Former Vice-President Atiku Abubakar, on Wednesday, wondered why the country had been saddled with what he described as “a heavy and almost unsustainable debt burden.”
Atiku, in an address at the Royal Institute of International Affairs (Chatham House), London, said President Olusegun Obasanjo and himself provided the leadership that paid off Nigeria’s entire foreign debt of $32bn in one fell swoop 12 years ago.
He said, “After paying off a monumental debt accumulated by previous governments, then President Olusegun Obasanjo, on April 22, 2006 said, ‘Nigeria will not owe anybody one kobo’. Today, almost exactly 12 years to the day, you can almost say, ‘Nigeria now owes everybody more than one kobo’.
“What happened in the intervening years to turn the dream that our administration had into this present reality where Nigeria now owes double what we paid off in 2006?”
Atiku, who spoke on the importance of strengthening state economic management systems, said structural defects in Nigeria’s federal structure prevented the federal, states and local governments from operating at optimal levels.
He said after 19 years of uninterrupted democracy, the states had been reduced to parastatals of the Federal Government and had become addicted to the monthly allocations from Abuja.
Atiku said, “The only way to get them to manage their economies in an economically viable way is to cure them of that addiction. Nigeria needs to be restructured. We must commit to a new development agenda with focus on wealth creation by the federating units, rather than wealth distribution from Abuja to state and local government capitals.
“We must undertake far-reaching economic reforms to attract private resources, including financial resources and build bigger, stronger and more dynamic sub-national economies. We must expand the frontier of private sector activities beyond the realm of the oil sector and build a new Nigeria without oil.”
The former vice-president stressed the need for states to look inwards rather than outwards.
He recommended that states should follow the example that Obasanjo and he laid between 1999 and 2007 “when we privatised and liberalised many aspects of the Nigerian economy.”
Atiku said, “It had the almost immediate effects of reducing our wage bill and increasing services, capacity and jobs in the private sector. By privatising those state government-owned public enterprises that gulp huge sums by way of recurrent expenditure yet give little returns by way of return on investment, state governments can free more of their revenue from recurrent and devote it to capital expenditure.
“We have promoted, tolerated and indeed celebrated a defective political structure. The federalism we practise is not smart. We politicised the creation of states and local governments over the years.
“States and local governments became too weak to meet their constitutional responsibilities and consequently the Federal Government emasculated them and took away those responsibilities which belong to them.”
According to him, the combined Internally Generated Revenue from all the 36 states came up to less than one per cent of the country’s nominal GDP and less than 12 per cent of their 2016 budgets.