THE most annoying and depressing news I hear every month is that of the monthly ritual undertaken by the 36 State Commissioners for Finance, when they gather at an 'enclave' in Abuja to 'share' statutory allocations from crude oil receipts.It appears to me that our leaders are content to keep 'sharing the national cake' rather than thinking of how to expand it. As a consequence, I am sometimes tempted to pray for our oil to dry up sooner rather than later. How else can our hopelessly indolent leaders be compelled to use their brains to think up creative, sustainable means of creating wealth'Our current predicament is quite reflective of a term in economics known as the 'resource curse' or the 'paradox of plenty', a phenomenon witnessed across many resource-rich countries (the Democratic Republic of Congo being one of the most extreme examples).The most dangerous consequence of being a resource-rich country, in my opinion, is the proliferation of a 'cabal', a predatory class with a sense of entitlement over the entire country's resources, accompanied by a decline in the performance of other, more productive and value-adding sectors of the economy (witness the near-collapse of Nigeria's agriculture sector from the 1970s, the same period when oil became our primary source of revenue).An important drawback to being resource-dependent is that commodity prices, by their very nature, are extremely volatile. A country like Zambia, for instance, which is heavily dependent on copper for most of its revenue, can be severely hit by a decline in copper prices, which, of course, are market-determined and lie outside its control.In contrast, a manufacturing nation like Germany not only reaps the benefits of value added for its exports, it has far greater leeway in fixing prices, thereby having a more reliable flow of revenue and enabling better preparation and execution of annual budgets. Given these advantages, no country, Nigeria inclusive, can afford to be content with basing its entire economy on a finite, non-renewable resource like crude oil.Our dependence on 'statutory allocations' from revenues based on a finite resource is not sustainable. Indeed, our oil reserves and level of production are even quite paltry compared with global amounts (Nigeria only produces 2.62 per cent of the world's oil with 2.67 per cent of global oil reserves).A pertinent question we need to ask ourselves is: Are we ready for a world without oil' More poignantly, are we ready for a world in which oil is no longer a strategic resource' I believe strongly that we must begin to take drastic steps to break free from the stranglehold of resource dependency before it is too late. My thoughts on how this can be done are detailed below.First, I propose a restructuring of the country into five major economic zones as opposed to the current geo-political structure that has promoted a North-South dichotomy. The five zones will be: Core North (comprising the current North-West and North-East minus Adamawa and Taraba), Middle Belt (comprising North-Central plus Adamawa and Taraba), West (comprising the current South-West plus Edo), East (comprising the current South-East) and South (comprising the current South-South minus Edo). Governors in each economic zone should congregate and form regional economic blocs and determine their areas of comparative advantage.The core north could, for instance, re-ignite their groundnut, cotton, textile and leather industries (who says we cannot develop a Nigerian answer to Gucci, Louis Vuitton, Prada and Versace'), the Middle Belt could utilize their large, fertile land to become Nigeria's agricultural powerhouse, the West could become a centre for financial services and an information technology hub (our own Silicon Valley, perhaps'), the East could focus on commerce, manufacturing and industry, while the South (now in full control of their oil resources) could replicate the Dubai model by utilizing its oil wealth to develop its massive tourism potential.The oil-producing states could be encouraged to contribute 30 per cent of their crude oil earnings every month (for, say, five years) into a special fund, the purpose of which would be to aid the other states in making the initial investments into the identified sectors.The fund should be distributed to the states in the same ratio as the current revenue allocation among them in order to prevent unnecessary rancor. The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) could be given supervisory powers to ensure strict adherence to the agreed terms.Second, I also propose that the Company Income Tax Act (CITA) be reviewed to give states the power to assess and collect tax from companies registered in their domain. In other words, instead of all companies paying their income tax to the federal government (as is currently the case), they should pay to the states where they are domiciled, and a portion of the tax realized by each state would be remitted to the centre.The effect will be fivefold: One, it will help to weaken the centre and strengthen the states, thereby entrenching true federalism; Two, it will motivate state governors to seek real-sector investment in their respective states as opposed to lazily waiting for oil handouts; Three, it will help generate more revenue for states, thereby empowering them further; four, it will help create more jobs in individual states and stem the relentless drift to urban areas; and five, it will promote greater accountability at state level as the governors will face greater scrutiny with regard to their use of the increased revenue.In proposing these ideas, I am not under any illusions that implementing them will be easy or devoid of resistance from those who, either out of ignorance or sheer selfishness seek to maintain the status quo. I am also aware that some of the finer details in the ideas proffered may not be universally acceptable and may need adjustment.However, I believe the underlying principle can be agreed upon: this practice of sharing oil money every month must cease.We must break free from this 'Dutch disease' if we are to fulfill our potential.
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