Date Published: 02/05/10

In Support of Alhaji Aminu Dantata on North’s Contribution to the Development of Nigeria

By: ADAMU M. FIKA (WAZIRIN FIKA)

On 17 th October 2009 a foundation was launched in honour of the late Sir Ahmadu Bello at the Murtala Square , Kaduna . Alhaji Aminu Dantata, the patriarch of the famous Dantata clan, who was the chief launcher at the occasion, seized the opportunity to debunk the notion that since the amalgamation of Northern and Southern Nigeria in 1914, the Southern Provinces had always subsidized the Northern Provinces . Alhaji Aminu maintained that the reverse was in fact the case. But opinion moulders in the South have pigheadedly continued to insist, without the slightest shred of evidence, that the South had contributed more financial resources to the development of the country than the North.

Lugard’s Policy on Taxation and Disposal of Revenue

In order to verify the veracity of either of the two sides of this great debate, I decided to search in public records at the National Archive and at Arewa House, both in Kaduna . One of the documents which I extensively used in this exercise is the report titled Administrative and Financial Procedure under the Now Constitution and the Financial Relation between the Government of Nigeria and the Native Administration written by Sir Sydney Phillipson in 1946. In it, Phillipson gave in detail the history of revenue sharing between the central Government and Native Administration including Tax Policy. The other documents used were the Nigerian estimates for the years 1914 to 1947-48.

From the early years of the amalgamation up to 1926, the philosophical basis for the collection and utilisation of public revenue in colonial Nigeria was given by Sir Frederick Lugard. In his report, Amalgamation of Northern and Southern Nigeria 1912-1919, he noted that “among other problems was the problem of taxation, direct and indirect, and disposal of revenue so as to benefit the country as a whole”.

Direct taxation was levied by the Government but collected by the Native Administrations the proceeds of which were divided equally between the Government and the individual Native Administrations. The 50 percent contributed by the native administrations together with the centrally collected revenue went to a single fund to be utilised “for the benefit of the whole country” on the basis of need.

The services on which the central revenue was expended were classified into Nigerian (central) and provincial. The provincial services were further subdivided into services in Northern provinces and services in Southern provinces. The figures in schedule I below, give the actual revenue contributed by each group of provinces and the actual expenditure on services in each of them: 

Schedule I

Actual provincial revenue contributions to the central Fund and Government expenditure on Provincial Services

1914 to 1925-26

In recognition of the soundness of the policy of encouraging Native Administration “to do their work for themselves” and his conviction that the 50 percent of the tax proceeds allowed them was insufficient to execute meaningful development projects, in 1926, sir Graeme Thompson, successor to Sir Hugh Clifford, increased the share retained by each “fully organised” Native Administration from 50 percent to 70 percent. There was no clear definition of “fully organised Native Administration” which was used for the first time in 1916 for the purpose of giving greater responsibility to those of them that appeared to be better organised. As was expected, the beneficiary administrations were enabled to shoulder greater financial responsibilities and execution of development projects such as road construction, sanitation, forestry, agriculture, education and provision of local amenities. The negative influence of the new arrangement affected the poorer Native Administration profoundly and, its implementation created undesirable gaps and inequality of economic, social and political development between neighbouring Native Administrations. In consequence the policy was reviewed, this time placing emphasis on helping the poorer Native Administrations. The distinction between fully organised and partially organised Native Administration was abandoned and a new set of principles was adopted as follows:

      (i)        That the demands of the poorer Native Administrations should receive prior considerations over the demands of the richer Native Administrations;

    (ii)        That the decision as to whether a new project should be undertaken by Native Administration must depend not only upon the capacity of the Native Treasury but upon the Nigerian Treasury;

  (iii)        That the Government must retain the right to reduce the level of tax to be retained by Native Administrations.

Under the new policy the pattern of provincial contributions and the pattern of expenditure on provincial services is as shown in schedule II below:

Schedule II

Actual provincial revenue contributions to the central Fund and Government expenditure on Provincial Services

1926-27 to 1938-39

In the financial year 1937-38, the British Government created a fund—the Colonial Development and Welfare--for the purpose of financing development projects in its colonies, including Nigeria, and became another source of fund. From that year the classification of expenditure on provincial basis was discontinued.

The following year, the Protectorate of Southern Provinces was split into the Protectorate of Eastern Provinces and the Protectorate of Western Provinces with head quarters at Enugu and Ibadan respectively.

Schedule III

Actual provincial revenue contributions to the central Fund

1939-40 to 1947-48

In 1946 the constitution was extensively reviewed, providing for three regional councils as intermediary bodies between the central Government and the Native Administrations. Under the new constitution the centre devolved functions to the councils. Sir Sydney Phillipson was appointed sole fiscal commissioner to recommend formula and procedure for allocating revenue for  purposes to Regional Councils. Phillipson recommended the adoption of the derivation principle to the fullest extent possible.

However, he noted that, since it is out of question that the inauguration of the new constitution should be marked by an enforced reduction of expenditure on regional purposes in any particular region, there must be an interim period during which the allocation of available revenue to Regions should be made with reference to the existing level of expenditure for regional purposes therein but “with gradually increasing approximation year by year to bring about a state of things in which the contributions made by each Region is proportional to the regional level of expenditure.”

On the basis of this principle, the expenditure estimates for any year would be based on the most reliable previous expenditure figures available at the time of the preparation of the estimates plus per cent for expansion. The figures arrived at were to be compared with proposed revenue allocation to each region. If the revenue for any region was found to be less than the proposed expenditure while the revenue in any other region exceeded proposed expenditure for that region, the surplus was to be transferred to the revenue of the region with deficit.

For the year 1947-48, the revised estimates for 1946-47 were used. On the revenue side, the proceeds of regionally collected revenue were £604,688 for the Northern Region, £157,747 for the Western Region and £242,213 for the Eastern Region. The amount available for regional allocation from centrally collected revenues was £2,788,766 giving total revenue to the Regions of £1,887,065 for Northern Region, £994,080 for Western Region and £911,129 for Eastern Region. The estimated regional expenditure estimates were £1,190,775 for the Northern Region, £880,078 for the Western Region and £1,278,081 for the Eastern Region.

Comparing respective regional revenues with expenditures, the revenue estimates for Northern and Western Regions exceeded their respective expenditure estimates by £696,290 and £106,002 respectively, while the revenue estimate for the Eastern Region fell short of its expenditure by £366,802. In order to ensure that there was no reduction in the level of services of the Eastern Region, parts of the two surpluses were utilised to wipe off the deficit of the Eastern Region. The two excesses exceeded the shortfall by £345,490, which was just about the amount needed for the Public Works Extra-ordinary (capital works) of all Regions. The Regional figure for the capital works were £178,640 for the Northern Region, £130,050 for the Western Region and £126,710 for the Eastern Region.

Put briefly, this meant that Northern Region contributed in effect a total of £517,650 to the Government expenditure on regional purposes in other regions: £24,048 to the Public Works Extra-Ordinary of Western Region, £126,719 for Public Works Extra-Ordinary Programme of the Eastern Region and £366,892 to the general regional purposes of the Eastern Region.

The 1948/49 expenditure estimates were based on the revised 1947/48 estimate plus 5 percent on both the Recurrent and Extra-Ordinary expenditure which came to £1,885,000 for Northern Region, £1,900,000 for Western Region and £1,673,000 for Eastern Region. Estimated Revenues came to £2,440,800 for the Northern Region, £1,543,600 for the Western Region and £1,323,800 for the Eastern Region, giving surpluses of £555,800 and £353,600 for the Northern and Western Regions respectively and deficit of £349,200 for the Eastern Region part of the revenue surpluses for Northern and Western Regions were transferred to Eastern Region revenue to wipe out the shortfall, thereby reducing the Northern and Western Region revenue to £2,216,780 and £1,407,821 respectively while the revenue of the Eastern Region was increased to £1,763,450.

A similar procedure was followed in the 1949-50 estimates when the Regional expenditure came to £2,265,705 for the Northern Region, £1,357,446 for the Western Region and £1,798,719 for the Eastern Region against regional revenue of £2,540,785 for the Northern Region, £1,508,355 for the Western Region and £1,327,733 for the Eastern Region, giving surpluses of £304,874 and £166,566 for Northern and Western Regions respectively, and a deficit of £425,462 for the Eastern Region. These were adjusted as was done in previous years to meet the minimum needs of the Eastern Region by reducing Northern and Western Regions Revenue Estimates to £2,265,577 and £1,357,998 respectively, and by increasing the Eastern Region’s Revenue Estimate to £1,798,295.

The magnanimity of  Northern and Western Regions subsidising the Eastern Region continued up to 1953-54, the year when Nigeria formally became a federation. In that year, the Regional Expenditure Estimates came to £7,230,000 for Northern Region, £5,701,000 for Western Region and £5,651,000 for Eastern Region, and the total of Regional Revenue came to £8,774,000 for the Northern Region, £10,188,000 for the Western Region and £5,188,000 for the Eastern Region, giving surpluses of £1,544,000 and £4,487,000 for the Northern and Western Regions respectively and a deficit of £463,000 for the Eastern Region.

It is clear from the foregoing schedules that during the first forty years of unification of Nigeria it was only in 1919 and1920 that the revenue contributions from the South marginally exceeded those from the North. In 1919, the South contributed £575,890 compared with the North’s £555,040 giving difference of £20,850 in favour of the South. On the expenditure side, the Government actual expenditure on services in the North was £350,279 compared with the actual expenditure on services in the South of £1,154,307. In effect the North could still be regarded as having contributed more if the combined effect of revenue and expenditure were taken into account.

In 1920 the south contributed £588,210 compared with the £579,210 contributed by the North, giving a difference of only £9,745. On the expenditure side, the Government spent the sum of £509,515 on services in the North and £1,900,973 on services in the South.

During the period of forty years the contribution of Northern Provinces to the central fund totalled about £18,000,000 compared with about £8,000,000 contributed by the Southern Provinces. On the expenditure side, the Government spent a total of about £13,000,000 on the services in the Southern Provinces compared with about £6,000,000 on provincial services in the North. In other words, the North contributed almost 225% more than the entire South, but itself received only 46% of the share the South got out of the common pool.

Contributing to the central revenue fund and receiving less spent on the Provincial Services in the North was not the only sacrifice made by the North. A number of projects and services which should have been more properly charged directly on the central fund were in fact financed by the Native Administrations in the North. The more important instances of these include:

The main road from Sokoto to Zaria was constructed from Native Administrations funds.

The Kaduna College, the Sokoto Women Training Centre, the Kano Law School were all financed from Native Administrations funds. The Okene Training Centre was in fact Native Administration institution, instead of being Government Institution. In fact, in the Northern Provinces the resources of the Native Administrations were regarded as available for any useful purpose.

During the depression of the early 1930s the Government sought the assistance of the Native Administrations in balancing the Nigerian budget when the latter materially relieved the strain on Government finances.  They also helped in arresting the process of drastic retrenchment then being followed when some of the Northern Native Administrations took over on secondment a considerable portion of Public Works Department staff and also undertook a much larger share of financial responsibility for the execution of public works.

Indeed the Native Administration in the Northern Provinces took over the strains of the expenditure on Extra-ordinary Public Work to the extent that in 1935-36 Government expenditure represented only 6.75 per cent of the total expenditure of £2,143,211 while the expenditure of the Native Administrations in the Northern Provinces represented 88.14 per cent. Native Administrations in the Southern Provinces provided 5.11 per cent. Also in the Northern provinces. the Native Administration organisations served both the Government and the Native Administrations purposes. While Public Works Department provided the supervisory staff, the Department is relieved of direct responsibility in respect of stores, accounts, recruitment of labour etc.

The duties of policing, prison services and institutions as well as administration of justice in the Northern Provinces, which were supposed to have been funded by the Government pool, were all financed from the Native Administration funds.

Even though they contributed more to the common pool, Northern Provinces were almost all but neglected in the provision of socio economic services. In the field of education, for instance, the central Government had, by 1946 built 23 primary schools in the South compared with only two in the Northern Provinces—in Jos and Kaduna; and even these were built to cater mainly for the children of Nigerians from Southern Provinces in the service of the Government and British mercantile houses.

Indeed, the Igbo language was the linga franca in the two schools outside of classroom because of the preponderance of Igbo children.  Alhaji Sale Jambo, one of the few Northern children who attended the Jos school, speaks Igbo language fluently.  Furthermore, the concentration of grant aided voluntary agency schools in the South made the situation for the North much worse.  It is not therefore surprising that by 1952 when Ministerial and representative government was introduced in Nigeria only 20 Northerners out of more than 610 senior and intermediate Nigerian officers listed in the Government Staff List of that year.

As can be seen from the foregoing, except for just two years, the North virtually bankrolled every year of the first 40 years of Nigeria’s existence. Therefore to call the North a parasite is the height of ingratitude; and, in the circumstance, worse than a mere case of blaming the victim. It betrays a clear case of the perfect ignorance of the situation.  It is indeed ironic that the resident of the former Eastern Region – particularly the South East zone, who for the first 40 years had been subsidized by the North should now lead the attack against the North describing Northerners as parasites.

Possession of a press that goes to town with its stories and views without investigation, a press that is more a megaphone for the prejudice of its elites, should be no licence for its owners to engage in unfounded insinuations and incessant insults to certain sections of the country. This attitude is irresponsible and very unhelpful; and so long as it continues, so long will sections of the country be hopelessly divided, and the nation itself remain undeveloped for the same reason.