Resource Control

We all know that resource control is the biggest obstacle to the actualization of true federalism in Nigeria. If we are honest to ourselves, we will all admit that we cannot separate resource control from true federalism. They are inseparable.

You cannot give the states more fiscal responsibilities and yet deny them access to maximize their areas of natural comparative advantage. You cannot let the states or regions generate their own electricity and yet deny them access to the gas beneath their land for gas plants and water for their dams. Whatever their comparative advantages is, be it human made or natural made, they must be controlled by the govt closest to the people. You cannot tell Kano state to have its own state and community police system and yet deny them access to the natural resources which they would use to fund their new fiscal responsibility. This is why we cannot separate resource control from true federalism. True federalism is not resource control, however, resource control is a feature of true federalism

 Now that we know what the most contentious feature of federalism is and who are in opposition to it, we now have a duty to solve it. Now that we know why the North in particular is against true federalism; fear of losing crude oil allocations, we now have a duty to think for over the genuine fears. Can our states survive if monthly allocations come to an end? We now have a duty to study the North and see how their comparative advantages can be maximized in the interest of the region. This is not suppose to be so but because we know this is imperative, we now have to think a way out. If it is indeed axiomatic and even incontrovertible that Nigeria needs true federalism as we strongly believe, then we have not just a patriotic duty but a moral duty to make it happen. There is need for the intellectual community of Nigeria to take a position on this.

 

What exactly is Resource Control?

Prof. Itsey Sagay gives us an interesting understanding of the concept. Resource control in his view involves three major components:

  • The power and right of a Community or State to raise funds by way of tax on persons, matters, services and materials within its territory.

  • The exclusive right to the ownership and control of resources, both natural and created within its territory.

    • The right to customs duties on goods destined for its territory and excise duties on goods manufactured in its territory.

Resource control, which in certain circumstances can be referred to as fiscal federalism, goes hand in hand with true federalism. This was recognized and implemented faithfully in the Independence and Republican Constitution (1960 and 1963).
 
The Regional Constitutions, in the 1960 and 1963 Constitutions, described each Region as “a self-governing Region of the Federal Republic of Nigeria.” To buttress the self-governing status of each Region, adequate provision were made to guarantee the economic independence of the Regions, thus avoiding the hollowness of a declaration of self-governing status totally undermined by economic dependence. Moreover, consistently with the Federal character of the country, i.e. country of many nations, the basis of revenue allocation was strictly derivative.
 
Section 140 which made provision for the sharing of the proceeds of minerals, including mineral oil, stated that: “There shall be paid by the Federal Government to a Region, a sum equal to fifty per cent of the proceeds of any royalty received by the Federation in respect of any minerals extracted in that Region and any mining rents derived by the Federal Government from within any Region.” For the purposes of this section, the continental shelf of a Region was deemed part of that Region. This is totally consistent with international law which characterizes the continental shelf as a seaward extension of the land of the coastal state.
 
By Section 136(1) 30 per cent of general import duties were paid into a distributable pool for the benefit of the Regions. With regard to import duties on petrol, diesel oil and tobacco, the total sum of import duty collected less administrative expenses, were fully payable to the Region for which the petrol or diesel oil or tobacco was destined. A similar provision was made for excise duty on tobacco.
 
With regard to produce, i.e. cocoa, palm oil, groundnuts, rubber and hides and skin, the proceeds of export duty were shared on the basis of the proportion of that commodity that was derived from a particular Region. As noted above, the derivative bases of the allocation of revenue and the proportionate share of such proceeds that went to the Region it originated from, clearly buttressed the operating base of.
 
From the above historical account, we can see that resource control has been an integral aspect of Nigeria’s short lived federalism.