States’ request for bail out and its consequences

We the governors of  the progressive  party met today to review the state of  the economy…it has become so serious and urgent actions must be taken for a bail out for our states.   We have some challenges because of the drop in oil price and issues of oil theft….

– Governor Okorocha Rochas, June 16, Abuja, at a meeting of governors of All Progressive Congress.

“A precedent embalms a principle”, William Scott, 1745-1836.

(VANGUARD BOOK OF QUOTATIONS p 198).

INTODUCTION

The request by seven All Progressive Congress, APC, Governors, namely, Okorochas (Imo), Ambode (Lagos), Al-Makura (Nassarawa), Aregbesola (Osun), Masari (Katsina), Ganduje (Kano) and Ajimobi (Oyo) raise several questions before consideration of the content of the request itself, as well as the reasons adduced for it.

First, the seven governors don’t even form a majority of the APC governors in Nigeria. They certainly amount to just twenty per cent of the thirty-six governors in Nigeria. So, the issue of locus arises. Are they speaking for themselves, all the governors of APC or all the governors of Nigeria? A corollary question is: were they mandated by those absent to make the request on behalf of those absent? If not, do they expect the President of Nigeria to seriously consider their strange, to say the least, request?

Second, even the seven in attendance can be grouped into two – those on their first term (Ambode, Masari, Ganduje) and those on second term (Rochas, Aregbesoal, Ajimobi). The first-timers can convincingly argue that they were not in office four years ago when crude oil was selling for $118 per barrel, when the budget benchmark was $78 per barrel; and so they could not have saved for the rainy day. The second-timers can offer no such excuse. When a budget benchmark is set at $78 per barrel, all recipients of funds from that source are expected to save for the day when the price would go below $78. Failure to do so cannot be blamed on the Federal Government. The blame belongs to those who spent every kobo in the last four years.

Third, the monthly revenue allocation exercise, expected to be attended by all Commissioners of Finance, also assumed that the Commissioners would not leave their brains behind when coming. The slide in revenue allocated started from 2013. All the Finance Commissioners, if they were not incompetent, should have drawn the attention of their principals, the state governors, to the continuous slide, after three months. They should also have conducted medium and long term studies to determine the drift of revenue to be expected from Abuja. That is what planning is about. That leads to two questions: which state government received such a study from the highly-paid commissioners of finance and immediately drew up an action plan to deal with what had turned out to be continuous decline in federally-allocated revenue? Again, why blame the Federal Government for their poor governance?

Third, different states got into the problem in which they find themselves and the arrears of salaries owed to public servants range from three to nine months. Are the governors asking the Federal Government to pay all the arrears of all the states or part of it? Also, is the bail-out supposed to be in the form of grant (gift) or loan? If grant, should it be based on the equality of states (i.e the same amount for every state) or on other criteria? If other basis will determine the amount advanced, have they worked out and agreed on these modalities? Otherwise, the meeting at Abuja was a mere jamboree.

Fourth, not once since 1960 had the Federal Government been asked to bail out each of the federating units. And, there is no provision in the constitution for such a bail out. Obviously, this strange request, if granted at all, would establish a precedent which might be applied again in the future – if states recklessly misapply their funds. The question is: is this what we want; especially, when the governors are not also prepared to open their states for probe to determine if funds which could have been used to pay workers have not been mis-appropriated. We will return to this matter later.

Fifth, the presence of the Lagos State Governor, Akinwunmi Ambode, in the midst of “beggar” governors, must be embarrassing – not only to Lagosians, but to the entire country. Next to the Federal Government, Lagos State is the most viable state. In fact, the state might as well have its own mint to print all the money it needs for its operations – as long as the income is well managed. Was Ambode in attendance to share “solidarity” with his colleagues to avoid being regarded as snobbish or was the mistake inadvertent?   Just as Abuja represents our status as a nation, Lagos is the financial and economic capital of the country. The entire world is interested in Lagos. The governor of Lagos state cannot, deliberately or inadvertently create the impression that the state cannot manage its affairs as to default on salaries.

Finally, there is overwhelming evidence that states are in their various predicaments because fours groups of officials failed to perform their constitutional functions as required. These are, in order of culpability: the governor, the State House of Assembly, the Finance Commissioner and the Auditor-General. Recklessness in government, which is pervasive, insufficient oversight functions, collusion in mismanagement of resources and poor quality of individuals holding these offices account for the bulk of the problem. Generally, the Commissioner for   Finance in most states is no more than the Governor’s Bag Man – he holds the state’s funds in a bag into which the governor dips his hands at will; no questions asked.

WHEN RECKLESSNESS IS CONSIDERED A VIRTUE

FILE PHOTO: Governor Edo State, Comrade Adams Oshiomole (right); Governor State of Osun, Ogbeni Rauf Aregbesola; (2nd right); Deputy Governor Boron State, Alhaji Zannah Umar (2nd left); Governor Jigawa State, Alhaji Badaru Abubaker (left). during the All Progressive Congress (APC) Governor Forum, at
Imo State lodge in Abuja, on Tuesday

“Nor should we listen to those who say ‘The voice of the people is the voice of God’; for the turbulence of the mob is always close to insanity”, Alcuin, 735-804.

Elected officials, and those appointed to offices covered by law are supposed to provide leadership – not pander to the whims and caprices of the “masses”. True leaders are a breed apart; they don’t, or should not think like the masses. That was why Lao-tsy, 6th Century AD, said that they are “not so good when people obey and acclaim [them]”. (VANGUARD BOOK p 124). Below are examples from the past and the present, of expenditures made in various states, which were acclaimed at the time, and which have now become drains on resources without yielding any, or very little income to the states. Readers should bear in mind that in economics reckless spending, with public funds refers to expenditure made which confers no economic benefit to the people. This is important because defenders of the state governments will soon flood the airspace with gibberish as “explanations”.