Impact of Revenue Allocation and Agitation for Resource Control in Niger Delta Area

Impact of Revenue Allocation and Agitation for Resource Control in Niger Delta Area

 Abstract

The research is an analysis of resource allocation and utilization in Nigeria but using Niger delta as case study. The main objective of the research was to examine revenue allocation to Niger delta between 1999-2007 and analyze how this revenue was utilized in some key sectors of the state economy. The idea is to establish the relationship between revenue generation and expenditure within the context of Nigeria federation.

The data gathered and interpreted revealed that majority of the resources generated in Niger delta within the period under-review were misallocated and malutilized. Oral interview were conducted and opinions of relevant stakeholder brought to bear in the analysis of the issues. Majority of those interviewed (75%) especially those outside governmental power like opposition political parties and Non-Governmental Organization (NGO’s) agreed to the fact that there existed a deliberate misapplication of state resources to venture or areas that have no direct benefit to the citizenry, implying that the problem of Niger delta is not inadequate resources but fiscal discipline.

Many of the developmental projects initiated by the state government were first, to benefit the few political elites and their interest either within or outside the state. These projects require billions of naira which often are paid without recourse to procedures and guided regulations. This stem from the fact that at any point the government becomes interested in a particular project, much efforts are geared towards the release of funds for execution of the projects. Various tables and figures in the previous chapters have confirmed this.

The study also revealed that the lack of certain mechanism like the department of tender Board and due Process office in the advertisement, award, execution and monitoring of public contracts portray the government as being corrupt and wasteful. The study equally revealed that during that administration, the relationship between the public servants and the government was hostile. This was demonstrated through the incessant industrial actions especially from the National Union of Teachers including the state owned university, Cross River University of Technology.

Basic assumptions were raised and tested and the result revealed that the problem of Nigeria as exemplified in Niger delta is inefficient resource utilization and is the root cause of fiscal crisis in Nigerian federalism. Equally, corruption by the ruling political elites is responsible for the under development of Niger delta and many parts of Nigeria.

This also situates the usefulness of the choice of elite’s theory as the bases for the explanation of the problem. The Niger delta people still continue to live in abject poverty despite huge resources generated because of bad governance. The administration of Donald Duke was too cosmetic, elitist as demonstrated in areas like Calabar Carnival, beauty competitions etc. The implication is that people are forced to live a certain life style which is not commensurate with their income.

The foregoing discussions justified the use of elite’s theory for this study. The elites theory suggest that there is a small political class that dictate, determined and control political power whether such power is economic, political, social or cultural. It also suggest how these powers are distributed, that is to confirm Laswel, “who get what, when and how”. The politics of resource allocation and utilization in Nigeria is purely an elitist business. The elites through the support of bureaucratic process and executive advantage are responsible for the

management of public resources in Nigeria, which in many cases is to their benefits. Even the EFCC, through its former chairman Nuhu Ribadu cast the state of governance in the Niger Delta: “The elite in the Niger Delta is the richest segment of the Nigerian population but this has not translated into health, education or infrastructure….. Resources that go into the Niger Delta are just going to feed the pattern of corruption – It is going to complete waste and corruption”. Niger delta is in the Niger Delta and vividly represents Rabadu’s position.

Impact of Revenue Allocation and Agitation for Resource Control in Niger Delta Area

CHAPTER ONE

INTRODUCTION

 1.1     Background to the Study

 Federalism has its essence in two organically related issues. These are power sharing and resource allocation. The former defines the political essence of federalism while the latter underpins its fiscal dimension. Over the years, the fiscal dimension of the federalist practice has been quite problematic in Nigeria.

In effect, fiscal relations within the context of the Nigerian federation is said to have been characterized by systematic defects which have given rise to dysfunctions and crises. One significant dimension of the fiscal relations problematic in Nigerian federalism has been the question associated with the issue of resource control. The issue of resource control is as old as the Nigeria federation. In the 1950’s for instance, the tendency was manifested in the fashion of interregional controversies over the acceptable revenue allocation principles and formulae.

In more recent times, the problem of resources control has not only persisted, but it has been rather politicized by different opinions. The insistence of the oil producing states of the Niger Delta on the principle of derivation as the yardstick of revenue allocation in Nigeria is better understood within this matrix. Incidentally, the bulk of the existing literature on Nigeria’s fiscal federalism has only paid attention to the fundamentals of resource control and inadequate resources for States to develop their areas.

For instance, Attah (2002), Dafinone (2005) and Ilagha (2007) have tended to support the politics of resource control on the basis of ownership of resources by a particular region rather than advocating for true fiscal Federalism that will promote the unity of Nigeria. In effect not much has been said in the existing literature regarding the basis and logic of the resource control within the ambit of the politics and crisis of revenue allocation in Nigeria. The issue of resource control has at different times pitched the federal government against its federating units. This has been clearly demonstrated by the “Niger Delta Debacle” which has turned out to be the most controversial issue in the Nigerian federation at the present.

The basis of the resource control activism is perceived by some Nigerians as the marginalization of the federating units by the overbearing federal government, particularly in matters of fiscal relations. While others their argument on the overbearing influence of the federal government on matters of fiscal relations is not enough justifications for either resource control or increase resource allocation to certain area. There is therefore, a controversy on efficient and equitable fiscal relations in Nigeria between the different levels of governments. Viewing the positions arising from the different opinions on this issue, the present study is a departure from the common and frequent arguments on the issue.

It is rather interested in the examination of revenue allocation in Nigeria and the extent to which these revenues have been utilized for public good in one of the federating units- Niger delta. The study with empirical data generated from both primary and secondary sources reveals an inefficient and ineffective utilization of resources to the key sectors of the state economy. As a result of this, Niger delta government’s responsibility to its people in terms of economic development from effective resource utilization between the periods of 1999-2007 did not reflect the realities of accountability and transparency.

Impact of Revenue Allocation and Agitation for Resource Control in Niger Delta Area

1.2.  Statement of the Problem

 The study is an attempt to examine the problem of revenue or resource allocation and utilization in the Nigerian federation using Niger delta as a focus of study. In recent times, federating states have renewed agitations for either resource control or increased revenue from the center to facilitate development at State. This agitations seem to suggest that revenue allocation to States is inadequate for the development of basic infrastructure at the State level.

This gives rise to the present research in Niger delta base on the level of poverty, infrastructural decay and social disconnect in the State and other States in the Niger Delta in spite of the huge financial inflow into the States. It is the combination of poverty and the huge financial income and the consistent agitations for increased resource allocation that necessitated this research. Therefore, the study examines the extent to which the revenue of Niger delta was utilized for certain key sectors of the economy. This will brings out the rationale if any, for the agitation for either resource control or a review of the revenue formula.

It is important to state that most extant works on fiscal federalism in Nigeria have tended to overemphasize the issue of resource control and /or power sharing (Douglas, 2001; Guyu 2003) than revenue utilization. There appear to be little or no interest on the issue of resource misallocation and fiscal responsibility in discussing revenue sharing in Nigeria.  This study takes these issues as a point of departure and investigates the interface between fiscal federalism and resource management and utilization in Nigeria from the stand point of Niger delta, 1999-2007.

Specifically the study seeks to address the following fundamental problems;

1. What is the nature of fiscal relations in Nigeria?
2. What is the place of resource management/utilization in Niger delta?
3. Does the practice of fiscal responsibility in Nigeria fulfill the principle of fiscal responsibility?
4. What are the problems and prospects of resource management/utilization in Niger delta?

1.3 Objectives of the Study

 To examine the nature of fiscal federalism in

1. To investigate the place of resource allocation and uitilization in Niger delta federating state.
2. To ascertain whether the practice of fiscal federalism in Nigerian fulfills the ideals of fiscal responsibility and efficiency.
3. To examine problems and prospects of efficient resource allocation and ultlization in Nigeria with particular reference to Niger delta.

1.4  Significance of the Study

 The existing literature on fiscal federalism in Nigeria have tended to over emphasize the issue of resource sharing and control at the expense of the fundamental question of efficient resource utilization and management. This study has critically examined some of the issues on fiscal relations and has contributed significantly by renewing the call for the review of the existing revenue allocation formula in Nigeria to favour the federating states in order to foster development at the rural areas where majority of the citizens live.

Also, The study is of significant because it has carefully departed from the politics of resource control which is based on sectional agitations and examine the utilization of resources in one of the states which is seen as a replica of other states in Nigeria.

The study has equally brought out clearly the level of revenue allocation in Nigeria using Niger delta as a case study. Based on the realities discovered in the study, the research is clear about the level of malutilization through the misapplication of resources in Niger delta. Similarly, the study emphasized the place of the political elites in governance in Nigeria.

Besides, it is expected that the findings and recommendations made by the study will serve as valuable inputs to policy makers in the endeavors towards moving the Nigerian federation forward. Overall, it has enriched the existing literature on the subject matter towards the goal of cumulative advancement of knowledge.

Impact of Revenue Allocation and Agitation for Resource Control in Niger Delta Area

1.5  Basic Assumptions

 The study is carried out within the following postulates;

1. Fiscal indiscipline especially at the state level is at the root of the crisis of resource utilization in
2. Lack of efficient revenue allocation and utilization mechanisms and practice have been the bane of governance in Niger delta.
3. Fiscal responsibility is a necessary requirement for good governance in Nigerian federation.

1.6 Scope and Limitation of the Study

 The study addresses its subject matter within the context of contemporary Nigerian federalism with reference to the period of 1999-2007. It focuses on Niger delta as the case study. The reason for choosing this period is to capture and appraise the impact of democratic process vis-à-vis the subject matter. Within the above context and time frame, the study interrogates the politics of resources utilization and fiscal responsibility with a view to ascertaining its significance, problems and prospects

The major constraint faced in the study is the difficulties in assessing relevant official records from public (government) sources. The fears expressed by some civil servants were obvious to the effect that the research was investigating the state’s finances or working for some security agencies of the federal government. At a point, the researcher was invited by the security office to explain reasons behind the research.

Also both current and former public officers were reluctant to give relevant information for the study for the fear of indicting themselves or their political associates. However, the researcher was able   to make adequate efforts towards mitigating these challenges by way of a rigorous field research.

Impact of Revenue Allocation and Agitation for Resource Control in Niger Delta Area

1.7  Working Definition of Concepts

 Resource Allocation– Simply means the distribution of both financial and human income within a particular period of For the purposes of this study, it is income generated by the Niger delta government into its purse within a fiscal year either internally or from external sources.

1. Resource utilization– This is an effective and efficient allocation and use of resource or revenue to the various sectors and projects of the Niger delta government as provided for, in the law, usually in the state’s annual Within our context, resource utilization is reasoned from both human and financial stands. From the human stand, it is the allocation of qualified and experienced personals to implement jobs which they have full knowledge while from the financial point; it is the allocation of revenue to projects that benefit the public.
2. Resource misallocation: This is the wrong or abused allocation by political leaders of appropriated resources to different sectors of the This is usually measured by the extent to which the yearly budget is expended on both capital and recurrent projects. For the purpose of this study, it can be determined by assessing government financial records vis-a-vis and infrastructural projects with the amount of money allocated in the annual budget.
3. Resource malutilization: This entails the wrong use of revenue to sectors of the economy owing to corruption and self-interest.
4. Bad Governance – It is associated with a system whereby there is lack of accountability and transparency by public officials in the implementation of public policies. In this wise, the utilization of public resources or revenue by officials of government has over the years shown lack of It also involves allocating resources to ventures that do not benefit the general public. In this research, it will be demonstrated using a viable score on resources, to determine the process of award of project and if actually the projects were executed.