Buhari & Jonathan Cannot Explain How they Will Pay for Campaign Promises

Less than 10 days before the rescheduled Nigerian presidential election, neither major political party or candidate has provided a single iota of explanation as to how they intend to pay to run the government in the immediate future, yet alone finance all their development promises. Without a plan to pay for government Nigerian people should understand that there is absolutely no validity whatsoever in the stances and promises from either political party. Right now the Nigerian currency, the naira is arguably the worst performing currency in the world. While others countries that are close to Nigeria in fiscal instability have support from the EU and other major donors who have a vested interest in them, Nigeria has nothing substantial lined-up. Not surprisingly Nigerian capital markets are suffering from massive capital flight and the Central Bank of Nigeria (CBN), has been forced to devalue the naira to record lows causing inflation throughout the country.

In a climate like this financing the government and pulling the country back on track, to achieving fiscal stability as fast as possible should be the top priority. That will require the government to find new ways to finance itself outside of oil. It is clear that the APC and Buhari do not realize this. They instead have filled the public with stories of rampant corruption (that does not include themselves) and painted the picture that as long as that stops everything will be just perfect. That is a myth. Even if one were to accept the most egregious tales of corruption and assume they were stopped tomorrow, it is not enough to give Nigeria fiscal stability. In order to avert a major crisis the country must diversify its source of revenue immediately so that by the end of 2015 the state is pulling-in 10s of billions of dollars from other sources outside of oil. The plans being promoted for diversification of industry will take years so they are not real tangible solutions to present problems at all. The ruling PDP, has failed miserably over the years to diversify the states source of revenue. The Ministry of Finance, has done very little in this regard and deserves most of the blame for these failures.

The solution to all this is actually quite simple. The wealthy 2% in Nigeria have become drastically richer over the last decade, yet they have not been required to pay into the state that has made them so fabulously wealthy. In my recent article “Taxing Nigeria's Rich“, I outline several measures designed to take an minimum average of 2000 dollars a year from each of the 5 million members of the nations elite. This is however not an end, it is just the starting point. An owner of a basic 300,000 dollar property in a major global city would be subject to 4-6 thousand dollars a year in property taxes alone. In addition, those homeowners would face income taxes that would be deducted by their employers, and other sales taxes and user fees that are seldom found in Nigeria. Even ordinary parking meters on public streets are not used in Nigeria's major cities when most countries use them even in small towns. There is a virtual plethora of options for government at all levels in Nigeria to increase their revenue, so much so, that the primary source of revenue for the Nigerian government should not be oil but rather its own people. The internal revenue by right should record two to three times as much revenue as the national petroleum corporation, and any competent minister of finance should realize that and implement it the necessary reforms. However both the APC and the PDP are truly elitist parties that are filled with people who are not at all disposed to leveling higher tax burdens on themselves and their colleagues among the upper-elite. Lagos State, run by an APC Governor, is privatizing the water corporation in order to reduce state spending and raise capital. While Lagos State has embarked on a taxing programme, the have ignored parking fees as a major source of revenue, and have not really instituted progressive measures to significantly target the super wealthy throughout the state. In fact some of the major candidates for high-office in that state from both parties are known to be tax-evaders even as they are campaigning for the governorship. There is no reason to assume that any of these political parties would support the necessary revenue generating taxation measures to redistribute wealth from Nigeria's rich and achieve fiscal stability. The fact that they have been silent on it throughout the entire extended campaign is very telling.

The Nigerian Labour Congress (NLC), the umbrella union for most workers in the country, has had to organize against both the APC and the PDP alike. Labour has no progressive political leaning option to chose from in this election and no candidate that they can rely on to implement the needed redistributive changes that Nigeria needs to see immediately. To make matters worse, there does not appear to be much pressure on either candidate to embrace progressive principles. Both are able to make empty promises, parade around the country with incomplete visions in the case of the APC and failed governance in the case of the PDP. Regardless of who wins, the nation will ultimately be left in the same or worse place than it is in today no matter who is elected. The opposition APC has not done what is required to distinguish itself as an alternative to the PDP, and the PDP's record and dismal failures and incompetence especially in Finance and Trade speak for themselves. The Nigerian media is among the most compromised aspect of society, with various media houses openly serving as mouth-pieces for either of the two major parties. It is known that Nigerian media outlets sell space in their publication to the highest bidder, running stories, offering air-time, and distribution to special interests or whoever pays, so the public cannot rely on Nigerian media anymore than they do on incompetent and corrupt governance. Moving forward, it is clear that collective action bodies like NLC are the last real hope Nigeria has to achieve the real change and the real reforms that the country so badly needs.

Kuranga and Associates Limited is an investment management advisory firm and an asset manager with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2014 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

David O. Kuranga; Ph.D.
Managing Director
Kuranga & Associates Limited
Phone: 212.363.0936
[email protected]
https://kurangaandassociates.wordpress.com
http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga