A look at the top 10 economies of the world show their revenues come from taxes not natural resources. As a matter of fact, many have no natural resources and have built their economies on the strength of intangibles such as services and tourism. Imagine what these economies will achieve if they have the kind of natural and human resource that Nigeria has.
Below are four actions that can be adopted to reposition Nigeria so that she not only survives but thrives and be on its way to becoming Africa’s giant again.
Efficient tax collection practices
All tax collecting arms of the various governments (federal, states and locals) must embrace technology to bring more people into the tax net. This should be done via fair assessment and transparent publication and public enlightenment of taxes due and clear and highly efficient remittance processes. Leakages and avenues for corruption by tax officers must be closed and jail terms proposed and enforced on those attempting to game the system. Nigeria can build its economy on an efficient revenue collection system.
Self-sufficiency in food production
Until Nigerians can feed themselves, the country’s economic stability will be subject to factors outside their control. In a country with as much arable land as she has, Nigeria has no business importing food. The government, through policies, training, capacity building, research and funding must reposition the agricultural sector. There are some admirable initiatives but government must do ten times more than she is currently doing to infuse growth into the sector. Government at all levels must incentivise players in the agric space through tax holidays, import waivers on agricultural equipment and low cost of land lease.
Local substitution and production
The high taste for foreign products and services must stop. The handwriting is on the wall; it just isn’t sustainable. The imbalance in trade does Nigeria’s economy no good and the escalating exchange rate is a clear pointer to the urgent need to change that approach. She must start substituting foreign taste with local ones: Gucci shoes for Mona Matthews shoes, Mary Kay would give way to Ashake Bae cosmetics and Toyotas and BMWs would give way to Innoson sedans and SUVs. Nigerians must not only find substitutes for their own use, they must produce competitively and sell to other African countries. Electric power must be given urgent and utmost priority in order to achieve these.
Drastic cut in government expenditure
This step requires courage on the part of this government. Government should let go of 50% of its current work force. The bureaucracy is over staffed and under worked. Mediocrity is tolerated and bottle-necks are seen everywhere. The national assembly cannot be left out of this pruning process. Their fat salaries and allowances has to be drastically reduced using all avenues permissible under the law. Government should help the 50% of its discontinued work force transition to new careers through setting up or partnering to create learning centres that teach skills as basic as tailoring to skills as interesting as robotics.
The party in power will likely become unpopular with the last suggestion and the move will prompt the NLC to go on a one-year “warning strike” (imagine how long the real strike will last for). But the truth is undeniable. Government is over-staffed and currently broke and cannot carry the weight of its workforce. Several state governments would have to tow this line or bear the shame of owing salaries for months. Let the people go, give them some skills and cash. They are Nigerians, they will sort themselves out.
These are hard choices and one year may not be long enough for all to be achieved, but if the commitment doesn’t begin now to implement some of the suggestions above and more, God forbid our economy slows down into a recession as occurred in Japan. Considering Nigerians are a highly “religious” people, I am sure I will get a lot of amen.