Bail-Out Funds to States Illegal – Hamman Tukur Ex-Chair RMAFC
Engr. Hamman Tukur was the longest serving Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) where he served for ten years in two tenures. He left a mark and impact that was felt across the nation especially introduced the monetisation policy in government as a system to reduce wastage of funds on public officers’ perks and also compelled Nigeria National Petroleum Corporation (NNPC) to be more open and transparent after controversy of alleged missing revenue from the oil sector during President Obasanjo’s government.
A former Rector of Kaduna Polytechnic and Managing Director, National Electric Power Authority, (NEPA), Hamman Tukur was also Director-General, Federal Ministry of Mines, Power and Steel and Ministry of Petroleum Resources. A Member, Institute of Strategic Studies, Kuru; Fellow, Nigerian Society of Engineers; Fellow, Yaba College of Technology and Member, Institute of Electrical Engineers (England). He is an Officer of the Federal Republic (OFR) amongst several other honours.
In an Exclusive Interview with the Economic Confidential, Engr Hamman Tukur, talks on various economic issues:
EC: How is life after your service at Revenue Mobilization vis-à-vis the country?
Tukur: Manageable. We are surviving. As an individual and even as a nation, it has been a miracle I must say. As for me you are already seeing me and my nature. But as a nation, I am still at a loss about the talks of restructuring. To restructure what? Nigeria has lots of serious economic problems. Insecurity, and others problems. Should we not be talking about all these? Economic recession in any country is a serious one and we need to get out of it. But to go into the politics of restructuring, are we going to adjust the boundary of the Benue River, or River Niger or demolition of states and merging others. Survival of the nation is paramount and not political issues and other emotions being debated. Our priority now is to get out fully out of recession. The leadership is the one that needs restructuring so that they can take their responsibility seriously.
EC: Since you left Revenue Mobilization Allocation and Fiscal Commission(RMAFC), there has not been stable revenue allocation formula in place. What is your take on that?
Tukur: Is it not obvious that those benefiting from the system would not allow its operation. Lack of formal formula is the bane. As far as I know, the Commission has not been reconstituted. And of course the chairman there is in acting capacity. I am not aware in the Act that there is provision for Acting capacity. Since it is constitutional body, the appointment has to be made by the President and screened before confirmation by the legislature. Remember that if the commission says the salary of a particular public servant is N2000.00 because of the economic situation, it stands binding. I tell you a story during the time of President Olusegun Obasanjo. I approached him and said the salary of the Chief Justice of the nation should be higher than that of Mr. President. He replied me saying how dare say that!! Do you know who you are talking to? I told him Mr. President. I told him that if you Mr. President takes a decision on any matter, it can be reversed, but if the Chief Justice of Nigeria takes a decision, you cannot reverse it. You can see that the Revenue Commission is not constituted to play its constitutional roles as provided in the Act. To mobilize revenue is a very enormous task. You know people had in the past looted the treasury. Some of the money has been returned. Now the Revenue Commission will now ask the Central Bank of Nigeria(CBN) how much has been recovered so far in order to guide the commission in advising the government how to channel such recovered loot for development. It is either it returned to where it was stolen or put in the federation account for government to utilize for developmental purposes.
EC: Are you saying it is difficult to have a revenue allocation formula now?
Tukur: So there cannot be a revenue formula where there is no constituted commission. There ae rules guiding the commission such as plenary where decisions are taken in order to have a force of law. That is why the commission is not too active now. Remember that it is one of the seven bodies put in place by government and their decisions are always difficult to reverse.
EC: What is your position on the current inflationary trend vis-à-vis subsidies that had been in place?
Tukur: I hear about removal of petroleum subsidy and other related issues. Please let’s analyze this very well. How can you talk of removing something and yet when I go to the petrol station and pay N48.00 above the former price? You are not removing but transferring that cost to the ordinary man. Now I went to the Economic and Financial Crimes Commission(EFCC) and I threatened to go to court. During the time of Obasanjo and pushed out several circulars and government told NNPC to budget for this subsidy. Because we officially wrote Organization of Petroleum Exporting Countries(OPEC) to allocate 445,000 thousand barrels per day of crude to take care of the nation’s four refineries. And OPEC said on condition that you do not sell this 445,000 bpd of crude outside the country. This will make ordinary Nigerians not to feel the impact of fluctuations in oil prices. And when the refineries refused to work, what happened to the 445,000 bpd of crude? Who is supposed to talk about this? This to me is criminal. Now if they cannot be used by the local refineries, they should be sold and all the by-products brought back to the nation to fulfil OPEC requirement.
EC: Where are we in the oil and gas sector?
Tukur: The oil and gas sector is still there, but the operators are a different story. let me talk about Nigeria and OPEC. OPEC has not changed the quantity of crude oil export allocated to Nigeria in its daily production. If you are able to produce that quantity, look at your budget, your benchmark what is it? If you sell it higher, where is the difference? In other economies, the difference is what they use to develop the oil sector, rail system and a host of other infrastructure. In Nigeria, tell me whether if there is a difference, has there been any supplementary budget to take care? You have not answered me. When I was at the RMAFC, I think the benchmark was $65 to a barrel. When I was at the commission, we were daily monitoring every transaction and that time oil was selling for about $110 and above. And I now wrote to the presidency, because it was not touching the budget. We advised that the excess should be used to develop infrastructure. They instead set up excess crude account or Sovereign Wealth Fund in Dollars. These are the same people we go to and borrow money. Haba!
EC: How will you therefore describe the account?
Tukur: Whether you call it excess crude revenue account, or Sovereign Wealth Fund, all of them are illegal. There is no place for any of these things in the Constitution. They keep talking about the benchmark. What is the meaning of benchmark in terms of the budget? Budget is a proposal of what a government wants to do within the next one year. If one comes out to say one has gotten enough of the money and does not want any more, without a law, does it make sense? If that budget is approved by the National Assembly and the President signs it, it is absolutely illegal. Which agency fixes the benchmark in the budget? This is also illegal because all revenues are supposed to go into the Federation Account and shared to the three tiers of government according to approved sharing formula. The data the Commission had are still the ones being used till today. We did not change the governance structure. It is the Commission that has refused to give the country a fresh revenue allocation formula. It was supposed to be changed every five years. Nobody knows what is happening at the Commission anymore. It appears there is no political will to do so.
EC: Is the Benchmark necessary?
Tukur: But again, what is benchmarking? Benchmarking is like a sledgehammer. It will kill us one day. The role of the Commission is mobilizing the revenue and allocating it. The fiscal aspect is meant to check what the beneficiaries of the allocation did with what they got. The only thing the law did not give the Commission was the power to punish those who fail to use it properly. If the Commission mobilizes and allocates revenue, if one fails to use the revenue well, for instance, misappropriate, the Commission does nothing beyond just monitoring. If one steals or misappropriate, the Commission should say one has stolen, and that you must not continue to steal or misappropriate.
EC: How did you tackle these problems with the Obasanjo administration, notably loans to the power sector and others?
Tukur: Okay. Yes I think it was only when Obasanjo asked for $5.3 billion to finance NIPP (National Integrated Power Project) that the Commission said he cannot take it from the Federation Account without recourse to the other tiers of government. We told him that if he wanted any money, he should take it from the Federal Government’s share of the money, and then go to the National Assembly for approval. You are aware of the recent bail-out by the Federal Government to states. The president should tread softly. We must caution President Buhari the same way we did to Obasanjo when he wanted $5.3 billion. When the Commission said he cannot take the money, one day he had to send the then Secretary to the Government of the Federation, Alhaji Yayale Ahmed to come and tell the Commission that he wanted that money. I said no, the money does not belong to me, but the Federation Account.
EC: So how should the Federation Account be operated in that regards?
Tukur: What that means is that all the three tiers of government that own the Account must be aware and agree that the money be withdrawn for the purpose. Then the formula for sharing between the federal, states and local governments would apply. There should be no question of states staying somewhere to allocate what the local governments want. This is wrong. The money in the Federation Account belongs to the federal, states and the local governments. This is democracy. That is what applies to the National Population Commission. If the Commission says one village is 200,000 people, before anyone can undo it and change that decision, it would pass through a lot of processes.
EC: What can you say about the bail-out to States by President Buhari?
Tukur: Buhari gave out a lot of money to states recently in the name of bail-out. Who gave him that money? How did he get access to the Federation Account, or the authority to release that money? Did he go through appropriation for approval? If he released the money before it was approved, then it is illegal. In any case, who told the states to be broke? Who stole their money? He (Buhari) should have asked the state governors where their money was. Some people argue that the money used for the bail-out was from the Nigeria LNG dividend. But, the Constitution is very clear: all revenues of government must go into the Federation Account first before anything. The only exception that is made is written in the Constitution itself, and that is Armed Forces, including the military, Police and Federal Capital Territory (FCT). Anybody or agency paying tax to government for whatever description it should be channelled to the Federation Account.
EC: How does Revenue Commission intervene in that regards?
Tukur: That is why one of the key responsibilities of the Commission is to mobilize government revenue to the Federation Account before allocating. It is total. Exceptions are clear, so that no one can pretend. What that means is that wherever any revenue has not been remitted to the Federation Account by any agency, the Commission must ask questions. If any money must be released, the National Assembly must be approached for supplementary appropriation.
EC: What is your view of the Federal Government posture of engaging foreign contractors to the detriment of Nigerian Engineers?
Tukur: Well my position has been articulated in my personal letter to the Nigerian Society of Engineers(NSE) and protested this vehemently. The NSE is supposed to let government know its position. These engineers have been trained with public funds and we expect returns from them and so they should ask questions.
EC: In recent times the CBN has held on to the monetary policy rates for seven consecutive times as part of efforts to reposition the economy. What is your take on this?
Tukur: Okay tell me a bag of rice is about N18,000. How can a miserable bag of rice be N18,000? But before now it was less? Is that a mark of recovery? Please go to the market. What does inflation going down mean to the ordinary Nigerian? Cooking oil went up astronomically, why? And you want me to look at figures?
EC: What is your advice to government on Ajaokuta Steel Complex?
Tukur: My advice is to move away from disaster! Ajaokuta was designed along with the four rolling mills in the country to put Nigeria on the map of steel developed nations. It was 98 percent completed. It provided special power source. At the time Ajaokuta was on, the nation’s power supply dipped, because of heavy power consumption. Rail was to be connected. The Ports were ready. The raw material was there from Itakpe. The inland Rolling mills were there. Oshogbo, Katsina, Jos and Delta steel Aladja. It a shame! The next thing is privatize! If you privatize these industries before developing them, what is the primary responsibility of government? Government should take full responsibility in developing this infrastructure before calling on private investors as a mark of encouragement.