproductive and moribund state run industries and ventures should be concessioned and handed over to the private sector.

Again, more than ever, to avert the imminent collapse or prevent the completion of a collapsing that has already begun, the country needs to be restructured. Some Items need to be taken away from the exclusive list for states to explore and exploit so as to promote financial independence and self sustainability of the component units that make up this federation unlike the beggars we have today as states.

The fiscal crises we are in today can be averted if the leaders demonstrate enough political will. There is still little time. A stitch in this time will indeed save nine.

Caleb Onyeabor is a Nigerian intellectual, an avid advocate for political justice, social justice, and economic justice. Author of Diary of a Messed Up country. Follow him on Twitter via twitter.com/caleb_onyeabor

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