VENTURES AFRICA – Currently, the Nigerian government is running low on revenue due to the steep decline in oil prices to less than 50 dollars a barrel. This has led many analysts to question how the national and state governments are going to fund their development when 90 percent of their revenue is derived from oil exports. Many have called for a diversification of exports, which is indeed a major issue, since 70 percent of Nigeria’s export revenue comes from crude oil. Looking beyond a diversification of exports, since 90 percent of government revenue still comes from oil revenue, the real issue is that public officials and lawmakers throughout the country have failed to develop alternate ways the state can increase revenue and diversify its funding structure so that they rely far less on oil revenue. Even the ministry of finance with all their claims of efforts was only able to increase tax revenue by half a billion dollars in taxes. (real full article on Venture Africa) .
My understanding of diversification in development term is that it is a process, which begins with the government, providing more and improving lifestyle before seeking to implement strategies for returns, a more recent example, in Africa, being Rwanda.
As is common, the usual manner of Nigerian- quick-wins solutions, David Karanga’s suggestions starts from the middle rather than the beginning, which in this case would be tangible government intervention to strengthen and improve livelihood, to give the poor more and strengthen the middle class; causing a chain reaction in poverty reduction. Rather, David’s suggestions, focuses on what the struggling citizens should sacrifice to assist the government in this tough time.
As Lagos is case study in David’s article, fails to consider the challenges facing the average Lagosian. I wonder how and why anyone would think this is a good idea! Where are citizens supposed to get the money to pay for this parking fee to help a desperate government who provide nothing for the people raise revenue?
How much is minimum wage? In a country with no social goods whatsoever, where citizens pay electricity bills yet never see electricity, but rather keep buying fuel and diesel for power supply and David believes this make sense?
Since the poor are never considered in policy implication, let’s look at the middle class. How much does the so-called average middle class earn? Can they afford anything? What can they afford? Does this matter and what are the implications for David’s suggestions?
With the falling Naira rate putting immense pressure on the middle class, howbeit, for proper perspective, the term middle class in Nigeria is merely a statistic income group who are economically living a lie, as they spend everything they earn on a month to month basis, sometimes, in advance.
Can this demographic afford a car or to rent decent housing without financial assistant from their support systems? What are the implications of older citizens who should be considering retirement plan, still supporting their young adult children who are mostly unemployed or earning incomes barely enough to survive?
Yet, as implied by David Karanga, this is a common practice and should be considered to raise revenue, as bad as things are; the Naira is being buried daily.
Further, since January 2015, the labor market has been under allot of pressure; laying people off to join the growing poll of unemployment in the country due to oil price decline and also, there are projections for more job loss after the election, and this makes sense?
What is obvious here is a desperate government that does NOTHING for its people trying to sacrifice its citizens to raise revenue in desperate times and expect the people to trust that such sacrifice is for the greater good, yet the citizens are still asking the government for a tangible explanation for the mysterious disappearance for $20B.