Governor Ambode’s Ambition of Zero Dependence on Federal Allocation

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The Lagos State governor’s plan for progressive elimination of dependence on federal allocations is laudable and worthy of emulation by governors of other states in the federation, writes Vincent Obia

Verbalising the inability to meet basic obligations due to dwindling federal revenue allocations has of late become a familiar ritual among state governors in the country. A situation created and sustained by a pseudo-federal system that reduces states to unproductive spoon-fed entities and glamorises indolence, the drop in federal revenue has, ironically, caused both euphoria and despair. To many governors, it has provided a convenient excuse for owing their workers several months’ salaries. But one governor has decided to rise above the systemic limitations to focus on creating wealth for the good government of his state.

Governor Akinwunmi Ambode of Lagos State says he hopes to reduce his state’s dependence on federal allocations to 10 per cent in three years. “We also have plans to achieve zero per cent as we develop our potential in tourism and services,” Ambode adds while addressing residents at a town hall meeting on Tuesday.

The Lagos State governor is exploring the state’s huge population as well as advantages in the hospitality and service sectors to eliminate the ignominious reliance on the federal government by states for sustenance.

Ambode’s ambition is praiseworthy and commendable. Other state governors should emulate the lofty ideals of the Lagos State governor, as he tries to up the ante in fiscal independence, which the state has been known for since the inception of the Fourth Republic in 1999. Nigerians cannot forget in a hurry the events of 2004, when the state was denied revenue allocations due to its local governments from the Federation Account for nearly one year.

Its offence was the conduct of elections into 37 newly created local council development areas, which brought the number of local governments in the state to 57. The then President Olusegun Obasanjo was offended that the Lagos State governor at the time, Asiwaju Bola Tinubu, exercised what he thought was the state’s statutory and moral right to create local governments under a federal system.

The Lagos State government sued the federal government at the Supreme Court over the seizure of the state’s local government funds. And the apex court ruled on December 2004 in favour of the state, ordering the federal government to release the withheld funds. It was a landmark judgement that clarified the fact that no level of government has the power to withhold funds statutorily meant for another tier of government.

Very importantly, the state government was able to deal with the financial difficulty occasioned by the seizure of its council funds by the federal government and manage to stay afloat.

Lagos State has also led in internally generated revenue. With an IGR of N185.541 billion in 2010, N202.761 billion in 2011, and N219.202 billion in 2012, Lagos topped the states’ IGR table, followed by the oil-producing states of Rivers and Delta, respectively. Lagos State’s monthly IGR increased from N20 billion in 2013 to N23 billion in 2014. The state currently generates about N24 billion monthly.
Ambode plans to eliminate dependence on federal fund allocations altogether and run the state on the basis of internal revenues.

The Lagos experience brings to the fore the sad relationship between Nigeria’s obsession with a quasi-federal structure built on the nationalisation of resources and the country’s underdevelopment. The state has presented the strongest stand against this system, which has stifled creativity and killed healthy competition among the federating units since the early 1970s, and retarded national development. Lagos has remained the leader in terms of capacity and disposition to independent development.

Conversely, states that have seemed to be very comfortable with the partial federal structure have been the most backward – which sets the country’s fundamental economic challenge in stark relief.

The states must come together to demand fiscal federalism and a truly federal system that would release the creative capacities of the federating units to achieve their full potential. It is only then that they can really contribute individually and collectively to national development.

A truly federal structure that abolishes the current immoral expropriation of local resources would also prevent the federal government from being an encumbrance to itself. It would free the federal government from numerous needless burdens and enable it to focus properly on the core national obligations of ensuring a robust national defence system, strong currency, and effective border security. These are responsibilities on which the Nigerian government has fallen far short of expectations.