Ife Adebayo: Nigeria – The urgent need for fiscal federalism (Y! Politico)

Ife Adebayo


State Governors can sit, fold their arms and wait for the next bottle of milk from the federal government to pay salaries and fix roads. If these states are being made to fend for themselves they will have to pick up their thinking caps and find ways to employ their youth and develop their regions.

Speaking at a special rally organised at the Teslim Balogun Stadium, Surulere, to mark the Local Government Day in Lagos State in 2011, Asiwaju Bola Tinubu, former Lagos State governor and Action Congress of Nigeria (ACN) national leader said “The federal government takes far too much revenue to the detriment of states and local governments  where the real development takes place. For a truly federal state, states and local governments must take a minimum of 70 per cent of federally collected revenue“.

The Action Congress of Nigeria has constantly kept the issues of Fiscal Federalism on the front burner of the national discourse but the PDP government has continued to rebuff every attempt made to push forward policies and legislation in this regard.

Currently Nigeria is run with oil money. The Federal Government allocates all funds to its self and then serves as a feeding bottle to the State and Local Governments. State Governors can sit, fold their arms and wait for the next bottle of milk from the federal government to pay salaries and fix roads. If these states are being made to fend for themselves they will have to pick up their thinking caps and find ways to employ their youth and develop their regions.

The Nigerian budget for 2013 has been signed by the President. The budget is set based on projected price of oil, this is to say if for any reason the price of oil falls way below the projected price used for the budget the Nigerian Government will grind to a halt. Nigeria cannot continue to rely on proceeds from oil, we must immediately begin to develop other sectors and the first step towards developing sectors is to allow every state control of their resources with a tax being paid to the centre. From the tax paid to the centre money can be given to some states to fund important sectors such as education and security.

Nigeria’s GDP per capita for 2011 was $2,600 (N416,000 using an exchange rate of $1 to N160), this value is derived by dividing GDP by the total population. That is to say the purchasing power of Nigerians per individual for the year 2011 was N416,000 per individual. Does this give you an idea of why we have so many poor people in the country?

How can we solve this problem? We can only solve this problem by increasing the ability of every Nigerian to earn. Oil, our major source of national income employs only a negligible section of the Nigerian population, we need to empower Nigerians in the areas of Agriculture, Mining, Information Technology, Engineering, Arts, Tourism, just to mention a few. We have seen ACN states like Osun come up with Agricultural programmes that ensure agricultural products from the state can be easily transported to areas where they are needed like Lagos. We have seen Ekiti State renovate the Ikogosi Warm Springs and turn it to an international standard tourist centre; Lagos state rail project is employing engineers, accountants, artisans, technicians etc. ACN states are coming up with ideas that empower the people. Ideas that give Nigerians the ability to earn.

Nigeria also has a wide array of underexploited mineral resources which include natural gas , coal , bauxite , tantalite , gold , tin, iron ore, limestone, niobium, lead and zinc. Despite huge deposits of these natural resources, the mining industry in Nigeria is still in its infancy. State Governments have not invested in these sectors because they have no reason to, because they get their milk from the Federation Account every month.

This system cannot work, Every Nigerian state must put on their thinking caps and start to develop projects that can provide jobs for the populace and enable Nigerians make more money for themselves. This can only be done by decentralising power, by giving states more options, by making state governors and local government chairmen responsible for their regions. The man in Benue and Calabar should focus on the production of cement from his limestone deposits and production of the vast array of fruits found in these regions, the Plateau man should focus on the growing vegetables, potatoes and other food crops, then the guy in Aba can focus on making my top quality Aba made tennis shoes, while the fuel needed to get man and materials to their various destinations is provided from Rivers and Delta State. The Lagos State financial centre provides loans and funding for these projects. Basically what I have described above is division of labour with every region focusing on its own area of strength.

These things are possible and the opportunities are enormous. All we need do is develop policies that decentralizes power and gives states more responsibility.


Ife Adebayo is an IT Consultant with work experience in Germany, United Kingdom and Nigeria. He currently runs his own IT firm in Lagos, Nigeria. He is an ardent believer in the Nigerian project and encourages all Nigerians to become actively involved in making Nigeria a better place. Ife is a registered member of the Action Congress of Nigeria, Epe Local Government, Lagos State. He was an active member of the UK branch of the party, holding the post of Youth Leader for the year 2010/2011.


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

One comment

  1. The revenue and allocation given to state it still not enough to run the affirs of the state and he allocation given to is embellzed by d state men. Despite all revenue we generate in these country we still go for loans. As d state men would say, that it is never enough to handle the needs of the nation but some countries do not have 1/3 of what God has given we Nigerians through nature.

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