Special Report
Today we publish the concluding part of the second batch of the South South’s reaction to the “Key Issues before the Northern delegates to the 2014 National Conference,” issued by the North.
THE only non-oil revenue source accruing to the federation account is Value Added Tax (VAT), which proportionate contribution was 26 per cent in 2009, 20 per cent in 2011 and 24.4 per cent in 2012. It must be stated that even the VAT for which northern states receive larger chunk because of the introduction of very elementary and unjustifiable indices for horizontal distribution of a revenue is sourced from mainly Lagos State in Southern Nigeria.
From Table B below which is self explanatory, it is evident that no Northern state has been contributing to the federation account since proceeds from oil and gas became predominant source of federally collectable revenue from early 1960s. Even the claims that the North was funding the machinery of government with groundnut and cotton exports before the oil was discovered is a fathom assertion (see Table C i & ii below). Table B shows very clearly that Adamawa, Bauchi, Borno, Gombe, Jigawa, Kaduna, Kano, Katsina, Sokoto, Yobe and Zamfara states contributed nothing to the distributable pool and yet receives so much from the federation account. This has been the pattern of docile dependence since 1913 and 1914 (see Table C(i)(ii).
And so if the benevolence and magnanimity of the Southern states had ensured the economic sustenance and survival of the Northern states all these years since our amalgamation, is insult the best form of reward? We wish to note that belligerence has no positive reward.
Positivereward
It can be clearly seen that whereas Southern Nigeria was able to generate GBP2,668,197 the total revenue generated by Northern Nigeria on what could be qualified as recurrent receipts is only GBP794,310. On specific export revenue, Table C(ii) indicate that the major export items of cocoa, timber and palm oil produced by Southern Nigeria gave a cumulative sum of GBP2,117,910 in 1913 as against the sum of GBP1,099581 for cotton lint, hides and skins, groundnuts and tin, the predominant export items by Northern Nigeria. Similarly, in 1914 Northern Nigeria exports earned a cumulative sum of about GBP1,442,783 compared to GBP1,829,964 earned as revenue by Southern Nigeria. Where, therefore, is the source of the claim that Northern Nigeria provided funding for the machinery of government of Nigeria before oil was discovered? As a matter of unblemished historical fact, it is on record that the amalgamation of the Northern and Southern protectorates was essentially to unburden the British government (treasury) of the perennial financial deficits of the North which was borne by the Colonial administration for the South to shoulder. There was no mincing of words about that as the Colonial Secretary, Lord Harcourt attempted to justify the amalgamation before the British parliament.
With all these glaring and undisputable facts, it is confounding that a supposed Northern intellectuals rather than appeal to the conscience of the people of the South to think of collaborative strategies to move the country forward to assume the vaunting temerity and affront indulge scandalously indefensible claims in their so-called Northern agenda to incite indiscernible minds. If the intent was to blackmail and cow the people of the South to submission, we wish to state categorically that they have not only failed in their attempt to do so but also be reminded that for only collecting monies generated from the South without corresponding contributions they remain debtors to the people of the South.
Alleged excess receipts by the south south states: It has always been a sour point of contentious claims that the South South states receive more than proportionate share from the federation account. Such claims are rooted in the derivation quotient of the revenue receipts by oil producing states. The controversy itself is so vexatious as it reminds the oppressed minorities of the South South of our chequered history as a people that had long been despised, subjugated and neglected over the years.
It is simply a case of “what is good for me is not good for”. We have sufficiently showed earlier that up to 1968, the derivation principle was applied based on 50 per cent; indeed it was producing regions paying tax to the federal government. Because a group of people ascribe to themselves “lordship” and the right to perpetual hegemonic rule, and because of their long occupation of power through the barrel of the gun that conferred on them the authority to enact expropriatory laws that transferred a people’s right to property ownership their hirelings could continue to throw salvos without thinking through.
However, we notice from Table D below that such claims are far from truth. We deliberately selected the core Northern states of Kano, Jigawa, Katsina, Sokoto and Kaduna for comparison with the South South states.
Minimumcompensation
While regarding the 13 per cent derivation as minimum compensation for the rights of the people of the South-South states to resource ownership and, therefore, it cannot be regarded as statutory earning, our Table D shows that, for instance, in 2012 the non-revenue contributing states like Kano, Katsina, Jigawa, Sokoto and Kaduna states received proportionately higher revenue than the oil producing states of the South-South like Akwa Ibom, Bayelsa, Delta, Edo and Rivers States.
It indicates that these states that contribute nothing to the federation account receive higher proportionate share from the total federally collectable revenue than the states that produce the bulk of wealth for the country to share. Whereas, for example, states like Akwa Ibom, Bayelsa, Delta, Edo and Rivers receive 1.2 per cent, 0.5 per cent, 1.2 per cent, 0.8 per cent and 1.6 per cent of total federally collectable revenue respectively in 2012, Jigawa, Kaduna, Kano, Katsina and Sokoto states receive 1.0 per cent, 1.1 per cent, 1.6 per cent, 1.2 per cent and 0.9 per cent from the total federally collectable revenue respectively in 2012 without contributing a dime. It must be emphasized that these oil producing states bear the excruciating brunt of vastly devastated environment and ecology, barren infrastructure as well as the complete desecration of their traditionally known means of livelihood. How revenue to oil producing states. Whereas states like Akwa Ibom, Bayelsa, Delta and Rivers States contributed approximately 30 per cent, 19 per cent, 22 per cent and 22 per cent respectively to total oil revenue the proportional value of what they received in real terms was about 7 per cent. So how can someone accuse these states of being insensitive in their demand for increased allocation to derivation principle?
In real terms, therefore, the oil producing states and other revenue baskets of Southern Nigeria have been the perpetual losers in this big time game of being “brothers keepers” who have continued to show vaunted ingratitude and hatred for their love and care. It perhaps needs repeating that nobody in this country is born a second fiddle. It is an error of judgment for any group of people to claim that they have superior claim to “being Nigerians” than others. It is this attitude of aristocratic assumption in a multi-ethnic, multicultural heterogeneously complex society that could prompt one to think that an age old practice of fiscal federalism could be thrown aboard because it doesn’t favour him.
Justice and equity is not only when equals are treated equally; it is indeed when labour and sacrifices are honoured and respected in equitable manner. In other words, it is only when sharing takes into cognizance all our contributions to make available the resource being shared that we can say there is equity and justice. It can be seen from Table H above how the states in Northern Nigeria have received far more than they ever contributed especially with their over-bloated local government areas (LGAs). When the Table H is analyzed alongside Table B, the Northern Nigeria states and their proteges should remain perpetually grateful to the oil producing states, rather than insulting us.
The indispensability of tax based revenue allocation: Nigeria, since the inception of regionalism under the administration of Sir Arthur Richard in 1946 had practiced tax based fiscal federalism. The practice allowed the federating regions to each grow and develop at its own pace, while also supporting the critical need for balanced national development. It was the reason why the Western regional government of the late Sage, Chief Obafemi Awolowo recorded landmark achievements for the people. Fiscal federalism encourages creativity and the exploration of innate competences and ability.
Innatecompetences
It was the several benefits inherent that informed its inclusion in both the 1960 and 1963 Constitutions of the Federal Republic of Nigeria. Because the founding fathers of this country were altruistic, they acted for the good of the people. Today, the legacies of late Sir Ahmadu Bello, the then Premier of Northern Nigeria and Chief Obafemi Awolowo, his counterpart in Western Nigeria can speak for them, even in the future. They could do what they did because they were independently managing their resources. Nobody depended upon another. Federalism, fiscal federalism was practiced at its best.
This country is fully resource endowed. There is no part of Nigeria where natural resources are not in abundance. But because of the commonwealth provided by the revenue from a wasting asset like oil and gas, nobody cares about exploring such resources to be part of the commonwealth. May be it is a grand design. There is nowhere in the world where strategic considerations are not given to the replacement of a wasting asset like oil and gas for the benefit of those who own the resource. The models of federalism Nigerian copied rather to exploit and milk the people, they enthrone practices for their future self sustenance. Nigeria appears always to be counted on the part of those who exploit the tyranny of number to oppress, deprive and deny minorities of what is naturally theirs.
God has a purpose for positioning the people of the Niger Delta in a difficult, swampy and low land terrain where the cost of infrastructure construction quadruples the cost of construction in the dry upland. It is the reason why since over 50 years of independence and the continuous financial support from oil mineral proceeds, the heart of the Niger Delta has the inglorious record of the fewest number of federal roads. The only main artery linking the Niger Delta states, the East-West-Warri-Port Harcourt-Uyo-Calabar road remains a far cry from completion. Without mincing words, we know without doubt that no Nigerian would commit itself to developing the South-South except by ourselves.
Insolence andarrogance
As earlier said there is no part of Nigeria that is not endowed with natural resources. Yet, despite the several billions of naira devoted to its exploration the lure of free money has consistently dampened commitment and zeal in that regard. A regime of fiscal federalism where every resource owner pays appropriate tax to fund the running of the federal government will possibly engender a desiradum for internal revenue generation. A critical look at the Table J below should instructively encourage every state to be inward looking. Every state is not only a natural resource basket but potentially wealthy state. That is how much God loves us; we tend to undermine and reject God’s love for us because of our oppressive style of repressing the hapless minorities.
Even if those whose penchant for insolence and arrogance did not know or pretend not to know, kindly know forthwith that you have what it takes to stand on your own without depending on proceeds from oil and gas. Let it be our collective duty to contribute to fund the federal government; it cannot continue to be the responsibility of Southern Nigerian states alone. Based on the foregoing, it is the position of South South that this “beggar syndrome” whereby every state runs to Abuja to beg for survival must stop. That practice is antithetic to the practice of federalism. If the authors of the Northern agenda think that is a practicable, acceptable mode of governance, we wish to state clearly that such practice is not in sync with democratic federalism. Accordingly, we wish to state our minimum position in the following tax based revenue allocation formula:
The unpatriotic calls for the scrapping of the Ministry of Niger Delta Affairs and the Niger Delta Development Commission: We have been severally entertained with voices of opposition from the North calling for the scrapping of the Ministry of Niger Delta and the Niger Delta Development Commission, institutions put in place to develop the long neglected Niger Delta area. These unpatriotic, wicked and self-serving calls evidently are products of lack of knowledge of our political history and an attempt to promote ethnic jingoism.
Ethnicjingoism
It is important that, as underfunded as these institutions are, which has crippled their capacity to deliver on their mandate, we put in perspectives the fundamental essence of their existence. The Niger Delta Region, being the third largest wetlands in the world, and the largest in Africa has 70,000 square kilometres with four different ecological zones. The region is blessed by God to be producing crude oil/gas, beginning with Oloibiri in the present Bayelsa State since 1956, which has become the economic live wire of Nigeria since its boom in 1970. Oil and gas revenue contributes about 80 per cent of Nigeria’s total earnings, and 95 per cent of export earnings.
The ecology of the region is swampy, criss-crossed by rivers and creeks that makes development difficult. Hence, the regional government of Eastern Nigeria did not do anything to promote its development. This led to the agitation by the Chiefs and Leaders of the Rivers Province, led by late Chief (Dr.) Harold Dappa-Biriye, the patriarch of the Niger Delta and doyen of state creation in Nigeria, to demand for the creation of Rivers State effective 1953, a political development paradigm as governments in the hinterland of Enugu, Kaduna or Lagos would not understand the deltaic ecology of the region and develop it.
The agitation formed the main agenda for the 1957 Lancaster House Conference in London where Harold Dappa-Biriye presented the position of the Ijaws, in particular, and Niger Delta, in general.
The fears were so well articulated that the British Colonial Secretary of State appointed the Henry Willink to chair a Commission on September 26, 1957. Nigerians are not alien to the economic devastation occasioned by the activities of Ijaw youths in the Niger Delta from 2006 to 2009, leading to the proclamation of Amnesty offer by late President Umaru Musa Yar’Adua in October, 2009. The recourse to arms to demand economic and social justice from Nigeria’s ruling class culminated in the plummeting of the country’s oil production capacity to 600,000 bpd in 2009 from 2.6 million bpd in 2006.
Amnestyprogramme
The Amnesty programme as well as the creation of the Niger Delta Ministry were, therefore, an informed choice between providing palliatives to an aggrieved long neglected people who were fighting for economic justice and permitting a failure of the Nigerian state. We, therefore, find it extremely absurd and insensitive when Northerners, in their desperate attempt at seeking means of enhanced free revenue, without a sense of history demand for the abrogation of these intervention institutions.
The danger in prying at another man, however, is that it gives room for self exposition. The people of the South have never openly probed into the several billions of petro-naira bureaucratically crafted institutions to benefit the North in the name of bridging cost, for the movement of petroleum products. While the Northern states have continued to enjoy petroleum products at controlled price because of the effect of bridging which the Petroleum Equalization Fund (PEF) offsets, oil producing communities in the hinterland of the Niger Delta pay three times the cost of fuel per litre.
We note from Tables M and N that the North West zone alone received over N119 billion naira from the PEF for the funding of ostentatious consumption without impacting on the economic lives of the ordinary people, with revenues from oil and gas; while the South South, the producers of the resource had a paltry N5.7 billion.What went to the North West alone amount to over 22 per cent of the total releases to develop the entire Niger Delta region (including Abia, Imo and Ondo states) for the corresponding period 2010 to 2013. Is this the economic justice and equity the Northern apostles of balanced national development are advocating?
When the institutional operations are lopsidedly balanced in their favour, as perpetual parasites, they do not only endorse it as being progressively germane but also work collectively to protect it. Hence, there was not a single Northern voice that protested the myopic, ethnocentric maladministration of the Petroleum Trust Fund (PTF) by General Muhammadu Buhari when he was chairman. Till date, the Petroleum Development Trust Fund (PDTF), an offspring of PTF, has become a veritable channel to empower only Northern youths to acquire education abroad. Regrettably, the entire funding is coming from the despised South-South oil and gas wealth.
Conclusion: Let all delegates be reminded that President Goodluck Jonathan, GCFR, in response to the several decades of agitation conveyed this conference to offer Nigerians the opportunity to address the myriad of challenges that have fuelled the age-long bickering that tend to tear the country apart, so that people can sit together to talk to resolve their differences and strengthen our bond of unity. And we do not think that can be achieved with an air of intransigence and belligerence which some delegates, especially from the North tend to exhibit.
Unfortunately, these delegates appear predisposed to the “aristocrat-proletariat” or better put, “master-servant” garb in their comments and actions. They are fixated in their primordial opinions of mastership bequeathed to them by their forbears and never realized that “change” is the only permanent thing in life. The change Nigerians seek is to transform our country to a truly federal state where federalism principles are practiced to the letter. And that comes with the untainted practice of fiscal federalism.
As a people our minimum position is that Nigeria must be a truly federal state where the principles of federalism and fiscal federalism are practiced; where all resource producing states shall have unimpeded right to its ownership, control and management and pay appropriate taxes to the Federal Government. We cannot and shall not accept the grave economic injustice of 13 per cent foisted on us by the Military engineered 1999 Constitution. Nigeria must go back to the basics of the 1960/1963 Constitutions in our fiscal operations.
Even the import of the provisions of Section 162(2) of the 1999 Constitution of the Federal Republic of Nigeria, which had been severally reported as a compromise, contemplates an upward review hence it says “being not less than 13 per cent.” This presupposes intermittent increase over time. Therefore it will be in the interest of all Nigerians that our brothers from the North hearken to the voice of reason and avoid being bellicose as we collectively build a new Nigeria. A stitch in time saves nine.
Vertical Allocation:
Producing States (to pay 50% tax to federation account) 50%
Distributable Pool 50%
Horizontal Allocation:
Federal Government 20% of 50%
States 60% of 50%
Economic Development Fund 15% of 50%
Federal Capital Territory 1.5% of 50%
Ecological Fund 1.5% of 50%
Research and Development Fund 2% of 50%
Proceeds from Produce, VAT and Duties
Vertical Allocation:
Produce: State of Origin 100%
Duties Federal Government 60%
Distributable Pool 40%
VAT : State of Origin 50%
Distributable Pool 50%
Horizontal Allocation (Proceeds from VAT and Duties)
Federal Government 20% of 50%
States 60% of 50%
Economic Development Fund 15% of 50%
Federal Capital Territory 1.5% of 50%
Ecological Fund 1.5% of 50%
Research and Development Fund 2% of 50%
Distributable Pool 50%
Horizontal Allocation:
Federal Government 20% of 50%
States 60% of 50%
Economic Development Fund 15% of 50%
Federal Capital Territory 1.5% of 50%
Ecological Fund 1.5% of 50%
Research and Development Fund 2% of 50%
Proceeds from Produce, VAT and Duties
Vertical Allocation:
Produce: State of Origin 100%
Duties Federal Government 60%
Distributable Pool 40%
VAT : State of Origin 50%
Distributable Pool 50%
Horizontal Allocation (Proceeds from VAT and Duties)
Federal Government 20% of 50%
States 60% of 50%
Economic Development Fund 15% of 50%
Federal Capital Territory 1.5% of 50%
Ecological Fund 1.5% of 50%
Research and Development Fund 2% of 50%
Table Ci: HEADS OF REVENUE
1913
Southern Northern Total
Nigeria Nigeria
Licences and Internal Revenue 18,012 29,281 47,293
Fees of Court, etc 74,168 65,029 139,197
Customs 1,772,619 .. 1,772,619 Marine 32,129 .. 32,129
Railway 632,130 .. 632,130
Interest 109,544 .. 109,544
General Tax .. 545,902 545,902
Post and Telegraphs 18,651 11,566 30,217
Rent of Government Property 3,265 3,832 7,097
Miscellaneous 7,519 2,700 10,219
Non-recurrent 160 .. 160
Imperial Grant-In-Aid .. 136,000 136,000
Total GBP 2,668,197 GBP794,310 3,462,507
Southern Northern Total
Nigeria Nigeria
Licences and Internal Revenue 18,012 29,281 47,293
Fees of Court, etc 74,168 65,029 139,197
Customs 1,772,619 .. 1,772,619 Marine 32,129 .. 32,129
Railway 632,130 .. 632,130
Interest 109,544 .. 109,544
General Tax .. 545,902 545,902
Post and Telegraphs 18,651 11,566 30,217
Rent of Government Property 3,265 3,832 7,097
Miscellaneous 7,519 2,700 10,219
Non-recurrent 160 .. 160
Imperial Grant-In-Aid .. 136,000 136,000
Total GBP 2,668,197 GBP794,310 3,462,507
Table Cii:
1913 1914
£ £
Cocoa 157,480 171,751
Cotton Lint 159.223 50,791
Hides and Skins 197,214 505,785
Ground-Nuts 174,716 179,219
Tin 568,428 706,988
Timber 106,050 86, 522
Palm Oil 1,854,384 1,571,691
£ £
Cocoa 157,480 171,751
Cotton Lint 159.223 50,791
Hides and Skins 197,214 505,785
Ground-Nuts 174,716 179,219
Tin 568,428 706,988
Timber 106,050 86, 522
Palm Oil 1,854,384 1,571,691
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