To The People Of The Southwest, The Third Largest Economy In Africa, Please Ask Not What Abuja Can Do For You, But Ask Your Governors What You Want Them To Do For You
In this electioneering period in Nigeria, propaganda and falsehood are peddled relentlessly, and facts are avoided like a plague leaving many confused. The focus of this article is to raise the consciousness of the Southwesterners of the hidden resources in the region that when harnessed, and through a multiplier effect, will produce a win-win outcome for all, the rich and the poor in the region.
The GDP of the entire nation of Nigeria, the largest economy by far in Africa, currently is about N130 trillion naira(about $594 billion US dollars)(Wikipedia, list of African countries by GDP(nominal)). The Southwest, one of the six geopolitical regions of Nigeria, has an estimated GDP of about N67 trillion naira( about $305 billion US dollars), more than half of the GDP of the nation.
By our estimates, the Southwest region was the third largest economy in the continent of Africa n 2014! This must be a shock or a pleasant surprise to many people!
But the governors in the region have not adopted a robust revenue generating strategy to tap into the resource base of the region. Taxation of the poor and lower middle-class people is a bad strategy which does not reflect a global best practice. The poor have a greater propensity to spend than the rich, so a taxation of the poor is counter-productive as it eliminates the boost to the economy that their spending provides.
Taxation of the rich, middle-class, and upper middle-class, but not the poor, is a global best strategy to raise revenues for the operation of government, the provisioning of infrastructures, robust security apparatus, and social security services that benefit everyone: the rich, the poor, and the disadvantaged in society. Fortunately, there are millions of rich people living in the Southwest: naira millionaires, multi-millionaires, billionaires, and trillionaires available to be taxed.
If the governors of the Southwest had adopted a comprehensive income taxation for revenue as their strategy in 2014, they could have raised N13 trillion naira from a progressive income tax range of 0% for the poor, to up to 30% for the rich: ten times more than the N1.3 trillion naira raised last year!
The combined budget-to-GDP ratio of the states in the Southwest in 2014 was abysmally low, about 2% compared to about 40% in many advanced nations of the world. For the sake of argument, a budget that is 40% of the GDP of the Southwest is approximately N25 trillion naira. This is about twice the budget realizable from using a progressive tax bracket of 0% to 30%.
If the enhanced income-tax-based revenues are spent appropriately, the Southwest will become a prosperous region with robust infrastructures, full employment, improved security, and a world-class social security service.
It is widely accepted that many governors of the Southwest have performed well. If they had tapped the hidden resources of the region, their performance would have been elevated to outstanding and transformational! We wonder why policies that would have made a difference in the lives of the majority of the people, such as progressive income taxation, had not been vigorously pursued and implemented. Income taxation will also diminish godfatherism and empower the people while swelling the coffers of governments in the region.
With abundant revenues through income taxation, the Southwest will be in a position to stop accepting monthly oil revenue distributions from the center, but be able to partner with Abuja and other state governors in joint projects of mutual benefit that will drive the economic growth of the nation.
The question that must be asked of the governors of the Southwest is this, are they aware that the great book says, for whom much is given much is required?
So much has been given to the region by the grace of God. So much then is required of the Southwest governments. The governors in the Southwest have an obligation not only to take care of the welfare of their residents but to also drive the socio-economic growth of the nation.
In conclusion, to the people of the Southwest, the third largest economy in Africa, ask not what Abuja can do for you, but ask your governors to:
1. Tax the peoples' incomes, a global best practice, using a progressive tax rate from 0% to 30%.
2. Use the revenues from the income tax to fund government operations, build, monitor, and maintain physical, security, health, education, and research infrastructures, and to provide services and social security to the people. As he who pays the piper dictates the tune, politicians will be compelled by the income tax payers to shift their allegiance from godfathers to the people. This will end godfatherism as the dominant factor in politics in the Southwest.
3. Promote exports and the tourism industry.
4. Work cooperatively with the private industry, research and development centers, and the tertiary institutions in the region.
5. Promote regional integration through intra-regional partnerships and engage in mutually beneficial ventures with Abuja and other governors in other regions.
6. Stop accepting the monthly oil distributions from Abuja from October, 2015, as this is the root of corruption in Nigeria. To curb corruption in the Southwest and elsewhere in Nigeria requires pulling up the root of corruption in Nigeria by ending the shameful exploitation of the minorities in the oil producing states.
Abitunde Taiwo