By Uche Anichukwu
Former Deputy President of the Nigerian Senate and Speaker of ECOWAS Parliament, Senator Ike Ekweremadu, nailed the Nigerian situation in three words that have stuck in the Nigerian political lexicon: feeding bottle federalism.
Delivering the 2012 edition of Oputa Lecture on Governance in Africa at Osgoode Hall Law School, York University, entitled “Nigerian Federalism: A Case for a Review”, Ekweremadu forewarned that Judgement Day would ultimately come upon the nation unless it did away with ”the military-imposed ‘feeding bottle federalism’ to enthrone one predicated on self-reliance, hard work, enterprise, and resourcefulness to catalyse development”.
According to Ronald Watts (1929-2015), who spent over 40 years of his life on comparative study of federalisms, federalism provides a technique of constitutional organisation (framework) that permits action by a shared government for certain common purposes in a larger political unit, combined together with autonomous action by smaller constituent units of government, directly and democratically responsible to their own electorates.
Also, the fiscal component of federalism (fiscal federalism) allows component units the latitude to mobilise and make good use of their God-given resources. That was why the late Premier of defunct Northern Region, Sir Ahmadu Bello, argued in Nigeria’s formative years that federalism was the “only guarantee that the country will grow evenly all over, (so) we can spend the money we receive, the money we raise, in the direction that is best suited to us”. Of course, Chief Obafemi Awolowo and Nnamdi Azikiwe were on the same page with the Sarduana.
And truly, the period between 1954 and 1966 has been referred to as the golden era of Nigerian federalism as the component units enjoyed considerable control over their resources and kept 50 percent of revenues generated therefrom. The Eastern Nigerian economy was rated the fastest growing and industrilaising economy in the world as Premier of the Eastern Region, Dr. M.I Okpara, rolled out factories, plantations, and farm settlements all over the region.
That was before the military unmade our federalism and reversed our fortunes. Decree No. 51 of 1969 promulgated by General Yakubu Gowon regime vested the entire ownership and control of all petroleum in, under or upon any lands, including land covered by water in the Federal Military Government. What the component states were entitled to was reduced to 45 percent from 1969 to 1971, while the offshore component of the 45 percent was removed in 1971. This fluctuated from 20 percent (excluding offshore) in 1975 under General Murtala Mohammed and zero percent under General Olusegun Obasanjo (1979) to 1.5 percent in 1982, 3 percent in 1992, and 13 percent in the 1999 Constitution. Worse still, the FG equally takes the lion’s shares of from the Federation Account.
The fiscal emasculation of the states expectedly came with considerable evaporation of their political, administrative, and economic powers. Whereas the Exclusive Legislative List contained 44 items at independence, while the Concurrent List contained 28 items, 16 of those 28 items (about 57 percent) have been swallowed up by the Exclusive List between independence and the 1999 Constitutions. FG progressively became the self-appointed landlord and Santa Claus. Biting off more than it could chew, it constituted itself into a behemoth, not only incapable of solving problems and moving Nigeria forward, but also practically burying the development initiatives of the federating units, be it healthcare or education, infrastructure, agriculture, security, etc.
Nothing has exposed the hopelessness of our situation as our response to the COVID-19 pandemic and how our economy has fast-melted. But for a few states like Lagos, Enugu, Kaduna, most states look up to Abuja such that the Government of Kano is more interested in securing N15 Billion FG COVID-19 intervention fund than it is in establishing the cause of over 640 reported deaths in two weeks. In Gombe, COVID-19 patients took to a federal highway to protest hunger and lack of medical attention. This is the height of it.
Simon Kolawole sums up our situation in simple terms. The story of Nigeria, he writes in his 4th March 2012 piece in Thisday Newspaper entitled “Federal Allocation and Our Future”, is like that of a father, who has 36 children. A good father, he writes, will encourage all his children to be creative and hard working so that they can make money to sustain themselves. A bad father will ignore the larger picture of every child being self-sustaining and insist on redistributing his children’s wealth.
“The eternal reliance on oil revenue has done a lot of damage to the federation. Why do we need to stretch our brain to dream of building our own Microsoft and Apple when we can look up to Abuja for the flow of petrodollars every month? Why should Bauchi bother to tap its tourism potential? Why should Bayelsa dream of feeding Africa with its FADAMA rice when there is a fat Federation Account Allocation Committee cheque to be collected in Abuja monthly? Why should Aba be developed into our own Taiwan or Japan? There is no such incentive. The only incentive I can see in Nigeria is Federation Account”, he adds.
Let us contrast this scenario with the United Arab Emirates (UAE) made up of seven emirates. Abu Dhabi Emirate holds 92 billion barrels of UAE’S estimated 98.63 billion barrels oil reserve. Dubai Emirate holds only 4 billion barrels, while Sharjah Emirate holds 1.5 billion barrels. But what Dubai (comparatively) lacks in oil deposits, its visionary leaders made up by transforming their emirate from poor fishing villages to a global financial, tourism, aviation, and real estate hub.
Raw Materials Research and Development Council’s data show that every Nigerian state is stupendously endowed with combinations of natural resources- natural gas, coal, gold, diamond, iron ore, gemstone, marble, quartz, etc. And these are apart from our rich arable lands and tourism potentials. So, ordinarily, we should be talking about at least economies. But we are not so lucky, no thanks to oil-driven feeding bottle federalism.
That is why our economy and $34.62 billion 2020 budget is already in tatters due to oil slump occasioned by COVID-19 pandemic. We hoped to sell oil at $57 per barrel at the beginning of the year, but we were forced to cut the benchmark to $30. Although Brent-crude rallied above $30 a barrel in the first week of May, our glut of oil is fetching about $10 less. Therefore, the benchmark has been cut down to $20.
According to Nigeria’s Minister of Finance, the N8.6 trillion projected overall inflow into the Federation Account would now drop to N3.3 trillion. Therefore, the states, which were expecting to N3.3 trillion share from the Federation Account in 2020 would not have more than N2.1 trillion, while the councils expected share had plummeted from N2.5 trillion to maximum N1.5 trillion. FG’s share would now drop from N4.8 trillion to N2.4 trillion (50 percent). Not only does the budget face further, huge slash, Nigeria is already on borrowing spree- $3.4 billion from and $850 billon to be sourced locally. The IMF has additionally predicted that Nigeria would suffer its worst recession in 30 years. Our economy has cratered.
Contrast our scenario with just one county (equivalent of local government area) in the US where federalism is allowed to work: Los Angeles County. Officials of LA County recently proposed a $35.5 billion for its 3.9 million residents amid the pandemic. Note that LA’s budget dwarfs ours. Although the County’s CEO, Sachi Hamai, admitted a challenging future due to the COVID-19 global crisis and projected a $1 billion drop in LA’s revenues in the current fiscal year, which ends on 30th June, there is no doubt that the County’s broad-based economy and investments in the Rainy Day Fund would help it weather the storm.
Meanwhile, I have bad news for those hoping against hope for a quick rebound of oil. In a recent report titled “Nigeria Stares into the Abyss of Life Without Oil Cash”, Bloomberg quotes Andrew Nevin, a partner and chief economist for Nigeria at PricewaterhouseCoopers as saying that “There is a possibility that at least for three to five years, there’s going to be no revenue flowing to the government from oil.”
It further reports that at least six tankers carrying about 4.5 million barrels of Nigeria’s crude have been floating off Gibraltar and nearby Ceuta, looking for buyers, while a seventh vessel is about to join them.
Fellow Nigerians, the Judgement Day is finally here. Just as COVID-19 is finally abolishing the Almajiri syndrome, the pandemic appear equally determined to forcefully reset our federalism. The era of free oil money may well be over. We either wake up, smell the coffee, rejig our federalism or we all sink.
Meanwhile, to one of those men, who saw tomorrow, the “author” of feeding bottle federalism, Senator Ike Ekweremadu, PhD, CFR, who clocks 58 years on Tuesday, I say a happy birthday in advance.
Anichukwu lives in Abuja