In the latest report published by the Cable News, only 20 states generated revenues from their local governments in 2023. While Lagos State led with N10.49 billion, sixteen states were totally absent from the list of states who generated IGR from their local governments this past year. Among the conspicuously missing 16 states include Adamawa, Anambra, Bayelsa, Benue, Delta, Enugu, Katsina, Kano, Kebbi, Nassarawa, Niger, Plateau, Rivers, Sokoto, Yobe and Zamfara. With this revelation, is it safe to say that these states are not economically productive, and are not viable to make any contribution at local government level to the common purse but they are drawing money every month from the federation account? Examining the number of states mentioned above, 11 of them are northern states, despite their population contribution to Nigeria and productivity potential. Is it therefore safe to declare that for so long a time, the North has been so comfortable and happy about the retarding, indolence-brewing Nigeria’s unitary system for the regions to remain unchallenged as a result of the regular monthly money-sharing from the centre?
The noise surrounding the President Bola Tinubu’s Tax Reform Bills has brought to fore, again, the issue of derivation and equitable distribution of generated incomes in Nigeria. The governors of the nineteen northern states and the top traditional rulers from the region rose from a meeting on Monday, October 28 in Kaduna with a decision to reject the Nigeria Tax Reform Bills that took a year of committee work to package. By the communique released by the northern meeting, the tax reform bills were against the interests of the North and other sub-nationals, especially the proposed amendment to the distribution of the Value Added Tax, that proposes derivation-based model.
It was on record that the VAT distribution was a legal matter in 2021 at the Federal High Court in Port Harcourt, Rivers State. But for the political solution to the legal issue, the court had ruled that Rivers State Government, and not the Federal Inland Revenue Service, should collect VAT, translating to the fact that every state should or would be collecting VAT.
Way back in 2014 during the National Conference, it is also on record that resource control, fiscal federalism, and devolution of powers were issues of disagreement between the northern and southern delegates. The disagreement over fiscal federalism had degenerated to the extent of pitching delegates against each other to the point of insults and to such a level that a delegate accused the North, openly, that the region had held Nigeria back for so long. The bone of contention at the conference was an insinuation that the North did not want any move that would starve the northern states of funds.
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So, has the North held Nigeria back from taking progressive steps? Rather, if one may ask, what is it that the North is really bringing to the table to move Nigeria forward; or in what ways has the North been contributing to ensure economic growth, peace, prosperity, progress and productivity in Nigeria? Other than population explosion and an army of untrained children that are growing per minute, the North in the past two decades has been contributing great insecurity, either directly or vicariously, by lending its army of untrained children to banditry and religious extremism in the mould of Boko Haram. While lending his pen to the ongoing tax reforms and derivation debates, Festus Adedayo, in his piece titled “Ayinde Barrister, North and Tinubu’s VAT Bill”, declared that “before the tax bills, the criteria Nigeria deployed for allocating resources to the tiers of government violated rational consideration, except for other primordial considerations. Allocating unearned money to states strengthens their renteer drive and weakens the revenue generation drive and capacity of other states. It makes states dependent on the monthly dole-outs from the Federal Government”.
As it was in 2014, even prior to that national conference, so it is today. With these tax reform bills and the position of the northern governors, it is clear that the North, with her teeming population, does not see any need to productively engage her manpower. Where this is the case, it is pure indulgence occasioned by the fact that something will always come from the centre every month. With an army of unemployable and indolent battalions, is that not sustainable invitation to insecurity and anarchy? Quoting Festus Adedayo again in respect of the ongoing power transmission line vandalism, “so, when the north made so much hoopla that it was all alone in darkness, it needed be told that the south didn’t breed (power transmission) bandits. Two northern states – Niger and Zamfara – are the greatest security burdens of Nigeria today. Those bandits didn’t wake up to be societal nuisances in one day. They are the neglected out-of-school children of decades back who have now morphed into a full plumule of violence. It is said that a mother who births an irresponsible child should back him”.
If one may ask again, if the North is not ready to shift from being collectors of monthly dole-outs from Abuja, should the rest of Nigeria be trapped in this very regressive unitary system or they, on their own, are ready to find lasting solutions to meet their own progressive and productive needs? Nigeria needs a structural reforms more than ever before.
Ola Emmanuel is a business planning consultant
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