Opinion
Diversifying the revenue base
As the price of crude oil in the international market nose-dives, fears have heightened that the nation’s three tiers of government may soon run into serious financial crisis. Crude oil price per barrel fell from $147 to less than $42, its lowest price since January 2007. Apart from the sharp decline in oil prices, government’s actual revenues for 2008 fell below budgeted levels due to the Niger Delta crisis, which resulted in a series of oil production shut-his.
As the possibility of further fall in prices looks real, the development is already causing some disquiet among the major stakeholders to the Federation Account. While the federal government appears to be facing the grim reality by reducing the budget benchmark price to a more realistic price, the 36 governors initially insisted on a higher benchmark price.
The drastic fall in crude oil prices has been attributed to the scaling down of industrial production in the United States and other industrialised countries as a result of the global meltdown.
Truly, the fall in crude oil prices calls for prudent spending. But contrary to the wise counsel by the CBN governor that oil dependent countries should not spend their entire oil revenues during boom periods, the three tiers of government have been lavish in their spending of the excess crude earnings.
The N16 trillion that accrued to the country between 1999 and 2007 was largely frittered away. Very little was done to diversify the nation’s revenue basis.
It is common knowledge that oil and gas exports account for more than 80 per cent of federal government revenue. It is estimated that Nigeria has earned over $1.7 trillion from oil since independence. Though the country’s foreign reserve stands at $60billion, it can only finance less than 30 months of import bills.
Indeed, the times are hard and offer a lot of challenges. Without being told, state governors as well as local government councils ought to intensify efforts at raising their internally generated revenue profiles. That is to say that states and LGs should henceforth depend less on the monthly FAAC allocations by intensifying their internally generated revenue drives.
It is heartrending that after the country has gone through painful boom-bust crises in the past, there has never been any genuine effort to diversify the nation’s resource base and stimulate internally generated revenues. Instead, a period of depressing global economy and declining revenue from oil has always resulted in the formulation of anti-people policies. Owing to over-dependence on oil, revenues, the three tiers of government have virtually abandoned other veritable sources of income.
Even for the few revenue sources other than oil, there is mounting evidence of insufficient collection of taxes that belong to the three tiers of government. There are many federal agencies that short-change the government in the area of money remittance to the government. For instance, federal agencies such as the Nigerian National Petroleum Corporation (NNPC), the Nigeria Ports Authority (NPA) and the customs have reportedly failed several times to transfer a large chunk of collected revenue to the Federal Inland Revenue Service. The federal government is accused of rashly granting duty relief that reduces the revenue pool, hurt domestic production and induces job losses.
Banks are also accused of remitting only a fraction of the revenues they collect on behalf of government to public treasuries. Indeed, the House of Representatives stated recently that over N1 trillion receipts by ministries, departments and agencies in the last few years were not remitted and largely unaccounted for.
The defective federal structure and the existence of anti-investment laws in the nation’s statute book, that render about 34 non-oil mineral resources untapped have stifled wealth creation and economic diversification. The effect is that virtually all the 36 states and their 774 councils remain fiscally weak and unviable.
Now that oil revenues are drying up, the government should not aggravate the level of poverty in the society by increasing the burden of taxation on the people. While the existing loopholes in revenue collection should be plugged, the three tiers of government should look for ways of cutting down on the escalating cost of running government. It should check the rampant graft and profligacy by public life.
Arnold Alalibo
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Empowering Youth Through Agriculture
Quote:”While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries”.
The Governor of Rivers State, Sir Siminalayi Fubara, recently urged youths in the Rivers State to take advantage of the vast opportunities available to become employers of labour and contribute meaningfully to the growth and development of the State. Governor Fubara noted that global trends increasingly favour entrepreneurship and innovation, and said that youths in Rivers State must not be left behind in harnessing these opportunities. The Governor, represented by the Secretary to the State Government, Dr Benibo Anabraba, made this known while declaring open the 2026 Job Fair organised by the Rivers State Government in partnership with the Nigeria Employers’ Consultative Association (NECA) in Port Harcourt. The Governor acknowledged the responsibility of government to create jobs for its teeming youth population but noted that it is unrealistic to absorb all job seekers into the civil service.
“As a government, we recognise our duty to provide employment opportunities for our teeming youths. However, we also understand that not all youths can be accommodated within the civil service. This underscores the need to encourage entrepreneurship across diverse sectors and to partner with other stakeholders, including the youths themselves, so they can transition from being job seekers to employers of labour,” he said. It is necessary to State that Governor Fubara has not only stated the obvious but was committed to drive youth entrepreneurship towards their self-reliance and the economic development of the State It is not news that developed economies of the world are skilled driven economies. The private sector also remains the highest employer of labour in private sector driven or capitalist economy though it is also the responsibility of government to create job opportunities for the teeming unemployed youth population in Nigeria which has the highest youth unemployed population in the subSahara Africa.
The lack of job opportunities, caused partly by the Federal Government’s apathy to job creation, the lack of adequate supervision of job opportunities economic programmes, lack of employable skills by many youths in the country have conspired to heighten the attendant challenges of unemployment. The challenges which include, “Japa” syndrome (travelling abroad for greener pastures), that characterises the labour market and poses threat to the nation’s critical sector, especially the health and medical sector; astronomical increase in the crime rate and a loss of interest in education. While job seeking youths should continuously acquire skills and explore opportunities within their immediate environment as well as in the global space through the use of digital platforms, government, corporate/ multinational organizations or the organised private sector should generate skills and provide the enabling environment for skills acquisition, through adequate funding and resettlement packages that will provide sustainable economic life for beneficiaries.
While commending the Rivers State Government led by the People First Governor, Sir Siminilayi Fubara for initiating “various training and capacity-building programmes in areas such as ICT and artificial intelligence, oil and gas, maritime, and the blue economy, among others”, it is note-worthy that the labour market is dynamic and shaped by industry-specific demands, technological advancements, management practices and other emerging factors. So another sector the Federal, State and Local Governments should encourage youths to explore and harness the abounding potentials, in my considered view, is Agriculture. Agriculture remains a veritable solution to hunger, inflation, and food Insecurity that ravages the country. No doubt, the Nigeria’s arable landmass is grossly under-utilised and under-exploited.
In recent times, Nigerians have voiced their concerns about the persistent challenges of hunger, inflation, and the general increase in prices of goods and commodities. These issues not only affect the livelihoods of individuals and families but also pose significant threats to food security and economic stability in the country. The United Nations estimated that more than 25 million people in Nigeria could face food insecurity this year—a 47% increase from the 17 million people already at risk of going hungry, mainly due to ongoing insecurity, protracted conflicts, and rising food prices. An estimated two million children under five are likely to be pushed into acute malnutrition. (Reliefweb ,2023). In response, Nigeria declared a state of emergency on food insecurity, recognizing the urgent need to tackle food shortages, stabilize rising prices, and protect farmers facing violence from armed groups. However, without addressing the insecurity challenges, farmers will continue to struggle to feed their families and boost food production.
In addition, parts of northwest and northeast Nigeria have experienced changes in rainfall patterns making less water available for crop production. These climate change events have resulted in droughts and land degradations; presenting challenges for local communities and leading to significant impact on food security. In light of these daunting challenges, it is imperative to address the intricate interplay between insecurity and agricultural productivity. Nigeria can work toward ensuring food security, reducing poverty, and fostering sustainable economic growth in its vital agricultural sector. In this article, I suggest solutions that could enhance agricultural production and ensure that every state scales its agricultural production to a level where it can cater to 60% of the population.
This is feasible and achievable if government at all levels are intentional driving the development of the agricultural sector which was the major economic mainstay of the Country before the crude oil was struck in commercial quantity and consequently became the nation’s monolithic revenue source. Government should revive the moribund Graduate Farmers Scheme and the Rivers State School-to-Land agricultural programmes to operate concurrently with other skills acquisition and development programmes. There should be a consideration for investment in mechanized farming and arable land allocation. State and local governments should play a pivotal role in promoting mechanized farming and providing arable land for farming in communities. Additionally, allocating arable land enables small holder farmers to expand their operations and contribute to food security at the grassroots level.
Nigeria can unlock the potential of its agricultural sector to address the pressing needs of its population and achieve sustainable development. Policymakers and stakeholders must heed Akande’s recommendations and take decisive action to ensure a food-secure future for all Nigerians.
By: Igbiki Benibo
