North and revenue formula
By Sun News Publishing
Monday March 05, 2012



The call by the Governors of the 19 northern states for a review of the revenue allocation formula is not new. Similar calls have been made in the past regarding the imbalance in the nation’s revenue sharing formula. However, the call from the north did not strike the right chord. It veered off the mark when it was presented as a northen agenda.

While inaugurating the Advisory Council of Sir Ahmadu Bello Memorial Foundation recently, the Governor of Niger State and Chairman of Northern Governors’ Forum, Dr. Muazu Babangida Aliu, stated that the current revenue formula needs to be reviewed to reflect current realities. He lamented a situation where some states in the South receive allocations that are 20 times or more those of some of the northern states.

This, he said, has led to a situation where certain parts of the country are not doing well while others are doing exceptionally well. But if Governor Aliu did not go far enough in underlining the angst of the north over the current revenue formula, the Governor of Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, a northerner, brought the northern position into sharper focus when he decried what he saw as the low allocation to the northern states from the Federation Account.

He linked the on-going violence in the north to the uneven distribution of the country’s wealth and submitted that it was necessary to focus funds on regenerating other regions in the interest of long-term stability of the country. The need to review the current revenue formula in which the Federal Government gets the lion’s share of the country’s resources cannot be overemphasized. With the Federal Government’s 52.68 percent, States 26.72 and Local Governments 20.6 percent, it is glaring that states and local governments are not well represented in the revenue allocation formula.

Quite a good number of concerned Nigerians have made this point in the past. The argument is that fiscal federalism is not guaranteed by such an arrangement. As a country of federating units, no one unit should be made to go cap-in-hand before the other. The present arrangement also makes the centre a lot more powerful than the other units. The fierce competition for political offices at the federal level has, sometimes, been linked to the financial preeminence of the federal government.

However, the northern governors and Sanusi got it all wrong when they presented the problem as if it is peculiar to the North. The fact is that apart from the few oil-rich states of the South that receive huge monthly allocations, the other states of the south are as disadvantaged as the states of the north. Any advocacy for a review must therefore recognize this fact. To seek to regionalize an issue that affects the entire country is to weaken the force and import of whatever merit the issue has.

Sanusi did not help matters when he failed to draw a line between his office and his regional affiliation. As CBN Governor, he should have spoken like an expert, not as a northerner. Besides, he should have striven to offer an informed and unbiased perspective on this matter. But his lack of circumspection led him to assume, rather wrongly, that the current revenue allocation formula is decidedly in favour of the south. It is not. We expect commentators and analysts who choose to speak on issues such as this to strive to illuminate them rather than draw wrong parallels. If they do that, we will not be saddled with regional or sectional outcries such as the one emanating from the north.

However, we recognize the prevalence of poverty in the north. Even though poverty is a third world phenomenon and affects the entire Nigeria, we are aware that it is more extreme in the north. But the right reasons have to be sought for this state of affairs. The problem of extreme poverty in the north is largely traceable to the low level of education among the people and their cultural norms and attitudes which permit and promote dependence as against the competitiveness that the south is known for. The north needs to work toward dismantling this cultural hang-up.

Therefore, if poverty is less prevalent in the south, it is not because the states of the region receive huge allocations, it is because individual quest for self-attainment is very pronounced in the region. Nigerians should always strive to advance the right arguments on issues so that an all-important issue such as revenue allocation formula is not made to wear a sectional garb.

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