How Is Economic Underperformance Fowler’s Fault?

August 30, 2019by Tope Fasua0

The entire government should step up and receive its blame over a collective mediocre performance. What about the Customs? If we compare the Nigeria Customs Service collections between 2012 and 2014, with the figures for 2015 and 2017….


One of the momentous events of the last few weeks was the leakage of the query, yes query, from the chief of staff to the president, Mallam Abba Kyari, to Mr. Tunde Fowler, the chairman of the Federal Inland Revenue Service (FIRS). That was a query with a tight timeline for a reply. It was stern; the type that makes the addressee shiver in their pants. And for that reason, it was an odd memo. For one, Mr. Fowler is a member of the ruling party. He hasn’t erred politically in any way as far as the people can tell. Why then will he deserve a stern query, which was somehow leaked to the public?

Equally puzzling was the prompt reply to the query, which was swiftly leaked too. The reply rambled around a bit and the preponderance of opinions is that Mallam Kyari, President Buhari’s alter ego, who was conferred with more power and authority by the president himself at the induction of the new ministers, has gotten Fowler in a corner. But I believe that the government or Kyari – or whoever is behind the initial letter – is being unfair to Tunde Fowler, whom I have met once or twice but we cannot be called friends or associates of any type. He wouldn’t even remember me at all.

The failure of the economy, or the oncoming fiscal crisis, should not be blamed on Fowler. Asking Fowler to explain the reason for the shortfall of revenues between 2012 to 2014 on one hand, and 2015 to 2017 on the other, is being clever by half. The economy went into a deep recession in 2016, even though the signs had started to show in 2015. A lot of what happened had to do with the leadership and management style of President Buhari, which caused our slowness in responding to the drop in crude oil price. Till date, we have not responded properly with the much needed cuts in political appointees’ emoluments and allowances, stricter monitoring of expenses among top government functionaries and, of course, mass mobilisation around job creation and diversification of the economic base. We haven’t recovered from the initial lethargy of President Buhari; a phenomenon which may still be continuing. A tax collection of N4.93 trillion in 2014 dropped sharply to N3.3 trillion in 2015, later climbing to N4.0 trillion in 2016 and N4.3 trillion in 2017. It was in 2018 that the FIRS could be said to have returned to its mojo when it achieved N5.3 trillion – a figure that is in nominal terms the highest ever collection in Nigeria by the service. We can see that 2018 was cleverly excluded from the analysis by Mallam Kyari and it will be great to know why.


So we are asked to compare 2012 (N4.6 trillion), 2013 (N5.007 trillion) and 2014 (N4.93 trillion), with 2015 (N3.3 trillion), 2016 (N4.0 trillion) and 2017 (N4.3 trillion). It is clear to all that the N14.6 trillion collected within the first three years is much better than the N11.6 trillion for the second set of years. That is where the CoS hopes to nail Fowler. But before the CoS achieves that, we need to also remind the entire government that there was a devaluation in 2016. The naira tumbled from N177 to the dollar, to N305 officially. That was about a 42 per cent devaluation, if we use the US dollar as the base. This devaluation also came with an increase in fuel price from N97 to N145. This president actually got away with so many things. Anyhow, back to the matter of taxes, with this devaluation, we ought to have been challenging ourselves to increase revenue collection across the board by at least 42 per cent in order to meet up with the real value of what was collected earlier and be able to provide for the needs of our people. But instead of achieving an increase, what we had was a decrease. In fact, the N5.3 trillion collected in 2018 was barely N3.07 trillion in 2013’s money in real terms (if we discount with the 42 per cent devaluation). We haven’t even controlled for year-on-year inflation!

The entire government should step up and receive its blame over a collective mediocre performance. What about the Customs? If we compare the Nigeria Customs Service collections between 2012 and 2014, with the figures for 2015 and 2017, what we will see is dismal performance, like what happened at the FIRS. I haven’t seen any memo to Hameed Ali, Buhari’s right hand man, in the newspapers or online. I am not interested in the tribalism debate that usually crops up. I am just saying if Fowler deserves a query, so does Hameed Ali, and many more in the rank and file. For the Customs, it is even more imperative, because everything they do there is denominated in foreign currency. A $10,000 import in 2015 jumped in naira value, from N1.7 million to N3.05 million (official rate). The import duty is levied on the naira figure. So where is the money?

Precisely for the Customs, the sum of N741.8 billion was collected in 2012, while in 2013, the NCS collected N850.8 billion. By August 2014, the Customs had declared a collection of N622.2 billion and closed that year at N833 billion. By 2015, Customs revenue was up slightly at N904 billion but this went down to N898 billion in 2016. The figure for 2017 was N1.012 trillion, which grew to N1.2 trillion in 2018. Given the devaluation of currency from N150=$1 to N326 (for international trade) between 2011 and 2016, the Customs’ figures should be above N2 trillion since 2016. Where is the money? And where is the amount rescued from corruption by Hameed Ali, who chose not to identify with his troops by wearing their uniform? I thought that should make a lot of difference.

I will however admit that Mr. Fowler could have done much better. The Voluntary Assets and Income Declaration Scheme (VAIDS) – the timing of which I criticised – ended a monumental failure in my view (and that came with huge costs). The cost of collection, the amount deducted by FIRS for its running and staff bonuses, we understand, has ballooned under Fowler. People complain of all sorts at FIRS. And of late, we read about estacode fraud in the service. Earlier, it was about the recruitment of politically connected workers. We the people are not happy at all. We are asked to pay taxes and we are struggling to keep up. The least that we should be given is an inland revenue service where we will know that our taxes are safe, well-managed, and under the general care of measured people. We want political influence to be very distant from the FIRS. We want a very professionally run tax manager, not one where the children of the rich and connected go to snooze all day – having been made to work in a place they have no commitment to because they would rather be disk jockeying, making music or starring in Big Brother Nigeria. Let us get serious please.

Finally, I will want to urge President Buhari to lose his smugness towards the Nigerian people who reposed so much hope in him. The idea of ceding so much power to the CoS is part of that smugness. Yet we have suffered so much since his government came. Businesses have shriveled and failed. With revenues dwindling everywhere, what do we expect? And with the amount of crimes around those revenues – as civil servants still spend on themselves recklessly – the president has done nothing to help the most vulnerable by making some examples out of some of these people.

Mallam Abba Kyari should note that the memo he wrote also concerns him. Since he represents the president on most matters now – including as a senior prefect to all the ministers – he should please reflect on the wide-reaching fall in revenue since they came, and ensure that the people of this country see a better life. Unfortunately, Minister Chris Ngige made a statement a couple of days back that 60 per cent of this year’s budget will be rolled over into next year! For as far back as I remember, this is how we have been spending only 40 per cent of the budget on the people. The rest gets rolled-over, but the pockets of a few are filled all the same, while the people wait for Godot. The government never tells us when the enjoyment is on. We only hear of the onset of hard times – just like Garba Shehu has warned us recently while explaining the rationale behind the Kyari memo to Fowler. But as much as we know the issues around Fowler’s leadership of FIRS, we disagree with Kyari; Fowler is not to blame for the drastic drop in collections. If we must blame anyone, we should blame the supreme leader, who takes issues of the people’s welfare with much levity. And we must beg him to see the damage and save the people.

by Tope Fasua

Tope Kolade Fasua is a Nigerian ex-banker, entrepreneur, economist and writer with 28 years of work, business and policy analysis experience. He is the founder and CEO of Global Analytics Consulting Limited, an international consulting firm with its headquarters in Abuja, Nigeria, and footprints in the United Kingdom, USA and United Arab Emirates. Fasua has authored numerous columns on newspapers and six books. He currently keeps regular columns on policy analysis issues with Premium Times and Daily Trust newspapers.

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