Before we crucify Okereke-Onyiuke

ONE of the major issues that have dominated public discourse in recent times is the activities of a group of professionals under the aegis of Africans for Obama 2008. The leading dramatis persona is the indefatigable amazon of the Nigerian Stock Exchange, Professor Ndi Okereke-Onyiuke. Haven listened to her position on the Obama candidature I think that the harmless lady was only being excited about the rising profile of the black race in a strong economy like the United States, taking into consideration what could be seen as its ripple effect for a growing economy like Nigeria.

Taking into consideration the fact that Nigerians are a very sensitive lot, given the various intervening variables that condition their reactions, the Obama issue should be seen as a mere pedestrian discourse that fits into the game plan of a segment of the disgruntled elites who see Okereke-Onyiuke's records with awe and envy .

The thesis of her comments was that Africans for Obama 2008 is not a Fund Raising Organization for Senator Barack Obama. The United States Electoral Law does not allow foreign nationals to donate money to an American candidate for the purpose of election. She explained that the aim of Africans for Obama 2008 was to sensitie and mobilise Africans of voting age in Diaspora and other Americans to exercise their voting right. She never urged them to vote for Obama but simply said, "Go out to Register and vote".

Professor Okereke-Onyiuke was not the only speaker, her Vice Chairman of the group, Dr. Erieka Bennett and two other African Americans reinforced her thesis with emphasis on the need for Africans in Diaspora and indeed other eligible voters in the United States to vote. The forum presented an idyllic setting as journalists and other guests had an interactive session. All questions and observations about Africans for Obama 2008 were discussed fully and the session ended with an announcement of dinner the following week.

The climax of the press briefing was when Professor Okereke-Onyiuke told the relaxing audience that she had about five years ago come across Obama. It was the day of glory when she won a prestigious award from congressional Black Caucus. She is the first winner of this award in Africa. Everybody at the hall wanted to take photograph with her. Senator Barack Obama was on the queue. The man queued for one hour before it got to his turn. He told Professor Okereke-Onyiuke that he had a scheduled meeting but had to cancel the meeting because he was very happy to identify with this prestigious award.

She showed the audience at the conference the photograph she took with Obama. It is interesting to note that Obama was not a world figure as at that time. But uneasy lies the head that wears the crown. The moment she heard that Obama is now a front runner for the White House, she took it as an historic challenge on how best she could mobilise all Africans in Diaspora and other American eligible voters to exercise their voting right. We can see a case of passion in the candidacy of Obama.

Against the background of initial explanation of the basis for initiating Africans for Obama, why then is the controversy dogging this group? I think it is more of sentiment than facts. The Dinner / Concert was publicised in National Dailies and Television apparently to avoid injurious speculation. The target were the elites that believe in Obama's vision and have the wherewithal to pay without coercion.

The media cannot claim any credit for getting the ticket rates because it was public knowledge. Why did a section of the media twist the whole story into "fund raiser" despite the initial World Press Conference and the Dinner / Concert that was covered by virtually all electronic media including NTA, Silverbird, CNBC etc?

It appears to me that most media reports on the controversy over-dramatized the issue at variance with the organisers' intention. The role of the Economic and Financial Crimes Commission (EFCC) in the reporting style of the media raises a big question mark on the way the media were reporting the story. After a telephone invitation for a chat, why must the EFCC contact the media on phone on the same subject leading to speculative reporting that she has been detained, quizzed, arraigned etc. Virtually, all the media reports that published the story quoted the EFCC spokesman, Mr. Tunde Babafemi. It may be necessary for the EFCC to appreciate the way Nigerian media report news, especially when it comes to sensationalism. How ethical is it to say that EFCC quizzed or arraigned someone invited via telephone?

The letter purportedly written by the Director General of Securities and Exchange Commission (SEC), Mr. Musa Al-Faki; requesting for clarification of Professor Okereke-Onyiuke's role in Africans for Obama 2008 developed wings and flew to all media houses before it was "dispatched" to the recipient". This casts a shadow on internal communication between the Securities and Exchange Commission (SEC) and The Nigerian Stock Exchange (NSE) which are supposed to work towards the same goal. This brings into memory some previous issues published by the media before The Exchange received SEC's letter. This is not an encouraging style of communication by the apex regulatory body.

I have read the statement signed by The Exchange's President, Dr. Oba Otudeko, OFR, stating that Professor Okereke-Onyiuke's involvement in Africans for Obama is a purely private affair and she has her inalienable rights so far it does not conflict with her official duties. Similarly, I took time to digest the statement signed by Professor Okereke-Onyiuke where Africans for Obama restated its position in terms of not raising funds for the Obama campaign. I do not think there is any diametric difference between the statement by Obama's campaign group and the position of Africans for Obama.

The latter has never claimed that it is an affiliate and neither has it stated that it raised funds for the Obama campaign. At this juncture, we need to locate Professor Okereke-Onyiuke on the prism of personality. Those who are close to her believe that she is a very pleasant lady with many track records of academic and professional laurels.

She has a strong background of a father who was a Barrister at Law (now late) and a fearless Speaker of House of Assembly in the then Eastern Region. Her mother was a strategic board guru while she is surrounded by a team of highly educated brothers and sisters. These must have partly shaped her world view.

She schooled in the United States where she stayed for 14 years; including her University Education and robust stewardship at the New York Stock Exchange before she was poached by Sir Mobolaji Bank Anthony who was excited to see a Nigerian holding a managerial position in the New York Stock Exchange. Unconsciously, aunty Ndi, as she is fondly called attempts to domesticate American life in Nigeria. She needs to appreciate that the openness of America is far ahead of contemporary Nigeria. If a father imposes corporal punishment on the child in America, the child can call the Police. If a child does that in Nigeria, people would think he is a bastard or has brain tumor or remote control of enemies at work. Like any human being, she may have her own frailties. But on the scale of balance, those who are close to her find her an amiable, hardworking and always ready to make an impact.

Regardless of controversies dogging her activities in the national and international politics, nobody can underestimate her success stories on The Nigerian Stock Exchange. She has put the market on the global map and the records are there forever.

All her activities in the national and international arena being referred to by some groups and individuals were done with good intention. Just peep at her contributions to sports and the role she is playing currently for Nigerian Universities Games (NUGA). She just need to constantly appreciate that the Nigerian environment is different from the United States of America in many regards. We all pray that Senator Barack Obama wins. The same people that are calling for the heads of Professor Ndi Okereke-Onyiuke, other Nigerians and African Americans that share a common vision of Obama would be the first to troop out and identify with their African brother. Let Obama take his seat at the White House, critics of these professionals would be the first to request for Obama to put Africa, nay Nigeria on the priority list of his economic policy.

Alexander Solzhenitsyn

IN June 1974, or thereabout, a Ghanaian friend of mine presented me with a book, Letter to Soviet Leaders, written the year before by Alexander Solzhenitsyn. The book was translated from the Russian original by Hilary Sternberg and published by Index on Censorship. It was distributed world-wide by Fontana Books, London. Coming three months before the appearance of Solzhenitsyn's The Gulag Archipelago, the letter was a bitter and holistic denunciation of the Union of Socialist Soviet Republics (or the Soviet Union, or USSR): its philosophy, ideology, economics, politics, state system and foreign relations.

The Ghanaian friend who gave me Letter to Soviet leaders, by post, was a foundation graduate student of Computer Science at the University of Lagos. This was in the early days of my socialist consciousness and involvement in organised socialist politics. The reason for his book gift to me was patronising: to open my eyes to the "evils" of what I was getting into. I was angered by his patronising attitude, but I thanked him and read the book.

Ten months after this book gift, I was given another book authored by Solzhenitsyn. But the circumstances were different. I had been detained in January 1975 by General Yakubu Gowon's military government for "subversive" agitation. In April, I requested my jailers for books to read. After a long consideration, I was given two books: The Holy Bible and Solzhenitsyn's The First Circle. I was familiar with the former, but I was seeing the latter for the first time. The message of my jailers was clear. I read both of them. The First Circle is a fictionalised account of prison experience in the Soviet Union under Joseph Stalin (1879 - 1953) and - to some extent-under his successors. Upon my release I obtained my own copy of The First Circle and a Soviet response titled The Last Circle. I scribbled my own comment: Neither First Nor Second Circle (unpublished).

Since these early days, I have read a couple of other fictions and essays written by Solzhenitsyn. They have added to my knowledge of the Stanlinist brutality and irrationality, as well as Russian history. Beyond this, I can testify that Solzehnitsyn, who died in Moscow on August 7, 2008, at the age of 89, was a fine writer, well-read in Russian history, philosophy and literature. He must have been a brilliant army officer, having been twice decorated during World War II. He was a courageous man with a very strong spirit. He was undoubtedly a Russian patriot, as distinct from a Soviet patriot. In spite of all these attributes, however, I am not a "follower" of Solzhenitsyn for reasons I shall provide below.

Many tributes have been paid to Solzhenitsyn since his death. The internet is loaded with them. He was given a semi-state burial in Moscow, and this was shown live by the leading international cable televisions. The limited aim of this piece is to refute some glaring errors, distortions and deliberate misinformation about him and his career-especially by Nigerian media commentators. I shall do this by invoking his Letter to Soviet leaders. After all, this letter was almost his last critique of the Soviet system before his expulsion from the Soviet Union - an act that cannot be defended now as it could not be defended then. But before this, I may sketch, as preface, the trajectory of the great man's life. More copious essays on this can be found in the internet and the world media.

Alexander Solzhenitsyn was born in Russia in 1918, the year after the Russian socialist revolution. His father, a retired army officer, died shortly before he (Alexander) was born. The young Solzhenitsyn was, therefore, brought up by his mother who encouraged him to study widely - mathematics, history, philosophy and literature. He was raised in the Russian Orthodox faith. He took a degree in mathematics. He became a member of the youth wing of the ruling Communist Party and edited several of their publications. He fought in the Society army during World War II, and rose to the rank of Captain.

It was towards the end of that war that his trouble began. His letter to a friend, in which he bitterly criticised Stalin and his conduct of the war, had been intercepted. He was charged with "anti-Soviet propaganda" and "founding a hostile organisation", found guilty and sentenced in July 1945 to "eight-year term in a labour camp, to be followed by permanent internal exile". In March 1953, following the death of Stalin, Solzhenitsyn was given a conditional release. He renounced Marxism and "Communism" during this period. Solzhenitsyn wrote several books during his "labour camp" years, and continued writing after his final release. Some of his books were published in the Soviet Union. In 1970 he received the Nobel Prize for Literature which was given in absentia because he was not allowed to travel to Sweden. In February 1974, Solzhenitsyn was deported from the Soviet Union.

I may now turn to Solshenitsyn's Letter to Soviet leaders which he completed on September 5, 1973, and sent to a number of Soviet Union's leaders of state and party. I shall use that book, as a source of refutations. And for these, I refer only to the article "Alexander Solzhenitsyn and the Russian liberation" (The Guardian, August 13, 2008), contributed by my friend, Professor Emmanuel Eseimokhai, the Academic Chancellor, Basas International Law Bureau, Abuja. I am selecting Eseimokhai because he is at home with the subject. I agree with much of what my friend wrote, but not when he said: "It is not true that Solzhenitsyn hated communism, as some ill-informed scholars have said. He was a communist cadre but disagreed with the Soviet Communist Party on ideological issues".

Not so, Emmanuel. Yes, Solzhenitsyn was a communist cadre. But he renounced Marxism and Communism fundamentally and in their totality - not just their Soviet variants - before he left the prison camps. Solzhenitsyn hated Marxism and Communism with a passion whose ferocity I have seen only in very few personages of his historical stature. Hear this: "Marxism is not only not accurate, not only not a science, has not only failed to predict a single event in terms of figures, quantities, time-scales or locations. Only the cupidity of some, the blindness of others, and a craving for faith on the part of still others can serve to explain this grim humour of the twentieth century; how can such a discredited and bankrupt doctrine still have so many followers in the West!" (Letter, page 43).

Just before this passage, Solzhenitsyn had claimed: "This ideology that fell to us by inheritance is not only decrepit and hopelessly antiquated now; even during its best decade it was totally mistaken in its predictions and was never a science. A primitive, superficial economic theory, it declared that only the worker creates value and failed to take into account the contribution of either organisers, engineers, transport or marketing systems". He then went on to list specific instances where, according to him, Marxism had been "mistaken". Beautiful language; but wrong, pathetically wrong. He was wrong when he wrote his letter in 1973. He is wrong today. But it is not my intention to refute Solzhenitsyn here. I only wish to correct misconceptions about him.

Solzehnitzyn's Letter to Soviet Leaders was essentially a call on Soviet leaders to abandon the ruling ideology. Leave it to other nations and peoples who may want it, he admonished. He blamed all the ills and problems of the Soviet Union on the ideology. He vehemently rejected suggestions that Russian history might, in part, explain some specific structure and practices of the Soviet State, including the labour camp system, internal exile, deportation, secret police, etc. He overlooked the fact that these features of the Soviet system existed in Tsarist Russia. For instance, Leon Trotsky, the field commander of the Russian revolution, was sent on internal exile to Siberia under the Tsar. Ten years after the revolution, he was sent by Stalin on internal exile to Kazakhstan; and then deported to Turkey.

Solzhenitsyn urged Soviet leaders to abandon internationalism. Hear him: "Let's leave the Arabs to their fate, they have Islam, they will sort themselves out. And let's leave South America to itself. Nobody is threatening to take it over. And let's leave Africa to find out for itself how to start on an independent road to statehood and civilisation, and simply wish it the good fortune not to repeat the mistakes of uninterrupted progress. Our people are not going to live in space, or in South-East Asia, or Latin America: it is Siberia and the North that are our hope and reservoir" (Letter, pages 28-29). Abandon "world revolution", he urged. Surrender "communism" to China, and the danger of a terrible war with that country would vanish, he pontificated. Solzhenitsyn was also anti-Jew, cynically and suggestively drawing attention to what he saw as the preponderance of Jews in the leadership and membership of the ruling Communist Party.

I mentioned Solzhenitsyn's courage and patriotism. Let me illustrate with the concluding paragraph of his Letter: "I have amply demonstrated that I set no store by material wealth and I am prepared to sacrifice my life. To you such a vision of life is a rarity - but here it is for you to behold".

Missed targets as opportunity

ONE does not need to be a cynic to suspect that target dates are set to be missed. And that is why I was mightily baffled by the uproar that attended the revelations about the interesting happenings in the power sector. Why were we so shocked? It is not only in the country that things don't always turn out the way that those in power and of power promise they will. Did that eminent organisation, the United Nations not promise us that most of the world's problems would be matter of a memory by the year 2000?

We are all witnesses to what happened. The year 2000 came and vigorously disclaimed responsibility for the failure of the trumpeted certitudes of the bureaucratic and scientific clairvoyants. The lesson: Predictions fail. Targets can be missed. And heaven will not fall. So the grey Eminences at the U.N did the most sensible thing in the circumstances: they ambushed another decade's end on which to hang the world's expectations. Why then should we, in this little corner of the world, demand the heads of our target-missers just because the power sector's performance lags behind our expectations?

Why are we all pretending? We know that our problem is that we would rather take the longer route to arrive at the nearest destination. Even when we know there is a short cut to solving the power problem in the country, we have refused to take that road. And this road is the only one to take us out of the tunnel to luminous light. Forget about reforms. Forget about probes. Give your technical experts a pat on the back or wherever, and banish them out of sight. Enough of precious time squandered using an axe to split a broomstick.

What we really need to do is persuade the National Assembly to approve, as a matter of urgency, the financial instrument to provide funds for the purchase of generator sets for every identified Nigerian citizen, those without emigration on their minds. Consequent upon this noble and historic national recovery intervention, the next natural step is to change the name of the country. That should not be difficult.

Now at last, we have something in common which the new name should celebrate: Generators. So we rename our country Generatoria. We have a choice of two names to call ourselves: Generatorians or Generatese. Should the majority decide in favour of the latter - having had enough problems with the one ending in ".. ria" - we can then advertise our new identity to the international community.

As a mark of maturity and in recognition of the existing good relations between our nation and our former colonial master, we can return the old name, Nigeria, to any surviving relative of that distinguished builder of the British Empire, Captain Frederick Lugard and his wife, Margery. Hopefully, this gesture will be seen as our expression of gratitude to the couple, the madam especially, for coining a name for the disparate cultural and geographical areas cobbled together to add to the white man's burden. It would not be a day too soon. Few will miss a name that has done not much good either to the geographical space or those who occupy it.

And there are other gains. We will all be rid of the Green passport, that pernicious travel identity document that assures its carrier neither welcome nor dignity at foreign land borders, air or seaports; an international legal document of self-recognition that has turned out to be an embarrassing possession. It will be a welcome relief to change the discredited green colour to the colour of crude oil: dirty grey. Should there be objections from the aesthetic in our midst, why, we could settle for the golden glow of the refined product, petrol itself.

Another gainer will be the poor national flag, our unremarkable and uninspiring symbol of nationhood. There is absolutely no more excuse or logical reason we should retain the prominent green segments of the flag. Let's face it, we have long ceased to be an agricultural country! We are, proudly, an oil-producing country! So, no symbolism will be lost by substituting the green of the flag with gold. With luck and international goodwill, a flag that has always suffered from non-recognition among flagpoles at venues of international conferences may begin to compel attention to itself.

Perhaps, the greatest gain of all is that those nations that have hitherto, out of envy or from whatever motive, grudged us our greatness or refused to acknowledge it will be convinced, beyond reasonable doubt, that the one and only indisputable power house of the African continent has finally arrived. Just imagine, over one hundred and forty million generators - corporate and personal - of varying capacities, sourced from all corners of the globe chugging and clanking and whirring round the clock from Sokoto to Sapele, from Badagry to Yenagoa! How could any doubt the evidence of their aching ears and burning eyes?

And there is the possibility, too, that this happy development, this national re-branding, may yield dividends of inspiration to our creative talents. I can imagine a gifted poet of the future forcing the word Generatese that will henceforth designate you and I, to rhyme with words like Grease or Sleaze. So missing out on the target date or dates for generating the power requirement for the nation may turn out to be a blessing in disguise afterall.


Aiyegbusi lives in Lagos.

Joint Tax Board and the National Tax Policy

THE Joint Tax Board recently conducted regional sensitisation workshops on the proposed national tax policy and invited memoranda from the public. The draft document proclaims that "the overriding objective of the Nigerian tax system is to achieve economic growth and development. For Nigeria to pursue an active development agenda or to even carry out the basic functions of government, its tax system should be able to generate resources for government to provide basic public goods and services".

And citing the all- round poor infrastructure which makes investment projects costly, the JTB seeks to try and compensate for poor infrastructure by proposing a new tax system that allows companies higher post-tax profits as a means of ensuring higher domestic investment that will lead to higher economic growth.

The document is essentially an admission of the poor administration of the existing tax system because direct taxes, as JTB explains, are difficult to collect. Nonetheless, even at the low level of tax administration over the years, the apparent contribution of roughly 80 per cent of annual budget expenditure by oil receipts since 1974 (with four consecutive years to date purportedly posting excess crude earnings) and the sizeable amounts of non-oil revenue are proof that the tax system has successfully provided government with ample resources. In view of the purported current excess revenue, does government still require further increases in non-oil tax revenue before settling to play its part as the JTB advocates?

Several aspects of the draft document are contradictory and inconsistent with the stated overriding objective. For instance, one, the JTB proposes wholesale subsidy of firms "by using revenues from Nigeria's oil wealth to alleviate the tax burden on companies in order to diversify the economy". Such a policy will on the contrary render firms inefficient and uncompetitive and dependent on government thereby defeating the set goal of boosting non-oil revenue for government use. Interestingly, except for complaints against multiple taxation which is a symptom of the inequitable sharing of collected revenue, the current level of company income tax has not attracted any protests since it is comparable to relevant tax levels in serious economies.

As a matter of fact, any reduction in any tax with respect to foreign investors will transfer tax revenue forgone to the investor's home government under subsisting double taxation avoidance arrangements. Also the related plan to reduce personal income tax will institute a less progressive tax regime which has adverse implications for aggregate consumption thereby stifling production and economic growth contrary to JTB's advertised goal.

Two, whereas JTB's insistence on reserving tax collection for career civil service tax collectors is well-founded, its call at the same time for tax authorities to retain 10 per cent of total revenue collection at once is selfish and evinces lack of full appreciation of the extent of government responsibilities.

The plan will create a class of overpaid civil service tax officers in place of the rightly rejected private tax consultants, a development that will lead to a restive civil service with different professional cadres spoiling for inflated and matching salaries. Will such turmoil and ensuing inflation promote the promised rapid economic growth?

Three, the planned deliberate shift from direct to indirect taxation for the sole reason of ease of collection betrays reprehensible indolence. The proposal will considerably reduce the workload of tax agencies and result in cuts in the work force, an undesirable spin-off. As if to give the lie to JTB's proposals, the steadily improving administration of the existing tax system by Lagos State has, in the words of JTB Chairman, Ifueko Omoigui-Okauru, "now culminated in making Lagos State the only State in Nigeria where revenues from taxes surpass incomes coming from the Federation Account on a monthly basis". That achievement was in spite of the fact that huge revenues generated by the various ports, and the many industrial and commercial establishments based in the State accrue directly to the Federation Account.

Four, JTB proposes to make VAT the major source of non-oil revenue by in the first instance tripling the current VAT rate of 5 per cent. To raise VAT is inflationary, which dampens demand thereby stifling industrial production. The plan contradicts the set goal of the proposed new tax system. And given the country's healthy revenue position coupled with the established fact that a high VAT rate works against the national interest, it becomes untenable for JTB to push the argument about some overarching national commitment to match the high VAT rates in ECOWAS countries that happen to lack other major sources of revenue.

Five, purportedly to increase tax collection efficiency, the draft policy seeks to make the Ministry of Finance the sole authority on tax policy formulation and also to convert JTB into a policy making body for those taxes whose administration is split across states by the 1999 Constitution. The long and short of this prescription is to centralise the collection of non-oil revenue just like oil revenue. But true to the ingrained character of a cheating federation, the proposal will merely reinforce Abuja as centre for sharing revenue booty literally forcibly taken by federal might from a few states, which are dispossessed and left pauperised to drift into violence, while states that contribute little or nothing to the Federation Account gorge themselves with the lion's share of the public income.

Nigeria has come to rue such purportedly good-intentioned centralisation - it was the vogue in the 1970s - in all spheres of our national life because political and economic progress has eluded the country these past three decades. Militancy in the Niger Delta can be traced to the centralisation and unfair disbursement of oil revenue. We should therefore not wait for centralised collection of non-oil revenue to begin to breed urban guerrillas in states stripped bare of their plentiful non-oil revenue before casting away JTB's wrong-headed and retrogressive national tax policy.

What is needed is a national tax policy that focuses on the efficient implementation of the revenue prescriptions of Section 163 of the Constitution. In addition to the planned unique taxpayer identification number system, the JTB should oversee the development of guidelines for the various tax authorities to collect all taxes levied under national and state laws without any attempt at imposing uniform tax rates throughout the federation. It is proper and desirable for citizens and businesses to freely move and locate in any part of the country to exploit any differences in benefits offered by various state tax laws.

While Item D of Part II of the Second Schedule of the Constitution enjoins the tax authorities to avoid double taxation among states, the vexed problem of multiple taxation in a state (which the unacceptable centralised tax collection was also meant to eliminate) will hardly arise if fair and appropriate levels of derivation principle give back to entitled states from the Federation Account adequate funds for tackling the peculiar problems that face high revenue-yielding areas. The absence of a federal legislation on this issue almost one decade into the democratic dispensation is unfortunate indeed. It should also be noted that proposing centralised tax collection to resolve multiple taxation problem is unwarranted because in a democratic setting, genuinely elected state and local government representatives, who are closer to the people than federal agencies, cannot but be responsive and amenable to the preferences of the tax-paying public regarding what specific taxes and tax rates to levy and apply.

Amidst our vast resource endowment, it is extremely painful to observe that the Federal Government and its agencies would rather dither endlessly, side-track obvious solutions and contrive untested policies which have kept our dear country down for so long. Government should have a rethink.

Joint Tax Board and the National Tax Policy

THE Joint Tax Board recently conducted regional sensitisation workshops on the proposed national tax policy and invited memoranda from the public. The draft document proclaims that "the overriding objective of the Nigerian tax system is to achieve economic growth and development. For Nigeria to pursue an active development agenda or to even carry out the basic functions of government, its tax system should be able to generate resources for government to provide basic public goods and services".

And citing the all- round poor infrastructure which makes investment projects costly, the JTB seeks to try and compensate for poor infrastructure by proposing a new tax system that allows companies higher post-tax profits as a means of ensuring higher domestic investment that will lead to higher economic growth.

The document is essentially an admission of the poor administration of the existing tax system because direct taxes, as JTB explains, are difficult to collect. Nonetheless, even at the low level of tax administration over the years, the apparent contribution of roughly 80 per cent of annual budget expenditure by oil receipts since 1974 (with four consecutive years to date purportedly posting excess crude earnings) and the sizeable amounts of non-oil revenue are proof that the tax system has successfully provided government with ample resources. In view of the purported current excess revenue, does government still require further increases in non-oil tax revenue before settling to play its part as the JTB advocates?

Several aspects of the draft document are contradictory and inconsistent with the stated overriding objective. For instance, one, the JTB proposes wholesale subsidy of firms "by using revenues from Nigeria's oil wealth to alleviate the tax burden on companies in order to diversify the economy". Such a policy will on the contrary render firms inefficient and uncompetitive and dependent on government thereby defeating the set goal of boosting non-oil revenue for government use. Interestingly, except for complaints against multiple taxation which is a symptom of the inequitable sharing of collected revenue, the current level of company income tax has not attracted any protests since it is comparable to relevant tax levels in serious economies.

As a matter of fact, any reduction in any tax with respect to foreign investors will transfer tax revenue forgone to the investor's home government under subsisting double taxation avoidance arrangements. Also the related plan to reduce personal income tax will institute a less progressive tax regime which has adverse implications for aggregate consumption thereby stifling production and economic growth contrary to JTB's advertised goal.

Two, whereas JTB's insistence on reserving tax collection for career civil service tax collectors is well-founded, its call at the same time for tax authorities to retain 10 per cent of total revenue collection at once is selfish and evinces lack of full appreciation of the extent of government responsibilities.

The plan will create a class of overpaid civil service tax officers in place of the rightly rejected private tax consultants, a development that will lead to a restive civil service with different professional cadres spoiling for inflated and matching salaries. Will such turmoil and ensuing inflation promote the promised rapid economic growth?

Three, the planned deliberate shift from direct to indirect taxation for the sole reason of ease of collection betrays reprehensible indolence. The proposal will considerably reduce the workload of tax agencies and result in cuts in the work force, an undesirable spin-off. As if to give the lie to JTB's proposals, the steadily improving administration of the existing tax system by Lagos State has, in the words of JTB Chairman, Ifueko Omoigui-Okauru, "now culminated in making Lagos State the only State in Nigeria where revenues from taxes surpass incomes coming from the Federation Account on a monthly basis". That achievement was in spite of the fact that huge revenues generated by the various ports, and the many industrial and commercial establishments based in the State accrue directly to the Federation Account.

Four, JTB proposes to make VAT the major source of non-oil revenue by in the first instance tripling the current VAT rate of 5 per cent. To raise VAT is inflationary, which dampens demand thereby stifling industrial production. The plan contradicts the set goal of the proposed new tax system. And given the country's healthy revenue position coupled with the established fact that a high VAT rate works against the national interest, it becomes untenable for JTB to push the argument about some overarching national commitment to match the high VAT rates in ECOWAS countries that happen to lack other major sources of revenue.

Five, purportedly to increase tax collection efficiency, the draft policy seeks to make the Ministry of Finance the sole authority on tax policy formulation and also to convert JTB into a policy making body for those taxes whose administration is split across states by the 1999 Constitution. The long and short of this prescription is to centralise the collection of non-oil revenue just like oil revenue. But true to the ingrained character of a cheating federation, the proposal will merely reinforce Abuja as centre for sharing revenue booty literally forcibly taken by federal might from a few states, which are dispossessed and left pauperised to drift into violence, while states that contribute little or nothing to the Federation Account gorge themselves with the lion's share of the public income.

Nigeria has come to rue such purportedly good-intentioned centralisation - it was the vogue in the 1970s - in all spheres of our national life because political and economic progress has eluded the country these past three decades. Militancy in the Niger Delta can be traced to the centralisation and unfair disbursement of oil revenue. We should therefore not wait for centralised collection of non-oil revenue to begin to breed urban guerrillas in states stripped bare of their plentiful non-oil revenue before casting away JTB's wrong-headed and retrogressive national tax policy.

What is needed is a national tax policy that focuses on the efficient implementation of the revenue prescriptions of Section 163 of the Constitution. In addition to the planned unique taxpayer identification number system, the JTB should oversee the development of guidelines for the various tax authorities to collect all taxes levied under national and state laws without any attempt at imposing uniform tax rates throughout the federation. It is proper and desirable for citizens and businesses to freely move and locate in any part of the country to exploit any differences in benefits offered by various state tax laws.

While Item D of Part II of the Second Schedule of the Constitution enjoins the tax authorities to avoid double taxation among states, the vexed problem of multiple taxation in a state (which the unacceptable centralised tax collection was also meant to eliminate) will hardly arise if fair and appropriate levels of derivation principle give back to entitled states from the Federation Account adequate funds for tackling the peculiar problems that face high revenue-yielding areas. The absence of a federal legislation on this issue almost one decade into the democratic dispensation is unfortunate indeed. It should also be noted that proposing centralised tax collection to resolve multiple taxation problem is unwarranted because in a democratic setting, genuinely elected state and local government representatives, who are closer to the people than federal agencies, cannot but be responsive and amenable to the preferences of the tax-paying public regarding what specific taxes and tax rates to levy and apply.

Amidst our vast resource endowment, it is extremely painful to observe that the Federal Government and its agencies would rather dither endlessly, side-track obvious solutions and contrive untested policies which have kept our dear country down for so long. Government should have a rethink.

Joint Tax Board and the National Tax Policy

THE Joint Tax Board recently conducted regional sensitisation workshops on the proposed national tax policy and invited memoranda from the public. The draft document proclaims that "the overriding objective of the Nigerian tax system is to achieve economic growth and development. For Nigeria to pursue an active development agenda or to even carry out the basic functions of government, its tax system should be able to generate resources for government to provide basic public goods and services".

And citing the all- round poor infrastructure which makes investment projects costly, the JTB seeks to try and compensate for poor infrastructure by proposing a new tax system that allows companies higher post-tax profits as a means of ensuring higher domestic investment that will lead to higher economic growth.

The document is essentially an admission of the poor administration of the existing tax system because direct taxes, as JTB explains, are difficult to collect. Nonetheless, even at the low level of tax administration over the years, the apparent contribution of roughly 80 per cent of annual budget expenditure by oil receipts since 1974 (with four consecutive years to date purportedly posting excess crude earnings) and the sizeable amounts of non-oil revenue are proof that the tax system has successfully provided government with ample resources. In view of the purported current excess revenue, does government still require further increases in non-oil tax revenue before settling to play its part as the JTB advocates?

Several aspects of the draft document are contradictory and inconsistent with the stated overriding objective. For instance, one, the JTB proposes wholesale subsidy of firms "by using revenues from Nigeria's oil wealth to alleviate the tax burden on companies in order to diversify the economy". Such a policy will on the contrary render firms inefficient and uncompetitive and dependent on government thereby defeating the set goal of boosting non-oil revenue for government use. Interestingly, except for complaints against multiple taxation which is a symptom of the inequitable sharing of collected revenue, the current level of company income tax has not attracted any protests since it is comparable to relevant tax levels in serious economies.

As a matter of fact, any reduction in any tax with respect to foreign investors will transfer tax revenue forgone to the investor's home government under subsisting double taxation avoidance arrangements. Also the related plan to reduce personal income tax will institute a less progressive tax regime which has adverse implications for aggregate consumption thereby stifling production and economic growth contrary to JTB's advertised goal.

Two, whereas JTB's insistence on reserving tax collection for career civil service tax collectors is well-founded, its call at the same time for tax authorities to retain 10 per cent of total revenue collection at once is selfish and evinces lack of full appreciation of the extent of government responsibilities.

The plan will create a class of overpaid civil service tax officers in place of the rightly rejected private tax consultants, a development that will lead to a restive civil service with different professional cadres spoiling for inflated and matching salaries. Will such turmoil and ensuing inflation promote the promised rapid economic growth?

Three, the planned deliberate shift from direct to indirect taxation for the sole reason of ease of collection betrays reprehensible indolence. The proposal will considerably reduce the workload of tax agencies and result in cuts in the work force, an undesirable spin-off. As if to give the lie to JTB's proposals, the steadily improving administration of the existing tax system by Lagos State has, in the words of JTB Chairman, Ifueko Omoigui-Okauru, "now culminated in making Lagos State the only State in Nigeria where revenues from taxes surpass incomes coming from the Federation Account on a monthly basis". That achievement was in spite of the fact that huge revenues generated by the various ports, and the many industrial and commercial establishments based in the State accrue directly to the Federation Account.

Four, JTB proposes to make VAT the major source of non-oil revenue by in the first instance tripling the current VAT rate of 5 per cent. To raise VAT is inflationary, which dampens demand thereby stifling industrial production. The plan contradicts the set goal of the proposed new tax system. And given the country's healthy revenue position coupled with the established fact that a high VAT rate works against the national interest, it becomes untenable for JTB to push the argument about some overarching national commitment to match the high VAT rates in ECOWAS countries that happen to lack other major sources of revenue.

Five, purportedly to increase tax collection efficiency, the draft policy seeks to make the Ministry of Finance the sole authority on tax policy formulation and also to convert JTB into a policy making body for those taxes whose administration is split across states by the 1999 Constitution. The long and short of this prescription is to centralise the collection of non-oil revenue just like oil revenue. But true to the ingrained character of a cheating federation, the proposal will merely reinforce Abuja as centre for sharing revenue booty literally forcibly taken by federal might from a few states, which are dispossessed and left pauperised to drift into violence, while states that contribute little or nothing to the Federation Account gorge themselves with the lion's share of the public income.

Nigeria has come to rue such purportedly good-intentioned centralisation - it was the vogue in the 1970s - in all spheres of our national life because political and economic progress has eluded the country these past three decades. Militancy in the Niger Delta can be traced to the centralisation and unfair disbursement of oil revenue. We should therefore not wait for centralised collection of non-oil revenue to begin to breed urban guerrillas in states stripped bare of their plentiful non-oil revenue before casting away JTB's wrong-headed and retrogressive national tax policy.

What is needed is a national tax policy that focuses on the efficient implementation of the revenue prescriptions of Section 163 of the Constitution. In addition to the planned unique taxpayer identification number system, the JTB should oversee the development of guidelines for the various tax authorities to collect all taxes levied under national and state laws without any attempt at imposing uniform tax rates throughout the federation. It is proper and desirable for citizens and businesses to freely move and locate in any part of the country to exploit any differences in benefits offered by various state tax laws.

While Item D of Part II of the Second Schedule of the Constitution enjoins the tax authorities to avoid double taxation among states, the vexed problem of multiple taxation in a state (which the unacceptable centralised tax collection was also meant to eliminate) will hardly arise if fair and appropriate levels of derivation principle give back to entitled states from the Federation Account adequate funds for tackling the peculiar problems that face high revenue-yielding areas. The absence of a federal legislation on this issue almost one decade into the democratic dispensation is unfortunate indeed. It should also be noted that proposing centralised tax collection to resolve multiple taxation problem is unwarranted because in a democratic setting, genuinely elected state and local government representatives, who are closer to the people than federal agencies, cannot but be responsive and amenable to the preferences of the tax-paying public regarding what specific taxes and tax rates to levy and apply.

Amidst our vast resource endowment, it is extremely painful to observe that the Federal Government and its agencies would rather dither endlessly, side-track obvious solutions and contrive untested policies which have kept our dear country down for so long. Government should have a rethink.

Nowhere Is Safe

WHEN armed robbers attack ordinary Nigerians, the news dies to its ordinariness. The attitude seems to be that the poor are entitled to more troubles, so that they would remain poor, or possibly decrease in number. On the other hand, the news of two robbery attacks last week presses home the fact again that security in Nigeria is simply lax.

The first account was of robbers invading a section of the office of the Delta State Governor. They must have known their target, the accounts section, which they vandalised and took some money away. How were they able to succeed? It was more intriguing to hear that they gained access to the office through the roof.

We had taken it for granted that such offices would be well guarded by men and fortified with appropriate security gadgets. What type of robbers were endued with such confidence that they could perch on the roof of that building, at an odd hour, without fear of detection?

As if that was not embarrassing enough, robbers struck at the Katsina home of the President. They entered rooms in the building. The President’s mother lost some valuables to the thieves who concluded their assignment undisturbed, and did not bother to disturb her sleep.

We are wondering how they got in and left without being noticed or stopped. Their confidence is stunning. The web of security round the President and his family should be such that those who have no business around him cannot get close to his private or official residence. Is that no longer the situation?

These two incidents partially tell the story of the insecurity in the country. The worse part of it is that the security agencies seem to have lost their investigative and intelligence gathering abilities.

If robbers can strike in these places what hope is left for the ordinary people, who look up to the authorities to provide security? How would the police explain their failure to guard these places? Is any explanation acceptable in these circumstances?

Had the intruders planned anything more sinister, they would have succeeded. The failure of security in the two incidents is glaring. It also exposes the fact that most of the places we think are under security could be porous, placing government officials, as well as official documents in grave danger.

With whom did the robbers plan these operations? Should these be among the cases the police would tell the public that they are still investigating? In some places, the officers concerned with the security of these places would have resigned in embarrassment. Things are so different here.

Incidents like these make Nigerians lose hope in the ability of their governments to protect them. If the authorities cannot take care of their own personal security, how can they think of the security of others?

How the two governments react to these embarrassments could be the defining indications of the importance government attaches to security. Any indecisive moves can only embolden the criminals

Banks: Mega Profits, Poor Services

AS several banks release their profits, which have increased dramatically over the previous years, the Central Bank of Nigeria and the Governor in particular should to some extent justifiably feel that the optimism that consolidated banks will generate better results and provide reassurance has been vindicated. Even if the economic performance in other sectors of the economy failed to match the heady performance of the banking sector, the fact remains that the sector has been the major driver of the Nigerian economy in the past two years.

In the period under review, three Nigerian banks have emerged among the top 1000 in the world unlike 2006 when no Nigerian bank was in that category.

However, with the unprecedented growth in earnings, virtually all around, it is too soon to allow complacency to set in. There are warning at home and from abroad that the sector still has a long way to go before confidence can become unshaken.

For instance, Standard & Poor’s Ratings Services in a recent report, classified the Nigerian banking sector as a high risk one in a global context. Among the reasons given for this low assessment of our banks are high operational risks, a weak judiciary, poor corporate governance, internal security problems and infrastructural deficiencies. It also listed low wealth as well as poor development levels as factors militating against Nigeria’s economic growth, which could make the current profit levels unsustainable.

Internally, banks are coming increasingly under suspicion by customers for what a growing number of depositors consider shady deals and illegal charges bordering on outright fraud. Customers are not aware of charges banks make on their accounts for transactions. Banks think it is only big customers they owe explanations in this direction.

Perhaps the most distrusted bank service today in Nigeria is the ATM card, which was designed to reduce over the counter transactions and speed up payments. It has become the most contentious product of banks.

Where disputed withdrawals occur through ATM cards, it is almost impossible for the customer to get redress. The bureaucracy laid before the customer simply tells him to forget the issue. There are frequent complaints in the media of complaints that have remained unattended in more than a year.

Banks have also concentrated their services in the urban centres. Some streets in Lagos have more bank branches than the total number of bank branches in some States. The vastly under-banked rural areas include most of the local government headquarters, which have their monthly allocations from the Federation Account delivered to them through bullion vans.

Nigerian banks are also victims of the poor infrastructure. They provide virtually all their own power, security, and IT connections at costs, which foreigners can only imagine. Thus, the cost of banking business in Nigeria like anything else is higher than in most countries of the world.

Still, banks must strike a balance between huge profits in the short run, which could undermine their ability to sustain the profitability in the long term and improved services, which are necessary for long term growth.

Banks should urgently address improved services and stem flagging consumer confidence in the sector.