Citizens blame the FG for everything. But should they?

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 Citizens blame the FG for everything. But should they? 


By Capt. Samuel Caulcrik 





The 1999 Constitution, as amended, delineates the Constitution into the exclusive list (FG), concurrent list, (FG and states) and the residual list - mainly the states (any matter not mentioned in the exclusive list and the concurrent list)


For clarity of the 1999 Constitution as currently amended. 


Exclusive List: Defence, aviation, currency/coinage, foreign affairs, customs & excise, immigration, policing, and maritime shipping.


Concurrent List: Higher/post-primary education, electric power generation, agricultural development, tax collection administration, industrial development, and scientific research.


Residual List: Local government administration, chieftaincy and traditional institutions, land management/tenure (outside federal territories), markets/motor parks, and intra-state tourism.


Under the 1999 Constitution of the Federal Republic of Nigeria, these powers are divided into three primary lists found in the Second Schedule. If there is any conflict between a federal law and a state law on a shared topic, the doctrine of covering the field applies—meaning federal law takes precedence and the state law becomes void to the extent of its inconsistency. 


Exclusive List: Defence, aviation, currency/coinage, foreign affairs, customs & excise, immigration, policing, and maritime shipping.


Concurrent List: Higher/post-primary education, electric power generation, agricultural development, tax collection administration, industrial development, and scientific research.


Residual List:

Local government administration, chieftaincy and traditional institutions, land management/tenure (outside federal territories), markets/motor parks, and intra-state tourism.


However, following a landmark Constitutional Amendment (5th Alteration) and the subsequent Electricity Act 2023, authority is split based on geographic boundaries and market structures.


The Federal Role: The Federal Government, through the Nigerian Electricity Regulatory Commission (NERC), maintains absolute authority over interstate transactions, the national grid, and cross-border electricity trading.


The State Role: State governments are empowered to fully regulate, license, and operate their own intrastate electricity markets. A state can pass its own electricity law, set up a local regulatory commission, and order NERC to transfer oversight of all generation, distribution, and retail supply happening entirely within its state borders.


Current Reality: Power devolution is scaling rapidly. As of August 2024, NERC has completed the formal transfer of regulatory authority to 17 states (including Lagos, Edo, Enugu, Akwa Ibom, and Oyo), with the remaining states preparing their institutional frameworks to take over their local grids


Taxation is a major source of friction under Nigeria's Concurrent List. The system is split into jurisdiction to legislate (make the law), jurisdiction to collect, and revenue sharing models. Sweeping fiscal changes enacted under the new Nigeria Tax Act significantly overhauled this landscape to eradicate overlapping taxes.


Tax Category: 

1. Companies Income Tax (CIT) - collected by the FIRS (now NRS) -Enters the Federation Account; shared among Federal, State, and Local governments.

2. ⁠Personal Income Tax (PIT) - FG sets the law but it is collected by each state of residence and retained entirely by the State where the individual resides (except for military/diplomatic personnel).

3. ⁠Value Added Tax (VAT) - Collected by NRS - Distributed via a strict derivation model: 10% Federal, 55% States, and 35% Local Governments.


There has been a historical challenge where state and local governments invented dozens of minor levies on businesses travelling across borders. 


The new Tax Act has introduced the Joint Revenue Board (JRB) and a Model Harmonised Taxes Law. Over 18 states have already domesticated this law, drastically compressing over 50 confusing local tax items down to just nine clear sub-heads to ease the burden on small businesses.

.... Caulcrik, is an Aviation Industry Strategist / Former Rector, NCAT 

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