Is the north an over-pampered toddler who doesn’t want to drop his mother’s breast milk – and must be weaned by force to take growth and development steps? The ongoing controversies, agitations and debates over the Tax Reform Bills has brought to light again the need to ask this deep-probing question – and many like it.
Prior to 1914 when Britain brought various groups together under one central administration for its own convenience, every group had been carrying out various productive enterprises (thriving trade and commerce); even establishing economic relations with other groups to exchange goods that could be found in other groups that it could not produce. That time, no group, either in the south or in the north, was productively lazy since there was no central administration, a Father Christmas, to look up to for the financing of their needs. Merchants in one area moved their goods to trade with other communities – from the wetlands to the savannah, and vice versa. The Yorubas called the then itinerant traders, reputed for long-distance trading, ‘alajapa’.
However, the 1914 administrative convenience that merged the protectorates brought with it the central government’s economic influence from the centre which triggered the steady whittling of the self-reliant capacity of the various ethnic groups. This got to its head around 1950 when the Britain’s Under-Secretary of State for the colonies, Rees Williams, suggested that Britain should give “support and encouragement to our friends, especially those in the Northern territories”. The north had started enjoying especial, spoilt child treatment from the centre; which eventually formed a pattern to the North’s reaction to Nigeria’s socio-economic and socio-political questions.
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Right from ‘as soon as practicable’ submission to the call for Nigeria’s self-governance in 1956, to the passage of the Petroleum Industry Bill toward becoming an act in 2022 and now to the Tax Reform Bills of 2024, the north has maintained an attitude of reluctance to the weaning of the component parts from the apron string of the centre for a truly federal country to be established.
Going by the history of happenings in the 1940s and 1950s, can one rightly declare that the north was indulged too much by Britain at the expense of other ethnic groups, and that the north has somehow been trapped and unable to move on productively without holding on to what the central government can bring to the table and make available? The confession of Elder Statesman, Alhaji Tanko Yakasai during the celebration of his 94th birthday in 2020 that the North’s attitude to self-rule proposal in 1956 was as a result of the region lacking the requisite human capital to face the challenges of self-governance is a pointer to this very fact. What Nigeria has been passing through has been a game card, ab-initio! Taking a cue from Alhaji Tanko Yakasai’s revelation in respect of the 1956 self-rule proposal, can we agree that the attitude of the north to the current fiscal federalism attempts to reposition Nigeria is also a deliberate economic game by the North to prevent other regions from taking their destinies in their own hands and moving on productively to meet the needs and socio-economic aspirations of their people?
It is on record that the passage of the Petroleum Industry Bill in 2021 took almost twenty years before it could be passed as a result of vested interests from various quarters within and even outside Nigeria. And now Nigerians are faced with the Tax Reform Bills, four of them, which, among other provisions, include Value Added Tax (VAT) sharing template.
Since the announcement of the establishment of the Committee on Fiscal Policy and Tax Reforms, July 2023, and its inauguration on Tuesday, August 7, 2023, not a few believe that the tax reform bills will introduce new lease of life to fiscal structure of Nigeria. But after more than a year’s work and the steps towards legislative passage of the bills is revved up, the tax reform bills are bedeviled with fresh hurdles since October 2024 when the northern governors openly rejected some of the proposals, particularly the VAT sharing template in one of the four bills. The northern governors and some stakeholders from the region have mounted vociferous opposition to the bills by calling for outright rejection, and declaring that the bills are against the interests of the North.
If one get correctly the North’s position against the new VAT sharing provisions, the north is fighting for the federal government to retain larger share of the realized funds instead of the new formula that conceded more to the states and the local governments. But VAT is purely a consumption tax, so how come the north is not seeing its population advantage to embrace the new proposal? Or is it that the North’s strength is just in numerical count and not in consumption power? This probing query brings to fore again the issue of productivity that correspondingly goes with purchasing powers. The north believes that the federal government should maintain the present unitary and centrally-controlled fiscal structure, retain more of the resources coming to the centre and distribute to various components according to perceived population figures even if the population are not that productive.
The fact remains that what obtained in 1950s can no longer suffice in 2020s. The world had moved on and every country must run her economic race in a manner that is optimally productive and progressive if such a country wants to have a place in the comity of countries that matter in this present technological age. Nigeria cannot afford not to move with time, and cannot afford to hold on to unitary system in its fiscal system. To become a truly federal country, each component part, this time the states, must have the freedom and latitude to run its productive economy without let or hindrance, and no other parts must be allowed to hold back or hold down the economic development and progress of the other states. The earlier the north faces this reality, the better for its economic development – and its people having the bests life can offer.
Ola Emmanuel is a business planning consultant
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