Debo Adejugbe: Nigeria’s politics of revenue sharing (Y! Politico)

by Debo Adejugbe

Debo Adejugbe Y! Politico 2

How is the present revenue accrued to the various federating units deployed? Has it, in all honesty, led to a better standard of living for the populace?

In recent times, there have been calls for a review of Nigeria’s revenue sharing formula which according to the proponents, lopsidedly allocates more money to the Niger-Delta region than other regions in the federation – mainly the North.

Ruminating on 2012 budget figures which allocated N116.5 billion (29.65 percent) of the total votes to the six geo-political zones to the South South, followed by the South West which got N65.52 billion (16.67 percent) and the North Central (including the Federal Capital Territory (FCT)), which received 63.92 billion (16.27 percent); while North West got N56.96 billion with the South East getting N49.2 billion and North East which had the lowest amount, getting N40.89 billion or 10.40 percent of the total N392.96 billion allocations for the six zones, it looks truly lopsided.

That is not the full story though. The revenue sharing formula used in allocation to the three levels of government in Nigeria is: Federal Government (52.68%); States (26.72%); and 770 Local Government Areas (20.60%). The Nigerian Governors Forum, recommended in 2012, a drastic reduction in the Federal Government’s allocation to reflect this formula: Federal Government (35%); States (42%); and Local governments (23%) conveniently upsetting the cart to favor the states.

A cursory look at the history of the Nigerian state reveals that these agitations on revenue sharing aren’t exactly new as there were issues, even before independence. For example, the Richard’s constitution of 1946 introduced the principle of derivation, granting autonomy to the regions on resources coming from them.

In 1954, Sir Louis Chick’s commission recommended that the total revenue available to Nigeria be allocated in such a way that the principle of derivation be followed to the fullest degree, for the purpose of meeting the reasonable needs of the center and each of the regions, among others. Sir Arthur Richards adopted the recommendation gleefully only for it to be replaced with another formula produced by another commission headed by Jeremy Raisman in 1958.

Raisman’s recommendation on its part ignored the principle of derivation, instead placing greater emphasis on population, which it regarded as an approximate index of fiscal need. The next fiscal review commission undertaken by a special commission led by Binn also emphasized on the use of the principle of fiscal need (The Economy).

The principle tilted in favor of the Northern part of the country that, by “right”, is more populous than the rest of the country. Even a novice in figures understands how our census figures has permanently followed a pattern -suggesting that our population has a fixed growth system that has consistently upheld the percentage figures ascribed to territories over the years. Absurdly accurate figures, if you ask me.

The military’s incursion into government destabilized the plans but in the second republic, President Shehu Shagari signed the Revenue Allocation Act which granted the FG 55%, States 30.5% and the LGAs 10% of all allocations while 4.5% goes into special funds with the derivation principle not getting a mention.

The present derivation regime owed its existence to the constitutional conference commissioned by General Sani Abacha in 1995, headed by Justice Nikki Tobi, which recommended a 13% derivation to oil producing states. It subsequently found its way into the 1999 constitution and became operational in April 2000.

I know it all sounds like a lesson in history but my point is that “the point” of revenue allocation has been totally missed. The present agitation and counter-agitation is not to the benefit of the people -the main reason why there is a revenue issue in the first place.

How is the present revenue accrued to the various federating units deployed? Has it, in all honesty, led to a better standard of living for the populace? How about our infrastructures? What of our Education and Power sectors? The obvious answer is no and this is where the corruption debate surfaces again.

In January 2013, Mallam Nuhu Ribadu challenged the 19 Northern states governors – the main agitators for an improved revenue sharing formula – to account for the N8.3 Trillion that accrued to their states between 1999 and 2010. Nothing was heard from that front; either they never heard him or the accounts were too strenuous to compute. The little, as they claimed, going to the North ought to be accounted for before they can genuinely tell us it is not enough.

On their part, the South-South governors asked for an upward review of the 13% making passionate pleas about environmental degradation. The question to them is: what have they used the 13% for, which can stand the test of good governance? Is it not for servicing thieves such as Igbinedon, Alamieyeseigha and Ibori? We heard rumors of Timipere Sylva’s 48 properties in Abuja and the Rivers state government’s operation of 3 private jets. Are they genuinely concerned about the people or the servicing of their opulent lifestyles?

In 2012 alone, Nigeria received $90 Billion in oil revenue and a further N5Trillion came in via domestic taxes and yet our infrastructure base is almost nonexistent. Rather than look to solve these issues with the money coming in presently, it is the shrieking cry of “more” that has rented the air.

It is clear that the politics of revenue sharing in Nigeria does not factor the people into reckoning, as everyone is crying for more, but cannot give a good account of the little –according to them- that has consistently found its way into the pockets of few to make use as they see fit (on behalf of the general populace).

I have come to realize that the only thing generally acceptable to politicians from both divide is that money must be shared. How to share –and to whom- has remained the key factor in how governments are formed while the people’s welfare has been relegated to just a byword in the grand scheme of things. That, exactly, is the point of all the lobbying and accusations that we are cropping up as the politics of 2015 appears on the horizon.


Debo Adejugbe is a trained Telecommunications/Electronics Engineer and a certified IT professional living in Lagos. Dad to amazing Hailey and an advocate against Sexual and Domestic Abuses. Debo has political sympathy for the Labour Party. He tweets from @deboadejugbe


Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

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