Leadership (Abuja)
Jerry Uwah
26 August 2008
opinion
The Fourth Republic was just a few months old when the late Chuba Okadigbo was confronted by the press with facts suggesting profligacy on the part of members of the National Assembly. Okadigbo's response was that he did not come to Abuja to spread poverty. That statement was loaded. About eight years after it was uttered, apparently as an insult to the toiling masses of the country, the National Assembly still behaves true to it. Even as poverty is tightening its merciless grip on over 70 per cent of the country's population, Nigerian lawmakers and other top politicians live in stupendous opulence at the expense of the poor. They are even asking for more.
President Umaru Musa Yar'Adua has spent the last one year reversing his predecessor's policies. The changes have been so monumental that many of us have lost count of what is still left of former President Olusegun Obasanjo's reforms. Right now, I cannot say precisely what Yar'Adua's position is on the issue of monetisation. If he is still implementing the monetisation policy, then Nigeria is burning its candle from both ends, given the huge sums being spent on the acquisition of vehicles for government officials.
I remember Babagana Kingibe, secretary to the government of the federation, was once quoted as saying that the aspect of monetisation that bars ministers from being provided with official cars and drivers was demeaning and an unnecessary humiliation of holders of the exalted offices. Kingibe was so upset by the policy that he ordered the replenishing of what he regarded as the depleted fleet of ministers' cars. Midway into the replenishing exercise, the president himself intervened and ordered that the acquisition of cars for ministers be halted since the monetization policy had not been scrapped. Today, a thin gray line divides monetisation and the old era when the provision of official cars rested squarely on the over-burdened shoulders of the federal government. The fleet of cars of top government functionaries is bloating by the day. In fact, the poorer Nigeria becomes, the more we spend on government functionaries. The National Assembly is still squabbling over the scandalous cost of acquiring scores of Peugeot 407 top-of-the-line cars for its key members at the expense of the federal government. Perhaps the most insulting is the hiking of lawmakers' and top politicians' pay by 100 per cent. Even the international community is saddened by the profligacy of Nigeria's rulers. Like the Holy Bible said, 'their belly is their god.'
The monthly remuneration of an average member of the National Assembly is in the range of N10 million. In fact, in the current budget, the National Assembly alone gulps N140 billion. That is the budget of Zamfara, Sokoto and Kebbi States put together. Ironically, the money would be spent on just about 600 public functionaries. The cost of governance in the country has therefore spun out of control. In fact, an informed analyst contends that the cost of governance consumes 80 kobo out of every naira earned by the federal government. The remaining 20 kobo is spent on capital budget. The cost of governance has taken such a disproportionate share of the national budget that, in the last three years, even as oil prices average about $70 per barrel, infrastructure has decayed to the extent that Standard & Poor's (S&P), a leading financial industry rating agency, in its recent report classified Nigeria's banking industry as high risk. The agency attributed the high operational risk faced by Nigerian banks to unstable politics, weak judiciary system, poor corporate governance, internal security problems and infrastructural deficiencies.
It fingered infrastructural deficiency as a major contributor to the low rating that the Nigerian banking system attracted. The credit risk carried by Nigerian banks is very high, because the hostile business environment makes it difficult for borrowers, especially small and medium enterprises, to honour their loans repayment commitments. Infrastructure, especially power, is in advanced state of decay in the country. Zain, one of the nation's GSM providers, recently announced that it burns 450 litres of diesel every second to power its 3,600 base stations strewn across the country. The same company employs two security men at each of the 3,600 base stations because it lost two expensive power generators in one month. That tells any investor of the level of insecurity in the land. No one can, therefore, blame S&P for its assessment.
An economy running on generators can only present the banking system with high-risk borrowers. The cost of doing business is so high that lenders have resorted to building the high risk presented by numerous borrowers into the cost of funds, thus escalating lending rates. The irony, however, is that the risk of default rises with the cost of funds. That explains why S&P rates Nigerian banks as high risk. Nigeria is apparently burning its candle from both ends. While members of the National Assembly are clamouring for higher pay through legal means in a land where poverty reigns supreme, the same set of politicians are busy stealing from the lean treasury. The renewed campaign for higher pay for legislators at this time is a primitive way of legalising criminality and extortion. The lawmakers do not deserve their current pay. Many of them hardly report for duties. They have perfected a way of extorting more money from the executive before approving each ministry's budget. They know that members of the executive have a free hand on the till. That is their own way of getting their cut from whatever is stolen by members of the executive arm of government.
The high cost of governance is primarily responsible for the under-development of the country. Nigeria sits on huge reserves of gas. Fertiliser, a key input in agriculture, is obtained from gas. Even smaller oil producers like Algeria are self-sufficient in fertilizer production. Nigeria imports basically all its fertilizer. National Fertiliser Company of Nigeria (NAFCON), Port Harcourt, which was a beehive of activity in the late 1980s and early 1990s, was run aground by the cankerworm of corruption. Since then, no one has given serious thought to the idea of building a plant that would convert gas to fertilizer. Each day, we flare away associated gas worth millions of dollars and end up polluting the environment with what could easily be converted to wealth.
The landing cost of imported diesel is about N143 per litre. The Nigerian National Petroleum Corporation (NNPC) sells the little that Nigeria's crippled refineries manage to squeeze out to marketers at N65.15 per litre. The pump price of the product is now N160 per litre depending on where the purchase is made. What could be derived from the above scenario is that the pump price of diesel cannot be more than N90 per litre if it was produced in Nigeria. No one in the federal government can explain why the sixth largest exporter of crude oil cannot build and maintain refineries that would make it a net exporter of petroleum products. The only reason is that the cost of governance takes just about everything and leaves the government with nothing to invest in the future of the country.
The rulers of Nigeria are so engrossed with what goes into their pockets that what they have only succeeded in doing is to spread corruption evenly down the three tiers of government. From the federal to local government councils, the password is 'sharing formula'. Local government allocation from the federation account passes through state governors who take their own cut and pass it down to the council chairmen. The chairmen take their cuts and give councilors their own share of the loot. What is left is used to settle staff salaries. If the allocation is robust enough to stand the pressure of the numerous layers of cuts and still has something left, then whatever is left is used for community development.
Government contractors from federal to local councils behave just like the politicians. When they get a contract and are mobilised to move to site, they first use the money to build new houses, buy more trendy cars and then move to the site to spend whatever is left of the mobilisation fee. The one who won the contract to build a major road in the community I live in Lagos ended up spending two years to put asphalt on a one-kilometre road. The moment he collected the first installment of the contract sum, he hurriedly built another house and acquired two new sport utility vehicles (SUV). What was left of the money could only build drainages which trapped many cars in their owners' compounds for one year. For a whole year, nothing happened on the road as residents groaned in silence from the disruption caused by development. After much pressure from the community, the man was mobilised again to return to site. He hurriedly put asphalt on 80 per cent of the road and disappeared. Those who gave him the job in the council could not complain because they apparently got their own cut. That is how politicians under-develop Nigeria. Only a wicked and insensitive ruler would double the remuneration of derelict, over-pampered lawmakers in a country where 10 million children are out of school, either because government could not provide the classrooms or the high cost of governance has reduced their parents to paupers who cannot foot the bill of sending their children to school. I am convinced that Yar'Adua is a God-fearing ruler. Unfortunately, his hands are tied and he has been paralysed by the fact that those looting the treasury were the ones who paid the bills for his ascent to power. The man is simply dumb-founded by the monumental swindling of the nation going on around him. The president would probably love to see the lawmakers taking less than 25 per cent of what they are earning now. But he cannot raise a finger against them because of the impeachment power they wield. The experience of Adamawa State governor Murtala Nyako is enough to scare the president into hurriedly signing off more money for the lawmakers. The only thing is that the president has no moral right to talk about fuel price hike if he cannot curb the uncanny extortionist penchant of lawmakers.
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