The story by Nduka Chiejina, Assistant Editor, went on to point out that “Two weeks after sharing tax proceeds from the Nigerian Liquefied Natural Gas, NLNG, the three tiers of government yesterday shared a larger amount of cash from the Federation Account for the month of June than they did for the month of May 2015.” With all due respects to my colleagues in the media, this is a story for the front page of every newspaper and headline news on electronic media.
For those who have lately rained maledictions on the governors of Nigeria in general, and inexplicably Ogbeni Rauf Aregbesola of Osun state in particular, it might give them a pause for reflection on the true state of the nation’s economy.
Without defending the governors against charges of profligate spending, the published allocation for June goes a long way towards sustaining the point that the fault is not entirely their own – irrespective of political affiliation, APGA, APC or PDP.
Incidentally, the fault does not belong entirely to the Federal Government under Jonathan either. A lot of what has happened could be traced to our faulty federal system, as will be explained later and to external factors which are totally out of their control.
The majour source of our current problem lies in the federal government assuming sole responsibility for determining the benchmark of price and volume of crude exports on which the annual budget is based, exclusively reporting the revenue generated without verification by the two other tiers of government, states and Local Governments, and declaring whatever the FG wanted as gross revenue, distributable revenue and Excess Crude revenue. It was a “Father knows best” system which had landed us in trouble.
The states, from the 1970s, when crude became the mainstay of the economy, not just now, had been administered by mentally lazy people – both as Governors and Commissioners of Finance—without exception. Otherwise, why should states which depend on revenue from crude for up to eighty (80) per cent or more of their revenue allow the FG alone to determine all the parameters mentioned above?
Why should the FG alone determine the benchmark, export volume, gross revenue and distributable income without checks and verification by the states? The Governors of states, up till now, had managed their relationships like members of a religious group based on faith in which the leader is totally trusted. “Faith”, meanwhile, “is not belief without proof, but trust without reservation.” (Elton Trueblood, in VANGUARD BOOK OF QUOTATIONS, p 55).
Unfortunately for the States and LGs, the trust had been totally misplaced as the current controversy over the disappearance of US$2bn from the Excess Crude Account, ECA, had demonstrated. That there is a dispute at all is clear proof that the states and LGs now have started to exercise doubt – which should have been there all along. That no small group of individuals can be trusted with funds belonging to others had been the verdict of history.
That is why there are independent or external auditors to verify what those in charge declare. Politicians, who should know themselves better than others should have been the last people to allow the fraud-prone system foisted on us by the military since 1967 till today to continue. The result, which should take some, but not all, the heat from the governors, is shown below between the allocations to states in 2006 and today 2015.
In July 2006, the aggregate to states was N196.26bn when the price of crude was under US$45 per barrel. In June 2015, nine years after crude oil at US$56-60 per barrel, “Mrs Anastatia Nwaobia, Permanent Secretary of the Federal Ministry of Finance, said the sum of N449.68 was shared…the states shared N111.04bn.
For further reference the states’ allocations in July 2006, were as follows: Abia, N3.96bn; Adamawa, N3.53bn; A/Ibom, N14.44; Anambra, N3.61bn; Bauchi, N4.10; Bayelsa, 13.16bn; Benue, N3.8bn; Borno, N4.1bn; C/River, N3.98; Delta, N15.8bn; Ebonyi, N3.0bn; Edo, N4.2bn; Ekiti, N3.08bm; Enugu, N3.3.29; Gombe, N3.15bn; Imo, N4.37bn; Jigawa, N3.92bn; Kaduna, N4.29bn; Kano, N5.55bn; Katsina, N4.30bn; Kebbi, N3.3.59bn; Kogi, N3.5bn; N3.12bn; N5.49bn; Nass, N2.99bn; Niger, N3.90bn; Ogun, N3.45bn; Ondo N6.95bn; Osun, N3.33bn; Oyo, N4.19bn; Plateau, N3.0bn; Rivers, N23.25bn; Sokoto, N3.72bn; Taraba, N3.4bn; Yobe, N3.39bn; Zamfara, N3.53bn.
No state will collect anything close to that now.
The year 2006 was two years after Obasanjo and Okonjo-Iweala imposed the ECA on the states and the Federal Government commenced robbing the states blind. In 2006-7 US$13-16bn was withdrawn from ECA for POWER PROJECT which has not seen the light of day till now. Thus today, states are receiving less than they did in 2006 –long before the minimum wage reached N18,000 per month and exchange rate escalated from N150 to N220 per US$1.
The first question we must answer is, how was it possible that states received N196bn in allocation in 2006, and a mere N111bn in 2015? The astonishing answer is: the Federal governments of Nigeria under Obasanjo, Yar’Adua and Jonathan had increasingly kept more than their own share of the revenue as a result of which the states are being pauperized.
The theft of states and LGs share of aggregate revenue, which started under Obasanjo, reached its peak under Jonathan. Between 2004, when ECA started and today, the states and LGs might have been robbed of close to a trillion naira because they were careless enough to allow the FG to determine everything about crude oil.
Now we are all in trouble as crude prices plummet to US$40 per barrel next year. The only silver lining in the horizon is the fact that we would never again have Okonjo-Iweala and Obasanjo in charge of the national purse.