Roadmap to Fiscal Restructuring

This is in response to Kayode Komolafe’s column in the THISDAY edition of June 28, 2017 entitled “The National Question and Its Perversion.” The only route to restructuring is strict adherence to the provisions of the 1999 constitution. It could be through a constitutional amendment process initiated by the President or a National Conference backed by an Act of parliament. A sovereign Conference is not a solution but a highway to anarchy. We have entrusted our sovereignty already to the President and the National Assembly. The Jonathan’s conference was not representative of the entire political spectrum of Nigeria. My position on this is that constitutional amendment process through NASS will be cheaper, precise and also engender clarity in objective accomplishment.

Restructuring must be a gradual process that is designed to ensure stability of the polity, peaceful coexistence and economic development that is mutually beneficial to all the federating units.

The benchmark for revenue allocation should be 33% derivation, 47% for the states to be shared based on the current criteria and 20% for the federal government.

Based on the need to avoid destabilization of the governance and to enable the federal government to thoroughly prepare the public service for the new dispensation, I suggest the maintaining following schedule in reducing its allocation: the present allocation till 2020; 40% allocation between 2020 – 2025; 30% allocation between 2025 – 2035; 25% of allocation between 2035 – 2045 and 20% of allocation permanently from 2045 Based on the need to prepare the states for economic sustainability as witnessed during the First Republic, I suggest the following schedule in increasing derivation: maintaining status quo until 2025; increasing derivation to 20% between 2025 – 2035; raising derivation to 25% between 2035 – 2040; increasing derivation to 30% between 2040 – 2045 and keeping derivation permanently at 33% from 2045

Based on the need for equity in the states, all revenue generating local government areas shall be entitled to the operating percentage of derivation from their state governments. This is based on the calibration as stated above. Example: All the oil producing local government areas in Delta state shall be entitled to 33% (if the derivation regime is 33%) of oil derivation and this must be shared based on production levels.

All mineral-producing communities shall be entitled to 33% of derivation to local government areas. The same conditions are applicable in the relationship between the states and local governments.

VAT proceeds should from 2019 be based on 70% derivation and 30% for the federal government

Important pre implementation Agreements: should include the following; perpetual union prior to the implementation of the restructured parameters. notwithstanding the political status of the country and entertaining any form amendment either directly or indirectly. I have no doubt that a focused restructuring process can take place within 25 years. Citizens of each state of the federation will have the incentive to make their state great.