Revenue allocation and the clash ahead

OLUSOLA FABIYI writes on the lamentation by the northern governors that the nation’s wealth is unevenly distributed vis-à-vis the stand by the oil producing states that nothing should alter what comes to their purse from the federation account.

ajority of Nigerians would have thought that by attaining the enviable position of the Governor of Central Bank of Nigeria, Mallam Lamido Sanusi, would be a contented man. Those with such a thought should better perish it. No, he does not have the ambition to contest for the position of governor of his home state, Kano. Sanusi also does not want to be President of Nigeria. His next aspiration, he says, is to become the Emir of Kano. In his quest for the coveted traditional stool, Sanusi did not say he wished the present occupier of the exalted office, Alhaji Ado Bayero, death in order to fast-track his desire. He did not, nevertheless, feel he should assume the office of the emir before being seen to know the predicament facing his people, not only in the state, but in the Northern Nigeria.

The CBN governor, like every other Nigerian, is worried about the activities of the Boko Haram sect. But while others condemn it without reservation, Sanusi thought otherwise. He traced the problem of the sect to unequal distribution of Nigeria’s wealth in an interview he reportedly granted the Financial Times of London. He said that attempts to redress historic grievances in Nigeria’s oil-rich south might have inadvertently helped create the conditions for the insurgency spreading from the impoverished North-East of the country. He said it was now necessary to focus funds on regenerating other regions, if Nigeria wants to secure long-term stability.

He said, “There is clearly a direct link between the very uneven nature of distribution of resources and the rising level of violence. When you look at the revenue figures and look at the size of the population in the North, you can see that there is a structural imbalance of enormous proportions. Those states simply do not have enough money to meet basic needs while some states have too much money.”

Granted, the National Bureau of Statistics in its latest 2010 poverty profile said that 112.519 million Nigerians live in relative poverty conditions. The Statistician-General of the NBS, Dr Yemi Kale, while unveiling the report noted that the North-West and North-East geo-political zones recorded the highest poverty rates in the country with 77.7 per cent and 76.3 per cents respectively in 2010. These two zones are areas where the activities of the Boko Haram sect are predominant in the northern region.

Last week’s statement by the Chairman of the Northern Governors Forum and Governor of Niger State, Dr. Babangida Aliyu, however, indicated that Sanusi spoke the mind of the North on revenue allocation. At the inauguration of the Advisory Council of the Sir Ahmadu Bello Memorial Foundation, Aliyu, on behalf of the 19 northern states, kicked against what they called uneven distribution of the nation’s wealth. They argued that this had made some states to do better than others. They, therefore, demanded a review of the revenue allocation formula to reflect current realities.

According to them, a situation whereby a state like Niger gets N4.2bn or N4.5bn as monthly allocation and some others get 20 times that amount was unfair. The governors said some states use half of their monthly allocations for salaries and other overheads, thereby leaving a balance that could barely address the provision of infrastructure and other needs. The governors said that they hoped that the revenue allocation would be reviewed before the end of this year. They also said that in the present allocation formula, the money being realised from the oil wells located over 200km away from the shore of the country were supposed to be shared by all the tiers of government. They complained that instead of this, the money was being given to the states close to the oil wells. This money with the derivation fund, according to them, made some states to be richer while others are struggling to survive.

Aliyu said, “The revenue allocation formula should be looked at. There are oil wells that were over 200km away off the shore of the country. Those ones before the passage of law by the National Assembly were supposed to be oil wells for the whole country. But now, they have been made to be given only to the contiguous states in addition to the 13 per cent derivation. So, if you look at that, you will say that it will not serve everybody well if certain parts of the country are not doing well why some parts are doing exceptionally well.”

Currently, the revenue allocation formula is 52.68 for the Federal Government; 26.72 per cent for states and 20.6 per cent for local governments. Thirteen percent is also given to the oil-producing states as derivation. The 13 per cent derivation was introduced in 1999, as part of measures aimed at redressing historic grievances of oil-producing states of the Niger Delta.

Official figures from the government had shown that oil producing state of Rivers received N1,053bn between 1999 and 2008 from the federal allocation. However, two states from the North-East, Yobe and Borno received N175bn and N213bn respectively during the same periods.

The position of Sanusi and the northern governors notwithstanding, oil-producing states have said they do not buy their arguments. The South-South governors said such a call smacked of insensitivity to the plight of their zone, evident in its over 50 years of marginalisation and environmental degradation. They advised the Northern governors to develop their revenue base as each state had a resource to develop. Explicitly, the Rivers State Government said Aliyu’s comment was unfair and lacked appreciation of the fact that the oil-producing states were, the “goose that lays the golden egg.” Paradoxically, the Governor of Rivers State, Mr. Rotimi Amaechi, is the chairman of the Nigerian Governors’ Forum. But he said that every state had resources it could develop and generate revenue from and that “nobody should be worried when some concessions are given to oil-bearing states.”

The state’s Commissioner for Information and Communication, Mrs. Ibim Semenitari, said, “Knowing the environmental degradation in the Niger Delta, the thought of getting equal allocation of funds is unnecessary. We also have states that are doing well in agriculture but the proceeds from such resources are not shared among states. The funds that are shared among the states of the federation come from the oil-bearing states. The level of magnanimity from the Niger Delta should be saluted and not the call for sharing the proceeds from the oil-bearing states equally.”

Also, the Commissioner for Information and Communication in Akwa-Ibom State, Mr. Aniekan Umanah, described the northern governors’ demand as improper. He said when the region was receiving 50 per cent derivation for groundnut, it did not share it with anybody.

“Now that 13 per cent oil derivation is paid to the South-South and other oil producing states in the country, they want the money to be shared with them,” he added. He also faulted the Northern governors’ claim that oil wells that were over 200 kilometres off shore were supposed to be oil wells for the whole country, saying people inhabit the coastlines. He noted that oil-producing states did not share their 50 years of environmental degradation with the North. The Governor of Abia State, Chief Theodore Orji, also said his northern counterparts demand was uncalled for. Speaking through his Chief Press Secretary, Mr. Ugochukwu Emezue, Orji said it would be unfair for anybody to complain about what Niger Delta states get as monthly allocation due to the amount of environmental degradation they have suffered.

In the same vein, the Commissioner for Information in Ondo State, Mr. Kayode Akinmade, noted that the oil-producing states currently enjoying the 13 per cent derivation funds had the statutory rights to do so. He added that the bulk of the money being used to develop the country was “coming from the natural resources being derived from the oil-producing states but they remain the least developed in terms of provision of infrastructural facilities.”

Individual leaders in the South-South also opposed the northern governors, saying their position was against the spirit of proper federalism. Niger Delta activist, Annkio Briggs, said, “The people from the Niger Delta are bringing the oil that God has given to them. The oil is in our land and it belongs to us.”

Similarly, Niger Delta activists said states in the North should find ways of generating revenues to run their states as the region once did through groundnut pyramids, rather than seeking more allocation from oil. Also, the former President of the Ijaw National Congress, Prof. Kimse Okoko, described the position of the Northern governors as ‘insensitive.’ He said it had reinforced the call for a Sovereign National Conference and the urgent need to amend the 1999 Constitution in favour of true federalism.

The northerners are not running away from such challenge. But they are saying such expected restructuring must be able to address what they call “the lopsidedness in the structure of the nation’s politics and economy.” At their meeting in Abuja, some leaders of the region like Aliyu and his Jigawa State counterpart, Alhaji Sule Lamido; Dr. Junaidu Muhammed; a former Senate President, Dr. Iyorchia Ayu; a former Deputy Senate President, Dr. John Wash-Pam; former Secretary to the Government of the Federation, Alhaji Yayale Ahmed; and former ministers, such as, Dr. Shettima Mustapha, Alhaji Adamu Waziri and Mallam Lawal Batagarawa and a former Chairman of the Presidential Advisory Council, Prof. Nur Alkali, said the time to talk is now. But with the stand of the two regions on revenue allocation, will the proposed longing for talk yield any positive result? May be yes, may be no. But Nigerians are waiting.