The storied federal government bailout to states suggests that, the federal government is becoming rather motherly. The state governors are not getting informative about the issue, but acting picky. You know why? Our states are economic wilderness. The micro-economic environments in the states are anti- growth and anti-development. Bailouts have no fiscal sustainability. The bailout syndrome is a vicious circle. The states will always ask for more like Oliver Twist. The Greece experience had shown that, bailouts are not the solution to financial distress. What is required is financial prudence and creative thinking.

Anyway, the economic definition of the word “bailout” is practical and not theoretical. The states economies are the sum total of the national economy. But two halves do not make a whole. The federal government has no economic control over the states. Bailout is being used as a political instrument not as an economic instrument. Nigeria’s economy is disarticulated and not coherent. There is no sectoral and regional complementarity and reciprocity. Results can only be obtained by exploiting opportunities, not by solving problems. Business is a process that converts knowledge outside resources into economic value. Bailout is only throwing money at the problem. Business is an economic system dependant on capacity for economic performance. What have the Governors done with solid minerals and agricultural potentials in their states? They have been chasing petro-naira lazily.

Hmmm…, wait a minute! What about the so called oil producing states? They are also victims of their planlessness. The bailout syndrome is a deficient political and economic strategy. Permit me get pastoral. Proverbs chapter 21 verses 5-8 and Hosea chapter 13:6-7 had given us the clues to the problem at hand. We cannot make successes without good planning. This economic meltdown calls for godliness and righteous use of our God given resources. Proverbs 7:14 tells us that, both good and bad times must be endured because they came from God. What lessons have we learnt from the situations or circumstances confronting us now as a nation? We cannot diversify with a bailout syndrome. Every state should start to explore areas it has comparative advantage. Loans should be applied to the need structures for which they were obtained.
The states had become economic colonies to the federal government. They are not economically viable and so exist only for administrative convenience. Money received from the excess crude funds was not used for productive purposes. States existing as economic parasites cannot have good investment sense. They have committed economic suicide with loans and bonds, and thereby creating debt overhangs. The bailout syndrome defines the problem with our federalism.

And, it is a fact that, political democracy must go hand in hand with economic democracy. When the political process becomes excessively monetized, only economic aristocrats will secure power positions. They can buy their way into political positions and hijack the process of governance. So, politics will not be a game of service. It will rather be an investment. Workers in Bayelsa State had been forced to receive half salaries. The political class in the state had refused to make any sacrifice. And, they are living in luxury. The vitality and strength of the state had been mindlessly looted by rampaging politicians. This was done through dubious N40 Billion airport loan facilities. But you may ask, what is the economic value of an airport project to the people and economy of Bayelsa state? This misapplication of funds is not peculiar to Bayelsa State. It is the trend in most of the states of the federation.

Therefore, those who are championing the fight for resource control should realize that; the oil producing states cannot develop without good economic sense. The strong should not be allowed to do what they can-looting the state treasury-and the weak suffering what they must. Also, those agitating for the restructuring of the polity must have a rethink. The transformation of the six geo political zones, into federating units and the 36 states as federating zones is rather too academic. This will not change our political culture. We have been evasive of fiscal federalism. Section 134 (1) of the 1960 independence constitution of the federal Republic of Nigeria provided for fiscal federalism. It is time enough we wake up to the truth and stop pettifogging on salient national issues. States should learn to grow on their own. Our federal system of governance incentives economic laziness in the states.

Force Bray is a Citizen Journalist