The All Progressives Congress, APC, came into office on the mantra of change. Nigerians votes to the party because they wanted a paradigm shift from how the country is administered in the past. In this piece, Assistant Editor, MIKE ODIAKOSE posits that for the APC administration to succeed it must take another look at the recommendations of the 2014 National Conference, especially the areas that dealt with power devolution and fiscal federalism to make the states more financially independent. There is a general consensus across the country that Nigeria is long overdue for restructuring. The lukewarm attitude of the ruling class to this demand led to several agitations for sovereign national conference. Since the return to democracy in 1999 two national conferences have been held in the country to satisfy the yearnings of Nigerians for the restructuring of the country.
The first was during the administration of former President Olusegun Obasanjo in 2005. Though very strategic recommendations that would have brought the country out of the woods were made by the 2005 conference, the issue of alleged third term agnda by Obasanjo killed the report of the 2005 national conference.
In 2014 the administration of former President Goodluck Jonathan organised another national conference where the delegates dissected the the recommendation of the confab.
It is widely believed in several quarters that the financial crunch facing almost all the states would have been avoided if the federal government (executive and legislative arms) had commenced implementations of the 2014 national confab report. The confab made strong recommendations that would assist the states to boost their Internally Generated Revenues and make them less dependent on the federation account. The confab had recommended for devolution of some powers of the federal government that inhibits states from tapping optimally resources in their various states.
The new APC administration will be on the right track if it picks up the report of the 2004 national conference to look at how it could assist states to gain some measures of financial independence through power devolution and fiscal federalism. If the party and the administration of President Muhammadu Buhari fails to do this the states will continue to come back to Aso Rock for bailouts while the debate on power devolution and fiscal federalism will gather fresh momentum that may lead to yet another national conference.
The issue of Fiscal Federalism has engaged various commissions and committees since the colonial days. Between 1948 and today, nine commissions, six military decrees, one Act of the legislature and two Supreme Court judgements have been resorted to in defining and modifying fiscal interrelationships among the component parts of the federation. The first phase of the development of fiscal federalism in Nigeria occurred during the 1948-1952 period. This phase was marked by a centralized financial arrangement in which the excess in the budget of the central government was allocated to regional governments on the principle of derivation.
In the second phase (1952-54) autonomous revenue and tax jurisdiction for the regional governments was introduced in addition to the operation of the principle of derivation for the sharing of federally collected revenue. The basic elements of the second phase were carried over to the third phase (1954-59). A major distinguishing factor of this phase was the emphasis on the derivation principle in the sharing of federally collected revenue.
This pleased the Northern and Western Regions given the boom in their export commodities: cotton and groundnut in the North and cocoa in the West. The Eastern Region, whose main export crop; palm oil, In developed federal systems the federating units have the right to control their resources and pay appropriate taxes to the federal government. To achieve true federalism, section 144(1) subsection 3 of the 1999 constitution should be amended so that ownership and control of all resources will be vested in the federating states. The vexatious section provides that “the entire property in and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the exclusive economic zone of Nigeria shall be vested in the government of the federation…”
Equally due for amendment is section 162 of the constitution so that the federating units will pay taxes to the federal government from the resources in their areas while Section 315(5)(d) relating to the Land Use Act should be reformed to guarantee the access of people to land and adequate compensation to those whose lands have been taken for public use.
Rather than dissipate energy trading blame with the federal government or lobbying for a review of the revenue allocation formula, state government should consider the option of championing the clamour for return to fiscal federalism and true federalism. Those core areas where the regions were generating income should be returned to the states which consequently will lead to devolution of power from the federal to the states and local government councils. There is no doubt that it might take some time for some of the states to find their feet when fiscal federalism is re-introduced in the country because of decayed infrastructure. There should be a window period during which states that lack the machinery and capacity to improve their revenue-yielding avenues are assisted by the federal government and neighbouring states to meet the emerging challenges.
Fiscal federalism will further encourage healthy competition between the states as witnessed during the first republic where laudable project initiated in one region is quickly replicated in other regions. It will boost inter-state relation as several contiguous states can come together to execute projects that, otherwise, might be too expensive for individual state to execute like the power project all the South-South states are jointly financing. The fear that fiscal federalism will strangulate some states is misplaced as every part of the country is richly endowed with one mineral resource or the other.

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