A COMPREHENSIVE EXAMINATION ELUCIDATING THE JUXTAPOSITION OF NATURAL RESOURCE MANAGEMENT AND FEDERALISM IN THE CONTEXTS OF NIGERIA AND SOUTH AFRICA

BACKGROUND OF THE STUDY: A very striking feature of every federal state is the existence of diversities. Whether federations are formed by integration of previously independent entities or through differentiation of a single entity into many components, the central motive is usually to enhance political and economic benefits. The nature and dynamism of federal states are usually influenced by the structure of its internal territorial configuration. As a result, the different component units that make up the federation struggle for economic and socio-political dominance. In this struggle, the state is the major mediator and distributor of all the privileges and this role increases the value of the state. As opined by Suberu (1998:277), the line demarcating politics and economics has been erased as state power equals wealth and wealth is
the pathway to power. In this connect, Awa (1976:12), contends that one of the aims of federalism is that economic resources in various component units should be used in such a way that the entire political system benefits equitably from the economies of scale. The political system in a federal state is usually a configuration of ethnic, religious and cultural groups. Either in isolation or in combination, these groups’ identities may have some bearing on the political conduct and socioeconomic role in the society. Since most federal states are heterogenous, it should not be surprising that their internal politics are defined and characterized by their pluralities, and these different identities have remained powerful elements in their domestic politics.
Notwithstanding, federalism has had multiple significance for managing diverse societies. It is an approach to governance that may be applicable to certain countries given their pluralism in terms of culture, religion, language and ethnicity. The quest for unity in diversity in a federal state is usually achieved through the framework of rules as enunciated and implemented by the state. Thus, federalism could be conceived as a system of rules for the division of public policy responsibilities among a number of autonomous governmental agencies. These rules define the scope of authority available to the autonomous agencies and provide a framework to govern relationships between and among agencies. In most federal states, particularly in Africa, such as Nigeria, Sudan, South Africa etc, the nature of the division of powers often times constitute the major impediment to the realization of federal objectives. More so, some federal states outside the shores of Africa such as Venezuela, Malaysia and Austria are highly centralized while Switzerland and Canada are highly decentralized.  Each federal state is unique and it is this peculiarity that underscores why federal states behave differently.
One of the major challenges of federal states has been the concerted efforts of the central (federal) government to turn the component units into its administrative units. This is necessitated by the fact that federal governments are increasingly becoming involved with the distribution and management of wealth, and these include, the management of proceeds from the exploitation of natural resources while the component units are more or less instrument of this distribution. As a result, the centrifugal and centripetal forces that shape the search for equilibrium between the constituent units and the federal government find its most lucid expression on the nature of balance between centralization and decentralization of the governments. In most federations of the world, particularly, Nigeria as well as South Africa, responsibilities are divided among the governmental institutions like the legislature, executive and the judiciary; and among the various structures of the federation like the federal, state (province) and local governments. The nature and character of political structure of any federation necessarily impact on the political system. This fear was highlighted thus by Ikejiani and Ikejiani, (1986: vii)i when they argued that: It is most important for us to warn that to try under the national political structure is probably to fail. The major task is to reform our present political structures and institutions of government. The difficulties spring not from the qualities of leadership but from the fact that we are trying to solve the problems of Nigerian unity with political structures and institutions that are absolutely inappropriate. Nigeria, we dare say, will not, regardless of who is the head, or which political or military regime is in power, recover from the general malaise, disunity, instability and all the iniquities which have engulfed her until our political structures and institutions are changed. Until this is done, Nigeria will continue to have little confidence in their governments and will continue to live with policies that are inefficient and ineffective in dealing with the problems, especially the problem of… ‘revenue allocation and management of natural resources’.
Thus, the task facing Nigeria, and indeed, other federal states like South Africa is to reform the political structures and governmental institutions with a view to reducing the degree of inequity in the system. The debate is on how federalism will be able to create a feeling of satisfaction and fairness among the component units, without deepening existing conflict lines.
The perception of inequality, marginalization and intimidation of one such group by another as it concerns the allocation of governmental resources and management of natural resources is usually measured on the basis of group/regional identity. As a result, the management of natural resources is a contentious issue, particularly, in federal societies that are characterized by pluralistic tendencies, fear of marginalization and domination among others.
Therefore, the politics of natural resource management is a very contentious issue because of the problem associated with different groups and their contributions to the federation vis-à-vis the distribution of resources. The contentious problems that every federal or plural state has to contend with include the problem of what should be the institutional form of the government? How can all sections of the country work in harmony and none feel excluded or dominated by the others? (Kew and Lewis, 2010). And most importantly, how can economic, political and financial resources, etc be distributed or allocated to eliminate any perceived feeling of marginalization or domination of one section by the other? In fact, the bane of every plural society is the national question, particularly as it concerns the distribution of resources, particularly, revenue allocation between the tiers of government and among the component units. In this context, it is the state that is the purveyor, enunciator and distributor of these resources, and hence the struggle to control the apparatus of the state for the authoritative allocation of these resources adds dynamism to internal politics of federal states.
This is necessary because of low development of the productive forces, which increases the use of the state power as an instrument in the hands of the dominant class. The peculiarity of the states in Africa manifest not only in its relative autonomy, but more importantly in its role as a means of production. This was aptly buttressed by Ake (1985: 3), when he asserted that the unique feature of the socio-economic formation in post-colonial Africa, and indeed in contemporary periphery formations generally is that the state has very limited autonomy. The degree of autonomy of the state is usually a consequence of the level of the development of the productive forces. As a result of lack of autonomy of the states in Africa, the state became an instrument in the hands of the dominant class, particularly, the hegemonic dominant class. This dominant class uses the state and its apparatuses for primitive accumulation of the resources of the people, particularly, through governmental policies that seek to protect their interest. Consequently, all policies, including those relating to the access, exploitation and management of natural resources are formulated to suit the interest of the dominant class. As a result, the state which is constituted to play a regulatory and mediating role in the allocation and distribution of power and resources becomes an instrument in the hands of the dominant class, and indeed, serves as a means of production. But this ought not to be so, particularly in a federal state because of its inherent devices by which federal qualities of society are articulated and protected (Livingstone: 1956).
This study therefore attempts to determine how the practice of federalism impacted on revenue allocation and natural resource management in Africa’s two most important countries: Nigeria, Africa’s most populous state, and South Africa, Africa’s wealthiest and most developed state (Sodaro, 2001). Both Nigeria and South Africa share a lot of similarities, yet, they are radically different in many ways. Accordingly, Kan-Onwordi (2007:56) avers that in 1991, South Africa contributed just 4% of Africa’s global export trade, but by 2007 it had become the continent’s largest economy while Nigeria because of its huge population remains the continent’s biggest consumer nation. Politically, both Nigeria and South Africa are sub-regional powers in West Africa and Southern African respectively, and continentally, both are powerful countries.
Both have also experienced different types of dictatorship, typified in Nigeria by over thirty years of military dictatorship and in South Africa, by over thirty-three years of apartheid regime. Notwithstanding these similarities, both Nigeria and South Africa are significantly different from one another in many other ways. While Nigeria has a population of 140 million according to 2006 estimates, South Africa has a population of 44 million. The difference also manifested at the economic level. While the GDP and Per Capita Income of South Africa are put at S187.3 billion and S12, 200 respectively, Nigeria’s GDP and Per Capita Income are put atS77.33 billion and S1, 400 respectively (Kan-Onwordi, 2007: 57). However, according to 2009 estimate, the Per Capita Income in South Africa was S10, 000, while that of Nigeria is S2, 400. It is equally important to observe that while Nigeria is a mono-product economy with agriculture and oil contributing over 70% of GDP with services contributing a meager 27%, the South African economy is grossly dependent on services, which contributes almost 70% to GDP while other sectors contribute the remainder.
The economies of the two countries are further defined by the fact that Nigeria’s economy has a huge informal sector; that of South Africa has a large formal sector.
Nigeria is endowed with vast and largely untapped natural resources including such
minerals as oil, limestone, tin, columbite, silver, coal, gypsum, shale, zircon, zinc, iron-ore, and natural gas to mention but a few (Anyanwu, 1997: 3). Nigeria has long possessed a high potential for developing into a regional and global superpower with its abundant human and natural resources. However, the Nigerian economy is heavily dependent on crude petroleum export as the main source of foreign exchange earnings and government revenue. For decades, revenue from oil accounted for over 90 percent of export earnings. The over dependence of the Nigerian economy on oil has had its own effects. For instance, by 1980, the oil sector which accounted for 22 percent of GDP provided 80 percent of government revenue and over 96 percent of export earnings (Anyanwu, 1997: 5). Even with the oil boom of the 1970s, the government could not properly harness the enormous revenue into productive use. As a result, starting from the mid 1981, when the world oil market began to collapse due mainly to oil glut, the Nigerian economy witnessed a very serious crisis. This crisis resulted in the adoption of the Structural Adjustment Programme (SAP) in 1986. Even more important is that the year 2008 witnessed yet another boom in the oil sector as the world oil market experienced the highest ever increases in the prices of crude oil. In all these, the centrality of the role of the state is never in doubt. On the other hand, South Africa is abundantly endowed with gold, coal, platinum and diamond etc. She has the strongest economy in Africa. As a result of the lifting of sanctions and the good will generated by the transition from apartheid to non-racial democracy in 1994, the South African economy turned around and grew by an average of 3 percent in 1994 and 1995 with a Per Capita GNP in the 1990s of about S3, 500. Much of South Africa’s infrastructure and economic development were built on mining, especially gold and diamond (Sodaro, 2001).
Meanwhile, it is important to state that revenues from mining alone are insufficient to carry South Africa in the twenty-first century, which necessitated a reform agenda by the government that brought about diversification of the economy. It is in fact these similarities and differences as noted above that necessitated a comparative study of federalism and the management of natural resources in both countries with a view to ascertaining how the two states employ the proceeds from natural resource exploitation to impact on the standard of living of its citizens defined within the context of provision of basic social amenities. The study situates the discourse within the context of the centrality of the state in understanding how federal states manage their natural resources.