FISCAL FEDERALISM: THE STRUGGLE FOR RESOURCE CONTROL
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FISCAL FEDERALISM: THE STRUGGLE FOR RESOURCE CONTROL
CHAPITRE ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
The type and state of financial ties in any federal system of government is critical to its existence. One of the most persistent sources of contention in most, if not all, federal countries is the issue of providing appropriate financial resources.
The sheer nature of Nigeria, in terms of the diversity of its people, the vastness of the country, their unique histories, customs, and a highly diversified society, made some sorts of federalism necessary.
The problem of resource control has acquired currency, owing mostly to the widespread disregard for oil-producing areas, on which the country’s income is dependent, in development attempts. The drive for resource control is a quest for authentic and functioning federalism, sometimes known as classic federalism.
The underlying notion of resource control, whether by omission or commission, is portrayed and misconstrued in certain quarters as being solely in the interest of the Niger Delta people.
The centre stage that the resource control fight has taken in the national discourse is well-deserved. What they do not realise is that resource control, or classic federalism,
is a veritable path to the nation’s rapid socioeconomic development since it serves as a wake-up call for all Nigerians to capitalise on the chances in their local surroundings for our collective greatness.
This claim is supported by the fact that it is only via fiscal federalism, of which resource control is a component, that we can transform our economy from a mono-product to a multi-product.
The reality that there has been a significant amount of politicisation in the scheme of things cannot be overstated. The cry for self-determination by many ethnic groups in Nigeria recently took on unprecedented proportions when the governments of the south-south area sought for ownership of the natural resources available in their geopolitical territory.
Previously, the Ijaw nation, led by Adaka Boro, and the Ogbonis, led by Ken Saro-Wiwa, had launched progressive campaigns to stop successive Nigerian governments from exploiting and plundering the Niger Delta’s petroleum riches.
The then-president of the Movement for the Survival of the Ogboni People (mosop) waged vigorous efforts. The late Ken Saro-Wiwa’s efforts to halt the aforementioned problems, particularly those related with the reckless exploration of crude oil in the Niger Delta area, won Ken-Saro-Wiwa’s execution as retribution for his Mosop’s resource control leadership.
It is sufficient to say that the south-south state’s movement for resource control is focused at capturing resources located within their zone. The supporters of resource control argued based on two factors: first, the underdevelopment of the Niger Delta region by successive military governments,
despite the fact that the majority of income obtained from the region is used to sustain the entire country. As a result, resource control supporters argue that notwithstanding the irrational exploitation of crude oil in the Niger Delta area. There is nothing to show for it in terms of human or infrastructure development.
Second, proponents of resource control argued that the states’ desire to manage resources is just an attempt to establish a traditional federal system of governance in Nigerian politics. Although the control of resources agitated by some states, particularly the southern states, does not sit well with some eminent Nigerians,
the contesting states are not celebrating the supreme court judgement on the suit field by Bola Ige, the late slain Minister of Justice and Federal Attorney General on the Interpretation of (section 162, subsection 1 of the 1999 constitution) that deals with the distribution of the country’s revenue.
In Nigeria, the question of resource control and derivation formula is not a new phenomena. It dates back to the colonial period. It happened in 1946, during Sir Author Richard’s tenure as Governor General of Nigeria. A commission was formed as a result of the resource control issue.
The Commission was established by the governor general, led by Sir Sydney Philips, to design financial and administrative procedures for the country. The committee suggested “declared revenues” for the regions and “non-declared”
revenues for the federal government. The recognised principle was derivation, even progress, and population in that order of significance. However, this did not benefit all regions, and as a result, it was not widely embraced.
The subject of resource distribution sharing remained unresolved when the military handed over political power to the civilians in May 1999. The governments of the Niger Delta region announced measures for resource control,
a revision of the derivation formula, true federalism, and a national convention, which were eventually joined by the governors of the south.
It is from this perspective that the project will examine the impact of Niger Delta resource control on Nigeria fiscal federalism, as well as take a critical look at all problems in demands with the goal of identity and propose solutions for the sake of coexistence and the unitary of the nation.
STATEMENT OF THE RESEARCH PROBLEM
There is little doubt that the Niger Delta Region’s progress is being slowed, and its people are becoming impoverished. These circumstances have resulted in widespread poverty, with over 75% of the population living on or below the poverty line, poor sanitation and waste disposal, pollution contributing to illness,
a lack of electricity and pipe-borne water supply, and, most importantly, severe environmental degradation caused by the exploration and exploitation of oil and gas in the region, as stated in the problem statement.
There was also deforestation and a scarcity of farmland as a result of oil exploration and the federal government’s failure to listen to and compromise with the struggle for resource control by the people of the Niger Delta Region as a quest for a true and functional federalism with principles inherent in the spirit and letter of Fiscal federalism, as well as the implication for resource control shall all cov
Another issue raised by the research study is the Nigerian government’s over-reliance on the oil and gas sector of the economy, as well as its neglect of other sectors such as agriculture
and other untapped resources in other regions of the federation. It also encompasses the Niger Delta region’s efforts to achieve justice, fairness, and equitable resource control.
Finally, one of the research study’s problems is the effect of multinational firms and compradors on oil and gas exploration in the Niger Delta Region. While some Greeks pray that the water would not swallow them like it did in the time of Biblical Noah or the Tsunami, oil firms are busy investing money to safeguard their oil rigs and installations from ocean encroachment, allowing their host communities to perish.
1.3 Objectives of the Study
The following are the study’s objectives:
To comprehend the dynamics driving certain states’ desire to exert control over their resources.
To determine the consequences of some states’ efforts to control their resources.
To determine whether resource control may put a stop to or at least reduce the reoccurring problem connected with Nigerian fiscal federalism.
To determine whether resource control in Nigeria policy generates centripetal or centrifugal forces.
To determine if resource control would lead to development in the federating units.
1.4 Significance of the Research
The primary and dominant value of this research study is that it exposes members of the public to the contentious problems linked with fiscal federalism and resource control. It is intended that this will raise public awareness and consciousness.
More importantly, the project work will not only examine the fractious connection that existed between the federal and state governments (Niger Delta states), but will also seek or rather propose remedies that would improve cordial relationships for long-term federalism.
The study is desirable because there is an overarching need to comprehend the inherent problems in the operation of federalism in Nigeria as it relates to resource control and its consequences in the modern day.
It is also hoped that the study will educate the people and various government bodies about their economic and legal rights regarding fiscal federalism and resource control.
Because the goal of any social science research is to provide solutions to specific social, economic, and political problems, the study is extremely relevant in providing solutions to the problems associated or inherent in fiscal federalism and the Niger Delta region’s struggle for resource control.
1.6 Limitations of the Study
The constraints are created around its limitations; they are the factors inherent in the research setting that may affect the outcomes and that the investigators must recognise and acknowledge for the investigation.
It will also look at the horizontal trends and antecedents of Nigeria’s constitutions, statutes, and decrees related to fiscal federalism and resource control legal framework.
The main issue is that the information required is difficult to obtain due to the formal bureaucracy involved in collecting essential government materials.
1.6 Definition of Terms
Before delving into the more rigorous and methodical aspects of this work, it is necessary and imperative to begin by providing operational definitions of specific terms or concepts whose clarifications are fundamental to the overall understanding of the work. The following are operational definitions for terminology used in this study:
a) Federalism: This is a method of splitting powers so that the central and regional administrations are independent within their respective spheres. It can also be viewed as a constitutional structure for distributing government authority by area in order to maximise freedom of expression of cultural, socioeconomic, and political characteristics.
b) Resource Control: This encompasses three primary components of power, the right of a community or state to raise funds, either via taxation or through the sale of goods and services, inside its jurisdiction. Within its borders, it creates exclusive rights to the ownership and control of natural resources.
Customs charges or excise levies on items manufactured in its territory and are bound for its territory. It can also be viewed as a rigid commitment to the deprivation principle.
c) Fiscal Federalism: Fiscal federalism refers to the financial governmental interactions between the several tiers of government in a federation. It is a result of federalism that is concerned with the interaction between the various levels of government in terms of the allocation of national review (National cake) and the delegation of functions and tax powers to constituent units in a federation.
d) Derivation: Derivation is a revenue allocation system in which a set amount of finance is provided to the component units of the federation based on revenue generated from the area’s mineral resources. Because of its relationship to taxation and compensatory aspects, it is considered as having the intrinsic power to overcome the feeling of alienation felt by members of any unit.
e) Niger Delta Region: The Niger Delta Region is made up of nine (9) states that are not actually united geographically but are bound by their economic emancipation to control their region’s God-given national riches.
The south-south zone and the Niger-Delta region have distinct characteristics. The south-south zone is a geopolitical zone comprised of six (6) states with vested interests bordering on the political.
The Niger-Delta region is made up of nine (9) states. These nine (9) states that have banded together are unified in their struggle, or rather in their fight for the region’s economic emancipation.
The Niger Delta Region consists of nine (9) states: Abia, Akwa-Ibom, Bayelsa, Cross-Rivers, Delta, Edo, Imo, Ondo, and Rivers.
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