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Building A Greater Industrial Nation – Activating Fiscal Federalism in Nigeria

Building A Greater Industrial Nation – Activating Fiscal Federalism in Nigeria

There used to be a time when Nigerian leaders made things happen. This is Michael Okpara’s three year report. Look at the number of industries ( yes, industries, not companies) he opened in one year. When Sam Mbakwe was running his show, Imo State had a similar party. Go to the northern part of Nigeria, industries everywhere with Kaduna the industrial capital. Then, Awolowo was always overbooked for commissioning plants in Lagos. Nigeria was at its zenith on industrial development.

But today, where are we? Last year, 26 states did not attract a single FDI. Adamawa state made the list of outperformers because it attracted $20,000 (not a typo). You know what happened and brought this paralysis? The 1999 Nigerian Constitution, in my opinion. That document upended the comparative advantages within states.

It is that bad constitution that has made Sani Abacha a better economic custodian than most current political leaders. Babangida was light years ahead of these politicians when you note that he planned and built Abuja within less than 5 years. Some are ruling for 8 years with nothing to show.

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When your strategy is wrong, even a great execution will diminish you. I do hope we revisit the 1999 constitution and bring fiscal federalism back.

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Comment #1; We are seeing graft, corruption, and gross mismanagement. The constitution does not control or change politicians and people in power.

My Response; You wrote in irony. Without the constitution, corruption would not have scaled as we have now. People do not steal from themselves. If Abia does not get Abia working and at month end, it gets nothing from Abuja, then, you will see a different governor. But because it is sure something is coming at month end, it can relax. That is a grand corruption enabled by a bad constitution!

Comment 1 follow up: Not in irony. I’m sure the constitution does not permit mismanagement or corruption. So, it is redundant to change the constitution. It may seem to enable it but it’s more like post hoc fallacy. The underlining issue is the lack of accountability and enforcement mechanisms and I believe this lies more to culture than legislation.

My further response: This is the fact: Nigeria’s corruption of today is “grand corruption”. That will translate to ALL CORRUPTIONS. IBB spent 8 years in power, and built many things because he kept Nigeria’s money. OBJ spent 8 years using the new constitution, he spent that time sharing Nigeria’s money with states. What did OBJ do that cost money? Put GEJ and of course Buhari. The difference is clear: Abuja cannot plan because Abuja cannot even SAVE because constitution made it illegal: share all at month end is the law.

Comment #2: Whilst agreeing with you that the constitution needs to be re-jigged but the constitution is not all that is wrong with our country. How many of our governors’ have tried working on enabling environment for businesses? How many have gone around to meet with wealthy citizens from their States with a plan for where and what they can invest in. We have an irresponsible set of political leaders period. Let me start with my State Anambra. We have about the richest set of individuals as far as Nigeria is concerned. After Dr Chukwuemeka Ezeife have you heard of any of the recent ones canvassing for think home investment? Which part of the constitution prevents them from establishing industrial estates? Go and ask around, it is mostly Buhari’s mismanagement of our diversity and Nnamdi Kanu’s propaganda that has made some wealthy people to start moving their investment to the South East. I have lived and worked in Warri. It’s proximity to Onitsha makes it the Port of choice for the traders but youth restiveness have made even traders in Warri to start patronizing other Ports’ yet their governor’s have not deemed it fit to read the riot act to the rascals. Again I say it this constitution will not do us any good but the politicians have arguably done their worst not their best. How many are thinking of industries? We have people in diaspora who want to come back and invest, do you know of any State that has an office where such people can go to for guidance. Recent reports show that the industrialized countries have been stock piling metals that they think have low deposits remaining, how many of our governors’know the quantity of minerals in their States and what they can be used for?

My Response: “How many of our governors’ have tried working on enabling environment for businesses?” -there is no incentive for a governor to do that today because the system is designed to make them lazy. Yes – the state gets a huge alert in its bank account at month end whether it works or not. Also, its income is taxed by Abuja and that income is later shared. So, your gains on productivity are marginal and that is why most do not care since at the end, everything is shared together. With fiscal federalism, everyone runs at its own pace, pushing comparative advantages to rule.


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1 THOUGHT ON Building A Greater Industrial Nation – Activating Fiscal Federalism in Nigeria

  1. Those guys weren’t trained with blood (oil) money, the ones holding sway now are all products of blood money, so it’s showing in their conducts and understanding of public service.

    We groom criminals at an unprecedented rate, blaming the constitution is just half of the story. Most of the current and past occupants of last two decades went to some of the best schools in the world, they travelled wide, but again, these are ephemeral things. What makes a man or woman to be classed as noble or honourable comes from within, we do not produce enough good people, it’s a fact.

    We know that the constitution is terrible, we also know that things are bad, so why are we making them worse? No man or woman of nobility does such, we lost it as a people, and no amount of excuses and explanations to the contrary can hold water.

    Morality is the foundation of every great society, it’s never optional, it’s the only option available. You don’t pretend to be good because someone is watching, rather you do good even when no one is watching; that’s what makes you a decent creature.

    Nowhere in the constitution it says you can steal or be lazy, there are impediments, but we have managed to desecrate every aspect of our national lives; unforgivable!

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