Who is afraid of Fiscal Federalism?

The agitation for fiscal federalism or as some may prefer to put it, restructuring, is as old, if not older than the current Nigerian democratic experiment.

This agitation has largely formed the rallying point of Nigeria’s progressive camp of yesteryears, when the call, though dominated by politicians and activists from the southern part of the country rented the air in deafening fashion.

Recently, the agitation seems to have returned to the front burner, since the call came from a most unexpected quarter, former Vice President Atiku Abubakar.

The call for restructuring and fiscal federalism by Atiku, from the North East geopolitical zone, caught many by surprise, as it was not normally expected. This is because every call for restructuring has always met iron clad resistance from the northern part of the country.

After Atiku’s call, others, especially the traditional proponents from the southern part of the country took up the battle cry again, positing that if the nation can restructure along fiscal federalism principles, more than half of the armed agitations in the Niger Delta, calls for the Republic of Biafra and secessionist or separatist agitations will automatically disappear.

Aside the above, the sorry financial state of states of the federation will also be sufficiently taken care of, as the current practice of over concentration of funds at the central government would have been freed, and the states will have more money not just to pay salaries of workers but also carry out developmental projects and build necessary infrastructures for their people.

Read also: Restructuring: Osinbajo a disappointment to South West, says Afenifere

The current economic downturn in the country, occasioned largely by dwindling receipt from oil exports because of fallen prices and the activities of Niger Delta militants, has fatally exposed the error in Nigeria’s federal structure, where states have to go cap in hand every month to receive stipends from the federal government.

While the federal government keeps over 50% of money accrued to the federation, the 36 states and the 774 local government areas in the country share the rest. States have always protested this practice but nothing has been done yet to correct it!

The question that has however remained is, ‘who is afraid of restructuring or fiscal federalism? Why has a section of the country continually agitated for it and another continually shot it down? Are there fears these other sections of the country sre entertaining and how genuine are these fears?

From the history of the country and as recent as 2014 during the National Conference convened by the administration of former President Goodluck Jonathan, the issue of restructuring and fiscal federalism took the front seat and during debates, emotions ran high severally and as usual, northern delegates worked hard to shoot it down!

According to analysts, the major reason behind northern opposition to fiscal federalism is because it was unthinkable for them to have southern states control the resources in their domain, especially crude oil and send a percentage to the federal government either in the form of taxes or royalties.

The fear of losing out in the sharing of the country’s wealth by northern states may not be founded or tenable because before the advent of oil, the three original regional government, then controlling their resources, were all doing well.

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The regions developed at their pace, with the north making massive investments in agriculture, and the Kano groundnut pyramids attracting global attention. The North, unknown to many is immensely blessed in agriculture, and can actually overtake the Niger Delta in revenue if states in the region will go back to it.

Thankfully, with the current dwindling oil revenue, there appears no other option but to look inwards.

Aside agriculture, virtually every state in the country, especially, northern states are blessed with solid minerals that could be tapped and turned into money spinners. But for that to happen, there is still the need for fiscal federalism as current laws in the country vests all of them in the federal government.

And despite this, illegal mining continues unabated on a daily bases without revenue accruing to the state governments, or federal for that matter.

In spite of the fear, and opposition to fiscal federalism, one thing however is clear; states need to free themselves from the shackles of poverty, and subservient status to the federal government which they depend on for funding.

The question now is; what do they do?

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