By Jude Ekeh
The improvement seen in the crude oil price in recent weeks presents both a relief for the few responsible state governments that have been driving development with meager resources and a warning for others that may easily forget the hard lessons of the oil price fall. Inability to build adequate economic buffers and the low productive capacity of the economy are the main problems that expose both federal and state governments to fiscal crisis once the oil market faces the downside of the cycle.
The pace of the economic development function under the present administration is retarded considerably by the absence of fiscal surpluses that should have been built up during the upside of the oil market cycle. In the brightening hopes for a sustained crude oil price recovery, it should be expected that federal and state governments should not let themselves be entangled in such fiscal misconduct again.
The drop in revenue inflow from oil could still have had less devastating effects on the nation’s economy if the state and federal governments had improved economic and operating capacities of their respective economies to deliver increased productivity, employment and opportunities for self employment. The more judicious and enterprising state governments have recognized this major drawback and have embarked upon aggressive capacity building to facilitate rapid economic development.
The Enugu State government, led by Hon Ifeanyi Ugwuanyi, is one of the few that has so far pursued infrastructure development with meager resources at its disposal with the objective of creating a bigger economic capacity for the state. The improving oil price and the expected improvement in revenue inflow will therefore be a big relief for such state governments already on the right track of repositioning the state economies.
Should the oil market continue to improve, state governments will need to take one important step and that is to start building economic buffers that would shield state finances from the volatility of oil price and revenue in the future. For many states that aren’t yet thinking ahead, the prospects for improving revenue inflow from the federation account appears to ring the last warning bell. The warning is that those who fail to seize this opportunity to build the missed internal economic capacity could miss yet another chance.
We are close to one year in office of the present administration and both state and federal governments are expected to present democracy dividends to the people in two months time. Only very few state governments may have anything reasonable to show the people in terms of development projects at the end of one year in office. For the rest it will be a blame game all over how oil price collapse has undermined their ability to deliver their electoral promises.
While there are numerous natural resources to be developed and exploited across the various states of the federation, a number of the states are manifesting serious symptoms of being unviable. Nigeria has as many as 34 solid minerals, vast arable land and more than 170 million youthful human resource capacity. Every state of the federation has its fair share of nature’s resource allocation.
As it has done before, the drop in oil price is sending the message once again about the critical need for Nigeria to look inwards now; use locally available resources to build a strong internal economic capacity. State governments should lead in this direction in order to reduce their dependence on federal allocations and minimize the risk of revenue fluctuation with the volatile oil market.
I am impressed about what the Enugu State government is doing so far in the health sector, for instance. It is constructing three new specialist hospitals in each of its three senatorial districts. This is further to the upgrading of six district hospitals to specialist hospitals early this year.
The state government is pursuing a vision to make the state a choice destination for healthcare services in Nigeria and beyond. It is presently working towards the completion and commissioning of ultra-modern diagnostic centre, which is designed to be a world class centre of medical excellence. This is in addition to ongoing upgrading and strengthening of the existing health facilities and institutions in the state.
With the vital role that the Orthopaedic Hospital Enugu has played since its establishment in 1976, Enugu State already has an operational advantage in the area of specialist healthcare services. This is a great opportunity the state government is capitalizing on to extend this area of competence.
The Orthopaedic hospital, which was established to take care of the Nigeria/Biafra’s war victims, is renounced for numerous medical feats. It serves up to 14 states in the country as its catchment areas and also supports some foreign countries to deal with their endemic medical challenges.
Having under its enclave one of the most important healthcare institutions east of the Niger, it can as well develop that status further to become a state with some of the best specialist medical services in Nigeria and Africa. If this is achieved, the state can derive more revenues from specialist healthcare services than some oil producing states can hope to receive from oil exports.
The ability to appreciate what we have and work with it rather than keep complaining about what we lack is the critical factor in development and growth of any society. If it is true that Nigeria is rich in human and material resources yet to be explored, federal and state governments should seize from bemoaning the collapse of crude oil price and move ahead to explore these abundant resources.
The time for the government and the people of this nation to act is now. The downside of the oil market cycle can linger for 10 years and more and therefore only people and governments that are taking steps to develop their potentials have a chance of surviving in the years ahead.
Cost saving initiatives present viable options in times of revenue shortfall. Internal economic capacity building therefore needs to focus on major areas of dollar-denominated spending such as healthcare services and education. We need to build new capacity in medical research in Nigeria to develop drugs from locally available raw materials.
This will ensure that effective drugs are not only available continually but affordable to the people. The prospects for developing vital specialist healthcare services at comparatively cheaper cost will no doubt hasten the desire of a state like Enugu to become a centre for medical tourism in Nigeria and in the world.
I expect from state governments a new passion in internal capacity building, a new zeal to accomplish and a defiant determination to give the various states a big facelift in operating capacity. Touching lives at the grassroots is the key development strategy that state governments were set up to drive. The capacity to do so should be painstakingly shielded from any particular product or resource and this is yet another good time to do so.
Ekeh, a public affairs commentator writes from Abuja
