BY OIKONOMIA WITH LEKAN SOTE
The task of raising funds for government business is called “Ways & Means” by the British whose Parliament has a Committee for Ways & Means. In Nigeria’s National Assembly, it is called the Appropriation Committee, maybe because of the tendency of Nigerian governments to “appropriate” money from the citizens.
Sometime ago, the All Progressives Congress government coveted unclaimed dividends and deposits in dormant bank accounts of poor or dead Nigerians, who might have descendants or beneficiaries, even if they were unknown, to finance usually profligate expenditures of needlessly Big Government.
By some stroke of providence, the Federal Government either forgot its evil intention, or was persuaded out of it by counsellors. Unverified reports indicate that some of the owners of the unclaimed dividends and dormant bank accounts woke up to retrieve their assets.
Cumulatively, Nigerian governments, including the current one, woefully failed to evolve appropriate macroeconomic policies that will grow companies that can conveniently pay taxes to finance government projects, services and the gluttonous excesses of public officials.
All they seem to know how to do is to tax Nigerians to death, with multiple taxation, imposition of levies, tariffs and all manners of extortion that leave the citizens broke and fearful.
What makes the fleecing of Nigerians by their own government more painful is the government’s seeming inability to check both inflation and the continuous slide of the Naira, but watches helplessly as the purchasing power of Nigerians emaciates.
Government is, however, arguing that the rise in the rate of the inflation is decelerating, (confused?), though one must acknowledge that the price of one paint-pail of gari staple dropped from N2000 to N1500 last week. Nigeria Bureau of Statistics says inflation dropped from 15.99 per cent in March to 15.40 per cent in October 2021.
But you get worried when President Muhammadu Buhari, his ministers and aides, who have failed the nation, either refer to Nigerian youths as lazy, or talk down on other Nigerians as if they were unimaginative and cannot take advantage of opportunities before them.
“There should be no reason to raise taxes, levies and tariffs, burdening Nigerians who are just getting by in these times of Covid-19 lockdown, low productivity, unemployment, weak currency, high inflation and interest rates
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What is worse is that the government does not seem to want to ensure that prices of consumer products, like gas and petroleum products, supplies of which are almost sorely under its control are within the reach of citizens.
By the end of 2021, the price of domestic gas had spiked from N3500 to N10000, just as the government was plotting to raise the pump price of petrol by more than 100 per cent, to N340 per litre in 2022.
None believed Group Managing Director of Nigerian National Petroleum Company Limited Mele Kyari’s promise that the government will find a way to return the price of cooking gas to its old price, though it recently dropped to N8500. Right now, the people in Warri would have asked Mele, “Na today?” in their most sarcastic mood.
While Godwin Emefiele, the overworked Governor of Central Bank of Nigeria, is justifying tolling of roads for which the Buhari government took loans, the taciturn Minister of Finance, Budget and National Planning, Zainab Ahmed, is prepping Nigerians for payment of more tax.
Minister Zainab promises that products of the “sin class,” like tobacco, alcohol and carbonated drinks will attract more tax, and the proceeds will be used to finance health, education and security.
When she boasts that the Treasury Single Account method adopted for monitoring and collecting government revenues is yielding good results, you begin to wonder why the government needs to further raise tax rates.
One would have expected that TSA would plug a lot of leakages the Voluntary Assets and Income Declaration Scheme way, and other aggressive tax collection initiatives to mobilise and drag those who notoriously evade tax into the tax net.
There should be no reason to raise taxes, levies and tariffs, burdening Nigerians who are just getting by in these times of Covid-19 lockdown, low productivity, unemployment, weak currency, high inflation and interest rates.
You will recall that after raising Value Added Tax, by 50 per cent, from 5 to 7.5 per cent, in 2019, the government still took loans to feed the over bloated Big Government that spends more than 70 per cent of its annual budget on staff salaries, white elephant projects and other wasteful overheads.
And despite the deceitful back-and-forth, the government quietly acquiesced to the electricity distributing companies’ quest to raise electricity tariffs, and pretends as if it is not aware that prices of nearly every consumer item have increased astronomically.
Maybe the multilateral and Chinese lenders have hinted of some fatigue and that is thus making the Federal Government to look inward to pile more weight of poverty on the citizens by tolling roads.
By the third quarter of 2021, Nigeria’s public debt (owed by Federal and state governments) was in the neighbourhood of N38.005 billion.
Another report indicates that, by July 2021, about 98 per cent of every Naira earned by the Federal Government went into debt servicing.
Yet on Wednesday, December 15, the Senate approved a request for another tranche of $5.8 billion foreign loan that the Federal Government says will be used to finance infrastructure, create jobs, alleviate poverty and further secure the nation.
Shehu Sani, who served only in the 8th Senate, points out that the current rubberstamp 9th Senate has approved more than N12 trillion (or $ 30 billion) loan requests for the Buhari regime within a space of just two years.
The International Monetary Fund has grim prognostications about Nigeria’s debt binge: Nigeria’s debt to Gross Domestic Product will rise from 33.7 per cent in 2021 to 42 per cent by 2026. Also, the ratio of government revenue to GDP will decrease from 7.2 per cent in 2021, to 6.5 per cent by 2026. As you know, petroleum, which provides most of the government’s revenue, is going out of fashion.
But strangely, the IMF is predicting that the ratio of government expenditure to GDP will decrease from 13.3 per cent in 2021 to 12.6 per cent by 2026. This 0.7 per cent decrease will happen only if Big Government is shrunk or something is done to rev up the growth of the GDP.
Everyone pretty much accepts that the government has to be funded from the taxes paid by citizens except there is freebie from royalties from some God-given resources, like petroleum and gas, which former President Olusegun Obasanjo regards as a gift of nature.
But government, (or more specifically, state actors), must come up with policies that will guarantee the wellbeing of commerce, in order to increase employment, reduce crimes, and receive sundry taxes that will be used to provide common services, like the military, police, the judiciary system and governance for the common man.
What the Buhari regime, and governments before it, do is to harass Nigerians with sundry levies to pay the remunerations of idle bureaucrats. If you doubt, remember that the Buhari regime, which claims to emphasise infrastructure over overheads in economic planning, spends only about 30 per cent of its annual budget on capital projects!
He’s the scoop: Wherever debt and debt servicing, that the Buhari regime is piling up for future generations, exceed the government’s capacity to generate revenue, as petroleum goes out of fashion, governance will be achieved only by deficit, euphemism for debts.
Government must be intentional in running the economy to raise tax, royalty and other revenues.
