“True Fiscal Federalism becomes the most viable option in changing Nigeria and putting it back on the path of greatness.” – Author
Street drama on Voter education. Photo: UNDP Nigeria
One of the evils of the present skewed, flawed, corrupt, unitary ‘feeding bottle’ federalism that we currently practice in Nigeria is that it has totally destroyed community-locality governance in the rural areas. Federalism as a system of government is designed to guarantee a high level of autonomy to the federating units while they share few other relationships with the central authority.
That is what federalism means. But in Nigeria, our federalism is an aberration, a calculated fraud designed to underdevelop the local communities, deny them access to their resources and deprive them of government presence; all in the bid of favoring the Abuja and state government house politicians. It is time to destroy this system and replace it with what the ideal federalism.
Another evil of the present system of government that we practice is that it alienates the local people and their communities from actively participating in the affairs of government. The Local Government Chairmen and the local government do not technically need the local people and communities in order to survive. Their survival depends on Abuja allocation; free oil money. Not from within their local economies. This is why we at the local level cannot hold them accountable because the money they steal technically belongs to nobody!
As a prima facie principle for True Fiscal Federalism, community governance must be entrenched for development and productivity to be evenly distributed across the federating units of the Nigerian federation. Local governments must not continue to look up to Abuja to survive, they must look within. They must be allowed to build local infrastructure, tax local businesses, have a reasonable share in local business explorations, and make profit to run their local economy and government.
What is missing in Nigeria today is competition amongst the federating units and the only way to correct this abnormality is to restructure the polity into a True Fiscal Federalism. We must learn to send more fiscal responsibilities to the local governments closest to the people and save Abuja from this regular embarrassment of being responsible for the failure of the entire country.
What then is community governance and how can it be entrenched? Community governance as an aspect of true fiscal federalism is a system which guarantees the autonomy of communities in the generation of revenue, provision of fiscal responsibilities, and upward contribution to the central government in taxes, royalties and otherwise.
It is a system that allows every single community in Nigeria to operate as an independent government but loyal to the state and federal governments. Under this system communities will be allowed to design their annual budgets, embark on taxation, explore natural resources in their domain, manage basic social amenities and pay royalties/tax to the state and federal governments.
For example, under the present style of government in Nigeria, communities do not see the public schools in their communities as their property that should be protected, promoted and developed; likewise security, environmental sanitation, taxation, maintenance of public utilities and general public services.
This is why some communities go as far as allowing their indigenes steal and vandalize newly built and renovated schools and water system in their communities. To them, it is government property and government property belongs to nobody! This is as a result of the level of alienation the present system has conditioned them to become.
Once we decentralize economic and political power and give communities fiscal responsibilities to do certain things for their communities, there will be grassroot development and participation in the business of governance. There become a sense of communal ownership and responsibility.
First, communities should be allowed to have a 100% control over the natural resources (land, crude oil, gold, etc) in their domain while they will be expected to pay (lets a 50% or more) in tax from whatever money they make from these resources, to the state and federal government.
Second, all forms of taxation should be 100% localized. Communities/towns should be allowed to tax local businesses and make returns to the government.
Third, a number of basic fiscal responsibilities should be funded by the revenues raised by the communities. Public Basic Schools (primary and secondary), community health centers, security personnel, etc should all be managed and funded by local communities and not the government. Government can set the standards, provide training and possibly build infrastructures (if possible).
As for the day-to-day running; recruitment (hiring and firing of staff), maintenance of infrastructures, discipline, etc., all these should be managed and funded by the communities. Local governments should therefore be funded from the local communities that constitute the local government and not from free federal allocation from Abuja. This is the only way to introduce accountability, commitment and sincerity in the management of local public fund.
However, this change cannot happen under the present skewed, flawed, corrupt, unitary ‘feeding bottle’ federalism that we practice in Nigeria. For this to happen, we must first restructure Nigeria into True Fiscal Federalism so as to allow communities have an active role in governance at the local level. Communities must be allowed to have fiscal responsibilities such as generating revenues and having annual budgets and meeting the basic local needs of their people.
Communities must be allowed to own and control the natural resources in their domain and paying taxes to the central government. Under a restructured Nigeria, every community must learn to generate and spend its cash based on its internal capacity, and equally even pay tax to the government. The state and federal governments will continue to provide its own responsibilities as may be defined in the new arrangement. This is the basic foundation upon which True Fiscal Federalism is built around the world; bottom-up approach to governance.
There comes an urgent need to replace allocations with IGRs and stop the monthly ritual of sharing oil money on a monthly basis at Abuja. Abuja should be funded from contributions of all the federating units and not it funding the federating units as it presently is. It is time to discard this ‘feeding bottle’ federalism and replace it with an efficient, productive, competitive and locally driven fiscal federalism.
True Fiscal Federalism becomes the most viable option in changing Nigeria and putting it back on the path of greatness. Join the debate on our social media sites for more ideas and solutions on the Nigerian problem using the hashtags #RestructureNigeria and #TrueFiscalFederalism.
Tony Osborg (@TonyOsborg) writes for The Federalist Movement of Nigeria (www.truefiscalfederalism.com) from Kano City, Nigeria.