THE relationship between governors and the Federal Government is difficult to predict. But for most times, it blows hot and cold, depending on what is on the table. If the issue at stake has to do with elections, a lot of noise would be made out there to confuse the public.However, at the critical time, the Presidency and the Governors' Forum would come out with a plan that would put a smile on the faces of all concerned.It could be argued that since majority of the 36 States and the Federal Government belong to the same political party, it is fairly easy for the president and the governors to get along. But generally, the Governors' Forum manages to bring nearly all the states under its umbrella and the results are quite impressive.When the stakes are high politically and there is tension in the land, the forum takes a central role in making sure that the polity does not boil over. When it had to do with money, both the Presidency and governors also managed to get along.So, for most times, the relationship has been symbiotic, 'you rub my back, I rub your back' kind of thing and the polity gets going.But since the return of Finance Minister, Dr. Ngozi Okonjo-Iweala and her insistence that government embarks on belt-tightening policies to rescue the economy from profligacy, the eyes of governors have turned red and they have since refused to smile.First, it was the issue of N18,000 minimum wage for workers all over the country, supported by a law made by the National Assembly, but which has turned into a ding-dong affair because some states have realised that they do not have the capacity to pay.The poser is, bearing in mind that the Revenue Allocation Formula, which states subscribe to, does not allocate funds on equal basis to states, and given that some states generate more internal revenue than others, why prescribe the same minimum wage for all states, irrespective of population and size of their bureaucracies'The NASS is amused that states are kicking against the execution of the National Minimum Wage Act, which was duly debated, passed and signed. The public is also amazed that the governors began to kick only after the law was signed. At the time the law was discussed, passed and signed by the President in March, many governors had elections ahead of them and could not make valid alternative arguments, only to renege when it was time to execute.In the attempt to find ways out of their tight financial straits, the Governors' Forum reechoed the old idea for a cancellation of the subsidy the federal government purportedly pays for petroleum imports.States, having figured that freeing government from subsidising imported petroleum products would make more funds available to be shared, began to champion the removal of subsidy. That provided a fillip to the federal government resolve to work out a timetable for removal of the subsidy on petroleum products.Subsequently, the government went a step further to implement an agenda that had been in the works ' putting money in the proposed Sovereign Wealth Fund (SWF).The SWF law, which President Goodluck Jonathan signed in May, was meant to replace Nigeria's Excess Crude Account (ECA), in which government had saved excess revenue from the sale of crude above the set benchmark in the budget.Former President Obasanjo created the ECA in 2003 and there have been arguments on how the funds are shared among the three tiers of government, as there are no clear laws to that effect even though the Constitution has a clear position on revenues and their disbursement.President Jonathan, on the occasion of the signing of the SWF law, promised that it would accomplish three main objectives: saving money for the future; providing finance for infrastructure; and providing stabilisation fund to defend the economy when the crude oil market runs into trouble.In defiance of the governors' objection to the fund, the Minister of Finance announced that the federal and state governments had agreed to commit an initial seed of $1 billion from the Excess Crude Account (ECA), where it had been saved, to establish the SWF.IT is curious that the same governors, who do not see any problem with fuel subsidy removal, now find the SWF a no-go area. The SWF is not the same thing as the money expended by government to subsidise importation of petroleum products.Note that when government decides to hands off subsidy, a lot more money would be handed back to the states. In addition, they will continue to share money from the ECA, in the event that the SWF idea is shot down.Literally, states want to swim in money because, as they argue, they need money to do a lot of things. Does it mean states don't want to save for the rainy day'Last Monday, the 36 State governments were reported to have gone to the Supreme Court, to ask that the federal government be restrained from making any withdrawals from the Excess Crude Account, pending the hearing and determination of a suit they filed in 2008.The suit refers to a case brought in 2008 when the governors asked the federal government to pay into the Federation Account N5.51 trillion ($34.7 billion) it said was accrued between 2004 and 2007 from the proceeds of crude oil sales, petroleum profits tax and oil royalties.The governors also asked the apex court to order that all sums standing to the credit of the account styled the Excess Crude Account (or any account replacing same by any name howsoever), be paid into court or be otherwise secured as the court may deem fit, pending the hearing and determination of the substantive suit.Counsel for the governors, Chief Adegboyega Awomolo (SAN), said the governors were forced to file the application because the federal government and its officers had consistently, and in total disregard for the pending suit, withdrawn, utilised, disbursed and allocated funds from the account and had nearly depleted the sum of N5.51 trillion being the balance on the account as of 2008, when the case was instituted.The governors contended that the conduct of the government of the federation and its officials is a violation of the principle of the Rule of Law and breach of the independence of the Judiciary and constitutes a violation of the principle of rule of law.So, the governors are not against the idea of saving for any eventuality, but they are asking that the federal government stops taking unilateral and unconstitutional actions regarding the management of federal monies.This brings back the old argument about fiscal federalism, the same argument many in the political class have refused to attend to, or are scared to discuss.The 1999 Constitution, in section 62(1), provides that;The Federation shall maintain a special account to be called 'the Federation Account' into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, The Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.On this score, it can be argued that both the ECA and SWF are alien to the Constitution even though they are Acts of the National Assembly. Thus, in going to the Supreme Court, the states know the advantage the Constitution has over legislation. For this reason, some have called for a political solution that would bring the two tiers to a compromise.The National Assembly has joined the states in the demand for more money, which, again, is an old argument. The federal government takes the lion share of 52.68, leaving 26.72 for 36 States and 20.60 for the 774 local councils in the country.The Constitution permits the NASS to tinker with the sharing formula and it is hoped that that will happen sooner than later, to relieve the federal government of its larger-than-life posture that does not impact on constituents that are under states and local governments.The face-off calls to serious question the ultimate need to reorder the federation and free the units from a central command that is bogus, fraudulent and inefficient.
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