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VAT:Between Common Sense and Critical Observation

Published

3 years ago

on

 

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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Dr. Muhd Sani Umar Rijiyar Lemo: PLEASE RE-OPEN OUR BORDER WITH NIGER REPUBLIC: A REMINDER TO OUR LEADERS!

Published

1 year ago

on

November 2, 2023

By

President Bola Ahmad Tinubu

 

By Prof Muhd Sani Umar R/Lemo

October 30, 2023.

In the name of Allāh, the Entirely Merciful, the Especially Merciful. We are immensely grateful to Him for sparing our lives, and giving us the health and wherewithal to live to this moment.

There is no doubt that people are complaining about the rising cost of living, poverty and inflation that we are facing in the country. This is the reason why we will keep drawing the attention of our leaders to the burden of the masses resting on their shoulders. Indeed this leadership is a voluntary task that they acceded to bear; not a mere honour and privilege given them nor an opportunity for their personal pleasure and luxury. Rather, they have been entrusted with the responsibility of the millions of people under them; a trust that will surely be accounted for before Allāh SWT. He says in the Qur’ān:
“And fulfil (every) covenant. Verily, the covenant will be questioned about.” [Al-Isrā’:34]

Therefore it is the responsibility of the leaders to map ways to alleviate the distressing hardship people are currently facing in the country. Although it is known that Allah SWT is the provider of wealth and sustenance, but His provision is subject to the responsibility and role an individual plays in realizing it. When the leaders neglect to play those roles, they will be responsible for the situation it will result in.

It is important for our leaders to know and understand that one of the important pillars of leadership is the protection of lives, health, faith, wealth, property and honor of the people being governed.

Insecurity is still one of the most serious issues we are facing, although we have witnessed some of our governors making good efforts in that regard. It is our hope that all governors will join hands with the federal government and try their best, while we continue to pray for Allah’s divine help in solving the problem. We are confident in His promise that:
“And those who strive for Us – We will surely guide them to Our ways.” [Al-‘Ankabūt:69]

Our economy is continuously deteriorating, and the masses are plunging deeper into hardship. It is the duty of the government to find ways to ease the lives of the people. Taking actions that will further sink the masses into misery is tantamount to falling into the first category of the people in the prayers of the Prophet SAW that:
“O Allah, whoever is in charge of the affairs of my nation and is harsh on them, then be harsh on him, and whoever is in charge of the affairs of my nation and is kind to them, then be kind to him.” [Muslim:3/1828]
Every Muslim should hope to be part of the latter and away from the former category.

It is common knowledge that one of the fundamental sources of ease of doing business is the freedom to traverse between places in search of livelihood. Allah says in the Qur’ān:
“He it is Who has made the earth subservient to you; so walk in its paths and eat of His provision.” [Al-Mulk:15]
In another verse He says:
“He has known that there will be among you those who are ill and others travelling throughout the land seeking [something] of the bounty of Allāh” [Al-Muzzammil:20]
And He also says:
“And when the (Juma’ah) prayer has been concluded, disperse within the land and seek from the bounty of Allāh.” [Al-Jumu‘ah:10]

Thus, to travel between one place to another is a means of seeking from the riches Allah SWT endowed the world with. Hence, giving people the freedom to traverse borders in search of things that are beneficial to them and the society is part of the rights accorded to them by Allah SWT, and preventing them from doing so is denying them that divine right for which they will have to account in front of Allah.

Recently, the federal government announced that it had directed for the opening of land borders, and lifted the ban on importation of some foods and other products needed by our people.

This measure will surely boost the commercial viability of the nation, because import and export of goods and services between societies is one of the basic transactional norms in human lives.

Unfortunately, despite the directive from the Federal Governtment, while the southern borders remain freely accessible, land borders on the northern part of the country, are still closed. This means that the respite this measure will bring to the nation will not be enjoyed by the northern people. The Nigeria-Niger border plays a vital role in the socioeconomic well-being of the Northern states, and its continued closure has dealt a heavy blow to commercial activities on both sides. Thus, persistence of this measures means that the Northern part of the country is being alienated from their national entitlement.

Yes, the recent coup in Niger Republic has been cited as the reason for taking this drastic action. Neither the people of the North nor the Nigerien people played a role in the execution of the said coup, therefore it is not right to punish either for someone else’s wrongdoing. Also, two wrongs can never make a right.
Furthermore, this coup is not the first coup that took place in an African nation nor the West African states. Yet this measure taken by our government has not been taken elsewhere in similar cases. The illegitimacy of the coup should not be an excuse to take a measure that will consequently punish the northern region. The best way to attain justice is rectify any wrongdoing through rightful means.
Similarly, it is important to remind our leaders that protecting the interest and well-being of our nation is superior to the protection of any external interest beside it. It is apparent that the border closure may be a strategy to compel the military government into submission, may serve or protect an external interest vested by some countries elsewhere and some regional bodies, but none of these interested parties experience any part of the resultant hardship.

In conventional norms, all external interests that are in conflict with our national interest should not be entertained. It is not right for the government to punish its citizens for that interest’s sake.

Therefore, we are calling on our the Federal government to act swiftly; our northern leaders, legislators, ministers and elders should speak out on this issue and draw the attention of the federal government to the wrongs being committed against an innocent people. It’s their duty to repeatedly speak on this issue, organise conferences and meet the relevant authorities involved in order to find a solution. We are living in a society where your rights are easily denied if your voice of resistance is not loudly heard. We must collectively rise, speak out, write and meet relavent stakeholders on our problems. When southern land borders remain open and their markets thrive, our northern borders that boost our economy should not remain closed putting our markets and populace into hardship.

Our leaders should be aware of their responsibility and the consequences of their actions which will all be adjudged before Allah SWT.

The Prophet SAW narrated the story of a woman who tied her cat indoors, without feeding it or allowing it to forage for food until it died, which led her to abide in the hell fire [Reported by Muslim:4/2243]

If this is the ramification of her action towards a cat, what then will be the consequence of blocking millions of people from their rightful means of livelihood without provision of another relief? For a life of a single human being in the eyes of Allah is far more precious than that of a cat. He (SWT) says: “And indeed We have honoured the Children of Adam.” [Al-Isrā’:70]

In the end we will all return to Allah SWT and stand before Him to account for our actions after this ephemeral life. “Say ‘The enjoyment of this world is little.ʼ” [An-Nisā’:77]
Our faith, religion, and nationalism should motivate us to do what is right.

(Note: This article was originally from a recorded program in Hausa transcribed and translated to English for wider circulation)

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The ECOWAS-NIGER WAR, “STILL BOOTING”? By Haruna Adamu Hadejia

Published

1 year ago

on

September 2, 2023

By

Haruna Adamu Hadejia

 

The republic of Niger has become a point of reference in these days, probably as a new world “laboratory” for sovereignty test. It has shown the world that African countries are beginning to resist the western powers’ long and assumed perpetual dictatorship. Many people around the world have defined the republic of Niger and Africa in general as paupers until recently.
Lately, France shuns the ultimatum given by Military Junta in Niger for france’s envoy to exit. One wonders, why did they want to stick? While on one hand, the ECOWAS seems to be booting (undecided) on the possibility of; strike or not to strike. The hypothesis (Ho) and (H1) on the war remain unclear while sanction is quietly working in Niger with some adverse effect on both Niger and specifically north western part of Nigeria largely on economy.

Many people postulates that the ECOWAS formation in (1975) was facilitated by the western world just to protect their interest; get advice and decisions from them and simply implement what they want. Many were of the opinion that even the ultimatum given by ECOWAS to Niger was engineered by the western world.

The worrying issue before the western world and ECOWAS in particular in my opinion is that, they have not yet found genuine coefficient of staging war as they intended to do. Why? Because the citizens of Niger not necessarily the MILITARY simply say “NO, allow us to solve our own problems” coupled with the brethren support from neighboring African nations around Niger such as Mali. This coalition really angers the west and the 11 countries out of 15 in ECOWAS. Niger also gained additional sympathy from other parts of the world and has this has opened up a platform for all nations to rediscover or re-trace their independence.
It was reported that, the Presidents of Egypt and Algeria advised the ECOWAS not to venture into war. They have the bitter experience of what it takes to be at war front, they still have some left over of such happenings in their countries.

Our President is of course, at the center of ECOWAS BEING ITS CURRENT Chair and also the President of Nigeria which is well respected in the world. However, with the present on-going rancor in Niger we are beginning to respectfully shrink in the eyes of some nations especially our close friend, Niger who respects us more than any nation in the world. But today, the algorithm has changed. Citizens of Niger knew only Nigeria not ECOWAS. Should anything happen to the citizens, their fingers will only point at Nigerians being their brothers and not the whole of ECOWAS. How do we recover such respect and prevent further spill of the trust they have in us??

As postulated in my last publication of August 5 by Kano online Times, the giant nations have other ways to deal with ECOWAS in the event that the war didn’t take place. One of them has started coming up; the world bank is threatening to freeze the accounts of ECOWAS if they couldn’t execute this war. Possible compressing of foreign Aids to ECOWAS, introduction of some strong financial and economic policies on ECOWAS, or what?

Again, what would it look like now that, Prigozhin the leader of private security Wagner organization of Kremlin is dead? This is someone that was smelled to be in Africa to contract the war before his death. Will the US, France and their allies have a dinner for having at least one their blockages being removed? Similarly, what is Putin going to do differently now that Prigozhin is dead; perhaps become a stronger independent contractor to solely fight for and on behalf of the Niger Junta in the name of “liberation” and love for them while tapping their uranium which they will be willing to sell at lesser proceeds? Yeah, this could aptly be forecast as another opportunity for Putin to cheaply annex Nigeria once kremlin steps into Niger.

My argument is that, all these self-anointed saviors of Africa are truly not to be trusted and must not be trusted. We will only breathe independent air thoroughly if all outsiders can stay clear of Africa and allow us to drive our processes and the possibility of achieving this is only when our leaders fairly lead us.
Recounting from the military takeover of power in Niger up to the time of border closure between Nigeria and Niger, we understand that many states all in the Northern Nigeria are concerned in many ways. Already, the war is subconsciously taking place politically, economically, socially. Recent visit to Maigatari market an export processing zone (border with Niger in Jigawa state) shows how deserted the market is. There is skew negatively of livestock, grains and other products, the mass exodus being witnessed on weekly basis by people from across the federation is evidently a sign of setback. The Machina market (in Yobe state) is equally going down by the day. The same story in Jibiya of Katsina state, the many market stalls are largely scanty because the occupants are no longer using them coupled with the insecurity there and no one to maintain the thatch sheds due to poor turnout of people for commercial activities. Summarily, the IGR of the local governments bordering Niger must have recorded significant losses in this respect.

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Socially, it will take time to heal the wound created as a result of such border closure. The brothers and sisters that married from both countries can no longer see or trade with each other, just like South and North Korea, until such a time when the border is opened. What a distress!

At federal level, Nigerians are interested to know how much the country has economically lost from the electricity cut to Niger, custom and excise duty and from other sources such as money markets. Nigeria but North is being tested economically and socially???
The proverbial expression of Pandora must not be allowed to have a pIace in our midst, meaning a source of endless complications or trouble arising from simple miscalculation should not in a haste be used to jeopardize not only historical but sustainable relationship with our neighbor. Let our leaders not subject us to a test tube baby.

Simply, we all understand that ECOWAS is technologically “booting” to come up with alternative measures to handle the situation. After this scenario, what type of punishment will the west introduce to deal with us (citizens) again? I once said that the west, have multiple approaches to handle us perpetually and this must be resisted. This is the scenario Nigeria (Africans) have been subjected. The west is not willing to allow us to rest.

We must see this present circumstance as an attempt to change Africa heritage by the west while the time for resistance by Africans has finally arrived. I wish late Gawo Filinge of Niger, Aminu Kano, Sa’adu Zungur and similar social movers are alive just to analyze the on-going silent sanction on Niger and go back to sleep. Am sure, they will encourage Nigeria-Niger to be strong and endure the struggle. Because the more courage they have, the tendency for becoming greater in future as a result of being resilient.

Unknown to many, this tussle has opened doors of hope for Niger republic such as the need for them to think of generating their own power plant, identify other economic countries for ties to transact business and take advantage of currency swap, rediscover and export their unique mineral (uranium) for foreign exchange, introduce their own currency for trade and also integrate their culture as part of income generating avenue. They can harvest more from their national patriotism as exhibited by the recent solidarity demonstrations enjoyed by the new government from the citizens. On the other hand, Nigeria must intensify efforts to look inward and solidify its strategic path to protect our sovereignty. Though, these processes are quite starving and require sacrifice. Indeed, citizens must sacrifice to get things fixed.

A twitter friend called “Steve” responded to my early post 72 hours ago that, “Nigeria needs to invade asap, do not let Niger become base for Russia to invade Nigeria, Russia and China are coming for control and the gold”. This statement of his made me crazy and had to drop my pen and rest for a while before continued with my memo. If this notion of him is to be interpreted right, then my earlier opinion that we shouldn’t trust any of the “power holders” has been validated.

One nagging issue that keeps bugging some of the progressives around is must we be submissive to them? They just wanted to traced back what they mistakenly left behind during colonization and introduce a new scientific approach of modern colonization.

While “ba’a sauke girki ba”, another country in Africa has just thrown out civilian government in the republic of Gabon, Ali Bongo who has been in power since 2009 after winning third term election on last Saturday’s poll, August 26, 2023.

As am writing this piece, another episode happened in Rwanda a country which just hosted the “capacity building session” for our Nigeria’s Governors last week supported by the UN, with President Paul Kagame in office since year 2000 (23 years) for God’s sake, retires multiple senior army officers including influential General called James Kabarebe shortly after he learnt about military take-over in Gabon. Why is it happening now? Is Paul not sending a signal that he has all been driving wrong? Who influenced him to do this? In the interest of Rwanda which suffered irrecoverable genocide years ago or western interest? All these confusions must be justified by the power that be.

By whatever definition, Africa must not relegate itself in the eyes of the so-called super powers, taking advantage of telling us that we are corrupt while they created, initiated, seed and nurtured the basis for corruption from kindergarten to tertiary level of our political class.

Afterall, all nations can be super. They should be reminded that, if they earlier used a generic template to define all Africans, time has come to review the template after centuries and re-allocate “specific” ledger to each nation.

I come in peace!

Haruna Adamu Hadejia, a journalist and public affairs analyst, wrote this piece from Dutse, Jigawa State.

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Ministerial Nominee’s: Between Fair Proportions and Political Relevance.

Published

1 year ago

on

August 17, 2023

By

Minister Nominees

By Abubakar Sadiq Dauda

I will start with the following highlights:

Deputy Senate President,
Speaker House of Representatives,
National Chairmanship,
5 Senior Ministers,
5 Junior Ministers, were all allocated to the Northwest Geo-political zone, which happens to be the powerhouse of Northern politics.

Kano got the National Chairmanship position which doesn’t add any capital developmental stride to the state or region. That gave birth to the appointment of two of its indigenes as Junior Ministers because the leader of the party in the state is in no position to shout injustice since he graciously accepted a role meant for the North-central bloc.

Kaduna on the other hand, has a Speaker, thus one Ministerial nominee was picked. A fair share if u ask me. However, one of our very best, picked from this very North side (El-Rufai) was frustrated, thus he lost interest. Not his own individual loss, but our own collective loss.

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Though at a time, he once said, the only way for the party and the President to pay him for his effort, is to give one of his own (Iyan Zazzau), the office of the speaker, which ought to have gone to the North-central. El-rufai request was graciously honoured. We may cry and wail but agreement is agreement.

Our very own greed and miscalculation will keep consuming us in terms of our relevance politically, and the development of the North as a whole. Once the Northwest lost relevance and control, the entire North will be on its knees.

Certainly, we were not shortchanged, we got outsmarted, that has always been the case whenever power shifts to the South.

Morally, the North got its own fair share. Politically, it got nailed, yet again!

Sadiq is a political observer, writes from Kano, Nigeria. Can be reached via sadiqdauda55@gmail.com

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