Firstly I
would like to define Resource Control as “the control and management of
resources by the state or local governments from whose jurisdictions the resources
are extracted” [2]. By resources I mean all resources not just crude oil. I
would also like to describe resource control as ‘financial autonomy for states
and local governments”. In the political parlance it would be best described as
‘fiscal federalism’.'
Next I would
like to posit that if everyone had a proper understanding of Resource Control
and of Risk Based Performance Management (RBPM), no one would argue against
resource control in the Nigerian context.
The truth
however is that due to a lack of understanding of the underlying principles “derivation
and resource control has always been an emotive and vexed political issue in
Nigeria since independence. In today’s terms the debate centres on how the
Multi Billion Dollars Oil Revenue should be apportioned between the Oil Producing
States and the Federal Government in Abuja? Add to this debate ethnicity,
religion, perceived notions of marginalization, lack of alternative sources of
hard currency, regionalism and you see what a controversial issue this is.” [1]
This should not be the case however. In this post I will seek to look at this
vexed issue in a technical, academic and professional way.
Given the
current economic situation and the drastic drop in oil prices I believe that
Nigeria is presented with a divine opportunity to re-visit the issue of
resource control (financial autonomy, fiscal federalism; call it what you
choose) as a way for solving many of our myriad issues. The time is opportune
because the emotions the subject usually raises should be doused in this time
of fallen oil prices, with longer term prospects of low prices for the
foreseeable future, fortuitously de-emphasizing crude oil as the sole resource.
Let us start
by identifying a few of the many Nigeria’s resources for which resource control
is advocated. In addition to crude oil, Nigeria is abundantly blessed with agricultural
resources, forest resources and mineral resources. Every one of the seven
hundred and seventy four (774) Local Government Areas in Nigeria has at least two
to three principal resources in
commercial quantities, many have seven or more, some as many as sixteen and a
few have as many as twenty. Any single one of these resources if properly
developed and harnessed is capable of making the local government area
self-sustaining and economically viable.
Local governments with fifteen or more resources have the ability to
become major contributors to GDP and foreign exchange earnings. A partial
listing of the resources in commercial quantities state by state is attempted
for illustration purposes.
In
alphabetical order we have Abia State:
Has crude oil, several agricultural crops such as Oil Palm and Raffia palm,
livestock, and several minerals such as; glass sand, shale, bentonite clay,
limestone, rock salt, phosphate rock, kaolin, gypsum, laterite, clay, granite,
black marble, marble and lignite. With
these resources Abia State was able to generate internally revenue of only N13.35bn
in 2015 up 7.33% from 2014. Its monthly FAAC allocation in December 2015 was
N2.66bn and its annual wage bill is about N30bn, which is more than double its
internally generated revenue. In 2015 Abia state was one of the states owing
worker’s salaries according to the Nigerian Labour Congress (NLC). Abuja FCT: Has several agricultural
crops including groundnut, livestock, and several minerals such as; granite,
marble, galena, laterite, tantalite, wolframite, tin ore, clay, dolomite, mica and
clay. With these resources Abuja FCT did not record any internally generated
revenue. Adamawa State Has several
agricultural crops including groundnuts, livestock, fisheries, and several
minerals such as; trona, salt, baryte,
granite, clay, coal, gypsum, limestone, uranium, kaolin, ilmenite, watron,
magnesite and marble. With these resources Adamawa State was able to generate
internally revenue of only N4.45bn in 2015 down 12.19% from 2014. Its monthly
FAAC allocation in December 2015 was N2.51bn and its annual wage bill is about
N23bn, which is nearly ten times its internally generated revenue. [3][4][5][6]
Akwa Ibom State: Has several agricultural crops
including oil palm, coconuts and raffia palm, livestock, fish, crude oil,
natural gas, and several minerals such as; clay, rock salt, silica sand and limestone. With
these resources Akwa Ibom State was able to generate internally revenue of
N14.79bn only in 2015 down 5.99% from 2014. Its monthly FAAC allocation in
December 2015 was N10.8bn and its annual wage bill is about N33.2bn which is
more than twice its internally generated revenue. In 2015 Akwa Ibom state was (inexplicably)
one of the states owing worker’s salaries according to the NLC. Anambra State: Has several agricultural
crops including oil palm and raffia palm, fisheries, and several minerals such
as; iron ore, clay, kaolin, crude oil, sandstone, lignite, natural gas, pyrite,
iron stone and sandstone. With these
resources Anambra State was able to generate internally revenue of N14.79bn in
2015 up 29.32% from 2014 and more than double the corresponding figure in 2012.
Its monthly FAAC allocation in December 2015 was N2.58bn and its annual wage
bill is about N16.3bn which is just slightly more than it’s internally generated
revenue. [3][4][5][6]
Bauchi State:
Has many agricultural crops including Groundnuts and Gum Arabic,
Livestock, Fish, and many minerals such as; Kaolin, Gypsum, Cassiterite,
Galena, Clay, Tantalite, Iron Ore, Gemstone, Sphalerite, Muscovite, Quartz,
Columbite, Baryte, Tungsten, Rutile, Copper, Zinc, Zircon, Talc, Silica sand,
Glass sand, Monazite, Feldspar, Ilemnite, Tantalum, Trona, Mica, Granite,
Laterite, Graphite, Tin, Monozonite, Limonite and Wolframite. Lead, Agate, Coal,
and Calcophrytes. With these resources mostly
untapped Bauchi State was able to generate internally revenue of N5.39bn only
in 2015 up 10.2 % from 2014. Its monthly FAAC allocation in December 2015 was
N2.98bn and its annual wage bill is about N26bn which is more than five times
its internally generated revenue. In 2015 Bauchi State was one of the states
owing worker’s salaries according to the NLC. Bayelsa
State: Has several agricultural
crops including Oil Palm, and Raffia palm, Livestock, Fish, Seafood, Crude Oil,
Natural Gas, Salt, Timber, Cane wood and very few minerals such as Silica Sand.
With most of the state’s resources tapped
by the federal government Bayelsa State was able to generate internally revenue
of N8.71bn only in 2015 down 25,76% from 2014. Its monthly FAAC allocation in
December 2015 was N6.48bn and its annual wage bill is about N48bn which is more
than seven times its internally generated revenue. Benue State: Has many agricultural crops including Groundnuts and
Oil Palm, Livestock, Poultry, Fish, and several minerals such as; Lead, Brine,
Zinc Ore, Silica Sand, Clay, Coal, Bentonite, Anhydrous Calcium, Sulphate,
Glass Sand, Baryte, Limestone, Feldspar, Gypsum, Kaolin, Wolframite, Ilemnite,
Bauxite, Shale, Mica, Granite, Galena and Lead. With these resources mostly
untapped Benue State was able to generate internally revenue of N7.63bn in 2015
down 8.55 % from 2014. Its monthly FAAC allocation in December 2015 was N2.82bn
and its annual wage bill is about N34.8bn which is more than four times its
internally generated revenue. Borno
State: Has many agricultural crops
including Groundnuts, Cotton and Gum Arabic, Livestock, Fish, and several minerals
such as; Salt, Sapphire, Silica Sand, Quartz, Mica, Granite, iron Ore, Alluvial
Gold, Magnesite, Uranium, Feldspar, Topaz, Nepheline, Aquamarine, Kaolin, Gypsum,
Limestone, Bentonite, Trona, Potash, Laterite, Uranium, Fuller’s earth and
Diatomite. In the case of Borno State the security situation has not helped
matters but despite this, the state was able to generate internally, revenue of
N3.53bn in 2015 up 21.8 % from 2014. Its monthly FAAC allocation in December
2015 was N3.05bn and its annual wage bill is about N20.7bn which is more than
five times its internally generated revenue. [3][4][5][6]
Continuing
we have Cross River State: Has many
agricultural crops including; Oil Palm, Groundnuts and Raffia Palm, Livestock, Fish,
and several minerals such as; Salt, Coal, Limestone, Tourmaline, Glass
sand, Crude oil, Natural Gas, Tin Ore,
Mica, Ilemnite, Kaolin, Clay, Sharp Sand, Quartz, Granite, Spring Water,
Muscovite, Galena, Zinc, Gold, Uranium and Baryte. With these resources mostly
untapped Cross River State generated internal revenue of N13.57bn in 2015 down
16.01% % from 2014. Its monthly FAAC allocation in December 2015 was N2.53bn
and its annual wage bill is about N22bn which is more than one and a half times
its internally generated revenue. In 2015 Cross River state was one of the
states owing worker’s salaries according to the NLC. [3][4][5][6]
Delta State: Has several agricultural crops
including Oil Palm, Groundnuts and Raffia Palm, Livestock, Fish, Salt, Crude
Oil, Natural Gas, and several minerals such as; Lignite, Kaolin, Laterite,
Gravel, Silica Sand, Laterite Clay, River Sand and Granite. With these resources mostly untapped Delta
State generated internal revenue of N40.81bn in 2015 down 4.93% % from 2014.
Its monthly FAAC allocation in December 2015 was N9.286bn and its annual wage
bill is about N85.2bn which is more than double its internally generated
revenue. Ebonyi State: Has several
agricultural crops including Oil Palm, Rice, Groundnut and Raffia Palm,
Livestock, Fish, and several minerals such as; Salt, Limestone, Lead, Zinc,
Gypsum, Marble, Granite, Galena, Laterite, Feldspar, Quartz, Pyrite, Black
marble, Clay, Bentonite, Lead and Shale. With these resources mostly untapped
Ebonyi State generated internal revenue of N11.03bn in 2014 data for 2015 is
not available. Its monthly FAAC allocation in December 2015 was N2.55bn and its
annual wage bill is about N16.8bn which is about one and a half times its
internally generated revenue. Edo State: : Has several agricultural crops including Oil Palm, Rice, Rubber and
Raffia Palm, Livestock, Fish, and several minerals such as; Salt, Limestone,
Dolomite, Kaolin, Feldspar, Clay and Marble. With these resources mostly
untapped Edo State generated internal revenue of N19.12bn in 2015 up 10.95% %
from 2014. Its monthly FAAC allocation in December 2015 was N3.18bn and its
annual wage bill is about N28bn which is more than one and a half times its
internally generated revenue. Ekiti State:
Has several agricultural crops including Oil Palm, Cocoa, Raffia Palm, Rice,
Livestock, and several minerals such as; Charnockite, Clay, Kaolin, Quartz, Granite,
Mica, Gemstone, Lignite, Limestone, Feldspar, Tin Ore, Bauxite, Tantalite,
Columbite and Cassiterite. With these resources mostly untapped Ekiti State
generated internal revenue of N3.29bn in 2015 down 4.99% % from 2014. Its
monthly FAAC allocation in December 2015 was N2.58bn and its annual wage bill
is about N24bn which is more than seven times its internally generated revenue.
In 2015 Ekiti state was one of the states owing worker’s salaries according to
the NLC. Enugu State: Has several
agricultural crops including Oil palm, Yam, Rice and Raffia palm, Livestock,
Fish, and several minerals such as; Iron
ore, Clay, Kaolin, Coal, laterite, Silica, Copper, Bauxite, Crude Oil, Natural
Gas, and Glass stone. With these resources mostly untapped Enugu State
generated internal revenue of N18.08bn in 2015 down 6.47% % from 2014. Its
monthly FAAC allocation in December 2015 was N2.53bn and its annual wage bill
is about N62.4bn which is more than three times its internally generated
revenue. [3][4][5][6]
Gombe State: Has many agricultural crops
including; Groundnuts, Soybean, Maize and Rice, Livestock, Fish, and several
minerals such as; Kaolin, Gypsum, Granite, Bentonite Clay, Coal, Baryte and Limestone.
With these resources mostly untapped Gombe State generated internal revenue of
N4.78bn in 2015 down 8.61% from 2014. Its monthly FAAC allocation in December
2015 was N2.34bn and its annual wage bill is about N14.4bn which is three times
its internally generated revenue. Imo
State: Has crude oil, several agricultural crops including Cassava, Oil
palm, Raffia Palm, Rubber and Rice, Livestock, Fish, and several minerals such
as; Bentonite Clay, Kaolin, Limestone and Zinc Ore. With these resources mostly
untapped Imo State generated internal revenue of N4.57bn in 2015 down 48.3% %
from 2014. Its monthly FAAC allocation in December 2015 was N2.89bn and its
annual wage bill is about N22.8bn which is more than four times its internally
generated revenue. In 2015 Imo state was one of the states owing worker’s
salaries according to the NLC. Jigawa State: Has many agricultural
crops including; Groundnuts, Soybean, Tomato, Wheat, Gum Arabic, Maize and
Rice, Livestock, Fish, and several minerals such as; Kaolin, Clay, Iron ore,
Quartz, marble, Silica Sand, Potash,
Granite, Glass stone, Limestone, talc. With these resources mostly
untapped Jigawa State generated internal revenue of N5.08bn in 2015 down 23.46%
from 2014. Its monthly FAAC allocation in December 2015 was N2.81bn and its
annual wage bill is about N33.5bn which is more than six times its internally
generated revenue. In 2015 Jigawa state was one of the states owing worker’s
salaries according to the NLC. Kaduna
State: Has many agricultural crops including; Groundnuts, Soybean, Tomato,
Sugar Cane, Wheat, Maize, Cotton and Rice, Livestock, Fish, Timber, and several
minerals such as; Kaolin, Clay, Salt, Zircon, Silmanite, Graphite, Manganese,
Quarry Sand, Ferrous Oxide, Granite, Smoky Quartz, Quartz, Columbite, Tin Ore,
Cassiterite, Gemstones, Limonite and Talc. With these resources mostly untapped
Kaduna State generated internal revenue of N11.53bn in 2015 down 10.8% from
2014. Its monthly FAAC allocation in December 2015 was N3.29bn and its annual
wage bill is about N27.4bn which is more than twice its internally generated
revenue. Kano State: Has many agricultural
crops including; Groundnuts, Soybean, Tomato,
Pepper, Sugar Cane, Wheat, Maize, Cotton and Rice, Livestock, Fish, Timber, many
minerals such as: Clay, Zircon, Silmanite, Graphite, Kaolin, Manganese, Quarry
Sand, Ferrous Oxide, Granite, Smoky Quartz,
Quartz, Columbite, Tin Ore, Cassiterite, Gemstones, Limonite, Lead, Zinc,
Monazite, Laterite, Silica Sand, Rhyolite, Copper, Gold and Talc. With these resources
mostly untapped Kano State generated internal revenue of N13.61bn in 2015 down
0.3% from 2014. Its monthly FAAC allocation in December 2015 was N4.11bn and
its annual wage bill is about N36bn which is nearly three times its internally
generated revenue. In 2015 Kano state was one of the states owing worker’s
salaries according to the NLC. Katsina State: Has many agricultural
crops including; Groundnuts, Soybean, Tomato,
Pepper, Onion, Sugar Cane, Wheat, Maize, Cotton, Gum Arabic, and Rice, Livestock, Hides and Skin, Fish, Timber,
many minerals such as: Clay, Zircon, Silmanite, Graphite, Kaolin, Manganese,
Quarry Sand, Ferrous Oxide, Granite,
Smoky Quartz, Quartz, Columbite, Tin Ore, Cassiterite, Gemstones,
Limonite, Lead, Zinc, Monazite, Laterite, Silica Sand, Rhyolite, Copper, Gold, Amethyst,
Tourmaline, Feldspar, Precious stones, Aquamarine, Emerald, Chromite, Topaz,
Mica, Glass Sand and Talc. With these resources
mostly untapped Katsina State generated internal revenue of N5.79bn in 2015
down 7.46 % from 2014. Its monthly FAAC allocation in December 2015 was N3.12bn
and its annual wage bill is about N14.4bn which is more than twice its
internally generated revenue. In 2015 Katsina state was one of the states owing
worker’s salaries according to the NLC. [3][4][5][6]
Kebbi State: Has many agricultural crops
including; Groundnuts, Soybean, Cotton, Tomato, Onion, Pepper, Gum Arabic,
Pepper, Maize and Rice, Livestock, and several minerals such as; Kaolin,
Bauxite, Gold, Clay, Manganese, Magnesite, Mica, Feldspar, Iron Ore and Quartz.
With these resources mostly untapped Kebbi State generated internal revenue of
N3.59bn in 2015 down 6.73% from 2014. Its monthly FAAC allocation in December
2015 was N2.61bn and its annual wage bill is about N12bn which is more than
three times its internally generated revenue. Kogi State: Has many agricultural crops including Groundnuts, Rice,
Maize, Soybean and Oil Palm, Livestock, Fish, Poultry, and several minerals such as; Limestone,
Quartz, Marble, Dolomite, Iron Ore, Coal, Gemstones, Crude Oil, Ornamental
stone, Talc, Cassiterite, Mica, Kaolin, Granite,
Columbite, Tantalite, Feldspar, Phosphate and Gold. With these resources mostly
untapped Kogi State generated internal revenue of N6.77bn in 2015 down 3.05 %
from 2014. Its monthly FAAC allocation in December 2015 was N2.72bn and its
annual wage bill is about N14.4bn which is more than twice its internally
generated revenue. In 2015 Kogi state was one of the states owing worker’s
salaries according to the NLC.[3][4][5][6]
Kwara
State: Has many agricultural crops including Groundnuts, Rice, Maize,
Soybean, Coffee bean, Tobacco and Oil Palm, Livestock, Fish, Poultry, and
several minerals such as; Clay, Kaolin, Feldspar, Dolomite, Marble, Quartz and
Granite. With these resources mostly untapped Kwara State generated internal
revenue of N7.18bn in 2015 down 73.57 % from 2014. Its monthly FAAC allocation
in December 2015 was N2.27bn and its annual wage bill is about N11bn which is
more than one and a half times its internally generated revenue. Lagos State: Has several agricultural
crops including Oil Palm, Coconut, Raffia Palm, Rubber, Rice and Soybean,
Livestock, Fish, Seafood, Timber, and few minerals such as; Clay, Gravel, Sharp sand, Laterite, Silica
and Bitumen. Lagos state as the former administrative capital of Nigeria and
the current commercial capital is host to a myriad of companies and businesses.
There is therefore more exploitation of resources attracting masses of workers
and attracting the population of over 20 million. With effective Personal
Income Tax collection and management Lagos State generated internal revenue of
N268.22bn in 2015 down 2.96 % from 2014. Lagos state has a commendable policy
that worker’s salaries should not exceed 30% of internally generated revenues,
if workers want an increase in salaries then they need to increase IGR. This is
an example of risk based performance management. Its monthly FAAC allocation in
December 2015 was N8.26bn and its annual wage bill is about N76.5bn which is
less than a third of its internally generated revenue which gives it sufficient
revenue to pay salaries and embark upon capital projects. It is worthy of note
that the adversity it faced, of Local Government Funds withheld by the Obasanjo
administration in 2004 {over the creation of Local Council Development Areas (LCDA’s)}
was an impetus to drive tax management and internally generated revenues to new
heights. This is also an argument in favour of financial autonomy. When states
cannot look outward for revenue, they would by necessity look inwards.
Necessity is always the mother of invention. [3][4][5][6]
Nassarawa
State: Has several agricultural crops including Groundnut, Maize and Rice ,
Livestock, Fish, and several minerals such as; Gemstones, Cassiterite, Beryl,
Clay, Topaz, Sapphire, Granite, Emerald, Baryte, Salt, Silica sand, Galena,
Amethyst, Glass sand, Coal, Limestone, Iron Ore, Marble and Monazite. With
these resources mostly untapped Nassarawa State generated internal revenue of
N4.28bn in 2015 up 4.59% from 2014. Its monthly FAAC allocation in December
2015 was N2.28bn and its annual wage bill is about N24bn which is nearly five
times its internally generated revenue. Niger
State: Has several agricultural crops including Groundnut, Maize, Soybean
and Rice, Livestock, Fish, and many minerals such as; Kaolin, Limestone,
Granite, Clay, Silica, Gold, Glass sand, Granite, Graphite, Talc, Feldspar,
Galena, Copper, Columbite, Marble, Iron Ore, Glass sand, Asbestos, Quartz,
Gemstone, Tourmaline, Manganese, Kyanite and Mica. With these resources mostly untapped Niger State
generated internal revenue of N5.97bn in 2015 up 3.98% from 2014. Its monthly
FAAC allocation in December 2015 was N2.91bn and its annual wage bill is about
N31.2bn which is more than five times its internally generated revenue.[3][4][5][6]
Ogun State: Has several agricultural crops
including Oil Palm, Raffia Palm, Maize, Rice, Cocoa and Soybean, Livestock, Fish
and several minerals such as; Clay, Kaolin, Feldspar, Gemstones, Quartz,
Granite, Mica, Silica, Glass sand, Gypsum, Limestone, Phosphate, Red Clay and
Tar sand. With the efforts made by
Ogun State to woo investors and companies to tap into its resources, it generated
internal revenue of N34.59bn in 2015 up 48.42% from 2014. Its monthly FAAC
allocation in December 2015 was N2.43bn and its annual wage bill is about N108bn
which is more than twice its internally generated revenue. In 2015 Ogun state
was one of the states owing worker’s salaries according to the NLC, however the
Ogun state government refutes this claim. Ondo
State: Has several agricultural crops including Oil Palm, Raffia Palm, Coffee
bean, Maize, Rice and Soybean, Livestock, Fish, Gmelina Pine and several
minerals such as; Granite, Clay, Gabbro, Charnockite, Quartz, Crude Oil, Tar,
Salt, Glass Sand, Limestone and Coal. With these resources mostly untapped, Ondo
State generated internal revenue of N10.09bn in 2015 down 16.05 % from 2014.
Its monthly FAAC allocation in December 2015 was N3.58bn and its annual wage
bill is about N48bn which is more than four times its internally generated
revenue. In 2015 Ondo state was one of the states owing worker’s salaries
according to the NLC. [3][4][5][6]
Osun State: Has several agricultural crops
including Oil Palm, Raffia Palm, Coconut, Cocoa, Maize, Rice, Cotton, Coffee
bean, Sunflower and Soybean, Livestock, Fish, Timber, Bamboo and several minerals such as; Gold, Laterite, Sand, Gravel, Talc, Feldspar,
Kaolin, Aquamarine, Mica, Granite, Quartz, Clay, Dolomite and Beryl. With these
resources mostly untapped, Osun State generated internal revenue of N8.07bn in
2015 down 5.46 % from 2014. Its monthly FAAC allocation in December 2015 was
N2.38bn and its annual wage bill is about N22.8bn which is more than twice its
internally generated revenue. In 2015 Osun state was one of the states owing
worker’s salaries according to the NLC Oyo
State: Has several agricultural crops including Oil Palm, Date Palm,
Coconut, Cocoa, Maize, Cotton, Tobacco and Soybean, Livestock, Timber, Bamboo
and several minerals such as; Tantalum, Laterite, Iron Ore, Quartz, Kaolin,
Silmanite, Iron Ore, Granite, Marble, Limestone, Tourmaline, Aquamarine,
Feldspar, Talc and Dolomite. With these resources mostly untapped Oyo State
generated internal revenue of N15.66bn in 2015 down 4.11 % from 2014. Its
monthly FAAC allocation in December 2015 was N3.01bn and its annual wage bill
is about N49bn which is more than three times its internally generated revenue.
In 2015 Oyo state was one of the states owing worker’s salaries according to
the NLC.[3][4][5][6]
Plateau State: Has several agricultural crops
including; Groundnuts, Tomato, Maize, Wheat and Rice, Livestock, and several
minerals such as; Columbite, Monazite, Zircon, Kaolin, Dolomite, Limonite, Cassiterite,
Gemstones and Clay. With these resources mostly untapped Plateau State generated
internal revenue of N6.93bn in 2015 down 19.42 % from 2014. Its monthly FAAC
allocation in December 2015 was N2.60bn and its annual wage bill is about N20.7bn
which is more than three times its internally generated revenue. In 2015
Plateau state was one of the states owing worker’s salaries according to the
NLC. Rivers State: Has several agricultural crops including
Coconut, Oil Palm, Rubber and Raffia palm, Livestock, Fish, Seafood, Crude Oil,
Natural Gas, Salt, Timber, Cane wood and few minerals such as Silica Sand,
Glass sand and Clay. With these resources and a burgeoning upstream and
downstream oil industry attracting associated oil service companies Rivers
State generated internal revenue of N82.10bn in 2015 down 8.54 % from 2014. Its
monthly FAAC allocation in December 2015 was N7.71bn and its annual wage bill
is about N96bn which is N14bn more than its internally generated revenue. Surprisingly
in 2015 Rivers state was one of the states owing worker’s salaries according to
the NLC. Sokoto State: Has many agricultural crops including; Groundnuts, Tomato, Onion, Pepper, Gum Arabic, Pepper,
Wheat, Maize and Rice, Livestock, and several minerals such as; Silica, Clay, Kaolin,
Bauxite, Gold, Gypsum, Limestone, Hides and Skin, Phosphate, Salt and Feldspar.
With these resources mostly untapped, Sokoto State generated internal revenue
of N6.22bn in 2015 up 9.75% from 2014. Its monthly FAAC allocation in December
2015 was N2.75bn and its annual wage bill is about N16.8bn which is more than
twice its internally generated revenue. [3][4][5][6]
Taraba State: Has several agricultural crops
including; Groundnuts Cotton, Rice, Soybean, Feldspar, Quartz, Muscovite,
Tourmaline, Tantalite, Cassiterite, Columbite, Graphite, Muscovite, Sapphire,
Zircon, Baryte, Limestone, Galena, Gypsum,
Glassy Quartz, Tamarind, Magnesite, Bauxite, Pyrite, Garnet, Zinc, Lead
and Salt. With these resources mostly untapped Taraba State generated internal
revenue of N4.15bn in 2015 up 8.57 % from 2014. Its monthly FAAC allocation in
December 2015 was N2.39bn and its annual wage bill is about N21.6bn which is
more than five times its internally generated revenue. Yobe
State: Has many agricultural crops including Groundnuts, Rice, Tomato,
Maize, Wheat, and Gum Arabic, Livestock,
Fish, and several minerals such as; Salt, Trona, Potash, Shale, Clay, Silica,
Diatomite, Mica, Epsomite, Gypsum, Kaolin, Limestone, Tamarind, Bentonite,
Marl, Quartz, Granite and Laterite. With these resources mostly untapped, Yobe
State generated internal revenue of N2.25bn in 2015 down 36.53 % from 2014. Its
monthly FAAC allocation in December 2015 was N2.44bn and its annual wage bill
is about N18bn which is more than six times its internally generated revenue. Zamfara State: Has several agricultural
crops including; Groundnuts, Maize and Rice, Livestock, Fish, and several solid
minerals. With these resources mostly untapped Zamfara State generated internal
revenue of N2.74bn in 2015 down 14.88 % from 2014. Its monthly FAAC allocation
in December 2015 was N2.50bn and its annual wage bill is about N13.2bn which is
more than four times its internally generated revenue. In 2015 Zamfara state
was one of the states owing worker’s salaries according to the NLC.[3][4][5][6]
Given the
plethora of resources spread across the states of Nigeria there is no reason
for states to be so poor as to owe wages. It is necessary to interrogate the
numerous cases of states not generating enough internally to pay salaries. Only
one state is currently able to pay salaries from internally generated resources
namely; Lagos State. The next state to hit that mark will probably be Anambra
State which is currently covering 90% of its wages from internally generated
revenue (IGR) and is growing IGR at the current rate of 29.32% having doubled
IGR between 2012 and 2016.
The
implication of the low revenue generation by the states is that most of them
can barely sustain themselves without recourse to monthly federal subventions. Most
states have had to take short-term bank loans to settle wages whenever there
were delays or reductions in the monthly disbursements by the Federation
Accounts Allocation Committee (FAAC). This is unsustainable.
Mr Dauda
Garuba, coordinator of the Revenue Watch Institute and a revenue advocate while
speaking to The Daily Trust Newspaper some time in 2013 said; “the state
governments are simply too lazy to generate revenues internally because of the
oil money they receive from Abuja every month. Because of the oil revenue they collect monthly, state
governors are no longer serious in making money for their states.” Garuba described
the situation whereby states depend heavily on federal subventions as
unfortunate because each state has the potential to sustain itself. “It is
unfortunate that the governors, particularly in the North abandoned
agriculture. Every state has the potential to be self-sufficient only if the
chief executive knows what he is doing,” he said. Mr Garuba’s position
buttresses the point that people, organizations, states and nations do what
they are rewarded for. If states and local governments are rewarded for doing
nothing by receiving allocations then there is no incentive to industry,
innovation and performance.
This paper
seeks to expound the view that the laziness, lack of foresight, absence of
endeavor and drive noted by Garuba can be corrected and reversed (very quickly)
and State governors and Local Government Chairmen can become revenue earners if
given financial autonomy. If you want to change behavior very quickly then
change the performance measurement and reward system. Let the system reward
people for the risks they take. With financial autonomy and resource control they
would literally have to bake the cake using the resources available to them and
pay taxes to the state and federal government as applicable. This would be a
complete reversal of the current situation where many of them sit with arms
folded waiting for a piece of the cake baked centrally with resources from
other states to be sent down to them. This view is buttressed by studies in
risk based performance management.
Risk-Based
Performance Management (RBPM) is a strategic execution methodology, developed
to enable entities (be they corporations, local governments, states or
federations) to sustain strategy execution by integrating business strategy,
performance and risk management. Core to Risk Based Performance Management
(RPBM) is the understanding of ‘risk appetite’ and how the entity can operate
“within appetite”. Building on existing and widely deployed methodologies,
namely the Balanced Scorecard and COSO framework, Risk-Based Performance
Management is a proven response to the performance and risk challenges
presented in today’s
business
environment.
Resource
Control or Financial Autonomy inherent in a true fiscal federalism encourages
local governments and states to own their choices, actions, inactions and
decisions. They can pursue performance based objectives with the confidence
that they are backed by the necessary resources. They are motivated to take the
risks within their risk appetite and reap any associated rewards. They are
motivated away from laziness and idleness because the direct link between
actions taken and rewards received will take away any excuse for inaction.
Taking performance management and risk management to the lowest level of
government i.e. Local governments is the way to go. All the 774 local
governments of Nigeria are endowed with resources to self-supporting extents. A
reference to Investment Opportunities for Job Creation in Nigeria by FIIRO will
give comprehensive guidance as to resources available in each local government
and the applicable technology available to exploit those resources. What is
missing is the impetus to exploit them, the necessity to take risk and the
assurance that rewards will come to the successful risk taker, which financial
autonomy will provide. Local governments should be given the responsibility for
generating their own revenues and autonomy over resources in their local
governments. A certain percentage of the revenues should be retained by
themselves say 70% and 30% remitted to the state as taxes. The states having
aggregated all taxes form local governments should retain a certain percentage
say 60% for statewide capital programs, recurrent expenses, equalization fund
to be shared to all local governments on the basis of population and then remit
taxes of say 40% to the federal government. Government being closer to the
people will be easier to hold accountable.
This concept
is not new to Nigeria it was practiced in the past when the regional Marketing
Boards held sway. The British colonial government established the Marketing
Boards in Nigeria at the end of the Second World War in the 1940s. The Cocoa
Marketing Board was set up in 1947, while the Groundnut, Cotton and Palm
Produce Marketing Boards were established in 1949. The boards were established
primarily to stabilize Nigerian producers` prices in order to eliminate the
seasonal price fluctuations of the export produce. Other reasons were to
provide funds for regional governments and economic development of the
production areas and scientific research in agriculture; improvement of the
quality of the crops through the grading system; and putting to an end a series
of producer protests. [7]
This model
was successful to a very great extent as the three regions developed
comfortably from the proceeds of their resources; Palm Oil in the east,
Groundnuts and Cotton in the north and Cocoa in the west. Those were the days
of the groundnut pyramids which have since disappeared because of the scrapping
of resource control.
References
1. The Resource Control Movement in
Nigeria by John Iyobhebhe
2. Resource Control in Nigeria by
Henrik2009
3. Investment Opportunities for Job
Creation by FIIRO
4. Internally Generated Revenue at State
Level in 2015 by National Bureau of Statistics.
5. List of seventeen states owing worker’s
salaries in Nigeria by Naijacamp.com
6. Facts about Nigeria 35 out of 36
States cannot pay their Bills by Grassroot
development initiative.
7. A Critique of the Establishment of
the Marketing Boards in Nigeria in the 1940s by D.O. Iweze
