The grouse of critics of the Zamfara gold misadventure, and rightly so, is that since Nigeria is a federation, its revenue allocation formula must be consistent with the principle of federalism as it obtains in other federal systems such as America, Canada, Australia and Switzerland. This was relatively so under the 1960 Constitution, for which reason the regions were strong, healthy and able to move at their own pace. The result was that there was little interest in and no pressure on the center just as there was little or no struggle for federal appointments as obtains today.
Attempts to have an acceptable revenue formula began in 1958 shortly before independence when the Raisman Commission was set up. There were also the Aboyade Technical Committee on Revenue Allocation and the Okigbo Commission on Revenue Allocation of 1979, all set up to assuage popular agitations against the extant revenue formula. However, the forays of military into the politics reversed this trend. The salute-and-obey command structure of the military filtered into governance, sounding the death knell on decentralization and devolution of powers associated with federalism. Thus Nigeria had a Revenue Allocation principle uniquely and peculiarly at variance with the acclaimed principles of federalism in two sensitive areas giving rise to reasonable apprehension from true patriots.
First is the ratio for the distribution of the revenue between the three tiers of government by which 55% was allocated to the Federal Government, 35 % to the 36 state governments and 10 to the 774 local governments. This in all intent and purposes and for all times is manifestly unjust, inequitable, exploitative and oppressive of the states as it subjects them inexorably to mere appendages of the Federal Government.
Section 162(1) of the 1999 Constitution of Nigeria establishes the Federation Account into which shall be paid all revenues collected by the government of the federation with a few exceptions. Subsection 2 of the said section empowers the National Assembly to determine the formula for the distribution of funds in the Federation Account. The proviso to the sub-section entrenches with respect to natural resources, the principle of derivation in any formula the National Assembly may come up with. By this principle, “not less than 13 per cent ” of the revenue accruing to the Federation Account directly from any natural resources shall be payable to a state of the federation from which such natural resources are derived. For a state to qualify for this allocation of funds, from the Federation Account, the natural resources must have come from within the boundaries of the state that is the resources must be located within that state. Pursuant to the provision of the constitution, the National Assembly promulgated the Allocation of Revenue (Federal Account) Act which pegged the derivation formula exactly at 13 per cent even though the constitution anticipated it could be more.
The principle of tokenism reflected in the derivative formula promulgated by the National Assembly did little to assuage public clamor for a revenue formula that is consistent with federalism. For nowhere in the world are constituent units in a federation made as ridiculously dependent on the central government as obtains in Nigeria. In fact the vociferous agitation which the present constitutional arrangement generated was one of the reasons which made the convocation of the 2014 national conference quite compelling. Those who oppose the extant formula often refer to the 1960 Constitution which allowed to “each region a sum equal to fifty per cent of (a) the proceeds of any royalty received by the federation in respect of any minerals extracted in that region and (b) any mining rents derived by the federation during that year from within that region.” In addition to that, the federation was expected to “credit to the Distributable Pool Account a sum equal to thirty per cent of – (a) the proceeds of any royalty received by the federation in respect of minerals extracted in any region and (b) any mining rents derived by the federation from within any Region.” This is vintage fiscal federalism at work, the 1979 and 1999 Constitutions notwithstanding.
Although the 1999 Constitution improved sparingly on the shortcoming of the 1979 Constitution in the area of revenue allocation accruing from natural resources on derivation principle, it fell far short of the lofty principles contained in the 1960 Constitution in this important area. While the 1979 Constitution omitted to make provision for sharing revenue accruing from natural resources on derivation principle, the 1999 Constitution did by allowing 13% to derivation principle, a far cry from the 50% prescribed by the 1960 Constitution.
The phenomenal growth which the country and each of the regions experienced during that period as a result of the revenue allocation principle in place at that time should naturally commend the same formula to the country. It was a period when competition was encouraged among all the regions. And expectedly each Region rose to the occasion and competed very well with the result that the Northern region became identified with groundnut pyramids that earned foreign exchange for Nigeria. Through that means, Western region harnessed its cocoa from which it was able to sustain its free education program, built network of roads, set up the first television station and generally set the pace in governance in the whole of Africa. The Eastern region also survived on the incredible industry of the people with its coal mining and palm produce. The landmarks of that era across Nigeria remain for all to see up till today.
If for whatever reason it is not practicable under Nigeria’s peculiar circumstances for a state to have absolute control of its resources, there is no reason the half measure of the 1960 Constitution cannot be replicated. That should be the worst case scenario. On the contrary, Zamfara can set the precedent that there is light at the end of the tunnel. Northern politicians and opinion leaders and elder statesmen who have the benefits of hindsight with which they could conveniently steer the ship of the nation away from atrophy and a crash, must rise to the occasion. They seem to have abdicated their patriotic duty to the country gradually giving way to despondency.
Instead, they have capitulated abysmally to primordial and ethnic sentiments that can hardly lift the country from the economic and political morass that has been her lot over a long period of time. They have chosen to identify with ethnic and regional cleavages such that the token conceded by the 1999 Constitution, adjudged to be poor and inequitable, even stands imperiled. Unless all Nigerians of goodwill stand up and promote the principle of derivation or resource control, it will lose all and the cynics will have the day. As has been observed, revenue allocation, derivation and resource control is the greatest litmus test of the much vaunted one, united and indivisible Nigeria. Failure to seize this moment and do what is right will render the Zamfara gold reserve as the greatest fraud perpetrated against Nigeria and her future.
