Greater State Autonomy Is Solution To Addressing Poverty, Unemployment, Insecurity – VP Osinbajo
Keynote address deivered by his Excellency, Prof. Yemi Osinbajo, SAN, GCON, Vice President, Federal Republic of Nigeria, at the 3rd anniversary of the 8th assembly of the Lagos state house assembly titled, “Strengthening legislative institutional: panacea for enduring democracy (stronger states, dealing with poverty).
First, let me express my sincere condolence to His Excellency the Governor, Mr Speaker, the government and people of Lagos State on the terrible disaster of yesterday, and I express my condolence on behalf of Mr President and also all Nigerian people. I pray that we would never again see a reoccurrence of this type of tragedy, in Jesus name.
Let me begin by saying how very deeply honoured I am by this kind invitation to be here. It is an enormous honour to have been invited to speak in this place of history, this history making place and a place of law making. I have been here twice before, both for confirmation hearings as commissioner designate, the first in 1999 and the second in 2003. I have also been here several times defending budgets and for presentation of budgets, and very often trying to negotiate my way through.
But at each of those occasions the sheer importance of the legislative function as a pivot of our democracy has never escaped me. Indeed as it has been said and I say that this is not original. “Of the three organs of the government, the place of primacy belongs to the legislature. The function of government begins by law-making and is followed up by law-enforcement and adjudication functions. As such, the legislature is the first organ of the government.” This occasion is an auspicious one – the 3rd anniversary of the 8th Assembly. It comes at a time of great challenges and even more incredible opportunities for our nation and for this state which is its most populous and the centre of commerce in Africa’s largest economy.
From the theme: ‘Strengthening legislative institutions as a panacea for enduring democracy’, I have chosen a topic, ‘Stronger states and the eradication of poverty’. My reason for this choice is from the recognition of the fact that the legislature is no longer, in modern democracies, an island. Indeed it is the crucial gateway and interlocutor to the most important concerns of those who brought us here. In our case, the Nigerian electorate and those concerns revolve around simple issues. How do we survive, how do we make a living for ourselves? That is the central question of what occupies government; that is what occupies the legislature in this centre of government.
Perhaps the most important business of governments today is the creation of an environment that conduces to reduction of poverty by the creation of wealth, jobs and opportunities. It is my thesis that the most important structural change we can make in Nigeria is to speedily eradicate poverty and this is best achieved by stronger States, by creating stronger states, and by states I mean, the legislature which is the centre of the state including the executive and the judiciary.
Nigeria is a Federation of 36 sub-nationals and a Federal Capital Territory. The people, land, the busineses, the schools and healthcare facilities are all in the states. It is simply impossible for the nation to be wealthy when its component parts are poor. The standard of living of the federation depends on the standard of living of people who live in the states.
So, for emphasis, there are two streams of thought that I intend to advance in the next few minutes.
The first is that poverty can be eradicated, that a better standard of living and improved development indices are possible by actions of States.
The second is that to achieve these objectives we need stronger states. What does concept of a strong state mean? It means two things. The first is what states must do for themselves. By that I mean the three arms of government especially the executive and the legislature working proactively and creatively as independent administrative and wealth producing economic entities.
The second is the devolution of more power to the states, enabling the states to control more of their resources and make more of their own administrative decisions such as creation of Local Governments; the state and community police, including the state prisons; creation of special courts and tribunals of equivalent jurisdiction to high courts. The point I am making is that states must have more powers and more rights.
The phenomenal achievements of the Western Regional Government of Chief Obafemi Awolowo in six years illustrate how the convergence of the two imperatives I have mentioned earlier can be used to transform the socio-economic destinies of millions.
He was Premier of the Western Region of Nigeria from 1954 to 1960. The Western region is what today constitutes Oyo, Ogun, Ondo, Ekiti, Osun, parts of Kwara and Kogi, Edo and Delta, Lagos( as far as jibowu/ ikeja, Agege).
The six year period of the Awolowo government is often cited as one of the most progressive of any government in the developing world. Some of the major accomplishments include a major agricultural revolution, government supporting and subsidizing cash crop production, using commodity exchanges to enhance agri-business, several farm settlements, several Agro-allied and other industries including Oodua Textile Industries, Ado Ekiti, Okitipupa Oil Palm Mills, Oluwa Glass Ifon Ceramics, and Ire Ekiti Brick Industry, as well as several industrial estates or parks, including the Ikeja industrial estate. A network of roads across the region. the University of Ife (now Obafemi Awolowo University), The 26 Storey Cocoa House, Ibadan, Airport Hotel, Ikeja, Western Nigeria Television Authority (first of its kind in Africa, ahead of many European countries and certainly ahead of South Africa).
But by far the most significant of these achievements is the Free Universal Primary Education. In 1952 when the scheme was proposed, 381,000 children were enrolled in school. By 1955 when the scheme took off 811,432 children were enrolled and the numbers continued to grow.
The government devoted as much as 41.2% of the 1958/59 recurrent budget to Education, at that time, one of the highest in the world. At the same time, the region nurtured a vibrant civil service and judicial system, which is widely acknowledged as a model, even today.
So, how were Awo’s phenomenal achievements possible? There was no oil revenue and no Federal revenue. In fact, the Western region gave revenue to the central government. How did they do it? Mostly taxes and revenues from agriculture, especially cocoa.
Free education which was audaciously launched by the Awolowo government was directly on the back of income taxes. A capitation or poll tax was imposed by the Western region government mainly to fund free education, despite much opposition and protests. For those who follow his political history, Awolowo of course lost elections in the west on account of his insistence on free education. That kind of political courage is always difficult to find these days but that is the cost of leadership.
The truth is that a combination of visionary leadership and strong autonomous states is a winning formula for economic development, and that is really as simple as it is. Awolowo was also a visionary leader but he also had an autonomous region behind him.
But the process of creating stronger sub-nationals is possible even without making any major constitutional changes. Even within our current legal and constitutional framework much is possible. In the period from the civilian government of Ashiwaju Bola Tinubu, in which I was privileged to serve, to date, the government of Lagos state government working closely with the State House of Assembly has challenged the Federal Government and the National Assembly before the Supreme Court in several cases designed to deepen the independence and the autonomy of states. The Supreme Court established the following principles in the cases:
The first is that states could by law of the State House of Assembly create their own local governments. However, after the creation by law the state would have to go a step further by submitting returns to the National Assembly which in turn would list the new local government areas to be in the Constitution. It is because the state can create its own local governments that the Lagos state government at the time took the position that it could hold elections into the LCDAs that it created without any other law. But in consultation again with the State House of Assembly we agreed to create a special which is an LCDA law to empower the LCDAs not only to function administratively but to be capable of rendering the sort of services that local governments render. The important point to be made is that after the Supreme Court had said that we had the right to create local governments we have not back tracked on that since then and even up till today, state governments have maintained that position.
The second is that the Constitution intends that everything relating to local government must be in the province of the State Government rather than in that of the Government of the Federation. The National Assembly has no power whatsoever under any provision of the Constitution, to increase or alter the tenure of the elected officers of the Local Government Councils. Only the House of Assembly of a state has such power.
The third point is that a state has exclusive legislative and executive authority over urban and regional planning functions. Even with respect to federal lands in states, the Federal Government must seek building or other development control permits from the state. It is to the effect that the state has exclusive authority to make laws on urban and regional planning. Even where federal land is concerned the Federal Government must seek permission from the state.
The fourth is that the President has no power however good his reasons may be to seize or withhold the statutory allocation of a state or local government.
Permit me to consider the next ruling of the Supreme Court in some detail to demonstrate the extensive powers of State legislatures especially over the supervision of statutory allocations. The case had to do with the monitoring of revenue allocated to Local Government Councils from the federation account.
On the 12th of May 2005, the National Assembly passed a law titled the Monitoring of Revenue Allocation to Local Government Act 2005. The law established a monitoring committee for funds allocated to the local governments and required each State to give account of how it expended local government allocations to the accountant general of the Federation. Lagos State challenged the law.
In the lead judgment of Honourable Justice Niki Tobi, his lordship took time to explain the practical implications of the principle of federalism in our Constitution he said “Federalism, as a viable concept of organizing a pluralistic society such as Nigeria, for governance, does not encourage so much concentration of power in the centre.” Each of the federating units must be independent and coordinate. Each of them exists not as an appendage of the other but as an autonomous entity in the sense of being able to exercise its own will in the conduct of its affairs, free from direction by another government. This his Lordship contrasted with unitarism – an arrangement where the Constitution “concentrates at the central or national level a very strong central command, making the regions or groups parasitic on the centre, in the sense that they do not enjoy any autonomy.”
The Honourable Justice of the Supreme Court then went on to examine the respective powers of the federal and state legislatures, concluding the exercise as follows:
The first is, considering section 4(2) of the Constitution, the National Assembly could not exercise legislative powers in matters not included in the Exclusive Legislative List. The State Houses of Assembly on the other hand can legislate on maters not included in the Exclusive List as well as matters reserved to them on the Concurrent List.
Secondly, the only constitutional function of the National Assembly, under section 162(5), is to allocate to the States the amount standing to the credit of Local Government Councils whereupon the National Assembly became functus officio. It is the constitutional function of the House of Assembly to distribute the amount. In other words, “section 162(5) stops at allocation, and section 162(8) picks up from section 162(5) to distribute the money.”
The third point, the establishment of a State Joint Local Government Committee, is the function and responsibility of the Government of a state which is vested with power to maintain the State Joint Local Government Account by the appropriate sections of the Constitution.
The moment a State maintains a special account in the name and style of “State Joint Local government Account”, it ceases to be Federal Government finance and the Accountant General of the Federation cannot police the funds.
The final point is, the rendition of monthly accounts to a federal body in a matter which is within the exclusive domain of the state vide the appropriate provision of the Constitution is against the federal structure in the Constitution.
And the court concluded that as regards provision of that law which empowers the Auditor General of the Federation to submit a report to each House of the National Assembly stating how monies allocated to each State for the benefit of its Local Councils were spent, the Court held that the Auditor-General of the Federation had nothing to do with an exclusively sate affair.
The Lagos state legislature has also in this tradition of establishing and pushing the frontiers of federalism by legislation and litigation where necessary have also made great strides.
In more recent times, the Hotel Occupancy and Restaurant Consumption Tax Law Cap which imposes a 5% tax on sales in hotels and restaurants was passed by this House, it was challenged by the Federal Government at the Supreme Court, but the court declared that the law valid because matters of hotel and consumption tax are state affairs.
Also, the Lagos State Internal Revenue Administration Law 2006 established the Lagos State Internal Revenue Service by State Law (for the first time). Aside from several structural changes brought about by the law, it granted LIRS autonomy from the civil service such that its remuneration and disciplinary processes were more businesslike.
The Lagos State government, through its House of Assembly, enacted the Lagos State Waterways Authority Act and also modified the National Inland Waterways Authority Act of 2004 by the Lagos State Law. The law established the Lagos State Waterways Authority and saddled the agency inter alia with the regulation and management of the “internal waterways” of Lagos State.
The House of Assembly did this pursuant to the provisions of Section 315 of the Constitution of the Federal Republic of Nigeria, 1999 which empowers it to repeal an existing law. The Lagos state government argued that by the said provision, it had the power to repeal the National Inland Waterways Authority Act which vests the powers over its inland waterways of Nigeria in the National Inland Waterways Authority (NIWA). These are consequential legislation which strengthen state autonomy and I think it is very important to emphasise again that what the Lagos State House of Assembly has done is to push the frontiers of federalism by passing laws it believes is within the purview of what the state legislature could do and by so doing, it has deepened and strengthened federalism in Nigeria. And several of these legislations have proved to be sustainable. We are yet to find one that the Supreme Court has struck out, the court has upheld all of these laws, time and time again.
Let us now turn to the question of eradication of poverty. There is no question that poverty remains one of the most critical contemporary challenges of our nation. It is both a cause and effect of the conditions of squalor, disease and misery that millions of our people live in. The good news is that it can be solved and eradicated.
One of the major philosophical arguments that arose in the drafting of the APC manifesto, was the issue of how to eradicate poverty. The view that prevailed, was that we had to intentionally address the creation of economic opportunities for the bottom of the pyramid, the poorest.
The idea that by promoting formal sector businesses alone and hope that as they grow, they would provide jobs for the millions, is unrealistic. In any event, our informal sector in which hides our poor, is about 60% of GDP. There have been conflicting arguments about this issue, some argue that the best way to deal with poverty, is by strengthening formal businesses, creating the environment for big businesses to thrive, and we hope that when those businesses thrive, they will create enough jobs for the millions of the poor people that we have. The question is that that has not always been the case, our population growth is already outstripping economic growth.
Our population growth, as you know, is almost over 3%, and economic growth today, is certainly under 3%. By 2050 we would have the third largest population in the world. Three issues are critical to resolving the poverty problem. The first is education, second is healthcare, and the third is the provision of jobs.
Education, especially relevant education, is the surest pathway out of poverty. The immediate challenge is to resolve some of the crisis in that sector. The outrageous number of out of school children, about 10 million, and these include, to quote Prof Iman, “the children of the pastoralist communities who are spread across the country, the Almajiri and girl-child, found predominantly in the North, the out of school boys in the South-west and South-east as well as children of migrant fishermen in the South-south. In addition, there is the growing number of migrant farmer children in parts of Ebonyi, Ekiti and Ondo states and more recently, children displaced by the Boko Haram insurgency in the North-east”
There is also the problem of poorly trained and poorly remunerated teachers, and low investment in education, at both National and sub-national levels. There is a crucial need to address the issues by a mass youth and adult literacy programme leveraging radio and electronic and mobile platforms.
Comprehensive educational curriculum including Science, Technology, Engineering and Mathematics (STEM), and Technical, Vocational Education and Training (TVET) and Teacher Education, Capacity Building and Professional Development. These are issues that must be addressed.
At the last meeting of the National Economic Council; a council involving all of the state governments, we had a full discussion of this issue of education and how to deal with the educational challenge. One of the major problems we have is how to ensure that our adult population, that is even illiterate, is also made literate. And how to ensure that our growing youth population that is illiterate, is somehow, made literate. There is no way we can do it without technology. It is clear that we need to use technology and all the mobile and electronic platforms and some of those experiments going on. I know that at the Ministry of Education, there is a lot going on regarding using radios and mobile platforms for mass education.
There is a need to focus, spend time and put resources behind education, not just at the Federal level but in particular, at the State level. This is because the States have primarily, the duty to ensure that primary and secondary education is funded. It is within the province of the State government, Federal government does not own primary and secondary schools, except the unity schools.
Most of the problems we have are solvable, but perhaps it is important for us to talk about the public health challenges that we have. The good news is that most of the problems in our healthcare system are also solvable. It is better funding and more deliberately targeted preventive healthcare.
Take two significant diseases, Malaria and Aids. Malaria is one of the most important public health problems in the world. As of 2014, Nigeria accounted for nearly 29% of the global malaria deaths. Malaria is responsible for approximately 60% of outpatient visits to our hospitals, and 30% of admissions.
It is also believed to contribute up to 11% of maternal mortality, 25% of infant mortality, and 30% of under 5 mortality. It is estimated that about 110 million clinically diagnosed cases of malaria and nearly 300,000 malaria-related childhood deaths, occur each year.
The disease overburdens the already-weakened health system, and exerts severe social and economic burden on the nation, retarding the Gross Domestic Product (GDP) by 40% annually and costing approximately N480billion in out-of-pocket treatments, prevention costs, and loss of man hours (FMoH and National Malaria Elimination Programme [NMEP] 2014).
Nigeria has the second largest HIV epidemic in the world. Although HIV prevalence among adults is much less (2.9%) than other sub-Saharan African countries, such as South Africa (18.9%) and Zambia (12.4%). In absolute numbers, because we have more people, Nigeria has more people with HIV, there is more prevalence in absolute numbers, but actual occurrence is much lower than other parts of Africa. So the eradication of malaria and the prevention and containment of AIDS, will be major economic milestones.
The issue is that we must increase the aggregate National health expenditure. In 2017, the health budget of the 36 states was a little above N332.1billion, which was about 4.9% of total budget size. This year, only Bauchi has met the 15% target of the “Abuja Conference” target, where African Union countries pledged to set a target of allocating at least 15% of their annual budget to improve the health sector.
States must ramp up their spend, this year for the first time, with the active collaboration of the National Assembly, we met the 1% of our National budget prescribed by the Health Act for health care cost.
But perhaps more importantly, it is time for compulsory Health Insurance. The huge out of pocket expenses for malaria treatment make it clear that we need health insurance. Every State can have its own, this is an important conversation for the executive and legislature to have, in setting a legislative agenda. There is no question at all, that we must spend more on healthcare just as we must spend more on education.
So how do we deal with the job creation issue? As I mentioned earlier, our party, the APC, realized that we simply had to adopt a bottom-up economic model. One where government directly intervenes in by a massive social investment programme.
This sort of programme addresses youth especially graduate employment and credit to small businesses but especially credit to the smallest businesses, the one table trader, the bread or plantain seller or the MA Shai. This is the largest segment of our working population; their inventory is no more than N5000 – N10,000. They are an important part of the value chain of most goods, they sell the single sachets of soap, sugar, and spices to the largest numbers of our people. But they are forgotten and ignored in economic plans and budgets, and considered too unwieldy and risky for micro credit loans.
One of the reasons why our poverty figures are high, is because of our large informal sector, consisting of the petty traders whose income does not fit into the extreme poverty bracket, but are counted in the number because there is no way of tracking them or their income.
The plan of the Federal Government is to expand our GEEP, micro-credit programme, to give smaller credits to this group, eventually open bank accounts, what is called the Government Savings Account (GSA).
By giving them credit to replenish and increase their inventories, we give them a stronger chance, to earn more, while they also service the value chain that they are a part of. But more importantly, we bring them into the formal sector, where they have access to government and private credit and we lift more permanently out of poverty. This is an important part of the Economic Growth and Recovery Plan, ERGP, and we believe that by next month, July, we should begin that micro-credit, giving to the bottom of the pyramid. It is a very interesting process, we have working with us, most of the major banks, also some of the TelCos and payment companies. We think it will be a game changer in terms of the way we approach our economy and economic planning in our country.
For youth unemployment, we believe that while creating an environment for business and industry to take off and provide jobs, government has to intervene especially with the unemployed graduates. So our N-Power programme where we engaged 200,000 graduates, and will be engaging another 300,000 in July, is the largest post tertiary jobs programme in Africa. All of the volunteers are given electronic tablets which has extensive training and capacity building resources inside it. We now know that we can train large numbers electronically.
The Lagos State Employment Trust Fund established by a law of this House in 2016, is an excellent example of state intervention in creating opportunities for small businesses. As of May 2018, the fund has given out 7,000 loans totalling almost N5 billion, it has created over 12, 500 jobs in its first six months of operation. We think that this is a very important initiative of the State government, because it understands and addresses and important segment of our society; the young bright minds that require some capital to be able to multiply their ideas and thoughts.
The Home grown School Feeding Programme is another important programme we do in collaboration with state governments. We feed 8.2 million children daily, engage over 70,000 cooks, and patronize farm products in every state where the programme runs. It is both a direct job creation scheme as well as a health programme for the children in public primary schools. The programme is an important collaboration between Federal and State governments and plans have been concluded with the Lagos state government, to commence the programme in public primary schools in Lagos.
Nigeria’s economic growth will depend largely on the successes of local businesses. While the Federal government has substantial responsibility for creating the right environment for ease of doing business, because all businesses take place in states, the active collaboration of states is crucial. How? Speeding up the processes for securing title to land. Fortunately, we have worked with our able and dynamic governor, to ensure that this happens in this state. This is a state that everybody looks to for commercial activity. The governor has worked in collaboration with the Federal government to ensure speeding up permits and title documents. This has helped us in moving up in the Ease of Doing Business ranking of the World Bank. I would like us to commend His Excellency, the governor, in supporting us in that way.
At NEC, we have agreed to collaborate to ensure that we have uniform fees for the installation of pipes and cables for broadband infrastructure. This is absolutely important, because broadband infrastructure is the next level of infrastructure that we need for the kind of growth we must experience. Without broadband infrastructure, we will be miles and years behind our competitors anywhere in the world. We can’t afford to have problems with people who want to install infrastructure, which is crucial for the next level of our economic development. Gladly, all of the governors agreed that we need to watch the cost and agree on sensible cost for doing so.
We must also avoid the impunity in tax legislature, especially by tax imposition by agencies, for medium to small scale businesses, small claims courts, fast track courts, and ADR are important. The Lagos State judiciary has as usual, set the pace in these important adjudicatory reforms. I must say that what Lagos state judiciary has done, with small claims court, fast track courts, has set the example for all other states. Without those small claims court, most small businesses won’t be able to do their businesses effectively. Without fast track court, commercial activity is slower, with ADR, it will be practically impossible for the sort of options that are required in a very busy commercial environment such as we have.
Again, the Lagos state judiciary and government, have gone way ahead of others and created the exemplary institutions that we all want to see. I want to say as I close, on the issue of security, the one that is crucial is, it is possibly the most important function of government. There is no way we can possibly expect to have commercial activity, social activity in a way that is satisfactory, if we cannot guarantee security.
In guaranteeing security, the role of government; the State government, the role of State judiciary are crucial. The Federal Government has the overarching role of ensuring that the Police works, the Army is doing their job, and other security agencies are doing their work.
But we have argued repeatedly, and we believe it is the position of our party, that you cannot police a country of this size, with a police command that functions out of Abuja. It is just impossible, we must have a state police, community police. The reason why it is so obvious is that policing is always a local function. Anyone who is a police man must be able to speak and understand the local language. If a police man doesn’t understand the local language, he stands at a major disadvantage. This is why state or local policing is important as part of our security architecture.
Some of what we have seen in many parts of the country, where we have had herdsmen killings and clashes with farmers, and the slow responses of the security agencies, has been on account of the fact that local policing is weak. If you look at the Logo local government area in Benue state, it is on the border and far away, the number of policemen stationed there, and several other local governments, are far too small to contain the sort of challenges that they have there. We must have Special Forces and Joint Task Forces, in order to maintain peace. But how is that possible in several local governments across the country?
The only solution we can proffer, therefore, is some form of local policing so that the state can decide, how many police men, how many security agencies are required. That is the way by which we can have enduring solutions.
Let me end by thanking the RT. Hon. Speaker for this kind invitation, and also to all the Honourable Members of the House of Assembly, and to my brother, His Excellency, the Governor of Lagos state, Akinwunmi Ambode, not just for the dynamic leadership he has shown in Lagos state, but for giving us some bragging rights, that we are able to say that consistently, Lagos state has already changed.
My brothers and sisters of this revered house, the opportunity for leadership is an incredible God-given one. Whatever we choose to do and however we choose to do it, we must recognise that this is possibly the most important occupation we will ever have. We can be promoted in the lines of business, but public service is possibly the most important occupation we will have, because it is the only occupation that allows you to touch millions of lives.
There are two ways of looking at it, one, it is an opportunity for self-aggrandizement, to do something for one’s self, it may also be an opportunity for actually making a difference in the lives of millions. The choice is always open to us, but I think that a country in our state, with the tremendous resources that we have, and for us in office at this time, we have the responsibility to ensure that the choice that we make, is one that advances the rights and interests of our people.
Thank you very much.
Senior Special Assistant to the President on Media and Publicity
Office of the Vice President
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