Feature/OPED
Nigeria and Unending Global Debate About Federalism
By Jerome-Mario Chijioke Utomi
There exists no ambiguity to the fact that Nigeria is a federal state with three tiers of government, which consists of the federal government at the centre, 36 federating states and 774 Local Government Areas.
What is, however, the news is that, like its global counterparts, the federal system currently practised in Nigeria is characterized by a high level of debates, controversies arising from structural imperfections and riddled with calls on the federal government to identify in the nation the imperfections and have them amended according to the changing time of its political sovereignty.
In December 2020, for instance, Bola Ahmed Tinubu, now President of the Federal Republic of Nigeria, while speaking in Ibadan, Oyo State, on the topic Time to Restructure is Now, at the 3rd Annual Abiola Ajimobi Roundtable, stated, among others, that the current relationship between the police and the people needs such reform so that the police may help better answer the security challenges we now face. In fact, it is long overdue.
Tinubu stressed that power generation was the most important factor in economic development. States currently are shut out from this vital sector even though the nation suffers a paucity of power. States must be allowed to engage in power generation as long as their efforts are consistent with and do not undermine federal labour in this sector. If we begin with these fundamental changes, then our states will become stronger, more able catalysts of economic development.
“By instituting true federalism, we open the door to prosperity and greater democracy and openness throughout Nigeria. This will help bring peace and tranquillity where there is now tension and uncertainty about the pathway our nation is on. This important change will require more funds in state hands and less in federal. Other items such as stamp duties for financial transactions, tourism, and the incorporation of businesses should also occur at the state level and be removed from the federal charge,” Tinubu concluded.
Obviously, while it is not hard to identify that Tinubu’s comment amply and perfectly demonstrates the way to go, it, on the other hand, remains an open secret that the challenge arising from federalism as a system of government is not Nigeria-specific but of global dimension and concerns.
It, therefore, elicits the question as to why the Federal system has become reputed for creating more friction than cohesion whenever and wherever it is practised. Why is it that the fundamental assumptions inherent in the system, in most cases, fail to offer targeted road maps for upholding the health and vitality of a nation’s peaceful coexistence?
Adding context to the discourse, available information at Wikipedia, the world’s information powerhouse, shows that there are roughly/about 25 countries in the world where the federal system of government is practised today.
Interestingly also, these countries, when put together, represent 40 per cent of the world’s population. These countries include but are not limited to; India, the United States of America (USA), Brazil, Germany and Mexico.
Typically, the federal system of government tends to have so much passion for constitutional governance based on a mixed or compound mode of government that combines a general government with regional governments in a single political system.
While many political commentators accept as true that its greatest strength as a system of government is that in a country where there is much diversity, and the establishment of a unitary government is not possible, a political organization can be established through this form of government.
In this type of government, local self-government, regional autonomy, and national unity are possible; others argue that with the division of powers, the burden of work on the centre is lessened, and the centre needs not to bother about the problems of a purely local nature.
It can devote its full attention to problems of national importance. Because of provincial or regional autonomy, the administration of these areas becomes very efficient. To the rest, in a federal government, the provinces, regions or states enjoy separate rights, and they have separate cabinets and legislatures. Local governments also have separate rights, and the councils are elected by the people to run the local administration.
Despite these virtues, there are examples of nations across the globe where like Nigeria, the federal system has remained a pathway to discord.
For instance, in India, the system presents a conflicting scenario. It is a quasi-federal system containing features of both a federation and a union that allows power to be divided between the central government and the states.
Article 1 of the Indian Constitution suggests that the territory of India shall be classified into three categories; the Union Government (also known as the Central Government), representing the Union of India, the State governments and the Panchayats/Municipalities. Basically, it implies an inculcation of a strong sense of love and respect for one’s region, ethnicity, language, and culture.
It is this love which makes regions fight for greater autonomy within the nation and directly puts the authenticity of Indian federalism in danger.
Another area of concern is that the most important power of the Governor sometimes comes in conflict with the federal structure of the country. To illustrate this claim, the power vested upon him by Article 154 of the Indian Constitution states that the Governor holds all the executive powers of the state. Going by analysis, this provision implies that the Governor can appoint the Chief Minister, the Advocate General of the State, and State Election Commissioners. The most paramount and, in my view, troubling executive power at his disposal is that he can recommend the imposition of constitutional emergency in a state.
In Brazil, the burden of the challenge is not different. More specifically, the problems facing the country’s federal system and constitutional governance involve several issues.
First and most importantly, Brazil is a federation characterized by regional and social inequality. Although the 1988 Constitution and those preceding it have provided several political and fiscal mechanisms for offsetting regional inequality and tackling poverty, these mechanisms have not been able to overcome the historical differences among regions and social classes. Governments of the three orders have not been able to reduce poverty and regional inequality.
Their ability to act is limited by a number of factors, not the least of which is the fiscal requirements of international leaders and federal financial institutions and regulations.
Another factor, says a report, adversely affecting states is the opening up of Brazil’s economy. This tends to make inter-governmental relations more complex, increasing the differences between developed and less developed states. This also contributes to the current trend towards reversing previous, although timid, initiatives favouring economic decentralization.
An added issue is that in Brazil, there are few mechanisms to coordinate the three government orders. This has become more important because municipal governments have upgraded their financial standing within the federation vis-à-vis the states and have also been responsible for important social policies. The prospect of transforming constitutional principles into policies for regional development is not currently on the agenda for Brazil.
While the world sympathizes with Brazilians on whose shoulders lay this awkward situation, the federal system in Germany, says 75-year-old Rain-Olaf Schultze, author of the book; the Politics of Constitutional Reforms in Northern America, is at a crossroads and dramatizes worrying concerns.
Schultze noted that new weaknesses have emerged in the success story of the postwar German federal system. The highly successful West German federal system, which for 40 years brought economic and social prosperity to Germany’s “second” democracy, has fallen into a state of crisis, mostly as a result of the momentous changes that occurred toward the end of recent decades.
On the surface, German reunification looks complete – however, reunification is still in progress on the cultural and economic levels, the consequences of which will continue to evaluate German politics for decades to come. These strains have made structural reforms essential for the political system.
From Germany to Nigeria, the situation is not different. Today, the restructuring debate, as noted in the introductory part of this piece, rends the political wavelength of the political space called Nigeria.
Synoptically, this is how a political commentator recently captured the whole debate: The south-south claim continued deprivation and blight from oil pollution, despite being the hub for the nation’s oil wealth. The south-east legitimately gripes that nothing will change the history of the Igbos being divested of some of their properties and wealth after the war and being handed only twenty pounds each; and that 62 years after independence, the Nigerian presidency continues to elude the Igbos. The North has valid stitches too.
Most of Nigeria’s insolvent states are in the North; the broadest swathes of underdeveloped Nigeria are in the North, and the largest numbers of uneducated and unskilled youths are from the north. Because northern states are not oil producing, they also lose out on preferential derivation from oil.
While it has, from the above concern, become obvious that the Federal System is riddled with challenges, particularly in a country like Nigeria, the truth must be told to the fact that, in absolute terms, federalism remains the answer to many of the nation’s political and socioeconomic challenges if well practised.
Aside from many supporting the validity of a federal system of government, the greatest lesson of the federal system, says Scott Moore, a research fellow at Harvard’s Belfer Center for Science and International Affairs, is that countries can often become stronger by adopting a looser union.
Utomi is the Programme Coordinator (Media and Policy) at Social and Economic Justice Advocacy (SEJA), Lagos. He can be reached via [email protected]/08032725374
By Luke Kyohere
The global payments landscape is undergoing a rapid transformation. New technologies coupled with the rising demand for seamless, secure, and efficient transactions has spurred on an exciting new era of innovation and growth. With 2025 fast approaching, here are important trends that will shape the future of payments:
1. The rise of real-time payments
Until recently, real-time payments have been used in Africa for cross-border mobile money payments, but less so for traditional payments. We are seeing companies like Mastercard investing in this area, as well as central banks in Africa putting focus on this.
2. Cashless payments will increase
In 2025, we will see the continued acceleration of cashless payments across Africa. B2B payments in particular will also increase. Digital payments began between individuals but are now becoming commonplace for larger corporate transactions.
3. Digital currency will hit mainstream
In the cryptocurrency space, we will see an increase in the use of stablecoins like United States Digital Currency (USDC) and Tether (USDT) which are linked to US dollars. These will come to replace traditional cryptocurrencies as their price point is more stable. This year, many countries will begin preparing for Central Bank Digital Currencies (CBDCs), government-backed digital currencies which use blockchain.
The increased uptake of digital currencies reflects the maturity of distributed ledger technology and improved API availability.
4. Increased government oversight
As adoption of digital currencies will increase, governments will also put more focus into monitoring these flows. In particular, this will centre on companies and banks rather than individuals. The goal of this will be to control and occasionally curb runaway foreign exchange (FX) rates.
5. Business leaders buy into AI technology
In 2025, we will see many business leaders buying into AI through respected providers relying on well-researched platforms and huge data sets. Most companies don’t have the budget to invest in their own research and development in AI, so many are now opting to ‘buy’ into the technology rather than ‘build’ it themselves. Moreover, many businesses are concerned about the risks associated with data ownership and accuracy so buying software is another way to avoid this risk.
6. Continued AI Adoption in Payments
In payments, the proliferation of AI will continue to improve user experience and increase security. To detect fraud, AI is used to track patterns and payment flows in real-time. If unusual activity is detected, the technology can be used to flag or even block payments which may be fraudulent.
When it comes to user experience, we will also see AI being used to improve the interface design of payment platforms. The technology will also increasingly be used for translation for international payment platforms.
7. Rise of Super Apps
To get more from their platforms, mobile network operators are building comprehensive service platforms, integrating multiple payment experiences into a single app. This reflects the shift of many users moving from text-based services to mobile apps. Rather than offering a single service, super apps are packing many other services into a single app. For example, apps which may have previously been used primarily for lending, now have options for saving and paying bills.
8. Business strategy shift
Recent major technological changes will force business leaders to focus on much shorter prediction and reaction cycles. Because the rate of change has been unprecedented in the past year, this will force decision-makers to adapt quickly, be decisive and nimble.
As the payments space evolves, businesses, banks, and governments must continually embrace innovation, collaboration, and prioritise customer needs. These efforts build a more inclusive, secure, and efficient payment system that supports local to global economic growth – enabling true financial inclusion across borders.
Luke Kyohere is the Group Chief Product and Innovation Officer at Onafriq
In a heartfelt statement released today, the Conference of Nigeria Political Parties (CNPP) has extended its warmest congratulations to Ghana’s President-Elect, emphasizing the importance of learning from Ghana’s recent electoral success as Nigeria gears up for its 2027 general elections.
In a statement signed by its Deputy National Publicity Secretary, Comrade James Ezema, the CNPP highlighted the need for Nigeria to reclaim its status as a leader in democratic governance in Africa.
“The recent victory of Ghana’s President-Elect is a testament to the maturity and resilience of Ghana’s democracy,” the CNPP stated. “As we celebrate this achievement, we must reflect on the lessons that Nigeria can learn from our West African neighbour.”
The CNPP’s message underscored the significance of free, fair, and credible elections, a standard that Ghana has set and one that Nigeria has previously achieved under former President Goodluck Jonathan in 2015. “It is high time for Nigeria to reclaim its position as a beacon of democracy in Africa,” the CNPP asserted, calling for a renewed commitment to the electoral process.
Central to CNPP’s message is the insistence that “the will of the people must be supreme in Nigeria’s electoral processes.” The umbrella body of all registered political parties and political associations in Nigeria CNPP emphasized the necessity of an electoral system that genuinely reflects the wishes of the Nigerian populace. “We must strive to create an environment where elections are free from manipulation, violence, and intimidation,” the CNPP urged, calling on the Independent National Electoral Commission (INEC) to take decisive action to ensure the integrity of the electoral process.
The CNPP also expressed concern over premature declarations regarding the 2027 elections, stating, “It is disheartening to note that some individuals are already announcing that there is no vacancy in Aso Rock in 2027. This kind of statement not only undermines the democratic principles that our nation holds dear but also distracts from the pressing need for the current administration to earn the trust of the electorate.”
The CNPP viewed the upcoming elections as a pivotal moment for Nigeria. “The 2027 general elections present a unique opportunity for Nigeria to reclaim its position as a leader in democratic governance in Africa,” it remarked. The body called on all stakeholders — including the executive, legislature, judiciary, the Independent National Electoral Commission (INEC), and civil society organisations — to collaborate in ensuring that elections are transparent, credible, and reflective of the will of the Nigerian people.
As the most populous African country prepares for the 2027 elections, the CNPP urged all Nigerians to remain vigilant and committed to democratic principles. “We must work together to ensure that our elections are free from violence, intimidation, and manipulation,” the statement stated, reaffirming the CNPP’s commitment to promoting a peaceful and credible electoral process.
In conclusion, the CNPP congratulated the President-Elect of Ghana and the Ghanaian people on their remarkable achievements.
“We look forward to learning from their experience and working together to strengthen democracy in our region,” the CNPP concluded.
By Kenechukwu Aguolu
The proposed tax reform, involving four tax bills introduced by the Federal Government, has received significant criticism. Notably, it was rejected by the Governors’ Forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive. This article highlights the purposes of taxation, the qualities of a good tax system, and some of the implications of the proposed tax reforms.
One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.
A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.
In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.
The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.
The proposed tax reforms by the Federal Government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions should be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.
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