For Economic Restructuring


Guest Columnist By Femi Falana

The demand for fiscal federalism is to enable the federating units to control their resources with a view to funding social services and infrastructural development. In making a strong case for federalism, Chief Awolowo insisted on the provision of social services for the people.  Thus, in defending the budget of his government while he was premier of western region, Chief Awolowo stated that “as far as possible within the limit of our resources, expenditure on social services which tend to be the welfare, the health and the education of the people should be increased at the expense of any expenditure that does not answer to the same tests”. It is on record that the administration voted more than 50% of the annual budget to social services. Ironically, Governor Fayose who has joined the campaign for “true federalism” has introduced the payment of school fees in all primary schools in Ekiti State!

There is a lot of controversy on fiscal federalism. In accordance with the tenets of federalism the exclusive legislative list should be limited to the country’s external trade, customs duties, export duties, tax on incomes, profits and capital gains, interstate commerce, external borrowing, mining rents and royalties from mineral resources etc. The distorted revenue allocation formula favours the Federal Government as it has been allocated 52% of the revenue accruing to the federation account.

The remaining 48% is shared among the 36 states and the 774 local governments and the 6 area councils in the Federal Capital Territory. At the 2014 national conference many delegates proposed 18% derivation for the oil producing communities. But as the conference delegates could not reach a consensus on the matter the proposal was shelved. It is submitted that since the payment of 13% of the revenue in the Federation Account to the oil producing states has not improved the quality of the lives of the people in the Niger Delta region any increase in revenue allocation ought to be tied to the development of the area the where natural resources are produced.

Apart from the rents from crude oil the beneficiaries of the monthly allocations are not interested in other sources of revenue. Hence, the current revenue allocation formula is based on the crumbs from the master’s table. As the country does not know the quantity of crude oil produced by the oil companies the ruling class fights over what is paid into the Federation Account by the Nigerian National Petroleum Corporation (NNPC). For instance, the Nigeria Extractive Industries Transparency Initiative (NEITI) has reported that the NNPC and Nigerian Petroleum Development Company (NPDC) have failed to remit the sums of $21.7 billion and N316 billion to the Federation Account. No state government has shown any interest in the recovery of the huge sums of money. The Governors Forum is too busy feasting on the Paris/London club loan refund that it has no time to react to the NEITI report. From 1999 the nation has lost trillions of Naira due to indiscriminate duty waivers illegally granted by the Federal Government.

In 2011, the sum of N2.3 trillion was lost to fake importers of fuel. From 2011-2014, the oil shipped from Nigeria and discharged in Philadelphia port in the United States but not recorded in Nigeria was 60 million barrels valued at $12.7 billion. Even though the federal government has filed suits against the indicted companies no state government has shown any interest in the cases. It has been confirmed that the privatization carried out by the Ibrahim Babangida and Obasanjo regimes led to asset stripping and hence the vanishing of the nation’s public enterprises. Without questioning why the Nigerian Airways collapsed the Federal Government has decided to establish another national carrier. At the time of the illegal liquidation of the Nigeria Airways it had 32 aircraft in its fleet. Its landed assets in several parts of the country, United Kingdom and the United States were equally sold at give away prices.

As there is no solution to the economic crisis plaguing the country the members of the ruling class have created confusion and disunity among the people.  A few years ago, a senator who wanted to incite the Niger Delta against the north claimed that 80% of the nation’s oil blocks were in the hands of northerners. I countered the irresponsible statement by stating that more than 80% of our oil resources are in the hands of foreign oil companies. Mr. Segun Adeniyi, the chair of the editorial board of THISDAY, intervened and listed those who own which oil blocks in the country. From the detailed information supplied by him it was crystal clear Nigerians are not serious players in the oil industry as majority of local oil block owners have sold them to foreign oil companies.

While the allocation of 52% of the revenue of the federation to the federal government cannot be justified the demand for an equitable revenue allocation formula should be tied to the commitment of state and local governments to provide education, health, housing and other basic amenities for the people and investment in infrastructural development, job creation and industrialization.

All the arguments and debates on resource control, restructuring and federalism are meaningless to the majority of the people who are groaning in poverty in all parts of the country. The demand for devolution of powers from the federal government to the state and local governments should be accompanied by a demand for the overall development of the society. The ruling class should therefore be prepared to make Chapter II of the Constitution justiciable, as there must be a relationship between demand for increase in revenue and social needs.

According to Kayode Komolafe, the neo-liberal ideologues in the federal government “have  further restructured the socioeconomic structure in what amounts to a policy coup. They have devalued the currency, raised the cost of energy and retrenchment of workers has become a policy virtue in both the public and private sectors. At least, President Muhammadu Buhari is on record to have said that he was more or less presented with a fait accompli by our free market fundamentalists in power acting under the instruction of the policemen of global capitalism.

The enormous existential risks to which the poor people are ultimately exposed to by this reckless experiment in the name of economic management is never the business of champions of geo-political restructuring.”  It is high time the champions of political restructuring were made to realize that the masses of our people are demanding socio-economic restructuring which will replace the peripheral capitalist system, which has consigned them to poverty and misery.

It is a national scandal that cholera, meningitis, Lassa fever and other preventable diseases are still ravaging millions of our people in the 21st Century. Based on the collapse of public medical centres in the country, top public officers and rich individuals are being flown abroad for medical attention. Before his death in December last year, President Fidel Castro who was sick for about 10 years was never flown out of Cuba for medical attention. Even though Nigeria is more endowed than the island our leaders are always taken abroad for medical attention. Instead of challenging the federal government to take advantage of President Buhari’s ill health to demand for the refurbishment of our hospitals we are debating the contents of the letter transmitted by him to the National Assembly.

I have referred to Cuba because we share similar history and geography. But that poor country has abolished malaria fever, typhoid fever, cholera, meningitis and other tropical diseases. Whereas every citizen of Cuba is entitled to free medical care the Democrats and Republicans in the United States Congress, the richest country on earth, are fighting over the rationale in extending medical insurance to the poor. As Nigerians are praying fervently for the speedy recovery of President Buhari we must end the shame of rushing privileged citizens to the United Kingdom, India, United Arab Emirates for medical attention. A substantial part of the loot being recovered by the federal government should be earmarked to fix the health sector.

In his capacity as the nation’s Vice President and chairman of the National Council on Privatisation, Alhaji Abubakar presided over the restructuring of the nation’s economy through the liquidation of public assets and the privatization of the commanding height of the economy. The policy led to the official looting of the commonwealth by imperialism and its local lackeys. All public enterprises and major assets including oil blocks were sold to the so called “core investors”. It is my   submission that the nation cannot be seriously restructured without equitable redistribution of wealth horizontally among classes.

This goes beyond the vertical restructuring of federating units. Therefore, those who have cornered our commonwealth should not be allowed to talk of restructuring in vacuum. In other words, the campaign for restructuring should encompass the decentralization and democratization of political and economic powers, which have been privatised by all factions of the ruling class. In particular, the struggle for federalism has to confront the control of the national economy by imperialism and the comprador bourgeoisie.