FG and financial  loans for states

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No doubt, President Muhammadu Buhari brought succour to public servants in the financially distressed states through the recent bail-out funds to the governors to off-set outstanding salaries and pensions. However, fact remains that this is a fire brigade approach, as it merely scratched the surface. There are still fears that with mounting economic challenges, the illiquidity of the states would linger for long, especially given Nigeria’s queer federal system of government.
It is unfortunate that ethno-religious calculations have been responsible   for our lopsided federalism, which has continued to militate against any real economic and technological development. For long, the revenues from oil sale were wasted on white elephant projects rather than on infrastructures that would help wean the country from overdependence on oil.

That is why the blame for the comatose state of the economy lies with the past military and political leaderships. In their determination to control of the economy, they failed to allow the federating units the opportunity to harness the natural resources in their respective jurisdiction.

The consequences are what the country is reaping today, with falling oil prices and dwindling revenue.
It amounts to groping in the dark for the federal government to arrange for conditional N90 billion loan from the private sector through the issuance of bonds to enable the state governments fund their capital components of the 2016 budget.
Ironically, such loan would in future hamstring the independence of these governors and prevent them from seeking creative ways of running their states.
The loan will also mortgage the people and worsen their material wellbeing.
We all know that the 1999 Nigeria Constitution (as amended) bans states from exploring and exploiting the mineral resources within their areas. We advocate that this section of the constitution should be amended to reflect true fiscal federalism. That is why the call for restructuring the country has become strident in recent times.
Nigeria’s founding fathers took cognisance of the country’s multi-ethnic and religious composition before adopting a federal system of government. If the federal system of government is working in larger economies such as the United States of America (USA), Canada and India, what then prevents it from succeeding in Nigeria.
That is why we join other well-meaning Nigerians to call for the immediate restructuring of the federation to reflect the realities of the country.
Such restructuring would mean a transfer of more powers from the centre to the federating units. It also presupposes that each unit would generate funds according to its capacity; paying only stipulated taxes to the centre.
It amounts to playing the proverbial ostrich for the federal government to be doling out bailouts to states rather than allowing them to generate resources according to their respective capacities. We therefore call on the Buhari administration to re-examine report of the 2014 National Conference. We believe that would be a starting point to reverse the present lopsided federalism.
We also advocate that there should be only two tiers of government; federal and states or regions with the review of revenue allocations for more money to be with state governments. The present constitution is by any stretch of imagination, unitary and this is responsible for the country’s persistent  political and economic quagmire.

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