It is indeed interesting to see so many Nigerians today talk about restructuring the Nigerian state. This is heartwarming on account of the fact that today we have come to appreciate restructuring as a necessity for Nigeria’s continued existence. This is a crusade I began almost two decades ago; a crusade that has taken me to prison and back.
In the course of this crusade, I have had my younger brother brutally murdered in cold blood by agents of the state; I have had my residence turned inside-out by security agents brooding over my massive library like maggots rummaging the remains of decaying carcass. I have been cursed and discussed; scandalised and analysed. The leeches of the Nigerian state are mad; and I am happy. The struggle rages on and that’s just the way I love it. My happiness is that my crusade has put Nigeria on notice and today we are all talking about it.
Even though it is a welcome development that we have been caught by the bug of restructuring, I am afraid not so many of us understand the true essence of restructuring. I say this because in recent times I have heard people talk about merging of states as a form of restructuring. I am afraid this is not restructuring by any stretch of the imagination.
The question is: What type of restructuring does Nigeria need? For the avoidance of doubt, Nigeria needs both structural and fiscal restructuring. Structurally, Nigeria must constitutionally define the federating units. For now there are six geo-political zones in the country. These geo-political zones should be constituted into the federating units with equal constitutional rights. The states as presently existing make up the zones.
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Each zone will have its own constitution, which must not be in conflict with the federal constitution. The federating units should be in-charge of the states and LGS. The States’ Houses of Assembly will remain as they are but there will be Regional Houses of Assembly that will function as the highest legislative organ of the region.
Each region should also have its own police, courts; and sustain its educational and other sectors. The powers of the central government should be significantly reduced to issues of immigration, currency, military/defence and foreign affairs. Power, in essence should devolve more to the federating units. Each region must have a premier who should coordinate the activities of the region and report to the federal Prime Minister.
On fiscal restructuring, there must be a comprehensive overhaul of the exclusive legislative list as contained in the First Schedule of the constitution. The regions must be in-charge of resources within their space. These resources are to be exploited by the regions and an agreed percentage paid to the central government. In other words, we must be ready to do away with the present revenue sharing formula. In terms of elections, INEC will remain to conduct federal elections, while each region will establish its own electoral body to conduct regional and municipal elections.
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In concrete terms, these were the provisions of the 1963 Republican constitution which was suspended in the wake of the 1966 military coup, which paved the way for the usurpation of regional powers by the military. This type of restructuring would immediately address issues of ethnic and religious agitations and put a permanent stop to the conflagration in the Niger-Delta. It will also stop this monthly ritual of disbursing federal allocations to states.
It is because of the monthly allocations that states no longer strive to develop their internal economies. A through-going restructuring of the type outlined above will compel the regions and states to look inwards to identify and develop their internal economies and by extension the national economy. That is the best way for diversification.
In the First Republic, the North was famous for its groundnut pyramids, the West was known for its cocoa, the Midwest for rubber, South-East for palm produce and South-South for lumbering and fishing. In addition to this vast agricultural profile, which presently is lying fallow, each region has mineral deposits. With proper restructuring, each region will be compelled to develop its own mineral resources. I have written extensively on this issue and many of my books dealing on Nigeria’s restructuring can be found on the book shelves. That is the restructuring Nigeria needs now; not merging of states.
For the avoidance of doubt, the National Political Reform Conference of 2005 organized by the Obasanjo administration and the one organized by Goodluck Jonathan in 2013 recommended most of the foregoing. I recall the only contentious issues were tenure for the president and fiscal federalism – issues which we advised should be subjected to referendum. Rather than implement the recommendations of those Conferences, Buhari has typically dumped them into the trash can.
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Honestly, Buhari’s medieval understanding of Nigeria’s problem leaves much to be desired. Among my people, a child is considered cursed when that child, instead of sucking the mother’s breast chooses to suck a bump on the mother’s body. Only a fool will see a straight route to a destination and choose to go through the bush path. Buhari has the answer to Nigeria’s restructuring in his hands. Why would he not implement it?
Or does he think that the answer to Nigeria’s problems lies in murdering defenceless Biafran agitators or sending Nigerian Army to crush Niger-Delta Avengers or Nigeria soldiers roaming the length and breadth of Sambisa forest in search of phantom missing Chibok girls on pretension of fighting Boko Haram. Buhari is indeed dancing the ghoulish Surugede without knowing the Surugede is the dance of the spirits. Igbo folklore has no record of any person who ever survived the Surugede dance.
Views expressed by contributors are strictly personal and not of TheCable.
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TRULY, NIGERIA NEEDS RESTRUCTURING; BUT FIRST OF ALL, FISCAL FEDERALISM!
July 31, 2016 • 2 Likes • 4 Comments
For any Nigerian to say we do not need to restructure or re-arrange the governance structure of this country is to be living in denial.
The truth is that with the present 36 states structure in Nigeria and agitations for more, it will not be easy to return to the regional structure of the 60’s and 70’s. However, if America has 52 states and could still maintain true federalism, then, it is very possible for Nigeria to operate a truly federal structure.
Perhaps, the fear of losing control or precipitating a fission of the country through restructuring is reason for the blatant opposition by most Nigerian to the agitations for restructuring of Nigeria. But we all need to disabuse our minds about this issue of restructuring. It is not a call for the division of Nigeria or an agenda to render some parts of the country hopeless without support.
For starters, we should have a fiscal restructuring where collection of production and local trade driven taxes such as Derivation tax from exploitation of natural resources, Excise Tax from local manufacturing activities and sales tax on retail sales of goods and services within each state (to replace the current regime of Value Added Tax) are devolved to the states, in addition to the existing tax heads currently under the charge of state governments, with the exception of personal income tax and withholding tax, which I am strongly advocating should be collected by the Federal government. Personal income tax for reasons of job mobility and ease of collection across all states of the federation and Withholding Tax because of regulatory oversight on Banks and other source of withholding tax returns by CBN, SEC and other federally controlled financial sector regulators.
The federal government should continue to collect personal income tax, company income tax, customs duties, capital gains tax, withholding tax and other special purpose taxes like luxury goods taxes and tobacco taxes should be collected by the Federal government while and shared on a 80:20 ratio between the Federal and state governments or as may be reviewed and recommended by the Revenue Mobilization and Fiscal Allocation Commission from time to time but with the federal government having maximum share of no less than 70%. However, I would strongly recommend that any percentage due to the states be shared equally amongst the states and not on derivation basis, so as to give each state equal leverage on basic income for operations of their states and maintenance of law and order.
I believe that one major reason for redundancy and dearth of industrial and commercial activities in many states in Nigeria is because their major source, if not the only source, of revenue earnings is from Federal government and not tied to their states own productivity. Then, how can a state Governor who receives 100% of his state’s revenue from central government think out of the box and work hard to ensure a conducive environment for commerce and industry in his state, when the main sustenance for his government does not come directly from such activities? Why then would a state governor, who is not seriously challenged by operational cashflow issues, not have time to create ethnic militias, promote religious extremism and play soap-box politics? However, when states only receive minimal financial support from the central government and are in charge of assessment and collection of productivity driven revenue earnings, it will make state Governors more creative and innovative in order to survive and ensure meaningful development of their various states.
For example, the devolution of collection of derivation tax from exploitation of natural resources to state governments will create an incentive for every state in Nigeria to look inwards and seek to develop at least, one natural endowment in their state. This will give rise to specialization and industrial value chain development in every state of Nigeria, as there is no one state in Nigeria that does not have at least, one natural endowment to explore and exploit for income and profits. This would create a veritable source of revenue for states with highly demanded resource commodities and as well, the onus to protect the environment in which such natural resource is being exploited and developed. For instance, many Niger-Delta communities are suffering a lot of environmental degradation and loss of livelihoods today due to the negative impact of oil and gas exploration and production, if the states in which these activities happen are the ones directly collecting derivation levies or taxes from the oil and gas companies, environmental activists and the relevant state agencies will have an easier job getting them to live-up to their environment stewardship and corporate social responsibilities.
Devolution of collection of sales tax on retail goods and services will create a situation where a state government will do everything possible to ensure an enabling environment for local trade and commercial activities to thrive in their locality, so they can collect more revenue. Collection of Excise tax from industrial activities would make state governments work hard to attract and promote such activities in their states, so as to be able to collect more revenue from them. Invariably, this will also create employment for the residents of such states and make their governments work harder to retain such activities, instead of embarking on wasteful and unnecessary white elephant projects to dispense political patronage and give a false appearance of development.
The argument could be made that the informal sector in Nigeria is so large that the task of assessment and collection of sales tax for instance might be daunting for the state government but I believe that once there is a will there will always be a way. Perhaps the effort by state government to widen their tax nets will provide the innovative thinking that would put some organization and sanity into the local markets for goods and services in most states in Nigeria. For example, during the time of Governor Raji Fashola, Lagos State embarked on a project, under the Ministry of Commerce and Industry, to scope the informal sector and find ways of bringing the operators into the Tax net in Lagos. However, while I don’t have an update on that particular project, almost every Nigerian know that Lagos State currently have the highest Internally Generated revenue base of all the 36 states in Nigeria.
However, it is pertinent to note that fiscal restructuring will simultaneously give rise to devolution of some administrative responsibilities and powers to the states such as policing and other law enforcement authority.
Subsequently, there would be agitations by states for a change to the exclusion list in our statute books and expansion of the concurrent list of laws on which state governments could legislate and adjudicate. Gradually, we would move from being a quasi-unitary, central command styled federation to a truly federated union of provinces and nationalities like the USA, Australia, etc.
Written by
Olugbenga Emmanuel Adelana
Agricultural Finance and Investment Professional