‘True Federalism’ and other fallacies By Simon Kolawole

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Public debate in Nigeria, permit me to say, is not as educative as you would find in many civilised societies. The predominant elements here are ethnic and religious emotions, garnished with delicate lies and dangerous half-truths. The first casualties, as always, are facts and logic. There is the “herd instinct” which makes us believe, say and do things like the people in our corner. The groupthink syndrome has stifled common sense and meaningful interlocution. For the fear of “dragging”, nobody wants to express an unpopular opinion. If you try to apply reason, you may be shredded. As Professor Wale Adebanwi would say, “It is treasonable to be reasonable in an unreasonable society.”

One topic of debate that has raged for ages, and will never stop dominating the airwaves, is the campaign for “true federalism” in Nigeria. I have done extensive research on federations across the world and I must admit that Nigeria is the only country where the term, “true federalism”, is in use. I stand to be corrected. While no two federations are exactly alike, I don’t know of any other country where people are campaigning for “true federalism”. Why? Because there is no such thing. “True federalism” is a complete fallacy, a made-in-Nigeria fantasy. You either run a federal system or not. There is no “true” or “false” federalism. Every federal system has its peculiarities and practices.

The basic definition of federalism can be captured in one sentence: a political entity in which power is shared between the national and subnational governments. One thing is common to ALL federations: the centre controls defence, monetary policies and foreign relations. How the rest of the political and legislative powers are shared differs from one federation to the other. In Nigeria, the powers that belong to the federal and state governments are defined on three lists: exclusive (federal), concurrent (federal and states) and residual (states). I have not found any two federations where the items on each list are exactly the same. So, what really is this “true federalism”?

In most federations, there are only two levels: the central and the subnational governments. In Nigeria, we have three tiers: the centre (federal), 36 states and 774 local government areas. The LGAs, though, are only third tier in name: they are part of the states. The three-tier system is somewhat peculiar to Nigeria. In the US, as with Germany, Ethiopia and most other federations, there are only two tiers: the national and the subnational. Councils and municipalities are under the states. That does not mean they are practising “false” federalism. In 1988, Brazil introduced a third tier called municipalities, which are independent of the states. The country has 5,570 of them.

Federal vs Unitary Systems

While the campaign for “true federalism” — as misleading as it sounds — has gained so much ground in Nigeria over the years, by far the bigger fallacy is that we can only develop if we practise this imagined system. It is a common argument among the protagonists that unless Nigeria practises “true federalism”, the country will remain stuck in underdevelopment. There is no evidence anywhere in the world to back this claim. No matter the indices we deploy, there is no proof that federalism develops or retards the development of any country. If we push this argument too far, we may end up discovering that centralisation of powers, as in the unitary system, works better.

In a unitary system, power resides with the centre. It decides what to delegate or devolve to the administrative units. (This is markedly different from federalism where the states self-govern. In Nigeria, states are constitutionally empowered to legislate on several items: taxation, education, healthcare, environment, and rural development, among others.) You know what? The UN has 193 members and 165 of them run a unitary system. Do the math. That is an overwhelming 85 per cent! In case you are wondering which countries make up the 165, let me list just a few: China, France and the UK. You can google it. Did you notice that these three are Super Powers? You didn’t? I did.

Let me take it a bit further. Using the UNDP Human Development Index — which measures the quality of life and standards of living in 189 countries — we could say the world’s most prosperous countries in 2019 (reported in 2020) run a unitary, not federal, system. In the Top 20, only seven practise federalism. In fact, in the Top 10, seven are unitary states and only three are federations. If we are to apply a mischievous logic, therefore, we can say that federalism makes countries poor and unitary system makes them prosperous. Of course, that would be absolutely false: federal or unitary system does not develop any country. It is good governance that has always done the trick.

Fiscal Federalism vs Resource Control

There is a campaign for “fiscal federalism” in Nigeria which is mistaken for “resource control”. The fiscal federalism theory was propounded in 1959 by Richard Musgrave, a German-American economist. He argued that the federal government should address the inequality in the distribution of wealth among the states in order to achieve economic stability in the entire federation. His key proposition is that the federal government should play the lead role of “redistributing” resources while the states should handle the “allocation” to specific sectors, such as education. This is to have a fiscally balanced federation so that no part is left behind for being poorer than the others.

It is true that in most federations, states own the oil in their territories — but that is not the whole story. In Canada, oil provinces are in control of their resources. But because only very few provinces have oil (Alberta and Saskatchewan), the federal government has an “equalisation fund” from where other provinces get grants for fiscal balancing. Conversely, in Mexico, the federal government is in total charge of all the oil revenue. Mexican states, whether or not they have oil, receive a flat 20 per cent as allocation. Municipalities where oil-production and shipping take place receive an extra 3.17 per cent as compensation for the environmental challenges. Different strokes for different folks.

Australia uses “horizontal fiscal equalisation” to support states with lower capacity to raise revenue. Belgium has the “national solidarity intervention” to beef up the finances of regions where the average per capita yield of personal income tax falls below the national average. In Germany, taxation is exclusively under the federal government, but the parliament passed a “state tax law” in 1920 to ensure that every state gets at least 80 per cent of the average tax revenue accruing to the 16 states. That means if the average tax revenue generated per state is $100 million, no state will get less than $80 million from the federal purse — even if the tax is not derived from its territory.

Why federalism for Nigeria?

I might have argued that unitary systems are the most common in the world and that they dominate the list of developed countries, but I am by no means suggesting that we should ditch federalism. Federalism is usually practised where there is ethnic and cultural diversity, and Nigeria absolutely qualifies on that count. I want us to continue along that path. Because of the self-governing feature, the states or regions can determine their priorities, policies, traditions and, in most countries, internal security. The wisdom is for the states to maintain independence from the centre — as long as this independence does not undermine the integrity and sovereignty of the federation.

Established in 1789, the US federation is the world’s oldest. It is often cited as the perfect example of federalism by Nigerian campaigners. It would appear that when these campaigners say Nigeria needs to practise “true” federalism, they mean the US variant. But this position ignores an all-important fact: the history of state formation. The US is a consensual union: all the states voluntarily agreed to form a federation. All the terms and conditions were agreed upon before they signed the dotted lines. The Nigerian federation, on the other hand, was set up by the British colonial government and Nigerians only started negotiating the union terms thereafter. Big difference.

To be clear, there is a point I would still like to make, lest I be misunderstood (I will still be misunderstood in any case, but I want this on record): I am not saying all is well with the Nigerian federation or that we do not need to tweak the constitution. That has never been, and will never be, my position. We, without any doubt, need to make critical changes to deliver development to the Nigerian people. The centre needs to devolve more responsibilities and revenue to the states because the states are closer to the people. But we can make all these arguments without whipping up ethnic sentiments, without lying to the children that there is something called “true federalism”.

I will repeat myself yet again: all countries that have developed did so on the basis of competent and patriotic leadership — not “true federalism”, “fiscal federalism”, presidentialism, parliamentarianism, regionalism, balkanisation and such like. In Nigeria, we appear to have deliberately erected plenty ethnic, religious and regional barriers in the development discourse so that we do not address the real obstacles to our progress. If we succeed in balkanising Nigeria by playing up these sentiments, even the new nations that will come out of Nigeria will only develop if they have good governance. Trust me, there is no alternative to competent and patriotic leadership.

Let me now summarise my takes on these fallacies. One, there is nothing like “true federalism” as being regularly canvassed in Nigeria; rather, there are variants of federalism and no two federations practise the system exactly the same way. Two, “fiscal federalism” means a fiscally balanced federation where no part is left behind for being poor; it does not mean “resource control” as being popularly canvassed here. Three, countries are not developed by federalism or unitary system — it is the quality of leadership that determines the height a country will attain. I hereby implore those who are willing to learn: read wider and stop being misled by the loudest voices in public discourse.


AND FOUR OTHER THINGS…


TAMING TWITTER

As I was saying, Twitter and other social media apps have been hijacked to propagate fake news and hate speech, thereby putting societies at risk. They certainly need moderation and sanitisation — if civilisation is not to be eroded. But I insist: Nigeria is not going about it the right way. In a democracy, there are civil ways of doing things. While I won’t question the resolve of the federal government to address threats posed to national security by the misuse of social media, the way to go is get the tech giants to take responsibility for the sanitisation. There are bigger threats to the “corporate existence” of Nigeria, such as insurgency, banditry, kidnappings and arson. Priorities.

NBC BULLIES

When the National Broadcasting Commission (NBC) threatened to sanction broadcast stations if they continued to tweet, it turned out to be a big opportunity in the struggle for media freedom in Nigeria. I would have loved members of the Broadcasting Organisations of Nigeria (BON) to, in unison, defy the NBC cowards. Let NBC go wild and ban all the private stations. That would have been a great landmark in the history of media freedom in Nigeria. And I am damn sure any sanctions imposed by the power-drunk NBC cannot stand in a court because no law would have been broken. What an opportunity to assert press freedom and spit in the face of the NBC bullies. Missed.

END SARS AND FDI

Asked by ARISE TV to comment on declining inflow of foreign direct investment (FDI) into Nigeria, President Buhari took a curious detour by linking it to the End SARS uprising and the ensuing burning and looting. This, he said, discourages investment. Something tells me the president was only looking for the slightest opportunity to fire back at the protesters, whom he accused of trying to bring down his government (#EndBuhari trended along with #EndSARS, and there was a street theory that the UN would remove a president if protests lasted for 30 days). Truth be told, though, the fall in FDI pre-dated the End SARS mayhem. But, well, Buhari fired the shot all the same. Noted.

THE BUHARI PERSONA

Recent TV appearances and pronouncements by President Buhari must have confounded a number of people, particularly those who say he is “Jibril Al Sudani” as well as those Facebook professors who theorise that he has dementia. They are living with the contradictions: in one breath, they’ve been criticising the “real” Buhari after the interviews and unwittingly admitting that he is not Jibril and does not have dementia; in another breath, they insist he is Jibril or that he has dementia. I would rather stick to one position and be damned than moving the goalpost based on the argument at hand. From the TV interviews, though, I can say this is the same Buhari of pre-2015. Indisputable.

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