The Missing Tier of Local Government

In the year 2011, the 774 Local Governments and the 6 Area Councils (LGAs) in Nigeria received almost N1trillion (about $7billion) from the Federation Account, which is equivalent to the entire annual budgets of Burkina Faso, Rwanda, Burundi and Togo combined. These transfers were to enable them carry out their functions, which include the administration of primary education and primary health care, construction of markets and boreholes, and rural development in general. Most Nigerians would agree that is little or nothing to show for this huge transfer of free cash to the LGAs. It has not always been this bad.

Between 1955-1965, LGAs (or Native Authorities as they were then called) were responsible for about 12 per cent of the public expenditure in the country, equivalent to almost 10 per cent of the GDP. But today, they gulp about 21 per cent of our national revenue without commensurate results for the subventions that they collect from the federation. And worst still, with few exceptions, they now entirely depend on transfers from the centre for their own expenditures. They no longer generate revenues like in the first republic and believe they are created simply to collect monthly allocations to spend on politicians, thugs and families. It would be an understatement to say that the LGAs performance of their core functions has been disappointing, nearly criminal.

The primary responsibility of local governments as enshrined in the constitution is rural, urban and community development as outlined earlier. However, rather than working to reduce poverty by providing these services to their people, they end up just paying salaries of primary school teachers, and not much more. While our LGAs contribute a negligible percent of our GDP and employ less than 2 per cent of the employed population, in the United States, counties, which are the equivalent of our local governments contribute about 20 percent of the GDP and employ about 10 percent of the employed population. Everything from elementary schools to international airports are developed and under the control of counties, municipalities and city councils in the US!

In South Africa and Indonesia, local governments have the responsibility to provide an expansive range of services like those in Nigeria, but they are largely fiscally and political autonomous, as only about 14 percent of their revenue comes from central government transfers, compared to the almost 90 percent in Nigeria. Local governments and council elections are independently conducted without interference from the provinces. Unlike, Nigeria, countries, taxes constitute by far the largest source of revenues, comprising on average of 52 percent of total revenues. Council elections are not decided by the states/provinces, but by community arrangements that guarantee free and fair emergence of credible leadership. The instances above point to the direction of reform of our broken and dysfunctional LG system.

In preparing this piece, I conducted an informal straw poll of the perception of the respective LGAs performance on a scale of one to hundred among my circle of friends, relations and work colleagues. It is admittedly unscientific and the sample small, but quite insightful. First, local governments were scored about 10 per cent in the performance of their five core constitutional functions and the sample believed that they show no sign of improvement. Secondly, the overall performance of LGAs has slipped considerably from about 40 per cent in 2005 when the average LG got N60 million monthly from the centre, to less than 10 percent in 2011, when they got an average of N100 million monthly from the Federation Account!. What I learnt from the sample is that most LGAs only pay primary school teachers’ salaries and nothing more out of their core functions. No respondent gave any LGAs more than 40 percent in any service delivery area – a failing grade in any exam anywhere in the world. It is therefore no surprise that our rural areas are so underdeveloped.

It was General Murtala Muhammad regime that inaugurated and subsequently accepted the recommendations of the Dasuki Local Government Reforms Committee in 1975. The administration promulgated the enabling law effective on October 1, in 1976 to entrench Local Governments as an independent and self-accounting tier of government. The reform’s two most important priorities were to reduce development inequality (between urban and rural areas) and to increase political accountability across the country. We then had 360 LGAs in the 19 states of Nigeria.

To carry out these efforts, the 1979 constitution assigned to the LGAs some substantial resources, along with political and economic responsibilities. They were required to provide most public services with the exception of higher education and security. The essence was to create strong political accountability, democracy and a sustainable political culture.

What went wrong with the Local Government reforms? Why has the responsiveness of LGAs to the needs of their citizens been deteriorating as their revenue-dependency increasing? And how did Commissioners of Local Government become the best friends of State Governors, almost always, governors-in-waiting under this democratic experiment?

The reforms failed because the federal government itself and the states, in pursuit of political maneuverings and a share-the cake mentality changed all that. First, we allowed the number of LGAs to spiral to 450, then 78), while the number of states nearly doubled from 19 to 36 plus FCT. Resources had to be more thinly spread across a larger number of fiscally-weak, often incompetent administrative units. Then, more recently, in what looks like a reversal of our federalism and Constitution, the PDP-led central government for the past 10 years has implemented a policy, which rather than encourage LGAs to provide affordable services for their localities by strengthening their political and fiscal autonomies, has embraced the opposite: annexing them to the state governments and treating them like fiefdoms instead of independent third tier of government.

The two culprits that enabled this “annexation” of LGAs in the 1999 constitution are the creation of State-Local Joint Account and the State “independent” electoral commissions! These have undermined economic development and political accountability. Obviously, neither the states that have swallowed the LGAs by collecting their monthly subventions nor the local governments themselves are offering any core service to Nigerians. These sections of the constitution need to be revisited.

There also seem to be a lack of commitment from the federal government to make local governments truly functional. A wide range of complex constitutional and technical issues needs to be addressed. There are confusions about the roles and responsibilities entrusted to local governments, some of which they lack the technical and administrative capacity to execute. Limited legitimacy and legal obstacles hinder them from exercising many of their functions. Thus the impact of the whole process in terms of service delivery, local economic development, poverty alleviation and entrenchment of democracy is doubtful and probably not feasible at all under the current constitutional framework.

Effective LGA administration can strengthen democracy in Nigeria, improve the quality and cohesiveness of government, entrench democratic values, improve the effectiveness and efficiency of service delivery and create an enabling environment for local economic development. The main advantage of LGAs is that due to their relative proximity to people, scale and scope limitations, they can be more efficient (or at least as responsive) at providing certain public services compared to states and federal government if properly organized and resourced.

Local governments have a significant impact on population and employment growth of their areas of jurisdictions. How the grassroots are governed matters for local economic growth. They could also stimulate income growth for the people if they perform their core functions effectively, especially in the current economic crises marked by high unemployment. We need to economically empower more people in the rural areas, create an environment for good jobs (formal and informal) and enable decent wages, benefits, good living conditions and prosperity. Local governments must create job programs that take advantage of the competitive advantage and resource endowment of each community. A city, town or village (by community efforts) can create jobs in both the private and public sectors to put people to work to grow the local economy. The Town and Village Enterprises TVEs of China, floated by local governments are good models of rural industrialization and employment opportunities.

There is the need to constitutionally mandate LGAs to invest more on projects that actually create a large number of good jobs for their people while providing them with the crucial services. LGAs dish out billions of naira in incentives as part of their poverty eradication and empowerment efforts, but with few or no sustainable jobs to show for them. They need to prioritize direct public spending by local governments on programmes that stimulate economic activity and therefore create jobs. Some of these initiatives include building and rehabilitation of infrastructures, investments in access roads, and renovating/upgrading of schools facilities, health centres, motor parks and markets.

For LGAs to be effective, the overall governance system should essentially have the following features: a balanced set of political, administrative and fiscal powers. They must be able to play their role in an overall conducive structure of democratic governance and practices, e.g. with fair and free elections that give council members legitimacy. Intergovernmental linkages should be adequate, including redefined federal and state governments roles that will allow sustainable local development. Processes for elaborating development policies at local government levels must be well articulated. There should be strong upward, downward and horizontal accountability within the governance system of the local governments. This should not only ensure improved service delivery and transparency, but also offer protection against elite capture and corruption. There must be active citizenship and empowered communities so that all groups and individuals can be properly represented. People must have access to information and be able to express their views to achieve a good balance between federal, state and local governance processes. Better quality people – at political, technocratic and administrative levels need to be available to work in our LGAs, and more experienced, “retired-but-contented” public servants run for LGA positions.

Nigeria cannot develop if our LGAs are unwilling and unable to redistribute resources in favour of the poor and ensure that the poor have access to basic services. Federal agencies must be able to ensure that national poverty reduction strategies are reflected at grassroots by including and integrating them into the core function of LGAs. Monitoring mechanisms must be in place to monitor the process of governance at the grassroots, to reflect on results and make necessary adjustments in the process from time to time. In the meantime, our LGAs are best described as missing in action. And Nigeria is the worse for it. We must address this as a matter of utmost urgency.
By: Nasir Ahmad El-Rufai

In the year 2011, the 774 Local Governments and the 6 Area Councils (LGAs) in Nigeria received almost N1trillion (about $7billion) from the Federation Account, which is equivalent to the entire annual budgets of Burkina Faso, Rwanda, Burundi and Togo combined. These transfers were to enable them carry out their functions, which include the administration of primary education and primary health care, construction of markets and boreholes, and rural development in general. Most Nigerians would agree that is little or nothing to show for this huge transfer of free cash to the LGAs. It has not always been this bad.

Between 1955-1965, LGAs (or Native Authorities as they were then called) were responsible for about 12 per cent of the public expenditure in the country, equivalent to almost 10 per cent of the GDP. But today, they gulp about 21 per cent of our national revenue without commensurate results for the subventions that they collect from the federation. And worst still, with few exceptions, they now entirely depend on transfers from the centre for their own expenditures. They no longer generate revenues like in the first republic and believe they are created simply to collect monthly allocations to spend on politicians, thugs and families. It would be an understatement to say that the LGAs performance of their core functions has been disappointing, nearly criminal.

The primary responsibility of local governments as enshrined in the constitution is rural, urban and community development as outlined earlier. However, rather than working to reduce poverty by providing these services to their people, they end up just paying salaries of primary school teachers, and not much more. While our LGAs contribute a negligible percent of our GDP and employ less than 2 per cent of the employed population, in the United States, counties, which are the equivalent of our local governments contribute about 20 percent of the GDP and employ about 10 percent of the employed population. Everything from elementary schools to international airports are developed and under the control of counties, municipalities and city councils in the US!

In South Africa and Indonesia, local governments have the responsibility to provide an expansive range of services like those in Nigeria, but they are largely fiscally and political autonomous, as only about 14 percent of their revenue comes from central government transfers, compared to the almost 90 percent in Nigeria. Local governments and council elections are independently conducted without interference from the provinces. Unlike, Nigeria, countries, taxes constitute by far the largest source of revenues, comprising on average of 52 percent of total revenues. Council elections are not decided by the states/provinces, but by community arrangements that guarantee free and fair emergence of credible leadership. The instances above point to the direction of reform of our broken and dysfunctional LG system.

In preparing this piece, I conducted an informal straw poll of the perception of the respective LGAs performance on a scale of one to hundred among my circle of friends, relations and work colleagues. It is admittedly unscientific and the sample small, but quite insightful. First, local governments were scored about 10 per cent in the performance of their five core constitutional functions and the sample believed that they show no sign of improvement. Secondly, the overall performance of LGAs has slipped considerably from about 40 per cent in 2005 when the average LG got N60 million monthly from the centre, to less than 10 percent in 2011, when they got an average of N100 million monthly from the Federation Account!. What I learnt from the sample is that most LGAs only pay primary school teachers’ salaries and nothing more out of their core functions. No respondent gave any LGAs more than 40 percent in any service delivery area – a failing grade in any exam anywhere in the world. It is therefore no surprise that our rural areas are so underdeveloped.

It was General Murtala Muhammad regime that inaugurated and subsequently accepted the recommendations of the Dasuki Local Government Reforms Committee in 1975. The administration promulgated the enabling law effective on October 1, in 1976 to entrench Local Governments as an independent and self-accounting tier of government. The reform’s two most important priorities were to reduce development inequality (between urban and rural areas) and to increase political accountability across the country. We then had 360 LGAs in the 19 states of Nigeria.

To carry out these efforts, the 1979 constitution assigned to the LGAs some substantial resources, along with political and economic responsibilities. They were required to provide most public services with the exception of higher education and security. The essence was to create strong political accountability, democracy and a sustainable political culture.

What went wrong with the Local Government reforms? Why has the responsiveness of LGAs to the needs of their citizens been deteriorating as their revenue-dependency increasing? And how did Commissioners of Local Government become the best friends of State Governors, almost always, governors-in-waiting under this democratic experiment?

The reforms failed because the federal government itself and the states, in pursuit of political maneuverings and a share-the cake mentality changed all that. First, we allowed the number of LGAs to spiral to 450, then 78), while the number of states nearly doubled from 19 to 36 plus FCT. Resources had to be more thinly spread across a larger number of fiscally-weak, often incompetent administrative units. Then, more recently, in what looks like a reversal of our federalism and Constitution, the PDP-led central government for the past 10 years has implemented a policy, which rather than encourage LGAs to provide affordable services for their localities by strengthening their political and fiscal autonomies, has embraced the opposite: annexing them to the state governments and treating them like fiefdoms instead of independent third tier of government.

The two culprits that enabled this “annexation” of LGAs in the 1999 constitution are the creation of State-Local Joint Account and the State “independent” electoral commissions! These have undermined economic development and political accountability. Obviously, neither the states that have swallowed the LGAs by collecting their monthly subventions nor the local governments themselves are offering any core service to Nigerians. These sections of the constitution need to be revisited.

There also seem to be a lack of commitment from the federal government to make local governments truly functional. A wide range of complex constitutional and technical issues needs to be addressed. There are confusions about the roles and responsibilities entrusted to local governments, some of which they lack the technical and administrative capacity to execute. Limited legitimacy and legal obstacles hinder them from exercising many of their functions. Thus the impact of the whole process in terms of service delivery, local economic development, poverty alleviation and entrenchment of democracy is doubtful and probably not feasible at all under the current constitutional framework.

Effective LGA administration can strengthen democracy in Nigeria, improve the quality and cohesiveness of government, entrench democratic values, improve the effectiveness and efficiency of service delivery and create an enabling environment for local economic development. The main advantage of LGAs is that due to their relative proximity to people, scale and scope limitations, they can be more efficient (or at least as responsive) at providing certain public services compared to states and federal government if properly organized and resourced.

Local governments have a significant impact on population and employment growth of their areas of jurisdictions. How the grassroots are governed matters for local economic growth. They could also stimulate income growth for the people if they perform their core functions effectively, especially in the current economic crises marked by high unemployment. We need to economically empower more people in the rural areas, create an environment for good jobs (formal and informal) and enable decent wages, benefits, good living conditions and prosperity. Local governments must create job programs that take advantage of the competitive advantage and resource endowment of each community. A city, town or village (by community efforts) can create jobs in both the private and public sectors to put people to work to grow the local economy. The Town and Village Enterprises TVEs of China, floated by local governments are good models of rural industrialization and employment opportunities.

There is the need to constitutionally mandate LGAs to invest more on projects that actually create a large number of good jobs for their people while providing them with the crucial services. LGAs dish out billions of naira in incentives as part of their poverty eradication and empowerment efforts, but with few or no sustainable jobs to show for them. They need to prioritize direct public spending by local governments on programmes that stimulate economic activity and therefore create jobs. Some of these initiatives include building and rehabilitation of infrastructures, investments in access roads, and renovating/upgrading of schools facilities, health centres, motor parks and markets.

For LGAs to be effective, the overall governance system should essentially have the following features: a balanced set of political, administrative and fiscal powers. They must be able to play their role in an overall conducive structure of democratic governance and practices, e.g. with fair and free elections that give council members legitimacy. Intergovernmental linkages should be adequate, including redefined federal and state governments roles that will allow sustainable local development. Processes for elaborating development policies at local government levels must be well articulated. There should be strong upward, downward and horizontal accountability within the governance system of the local governments. This should not only ensure improved service delivery and transparency, but also offer protection against elite capture and corruption. There must be active citizenship and empowered communities so that all groups and individuals can be properly represented. People must have access to information and be able to express their views to achieve a good balance between federal, state and local governance processes. Better quality people – at political, technocratic and administrative levels need to be available to work in our LGAs, and more experienced, “retired-but-contented” public servants run for LGA positions.

Nigeria cannot develop if our LGAs are unwilling and unable to redistribute resources in favour of the poor and ensure that the poor have access to basic services. Federal agencies must be able to ensure that national poverty reduction strategies are reflected at grassroots by including and integrating them into the core function of LGAs. Monitoring mechanisms must be in place to monitor the process of governance at the grassroots, to reflect on results and make necessary adjustments in the process from time to time. In the meantime, our LGAs are best described as missing in action. And Nigeria is the worse for it. We must address this as a matter of utmost urgency.