By Shettima Dan’Azumi, ESQ
Northern Nigerian states are gradually losing a significant portion of their Federal Accounts and Allocation Committee (FAAC) allocation shares, which is undoubtedly their biggest revenue source. From the Local Government Funds and Fiscal Reform Bills to dividends from NLNG shares of NNPC and, today, the National Lottery, all these are part of the pool that makes up the monthly national cake distribution known as FAAC.
These developments are not surprising to any student of development. We all saw it coming. Early this year, the Supreme Court, in a suit filed by the Federal Government, scrapped the States and Local Government joint account, which had previously entrusted local government funds to their respective states.
In another case, the Supreme Court also agreed with the AGF’s argument. It held that the NNPC’s stake (shareholding) in the NLNG, unlike the NNPC itself, actually belongs to the Federal Government, not the entire Federation. Those billions of dollars accrued to NNPC from NLNG annually are no longer to be shared with the States as part of FAAC.
Similarly, VAT, a chunk of the non-oil revenue currently shared based on equity, derivation, and population formula amongst FG, States, and Local Government, will, if Emilokan’s Executive Bill succeeds at the National Assembly, now be shared based on derivation or consumption or both. Either way, I don’t see how the North can benefit. I will get to the reason shortly.
Then came today, another blow in a Suit initiated by the Lagos State Government. The Learned Justices of the Supreme Court, while granting all the reliefs sought by the AG of Lagos State, held that revenues accrued to the Federation through the National Lottery Commission from the regulation and royalties of lottery and other online games are in reality within the Residual Legislative List, exclusive to States to regulate and generate revenues from.
I believe there may be more of these seemingly harsh interpretations of the law in the near future because that is what the Constitution actually contemplated.
If you put these chains of events together, you would only come to one conclusion: that full federalism is taking a crude shape in the country against the wish of everyone. We would have prepared for this time if northerners had been thoughtful and proactive. We would have confronted the issue of restructuring with strategy rather than our usual rejectionist attitude to achieve it on our terms and put a timeline for gradual implementation to minimise its impact. With our sell-out NASS members, who either do not appreciate where all this is headed or have been bought to look away, it’s only a matter of time. May Allah rest the soul of Senator Suke Yaro Gandi and the rest of his contemporary visionaries and patriots.
What should we expect now? Our FAAC-reliant states will receive a shorter allocation. If VAT is to be shared based on derivation, then most of the Corporate Headquarters of businesses where the remittance of VAT takes place are far away from the north. What if it’s to be shared based on consumption? The follow-up question is: how do you determine the end users when you don’t have the data to prove where it is consumed? Even if this data exists, most of our businesses in the north, including Kano State, are not formal businesses, so their distributors are in Lagos and other Southern States. Our traders are running away from the institutionalisation of corporate governance frameworks in their businesses, which will give them the capacity to deal with manufacturers and wholesalers directly and document their dealerships properly. We are simply traders.
The lottery is worse because most states think the whole business is haram. But, wait, is it not the double standard that you are operating a secular state, collecting VAT revenue generated from breweries and royalties from casinos, including the lottery, for all these years while still believing it’s haram? At least, it would soon be over, and we shall stick with halal revenues.
To cut a long story short, the North must wake up on governance and development issues. The culture of electing clueless governors and the dominance of corrupt and soulless political class must end. We must pay more attention to our manpower and skills development policies and reform our education systems because that’s what all these boil down to. EDUCATION! Our youth must stop social media praise-singing and political sycophancy and embrace education and skill acquisition. Our businesses must adopt corporate governance and innovation and be more industrious and forward-thinking.
Because Emilokan is not your mate.
