BY SIMON KOLAWOLE
WHAT I would call a routine conversation with a former Nigerian leader inspired this write-up. After expressing his concern about certain developments in the polity, the retired general said he was worried about how Nigerians keep promoting ethnic and religious sentiments at a time the country needed all the unity it can afford to make progress. “What really are we benefitting from playing up these sentiments on virtually every national issue that has nothing to do with ethnicity or religion?” he asked me — and I could feel and touch his despondency. Regrettably, it was not as if I had an answer to his question. All I always try to do is put a question mark on the most popular answers.
“Your Excellency,” I ventured a response, “it is a natural thing to expect in a federation of this nature where there is a fierce economic and political competition. The mutual suspicion will always be there. People often feel the need to cling to their primordial affinities on national issues because they think they will gain or lose… I am just amazed at how some people who have served in very senior national positions retreat to their ethnic cocoons when they retire. I wonder what they must have done quietly while in public office to promote their sectional agenda. People always feel the need to defend their lines… and the intense competition is turning people to ethnic champions—”
“But if we are all speaking for our ethnic groups,” he cut in, “who will speak for Nigeria?”
This conversation took place about six months ago, but it keeps coming to my mind, more so in the light of the ongoing rumpus over the tax reform bills. Most comments have been sectional and sentimental. Only very few comments are from informed positions. I have seen people from states that will benefit campaign against the reform, thinking they will lose. I have also seen people from states that will lose support the reform, thinking they will gain. Many are just following the crowd, parroting what someone from their part of the country says. The airwave is full of many protagonists and antagonists who have not studied the bills. This is the bit about us that bothers me all the time.
As I argued in an article, ‘PIA and the Triumph of Mischief’ (August 22, 2021), most of those who make initial comments on a national issue and stir long-lasting controversies often have two things in common: ignorance and mischief. These are very powerful tools for the perpetuation of underdevelopment in any country. The initial comments on the Petroleum Industry Act (PIA) were based on the wrong interpretations of “profit oil”, “profit gas” and “frontier exploration” which were portrayed as an attempt by one section to cheat the other. I started hearing statements like “this is the most anti-Niger Delta legislation in our history” despite the improved benefits for the region.
As a result, nobody was thinking about Nigeria, nobody was speaking for Nigeria. And we missed a fine detail: that the national oil company and industry regulators quietly used the PIA to corner considerable oil revenues and remit less to the federation account. A lot of the oil revenues that should go directly to the federation account and be shared by the three tiers of government are now being retained by these entities. Some agencies have become richer than many states. One even budgeted N50 billion for “welfare” for 2024. The PIA created what I would call parallel governments, depriving federating units vital revenues. But we were blindly arguing over “frontier exploration”.
A similar pattern has emerged over the tax bills. Many comments are being built along regional lines. Dr Rabiu Musa Kwankwaso, former minister of defence and former presidential candidate who wanted to lead the whole of Nigeria, said the bills are meant to colonise the north. He said taxes will be collected from Kano and sent to Lagos. But as simulated models on VAT derivation are showing, Lagos will be one of the losers while Kano will be one of the gainers. (By the way, this worries me. I live in Lagos. If the state loses huge revenue from the removal of the “headquarters factor” in VAT derivation, I am afraid the Alausa taxman will go into a revenue overdrive to make up for the loss.)
People can have sectional opinions over national issues. It is legal. However, it would be more helpful to stick to the facts. Opinion leaders should realise that their words carry weight and their followers may not have the capacity to fact-check them. The academia is not spared. I read the widely circulated position paper of a professor of accounting at the Ahmadu Bello University (ABU), one of Nigeria’s most respected academic institutions. He kept saying the new VAT derivation formula is not in the bill, even when it is stated in section 22(12) of the tax administration bill that it shall be by the location (not origin) of supplies. His position probably shaped the opinion of many northern leaders.
I got one insightful response to my article of last week. I found someone speaking for Nigeria, devoid of our dyed-in-the-wool sentiments. Please indulge me to quote him extensively: “I loved your lines about data above religious and ethnic sentiment. There is one area I wanted to point out which has not been much tackled and which this issue throws up: that’s the issue of VAT on agricultural products. If agriculture makes 25% of Nigeria’s GDP and the North makes up 94% of agro produce (according to circulating data), then the North is producing over 23% of Nigeria’s GDP. This is staggering. The issue here is VAT is not taxed on agricultural products, unlike many other countries.”
He expanded his argument thus: “The North is being deprived of 7.5% of 23% of GDP. Estimates say this could be well above between N4 trillion, based on current GDP (N240 trillion) and current food consumption levels. This is more than the total collected VAT today by all 36 states. Imagine what an extra N4 trillion could do in Northen States?
…to be continued
