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Opinions of Monday, 23 August 2021

Columnist: Ogundare Bright

No need creating new states

File photo to illustrate the story File photo to illustrate the story

Nigerian daily newspapers on August 8 reported that the Senate had recommended the creation of new states. It was, however, later clarified by the Senate that it had not recommended the creation of new states but declared its readiness if the motion is pushed through. On the economic front, the Nigerian economy faces a two-pronged battle with a rising inflation rate and economic fallout of the ongoing COVID-19 pandemic. With these, should we even be considering creating more states at this time?

The creation of more states is not just a political question. It is also an economic question. In an April 2021 report by the National Bureau of Statistics on the Internally Generated Revenue of the 36 states and the Federal Capital Territory in 2020, a total of N 1.31 trillion was generated by all the states. Out of these states, just three viz, Lagos, Rivers and the Federal Capital Territory generated almost half of the amount, generating 32.08%, 8.97%, and 7.05%, respectively. In monetary figures, just Lagos and Rivers states generated above N100 billion, while 12 states generated above N25 billion.

Furthermore, 17 states generated below N15 billion, as six of them Yobe, Taraba, Adamawa, Gombe, Jigawa and Ekiti generated below N10 billion. In terms of contributions of the IGR to total revenue, most states get the bulk of their revenue from the Federal Accounts Allocation Committee, a committee tasked with monitoring the accruement and disbursement of the federal revenue. Only Lagos and Ogun states as well as Abuja have an IGR more than what they receive from FAAC. Meanwhile, 20 states get at least 75% of their revenues from FAAC.

As evidenced by the report, most states in Nigeria are not economically viable. Many states cannot pay salaries using their own Internally Generated Revenues. The states have become so heavily dependent on federal allocations that they cannot do the most basic tasks of governance. The creation of new states will involve splitting some of the existing states which themselves are in the first place not viable. To put this into perspective, out of the proposed states, there will be two states created from the Adamawa State and one from Taraba State, both of which generate less than N10 billion. What will be the fate of these new states created on a faulty economic foundation?

The agitation for statehood is primarily borne out of ethnic discontent with the state’s political structure, which does not allow minority ethnic groups to attain the highest political positions. Creating a separate state for everyone will not solve this.

Nigeria’s democracy relies on alienating the smaller ethnic groups. Within a minority ethnic group, one is bound to find a smaller group with a legitimate grievance against the larger group in matters like senatorial positions. If the solution to minority agitations is to create a new state, we might end up turning every local government into a state.

Furthermore, creating new states will increase the already high cost of governance in Nigeria because this will translate to extra governors and deputy governors and their appointees, more state Houses of Assembly members and federal legislators with their aides. This expansion, in turn, translates into more costs in a country with the highest number of people living in poverty and the most well-paid political office holders in the world. Finally, all facts point to the needlessness of creating more states.

Instead, the National Assembly should concentrate on making the states more viable. A stress test includes an objective evaluation of each existing state with their IGR, expenditure and debt portfolio, and capacity to respond to varying degrees of economic crisis. This stress test will then be used to build policies that will make them more economically independent and viable. With the rest of the world moving away from reliance on oil and its dwindling fortunes, we cannot continue to create more states to depend on the oil revenues from FAAC.