Time to look inwards

The ongoing impasse between the federal and state governments over the delay by the former in releasing the allocation for the month of September, has once again justified the call for states to begin to look inwards for self-sustenance.

It has been said over and over again that the practice of going cap-in-hand to Abuja every month for allocation is not healthy enough for state governments that hope to meet the infrastructural needs of their people.

The over-dependence on oil by government in the face of continued loss of revenues through oil theft and drop in patronage from some major oil buyers, among other factors, is dangerous to a country that aspires to join the league of developed nations of the world.

It has been stressed over time that all the states in the country have got abundant huge potentials that can be exploited for their economic well being. But the sharing of “free money” as it were, has beclouded leaders’ think-ability in this regard.

Although Ngozi Okonjo-Iweala, finance minister and coordinating minister for the economy, has continued to say the country is not broke, if this is true, why is it that for the second time this month the monthly Federal Accounts Allocation Committee (FAAC) meeting was aborted?

Whatever is the reason for the delay, we are inclined to believe that it is a wake-up call for the states to begin to plan on how to look beyond Abuja for survival.

The formulae for the division of Federal Account revenues have been a continual focus of debate in the country. The Federal Government’s lion share has remained one point of contention, with many states lobbying for a higher pay.

Other areas drawing serious controversy include the formula for the division of revenues from the federation account, the division of tax authority, the financing of the fuel subsidy and the management of fiscal reserve of the country (Excess Crude Account, Sovereign Wealth fund).

The distribution among states also is a source of controversy, particularly the derivation principle that gives a substantially larger share of revenues to the oil producing states in the Niger Delta. While the oil producing states clamour for even greater share of oil revenues, citing international examples of countries that receive a large share of their resource wealth, as well as pointing out significant environmental degradation and other negative externalities from oil production in the region, other states argue against the much larger share of revenues received by the oil producing region on equity grounds.

Babangida Aliyu, governor, Niger State, who has been vehement in the agitation for what he describes as a more equitable model of sharing, suggested that “Credible revenue sharing arrangement in a true federalism must be guided by the objectives of national integration, survival, justice, equity and efficient resource allocation. The revenue allocation formula should be looked at.”

We are pained that the huge allocations to federal, state and local governments over the years have not reflected in the lives of the citizenry. The more the allocations grow, the more the amount of money being siphoned by a few individuals in the corridors of power.

It is our candid opinion that it is high time governments in the country began to take seriously the issue of making their internally generated revenues (IGR) the bedrock of their finances rather than the perennial habit of going cap in hand to Abuja.