Thursday, 21st September 2023

Nigeria and the money problem

By Debo Adesina
25 July 2016   |   5:45 am
There was something unnecessarily exultant about the reports a few days ago of how, for the first time in a while, the federating units of Nigeria had more than N500 billion to share from the federation account in the month of June. So?
AFP Pius Utomi Ekpei

AFP Pius Utomi Ekpei

There was something unnecessarily exultant about the reports a few days ago of how, for the first time in a while, the federating units of Nigeria had more than N500 billion to share from the federation account in the month of June. So?

Improvements are being recorded in some areas and from the breakdown of the allocation, a little more money is going to each of the three tiers of government. But the need for more and worry over money are still very much alive! Indeed, as the managers of the economy warned, the nation is very much in economic recession out of which it may not snap until the next quarter.

While the good news may not be comforting enough or the hope of a better tomorrow should not be discountenanced, it is important to note once again that the real trouble with Nigeria is not how much money is being shared but how or even why, in some respects, it is being shared between the central government and the federating units. It is not the revenue formula but the form of the supposed federal relationship. And no amount of money made or shared under the current dishonest relationship form will engender any meaningful development for Nigeria.

Our country has had a life-long problem with money: how to make it, how to share it or how to spend it. The feverish debate over this dates back decades! The Hicks-Phillipson Commission of 1951, the Chicks Commission of 1968, the Raisman Commission of 1958, Binns Commission of 1964, the Dina Interim Committee of 1968, the Ojetunji Aboyade Technical Committee set up by the military administration of General Olusegun Obasanjo in1977, the Pius Okigbo Commission of 1980, the Revenue Mobilisation

Allocation and Fiscal Commission of 1989 and so many others were empanelled with a view to distributing the country’s resources in ways that would make such serve the greatest good of the greatest number of Nigerians and assuage agitations against perceived injustice or lack of equity in the land. But all of these have achieved little because they have been nothing more than exercises in national self-denial or deceit. Today, the present revenue sharing formula negates the principle of federalism and is at the root of various threats to the unity of Nigeria. It negates the wisdom that since the country is supposedly a federation, its revenue allocation formula must be consistent with the principle of federalism.

The generation system encourages indolence and waste while the ratio for distribution between the three tiers of government is unjust, inequitable, exploitative and reduces every other tier of government to mere appendages of the Federal Government.

This completely lays to ridicule the beautiful design of a federal system of government which by nature holds that every constituent unit must be sufficiently independent of the centre in a way that the unity of the whole is not compromised. Nigeria’s warped arrangement, which has consigned state governments to perpetual beggars, more than anything else, holds down the country’s progress.

Section 162(1) of the 1999 Constitution of Nigeria establishes the federation account into which shall be paid all revenues collected by the government of the federation with a few exceptions. Subsection 2 of the said section empowers the National Assembly to determine the formula for the distribution of funds in the federation account. The sub-section provides, with respect to natural resources, the principle of derivation in any formula the National Assembly may come up with. By this principle, “not less than 13 per cent “ of the revenue accruing to the federation account directly from any natural resources is deemed payable to a state of the federation from which such natural resources are derived.

In accordance with the provision of the constitution, the National Assembly has since promulgated the Allocation of Revenue (Federal Account) Act which pegged the derivation formula exactly at 13 per cent. This, of course, has done little to assuage perennial clamour, even till today, for a revenue formula that is consistent with true federalism with a view to weaning the constituent units in the Nigerian federation made from being dependent on the central government. Those who seek a true federation or something close to it often refer to the 1960 constitution which allowed “each region a sum equal to fifty per cent of (a) the proceeds of any royalty received by the federation in respect of any minerals extracted in that region and (b) any mining rents derived by the federation during that year from within that region.”

In addition to that, the federation then had to “credit to the Distributable Pool Account a sum equal to thirty per cent of – (a) the proceeds of any royalty received by the federation in respect of minerals extracted in any region and (b) any mining rents derived by the federation from within any Region.”

Though the 1999 constitution allows 13% for the derivation principle, the subsisting campaign today remains that the phenomenal growth which Nigeria and each of the regions experienced in the first republic was as a result of the 50% revenue allocation principle in place. And on the evidence of history before our very eyes, this is an incontrovertible fact that recommends the return of Nigeria to her past if the nation would ever make progress.

Meanwhile, we must not lose sight of the fact that there have been calls for a return to the Parliamentary System of government which, on record worked perfectly for Nigeria in the first republic, with the federating units competing in a healthy manner, democracy yielding good returns to the constituents.

Of course, there are those who argue, and justifiably too, that more than the system of government, what really ails Nigeria is the political elite manning the structure or running the system. In them, integrity has been sought largely to no avail. However, while the desirability of a presidential or parliamentary system can be debated, indisputable is the consensus that the federal structure is pretentious, if not fraudulent outright and needs to be re-designed!

No doubt, President Muhammadu Buhari has sought to lay a few good ground rules by frowning at any form of ostentatious living on the part of those around him and he has so far led by example in trying to cut the cost of governance.

It is doubtful, if this ideal is shared by the emperors in State Government Houses who still exhibit the same greed and insensitivity as obtained in the past. Their sumptuous lifestyle at the citizens’ expense is daily on display. In spite of the subsisting outrage against it, many of them are still feeding fat on the people’s resources even when they cannot pay workers’ wages. By the way, how many of them have conveniently ignored calls to repeal the laws their predecessors caused their legislatures to make awarding them such out-of-office benefits as make them the same locust in retirement that they were while in office? Well, you can hardly blame them. They stand to enjoy same!

That the culture of greed, mindlessness, insensitivity and impunity in Nigeria’s public service still thrives goes without saying. The local government, for instance, remains a conduit for taking funds from the common wealth for the personal use or aggrandizement of the state governors and their cronies.

Local government is supposed to be an autonomous structure for people’s participation in governance at the local level but the state governors have never allowed this autonomy. The allocations to the third tier have often been appropriated by the potentates who dictate the leadership of the councils and how whatever crumbs they grant them must be spent.

State governors, in many cases, not only decide what projects must be executed by each local council, when any project is to be executed at all, the contractors and mode of payment are dictated from the state capital.

The moral is that corruption is not only very much on the prowl, it is aided and abetted by the current pretence that is Nigeria. Corruption will thrive for as long as a so-called federation is a corruption of the real thing.

Let it be said for the umpteenth time: it not only recognizes or harnesses diversity, federalism allows the federating units and the central government to be united in purpose even as they are disparate in their pursuits and means. With power clearly defined and responsibilities delineated, accountability would be guaranteed by the direct participation of the people in their own resource generation and governance. Their current docility, occasioned by free money from oil and the falsehood of Abuja, would, certainly, be cured by the immediate impact of any sign of impunity or mismanagement of truly hard-earned money from the sweat, soil or toil of all!

The very concerted efforts of President Muhammadu Buhari notwithstanding therefore, and he deserves commendation for his efforts so far, Nigeria certainly will forever remain in the grip of a corrupt, inept, clueless and lawless elite, in both private and public services whose position is helped in no small measure by the falsehood of Nigeria’s federation. He should think seriously about that!