The AfDB boss, Akinwunmi Adesina advocates restructuring so that states can effectively utilise their vast resources for development.
Although Nigeria has bitumen reserves worth up to $1.5 trillion, the country spends over N300 billion importing the product, Akinwunmi Adesina, the President of the African Development Bank Group, has said.
Mr Adesina was the guest speaker at the Second Term Inauguration Lecture of Governor Oluwarotimi Akeredolu in Akure on Tuesday.
Speaking virtually on the theme 'Towards A New Nigeria: From Federal Fatherism To a Commonwealth,' the AfDB boss said there is a need for an urgent review of the current federal system practised by the country if it hopes to grow out of her economic woes.
"Nigeria's federalism does not grow its constituent entities. It simply makes them perpetually dependent," said Mr Adesina, a former minister of Agriculture.
"The total value of bitumen reserves in Nigeria could be worth up to $1.5 trillion, with an estimated 16 billion barrels in Ondo State," he said.
"The potential state wealth from bitumen alone could be worth $657 billion. The paradox however is that Nigeria spends over N300 billion importing bitumen."
He said given its vast resources in bitumen, Ondo State should have the best roads in Nigeria.
"But its roads are barely tarred with bitumen. That is the irony of Nigeria; it imports what it has in abundance and leaves its own resources untapped."
He noted that the state's wealth is locked under the ground and therefore, not visible, adding that Ondo State ranked number 13 of the Top 20 states in Nigeria in terms of its GDP, estimated at $8.4 billion.
"That's the irony of Nigeria's states: they are poor in the midst of plenty."
Mr Adesina called for a review of the entire system run in the country, arguing that "the union would be stronger when restructured".
"With the magnetic field of federal revenue allocations, states are constantly pulled, powerlessly into perennial dependency. The Nigerian system is therefore not federalism, but fatherism," he said.
"'The resources found in each state or state groupings should belong to them. The constituent entities should pay federal taxes or royalties for the resources.
"The stronger the states, or regions, the stronger the federated units. In the process, our union would be stronger."
Mr Akeredolu and his deputy-elect, Lucky Aiyedatiwa, would take their oaths of office on Wednesday to begin a second term of four years in office, after being declared the winners of the October 2020 governorship election.
He defeated his rivals: Eyitayo Jegede of the Peoples Democratic Party, and Agboola Ajayi, his erstwhile deputy who defected to contest on the platform of the Zenith Labour Party.
Wednesday's inauguration comes is in spite of his election being challenged by Mr Jegede at the governorship election tribunal.
Meanwhile, in his remarks at the lecture, Mr Akeredolu lamented "the present inclination to ethnic nationalism and clannish satisfaction in place of nation-building". He said that Nigerians, including highly revered citizens, "were gradually and unconsciously replacing national patriotism with sectional activism".
"Regrettably, even those with palpable national passion and patriotism are today, gradually tilting to the unintended ethnic nationality cabin," he said.
"Most Nigerians are losing faith in our 'Unity in Diversity' sloganeering, but there is an opportunity to restore national consciousness through True Federalism. It hurts none, it pays all."
Mr Akeredolu said the most potent threat to national belief is insecurity, adding that "the consequences had become increasingly daring because the issues had been allowed to persist for too long".
" As leaders, the choices we make create the path to our desires," he said. "We cannot pretend that all is well when indeed, more things are going wrong," he said."
"What we have set out to do in the south-western states is not targeted at any ethnic nationality or business.
"But we are against criminality and we shall fight criminality with every legal means. It is in the interest of our collective wellbeing. All we require is the support and understanding of all federating units, including the Federal Government.
"The simple truth is that we have lived in self-denial amid an excruciating pain that is almost cancerous now."
He said he desired a more united Nigeria "with every ingredient of freedom, rule of law, patriotism, love, mutual respect and harmony", adding: "and I am prepared to fight for it legitimately for the benefit of all."
"Let's all be convinced that these disturbing moments are surmountable if only we can be patriotic and courageous enough to confront them through the lens of dynamism. We shall overcome as a nation," Mr Akeredolu added.
Mr Akeredolu recently gave an ultimatum to herders to vacate the forest reserves in the state due to the activities of criminals in their midst. His directive was condemned by some northern leaders.