Let's Talk Afro-Geopolitics II: The Future of the Nigerian State

[newworldafro]

Great Thread. Keep em going.

Zaire/Ethiopia one was good too.

 

[TMNT4000]

No doubt.. I don't think all of the countries will break apart. But it will be damn well near it. This will happen when the usa finally buys the farm. You will get a globally gasp... and then people will start to realize what that means. No more global unipower to police shyt...the rest of the world then proceeds to explode....


the amount of ethnic cleansing that's gonna take place globally




Some tribes in Africa that exist today.. ain't gonna exist when this is all over

What do you mean by this?

 

[The Odum of Ala Igbo]

For those who voted for the demise of the Nigerian state, how come?

 

[Poitier]

For those who voted for the demise of the Nigerian state, how come?

boko haram
what comes after oil
middle belt crisis
cronyism
and will lagos be the only major city and port

 

[The Odum of Ala Igbo]

boko haram
what comes after oil
middle belt crisis
cronyism
and will lagos be the only major city and port

Boko Haram - Boko Haram will probably become a perennial thorn, trying to claw out a Kanuri Caliphate in Borno. Not lethal to the state but a thorn in its side.
After Oil - This will probably kill Nigeria. Nigeria in 2060 may be a scary place to be. Low electrification because investments were put in 50 years ago. Small manufacturing base because of insipid leadership who put in bad economic policies. Nigeria may be like a giant village.
Middle Belt Crisis - The state will continue to fester because it does not threaten the revenue of the state nor its territorial integrity.
Cronyism - Some states have developed with cronyism. The real killer is not patronage corruption (which is everywhere), but looting corruption (stealing $16 billion from the national oil company). No easy solution for that besides digitizing everything.
Lagos/Infrastructure - This irks me to no end. Yoruba elites are blocking port development at Warri, Calabar, Port Harcourt in order to keep all the money to itself. Nigerian elites are willing to delay/stop development in order to 'eat yams'.

 

[Poitier]

Lagos/Infrastructure - This irks me to no end. Yoruba elites are blocking port development at Warri, Calabar, Port Harcourt in order to keep all the money to itself. Nigerian elites are willing to delay/stop development in order to 'eat yams'.

Yeah, I forgot energy but this is worrisome. Are there any incentives to change this?

 

[The Odum of Ala Igbo]

Yeah, I forgot energy but this is worrisome. Are there any incentives to change this?

One policy change is getting the government out of the electricity business. It's funny that there's shortages of the things that government controls access to. Those things being fuel, electricity and US dollars. The problem is, given the issues regarding the generation of power and its transmission across the country - it's supposed to form a natural monopoly. Governments are supposed to be the best actor to manage natural monopolies to avoid harms towards consumers.

What I do know is that Nigeria should be using its natural gas to be a hub for power generation in West Africa.

I'm not an expert on electricity policy in developing countries though I'd love to speak to one about this.

 

[The Odum of Ala Igbo]

Great Thread. Keep em going.

Zaire/Ethiopia one was good too.

Thank you. It's my hope that the Afro-Geopolitics III thread will be initiated by someone else on a different topic/issue regarding Africa and its diaspora.

 

[Red Shield]

What do you mean by this?

You never heard the expression "buy the farm"?

 

[KOohbt]

What's that intra West African trade looking like?

 

[The Odum of Ala Igbo]

State(s) of crisis: sub-national government in Nigeria

In Nigeria’s March 2015 presidential election, the incumbent peacefully conceded defeat and transferred power to an opposition party for the first time since the end of military rule in 1999. Nigeria has the largest economy in Africa, generating about 20% of the continent’s total GDP, and transfers a far greater proportion of resources to sub-national government than any other country. Yet standards of governance remain extremely low, public services are among the worst in Africa and economic growth has exacerbated inequality rather than creating jobs. According to the National Bureau of Statistics, two out of three Nigerians live in poverty.

The federal system of governance in Nigeria is failing to provide the basic welfare for all citizens that the 1999 Constitution prescribes. On the first anniversary of the election victory of President Muhammadu Buhari, this Briefing Note examines the origins and purpose of the federation, state governments’ financial management and responsibilities, governors’ arbitrary power, and the need to increase internally generated state revenue. It suggests practicable reforms that could help change state governments from elected autocracies to agents of social and economic development.

SUMMARY

• A federation for peace
• Fiscal profligacy
• The governor’s domain
• Lagos: a state of exception?
• Detached states
• Sources

IGR from this source.

Akwa Ibom, the state that produces the most oil, derives almost all of its N462 billion (US$2.3 billion) budget from the federal “handout”. It covers only a fraction of its recurrent costs with local revenue and routinely accrues substantial bank debts and salary arrears. The example may be extreme, but when receipts from the federal revenue pool in the first nine months of 2015 halved compared to the previous year, due to the collapse in global oil prices, most states rapidly became insolvent. One of Buhari’s first decisions as president was to authorise a bailout fund for 27 indebted states endowed with N338 billion (US$1.7 billion) of federal government funds – a sum substantially larger than the annual budget of the Ministry of Health or the budget for defence and the armed forces. In addition, the Debt Management Office converted N324 billion (US$1.6 billion) of state debt to long term bonds.

“If everyone in the states had budgeted correctly there would have been no need for this [bailout],” a former state finance commissioner told ARI. “Even when the oil price was high, virtually all the states were spending more than they earned”. Whether the bailout was to stave off a potential collapse of banks that had lent large sums to state governments or was politically motivated is unclear. But the finance commissioner regards the decision as a missed opportunity. “[Buhari] could have imposed conditions – revenue and spending targets – on the states before agreeing to bail out their debts and approve new money”. The Federal Government has in effect refunded the costs of state mismanagement and profligacy.




Lagos: a state of exception?
Lagos is frequently cited as setting the standard for improved state governance. It is the smallest by area but wealthiest state, home to Nigeria’s commercial capital, and has an abundance of well-qualified people. A decisive factor, however, in changing state administration was having its federal funding cut off in the early 2000s during a dispute between then President Olusegun Obasanjo and state governor Bola Tinubu, over Tinubu’s decision to create new LGAs in his domain. Shortage of funds forced the governor to assess what could be done to maximise the state’s IGR. But to raise tax revenues from various sources, including property, required a promise of benefits; and to make it sustainable those benefits had to be delivered to taxpayers. Federal funding resumed in 2007, but taxes still produce 60% of Lagos’s revenue. Its IGR, about N300 billion (US$1.5 billion) in 2014, is equivalent to the combined IGR of 32 of Nigeria’s 35 other states.4

Reliance on IGR made the Lagos state government more accountable to its electorate, who in turn became more aware of their right to judge its performance. Under Tinubu’s protégé and successor, Babatunde Fashola, crime was reduced, the environment improved, roads were built and the transport system expanded. Prompt action to contain a possible outbreak of Ebola in 2014 demonstrated governmental competence. Now that Fashola is a federal minister, many expect Nasir el-Rufai in Kaduna state, in the north-west, to earn the reputation as Nigeria’s most praiseworthy state governor. Elected in 2015, el-Rufai moved quickly to close the state’s commercial bank accounts; eliminate “ghost workers” from the payroll by introducing digital ID for the civil service; concentrate resources on infrastructure, transport and public services; and ensure that LGAs receive their correct share of funding.
While the marked improvement in the administration and revenue collection in Lagos state are commendable, admiration needs to be tempered. As a former state commissioner told ARI:

“Lagos could achieve far more. The state piled up huge debts to fund infrastructure on the wealthy islands, but we could have done better if more had been spent on housing and new towns on the mainland and the outer reaches of Lagos, which would have reduced congestion and created jobs. There was no emphasis on taking care of the less well-off. Lagos state since 1999 has done nothing for the under-privileged and low-income earners that make up about 90% of the population”.

The nature of politics and corruption has not altered. The same party – the Action Congress of Nigeria, now part of the All Progressives Congress national coalition – has controlled Lagos since 1999, which ensures that political patronage strongly influences investment decisions. Contract inflation is rife and transparency poor. As one donor official put it, “Lagos looks shiny from a distance, but not when you look closely”.

Detached states
Government in Nigeria “is detached from its people at every level of the federation”, says Chidi Odinkalu. The restoration of elected civilian government in 1999 has done little to invigorate state or local governments. The failure to promote transparent, accountable sub-national government as the engine for local development is a result of weak institutional capacity and lack of political will. Although most states appear to have been set up to fail economically, demands to create more continue. As a Nigerian political commentator put it to ARI, “people on a gravy train don’t ask to stop the train”.

Nigeria’s crude oil earnings declined by 40% in 2015. Low oil prices mean that states cannot rely on the Federal Accounts Allocation Committee to increase their diminished monthly payments. A process of “structural adjustment” is required. African Development Bank country director for Nigeria Ousmane Dore told ARI “we are very worried about state governments’ finances”.5 Some states will try to borrow their way out of difficulty rather than focusing on what, according to Dore, is “the main problem”: the lack of IGR. In the short term, the Federal Government needs to be clear that it will not reward profligacy with further bailouts. This would force state governors to live within their means, controlling expenditure and augmenting income by raising revenues, and providing services in return.

In the longer term, solutions abound that look effective and straightforward on paper. The federal allocation formula could be altered to reward better governance. The number of states could be reduced to create more economically sustainable units. The overlap in responsibilities between tiers of government could be eliminated. However, many such measures would require constitutional amendments that are extremely unlikely or well-nigh impossible to implement within Nigeria’s political economy for other reasons.

Less ambitious reforms may be possible. The prudent guidelines on government spending and debt that the Fiscal Responsibility Act requires are only binding on the Federal Government. The same limits and guidelines should apply to state governments to prevent a recurrence of the recent insolvency and bailout. The Debt Management Office should also have increased powers over state government borrowing. Stricter requirements for disclosure of revenue and spending, and the imposition of conditions, would improve state financial management; as would timely, independent audits of state-owned enterprises and the gradual privatisation of such companies. A new initiative, BudgIT (yourbudgit.com), is already making headway in providing the public with budgetary information that enables citizens to monitor the performance of their elected representatives.

The 1999 Constitution Alteration Bill passed by the National Assembly in 2015 included a provision securing the financial autonomy of state assemblies. This would have strengthened the authority of state legislatures over the executive, but other provisions in the Bill led to it being blocked by the outgoing president, Goodluck Jonathan. Legislation is urgently required to ensure that state assemblies cease to be mere appendages of governors.

The Independent National Electoral Commission (INEC) won praise for its conduct of the 2015 presidential election. Biometric identification was used effectively and the commission succeeded in maintaining its independence and integrity under the most testing circumstances. More credible state government elections would make it harder for state governors and their “godfathers” to secure power by fraudulent means.

The abolition of the state electoral commissions appointed by governors would be a step towards improving the autonomy of LGAs. Prof. Ibrahim, a member of the late president Yar’Adua’s Electoral Reform Commission, told ARI that “in every part of the country the commission visited, everyone wanted the LGAs to be elected fairly and democratically because that is the branch of government closest to everyone’s lives”. The task of organising LGA elections should be assigned to INEC. If elected, as opposed to selected, LGAs could be held to account by local voters, demand their federal allocation from state governments and do what they are mandated to do: deliver basic services at grassroots level.
Nigeria’s states are in crisis. But modest improvements in IGR, financial management, conduct of elections, the autonomy of state assemblies and LGAs, and service delivery are readily achievable and would improve the lives of millions of Nigerians.

 

[The Odum of Ala Igbo]

What's that intra West African trade looking like?

Not good for a number of reasons:
1) Colonial legacy of export of primary products to Europe and North America
2) Lack of inter-African trade infrastructure like good roads, air links
3) Import bans are readily used
4) Border closures readily used

 

[The Odum of Ala Igbo]

Reviving this thread in light of the Fulani herdmen attacks across Nigeria, the 'deregulation' of the downstream oil sector in the country and the country's continuing economic crisis:

The Nigerian government wishes to give herdsmen land and grazing routes but Southerners across Nigeria resist this move. Especially since the government characterizes the Fulani as foreigners.
Herdsmen/farmers clashes: Nigerian govt proposes ranches, herdsmen insist on grazing routes - Premium Times Nigeria

The Federal Government on Tuesday reaffirmed its plans to establish cattle ranches as lasting solution to the frequent clashes between herdsmen and farmers in Nigeria.

The Minister of State, Agriculture, Heineken Lokpobiri, spoke at a one-day public hearing on a motion: “Tackling the Perennial Conflicts between farmers and cattle herdsmen”.

The event, which was organised by the Senate Committees on Agriculture, and National Security and Intelligence, sought to proffer solutions to the frequent clashes.

Mr. Lokpobiri, who represented the Minister of Agriculture, Audu Ogbe, said constant problem between the Fulani herdsmen and communities was as a result of climate change resulting from global warming and desertification.

He explained that herdsmen had no option than to migrate southwards to find pastures for their animals, which now faced starvation in the North.

Mr. Lokpobiri said nomadic cattle rearing had become obsolete and this was why ranches were a necessity to provide adequate food to the cattle and forestall unnecessary clashes.

He said that with ranches, the livestock would be healthier, more productive, while the herdsmen would avoid unnecessary attacks.

The minister added that they would also be able to give their children opportunity to be educated.

“Global warming, desertification and Boko Haram insurgency are some of the factors that forced the herdsmen out of the North down to the South to find grasses for their cows.

“The problem happened in America many years ago and they resorted to ranches as a solution.

“The nomadic nature of cattle rearing in Nigeria make the cattle less productive. In other countries, the cows do not move; they are kept in ranches and so they are very productive.

“So, we have to give a new orientation to herdsmen for improved productivity.

“They used to argue that nomadic cattle rearing is a tradition but we have to ask, as a tradition, is it profitable to the rearers; is it sustainable in the modern realities?

“Traditions do change based on realities on ground,” Mr. Lokpobiri said.

He said that while government planned to establish ranches, government would also tackle problems of climate change, global warming and desertification through the Green World Project.

However, the herdsmen, under the Miyetti Allah Cattle Breeders Association of Nigeria, rejected the proposal of the government to establish cattle ranches but insisted on having grazing reserves and routes.

The National Legal Adviser of the body, Bello Tukur, said that what they wanted was the establishment of grazing reserves and routes across the country.

Mr. Tukur said some of the herdsmen already established ranches in their various areas of operations and there was no need for government to do same.

Meanwhile, members of the Ohaneze Ndigbo said that they were opposed to the bill in the House of Representatives seeking to establish grazing reserves and routes in the country.

They also expressed their total support for the establishment of ranches in the country as a means of ending the recurring conflicts between herdsmen and farmers.

Paddy Njoku, who spoke on behalf of the President-General of Ohaneze Ndigbo, said that a cattle rearing was private business.

Mr. Njoku said it was wrong for the Federal Government to propose to acquire people’s lands for grazing reserves, and urged the government to ensure cattle do not destroy farmlands.

He called for the immediate resettlement and rehabilitation of the victims of the recent brutal attacks by herdsmen in parts of the country.

Mr. Njoku said nomadic cattle rearing was obsolete and should be discouraged.

At the occasion, representatives of the Tiv and Idoma nations in Benue, Southern Kaduna and the South-South regions all pledged support for the establishment of ranches. (NAN)

 

[The Odum of Ala Igbo]

The Federal government of the country is 'deregulating' the oil industry although they still retain control over many different parts of it - which will probably cause a greater fuel crisis. A take on it posted below:
Nonso Obikili's Blog

As you no doubt have heard, there has been a change in the official fuel pricing policy. You can read the official press releases here and here. First the good news. Any Nigerian entity can now import fuel from wherever they like with forex from wherever they can get it from. This is all “subject to existing quality specifications and other guidelines issued by Regulatory Agencies”. This is good news because it means the import side of things should get more competitive. A more competitive space implies a more competitive price which is mostly good for everyone.



There are still significant risks of course. “Subject to existing quality specifications and other guidelines issued by Regulatory Agencies” could mean anything from a lets-just-make-sure-that-is-really-fuel type rules to lets-form-a-mega-cartel type rules. Given that the licensing body is the DPR then one cannot have too much confidence. But we can give them the benefit of doubt.



The not so good news? The subsidy at this point in time has been removed but the price fixing remains. The official line is there is a price band of between N135 and N145 per litre. Practically though that just means the price is fixed at N145. It feels a bit of a missed opportunity. There was a real chance to get rid of the price fixing behavior once and for all. However, it seems this regime is going to do what other regimes have done. Remove the subsidy, fix the prices, and when future prices increase tactically bring back the subsidy.



As you might have read in my previous posts, the subsidy isn’t really a policy that is implemented but something that just comes about when the government fails to adjust prices to match with the market. The stage is set for that again. The DPR and PPPRA have managed to politically retain their price fixing positions. You can bet that when crude oil prices go up, and they always do, the PPPRA and DPR will lobby for the subsidy to come back. If history is anything to go by the FG usually obliges.



It appears the FG has made this move not because it really wants to deregulate the oil industry, but because its hand has been forced. You have to wonder what it will do when it actually has a choice. The price fixing means the big thorn in the flesh of the downstream oil industry is still there. The FG has relinquished only very little control and still holds all the keys. So make long-term investments at your peril.



There is also the question of the cartels. The MOMANs and IPMANs and NUPENGs and PENGASSONs. No point moving price-fixing power from the government to the cartels. And there is also the FX question which will need to be resolved sooner rather than later.

 

[The Odum of Ala Igbo]

Nigeria unions to resist 'criminal' fuel price hike - BBC News

Nigeria's trade union federation has said it will resist what it calls the "criminal" 67% rise in the petrol price, as fuel subsidies are removed.

The government announced on Wednesday that the price was to increase in a bid to ease crippling fuel shortages.

The Nigeria Labour Congress (NLC) said the rise from 86.5 naira ($0.43) a litre to 145 naira should be reversed.

In 2012, the government was forced to back down on a similar price rise after nationwide protests.

Africa Live: More on this and other news stories

Why is Africa's largest oil producer short of petrol?

Buhari's battle to clean up Nigeria's oil industry

The subsidy, which has kept the price low, costs the government $2.7m a day and there is no provision for it in the recently approved budget for this year, thepetroleum ministry said in a statement.

Recent fuel shortages have seen Nigerians paying up to 350 naira a litre on the black market, it added.

The subsidy has also encouraged corruption with the government often paying for more fuel than Nigerians use, says oil analyst Neil Ford.

Image copyrightAFP
Image captionProtests in 2012 led the government to back down from its plan to end the fuel subsidy
Despite being one of Africa's largest oil producers, Nigeria has to import fuel to meet demand as its refineries are dilapidated and work at a fraction of their capacity.

Petroleum Minister Emmanuel Ibe Kachikwu said that the price rise should stabilise the market and help end the fuel scarcity.

But "even with the new price regime, Nigeria would remain one of the cheapest fuel markets in Africa," he added.

He also argued that increased competition in the sector will drive prices down.

One of the reasons behind the scarcity has been the shortage of US dollars held by the central bank that importers could use to buy the refined fuel.

As well as dropping the subsidy, the government has announced that importers can now buy dollars from other sources.

On the ground - Isa Sanusi, BBC Africa, Abuja

Image copyrightAFP
Some fuel stations in Nigeria have already begun to sell petrol at prices dictated by the market.

Many here in the capital, Abuja, started last night after the announcement that the subsidy had been scrapped.

Only filling stations owned by the state-run NNPC firm are selling at the old price until they exhaust their current stock.

And fuel is likely to be even more expensive in northern Nigeria because of the cost of transporting it there.

In January, International Monetary Fund chief Christine Lagarde urged Nigeria to drop the subsidy saying that it encouraged corruption and does not "help the poor".

But the NLC has argued that given the other economic difficulties ordinary Nigerians are facing, "the least one had expected... was another policy measure that would further make life more miserable".

It added that its national executive will be meeting on Friday to decide exactly what action to take.