Yet, more on restructuring

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By Gambo Dori

THERE seem to be no let in the ideas that are being generated for restructuring the country. We have already highlighted at different times papers on the subject by former Minister FCT, Mohammed Abba Gana and Senator Ibrahim Ida an indication how prepared our leaders are preparing. M T Usman is not a stranger to this column. Today I share his thoughts on the subject. Please read on: 

Some Nigerian politicians and their allies in the intelligentsia have succeeded in making “restructuring” the country’s number one issue, an existential one at that.  Anything “wrong” with the country is attributed to the absence of restructuring; any “good” that could come to us will be via restructuring – it is the elixir for our numerous maladies. They have framed the agenda and intend to steer the discourse.

The strident campaign for restructuring looks like a gang up against a section of the country and relied chiefly on sophistry, misrepresentation and outright falsehood. Restructuring must be seen as the latest phase in an eternal struggle to whittle down, to minimise North’s impact and influence on politics and governance in the country – it has as its predecessor the campaign for state creation which was obliged by a succession of military rulers. It is there in the campaign to sow division between the various communities of the North by playing up their ethnic and religious differences.

Additionally, the Niger Delta seeks to control resources in the region while the South-East wants to attain parity vis-a-vis the other major ethnic groups.

Restructuring has as it focal points the following: geopolitical zonal structure, devolution of power, revenue allocation/derivation and resource control/ fiscal federalism. All these tend to one aim – a loosening of the federation and consequent sequestration of the North.

  • Geopolitical zonal structure/Regionalism

Geopolitical zonal structure and regionalism are two sides of the same coin, the former the lexicon of the latter. Geopolitical zonal structure, a construct advanced by Dr. Alex Ekwueme, in effect seeks to confine ethnic groups to their areas of primary habitation, contrary to the current “open plan” political arrangement.

I prefer a reversion to the 21-state structure i.e. states created from 1991 should be merged with the original ones. There was no merit in their creation; it served the purpose of the then military rulers while politicians welcomed them as it had been an opportunity for them to become big fish in small waters.  We should aim at 12-13 states in North, to roughly coincide with the defunct region’s 13 provinces. This has the advantage of ethnic oneness in some cases and long-standing relationships and familiarity among ethnic groups in any one province in others. For the South, 11-12 states could be canvassed also.

  • Devolution of Power.

The 1999 Constitution (as amended) contained an expanded Exclusive Legislative List which conferred upon the federal government enormous responsibilities – and the powers to go with them. Clearly, the federal government must shed some of the weight in order to make a fresh start at effective service delivery which was quite visible in earlier eras. Adopting the provisions of the 1963 Republican Constitution in this regard will be the easiest and quickest way to devolve power to sub-national authorities i.e. states and local governments. Happily, the most vocal proponents of restructuring, Afenifere and the Professor Nwabueze group have now come round to the idea of a return to the 1963 Constitution, but taking into account developments since then. The Exclusive Legislative List will thus be trimmed to about 46 items from the near-70 in the current Constitution. It has the added advantage of affirming federal responsibility for such issues as banking and currency, customs and immigration and others that the South-West wants transferred to the states or regions.

Under this scenario Local Governments will cease to be the third tier and lose access to the Federation Account. States or regions will organise local government administration in their territories with respect to jurisdiction, powers and funding.

  • Revenue Allocation.

Revenue allocation is a grave constitutional matter in a federation, requiring a fine balance between the needs of the central government and those of the constituent parts. Nigeria has sought to deal with it over time. Its components today are derivation, equality of states, population, land and terrain. Derivation has become one of the totems of the restructuring campaign – the demand is for the payment of 50% of revenues derived from mineral resources to state(s) of origin to be reinstated as obtained in the First Republic. There is a clear case for the upward review of the percentage, currently 13%, paid for derivation, but it must be based on detailed examination of the sources of mineral revenues, particularly oil which have multiplied (on-shore, off-shore production).

  • Fiscal Federalism and Resource Control.

The two concepts address the same issue in so many words. Fiscal federalism envisages contributions to the funding of the federal government by the states/regions, while the latter seeks ownership of mineral resources by states/regions – from which presumably they would pay “agreed amount” to the federal government under fiscal federalism.  In a critique of what he called “the restructuring conversation” published in the Guardian issue of October 16, 2017 Benin City-based lawyer Solomon Ukhuegbe posited that a federation dependent on contributions from sub-national units would not long endure, citing the experience of the West Indies Federation of the 1950s. He also made the point that ownership of mineral resources has consistently been under the Exclusive Legislative List even at the time when “petroleum was a minor contributor to national revenue.” In essence, the provision in the Constitution with regard to ownership of mineral resources should remain as before.

On the matter of Value Added Tax (VAT), its collection and distribution there should be no fundamental change. VAT is a tax on consumption which in advanced countries is paid and collected at the retail level. Nigeria’s undeveloped tax system makes that impossible, so tax authorities make the manufacturers their collection agents. Lagos state being the country’s industrial hub means that collection will be highest there, even as the bulk of the products will be transported to the large consumer population inland. The current formula for VAT sharing takes the high collection rate in Lagos state into account.

Observation.

The clamour for “restructuring” has nothing to do with good governance or such ideals but politicking at its basest, simply focused on prising resources and revenues from the federal government and the less-obviously endowed states. The current revenue allocation formula, however, needs to be revised.  The federal share is too large and there are many non-state beneficiaries of the Federation Account and Special Funds. With more power devolved to the states the federal share should be reduced appropriately. Departments of the federal government that currently receive funding direct from the Federation Account in the name of “cost of collection” should revert to funding from the Consolidated Revenue Fund. With regard to revenue allocation between states the indices should be trimmed to three or four i.e. equality of states, population, internal revenue effort. Elements like land mass and terrain incorporated into the formula, simply reflect and magnify our differences.

Conclusion

Nigeria is a country much maligned by its leading lights that drive it continuously towards the darkness of division and conflict, with no thought to how togetherness and collective efforts can bring about progress for all. It is not at all certain that the restructuring debate will be the last challenge to the idea of a Nigerian federation.

M T Usman

 

 

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