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‘Irresponsible leadership not federal structure responsible for economic mess’

By E. Remi Aiyede
30 May 2016   |   2:08 am
The second critical issue that the government has had to confront is the issue of fiscal federalism, specifically the quest for an optimum revenue allocation system.


Federalism has been a major issue of debate and intergovernmental contestation since the return to democratic rule in 1999.  This is natural given the tendencies of military unitarism arising from the command structure of the military and its supplanting of the constitution under the juntas. The federal structure and jurisdictional lines and powers of the Federal Government vis-à-vis the state governments as stipulated by the constitution could only be clarified and fine-tuned under the rule of law as against the rule of the barrel of the gun under military rule. The Federal Government has had to confront state resistance to its overbearing attitude and the issues have been many.

Three critical issues have remained prominent in the first year of the Buhari government.  The first, which the president broached in his inaugural speech, was the issue of local government financing and accountability. It is curious that since that speech the president has not made reference to the sorry state of local governments and the way out.

The second critical issue that the government has had to confront is the issue of fiscal federalism, specifically the quest for an optimum revenue allocation system.  The is a long-standing issue, but this time triggered by the poor finances of the state governments, resulting from the fall in revenue yield from oil in the international market.  Many states have not been able to meet their financial obligations or even pay the salaries of their workers.

The governors initially thought that they could get a bailout from the Federal Government. But General Muhammadu Buhari, then President-Elect insisted that the states must address the situation themselves, the Federal Government was not in a position to bailout the states.  The state governors on 24 June 2015 at a meeting with the president requested for the refund of money spent on Federal Government projects by the states. They also asked that the tax paid by the Nigeria Liquefied Natural Gas Company (LNLG) and revenue from other revenue generating agencies be paid into the Federation Account and shared as stipulated by the constitution. They asked for a review of the revenue allocation formula and full details of the amount that accrued to the Excess Crude Account. They also requested for a special consideration for the three states that have been under the burden of Boko Haram insurgency.

To allay the fears of the governors, the President committed to providing a detail report on the economic and financial situation of the country, stop the abuse of the extant constitutional provisions regarding the payments of revenue into the Consolidated Revenue Fund of the federation, and to put the system back in place.

The president used the opportunity to reiterate his commitment to recover stolen funds and put an end to the impunity, lack of accountability, and fiscal recklessness that have hitherto characterized the management of national resources. Since then, neither the revenue from oil has improved nor the allocation to the states.  Today, with few exceptions all state governments and the Federal government continue to borrow to pay salaries or owe their workers arrears of salaries, with some owing up to seven months.

It seems the state governors initially thought that problem would go away in the short term hence the rush to draw from the federation revenue.  The situation has shown how the irresponsible management of resources by governments at all levels of government has largely explained why federalism has not been able to advance prosperity.  Since the collapse of the price of oil in the international market state governments have demonstrated poor innovation records.  The massive corruption unraveled by the Economic and Financial Crimes Commission (EFCC) further underscored political irresponsibility.

It is indeed amazing that the federal government and states like Bayelsa and Rivers, Oyo and Ondo are borrowing to pay workers’ salaries or are in arrears with such payment.  It is obvious that the belief that Nigeria is oil made rich country is false.  That the resources accruing from oil has been the focus of struggles and conflicts over federalism is most unfortunate.  This has been the case because political leaders have reveled in squander mania, political predation and have been irresponsible with public resources.  It is time to agitate for responsible federalism.

The current poor financial situation of governments is neither the result of fiscal federal practice nor the consequence of its federal structure.  Even if changes in the structure can help, it will not happen with irresponsible leadership.  The challenges of revenue growth and prudent use of resources are yet to be appreciated let alone addressed by the governors. A good number of the governors are second-term governors; they created the problem and are largely responsible for the current situation. The federal government is composed largely of people who have been in government since 1999, regardless of the change in the party in power. They are yet to admit their failures or take responsibility for the state of things and come to terms with the people. Responsible federalism would mean that the governors focus on expanding the revenue base of their states, improve on accountability and reduce corruption and waste of public fund in the states.

The third issue of intergovernmental tension is the conflict between Fulani herdsmen and farmers. It has led to a series of violent exchanges that have resulted in hundreds of deaths Plateau, Enugu and Ekiti States.  Some have used the word genocide.  The governor of Ekiti state has outlawed grazing in the state as a measure to prevent further bloodshed a few days ago.  The federal government under Buhari leadership has been accused of not giving the problem the attention it deserves. Suggestions that the National Assembly was proposing a Bill to create grazing reserves across the country has met with hostilities from the government, ethno-linguistic and Christian organisations in the south.

The Buhari Regime is yet to address these issues either by executive bills, policy or decisive intervention.  The National Assembly is too engrossed with its internal leadership challenges to reignite the process of constitutional amendment in spite of its promise to do so. Yet the problem touches on the very essence of ethnic coexistence in a multi-national federation.

• Dr. E. Remi Aiyede is of the Department of Political Science, University of Ibadan.