We continue looking at the effects that fiscal federalism would have on Nigeria:

    Political Effects: Giving states the powers to reserve the bulk of the monies they earn would also transfer to them a considerable amount of political power. One of the disadvantages of our present system is that there is too much power at the centre, and all vested in the president. Hence, this leads to the fight for the seat because everyone wants to control the resources of the nation via that seat. This is why we see so much emotions being vented around election periods as candidates bring in all possible tools (religion, ethnicity, regionalism) in order to win. Every demography wants to have one of its own there.

    But with fiscal federalism, it is the states that hold the bulk of the power, and cede to the Federal Government exclusively those things that are beyond their ability. We will no longer see a situation where a President can bully a state governor to defect to his party by withholding his financial allocations or where the ruling party at the centre can be ultimately powerful, even though it does not have control of the 2 most populous states (Lagos and Kano, 2003 – 2011).

    It would also lead to a pruning of the federal civil service, which is overpopulated, inefficient and overly bureaucratic. With 500 MDAs (ministries, departments and agencies), many of whom are merely duplicating the functions of the other, this leads to a chunk of our budget going to recurrent expenditure. With less money in her purse, the FG would have no other choice but to critically look at the relevance of many of these MDAs, and apply the knife to trim off the fat.

    Socio-Cultural Effects: Now, this is one of the best likely effects of fiscal federalism. Since fiscal federalism is going to introduce competition among the states, it will force the states to restructure their state civil services to be result-oriented. Thus, it would no longer be expedient for states to employ people based mainly on the fact that they are ‘indigenes’, or even worse, apply discriminatory factors such as religion, ethnicity and region. Sentiments cannot survive true competition. With such a policy in effect, states would look for the best hands available in order to deliver needed results, else they lag far behind their peers. The effects of such lagging behind can best be imagined: loss of business to other states, loss of population, and loss of revenue.

    With fiscal federalism, we are likely to see Sokoto State would employ a Chukwudi Nonso into its civil service, or where a Hausa man is working in the Delta State Government. This would also lead to the lowering to the barest minimum those sentiments which threaten to tear us apart every now and then. It would also remove mediocrity from our society, because no one has a guaranteed job simply because he/she is an ‘indigene’.

The positive effects of fiscal federalism cannot be overemphasized. This would be one giant step to achieving true federalism in all its ramifications, and have the structure in practice as is desired. What we need is a government with a strong political will, in particular, a National Assembly, since this largely requires a reworking of mainly our tax code, and some aspects of the constitution.

5 Comments on this post

  1. u ve really educate me on ds issue man, kip on kipin on bro

    james mark malgwi / Reply
  2. Great write up man.

    These things are plain obvious… I do not know why it seems so hard for the people at the centre to put their selfish interests aside and make decisions that would favor Nigeria as a whole.

    Is there a way Civil Society could suggest this to the NASS as a coherent pack of constitutional ammendments?

    koyegbeke / Reply
  3. […] in Nigeria and what its economic, political and socio-cultural effects will be in articles here, here and […]

  4. […] in dearly – fiscal federalism [See articles I have written about fiscal federalism here: 1, 2, 3,]. His plans might be                        inadequate but it is far better than […]

  5. […] Personally, restructuring Nigeria to be a truly federal nation fiscally and otherwise is the closest to a silver bullet I know for solving our retarding situation. I believe true and fiscal federalism will free up states to grow economically by building a tax-based society and will have multiplier effects into our socio-political lives and even how we co-exist as a nation. […]

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