A proposed agenda for a 9-state Southwest region, the second largest economy in Africa, from May 29 or October, 2015, an update

President Goodluck Jonathan has started to implement the recommendations of the National Conference. Great news!

Therefore, it is in the best interests of the Yoruba people to vote massively for President Goodluck Jonathan on 28th of March to finish the job including the creation of three new states that we want in the Southwest.

In President Jonathan's second term, the Southwest will need to find new ways to fund its 9 states: Ijebu(new), Oduduwa(new), Ibadan/New Oyo(new), Lagos, Oyo, Ogun, Oshun, Ondo, and Ekiti states.

We propose an agenda for the funding of the 9 states of the Southwest starting from June 1st 2015 or from October 1st, 2015.

We attempt to raise the consciousness of the Southwesterners of the status and standing of the Southwest in Africa, and thus the hidden resources in the region that when properly harnessed, and through a multiplier effect, will produce a win-win outcome for all, the rich and the poor, in the region.

The Southwest accounts for approximately 60% of the national economy.

Accordingly, from inference from the data on the GDP of African states(Wikipedia), the Southwest region has a GDP(nominal) of about

$360 billion dollars making it the second largest economy in Africa, with South Africa being in the 3rd place!

With 10 million enterprising Yoruba people in Diaspora added to the mix, we estimate that Yoruba people in the Southwest and in the Diaspora earn a taxable $500 billion US dollars or more!

Accordingly, we recommend the adoption of income taxation as a robust revenue generating strategy to tap into the huge resource base of the region. Taxation of the poor, the current practice in the region, 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 majority is counter-productive as it eliminates the boost to the economy that their spending provides. It is also partly responsible for the hardship faced by the majority of the people in the region who are poor.

Taxation of the rich, middle-class, upper middle-class, and Diaspora Yorubas, but not the poor, is the best strategy to raise the revenues needed for the operation of the 9 state governments, the provisioning of infrastructures, robust security apparatus, and health and social security services that will benefit everyone: the rich, the not-so-poor, and the disadvantaged in society.

The combined budget of the states in the Southwest in 2014 was abysmally low, about N1.3 trillion naira( about $6 billion US dollars), or about 1% of the total earnings of Yoruba people worldwide. But this is a mix of IGR, monthly oil distributions from Abuja, and loans. The true picture is a contribution of less than 1% from taxation, including the taxation of the poor!

We propose a taxation revenue target of 10% of the total income of Yorubas worldwide, or N10 trillion naira($50 billion US dollars), and we exclude the poor from paying income taxes.

To meet that target, we recommend a progressive income tax in the range of 0% to 20% for Yorubas in Nigeria, and 2% income tax for Diaspora Yorubas since they pay huge taxes in their host countries. We also recommend a discontinuation of the myriad of taxes on the majority poor in the region.

We recommend a distribution of a portion of the N10 trillion naira raised annually to fund the budgets of the 9 states according to:

N400 billion naira allocated to Lagos for its budget, and N200 billion naira to each of the remaining 8 states: Ijebu, New Oyo or Ibadan, Oduduwa, Ogun, Ondo, Oshun, Oyo, and Ekiti . This leaves a huge N8 trillion naira, a portion of which can be used for infrastructure projects in the region.

If the enhanced income-tax-based revenues are spent wisely, the Southwest will become a prosperous region with robust infrastructures, full employment, improved security, and a world-class social security service.

In conclusion, the agenda of the 9-state governments of the Southwest should include:

1. Progressive local income tax in the range of 0% to 20%, and a 2% Diaspora income tax.

2. Use of a portion of the revenues from the income tax to fund government operations as discussed above for each of Ijebu, Oduduwa, Ibadan, Lagos, Oyo, Ogun, Oshun, Ondo, and Ekiti states.

3. Build, monitor, and maintain physical, security, health, education, and research infrastructures, and provide services and social security to the people.

4. As he who pays the piper dictates the tune, politicians in the region will shift their allegiance from godfathers to the people. This will end godfatherism as the dominant factor in politics in the Southwest, an impediment to the development of the region like the unitary system of government and taxation of the poor.

4. Implement full employment, free tuition at all educational levels, free health care, and social security in the region.

5. Promote exports, the tourism industry, and rural development to stem the rural-urban migration and create employment and investment opportunities in rural areas.

6. Work cooperatively with the private industry, research and development centers, and the tertiary institutions in the region.

7. Promote regional integration through intra-regional partnerships.

8. Stop accepting the monthly oil distributions from Abuja from the end of May or October, 2015, as this is the root of corruption in Nigeria, the exploitation of the minorities in the oil producing states.

The implementation of an agenda like this will create an environment in the Southwest in which the rich, the poor, the not-so-poor, and commerce will thrive and produce a world-class socio-economy that will attract local and foreign investors. Socio-economic development in the Southwest will be emulated by the other regions and propel the nation towards becoming a qualified member of the elite G-20 club, the association of the 20 largest economies of the world.

In conclusion, I urge Yoruba civil society leaders, post-secondary student leaders, and elders to embrace this agenda, promote it widely, and encourage the existing organization for the development of the Southwest, DAWN Commission to implement it. DAWN should also be encouraged and empowered to choose a reputable accounting firm to serve as the Southwest income tax collection agency under its supervision. DAWN takes up this challenge, it should distribute a portion of the collected revenues to the 9 states for their operations/budgets as suggested above. The bulk of the balance, as suggested above also, should be spent on infrastructural projects, human capacity building activities, security provisioning, and social security services across the 9 states under its supervision. To encourage participation of the Yoruba people worldwide in this endeavour, the annual maximum overhead for DAWN and the tax collection agency it engages in this effort should not exceed 1% of the income tax revenues collected!

Abitunde Taiwo

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Articles by Abitunde Taiwo