VAT Brouhaha: The Fate Of Benue As Deeper Fiscal Federalism Looms
By Comr. Sylvanus Okpe
The dreaded restructuring; deeper fiscal federalism seem to be staring us in the face now albeit to the chagrin of unprepared, “feeding bottle” Northern states like Benue which has consistently, for years, refused to grow its Internally Generated Revenue (IGR) and continued to rely solely on other hardworking states like Lagos and Rivers to be getting a chunk of money monthly through FAAC.
The ruling of the Rivers state High Court which gave efficacy to the recently passed law in the state, Rivers State Value Added Tax No. 4, 2021 and consequently recognizing state governments as the rightful Tax collection authorities should rattle some dependent states like Benue and it is unfortunate that Benue people are indifferent to this discourse despite its monumental threat to our continued existence without the status quo of feeding bottle federalism.
According to the Nigerian Bureau Of Statistics (NBS) state like Lagos contribute about 55% in tax revenues to FG, this is more than what 30 states in the country put together, including our own Benue, brings to FG in tax revenues. The relentless agitation for greater autonomy from the states which are tired of the ‘Baboon da work, monkey da chop’ VAT arrangement and the imminent success, calls for states like Benue to brace up and take advantage of its potentials to grow her IGR and lessen its dependence on the centre.
Now the question is does Benue have the capacity to increase its IGR and extricate itself from the list of lazy states that cannot survive a month under a strict regime of deeper fiscal federalism? The obvious answer is yes. All Benue needs is good governance anchored on prudent management of resources to maximize her God-given potentials for the betterment of Benue state and Benue people.
The Nigerian Bureau of Statistics (NBS) in their release, named the manufacturing, textile, pharmaceutical industries as the highest tax generating sectors in the country. Going by that, Benue more than any state in the country today stand a better chance to generate more revenue in VAT.
To buttress further, Benue prides as the largest producer of Yam in the whole world, the economic benefits the state can generate from taking Yam to the secondary stage by processing it into Yam flour for commercial distribution and export cannever be overemphasized. The Katsina-Ala Yam Flour Ltd which the Ortom administration has unfortunately put up for sale would have been indispensable in increasing our economic prospects as well as preparing us for the looming deeper fiscal federalism in the country. Benue is also the 2nd largest producers of Cassava, Rice and Soyabean in the country and the largest producers of Benisead. These potentials unfortunately goes to waste without the political will and the wherewithal on the path of the leadership of the state to maximize them for the economic growth of the state. Cassava is a major raw material in the pharmaceutical industry, an industry named by the NBS as one of the highest revenue generating sectors in the country, the Benue State Pharmaceutical outfit, Makurdi which again the Ortom government has put up for sale would have placed Benue at a more advantaged position to healthily compete with states such as Lagos and Rivers in VAT revenue generation. It is also an incorrigible economic blunder that the current leadership of the state has also put up the Benfruits Nig Ltd Makurdi and the Benue Fruits Company Gboko for sale, allowing citrus fruits Oranges and other fruits such as Papaya, mango, Guava etc which if taken to the secondary stages of production, will yield unprecedented economic benefits for the state as well as lifting thousands of Benue citizens out of the poverty line, to litter the streets of the state in waste.
Come 2023, Benue must therefore look inwardly to elect a leader with the wherewithal to rescue the state from the economic crisis that will ensue should Supreme Court put the final nail on the coffin of the current fiscal federalism, paving way for every state to grow on its own.
It is a good thing that 2023 Benue state governorship aspirants like Chief Steven Lawani OFR has continued to peg his manifesto on Benue Economic Revivalism; to grow the state’s economy and improve her IGR through agricultural reforms. He equally has developed a comprehensive blueprint on how a robust foundation for Benue to attain economic independence and prosperity; graduating from a salary paying state to a leading social, economic and physical infrastructure hub in Nigeria, will be laid in the first two years of his administration. “Benue state cannot develop without first growing her IGR to meet the many financial needs of the state”, he often insist. His CV as a development economist and impressive record of excellence at the private sector are too persuasive to be waved aside if Benue must get it right in 2023.
Sylvanus is a lawyer, pro-good governance campaigner, he is the author of Africa Without Politics (A protest book on the leadership quagmire in Africa). He writes as a concerned Benue citizen from Olachagbaha.