To some people, Emir Muhammadu Sanusi II is a great loss to Nigeria, and to others he is a brilliant man whose bigotry lies just beneath the surface, but few can deny that his comments about Nigeria are often on target. He took to his Instagram page on Monday night to say the following:
The Lagos story is a story of what Nigeria can do with itself – transparency, consistency, regulations. That’s why today Lagos state is 30% Nigerian non-oil GDP, and Lagos can do
This country is better off with Lagos than with the Niger Delta. Let’s not make that mistake. We should be together as a country. Every part of the country is important. But, let us not be so obsessed by a resource, because we have had the commodity driven model, and we are blind to the potentials of an alternative model. Lagos doesn’t need oil. What is oil anyway? It is a raw material. You don’t drink it. You need it to move your vehicles. Now, you have electricity. You need it to fill your generator. Now you have solar power, and biomass. The future of oil is not there. So, those few people who are trying to break up this country over oil, after sometime that oil will be worthless.
In trying to contrast Lagos – a part of Nigeria that is generating enough revenue to sustain itself irrespective of federal allocations – and the rest of the country that is dependent on the ups and downs of oil revenues and is already on a second bailout, Sanusi is absolutely correct.
27 of 36 states have gotten federal bailouts since May last year, and many of them are still owing salaries and pensions. Many of those same states have requested a second bailout from the federal government which comes with 22 conditions attached, called the Fiscal Sustainability Plan.
While the oil boom lasted, federal allocations flowed and there was no urgency either to rein in expenditure or increase economic activity. The bazaar is now over, but the urgency from state governors to move away from oil dependency is not there. Everyone is waiting for oil prices to come back up.
Lagos however continues to thrive. While workers in many states did not get their salaries in time for Christmas, Lagos workers got double salary in December. According to a report by the National Bureau of Statistics (NBS) on the internally generated revenue of states for 2014, the IGR of Lagos was more than that of 31 states combined.
In a report by BudgIT in 2015 titled ‘State of the States’, Lagos was the state with the most surplus after taking care of its recurrent expenditure, and in the first quarter of 2016, it beat its revenue for the same period last year, raking in N101 billion.
The choice for Nigeria’s states is simple. They can continue down the path of oil dependency that leads nowhere, or there can be a serious effort to create the kind of economic activity that makes a state viable.
Natural resources do not make a state or country rich. At least, not for very long. Even in times of a boom in the price of this or that commodity, there is the need to use that money to invest in the infrastructure and human capital necessary to guarantee long term prosperity, because commodity cycles are inevitably boom and bust cycles.
For the fourth time, Nigeria did not do this, and is once again paying the price. The lessons of this present time are not just for the Federal Government to learn. The other 35 states need to take these lessons to heart, follow the example of Lagos, and move away from the crippling dependency on handouts.
That is the challenge Emir Sanusi has put forward, and they will do well to meet it. Everyone will be better off as a result.