Understanding Nigeria’s Big Brother Federalism

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PROLOGUE

The fragmentation of Nigeria was a strategy by the military to keep
the country united. But it also weakened the nation’s federal structure,
contributing significantly to the lack of economic viability of the states of
the federation, explains Bolaji Adebiyi

The report revealed what every discerning person had always known, only that this time around it corroborated, with facts and figures, the economic lameness of the states of the federation in contrast to the buoyancy of the central government, which in actually fact had neither the land nor the mineral resource of its own to justify its huge financial status.
Published by the Economic Confidential, an economic intelligence magazine, the 2016 Annual States Viability Index (ASVI) showed that 14 of the nation’s 36 states were insolvent as their Internally Generated Revenues (IGR) for the year were far below 10 per cent of their Federation Account Allocations (FAA).
According to the report, only six states, Lagos, Ogun, Rivers, Edo, Kwara and Delta States were economically viable, generating 30 per cent or more of their federal allocation, while 16 others were barely surviving with a little above 10 per cent.
A more pathetic revelation was the fact that even among the six states said to be viable, only two, Lagos and Ogun States, generated more revenue than their allocations from the Federation Account by 169% and 127% respectively. None of the other four had up to 100%.
But Lagos with a collection of N302 billion, a figure more than the revenue of 30 states, showed the immense economic possibilities in the country were all the states as aggressive in pursuing generation of revenue outside the monthly handouts from the oil revenue at the centre.
No wonder, therefore, many of the states had in the past two years being struggling to fulfil their obligations to their workers and contractors, with many of them in arears of six to 10 months. Of course, unable to pay salaries, provision of critical infrastructure to the teaming populace had become far more challenging than ever.
To salvage the situation, the federal government had to bail out the states, at least twice, to enable them pay workers’ salaries and gratuity of pensioners. This is an anomalous situation, indicating a deep dysfunction in the nation’s federal system, where the central government in Abuja has grown so big and powerful that it not only dictates to the states but also interferes in matters that ought to be the affairs of local government.
While the insolvency of the states has been blamed on their lack of initiatives and drive, not a few analysts have apprehended the skewed political and economic structure of the federation for the anomaly, pointing out that the fragmentation of Nigeria into multiple states has not only weakened the political authority of the states but has also undermined their capacity for economic viability.
With a 36 states plus the Federal Capital Territory and 774 local government structure, the political and economic imbalance could not have been otherwise, particularly given the principles and mode of revenue mobilisation and allocation, where the federal government owns mineral resources and collects rents and taxes on them for distribution to the states.

Exploiting its enormous political power, appropriated during the reign of the military from 1966, the federal government enforces a skewed revenue allocation formula that allocates to itself 48.5%; state governments, 24%; local governments, 20% and special funds, administered by the federal governments, 7.5%. The federal government, therefore, effectively administers 56% of the resources of the federation.
The states have being kicking though. But they are too weak to stand up to the bullying federal government, which retains the coercive machinery of state that it has not been able to put into effective use to starve off the rampant acts of criminality, including kidnapping, armed robbery and the new menace of herdsmen, who have being maiming and killing thousands of Nigerians on their farm lands. Other manifestations of the remoteness of resource allocation and application to the people are the massive infrastructure decay, inadequate healthcare, housing and education, so much so that agitations are rife in virtually all parts of the country for the redress of obvious social injustice and inequality. The agitations have taken the form of communal strife, militancy and separatist movements.
Yet Nigeria’s economic development and political integration was better assured in the past. With its three regions, North, East and West and a federal government at independence, the country operated a more effective federal system in which the component regions had a large measure of autonomy, retaining their own Constitution that asserted their rights to the control of their economic resources. This economic independence was guaranteed by the 1960 and 1963 Constitutions, which donated strict derivative and proportional revenue system that enabled the regions to keep 50 per cent of their mineral resource revenues, while 30 per cent of general import duties were paid into a distributable pool for the benefit of the Regions.
In fact, the total import duties collected on petrol, diesel oil and tobacco, less administrative expenses, were fully payable to the Region for which the petrol or diesel oil or tobacco was destined, with similar provision for excise duty on tobacco. The proceeds from produce export duties, including cocoa, palm oil, groundnuts, rubber and hides and skin, were shared on the basis of the proportion of the commodity that was derived from a particular Region.
Armed with the constitutional protection of the control of their economic resources, therefore, the regions were able to assert their political autonomy and developed themselves at their own pace, giving rise to the phenomenal development and growth of the immediate post-independence era.

But the advent of the military and oil changed the course of events since 1966. The rot began with the military coups of January 15 and July 29 of 1966. Having difficulties in managing a federal state, where subordinate officers who headed the regions would share powers with the Commander-in-Chief of the Armed Forces, Maj-Gen Johnson Aguiyi-Ironsi who took the reins of power from the failed coup plotters, promulgated Decree 32, which abolished the regions and unified the country under the command and control doctrine of the military. Lt. Col. Yakubu Gowon who led the counter coup in July not only maintained the governance structure but also began the process of fragmenting the federation, starting with the dissolution of the four regions into 12 states on May 27, 1967.
Although the creation of states by Gowon was a political imperative to undercut the impending Biafran secession as well as respond to the agitations of the minorities against the domination of the majority ethnic groups, it later became a tool of the military to weaken the component states in favour of the centre as a strategy to discourage separatist tendencies and enforce the unity of the federation as a corporate entity. This strategy became more imperative after the civil war in 1970 as the military put in place several legal frameworks that increasingly strengthened the power of the centre, leaving the states weak enough never to again threaten the unity of the country. So, the military fragmented the federation from four regions in 1967 to the 36 states and the FCT that subsist today. It also diluted local governments from 299 in 1976 to 774, passing a series of decrees that worsted the pre-military fiscal arrangement that was in favour of the regions as the component units of the federation.
One of the laws the military promulgated was the 1969 Petroleum Decree that effectively transferred mineral resources ownership rights to the federal government, to the exclusion of the states. Although targeted at arresting the huge revenue from oil taxes and rents, today states have to obtain licences from the federal government to explore and exploit the mineral resources beneath their own soil.

Having achieved the objective of weakening the component units to defend the unity of the federation, the military then proceeded to use state creation as a strategy for distributing the oil wealth across the federation, with a slanted derivative revenue formula that left the oil bearing states and region with the short end of the stick. And so, the desire of the military, whose leadership was dominated by a section of the country, to redistribute oil resources, coincided with growing agitations of the ever growing minority groups for states of their own that will defend their cultural identity and facilitate their economic development against the dominance of the majority groups.
Meanwhile as the oil receipts became the mainstay of national economy, other sectors particularly, agriculture, that sustained the post-independence and pre-military economy, began to decline with the effect that both the states and federal governments became almost wholly dominant on oil for sustenance. This explains the current situation in which a substantial fall in the price of oil has fuelled the severe economic crises that has landed the country in recession.
In spite of the hardships that came with it, the prevailing economic recession has its own advantage. It exposed in a more compelling way, the structural defects in the federation and simplified the argument for a fundamental restructuring in favour of a fiscal federal system that would enable the states to explore and exploit their resources, while paying taxes to the centre. It calls for a constitutional reengineering that would reverse the prevailing command-and control federal structure and restore the financial autonomy of the states to enable them be more creative and more effective in the discharge of their responsibilities towards their people.

Ayo Adebanjo: Nigeria Will Not Enjoy Peace and Stability Until We Go Back to True Federalism

89 years old Chief Ayo Adebanjo, a chieftain of the pan-Yoruba socio-cultural group, Afenifere, is of a firm believe that restructuring and true federalism remain the key elements for repositioning and cementing the unity of Nigeria. This elder statesman uses every forum to reiterate his position. Chief Adebanjo is not averse to state creation. However, he wants the principles of federalism fully implemented, with every unit truly autonomous and strong enough to stand on its own; where the federating unit will be complementary to the federal government and not subordinate. Adebanjo shares his dream of a new Nigeria with Yemi Adebowale and Bennett Oghifo

What have we gained as a country from the dismantling of regionalism 50 years ago?
From the way the constitution is made, it has not been beneficial, but at the initial stage when proper political activities took place, after the return to civilian rule in 1979, we had something good. But in the context of the federal system of government, it has not been a beneficial thing to Nigeria. In fact, Lagos State can be said to have been created to spite late Chief Obafemi Awolowo, just as Midwestern Region was created out of spite to reduce the size of the Western Region. They felt it was the size of the Western Region that made it to progress; they didn’t know that it was the programmes of the government. We must bring to focus the type of system that was run in Lagos before, the democratic system, which despised the office of the Oba of Lagos. But after the McPherson constitution, Lagos was merged with the West, and Awolowo was able to make a new law for Lagos. That was the position until the 1963 Constitutional Conference when Lagos was now severed from the Western Region. Thank God, the democratic system was very much in operation, when Lateef Jakande was the first civilian governor of Lagos State, under the UPN. Partially for Lagos, we have not done badly with the creation of states. But if the creation had been done under the principle of federalism, where every unit will be autonomous and strong enough to stand on its own; where the federating unit will be complementary to the federal government and not subordinate, more progress would have been made. The system that was run thereafter was the unitary system where the states are now subordinate to the federal government. But that was not the position before independence. The constitution that we had before independence created four regions, as a truly federal system and there was devolution of power. The regions at that time were the North, East, West and then Midwest. The crisis of 1953, which made the colonial government to send for the leaders of the party, brought about the 1954 Constitution. That was when Premiership was included in the constitution. At that time, the constitution of each region was written separately to show their independence, and that was what we had until independence, and even after we became a republic in 1963, we were still under that constitution- the federal government knows its powers and the regional government knows its powers. It was the military that de-structured Nigeria and that is where the crisis is presently. After the military intervention in 1966, came the instability we inherited and are yet to get out of till now. Not until we go back to it (autonomous states), this country will not have stability. In my own view, unless that position (true federal structure) is reverted to now, Nigeria will not exist. We must have federalism the way it is done all over the world, devoid of Nigerian factor. The thrust of federalism is that the federating units are autonomous in all aspects, except those powers conceded to the federal government and that is where you talk about the residual powers residing in the federating units. So, we know what powers the federal government has and the state governments will be contributing to the federal government and not the other way round. In 1954, Awolowo fought for derivation, what you now call resource control. We fought for it that each region must take majority of resources before contributing to the centre. The marketing boards then were broken to the regions and the regional governments had a lot of money; the North through groundnut, West through Cocoa and Eastern Region through their palm kernel. That was the position and there was peace and there was healthy competition among the regions; Awolowo built the Liberty Stadium, Ahmadu Bello built his own in Kaduna, Awolowo built the University of Ife, Ahmadu Bello built his in Zaria. In the Eastern Region, there were all sorts of good things. It was under that system that Awolowo perfumed all the wonders between 1952 and 1959 and there was no occasion he went to Tafawa Balewa for subsidy or bailout. Every region knew its resources and before you can go on free education, you are free to levy tax. The independence was such that the Western Region at that time had an embassy in London- that was where I got married at the Agent-General’s office. It was not the Western Region alone, because under the 1954 constitution that created federalism, each region had the power to have its own Agency in London. Awolowo was the first to blaze the trail and Chief LBR Okorodudu from Warri was the first Agent-General. After that, the Northern Region had its own, and the Eastern Region followed. The Western Region Agent-General was staying at 15A Kensington Palace Garden. Ihenacho was the Agent-General for the Eastern Region. All these were scrapped when the military took over, and that is why we are still having all these problems till today. Whenever we wanted anything, we went through our Agent-General office and we no long went through the colonial office; it showed how autonomous we were then.
So, the problem with our federalism is not as a result of state creation?
Yes, they can create as much as they want but the federating unit is the most important thing under the federal constitution.

What is your position about those who believe the creation of states has retarded Nigeria’s progress?
The creation of these states, irregularly, came under the military after the coup of 1966. That reverted the federal system we were enjoying, and ever since, we have not gotten out of it. All the political instability we have been having ever since will continue to be because, as Chief Awolowo told them at that time, the multi-ethnic, multi-cultural, multi-religious nature of our country cannot succeed in a unitary form of government. There is nowhere in the whole world that the unitary government will survive in that type of society and that is why we have our problem of Biafra today, IPOB tomorrow, Avengers will continue no matter what we do. We will not get peace, stability until we go back to true federalism. At this stage now, there is nothing left for this government other than to do restructuring immediately before any election. In fact, there is no room for APC to do anything now, other than to restructure immediately before any election. They have failed in their programme and in the remaining two years, there is nothing else they can do. What they can do as their legacy is to restructure the country before going for any election.

What should be the focus of the restructuring?
Restructure to federalism. Our constitution is a fraudulent document and the late Chief Rotimi Williams said it that our document is fraudulent; we are neither federal nor did the people of Nigeria make the constitution. When you say, ‘we, the people…’ did we make this statement? It was made by the military; are we federal? So, to describe our constitution as a federal constitution is fraudulent.
Is this not Federal Republic of Nigeria?
It is a fraudulent statement to make. To say that the system we are running is federal is fraudulent; under a federal constitution, the federating units are independent and not subordinate to the federal government- is it like this in Australia, Canada or the United States of America? You often say we run the American system and I asked a former Inspector General of Police at the 2014 conference, “you say you’re federal, but have you heard of Inspector General of Police in America? Even in Britain where they have the Parliamentary system, they have Chief of Cosmopolitan Police and that is why their security is effective. Coming back home, until they involved the local people in Boko Haram fight, they didn’t make progress; that is the essence, because the local people will know the nook and cranny of the area. Nigeria would have made much more progress if there has been political stability but you can’t get stability until you have this type of restructuring where every federating unit is satisfied. I’m happy that Chief Olusegun Obasanjo is now talking of negotiating Nigeria’s unity; before, he said Nigeria’s unity was not negotiable. There is nothing more negotiable that the unity of this country. The federating units must agree on how we want to live together. Let nobody come and preach to us that it is good for us to live together, because that is not the question now. The question now is how do we want to live together and on what terms? We have passed the stage of ‘it is good for us to live together’. We are already united, but what is causing dissention is how we are united on favourable terms to a section of the country against the terms our founding fathers agreed to at independence. The constitution to which the Saudana, Azikiwe, Awolowo agreed to from 1953 up to 1960, and I ask the question: can our Northern brothers who are opposed to restructuring now claim to be more northerner than the Saudana? Under what constitution did the Suadana become the Premier of the Northern Region? Under what constitution was Balewa appointed the Prime Minister of Nigeria? If all those saying they want the unity of the country are sincere, then they should know that there is need to restructure the federal system where every federating unit will develop at its own pace.

What you’re proposing will require constitutional amendment. What do you suggest?
That is how we confuse ourselves. People have been asking how we are going to implement the report of the 2014. If that is what we want, then the government should do it, because looking for excuses or technicalities not to do it will not help us. If there is nothing bad there, then why are we looking for technicalities? The government should take immediate step to implement it once you know that it is the solution to our problem, if not, we are just playing with fire? Until it is done, we will not get peace, and if there is no peace, there can be no progress, there can be no sanity. There is no situation in the country that was not captured in the 2014 National Conference document and these can be adjusted easily.

The Buhari administration is saying that Nigeria’s major problem is corruption. What do you think?
Well, I agree but when they emphasis corruption and make it appear as if some people are opposed to the fight against it. Which conscientious Nigerian will be happy to see the amount of money people steal? I give them kudos for that, but why I disagree with Buhari and APC is that the war against corruption should be made holistic; No matter how much you want to wipe out corruption, to do it outside the rule of law is nonsensical; I’m opposed to it. The moment you ignore the rule of law, nobody is safe. You can’t be fighting corruption and become dictatorial, ignoring the rule of law and imposing the rule of man, breaking into people’s houses under the guise of fighting corruption. It is unacceptable, as far as I’m concerned, for anybody to pretend to establish a civilian dictatorship under the pretense of fighting corruption, and that is what Buhari is doing. Since he has come into office, he has come back to show that he is the same Buhari of 1983, which I warned against before he was elected. What did I say Buhari was guilty of that he has not done now? I said he is a dictator and will not obey the rule of law. Right now, we are having a dictatorship and not a democracy, because the party to enthrone democracy is not united. He cannot say that he is implementing APC policies; when last did the APC meet? You are deceiving yourself if you think you are having a democracy under Buhari; it is a one-man rule. All the things that he is doing are not the decision of his party and I challenge him to say where the party met or held its convention. The party (APC) right now is divided into about five or six sections. How do you expect them to do anything for the good of the country? About Buhari, who says he is fighting corruption, one thing I thought he would fight first was the practices in political parties of demanding exorbitant fees for nomination of which he was a victim and he cried out that he had to borrow N27 million for his own. What has he done about this since he came to office? How is it impossible for him to have passed a law that no primary of any political party should exceed so much, to allow ordinary people to access to election? The election in this country now is only won by millionaires, no poor man can contest even local government council election. And Buhari says he is fighting corruption. Everybody was shouting that the money earned by the legislators was too much but has Buhari done anything about that also? Put a stop to it, that is how to kill corruption. People sell their houses to contest election and you want them to be incorruptible in office? Whom are you deceiving? Those are simple symptoms to kill corruption from the root. One of the things we did at the 2014 conference was to introduce independent candidacy. We removed the immunity of the governor and the presidential issue was settled so that we know where the president will come from at any particular time. And, of course, the bulk of the power is in the federating units. That is why I am insisting that it must be restructuring before election. Restructure should no longer be an election issue, because immediately they win an election, every winner will want to exploit what is there. Let’s settle the issue of what constitution we are going to operate before any election now.

What is your assessment of the Nigerian economy in the last two years?
What have we got? Nothing; you don’t need a crystal ball to say that. Unemployment and lack of electricity is going worse. The change we are having is change for the worse and not for the better. The only thing they shout about is corruption and even in corruption their score is four over 10, because they are partisan, not democratic in the way it is done, not logical. They are introducing militarism instead of democracy. What has Buhari done now to deserve the accolade of ‘converted democrat?’ What the country should do right now is to let all the military people who put us into this mess to call on Buhari (not on APC because there is no APC) to restructure the country now to save the country, because without restructuring now, Nigeria will not exist. They are not sincere about keeping the unity of the country; the northerners want to dominate the country.

Let’s Talk State Creation

EPILOGUE

State creation has proven to be more liabilities than assets, writes Olawale Olaleye

Generically a military idea, the concept of state creation was ostensibly conceived to foster development by breaking relatively large entities into smaller territories for ease of administration and control. But the politics of it was not lost either on the originators of this idea as the delimitation was daringly skewed in favour of certain regions and at the expense of the others.
Over the years, however, the people appear to have come to appreciate and embrace more, the politics of an otherwise sound initiative than the development side to it. The surge towards state creation has thus moved from a micro agitation to the macro level, with every national debate now featuring the call for state creation.
Little wonder, it was one major issue that defined President Goodluck Jonathan’s 2015 national confab. Save for the popular minority that cleverly debated their way through, the morbid majority would have gone beyond merely airing their voice but succeeded in shoving it through.
Yet, the elitist concern was both evident and arguable, as it was predicated on a simple question: how viable are the existing states before pushing for more? This recurring question has remained almost a lifelong joker of those pushing against the unreasoned agitation for more creation of states.
Characteristically, the General Overseer of the Latter Rain Assembly and a delegate to the National Conference, Pastor Tunde Bakare once corroborated this position, when he said only 10 per cent of Nigeria’s 36 states was viable.
Bakare, who made the assertion on SaharaTV while discussing his expectations from the National Conference, contended that “All the states created were created by military fiat” and that “Hardly do you find ten per cent of the states in Nigeria viable.”
This position was later corroborated by the Central Bank of Nigeria (CBN), which last year said only seven states were viable in the country and controlled about 90 per cent of the cash transactions in the country. He listed the states as Lagos, Rivers, Anambra, Abia, Kano, Ogun and the Federal Capital territory, Abuja.
CBN Deputy Governor, Operations, Mr. Tunde Lemo, who gave the hint, said it was the reason the identified states were the one slated for the second phase of the cashless project which kicked off on July 1, last year.
It is worthy of mention that in 2013, the National Bureau of Statistics (NBS) released some data on the internally generated revenue profiles of the states, which further proved that only a few states were undeniably viable.
With the southern states showing absolute, yet constant dominance on the NBS chart table, the north continued to post poor result, thus heightening concerns. Eight of the least 10 states in terms of IGR were from the north, including the north east states, which had been under the attacks of the Boko Haram sect.
Take for instance, whilst Lagos State, being Nigeria’s commercial capital, led by a desirable margin, Yobe had the least for 2012. With Lagos seven times more populated than Yobe, its N219.2 billion of IGR in 2012 was 123 times that of Yobe’s IGR of N1.78 billion.
When further analysed into regional bits and pieces, Lagos (SW) led with N219.2 billion, while Rivers (SS) followed with N66.2 billion, Ebonyi (SE) maintained N14 billion, Benue (NC) struggled with N8.4 billion, Kaduna (NW) had N11.5 billion to its credit, and Adamawa (NE) kept a profile of N4.6 billion IGR.
This data analysis, which detailed the financial strength of the states according to their regional standing, further showed that states like Kano, Anambra, Abia and Borno were as at then underperforming in their respective regions as their relatively high GDP and commercial nature failed to translate into tax revenues.
Three states, as at then, generated tax revenues of above N1,000 per head and they were Lagos, Rivers and Delta. But the IGR status of a majority of the Nigerian states was a cause for concern, raising serious questions about their viability, in the event of an oil price shock, which was the case in 2015. And to further compound this ugly situation, a majority of the states were also highly indebted and nearly insolvent before the new administration of Muhammadu Buhari came on board.
Naturally, as the nation celebrates 50 years of state creation, concerns about viability of the existing states have continued to strewn the debate for and against the call for more states creation, which clearly cannot function without the monthly handouts from the federation account as against looking inwards and exploiting their leadership ingenuity.
But, with a nearly comatose council administration in almost all the states of the federation, the call for the creation of more states is utterly defective, selfish, indefensible, unreasonable and patently unpatriotic. It fosters no enviable development, clearly, but an increased financial burden on the government of the federation and further impoverishing the masses. Perhaps, there’s really nothing to celebrate!