In the last three months, local governments, states and federal government officials have been at each others’ neck over short falls in revenue allocation from the federation account. The war of words is as a result of panic by state governments that they may not be able to meet their obligations to their workers if the federation account allocation continues to dwindle. The current panic stems from the fact that if the revenue shortfall from the federation allocation committee to states falls below some levels, it will result in many of the states not being able to pay their employees.
On two occasions, members of the committee from states have walked out on the Minister of State for Finance over the amount due for sharing. It is a shame that the committee members are not seeing the opportunity that the short-fall is offering them to think and act to remove their states from the shackles of oil. Before the discovery of oil, regions in the country had economy. They survived based on primary produce from the various regions. Nigeria will survive without oil. All that is required is for people to think. It is a sad story that the committee is not querying the Federal Government for not investing wisely, it is not asking for investment in the several minerals that dot the country, they simply bicker over sharing.
It is the sharing of cheap oil money that makes Nigerian politicians dummies, men and women who cannot think. They only wait to share. It is sharing that makes ministers come to office and leave without making any impact on the economy. It is the same for presidents and governors who preside over a sharing formula and nothing else. Over the years they just become political bird of passage. It is the sharing of oil money that is tearing the PDP apart. It is sharing that has caused the sharp division in the country – North,South. If there was no oil revenue to share at the centre, the fight over the zone to produce the next president will not be a do or die affair. It is a shame that in the Nigerian political equation of today, none is thinking about how to make a bigger cake for all to share.
While the bickering over sharing is on by clueless politicians and their co exploiters, it is important for the federal, state and local government functionaries to put on their thinking caps and fashion out how to generate internal revenue to sustain their operations. It will be foolhardy for government at all levels to continue to rely and plan on proceeds from oil sales. For a very long time, the signals have been showing the simple fact that this economy cannot continue to run on crude oil sales. Many of the states which commissioners of finance gather in Abuja to share from the federation account cannot generate up to N200 million per annum. Local governments are worse. Some cannot generate even a million naira a year. Yet, all gather in Abuja to share oil money.
Delta State has had for a while, the slogan, Delta without oil. States and local governments that have caught the vision of a Nigeria without oil early enough, will use the resources at their disposal now to develop the real sector of their economy and a viable tax system to grow their revenue base. At the moment, states that cannot generate internal revenue to meet at least their recurrent expenditure, will be in serious financial crisis in the next few years. The federal situation is a little different in that it has the capacity to borrow. But that in itself has its own limitations.
Now that there is still room for action, state and local governments must embark on internal reforms that will enable them generate revenue that will make them less dependent on revenue allocation from the centre. The big problem here is that right now, federal, state and local government revenue officials have become mentally lazy. In fact, the nation’s leaders have become lazy all because of cheap petrodollar that is converted to naira. The ordinary Nigerian is a very hard working person. Farmers, traders and market women who have nothing to do with cheap oil money work hard for their daily living.
But oil money sharing has enslaved government functionaries that all they do on daily basis is play the blame game. Instead of government officials creatively engaging the people in positive thinking and motivating the citizenry into productive ventures, it is accusation and counter accusation.
For instance, states have accused the Federal Government of misinformation and mismanagement concerning the federation accounts, including the failure of the NNPC to remit a whopping N2.983 trillion into the federation account in the last two years. They see the latest report on the federation account as a calculated attempt to confuse the public regarding the revenue accrued to the nation and give the impression that the government is under pressure to augment revenue shortfall, while in actual fact, the shortfall is as a result of poor management.
Specifically, while the Minister put the revenue earned in the month of July 2013 at N497.98 billion, the Central Bank of Nigeria (CBN) economic report for the same period stated that revenue from oil rose by 0.2 per cent to N645.65 billion, while gross non-oil receipt (corporate taxes, custom and excise duties and Customs’ special duties) was put at N404.53 billion, a total of N1090.18Bn revenue which was higher than the budget estimate of N702.54 billion approved by the National Assembly for July 2013,” the committee said.
The three tiers of government in the country have shared a total of N718.103 billion as federal allocation for the month of June 2013. They had shared N620, 656 billion as federal allocation for the month of May 2013. A breakdown of the allocation shows that the Federal Government got N294.038 billion (52.68%) as against N235, 778 billion it got in May; state governments got N149.140 billion (26.72%) compared to the N119, 590 billion they got in May while local governments got N114.981 billion (20.60%) as against N92.199 billion in May. The oil-producing states got a total of N52.230 billion as 13 % derivation revenue for the month of June compared to the N48, 874 billion they received last month.
The war of words is about sharing; Nigerians should let the proposed national dialogue centre on Nigeria without oil, what is the way forward? Let us think more about developing a sustainable economy than how to share from a wasting asset whose future is uncertain.
By Gabriel Omoh