Friday, July 22, 2011

The Local Governments And Nigeria’s Fiscal Policy

The call and need for national economic transformation which has been brought to the front-burner of national discuss by the President Jonathan’s political and campaign clichés have made it worth the while for us to have another look at the third tier of government in Nigeria and its potentials towards the national transformation agenda.The fundamental philosophy behind the creation of the local governments or the third tier of government in Nigeria is that it is the government that is closest to the people and therefore spreads development and a sense of belonging to rural and grassroots people. It also emphasizes the place of government in the lives of rural people and facilitates the mobilization of citizens to support government policies. The local government is a channel through which citizens participate in their states and national politics.
Going by the fore-going, it could be said that the local governments constitute a platform for citizens’ participation in the national economy. The former finance minister and now World Bank Managing Director, Dr Ngozi Okonjo-Iweala was reputed to have said during her tenure and fiscal re-engineering efforts in Nigeria meant to enthrone transparency and engender best fiscal and procurement practices; that “we may have 36 states’ governments, Abuja, and 774 local governments but we shall have only one economy in Nigeria.”Therefore, every relevant fiscal or monetary policy being enunciated at the national level, without the co-operation of the sub-national units of administrations, will not achieve the relevant objectives and goals for the whole economy. It was in the light of this economic and national reality that the states and local governments were encouraged to pass the public finance and transparency laws –Fiscal Responsibility, Public Procurement and Freedom of Information bills in their own areas of jurisdiction.
It is still in the recognition of the place of local governments in the operation of the national economy that the Fiscal Responsibility Act 2007 said that the Federal Government may provide technical and financial assistance to States and Local Governments that adopt similar fiscal responsibility legislation along the same lines as the Act, for the modernization of their respective tax, financial and assets administration. The Fiscal Responsibility Act also spoke about the local governments and their Treasures in the management of Excess Crude Account and the sharing of its proceeds. In the management of national debt also, both the 1999 constitution and the Fiscal Responsibility Act talk about the consolidation of debt of the federal, states and the local governments. Therefore the management of the affairs of the local government by the State governments as if the local governments are no longer federating units with equal access to the Federation Account is not in the interest of the overall national development. Federal political arrangements have a role of democratizing developments and allowing peoples of diverse cultures and economic opportunities to develop at their own peculiar pace. The almost subsuming and subjugation of the local governments to the whims and caprices of state governors and governments in a plural society is antithetical to the development and unity of the country.

A local government is a government at the grassroots level of administration “meant for meeting peculiar grassroots need of the people (Agagu, 1997:18). It is defined as “government by the popularly elected bodies charged with administrative and executive duties in matters concerning the inhabitants of a particular district or place (Appadorai, 1975:287).

Looking at the existence, performance and relevance of local government, Laski (1982:411) opines that: we cannot realize the full benefit of democratic government unless we begin by the admission that all problems are not central problems, and that the result of problems not central in their incidence requires decision at the place, and by the person, where and whom the incidence is most deeply felt.

Local government can also be defined as that tier of government closest to the people, “which is vested with certain powers to exercise control over the affairs of people in its domain” (Lawal, 2000:60). A local government is expected to play the role of promoting the democratic ideals of a society and coordinating development program at the local level. It is also expected to serve as the basis of socio-economic development in the locality.

So many political developments and reforms have affected the local governments in Nigeria to the detriment of the People who live at that level of the society. By their nature, local governments in Nigeria had essential practical role in the society. Services like the supply of potable water, maintenance of local health institutions like dispensaries and maternity centers,  cleanliness of the locality, supervised by health or sanitary inspectors; provision of health gadgets like incinerators, public latrines, supervision and control of markets and abattoirs; maintenance of local roads and courts, the latter for dispensation of justice under customary laws; including the meeting of an array of many other items of local needs which these institutions were set up to cater for; and so as to ensure the stability of the nation; and by the same contingency, to provide the training of local statesmen, some of whom would graduate into the State, and National Service

 As important as this tier of government has been, there are several impediments that have been infringing on its performance and functions in recent years. These impediments range from political but undue interference of the higher levels of government i.e. federal and state governments, bribery and corruption to embezzlement and gross inadequacy of well-trained and qualified personnel to mention a few.

The 1976 local government reforms gave great hopes for the future of that tier of government .In 1988; Military president Banbangida introduced the Presidential System of government at the local government level, making room for the elected councilors to constitute the law-making arm of the local government administration. But since the operation of 1999 constitution, and the operation of state-local council’s Joint account, the local councils have been greatly subjugated and subsumed in the state governments and most state governors use the resources that belong to the local governments as slush funds for their own personal comforts and those of their cronies.

The state governors manipulate the local governments and their personnel by appointing Care-Taker Committees and Sole-Administrators to run the affairs of a system that should have its own elected officials. The State governments create more local governments’ areas in their states and run them as Development Centres which the National Assembly refuses to recognize in the constitution. Governors use the State Houses of Assembly to reduce the tenure of elected local governments’ council officials, sometimes to a very ridiculous level- 1 or 2 years, and dissolving them at will. This brings a lot of instability in the system.The local governments in Nigeria need to be saved from the clutches of the state governors. The running of joint accounts between state governments and local councils has messed up the much needed pace of development which it was expected to hasten at the rural level. The handing over by the constitution, of the management of elections into the local councils to the hands of the State Electoral Commissions in the 36 states is a very simple way of retarding the development of the local councils.
The whole idea of the Independent National Electoral Commission (INEC) managing elections into States’ Houses of Assembly and governorship election leaving out the Local governments elections in the hands of State Electoral Commissions set up by governors and the state legislators, who have failed to assert their independence given them by the constitution ,is no longer fashionable and result-oriented.
The constitution of Nigeria needs to be amended to help protect and liberate the local government so that they fulfill their constitutional mandate to the nation and in the interest of the rural people. The most effective option in the present realities is the constitutional take-over of the elections into the local councils by the National electoral body, to achieve uniformity of tenure in all the whole of 774 local governments in Nigeria. That way opposition parties can now win elections at the state levels and perhaps assert their independence before the state governments.
Genuine developments at the local council will be possible when Local council Chairmen will owe their loyalty and office to the electorate and not the State governors. That way they can be held accountable to the resources they collect on monthly basis by periodic elections. This should constitute the roadmap to progress for the third tier of government in Nigeria.
 Ugo Jim-Nwoko is a Public finance researcher and a member of the Centre for Social Justice. Plot 17 flat 2 Yaounde Street, Wuse.

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