Is It Touché or Is It Genuine Concern?

The elder statesman, Ambassador Kingigbe, summed up the imbroglio the other day with, ‘…There is no victor and there is no vanquished.’ In the end, the government had to concede a lot; reversing almost everything Obasanjo gave the nation as a parting gift. The government, however, still reduced the so called subsidy by five naira per litre of premium motor spirit (PMS). Is it half full or half empty? If I remember very well, that was the position of the government from the evening of the first day of the national strike called by labour and the trade unions. Nonetheless, Nigerians were made to stay at home for three more days, to only win the promise to review the sales of two refineries and not to further reduce the subsidy of PMS for the next 12 months. Politics sure is all about compromises. However, in the end was it touché or genuine concern for the majority of Nigerians?

My friend, one Udeme, said, ‘That’s a lot of concession …but where is the government going to get the money to make up for the loss?’ For the reason that, in addition, the government is going to pay 15% pay rise to its workers. This could lead to close to 5% rise in inflation after the informal sector would have strived to have a share of the benevolence of the public pay rise. The price of oil is going up everyday, but where is the money. …Show me the money! My own contribution at this juncture is a warning borne out of scepticism. Nigerians should watch out for the naira in their pocket. It could be the next target for government to make up for this loss. The exchange rate is the only form of taxation that Nigerian government understands. This is not speculation; I just have a premonition. In a struggle when all is logically lost, and you win; you had better look around you – there could just be a catch.

By the way, can somebody tell me the 15% rise of the quantity zero? If the answer is still zero, that will still be the adjusted income of millions of the other Nigerians. I mean those without jobs and of course, there is no social security. Who is going to negotiate for them? The withdrawal of five naira, because that is what it is, from the so called subsidy of the price of a litre of fuel will surely affect them too. Did the negotiators forget about the predicament of this group or did they compromise? In the end, so there are those flattened upon (vanquished) after all. Did many of these so called other Nigerians not constitute the majority that voted in the last elections. If prayers were counted, that group must have prayed for a good government more that any other group. Now then, who would bear their cross?  

What does the Nigerian government need money badly for; in any case that Obasanjo could not wait? Is it about the huge amount of money spent in the last elections? For the results not to have reflected the representations of the electorate, it must have cost a bundle. The Singaporean great man, Lee Kwan Yew put it aptly and I quote. “Having spent a lot to get elected, winners must recover their costs and also accumulate funds for the next election. …The system is self-perpetuating.” Does government need money to reimburse those that have spent a lot to get elected? And, compensate maybe, those that were cheated in the last election who are now willing to abandon the fight for justice? It is self perpetuating, but you and I are not only hapless; we are helpless. We have to bear the cost. With a means of livelihood, one could adjust easily but those with nothing are worse than doomed.

The Monday after the strike was called off, everybody seemed to need cash badly. One should not forget that Nigeria ’s economy is still cash driven. Consequently, venturing inside the banks became no-go areas because of high activities. I, therefore, decided to join those that had queued up, outside, to withdraw money from the wall. The two ATM machines in my bank also broke down, somewhat. There were, however, technicians at hand to repair the broken-down machines. We were asked to be patient. What to do. It had started drizzling in any case. The guards ceded their seats to some of us waiting, while the rest hung around away from the rain of course. Among those sitdon-lookers was an affable middle-aged man. He, however, seemed more upset about the whole strike saga than the rest of us. He belonged to the informal sector of the economy - where time is money.

The arguments that ensued that morning ought to be what our legislators should be debating – I think. I wish the people I get to meet in the street were the ones in our Congress in Abuja - debating. Somebody had wondered that every Nigerian from the age of eighteen should have an income, either through gainful employment or government subvention. That made the rest of us to have a good look at this person who had such a crazy idea. The fellow, however, went ahead to convince some of us. I will say I was bought over. Using Europe as an example, specifically Britain , he explained thus: It becomes a drive to move the economy forward because it would be imperative on government to create jobs in order to unburden itself from such responsibility.

Besides, it could kick-start massive development; all it needs is just a political will to implement it. The scheme according to this proposal is based on sound tax reforms. Tax reforms have deliberately been slowed down in Nigeria for obvious reasons. As things are, the rich presently enjoy no taxation by the Nigerian government on their wealth outside the country so why not maintain the status quo. They only need to bring back a couple of dollars, Xerox it and live the life of princes in the midst of paupers. Also, it is too much work for a government that is pathetically lazy, who in any case is content with just selling the petrol dollar to the people through the faulty exchange rate as a crude form of taxation.

What we do is Xeroxing and at the end of every month, each state and local council go to Abuja to collect their share of the spoil of oil. It is no wonder that a huge percentage of what is realised from oil is used to pay salaries to the most unproductive sector of the economy – the Nigerian civil servant. There are, truthfully, not enough funds to develop the land afterwards. The fellow with the crazy idea continued: As people earn, they patronise businesses for their various needs, which government then taxes. By the time it is, to pay those on dole yet again, the stipend paid to the unemployed is back into the government treasury. Though there are bound to be dole bludgers that is those that would make no effort to find work, the majority of the unemployed would seek the dignity of employment.

One possible gain for the society is in the possible reduction in crime rate. Creating jobs is not that difficult, one of them said. It could be done just by the stroke of a pen. Imagine that you wake up tomorrow and the government has stipulated that no vehicle will enter Nigeria with any tyres fitted on it. Instantly, jobs needing tyre fitters would be created at the ports. If local tyres are then made mandatory and each car would need 5 tyres to start with, then the moribund rubber plantations in Edo and Delta states would come alive. Even Michelin that had just packed up production in Nigeria would be back in a jiffy. Investors in tyre business could come to our doors knocking.  

What a crazy idea, but we have seen it work elsewhere. While these discussions were going on, my mind loomed to some incredible dimension. In all the airports I have visited all over the world, and I have visited quite a lot, titivating works are forever going on in most of them 24/7. You can hardly see any repairs going on at any of Nigeria ’s airports let alone titivated. Britain is jokingly referred to as the cones capital of the world on account of the numerous amounts of traffic cones on its roads. British roads are forever being dug up 24/7. For those who are ignorant of what traffic cones are they are the orange or red or the combination of those colours; inverted cones used to temporarily demarcate roads for construction or repairs. These cones are, in modern days, manufactured out of plastics.

My colleagues and I used to joke that the West and Japan are the real developing world because of the continuous activities of maintenance, whilst the rest of us, particularly Nigeria , are fully developed. In Nigeria , once anything is built that is it and until it rots, nobody touches it or makes it better. The economic sense is not very obvious, but one could look at it this way. It is meant to create jobs. Let us suppose the city hall or council awards a contract worth $1 million to company A to fix either the road, water, or light in a particular area. Company A will hire equipments; hire workers, taken out of the unemployment market and buys raw materials to do the job. Company A and its workers are in due course taxed by the city. Those workers are at least temporarily out of the unemployment list.

If it is a continuous exercise, the temporary workers could be permanently out of the unemployment list. The leasing company and the raw materials suppliers would also be taxed by the city. Each of those would also patronise other enterprises that the city would also tax. In the end, almost all if not the entire $1 million that was awarded to do up the area would somewhat be back to the council’s treasury to be awarded to titivate other areas of the city. What has happened here is that the same money has practically gone round the economic sphere of the city making each productive unit satisfy its potential in development with no much money lost. For a bargain, it is a beautiful functional city gained as gratis.

Two things to my untrained mind went wrong during the restructuring of the economy. By omission or commission, taxation reform was left unattended and capital flight was not taken seriously. The duo, Buhari and Idiagbon, had made flight of capital a treasonable offence. Why did the successive governments treat it lightly? Can anyone imagine what the country would have been like if all that had been lost to other lands through illegal wealth transfer had been within the borders of this country? Imagine what the naira would feel like in your pocket. Somebody, a brainwashed advocate of blaming the masses for the plight of the naira, said it is because of Nigerians’ affinity for imported goods that brought down the value of the naira. That could be.

He was, however, countered by the affable middle-aged man who said whatever the masses import even if it is sand is value-added; it becomes part of the national wealth. The least is that there is tax at the port of entry. ‘When you take money out of a country and brings no goods back in return, it is negative value-added.’ It dilutes the value of the local currency, he said. The two men are right in a sense. In addition, with nothing brought back in return from money transferred outside the country, it prevents the government from earning tax on that wealth. That in return lowers the value of the local currency faster. Imports also have an effect but it is not as damaging to the wellbeing of the local currency as capital flight does. Imports generally affect the local industry, which affects employment, which affects government revenue from excise duty. Do not forget that the wealth of a nation is the sum of all the wealth of the people of that nation.

If part of the national wealth is illegally placed outside the country, then the net wealth of the nation is further away, in value, from the gross wealth of the nation. That being so, then development is stifled. Local businesses would be starved of funds that would otherwise have been available, while the country’s wealth that now resides outside its borders now funds development in other lands. But, why should I not keep my wealth where I like, after all it is my money? ‘For as long as you carry the country’s passport, then you are obliged to put your money where your mouth is,’ one of the guys quipped. For example, the passport is the property of Nigeria . It is your identity as a Nigerian, your security and your protection. It is an obligation.

The passport is backed by the might of Nigeria , which is the collective strength of every individual that makes up Nigeria . One’s obligation for these services of identity by association, security and protection is to make available, for use, one’s wealth by the people that have guaranteed that identity, that security and that protection. It is of course not free as it attracts interest. Keeping your wealth were you are not given the identity, security and protection as a non passport holder is short-change on those that accord you those services and recognition. What if I have dual nationality? ‘I suppose you would need to pay dual taxation on all your wealth,’ the gentleman answered. I seriously wished our legislators were listening, because capital flight is so damaging to the good of the community.

Lagos is the undisputed nerve centre of the nation, the commercial capital in another parlance. Lagos also epitomises the waste that has come to characterise the state of the Nigerian nation. Lagos is littered with abandoned vehicles parked by the road sides, most of which have been condemned for lack of serviceability. Not that most that are still plying the pot-holed roads in Nigeria and in Lagos in particular are near being roadworthy in any case. However, I wonder if people ever consider such despicable spectacle as a waste of our national wealth and not just of the individuals. Though those are private monies being left to abandon, they sure are part of the national wealth. A policy that allows Nigerians to import rickety contrivances that would not give value for money is damaging to the total wealth of the nation.

I think it is the religion of Islam that upholds that, “It is the duty of the community to prevent its members from straying erroneously far afield.” This seems like a negation of free spirit in enterprise and living. But, no nation yet can afford such liberty.

Samuel Akinyele Caulcrick. 

Lagos .

Robot  # 1 | 29.06.2007 08:26

What does the Nigerian government need money badly for; in ...Read the full article.