{"id":1396,"date":"2021-06-27T09:13:33","date_gmt":"2021-06-27T08:13:33","guid":{"rendered":"https:\/\/alimoshotv.com\/?p=1396"},"modified":"2021-06-27T09:13:33","modified_gmt":"2021-06-27T08:13:33","slug":"restructuring-and-the-1963-constitution-by-simon-kolawole","status":"publish","type":"post","link":"https:\/\/alimoshotv.com\/index.php\/2021\/06\/27\/restructuring-and-the-1963-constitution-by-simon-kolawole\/","title":{"rendered":"Restructuring and the 1963 Constitution by Simon Kolawole"},"content":{"rendered":"
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\u00a0 \u00a0 \u00a0 President Muhammad Buhari\u00a0 \u00a0 \u00a0\u00a0<\/strong><\/em><\/div>\n
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Funny how we hardly reach any cross-ethnic consensus in this country, but the campaign for a return to the 1963 Constitution \u2014 increasingly becoming the backbone of the \u201crestructuring\u201d agenda \u2014 seems popular in southern Nigeria and Benue state. The core argument is that we need to return to regionalism: every region should control its natural resources, take 50 percent derivation, run local councils and create state police \u201cas provided for under the 1963 Constitution\u201d. The 1999 Constitution, according to the #BringBack1963Constitution movement, is a glorified military document fit only to be used to wrap suya and sliced onions or roasted plantain and peanuts.<\/p>\n

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I have to admit upfront that a rational debate is difficult under this toxic atmosphere. Opinions are mostly settled along ethno-religious lines. It will be awfully problematic to have a dispassionate dialogue. To the typical southerner, northerners have been implementing an agenda of total domination as the structure of the country is eternally skewed in their favour. To the typical northerner, the structure is a fair reflection of our socio-economic and political demographics and southerners are only allowing pride and prejudice to colour their reasoning. With these entrenched mindsets on both sides, we cannot expect to have a decent discourse, much less reach a consensus.<\/p>\n

The loudest voices in the room are demanding a return to the 1963 Constitution for several reasons. One, it is widely claimed that the constitution granted resource control to the regions. Two, it is said that the constitution granted 50 percent derivation. Three, it is believed that the 50 percent derivation allowed the regions to compete and that was why Nigeria made progress then, compared to now. Four, it is argued that the 1999 Constitution, under which we currently operate, is a terrible piece of work foisted on the country by the military. There are many other reasons being advanced by the #BringBack1963Constitution movement which I cannot capture in this little space.<\/p>\n

For us to have a healthy and honest debate, we need to stick to the facts. We can then apply logic to the cold facts. To start with, it is incorrect to say the 1963 Constitution granted resource control to the regions. In fact, Item 25 of Part I under Section 69 of the Schedule of the constitution clearly placed \u201cmines and minerals, including oilfields, oil mining, geological surveys and natural gas\u201d on the Exclusive Legislative List \u2014 under the federal government. This was a word-for-word retention of Item 25 (Part I) under Chapter XI of the 1960 constitution, bequeathed to us by the British colonial masters. It was repeated as Item 36 (Part I) of the Second Schedule in 1979 and Item 39 in 1999.<\/p>\n

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More importantly, was derivation payment actually 50 per cent under the 1963 Constitution? Section 140, titled \u201cMining Royalties and Rents\u201d, stated thus:\u00a0\u201c(1) There shall be paid by the Federation to each Region a sum equal to fifty per cent of (a) the proceeds of any ROYALTY (emphasis mine) received by the Federation in respect of any minerals extracted in that Region; and (b) any mining RENTS (my emphasis again) derived by the Federation during that year from within that Region.\u201d<\/em>\u00a0This is a direct replication of Section 134 of the 1960 Constitution. I wrote an article in 2017 making an argument that the 1963 Constitution granted 50 percent derivation on minerals.<\/p>\n

However, I got an email from a senior lawyer, who is also a professor of law. He queried my interpretation. He said the key provisions of Section 140, along with the preceding Sections 136-139, 141-145 and Item 25 on the Exclusive Legislative List, were as follows. One, ownership of all minerals, including oil and gas, belonged to the federation. Two, the 50 percent derivation accruing to regions is in respect of \u201croyalties and rents\u201d derived from mining activities and not \u201crevenue\u201d from mineral sale. Item 25 already said all minerals, including oil and gas, belonged to the federation. \u201cAny and all revenues derived from their sale similarly belong to the federation,\u201d he said.<\/p>\n

In contrast, he argued, Section 162 (2) of the 1999 Constitution says that \u201cthe principle of derivation shall be constantly reflected in any approved formula as being not less than thirteen per cent of the REVENUE (my emphasis) accruing to the Federation Account DIRECTLY (mine, again) from any natural resources\u201d. The professor\u2019s core argument is that the 13 percent from \u201crevenue\u201d in the 1999 Constitution is higher than the 50 percent on \u201croyalties and rents\u201d in the 1963 Constitution. If he is correct, that means the much-derided 1999 Constitution is the only document in the history of Nigeria that grants derivation directly on revenue, as opposed to just the mining rents and royalties.<\/p>\n

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While I could not counter him, I am also aware of certain things. When the 50 percent provision was made in 1960, we did not have the kind of expansive oil taxation arrangement in place today. Royalty, a fixed sum paid by companies for mining a mineral, is just one handle. Oil companies now pay the following: signature bonus, after winning the rights to a block; 85 percent petroleum profit tax; two percent profit education tax; local content levy; and export supervision scheme levy of 0.5 percent on volume. In addition, the biggest source of oil revenue today is from the sale of Nigeria\u2019s share of joint-venture crude production and profit oil from the production sharing contracts.<\/p>\n

For clarity, federally collected revenues are shared by the three tiers of government AFTER the mineral-rich states have taken their 13 percent derivation, which is a first line charge. In addition to derivation, the oil-rich states also share from the monthly federation account allocation committee (FAAC). In 2019, Delta state received N165.2 billion as 13 percent derivation and N219.28 billion as net FAAC allocation. Akwa Ibom earned N119.7 billion as derivation and N171.98 billion as net FAAC allocation. If we revive the 1963 Constitution, the senior lawyer said, the 50 percent derivation from \u201crents and royalties\u201d will not favour the oil-rich states as much as the 13 percent on \u201crevenue\u201d.<\/p>\n

The 1963 movement has also successfully sold the idea that \u201cregionalism\u201d and \u201c50 percent derivation\u201d made the regions \u201ccompete\u201d in the first republic. This is urban legend. True, Western Nigeria earned its biggest revenues from cocoa, Eastern Nigeria from palm produce and Northern Nigeria from groundnuts, but the 50 percent derivation on \u201crents and royalties\u201d did not apply to agricultural produce. Agricultural revenue was not paid into the federation account. It was between the farmers and the regional governments. And, yes, this is retained in the 1999 Constitution. Osun and Ondo are into cocoa. Ebonyi and Kebbi are into rice. No constitution has stopped them.<\/p>\n

Let me be cheeky a little. Under the 1963 Constitution, Nigeria produced 417,000mt of groundnuts annually. Under the 1999 Constitution, we are now producing three million mt. Which is better? Nigeria produced 270,000mt of cocoa in 1965 and 650,000mt in 2004. Which is better? Under the 1999 Constitution, Nigeria became the largest producer of cassava in the world as well as one of the world\u2019s largest producers of tomatoes. We are now one of the largest producers of rice in Africa. Of course, you and I know that it is not the constitutions that produced the cassava and rice. It is about policies, incentives and commitment. We really can do with more sophistication in our thinking.<\/p>\n