Poverty In The North And Revenue Allocation

It was the Central Bank Governor Alhaji Lamido Sanusi that fired the first salvo to set the stage for the current issue of poverty and federal revenue distribution. In far away London, the English capital in an interview with Financial Times of London, Sanusi informed his audience that Boko Haram terrorism ravaging the northern part of Nigeria is a direct effect of poverty in the region. He puts the blame for the poverty in the region  on the un-equitable distribution of federal government revenue 

He went on to back-up  his claim with statistical data showing how much the South- South  states receive from the federal revenue compared to their counterparts from the north. Sanusi is a brilliant man and definitely knows how to use statistics.

Most times however he does not tell the whole truth.  Surely, Sanusi that has the data for the amount received by all the states has the data on how much each state is contributing to the federation. What are the South/South states contributing to the federal purse and what are their counterparts from the north contributing?

The CBN governor is being economic with the truth to suit his purpose. The South/South states have been subsidising the federation for over 40 years receiving less than 20% of their money back from the federation account.  Unfortunately Sanusi and people like him are unhappy with even the little of their money that they are receiving.

The governor of Niger State on behalf of the governors of the north is therefore calling for the reduction of fund due to the oil producing states. The oversimplified argument from the northern intelligentsia and their governors is that oil the main source of federal revenue is a natural gift from God and the south/south states made no contribution towards its creation.

Therefore the income from oil is gift from God and the region has no right over it. They argue for greater share of the revenue because the north has a larger land mass and population. Kano state a part of former Kano has 44 local governments that collect money from the federation account while Lagos state has only 20 .

The question then is if the South/South states played no part in the existence of crude oil; what part did the north play in the creation of the land mass which they are using to claim greater share of federal revenue?  What effort is required for a large population other than unrestrained procreativity from numerous wives and concubines?

The south/South is contributing more than its fair share to the federal purse. Any attempt to marginalise them further I believe will be resisted. My strong advice to those canvassing this line of thought is to carefully weigh the implication of their proposed action. I would sincerely request that they let the sleeping dog to lie before they plunge this country into major crises. 

The two key issues that should be occupying the minds of Governor Babiangida of Niger State and all the northern governors should be: 1) What made the majority of  northerners poorer than their southern counterpart; 2) How can they extricate the region from endemic poverty ravaging its population at the shortest time possible.

The north is poor because Nigeria is a rich country of very poor people. The north is poor because of its  low productivity base and a highly distorted and un-equitable income distribution structure. The main cause of this can be found in the historic antecedents of the region.  The early political leaders of the north rightly identified the key drivers of power structure in a federal system like ours; the military and federal bureaucracy. 

Once they identified these structures, they prepared and strategically positioned their  people to control both believing that whoever occupies them will be on the driver’s seat and use such position to direct development to the region. They did this with a small corps of elite, trained and prepared for that purpose.

Through sound strategic thinking, the north has remained at the top echelon of political, military and bureaucratic structure of the federation for many years. This may be as a result of the feudal system of the north which always protects its own.  In the Western part of Nigeria on the other hand, the early political leaders found the idea of mass education more compelling and therefore directed its efforts at massively educating its people, believing that a highly educated west will control the political and economic structure of the country.

While they did not succeed totally in the political front, they are a major factor in the federal bureaucracy and are the dominant factor in the economic terrain of the nation. The two groups used two different approaches for the same goal but with different results. Studies have shown that illiteracy and poverty are positively correlated. An uneducated person is more likely to live under poverty than his educated counterpart.

The early political leaders of the West by massively educating their people laid a foundation for future poverty reduction. It should therefore not be a surprise to any person if the western part of Nigeria performs better than other parts of the country in terms of most economic and poverty reduction indices.  It is interesting to note that like the north, the west do not receive any preference in terms of federal allocation of funds but  its people are not as poor as those of the north.

The early northern leadership through power control at the centre succeeded in creating a small corps of financially and politically powerful elite but also created a sea of uneducated and very poor people around them. The north controlled the entire federal power structure for many years. Instead of using their position to drive development to the region, they were more interested in converting state wealth into private wealth stashed at various financial institutions abroad.

Most unfortunate for the north is the fact that their elite (unlike their counterparts in western Nigeria) do not invest in their society or its people. They hardly give back to the society. For example, many good private schools in the west are owned by wealthy individuals who do not need the income of such schools to survive. Compare that with the north. Look at the number of private universities in the west today and compare it with the north. How many private foundations financed by wealthy individuals exist in the western axis compared to the north. The northern elite is too selfish and self centred.

An investment of $4 annually by the Abacha family in Almajiri education will wipe out   that syndrome in Kano in 5 years.  I am sure that $4m is less than 10% of annual interest on their loot!! The price of the selfishness of the elite of the north over the years is Boko Haram of today. You cannot have a sea of uneducated, unemployable but able bodied young men and women surrounding a handful of stupendously rich people over a long period of time without serious consequences. 

The south is not immune and their time will come but poverty in the north is worse than the south as all indicators have shown. The earlier the northern elite wake up the better for their own good because running to Abuja will not save them. 

How can the north be redeemed from the clutches of poverty?  First, only the north can redeem itself and it cannot be achieved overnight. It requires careful planning, discipline and  consistent policy application to achieve the objectives. The elite and political leadership of the region must face the reality and begin to address the issue before it consumes them. The responsibility of salvaging the region from the pangs of poverty lies squarely on them. No amount of federal fund allocation will solve the problem if they continue with their present lifestyle.   

All northern governments must as a matter of urgency address the educational backwardness of the region. Special attention must be given to female education. It must be made illegal for girls to marry before the age of 17 years. An educated woman is most unlikely to breed uneducated children.

The level of educational imbalance between the south and the north must be a source of concern to the leadership of the north. They should use education to address the almajari syndrome. A people breeding 3 generation of beggars is a time bomb waiting to explode.

The northern elites have benefited so much at the expense of its people. This is the payback time. The elite and financially powerful people of the region must develop and implement a road map for a productive and private sector driven economy for the region. Over dependence on rent seeking activities through the central governments had not done the region much good.

They must come together and where necessary employ foreign experts to develop large and medium sized agro-industrial complexes that will not only create employment but also help to stimulate development of small scale enterprises in the region.  Un-employment (and under- employment) is positively correlated with poverty.

Poverty breeds disease and crises which lead to greater poverty and ensures an unending chain of poverty.  There is need for urgent and massive injection of private sector investment especially in agriculture and agric-related business. The north has depended too much on government to the disadvantage of the people

Population Control and education. The region cannot continue with indiscriminate procreation.  The era of one man and 20 children is gone. Unfortunately this is most common with the uneducated. It is not surprising that China is having its highest economic growth when it is enforcing the policy of one child per family.

A decent family size of 4 children should be adequate. You may claim higher federal allocation with large population but when this population has no purchasing power, you have a large incubator for poverty, urban squalor and crime.

Development of Entrepreneurship in the region. Rent seeking and government patronage activities by a few powerful individuals in the region without adequate entrepreneurial skills has helped in creating a high level of poverty in the region. The political and economic leadership of the region must begin to develop the spirit of entrepreneurship in its people.

This can be done both by example and by creating various entrepreneurship development centres. For example the Babangida family can employ the services of Malaysians to develop 50,000 ha of oil seed farm (ground nut, soya-bean or sunflower) and processing factory for edible oil. Next to that will be a 10000 ha youth development farm where young school leavers will be trained and allocated 5 ha of farm land each.

They will be assisted through the extension service of the agro company to produce and feed the processing mill of the company. This will create at least 60,000 direct jobs and more than 150000 jobs indirectly. This is achievable within 1 year and will run successfully as a private company. The Abachas can do the same in Kano by irrigating thousands of hectares of land and employing Argentines to develop cattle ranch for beef and dairy products.

Attached to this will be a large number of Fulani herdsmen who can be encouraged  to settle in one place and put their children in schools. So many jobs will be created with its attendant multiplier effects.  For this to be effective, it must be a private sector initiative with little government assistance

Security, Ethnic & Religious Tolerance. Investment creates jobs.  Jobs generates income and purchasing power which creates more job and prosperity. But investment is nurtured and blossoms only in a peaceful and secured environment. 

Constant ethnic and religious intolerance is only driving the region deeper into poverty. Governments, religious and political leaders and all elites of the region must come together to fight for peace in the region. Investment does not know colour, religion or race it goes where it is secured with good returns.

The north alone cannot develop itself. It needs people from other places. If the region cannot tolerate others, it will live under poverty for a long time. If the example of the Niger delta is anything to go by; when Boko haram finishes with outsiders and non-Muslims; it will turn to its fellow brothers and who will the first targets: the leaders.     

Okemini (FCA) can be reached on iokemini@googlemail.com