Concluding thoughts on Nigeria’s economic restructuring (2)

The new economic paradigm should not be one of perverse incentives where physical and intellectual laziness and lack of creativity is encouraged and rewarded under an equalisation programme. Rather, it should be one that encourages creativity, the enhanced use of the intellect and physical action for the purposes of economic growth and development. In this direction, taxes such as Value Added Tax and any sales tax under any guise whatsoever should be collected and utilised by the states or regions of origin with a little contribution, being not more than 30 per cent, to the central government. Again, logical reasoning must be followed in the distribution of whatever resources that come to the centre. Any state or region for instance that bans the sale and consumption of alcohol will be automatically debarred from sharing in the proceeds of what amounts to sin by their standards. The proceeds of what has become illegal and sinful in their region will be isolated and shared only among the “sinners”.

To encourage innovation and creativity, apart from the state and regional pool of funds, a central fund that will be disbursed in the form of a matching grant will be managed by the federal government. The contours of qualifications for entitlement to draw from the fund will be clearly spelt out in the enabling law. This will also include the expected deliverables and results which will manifest after such federal funding. Such sunshine funding will also be established for the improvement of sustainability, transparency, accountability in fiscal governance. Milestones will be established which when met, will entitle a region to a definite share of the federal fund. States will be encouraged to bring more of their people into the tax net as taxation will become the basis of expression of citizen’s rights. Increased tax revenue must be anchored on governance structures that are very transparent and accountable because no one will like to part with their hard earned money for the kind of structures we currently run. Currently, governors are emperors accountable to no one and some states would rather put their development plans on a web portal that will require you to pay to download same.

The Federal Government will lose the right to confer special and unjustifiable incentives that favour some states and regions. For instance, the idea of designating some sea ports as the only venues for the importation and clearance of certain goods will become a thing of the past. There will be competition among the ports based on the services and incentives they offer to the importers. Again, designation of international airports will be based on the meeting of certain pre-defined standards as the regulatory authorities will also lose the right to use perverse regulations to divert traffic to certain airports. The ease of doing business will be enhanced; the idea of registering companies and business names in Abuja will be a thing of the past. This will now be done at respective state or regional capitals.

Opening up Nigeria for business will mean that infrastructure projects such as electricity generation and distribution, railways, pipelines, cable-lines, etc. will no longer be designed and postulated as missions impossible, only fit for some proverbial foreign investor. The states and regions will take centre stage and with the mobilisation of the people through good governance and fiscal transparency, tap the local resources to build such infrastructure in a new model of public private collaboration. It is possible with the number of billionaires we have created through the oil boom for government to collaborate with Nigerians to build the key infrastructure with little or no foreign borrowing. Nigerians have stashed away monies in billions of dollars across the world. The challenge therefore is to get them to get back this money and invest back in the country.  Again, the model of popular capitalism where people are encouraged to invest in a localised capital market/public vehicle that gathers big and small investors for the common good can be explored.

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In terms of natural resources such as minerals, states and regions will be at liberty to tap them and this will include oil and gas, bitumen, coal, tin, gold, columbite, gypsum, limestone, etc. The states and regions where they are located will own them and have the full legal title to them. This will include resources found in the continental shelf and offshore. However, they will give up in the form of taxation, 50 per cent of the proceeds to the federal coffers. This was the position in the 1963 Republican Constitution before the military incursion in our government and politics thereby distorting our federalism.

The benefits of this proposition are legion and can be the subject of a long treatise. Suffice to analyse only three of the benefits.  The first is that it will restore the common agreements of Nigerians and the founding fathers. The 1960 and 1963 Constitutions were negotiated and were the products of mutual respect and consensus. The new order of centralising everything was effected by military fiat and authoritarian absolutism of military decrees. There was no negotiation by the leaders of the component units of the federation, rather the ideas of a few prevailed. None of the constitution since then could be said to have been the product of popular consensus. The people were stricto sensu not involved in their making and enactment as all the constitutions derived their legality and authority from the barrel of the gun through military decrees.

The second benefit of reverting to the 1963 revenue sharing model is that it will improve the harnessing of our natural resources. From the natural resource map of Nigeria, no region is left unblessed by God. Every region has its fair share of resources which can be sustainably tapped for development. But the military mindset that was limited and beclouded by petrodollars only concentrated on crude oil and even kept burning and flaring gas. By the time other natural resources are harnessed and processed, the pool of revenue for sharing will increase. This will generate a win-win scenario for all.

The third benefit is that the harnessing of these natural resources will be done in a more sustainable and environmentally friendly manner. There will be no more mindset of forces of occupation who see no immediate nexus to the mines and therefore, have a devil may care attitude towards environmental remediation. The locals will be very involved and with full knowledge of the impacts of the activity on their future and livelihoods, safer and saner methods of extraction will be employed.

More powers will be devolved to the states and regions and the centre will be fairly lean. This will engender competition and growth as a few states and regions can move faster than others and therefore be seen as leaders. The spirit of emulation will set in so that the race will no longer be a race to the bottom as is currently the case. Rather, it will be a race to the top. However, there will be irreducible and minimum core state obligations which translate into rights for Nigerians across all the regions; no region will be permitted to contract out of these obligations in their constitution. This will include universal health coverage, basic education as a right and a minimum floor of social security.

Concluded

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