Sat. Apr 17th, 2021

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Is Nigeria Ripe For Restructuring? By Hon. Tunde Adeleye

11 min read
For restructuring to take place, it will require the complete dismantling of the unitary system of governance and a new Constitution to replace that of the 1999 constitution.
Hon. Tunde Adeleye | Electoral Commissioner, ODIEC

There are a number of problems that has persistently plagued Nigeria’s precarious economic and political development since independence in 1960, which was more political than economic. They include, but not limited to, bad leadership, unbridled corruption, poor infrastructure, lack of an adequate regulatory regime, general insecurity, ethnic mistrust, etc.

With a population growth estimated to be around 200m, and the youth acounting for 70% of that figure, the youths should by now comprise the knowledge workers in the new knowledge economy, in a post-industrial society. However, it doesn’t appear that Nigeria is ready to chart a new course to create an enabling environment for them to thrive.

Why is Nigeria not where she is supposed to be, given the great potential she had in the early 1970’s?

Before l go into the real reason why l strongly believe Nigeria needs to undergo a restructuring process, l want to first talk about the progressively backward economic development of Nigeria, and the dysfunctional and unworkable unitary system of governance, which is alien to the tenets of true Federalism that we should be practising.

First of all, it is important to take a cursory look back into history, as refusal to do that will not provide a clear understanding of how Nigeria arrived at this present mess, and how she can devise means of getting out of it.

No doubt, Nigeria’s dysfunctional polity is attributable to its defective foundation from the colonial era. To put it mildly, the amalgamation of 1914 was a fraud. Clearly, too, Nigeria was never designed or intended to be a nation, but as a business entity, that would be leveraged on as an extractive institution by the colonialists to help build the British Empire during the mid 19th century.

The British purposely ignored and disregarded the ethnic composition of diverse cultures within Nigeria before it was artificially formed, and forced these ethnic tribes to live together in a marriage of inconvenience. The end result today, depicts a polity that is extremely complex, and one that makes ethnic cohesivenes practically unworkable and intolerably divisive.

Although, Nigeria has been a Federal State since 1954, notwithstanding, the applicability of the tenets of true Federalism has eluded Nigeria, even after the attainment of independence.

Rather than operate the tenets of true Federalism, as enshrined in the 1963 constitution shortly after independence, Nigeria is saddled with the 1999 constitution which was crafted during the military regime, and which still operates as a unitary system of government – which is at odds with the practice of true Federalism.

What is Federalism?

Federalism is a political system of governance that allows for a power sharing mechanism between a central government and regions, or generating units known as states, under a written constitution.

Since power is decentralised and devolved amongst States, it empowers each State to develop on its own, at their own pace, without financial dependence from the center.

Instead of receiving monthly allocations from the central authority, which is the Federal Government at the center, it is the Federating units who are supposed to contribute a portion of the proceeds from the IGR of their sovereignty to the central authority.

There are examples of Federations who practice true Federalism, notably, United States of America, Australia, Canada, India and Brazil.

For instance, according to Statista. com, the State of California, with a population of 39.3 million people, is the 5th largest economy in the world, with a real GDP of 2.79 trillion U.S. dollars as of 2019.

Comparatively, California’s economy is bigger than that of Canada, Brazil or Italy. The interesting fact about the State of California is that she doesn’t have any natural resources like oil, which is what the State of Texas is renowned for.

Furthermore, the revenue accrued from the State of California is from non-oil products. As such, some of its revenue is generated from the intellectual output that is being churned out from Stanford University in California.

As a result, many multi-billion companies domiciled in Silicon Valley in California, such as Apple, eBay, Cisco, Lockheed, Hewlett Packard (HP), Google, Netflix, Facebook, Oracle, Tesla, etc, owe their technological state of the art gadgets and inventions from ideas birthed and nurtured from Stanford University.

The entertainment industry, particularly Hollywood, and the agricultural sector of the State of California, has equally contributed enormously to the GDP growth of the State.

Below are the 10 major global companies whose market capitalisation is greater than Nigeria’s total gross domestic product (GDP) of $375bn. In number one is Apple plc, which is based in Silicon Valley in the State of California.

(1) Apple – $1.6trn
(2) Microsoft – $1.54trn
(3) Amazon – $1.52trn
(4) Alphabet – $1.04trn
(5) Alibaba – $673bn
(6) Facebook – $665bn
(7) Berkshire Hathaway – $466.8bn
(8) Taiwan Semi conductor – $431bn
(9) Visa – $419.2bn
(10) Johnson & Johnson – $387bn

Source: Wikipedia

Given the GDP figure of $375bn for Nigeria, a comparative analysis below of the GDP of other countries is a reflection that Nigeria still has a long way to go to generate the same GDP as other advanced economies.

(1) India – $2,65trn
(2) Brazil – $2.05trn
(3) Mexico – $1.15trn
(4) Indonesia – $1.05trn
(5) Turkey – $851bn
(6) Saudi Arabia – $686bn
(7) Argentina – $637bn
(8) Thailand – $455bn
(9) Iran – $454bn
(10) United Arab Emirates – $382bn

Source: Wikepedia

Undeniably, the fundamental issues surrounding Nigeria’s lack of economic development as a country, is simply due to the fact that Nigeria is not productive and competitive enough as a country, as comparative Global Competiveness Index reports of the World Bank, on various countries for a number of years, has indicated.

The attendant commulative effect of this shortcoming is that, there is a dearth of creative entrepreneurs and businesses that are adding immeasurable value to Nigeria’s gross domestic product (GDP). The palpable absence of an enabling environment to ensure that Nigeria becomes a knowledge based economy, is equally lacking.

One of the main reasons for Nigeria’s economic woes, is that she only has a GDP of about $375bn, an annual meagre budget of between $24bn to $30bn. The truth of the matter is that Nigeria should have a GDP of about $2trn, an annual budget of about $200bn, and have an annual Foreign Direct Investment (FDI) target of $100bn.

Perhaps, it would be beneficial in the long term if Nigeria were to undergo a robust and strategic economic rethinking of the economy, with the hopeful realisation of having a 25 per cent GDP growth that was attainable in the early 1970’s.

With the population growing at an increasing rate of 2.6 per cent per annum, it is imperative that the economy of Nigeria create about 5.2m jobs a year to forestall foreseeable social unrest by unemployed and disgruntled youths, as witnessed during the #EndSars protest in 2020; and an end to banditry, militancy and kidnapping.

Given that Nigeria runs a mono-economy with over 90 per cent of government revenue coming from crude oil sales alone, and one of few countries with the lowest tax-to-GDP ratios on the world of just 6 per cent, and a $100bn infrastructural deficit, it is imperative that Nigeria needs to take drastic steps to sustain the fragile economy.

More importantly, the drop in global oil prices and the downturn of the global economy, exacerbated by the Covid-19 pandemic, has proven conclusively now that Nigeria needs to diversify the economy.

There are so many sectors like agriculture, tourism, manufacturing, shipping, solid minerals, etc, where Nigeria could easily generate 10 times more than the current $25bn or so, that Nigeria accrues from the sale of petroleum products.

Additionally, if States have autonomy, and grow their economy similar to the way the 50 States in America are doing, Nigeria would almost certainly reach the potential of a global economic power that economic experts have predicted by 2032.

Why Nigeria is not working

Given the ethnic diversity of Nigeria, and the numerous challenges of economic development as a country, coupled with political instability, injustice, marginalisation and the spate of insecurity in the country, it is becoming clear that all these challenges has created distrust and divisiveness between all the ethnic groups.

This unresolved issue continues to eat into the foundation of Nigeria and threatens the cohesiveness, peace and entity of one indivisible Nigeria.

To tackle this thorny issue is not too hard to comprehend. The political structure and governance of Nigeria is no longer working, neither is it economically and politically sustainable.

What Nigeria requires is an overhaul, or constitutional amendment of the 1999 constitution, whereby Federating States are empowered to be autonomous and less reliant on the centre – which is the Federal Government.

The impractical application of the unitary system has created a catalogue of political and constitutional crises, litigations, marginalisation, injustice and seeks to jeopardize the political and economic stability of Nigeria state, by different ethnic groups whose relentless cries for restructuring, sessession and dissolution of the Nigerian State has continued unabated.

The long held contention is the view that the military truncated democracy during First coup in 1966. In the same vein, they are also wholly responsible for dispensing with the 1963 constitution, which favoured regionalism, in place of a unitary system, which is similar to the miliary system of centralized hierarchical structure and authority.

After independence, Nigeria operated under the 1963 constitution. The founding fathers ensured that they did not deviate from the essential principles of federalism, by ensuring that each of the regions had its own constitution.

Even the creation of a new Mid-West region at that time was only validated through a referendum which was conducted in that region for the approval of the people in whom sovereignty resided.

All four regions at the time were autonomous, and gave up some powers to the central government, until the 1979, and later 1999 constitution, changed all that by military fiat without consultation with the people of Nigeria.

The 1963 constitution is still seen as a better model for true federalism, as it concentrated few powers at the centre and had a better fiscal resource allocation.

With the States determining their own fate by themselves, their are able to develop their economy by tapping from the resources held at bay by the Federal government. From the revenues generated via these natural resources, about 40 per cent can be remitted to the central government for the operationing running of the federation.

What is restructuring?

Restructuring is about change management. It refers to a better and new way of how things are done and properly organised for optimum operational efficiency. Change, in its implied form, is a process within organisations where restructuring is carried out by management as an “act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs”.

In the context of how this applies to Nigeria, restructuring is about a re-adjustment of the fundamental structure and the political system of government, operating under the the Nigerian State from the foundational stage to the present one, and the re-affirmation of the social contact between the people of Nigeria and the government, as enshrined in the 1999 constitution.

Under the provisions of a new constitution, there should only be two tiers of government — the central government which will have exclusive responsibility for common services such as the central bank and monetary policy, foreign affairs, defence and the armed forces, and immigration, and regional governments which will now have direct supervision over provinces (the present 36 states renamed).

Each region should also have its own constitution, which should be separate and not in conflict with the Federal Constitution, and should be responsible for State police, education, it’s own laws and system of governance.

What does restructuring mean to Ondo State?

Firstly, let us critically look at the natural resources presently available in Ondo State.

Ondo state is one of the oil producing states in Nigeria, it has the 2nd largest bitumen deposits in the world. It has one of the largest natural gas deposits in the world. Other mineral raw materials available in the state include:
Granite, Marble, Gold, Gemstone, Clay, Diorite, Lignite, etc

Source: Wikepedia

Under a regional system of governance, and operating with in the tenets of true fiscal federalism, each state, not least Ondo State, will be able to harness all the natural resources within their respective States, and no longer have to depend on the Federal government for allocations from oil rent each month.

Subsequently, if the Ondo State Government were to be in charge of the affairs of the State, without financial succour from the FG, the IGR of the State would almost certainly boost the GDP growth of the State. Local Industries will boom across Ondo State and the unemployment rate will significantly drop.

Instructively, Ondo State will no longer be referred to, solely as a Civil Service State, given the free market economy that will open up the state and enable enterprise to thrive exponentially to create many new sectors in the State, from mining, technology, Solar Farms, and Agro industrial hubs to compliment the one in Ore.

On a national level, given that the sovereignty belongs to the people, it is illogical and impractical to continue to operate a unitary system under the prevailing 1999 constitution in a democracy, especially one written during the military era.

Unarguarbly, a unitary system of governance encourages dictatorship, and it is too bloated and expensive to run. This fully explains why the pervasive unitary system of government breeds corruption with impunity, and makes the anti-corruption and zero tolerance for corruption crusade as a charade, and decidedly weak in its implementation.

Without doubt, the way the 1999 constitution was written, it glaringly obvious that it favoured certain ethnic regions, notably the North, and disenfranchises other regions and States, since they have no power over the control of resources within their respective States.

The adverse effect of this is that smaller States will struggle to survive, and will continually have to depend on subsistence from the Federal Government at the center.

To make this point clearer, the 1999 Constitution extended more exclusive lists of powers to the central Government than it was in the 1979 Constitution or the 1963 Constitution. For this reason, the concentrated powers at the center, is an indication that ethnic, cultural, religious, and linguistic diversities, were not taken into consideration while drafting the 1999 Constitution.

Observably, of the 600 composition of different ethnic groups in Nigeria at present, she is the only country operating a unitary system of government, devoid of the tenets of true fiscal Federalism.

To give an overview of how powerful the Federal Government is, Section 5 of the 1999 Constitution cedes the executive authority of the Federal Government to the President. By so doing, the Federal Government possesses overall powers over the 36 States governments.

Accordingly, Section 5 (3) of the 1999 Constitution, provides that “a state government can’t exercise its executive authority in a way to impede or prejudice the executive powers of the Federal Government or to endanger the continuation of the present unitary Federal Government”.

Not surprisingly, the incessant struggle for power at the center by all the ethnic regions in every general election, is characterized by an overzealous quest for control of natural resources and economic rent. Conversely, and in light of this development, this has necessitated the persistent agitation for restructuring, and secession plans by the South East and South West regions.

In the main, the 1999 Constitution remains anthetical to the practice and applicability of true Federalism, and for as long as it is operational, it will continue to impede national unity, including sustainable economic development.

For restructuring to take place, it will require the complete dismantling of the unitary system of governance, and a new Constitution to replace that of the 1999 coynstitution.

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