Towards Achieving Fiscal Federalism


For the umpteenth time, calls for a Fiscal Federation reverberated in various parts of the Nigerian State recently, have the familiar disgusting ungainliness of some selffish politicians, not withstanding. This time, however, virtually all states within the South-South geopolitical zone, which resources largely account for the country’s economic survival are united in calls for a truly Federal System of government that guarantees them management of their endowments.

With the opportunity afforded by the on-going public hearing convoked by the National Assembly towards reviewing the 1999 Constitution, the states have been agitating for a review of, among others, provisions under Sections, 44 (3) and 162-168 of the constitution.

Joining Rivers and Cross River States, Akwa Ibom and Bayelsa States, added their voices to the collective protest and demanded a constitutional relief that allows them control of their natural resources and the abolition of the current revenue allocation formula, enhanced by the vexatious provisions.

Section 44 (3) of the 1999 Constitution States, Notwithstanding the foregoing provisions of this section, the entire property in, and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic zone of Nigeria shall be managed in such manner as may be prescribed by the National Assembly.

By this singular provision, the oil producing states argue, they have been denied the inalienable right to manage their own economic resources, which, based on their persistent protests, negates the essence and spirit of a Federal System of government.

Even more worrisome are provisions in Section 162-168 which dwell predominantly on Federal revenue, and allocations.

Section 162 (10, a-c), for instance, states “For the purposes of subsection (1) of this Section,” revenue means any income or return accruing to or derived by the Government of the Federation from any source and includes

(a) Any receipt, however described arising from the operation of law;

(b) any return, however described, arising from or in respect of any property held by the Government of the Federation; (and) any return by way of interest on loans and dividends in respect of shares or interest held by the Government of the Federation in any company or statutory body.

Added to these is the obnoxious land use Act with its audacious annexation of all lands and resources there-in, there under and even above their land for the Federal Government, proceeds of which are distributed to all other states based on population, equality of states, internal revenue generation, land mass, terrain as well as population density.

Not only does the provision smack of natural injustice, it inadvertently appeals to communism as against the Federal System Nigeria today subscribes.

These protests are not new, but they have been overtly ignored by successive governments and the National Assembly, which membership, largely weighed in favour of the benefiting majority, who very frequently out-votes the Minority States whose natural resources are shared on daily basis.

But it must be said, and clearly too, that the refusal to heed to wise counsel has at various times threatened the peace and unity of the Nigerian State. Again failure to do the right thing has variously bungled the opportunity to correct obvious cases of injustice. The movement from Civil protest to armed militancy by youths of the Niger Delta area. Now, is yet another opportunity for the National Assembly to tinker  with the statusquo and decide whether Nigeria needs the Federal System or not.

We are aware that a true Federation must be one of choice by all the Federating units who also work and agree on basis of such partnership. But sadly, since that is not the case with the Nigerian example, it will be everything but just to continue the way we have gone over the years, pretending that it was a consensus among all units in the first place.

The Tide believes that the right option is to embrace a Fiscal Federation that encourages healthy competition, research, ingenuity and hard work among the Federating Units and not the type of federalism that makes several units dependent on the spoils of a few.

This is why we support wholly the calls for resource control provided that the federating units pay to the centre, the prescribed taxes and earnings as may be decided upon by the National Assembly. We say so not because it affects Niger Delta more today, but that it could affect Kano or Ogun or any other state more tomorrow.

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