FISCAL ENGINEERING IN ANAMBRA
In theory, Nigeria is a Federal State composed of coordinate central and provincial governments but in reality, the states are inferior entities to the Federal Government. Twenty-eight years of military rule in fifty years of independence had systematically reduced the states to vassals before the central government. By fiat of military decrees, the states became divested of ownership of the mineral resources in their territories, thus making Nigeria an oddity of a federal state.
The imbalance has been carried over into the forth republic through a military-designed constitution with a bloated, exclusive legislative list. Hangover from military rule has not afforded the political class recognition of the urgency for fiscal federalism. It is a measure of our unitary mindset that in twelve years of democracy since 1999, the country still operates a feudal revenue formula that allocates fifty-two percent of national revenue to the federal government at the expense of thirty-six States.
It is not surprising that a principal argument against the creation of more states has been the unviability of many of the exiting States. The marginalization of states in revenue allocation is compounded by the widespread mismanagement of the lean resources available to the same state. The point that huge revenue earnings by itself do not guarantee good financial health as much as prudent management is observable from Anambra State's fiscal engineering story.
Although neither an oil-producing state nor in the premier league of federation account recipients list like Kano and Sokoto States, Anambra State has proved to be fiscally resilient. Today, there will be more states hat are in arrears of workers' salaries or pensions or both than that are ;up to date in payment. Almost all the states are in one form of foreign debt or the other. Even the federal government which enjoys the lion's share of national revenue is equally indictable on these parameters.
Anambra state under the watch of Mr. Peter Obi deserves closer attention. This is especially the case because the state has achieved fiscal stability even while recording extensive infrastructural development. Available records show that even on the vexed issue of worker's gratuity, Anambra ranks among the most current states with payment up to the 2009 retirees. In the past four years, Anambra State has consistently paid its counterpart funding of projects initiated in partnership with international development agencies. World Bank Country Director in Nigeria, Onno Ruhl and former Finance Minister Okonjo Iweala had on occasions described the Obi administration as 'fiscally transparent' and 'responsible'.
Reduced cost of running government has proved to be an efficacious way of conserving funds for development for the Peter Obi administration. Over time, it has been established that the typical Nigerian government whether at local, State or federal level expends seventy percent of budgetary allocations on recurrent headings. For some critics, civilian rule in Nigeria is synonymous with profligacy. Only recently, it was contended that our federal legislators earn more than the president of the United States of America.
It will be recalled that in the wake of the global financial meltdown, late president Umaru Yar'Adua had sometime in 2009 ordered a slash in the salaries of federal political office holders. Subsequently, the Revenue Mobilization and Fiscal Allocation Commission sought to sell the idea to state governments but when the members of the commission came to Anambra State; they discovered that the emolument of political appointees was so low that instead of recommending a reduction, they advised an upward review. Till date, Anambra state still operates the old remuneration package.
Governor Obi for instance, has shunned the new Government House under construction as too big and opulent, insisting that the state has more beneficial things to do with lean resources.
•Nwokenife writes from Awka, Anambra State.