What governors can learn from Arsene Wenger

By Ayodele Lawal Adio

Governors have vociferously argued that the parlous state of their public finance is a direct consequence of falling oil prices and the mismanagement of the entire economy by the previous administration. This narration by the various chief executives isnt actually false but it is only half the truth as their oration intelligently hides the freezing of their ideas and intellectual bankruptcy. Their failure to effectively manage public finances, think without a box and inject productivity into their states explains their present conundrum.

There is however nothing unique about the positions these governors have found themselves today so rather that throw a pity party, successful models exist in which they could borrow from. Although newly disbursed funds by the federal government to the affected states have provided a temporary pillow, these states are certain to find themselves back in the hole if they refuse to wear a new thinking hat. Giving symptomatic solutions without addressing the root cause of the issue is as good as lightening a candle to cure cancer. Here are a few lessons governors can learn from veteran French manager Arsene Wenger who steered his team through turbulent times but was never caught under water:

1. Wenger had a vision for the club which was for Arsenal to match the other giants of Europe in terms of fan base, revenue and corporate endorsements. The only way to achieve this was to move to a bigger stadium away from the popular Highbury they all had become used to. What grand vision drives a majority of our governors? For the most part, the embark on white elephant projects and populists policies that drain the resources of the states and stagnate the people.

2. Borrow money for capital projects only, one that will ensure streams of revenue tomorrow. Arsenal had to borrow money to fund their new stadium and did not enjoy any public subsidy. However, when their 60,000 capacity stadium was ready, revenue jumped from the normal 37.4 million pounds per match day to well over 90 million pounds.

Sadly, it is the tradition of most governors to borrow to fund over heads, a definite recipe for failure. Governors should seek high yielding investments with both short, medium and long term benefits and make intelligent investments. If on the assumption that since 2012, these ailing states got an average of a billion naira per month from the SURE-P funds (it is on record that they got far more), they would have had about 20 billion naira to make calculated investments for their people but of course we have learnt to swallow the hard pill that “the people are the instruments of governance and not the purpose”.

3. Diversify your revenue base. After moving out of Highbury, Arsenal turned the place into an estate that housed close to 3000 people. This residential unit made 157 million pounds in 2011 alone. Arsenal also rents out its new stadium for conferences and major musical concerts generating extra millions of pounds to balance their books.

Asides Lagos, Kano, Ogun and 2 or three other states, generating internal revenue seem to be above the pay grade of most of these governors. Their lack of foresight and imagination leaves me wondering if any hope lies ahead for the coming generation. Instead of governors to lobby senators representing their states to pass legislation allowing them to tap the natural resources from their states and pay tax to the federal government, they would rather engage in tokenism.

4. Cut costs, improve efficiency and maximize profits. After Arsenal announced a pre tax loss in 2002, they were left with no choice but to reduce their wage bill. They sold off players like Nicholas Anelka and Overmas which earned them about 50 million pounds which went into funding a new training ground. Over the next years, they kept the wages of the entire team extremely low, bought cheap players and sold them for good margins to bigger teams and did enough to stay competitive. This way by 2010 arsenal were able to pay off their entire loan and are now able to pay higher wages and attract top players to their team. In two words, the strategy of Wenger was “delayed gratification”.

With an over bloated civil service, low productivity of the officers and a growing wage bill, governance as currently structured will never yield any dividend. Governors must find the courage to cut the cost of governance and must start by leading the line in terms of doing away with the excesses that goes along with the office. If a manager of a football club understands prudent financial management by balancing interests on and off the pitch with undeniable results, surely an elected executive carrying the mandate of the people must be able to deliver much more. Rather than this show of economic lunacy, Nigerians deserves a leadership that will take them them to the promise land.

Adio is executive director, Become Change Institute

@iamayolawal