A
new revenue sharing formula was on Monday proposed by the Committee on
Devolution of Power at the on-going National Conference in Abuja. The
aim is to empower the states and local governments in their development
efforts.
The
Committee, after four hours close-door session announced a unanimous
decision to trim the existing Federal Government revenue allocation by
10 per cent, thus bringing it down from 52 per cent to 42 per cent.
If
the proposal receives the consent of the Conference in plenary and is
used to amend existing sharing formula, the 36 states of the federation
will receive 35.0 percent allocation from the Federation Account while
local governments would receive 22.5 percents.
Co-Chairman
of the Committee and former Governor of Akwa Ibom State, Obong Victor
Attah, told journalists at the end of the meeting that the decision of
the committee was guided by the belief that some funds must be devolved
to states and local governments for greater development impact.
This
did not take away the understanding and acceptance of the fact that the
Federal Government, at present and until decided otherwise, still has
the military, the police and the entire security machinery to fund.
Attah
observed that during the Committee’s deliberation on the Exclusive and
Concurrent Legislative Lists, some items hitherto funded exclusively by
the Federal Government had been moved to the Concurrent Legislative List
for involvement of state governments.
He
said in taking the decision on the revenue sharing formula,
consideration was given to certain decisions that might be taken by
other committees, particularly regarding the status of the local
government.
The
Co-Chairman said for instance, that if the committee directly
responsible for political restructuring recommends the sacking of
existing 774 local government areas, then the revenue allocated to the
local governments will go to the states.
Shortly
after the media briefing by the former governor, the Committee shut its
door and went into another session of deliberation and debate on the
derivation formula.
It
was observed that after three hours of heated debate by the members, no
decision could be arrived at on the issue as both the delegates from
the south and others from the north were said to have taken to
incompatible positions on the issue.
In
a brief chat with journalists after the close-door session, Attah said
he was optimistic that a unanimous decision would be taken by the
Committee on the issue on Tuesday.
He
noted that all the delegates had different opinions on how much the
derivation formula should be benched; and that while some suggested 100
per cent control of resources, others said there should be no such
thing.
Attah
said the Committee’s decision would be guided by certain provisions in
the extant laws including the 1999 Constitution which have left
ownership of mineral resources no matter where they are found in the
custody of the Federal Government.
Meanwhile,
veteran journalist and member of the Committee on Politics and
Governance, Mr. Ray Ekpu, has advocated scrapping of the House of
Representative leaving Senate to be the only national law-making
chamber.
He
was opposed to the present arrangement where there is a Senate and
House of Representatives; describing it as wasteful and overburdened.
Ekpu
informed the Committee that the two chamber parliament is a breeding
ground for discord and disagreement as there are endless supremacy
battles between the Senate and House of Representatives and called for
increase in the number of senators from each state to four and one for
the Federal Capital Territory.
His
words, “I will like to vote for unicameral legislature because at
present, we are already overburdened. We have 774 parliaments in the
local government. We have 36 States Houses of Assembly. And we have two
at the national level.
“I
am advocating the scrapping of the House of Representative. I will vote
for having the Senate. We can increase the number of Senators to four
per state. In that case, we will have 144 Senators plus one representing
the FCT. We will reduce the cost. We will reduce the friction that
currently occurs between the House of Reps and the Senate.
“The
House of Reps is called the lower house; they said they are not lower
house. We are equals. But the constituencies are not equal. The salaries
that they earn are not equal.
“Nobody
in the House of Commons will say Members of Lords, we are equal. They
do different things. The Senate does confirmation hearing, but the House
of Representative don’t, but they say we are equal.”
On
the issue of state police, Mr. Ekpu supported it and went on to advance
reasons for aligning himself with the clamour: “My position (on state
police) is not an armchair presentation. I am speaking because I was a
member of the Police Service Commission for five years. And I have
knowledge about how the federal police work.
“If
you have true federal system, you will have state police, state courts
etc. These all go with true federalism. We are complaining already with
the problem we have in security. And look at the blame game going on
between the federal government and the Borno State government.
“If
you have a police service that is close to the people; that nearness
provides protection. It provides cover for the rural populace. Local
police will know the territory.
“If
I post a policeman from Abuja to my village; he doesn’t know the
arrangement, he doesn’t know the terrain. If you don’t have a local
police, you will be denied of local knowledge of happenings – customs
and people and so on.”
Also
on Monday, delegates in the Committee on Politics and Governance have
mourned the death of eminent jurist, Justice Chukwudifu Oputa,
describing it as a great loss to the legal profession.
Moving
a motion under matter of national importance shortly before the
committee moved into the business of the day, the Co-chairman of the
Committee, Prof. Jerry Gana called on Chief Mike Ahamba, SAN, to
officially intimate members of the death of Chief Oputa.
Chief
Ahamba described Justice Oputa as an eminent jurist who dispensed
justice without fear or favour. Continuing, he submitted that Justice
Oputa as not only an eminent judge; but a teacher of great repute. After
the motion, members stood for one minute in honour of Chief Oputa.
The
issue of the country's rising debt profile was the major concern of the
Committee on Public Finance as members sought to know the level of
control the Debt Management Office (DMO) has on state governments as
regards to borrowing.
The
Director General, Dr Abraham Nwankwo, insisted that borrowing and debt
management are part of modern economy. He gave examples of countries
like Germany and UK that have strong and frugal economy but still
borrow. He was the first guest of the Committee.
In
his presentation, he put the nation's external debt at 9.16 billion
dollars, with the states having approximately 2.8 billion dollars.
According to him, States account for 18 per cent of domestic debts while
the federal government accounts for 82 per cent.
The
laws guiding borrowing, he said, stipulate a that no state can borrow
except with the expressed permission of the National Assembly; and any
state that does not conform with the stipulation would be seen as
committing an illegality. States also require the approval of the
Finance Minister to borrow from the capital market, he added. For States
to borrow in whatever form, there must obtain the approval of their
respective Houses of Assembly.
Dr
Nwankwo explained that it was the responsibility of SEC to ensure that
the money borrowed from the capital market by the States is judiciously
utilised.
He
said in 2007, the DMO took a decision to help states establish debt
management departments to reconstruct their debt profile, particularly
domestic debt which he put at N8.7 trillion, excluding debts owed local
contractors. Contractor's debt is not included because it is a
structured debt and usually provided for in the budget.
The
Committee Chairman, Senator Adamu Aliero, expressed concern over the
action of State governments who borrow money indiscriminately from
foreign sources without due process. He sought explanation from the DMO
why it was so.
The
Director General’s response was that relevant agencies of government
saddled with the responsibility of tackling states that violate the laws
regarding debt management and borrowing should take appropriate action.
While
Nigeria’s cumulative debt at N10.1 trillion, about 10 per cent of the
nation's GDP, Dr Nwankwo, insisted that the Nigeria has been consistent
in servicing all its loans.
A
member of the Committee, Col Bala Mande expressed worries over the
tripling of the nation’s debt and wanted to know the relationships
between the DMO and other relevant agencies like EFCC and ICPC
Another
member, Chief Dipreye Alamieyeseigha wanted to know how effective the
control mechanisms are regarding borrowing given that most States do not
conform with laid down prescriptions.
Dr
Nwankwo explained that the DMO works with State governments but has no
relationship with either EFCC or ICPC, since the DMO was not a law
enforcement agency
On
the effectiveness of the mechanism to control State governments, he
said the DMO could do anything once the State Assemblies okay such loans
as stipulated by the law. He said the citizens have the responsibility
of ensuring that state government use borrowed money judiciously.
The
committee also met with the delegation of the National Planning
Commission led by Mr. Tunde Lawal, a Director of Micro Economic
Analysis, who represented the Minister of National Planning, Shehu
Yuguda. Mr Lawal briefed the committee on the state of the nation’s
public finance and the role of national budget in public finance
management.
He
said deficit financing was inevitable for a developing nation like
Nigeria and listed the major sources of Public Finance to include
Federation Account, Value Added Tax and oil revenue which constitute
about 76 per cent
He
said the net federally collected revenue in 2013 was N6 trillion, while
oil revenue accounted for 76 per cent of all net revenue accruing to
federal government.
· The GDP in 2013 was 9.8 per cent
· Value added tax 16 per cent customs 9'percent
· Non-oil tax increased from N1.5 trillion in 2010 to 2.1 trillion in 2013
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