States And Fiscal Discipline

AT his meeting with state governors on Tuesday, June 23, President Muhammadu Buhari admonished them to embrace fiscal discipline in the management of resources accruing to their states. The president apparently was referring to the statutory allocation to the state and their internally generated revenue.
The president’s advice arose from the financial crises into which several states have been plunged, making it impossible for some of them to pay their workers for several months now. Apprehensive of the danger ahead, the governors had dashed to Abuja in search of bailout to which President Buhari responded positively, at least, in principle.
For several months too, a good number of local governments have not been able to meet their salary obligations to their workers and primary school teachers. Debts owed by the various tiers of government started piling up during the tenure of the immediate past administration.
Beside the sharp drop in the nation’s oil earnings, President Buhari attributed the acute financial predicament of the states to their financial indiscipline which at some point became rather outlandish. He linked the dire financial scenario to fiscal recklessness, lack of accountability, financial leakages and non-adherence to administrative and financial instructions. He accused the immediate past state administrations of managing their resources with impunity and intolerable atrocities allegedly committed with the crude account.
While President Buhari was dishing out some worthwhile financial lessons to the state governors, the Senate President, Dr. Bukola Saraki, was inaugurating an adhoc committee to carry out a fiscal examination of the finance of the upper chamber of the National Assembly. The target of the project is to device the best cost-effective strategy for the Eighth Assembly, which is being accused of plotting a N9billion wardrobe allowance for its members in the midst of sharp decline in revenues accruing to government. Senator James Manager, representing Delta South Senatorial District, is head of the committee.
How did the states get so enmeshed in the excruciating financial logjam? Since the dawn of the subsisting democratic rule, the various administrations at all the tiers of governance had managed the affairs of their domains with perhaps the assumption that the rush of petrodollars into the federation account from which they draw monthly allocation would continue for eternity, hence there was little thought about saving for the rainy day. In the light of this, they embarked on all manner of projects, including grandiose ones that are not even of priority to the people. But the catch in the contracted infrastructural projects was the nauseating overpricing; a situation where the cost of doing at least two roads, for instance, might have been used for only one.
In some cases, moreover, contractual projects fully paid for were hardly ever delivered. There were some ghost contracts the obligations of which were fully met on account of collusion by the relevant masterminds.
In the area of tax collection, scams, reportedly, were the order of the day. In some states, tax collectors allegedly connived with corporate citizens to avoid or evade tax based on special arrangements that funnel huge sums into private coffers. Furthermore, some collectors brazenly under declared the amount generated for personal benefits, which implies that the governments got far less than what is accruable to them.
Little wonder President Buhari observed that the Second Republic scenario of inept and corrupt governance had been rekindled but quickly added that sanity will be restored in the management of the nation’s public and economic affairs.
There is, however, hope that the current situation would be reversed, even if not immediately. Mr. President and the state governors appreciate first hand, the impact of fiscal irresponsibility of previous administrations and the doom ahead if urgent steps are not initiated immediately to redeem the times.
President Buhari, state governments, legislators and allied political office holders know too well the needful thing to do to deliver the states and country at large from their dire financial quagmires. We can only add that all avenues for siphoning public wealth and those other areas that promote responsible governance, including but not limited to accountability, transparency, due process, zero impunity should be strictly adhered to.