NIGERIA, like the rest of the world is facing economic downslides. The Coronavirus epidemic dealt a great blow to many economies, and just as the nations were trying to recover from gruesome effects of the pandemic,came the Russia-Ukraine war that has affected the international prices of food, crude oil, and its derivatives.
TRUTH be told however, Nigeria should not have been victims, but rather beneficiaries in these global events. The various foreign aids during the COVID interregnum and the escalating prices of Gas and Crude Oil should have made the nation’s economy one of the bests in the world now. Ironically, the World Bank had raised the warning that the country might be facing an existential threat.
THIS warning, we observe, came on the heels of the fact that out of 115 surveyed nations in the world, Nigeria is on the 115 position of nations whose expenditures are well over her revenues. The reasons for this calamitous deficit funding of Nigeria’s political system is traceable to this regime’s unmitigated and Oliver Twist’s appetite and penchant for foreign loans.
AS at the first quarter of 2022, the nation’s debt stock had risen to N41.6 trillion and this is serviced (beyond IMF 93% projection) by 119% of her revenue. In other words, Nigeria borrows to pay debts. Added to this is the fact that the nation is projected to spend a whopping N6.72 trillion on fuel subsidy.
NIGERIA had over the years, contrary to our caution in various editorials, refused to develop her critical infrastructures that would have enhanced local productions of imported goods, especially the refineries, neither has she created an enabling environments for small scale enterprises to thrive. The resultant outcomes are that even Nigeria’s non-oil revenues stand among the lowest in the world.
THE neglect of the refineries had affected gas production and escalated fuel subsidy payments to the point that the nation’s economic pendulum swings between despondency and bankruptcy. Despite the actual reality that Nigeria faces existential challenges, we at The Hope may not whole heartedly subscribe to the World Bank’s recommendation that government needs to optimize its tax system in order to boost its revenue.
THE reality is that the tax system in Nigeria reveals an over taxation of the tax faithful, as there are several indications of multiple taxation of government workers. The reality, however, is that while taxes are removed from the gross earnings of Nigerian workers, it is uncertain that such are remitted into the coffers of government.
IN most cases, tax deductions are just avenues to cut salaries. Beyond that, governments had failed to provide taxable services to the people, and hence lost the moral right to seek for taxes. Most disheartening is the fact many private (foreign and local) enterprises are behind in their tax remittance due to their understanding of the corrupt practices that gives them ‘immunity’ from true taxation.
WE therefore caution that these global observations on the Nigeria economy must not be taken with levity. Rather, we insist that it is a timely warning that should awaken the government to its economic duties to the nation and nationals; and also provoke the stakeholders in the nation’s economy to the development of drastic and workable antidotes to the nation’s economic woes.
ON our part, we strongly advocate that there should be a total removal of subsidy from the nation’s petroleum industry. The funds thus saved should be invested into the critical sectors of the economy in such a manner that would enhance its revitalization.
THUS, priority should be given to education, development of small-scale enterprises, power generation and the creation of conducive environments for businesses to thrive. As the private and informal sectors are encouraged and allowed to participate more in the nation’s economy, more jobs and capital would be created to boost the nation’s Gross National Income and Gross Domestic Products.
IN order to cushion the effects of the subsidy (which in itself is riddled with fraud) removal, workers earning capacity and access to higher wages must be ensured through expansion of the tax net and effective tax collection systems.
FURTHERMORE, we insist that the cost of governance vis-à-vis the nation’s wealth is negatively skewed towards poverty. Hence there is a need for reduction through the review of parastatals with overlapping functions; reduction of the wages and volume of political appointees and other wasteful spending of government. A listening government can still prevent the intellectually deduced existential challenges of Nigeria.