We even had the awkward situation where the federal government created local governments and continues to allocate resources directly to them through so-called joint accounts with state governments. The result has been that local governments have ceased to be local, and they are also not national or effective. Rather the state governments essentially confiscate the funds and expend them as they wish. Thus the division of responsibilities for local government administration has killed the responsibilities. Put another way, the intrusion of the federal government in local government administration has virtually destroyed local administration.
There is no doubt that many of our states are not viable, and were not viable from the start, once you take away the federal allocations from Abuja. We have to find creative ways to make them viable in a changed federal system. Collaboration among states in a region or zone will help. We can examine the possibility of using the existing geo-political zones as federating units. We can also find other ways to determine the viability of states, for example by introducing a means test such that a state that is unable to generate a certain percentage of its expenditures internally for a specified period of time will be deemed unviable and collapsed into another or a group of states. We can constitute a body of non-partisan experts to suggest other ideas. But in all, we must devolve more powers and resources from the federal government and deemphasize federal allocations as the source of sustenance of states. We need to start producing again and collecting taxes to run our governments in a more sustainable way with greater transparency and accountability.
We have a unique opportunity now, with all the agitation and clamour for restructuring, to have a conversation that would lead to changes in the structure of our federation in order to make it stronger, enhance our unity and promote peace, security and better and more accountable governance. Ours should be a federal system that delegates to the federal government only powers and responsibilities for those matters that are better handled by a central government such as defence, foreign affairs, inter-governmental affairs, setting overall national economic policy and standards. Other powers and responsibilities should reside with the states, which will include the power to create and fund local governments as they deem fit.
Why do we have federal roads all over the country that don’t get maintained? Why do we have federal hospitals and schools all over the country that are no better than their state counterparts? We even have more clamour for federal takeover of existing state institutions. That is not how to run a federation. Rather we are centralizing more and making a mockery of federalism. This is a parody of federalism, and we must get away from it.
We should proceed from the assumption that the oil economy, which underwrote our profligate, unsustainable and unstable federal structure, has reached its peak. New technologies of oil production, especially horizontal drilling and hydraulic fracturing (also known as fracking) have helped to produce a glut in the world oil market. They have also helped to move the United States towards becoming the world’s top oil producer. This partly explains why US import of Nigerian oil has declined from 50% a few years ago to almost zero today.
Also the massive investments in and rapid growth in alternative energy sources show that it is unrealistic to expect the huge rises in oil prices of the past. Let me illustrate with a few examples. In 2004 the world generated only 48 gigawatts of electricity from wind power, but by 2014 wind power accounted for 318 gigawatts. In 2004 only 2.6 gigawatts of power were generated worldwide from solar photovoltaic (PV), but by 2014, 139 gigawatts were being generated, and this excludes an additional 326 gigawatts thermal solar water heating capacity. Also total annual biofuel production rose from 30.9 billion litres in 2004 to 113.5 litres by 2014. The same phenomenal increase is noticed in annual investments in renewable energy, from a mere $39.5 billion US in 2004 to $214.4 billion by 2014. In 2004 only 48 countries had policy targets regarding renewable energy but by 2014 the number had reached 144. As we speak here today cars using non-oil based energy either in full or in part are being produced for the mass market. And in June last year the US, Canada and Mexico pledged to derive 50% of their energy from clean sources by 2025. Next month Apple, the iPhone maker, will open its new massive headquarters. The complex, which will house over 25,000 employees, will be powered entirely by energy from renewable sources. Thus the world seems to have set upon an irreversible course of reliance on non-fossil and renewable energy.
Therefore the downward pressure on oil prices will likely continue even if the world economy fully recovers from the current slow-down. Add to that the militancy and instability in the Niger Delta, which have reduced our oil production capacity and revenues. So it will be foolhardy for us to think that this ‘unitary federal’ structure, erected on oil rents, can subsist without a major modification.
Thus, the fight in this country over “resource control”, while it may still have resonance today, is really a fight for yesterday. And, as I said at a conference in Kaduna eight months ago, even a discovery of large quantities of oil and gas in the north today can only bring temporary relief but cannot reverse the fundamental shifts in the world’s energy trajectory. So, my brothers and sisters, let us move on, like the rest of the world. We should embark on the badly needed restructuring of this country now even if we are hoping to strike oil in commercial quantities in another region of the country. That way we have a chance to live better in a few years’ time and leave a worthy legacy for our children and grandchildren.
Human resources, rather than large deposits of natural resources, are a nation’s most important asset. For example, Japan has little land for agriculture and no significant mineral deposits, but it is the third largest economy in the world. And Singapore has become a First World economy in our lifetime although it has little in terms of natural resources. We can similarly transform our country. We just need to start immediately. Our country boasts of millions of young people. It is within our means to give them good education and the skills they need to become productive, innovative and competitive in the modern world.
A trained, educated and entrepreneurial workforce in a restructured Nigeria that empowers her federating units to look to their strengths, emphasize production and internally generated revenues, and compete with one another to attract investments will truly transform us into a respectable people. It will help grow our economy rapidly, ensure needed employment for our young people, improve security, stabilize our politics and promote peace.
We need the courage to move in that direction.
Thank you for your attention, and God bless.
Text of Lecture by the Guest Speaker, Atiku Abubakar, GCON, former Vice President, Federal Republic of Nigeria, at the Annual Professor Ademola Popoola Public Lecture, Faculty of Law, Obafemi Awolowo University, Ile-Ife on Monday 6 March 2017
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