Grain · Capital · Laban's House
Recently, the Nigerian federal government provided the various states with a special sum of 435 billion Naira for the purpose of security and infrastructure. On the surface, this appears to be an attempt to stabilize the economy and to alleviate concerns regarding weak borders and bad roads. However, the actual effect of this money will ultimately depend on how it is spent. If the funds are given as handouts rather than being earned through local industry, there is a risk involved; namely, that the leaders may become good at gathering and distributing money, but not at building or keeping what the country really needs.
Experience has proven that a sudden gain of wealth can mask more serious issues. In the middle part of the 1900s, certain Gulf states became rich all at once and managed to build up modern cities rapidly. However, since they had not trained any local experts, the cities remained weak and had to rely on outside assistance for simple repairs; although they possessed resources, they lacked a solid basis. Nigeria's states are now at a similar junction. Should the 435 billion naira be employed merely for short-term remedies such as fuel, temporary security payments, or road repairs which don't last, the money will be exhausted quickly and the following government will have to deal with the same problems everywhere again.
If wealth is to be lasting then it must be channeled into enduring institutions rather than being spent quickly. This involves creating facilities that will still be of use a long time after the present leaders have departed, for example a digital land registry, reliable power stations, or roads which only require simple maintenance for many years. At the moment Nigeria's economy places too great a reliance on money from the centre and does not place sufficient emphasis on developing local skills and knowledge so as to enable these systems to be kept going.
When a governor receives an allocation, the resources involved do not actually belong to his state. Although he might be skilled at operating within the federal system, he has no say in the economic future of his state. It is therefore the state that is valued for complying with federal rules rather than for developing a strong economy of its own.
The only way to judge these funds is to see how openly and efficiently they are turned into enduring assets. Should a government not be able to cite any asset that will still be there in ten years as a result of the 435 billion Naira, then the money must have been wasted. Genuine security does not consist merely in having armed guards, since that involves a continuous expenditure; it is about having reliable electricity, good roads, and economic opportunities that last. We have to go beyond the headlines and consider how much of this money is actually being invested for the future rather than being spent immediately. The future of the country hinges on creating lasting value, not simply on the quantity of money that is distributed.
What should be done
The Federal Account Allocation Committee (FAAC) ought to require an 'Infrastructure Minimum' which means that 60 per cent of the special allocations must be linked to capital projects that can be verified and have a 20-year lifespan. The State Houses of Assembly ought to pass legislation establishing an independent Infrastructure Audit Office in order to monitor the conversion of cash into public assets. Commercial banks should set up 'Project Custody Accounts' for these funds, with payments only being released after the milestones have been verified by independent auditors.
Segun Jerome
Segun Jerome is the founder of Dadalowa, an education technology company operating in Canada. He also writes about Identity, Education and civilization development.