As the dust settles after Nigeria’s national and sub-national elections, the business of good governance naturally becomes the next interest for Nigerians. Since 1999, the common tradition among state governors has been embarking on monthly trips to Abuja to get state allocation from the Federal Accounts Allocation Committee (FAAC).
It is arguable that such an arrangement is tantamount to spoon-feeding the states to the effect that they hardly innovate to increase their internally generated revenues, although all of them sit on a wealth of natural resources, and are endued with plenteous human capital.
Economists have argued that what is inimical to states’ progress are extant legal frameworks that hamper them from using their natural resources to self-determine their mode and pace of development.
Gleaning from federal systems of government like the United States of America, Canada, and the United Arab Emirates, the states’ resources are used by the states to determine their own economic development as long as the manner in which they are used does not contravene the constitution of the federation. Under such an economic atmosphere, the sub-nationals forge their development path optimally.
To forge that argument, Nigeria has an unending history of insufficient power supply because the ultimate management of power comes from the center. The chief economist of PriceWaterhouseCooper, Dr. Andrew Nevin, has posited that Nigeria would be better off if the system was designed to have states produce their own electricity.
The senate on Wednesday, 20th July 2022 passed the Electricity Bill, 2022 which sought to repeal the Electricity and Power Sector Reform Act, 2005 and enact the Electricity Act. It consolidates all legislations dealing with the electricity supply industry to provide an omnibus and ideal institutional framework to guide the post-privatisation phase of the Nigerian Electricity Supply Industry and encourage private sector investments in the sector.
The primary aim of the bill, as stated in its very first section, is to create a comprehensive legal and institutional framework to guide the Nigerian Electricity Supply Industry (NESI). It de-monopolises the generation, transmission, and distribution of electricity at the national level, to empower states, companies, and individuals to generate, transmit and distribute electricity. States would also be able to issue licenses to private investors who have the ability to operate mini-grids and power plants within the State.
An economist and social affairs analyst, Mr. David Igbrude, said, “Now that the bill has been passed into law, the states should vigorously pursue building this vital infrastructure to empower their people to economic prosperity. On that note, the dynamics of power production, transmission, and distribution will be the onus of individual states.”
Furthermore, states are hugely endowed with natural and human resources that they can utilise to their benefit if they had the legality to do so, instead of the entire country relying on crude oil from the Niger Delta Region.
Nigeria must move away from total or excessive reliance on oil and gas. Nigeria must diversify. Crude oil-producing states must also benefit immensely from the natural resources that abound in other states.
Significant natural resources in states include, Abia: Gold, Lead/Zinc, Limestone, Oil/Gas & Salt; Abuja: Cassiterite, Clay, Dolomite, Gold, Lead/Zinc, Marble & Tantalite; Adamawa: Bentonite, Gypsium, Kaolin & Magnesite; Akwa Ibom: Clay, Lead/Zinc, Lignite, Limestone, Oil/Gas, Salt & Uranium; Anambra: Clay, Glass-Sand, Gypsium, Iron-ore, Lead/Zinc, Lignite, Limestone, Phosphate & Salt.
Also, Bauchi: Gold, Cassiterite (tine ore), Columbite, Gypsium, Wolfram, Coal, Limestone, Lignite, Iron-ore & Clay; Bayelsa: Clay, Gypsium, Lead/Zinc, Lignite, Limestone, Manganese, Oil/Gas & Uranium; Benue: Barite, Clay, Coal, Gemstone, Gypsium, Iron-Ore, Lead/Zinc, Limestone, Marble & Salt; Borno: Bentonite, Clay, Diatomite, Gypsium, Hydro-carbon, Kaolin & Limestone; Cross River: Barite, Lead/Zinc, Lignite, Limestone, Manganese, Oil/Gas, Salt & Uranium; Delta: Clay, Glass-sand, Gypsium, Iron-ore, Kaolin, Lignite, Marble & Oil/Gas; Ebonyi: Gold, Lead/Zinc & Salt; and Edo: Bitumen, Clay Dolomite, Phosphate, Glass-sand, Gold, Gypsium, Iron-ore, Lignite, Limestone, Marble & Oil/Gas.
Ekiti: Feldspar, Granite, Kaolin, Syenite & Tatium; Enugu: Coal, Lead/Zinc & Limestone; Gombe: Gemstone & Gypsum; Imo: Gypsum, Lead/Zinc, Lignite, Limestone, Marcasite, Oil/Gas, Phosphate & Salt; Jigawa: Butyles; Kaduna: Amethyst, Aqua Marine, Asbestos, Clay, Flosper, Gemstone, Gold, Graphite, Kaolin, Hyanite, Mica, Rock Crystal, Ruby, Sapphire, Sihnite, Superntinite, Tentalime, Topaz & Tourmaline; Kano: Gassiterite, Copper, Gemstone, Glass-sand, Lead/Zinc, Pyrochinre & Tantalite; Katsina: Kaolin, Marble & Salt; Kebbi: Gold; and Kogi: Cole, Dolomite, Feldspar, Gypsium, Iron-ore, Kaolin, Marble, Talc & Tantalite.
Also, Kwara: Cassiterite, Columbite, Feldspar, Gold, Iron-ore, Marble, Mica & Tantalite; Lagos: Bitumen, Clay & Glass-sand; Nasarawa: Amethyst (Topaz Garnet), Barytex, Barite, Cassirite, Chalcopyrite, Clay, Columbite, Coking Coal, Dolomite/Marble, Feldspar, Galena, Iron-ore, Limestone, Mica, Salt, Sapphire, Talc, Tantalite, Tourmaline Quartz & Zireon; Niger: Gold, Lead/Zinc & Talc; Ogun: Bitumen, Clay, Feldspar, Gemstone, Kaolin, Limestone & Phosphate; Ondo: Bitumen, Clay, Coal, Dimension Stones, Feldspar, Gemstone, Glass-Sand, Granite, Gypsum, Kaolin, Limestone & Oil/Gas; and Osun: Columbite, Gold, Granite, Talc, Tantalite & Tourmaline.
Furthermore, Oyo is endowed with: Aqua Marine, Cassiterite, Clay, Dolomite, Gemstone, Gold, Kaolin, Marble, Silimonite, Talc & Tantalite; Plateau: Barite, Bauxite, Bentonite, Bismuth, Cassiterite, Clay, Coal, Emeral, Fluoride, Gemstone, Granite, Iron-ore, Kaolin, Lead/Zinc, Marble, Molybdenite, Phrochlore, Salt, Tantalite/Columbite, Tin & Wolfram; Rivers: Clay, Glass-Sand, Lignite, Marble & Oil/Gas; Sokoto: Clay, Flakes, Gold, Granite, Gypsium, Kaolin, Laterite, Limestone, Phosphate, Potash, Silica Sand & Salt, Taraba: Lead/Zinc; Yobe: Soda Ash & Tintomite; and Zamfara: Coal, Cotton & Gold.
Hence, a lecturer in the Department of Law, University of Port Harcourt, Dr. Paul Okafor said, “Virtually all of Nigeria’s states have the potential to generate revenues and be viable if the right legal and institutional framework is put in place.”
In empowering the sub-nationals, it is imperative to empower the third tier of government to enjoy its financial freedom as allowed for that arm of government. However, that has been far from the reality in Nigeria.
While it is true that the constitution firmly envisions a system of local government, particularly to entrench government and governance at the grassroots, there is little doubt that the political classes at the first and second tier of government are yet to reach a consensus on the status of local governments across the country.
For example, a number of bills were recently engrossed as amendments to the constitution, about 44 in all. Importantly, 35 bills have been approved by state assemblies that include financial autonomy of state legislatures and state judiciary; power devolution to allow state governments to build and operate airports, prisons, railways, and power grid systems. Others include legislative power to summon president and governors; timeframe to submit ministerial and commissioner nominees; timeframe for submission of the national budget; and separation of the office of the Attorney-General of the Federation and the state from the minister or commissioner for justice.
However, one of the major exceptions is the bill seeking to grant financial and administrative autonomy to local governments that were voted against by the State Houses of Assembly. The bill sought to abrogate the state-local government joint account; establishment of local government as a tier of government; institutionalization of legislative bureaucracy in the constitution.
The Nigeria Financial Intelligence Unit (NFIU) had in 2021 called for the full autonomy of local governments, as well as increase their monthly allocation from 20 per cent to 23 per cent. The rationale is that the local governments constitute the closest arm of government to the grassroots. Therefore, if there must be any development such as primary health care and universal basic education, the local governments must be adequately financed.
A financial economist at the Nnamdi Azikiwe University, Awka, Dr. Felix Echekoba, told NATIONAL ECONOMY that “In the spirit of true federalism, and as an agenda for sub-nationals, the local governments must be adequately financed, and empowered to generate adequate revenues for proper functionality.”
