To highlight some significant events and
developments in response to a review of Nigeria as a federal structure,
it is intellectually pertinent to present a brief survey of the past to
understand the distinct phases through which the nation passed to
arrive at its present political state and economic condition vis a vis
revenue allocation or resource control.
Some of these historical periods have
enjoyed such degree of true federal structure, that in reference to
revenue allocation and federalism, not only were great strides made in
the promotion of social and economic development, the overall smoothness
in the system at both the regional and federal (central) levels over
shadowed the negative consequences of the power struggles, and by the
late 1950s a myth of Nigeria as a “federalism” enjoyed considerable
1.1 BACKGROUND OF THE STUDY:
The revenue allocation issue in the
political economy of Nigeria is as volatile as any other national
question such as population.
This means that how national revenue is
shared among the different components of the federal structure is
irretrievably tied to the national question. Hence no broadly acceptable
national revenue allocation formula has been put in place since 1947
and which has not generated controversy but had to be made acceptable in
the “interest of national unity” this controversy can be amplified with
the outburst of Gov Victor Attah of Akwa-IBOM state in response to the
supreme court ruling on the onshore/offshore dichotomy case, According
to him, if the judgment of the supreme court is implemented, it would
mean that they would go home with nothing, where as those that have
nothing to contribute, but have a large population and land mass which
are the indices for revenue sharing from the federation account will be
given the resources from our land to develop their land; and to them, it
is not only unjust, it is also wicked and that is why it is
unacceptable he therefore solicited the president to make as a matter of
urgency a bill to the national assembly which would seek to abrogate
the onshore, offshore dichotomy, as that will be in the interest of
national unity 1.
However, for many years now the revenue
allocation has been interlaced with volatile, which attracted the
attention of people within and outside the country.
But the researcher is poised to make his
own contribution to the effort towards bringing stability, peace and
development in the Nigerian polity and to achieve national unity.
1.2 STATEMENT OF THE PROBLEM.
There are problems with devising a
scheme of revenue allocation that is nationally understood and widely
accepted as equitable. Over the years, various formula as many as
thirteen have been tested and each has received some criticisms and
resentments from many quarters of the nation state.
Succinctly, it has grown to the extent
that it has assumed a thematic issue of national and international
status. But there could be some reasons behind this and the following
questions become relevant.
- What is resource control?
- To what extent can the issue of resource control be attributed to the lingering crisis in Nigerian polity?
- What is the relationship between resources control and political stability of the nation?
1.3 OBJECTIVE OF THE STUDY.
The main thrust of this exercise is to
unearth the remote causes of dissatisfaction among the south – south in
the revenue allocation formulae.
Secondly, to identify the reasons why the allocation principles have defied every pacifying effort.
And finally to explore why many units of
the federation are demanding for the control of the resources
collectively owned under Nigeria federal state arrangement.
However, this piece of work hopes to give a lasting solution to the disenchantment among the components of the federation.
1.4 LITERATURE REVIEW
In the words of Seltiz et. al. (1959)
“One of the simplest ways of economizing effort in inquiry is to review
and build upon the work already done by others.
This statement, in a nutshell,
underlines the entire logic behind the review of literature related
materials on a particular discipline. It serves as a stepping-stone,
launcher, or an aid to mankind’s bid to push toward the frontiers of
knowledge; which itself constitutes the essence of research.
While serving this function, the scope
of knowledge is generally amplified and our perception of our worldview
as regards the problem at hand will then come to a grasp in an
appreciable manner and of great importance to mankind if our knowledge
of the context of a particular subject matter understudy is greatly
enhanced. It is thus been observed that even acclaimed geniuses who have
played decisive roles in the history of social development, the likes
of Albert Eistein, Charles Darwin, Karl Max, Sigmind Frend, etc; had to
rely on the works of people before them to attain their thoughts
knowledge, as widely held, albeit correctly is not and never borne out
Therefore, regarding our subject matter
“the revenue allocation principle” and its attendant centrifugal effects
on the Nigerian polity, it is necessary that we acknowledge that quite
ample literatures have been expounded there upon.
The topic of discourse is very crucial
and polemic sequel to the fact that it pricks the toga of Nigeria
national unity. Inspite the fact that the issue of resource control
reared its head long ago, it resurfaced into the polity following the
enthronement of democratic regime in 1999.
According to Okafor Celestine, writing in Vanguard Newspaper of July 14th,
2001, “the battle for control of resources specially oil resources has
been a long drawn one. He recalled that by 1914 when Nigeria was
amalgamated, a legislation, colonial mineral ordinance was promulgated
which ensured on the monopoly on “British and British allied capital” by
the while government excluding the local people from taking part in the
nations oil sector. So the indigenous people goaded by the local elite
did not take it slightly and started agitating for greater participation
in the administration and management of the natural resources.
Furthermore, Ralph Nkwokedi maintained in his book; REVENUE ALLOCATION AND RESOURCES CONTROL IN NIGERIA FEDERATION that,
The question of resource control was for
the first time I Nigeria raised as a serious constitutional matter
during the London conference of 1953 to prepare for the 1954
constitution which reinforced the federal structure in Nigeria and move
clearly demarcated power between federal and regional government 3.
Nwokedi further pointed out that the
issue of resource control had not in the past generated much controversy
in the national politics mainly because during the colonial era and up
to the inception of the independence constitution the regions control
their mineral resource.
The regional governments then enjoyed
certain degree of autonomy that made it possible for them to control
their natural endowment.
But contrary to the existing situation
Nwokedi contends that the adoption of the report of Raisman Commission
of 1958, which recommended revenue allocation arrangement of 50% against
former 100%, culminated to the demand for resource control by the
regions. Coupled with the advent of the military regimes that eroded and
abrogated derivative principle to the advantages of the oil producing
areas, which aggravated the agitations.
In his submission in relation to the
issue of resource control in Nigeria federation he suggested that
Nigeria leaders should address the issue of resource control to give
states adequate participation in the development or management of their
resource and to enjoy substantial reward from the exploitation of such
national resources. This can be achieved by partnership agreement
between states and federal governments as well as the foreign investors.
Again that they should work out a universally acceptable mode of
revenue allocation formula that gives to each state revenue according to
However, from his suggestions above, one
can solve the problem of resource control. But a keen observer of
Nigeria polity and the existing formula was universally accepted based
on the voice of majority and considering the nature of Nigeria and
nature of their leaders “ATTITUDES PERCEPTION” of the leader, it will be
difficult to go by. Nigeria leader “Northern leaders” that wields this
political power is devoid of the political will to listen to the voice
of the minority moreover as the outcome will not favour his people hence
the allocation on population/ land mass.
There’s no gainsaying that the politics
of resource control stems from the believe that “the demand for
restructuring and resource control is borne out of deep-seated feeling
of marginalisation of the people that produce the bulk of the nation’s
foreign earnings i.e. oil.
Again, the highlight in the ten point
communiqué issued by southern Governors in GUARDIAN NEWSPAPERS OF
TUESDAY JULY 9, 2002, they said that they have resolved to fight for a
review of allocation along a democratic line as against an imposed one.
Remarkably, they also called for a national conference of all of
Nigeria’s ethnic nationalities. They described as unacceptable the
saddling of the nation with a unitary revenue allocation system
inherited from the military .4
Again during the second summit of their
conference, held in Enugu on January 2001, which was presented by
Governor Chimaroke Nnamani states inter-alia.
That resource control and derivation should hence forth be accepted as the basis of for revenue generation and allocation. 5
Meanwhile, several summits of the
southern Governors both in Enugu, Benin and Lagos have given a veritable
platform for the actualization of the resource control demand. They
argued that restricting ethnic zones without resource control is like
building without foundation. The governors unanimously agreed that it
would even be better for each of the federation to control their God
given resources as was practiced in the first republic when each region
developed at its own pace in line with the principle of true federalism.
So also, Godwin Darah writing in African
Today magazine on the topic “Niger Delta” the case for Federalism and
Resource Control, he made his opinion explicitly that,
The demand for the convocation of a
national conference is a peaceful way to resolve all the issues of
resource control and true federalism. Power will be decentralized and a
slim federal government will emerge. 6
From this it can be inferred that Darah
is of the opinion that the idea of convening a national conference that
will restructure the statuesque to the advantage of the federating units
leaving a slim central federal government as was obtained in any other
nation that is practicing federalism will be the way forward for the
The issues of resource control have enjoyed supports from many sympathizers and analyst. The Guardian Newspaper of December 21st 2000, in its front page reported that;
NIGERIA BACKS RESOURCE CONTROL BY STATES. 7
An opinion poll conducted by the Guardian has indicated that a good
majority of Nigerians across the six geopolitical zones of the country
representing 47.77% of the survey were positive when asked: “Do you
support the idea of resource control by the state”.
However, an equally 44.48% of the poll disagree with the idea championed by the south. But 7.46% declined comment.
Having had an in-depth analysis on the
force of resource control, the owns is one- one to have an idea of what
is expected of a true federalism. In that concept, the work of S.C Ugwu
quickly comes into focus in which he in his “federal system” the Nigeria
experience where he adopted the Wheare’s view on what a true federal
structure should look like thus he opined interalia:-
The general accepted nature of
federalism which has endured for long time is the one given by K.C.
wheare. He said that the most fundamental and distinguishing
characteristic of a federal system is that neither the central nor the
region all state government are subordinate to each other, but rather,
the various levels of government are coordinate and inter-department. 8
Each level operates directly with the people and helther may arrogate power to its power assigned to the other.
Also in the same work, Ugwu quoted
Elaigion who pointed out that in a federal system, the nature and
pattern of power sharing between the centre and sub-regional units
differ from one country to another, depending on the nature and
agreement reached by the multinational units. To K.C wheare, everybody
regards the U.S.A as example of federal government. He made U.S.A
federal system as a reference point and a model. In Ugwu’s work, he
reveals that federalism is a kind of compromise between advocates for a
strong central government and those who push for autonomy respect for
the right of the sub-regional units. 9
He identified some countries that
operates federal system of government which includes, U.S.A, Canada,
U.S.S.R, Nigeria, Switzerland and India etc. units of federations are
called different names in various countries, while the centre government
is usually referred do as federal government. In the contemporary
Nigeria components governments are called states likewise U.S.A, but in
pre-1967 Nigeria and former U.S.S.R, they are called regions, in Canada
and India they are called provinces while in Switzerland they are called
Ugwu revealed that the existing in
balance in the relationship between the federal and the component units
has eroded the Nigeria federal system and rendered it defective and
perfunctory. So in his own analysis and findings Nigeria federalism does
not the principle of true federalism.
In the same vain, Nnokedi in his own findings in revenue allocation and resource control in Nigeria federation opined thus,
It is obvious from the structure of the
federation in Nigeria and existing constitutional functions and source
of revenue are very much circumscribed and that more powers and revenue
are concentrated in the central of federal government. 10
So, the federal government controls
virtually all the major source of revenue like the mineral resources
including oil, while the state governments are left with grants or
allocation that come from the federal and other minor revenue source to
In the other hand, the constitution of
federal republic of Nigeria 1999 Amendment Bill of 2001, chapter 1 part 1
section iii part 1 subsection provides thus, “Nigeria is one
indivisible and indissoluble sovereign state to be known by the name of
the federal republic of Nigeria”.
Sub section 2 “Nigeria shall be a
federation consisting of states and a federal capital territory. In
relation to the structure, the committee made their recommendations
That Nigeria should continue to remain a
federation, clearly recognizing states as a federating units and Abuja
as a federal capital territory, but with much power devolved to the
federating units with the federal government enjoying a minimum of
important powers transcending states jurisdiction. 11
On the issue of revenue, section 162 (2) of 1999 Nigeria constitution provides that;
In determining the formula the national
assembly shall take into account the allocation principle especially
those of population, equality of states, internal revenue generation
provided that the principle of derivation shall be constantly reflected
in the approved formula as being not less than 13% of the revenue
accruing to the federation account directly from any natural resources. 12
The committee equally recommended
(1) That the derivation formula as contained in section 162 (2) should be increased substantially beyond the 13% minimum
It urged the government to commence full
disbursement of the derivation funds to the beneficiary states and thus
should apply to all natural resources as prescribed in the
Meanwhile, the recommendation of the
committee was informed by the proposal and petition as well as memoranda
sent to them by Nigerians. So based on their observation, findings and
judgment they now saw the dive need for restructuring which they made.
Emeka Anyoku in a lecture delivered at the Institute for Policy and Strategic Studies Kuru oh November 1st 200 as published in the Guardian newspaper, he posited that;
The idea of revising
constitution should be encouraged and the revised constitution must also
contain provision for federalism, decentralization and devolution of
power, which can be developed, to accord with the emerging needs for
greater autonomy and responsibility at the state and local level. 13
David, a senator writing on true federalism and resource control in a
paper presented in an international conference defined federalism;
As a system of government where more
than one level of government. (Federal, state and local government) the
federating units that state government exercise independent jurisdiction
within their defined territories these federating units are not
sub-ordinate to the central government. 14
He equally stated that “a federation is
coming together of different entities for the good of all but not the
less of their respective independence. He supported the establishment of
true federalism in the country and equally demands for 100% resource
control by the ethnic nationalities with appropriate tax paid to the
In the same vein, Abdul Oroh an
executive director of C.L.O in an interview with the Guardian newspaper
made his views clearly that, “we have a federal system that is not in
every way you would want to look at it, operating as a federal
structure, now we have a government that is very powerful a federal
government that controls all the resource: 16
He further argued that the federal
government should increase the 13% derivation to 50%. Oh the issue of
resource control, he justified it as being a legitimate demand.
Against the background of
resource control by states, the Kaduna state governor Alhaji Almed
Markifi who was reported by African today magazine vol. 7 No 9 as an
antagonist of the idea. He argued that federal resource including oil is
invested in the development of the federation, that it is wrong to hand
it over to area of derivation. But a critical inquest on his stand
tends to reveal that he is mixing the issue with sentiments.
Also Bala Usman a radical
historian from the Northern zone, in his monograph published in Africa
today magazine, he made claim that the agitation of resource control by
states is baseless. His stand is being informed by ethnic prejudice.
If we have been following the
argument of analyst and scholars with sound intellect, we can easily
deduce that there’s every need for a restructuring of the statusquo. In
doing this, the constitution should be made to reflect the principle of
true federalism, which facilitates stability and development in the
1.5 SIGNIFICANCE OF THE STUDY:
As indicated in our literature
review and purpose of study, quite a lot of literal work has been
devoted to the subject “ANALYSIS OF REVENUE ALLOCATION PRINCIPLES” both
in its general sense and with particular reference to the case of
Nigeria’s federalism. Most of these dealt with either the various
theories of federalism and resource control, the need for a true
federalism, the prospects and problems of revenue allocation in a
federal system. However, it remains that not much has been done in the
area of the contending issues involved. It is in this direction
therefore that we would like to view the significance of this study. It
is a contribution to the appraisal of the principles of revenue
allocation in Nigeria under review 1954 –
1.6 THEORETICAL FRAMEWORK:
In short, knowing that any
political inquiry without a conceptual or theoretical frame is usually
conceived as an exercise in futility in our discipline, the essence of
theories and concepts need not be overemphasized here.
In a work of this nature, it
behoves one to adopt David Easton’s System Analysis as one’s tool of
analysis in this piece of work. Accordingly, the system theorists
defined it as “A system is anything that comprises more than one part
with distinct boundaries which are interrelated in an organized unitary
whole with more than one distinguished parts that are connected. 15
Systems Theory was first adopted and developed by a German sociologist
Von Bertalanty (1991). But David Easton is the first major political
scientist who has developed a systematic frame on the basis of the
system analysis approach for the study of politics instead of merely
adopting it from Sociology and Anthropology.
(Varma. S.P.1999 RVSD)
Easton defined political system as “that
system of interaction in any society through which binding or
authoritative allocations are made and implemented. 16
David Easton in his analysis
treated all political systems as both open and adaptive systems and
focused mainly on the study of the nature of the exchanges and
transaction going on between the political systems and its environment.
He pointed out that political system
accumulate large repertoires of mechanism by which they try to cope with
their environment and through which they regulate their own behaviour,
transform their internal structure and even to remodel their fundamental
The system operates through the
process of input – output mechanism. The system received demand or
supports in form of input and pass through conversion process within the
system and then take the form of output.
This is followed by feedback mechanism, through which the effects and consequences are put back to the system as input.
Therefore based on the analysis
so far, Nigeria federation is a system comprising of many sub – systems
or units interrelated and contributing in distinctive manners to the
development and stability of the system.
The “Revenue Allocation principle” is a
demand from the environment in which the system will put through the
conversion process within the system and then take the form of output,
which will sustain the system to contribute to the sustenance of the
Meanwhile, in Nigeria
federation, the revenue allocation which is supposed to be the lubricant
to the system being controlled by the federal government has become the
object of conflict in the system. This is consequent upon the failure
of the federal government to live up to its functional expectation to
the federating units.
The agitation for states’
control of natural resources in their jurisdictions is the consequences
of the demand of the federating units for a better deal from the federal
government that authoritatively allocates the values for the system.
Therefore, should the federal
government maintain equity and fairness in allocating the revenue
accruable from these federating units? It will always enjoy the support
of the sub systems i.e. component units and the system will be stable.
So system approach becomes a veritable tool in a discussion of this nature.
1.7a METHOD OF DATA COLLECTION:
In the course of this academic
exercise, the writer / researcher depends heavily on content analysis
hence various text on federalism, Government, Politics, Seminar paper,
Journals, Daily News print and Electronic media. Also the U.N.N,
E.S.U.T, I.M.T, National- National Archives were of immense
The following hypothesis is being formulated.
H1. The inadequacy of the present
revenue allocation principle to address the plight of the oil producing
areas causes the socio – political crisis for the control of resources
H2. An upward review of the
derivation and even development allocation to the oil producing states
bears potential to check these centrifugal forces.
1.8 METHOD OF DATA ANALYSIS.
As earlier stated the content
analysis of the available data in respect to this work is the method I
used in the data analysis. The “CONTENT ANALYSIS” is what the researcher
1.9 SCOPE OF STUDY
This study will be confined to
the various causes of the agitation of state control of resources and
sequence of agitations from Raisman Commission of 1958 till 2002.
1.10 DEFINITION OF TERMS:
The principle in which there are two or
more levels or units of government with federal authority representing
the whole and act on behalf of the whole on certain matters assigned to
it by the constitution. 17
- RESOURCES CONTROL:
Lucidly, Ibori James; “……to be
substantially involved in the activities involving in the extraction of
natural resources in their region and if possible to control a major
percentage of stake. And like it happens elsewhere in the world taxes
can then be paid to the central government. 18
- REVENUE ALLOCATION:
The practice where one level of
government turning over a portion of the revenue it receives from
taxation to another level of government usually a lower one. 19