Sharing Of Revenues And Loots

A Political Bureau set up in 1987 to work out a political blueprint for Nigeria observed in its report that the allocation and sharing of revenue have been among the most contentious and controversial issues in the nation’s political history. Since 1946, various formulae had evolved, none of which gained general acceptance among the component units of the country.
There was a Philipson Commission on revenue sharing or allocation which was based on the principles of derivation and even progress. In 1951 there was another review of revenue allocation which retained the principle derivation but added the principles of needs, national interest and granted fiscal autonomy for the three Regions. In 1953 the principle of derivation was given greater emphasis, with revenues derived from import duties and excise tax going to he regions.
In 1958, a revenue sharing commission retained the principles of need, even development, derivation and fiscal autonomy, but introduced a Distributable Pool Account (DPA). That was the beginning of the slogan of sharing “national cake.” With the creation of Mid-Western region in 1964, the sharing formula was adjusted giving the North 42 percent, East 30 percent, West 20 percent and Mid-West 8 percent. Principle of land mass featured prominently.
With 12-state structure in 1967, the next revenue sharing formula was by Decree No. 15 of that year, whereby the old principles were retained, giving the Northern states the old region’s 42 percent and the six Southern states sharing what remained in the Distributable Pool Account. Decree 12 of 1970 reduced the sharing principles to two, based on population and equality of states. Revenue from export duties was reduced from 100 percent to 60 percent because of post-war reconstruction, justifying federal government’s monopoly.
In 1971 and 1975 radical changes took place, reducing revenue going to the states, with Decree No. 6 of 1975 making states’ share of oil revenue 20 rather than 45 percent. Aboyade committee (1977) recommendations were considered too technical and rejected. Okigbo Presidential Commission (1980) recommended 53 percent share for federal government but that was increased to 55 percent. Allocation to local governments was reduced to 8 percent from 10; states had 30 percent and 7 percent went into Special Funds.
Adjustments were made in 1981 by a revenue act, leaving federal government’s share unchanged, local governments share was increased to 10 percent; states’ share to 30.5 percent, reducing the Special Funds to 4.5 percent. Decree No. 36 of 1984 gave state governments 32.5 percent, reducing the Special Funds further to 2.5 percent.
Decree No. 49 of 1989 established the National Revenue Mobilisation, Allocation and Fiscal Commission, with mandate to mobilize and review public sector revenue, including disbursement, etc. With Decree No. 3 of 1991, revenue allocation formula was altered as follows: federal government 50 percent, state governments 25 percent; local governments 20 percent and special funds 5 percent. In less than 6 months this formula was changed to 48.5; 24 and 20 percents respectively for the three tiers of government.
The purpose of these citations is to emphasise the fact that the nation’s revenue sharing formulae have been quite unstable. The scrambles for creation of more states are associated with the desire to share or benefit from the proverbial national cake. The era of looting of the national treasury is associated with military rule. What is quite obvious in Nigeria’s political and economic history is that there are imbalances and lop-sidedness which give rise to instability and frictions. These issues have not been resolved.
The same instability and lop-sidedness that have characterised revenue sharing formula, coupled with deliberate looting of the nation’s resources, are also playing out in the sharing of recovered loots. The purported formula of “poorest of the poor” being used for disbursement of recovered loots tends to follow the same pattern of selectiveness and arbitrariness.
Who determines the “poorest of the poor” in each of the states of the federation? Would political and sectional interests not render the exercise of sharing of recovered loots unreliable and unfair? Even though international interests are involved in the loot sharing exercise, can there be any guarantee of transparency in the disbursement of the funds?
The most glaring indication of imbalance and lop-sidedness in the disbursement of recovered loots is the attitude towards the zones that produce the mineral oil which provided the revenue that was looted. Have various spurious formulae and principles not been used in the past in revenue allocation and sharing in Nigeria? To say the least, mineral oil producing communities are among the poorest and most marginalized people in the Nigerian federation. Mineral oil producing localities deserve a fair treatment.
Dr. Amirize is a retired lecturer, Rivers State University, Port Harcourt.

Bright Amirize