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________________________________________________________________________________ Journal of International Law and Strategic Studies (JILSS) ________________________________________________________________________________ Rediscovering the Essence of Federalism in Nigeria Ekokoi Solomon* Lecturer in Law at the Department of Public Law, Faculty of Law, University of Uyo, Nigeria Abstract This paper examines the economic role of federalism in Nigeria by assessing the capacity of the federal governing system to promote the well-being of citizens. It evokes the question whether federalism in Nigeria is a mere political compromise for the continued sustenance of the Nigerian State as inherited from colonial administration or a governing arrangement built around the welfare needs of the citizens. It identifies the economic functions of governments in a federal system and adopts the institutional framework which identifies the relationship between constitutions, constitutional structures and economic outcomes to evaluate constitutional economic rules. It asserts that a federal system that fails to deliver in these functions cannot claim to promote the social welfare needs of its citizens. It therefore recommends a re-assessment of Nigeria’s federal practice which calls for both attitudinal reorientation of those who operate the system and constitutional changes anchored on the needs of citizens rather than the organisation or structure of the State. ______________________________________________________________________________ * B.Sc (Uyo); LL.B (Calabar); B.L (Lagos); LL.M (Uyo)

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________________________________________________________________________________

Journal of International Law and Strategic Studies (JILSS) ________________________________________________________________________________

Rediscovering the Essence of

Federalism in Nigeria

Ekokoi Solomon* Lecturer in Law at the Department of Public Law, Faculty of Law, University of Uyo, Nigeria

Abstract

This paper examines the economic role of federalism in Nigeria by assessing the capacity of the federal governing system to promote the well-being of citizens. It evokes the question whether federalism in Nigeria is a mere political compromise for the continued sustenance of the Nigerian State as inherited from colonial administration or a governing arrangement built around the welfare needs of the citizens. It identifies the economic functions of governments in a federal system and adopts the institutional framework which identifies the relationship between constitutions, constitutional structures and economic outcomes to evaluate constitutional economic rules. It asserts that a federal system that fails to deliver in these functions cannot claim to promote the social welfare needs of its citizens. It therefore recommends a re-assessment of Nigeria’s federal practice which calls for both attitudinal reorientation of those who operate the system and constitutional changes anchored on the needs of citizens rather than the organisation or structure of the State.

______________________________________________________________________________ * B.Sc (Uyo); LL.B (Calabar); B.L (Lagos); LL.M (Uyo)

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‘Before [the output of] any system can change, first the assumptions holding it in place must change.’1 And ‘… great change dominates the world, and unless we move with [it] we will become its victims.’2

1. Introduction A constitution, in modern conception, is intended to set out the governing arrangement as well as the relationship between citizens and the State.3 Generally, a constitution relates to and defines the notion of separation of powers,4 limited government,5 democracy6 and governmental systems. Therefore, it would seem that a constitution is merely a legal and political document.7 However, this may not necessarily be the case as demonstrated by socialist constitutions such as those of the People’s Republic of China8 and the former Soviet Republics (before the collapse of the Soviet Union). And because there is growing interest in the economic function of a constitution9 as well as how economics may be applied to understand constitutions10 by adopting the efficiency theory in the study of constitutional orders and their economic outputs,11 it has become pertinent to examine constitutional economic rules which grant power and access to governments to determine market forces and resource allocation of public goods in Nigeria, in a view to ascertaining whether the Nigerian Constitution and the governing arrangement it adopts have the requisite potential to promote the welfare needs of citizens. According to constitutional history, Nigeria became a federal territory within the British Empire by virtue of the Nigeria (Constitution) Order in Council 1954 (otherwise referred to

1 R.T. Kiyosaki, ‘The Courage to Change’ in Ensuring Lifetime Security for Yourself and Children (Asian

Publisher1993) 177, p. 178 (emphasis added). 2 R.F. Kennedy quoted in A. J. Olsen, ‘Kennedy Exhorts Poles to Further US-Soviet Friendship’ New

York Times, New York, 2 July 1964,p. C6. 3 See generally, M. K. Mbondenyi & T. Ojienda (eds),Constitutionalism and Democratic Governance in Africa:

Contemporary Perspectives from Sub-Saharan Africa (Pretoria University Law Press, 2013). 4 See M. J. C. Vile, Constitutionalism and the Separation of Power (Oxford: Oxford University Press, 1967).

5 See C. J. Friedrich, Limited Government: A Comparison (New Jersey: Prentice-Hall, 1974).

6 See J. Elster and R. Slagstad (eds), Constitutionalism and Democracy(Cambridge: Cambridge University

Press, 1988) see also D. Greenberg et al (eds), Constitutionalism and Democracy: Transition in the Contemporary World (New York: Oxford University Press, 1993).

7 For a discussion on the need for a constitution to identify and set out a blueprint for the realisation of

the welfare needs of citizens, see B. Nwabueze, Constitutional Democracy in Africa Vol 1 (Ibadan: Spectrum Books) pp. 45-48.

8 See C. Pak-kwan, ‘Economic Constitutionalism in the China Circle: Comparative Economic Provisions

in the Constitutions of Mainland China, Taiwan and Hong Kong’ (1998)in Law and Governance in the Developing World, p. 1-40.

9 See eg, C. Beard, An Economic Interpretation of the Constitution of the United States (New York: Macmillan

Publishing Company, 1913 (1935)) and G. W. Scully, Constitutional Environments and Economic Growth (Princeton: Princeton University Press).

10 See R. A. Posner, ‘The Constitution as an Economic Document’ (November 1987) 56 George Washington

Law Review, p. 4. 11

See J. M. Buchanan, Constitutional Economics (Oxford: Basil Blackwell, 1991) and D. C. Mueller, Constitutional Democracy (New York: Oxford University Press, 1996).

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as the Lyttleton Constitution). Between 1954 and the present, Nigeria has had five Constitutions–the Nigeria (Constitution) Order in Council 196012 which ushered in independence; the Constitution of the Federation 196313 which marked the end of colonial representation in the government of Nigeria; the Constitution of the Federal Republic of Nigeria 197914 which replaced parliamentary government with the presidential system of government as well as brought about the second republic; the Constitution of the Federal Republic of Nigeria 198915 which was designed after its predecessor to inaugurate the third republic but operated partially for only two years; and the Constitution of the Federal Republic of Nigeria 1999 (as amended)16 which returned the country to a federal constitutional democracy and marked the commencement of the fourth republic. It is important to note that one feature has remained consistent and enduring in all of Nigeria’s constitutional experiences – i.e. the practice of federalism. And the attention which it has received from constitutional and political scholars, underscores the importance attached to federalism in Nigeria as demonstrated by the extensive literature on the subject. At the international stage, federalism has continued to attract the attention of more countries. In Europe, for example, the Maastricht Treaty of 1993 which established the European Union (EU) under its current structure drew the continent closer to a federal entity.17 And with the latest amendment to the EU Constitution–the Treaty of Lisbon,18 Europe appears to have become a single political and economic entity as well as a federation of independent States.19 In Africa, Ethiopia joined the group of federal States in 1995 when its new constitution adopted federalism as the governing system,20 while South Africa also joined the comity of federal States when its 1996 Constitution was

12

No. 1652 of 1960 Laws of the Federation of Nigeria 1960 [the 1960 Constitution]. 13

No. 20 of 1963 Laws of the Federal Republic of Nigeria 1963 [the Republican Constitution of 1963 or the 1963 Constitution].

14 Laws of the Federal Republic of Nigeria 1979 [the 1979 Constitution].

15 Laws of the Federal Republic of Nigeria 1989 [the 1989 Constitution].

16 Cap C23 Laws of the Federation of Nigeria 2004 [hereinafter the 1999 Constitution or the Nigerian

Constitution]. 17

See P. Craig & G. de Burca, EU Law: Text, Cases and Material (4th edn, Oxford University Press, Oxford 2007) p. 15; see also, Maastricht Treaty: Provisions Amending the Treaty Establishing the European Economic Community with a view to Establishing the European Union, signed on 7 February 1992 and entered into force on 1 November 1993.

18 See Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing the

European Community (2007/C 306/01) December 2007, entered into force on 1 December 2009, in Official Journal of the European Union vol. 50, art 1(b) & art 3b.

19 See A. Somex, ‘Europe: Political, Not Cosmopolitan’(December 2011) Rule of Law Center/Social

Science Research Center Berlin (WZB) Discussion Paper SP IV 2011-803, WZB, 18. However, Burgess argues that neither the EU nor its predecessor is a federation or confederation as his ‘theoretical analysis suggests that the EC/EU is neither a federation nor a confederation in the classical sense. But it does claim that the European political and economic elites have shaped and molded the EC/EU into a new form of international organization, namely, a species of “new” confederation.’ M. Burgess, Federalism and European Union: The Building of Europe 1950–2000 (New York: Routledge, 2000) p. 49.

20 See T. Regassa, ‘The Making and Legitimacy of the Ethiopian Constitution: Towards Bridging the Gap

between Constitutional Design and Constitutional Practice’ (2010) 23(1) Africa Focus 85, p. 87.

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adopted.21 As for Asia, there have been on-going debates in the Philippines on the advantages and disadvantages of adopting a federal governing system. For some scholars federalism is a political concept rather than a legal notion. The argument for or against this position is not within the scope of this paper. However, it is important to note that it is impossible to separate the ‘legal’ from the ‘political’ in view of the object of public law. For, as Loughlin has argued, public law is a distinct field of legal knowledge because of the singular character of its object–the activity of governing.22 So also is politics which is concerned with the making of choices for the functioning of the governing process. He further argued that the claim which conceptualises law as an autonomous mode of action and as an enterprise to be differentiated from politics merely seeks to eclipse the idea of public law as an aspect of political practice,23 since public law can hardly be differentiated from political jurisprudence. Accordingly, he points out that governing is a conceptual foundation of public law as are politics, representation, sovereignty, constitutive power and rights. And in order to promote the well-being of society, ‘modern governments have greatly expanded the range of their activities and have now assumed responsibility for furthering social and economic development, managing the economy, and providing for the welfare of their citizens.’24 These tasks are accomplished through the activity of governing as structured under the constitution, to determine how a people drawn into association with one another ought to maintain themselves, develop and flourish, by establishing some sets of governing arrangements, no matter how rudimentary. This is because ‘*t+he formation of governing arrangements is a ubiquitous feature of group life, [so much so that] [w]hatever the type of governing arrangement established, law of necessity holds sway.’25 The term ‘federalism’ is a derivative from the word ‘federal’, which means ‘having or relating to a system of government in which several states form a unity but remain independent in internal affairs.’26 It relates to ‘a system of associated *and co-operative] governments with a vertical division of governments into national and regional components having different responsibilities…’27 In the case of Nigeria, it has been posited that federalism was adopted to surmount the economic, political, social and cultural challenges the country inherited from colonialism,28 as well as afford the citizens multiple levels of protection with which to realise their welfare needs. As a political system, federalism which involves the distribution of governmental powers between a central authority and constituent political units by virtue of constitutional arrangement is well

21

For a comprehensive list of countries with federal constitutions, see Forum of Federations, ‘Federalism by Country’ <http://www.forumfed.org/en/federalism/by_country/index.php> accessed 22 May 2015.

22 M. Loughlin, The Idea of Public Law (Oxford: Oxford University Press, 2004) p. 132.

23 Ibid.

24 Ibid p. 8.

25 Ibid p. 5.

26 Concise Oxford English Dictionary (11th edn, Oxford: Oxford University Press, 2008) p. 520.

27 Black’s Law Dictionary (B.A. Garner (ed in chief) 8th edn, St. Paul: Thomson West, 2004) p. 642.

28 See eg, A. Utton, ‘Nigeria and the United States: Some Constitutional Comparisons’ (1965) 9 (1) Journal

of African Law, p. 41.

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established in Nigerian constitutional jurisprudence.29 Generally, it may not be presumptuous to argue that the adoption of the federal system in Nigeria arose out of the necessity to cater for the general welfare needs of the citizens.30 However, the law and practice of federalism in Nigeria suggests that this argument is flawed. In this paper, it will be argue that federalism as practiced in Nigeria is based on the assumption of the system as an ends in itself rather than a means to an ends. The argument of a flawed assumption of federalism in Nigeria is hinged on the systemic failure of federalism to promote the normative rights of citizens, as well as the emphasis of operators of the system on the distribution of political power rather than on how the principles of federalism may be applied to promote the welfare needs of citizens.31 In view of the foregoing, the institutional conception is adopted to examine constitutional economic rules which are applicable to the federal system in Nigeria. The institutional framework conceives that a constitution has the potentials to determine economic outcomes. It provides a vital link between the constitution, the structures it create and economic outcomes. Therefore, it is important to understand the distributive and allocative impacts of constitutional structures on governmental functions such as income redistribution, resource allocation, the promotion of economic activity, and well-being of citizens. The need to locate constitutions and constitutional structures within the institutional framework has become increasingly imperative considering that ‘*l+egal formalism is conceptual, concerned more with the definition of legal rules, [and] not the purpose it serves.’32 This paper is divided into four parts beginning with this one which evokes the constitutional basis of the concept of federalism as the governing arrangement in Nigeria. Part two examines the assumption upon which federalism was conceptualised by the American Federalist when they pushed for the adoption of the federal system as the governing arrangement in the United States of America (USA), and argues that federalism as a governing system is first and foremost concerned with promoting the welfare needs of citizens and that anything short of this is a déjà vu. Part three examines the economic stabilisation role of the national government in a federal system of government and argues that the rationale behind this is not an acknowledgement of the superior position of that government over the federating states or regions but a demonstration of the need for a single and consistent policy direction. In part four, the economic functions of income redistribution and allocation of public goods are examined. It evaluates how these functions determine the capacity of the federals system to promote and ensure the dual

29

See eg,Attorney General of Abia State v Attorney General of the Federation [2006] 6 NWLR (pt. 763) 264 at 422, para E-G; Attorney-General of Bendel State v Attorney General of the Federation & 22 Ors [1981] ANLR 85, 133 (SC).

30 See M. Oakeshott, The Politics of Faith and the Politics of Skepticism (T Fuller (ed), New Haven: Yale

University, 1996)p. 39. 31

See A. Fatai-Williams quoted in K. Amuwo et al (eds), Federalism and Political Restructuring in Nigeria (Ibadan: Spectrum Books Limited, 1998) p. 14.

32 F. Emiri & F. Eimunjeze, ‘Economics and the Problems of Jurisprudence’ in E. Essien (ed), Law: All-

Round Excellence: Essays in Honour of Professor Peter Umana Umoh (Accra: Toplaw Publishments Ltd., 2012) p. 90.

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protection of citizens’ well-being. Part five examines the future of federalism in Nigeria. It identifies how the federal system of government can remain relevant in contemporary Nigeria through the institutionalisation of social justice; and part six concludes with a call for institutional reforms through constitutional change as opposed to constitutional amendment.

2. The Assumption of Federalism In considering federalism as a form of governance, an association of people must first come to terms with how the notion of federalism could be applied to solve the problems confronting them. In the case of Nigeria, it is apparent that the early nationalists knew very little about the theory of federalism and how it may be applied in solving the social and economic problems of an evolving State.33 Neither have contemporary political and juridical actors readily or willingly come to terms with the reality that the practice of federalism in Nigeria is in the main characterised by its preoccupation with revenue allocation or what may be termed ‘distributive federalism’ centred around oil.34 According to James Madison, one of the early American Federalists, the double security which is safeguarded in the protection of the normative rights of the people and social justice are the ‘two considerations particularly applicable to the federal system of America, which place that system in a very interesting point of view.’35 Writing on the rationale for the choice and defence of the federal system over and above other forms of government by the early Federalists in the USA, Goldman notes that ‘Confederation was weak because the basis of the arrangement acted upon the states rather than on the people; and that there was no means to pursue the ‘end of government … which was the *redistribution of+ the commonwealth’.36 In what appears to be a dispute of the above claim or assumption of federalism, Eme Awa has argued that irrespective of the type of governing arrangement that is adopted by a society, government is obliged to promote the welfare of its citizens by providing ‘high standards of health services, access to education, the right to work and social security’37 which underpins the raising of taxes and expenditure. In as much as this is true, this argument misses the point in that it overlooks the fact that all societies are not the same in character, hence, the need to identify which governing arrangement is best suitable for individual societies. For a society with a unitary system would only be concerned with how to provide welfare needs for its citizens at a single level using uniform models, whereas a

33

A. Fatai-Williams (n 22). 34

See I. Ayu, ‘Reflections on Federalism and National Assembly Politics in Nigeria’, in J. I. Elaigwu, P. C. Logams, H. S. Galadima (eds), Federalism and Nation Building in Nigeria: The Challenges of the 21st Century (Monograph Series, National Council on Intergovernmental Relations, 1994) p. 131.

35 J. Madison, ‘The Federalist, 51’ in A. Hamilton, J. Madison & J. Jay, The Federalist Papers (L. Goldman

(ed), New York: Oxford University Press, 2008) p. 258. 36

L. Goldman, ibid, xv (emphasis added); see also W. Kehen, ‘Objects of Government’ in United States Government Part I <history-world.org/united_states_government.htm> accessed 26 November 2015.

37 E. O. Awa, Issues in Federalsim (Benin City: Ethiope Publishing House, 1976) p. 11.

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federal system would seek to ensure double levels in economic activities and the allocation of public goods for its citizens. According to Awa, ‘*t+he American federal system is therefore not obliged to provide welfare measures for the people and is not concerned with the problems created by varying standards of living of the people in the various states.’38 As this paper shows below, this is a fallacious argument which he arrived at by his narrow representation of the term ‘liberty’ as applied by the American Federalists. However, he acknowledges, correctly, that ‘liberty and dignity of life, in modern times, are meaningless under conditions of ignorance, poverty and disease’,39 because living life without having the things with which to live it well is akin to ‘a kind of slow and weary life which is worse than death.’40 The above remark suggests that the nature of liberty or rights entails that condition of poverty and deprivation will be satisfied and the failure to do so would render the concept of liberty or rights meaningless. After identifying the efficacy of three governing arrangements–unitary, devolution and federalism–in promoting the welfare needs of citizens, Wallace Oates argued that the raison d’être for the adoption of a federal system of government is to ‘ensure an efficient use of resources, to establish an equitable distribution of income, and to maintain the economy at high levels of employment with reasonable [economic] stability’,41 as the major setback of the unitary form of government is its ‘insensitivity to varying preferences among the residents of the different communities.’42 There is no doubt that a unitary system has its advantages, which, when combined with those of a devolved system has the potential to solve the economic stabilasation and distribution problems, while welfare provision of public goods and technical waste in the production process are eliminated. This is the promise of federalism. Therefore the character of federalism is demonstrated by its ability to combine the advantages of unitary and devolved systems by avoiding the shortcomings of each of these systems and making compromises that allow:

‘*t]he central government … primary responsibility for stabilising the economy, for achieving the most equitable distribution of income, and for providing certain public goods that influence significantly the welfare of all members of society. [And] [c]omplimenting these operations, sub-central governments can supply those public goods and services that are of primary interest only to the residents of their respective jurisdictions. In this way, a federal form of government offers the best promise of a successful resolution of the problems that constitute the economic raison d’etre of *government+.’43

38

Ibid. 39

Ibid p. 13. 40

C. Achebe, Arrow of God (London: Heinemann Ltd, 1989) p. 95. 41

W. E. Oates, Fiscal Federalism (Cheltenham: Edward Elgar Publishing Limited, 2011) p. 3 (emphasis added).

42 Ibid p. 11.

43 Ibid p. 14.

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The American federal system was not only created with the will independent of the majority to ensure and promote the general welfare needs of citizens,44 it was also created with the ability to exercise the will to satisfy these needs. The positive change occasioned by the activities of the American Civil Rights Movements of the 1960s is a case in point. Remarkably worthy of mention is the Economic Opportunity Act of 1964 which recognises that ‘*a+lthough the economic well-being of the United States have progressed to a level surpassing any achieved in world history, and although these benefits are widely shared throughout the [n]ation, poverty continues to be the lot of a substantial number of [the American] people.’45 The Act proceeds by acknowledging the fact that the full economic and social potential of the American nation could only be realised if every individual and segment of society has the opportunity to contribute to its progress. Hence, the legislation set out ‘to eliminate the paradox of poverty in the midst of plenty’ by opening to every member of that society the opportunity to work and to live in decency and dignity by strengthening, supplementing, and coordinating efforts in furtherance of this policy.46 This piece of legislation signaled the official war on poverty in the USA. And at the signing of the approved Bill, President Lyndon Johnson observed that:

For so long as man has lived on this earth poverty has been his curse. On every continent in every age, men have sought escape from poverty’s oppression. Today for the first time in all history of human race, a great nation is able to make and is willing to make a commitment to eradicate poverty among its people.47

The Economic Opportunity Act therefore provided the basis for the Office of Economic Opportunity (OEO) which coordinates all the social and economic programmes of the American federal government, the Job Corps, the College Work-Study Programme, Volunteers in Service to America (VISTA), Upward Bound, Head Start, Legal Services, the Neighbourhood Youth Corps, the Community Action Programme (CAP), Neighbourhood Development Centers, small business loan programmes, rural programmes, migrant worker programmes, remedial education projects, local healthcare centers and others. The political will necessary to provide for the welfare needs of American citizens was reinforced by successive legislation referred to as the Great Society legislation such as the Food Stamp Act of 1964, the Elementary and Secondary Education Act of 1965, the Higher Education Act of 1965, the Social Security amendments creating Medicare/Medicaid of 1965, the creation of the Department of Housing and Urban Development in 1965, the Model Cities Act of 1966, the Fair Housing Act of 1968, several job-training programmes, and various urban renewal-related projects. Today, the policy to protect significant population of Americans against poverty is entrenched in US public life in three forms namely, the direct anti-poverty programme which is commonly referred to as welfare, the

44

See Constitution of the United States of America (1787 and 1791), Preamble & art 1,s. 8, cl. 1. 45

Public Law 88-452, 78 Stat. 508. 46

Ibid. 47

L. B. Johnson, ‘Remarks Upon Signing the Economic Opportunity Act’ (20 August 1964) in G. Peters & J. T. Woolley, The American Presidency Project <http://www.presidency.ucsb.edu/ws/?pid=26452> accessed 30 June 2015.

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progressive taxation–which transfers wealth from richer to poorer Americans across the income distribution, and policies that tilt economic outcomes in specific markets to benefit people with lower incomes (e.g minimum wage laws).48 All these policies have not prevented the states to develop their own measures and programmes towards satisfying the aspirations of their citizens within their jurisdictions in addition to coordinating some of the federal policies within their territories. By so doing, governments at all levels respect, promote and fulfill the liberty or rights of citizens rather than just attempting to provide pockets of unmet social arrears of needs of citizens in a federal governing system. In Nigeria, the Constitution envisions a just society wherein the welfare of citizens is to be made the primary purpose of government,49 and therefore mandates all governments in the federation to identify and implement measures to redistribute income, provide public goods and services, as well as promote social justice.50 How efficient is the federal system in Nigeria in discharging the functions of economic stabilisation, income redistribution and the provision and allocation of public goods and services? These issues are examined in the following parts of this paper.

3. Economic Stabilisation Economic stabilisation involves a set of policy measures taken by government to keep inflation low and stable, and control the economic-cycle fluctuations in outputs and employment as minimal as possible by adopting both monetary and fiscal policies for the purpose of ensuring growth in productivity and economic development as the ultimate objects. And because no country can effectively operate a closed market economy, economic stabilisation measures also include coordination of international monetary transactions and international trade.51 In a federal governing arrangement, it has been generally accepted that the role of stabilizing the national economy rests with the national government. However, this does not imply, as Nwabueze has suggested, a system of ‘national federalism rather than dual federalism’.52 What it signifies, in the actual sense, is that in terms of stimulating and stabilising the economy, the leadership and direction of the national government is recognised, as the economy cannot afford inconsistencies in policies, ‘*g+iven that the economy of the country is a single, integrated one, and that events and the activities in one state [may] have impact in other states of the federation’.53 Yet, at the time of drafting the US Constitution and ‘for the first time in history *the role of stimulating the economy] was specifically excluded as a government function [and]

48

J. A. Miron, ‘Rethinking Redistribution’ (Winter 2011) National Affairs pp. 70-71. 49

See the 1999 Constitution (n 7), s. 14(1), (2)(b). 50

Ibid ss. 17 & 18. 51

See e.g J. B. Taylor, ‘Stabilization Policy and Long-Term Economic Growth’ in G. Wright & R. Landau (eds), Growth and Development: The Economics of the 21st Century (1995).

52 B. O. Nwabueze, The Presidential Constitution of Nigeria (London: C. Hurst Company, 1982) p. 42.

53 Ibid.

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government stood aside from direct provision of [social needs] as well as from all other forms of *economic activities+.’54 This situation however changed by the late 20th century with the establishment of a welfare state in USA with the federal government’s commanding involvement in economic activities.55 This has therefore resulted in the dominant role of the federal government in US constitutional law, a principle which has been applied to justify the federal government’s power under the ‘Commerce Clause’,56 even though there is no express provision in the entire constitutional document for the government’s operation of the economy. In contrast, the Nigerian Constitution expressly identifies the economic objectives of the State which include to harness the nation’s resources, control of the national economy, and participation in and the management and operation of the major sectors of the national economy, in a view to ensure the production and equitable distribution of public goods as well as the promotion of a planned and balanced economic development based on social justice.57 However, what constitute the major sectors of the Nigerian economy is not defined by the Constitution as this has been left open to conjecture to mean the items under the Exclusive and Concurrent Legislative Lists in the Second Schedule to the Constitution, for which the National Assembly has powers to legislate.

4. The Distribution of Income and Allocation of Public Goods The distribution or redistribution of income and the allocation of public goods are contemporary issues with economic implications for the well-being and living standards of citizens in every federal system. Income disparity is a global phenomenon which has a direct relationship with the capacity to access public goods. According to Oxfam International, the world is facing a growing tide of economic inequality.58 The significance of income distribution for any society is founded on the need to alleviate inequality and improve citizens’ standard of living, even though it has been argued that ‘inequalities relevant to people’s quality of life go beyond income.’59 For inequality in access to education, health services, political representation, ownership of property and social status contribute to create the socio-economic condition that affects the lives of people.60 The socio-economic condition which serves as a denominator in the determination of the quality of life is poverty or the absence of it. Therefore, it is not enough to address the problem of income inequality without tackling the causes of poverty. Income distribution

54

W. Kehen, ‘Objects of Government’ (n 26). 55

Ibid. 56

See (n 44) art 1,s. 8. The Nigerian equivalent is contained in the Exclusive Legislative List. 57

See the 1999 Constitution (n 16), s. 16(1)&(2). 58

Oxfam International, ‘Working for the Few: Political Capture and Economic Inequality’ (Oxford: Oxfam GB, January 2014).

59 See C. Melamed, ‘Inequality: Why it Matters and What Can be Done’ (Actionaid International April

2011) p. 6. 60

Ibid. See also, World Bank, World Development Report (Oxford: Oxford University Press, 1994) p. 4 where it noted that ‘… a better quality of life generally calls for higher income–but it involves much more. It encompasses as ends in themselves better education, higher standards of health and nutrition, less poverty, a cleaner environment *and+ more equality of opportunity’.

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Journal of International Law and Strategic Studies (JILSS)

or redistribution refers to the way a country’s ‘income cake’ is divided or shared between individuals and income units. And income inequality is determined by the extent to which income is distributed unevenly among a population. The income redistribution pattern is regarded as fair if people receive similar-sized slices of the income cake. This is however impossible to achieve but its impact can be minimised by the efficient provision and allocation of public goods. This is why it has been argued that poverty and inequality are man-made as they exist as a result of a complex system of power relationships built into the structures of society to resist ‘*a+ny attempts to redistribute wealth and income’.61 And as Nelson Mandela observed, ‘poverty is not inevitable. It is man-made and can be overcome and eradicated by the actions of human beings. And overcoming poverty is not a gesture of charity. It is an act of justice. It is the protection of … the right to dignity and a decent life.’62 In Nigeria, with an economy that is now rated 24th and projected to be among the 20 biggest economies in the world by 2030, inequality is on the increase,63 despite tremendous economic growth witnessed in the past 18–20 years.64 This could be attributed to the fact that the growth hitherto experienced has been built on a false economy.65 Some of the measures aimed at distributing income in Nigeria both at the federal and state levels include the tax policy–i.e the Personal Income Tax,66 Capital Gains Tax,67 Value Added Tax,68 the Companies Income Tax;69 the national minimum living wage policy70 (even though it may be argued that there is no mechanism to determine whether the national minimum wage is such that can provide a minimum living standard for the individual to live a life of dignity)71 as well as the subsidy policy. Considering that there is no identifiable social security system in Nigeria, the above policies have been fashioned in

61

I. Robertson, Sociology (New York: Worth Publishers, 1977) p. 254. 62

N. Mandela, ‘Make Poverty History’ (Speech made to end poverty in the developing world, London 2005).<news.bbc.co.uk/2/hi/uk_news/politics/4232603.stm> accessed 19 January 2016.

63 See The World Bank, Nigeria Economic Report (No. 2 July 2014) p. 1, which notes that ‘a large number of

Nigerians are clustered around the poverty line, implying a high degree of vulnerability for large part of the population.’

64 With the current Gross Domestic Product (GDP) put at over NGN 524 billion.

65 See K. Adeosun, ‘Financing our Future’ Vanguard (Lagos, 11 April 2016) p. 42.

66 See Personal Income Tax Act Cap. P8 Laws of the Federation (LFN) 2004 (as amended), s. 37 and the

Sixth Schedule. By these provisions the personal income tax system is fashioned to give advantage to low income earners in order to increase their purchasing power.

67 See e.g, Capital Gains Tax Act Cap. C1 LFN 2004, ss.1(1), 2(1), 3 & 11. The aim of the Act is to tax the

gains accruing to any person on disposal of assets. It is obvious that this tax is directed at those with income to that can afford to own property as the low income earners are least capable of affording property of their own.

68 This is a tax imposed and charged on certain goods and services. From the list of goods and services

exempted from being taxed, it is clear that low income earners are not likely to be much taxed under this head of tax as they are barely able to afford luxury items. See e.g, Value Added Tax Act Cap V1 LFN 2004, First Schedule.

69 The Companies Income Tax Act Cap. C21 LFN 2004, makes provision for the income of companies

providing goods or rending services to be taxed. This tax is not expected to increase the contract price but as tax on the payment (see s. 2).

70 See the 1999 Constitution (n 16) s. 16(2)(d); see also National Minimum Wage Act Cap. N61 LFN

2004 (as amended), ss. 1, 2 & 3. 71

See e.g Deloitte, ‘The Fiscal Environment and the Nigerian Worker: Is a New Approach Required?’ in ‘Financial Guardian’ The Guardian (Lagos, 11 January 2016) p. 44.

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a way that suggest the will and readiness of the governments to provide social benefits and their capacity to enhance the provision of quality education coverage, creation of jobs and other social safety nets for its citizens.72 Nigeria, like other countries of the world, has an income redistribution pattern that is uneven because people receive vastly different percentage shares of total national income. However, beyond income inequality, there is increased economic disparity because both the federal and state governments have failed to ensure that citizens have access to basic public goods and services and reasonable standards of living. And as long as accountability in governance is lacking and corruption, rent seeking and resource capture remain endemic, the cost of governance will continue to be high and efforts aimed at distributing income and the provision of public goods will, at best, remain superficial activities lacking significant impact on the lives of the citizens.73 For example in 2012, it cost the Nigerian public the equivalent of USD 8.3 billion to pay the salaries of those occupying political offices at the federal level. In that same fiscal year, the equivalent of USD 7.4 billion was allocated for the provision of infrastructure (public goods), but only half of this amount was actually directed to infrastructural development, while the other half was lost to corruption.74 This means that for every dollar spent on providing public goods in Nigeria, two additional dollars are spent on maintaining political office holders and that corruption and the high costs of governance, at all levels of government, are major impediments to the efficient redistribution of income as well as the provision and allocation of public goods in Nigeria. At the present, the lack of transparency and accountability at all levels of government, have made it impossible to ascertain what revenues are generated from the non-oil sources and how these revenues are being expended, as the focus has been on oil-generated revenues that have also been hugely mismanaged over the years.

5. The Future of Federalism in Nigeria Reflecting on the campaign in Britain whether to leave or remain in the EU, US president, Barack Obama counseled the British people to think deep and hard on how they would decide, as a decision for the former could see Britain lose its power and ability to promote the prosperity of its citizens. This advice is premised on the economic potentials of the federal system and it may very well apply to Nigeria which must, sooner rather than later, also decide how it intends, going forward, to operate its own federal system. For one, in

72

See e.g, D. Olowu, ‘The Right to Social Security in Nigeria: Taking up the Gauntlet’ (2007) 1(2) CALS: Review of Nigerian Law and Practice 91, p. 96; see also A. Solimano, ‘Beyond Unequal Development: An Overview’ (December 1998) World Bank Policy Research Working Paper WPS 209, pp. 28-9.

73 See National Bureau of Statistics, ‘The Nigeria Poverty Profile Report 2010’ (13 February 2012) p. 5

<http://www.nigerianstat.gov.ng/> accessed 14 February 2014. There has been no improvement of the human development indices despite the widely reported growth of the Nigerian economy in 2014 after it was rebased to indicate a Gross Domestic Product (GDP) of USD 510 billion in a manner that suggests that economic growth equals socio-economic development. This may not be unconnected with the practice by government functionaries who have now devised new means to capture public resources in the guise of Public-Private Partnership (PPP) investments, while reaping off the citizens.

74 See The Market Mogul, ‘Wealth Inequality in Nigeria’ <http://themarketmogul.com/wealth-inequality-

nigeria/> accessed 8 January 2016.

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practical terms, federalism in Nigeria reflects devolution of functions from the centre to the various political units referred to as states, rather than a vertical division of functions. This is an inverse process only consistent with a unitary system, a phenomenon which could pose major challenges to the efficient management of an economy as large as Nigeria’s. As a predominantly, centrally planned and uniform economic management is not the goal of federalism but of a unitary system which seeks to promote a unified and integrated economic development.75 Also, the nature of the Nigerian Constitution which was promulgated on 5 May 199976 and its three amendments,77 suggest that constitution-making in Nigeria is a process which identifies and outlines only political objectives for organisation of the State,78 as no constitutional amendment has set out to address the issues which have the potentials to address the social conditions of inequality and poverty in Nigeria.79 This failure to take on the social issues through the constitution-making process has increased the demands for a constitutional or national dialogue to reassess Nigeria’s federal ‘union’ which has been viewed by segments of the country to have failed in promoting economic justice for citizens. As philosophers have argued, a constitution serves as the root of economic justice because it guarantees justice in production, distribution, and exchange of public goods and services. In this regard, they maintain that the principles embedded in a constitution should seek to promote economic justice just as they seek to promote political justice. Economic justice entails the moral principles which guide society in designing systems which determine economic activities and impact on how individuals earn a living, participate in the economic process and lay an independent material foundation for their economic sustenance,80 as the ultimate purpose of economic justice is to enable each individual or group to creatively engage unrestricted and unhindered by any social construct embedded in law. Louis Kelso and Mortimer Adler have identified three essential and interdependent principles that guarantee economic justice or the lack of it in society.81 The first is participative justice which describes how an individual makes input to the economic process in order to make a living. This requires equal opportunity in gaining access to private property and productive assets as well as equality of opportunity to engage in productive activities. Although participation does not automatically guarantee equal

75

See B. O. Nwabueze (n 52) pp. 182-183. 76

By the Constitution of the Federal Republic of Nigeria (Promulgation) Act No. 24 of 1999. 77

Constitution of the Federal Republic of Nigeria (First Alteration) Act 2010, Constitution of the Federal Republic of Nigeria (Second Alteration) Act 2010 and Constitution of the Federal Republic of Nigeria (Third Alteration) Act 2010.

78 See generally, B. O. Nwabueze, A Constitutional History of Nigeria (London: C. Hurst & Co. (Publishers)

Ltd., 1982); see also B. O. Nwabueze (n 52) p. 7. 79

See e.g, D. Nayyar, ‘Alleviating Poverty: Role of Good Governance and Constitutional Reform Economic and Political Weekly (Mumbai, 14 October 2000) pp. 3740-3742.

80 See Center for Economic and Social Justice, ‘Defining Economic Justice and Social Justice’

<http://www.cesj.org/learn/definitions/defining-economic-justice-and-social-justice/> accessed 8 January 2016.

81 See N. G. Kurland, ‘Economic Justice in the Age of the Robot’, in J.H. Miller (ed),Curing World Poverty:

The New Role of Property (Missouri: Social Justice Review, 1994) 61, pp. 65-70.

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results, it however requires that every person be guaranteed by society’s institutions, the equal opportunity to make productive contributions to the economy, both through expertise or skill and productive capital. This principle rejects monopolies, special privileges, and other exclusionary social barriers to economic well-being of citizens. Rent-seeking, resource capture and corruption in society does the exact thing as they deprive the generality of citizens the opportunity to participate in the productive process. The second principle is distributive justice which defines the output rights or opportunity created by an economic system represented by the individual’s labour and capital contribution (input). Distributive justice functions through the distributional nature of private property operating in a free and open marketplace and becomes linked to participative justice, as incomes become linked to productive contributions of the individual. The principle of distributive justice involves the sanctity of property and contracts. It turns to the free and open marketplace, not government, as the most objective and democratic means for determining the just price, the just wage, and the just profit. However, it must be emphasised that a disconnect occurs in a situation whereby the individual is unable to participate in the economic process in order to gain access to property and productive assets which would in turn enable the individual to operate in the marketplace. This is where the double economic security which governments in a federal system arise to ensure that citizens are equipped to productively contribute in a free and open marketplace through access to education, healthcare and employment. It is commonplace for governments to confuse distributive justice with charity. Whereas distributive justice is based on the idea of ‘to each according to his contribution’, charity involves the concept of ‘to each according to his needs’.82 In Nigeria’s federal system, confusing these principles has led to endless conflicts and struggles for resources, which has inadvertently forced the national government to misdirect its focus on ensuring and promoting national integrity at the expense of citizens welfare needs. Therefore, it is important to note that distributive justice follows participative justice and there is disconnect between the two when citizens do not have the opportunity to acquire and derived economic benefits through participation in the productive process. And the third is the principle of social justice or a just society, which translates from individual justice, as its object is to secure and promote a certain minimum level of well-being for its member on the basis of equality.83 It involves the feedback mechanism which detects distortions in the input and or output principles, and provides the guidelines for the correction needed to restore a just and balanced economic order for every member of society. This principle is violated when unjust barriers to participation–such as rent-seeking, corruption and resource capture–are created by few individuals to harm or exploit others. Social justice may be instituted through law as it involves the justice of the laws that govern the relations between persons.84 Therefore, both participative and

82

See M. D. Greaney, ‘Charity or Justice: Where is Hope of the Poor? in J.H. Miller (ed), Curing World Poverty: The New Role of Property (Missouri: Social Justice Review, 1994) pp. 51-59.

83 B.Nwabueze, Constitutional Democracy in Africa Vol 3 (Ibadan: Spectrum Books) p. 154.

84 Ibid p. 151.

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distributive justice are necessary requirements that can be put in place by law (especially the constitution), for every person within a system to promote economic harmony, which has been defined as ‘*l+aws of social adjustment under which the self-interest of one man or group of men, if given free play, will produce results offering the maximum advantage to other men and the community as a whole’.85

6. Conclusion In a federation, whereas the function of stabilising the economy is solely that of the national government, the function of income redistribution as well as the provision and allocation of public goods are functions for which both the national and state or regional governments have responsibility, albeit in different capacities. While the national government must ensure the efficient distribution of income/wealth, and allocation of public goods and services that significantly impact on the welfare of all members of society, the states or regional governments are to do the same in respect of the welfare needs of citizens within their jurisdictions in accordance with their functions under the constitution. Arguments have been made to the effect that the failure of state governments in Nigeria to adequately and efficiently provide and allocate public goods within their purview is because the federal government has become involved in too many aspects of public life than it can effectively sustain. But it goes beyond this as it has increasingly become obvious that state governments lack the capacity to provide and allocate critical public goods relevant to the peculiar aspirations of citizens within their jurisdictions. The question of capacity or the lack of it border on legal and institutional constraints, the absence of political will, personnel issues and preference for short term programmes rather than sustainable long term planning, to mention but a few. At the present, Nigeria is in dire need of economic development which may be said to exist when unemployment, inequality and poverty are seriously tackled and drastically reduced over time through conscious efforts of the State.86 And the ways and means by which these social conditions are tackled may very well serve as indices of good or effective government and the governing system.87 Even though the claims as to the existence of a linkage between rights and development has been called to question,88 it has been argued that the concepts of rights and development are essentially concerned with the empowerment of the individual and that a linkage between these concepts is necessary, desirable and even inevitable if progress is to be made in economic development.89 To this end, it is important for citizens to consider and demand for a

85

The Oxford English Dictionary. 86

See D. Seers, ‘The Meaning of Development’(Eleventh World Conference of the Society for International Development, New Delhi 1969) p. 3.

87 See I. I. Ukpong, The Charms and Perils of the Nigerian Presidential System: A Critical Review of Issues,

Performance, and Trends (New York: Vantage Press 1984)p. 83; see also Udombana, pp. 58-59. 88

See M. Pieterse, ‘A Benefit-focused Analysis of Constitutional Health Rights’(PhD Dissertation, University of the Witwatersrand, 2005) p. 1.

89 See D. Olowu, An Integrative Rights-based Approach to Human Development (Pretoria: Pretoria University

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constitutional change to restructure the country’s governmental system and create institutions independent of the government to pursue people-centred economic development programmes with a view to effectively redistribute income/wealth, alleviate poverty. For, where a federal governing system fails in these functions, it is cannot claim to promote the citizens welfare. However, it must be noted that constitutional and institutional changes in Nigeria, by themselves, do not guaranty economic development, for to deny the role of political culture in the development process is a cockeyed idea.

Press, 2009) p. 5.