Weeks after the All Progressives Congress (APC) won the elections in 2015 and amid all the euphoria of the times, the party organized the first and only economic summit at the Hilton Hotel, Abuja. As a supporter of General Buhari, I attended. I noticed that there were many professors of Nigerian descent invited from abroad. The atmosphere was optimistic. We thought we had finally got it right. But many of the professors, as well as the captains of industry who were invited only, came to lament the scarcity of funds for economic development. A lot of the professors also came up with dating ideas, and I recall, in one of the breakout sessions, former Minister Bolaji Abdullahi having a hard time convincing them that basic education was a better investment than university education, with the scarcity of funds earlier alluded to. Someone like me was rather out of place there, because the conveners already had their famous and favorite intellectuals to call on. I recall trying to get the attention of Governor Fayemi on a personal basis and being brusquely brushed off by him too. In that season, I made friends with Okoi Obono Obla and Senator Olorunnimbe Mamora.
But it was in the last plenary I attended that I got the inkling that we may have missed it again. It was question and answer time, and try as I may, I was not called. But a white lady almost in front of me was recognized to be speaking. She got up and said, “I’ve heard many people say that you do not have financing for your projects.” I’ve been to many countries in my time. Nigeria is the only country where you don’t get charged for over-speeding. How then do you intend to get finance for your budgets? ” As a professional, she sat down after this short and direct question. She looked like a diplomat of sorts. But the organizers totally ignored this question, much to my dismay, and moved on to another question. The average Nigerian has no time for small fry like overspeeding tickets. Chances are that the lady was equally disappointed. But for me that day, that was it. After about 10 minutes, I got up and left. I lived in London, and I know how things work. I also understand the power of aggregating, from a large number of people, small fines, fees, duties, rates, rents, levies, and taxes. I know that you may not succeed as a government if you ignore what you think are the little things. Of course, the Buhari administration is closing in as one of the worst in our history. Not only have we seen two recessions in 7 years, there is a chance we will see another one within the next few months, making it a record 3 under the same administration. Put that down to bad luck, but we also lost whatever was left of our societal discipline, and too many of our people have become belligerent and destructive. And we are stuck with one of the lowest government revenue to GDP ratios in the entire world.
One unspoken reason behind our low revenue compliance and capability problems is that our elites are not yet ready to reach a consensus to use their wealth to reboot this economy. I recall the Vice President some months back, before the election frenzy, speaking about elite consensus. But he never followed up. At his 2019 colloquium, Asiwaju Tinubu also emphasized the need to be more aggressive in getting government revenue up. He even offered himself as a sacrificial lamb by saying if he was not paying enough taxes he should be approached. I have noticed, however, that our finance ministers would rather not rock the boat, and our tax collectors are such that they don’t understand just how dedicated to their jobs they should be. Some of them always take sides with taxpayers, helping to rationalize why people shouldn’t pay taxes. When an IRS man begins to say things like, “Hey, you know, they bought their own generator and did their roads,” you know you have a problem. A tax collector must have a single-minded approach to his job and only rationalize at the highest level. A trainee tax collector should do his job strictly, not assume the position of adjudicator for us taxpayers. A culture of tax and other revenue compliance must be achieved in Nigeria if we are to make progress. And hey, I am less particular about taxes than I am about other areas of government revenue, such as:
Back to the lady’s question: Why do we not collect fines for overspeeding in Nigeria? It is just because we refuse to be organized. We are also uncontrollable. And any society that is uncontrollable, where everyone and anyone does things the way they like, will never make real progress. Our uncontrollability is the reason why people now see Nigeria as a pariah nation—a place to be avoided. Not only have foreigners stopped coming here, they are also sealing us out of their country. They are only interested in our best brains, whom they hope to be able to reform. They have given up on us organizing ourselves, and even we have since given up. With EndSARS and other recent upheavals, our people have become even more uncontrollable. A lot of Nigerians would rather make a big scene and cause trouble if they are asked to pay a fine for overspeeding. They will put it on Instagram live and attempt to ridicule the law enforcers. Law enforcers too will rather just collect a small bribe and let the culprit go – money that should go to the state for, well, executing the budget. And then our professors will come to summits such as the APCs and lament how we don’t have the money to execute their brilliant ideas. Our government will also give up on getting organic revenues up and choose to borrow instead. Now we are in deep trouble, as we owe very close to $100 billion. In 2006, when we were in debt and begging forgiveness from the Paris and London clubs, we owed only $35 billion. The Buhari administration alone has contracted almost $50 billion in new loans, plus the devaluation of the currency effect. The Jonathan government, with Mrs. Okonjo-Iweala as a coordinating minister, left our loans at $53 billion.
Perhaps a more serious and intractable issue facing us in this regard is that we have too many “big men” who run for free. There isn’t anyone born of a woman in Nigeria who can stop the Nigerian big man and ask him to pay for overspeeding or for running traffic lights. Yet, these guys are the biggest culprits. They just don’t give a toss about things like this. They are also the ones driving motorcades of many luxury cars, paid for by the taxpayer. Yes, the poor, disappearing, unfortunate taxpayer.
Another administration approaches
If we are not careful, the next administration, if it is populated by the usual mindset, will also complain about having no money to finance its otherwise lofty ideas. Already, I’ve heard many people – a lot of the young folks – wondering where the funds will come from to run some of the ambitious projects of say, President Tinubu. I haven’t heard very ambitious ideas from the rest, who are basically trying to shrink public goods and pursue market-determined prices for everything. And so, I was just thinking about this issue the other day and decided to explore just one item; vehicle taxes, or road taxes, or car taxes; call it whatever you wish.
I discovered that Pakistan had recently doubled the car tax on any car beyond 1600cc horsepower, and tried to look at the revenue implications of a similar tax in Nigeria (even if collected at the state and local government level). Let’s start small. Assume an N10,000 annual car tax on small cars. There are about 15 million cars in Nigeria, but we use more SUVs than many countries around the world if not all. So, let’s say 50% are small. 7.5 million small cars multiplied by N10,000 equals N75 billion.7.5 million large cars at N30,000 each = N225 billion. This is the yearly potential collection on this tax line alone. We could start very small and scale later. And if the government can show integrity, fidelity, and example, this country can be transformed and GDP can grow in double digits. We are coming from a negative position anyway. I believe that we can transform this country without this reckless borrowing that mortgages our unborn children.
The world is changing rapidly. Nigeria has only been left behind because of the attitude of the people—leaders and leaders. We have a tendency to believe that development will fall into our laps, or that God will ignore other people in order to help us. Sometimes, we also believe we can borrow our way out of underdevelopment or that the white man will gift us technology. It is that simple. We act like people with simple minds, make all the wrong assumptions, and complain later. Development is hard. Development is difficult. Development is long-term and requires pain, planning, and perseverance.
I recall the day I paid 1,600 Dirhams in Dubai for overspeeding. Some eight years ago, Dubai, which had transformed its economy away from crude oil and into tourism, also got smart and installed speed cameras everywhere. One day, on my way from Al Ain, I was just ‘blowing my speed’ normally, doing a modest 120kmph, not knowing they had dropped the speed limit to 80kmph in some areas. What I paid that day alone is equivalent to N250,000 today. And that was not the only time that I was caught by the speed camera in Dubai, even in Umm Al Quwain. Nigerians are in Dubai, paying this every day. However, the purpose of this type of tax is not only to raise funds for the government but also to maintain social order. Abuja, our Federal Capital, is today the most unruly, most undisciplined, and, of course, the most corrupt city-state in Nigeria. Nobody has respect for traffic lights, not even the good old local taxis (they just don’t care anymore). On a few occasions, traffic police make brisk business for their own pockets. Of course, if we cannot make Abuja sane, there is no hope for anywhere else. Shame on the Buhari government, but things must change.
It is the seriousness around tax collection that makes South Africa’s budget 7 times our budget in dollar terms for her people, while we can only budget peanuts. The SARS (South Africa Revenue Service) gets at least R1.54 trillion every year. In Nigerian Naira, multiply by 26 to get N40 trillion Naira. Our entire federal budget is a mere N17 trillion, despite all the push from folks like me who have insisted that we budget higher for our people. At the current level, our per capita budget is a mere $200 per person, while SA’s is as high as $3,000 per person. In Europe and the USA, this number is around $25,000 on average. Why would any other country then have respect for us? We are not taking ourselves seriously and we have consistently allowed funds that are due to the government to flow instead into the pockets of individuals and gangs. This must change. Even tax havens like the Arab countries have embraced change. Whereas parts of Nigeria (particularly the north and east) are very resistant to taxation, even the Arab countries have introduced VAT at 5% (2017 in Dubai and 2018 in Saudi Arabia). Taxation in the new age is good unless you want to enter a serious economic crisis.
The challenge for our government is how to show fidelity to the people. How do we show that the government is not merely collecting from people to spend freely on their fancies? I believe this can be done. This was done in Lagos, under Governor Fashola. Signposts littered Lagos, showing what taxes were used for and encouraging residents to pay more. People found themselves complying more. This must be done nationally. And why not? We are now in serious trouble and a crisis, using 95% of our meager revenue to service interest on our $100 billion debt. Our Federal Inland Revenue Service now collects close to N7 trillion as against the N40 trillion collected by SARS of South Africa. We cannot continue like this. Certainly not. Nigerians should rally around to save their country and invoke the wrath of Hades on that public servant who wishes to usurp their sweat.