The Vice President, Professor Yemi Osinbajo, has charged federating states to devise innovative ways to boost their respective economies as a way of improving the standard of living of their people.
Osinbajo, who was keynote speaker at the Leadership Newspaper 2018 Awards ceremony Thursday in Abuja, also advised governors to build solid economic foundation upon which their predecessors would build to drive development process.
Speaking on the theme, “Towards Financially Viable State Governments,” the Vice President said federating states must take cognizance of what works for nation- states, adding that in most instances, national blueprints were equally implementable at sub-national levels.
He said, “We are heading towards a time when our states will be competing very actively with one another for big ticket investment as is already happening elsewhere in the world.
”When companies make important decisions about citing their offices primarily based on how easier it is a state makes for people to do business in it; states that make it easy for investors to acquire land, to register properties, to pay taxes, to access broad band internet would be the clear winners.
“Indeed, the problem of the state is the same as that of the federal government. The complete reliance on the source of revenue that is extractive and so requires no creativity or productivity whatsoever. ”Most resource-rich nations and sub-nationals in the developing nations end up being poor and financially unviable, because making easy revenues from the extraction of resources is habit for them; habit of easy money without efforts. Few jobs are created because there is no value added.
“We have countries like Japan, Singapore and North Korea with no significant natural resources and they are some of the most successful economies in the world because they create enough jobs for most of their population.
”Why is that so? (It is) because financial viability is based on innovation and productivity. Productivity means adding value. Not necessarily possessing the resources but adding value to whatever resources, even if you have to import the resources.
“So the consumers of crude oil, like those countries that I have mentioned, earn more than producers of oil because they add value to the crude oil that they import by processing it and converting it to petro-chemicals in some cases and often selling these improved products to the oil producing countries themselves at more profit.
”I have drawn my examples from experiences of nation’s state to illustrate the problem of states’ non-viability because I think that a lot of the answers to the challenges of creating financially viable state governments are the same as the challenges of creating financially viable countries or nation states.
”So, the prescriptions will always be similar. Most of the principles that work for national governments will also work for a sub-national government.”
In what appeared an indirect reference to states that pay little or no attention to the prospect of agriculture as a means to financial viability, Osinbajo lauded such states as Kebbi and Jigawa, saying both have witnessed tremendous improvements in earnings by their farmers.
“There should be a focus on agriculture especially on value adding along the agro-allied value chain by creating jobs, reducing imports and exporting more. Since all the lands are in the states except for the FCT, the states that have created the most jobs are those that have focused on agriculture and the value chain.
“Rice producing states have witnessed a tremendous rise in the prosperity of their people. States like Kebbi and Jigawa have noticed a significant improvement in the earning of farmers,” he said.
He said the Buhari administration had since assumption of office, done well to create an enabling environment for business to thrive.
The Vice President said, “We have reduced business registration time and we have implemented a functioning visa on arrival system. We have launched an online system for filing taxes among other reforms.
”By dismantling the bureaucratic obstacles in the way of businesses and investors, we are hoping to unleash the full potential of private enterprise-the kind of enterprise that create jobs and grows the economy and produces future taxes for government.
”On account of these reforms, the World Bank recognised Nigeria as one of the top ten most improved economies in the world and the International Monetary Fund, IMF cited our business climate reforms as a major contributor to lifting the economy out of recession last year.”
Osinbajo also highlighted the economic potential of the telecom sector noting that Information and Communication Technology (ICT) is already contributing one-tenth of the nation’s Gross Domestic Product (GDP).
“According to the Nigeria Communications Commission, NCC, the telecoms sector has attracted $70 billion investment in FDI in the last 16 years. That is the size of the economical potentials we are talking about and they can take their businesses anywhere once infrastructure is right,” he added.
Learn from Awolowo
The Vice President took a trip down memory lane to the developmental strides recorded by the sage, Chief Obafemi Awolowo (of blessed memory) in the then Western region. According to him, Awolowo as Premier of Western region relied on agriculture and income taxes to deliver on his economic blueprint spanning education, infrastructure and commerce.
“Recently, I had cause to refer to the remarkable achievements of Chief Obafemi Awolowo as the Premier of the then Western Region of Nigeria from 1954 to 1960. The western region is what today constitutes Oyo, Osun, Ekiti, Lagos, Ogun, Ondo, part of Kwara and Kogi, part of Edo and Delta States. The six-year period of the Awolowo government is often cited as one of the most progressive of any government in the developing world.
“Some of the accomplishments of that government include the University of Ife (now, Obafemi Awolowo University), the 26-storey Cocoa House in Ibadan, then an architectural wonder, the Western Nigeria Television Authority, the first in West Africa and in fact, the first in many parts of Europe. Belgium did not even have a television when the Western region had its own. There were various networks of roads across the region.
“By far the most significant of those achievements was the free education, the free universal primary education. In 1952 when the scheme was proposed, 381, 00 children (about 30 per cent of children at the time) were enrolled in school. By 1955 when the scheme took off, 811, 4 32 children were enrolled. The government devoted as much as 4 1.2 % of the 1958/1959 recurrent budget to education, one of the highest in the world at the time. At the same time, the region nurtured a vibrant civil service and a judicial system which is widely acknowledged as a model, even today.
“There was no oil revenue, no federal revenue. In fact, the Western region government gave revenue to the central government. How did they achieve financial viability? Mostly, it was taxes and revenue from agriculture especially cocoa and other mineral resources. Free education which was audaciously launched was directly on the back of income taxes,” he said.
“Things however soon took a turn for the worse,” the Vice President recalled with the involvement of the military in governance. “With the military regime of 1967 and all the money, everyone forgot about taxes. The federal government gave everyone an allocation. So today the states in the old western region, aside from Lagos, do not earn enough in terms of taxes or anything else to pay workers, let alone do capital projects. Without federal allocation, most of the states cannot survive,” he stressed.
A word for governors
Osinbajo who got a standing ovation with his delivery also urged state governors to think more about their legacy rather than the next election. In his words, only a synergy between a governor and his successor would help states consolidate on their achievements.
He added: “It is clear that governors have to think beyond four or eight year’s cycle. There must be a commitment to laying a foundation that our successors will build on. One of the challenges with governance today in Nigeria is the penchant for dismantling or dismissing everything inherited.”
Also at the event, Donald Duke, a former governor of Cross River State who was the guest speaker lamented the lack of continuity in projects implementation, noting that his template for the growth and development of the South-South state was abandoned upon the completion of his second term in office in 2007.
