When President Goodluck Jonathan agreed for Nigeria to hold a national dialogue on the way forward, many saw it as an avenue to put right what is wrong among the federating units. But Nigerians, who were enthused by the decision, became disillusioned when the composition of the dialogue was made by the ever sleep-walking Secretary to the Government of the Federation, Anyim Pius Anyim. Pius Anyim, who has been said to sleep at every available opportunity at meetings, in his sleeping mode, compiled a list of the old, the same people that have been a clog in the wheel of progress of the Nigerian nation; men and women whose source of wealth has mainly been from economic rent. Majority of those at the conference under normal circumstance would not make it. They have lived as parasites, sucking their host – Nigeria- dry. They have been stealing the nation’s resources. Knowing this, they have vowed never to let states control their resources. They, like their sponsors, see Nigeria as their farm yard. Because oil was found in Nigeria, mineral resources were conferred on the federal government so that those who have access to political power can expropriate it for their benefit. It is not for the benefit of Nigerians, but for selfish interest of the few who have political access. This group has continued to perpetuate themselves.
The struggle to control the oil wealth of the nation has been an issue between the north and the south. The Nigeria Governors’ Forum (NGF) sometime in 2011 raised a committee of six, headed by Governor Babatude Fashola of Lagos State, to review the revenue formula and submit its recommendation. The Lagos helmsman said that the committee recommended a new formula: Federal Government (35 percent), the 36 state governments (42 percent) and the 774 local governments (23 percent). The current revenue formula gives the Federal Government 52 percent, states 26.72 percent and the local governments 20.60 percent. The formula was not accepted by the powers that be. Last week, the issue raised its ugly head and caused another heated debate at the ongoing national conference. The supposed north stood against resource control and asked that the 13 percent given to oil-producing state be slashed to five percent. Who are these northerners? Who do these people speak for? Is it the north that has been so very deprived that these self-seeking individuals are talking about? Where has the money they have gotten so far from revenue allocation been appropriately applied for the benefit of the average Almajirai? It is when it pleases these rent seekers that they talk about the north. Can these men look at the global best practice in a federating state?
Professor Adobe Adedeji, an eminent economist, in his book, ‘Nigerian Federal Finance, Its Development, Problems and Prospects’, said that federal finance, in contrast with unitary finance, is a triple division of resources between the federal authority, the regional or state governments, and the local authorities. A study of federal finance therefore involves this triple relationship. But the most important characteristics of federal finance are to be found in the financial status of the ‘intermediate’ political entities, the states or regions, which are designed to perform certain functions which in a unitary system, are assigned to the central authority.
The principles of federal finance can therefore be interpreted to mean the principles which these intermediate political entities and the central authorities should follow in their fiscal operations. The position of local authorities in a federation is not appreciably different from their position in a unitary state, at least so far as finance is concerned. Nigeria has no defined fiscal structure in states and has not pursued taxation as main revenue source as a result of earnings from oil.
Each level of government has in the last 50 years or so, depended solely on revenue from sale of crude which is monetized every month and shared in a formula that is somewhat skewed in favour of the Federal Government. States and local governments in the federation have abandoned their responsibility of generating and developing their internal resources and only depending on the federal allocation for payment of salaries. This aberration arose from the incursion of the military into the polity that allocated resources based on its concept of its command structure.
In an established federalism, the principles of public finance, particularly of taxation, have received attention from the earliest days of economic analysis. The mercantilist, the physiocrats as well as the classical economists, advanced propositions concerning tax principles. David Ricardo and John Stuart Mills recognised the division of the subject-matter of public finance into three aspects – revenue, expenditure, and public debt.
Yes in Nigeria, there is revenue, expenditure and debt in public finance. The question is; what are the sources of revenue in public finance in Nigeria? Up till now, about 90 percent of public finance is from oil. What about other natural resources that are said to abound in the country? In every state of the federation, there are large deposits of mineral resources that when developed, can earn the country more money than oil, yet nothing is being done.
Is it normal for the control of land across the country to be vested in the governors while the mineral deposits in the same land are in the hands of the federal authority? If you need a mining lease, you take permit from the Federal Government but when you need land to build or develop structures, you obtain Certificate of oOcupancy from the state government.
Yet, all this while, these economic rent seekers have not seen anything wrong with this arrangement. Nigeria must begin to operate a true federalism in which tax policy becomes the key fiscal instrument. States must be allowed to develop the resources in their domain and pay tax to maintain the Federal Government. It should not be that every now and then the clamour for a new revenue formula begins to disturb the polity.
