By Adisa Adeleye
This week seems to be full of many interesting events – the usual carnage of Boko Haram killers and the assuring forecast that the reign of terror might, sooner than later, come to an end. It might be that the end of the month of July (month of fasting and sacrifice) could signify the start of the period of peace in the country.
It has been noticed that contrary to the expectation of pessimists, the debates in the National Conference have been robust, interesting and friendly in spite of theatrical displays of some members. The National Conference is a pleasant discovery (thanks to President Jonathan who set it up) full of wise, intelligent and patriotic Nigerians who are toiling to see that the country meets the expectations of many. Every Nigerian looks forward to reap the dividends of democracy in an atmosphere of peace and prosperity.
An interesting aspect of Nigeria‘s many problems has been handled at the National Conference through its Power Devolution Committee – its report is being intelligently debated. It has been agreed by many delegates that the Federal Government should transfer some of its heavy duties to the States by re-adjusting the Executive and Concurrent Lists to agree with the concept of true federalism.
Many delegates seem to favour a new revenue sharing formula which would give about 40 per cent to the Federal government and 60 per cent to the States and Local governments, as against the present formula which favours the federal government with over 52 per cent of total revenue. Since the states would have more responsibilities, they seem to be entitled to more funds.
What is baffling me, and perhaps many others of similar minds, is the effrontery of sharing revenue collected by the federal government (presumably on behalf of the people for the people) from the investments made only by the federal government. This is presumably so because the OIL MONEY which would be shared accordingly has its operations being funded only by the federal government. The receipts of oil operations are shared between foreign partners and the federal government – the Joint Ventures Owners.
It is a common belief that the present method of sharing revenue – monthly trip to Abuja by States Officials – does not agree with the practice of true federalism which requires its federating units to have its own source of revenue to take care of its activities.
It would be anomalous for states to dictate the sharing formula for an income for which it has contributed nothing to the operations that generate the income. That is one of the reasons why I have stated several times in this column that the notion of ‘OUR OIL‘ is vague. The ownership of ‘OUR OIL‘ should be in proportion of 60 per cent to the oil producing areas, 20 per cent to other states and 20 per cent to the federal government (for security of oil operations). The Owners (shareholders) would be responsible for the total cost of its operations and receipts. The foreign oil operators in Nigeria are responsible only to their share-holders in respect of income and to their home governments for tax liability.
It is an act of great magnamity for the oil producing states to be negotiating on the principle of 13 per cent derivation. In many democratic societies, companies (individuals or partnership) would prospect, discover and produce oil and keep the proceeds after paying due taxes to the concerned governments. It is recognized as the legitimate right of oil producing areas to be partners in prospecting, producing and sale of oil (crude or refined) and partners in sharing of the proceeds – from which they take care of consequences of oil production. Our foreign partners keep earning from oil to themselves and not to their home governments. This is why some of these companies could afford to sell dollars in our domestic foreign exchange market at the greatly depreciated value of the naira.
There is also a great deal of misconception about 50 per cent derivation principle of the pre-oil days. The 50 per cent is paid on royalty, rents, etc and not on the total receipts from sales of products – groundnuts, cocoa and palm-oil. Individual farmers planted and produced cocoa, groundnuts and palm-oil, and they were paid accordingly by the Produce Marketing Boards of each Region. Before the government scholarships, sons and daughters of cocoa farmers in the old Western Regions were trained as Doctors and Lawyers – elites of 1940s, 1950s and mid 1960s.
My argument is that if less emphasis is put on the sharing of OIL MONEY; and oil is properly structured as to its ownership, the less would be the craze for new non-economically viable entities and the argument on derivation would become merely academic. Perhaps the wise delegates have innocently forgotten that fiscal federalism would require that mineral resources in the states should be tapped by the concern states to reduce the unjust reliability of oil and gas which are narrowly located in swampy areas. The federating units should be able to harness their human and mineral resources to the best of their abilities.
If the National Conference is able to have a consensus on relationship between the federating units and the centre, the next crucial question will be, who controls the centre? Many believe that with the bitter and divisive nature of domestic politics, a form of coalition of parties would be ideal. This is more so because there is not much difference in political and economic ideology of the contending parties in the country.
The argument so far is on the ability of the members of the National Conference to come up with a peace agenda that would solve many problems and erase stumbling blocks to political unity and economic prosperity of the country. It will also depend on how President Jonathan could be statesman-like enough to prevent the National Conference becoming at the end, an “expensive talking shop”
There is no reason why the National Assembly and the Federal Executive Council should not find a way to see why the many important decisions as proposed in the National Conference should not find space in the present Constitution.
Or as some would agree, that a case has been made for a new Constitution to be drafted. Also, the improvement in the supply of electricity could brighten our dark alleys of a new Nigeria.