Atiku: Nigeria’s restructuring inevitable

The theme of this conference, “The Challenges of National Integration and Survival of Democracy in Nigeria” makes two very important acknowledgements: 1) national integration and the survival of Nigeria’s democracy are related and are important; 2) they both face challenges in Nigeria today. I believe that most Nigerians would agree with those propositions although we are likely to have differences regarding how to achieve national integration and ensure the survival of our democracy.

I have spoken, I think clearly and forcefully, on both issues on several occasions in the last twelve years or so. Permit me to focus on national integration in this presentation.

National integration, to me, simply means the process by which different components of a country, with economic, political and cultural links, develop a sense of nationhood, of unity, of oneness, of interdependence, irrespective of their different histories, experiences, ideologies, and cultural values and practices. Such a sense of nationhood and oneness encourages a commitment by the people to the survival of the nation and its values and principles, cultures and territorial integrity. One of those values may be democracy, that system of government which allows citizens the freedom to choose their leaders in periodic elections, speak their minds, associate with their fellows, and puts limits on the powers of leaders.

As a country we have mightily struggled to live up to this ideal. We have obviously not done enough to realize national integration, and the survival of our democracy is still a work in progress. The cost to us has been enormous. We even fought a civil war to forcibly keep the country together.

Since the various amalgamations that created the entity that we now call Nigeria, different segments of Nigeria’s population have, at different times and sometimes at the same time, expressed feelings of marginalization, of being short-changed, dominated, oppressed, threatened, or even targeted for elimination. Apart from regional, ethnic and religious groupings, other segments of the population such as labour and professional groups have expressed similar frustrations arising from a sense of exclusion and helplessness. This often stems from feelings that their voices are not being heard or that they are unable to hold those in power to account. There is also a sense of disengagement of large portions of the population, especially due to high rate of youth unemployment and lack of obvious economic opportunities.

We have over the years responded to these agitations in a variety of ways and with a variety of measures. These include the creation of states from the earlier three (and later four) regions to the current 36 states; a civil war, and other military operations in different parts of the country at different times; federal character principle; changes to revenue allocation formula; National Youth Service Corps; federal take-over or establishment and management of schools, universities, hospitals, and huge federal presence in the economy as an investor. Others include the excessive centralization and concentration of power at the federal level and the weakening of the federating states; and amnesty for “repentant ex-militants” of the Niger Delta.

Unfortunately these measures have not worked adequately to enhance national integration and the sustenance of our democracy. If anything, our unity has been fragile, our democracy unstable, and our people more aggrieved by their state in the federation. We have always responded with a suspicion of the “other” in trying to deal with these challenges to our integration and democratic survival. And, quite naturally, our responses/solutions have also been, at least partly, shaped by sectional interests and sentiments. The problem though is that sometimes what is in the short-term interest of a group may not be so in the long-run. And, more importantly, nation-building requires sacrifices of some sectional interests for the overall interest of the nation and all the segments. Unless we do not think that the nation’s unity is worth sacrificing for or that the sacrifices have to be made only by others and not by us!

Sometimes we implement contradictory policies that weaken national integration. An example is the requirement of state and local government of origin rather than residency for access to government services and jobs. That alone restricts people’s mobility and infuses in them a sense of rejection by the very country that wants them to feel welcome and proud.

Personally I believe in one strong and united Nigeria. I believe that we are stronger united, and that together our potentials are enormous. And I believe that Nigeria’s unity is worth sacrificing for.

It is not a secret that many Nigerians from outside the North hold the view that the main beneficiary of the status quo has been the north, an undifferentiated north. Sometimes they say it is the northern elite or the “Kaduna Mafia”. This sentiment, I think, stems largely from the following reasons:

• people of northern extraction being the heads of government at the national level for much of our post-independence period until 1999, during which period much of the current structure was put in place,

• the leading role that the north played in the war to keep the country united between 1967 and 1970,

• the country’s reliance on oil revenues which comes mainly from the Niger Delta, far away from the North, as well as

• what some see as a knee-jack resistance from northern elements to calls for the restructuring of the federation. Having led the federal side in the war to keep the country together, it is understandable that northern leaders would have less tolerance for what they perceive as another attempt to break up the country.

My focus here, however, is to show that the north and Nigeria have not been served well by the status quo and there is need for change. Who among us who went to primary and secondary school in the 1960s had much to do with the federal government? Did the northern regional government wait to collect monthly revenue allocations from Lagos before paying salaries to its civil servants and teachers or fixing its bridges and roads? In May this year the Governor of Niger State publicly stated that his state could no longer pay salaries because of dwindling federal allocations. And he is not alone. A recent report by Economic Intelligence published in a number of Nigerian newspapers showed that 9 out of the 10 States with the lowest internally generated revenue are in the north. And they are among the 15 states that the report said may go bankrupt if federal allocations to states continue to decline because their IGR is less than 10% of their federal allocations. There is something wrong with the structure of this country and we must see it for what it is. Even in the unlikely event that federal allocations are shared equally among all the states, we would still be in trouble if we cannot generate revenues internally.

How can we excuse the reality that the section of the country that produces most of the country’s food cannot raise revenues to cater to its internal needs? Who do we blame for having a large number of our school-age children being out of school? Why should our people continue to roam the forests with herds of cattle and sheep in the 21st century when we have had the opportunity to take advantage of advances in the technology and science of animal rearing to settle our herds in particular spots and produce even fatter animals to meet the country’s rising demand for meat? This is what the rest of the organized world has done. Therefore we need to promote diverse economic activities, tax the proceeds of those activities and use the proceeds to provide public goods and services for our people. Citizens and businesses do not generally volunteer money to governments.

It is the rising dominance of oil revenues that led us to abandon cash crop production and neglect food agriculture. Before oil, agriculture was our main industry and we taxed it (and the products of other economic activities) to develop the north – to provide education, healthcare and infrastructure. But because of oil we now plead helplessness. The north has the largest known deposits of solid minerals in Nigeria including some of the rarest and most expensive. So why should we be afraid of the concept of resource control, that is the control of rents by the areas of derivation?

My brothers and sisters, government revenues are based on taxation. Infrastructure for economic development is built with taxation. Rents on natural resource extraction, including oil rents, are not sustainable sources of revenues for government. And whenever and wherever they are dominant for a nation they tend to distort the economy, discourage productivity and encourage rent-seeking activities and dependency.

What Should be Done.

For a start we need:

• an honest reappraisal of the motives and principles behind existing solutions to our national integration challenges and their efficacy under current circumstances. Such an appraisal should not be shaped by which political party we belong to or any expected political benefits to individuals. It can be done with the help of a body of independent experts from this part of the country or even from outside the country.

• an honest and clear-headed look at better working federal systems in the world. Those systems will reveal among other things a greater devolution and autonomy for the federating units, less interference of the centre on local matters, such as local government administration, including local policing; central governments that depend on taxation of resource extraction and other economic activities rather than rents for their operations.

I’ve been speaking about achieving greater national integration through devolution and decentralization for some time now because I know that too much concentration of power at the centre hurts the country and the north in at least three critical ways: (1) destroying our economy and values as it does elsewhere; (2) putting too much premium on the struggle for power at the centre; and 3) creating the false perception that the north benefits from the status quo, thus presenting the north as being responsible for the country’s development challenges.

There is no doubt that oil revenues have helped Nigeria (and the north) to expand infrastructure, education, and health facilities. Those benefits have to be weighed against the long term costs, including distortions, the creation of dependency and unstable politics. And the level of poverty, illiteracy, unemployment and sense of hopelessness among our people, especially the youth, gives the lie to the perception that the north is better-off with the current socio-political structure in the country. Today the price of oil is low and the country’s economic survival is being threatened by groups disrupting the flow of that oil. When we look at our future in these circumstances what exactly do we see?

The north has ample supply of people, young people. All we need to do is educate them and provide them with the skills to be competitive in the country and the world. They and the north will succeed, and if they do, Nigeria will succeed. The world of today is not one of dominance by mere numbers. The quality of those numbers is more important. The world is also not dominated by the regions with the largest deposits of natural resources. For example, Japan, which has no significant mineral deposits and little land for agriculture is the third largest economy in the world. Also, Singapore moved from being a Third World to a First World economy despite having little in terms of natural resources.

I believe that we have reached the peak of the oil economy. Even for those who think nothing of diversifying to alternative revenue sources, the ‘jamboree’ is clearly over. Oil prices may still go up in real terms in the future, but the long-term trend will be downwards, and here are the reasons:

1. New technologies of oil and gas extraction, especially hydraulic fracturing (also known as fracking) have helped in pumping out more oil than the world needs. In fact, those technologies have helped to push the US towards becoming the world’s top oil producer. Is it any wonder that US import of Nigerian oil has declined to almost zero?

2. Growing investments in alternative energy sources as well as the declining costs per unit of these alternatives have not only added significantly to the world’s energy mix but also appear to have set the world on an irreversible move towards reliance on non-fossil and renewable energy.

Let me give you just a few examples. In 2004 the world generated only 48 gigawatts of electricity from wind power, but by 2014 wind power accounted for 318 gigawatts. In 2004 only 2.6 gigawatts of power were generated worldwide from solar photovoltaic (PV), but by 2014, 139 gigawatts were being generated, and this excludes an additional 326 gigawatts thermal solar water heating capacity. Also total annual biofuel production rose from 30.9 billion litres in 2004 to 113.5 litres by 2014. The same phenomenal increase is noticed in annual investments in renewable energy, from a mere $39.5 billion US in 2004 to $214.4 billion by 2014. In 2004 only 48 countries had policy targets regarding renewable energy but by 2014 the number had reached 144. As we speak here today cars using non-oil based energy either in full or in part are being produced for the mass market. And just last month, the US, Canada and Mexico pledged to derive 50% of their energy from clean sources by 2025.

The impetus for these dramatic changes came from the various energy crises which the world has experienced since the early 1970s; the creation of critical markets for renewable energy by such pioneer countries as Germany, Denmark, Spain and the U.S.; and the growing efforts to mitigate climate change. Of course the declining costs of renewables arising from the increased investments and capacity have been helpful. All of these will continue to put pressure on oil prices even when the world economy fully recovers.