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States and federal allocations: Matters arising


The anomaly that is the system which Nigeria currently operates came to the fore again the other day when the Vice President, Prof. Yemi Osinbajo lamented the fact that all the state governments cannot survive without the monthly federal allocations.

This is no news. It is indeed the very cause of underdevelopment which has bedeviled the nation since the military introduced a unitary and unified form of government from 1966.

Sadly, when the nation returned to democratic governance first in 1979 and then in 1999, there was no attempt to revert to the true federal system that propelled the First Republic and the economic gains that accrued therefrom.


In fact, state governments have since become so indolent that they have settled for the largesse that come from oil money.

But let us deal with the first principles. In the real sense, the Federal Government has no money.

The funds belong to the states. The monies which are shared monthly are generated from the states, particularly the oil-rich states in the Niger Delta.

However, owing to the incongruent provisions of the 1999 Federal Constitution the Federal Government claims the lion’s share and leaves the states impoverished.

The time has come for a change. And it is only within the framework of a restructured polity that the real economic potentials of Nigeria can be achieved.

A federal system of government depends on the constituent parts of the federation. Each section or region concentrates on developing the natural and other resources within its territory and pays taxes to the central pool.

In turn, the Federal Government concerns itself with defence and security, monetary policies, and external relations.

Currently, the Federal Government of Nigeria appropriates to itself 55% of the resources generated in the country. The main source of income is sale of crude oil, without any value added to it. This is scandalous, retrogressive and out of tune with the times.

But no one expects the Vice President to just complain. Nigerians expect an executive bill from the Presidency to alter the equation and make the states work harder.


All the states, in different proportions have natural resources that can be tapped and utilised to develop the economy. As was the practice in the first republic when the regions concentrated on their areas of strengths.

Nearly 60 years after independence the nation still depends on a single product to fund its budget.

This is in spite of the threat of oil losing its primacy in the international market because of the development of alternative sources of energy. As it is, there is no economic blueprint to deal with that situation when the time comes.

States, if properly guided and with the proper will, can live without federal allocations. Lagos State, for example, has focused its energies on internal sources of revenue.

Its cosmopolitan nature has helped this process. But what are the other states doing about the rich mineral resources that they sit on? Coal, Lignite and coke, Columbite, Bitumen, Iron Ore, Uranium, limestone and other mineral resources are in abundance in different states of the country.

Uranium, for example, is found in Cross River, Adamawa, Taraba, Plateau, Bauchi and Kano states while Bitumen is found in abundance in Lagos, Ogun, Ondo, and Edo states.

All the other states have rich mineral deposits that could do for them what oil has done for the nation. In spite of the many promises made by the current government in the pre-election campaigns, no concrete effort has been made to channel the minds of the states to economic self-sufficiency.

The All Progressives Congress (APC) should dust up its campaign manifesto and read the beautiful proposals which it presented to the Nigerian people as the basis for electing it.

Upon attaining power, its leadership quickly slid into the anarchical practices of the, ousted Peoples Democratic Party, PDP, which ruined the economy of the country. Nigeria has to grow.

No nation can expect a miracle if it repeats what it has done in the last 50 odd years and hope to experience something different. No nation develops like that.

The operating laws governing mining should be revisited and liberalised. Alternative sources of income for the country should be pursued.

The Federal Government should shrink the size of the exclusive list and grant many concessions to the states. The manufacturing base of the country should be strengthened.

The steel industry should be revived. One of the main requirements for this is power generation and supply.

A nation that cannot generate and distribute beyond 7000 megawatts of energy is not ready for the development train.

Also, the Police Force should be decentralised. The Federal Government currently chews more than it can swallow. The result has been criminal inefficiency.

The Federal Government should take the right steps and save Nigerian from economic disaster to which the country is currently headed.

No nation sells off its only natural resource without adding value, without investing, and without creating alternative sources of revenue and expects to benefit from the broad opportunities offered by modern business and best international practices.

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