VAT as a catalyst

A few weeks before he was removed from office, the then Emir of Kano, Muhammadu Sanusi, warned leaders in the North that if they do not change their policies and ways so that the region can begin to harness its huge resources, the day will come when their southern counterparts will drive demands for change that will create more problems for it. Hear him –

“If the north does not change, the north will destroy itself. If we don’t listen, there would be a day when there would be a constitutional amendment that addresses these issues of quota system and federal character. The rest of the country cannot be investing, educating its children, producing graduates and then they watch us, they can’t get jobs because they come from the wrong state, when we have not invested in the future of our own children.”

Well, that day is here. The frustrated words that have often been mouthed on the streets of the South are now finding voice in the law making chambers and courts of law. Make no mistake, the decision of the Rivers State High Court over the issue of VAT collections and administration enjoys wide support across the South. Many know that it will create problems for their own States too but they are all for it. Why? Anything to cut the umbilical cord of what is considered an overbearing and inequitable federal system that robs Peter to pay Paul.

That our States have become cost centers rather than development centers invites no argument anymore. Most exist for patronage and nothing more. 33 of 36 make little impact on VAT collection, for example, yet get paid for literally doing nothing. The same is true for the much touted GDP growth – all driven by economic activities in a small pocket of States. Such a situation will inevitably breed disaffection that will drive division and disunity.

How do we make more States viable? Drive competition, drive innovation, drive cooperation, and drive self-reliance. When a Yobe State knows that there’s no monthly federal bailout fund (that’s basically what the monthly federal allocation is) to rely on, it will begin to apply policies that will grow its own local economy and hunan resources. States should compete for talents (Lagos literally vacuums up most of them at the moment) through better living conditions. Investing in education and learning (especially in the North) will yield beneficial results and the end of the inequitable “educationally disadvantaged States” nonsense. A thinking Governor should have no problem identifying comparative advantages and build on them. There’s so much that is possible if we can all let go this feeding bottle system that inhibits growth and development.

It may be that the change that Nigeria needs, the change that will alter the dynamics of federal and state relationship so that the States become more self-reliant and resourceful, will begin to happen through the courts rather than through the legislature. The VAT ruling may see to that.

We wait and see!

Chris Adetayo