by Samuel Diminas
This article seeks to address issues raised in the following publications:
A......Re: Sanusi Links Boko Haram to Derivation
Thisdaylive, By Yemi Adebowale, with agency reports, and Ahamefula Ogbu
28 Jan 2012.
http://www.thisdaylive.com/articles/sanusi-links-boko-haram-to-derivation/108039/
(1) See comment for live link
B.....Nigerian central bank calls for end to imbalances
Financial Times
By William Wallis
January 26, 2012 5:27 pm
http://www.ft.com/intl/cms/s/0/02ce9e7e-4837-11e1-b1b4-00144feabdc0.html#axzz1klFc0HdC
(2) See Comment for live link
In order for us to have a well-rounded opinion on the often-raised issues of derivation, allocation, poverty, deprivation, corruption, militancy, terrorism etc and their relationship in the Nigerian equation, it would be pertinent to review the relevant financial data.
The purpose of this article is to bring to the public discourse, the relevant raw financial data required to reach informed conclusions on the issues.
The Source of all data is from the Federal Ministry of Finance, Abuja.
Summary of Gross Revenue Allocation by Federation Account Allocation Committee for the Month of August, 2011 Shared in September, 2011
http://fmf.gov.ng/images/FAAC/faacrepSep2011.pdf
(3) see comment for live link
All the information/data provided below, is also available on the Federal Ministry of Finance website www.fmf.gov.ng and Office of Accountant-General of the Federation website www.oagf.gov.ng. In addition, you would find on these websites details of the Capital and Recurrent allocations to all arms of Government including Federal Ministries and Agencies. The Budget Office website www.budgetoffice.gov.ng also contains information about the Budget.
NORTH EAST
Total Allocations to state, ie State Statutory + State VAT + LGA + LGA VAT
Adamawa: N7.31Billion
Bauchi: N8.39Billion
Borno: N9.15Billion
Gombe: N5.54Billion
Taraba: N6.73Billion
Yobe: N6.64Billion
NE Total allocation received = N43.76b
South East
Total Allocations to state, ie State Statutory + State VAT + LGA + LGA VAT
Abia: N7.76Billion
Anambra: N7.45Billion
Enugu: N6.55Billion
Ebonyi: N5.39Billion
Imo: N8.52Billion
SE Total allocation received = N35.67Billion
North West
Total Allocations to state, ie State Statutory + State VAT + LGA + LGA VAT
Jigawa: N8.49Billion
Kano: N13.56Billion
Katsina: N10.04Billion
Kebbi: N7.29Billion
Kaduna: N9.47Billion
Sokoto: N7.75Billion
Zamfara: N6.56Billion
NW Total allocation received = N63.16Billion
South West
Total Allocations to state, ie State Statutory + State VAT + LGA + LGA VAT
Ekiti: N5.67Billion
Lagos: N16.27Billion
Ogun: N7.16Billion
Ondo: N8.76Billion
Osun: N7.66Billion
Oyo: N9.68Billion
SW Total Allocation: N47.55Billion
North Central
Total Allocations to state, ie State Statutory + State VAT + LGA + LGA VAT
Benue: N8.20Billion
Kogi: N7.41Billion
Kwara: N6.03Billion
Nasarawa: N5.51Billion
Niger: N8.80Billion
Plateau: N6.84Billion
NC Total Allocation: N42.79Billion
South South
Total Allocations to state, ie State Statutory + State VAT + LGA + LGA VAT
Akwa Ibom: N21.76Billion
Bayelsa: N15.69Billion
Cross Rivers: N6.92Billion
Delta: N20.15Billion
Edo: N7.75Billion
Rivers: N22.28Billion
SS Total Allocation: N94.55Billion
**
States with least allocations; in Nbillion.
Ebonyi: 5.39
Nasarawa: 5.51
Gombe: 5.54
Ekiti: 5.67
Kwara: 6.03
Enugu: 6.55
Total allocation comparison by zone, starting from highest; in Nbillion
SS: 94.55
NW: 63.16
SW: 47.55
NE: 43.76
NC: 42.79
SE: 35.67
The reader is left to his or her own analyses of the data to reach their own conclusions.
The problems with Nigeria are very profound, there are no easy solutions to any of the problems, the sooner the Nigerian leadership as well as the people come to terms that hard and painful decisions are required to set the country on the right part, the better for Nigeria.
These hard decisions would include the dismantling of structures and policies which engender a culture of dependency, a constitutional review which would amend ambivalent and parochial laws, the acceptance of liberty and the freedom of private enterprise over government controlled inefficient management of businesses and important sectors of the economy, as well as a true Federalism which allows each state to be a master of its destiny, be it a desire for Sharia or a desire for state wide consumption subsidy, the center should not be micro-managing every detail of our lives, most govt policies should be left to state decisions while the FG faces the more dauning tasks left to FG's (The US system would make a good model)
The constituent states of Nigeria would need to pull apart a bit in order to save the country, the close central system is responsible for most of the friction and clashing of heads within the polity, it would be important for each state to be responsible for a large percent of their income rather than relying entirely on allocations from the center
On Boko Haram, we have to face the truth; it is more of a result of nurtured religious extremism over the decades that was bound to deteriorate; that is the direction we should be looking to solve the Boko Haram problem.
In a decentralized system, each state would have a more remarkable impact and responsibility to the people; if such a system existed, akin to the US system of Federalism, Boko Haram would more likely have noticed that 12 core northern states are full Sharia practicing states, were the states are mere passengers, little wonder the people do not attach much weight to state laws which in reality should impact more on each individual; the implication is the macabre dance of death to capture the center were all the action lies. We all need freedom from the center; including those at the center today whom would end up being the complaining opposition tomorow.
The structure of the Nigerian system of government, which highlights the center and diminishes the individual states, has been at the heart of the Nigerian problem from 1966 till date; it cannot be sustained for very much longer.
Nigeria is rich in natural resources. It boasts of more than 39 different types of solid minerals. In addition, it is vastly endowed with oil and gas and is currently Africa’s largest crude producer. The presence of large deposits of natural resources together with a population of about 150 million people, considered predominantly young and hardworking, bring forth the reason why Nigerians regard their country as a rich one. They also believe that like Venezuela, Iran, Iraq and Russia that are similarly blessed, the country ought to provide petroleum products that are cheap and accessible to its citizens. What this means in the reasoning of Nigerians is that they should pay less for petroleum products made from crude oil which nature has graciously and abundantly blessed them with. They also believe that they should not have to pay the same price like their neighbours in Benin, Togo or Ghana that are either resource poor or new entrants to the exclusive club of oil producing nations. Successive governments, on the other hand, have argued consistently that subsidy distorts the market and discourages investment. It is considered as a major drain on the economy; that the subsidy gulps scarce revenues that government needs to survive and provide services.
The eagerness of Jonathan to confront this stubborn issue is admirable, considering that it opens opportunities to put subsidy and fuel supply in Nigeria to rest. But the solution canvassed by his administration is both condemnable and dangerous for Nigeria’s democracy. What makes it condemnable?
The downstream sector has remained far too long in the hands of a selfish cartel that has got too used to super profit at the expense of Nigeria and Nigerians. When Nigeria deregulated and liberalised the downstream sector, it removed the monopoly rights previously enjoyed by the Nigerian National Petroleum Corporation as the sole importer of petroleum products. By opening up the sector for private participation, the government hoped to promote investment, efficiency and effectiveness . These are necessary to stimulate competition and make petroleum products available at reasonable prices to Nigerians. Instead, the deregulation created an oligopoly market where a few investors with strong politically connections emerged to seize and control products supply and pricing; thus cornering the monopoly rights previously enjoyed by the NNPC. Buoyed by political patronage and protection, they milk Nigeria through questionable transfer payments in the name of equalisation and subsidy payments from the Federal Government. By threatening to remove fuel subsidy, Jonathan, like previous leaders, appear to be taking sides with the cartel; preferring to take money from impoverished and helpless Nigerians and handing such resources over to profiteers and looters.
The downstream sector is locked in several shady deals which hamper accountability. The late former President Umaru Yar’Adua acknowledged this much when he said then that the cartel had become too powerful and out of control. They had seized the sector so securely that government could no longer guarantee uninterrupted supply of kerosene, diesel and petrol unless the importers were regularly appeased. So while the government claims to spend trillions on payments to importers, it has never been bold enough to publish a breakdown of actual amounts paid out and the beneficiaries. Industry experts have also given up, alleging that the petroleum equalisation and stabilisation funds are so opaque in that they will never allow Nigerians to understand or effectively engage the sector.
But the biggest leakage in the Nigerian economy is the widespread corruption that bleeds the nation of billions of dollars in the form of bloated contracts, over-invoicing, outright theft and disappearance of government properties. Not too long ago, Nigerians were confronted with startling revelations of mismanagement of public resources, including the $16.25bn power sector; over N20bn aviation rehabilitation funds; and N7bn community power projects. Several billions voted annually to education, agriculture, health, police, etc simply grow legs and disappear without a trace, leaving the sectors in a sorry state. Even the controversial excess crude account that stood at about $26bn, at the height of the commodity boom, is now almost totally liquidated. Yet, the country struggles to show value for it. The scale of looting unleashed by legislators in the sixth National Assembly in the form of illegal jumbo salaries, procurement thievery and borrowings in stark contravention of relevant laws could make a small nation such as The Gambia bankrupt. But the economic saboteurs in the serial heists walk around, freely flaunting their wealth while Nigerian prisons, where many of them deserve to be, are stretched to the limit by awaiting trial inmates, in custody for lesser offences.
The cartel in charge of the downstream sector has mutated over the last two decades, consuming local refineries and locking the country in permanent dependence on the importation of petroleum products. The importers have frustrated the half-hearted efforts to license and encourage new investment in refineries. And in so doing, Nigeria now relies on the resource-poor West for its domestic need for petroleum products. Disappointingly, rather than allow knowledge and superior reasoning to address the age-long problem of revitalising the downstream sector and fuel subsidy, the Jonathan administration, like a proverbial stray dog bent on being preyed, appears set to lock out further dialogue and reasoning on the matter. It has choosen instead to stick with subsidy removal as the only solution.
Removal of fuel subsidy is not an alternative to functioning refineries, an open and efficient supply chain and accountable management of public revenues. Focusing on these ones and ensuring the effective implementation of anti-corruption and public procurement laws will save more than 40 per cent of Nigeria’s annual budget. Without freeing the downstream sector from the hands of selfish oil importers that have successfully shown themselves to be economic saboteurs and others engaged in bleeding the nation of important revenues through corruption, outright theft, wastage and mismanagement, the government will continue to run below its earning capacity.
Now, what makes the current debate on fuel subsidy dangerous? Not a few Nigerians are worried or disappointed by the turn of events since Jonathan emerged as President on the promise of breath of fresh air. They are asking questions on social networks - Twitter, Facebook, MySpace - about when the transformation agenda Jonathan promised in his May 29 inaugural speech will come. In the meantime, the President’s list of sins appears to be growing - attempted tenure extension, poor power supply, insecurity, failed anti-corruption campaign, liquidation of the excess crude account without adding value to Nigerians, troubled amnesty programme, decayed infrastructure, abandoned key reforms (electoral accountability, petroleum industry, citizenship, etc), dishonoured national honours programme and now fuel subsidy. It seems every step of the way the President has been ill-advised - against the same Nigerian people that gave him huge votes.
The eagerness of Jonathan to go ahead with his economic team on the planned subsidy removal leaves the impression of a man desperate to correct a wrong impression. This eagerness at this moment of crippling insecurity that threatens foreign direct investments and bodes a strong possibility of implosion as a result of the sensibilities sparked, in part, by growing disenchantment with the six-month old administration, lessons from the Arab Spring, a near total collapse of governance and seeming lack of direction and urgency in this administration could have destabilising effects on Nigeria.
The Arab Spring has taught people around the world that their resolve can make the change they desire. The Jonathan administration should listen to the voice of reason and save the nation of what can become Nigeria’s ‘Harmattan Fall’.
- Olaide, an international development worker, wrote in from Rue 9x, Point E, Bourgiba- Dakar, Senegal via dayo_olaide@yahoo.com









