This shows a clear lack of imagination and a shallow understanding of fiscal federalism by the Governor.
The Governor also wrongly asserts that the “inequality in the allocation of resources is one of the most significant factors in the current raging insurgency affecting the region and threatening to engulf the outside world.”
There are many questions in this:
1. Does the NE deserve a Marshall plan
2. Should the Marshall be funded by petroleum proceeds?
3. Is the inequality in the allocation of resources one of the factors in the raging insurgency?
A. Does the North East require a Marshall Plan?
Yes that’s simple enough
B. Should the Marshal plan be funded by 13% of the proceeds from petroleum resources?
Why only petroleum resources? Why didn’t the Governor just say 13% from FAAC or 13% from VAT or Customs Duties? FAAC is a zero sum account, this means that funds are pooled and distributed to clear beneficiaries under defined percentages. To create a new 13% account funded by petroleum is to simply reduce the existing 13% derivation already appropriated to the oil producing states. It’s in effect robbing Peter to pay Paul.
C. Is inequality in allocation of resources a factor in the insurgency?
NO! Borno state is number seven in terms of net amount received from FAAC among the 36 states, (in this order, Akwa-Ibom, Delta, Rivers, Bayelsa, Lagos, Kano then Borno). However by Gross Statutory Allocation, Borno is 4th, (in this order Kano, Kaduna, Lagos then Borno). Note, Borno receives more than Akwa Ibom, Delta and Rivers without the application of 13% Derivation principle. In terms of VAT allocation, Borno is 11th out of 36 states.
So what inequality? Unless Shettima is saying it will be equal for Borno to receive more money from FAAC than AkwaIbom, FAAC being of course funded by petroleum.
Osun is dead last in net FAAC allocations, there is no insurgency in Osun, but I digress.
However this post is not just to bash, but to proffer solution… How should the Marshall Plan for the NE be funded?
1. By taxation, the power of the government is to create and impose a tax, thus raise VAT to 10% and use the increase to pay for environmental damage caused by desertification and erosion, and social services. No recurrent expenditure allowed.
2. By fiscal stimulus, pass a bill that drops Corporate Income Tax to 5% for 10 years for any company that set up a factory, farm, business in the NE and employ at least 50 employees, where half must be women, paying them above minimum wage with pension, National Housing Fund and National Health Insurance Scheme as part of package.
3. Giving the NE states a sovereign guarantee to borrow at the same rate as Nigeria and eliminate all charges, fees, stock exchange listing requirements etc for a North East Infrastructure Development Bond. Issue the bond at a subsidized interest of 1% for 15 years, and commit NNPC, NPA, NCC, NAFDAC, CBN etc. to invest in the bond. The unclaimed dividend fund currently at over N50billion can also be invested here.
4. Increase the tax on gas flaring by .5% and invest in solar infrastructure in the North East, connect every hut, home and hamlet to a solar off grid system. Also connect to irrigation systems to build islands of green to ensure all year round farming, to create jobs
5. Allow companies elect to invest the current 2% education tax only in the NE to fund social services. A company may for instance, select a group of schools and pay the 2% directly to a fund to pay for school rebuilding, school lunched, girl child education, maternal care etc
In closing, the governor’s statements demonstrate that the leadership in Nigeria is ONLY focused on crude oil. Change means the governor realizes that crude oil is only an enabler, not a solution.
It’s also important that 50% of all funds raised MUST go to education and job creation, absolutely nothing should go to recurrent expenditure. To stop the insurgency is to eliminate illiteracy and poverty in the NE, this Marshall plan should address those two issues…
It’s our problem, we can fix it.
(Photo Credit www.TheMarshalplanmovie.com)