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Economic Crisis: 14 things Nigerian governors fail to do to cut waste

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Wednesday, March 16th, 2016
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The current decline in global crude oil prices is a wake-up call for Nigerian states to rise to the realities of looking inwards to survive through the difficult times.

Most states of the federation apparently live from hand to mouth, severely feeling the impact of plunging oil prices.

Every month, their representatives go to Abuja for the Federation Accounts Allocation Committee (FAAC) meeting, where oil revenues are shared among the three tiers of government and the FCT.

In days when crude oil sold for an average of $100 per barrel, money was not the problem for some of the states. Allocations were often above budgeted benchmark price, and, besides statutory allocations, the government had excess crude oil money to share.

With revenues from oil exports shrinking every passing day and the excess crude revenue account almost depleted, states have to explore alternative ways to survive.

Here are 14 survival tips for state governors in the period of economic downturn.

  1. Kill corruption before it kills the states

One of the greatest challenges states are facing is corruption. States’ budgets are often padded with over-bloated contracts and bogus projects.

In many states, project sums are over-inflated, resulting in high incidences of abandoned projects. Sometimes before contracts are awarded, contractors are expected to make huge upfront payments to approving officials. If corruption is removed in the contract awarding process, states would save enough money for effective governance and development.

  1. Cut the governors’ long convoys

Despite the poor revenue situation of the states, the flamboyant lifestyles of their governors remain untouched. The trademark of most state governments is long convoys of latest models of exotic cars for governors, members of the executive councils and wives.

The costs of maintenance, fuelling and repairs of these vehicles are always major drain pipes on the resources of the states. If the states could cut down their appetite for exotic cars in long official convoys, they will save significant resources for other development priorities.

  1. First Class flight tickets and private jets

Apart from long official convoys, state functionaries spend huge portions of their resources on travelling within and outside the country.

Most state government officials travel with first class air tickets, while others have private executive jets permanently on standby to fly them across the country and abroad, many, on private trips.

Think about the cost of maintaining an aircraft – from parking permit at the airport, through insurance, to periodic maintenance abroad. If the states cut down the use of First Class air tickets and use of private jets, huge revenues can be saved from the excess expenditures associated with these lifestyles.

  1. Cut down on retinue of personal aides, political appointees and overheads

State governments will save huge revenue for development if they significantly reduce the number of political appointees that draw hefty salaries and allowances.

Most of the political aides, who receive huge fringe benefits from the system, are purely for political patronage and don’t bring any value to the system.

Monthly overhead payments to government departments should also be pruned, and redundant government agencies scraped to reduce wastages.

  1. Do away with security votes allocations

Every year, allocations for security votes take a huge chunk of the states’ budgets. Generally, expenditures under security vote allocations are never subjected to scrutiny. So, governors are at liberty to spend the allocations on anything that catches their fancy.

However, since all the issues the security votes are meant to be used for have already been catered for in the annual budget of the different government agencies, the states could save big by abolishing continued allocation for security votes.

  1. States’ liaison offices drain the purse

Every state has liaison offices in the Federal Capital Territory and other key states of the federation.

They have the full complement of staff and all the perks of office for the governor, ranging from official convoy of cars, governor’s lodge and guest houses, to political aides, advisers and assistants. All are maintained with huge allocations from the states. With such offices, most of the governors are virtually away from their states.

If the offices are scrapped, the budget allocations for their upkeep and maintenance will be saved for other meaningful uses in the state.

  1. Stop playing “Father Christmas”

Most state government executives accumulate huge extra budgetary expenses in the form of donations that do not add value to the business of governance.

Governors also donate vehicles, money or give contracts at inflated rates to traditional rulers and top politicians to either get traditional titles or political favours.

If such expenses that do not add value to the economic development or social welfare of the citizenry are stopped, or cut down by at least by 30 to 50 per cent, states would have more revenue saved for other development purposes.

  1. Check “ghost workers”

The payroll of most state governments are replete with names of non-existing workers who receive fat salaries and other benefits, including pensions, from more than one pay points in various ministries, departments and agencies.

States need to establish a structure that would check the ghost workers syndrome to save them huge revenues lost to faceless workers.

  1. Halt the frivolous borrowing

Most states in Nigeria borrow to spend and not invest. Some of the projects for which loans were taken for implementation are often abandoned, as such monies are often diverted to private pockets.

If states cultivate the habit of borrowing only when it is absolutely necessary, they would be saved the pain of servicing loans that have no projects on ground to show for them.

  1. Curb excessive media hugging

Most state governors love the media attention and publicity stunts.

States buy spaces in newspapers and magazines, prime time on live television and radio which often run for several hours. These media exposures cost a fortune of revenue that could have been saved for more important developmental uses.

For every conceivable programme, heads of state parastatals and agencies buy spaces in newspapers and magazines or TV airtime to sing the praises of governors and their wives.

  1. Change the “Owambe” mentality

Most state governments see every little event, from the birthday of the governor or his wife, to the marriage of the relation of any of its functionaries, as an opportunity to organise expensive parties, where expensive drinks are served and costly gift items are distributed to guests.

During such ceremonies, special attires, with face of the government official embossed, are imported and distributed at state expense.

State sponsored banquets, lunch and dinner events are regular menus of some state governments.

In some instances, some governors hire private jets to convey guests to secluded locations for exclusive parties at the expense of their states.

If the states must survive the difficult times, the state governors must stop this attitude and ensure that every kobo at their disposal is spent wisely to the benefit of the people.

  1. Stop award canvassing

State governors are known for jostling for recognition and seeking bogus awards from groups, organisations and media houses interested in merchandising same for cash.

Most of the governors pay huge amounts to be selected the best for the award so long as it does not come from their pocket.

Other governors pay millions of naira to get honorary doctorate degrees from universities in Nigeria and beyond.

Stopping this habit could save huge revenue for meaningful development project.

  1. Look beyond oil glass; explore areas of comparative advantage

There is no state without one natural resource or other endowments that could be tapped into. Every state has several agricultural products they can develop into a veritable revenue spinner.

States must look inwards and identify these natural endowments and work towards establishing cottage industries in industrial clusters capable of creating jobs, while generating revenue for the government.

Farm settlements in areas of comparative agricultural advantage could be one of the viable ways to go.

  1. Step up internal revenue generation drive

Without oil, states must look at other revenue generating avenues available. Citizens in most states do not seem to be paying taxes. States should think outside the box and decide to introduce taxes on luxury items. Tax consultants could be of help.


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