The Federal government, through the Ministers of Works & Housing, Mr Babatunde Fashola and Information, Alhaji Lai Mohammed, made an announcement that it is planning to reintroduce toll gates on major roads across the country after they were removed by the administration of former President Olusegun Obasanjo more than a decade ago.
This move, coming at a time the national assembly is debating whether to increase VAT or tax commodities such as recharge cards and data usage by Nigerians, betrays desperation on the part of the government to plug a leaking financial ship that may sink if not urgently attended to. The desperate move the government is taking to get extra money can be likened to licking the icing of a cake without taking chunks of the cake; while this could be satisfying in the moment, it doesn’t solve the bigger hunger problem. Increasing VAT, reintroducing toll gates, taxing recharge cards and mobile data are all cake icing, and not sustainable over the long term in an economy that is structurally defective and not producing enough wealth for citizens.
The Federal government needs to be more open and sincere about the financial state of the nation and take decisive steps to arrest the major areas where the bleeding of resources occurs. For starters, it would appear to be a slight on the Nigerian people that a debate was being held on the floor of the Nigerian Senate as to how to boost revenues, without a corresponding debate about reduction in the cost of governance, a significant amount of which goes to paying the outrageous salaries and allowances of the Senators, not to talk about the small matter of N5.5 Billion expended on the purchase of luxury SUVS for Senators.
The Executive must also take a deep introspective look at its expenditures as well as some line items of our budgets scream waste from the surface. It is rather disturbing that all calls for reduction in cost of governance are framed by the government in terms of reduction of staff strength of the public service, when in actual fact a more creative approach to administration could shave off a large chunk of the money spent in running government offices.
Indeed there can be no better time than now to consider the ubiquitous annual spend on petrol subsidy. According to a recent report in Bloomberg, Nigeria spent four times what was spent on education and science and technology, on subsidizing petrol alone, much of which is consumed by government owned SUVs by the way. For all the hue and cry over the effects a subsidy removal will have on the people of Nigeria, it is worth noting that Diesel is being sold at market determined prices, even though it goes into running industrial generators for the factories that still produce here as well as the trucks that haul goods all over the country.
What is spent subsidizing consumption would be better invested in areas such as healthcare and education to boost productivity, so that the government has a bigger pool to tax from rather than burdening the tax payer with even more taxes. Removal of subsidy would also give the government room to tax the huge economic activities that take place in the petroleum sector, while investors would begin to consider investing in local refining.
The times in which we find ourselves, demand that the government takes a long range view of the challenges, with a view to coming up with sustainable solutions that do not imperil our people. The sums that would be generated from the reintroduction of tolls and VAT would not contribute significantly to generating the 14billion UDS per annum, for the next ten years, which the World Bank estimates is required to plug the infrastructure deficit of Nigeria. It is time for government to look at the big picture and, as the President advised in of his more famous speeches, “live within our means”.