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VAT:Between Common Sense and Critical Observation

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By MA Iliasu

The chart showing the performance of Nigerian State governments in internal revenue generation has done it’s part in unveiling the mixed performances of the state economies. As expected, the public reactions, which to me are warranted, carry both the weight of reason and emotion. And may be for the first time in the history of Nigerian political economy debates aren’t taken over by regionalism and ethnic jingoism. It seems that conciousness has succumbed after realising how laziness and incompetence has been fairly distributed among both northern and southern ruling class. Governors particularly.

Having learnt the flow of sentiments from the day the revenue rankings were released to date, I conclude that the discussions around Internally Generated Revenue (IGR) and Value Added Tax (VAT) are more skewed toward the search for self actualisation rather than exclusive state independence. For which I’m hoping to be correct. Because if I’m wrong that’ll mean most of the commentaries on are not more than unwarranted emotional outbursts on how the economy really works.

Critical observation will tell that states like Kano are painfully underachieving. Possibly because the government ignores countless number of taxable entities and many other streams of revenue, or it doesn’t care to investigate the conduct of the revenue agencies, it’s very self inclusive. For it’s an established fact that the government source massive revenue not only from taxation but from the sales of valuable assets, among others.

On the other hand, without even mentioning Lagos that no economy has come close to compete with, you’ve Kaduna and Rivers. The economies that can easily be agreed to be of similar strength if not inferior to Kano’s. Yet with astronomical difference in IGR. The defining factor in that dilemma lies in their respective self-actualisation and economic competence. The same can be said on the other high-earning states against their low-earning counterparts. And where that’s concerned, questions are right to be asked on why should a state enjoy sizable share of other state’s hard work when in itself it’s in a unique position to contribute as much if not more.

The way I see it that’s where the conversation becomes critical. The high-earners think every state should enjoy as it earns. While the low-earners think the economic union should not be dissolved because they’re geographically and industrially rigged by nature. The indigenes of high-earners agree with their state’s notion. As do that of low-earners who think isolating their state expenditure with it’s earned revenue will awake them from the shameless slumber and make them more creative. The important of all is does the economy work that way?

To begin with governors who believe nature hinders their income stream, they must know that geography in economic context is either an advantage or a symbol of unique opportunity. It’s a fact that Lagos and Rivers as the custodians of Nigerian ports have find it easy, therefore advantageous to source revenue. But it’s the same with Jigawa that’s strategically positioned to be a massive tech-hub and schooling environment across Sahara, Yobe that’s agriculturally equipped to grow the most unique seeds and Delta that’s attracted to non fossils industry. Therefore, using nature as excuse is beyond lazy.

Nevertheless, no matter what any state does to achieve economic supremacy, one state must earn more than another. Thus, one state must record a deficit in trade with another. It’s a simple law of nature that’s very sensitive in economic policy especially in accounting internal trade.

For instance, it makes sense that Kano, the largest textiles market and importer in Africa, pays more to Lagos and Rivers, who are the custodians of ports, than it receives. Likewise if Kano, as the distributor of the shipment, receives more from Bauchi, a retailer, than it pays. The same line of argument can be asserted to the states that own what other states need more than it needs from them. And so recording deficit by the paying state is inevitable. Because needs and economies of scale can never be the same.

It’s due to that vivid notion the famous British economist, John Maynard Keynes argued that economies must bound together to solve the inevitable rigidities that’ll be caused by the unavoidable deficit breeded by such economic interdependence. According to Keynes, crises can be redemptive and non redemptive crisis. Redemptive crisis is the type of crisis that’s capable of becoming it’s own medicine. In short, any problem that can paradoxically becomes it’s own solution qualifies as redemptive. While non redemptive crisis is the type of crisis that can’t solve itself.

For example, in the ever prophetic General Theory, it was explained how trade off exists between inflation and unemployment. That’s to say by compromising inflation, unemployment often rises, which give rise to another wave of cyclical negativity. Meanwhile, inflation can be risked to reduce the level of unemployment. And lower level of unemployment means higher employment which can help eliminate the inflation. That way, inflation has laid the very foundation of it’s demise. The very redemptive crisis that Keynes had explained concisely.

The phenomenon with our state economies is that the internal trade between those respective states records deficit in the books of payers and surplus in the books of the receivers. The receivers are often the highest earning in the ranking of VAT while the payers are mostly the low ranking. And the intriguing dilemma is that where deficit and surplus are concerned a serious tension occurs to the market flexibility that’ll need cohesive effort by those states in order to be released. And if they’re isolated from one another by warranting each state to only enjoy as it earns, it won’t be possible.

It’s like two siblings in a family of three. The older is a farmer who therefore is discharged with buying food and consumables. While the younger is an engineer who’s discharged with water and electricity bills. It was agreed that none should interfere with any’s responsibility. Interestingly a period of bumper harvest keep taking place for the older. But sadly, the younger hasn’t been able to secure a job. Food has been available. But no water and electricity. The family eats but it reaches the level where there’s neither the water to boil the food nor the electricity to power the oven. The bathrooms are inept too. Their mother become worried. Things begin to fall apart because the house has gone insane and a family meeting gets summoned. A tension of similar magnitude will happen if state economies are left to their own mercy.

Firstly because in economic context, Nigeria is a single family by the very fact that the states are bound by a single currency and enjoy free trade with one another. Secondly, the states must pay for one another’s incapabilities collectively like beloved siblings because they live within the same family in which the flaw of one can devastate the situation of the other. Just like what happened when the above younger sibling couldn’t secure a job while the older enjoyed bumper harvests. Thirdly, all that has been mentioned doesn’t need to be accepted or agreed but must be complied, whether one side is lazy or hardworking, because it poses direct threat to the economic stability of Nigeria. Moreover, it’s a compensation for inflicting deficit in the event of trade, which was why the US and it’s dollar has been more stable than Europe and it’s Euro; all because they’re bound by the same currency.

It’s from that therefore that I learnt when Gov. Wike of Rivers suggested an exclusive state supremacy on VAT he was totally ignoring or ignorant of how the remittances among those states become what enables the highest ranking states to record the surplus that they’re boasting about. It’s a simple logic. When Bayelsa State as the lowest in the ranking is isolated with it’s small Internally Generated Revenue it’s purchasing power would decline severely. And state’s purchasing power is consumer’s purchasing power. If it declines it’ll mean no buyers for the available commodities in the Bayelsa market, which will hinder restocking from the industries in Lagos and Anambra. When it persists the commodity market will die. Deflation will strike and consequently investment will disappear. Small enterprises will become bankrupt.

Trade deficit goes hand in hand with governments that are also in deficit. If an economic crisis occurs within any among the economies that are bound by the same currency, the fall in demand will trickle down to the deficit economies. Once the crisis began, whether in a surplus state or not, it would inevitably soon reach both the surplus and deficit states. Even if it arrived in the form of a small downturn, some debtors would be made to feel that they were carrying too much debt. Keen to reduce their exposure, they would cut spending. But since, at the level of the national economy, society’s overall demand is the sum of private and public expenditure, when a large segment of the business community tries to reduce debt (by cutting expenditure), overall demand declines, sales drop, businesses close their doors, unemployment rises and prices fall. As prices fall, consumers decide to wait for them to fall further before buying costly items. A vicious debt–deflation cycle thus takes hold.

Now that’s the question the Nigerian state economies must sit down and ask themselves; is this where we want to go?

From what we’ve learnt recycling mechanisms are necessary to avoid the bubble from bursting. Likewise it’ll be absurd to allow lazy economies to keep enjoying off the hardwork of others. The best response in my opinion, is to set a minimum threshold, one that each state must abide by. An evaluation of state’s income streams must be made so that no state should source less than it should. Gubernatorial candidates must adequately explain henceforth how they intend to fund ambitious capital and recurrent projects. Both to the voters and intellectuals. Because the days of off-head projections are over. The truth is Nigeria is broke. And most states are lazy. While cutting them off will destroy the economy as a whole. The room for politicians who dreamt of becoming governors when they’re young is no longer there. What’s there is a capacity for difference makers. Policymaking bodies can no longer be filled with empty-headed pot-belly carrying nepotist. Trained economists must be engaged. For now, everything is up to the central authority, we shall see if it’ll tame the situation or sink the economy further.

MA Iliasu writes from Kano State. He can be reached via his email Muhada102@gmail.com.

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Doctor’s Spectacle: National Insecurity In The Face of Fragile Health System

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By: Dr Khalid Sunusi Kani

Do you know that “one-third of more than 700 health facilities in Northeast Nigeria, have been destroyed as a result of insurgency”? I was shocked the first time I laid my hands on the report released by the World Health Organisation (WHO) in the year 2016. Hmmmm, na wa woo! We don die…

Nigerians are vanishing from earth daily, not because of our negligence but as a result of the cluelessness of those responsible for safeguarding our lives and properties. Citizens are forcefully ejected from their heritage homes and blatantly separated from their loved ones. Our shelters are not safe, some were put ablaze by some mischievous personalities, the so-called “bandits, militants and Boko Haram.” Health Personnel are gradually evacuating from the areas where insurgency is on the rise. This is the architectural written description of the predicament of common people in Nigeria. These events have resulted in an abrupt change in the front pages of our newspapers to a near-death announcing space. If the present situation that we are living witnesses today continue, it will be very worrisome if care is not taken.

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In the context of poor security, public health interventions and the delivery of healthcare to the individual are more difficult to perform and less likely to succeed than in the context of security. Violence – including the threat of violence – in such contexts results in injury, death, psychological harm, impaired development or deprivation. Insecurity therefore, potentially has a double impact on people’s lives and well-being; this is the reality of everyday life for many millions of people in Nigeria.

High insecurity, difficult terrain and lack of health workers, medicines, equipment and basic amenities such as safe water are making access to essential, life-saving healthcare services extremely difficult for people in these conflict-affected areas.

The rate at which the insecurity is going like a bat out of hell is very alarming. It has resulted in an indiscriminate geometric increase in the number of Internally Displaced Persons and Refugees in our country. Numerous researchers have shown the inextricable relationship between Maternal Motarlity, Under Five Mortality, and Malnutrition among Children with the insurgency. Insecurity worsens the health condition by causing numerous commotions and disturbances in the normal physiological and mental health of the indigenous people of the affected areas.

Hmmm, as I’m writing with my ink at this point, my heart is silently bleeding profusely, fully aware of the dilapidated health system that has been in existence for decades even before the worsening of the security situation. And could you imagine how the situation would be when augmented with the rascal behaviour of bandits, Boko Haram and Niger-Delta Militants? It would be just like adding salt to the wound. That simply defines the current condition in our country – “Insecurity In The Face Of Fragile Health System.”

There was a story of a pregnant woman with a poor financial background in Zamfara State, living in one of the Local Government Areas with the highest attacks by the bandits. She had an Intrauterine Fetal Death(IUFD), which means the baby died inside her womb, a few weeks before reaching her Expected Date of Delivery (EDD). However, this tragedy is related to the inability to access healthcare from the nearby Primary Health Care facility in their residential. The health workers were all transferred to other health facilities and most of all, they were not willing to stay in the village as a result of the perpetual kidnapping of their colleagues in the danger zones. That’s how she nearly spent nine months without attending Antenatal Care (ANC) clinic. Had it been the village is secured, it would have been a different narration. Unfortunately, she is presently depressed and placed on antidepressants and regular follow-up with the psychiatric clinic at a tertiary medical centre.

Truly, in a secured society, pregnant women would be able to attend ANC, and health workers could tackle preventable causes of poor maternal and perinatal mortality through early detection of dangerous signs of pregnancy and subsequently help the women to deliver safely without any complications. This sympathising story is one in a million; just a tip of an iceberg. That’s how insecurity continues to affect mothers and children in IDP camps. Hundreds are dying as a result of poor environmental sanitation in the camps as inhabitants of these camps keep battling with deadly infectious diseases, all as a result of insecurity in my country.

Nevertheless, the Nigerian Government has the greatest role and responsibility to play in securing the lives and wealth of its citizens. People’s security has been described as “a basic value because it is an essential requirement or condition of a successful and fulfilling existence; it liberates people (both physically and mentally) to get on with the business of building their lives without undue fear of those around them … It is also peace of mind: liberation from the anxiety and apprehension associated with fear of those who are in a position to harm us.”

The above mentioned description of personal security runs parallel to the “narrow” concept of human security described in the Human security report 2005: “it is about protecting individuals and communities from any form of political violence.” Given that the definition of health encompasses a state of complete physical, mental and social well-being, it is both logical and intuitive that people’s security, whether viewed collectively or at an individual level, is necessary but not sufficient for their health.

With the above mentioned assertions, we would be able to believe that we need health for peace, and as well, we need peace for health. Nevertheless, Government must do the needful to renew its strategic approach in bringing to an end, this unhealthy Humanitarian disaster that has made our healthcare to be severely destroyed. Yes, We Can collectively bring it to an end!

Dr Khalid Sunusi Kani is a Medical Doctor| Public Health Advocate| Public Affairs Analyst.
Drkano01@yahoo.com

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Why Are Good Writers Bad Speakers?

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– Ibraheem Dooba

A certain minister who was an excellent writer gave a speech somewhere. It was one of his first speeches as a minister after his appointment by the President. Another writer who heard the speech complained that he wasn’t impressed by the minister’s performance. “It was as if he had never spoken in public before,” he told us.

“Well,” I reasoned, “he had never been subjected to an occupation where he had to speak all the time.”

Good writers get to be good because they write all the time. Which means that they are practised. Good speakers become orators because they speak frequently. In other words, they are practised. Accordingly, it is incredibly difficult to find an imam or pastor who is not eloquent. Why? Because they speak all the time. At least once a week. The imams during Jumu’a prayers on Friday and the pastors on Sunday.

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Not long ago, a friend told me this: “honestly, I prefer your writing to your speaking.” In other words, I prefer to read you than to hear you. Translation: “you are a terrible speaker!”

(I called him this morning to hear what he thinks now. Continue reading to see his new assessment of my speaking ability.)

People think that one ability seamlessly transfers to another. It doesn’t work that way.

Ask any neuroscientist and they will tell you that the brain grows new cells to accommodate new skills (neurogenesis). Thereafter, the more you practice, the more myelination. Myelination simply means the process of making brain signals travel faster for a particular skill.

Another minister in Nigeria, Dr Ali Isa Pantami, impressed the nation when he appeared in the Senate to be cleared as a minister of the federal government.

But I wasn’t surprised. The guy is a scholar and a preacher! Which is a devastating combination. He knows. He expresses the knowledge. Someone who has something to say and says it all the time is my definition of an orator.

You wouldn’t be surprised when Messi, Ronaldo or Salah plays well in a match. He is expected to play well. So that is not news. What is news is when he has a bad day and doesn’t play well.

So why are good writers bad speakers? If you have read this far, you must have figured it out by now: it is because they don’t speak!

The opposite is also true. Some great speakers are poor at articulating their thoughts in writing.

I know some good writers who are good speakers. Mahmud Jega is one of them because he is practised. He was a lecturer. He likes to share stories and he gets invitations to give talks.

Steven King is another example. He is a great American novelist who has sold millions of his books. But I wasn’t impressed by his earlier appearances on TV. But not surprisingly, he is now a better speaker (at least to me) because he put in appearances in shows like The Late Night Show of Steven Colbert.

Since I realized this, I’ve increased my speaking gigs and have accepted most of the invitations I received to give talks or lectures. It helped. What about the friend who said I was a terrible speaker? Before writing this article, I gave him a call. Here is what he said: “Sincerely, I think you have improved. You’re balancing both.”

Therefore, if you want to be a good writer, write every day. If you want to be a good speaker, speak frequently in public. But if you want to be a good writer who speaks well, do both.

 

PS: An even better way is to learn how to do both and then put that into practice. Put knowledge into practice.

#HowtoWriteWhatReadersLove

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The Onerous Task: Between Politics and Reality.

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By Abubakar Sadiq Dauda.

I watch with complete dismay how some People on social media use the opportunity of the recent arson that happened in Sokoto, to attack pro-buharist, in what looked like deviating from reality (destruction of the North) and attacking one another. Hence, misplacing our priorities yet again!

Perhaps the setbacks, Northerners are experiencing may be political and may also have the interest of our political masters both locally and internationally. The reality of it all is that it is being executed at the expense of our lives, properties and means of livelihood.

Therefore, the recent happenings call for the onerous task which is for us the followers and supposed ‘slaves’ to put our political undertone behind our backs, look for ways we can improve our lives, secure our properties and restore the lost glory of our region, the North.

The Masters in our political system have the capacity to recruit enough security agents to escort them, while they move on our highways from Sambisa to Shinkafi via Kaura Namoda, if they opt to move across that dangerous route. But the commoners, dare not move from Abuja to Kaduna except with the assistance of Allah alone.

The scenario I just highlighted above is the reason I believe we should halt the senseless tantrums and mockery we throw at each other. Let us drop politics and face our reality stained with hopelessness (unless we take measures and actions).

The issue of security in Nigeria has been a major challenge right from 1999, and it has been a major threat to our success. There has been an immense success in the fight against insecurity in the South, even when we were low on fighter jets, arms and ammunitions. Fast forward to 2021, from 2015 our security and armed forces were never equipped in the manner it has been equipped from statistics.

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Dozens of air fighting jets have been purchased, dozens of gunship helicopters were purchased and the majority of those assets were being deployed to the North, but still, there is no glimpse of hope even with the massive deployment of troops into our region.

With the short analysis I have laid out, I will still repeat what some people describe as a hypocritical gesture, which is to stop trading blames, drop politics and embrace reality by repeatedly calling on Allah to intervene.

Burying our differences and joining our heads is a must and it is a necessity for the quick growth and success of the North and Nigeria as a whole.

Quick reminder:

Last year exactly this period, we were mourning Zabbarbari massacre that occurred in Borno. A year after, it turned to innocent travellers in Sokoto. If this doesn’t make sense to us then I wonder what will.

May Allah’s mercy continue to be with the innocent souls we have lost to the hands of terrorists and enemies of our dear country.

God Bless the Federal Republic of Nigeria.
#SecureNorth

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