Who Says Nigeria Is Broke?
By Mujib Dada-Qadri (Caballo)
In an American fantasy drama television series titled "Game of thrones" with so much butt pinching suspenses, heart cracking betrayals and mythical philosophical quotes in which i find "what is dead may never die" as the most memorable, this is a common saying in the religion of the"Drowned god on the iron islands" and reply to the phrase goes thus "but rises again harder and stronger". The current situation of Nigeria is that of a "Drowned god" or maybe we have never been a "god" but definitely Nigeria was a "giant" and currently a sleeping one.
In 2016, with the usual round glasses and enviable "round mouth" Alhaji Lai Muhammed the Minister for information and tourism confidently broke the "bad" news that Nigeria is broke. Alhaji Muhammad Sanusi, the "Shugaban Kano" and an intimidating profiled banker also said in his majestic ambience which a blind man can find enviable that "Nigeria is bankrupt". You will be wondering what a "poor boy" like me is still trying to insinuate when the "big stars" have spoken. To be frank! Nigeria is just a "beautifully spoilt child"; I mean beautifully spoilt boy but a lucky one. I will tell you why he is still lucky despite the prodigality.
Interestingly, the oil economy betrayed us or it was just tired of us as the global oil price went so thin in 2015 coinciding with the grand entry of APC administration. One will be a well bribed "priest" to say that the PDP administration especially that of Ex-President Goodluck Jonathan didn't prepare a buffet of "bad luck" for us. With "thin" oil prices, poor or slow economic preparation, overlooted treasury, Nigeria skated into recession but best described as depression considering the scary poverty and higher cost of living. Nigeria was said to be broke and we are now "married" to 23 trillion Naira worth of debts.The question is, don't we have other escape routes?
Furthermore, "Nigeria is not broke but short of oil money", a country of over 190 Million people and the largest GDP in Africa, GDP of 475.57 Billion dollars according to World economic outlook data base for 2019, Nigeria surprisingly has bigger GDP than Singapore, Hong Kong, Malaysia and Isreal, the country also has bigger GDP than Egypt and South Africaand even Kenya but can you imagine that our "Tax to GDP ratio" is just 6.1%, you can compare ours with other African countries that i have listed below Kenya 18.4, Libya 2.7, Malawi 20.7, Mauritania15.4, Morocco 22.3, Namibia 28.8, Niger 11.5, Nigeria 6.1,Rwanda 14.1. Nigeria's tax income is just comparable to poorest African countries and necessarily one of the lowest in Africa despite the "fat" GDP and population, Nigeria's tax income is competing with Afghanistan and Chad which are all in single digits but can't even compete with Niger and many other "struggling African nations", countries with less than 40 million population having bigger tax income than Nigeria. This means that Nigeria is practically not a tax viable economy. Historically, long before the discovery of oil, the Lord Lugards of this world built the economy of the Northern and Southern protectorates with prudent tax system and the Regional Premiers too were very prudent with the tax economy until we got so "beautifully spoilt boy" by the oil economy.
Conclusively, like "Theon Greyjoy" will say during baptism that "what is dead may never die", Nigeria is still lucky and not broke if we can be more Innovative and more radical about the tax/revenue loopholes. In 2018, Mr Babatunde Fowler (FIRS BOSS) revealed that Nigeria made the biggest tax revenue so far in 2018 with 5.2 trillion Naira tax revenues although not hitting the 8 trillion Naira target. We must commend him for making the history but it must be known that our tax to GDP ratio must move beyond 6.2% to at least 12% to raise the tax revenues to at least 12 trillion Naira and rely less on debts, expand the annual budget which is lower compared to Angola, Egypt and South Africa and even too low for a country of over 100 million poor population. At this stage we need "expansionary monetary policy" and bigger state spendings for infrastructures, human capital, health and even social welfare schemes to tackle extreme poverty against the proposed VAT increment which is still a "shortcut to failure" as Nigeria still has a lot of trillions untaxed and untapped which are over 12 trillion Naira if we are to be more ambitious. Now that the "oil economy" is betraying us, can we get to be more Innovative with our tax collection strategies, fix existing VAT loopholes, fix revenue loopholes, organise the informal sector and "be more optimistic as we have many trillions waiting for us to be taxed".
Mujib Dada-Qadri is a Lawyer, Policy Analyst and a Writer.
Twitter: Mujib Caballo