Restructuring and the 1963 Constitution by Simon Kolawole

Funny how we hardly reach any cross-ethnic consensus in this country, but the campaign for a return to the 1963 Constitution — increasingly becoming the backbone of the “restructuring” agenda — 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 “as provided for under the 1963 Constitution”. 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. 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. 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. 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 “mines and minerals, including oilfields, oil mining, geological surveys and natural gas” on the Exclusive Legislative List — 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. More importantly, was derivation payment actually 50 per cent under the 1963 Constitution? Section 140, titled “Mining Royalties and Rents”, stated thus: “(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.” This 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. 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 “royalties and rents” derived from mining activities and not “revenue” from mineral sale. Item 25 already said all minerals, including oil and gas, belonged to the federation. “Any and all revenues derived from their sale similarly belong to the federation,” he said. In contrast, he argued, Section 162 (2) of the 1999 Constitution says that “the 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”. The professor’s core argument is that the 13 percent from “revenue” in the 1999 Constitution is higher than the 50 percent on “royalties and rents” 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. 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’s share of joint-venture crude production and profit oil from the production sharing contracts. 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 “rents and royalties” will not favour the oil-rich states as much as the 13 percent on “revenue”. The 1963 movement has also successfully sold the idea that “regionalism” and “50 percent derivation” made the regions “compete” 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 “rents and royalties” 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. 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’s 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. There is also this obsession with regionalism — that we should restructure to six regions to allow for “competition” and reduce “cost of governance”. We had three regions that “competed” in the first republic. So, we should now reduce 36 states to six regions so that we can compete again. That means we should bring Tiv from Benue together with Fulani from Nasarawa in the north-central region and under one governor? Jokes? The over 50 ethnic groups in the south-south should come under one governor? Abia, Anambra, Ebonyi, Enugu and Imo should become one state when Nd’Igbo are actually asking for an extra state? Do these 1963 campaigners listen to themselves at all? “Cost of governance” is not determined by the constitution. It is determined by the operators of the constitution. The 1999 Constitution prescribes one minister per state, which means we can do with 36 ministers, but we decided to appoint 43. Should we blame the constitution for that? A governor appoints 1,000 aides and buys 1,000 Prado SUVs and we think the high “cost of governance” is caused by the constitution? Lawmakers create millions of naira for themselves as monthly allowances but we want to blame the high “cost of governance” on the constitution? In the end, it is the operators of the constitution that decide either to be prudent or wasteful with public funds. Having six regions will not automatically translate to a massive reduction in costs. This is Nigeria. Meanwhile, the 36 states are allowed to “compete” by the 1999 Constitution. Abia styles itself as the “SME capital of Nigeria”. Cross River says it is Nigeria’s best tourist destination. Must competition be among only six regions when 36 states can play the game? If not that we tie viability to FAAC, all states are viable — if the leadership is right. As an aside, under the 1999 Constitution, aviation is on the exclusive list but Anambra has just inaugurated its airport. Akwa Ibom has Ibom Air. Lagos, Delta and Akwa Ibom states invested in Econet in 2001. If they had not sold off their shares, they would be earning billions today at a time FAAC revenue is low. But we prefer to blame the 1999 Constitution. I want to be clear on something: Nigerians have the right to keep looking for how to enjoy good governance and development. However, this is an exercise that must approached with facts and rigour, not just parroting the “received wisdom” being perpetrated from one generation to another. If the 1963 Constitution gave us Eldorado, why was the first republic overthrown? Read the coup speech of Major Chukwuma Nzeogwu and you would think he wrote it early this morning. I understand the nostalgia about the first republic, but the assumptions are simplistic. We had some visionary, competent and patriotic leaders but some think it was the constitution that did the work. Chief Obafemi Awolowo, for example, never used the 1963 Constitution. Under a colonial constitution, he governed and transformed Western Nigeria from 1952-59. Even with the “military” constitution of 1979, Awo’s cardinal programmes — free education, free healthcare, rural/urban industrial integration and gainful employment — were implemented by UPN governors. Till tomorrow, we are still celebrating the feats of Alhaji Lateef Jakande, Lagos governor from 1979-83. And you know what? Free education, free healthcare, rural/urban industrial integration and gainful employment are still allowed under the 1999 Constitution. If you doubt me, get a copy and read it. AND FOUR OTHER THINGS… LUCKLESS LAWAN After a long trial, Hon. Farouk Lawan was finally sentenced to seven years imprisonment for the bribery scandal of 2012. He had allegedly demanded a $3 million bribe from Mr Femi Otedola in order not to indict his company, Zenon Petroleum, in the subsidy scam probe by the house of reps. The irony was that Zenon dealt only in diesel, which was not subsidised, but our lawmakers can embarrass anybody. Otedola organised a sting operation and nailed him. It is not as if the “public hearing” blackmail has stopped — it is still a major source of income for the blackmailers. Lawan may still find a way out of prison. This is Nigeria where jails are meant for only the lowly. Sad. HIGH AND LOW Chidinma Ojukwu, the 21-year-old Unilag undergraduate who allegedly murdered Usifo Ataga, the CEO of Super TV, said something that needs to become a major focus of social action in Nigeria. The 300L student of mass communication said both of them were high on drugs, one of which she named as “roofies”. Brig-Gen Mohamed Marwa (rtd), chairman of the National Drug Law Enforcement Agency (NDLEA), recently attributed most criminalities in Nigeria, including banditry and terrorism, to the influence of illicit drugs. It takes more than courage, anger and hate to butcher a fellow human being. Addressing the drug menace must be priority in our security strategies. High. FEC VS TWITTER You mean Nigeria really nominated six ministers to meet with Twitter to resolve issues around the suspension of the microblogging site in Nigeria? To discuss issues of compliance that can be handled by a perm sec and a couple of technocrats? Can you see the quality of thinking in government? I would be surprised if Jack Dorsey, the Twitter CEO, attends the meeting. If he does, it would be just to humour us. It is a job the head of compliance at Twitter should handle. We still have to be thankful that President Buhari and Vice-President Yemi Osinbajo are not part of our delegation. In 1976, Gen Murtala Muhammed said Africa had come of age. And 45 years after, this. Demeaning. OPL 245 TWISTS Are Nigerians following the drama around the prosecution of the OPL 245 case in Italy? For the past five years, many people have been scandalised and reputations destroyed over the controversial deal, but new developments have shown that there was more to it. Shell and Eni and their executives have been discharged and acquitted over corruption allegations; Emeka Obi, a middleman for Malabu Oil & Gas in the negotiations, has been freed from jail for miscarriage of justice; and Fabio Da Pasquale, the prosecutor, is now facing investigation for allegedly manipulating evidence in his desperation to secure convictions. This should be made into a movie. Incredible.