Tinubu’s overall business strategy is a classic turnaround from a distributive model based on subsidized consumption to an investment led production model anchored on the Renewed Hope Agenda, and the way his government is resourcing it can be understood through the finance, people, information and technology lenses and how they are integrated across the federation.
The central strength of the resourcing approach lies in finance, and this is a federal responsibility. By removing fuel subsidy and unifying foreign exchange, the federal government took the high business risk at the centre and in return created a much larger financial pool for the entire value network. FAAC distributions that averaged N700 to N900 billion monthly in 2022 now consistently exceed N1.6 to N2.1 trillion, which has de-risked states and local governments financially. This has enabled the federal government to act as an internal venture capitalist, using the proceeds of a former cash cow to fund new ventures such as the Renewed Hope Infrastructure Fund, Lagos-Calabar Coastal Highway, Sokoto-Badagry Highway, student loans, consumer credit and CNG transition. Complementary reforms like the work of the Presidential Tax Reform Committee under Taiwo Oyedele and improved collection by FIRS under Zacch Adedeji show an attempt to shift the key value driver from crude oil volume to non-oil revenue like VAT, where 85 percent naturally accrues to states. This financial strength is real and measurable.
The weakness, however, is in people and integration, and it is shared but more acute at state and local government levels. While at the federal level there has been a deliberate recruitment of technocratic competence in finance with managers like Wale Edun and Yemi Cardoso to signal a new capability, the soft side of human resource management – changing the paradigm, culture and day to day behaviour of front-line implementers – has not followed. The intended strategy of ease of doing business and food security is being undermined by the realised behaviour of customs, immigration, police and regulatory agencies, which is a failure of performance management and coaching that Chapter 13 warns about. At state and local levels, the weakness is more pronounced. Most states lack the specialist HR and planning function to convert increased allocation into strategic capability. The HR audit needed to support new strategies has not happened. Increased FAAC is largely absorbed by recurrent expenditure, new convoys and a higher wage bill to meet the N70,000 minimum wage, rather than training, retention of skilled personnel or building pools of talent for future leadership. Local governments, now empowered by the July 2024 Supreme Court judgment granting financial autonomy and the move to direct allocation, remain the weakest tier in terms of people competence to manage budgets, manage data and deliver primary health and basic education.
The opportunity lies in information and technology, and responsibility here starts from the federal but can only be realised by states and local governments. The federal government has started to treat information not as a support function but as a transformative business model. The linkage of NIN-BVN, the digitization of FIRS, the e-procurement portals, student loan portals and CREDICORP show data mining to find tax leakages and target beneficiaries. It is also an architectural strategy combining existing technologies like mobile money and national identity to create new services, and it deliberately bypasses traditional gatekeepers by seeking to fund local governments directly rather than through states, and by using presidential communication channels to reach citizens directly. If states and local governments embrace this, they have an unprecedented opportunity to build third-party marketplaces for their own internally generated revenue, to use GIS for land administration, and to integrate value chains where federal infrastructure is complemented by state provision of land, right of way and feeder roads and local provision of last mile maintenance. States like Lagos and Kaduna that have invested in information capability are already showing how this leverage can shape new business strategies.
The threat is that integration fails, which would be a collective failure but with greatest consequence at federal level because it owns the overall strategy. The lesson of integrating resources is that competitive advantage comes not from separate resources but from the ability to pull them together across the value network. Tinubu’s new product launch of faster economic growth requires federal policy design to be manufactured by federal MDAs and distributed by states and 774 local governments. If federal builds a coastal highway but states do not provide spatial planning and security along the corridor, or if federal provides CNG buses but local governments do not maintain intra-city roads, or if federal shares more money but states do not invest in rural roads to reduce food inflation that is driving cost of living, then the threshold standards for competitiveness will not be met and rivals – in this case inflation, poverty and insecurity – will win. Too little change in resourcing strategies at state and local level will make overall federal change impossible, while too much uncoordinated creation of new ministries and agencies without competence will create chaos. The federal government is responsible for creating the funding and the information architecture, but states are responsible for converting allocation into capital assets and productive competence, and local governments are responsible for proving that direct funding can translate into tangible primary services. Without a formal performance management link tying federal transfers to capital expenditure ratios, IGR growth and service delivery audits, the financial strength at the centre may end up destroying citizen value rather than creating it.
