AS expected, the forces of reaction and retrogression that are well represented at the ongoing National Conference have wasted no time in rearing their heads. Their latest card is to oppose the attainment of true federalism by standing resolutely against fiscal federalism in a New Nigeria. Progressive forces at the summit should also stand firm: there can be no viable federal polity without resource control by the states.
Some reports emanating from the conference are depressing, though they are familiar. A committee co-headed by Ibrahim Coomasie, a former Inspector-General of Police, and Victor Attah, a former Akwa-Ibom State governor, has reportedly reached a deadlock over rational suggestions to restructure the country on the sound foundation of fiscal federalism based on control of resources located in their areas by the state governments. Short-sighted bigots and influence peddlers should not be allowed to frustrate our efforts to salvage the failing political entity called Nigeria.
A federal polity necessarily implies fiscal federalism by its major components. Nigeria’s development has atrophied precisely because of the absence of control over their natural resources by states. The 36 states that together with the Federal Capital Territory make up the federation today have been reduced to beggars, their representatives gathering every month at Abuja to share from a central pot. Only two states – Lagos and Rivers – can pay their workers without federal allocations, according to the Nigerian Bureau of Statistics.
But fiscal federalism, expressed through resource control, is the bedrock of a federal state. Defined as the control and management of resources by states and local governments from whose jurisdictions the resources are extracted, all federal states, from the United States to Canada, Australia, Brazil, Malaysia, Germany, Switzerland and India have it enshrined in their constitutions. Only Nigeria stumbles.
We were not always like this. The “road to perdition” started in 1966 when the military overthrew democracy and the 1963 Constitution and began a process of centralisation that has today made the country a federation only in name while operating in many respects like a unitary state. Nowhere is this more disastrous than in fiscal administration. Where the 1963 federal republican basic law granted extensive control over resources to the four regions, the subsisting 1999 Constitution and the 1979 Constitution after which it was patterned are federal deformities.
The results are glaring. Between 1946 when the Richards Constitution came into force in pre-independence Nigeria and subsequent constitutions, right up to the 1960 independence constitution and the superb 1963 basic law, fiscal federalism clauses that allowed the federating regions to control their resources, raise revenue and contribute to the centre saw consistent all-inclusive growth.
Under the law that allowed regions to retain 50 per cent of revenues earned from natural resources, contribute 30 per cent to the centre and 20 per cent shared among the regions, competition flourished. Each region defined its own priorities and developed according to its defined targets. Policies articulated made Nigeria to emerge as the second largest cocoa producer, largest groundnut producer, largest producer of palm kernels and major exporter of hides and skins, bauxite, tin, coal and timber. From almost zero level, there were in varying degrees at the regions, massive increases in school enrolment and literacy, infrastructure and a manufacturing sector began to take root.
In contrast to this, gradual centralisation began to take its constrictive toll from the early 1980s as more unviable states were created by successive military regimes and hamstrung by law from exploiting strategic resources outside farming. It is the historic duty of the national conference to return the country to the path of true federalism.
A country where component units gather with begging bowls to collect doles from the central government for their survival is not a federation. Even unitary states are every day devolving power and fiscal responsibilities to the regions. And for Nigeria, with its wide diversities in ethnicity, cultures, languages and faiths, only a federation or a confederation offers any chance of success as a sustainable polity. A former Vice-President, Atiku Abubakar, said recently that centralisation “killed our agriculture, local control of schools and promoted corruption.”
Delegates from the North, especially, are so fixated on oil revenues and care less of their region’s immense advantages in minerals and agriculture that they mistake resource control solely for revenue sharing. A federation is not about sharing revenues generated from a part; it is about creating wealth in all its parts. The conference should reject their bid to retain the subsisting rent-seeking, growth-inhibiting system that rewards indolence, false population figures and corruption, while stifling initiative and maximisation of natural resources and enriching a parasitic class.
Under the Canadian constitution, the provinces and federal government legislate on natural resources and the provinces have considerable control over their own natural resources. In the US, states have control over their resources and are subject only to federal taxes and laws on strategic resources.
Every part of Nigeria will benefit from fiscal federalism. Zamfara, for instance, will back resource control if it realises that it can earn up to $1 billion from exploiting its gold and other minerals; as will Nasarawa that has about 14 mineral types; or Enugu and Kogi with their coal, and Ondo with its bitumen.
For Nigeria to survive, the component units should be able to create wealth and jobs, while providing infrastructure and development. They cannot go far without fiscal federalism. Our position is that fiscal federalism must be the irreducible condition for Nigeria’s continued corporate existence.