Buhari’s New VAT Rate As Reverse Robin Hood

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President-Buhari

f the proposal to borrow N1.6 trillion to finance some components of the 2019 fiscal year is frittered away in fantastically corrupt procurement processes, which will most likely happen, and that would become the enabler of state capture by Nigeria’s political leadership, with the burden of repayment of these debts placed on future generations, the increase in value added tax (VAT) by 50 per cent, from 5 per cent to 7.5 per cent, is akin to reverse Robin Hood.

Nigeria’s wealth, which is mainly sourced from revenues derived from the exploitation and exportation of its huge deposits of oil mineral resources, has become substantially depleted in recent times. As the tenth oil producer in the world, Nigeria’s average output of 2.2 million barrels per day of black gold can no longer adequately sustain the economic needs of its nearly 200 million people. Ranked as the poverty capital of the world, with more than half of its population living in hunger and misery, Nigeria’s socio-economic problems are made manifestly intractable by a warped political leadership structure, resulting from an equally defective structure of the state, which is adverse to known principles of a functional nation in the contemporary world.

The reasons for the existence of the modern nation state are more economic than political, as they are essentially well managed corporate entities for the purpose of competitiveness for global resources. Fundamentally, the operational structure of a modern nation state is geo-economic in nature and form, which allows for the conversion of the enormous potentials and energies of its constituent peoples into an externally generating revenue capacity through competiveness in overseas trade and investment. A modern nation state is driven by a political leadership vision fixated on the global stage, with a mission to unite its constituent peoples around a nationalist socio-economic agenda to compete with other nations for global resources.

The unity of purpose, which is a condition preceding socio-economic development, is achieved through an organic structure of state that allows for integration and assimilation of its constituents peoples around geo-economic clusters where their individual talents are most relevant, with limitless political as well as economic rights, as citizens of the state. For such modern nation states as the United States of America, Great Britain, China and Japan, the economy defines everything, including the politics, foreign and national security policies, as well as immigration, as the latter are determinant factors in securing an advantageous share of global resources for their respective countries.

However, this is not the case with Nigeria. The largest black country on earth is in a primitive state of nature, as its operational structure is rigidly carved around ethno-geographic fault lines and not around integrated geo-economic centres as obtainable in a modern state. A rigid structure of ethno-geographic fault lines as federating units, which is made inorganic by the near absence of a seamless mechanism of assimilation and integration of its constituent peoples wherever they may choose to reside outside their places of origin, has created out of Nigeria a country of indigenes and not nation of citizens.

As a country of indigenes, Nigeria is a collection of various micro-ethno-geographic entities that are divided and often locked in horns over the struggle for the control of its meagre internal oil mineral resources. In the ensuing struggle, primordial sentiments of ethnicity, geography and religion are solidly crystallised into a divisive form of identity politics as a tool of power negotiation to secure an advantageous slice of the national cake by the contending constituent peoples of Nigeria. Unlike a modern nation state, Nigeria exists more on the political expediency of internal resources sharing, rather than on the economics of global competitiveness for external resources through overseas trade and investment.

To satisfy the insatiable want for state resources by Nigeria’s glutinous political leadership, President Buhari’s unproductive cabinet has come up with the most unimaginatively lazy strategy of engaging in more borrowing and raising the tax. Having exhausted all avenues of revenue by plundering the public purse in reckless orgies of financial debauchery, Nigeria’s political class has once again resorted to feasting on the flesh and blood of the impoverished masses of Nigeria.

Through a dubious elite consensus of Nigeria’s ruling political class, the principles of rotation of presidential power and zoning of top government leadership positions has deepened Nigeria’s primitive state of affairs with prospects of this continuing in perpetuity. Arising from this sorry state has been the steady degeneration of Nigeria’s political process into a criminal franchise of power purchase for self service through an elaborately corrupt patronage system at the expense of the public treasury. Nigeria is a thoroughly mismanaged entity by a class of unproductive political leadership, with an inflated sense of entitlement over its common patrimony, in a manner that has rendered it unable to compete for global resources through overseas trade and investments as means of growing national revenue at the same pace with the expanding needs of its growing population.

President Muhammadu Buhari, a man of high provincial proclivity, whose stoic stand against the corrupt practices of his opponents was mistaken for integrity by many, has now emerged the champion of identity politics and the living patron saint of state patronage as its only reward accordingly. To underscore this reality, President Buhari has put politics ahead of economics, by not only increasing the size of his government exponentially in a time of national financial difficulty but has also constituted a cabinet of partisan politicians whose only qualifications were their immense contributions to the unprecedented electoral heist of 2019. President Buhari’s current cabinet is a reflection of Nigeria’s corrupt state patronage at the expense of the commonwealth as the only reward system for political participation.

With a political leadership that is overtly preoccupied with the politics of resource sharing, instead of the economics of resource growing, Nigeria’s hyper unproductivity in recent times has pushed the country of 200 million people to the edge of fiscal disaster. The pressure of patronage arising from the politics of identity on the public purse has surpassed breaking point. In addition to a diminished excess crude account from $2.4 billion to about $600 million, rising by $11.77 billion from $10.32 billion in June 2015, Nigeria’s external debt profile stood at $22.08 billion in June 2018. The government of Nigeria has not been able to meet up its most basic responsibilities of the payment of the salaries of public servants and provision of basic social infrastructure without borrowing at a pace that the receipts from crude oil export cannot sustain.

To satisfy the insatiable want for state resources by Nigeria’s glutinous political leadership, President Buhari’s unproductive cabinet has come up with the most unimaginatively lazy strategy of engaging in more borrowing and raising the tax. Having exhausted all avenues of revenue by plundering the public purse in reckless orgies of financial debauchery, Nigeria’s political class has once again resorted to feasting on the flesh and blood of the impoverished masses of Nigeria. If the proposal to borrow N1.6 trillion to finance some components of the 2019 fiscal year is frittered away in fantastically corrupt procurement processes, which will most likely happen, and that would become the enabler of state capture by Nigeria’s political leadership, with the burden of repayment of these debts placed on future generations, the increase in value added tax (VAT) by 50 per cent, from 5 per cent to 7.5 per cent, is akin to reverse Robin Hood.

This proposed increase in VAT will only serve the interest of Nigeria’s political leadership class. Revenues from VAT, like others accruing to the federation account, is usually distributed among the three tiers of government. And for a warped governance structure that serves the interest of the few privileged to be in government, to the exclusion of the vast majority of those underprivileged not to be in government, this translates to money being taken from the poor and given to the rich. At this rate of high level leadership unproductivity, as evident in the degeneration of government business to administrative banditry, the poor will continue to toil in sweat and blood as the Biblical “hewers of wood and fetchers of water” in utter discomfort, for the comfort of their rulers, through an ad infinitum increase in taxes.

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