Still On Fiscal Federalism

Former president of the Nigeria Bar Association and a Senior Advocate of Nigeria, Chief Olisa Agbakoba, recently expressed popular sentiment among reputable Nigerians, when he backed his determination to institutionalise a truly Fiscal Federation in post golden jubilee Nigeria by sending a bill to the National Assembly.

With a title: “An Act to Alter the Constitution of the Federal Republic of Nigeria, 1999…” Agbakoba  has appealed to the Seventh National Assembly to amend the Constitution to reflect true federalism with the Federal Government wielding limited powers and responsibilities.

In the Bill, Agbakoba, among others, is seeking for the devolution of powers from the centre to the federating units in items such as health, education, agriculture, commerce and industry, transportation, prisons and police, housing and property development, land administration and management, including the mining of the minerals therein, among others.

Agbakoba’s logic, we believe, is in tandem with some of the yearnings of President Goodluck Jonathan’s Presidency, which we are aware, is currently consulting stakeholders on a whole range of issues in his proposed Constitutional amendment. The president’s proposal is said to include between 30 and 50 amendments in the provisions of the Constitution, encompassing the six-year single tenure for president, and governors, abolition of joint state-local government accounts, constructive true federalism, removal of prison management from the exclusive list, and new revenue allocation formula, among others.

The Tide agrees with both Agbakoba and Jonathan, among several other notable Nigerians, that a true federation cannot merely allocate pitance in funds to the federating units, and keep a bulksome without consciously devolving more powers to them. The truth of the matter is that the quasi federal system Nigeria operates today is not delivering the required dividends to the people because the centre is too heavy, indolent and corrupt.

We believe that many Nigerians are united over the need and the push to revert to the status quo ante and make Nigeria live the true meaning of a federal state, as in pre-1966 Nigeria. This is because, among politicians, labour leaders, lawyers, businessmen, human rights activists and other professionals, the direction is the same: There is a glaring awareness that ensuring fiscal federalism would be the yawning imperative Nigeria cannot do without, not only for socio-economic and political stability, but for the much-sought-after rapid development.

The Tide holds that the present concept of federal arrangement is retrogressive and lacks competitiveness. In fact, it is a direct opposite of what the founding fathers envisioned for the country at birth.

The concept of fiscal federalism was first introduced in Nigeria in 1946, following the adoption of the Richards Constitution. The period 1947-52 marked the beginning of the recognition of sub-national governments during which financial responsibilities were devolved to the three regions-North, West and East.

At independence in 1960, these three regions  were  clearly autonomous and controlled their primary resources, and thus, were able to generate ample revenue individually. From 1960 to 1966, the same constitution gave the federating regions so much powers that left the central government with barely 15 per cent of the nation’s earnings.

It was this system, as provided for in the nation’s constitution, that laid the foundation for the rapid socio-economic development witnessed in the regions during the First Republic. Unfortunately, that giant stride that could have put the country firmly in the league of developed nations of the world, was jettisoned as soon as the military took over the reins of governance, using the civil war as justification for the revision of that fiscal formula.

Today, there are 36 states and the Federal Capital Territory (FCT) with a near status of a state and 774 local governments recognised by the Constitution. If ethnic-based resource control, which has for years powered calls for a sovereign national conference is unacceptable, then the only choice left is to use the existing states and local governments as the federating units.

The Tide believes that Jonathan can rework Nigeria by the mock federal arrangement, which has been variously and derogatorily described as ‘lopsided’, ‘quasi’ federal structure to function like a truly federal system of government in which the federating units control their resources and pay taxes to the centre. That way, the Federal Government focuses on such exclusive issues as national security and defence, foreign policy, currency minting and monetary policy, among other limited concurrent responsibilities.

If Jonathan achieves these, in addition to ensuring 24-hour uninterrupted power supply, then, Nigeria is on the threshold of history, and indeed, transformation.