Lagos — To Say that Nigeria's economy is presently distressed will amount to restating the obvious. Of course, the signs are everywhere. Infrastructure decay, lack of critical skills for business development, poor regulatory environment, and the near absence of the political will to enforce contracts amongst other debilitations.
As a result, cost of production continues to skyrocket, leading in recent times to migration of businesses to neighbouring countries. And to compound these problems is the challenge of multiple taxation, which has become a nightmare for manufacturers, entrepreneurs, merchants and petty traders.
Only a few days ago the economy of Nigeria was practically brought to its knees following the one-week warning strike by umbrella Unions of food and cattle dealers based in the northern part of the country and doing business with the south, who were protesting alleged multiple taxation, extortion and other injustices meted out to their members as they carried out their businesses. They claimed to have earlier met the Commissioners of Agriculture of the affected States and even obtained an injunction from a Maiduguri High Court on October 19, 2009 restraining officials of these states from collecting illegal taxes from their members all to no avail. As a result of their strike food items like beef, tomato, beans, rice, vegetables, chicken, carrot, onions, yams etc immediately disappeared from the markets and where they existed the prices went out of the reach of the common man.
This is a true reflection of what the country has become. For several years the Manufacturers Association of Nigeria (MAN) had complained on the challenges its members were forced to go through as they moved their products around the country without anybody caring to listen. Apparently not being able to cope with the pressure any longer, the country's manufacturing sector has become a shadow of its past, contributing presently less than 4% to national GDP. Perhaps in a bid to boost Internally Generated Revenue (IGR), the different States and Local Government Areas across the country have heavily descended on the poor manufacturer, merchants and petty traders, who daily move their wares to different parts of the country. They are everywhere harassed and bullied by different Regulatory Agencies and State officials including the Police, Customs, Produce Inspectors, NAFDAC, NDLEA, FRSC, IGR Consultants and LGA Officials. To worsen matters is the activity of touts evenly distributed across the country, who in most cases parading as Council Officials seek gratification from people doing business in their areas of operation. In all cases the accumulated cost is transferred to the poor consumer.
We are aware that in some countries food is about the cheapest commodity. This is due to zero-taxation on food items with agricultural produce heavily subsidized. But the case of Nigeria is rather different. Multiple taxation became an issue in Nigeria from the 1980s following dwindling national revenue, which gave rise to States and LGAs seeking alternative sources. Most of these States have gone ahead to engage the services of Revenue Consultants, who often with the mindset of making profits both for themselves and the government, go out of their way to impose all sorts of taxes not covered by the Constitution. Thus, the more the tax payers transport their wares across the country the more they are confronted with incidents of multiple taxes, legally and illegally imposed.
We insist that the pursuit of additional revenue sources or in fact any other ulterior motive should not be an excuse by any arm of government indeed anybody at all to flout the Constitution. Our stand is based on the fact that multiple taxation is economically counterproductive, destroys investor confidence, raises the cost of doing business and in the long run compounds the woes of our already distressed economy.
In addition there are valuable lessons to be learnt from the recent strike by the umbrella Unions of food and cattle dealers. It became obvious given the impact of that strike that southern Nigeria presently depends almost totally on the north for food. This is not good enough considering that the nature of the country's soils can guarantee all-year round productive agriculture in these parts. At the same time, we know that this was not the case in the country's First Republic. So what went wrong? The strike equally showed that both the northern and southern parts of the country have a symbiotic relationship. If this is the case who are these people fanning the embers of division and emphasizing the centrifugal forces in the country? We think that we should be preaching the values that unite us instead of those that divide us.
We also ponder on the value of taxation, if it is not tailored towards the good of the taxpayer. The impression being portrayed is gross insensitivity on the part of government towards the well being of the citizens who pay tax. There is therefore an urgent need to harmonize the country's tax system to make it less harmful to the citizens and more productive to government. What Nigeria requires is an enabling environment for business to flourish. Undoubtedly, a functional railway infrastructure will in the long run reduce the burden of people engaged in interstate commerce.To state the obvious if we had invested in sufficient storage and processing facilities, the level of waste occasioned by the recent strike would have been minimized. It is time to address these issues now.