Entrepreneurial Governance as a Panacea to Sustainability of Nigerian States

Entrepreneurial Governance as a Panacea to Sustainability of Nigerian States

By Nnamdi Odumody

The Senate of the Federal Republic of Nigeria recently approved the sum of 30,000 naira as the national minimum wage. Over the past few months the Federal Government, States and the Organized Labour representatives have been involved in discussions with the Senate making a case of impossibility of meeting up with the sum. Considering rising inflation in Nigeria, the sum of N30,000 is nowhere near sustaining an average working citizen for a month. The Nigerian Labour Congress said that the Federal Government and States spend huge running costs which if slashed will make it possible for them to pay the demanded wages.

Nigeria runs a dependency system where all the 36 states and Federal Capital Territory, despite the numerous natural resources available in them, depend on monthly allocations from crude oil earnings. The federal government takes a large percentage while states take the rest.

Abia State estimated Gross State Product was 838.89 billion naira or 0.74 percent of Nigeria’s GDP in 2017. Its agricultural output was 45.59 billion naira (0.19 percent of the country), crude oil output was 117 billion naira. Its Non Oil Industrial Output was 63.1 billion naira contributing 0.4 percent of the country’s non oil industry while its Manufacturing output was 43 billion naira.

Considering the fact that Abia State is home to Aba which is famed for being home to leather and garment manufacturers and other industries, due to absence of enabling infrastructure by previous and the current administrations, its potential and capacity hasn’t translated to prosperity for state government in terms of revenue generation.

Despite its abundant hydrocarbon deposits, there is no petroleum refinery, gas processing industry or petrochemical plant which will have aided its industrialization drive. Its Internally Generated Revenue was 18 billion naira- a paltry sum. Recurrent expenditure, at 31.1 billion naira, was more than capital expenditure, an enabler of unlocking its productivity, which stands at 16.9 billion naira. This made it impossible for the state to pay salaries, and was bailed out by the Paris Club package which the Federal Government gave states across the federation.

Nasarawa State had an estimated Gross State Product of 1.2 trillion naira. Its agricultural output was 962.8 billion naira in 2017, and earned 4.4 billion naira as Internally Generated Revenue. Considering the rich deposits of solid minerals in commercial quantity around the state, the state could have increased her earning capability if it had marketed the assets well. She too was a recipient of fund bailout by the FG to pay salaries of her workers.

States in Nigeria

Kano State, the Commercial and Industrial Hub of Northern Nigeria, had an estimated Gross State Product in 2017 of 4.26 trillion naira. Considering its rich human and natural resources, strategic location, it should do better in Internal Revenue Generation than it did with 22.2 billion naira generated. Her recurrent expenditure was 157 billion naira while Capital Expenditure was 9.8 billion naira an amount too low to make impact on her 13.4 million people.

Nigerian State Governors should adopt an entrepreneurial approach to governance by unlocking the potentials which abound in their states to create competitive economies which will grow the GDP of the Nigerian economy.

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