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Editorial

Expectations From New Revenue Formula

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Thursday, April 7, 2022, the Chairman of Revenue Mobilisation, Allocation and Fiscal Commission
(RMAFC), Elias Mbam, presented the report of the proposed new revenue allocation formula for Nigeria to President Muhammadu Buhari. This is coming 30 years after the last exercise was carried out in 1992, during the military regime of Ibrahim Babangida.
Highlighting the key recommendations in the report, Mbam said the proposed vertical revenue distribution formula suggested 45.17 per cent for the Federal Government, 29.79 per cent for state governments and 21.04 per cent for local governments. Under the current sharing arrangement, the Federal Government receives 52.68 per cent of the revenue share, the states get 26.72 per cent and the local governments 20.60 per cent.
Under the special fund, the commission’s report recommended 1.0 per cent for ecology, 0.5 per cent for stabilisation, 1.3 per cent for natural resource development and 1.2 per cent for the Federal Capital Territory (FCT). According to him, the new sharing formula was reached after extensive consultations with key stakeholders, public hearings across the country, administering of questionnaires, and a study of several other countries with similar fiscal structures to draw useful lessons from.
The commission also visited the 36 states, the FCT, and all the local government areas including the six area councils in Abuja to sensitise and obtain inputs from stakeholders, according to the RMAFC chairman. The chairman added that literature reviews were conducted on the revenue allocation formula in Nigeria dating back to the pre-independence duration.
Memos were reportedly received from the public sector, individuals and private institutions across the country. Mbam further noted that the country’s political structure had altered since the last review in 1992, with the addition of six more states in 1996, bringing the number of states to 36. At the same time, the number of local government councils also increased from 589 to 774.
The revenue allocation formula is the fraction of resources accruing to the federation that goes to each component of the nation. It also specifies the resources conserved in the areas where they are produced, as well as the proportions of the revenue accruing to the collecting agencies of government. The lack of justice and fairness in the distribution of the resources often results in tension and controversies in the polity.
President Buhari’s reaction to the new income distribution formula is commendable. In particular, he said he would await the outcome of the constitutional review process before submitting the report to the National Assembly. He assured the commission’s members that the Federal Government would conduct an internal review and approval process for the report shortly.
Buhari said, ‘‘Considering the changing dynamics of our political-economy, such as privatisation, deregulation, funding arrangement of primary education, primary health care and the growing clamour for decentralisation, among others, we must take another look at our revenue sharing formula, especially the vertical aspects that relate to the tiers of government.”
If the new revenue-sharing procedure gets approval, the Federal Government will have its allocation reduced by 3.33 per cent. However, the most important issue with Nigeria is not how revenue is shared, but the revenue itself. Nigeria’s revenue to Gross Domestic Product (GDP) is about 8 perc ent while the average for Africa is 18 perc ent. Hence, it is more productive to concentrate efforts on improving revenue generation across the board than the fixation on sharing. We have a huge revenue problem.
The National Assembly should step up efforts to amend the relevant section of the Constitution for quick implementation of the new revenue formula. The Federal Government must immediately subject the report to its review and approval processes. We hail RMAFC for the meticulous work in carrying out its constitutional tasks. Nigerians, particularly state and local governments, are applauded for contributing to this development through the extensive stakeholder engagement processes.
At the height of the negotiating process of the current minimum wage of N30,000, the states (under the aegis of the Nigeria Governors’ Forum), proposed a fresh formulation to give them more resources. Governors cited their inability to pay. However, most of the governors have been reckless with the allocations they have been receiving, resulting in several states owing workers’ salaries and pension arrears. While state and local governments deserve to get more, the derivation on natural resources should also be jacked up with legally binding provisions on regular upward adjustments.
Nevertheless, the new sharing format is not the universal remedy for Nigeria’s stunted economic outlook. For now, Nigeria is a poor country. The World Bank estimates its Gross Domestic Product at $375.8 billion, the largest in Africa, but it is a deceptive narrative. At 200 million, its population far outstrips that of any other country on the continent. Our nation has been described by the World Poverty Clock as the global poverty capital, where 93 million people live below the $1.90 per day threshold.
The continuous sharing of oil resources currently generated will not be of significant help. The three tiers of government will permanently be bogged down in a financial crisis, primarily because Nigeria’s current structure is a dangerous aberration. For the nation to be progressive and dynamic, equity and justice have to be promoted in our federal system. Also, the retrogressive culture of entitlement to oil revenue should end. Ideally, the states should strive to become centres of development.
Across Nigeria today, the consensus is that there is an urgent need to devolve more financial resources from the centre to the states and local governments. This is to ensure that the tiers of government can carry out their functions and improve economic growth and development. While we endorse that agitation, we strongly believe that Nigeria could only attain its dream of development by operating true fiscal federalism, where every tier of government generates its revenue and controls the bulk of it, just as it was in the First Republic.

 

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Editorial

That Odili’s Health Centre Gesture 

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Ndoni, a small, but peaceful community in Ogba/Egbema/Ndoni Local Government Area of Rivers State
was recently filled with excitement when eminent dignitaries, including Governor Siminalayi Fubara, attended the inauguration of the new Comprehensive Primary Healthcare Centre. This generous donation came from the PAMO Educational Foundation, established by former Rivers State Governor, Dr Peter Odili, who hails from the Ndoni community where he is deeply revered. The Foundation holds a special place in the hearts of the local people.
The inauguration ceremony was a source of great joy and celebration for the community, as the new healthcare facility promises to provide much-needed medical services to the people of Ndoni. The facility is built to provide a wide range of healthcare services, including maternal and child health, immunisation, family planning, and treatment for common illnesses. It is expected to significantly improve the health outcomes of the community, especially for women and children.
PAMO Educational Foundation’s unwavering dedication to enhancing the well-being of the Ndoni community and its environs is exemplified by the establishment of this health facility. The Foundation has consistently invested in initiatives that foster education and healthcare, and this new amenity is a testament to its ongoing commitment. PAMO’s rich history of supporting educational endeavours and healthcare programmes in the community has laid the groundwork for the Foundation’s continued contributions. The health resource stands as a beacon of hope, providing much-needed medical services and improving the quality of life for countless individuals.
Undoubtedly, the presence of dignitaries underscored the necessity of the event and the value placed on the health centre by the community and the state government. The Ndoni people expressed their profound gratitude to PAMO Educational Foundation and former Governor Odili for their generosity and commitment to the well-being of the community. They pledged to make good use of the health appliance and ensure that it served its intended purpose for many years to come.
The former health centre, a vital lifeline for the town and its neighbouring communities, fell victim to the relentless floods of the River Niger in 2020 and 2022. The torrential waters ravaged buildings, destroyed crops, killed livestock, and tragically claimed lives. In the wake of this devastation, residents were left without access to essential medical services, a cruel blow that compelled them to undertake arduous journeys to distant communities like Omoku for over two years. The old primary health amenity was erected during the administration of Odili and inaugurated  in 2008.
The unveiling of the new health institution brought a surge of palpable relief and gratitude to the beneficiaries. The modern facility, equipped with state-of-the-art apparatus and dedicated medical professionals, stood as a symbol of hope and resilience. It marked a new chapter in healthcare for the community, providing them with the means to access quality medical services in the comfort of their own surroundings. The trauma of the floods was slowly fading into memory, replaced by a sense of renewed optimism and a profound appreciation for the gift of healthcare.
Governor Fubara inaugurated the event, which provided a platform for reconciliation as numerous politicians who had previously distanced themselves from the current government were seen at the gathering, showing their support for Fubara’s administration. In his address, the governor thanked Dr Odili, the founder of the PAMO Educational Foundation, and a key political figure in the state, for standing by his administration in the wake of the political turmoil in the state.
He pledged his government’s support to the Ndoni people by enhancing the healthcare accommodation and highlighting Odili’s legacy as a valuable gift. The administration aims to provide quality education, healthcare services, and empowerment, including agriculture and human capital development. Fubara has already approved the recruitment of 1,000 medical doctors for primary health, Hospital Management Board, and Rivers State University Teaching Hospital to improve healthcare delivery and ensure the use of zonal hospitals in the state.
Odili praised Fubara for his humility and commitment to protecting Rivers people in line with the constitution, and encouraged him to focus on providing good governance. He said: “Politics is over, it is now time for governance and you have to hit the ground running, you have touched the critical sectors. In less than one year in office, you have touched education, you have touched health, but the key to what you have done so far is the focus on human beings, on the people, especially the poor amongst you. Human beings are the soul of society. So touching the lives of human beings is more important, you have started showing signs of that.”
We express our sincere gratitude to the former governor for his incredible determination in establishing the health facility. This admirable deed will always be remembered in history as a symbol of his unwavering dedication to the health of the people in our state. By generously donating his personal resources, he has shown true patriotism and a deep love for his community. His selfless actions have not only provided essential healthcare services but have also inspired others to do the same.
For the Ndonis, the inauguration of the health facility marks a critical milestone in the provision of accessible and affordable healthcare. It is an attestation to Odili’s visionary leadership and his unwavering belief in the importance of investing in the health and well-being of his people. We celebrate this Rivers son for his exceptional foresight and humanity. His legacy will be forever linked to this exceptional facility, which will continue to serve as a beacon of hope and healing for generations to come.
All the elites in our state should emulate Odili by embracing a spirit of collaboration with the government to foster the development of the state rather than disparage aimlessly. Needless criticisms, on the other hand, can hinder progress and create an atmosphere of distrust. While constructive animadversion is essential for holding leaders accountable, excessive or unfounded negativity can undermine morale and discourage alliance. If we focus on solutions rather than problems, we can create a positive and productive environment that attracts investment, promotes innovation, and ultimately leads to a better future for all.
Peter Odili’s exploit underscores the critical role private sector infrastructural initiative plays in enhancing the economic landscape of a state. He has not only bridged the gap between the government and private entities, but has also set a precedent for cooperation that fosters innovation, attracts investments, and creates job opportunities. These partnerships are vital for unlocking the untapped potential of the state, laying the foundation for sustainable development. The government’s recognition and support of the private sector as a driver of economic progress are essential. Rivers State can progress towards a future characterised by robust economic transformation and an improved quality of life for its people, if it emulates Odili’s example of promoting synergy.

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Editorial

For Peace In The M’East

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Tensions in the Middle East have been a cause for concern for decades now. The region has been plagued by conflicts, violence, and instability, with countries such as Israel, Iran, Iraq, Yemen, and Syria being at the centre of many disputes. The failure to resolve these concerns may have devastating consequences for the people living in the region. It also has what it takes to escalate into much larger encounters.
If the international community fails to act swiftly to end the hostilities, there is a real risk that a Third World War might ensue. The clashes in the region are perplexing and passionately rooted in historical, religious, and political distinctions. The inability to address these underlying matters and uncover peaceful solutions has only fueled the fire of discord and contentions among the nations involved.
The Middle East is a crucial geopolitical region, with significant reserves of oil and natural resources, as well as being a hotbed of religious and cultural diversity. The fracas in the region has far-reaching socioeconomic aftereffects. Any intensification in the brunt could have widespread upshot for global security, trade, and stability.
No one should take the probability of a Third World War arising from the region lightly. The use of nuclear weapons, the involvement of major world powers, and the potential for an expansive regional conflagration could have catastrophic backlash. The international community must unite to address the root causes of the apprehensions in the region and work towards sustainable solutions.
The ongoing feud between Iran and Israel suggests that there may be challenging days ahead for international peace. It is troubling that what started with Israel’s offensive on Iran’s consular building in Syria on 1st April may not end with Tehran’s Operation True Promise. The bombing in Damascus, which killed at least two top Iranian generals, resulted in the first-ever direct strikes launched against Israel from Iranian territory. The Jewish State’s recent reprisal for the Iranian onslaught may open a new vista in the conflict.
During the intrusion, Iran reportedly launched more than 300 missiles and drones. Almost all were annihilated by Israel’s air defences, augmented by forces from the United States, United Kingdom and Jordan. The Iranians had made their intentions clear, giving Israel and its allies time to prepare themselves, and quickly issued a statement at the United Nations in New York that their retaliation was over.
With the current war in Gaza between Israel and Palestinians, there are fears that the region is on the brink of an all-out war, with conceivably fatal aftermath. This is a defining moment in the Middle East. That is why it is right for world leaders to pressure Israeli Prime Minister, Benjamin Netanyahu, to exhibit restraint. Then both Israel and Hamas could engage in talks to free Israeli hostages and end hostilities.
In addition to the Israel-Palestine strife, the civil wars in Syria and Yemen have further exacerbated the crisis in the region. The fray has resulted in massive deracination of people, extirpation of infrastructure, and loss of lives. The international community must seek a political solution to these inessential wars and provide humanitarian abetment to those affected by the violence.
Moreover, the rise of extremist groups such as ISIS has also destabilised the region, posing a threat to global security. Nations in the locale and beyond should interface and combat terrorism and extremism. A coordinated effort is required to address the very causes of the commination, such as poverty, lack of education, and political marginalisation. Clearly, the status quo in the bailiwick is unsustainable. A new approach is vital to end the dire straits in the region.
Intense diplomatic endeavours, dialogue, and cooperation are cardinal in resolving the impasse in that portion of the world. The use of military force or unilateral actions will only further escalate the situation and increase the risk of a larger conflict. It is time for all parties involved to set aside their disparities, and build a stable future for the Middle East.
Global amity is indispensable for the well-being of all individuals and nations. It is the foundation upon which sustainable development, economic prosperity, and human rights can thrive. The United Nations was established with the primary goal of advancing peace and security among countries, and it is obligatory that the organisation achieves this objective.
Super powers should animate collaboration and diplomacy to attain harmony. These nations have the wherewithal to make necessitous strides in promoting stability and security on a global scale if they set aside political dissimilarities and focus on common goals. Through open communication and mutual respect, super power countries can lead by example and inspire other nations to follow suit in creating a more nonbelligerent world for present and future generations.
Efforts must be made to avert a Third World War. Its idea is deeply disturbing and contentious. It is one that evokes fear, uncertainty, and global disquietude. The possibility of such a cataclysmic event occurring is something that many would rather not think about, yet the signs and anxieties among countries are becoming increasingly apparent. States must be vigilant, proactive, and committed to building a better future for the world.

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Editorial

Governor’s Pension Law Repeal, Otti’s Example 

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Abia State’s decision to repeal the governor’s pension law is a momentous move towards cutting down on
the expenses of governance and focusing on the welfare of pensioners in the State, who were last paid in 2014. Governor Alex Otti’s bold action in overturning this law demonstrates a dedication to financial prudence and transparency. This resolve will help in reducing the financial burden on the State.
Pension for governors and their deputies has been a contentious topic in Nigeria, with concerns raised about the ethics and morality of providing lifetime benefits to public officials who may only serve a limited term in office. Abia State has taken a bold step by repealing this law, setting a positive example for other States to follow. This move has sparked a much-needed conversation about the need for accountability and responsible governance in the country.
Governor Otti’s argument for repealing the governor’s pension law to alleviate the financial burden on the State and address the issue of unpaid pensions for Abia’s retirees is compelling. By prioritising the needs of the people over political considerations, Governor Otti is demonstrating strong leadership and a commitment to serving the best interests of the citizens.
The Abia State Governors and Deputy Governors Pension (Repeal) Law of 2024 has been widely reproached for its excessive provisions for former office holders. Not only does the law guarantee former governors and former deputy governors 100 per cent of the operative salary of their successors, but it also includes the provision of three police officers and two Department of State Services officers for life. Additionally, the State is responsible for paying for their domestic staff and building mansions for them in both their home State and in Abuja.
Proponents of these benefits assert that they are necessary to ensure that former governors are appropriately provided for after their tenure in office. They maintain that these benefits are in line with the sacrifices and responsibilities that come with holding a public office. Furthermore, supporters of the entitlements contend that these provisions are intended to attract qualified individuals to compete for gubernatorial positions, with the assurance that their welfare will be looked after once they leave office.
Despite efforts to eliminate these schemes in some States, about 18 States still retain pension for their former leaders, which many Nigerians view as a form of political hedonism. Zamfara set a precedent in 2019 by eliminating its pension law, signaling a shift away from the traditional practice of providing lucrative benefits to former governors and their deputies. Many other States continue to operate this practice, allowing former leaders to receive substantial pension and other perks even after leaving office.
In 2020, both Lagos and Kwara States announced their intentions to scrap their pension laws, acknowledging the increasing public outcry over the issue. Kwara went a step further by officially abrogating the law in January, 2021, demonstrating a commitment to reforming the system and promoting accountability. Meanwhile, Lagos took a more gradual approach by reducing the benefits for former leaders by 50 per cent in August , 2021. This move was perceived as a compromise between completely abolishing the scheme and maintaining the status quo.
According to the World Poverty Clock and the National Bureau of Statistics (NBS), Nigeria has been listed as the poverty capital of the world, with millions of people living in extreme poverty. The fact that States would continue to record more ex-office holders after every tenure only adds to the financial strain of these pension schemes. With the number of former office holders increasing each year, the costs associated with their pension become unsustainable for many States.
The funds that could be allocated towards alleviating poverty and improving infrastructure are instead being spent on providing lavish retirement benefits for a select few. The current pension schemes for ex-governors in Nigeria are not sustainable in the long term, especially in the face of the present economic realities. Reforms are needed to ensure that public funds are used more efficiently and effectively, and that the needs of the most vulnerable in society are given preference over the comfort of former government officials.
Pension for former governors often result in the enrichment of the wealthy elite at the expense of the struggling masses. These politicians typically only served in office for a maximum of eight years, yet, they are able to secure generous pension that allow them to maintain a life of luxury. Some even go on to hold positions as Ministers or Senators, further perpetuating their unjustified wealth.
Curiously, the 10th National Assembly is home to more than 12 former governors who continue to benefit from these lavish retirement benefits. In stark contrast, many public workers dedicate 35 years of their lives to serving the public and the government, only to receive meagre pension or sometimes none at all. Tragically, some pensioners pass away before ever receiving the benefits they are owed.
Other States should look to Abia State as a model for promoting democratic values and accountability. The active participation of civil society organisations, pressure groups, taxpayers, and activists is critical in upholding the principles of democracy and ensuring that the government is accountable to the people. The scandalous pension laws that have been passed in many States are not only unjust but also a detriment to the democratic process.
Nigerians should engage with their legislators and demand the immediate annulment of these obnoxious laws that serve to enrich a select few at the expense of the public. Citizens can help ensure that their voices are heard and that their rights are protected by actively participating in the legislative process and holding their representatives accountable. Abia is a constant reminder that democracy is a continuous process that requires the active involvement of all.

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