The decision of Lagos State governor, Babatunde Fashola, to sue the Federal Government over what he described as illegal deduction of one percent from statutory allocation to states in the federation may not be a surprise to many Nigerians. Some, especially those who have sympathy for the PDP, will see it as an action instituted by opposition. In as much as the opposition has been firing some salvo at the Federal Government at the slightest opportunity, the disclosure by governor Fashola that the nation’s economic council has not met for once in the last six months and that one percent of allocation to states is being deducted, should give cause for worry to those who understand the precarious situation the nation’s economy is in.
The governor while presenting the nation’s grim financial standing before members of the State House of Assembly in Lagos said the decline in revenue was also credited to decline in oil production, which was adduced to pipeline vandalism and crude oil theft and that the debate on accounting on crude oil is out there. Fashola lamented that since October last year, the Federal Government had been deducting one percent from states’ statutory allocations which was said to be for Police reform, describing it as unconstitutional and vowed to challenge it in court.
Nigerians, who are conversant with trends in the country, will recall the fact that for the first time in almost 15 years of the nation’s democratic experience, the country recorded some walkouts staged by commissioners of finance during meetings of the Federal Accounts Allocation Committee in Abuja. The first one happened in 2011, while the country witnessed more of such walkouts in 2013 due to irreconcilable accounts of the federation. Some states have had, in the recent past, to borrow to keep the government going.
On October 7th last year, this column in an article entitle: Nigeria will survive without oil, warned the nation of the consequences of over dependence on oil revenue. “In the last three months, local governments, states and Federal Government officials have been at each others’ neck over shortfalls in revenue allocation from the federation account. The war of words is as a result of panic by state governments that they may not be able to meet their obligations to their workers if the federation account allocation continues to dwindle. The current panic stems from the fact that if the revenue shortfall from the federation allocation committee to states falls below some levels, it will result in many of the states not being able to pay their employees.
“On two occasions now, members of the committee from states have walked out on the Minister of State for Finance over the amount due for sharing. It is a shame that the committee members are not seeing the opportunity that the shortfall is offering them to think and act to remove their states from the shackles of oil. Before the discovery of oil, regions in the country had their economies. They survived based on primary produce from the various regions. Nigeria will survive without oil. All that is required is for people to think. It is a sad story that the committee is not querying the Federal Government for not investing wisely; it is not asking for investment in the several minerals that dot the country, they are simply bickering over sharing.
“It is the sharing of cheap oil money that makes Nigerian politicians dummies, men and women who cannot think. They only wait to share. It is sharing that makes ministers come to office and leave without making any impact on the economy. It is the same for presidents and governors who preside over a sharing formula and nothing else. Over the years, they just become political birds of passage. It is the sharing of oil money that is tearing the PDP apart. It is sharing that has caused the sharp division in the country, North-South. If there was no oil revenue to share at the centre, the fight over the zone to produce the next president will not be a do-or-die affair. It is a shame that in the Nigerian political equation as of today, none is thinking about how to make a bigger cake for all to share.
“While the bickering over sharing is on by clueless politicians and their co-exploiters, it is important for the federal, state and local government functionaries to put on a thinking cap to fashion out how to generate internal revenue to sustain their operations. It will be foolhardy for the government at all levels to continue to rely and plan on proceeds from oil sales. For a very long time, the signals are showing the simple fact that this economy cannot continue to run on crude oil sales. Many of the states which commissioners of finance gather in Abuja to share from the federation account cannot generate up to N200 million per annum. Local governments are worse; some cannot generate even a million naira a year. Yet, all gather in Abuja to share oil money.”
The challenge now is that whilst this revenue decline has gone up, the nation has been unable to hold the National Economic Council, NEC, meeting in Abuja. In the recent past, the meetings had held every month. The meeting has not been held now for, at least, six months in spite of clear revenue declines. The National Economic Council is an organ for the discussion of economic issues concerning the 36 states of the country and comprises governors, the Governor of the Central Bank, the ministers of National Planning, Finance and others. The question is; what is the Federal Government afraid of for not allowing the economic council to hold its meeting? Is this government afraid of being asked to give account of the operations of NNPC? In fact, what about NIMASA, NPA, Customs and FIRS, all must render proper account to Nigerians. There is no escape route for this government.
