] ] Fol­low­ing the Na­tional Con­fer­ence: Fis­cal fed­er­al­ism

Daily Trust - - VIEWS OPINION -

Last Wed­nes­day, the Na­tional Con­fer­ence Com­mit­tee on De­vo­lu­tion of Pow­ers had a heated de­bate in which they were bi­fur­cated be­tween those for and against re­source con­trol. The in­ven­tion of the term “re­source con­trol’ is an ex­cel­lent ex­am­ple of po­lit­i­cal brand­ing, in which an ap­par­ently neu­tral con­cept has trans­formed into an ef­fec­tive po­lit­i­cal weapon to wrest more na­tional re­sources for a par­tic­u­lar zone of the coun­try. It has been suc­cess­ful in plac­ing a le­git­i­macy chal­lenge on the con­sti­tu­tional prin­ci­ple that min­eral re­sources be­long to the na­tion-state as a whole rather than the par­tic­u­lar re­gion that re­source is mined from. The prob­lem how­ever is that the re­source in ques­tion is petroleum, which more or less, all the states in the coun­try de­pend on for their pub­lic ex­pen­di­tures. It is this de­pen­dency that makes the de­bate on fis­cal fed­er­al­ism in Nigeria such an emo­tive is­sue.

Nigeria has a ren­tier econ­omy, which re­volve around petroleum rev­enues. Petroleum ex­ports which ac­counted for only 10% of ex­port earn­ings in 1962 rose to ac­count for 82.7% of to­tal ex­port earn­ings in 1973 and for a pe­riod peaked at 90-93% be­fore go­ing down to over 80%. The price of crude oil jumped from 11 US dol­lars per bar­rel to 40 US dol­lars per bar­rel in 1980 with out­put reach­ing 2.05 mil­lion bar­rels a day in the same year. The coun­try was turned overnight into a ren­tier State in which pub­lic ex­pen­di­tures be­came de­pen­dent on one re­source. Govern­ment spend­ing rose from N1.1 bil­lion in 1970 to N6.5 bil­lion in 1975, thus rais­ing State ex­pen­di­ture as a per­cent­age of GDP from 15.5% to 30.5%.

The then Head of State, Gen­eral Yakubu Gowon, de­clared that “fi­nance was not a prob­lem to Nigeria” and a spend­ing spree on ce­ment im­ports, fes­ti­vals of arts, sports jam­borees com­menced. The boom did not last long. In­deed, by 1978, an eco­nomic cri­sis was set in mo­tion, due to a de­cline in oil ex­ports and rev­enues. In­come from petroleum dropped from N7 bil­lion in 1977 to N5.9 bil­lion in 1978 while pro­duc­tion plum­meted from 2.1 mil­lion bar­rels in 1977 to 1.57 mil­lion bar­rels in 1978 (Olukoshi, 1991:29). Oil rev­enues rose briefly to a record N10.1 bil­lion in 1979 but col­lapsed to N5.161 bil­lion in 1982. By 1985, oil prices had fallen to 28 US dol­lars a bar­rel and by 1986, a bar­rel of oil was sell­ing at only 10 US dol­lars leading to the es­tab­lish­ment of the struc­tural ad­just­ment pro­gramme. The prob­lem with pub­lic ex­pen­di­tures how­ever is that you can spike it up rapidly but economies do not know how to bring it down. The growth of pub­lic ex­pen­di­tures has con­tin­ued and to­day, no state ex­cept maybe La­gos State, can sur­vive with­out petroleum rent.

Most of the Nige­rian petroleum re­sources are pro­duced in the ter­ri­tory of the Niger Delta mi­nori­ties and not sur­pris­ing, they have over time de­vel­oped a high “oil con­scious­ness” di­rected at get­ting more ben­e­fits from this main­stay of the Nige­rian econ­omy. Their in­tel­lec­tu­als de­vel­oped the the­sis of the Niger Delta suf­fer­ing from “in­ter­nal colo­nial­ism”, which at that time they ar­gued, was not car­ried out through eco­nomic dom­i­na­tion but through con­trol of po­lit­i­cal power which has been used to trans­fer the re­sources de­rived from the Niger Delta to other parts of the coun­try. Abuja be­came the sym­bol of the net trans­fer of re­sources out of the Niger Delta and for that rea­son, Oronto Dou­glas, at that time a civil so­ci­ety ac­tivist, named it “the city of sin” where the blood, pol­lu­tion and dev­as­ta­tion of the Niger Delta is trans­formed into spec­tac­u­lar de­vel­op­ment for the oth­ers.

To­day, Oronto Dou­glas is in the Pres­i­dency de­vel­op­ing strate­gies for keep­ing both po­lit­i­cal power and oil rev­enues in the hands of a Niger Delta Pres­i­dent. This pro­vides an in­ter­est­ing con­text for the de­bate over fis­cal fed­er­al­ism. At the be­gin­ning, the ar­gu­ment of the Niger Delta was com­pelling. They were the vic­tims - the ma­jor providers of Nigeria’s oil wealth and the ma­jor vic­tims of pol­lu­tion due to oil spillage and gas flar­ing. As mi­nori­ties, it ap­peared un­likely that they would ac­cess power so the strug­gle had to be fo­cused on petroleum re­sources. Their move­ment took a rad­i­cal and po­lit­i­cally or­gan­ised form with the dec­la­ra­tion of the Ogoni Bill of Rights de­mand­ing for po­lit­i­cal au­ton­omy in 1990 and the up­ris­ing that has since been on. Ken Saro-Wiwa, the leader of the Ogoni po­lit­i­cal strug­gle and eight of his col­leagues were hanged by the State in Novem­ber 1995 but that only pro­vided more fuel for the strug­gle.

The strug­gle was di­rected at cer­tain pro­vi­sions of the Con­sti­tu­tion. Item 1 on the con­cur­rent leg­isla­tive list of the 1999 Con­sti­tu­tion al­lo­cates vir­tu­ally all rev­enue al­lo­ca­tion pow­ers to the Na­tional As­sem­bly:

a) The di­vi­sion of pub­lic rev­enue -

i. be­tween Fed­er­a­tion and the States,

ii. among the states of the Fed­er­a­tion,

iii. be­tween the States and the lo­cal govern­ment coun­cils,

iv. among the lo­cal govern­ment coun­cils in the States;

Sec­tion 162 pro­vides the cri­te­ria for rev­enue al­lo­ca­tion for the Fed­er­a­tion Ac­count which shall be based on pop­u­la­tion, equal­ity of states, in­ter­nal rev­enue gen­er­a­tion, land mass, ter­rain as well as pop­u­la­tion di­ver­sity pro­vided that the prin­ci­ple of di­ver­sity shall not be less than thir­teen per cent of the rev­enue ac­cru­ing to the Fed­er­a­tion Ac­count di­rectly from any nat­u­ral re­sources. As the Niger Delta is a po­lit­i­cal mi­nor­ity, it is dif­fi­cult to see how they can evac­u­ate all the other cri­te­ria and get the re­source con­trol ar­gu­ment to win the day. Their strate­gic ob­jec­tive might there­fore be to lift the 13% up­wards. The prob­lem now how­ever is that there is a gen­eral per­cep­tion that the Niger Delta dom­i­nates the po­lit­i­cal, se­cu­rity and pa­tron­age ma­chines of the coun­try and hand­ing them more to the detri­ment of oth­ers would evoke strong re­sis­tance.

It is how­ever im­por­tant to re­call that nowhere in the coun­try did the Nige­rian State cause havoc, re­press, and op­press the people and the com­mu­ni­ties more than in the Niger Delta. The state car­ried out bru­tal op­er­a­tions and phys­i­cally mil­i­tarised the area in a fash­ion that is more as­so­ci­ated with for­eign oc­cu­piers. If other Nige­ri­ans have for­got­ten this, the people of the Niger Delta have not. The stage is set for an in­ter­est­ing bat­tle. Let us not for­get the words of the Kaima dec­la­ra­tion of 1998 is­sued by the Ijaw Na­tion: “That the po­lit­i­cal cri­sis in Nigeria is mainly about the strug­gle for the con­trol of oil min­eral re­sources which ac­count for over 80% of GDP, 45% of na­tional budget and 90% for­eign ex­change earn­ings from which 65%, 75% and 70 re­spec­tively are de­rived from within the Ijaw Na­tion. De­spite these huge con­tri­bu­tions, our record from the Nige­rian state re­mains avoid­able deaths re­sult­ing from eco­log­i­cal dev­as­ta­tion and mil­i­tary re­pres­sion.”


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