The present Osun financial crises evoke pity if one takes the time to understand its structural roots. It is hard for those of us who are familiar with the turf watch the governor, a man of an otherwise adored and praised by his people being picked at by an understandably aggrieved public over the turn of events. It will be a grave political mistake to treat this as a simple public finance management issue and turn a blind eye at the larger picture of fiscal dealings of the federal government with states.
Everyone is familiar with the narrative of a crash in allocation from the Centre. Well, it is real. If the receivables on your budget have had to take a 60% crash without precedence or warning, you are certainly going to be caught struggling in a net awhile, especially if your payables remain unforgivingly deductible at source, principal, interests and all!
But there is more. The creation of Osun state in 1991 by the Babangida administration left certain key elements out which was key to the survival and thriving of a federating entity – and some of such omission can be observed in a few young states as well. You can expect those states to reach their critical cusp any moment too and manifest fiscal trouble symptoms akin to what we have seen in Osun this far, unless the present federal administration alters the fundamentals to protect other states.
No.1. A new state must have a down payment of certain basic infrastructures. For Osun, the capital was billed to be linked to the Ibadan-Ilesha expressway by a 32-km road at Gbongan on the bill of the Federal government. This was left undone. Oshogbo remained a capital with a little “This way to” signboard pointing in its direction. How is that type of an environment to grow and become self-sustaining? Who wants to put his business in a location with no roads in a modern sense? The city was to be skirted by a 30-km axial road to broaden its rim and make movement faster. About 12km of that was built by the Federal government way back under military administration and the rest abandoned. But for the Bisi Akande government of 1999 to 2004, Osun could up till now still be without a state secretariat. The whole environment remained a pastoral and idyllic one, hardly the type that attracts or stimulate forward socioeconomic movement at all.
The Aregbesola administration in its zeal to accelerate economic development in the state had eagerly taken the bull of those projects by the horn and had gone to source long term loans to build those roads I mentioned as well as another federal road linking the state to Kwara. That bridge you see on the expressway that links Oshogbo at Gbongan on your way to Abuja is being built by the state, not the federal government. Pubic schools were pathetic, empty sheds and something just had to be done. Those projects are important if the state is to be stimulated economically and it is not fair for the Federal authorities to have shown a cavalier attitude in its duty to the newborn state 25 years on.
I believe if the Fed should repay Osun for those projects today, the state will be out of financial woods for the good part of its present N36billion salary bill, to begin with.
Talking about salary, how does a state like Osun cope with this huge personnel cost that swallows over 70% of its total revenue?
No. 2 , Osun has proven gold reserves which has been mined artisanally since the Portuguese colonization in the 16th century. Till date, there is no structured exploration of the mineral for lack of funding. Gold exploration is not as simple and as cheap as oil exploration. In prospecting for oil, the earth is bombarded with sound signals and the echoes analyzed to reveal subterranean liquid bodies. For gold, you need extended periods of digging with actual augers to several meters of depths. Workmen descend as deep as 5km in some South African gold shafts following gold veins.
The Fed should have funded the exploration of this mineral for the benefit of the state right from inception. Such legacy projects would have given the state a solid local economic foundation on which viability and development can be built. The standard practice in gold exploration is to engage what is called a Junior Mining concern. This will map out the gold and gather geological data that the actual mining company will rely on for a mining contract and actual exploitation. The means for engaging a Junior Mining company is beyond the state. One would have thought that a special development federal fund should do this. There must be some basic economic skeleton to give form and structural integrity as foundation for a political entity like a state upon which further development can be built. If this is not done, the states are but mere geographical expressions and the governors are mere transmitters of handouts from Abuja.
No.3 is water resources, which among other things, is cardinal to local economic development. The Osun River is a branch of the Niger running through the state all year round. It seems that river in fact played a crucial role in making the survival and the thriving of early settlers possible in what grew to become Oshogbo, the state capital. Throughout its length, there is nowhere it is stopped with dykes for conservation for off-season farming. Why is this so? This idea was central to the creation of the River Basin Development Authorities, a federal agency, but what have they done with the Osun river so far? In fact the Aregbesola government has been spending billions dredging that river so it will stop overflowing its banks and killing people. Since Aregbesola came in, death by flooding has stopped in the state. And for a fact, here is another area where the Federal government is indebted to the state in form of Ecological Funds. The state has borne the brunt while Abuja plays politics with refunds. I am certain Abuja owes Osun much more than its N29 billion salary debts in statutory Ecological Funds alone! But let’s get back to irrigation. Why wasn’t a major dam for water conservation not one of the endowments for that state at creation to give it a modern agricultural launching pad? This would have made a whole lot of difference for the state’s large farming communities and reduced dependence on monthly federal handouts. It would also have impacted positively on IGR, for you can only increase IGR to a point by tightening collection strategies alone. Real increase in IGR is a function of local productivity. The trouble that Governor Aregbesola got himself into stemmed from the fact that he keenly saw the need for some of these infrastructures and he rammed himself into the job of providing them with borrowed funds, hoping for some clement political turn that will help address the Federal attention deficit the state has suffered, especially as an opposition state. It was something that was bound to happen someday – any day a governor that is passionate about development gets on the saddle in Oshogbo. It may have been for the fear of the present quagmire that foregoing governors left the works undone, yet, what real good can come from a leader who walks on eggshells? He is probably the type of a governor who wouldn’t want his main achievement in power to be mere prompt salary payment and so had to stretch his resources thin, living as it were, in hope. Had the federal government not cut allocations to that state much earlier than the period of declining oil revenue, you can be certain that his projections would have worked and these seams would not have burst.
Somebody has to be brave and adventurous at a point in a community’s leadership history to provide that initial lifting force that seeds growth. Yes, it comes with a price which I think Ogbeni and the people of the state are paying right now. However, it will serve us well as a people not to throw the baby out with the bathwater by failing to dig deeper. The reasoning that the Osun governor is wanton with the state’s affair or is flagrantly uncaring is simplistic as it is unfair. To just dismiss the man with a simple wave of the hand in a politically convenient way that our system affords will do much more harm to the state and will not lead to a solution. A question is pertinent: Why was allocation to this state cut from around April, 2014, a few months to the state’s tensed governorship election which the erstwhile ruling party sent 73,000 troops to police and was clearly desperate to win? Was there a deliberate plot to scuttle the state financially? Where does this take us in redefining the fiscal relationship between the federal government and states? Answers to those questions will equip us with the right tools to address the Osun financial situation more rationally.
Governor Aregbesola must have his own imperfections of course. Perhaps, he is too zealous for development, maybe he could have been slower. Or he could have first right-sized the state’s bloated civil service. It is possible he could have somehow mitigated this whole cascade of events. But then, real-life leadership comes with risk taking, it’s prices and it’s gains. Maybe that was the reason that the state hardly ever came near the headlines in terms of physical development until Aregbesola came along.
I believe if the Federal government honours 70% of its statutory obligations to the state right now, its present troubles will be history. If it goes further to endow the state by helping it in the area of gold exploration and water conservation/irrigation, that state will become another golden egg goose in a most literal way.
John Ogunlela is an agricultural scientist, entrepreneur, blogger, public policy analyst. He resides in Osogbo an can reached via email@example.com