Nigeria, Federal Opulence and State Indigence: A case for fiscal federalism – Atayeṣe Group

August 16, 2015




The Seminar was well attended by a wide cross section of opinion makers and intellectuals from academia, civil society groups, government officials, various professionals as well as experts in public finance. Others in attendance included journalists and a large number of members of Atayese.

Participants established a working definition of “fiscal federalism ” as the policy guiding the allocation of revenue generated through taxation and other means and their expenditure among different tiers of government- usually the Central (Federal) government and the federating units- states/regions/ provinces.


Participants generally agreed that the current public finance distress in Nigeria ; inability to pay wages and salaries, pensions, overheads and contractors in most states arose mainly from the inadequate and greatly reduced federal allocations as well as mismanagement of public funds under their control, nevertheless made the following observations:


1. That Nigeria operates a system of fiscal centralism where funds accumulated and disbursed from the “federation account “are unfairly skewed in favour of federal government, as the keeper of the national purse.

2. That the monthly sharing of funds from the Federation Account was largely a creation and carryover from the centralized administration of the military rule.

3. That government induced overheads from indefensible official allowances, maintenance cost of public facilities, wastage and corruption etc, rather than salaries constitute the greater part and account for high public sector recurrent expenditures in Nigeria.

4. That most of Thirty six states of the Federation cannot afford the cost of governance adopted or survive without allocation from the Federation account under the extant structure and constitution because internally generated revenue forms a very negligible part of their total revenue.

5. That even where the states are able, the constitution of Nigeria constrains them from engaging in certain revenue generating activities to augment and enhance their internally generated revenue, e.g. Mineral and land acts as well as some of the 68 items which crowd the exclusive list.

6. That in a true federal system, the two tiers of government (Federal and States) are supposed to be coequal coordinates, but in Nigeria, the states are subservient to the Federal government.

7. That the inability of the states to meet their financial obligations is a threat and clear recipe for social, economic and political instability

8. That the governments’ lack of clear-cut socio-political and economic ideology makes them pliable and less focused on real development and good governance

9. That Nigeria has experienced over the last four decades, a deteriorating quality of fiscal operations despite the high caliber of human and non-human resources.

10. That over centralization of powers at the federal level, the elimination of regions and the atomization of states has resulted in an insatiable demand for states and local governments.

11. That Governments’ reliance on free-rider fiscal regime instead of direct taxation to fund its operations has disenfranchised the people who have no apparent reason to call their political leaders to account.

12. That there is a no priority in the payment of salaries, pensions and gratuities contrary to the time honoured financial code governing public funds management

13. That banks and the financial sector in general fail to perform due diligence analysis before extending credit to governments

14. That governments appoint excessively large number of aides and officers as political jobbery, without established need, and pay regular monthly salaries for no apparent job done. (Job for the boys).

15. That our political culture of do-or-die in order to acquire power has made the plunder of our resources to take precedence over and above the creation of wealth and good governance consequently leading to the promotion of insecurity, instability and corruption.

16. That the high reliance/dependence on a mono-product economy has led to a general disregard for developing a knowledge economy in Nigeria

17. That our governments most times operate on ad hoc, spur of the moment basis, with no well thought-out plans on a consistent and enduring basis.

The Seminar consequently came up with a number of suggestions for a sustainable development of our economy and enhancement of our human development index:


1. Drastic reduction in the cost of governance through the elimination of high overhead expenses by cancellation of the various perks and allowances enjoyed by public officers- like government provisioned and maintained chauffeur driven vehicles, reduction in the dubious and not necessarily justifiable use of consultants for activities ordinarily performed by public officers, government provisioned and maintained houses for public servants, etc.

2. Federal government should employ the doctrine of necessity to pay off once and for all, the arrears of all states in terms of salaries, pensions and gratuities as a first charge on the federation account in order to stem the current tide of insolvency and avoid possible breakdown of law and order.

3. States to leverage on their areas of comparative advantage like the professions, agriculture, information technology, tourism, infrastructure, education, medical health etc

4. A collaborative and coordinated effort by southwest states to jointly launch projects to take advantage of economies of scale rather than duplicate efforts with projects which fall short of meeting their goals or become white elephants

5. That states should have short, medium and long term goals which should be bench-marked against specified milestones

6. States should consider a massive investment in education and health as human capital is the fulcrum over which all other developments revolve and thrive.

7. That our states should operate a transparent and open government by carrying all stakeholders along in its decision making process- Unions, civil society groups, youth associations, think-tanks etc.

8. Establishment of a socio-political and economic ideology as enunciated in a Yoruba Agenda

9. That unviable states consider merging with others to enhance their viability. Primarily poor states must be administered at costs bearable by their revenue generation capacities.

10. Amendment of the constitution to reflect six federating regions/zones and institution of a collegial presidency


11. That the governors of the South West should endeavour to meet monthly or bi-monthly to discuss, share experiences and obtain feedback/follow through on their policies while updating same.

12. That an Odua Development fund should be set up from proceeds and investments dividends of Odua Investment Company Ltd and high net worth individuals in the Southwest.

13. That annual levies be made compulsory for voting age adults in all SW states and consolidated into an investment fund targeted at specific projects within specified periods.

14. The establishment of ‘government by design’ which is knowledge-based and entails the collection and use of accurate data and intelligence to bench mark and shape our economy.

15. Devolution of power from the federal to the states with the states controlling their resources and paying an agreed percentage into a Federation Account towards clearly defined goals.

16. The southwest states to take advantage of the directorate of DAWN in order to integrate their economy, social services and infrastructure

17. Yoruba History to be taught and made compulsory in our schools and the language developed to a level that it is usable for the sciences and technology.

18. Entrenchment and promotion of the Omoluabi philosophy in our leaders and governing class or risk being ostracized.

Mr. Tokunbo Ajasin (signed) & A.O. Tao (signed)

Atayeṣe is a Yoruba Group’s socio-cultural initiative.


SUNDAY, AUGUST 16, 2015. 4:25 a.m. [GMT]

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2 Comments on “Nigeria, Federal Opulence and State Indigence: A case for fiscal federalism – Atayeṣe Group”

  1. ADEYEMI Says:

    “Establishment of a socio-political and economic ideology as enunciated in a Yoruba Agenda”

    Just curious: I have a copy of a published Yoruba Agenda in a booklet form, almost 2 decades old, being a member of IDILE under ALAJOBI. The question is: Is the Yoruba Agenda mentioned in this communique the same as the one in my possession? If so, why has the ideology kept out of the reach of many Yoruba sons and daughters?

    Majority are ignorant of its existence. The comments and pronouncements we heard and read about, before and post last presidential election in Nigeria clearly exposed the dwindling popularity of Yoruba Agenda. Suffice to say it was why many Yoruba sons and daughters openly disparaged the Yoruba leaders who aligned with Jonathan on ideological basis. Shockingly, not Igbos, not Hausas, but Yoruba sons and daughters called their elders thieves who had collected billions from Jonathan, “the thief”. Several attempts by some of us privy to this AGENDA, to set the records straight were met with worse insults and abuses. I read alleged comments from Rtd. General Akinrinade’s stable condemning the decision of our elders in Afenifere and was shocked because I knew about his dispositions during the dark Abacha era. More worrisome was my perception when I also read a purported comment from Tokunbo Ajasin about Buhari’s impending magic wand to administer the polity, even despite his (Buhari)’s disdain for any confab whatsoever. Seeing same Tokunbo Ajasin signing this communique therefore necessitates my question above.

    The folks in APC who hold power today have long parted ways with doctrines of Yoruba Agenda as packaged from the beginning since the Action Group era. General Buhari’s position is clear so far. Who will spread the agenda to majority that never even heard about it? .



    • emotan77 Says:

      Dear Yemi,

      How are you, and thanks for these insightful and informed comments on the ever-shifting stand of the Yoruba since Awo’s demise.

      I’d like to first touch the idea of a Yoruba Agenda as regards the other two major ethnic groups: ALL groups have their agendas, stated or otherwise. This takes me to why “not Igbos, not Hausas, but Yoruba sons and daughters called their elders thieves who had collected billions from Jonathan, ‘the thief'” and how many saw attempts “by several of you privy to an AGENDA and tried to contribute to discourse ongoing to set the records straight were met with insults and abuses.” Ditto the calling of elders in Afenifere names.

      It’s all part of the Yoruba mindset that ALL Yorubas must not only be in THE MAINSTREAM but others must join or keep quiet. I remember appealing to elders like Chief Akande NOT to call Ondo State indigenes “bastards” simply because they favored Mimiko then because people like me voted for APC in 2007 but the people in my state of origin supported Mimiko because of the work he was doing; I lived at Akure from 2011 to 2012 and voted Labor’s Mimiko.

      While the ọmọluabi in the average Yoruba OF OLD traces of which inheres in all Yoruba abide, Ibos and Hausas tend NOT to go speak out publicly against anybody from their ethnic group NO MATTER THE DEPTH OF CORRUPTION or disgraceful acts. Whatever people may say or believe, Nigeria is a land of many nationalities where values, mores, et cetera vary and what this means is the age-old discussion that we must respect these differences and create a central government that would allow these PEOPLES to grow and prosper while remaining together, sort of like the US motto of “out of many, one”.

      This means hearing out those with dissimilar views to those of the majority within Yorubaland rather than DROWNING OUT is THE ONLY PATH that would enable us prosper because as things stand right now, Nigeria IS our home.

      I wondered aloud about a year ago on this blog IF, as things stand in the region, we could make a Yoruba country work for ALL IF it gets to go her own way because it seemed and still seems apparent that the same divisive forces would be at play. Would there be clamor for an Ondo/Ekiti country? Or Oyo Country …

      There’s no reason, Yemi, why people’s position cannot change while a central agenda should be constant which could be as a result of a change in the others’ camps but NOT MORAL PRINCIPLES.

      Regards, as always,



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