Revenue Formula: The barricade before Northern governors

on MARCH 17, 2012 · in SPECIAL REPORT

Ben Agande, Abuja

The perpetual suspicion between the Northern and Southern part of the country appears to be heading to a crescendo following the recent call by the Governor of Niger State , Dr Babangida Aliyu for a review of the current system of revenue allocation, which he argued  puts the northern part of the country in a disadvantaged position

At the end of the meeting of the Northern Governors Forum, Dr Aliyu who is the chairman of the Forum argued that the disproportionate allocation of funds to states especially based on the derivation formula has ensured that while some states in the Niger Delta region are stupendously rich, some states in the north barely manage to survive because of the pittance that accrue to them.

He therefore argued that in order to check this trend, the allocation to the oil producing states should be reduced in order to increase what is available to other states especially in the north. He particularly frowned  at the 13 per cent derivation principle as it affects  revenues from offshore explorations which are  treated as being derived from the Niger Delta, a position he said is an anomaly because they should not be treated as such.

Expectedly, the call by the chairman of the Northern governors Forum has generated angry reactions from the South, especially from South-south politicians. Some of them have argued that the call by the Northern governors especially for the reduction in the revenue accruable to the Niger Delta state is not only insensitive to the huge sacrifice the region makes to ensure that the country benefits from its resources, but a provocation coming at a time that thee restiveness from the region was just being tamed.

*Gov Aliyu Babangida, Chairman Northern States Governors’ Forum

According to Hon. Ken Chikere (PDP Rivers), though  the north has the right to ask that resources accruable to it be increased, the timing and the condition attached to the demand was wrong as it amount to incitement.
“It is legitimate to ask for more money. Every governor would want the revenue accruing to his state to be more so that he can develop the state. But what is wrong with the call for more money by the northern governors is the fact that the call is predicated on the report of the revenue accruing to oil bearing states. It is wrong to predicate their call based on the revenue accruing to these states because of the problems associated with these states where oil is coming. The resources that are given to them by way of derivation is to help them confront the numerous problems.

“It is irresponsible to ask for additional funds based on the funds given to oil bearing states at this time of gross upheaval in the polity. It is like incitement and it is unexpected of governors and leaders to incite Nigerians, even their own people at this time of security threat in our country” he said.

His view is shared by many members of the House of Representatives from the Niger Delta region who believe that the argument that the revenue derive from the country’s should not be shared to the contiguous state is not only childish but simplistic.

According to Hon. Esimeh  Eyiboh, “What I expect is that as leaders we should concentrate on the issue of diversification of our revenue base, on the issue of sustainable alternatives not only sharing and sharing. People are threadbare, hungry and hopeless. Leadership is becoming more complicated and intriguing by the day. Nigeria is one nation on the surface of the earth that is very blessed. The weather is very fair, no natural disaster. What leaders should be thinking about now is how to replicate the groundnut pyramid in Kano, Cocoa revolution in the South West and Palm oil in the East.

We should return to Agriculture. Natural resources abound in this country. This should be developed rather than insist on sharing” he said.

The same argument is shared by Hon. Ossai Ossai who argue that rather than become lazy and wait for funds from the federation account, the governors of the northern state should put on their thinking caps and explore ways of developing the minerals obtainable in their states.

“If they develop their agricultural potentials and other minerals, there won’t be any argument of reducing what is accruable to the oil producing states.

What the oil producing  states should do is to increase their agitation to ensure that 50% of revenue derive from their states should be retained. That is the only way to ensure that the damage done by the activities of oil companies is mitigated” he noted.

Although the legislators from the Northern parts of the country have been circumspect in their support for their governors, partly because they were not carried along by the governors, they however believe that the huge difference in the funds available to the oil producing states and the non-oil producing states is no longer sustainable because while one part of the country appears to be stupendously rich from its share of the federation account, other parts are barely managing to survive.

According to Hon.   Mohammed Abubakar, ‘while we believe that the oil producing states deserve to get a certain level of funds as a result of the oil from their land, the present arrangement is unsustainable. We believe that there has to be a review of the revenue sharing formula so that there can be a fair deal for other parts of the country so that one part of the country can not be a drag back on the other parts of the country” he said.

But for the Deputy Minority leader of the House of Representatives, the whole notion of the northern governors asking for more money from the federation account is not only self serving but not borne out of altruism.
According to him, “They (Northern Governors) have never taken a position that will change the life of their people such as that of agricultural reform, which will boost agricultural production and equally improve economic activity of the region. Besides, how many tractors and other agricultural equipments are in operation today in Northern Nigeria?

“The truth is Northern Governors have never considered convocation of a northern economic summit that will come up with a comprehensive blue print on the development of the region and pursue its implementation religiously with all seriousness and goodwill.

“New revenue allocation formula that will favour non oil producing states can only be realized with the help and acceptance of the other regions. Why were they quiet on subsidy removal? It’s simply because they will get money to waste and northerners are the most affected by removal of oil subsidies due to the endemic poverty in the region”, he said.

He noted that past leaders in their wisdom created local governments to get more revenue to the people at the grass roots but the Governors connived to suffocate them of funds through the illegal joint account.

“Just imagine how many people will benefit if the Governors should release LGs funds directly to the local councils and monitor its utilization effectively,” he said adding that ‘ the Governors should  be honest enough to provide an effective local government system through free, fair and credible elections.

“There should equally be sustenance of past policies but for instance, even their chairman Governor Mua’azu Babangida Aliyu abandoned his successor’s policies and programmes like the housing estates in Suleja and Madalla despite being of same political party with him,” he stated.

But beyond the war of words  between the northern and southern leaders over the revenue sharing formula, the journal to any alteration is far off. Apart from the fact that any new formula will have to be endorsed by at least two thirds of the two chambers of the national assembly, there has to be enough horse trading for any party interested in any alteration to make any progress.

Even though the north has numerical superiority in the national assembly above other region, it is not likely that such brazen change as being proposed by the northern state governors can be achieved out rightly.

With the discordant tune coming from even members of the northern caucus in the House of Representatives on the desirability of the new formula, what the introduction of the new formula bill may possibly achieve is a sharp division among members of the House who have so far maintained a semblance of national cohesion. Less of rhetoric and more of consensus building and compromise will go a long way in ensuring that a middle course is met by both the north and the south in their quest for a fairer revenue sharing formula. How our politicians are able to achieve this with less rancor would go a long way in defining the progress we have made politically as a nation.

SOURCE: Vanguard Newspaper, 18 March 2012. http://www.vanguardngr.com/