Written By  Yushau A. Shuaib

WINDFALL: Sharing of Excess Crude and Dollarised Allocations

Economic Confidential February, Daily Trust February 12, Leadership February 12, Daily Independent February 13,

New Nigerian February 15, Vanguard February 18, Daily Triumph February 19 and Sunday Leadership March 9, 2008

This is a season of windfall and a period of extra vigilance by electorate to closely monitor how huge and unprecedented revenue allocation would be managed from the Federation Account. Imagine this reality: apart from the monthly statutory releases, VAT disbursements and internally generated revenue, $4.017billion of excess crude revenue would be shared from February 2008 and paid in dollars to tiers of government.

The agreement over this jumbo package came from the National Economic Council (NEC), an advisory body which is chaired by the Vice President Goodluck Jonathan. Other statutory members are the governors of the 37 states of the federation representing their states while from federal government’s side are the ministers of finance, Dr Shamsudeen Usman, his counterpart in the National Planning, Senator Sunusi Daggash and Governor of the Central Bank of Nigeria, Prof. Charles Soludo.  

According to Finance Minister, Dr. Shamsudeen Usman, the payment is going to be paid like the $1.8 billion refunds from excess deductions from the Paris Club exit settlement to states in December 2007 which was done in dollars by the apex bank to the domiciliary account of the states.

It could be recalled that a monthly magazine, Economic Confidential exclusively reported a meeting in December on how the stakeholders decided to manage funds from the excess crude account in 2008. The magazine also disclosed that in 2007 least recipient states from the federation account received an average of N3billion monthly each excluding occasional releases from excess crude accounts, while some oil producing states received as high as N10billion each monthly due to the derivation principles.

The Rivers State Governor, Rotimi Amaechi, after the NEC’s meeting said the money would be shared at the ratio of 80:20 to states and FG respectively. He stated that in a bid not to allow it affect the macro-economy, governors agreed that it will be essentially used for the purpose of construction. To further prove that it is a generous windfall, Amaechi added that the first installment coming before the end of February would enable those who have already passed their budgets and those who are still going on with their budgets to factor in properly and commence implementation. He even sent a strong signal that that they would “set up a peer review mechanism where states will peer review each other not Federal Government or any other agencies but the states will try and compare notes of what you are doing with the other and see where we can borrow from the other and manage together the economy.” Probably he is sending a signal to anti-corruption agencies and other regulators not to poke-nose in their management of the funds.

Definitely, to have arrived at this critical decision, personal opinion or constitutional perspective may have given ways to professional cum political solutions considering the caliber of personalities whose professional views in the past could have been in variance to the latest policy matter. Dr, Shamsudeen Usman, Senator Sunusi Daggash and Prof. Charles Soludo are highly respected and knowledgeable intellectuals (all first class graduates) with pedigree on economic matters. They might have consented to the agreement in the interest of the economy and sovereignty of Nigeria even though the conditions and details of releasing the chunk of the fund and in dollars still remain cloudy.

     Another interesting dimension is the extreme generosity of the federal government by conceding to the ratio of 80:20 to states’ advantage against the existing revenue formula that provides for FG 52.68%, States 26.72% and LGC 20.60%. The present proposed formula too pending before the National Assembly for approval favours the federal government which recommends for FG 53.69%, States 31.10% and LGCs 15.21%. It is hoped that the President and his vice who were governors before their elections were not stampeded and pressurized by all-powerful Governors’ Forum to concede to this excessive charity which seemingly promotes fiscal federalism with the hope propelling fiscal decentralization.

The new policy will excite different reactions from watchers of the economy especially the multilateral institutions and the acclaimed economists but definitely not the politicians because of the way and manner politics is played in our clime. Though an average Nigerian may be novice on economic terminologies and theory, but like the typical market woman he/she knows the reality on ground especially on how some immediate past political leaders have squandered the revenue for frivolities and dented the nation’s image with their kleptomaniac tendencies.

The dollarized allocation for lodgments in domiciliary accounts could have been surreptitiously influenced by emerging economic dominants i.e. the consolidated banks that have been in supremacy struggle to manage the foreign reserve. However the policy is said to be aimed at managing the flow and strengthening of naira, besides providing an additional instrument for effective liquidity management by the CBN. In fact it is claimed that if the apex bank disburses such funds to states in naira, it would have to print additional Naira – thus pushing additional funds into the economy with a potential to trigger inflation. But with the new policy, Nigeria doesn’t need to print Naira again given the fact that the country earns dollar from its crude oil export, which constitutes mores than 90 per cent of her earnings.

As hazy as the conditions are presently, there is necessity for convincing clarity on the dollarized allocation considering the constitutional impediment against promoting foreign currency to our local legal tenders. The governments must also evolve, not through rhetoric, practical mechanisms to avoid triggering off inflation and turning our Naira notes to worthless tissues. Banks as major beneficiaries of lodgements of billions of dollars in their accounts, must be humane and flexible  in their operation by providing financial assistance, soft loans for productive projects and enterprises to individual and corporate bodies as mark of respect for using public funds to run their banking businesses. They should also engage in extensive social responsibility programmes for the benefit of the poor.

What the citizenry need is not the amount of cash in monetary terms but provision of infrastructure and enabling environment for diversification of the economy. Diversification that would encourage mechanized farming for mass food production; develop capacity building to churn out highly educative workforce in ICT; tackle the power generation to reduce the cost of doing business; and invest in industrialization to revive the productive sector.

The beneficiaries should undertake worthy projects that are specific, measurable, actionable and time bound for poverty-elimination and for easy tracking by the citizenry. These will also ensure reductions of unemployment rates and by extension curb the menace of restless youth militants, aggressive area-boys and illiterate Almajiris. It may also be necessary to encourage the states to emulate the federal government in passing into law their fiscal responsibility and procurement bills too to check and promote transparency and accountability at that level.

The argument that the states do not require monitoring from any agency is a whimsical thinking considering the fact that their respective arms have oversight roles on receipts and disbursements. This is the period where not only anti-corruption agencies, like EFCC, ICPC but also civil society groups and media to come out in full force in ensuring that nobody is engaged in money laundering and other corrupt practices. Everybody must be a whistleblower.

The excess crude windfall, like a sudden jackpot, if not adequately managed, since most of the beneficiaries did not envisage the development in their budgets, it may have adverse consequences on the economy.  Extreme caution is required before spending a dime of super-manna, not from heaven but, from fluctuating global oil prices.

Though the responsibilities of respective tiers of government are clear in the Second and Fourth Schedules of the 1999 Constitution—especially on the exclusive and concurrent legislative lists, the federal government should henceforth cede its financial intervention to the states in the areas of education, industrialization, health, agriculture and concentrate more on its major statutory power on national security, foreign affairs, regulatory reforms, dispute resolutions, extractive industries, monetary and general economic policy.

Most painful irony is that while FG generously concedes to state demands, many states continue to abuse the local government councils by appointing administrators to run their affairs and misappropriating their allocations in the name of joint projects. Since the states are no more extension of the Federal Government, local governments too should cease to be annexes of the states. In fact that ratio of 80:20 without the mention of LGCs sounds illegal and unconstitutional for delisting a constitutional tier.

It is hope that the excessive generosity of President Yar’Adua will be reciprocated by governors too by allowing the local government councils to operate as democratic entities and fully entitled to their monthly allocations without deduction and interferences in the spirit of the due process and fiscal decentralization. Above all the public officers and custodians of our collective wealth should not only think about being accountable to the electorate, they should also remember they would account to almighty God too.

Spin doctor is a slang which describes a person who publicizes favorable interpretations of the words and actions of a public figure, especially a politician. Surprisingly public relations persons object to being described as such because they believe the phrase has derogatory connotation and is more appropriate for those who specialize in turning black to white and vice versa. However as could be observed from commentaries over the redeployment saga of Mallam Nuhu Ribadu, the Chairman of the Economic and Financial Crime Commission, EFCC, almost all major opinion molders including the media, clerics, scholars, lawyers, activists amongst others have engaged in spinning to either eulogize or castigate the parties in the brouhaha over the man’s redeployment for capacity building at the prestigious National Institute of Policy and Strategic Studies (NIPSS) in Jos Plateau State. Everyone seems to be an unsolicited spin doctor for the parties involved.

On the other hand, the professional spin doctors use the media anonymously to divulge sensitive information or reckless insinuations, to cast aspersion on presumed opponents while portraying their principals in favorable spotlight in the battle of wits. Since the case involves security and intelligence, the attempts by the so-called reliable sources to hide their identities are efforts in futility. In this age of advanced technology, editors and spokespersons must be aware that telephone lines and messages are easily tapped and intercepted for various purposes.

The most unfortunate scenario staring us on the face as a nation is the politicization and personalization of the redeployment which, mind you, is not removal. The painful irony is the angle it is taking: EFCC vs the Government or Nuhu Ribadu vs President Yar’Adua. Definitely the uproar has given the nation, not only the leaders a bad image. Why should we go through this unnecessary bickering which overheats the system in the New Year? In fact some have gone to the extreme to question any achievement of the new administration and read ulterior motives on its professed seven point agenda insinuating as well that the rule of law slogan is used as a smokescreen to protect corruption. The situation took a frightening dimension when international community and foreigners were dabbling into a purely internal affair.

There is no doubt that Ribadu was able to court the goodwill of the public, especially the media by his receptiveness to their enquiries and for daring the untouchables. He therefore deserved all the solidarity, taking into cognizance that as human he has obvious shortcomings which explains the alleged selectivity in the choice of his preys.  EFCC as anti-corruption agency, under him undoubtedly performed exceedingly well in raising the consciousness of Nigerians on the ills of corruption. It is a memorable legacy that within a short time he established a well-organised institution where staffs are provided realistic welfare package to dissuade them from corrupt practices and even set up a well-equipped training institute.

 It is instructive that most of the officers in EFCC that create a perception of incorruptibility, are not from the moon but products of our same much vilified Nigerian Police on secondment.  It is quite a case of black pot producing white pap even if they are righteous converts of late. In the first instance there could not have been a necessity for the creation of ICPC and EFCC if the police had not failed in their responsibilities in crime prevention and protection of life and property. The two anti-corruption agencies should have been departments under the police force. EFCC is a clear lesson that with political will we can make radical transformation. Were Ribadu and his team typical consultants who are entitled to commissions for recovery of funds, from what they have recovered so far, definitely they could have been a new generation of billionaires without cutting corners.

The grievous mistake committed by Nuhu Ribadu was his refusal to reason with members of the last legislative arm during the administration of President Olusegun Obasanjo who had intended to amend the act establishing EFCC to make it more autonomous like other constitutional bodies whose membership tenures are guaranteed such that members cannot be removed or redeployed without the consent of majority of the legislators. In fact even the federal civil service commission has no power to sanction, appoint or promote staffs of such bodies. Example can be cited of the Independent National Electoral Commission (INEC) and the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC). As it is presently constituted, the law does not confer the EFCC with such autonomy and independence.

Surprisingly too much emotion and sentiments have been poured on the redeployment instead of addressing the basics. The nomination of Ribadu for the course is befitting of his status. The National Institute of Policy and Strategic Studies (NIPSS) is the highest leadership training institute for top functionaries in public and private sectors in Nigeria. It is not for nothing that the institute is often referred to as Mafia Nigeria Incorporated (MNI) instead of its official acronym for Member National Institute.  It has served as a training ground for most top ranking leaders who later became Presidents, ministers, governors, chief executives of corporate organizations, chiefs in security and public service etc. Its serene environment is tonic for the kind of strenuous but strategic studies undertaken and yet it has a component for local and foreign tours for participants to understudy other environments in providing practical solutions to our myriad of problems.

We must remember that most of the victors and losers of the 2007 Elections have their fates sealed by Nuhu Ribadu’s EFCC when it cleared or indicted them through a report of investigation. Surprisingly some indicted public figures, who were presumed as corrupt were alleged to have funded victories of the cleared candidates. These are some of the moral questions. Politics is a dirty game. But I wonder: Isn’t it reasonable to expect relief in whatever way for financiers who induced the system to influence the electoral process after they might have entered into agreement for soft landing? Some say NO POLITICIAN is EVER CLEAN. We know that big corporations all over the world fund and install governments to protect their interests.

I want the next stages of EFCC to be mindful of our reality and peculiarity. It should consider treading softly on our indigenous entrepreneurs whose investments have provided legitimate employments to our youths and provide social service to our society. Like I always say, where we to be forced to choose between two evils, we can only settle for a lesser one. For instance if Otunba Mike Adenuga of Globalcom, has a case to answer in corporate competitive scheming, we must consider the fact that he has successfully broken the monopoly of foreign communication operators with affordable and quality service; his firms also provide thousands of jobs and engage in massive corporate social responsibility than other similar organizations. I should not be misunderstood here, just being frank and expressing a belief that most organizations engage in hanky-panky to win patronages. We need to support and encourage ours with all incentives and reliefs in the business world without harassment and intimidation.

We only hope if another dogged fighter like Prof. Dora Akunyili of NAFDAC is nominated for similar a programme or assigned a greater role, we won’t interpret it to mean that the government wants to flood the market with fake drugs to exterminate the entire citizens. There is nothing more dignifying than leaving the stage when the ovation is loudest. Failures of most leaders result from attempts to overstay their usefulness. The contributions of those, whose tenures were shortened, even in controversial circumstances, still linger in memory years after they had left. I remember Murtala Muhammad and Muhammad Buhari/ Tunde Idiagbon administration. I believe Nuhu Ribadu can still play a greater role in future. Since Mallam Nuhu Ribadu himself has admitted he has nothing against the redeployment for studies and that the government did that in national interest, may I therefore call on spin doctors to sheathe their swords now that the position is clear?

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