A friend once told me how tomatoes and other stuff literally rot away in the sun in Benue after harvest. Thus I was very happy when President Good Luck, Governor Suswan attended Tony Elemelu and Transcorps new Terago Juice Plant opening, a new first of it's kind, juice concentrate facility in Nigeria in Benue. The plant I hear can produce 26,000 metric tons of orange, mango juice concentrate per annum. I also hear Nigeria spends $1b importing juice concentrates so this is a good example of import substitution and a welcome jobs, jobs, jobs to Benue.
I am also reading how Governor Amechi of Rivers is getting into joint venture with folks to turn Rivers to an Agric exporter, he has a Cassava initiate with the Dutch, large scale poultry with the Zambians, a banana plantation with the Mexicans, large scale fish farming in Buguma, an upcoming sea fish project with the Chinese and the injection of N20b into RISONPALM. The $140m Israeli backed farm settlement system involves the creating of an Agro Industrial City Project. The Israeli firm LR Group will contribute $40m and Rivers $100m. It involves over 3000 hecters of virgin land which will be developed, and will build from scratch 100 homes in 3 centers close to each other, with water, power, schools, hospitals etc. These centers will do commercial and Agro processing. The selected farmers will work for the project but will also have their own 2 hectare farms within The complex. In effect a kibbutz. Again Jobs jobs jobs
The Lagos state government is now tapping into the FGN rice transformation plan, Governor Babatunde Fashola has a Special Assistant on Rice, and the chap is developing rice fields, putting graduates to work in farms and Fashola even wants to buy land outside Lagos (in the Ogun Osun River Basin Authority) to grow rice. The State has also set up a joint Private and Public sector Rice transformation committee to benefit from the FGN NIRSAL project. All I see is jobs jobs jobs
I am also reading how the TY Danjuma foundation is launching a Agro Business grant scheme with the NYSC that will provide seed grants to NYSC graduates interested in starting sustainable Agro business. Yep jobs jobs jobs
If you notice, I have posted Private sector, State and Individual initiates all tapping into agriculture. Agriculture is 44% of our GDP and employs 80% of Nigerians. Any push or vision to industrialize and reduce poverty in Nigeria that does not focus on Agriculture is a non starter. Keke Napep cannot eliminate poverty, Agriculture can.
So ask your Governor, even your LGA what they are doing about Agriculture today.
Wednesday, March 14, 2012
Monday, February 20, 2012
Using our Nolly
Rangers of Enugu v Heartland of Owerri, see attendance, negligible Why? Everyone was at home to watch Sunderland take on Arsenal on DSTV
By sheer numbers alone, our football should be the most lucrative in Africa, we have the fans in every city to fill a 10,000 capacity ground, but where are the fans? Where are the sponsors? Better still where are the Nigerian investors? DSTV is investing in Nigerian football, a South African company, they are also sponsoring the Nigerian Basketball League.
What about Nigerian music? Today Nigerian music, the hip hop brand is the best in Africa, economically that is, we have even won the Grammy Twice! these chaps were made, produced and blended in Agegunle and Jos. However It took DSTV, South Africans vis Channel O to make Nigerian music hip!
What about movies, Nollywood is a $500m industry, Nollywood is the highest employer after the Federal Government, Where are the Nigerian institutional investors? How many Nigerian banks have a Nollywood desk?
see how Economist describes the power of Nollywood.
"Nigerian films are as popular abroad as they are at home. Ivorian rebels in the bush stop fighting when a shipment of DVDs arrives from Lagos. Zambian mothers say their children talk with accents learnt from Nigerian television. When the president of Sierra Leone asked Genevieve Nnaji, a Lagosian screen goddess, to join him on the campaign trail he attracted record crowds at rallies. Millions of Africans watch Nigerian films every day, many more than see American fare"
This is power, latent power, has Nigeria tapped this power? This is far beyond some patriotric write up, this episode in Nigeria economic history will probably go down as the biggest missed opportunity by Nigerian businesses and the government.
the Pentagon has an agreement with Hollywood, Hollywood gets all the military gear it needs for it's films, but has to portray the Military and America in good light, the "bad movies" like Platoon which show GI's abusing Vietnamese girls don't get Pentagon support. Hollywood is America biggest export, it's Hollywood that sells IPods not Apple, it's Hollywood that sells American cars, not Detroit, Hollywood sells Jeans, not Levis. simplly put Hollywood is Americans marketing department.
Everybody in this planet admires America, even the Iranians and the North Koreans why? What they see ND believe on hollywood. At a point, America was beaming the Cosby Show with the Huxtables into communist Cuba to show the comrades what they were missing.
So why can't the Nigerian government use Nollywood and our hip hop music to sell Nigerian goods? Why can't the Northern textile mills get DBanji and Asa to promote "Nigerian textiles" just as the US milk industry uses hollywood stars to promote the consumption of Milk? That surly will spark a demand for the Nigerian cotton abi?
I read that 1m jobs were lost by the leather industries in Kano, Why cant Aba and Kano together ask Nollywood to promote made in Nigerian shoes, if the same Genevive says in Zambia that she wears only genuine Kano leather slippers or Made in Aba pumps, do we not think Malawians will demand those same Kano leater slippers? Even for security, Why can't the SSS sponsor a local hausa film to explain why Boko Haram will only lead to job losses and disinvestment in the North?
For our football, why cant the FGN guarantee loans to football clubs or even ask the NDE to buy bonds issued by these football clubs? The value chain for football involves the publicity, the sportswear, the betting, the broadcasters, accountants, agents, sports medicine, hospitality etc, these are all jobs long hanging fruits, have we tapped it? If DSTV can show Nigerian football, why can't NTA?
I commend Lagos state for using Nollywood to sell the paying of taxes, the result are very positive.
You can't "buy" a Nollywood, It's a godsend, and the Nigerian Govt must use it. If the banks won't loan money to Nollywood, then simply allocate money to them, because they are job creators, heck we allocate money for other consumption stuff like paying religious pilgrimage estacode.
We need to use Nollywood, we need to maximize our hip hop music and our football to create jobs, and drive Nigerian exports, if we don't, DSTV will rebranded Nollwood as DSTV Magic and that goodwill will go to Jbourg.
It's our problem and we can fix it
By sheer numbers alone, our football should be the most lucrative in Africa, we have the fans in every city to fill a 10,000 capacity ground, but where are the fans? Where are the sponsors? Better still where are the Nigerian investors? DSTV is investing in Nigerian football, a South African company, they are also sponsoring the Nigerian Basketball League.
What about Nigerian music? Today Nigerian music, the hip hop brand is the best in Africa, economically that is, we have even won the Grammy Twice! these chaps were made, produced and blended in Agegunle and Jos. However It took DSTV, South Africans vis Channel O to make Nigerian music hip!
What about movies, Nollywood is a $500m industry, Nollywood is the highest employer after the Federal Government, Where are the Nigerian institutional investors? How many Nigerian banks have a Nollywood desk?
see how Economist describes the power of Nollywood.
"Nigerian films are as popular abroad as they are at home. Ivorian rebels in the bush stop fighting when a shipment of DVDs arrives from Lagos. Zambian mothers say their children talk with accents learnt from Nigerian television. When the president of Sierra Leone asked Genevieve Nnaji, a Lagosian screen goddess, to join him on the campaign trail he attracted record crowds at rallies. Millions of Africans watch Nigerian films every day, many more than see American fare"
This is power, latent power, has Nigeria tapped this power? This is far beyond some patriotric write up, this episode in Nigeria economic history will probably go down as the biggest missed opportunity by Nigerian businesses and the government.
the Pentagon has an agreement with Hollywood, Hollywood gets all the military gear it needs for it's films, but has to portray the Military and America in good light, the "bad movies" like Platoon which show GI's abusing Vietnamese girls don't get Pentagon support. Hollywood is America biggest export, it's Hollywood that sells IPods not Apple, it's Hollywood that sells American cars, not Detroit, Hollywood sells Jeans, not Levis. simplly put Hollywood is Americans marketing department.
Everybody in this planet admires America, even the Iranians and the North Koreans why? What they see ND believe on hollywood. At a point, America was beaming the Cosby Show with the Huxtables into communist Cuba to show the comrades what they were missing.
So why can't the Nigerian government use Nollywood and our hip hop music to sell Nigerian goods? Why can't the Northern textile mills get DBanji and Asa to promote "Nigerian textiles" just as the US milk industry uses hollywood stars to promote the consumption of Milk? That surly will spark a demand for the Nigerian cotton abi?
I read that 1m jobs were lost by the leather industries in Kano, Why cant Aba and Kano together ask Nollywood to promote made in Nigerian shoes, if the same Genevive says in Zambia that she wears only genuine Kano leather slippers or Made in Aba pumps, do we not think Malawians will demand those same Kano leater slippers? Even for security, Why can't the SSS sponsor a local hausa film to explain why Boko Haram will only lead to job losses and disinvestment in the North?
For our football, why cant the FGN guarantee loans to football clubs or even ask the NDE to buy bonds issued by these football clubs? The value chain for football involves the publicity, the sportswear, the betting, the broadcasters, accountants, agents, sports medicine, hospitality etc, these are all jobs long hanging fruits, have we tapped it? If DSTV can show Nigerian football, why can't NTA?
I commend Lagos state for using Nollywood to sell the paying of taxes, the result are very positive.
You can't "buy" a Nollywood, It's a godsend, and the Nigerian Govt must use it. If the banks won't loan money to Nollywood, then simply allocate money to them, because they are job creators, heck we allocate money for other consumption stuff like paying religious pilgrimage estacode.
We need to use Nollywood, we need to maximize our hip hop music and our football to create jobs, and drive Nigerian exports, if we don't, DSTV will rebranded Nollwood as DSTV Magic and that goodwill will go to Jbourg.
It's our problem and we can fix it
Saturday, July 2, 2011
fix the fiscal federalism
Fix the Fiscal Federation
Executive Summary
The Federal government has abrogated to itself massive power over virtually every economic activity in Nigeria. This makes the states and Local Governments useless and makes the cost of running the federal government obscene. A key figure to take away is that the FGN spends 63% on its workers to provide these services to the Nigerian people.
The proposal is for the President to present a Bill to reduce the powers, specifically the fiscal powers of the Federal Government by devolving tax powers to states and Local governments.
What is the problem with Nigeria fiscal structure?
1. The Federal Government legislates and collects all fiscal revenue.
Nigeria is a federal republic In Nigeria, the fiscal power should be based on a three-tiered structure of federal, state and local governments but this is not so. The Nigerian tax system favours the federal government, as pointed out by the Study Group on Tax Reform (2003), the federal government accounts for 99% of the tax revenue in Nigeria.
All fiscal enactment powers are held by the Federal Government e.g. Personal income tax (PIT) is legislated by the federal government, payable by individuals, but collected by state authorities. For concurrent taxation such as the capital gains tax and stamp duties, the federal government retains legislative power, while sharing administrative powers with the states. The federal government has jurisdiction for such taxes as VAT and Education tax. The federal government taxes corporate bodies while state and local governments tax individuals.
The state and local governments have had no freedom to introduce new taxes because matters dealing with taxation are on the Exclusive list of the constitution. They may enact laws only with the concurrence and approval of the National Assembly
Why is this problem?
1. It deprives the states and Local governments the ability to use taxation as a means of earning revenue or attracting investment.
States like Lagos earn almost 80% of their income from the PIT, but they cannot determine the rate to apply to attract investment. The Company Income Tax CIT and the VAT are collected in states. Lagos State may build roads and attract multinationals to Lekki but the federal government will take the revenues generated by these multinationals.
It also put all the states in the same bracket in terms of tax policy. Ogun state for instance cannot use a lower VAT or CIT rate as an incentive to attract investors from Lagos to Ogun. Yobe state cannot declare a tax free zone to attract Dangote Industries to set up a factory there.
States like Lagos also see no incentive to enforce the payment of taxes as these taxes are sent to the centre. The CBN estimates that Lagos has about 60% of the manufacturing and commercial activity in Nigeria. Lagos is the generator of the highest VAT and the highest Customs duty, but it does not see these tax benefits. It is, instead, shared anchored on such factors as equality of states (40 per cent), population (30 per cent), landmass and terrain (10 per cent), social development needs (10 per cent), and internal revenue efforts (10 per cent). This sharing formula, discouraging revenue drive, particularly for federally adjudicated taxes e.g. VAT.
2. The federal government is reckless with spending.
The tax (and revenue) collected is used to pay federal workers.
Take the figures for 2010, the total receipts for Companies Income Tax, VAT and Customs duty was N1.40t (net of cost of collection, gross collection was N1.52t). Let us now look at the total non-debt cost of the federal government (salaries, pensions) that is N2.54t.
In effect, the total tax revenues of the nation are swallowed up by personal cost of the federal government. An argument can be made that oil revenues are actually paying the salaries of the federal workers but keep in mind that non-oil revenues made up 34% of the total revenue in 2010.
In addition, how many federal workers do we have in Nigeria? The federal workers take home 63% of the total revenues of the nation, (tax and oil receipts).
3. It makes Local governments ineffective.
The current fiscal structure created a situation where the Local governments must exist at the mercy of the federal and state government.
Primary schooling is the exclusive responsibility of local governments; the constitution states, “The functions of a local government council shall include the provision and maintenance of primary, adult and vocational education”. We then wonder how Nigerian children can be educated by taxes charged on items such as fees on marriages, motor parks and bicycles.
Unlike States who can charge Personal Income Taxes generate billions of Naira (like Lagos), the Local governments have been “allocated” very poor means of livelihood and are thus unable to serve the citizens of the LGA.
What can GEJ do about it?
• Amend the constitution to allocate to the three theirs of the federation appropriate income-generating taxes to enable them fulfil their constitutional requirements. The federal government cannot simply tax the wealth of Nigeria and spend it on only the federal workers. Such a move will discourage the payment of taxes.
• Devolve most of the powers from the exclusive list to the concurrent and the forth schedule or and duties of the Local governments e.g. Insurance, stamp duties as a whole, and VAT.
• The states and Local governments should share VAT
• States to determine and charge Personal Income Tax
• Local Governments to charge Property taxes, charge, and collect the education taxes
• Pass a law that will cap how much of the federal, state or Local Government earnings can be allocated to recurrent expenditures. This is specifically to forestall a situation where taxes are charged just to maintain the lifestyle of workers.
It’s important to note that The former president of the NBA has presented a private bill to the National Assembly for an Act to alter the Constitution of the Federal Republic of Nigeria 1999 by creation of the States Court of Appeal, introduction of Federal and State Legislative Lists and adjustments/modifications of legislative powers of government between the Federal and State Governments."
Agbakoba said the present "bloated federal system" had made governance too expensive to support any meaningful development in the country.
The bill seeks to replace the "Exclusive Legislative List" with "Federal Legislative List" with respect to powers limited to the federal government and introduced the "State Legislative List" for powers exclusive to the state governments.
Issues recommended in the bill for devolution to the states include natural and mineral resources, excluding petroleum and gas; agriculture; micro finance banks; municipal police, state appeal courts; solemnisation of marriages; incorporation of business enterprises with state objects; taxes on income and profits within states, other than income and profits of companies; regulation of labour and industrial relations at the state level, including prescription of minimum wage; and evidence.
It is our problem and we will fix it.
Executive Summary
The Federal government has abrogated to itself massive power over virtually every economic activity in Nigeria. This makes the states and Local Governments useless and makes the cost of running the federal government obscene. A key figure to take away is that the FGN spends 63% on its workers to provide these services to the Nigerian people.
The proposal is for the President to present a Bill to reduce the powers, specifically the fiscal powers of the Federal Government by devolving tax powers to states and Local governments.
What is the problem with Nigeria fiscal structure?
1. The Federal Government legislates and collects all fiscal revenue.
Nigeria is a federal republic In Nigeria, the fiscal power should be based on a three-tiered structure of federal, state and local governments but this is not so. The Nigerian tax system favours the federal government, as pointed out by the Study Group on Tax Reform (2003), the federal government accounts for 99% of the tax revenue in Nigeria.
All fiscal enactment powers are held by the Federal Government e.g. Personal income tax (PIT) is legislated by the federal government, payable by individuals, but collected by state authorities. For concurrent taxation such as the capital gains tax and stamp duties, the federal government retains legislative power, while sharing administrative powers with the states. The federal government has jurisdiction for such taxes as VAT and Education tax. The federal government taxes corporate bodies while state and local governments tax individuals.
The state and local governments have had no freedom to introduce new taxes because matters dealing with taxation are on the Exclusive list of the constitution. They may enact laws only with the concurrence and approval of the National Assembly
Why is this problem?
1. It deprives the states and Local governments the ability to use taxation as a means of earning revenue or attracting investment.
States like Lagos earn almost 80% of their income from the PIT, but they cannot determine the rate to apply to attract investment. The Company Income Tax CIT and the VAT are collected in states. Lagos State may build roads and attract multinationals to Lekki but the federal government will take the revenues generated by these multinationals.
It also put all the states in the same bracket in terms of tax policy. Ogun state for instance cannot use a lower VAT or CIT rate as an incentive to attract investors from Lagos to Ogun. Yobe state cannot declare a tax free zone to attract Dangote Industries to set up a factory there.
States like Lagos also see no incentive to enforce the payment of taxes as these taxes are sent to the centre. The CBN estimates that Lagos has about 60% of the manufacturing and commercial activity in Nigeria. Lagos is the generator of the highest VAT and the highest Customs duty, but it does not see these tax benefits. It is, instead, shared anchored on such factors as equality of states (40 per cent), population (30 per cent), landmass and terrain (10 per cent), social development needs (10 per cent), and internal revenue efforts (10 per cent). This sharing formula, discouraging revenue drive, particularly for federally adjudicated taxes e.g. VAT.
2. The federal government is reckless with spending.
The tax (and revenue) collected is used to pay federal workers.
Take the figures for 2010, the total receipts for Companies Income Tax, VAT and Customs duty was N1.40t (net of cost of collection, gross collection was N1.52t). Let us now look at the total non-debt cost of the federal government (salaries, pensions) that is N2.54t.
In effect, the total tax revenues of the nation are swallowed up by personal cost of the federal government. An argument can be made that oil revenues are actually paying the salaries of the federal workers but keep in mind that non-oil revenues made up 34% of the total revenue in 2010.
In addition, how many federal workers do we have in Nigeria? The federal workers take home 63% of the total revenues of the nation, (tax and oil receipts).
3. It makes Local governments ineffective.
The current fiscal structure created a situation where the Local governments must exist at the mercy of the federal and state government.
Primary schooling is the exclusive responsibility of local governments; the constitution states, “The functions of a local government council shall include the provision and maintenance of primary, adult and vocational education”. We then wonder how Nigerian children can be educated by taxes charged on items such as fees on marriages, motor parks and bicycles.
Unlike States who can charge Personal Income Taxes generate billions of Naira (like Lagos), the Local governments have been “allocated” very poor means of livelihood and are thus unable to serve the citizens of the LGA.
What can GEJ do about it?
• Amend the constitution to allocate to the three theirs of the federation appropriate income-generating taxes to enable them fulfil their constitutional requirements. The federal government cannot simply tax the wealth of Nigeria and spend it on only the federal workers. Such a move will discourage the payment of taxes.
• Devolve most of the powers from the exclusive list to the concurrent and the forth schedule or and duties of the Local governments e.g. Insurance, stamp duties as a whole, and VAT.
• The states and Local governments should share VAT
• States to determine and charge Personal Income Tax
• Local Governments to charge Property taxes, charge, and collect the education taxes
• Pass a law that will cap how much of the federal, state or Local Government earnings can be allocated to recurrent expenditures. This is specifically to forestall a situation where taxes are charged just to maintain the lifestyle of workers.
It’s important to note that The former president of the NBA has presented a private bill to the National Assembly for an Act to alter the Constitution of the Federal Republic of Nigeria 1999 by creation of the States Court of Appeal, introduction of Federal and State Legislative Lists and adjustments/modifications of legislative powers of government between the Federal and State Governments."
Agbakoba said the present "bloated federal system" had made governance too expensive to support any meaningful development in the country.
The bill seeks to replace the "Exclusive Legislative List" with "Federal Legislative List" with respect to powers limited to the federal government and introduced the "State Legislative List" for powers exclusive to the state governments.
Issues recommended in the bill for devolution to the states include natural and mineral resources, excluding petroleum and gas; agriculture; micro finance banks; municipal police, state appeal courts; solemnisation of marriages; incorporation of business enterprises with state objects; taxes on income and profits within states, other than income and profits of companies; regulation of labour and industrial relations at the state level, including prescription of minimum wage; and evidence.
It is our problem and we will fix it.
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