Okonjo-Iweala’s admonition to governors

The Director-general of the World Trade Organisation (WTO), Dr Ngozi Okonjo-Iweala, hit the bull’s eye recently when she advised Nigerian governors to avoid piling up debts on their states and instead prioritise citizens’ welfare if they want to have successful tenures as governors.

In an address at the Nigeria Governors’ Forum (NGF) induction ceremony on Monday at the Presidential Villa, Abuja, Okonjo-Iweala emphasised the importance of prudent financial management for state governments and the need to sustain payment of workers’ salaries.

The former finance minister and minister of finance during the Olusegun Obasanjo and Goodluck Jonathan administrations urged governors to prioritise the payment of teachers, healthcare workers, and pensioners, while investing in infrastructure, education, and basic healthcare.

Highlighting the need for increased internally generated revenue (IGR), Okonjo-Iweala suggested that governors should focus on transparency and efficiency in their financial practices. She encouraged them to publish information about the federation revenue allocation and IGR, to enable citizens to have a clear understanding of their state’s financial situation.

She said, “Nigeria is a country with no social contract, meaning that Nigerian political leaders have never been able to agree with each other to stick to a common set of principles, values, and policies that consistently deliver for their citizens regardless of ethnic group or political persuasion.

“You have a lot of healing to do – within your states, and between them. Through your words, deeds, and policies, you need to demonstrate to Nigerians that they are equally loved; that they can settle and do business in any part of the country without fear,” he said.

Moreover, Okonjo-Iweala emphasised the importance of monitoring debt profiles and controlling expenditure. According to her, while investing in critical sectors such as infrastructure, education, and basic healthcare, governors should prioritise the timely payment of teachers and healthcare workers.

Citing data analysis from the National Bureau of Statistics and Budgit, an organisation dedicated to providing financial reports on country budgets, Okonjo-Iweala revealed that a majority of states rely heavily on federal allocations for revenue. In fact, for 33 states, federal allocations account for the majority of their revenue, with 13 of those states depending on monthly impact allocations for approximately 70 percent of their revenue.

While state governments experienced a slight increase in IGR, rising from N1.2 trillion in 2020 to N1.61 trillion in 2021, these figures pale in comparison to the Federal Account Allocation Committee (FAAC) allocations of N2.23 trillion in 2020 and N3.16 trillion in 2021.

“While I commend those states that have made additional efforts, governors need to do much more. States must figure out ways to increase IGR. This goes hand in hand with using your 48 percent share of federal allocations more transparently, efficiently and effectively.

“You must share with your state citizens how much FAAC allocation you receive each month, how much IGR you collect, and how you spend it. We used to publish this information routinely during my time as finance minister under Presidents Obasanjo and Jonathan. We must resume this practice so your citizens can hold you accountable.

“Excellencies, please watch your debt profiles, and keep careful control of expenditures, even as you invest in infrastructure, education, and basic health systems. Please endeavour to pay teachers, health workers, and others their salaries, and retirees their pensions,” Okonjo-Iweala told the governors.

The WTO chief executive pointed out that the COVID-19 pandemic severely impacted on Nigeria, leading to a rise in poverty rates, as according to the World Bank, an estimated 95 million Nigerians fell below the national poverty line in 2022, accounting for 43 percent of the population. She also highlighted the potential of Nigeria’s youthful population, stating that the country has an opportunity to attract investment in labour-intensive production processes.

She encouraged governors to create business-friendly environments to attract both domestic and foreign investment, stressing the importance of Nigeria positioning itself as a platform for producing goods and services to meet regional and global demand.

Speaking on youths’ craving to relocate from Nigeria, she said:  “Excellencies, you must make your states and all Nigeria a hospitable, encouraging place where young people want to stay and thrive, not leave. Much as we appreciate remittances sent home by these migrants, Nigeria will not develop and prosper if its youthful, tech-savvy population leaves. Without them, our demographic dividend disappears.

President Muhammadu Buhari had on the occasion emphasised the importance of delivering on campaign promises and urged the governors to prioritise the needs of the people. He commended the democratic process in Nigeria, highlighting the recent general elections that saw the election of a new president and 18 newly elected or returning governors.

Okonjo-Iweala’s admonition could not have come at a better time as May 29, will herald the commencement of the tenure of most of the 36 state governors with a few returning for a second term of four years. We urge the governors to take heed or end up the ultimate losers; they should learn from the outgoing governors who lost their bid for the senate, having been rejected by their people.