Time For North To Get More Revenue

Gov. Babangida Aliyu, Chairman Northern Governors Forum

At present, all the 19 northern states cannot effectively function without the monthly allocation from the Federation Account. But can the 19 northern states ever survive without the monthly allocations from the Federation Account? - Certainly yes; if the region can wake-up from its slumber.   

The thirst of northern Governors for more revenue from the Federation Account stems from the age-long scramble for easy oil money by the Nigerian political class. It is also an indication of the poverty of ideas on how to free the region from the ‘slavery’ of   increasing reliance on the Federation Account as well as poor creativity in new ways of generating revenue apart from oil. In addition, northern leaders are not enthusiastic about utilizing the vast agricultural land and the human capital of the region.

 

Nonetheless, it is hightime northern states initiated new ways of generating more revenue. The new ways have to take cognizance of agriculture and human resources.

In a world where land has become a scarce resource- Northern Nigeria encompasses about 75% of Nigeria’s 993,773km2 of land area, with climatic conditions favourable for agriculture. The region has more than 400,000km2 of large array of flora and fauna, naturally fertile and arable land, water bodies and large number of populace with potentials to be agricultural entrepreneurs. Why, then does agriculture suffer setback in the region? Many factors can be said to be responsible for this, few among them are: indolence created by heavy reliance on the easy oil money; neglect and lax assessment of the place of agriculture in regional development; poor implementation of agricultural programmes and schemes; non involvement of rural dwellers, youths and real farmers in the agricultural programmes. And   lack of well-defined roles between governments at all levels. 

The North, being blessed with favourable climate for agriculture needs to redefine the implementation strategies of its agricultural programmes and policies in such a way that youths and rural famers will be the central focus.   

This writer once advocated a  ‘youth/rural farmers-centered’  agricultural programme  that  will employ an all inclusive technique where youths, local communities, local councils, states, and the private sector (financial institutions and private investors) will be active and major participants. Financial institutions and private investors will act as financiers; governments at all levels will have well-defined roles, while the youths and rural farmers will be the main targets. In addition, the programme will be designed to be four-pronged- ‘export oriented’, ‘large’, ‘medium’ and ‘small’ scales. How will it be implemented? 

Northern states collectively (through any of their regional agencies) act as guarantor of fund to be provided by financial institutions or private investors. This will be done through the issuance of either callable, par value or coupon rate bonds. The scheme will involve local councils and state governments providing lands and other logistics. The private investors or financial institutions who participate in the scheme are not to give money directly to the governments in order to receive the bond-certificates. Rather, it would a kind of batter arrangement; the investor (either financial institution or private individuals) will set up farms and put in place all structures required in  modern farms. After which a bond certificate equivalent to the cost which would have been consented to by both parties will be issued to them. This will help reduce financial irresponsibility- the main reason for the failure of most good programmes in Nigeria, as far as the scheme is concerned.

As a way of encouraging investors to participate in the scheme, the investor would take a prescribed stake, between 5% and 10% in any of the farm they setup before the maturity of the bond. This is an added value to investors since, in addition to the interest they will get from their bond when it is redeemed, they will have shares in the farm’s profit. However, after the maturity of the bond, their stake in the farm will be transferred to the host communities.

Despite the seeming complexity of such a scheme; if experts in various fields are engaged in designing its workability, it can be experimented as a tool for the implementation of numerous government programmes. It will accelerate agriculture as a source of growth for regional and national economy; improve its capacity as a provider of investment opportunities for the private sector; and a prime driver of agriculture-related industries.

There is a huge hole on the health of the education sector in northern Nigeria. Hence, a need for a shift in the way the sector is run in the north. This shift will put in place a system that provides adequate funding, help in improving standard and   quality of both teachers and students, a system that completely aids in shifting away from the status quo where- government is the provider, administer, monitor and assessor of how funds are utilized. 
 

This writer is a strong advocate of greater participation of the private sector in managing of public schools. However, not a ‘bulldozer’ kind of participation, where government will entirely surrender these schools to private entrepreneurs.  States in the north can introduce a ‘measured’ public-private partnership in the education sector. Where government builds new schools, equips old ones,  then take a benchmark from a well-run private school on what it costs per student head in running a school;  then a gradual entrusting of public schools to private sector, where government provides the funds, taking into cognizance  cost per student; as it is in private schools, while the private sector manages it especially in the area of infrastructure maintenance, provision of teaching tools, management of training programmes for teachers etc. 

Ideas development is also an excellent way to create employment for skilled manpower in the north, and the region can use it to generate more revenue i.e. using the well known concept of: Innovate-Create-Invent-Invest. Experts have maintained that it is the most difficult but the most effective way of creating long-term employment and wealth. Despite the seemingly low literacy level in the north, the region churns out thousands of graduates yearly. States in the north should establish innovation and invention centres across the region and in tertiary institutions. The centres should work in such a way that, graduates with technical skills and entrepreneurship passion, will have access to facilities and environment that support thinking for invention and innovation. There are many government and non-governmental agencies that can play vital roles in such a scheme. Moreover, private investors can also be major participants, as they can be fund providers for any invention or innovation with great market potentials. With this kind of scheme, it is possible to see new industries surface; the economy gradually grows and lots of good paying jobs are created.

Northern Governors should utilize the region’s agricultural potentials and human capital to generate more revenues and wealth for the region, instead of the crave for more easy oil money- which seems to be grease that runs corruption, poor creativity in revenue generation and low national productivity in Nigeria.

Zayyad I. Muhammad writes from Jimeta, Adamawa State, zaymohd@yahoo.com, 08036070980.