Federal ministries attempt to manage local issues from Abuja, creating bureaucratic delays and contextual mismatches. Meanwhile, local governments with intimate knowledge of community needs, lack resources and authority to address them. The result is governance that satisfies no one and develops nothing.
This administrative dysfunction manifests as excessive bureaucratic interference in private sector operations. Businesses face multiple layers of approvals, permits, and regulatory compliance that are designed more for control than facilitation. The unwieldy bureaucratic machinery creates bottlenecks that slow economic activity and discourage investment, while the distance between decision-makers and implementers ensures that even well-intentioned policies are poorly executed.
Without functional local institutions to provide basic services, regulate markets, enforce contracts, and facilitate access to credit and technology, informal enterprises remain trapped in survival mode rather than growing into productive businesses.
The path forward: Political governance as economic strategy
Achieving Nigeria’s ambitious target of becoming a one trillion-dollar economy requires growth rates of 7-8 per cent sustained. Such growth rates are impossible within the current governance structure because economic energy across all levels of society cannot be unleashed.
A revolution in political governance will admit a rush of new economic actors currently trapped, useless and unproductive in the informal sector. When local governments can effectively support local businesses, when communities can organise their own development initiatives, and when state governments can create enabling environments for regional economic clusters, Nigeria will witness an explosion of entrepreneurial energy that has been suppressed for decades.
Restructuring as economic imperative
The solution requires restructuring, rebalancing, or devolution. Regardless of terminology, the imperative is clear: Nigeria must transition from its current unitary system disguised as federalism to genuine multilevel governance where each tier has meaningful autonomy and responsibility.
Genuine multilevel governance is not merely a political preference—it is an economic necessity. Countries that achieve sustained high growth rates do so by mobilising economic activity across multiple levels of governance. When only the federal level is truly functional, economic growth is artificially constrained by the capacity limitations of that single level.
More important, functional multilevel governance creates multiple entry points for economic participation, allowing entrepreneurs to access services and build businesses through local institutions rather than navigating federal bureaucracies in Abuja.
Implementation framework: Executive actions, legislative reforms and administrative restructuring
Implementing genuine multilevel governance will require constitutional amendment, but beyond constitutional amendment there are certain executive actions and administrative restructuring the President can undertake to redirect the country.
Executive actions
The President can immediately transfer specific functions to state and local governments through executive orders. Issues like driver’s license, agriculture, microfinance banks, labor regulation, including minimum wage prescriptions, business incorporation, state taxes, trade within states, etc can be devolved administratively.
Legislative reforms
The National Assembly can utilise Sections 4(1) and 315(1)(a) & (4) of the Constitution to replace the 1999 Constitution and prioritise devolution of powers and fiscal federalism. I recommend that the National Assembly create a new legislative list for Federal, State, and Local Government. Local Governments should have clearly defined legislative powers within the constitution.
Powers relating to infrastructure such as road construction and maintenance, street lighting, and waste management should be clearly assigned, along with primary healthcare, education, social welfare, business licensing, market regulation, tax collection (community tax, tenement rates), voter registration, conduct of local elections, and management of public facilities like cemeteries to local governments. Currently, State governments have largely usurped these functions and crippled the 774 local governments that are supposed to be a source of energy and economic activity. The same should apply to states.
Functions of state governments should be clearly set out by the constitution, as they are being usurped by the federal government. For example, is the Supreme Court suited to adjudicate chieftaincy, inheritance, and land matters from states? Should the Federal Government hold onto policing powers with one Inspector General of Police in Abuja overseeing policing of 200 million people? Should Federal Government control airports in the country, even when built by states?
The National Assembly must pass legislation that empowers subnational governments to take on more economic policy while providing the legal framework for intergovernmental cooperation. Revenue allocation formulae can be adjusted to match resources with responsibilities.
Administrative restructuring
Federal ministries can be restructured to focus on policy formulation and standard-setting rather than direct implementation. This would free up resources and expertise to support subnational governments whilst reducing the federal government’s operational burden.
Most important, restructuring would transform the administrative governance approach from one of interference and control to one of facilitation and support. Rather than bureaucratic agencies, acting as gatekeepers that slow down economic activity, they should be enablers that help businesses navigate regulatory requirements efficiently.
Expected outcomes: Multiplying growth centres
Proper political governance would create multiple centres of economic growth across Nigeria rather than concentrating activity in Abuja and a few commercial centres, unleashing the economic potential of over 200 million Nigerians currently marginalised in the informal sector and replacing rent-seeking extraction with broad-based economic participation.
Conclusion:
The imperative for paradigm shift
President Tinubu’s administration stands at a crossroads. The President must do a U-Turn and embrace fundamental governance restructure.
Without functional political governance at all levels, economic interventions will continue to produce disappointing results regardless of their technical merit. Nigeria’s challenge is not economic—it is political. The system of centralised economic planning has created a dual economy where a small elite captures enormous value through rent-seeking while over 200 million Nigerians remain trapped in unproductive informality.
A new scheme of political governance that recognizes that politics and economics is local will unleash a volcano of tremendous energy that will be unstoppable by anyone, to the ultimate benefit of economic development.
The wrong diagnosis has led to wrong results for too long. It is time for the right diagnosis and the right treatment: political governance reform is the foundation for sustainable economic transformation.
Concluded.
Dr Agbakoba (SAN) is a former President of the Nigerian Bar Association (NBA).
