A state is not a company. We are not dealing with solvency issues, we just have cases of illiquidity. States being sovereigns like the Federal Government cannot be insolvent. You can’t scrap them. You also cannot leave them to be acquired by any interested buyer as if they are a company. The reality is that States contribute every dime in the federation account, and you allow each state to control the resources it owns, including land borders, inland waterways, and seaports, no state will suffer illiquidity. Somes states are broke because of federal compromises that constrain their ability to appropriate resources they are blessed with in full.
The Federation thus needs to do all it can to ensure that the states are liquid, including allowing them to enjoy derivation on any revenue they contribute to the Federation account like oil producing states currently do; or even put many of the economic sectors that are currently on the exclusive list on the concurrent list so that they can have the liberty to manage sectors which the Federal government has not adequately managed, including rail, pipelines, power transmission, inland waterways, borders, and coastlines; or change the revenue allocation formula to give the states more; or give the states rights to issue treasury bills like the Federal government, since they and Local Government areas are also sovereign, by virtue of the fact that the constitution of the federation apportions the powers to express it’s sovereignty across the thee three tiers.
But long history of unitary military dictatorship has made Nigerian subconsciously accustomed to a practice in which only the Federal government issues treasury bills—one possibility is to apply the revenue allocation formula to all treasury bills and bonds issued by the central bank and debt management office. These are economic, fiscal and financial restructuring measures, rather than political restructuring.
They reconfigure Nigeria’s Economic federalism, reconfigure Nigeria’s fiscal federalism, reconfigures Nigeria’s financial federalisim, but leaves the political federalism unaltered. A state therefore cannot possibly fail if the federation has not failed. Downsizing the workforce will lead to migration across states that will export the problem to other states.