Options to restructure (re-federalise) Nigeria

By Edoba Omoregie   |   02 August 2017   |   2:29 am  

President Muhammadu Buhari

In the past few weeks there has been a frenetic resurgence of two narratives in Nigeria’s perennial quest for national stability and nationhood: separatism and (re)federalization or what proponents choose to call restructuring. While the call for separation is more strident from the South East and its focus is quite clear, if not popular nation-wide, there is a growing and baffling tendency to confuse the fine-lines of the agitation for restructuring. In this contribution I shall attempt to clarify the restructuring narrative; but first, a bit of history.
Historical Foundations

It is well known that formal federalism was introduced in Nigeria under the last colonial constitution of 1954. That constitution attempted to reflect the thoughts of the colonial government and some of the aspirations of the indigenous founding fathers. Most of what were contained in regard to distribution of powers in that constitution were reproduced in the Constitutions of 1960 and 1963 respectively. Exclusive powers were assigned to the federal government in over 40 items. The federal government shared over 20 concurrent powers with the regions. This is unlike the extant constitution in which the federal government is assigned 68 items of exclusive powers while sharing 12 concurrently with the states. All of Nigeria’s federal constitutions have conferred primacy clauses in favour of the federal government to preempt state legislative overreach in the list of concurrent powers. The 1979 and 1999 Constitutions are notable for introducing a sea-change in distribution of powers. The changes introduced are underscored by accretion of far more powers to the federal government than was the case in the 1960/63 Constitutions.

This increment is particularly significant for granting exclusive powers to the federal government over virtually all tax sources including taxation of incomes, profits and capital gains; most of which were concurrent tax sources in 1960/63 Constitutions. Allocation of nationally mobilized fiscal resources has always been left to be determined by Act of Parliament. However, under the 1960/63 Constitutions, whatever allocation formula was designed by the Act, 50% of fiscal resources derived from mineral (including oil mineral) in a region was to be allocated to that region, leaving 30% in a distributable pool to be shared unequally between all the existing regions and the federal government while the balance 20% went to the federal government alone. This fiscal arrangement was terminated during military rule long before the promulgation of the 1979 Constitution and has never been restored. However, the derivation principle was restored in the 1999 Constitution for the first time since the abrogation of the 1963 Constitution, but with a significant reduction in the percentage due to entitled states from 50% to a minimum of 13%.

Challenges of federalization
Two broad conceptual issues are easily identifiable from the foregoing, namely distribution of powers and fiscal federalism. I proceed with an assumption that it is well known distribution of powers is one of the dominant principles upon which every federal system is erected. Both the federal government and the states must possess powers in a constitutional framework to qualify as dual partners/sovereign in the federal compact. The concern, however, is what volume of powers should one possess not to tilt the scale too far as to weaken the capacity of the other to deliver public goods? There is a major dearth of literature on Nigeria’s federal system to explain what has guided the distribution of powers to both the federal government and the (regions) states even at the point of introducing the first federal constitution of 1954. What is clear is that before 1966, the constitutional arrangements appeared to have created a relatively satisfactory balance of distributed powers. Throughout Nigeria’s federalism history before the military structure in 1966, there were no significant compliant against the distribution, except that it is well recognized that the regions appeared to have been more empowered to exercise more responsibilities than the states currently do.

The sea-changes instituted by the 1979 and 1999 Constitutions in increasing the distribution of exclusive legislative powers to the federal government appear not to have been based on any conceptual premise except perhaps for continuance of the “holding together” agenda of the military regimes resulting from the bitter civil war episode. Yet, the agitations to distribute more powers to the states persist especially in the southern part of the country. Many northern states appear quiet on the question even as they are also victims of more accretion of powers to the federal government. Such apparent indifference, which could correctly be interpreted as passive resistance, may be the result of their justifiable linkage of the agitations from the south as a call for dismantling of the current framework for distribution of nationally mobilized fiscal resources. Their fear is that such a move would ultimately undermine their fiscal profile. The result of the persistent agitation to jettison the current framework of distribution of powers on the one hand, and the self-preservative resentment against the agitation on the other, are perhaps the most potent centrifugal forces shaking the foundations of Nigeria’s contentious federal design as a whole.

Conceptual clarifications
In order to overcome the challenges thrown by apparently irreconcilable gulf of vested interests, it is important to clarify the twin questions of distribution of powers and appropriate fiscal federal arrangement which are at the heart of the gulf. The principle of subsidiarity is the most acceptable mechanism by which to determine the powers to be distributed to the tiers of government in the federal system. The principle is founded on the idea “that in a federation, the powers of government should be exercised by the sub-national units (states) because they possess more competence in solving problems which confront government daily and that the national (federal) government should only exercise power in respect of those matters in which the sub-national units are incapable of achieving result acting on their own because such (matters) are wide in scope, complex in nature or are of broad national effect.” Attempts have been made to summarize the virtues of the principle to include: a) subsidiarity promotes sub-national variation in preference; b) deepens competition for tax payers and businesses leading to improved quality in delivery of public services; c) enhances experimentation to develop the best set of rules or regulations; and d) makes public policy monitoring less costly and more effective when performed by state officers than when performed by federal officials since it is easier for people to physically observe and question government officials who are in close proximity to them than those far away in the national government. The principle of solidarity, on its part, also forms an integral aspect of a typical federal system. It is called by various names in many federal constitutions: “federal loyalty”, “mutual help” or “mutual assistance”, “mutual collaboration” or the “principle of cooperative government and intergovernmental relations”.

The basic premise of the principle is the idea that all the partners in the federal bargain owe obligations to each other to demonstrate a certain level of benevolence to each other in their togetherness which is the concomitant effect of being bound in a sovereign federal union. This entails a whole lot of mutual consideration or forbearance, which would have been unavailable but for the bond of union. This is not only offered horizontally between the states but vertically between the federal and state governments as well. It is the justification for fiscal equalization, federal grant-in-aid or what the military regimes referred to as the need for “even national development” or the notion of “national integration” expressed as one of the economic policy objectives of government in Chapter II of both the 1979 and 1999 Constitutions. The theory of federal formation is incomplete without determining which principle(s) are suitable to maintain a level of fiscal equilibrium or balance that caters for the aspirations of the federal government and the federating states. There is no one-size-fit-all principle of fiscal federalism. However, what is undisputed is that in all federal systems, each tier is assigned powers carrying responsibilities which it must accomplish by deploying financial resources.

In exercising such powers, each government (tier) invariably acts directly upon the people. It is therefore to be expected that within their sphere of distributed powers both the federal government and the states should separately possess the power to mobilize financial resources through taxation, licenses, fees and other revenue sources, to accomplish their constitutionally distributed powers. Going forward two issues demanding for compromise in the ongoing debate are: i) How can the distributed powers be made to comply with known principle(s)?; and ii) How can the limits of national revenue mobilization for redistribution be drawn without provoking a sense of denial in more-endowed states and creating a sense of entitlement in less endowed ones? In the remaining portion of this contribution, some options are setout to tackle these questions.

Legal and policy options for re-federalization
Legal options

Going forward, the first concrete way to restructure (re-federalize) is to mount a constitutional alteration process with a view to stripe the current contentious federalism framework in the 1999 Constitution of its disagreeable contents. However, this is easier said than done without factoring in the vested interests of the partners in the federal compact: the states and the federal government. Under the constitution (section 9), the input of State assemblies and the National Assemblies are required to effect any constitutional alteration. A proposed constitutional review should focus on achieving two broad goals: a) Alteration of the current scheme of allocation of responsibility to divest the federal government of some of its powers to the states. To meaningfully achieve this and avoid the pitfall of arbitrary distribution of powers as appeared in the 1979/99 Constitutions, the principle of subsidiarity should form the basis of distribution. In this regard, the thoughts that should weigh on the minds of drafters should be: What are those matters which can be better assigned to the states to achieve effective result and meet the developmental aspirations of citizens? What are those matters that are better assigned to the federal government because they are wide in scope, complex in character and of broad national effect beyond the capacity of states? b) Formal inclusion of express provision in the constitution, not just in the non-justiciable policy portion as is currently the case, but in the lists of distributed powers provisions guaranteeing federal solidarity and preempting any possible compromise of the vested interests of all parties to the federal compact, inclusive of interests in financial resources to meet their legitimate developmental aspirations.

In this regard, the federal government should be constitutionally bound to ensure a minimum level of comparable living standards for all Nigerians irrespective of the state they reside. Unfortunately, given the level of vested interests and acerbic rhetoric from proponents and opponents of restructuring, it’s virtually unlikely that constitutional alteration can be possible to reform the current contentions federal arrangement. A less appreciated legal option is to patiently await judicial review of contentious portions of the constitution to bring them up to speed with a more progressive federalist agenda for the purpose of accommodating and balancing the vested interests of partners to the federal agreement both horizontally and vertically. From a comparative standpoint, this is the path taken by many mature federations. This will take time to achieve in Nigeria. It is less perceptible, less dramatic, often founded on reasoned jurisprudential evaluation, and can be quite effective since citizens are more likely to accept judicial conclusions which are thought to be based on hard law and facts than on politically-motivated considerations. However, it will require a leeway in the current constitutional framework for the Supreme Court to be purposive in realizing such agenda and acceptance by majority of justices of the Court. In addition, it will require fundamental reforms to constitute the court as a court of nine Justices, just like the American Supreme Court, with constitutional cases as its only jurisdiction.

Policy options
There is little doubt that the legal option especially through constitutional alteration requires a lot of compromises and mobilization of support to achieve. It can meet with strong resistance and frustration which could boil over, even leading to strife if the current level of mutual suspicion and antagonism persist. These grim possibilities probably explain why, despite decades of arguments on the issues, no serious efforts have been mounted to review the federalism portions of constitution. Perhaps, this may be a prudent way to forestall serious conflicts which may result in the review process and even after an apparently successful review. But for how long can this prudential approach last without itself creating more tension which could boil over and provoke strife? A less known mechanism adopted even by the United States’ federal government to balance the agenda and aspirations of partners in the federal bargain is the use of Policy Federalism by which the federal government, through the instrumentality of executive orders, lays out a broad set of rules to determine when the federal government may refrain from exercising its powers where the best interests of the various states may conflict with federal action.

This approach has operated in the United States for many years and remains a very viable option till date in that country. This strategy, which contains elements of subsidiarity and solidarity principles, could be quite effective in Nigeria as well, if crafted with fidelity, to recognize the legitimate developmental aspirations of all partners in the federal agreement. It is not a static instrumentality, but can lend itself to review to accommodate emerging aspirations of all segments.

The federal system in Nigeria has endured serious strains over the years. Currently, the most serious country-wide contentious issues appear to be resentment against centralizing tendency and resistance against alteration of the extant fiscal arrangement. The contending positions are not irreconcilable. In this short contribution, I have laid-out the outlines of certain strategic options to reconcile the contentious claims. In summary, I have proposed that going forward and in order to accommodate the agitations and reassure those opposed to federalism reforms or restructuring resort can be had to the options of the subsidiarity and solidarity principles, constitutional alteration, judicial review and policy federalism. The “devil” is in the details!
* Prof. Omoregie is of the Faculty of Law, University of Benin, Benin City.

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