Let me start by painting a scenario. Imagine that Shell Oil Company has 2000 employees living and working in a camp estate with their families, like we saw whilst growing up in Warri. The camp is then designed to handle a reasonable population in terms of municipal services like built infrastructure, medicals, recreation, security and education, etc.
Think what would happen when the reward system used in promoting and remunerating employees change. Imagine that they now make the population of each home to carry a weight thrice as much as the work output of the employee who is the head of that home as a measure for promotion? Basically, an employee gets more because he has more children. Though he still gets an increase based on his work output, but that’s only a third of what he gets from his size.
What do you think would happen in that work estate?
1]. People would struggle to outbreed one another and the population would keep shooting up
2]. The population count in each home would be subject to attempts at manipulation
3]. There would be mutual distrust, tensions and unhealthy clamouring
4]. Productivity would drop among the folks who still prefer keeping a sustainable size
5]. Municipal services would find it hard keeping up and even those who maintained common sense would suffer. A chain is only as strong as its weakest link.
6]. The company’s combined wealth would continue to drop, etc.
This is our situation today with the current revenue allocation formula to states. The incentive for IGR is about 10% while the one for population count is 30%. This also includes a 13% derivation to oil states not captured here.
Our current revenue allocation formula does not encourage productivity. When we speak about “structure”, this is one of the simple ones that keeps us up at night. We need to reverse this in a space of 15 years to population having 5% and IGR effort having 35%. We can do this by moving 5% sideways every 5 years until we arrive at that number.
If we do this, we would see states digging deep to explore their human and geographical resources for wealth generation and development. They would drive their own ease of doing business indices. We would have a fairer census figure and manipulation and political pressures would be less. We would see states champion family planning. Local political leaders (governors, HOA and LG) will also be better scrutinized by the electorate, rather than focusing on Abuja. Our collective national productivity and wealth will grow.
From 1947 till date, the revenue allocation formula between the tiers of government has been reviewed 12 times. This is 2017 and we are ripe for another one. Hopefully, as suggested here, we get one that turns our states into production rather than consumption centres.