SHUAIB: We Must Have Strong Institutions, Fiscal Discipline
NIGERIA is a poor nation by social indices, because it is a country with almost half of its youths unemployed. Let us forget the statistics that says unemployment is seven per cent. There is a high level of unemployment, poverty and a social breakdown in the system.
A country having the three together will definitely be poor. Despite the rebasing that we did, Nigeria is still classified as low-income country, while South Africa is still above it, because ordinarily, GDP is not sufficient enough to classify a country as moving from low to medium income level. Nigeria definitely is a poor country.
How can the Buhari administration fund the government despite the inherent challenges?
I think there is something good for the current government, if wrong steps are not taken from the beginning. People believe so much in it, and are ready to make sacrifices.
Two or three weeks before the inauguration, when we were buying fuel at N800 per litre, we didn’t see demonstration anywhere.
People have hope that his government will make a change. That is a big capital; an asset that the present government should leverage on.
We are going through austerity measure, and things have to go down. If people believe their leader is going through the same thing, they will endure more. The current government must ensure that the systems and institutions are working.
If for instance, I pay tax, and I know the tax I paid will not be used to buy my father’s property, rather, will be used to develop infrastructure for my family, as well to go to school with better health care facility, I will continue to pay.
What I’m saying is that the current government has to work on its integrity so as to tackle institutional failure.
I always say corruption is not the cause of anything; it is a symptom. It is like you have headache, if you don’t cure malaria, the headache won’t go.
If everybody knows the judiciary will work very well, the police too will do their job very well, and the law will be enforced.
Nobody will ask or take bribe. If our leaders are not doing the same thing, people below will not ask. Automatically, corruption will end. We don’t need laws for corruption; we just need to make the laws, so that corruption finds its way out of the system.
These days, the police are friendlier, even when they want to ask you for your licence, unlike before. They just realised that the tone from the top has changed to civility and democratic system. The current government has to ensure that the system works and the institutions are made to be institutions; I mean the rule of law enforcement. They also have to leave by example.
Government has to look for other sources of finance. It hasto reduce itsexpenditure, especially, the recurrent ones. One of the things government can do is to match expectation with revenue.
If the government says pay us this tax, and we will do this and the people see that it is done, that will build confidence and will be ready to pay another day.
Government has to block the loopholes in revenue generation, and then, all these effort of settling people just to win political scores should be discontinued to allow rules of law to reign. When everybody knows they have to play by the rules, they will adjust gradually.
What are other ways of generating fund to deliver dividend of democracy?
If you listen to their manifestoes, especially, the vice president, he articulated the key areas; they knew they couldn’t introduce new sources of revenue, because it can work against them, politically. But the existing instruments can still be strengthened to get more. Look at the subsidy scandal; if they can monitor that very well, and ensure that we get all we have from fuel, automatically, even at $40 per barrel, we can sufficiently finance our budget. If you look at the report on NNPC that was published, you can see how the mess was done. If you sum all those money together, it is more than the national budget in a year.
I think the problem is basically that of institutions. They should be strengthened. If you listen to Buhari, when a cable network interviewed him, he argued that when he was there before, they hardly imported fuel. All they did was swap — also called Counter Trade. They ask a refinery to refine crude oil and the refinery was paid in crude oil equivalent of the required payment. In that case, you don’t need to pay subsidy again. Those are the mechanisms of reducing wastage and corruption. We can still survive if we can ensure accountability and transparency in our system.
The swap system will relieve the government of paying someone for work that has not been done. There is no way they can effectively monitor subsidy payment effectively because the people are benefiting from it. We can get more resources from our natural endowment; you can even enforce the existing tax rules, without introducing new ones.
Why is it that only Lagos State and one or two other states are able to survive the current financial crisis? It is just because sometime ago, they were able to close their eyes and enforce tax rules. They didn’t introduce any new one.
If the Federal Government can allow states to generate their funds, the pressure will reduce. It should also stop using something that is common as political instrument.
If they can align all their system, and block all loopholes in every sector, we will have money to run the government.
In the case of oil theft in the Southern part of the country, there can be an arrangement to carry the local people along, for them to derive some benefit directly. They will be ready to die and defend where they are getting their daily bread.
What should the government do in terms of the institutions?
By Institutions, I mean ensuring that the rules are followed. It is just the arrangement. For instance, in Nigeria, how many of these political office holders are paying tax? Imagine how much our president would be paying to the government if he pays tax. Imagine what the government will realise if all the state governors and public officials pay their actual tax from what they earn. At the end of the day, they will have less than 50 per cent of their money left, if they obey the Nigerian laws.
But because they are the ones making the law, they don’t obey the laws. It is the poor that obey the laws. Definitely, those who actually have the money to pay tax do not pay it; those who don’t have are the ones paying. The enforcement of the law and implementation of rules is important.
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