26 Aug

The week ahead – More states will try to break free

The Cross River State Governor, Ben Ayade, has signed the Home-Land Safety and Security Services Bill 2016 and eight others into law. Speaking at the signing ceremony at Government House in Calabar, Ayade said the bill, code-named “Operation KBM,” is a response to increasing social and security challenges. According to the Governor, the bill is aimed at providing neighbourhood watch, vigilante patrol and intelligence gathering services, providing supportive information to the Police and also providing a real-time, on- time emergency intervention in locations and areas of physical security threats.

The Nigerian Air Force said it killed an undisclosed number of Boko Haram leaders during a raid on the insurgents’ Sambisa Forest hideout. Army spokesman, Col. Sani Usman, said in a statement that the leader of the group, ‘Abubakar Shekau’ was “fatally wounded” on the shoulders during the raid. Usman said the Boko Haram leaders killed in the raid included Abubakar Mubi, Malam Nuhu and Malam Hamman. The military said NAF fighter pilots carried out the raid on August 19 while the insurgents were performing Friday rituals at Taye village in the Gombale district, Sambisa, Borno. It is not immediately clear if the affected Boko Haram leaders were on the military’s 100 Most Wanted list of the group. Meanwhile, the Borno State Attorney General and Commissioner of Justice, Kaka Shehu Lawan, has called for the arrest of the former governor of the state, Ali Modu Sheriff, for allegedly creating insecurity situation that led to the emergence of Boko Haram. The former governor of Borno state, Ali Modu Sheriff has denied the allegation that he is the sponsor of the terrorist organisation.

The Oyo state government has approved the creation of 35 Local Council Development Areas from its existing 33 council areas. Gbade Ojo, the Chief of Staff to Governor Abiola Ajimobi, told journalists in Ibadan that the move was in accordance with the advice of the state legislature which argued that it would aid effective grassroots development. During the briefing, the Local Government and Chieftaincy commissioner, Bimbo Kolade, said the newly created LCDAs are financially capable. Under the new council arrangement, the Ibadan zone will get 14 councils, while Ibarapa zone gets two more councils. Four councils will be added to Oyo zone, Ogbomoso zone will get seven and Oke-Ogun area will get eight. Currently, Oyo has 33 council areas, but with the new move, the state will be divided into 68 council areas, with 35 new councils having LCDA status. The state follows in the footsteps of Lagos, which became the first state in the country to create additional local councils in 2002.

Enugu state has issued an ultimatum to all federal institutions in the state to remit ₦13 billion in Pay As You Earn (PAYE) taxes by the end of August or risk facing sanctions. According to the state’s Board of Internal Revenue chairman, Emeka Odo, the prevailing economic climate has fueled the state government’s appetite for recovering debts. He said that some federal establishments which enjoyed patronage from the state government blatantly refused to remit taxes deducted from employees’ salaries. Odo listed some of these indebted government agencies as the Federal College of Education, Ehamufu, which owes ₦197 million in taxes; the University of Nigeria, Nsukka (₦10 billion); the University of Nigeria Teaching Hospital (₦3 billion); and the National Orthopedic Hospital, Enugu (₦131 million). These organisations are said to have accrued these tax liability over a period of five years and the list of debtors include banks operating in the state who are said to owe millions of naira in unpaid withholding tax on deposits by individuals.

The Presidency has denied media reports that President Muhammadu Buhari is seeking emergency powers to tackle the nation’s economic challenges. The Vice President’s spokesman, Laolu Akande, said the economic management team has been considering several policy options and measures to urgently reform and revitalise the economy. Some of these measures he concludes may well require legislative amendments and presidential orders that will enable the executive arm of government move quickly in implementing the economic reform plans.

Suggestions

  • It is clear that states are increasingly resigning themselves to seek new and creative ways to skirt around some of the most glaring flaws of our current brand of federalism. We have on numerous occasions called for a constitutional amendment as promised in the APC manifesto on instituting state police forces, and Cross River has just demonstrated the lengths to which some states will legally resort to in order to get a lid on rising insecurity in the federation. Ekiti has just passed a law regarding grazing, and it is not far-fetched to imagine that a state police will be next. Our federal police force is woefully inefficient, poorly constituted, underfunded, and rife with unapologetic corruption, the military is straining at the limits of operational possibilities and federal paramilitary agencies like the DSS and the civil defence corps are non-starters in executing a new security strategy for Nigeria. The only plausible solution is state police forces, but between an unwilling and bogged down government at the centre, a funds squeeze and paralysing political groupthink, it will probably not happen within this administration’s tenure – and that would be a shame.
  • There have been many reports linking military raids to the death of Abu Shekau, and yet he keeps releasing audios and videos denying same. We advise the military to come clean with a factual explanation of the death of Abu Shekau, for us to understand whether the name is a title used by the sect or an actual human being. We commend the efforts of the military in the North East as well. A bigger problem is, however, emerging – the terrible situation in the IDP camps has provided ample recruiting grounds for Boko Haram terrorists. The government must urgently fix this crisis in order to forestall undoing the good work the military has done in the North East thus far.
  • We find this essentially a whitewashing of the real issue at hand – an abysmal failure of governance at the local government level. A lot of this is due to the manner in which state governors have emasculated the local governments through control of their funding. Local government elections are yet to be conducted in Oyo, as in many other states across the country. Most Nigerians only encounter local government officials as extortionists, collectors of a myriad of burdensome taxes and general hooliganism that disrupts business. A total rethink of local governments in delivering good governance to Nigerians must be had so that they can be freed them from the overbearing influence of state governors.
  • State governments, under pressure to balance the books and fund new capital projects, are increasingly relying on internally generated revenue to fund their activities and Enugu is no exception. While this is welcome for much needed fiscal independence from an increasingly shrinking central allocation pot, an underlying and little talked about challenge looms – it seems the state and federal governments are increasingly honing in on a small and squeezed tax base. According to the Federal Inland Revenue Service, less than 10% of Nigerians pay any form of direct tax, 46% of whom are registered in Lagos alone. Last year, the federal tax man logged in ₦3.7 trillion in 2015, according to a breakdown of revenue generated on its website, the lowest figure since 2010. Even the government isn’t diligent about collecting taxes on its own employees – a June 2016 PwC Nigeria summary found a “very low correlation between the high public sector wage bill in the budgets and the paltry personal income tax collection nationwide” – a situation the Enugu tax boss was hinting at. Furthermore, “VAT revenue of about ₦700 billion in 2015 is less than 1% of Nigeria’s consumption GDP of about ₦80 trillion.” Even more surprising, the summary goes on, was the revenue collection totals by the Nigerian Customs Service given that the country is heavily import dependent. Taxation is immensely important to national development as a key source of sustainable revenue and an indicator of economic well-being because of its near certainty and predictability; empowering economic planners with the ability to more accurately design and implement intelligent spending plans. Going forward, the aim of states, and Abuja has to be to find a way to increase the national tax base. One easy way to do that? Simplify and incentivise tax registration. If a biometric ID card such as that being developed by the National Identity Management Commission, linked to such services as bus services, banking products, school registrations or even shopping is married to tax clearance purposes – an incentive to be registered with the tax man will be created, hence growing the tax base. That would go a long way in correcting the current scenario where South Africa, with a third of Nigeria’s population, generates 50% more revenue from taxation alone than Nigeria does from tax and oil earnings combined.
  • We wish to restate that the President does not need emergency powers to rescue this economy, and we counsel him to make use of available institutions, strengthen and empower them to get the job done. The problem with extra powers aside of the Constitution is such that both the President and his lieutenants could misuse these powers, and that does not bode well for the democratic process.