It is paradoxical that despite the huge revenues accruing to the Federal Government, the level of poverty in the country has worsened. According to the recent report from the Nigeria Extractive Industries Transparency Initiative (NEITI), a total of N28.58trillion was remitted to the Federation Account between 2012 and 2016. The remittances contained in the agency’s Fiscal Allocation and Statutory Disbursement (FASD) audit report came from three major sources: mineral revenues, non-mineral revenues and Value Added Tax (VAT).
Details of the revenue sources showed that mineral revenues contributed the highest amount of N18.15trillion (after de- duction for Joint Venture Cash calls and subsidy payments). This represents 64 per cent of the total earnings. This was followed by non-mineral source with N6.6trillion, representing 23 per cent, while VAT contributed N3.73trillon or 13 per cent. Also, a year-by-year breakdown of the total re- mittances indicated that N4.19trillion was remitted in 2012, N4.73trilion in 2013, N4.69trillion in 2014, N2.89trilion in 2015, and N1.65trillion in 2016.
Furthermore, a summary of the N18.36trillion revenues from mineral source shared among the three tiers
of government showed that the Federal Government received the lion’s share of N8.32trilion from 2012 to 2016,
trailed by the state governments, sharing N4.22trilion, while the 774 local governments received N3.25trilion, excluding the N2.36trillion 13 per cent derivation to the oil, gas and mining producing states. In addition, the NEITI report revealed that from the non-mineral revenue of N6.68trillion, the Federal Government received N3.52trilion, the 36 states got N1.79trilion and the local governments took N1.38trillion. Similarly, the Federal Government received the highest amount of the N3.7triliuon revenue that accrued from VAT, with N560billion.
No doubt, the NEITI report is indeed disturbing. It raises some pertinent questions: How was the money spent and for what purpose? Was the money spent on things that will yield optimal benefits to the economy and the citizens or on profligacy? It is disheartening that Nigeria remains on the bottom rung of human development indices because of the less than optimal use of funds from its natural resources. There is no doubt that our economy is wobbling while the essential infrastructure is in worse conditions ever because of corruption in high places and misplacement of priorities. It is not enough for the government to bemoan the current shortfalls in revenue target without first resolving the inefficiency in the use of available revenues. It is no longer news that many Nigerians are jobless. There is heightened insecurity, dilapidated infrastructure and grinding poverty. Millions of children are out of school and there is general decline in the welfare of Nigerians. The paradox is that as the country is experienc- ing steep decline in human development indices, a lot of government revenues are being spent on political office-holders. The cost of sustaining them has become too high and unsustainable. For instance, the 2019 budget has non-recurrent expenditure (salaries, overheads and other recurrent items) of 46 per cent of the total expenditure of N8.92trilion.
Considering the level of poverty and unemployment in the country and the fact that the government is the highest employer of labour, it may prove difficult to cut down the size of bureaucracy without having a strong and robust private sector-driven economy, which can employ a good number of the jobless citizens, especially the youth, the active population. The way forward is to drastically reduce the cost of governance, part of which must be a hefty cut in the emoluments and allowances paid to lawmakers and other political officials.
Undoubtedly, the current bureaucracy in the country cannot be sustained in view of the extant financial crisis. There is also need to tackle public sector corruption, which still remains high despite the efforts to curb it. It will be recalled that the Office of the Auditor-General’s report in 2018 revealed huge corruption and mismanagement of funds in virtually all Ministries, Departments and Agencies (MDAs) at the federal level. It noted that the deficiencies were so deep and shocking that their financial statements were opaque and did not meet General Ac- ceptable Accounting Principles (GAAP). To say the least, this is unacceptable and must stop.
Also, the report by NEITI that the Federal Government diverted N544billion to fund the Independent National Electoral Commission (INEC), and national security is quite inexplicable. Therefore, the government should be transparent in all its expenditures in the overall interest of Nigerians, especially in respect of their welfare and security as provided in Section 14(2) of the Constitution. Government must realise that money does not necessarily make a nation wealthy if it is not invested in capital projects that will improve the quality of lives of the people.