18042019 - PRESIDENTIAL TUSSLE:I always beat you in every election, Buhari tells Atiku

LAST week, most Nigerian
newspapers were awash
with stories about the
International Monetary
Fund’s 2019 Article IV
Consultation with the country.
This is an annual process in
which the IMF scrutinises a
country’s economic
management and reports its
findings.
The IMF doesn’t pull
punches in its reports, and
this year it minced no words
about the state of Nigeria’s
economy. Economic growth is
stunted, it said, by “persisting
structural and policy
challenges”. One of such
challenges is “low revenue
mobilisation”. As the IMF put
it: “The revenue base is simply
too low to address the current
challenges”.
Nigeria is, of course, a
mono, oil-dependent
economy, which is at the mercy
of volatile world oil prices for
70 per cent of its revenue. At
5.9 per cent of GDP, Nigeria
has the worst tax to GDP ratio
in sub-Saharan Africa and at
three per cent of GDP, its nonoil
revenue mobilisation is one
of the lowest in the world. As
a result, this country is
constantly prone to fiscal
shocks, as every adverse
movement in world oil prices
puts its economy out of kilter.
But being in dire fiscal straits
has rarely constrained
Nigeria’s budget sizes. For
instance, as the economy went
into a tailspin in 2015,
following the collapse of oil
prices,
President
Muhammadu Buhari’s 2016
budget was N6.08 trillion, with
Nigeria’s deep fiscal quagmire
and tax conundrum
a deficit of N2.2 trillion.
The following year, with the
economy still in recession, the
budget was a record N7.29
trillion, with a deficit of N2.3
trillion. The 2018 budget was
ratcheted up to N9.12 trillion,
with a deficit of N1.95 trillion.
All the budgets were based on
unrealistic revenue
projections, resulting in
bigger deficits, funded
through increased
borrowings.
Government officials are
quick to say that Nigeria’s
spending, deficit and debt
levels are not extraordinary by
international standards.
Indeed, looked at in isolation,
that’s true. For instance, at 12
per cent of GDP, government
spending as a share of GDP is
low when compared to, for
example, India’s 27 per cent,
China’s 34 per cent or the
UK’s 38 per cent. Equally,
Nigeria’s debt as a share of
GDP is low at about 27 per cent
when you consider that for
several countries it’s well over
70 per cent.
But such comparisons are
misleading because they
ignore the critical issue of debt
service to revenue ratio. As the
IMF once pointed out,
“Nigeria’s Debt/GDP ratio, at
about 25 per cent, is relatively
low, but debt servicing, which
takes about 50 per cent of
There is no social
contract in Nigeria;
instead, what exists is
deep distrust between
government and
citizens,which, of
course, breeds
systemic noncompliance
revenue, is quite high.”
Indeed, the IMF estimates
that servicing the outstanding
debt will gulp up about 63 per
cent of the Federal
Government’s revenues for
2019! A country that spends 63
per cent of its revenues on
servicing debt, surely can’t
Vanguard, THURSDAY, APRIL 18, 2019—31
have much left to spend on
priority areas, such as health
and education.
That was the context in which
IMF advised Nigeria to
broaden its revenue base “to
lower the ratio of interest
payments to revenue and make
room for priority expenditure”.
But how would Nigeria
achieve this? The truth is that
this country is woefully
incapable of mobilising
internal revenues and, on
their part, the citizens are
unwilling to pay taxes, lacking
any moral imperative to do so,
let alone the statutory
obligation. As someone put it:
“In Nigeria, the government
pretends to tax people and
people pretend to pay”!
Yet, this is a serious matter,
for the statistics are
staggering. According to a
recent analysis, 67 million of
Nigeria’s labour force of 77
million are not registered tax
payers.
In 2016, just 241 people paid
more than N20 million in
personal income taxes, as
reported by the Ministry of
Finance. Indeed, Dr. Tunde
Fowler, the executive
chairman of the Federal Inland
Revenue Service, RIRS, was
quoted in one newspaper as
saying that “over 6,772
billionaires don’t pay tax”.
Less than six per cent of
registered taxpayers are active
in the corporate income tax
category, and Nigeria raises
less than one per cent of GDP
in VAT revenue, according to
the IMF.
With such an abysmally low
revenue mobilisation, with a
tax-to-GDP ratio of just six per
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cent, the worst in Africa,
Nigeria certainly lacks the
wherewithal to achieve
accelerated growth and
develop state capacity. Which
is why it is ludicrous that the
Buhari government is talking
about raising the VAT rate by
50 per cent and introducing
new taxes when there are
acute weaknesses in the tax
administration system, as well
as the problem of systemic
non-compliance.
But there is systemic noncompliance
because
government lacks legitimacy
in the eyes of the people. That
lack of legitimacy stems from
the woeful failure of successive
Nigerian governments to meet
the basic needs of the people.
Nigerians literally have to
look after themselves.
Think of it: nearly 50 per cent
of Nigerians have no access to
electricity; only 29 per cent
have access to sanitation; over
90 million of the people live
in extreme poverty; two-thirds
of the world’s hungriest
people live in Nigeria and
seven other countries, and
Nigerians are the sixth most
miserable people in the world.
Truth is, there is no social
contract in Nigeria; instead,
what exists is deep distrust
between government and
citizens,which, of course,
breeds systemic noncompliance.
Nigeria is in a deep fiscal
quagmire yet faces a serious
tax conundrum: it lacks the
capacity to administer taxes
and, more worryingly, the
legitimacy to induce voluntary
compliance.
Delta politics of zoning: The myth and deceit
By Brown Depreye
DELTANS have never been more
apprehensive of their political
future like they felt before the 2019
governorship election.
This feeling was occasioned by not
only the threats from the All
Progressives Congress, APC,
chairman, Adams Oshomiole, on the
need to colonise Delta State but also
on what happens in 2023 when the
zoning system imposed on the state in
2007 by the then Governor James Ibori
expires.
Fair as it appears, this zoning was a
mere exercise designed to satisfy the
interest of certain individuals, as the
only way of hanging on to the corridors
of power. Like as in every good movie
that has two ends, the zoning
arrangement in Delta State seems to
be heading towards a tragic end.
What will happen at the end arena
remains a matter of prophetic guess
work as many nationalities in the state
are beginning to ask the inevitable
question: ‘How Did we get here and
who is the ultimate beneficiary’ of this
so ‘beautiful’ zoning forced down our
throat?
There is no doubt that the Peoples
Democratic Party, PDP, has remained
the political landlord of Delta State,
having won all the elections so far in
the state. It is also an established fact
that with zoning, the PDP has
produced excellent leadership in the
state.
However, there is an emerging
school of thought with an already
established large followership that now
questions or views the political
arrangement as serving the interest of
a select few.
This school of thought has its main
campus in the Ijaw axis of the state
with satellite campuses in Isoko and
Ndokwa axis of the state and their
students are many. Their position is
that if the zoning arrangement must
continue in Delta State, it must
continue from the South Senatorial
District that houses the Itsekiris, Ijaws
and Isokos.
Their argument is hinged on the
premise that by 2023, all the three
senatorial districts in the state would
have had a taste of the exercise and it
will only be fair that the South
Senatorial District which has
consistently turned in the highest
number of votes be allowed to enjoy
the highest office which their votes
gave to Central and North senatorial
districts.
They argue further that Central
Senatorial District has already
produced two civilian governors of the
state in Chief Felix Ibru and James
Ibori. The Ijaws who hold strong to this
argument have the sympathy and
understanding of the Isokos who feel
highly marginalised in the zoning
arrangement.
For the Isokos, they have been turned
to the wretched of the earth, or so they
argue. They are vexed by the fact that
in this present dispensation, under the
government of Okowa, all they have
The Isokos argue that since
they have nothing to live for,
they would rather work with
the Ijaws and Ndokwas to
ensure that the next governor
does not come from the
Urhobo axis as the PDP has
not really fared well in
Urhoboland
gotten is a miserable office of the
Majority Leader of the House of
Assembly, while the Urhobos who are
waiting with smiles for 2023, are gifted
with the powerful position of the
Speaker of the House, the number
three man in the state.
The Isokos argue that since they
have nothing to live for, they would
rather work with the Ijaws and
Ndokwas to make sure that the next
governor does not come from the
Urhobo axis as the PDP has not really
fared well in Urhoboland.
According to them, Isoko, despite
having so many oil wells in its two local
governments, remains the most
marginalised in the state. They have
exhibited brotherhood where
necessary, received pains for their
fellow Deltans only to be dumped at
the end of the day.
It will be too sad if by 2023 the Isoko
nation and its leaders choose to remain
fourth class citizens in a state where
their input in terms of both natural and
human resources are required to move
the state forward.
In these cacophony of arguments,
what is evident and sure is that it will
not be business as usual in Delta, come
2023 because the Ijaws and Isokos are
spoiling for their pound of flesh.
How the political leaders led by
incumbent governor handle the
emerging threat will determine which
party wins the next gubernatorial
election in Delta State. Until then, the
comedy is still loading.
The year 2023 definitely will create
a new dawn for Deltans, that is if
urgent steps are taken to correct
perceived marginalisation and
appease the aggrieved.
•Depreye, a public affairs analyst,
wrote from Asaba, Delta State