Home Analysis Developing Nigeria’s non oil revenue sources: the right way to go

Developing Nigeria’s non oil revenue sources: the right way to go

by Business News Report

Perhaps, a revolution of Nigeria’s fiscal federalism is in the offing. May be, just may be, if the power that be can see it and tap into it to develop Nigeria’s non oil revenue sources. The only good news that has come into focus in Nigeria public finance is the one informing the nation that FG, States; Local Government Councils are billed to share N1.7billion revenue from solid mineral. For a long while now, it is either there is a verbal war on sharing of oil revenue among the three tiers of government or there is bickering among the governors on which state is entitled to have a lion share of the oil revenue.

None of the federal, state or local government politicians have been state man enough to canvass increased efforts in baking the proverbial Nigerian national cake. Nigeria has always been taunted as being endowed with enormous natural resources that have remained in the raw form without being exploited.
In the time past, Nigeria boasts of its resources from export of coco, cotton, rubber and ground nuts. From 1967 to 1970, Nigeria fought a civil war without going into debt. After the civil war, developments plans were embarked upon, Nigeria’s public finance was sound and healthy. But with the oil boom in the late seventies, the government and people of Nigeria focused only on easy money and threw the baby and the bath water through the window by neglecting its traditional sources of revenue.

Chairman, Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Mr Ellias Mbam, recently said that over N1.7billion revenue from solid minerals will soon be distributed among the three tiers of government. Mbam made this known in an interview in Abuja. Revenues from crude oil sales account for nearly 90 per cent of monthly allocations to federal, states and local governments by the Federation Accounts Allocation Committee (FAAC). Mbam described the revenues from solid minerals as very positive in the present administration’s bid to diversify the economy.
The significance of this development may be lost to many Nigerians. For the first time in years, the solid minerals sector is contributing to the federation account. To have generated N1.7billion from solid minerals waiting for distribution among the three tiers of government is an opportunity the nation should grab and encourage a further development of the sector.

Luckily enough, the derivation principle also applies here as the Chairman said “What is holding us from forwarding the sharing is the 13 per cent derivation. We have asked the Mines and Steel to provide us the states where these revenues were generated so that they can get their 13 per cent derivation.” The RMAFC boss explained that the 13 per cent derivation was not exclusive to oil-producing states. According to him, any revenue from natural resources from any state entitles the producing state to derivation. He also stated that the Accountant-General of the Federation had opened a dedicated account for the solid mineral revenue with the Central Bank of Nigeria (CBN).

This is an opportunity for states in the federation to compete in the development of the resources in their domain. Even states with large deposit of oil wells can benefit more by looking outside oil. Agriculture can generate more revenue than oil if properly exploited. The value chain in the various product lines should be the focus of development. The amount of agricultural resources wasted every year can be tapped into through the setting up of light industries across the agricultural belt to process and package products for export. Solid mineral development can earn Nigeria billions of dollars every year. Nigerians must wake up and learn to live outside oil. This is the future of this nation.

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