By Abdulrauf Aliyu
The Northern political class must confront a stark and unavoidable reality: the economic road ahead will demand proactive efforts, strategic vision, and collective action. The ongoing debate over the derivation principle in Nigeria’s VAT bill mirrors the North’s economic vulnerabilities. Resisting reforms without addressing these underlying weaknesses is akin to riding a bicycle with flat tyres on an uneven road—an unsustainable effort that guarantees stagnation. If the North wishes to avoid being labelled as a “parasite” in the federation, it must begin to pedal toward self-reliance and economic transformation.
Imagine the North as a cyclist on a long journey. The bicycle represents the region’s economic structure, while the road is the national economic framework. A cyclist needs a well-maintained bike, the stamina to pedal, and a navigable road to progress. The current state of the North’s bicycle—a reliance on federal allocations, minimal diversification, and weak infrastructure—means that it cannot effectively traverse the challenging terrain of modern economic competition. Simply hoping for the road to level out, without repairing the bike or building strength, is not a viable strategy.
This metaphor underscores the urgency for the North to invest in repairing its bicycle. At present, the North relies heavily on federal transfers, which constitute the bulk of its revenue. This dependency leaves the region vulnerable to fiscal shocks, such as a shift toward derivation-based revenue allocation. While federal redistribution has historically been necessary to address disparities, it cannot remain the North’s primary economic strategy. A bicycle cannot rely solely on the road’s gradient to move forward; the cyclist must pedal.
Economic diversification is the first step to gaining momentum. The North possesses vast resources, from fertile agricultural lands to untapped mineral reserves. Yet, these resources remain underutilized due to policy inertia, corruption, and a lack of investment in infrastructure. By focusing on sectors like mechanized agriculture, agro-industrial processing, and renewable energy, the North can create jobs, expand its tax base, and increase its contributions to national revenue. Strengthening the private sector through incentives and public-private partnerships will also be key to creating a more resilient economic foundation.
Pedalling also requires stamina, which in this context refers to human capital. The North’s large population is an asset only if it is healthy, educated, and equipped with marketable skills. Currently, the region faces significant deficits in education, healthcare, and vocational training. These gaps limit the workforce’s productivity and reduce the North’s attractiveness to investors. Investing in human capital development must be a top priority for the Northern political class. Without this, the region’s demographic strength risks becoming a liability—a cyclist carrying excessive weight with no ability to propel forward.
A good road is equally crucial for progress. In Nigeria’s federal structure, the road represents the national economic framework and fiscal policies. The VAT derivation debate highlights the need for the North to advocate for policies that balance equity and efficiency. While outright opposition to derivation is understandable given the North’s current economic realities, it cannot be a long-term strategy. Instead, the Northern political class should push for a hybrid revenue-sharing model. Such a system would allocate a portion of VAT revenues based on derivation to incentivize regional economic growth while ensuring that less-developed regions like the North continue to receive redistributive support.
This approach aligns with ideas from Stefan Dercon’s Gambling on Development, which argues that successful economic transformation hinges on an “elite bargain.” For the North, this means the political class must agree on a developmental vision that prioritizes long-term regional growth over short-term political gains. This bargain requires Northern leaders to shift from a mindset of dependency to one of agency. They must commit to policies that foster productivity, accountability, and inclusivity, ensuring that economic benefits reach the broader population rather than being captured by a narrow elite.
The cyclist analogy extends to governance. A bicycle requires constant maintenance—lubricating the chain, tightening the brakes, and replacing worn parts. Similarly, good governance is essential to ensure resources are used efficiently and transparently. The North’s challenges are not solely due to resource constraints; they are compounded by corruption, mismanagement, and weak institutions. Rebuilding public trust through transparent governance and effective policy implementation is critical. Only then can the Northern political class build the social and political support needed to implement bold economic reforms?
Another key lesson from Gambling on Development is that growth requires collaboration. For the North, this means forging alliances, both within the region and with other parts of Nigeria. Regional cooperation among Northern states can create economies of scale, improve resource allocation, and foster shared development goals. At the same time, the North must engage constructively with Southern states to shape national policies that benefit all regions. A cyclist does not compete against the road but works with it to reach the destination.
Denial of the North’s economic challenges will only perpetuate the region’s stagnation. The VAT derivation debate is a turning point—a reminder that the era of federal dependency is nearing its end. To avoid being seen as a region that merely consumes without contributing, the North must rise to the occasion. This is not about abandoning federal support but about using it as a springboard for self-sufficiency.
The Northern political class has a responsibility to ensure that the region is equipped to compete in a restructured Nigerian economy. The road ahead may be rough, but with a well-maintained bicycle and a determined cyclist, the North can make significant progress. This journey will require hard choices, strategic investments, and collective action. But the destination—a self-reliant and prosperous North—is worth the effort. The time to pedal forward is now.
Mr Aliyu writes from Kaduna
