Buhari’s “Severe Consequences” Oct 1 Speech, And Ghana’s Opportunity on Nigeria

Buhari’s “Severe Consequences” Oct 1 Speech, And Ghana’s Opportunity on Nigeria

I have read President Buhari’s Oct 1 speech (full text below). There is no argument – he wants more internally generated revenue from Nigerians and Nigerian companies. He spoke of “severe consequences” for government agencies that fail to reach their revenue targets. But Mr. President needs to manage this high-voltage searchlight for revenue especially tax collection carefully. As we move from 5% VAT to 7.5% in coming months, the highly ambitious tax-collectors in Nigeria will harass companies mercilessly.

Our revenue-generating and reporting agencies will come under much greater scrutiny, going forward, as the new performance management framework will reward exceptional revenue performance, while severe consequences will attend failures to achieve agreed revenue targets

This is my prediction: if Nigeria jacks up tax, Ghana will cut us out as a destination for future companies. Within AfCFTA or simply ECOWAS, I expect a fintech to create a product that will make it possible for a digital company which operates in Nigeria to incorporate in Ghana and have a bank account in Ghana, with all revenues going to the bank in Ghana. Ghana is dismantling tax across the board and the music is exciting to businesses that want to reach Western African market. Simply, as that money moves to Ghana, Nigerian banks, tax agencies and Nigeria  will lose.

This is not theory, check Stripe Atlas: “With Stripe Atlas, entrepreneurs can easily incorporate a U.S. company, set up a U.S. bank account, and start accepting payments with Stripe” without living in U.S. or being a U.S. personnel. We may just have a Western African version. We need tax collection efficiency – I support that. But the mechanism of executing that playbook needs to evolve.

Comment on LinkedIn Feed

Comment: Yes this could be disastrous for the country going forward. But what do you propose to the government on how to increase the tax base? How do you convince Nigerians that their taxes won’t end up abroad in a corrupt politician or civil service DG account. How can we create a social contract between the government and the citizens which ensures Nigerians sees the need to pay taxes?

My Response: Less than 17m people/companies pay taxes in Nigeria. That is off by at least 80m. My playbook will be pouring all money into NIMC to make sure we know every Nigerian. If we do that, we can know who pays tax or not. Yes, EXPAND the tax base, not increase tax. If you expand the base, revenue will go up. But to do that, govt has to make sure NIMC works. NIMC is our SSN in US. Since 2007, they have been doing NIMC – it has to be 100% ready!

The full speech below

Dear Compatriots,

1st October each year is an opportunity for us to reflect and thank God for his endless blessings on our country.

2. It is also a time for us, collectively, to:

3. Remember the sacrifices made by our Founders and great leaders past; by soldiers, by distinguished public servants; by traditional leaders, by our workers —- sacrifices on which Nigeria has been built over the 59 years since Independence in 1960; and

4. Rededicate ourselves to attaining the goals which we have set for ourselves: a united, prosperous and purposeful nation in the face of 21st-century opportunities and challenges.

5. In the past four years, the majority of Nigerians have committed to Change for the Better. Indeed, this Administration was re-elected by Nigerians on a mandate to deliver positive and enduring Change – through maintaining our National Security; restoring sustainable and inclusive Economic Growth and Development; and fighting Corruption against all internal and external threats.

6. This Change can only be delivered if we are united in purpose, as individuals and as a nation. We must all remain committed to achieving this positive and enduring Change. As I stated four years ago, “Change does not just happen… We must change our lawless habits, our attitude to public office and public trust… simply put, to bring about change, we must change ourselves by being law-abiding citizens.”

SECURITY:

7. Good Governance and Economic Development cannot be sustained without an enabling environment of peace and security. In the last four years, we have combatted the terrorist scourge of Boko Haram. We owe a debt of gratitude to our gallant men and women in arms, through whose efforts we have been able to achieve the present results. We are also grateful to our neighbours and allies – within the region and across the world – who have supported us on this front.

8. The capacity of our armed forces to defend our territorial integrity continues to be enhanced by the acquisition of military hardware as well as continued improvements in the working conditions of our service men and women.

9. The Ministry of Police Affairs has been resuscitated to oversee the development and implementation of strategies to enhance internal security. My recent assent to the Nigerian Police Trust Fund (Establishment) Act has created a legal framework to support our Police with increased fiscal resources to enhance their law enforcement capabilities.

10. These initiatives are being complemented by the ongoing recruitment of 10,000 constables into the Nigeria Police Force. This clearly demonstrates our commitment to arrest the incidence of armed robbery, kidnapping and other violent crimes across our nation.

11. We remain equally resolute in our efforts to combat militant attacks on our oil and gas facilities in the Niger Delta and accelerate the Ogoni Clean-up to address long-standing environmental challenges in that region.

12. The recent redeployment of the Niger Delta Development Commission from the Office of the Secretary to the Government of the Federation, to the Ministry of Niger Delta Affairs underscores our commitment to enhance the living standards of our communities in the Niger Delta, through coordinated and appropriate programmes.

13. Our attention is increasingly being focused on cyber-crimes and the abuse of technology through hate speech and other divisive material being propagated on social media. Whilst we uphold the Constitutional rights of our people to freedom of expression and association, where the purported exercise of these rights infringes on the rights of other citizens or threatens to undermine our National Security, we will take firm and decisive action.

14. In this regard, I reiterate my call for all to exercise restraint, tolerance and mutual respect in airing their grievances and frustrations. Whilst the ongoing national discourse on various political and religious issues is healthy and welcome, we must not forget the lessons of our past – lessons that are most relevant on a day such as this.

15. The path of hatred and distrust only leads to hostility and destruction. I believe that the vast majority of Nigerians would rather tread the path of peace and prosperity, as we continue to uphold and cherish our unity.

ACCELERATING SUSTAINABLE AND INCLUSIVE ECONOMY GROWTH

16. This Administration inherited a skewed economy, where the Oil Sector comprised only 8% of Gross Domestic Product but contributed 70% of government revenue and 90% foreign exchange earnings over the years. Past periods of relatively high economic growth were driven by our reliance on Oil Sector revenues to finance our demand for imported goods and services. Regrettably, previous governments abandoned the residual Investment-driven Non-Oil Sector, which constituted 40% of Gross Domestic Product and comprised agriculture, livestock, agro-processing, arts, entertainment, mining and manufacturing activities that provide millions of jobs for able-bodied Nigerians and utilize locally available raw materials and labour for production.

17. To address this imbalance, our commitment to achieving economic diversification has been at the heart of our economic strategies under the Economic Recovery and Growth Plan, which I launched on the 5th of April, 2017.

18. This medium-term development plan charted the trajectory for our economy to exit from recession and return to the path of sustainable, diversified and inclusive growth for Nigerians. Pursuant to these reforms, the economy has recovered and we have had 9 successive quarters of growth since our exit from recession. The exchange rate in the last 3 years has remained stable, with robust reserves of US$42.5 billion, up from US$23 billion in October 2016.

19. Learning from the mistakes of the past, this Administration is committed to responsibly managing our oil wealth endowments. We will continue to prudently save our oil income and invest more in the non-oil job-creating sectors.

20. In this regard, we are significantly increasing investments in critical infrastructure. Last year, capital releases only commenced with the approval of the Budget in June 2018. However, as at 20th June this year, up to N1.74 trillion had been released for capital projects in the 2018 fiscal year.

21. Implementation of the 2019 Capital Budget, which was only approved in June 2019, will be accelerated to ensure that critical priority projects are completed or substantially addressed. The Ministry of Finance, Budget and National Planning has been directed to release N600 billion for Capital Expenditure in the next 3 months.

22. To maximise impact, we shall continue to increasingly welcome and encourage private capital for infrastructural development through Public Private Partnerships. Through the Road Infrastructure Tax Credit Scheme, which I initiated in January this year, we are giving incentives to private sector inflow of over N205 billion in 19 Nigerian roads and bridges of 794.4km across in 11 States of the Federation.

23. As we push to diversify the economy, we still remain focused on optimizing the revenues generated from the oil and gas sector. We will, working with the Legislature, soon pass the Petroleum Industry Bill and amendments to the Deep Offshore Act and Inland Basin Production Sharing Contracts Act into law, to ensure Government obtains a fair share of oil revenues, whilst encouraging private sector investment.

24. We will also continue our fight against illegal bunkering of crude oil and the smuggling of refined petroleum products across our borders, including the diligent prosecution and conviction of offenders found guilty of these acts. Whilst Nigeria remains committed to free and fair continental and international trade, we will not hesitate to take all necessary steps to tackle illegal smuggling, transshipment and other predatory trade practices that destroy jobs in our country.

25. We are resolute in reforming the power sector. In August this year, we launched the Presidential Power Initiative to modernize the National Grid in 3 phases: starting from 5 Gigawatts to 7 Gigawatts, then to 11 Gigawatts by 2023, and finally 25 Gigawatts afterwards. This programme, in partnership with the German Government and Siemens, will provide end-to-end electrification solutions that will resolve our transmission and distribution challenges.

26. The programme will also look to localize the development and assembly of smart meters as well as the operations and maintenance capabilities of transmission and distribution infrastructure.

27. I am pleased with the improved inter-agency collaboration between the Ministry of Power and the regulators in the banking and power sectors to ensure that electricity sales, billings and collections are automated and become cashless.

28. These initiatives are important to ensure that the technical and collection losses in the sector are substantially reduced. I remain confident that Nigerians will have affordable and uninterrupted electricity supply in the not too distant future.

29. Our efforts to improve the power sector will complement other infrastructure investments projects under the Presidential Infrastructure Development Fund, which is investing in the Mambilla Power Plant project, as well as key economic road infrastructure such as the Lagos-Ibadan Expressway, Second Niger Bridge and Abuja-Kano Expressway. The first set of these projects remain on track to be completed by 2022.

30. Our journey to food security and self-sufficiency is well underway. We have made remarkable progress in almost all segments of the agriculture value chain, from fertilizers to rice, to animal feed production. We shall sustain these policies to ensure additional investments are channeled, thereby creating more jobs in the sector. We must not go back to the days of importing food and thereby exporting jobs.

31. Our commitment to achieving macroeconomic stability and economic diversification, has been underscored by the merger of the Ministry of Finance with the Ministry of Budget and National Planning.

32. This combined Ministry has the important mandate to enhance the management of domestic and global fiscal risks; coordinate policies with the trade and monetary authorities; raise and deploy revenues to fund budgeted expenditure; and integrate annual budgets and medium-term fiscal strategies.

33. With this, our revenue-generating and reporting agencies will come under much greater scrutiny, going forward, as the new performance management framework will reward exceptional revenue performance, while severe consequences will attend failures to achieve agreed revenue targets.

34. I recently constituted an Economic Advisory Council to advise me on inclusive and sustainable macroeconomic, fiscal and monetary policies. This independent body will work with relevant Cabinet members and the heads of key monetary, fiscal and trade agencies to ensure we remain on track as we strive for collective prosperity. However, we are also committed to ensure that the inconvenience associated with any painful policy adjustments, is moderated, such that the poor and the vulnerable, who are most at risk, do not bear the brunt.

35. Our ongoing N500 billion Special Intervention Programme continues to target these vulnerable groups, through the Home-grown School Feeding Programme, Government Economic Empowerment Programme, N-Power Job Creation Programme, loans for traders and artisans, Conditional Cash Transfers to the poorest families and social housing scheme.

36. To institutionalize these impactful programmes, we created the Ministry for Humanitarian Affairs, Disaster Management and Social Development which shall consolidate and build on our achievements to date. To the beneficiaries of these programmes, I want to reassure you that our commitment to social inclusion will only increase.

37. Our population growth rate remains amongst the highest in the world, presenting both challenges as well as opportunities. It is our collective responsibility to ensure that we provide adequate resources to meet the basic needs of our teeming youth.

38. Accordingly, we shall continue to invest in education, health, water and sanitation, as well as food security, to ensure that their basic needs are met, while providing them with every opportunity to live peaceful, prosperous and productive lives.

FIGHTING CORRUPTION AND RESTORING GOOD GOVERNANCE:

39. On fighting corruption, our institutional reforms to enforce the Treasury Single Account policy, introduce the Whistle-blowers’ Initiative, expand the coverage of the Integrated Payroll Personnel and Information System as well as the Government Integrated Management Information System have saved billions of Naira over the last four years, and deterred the rampant theft and mismanagement of public funds that have plagued our public service.

40. The Ministry of Justice, the Independent Corrupt Practices Commission, and the Economic and Financial Crimes Commission will continue to address this menace. We are determined to ensure that transparency and good governance are institutionalized in public service.

41. We must commit to installing a culture of Good Governance in all we do. This Administration has fought against corruption, by investigating and prosecuting those accused of embezzlement and the misuse of public resources. We have empowered teams of prosecutors, assembled detailed databases of evidence, traced the proceeds of crimes and accelerated the recovery of stolen funds.

42. Furthermore, we partnered with our friends abroad to combat tax evasion, smuggling, terrorism and illicit financial flows. In June 2018, I assented to the Mutual Assistance in Criminal Matters Act, to provide a domestic legal framework for obtaining international assistance in criminal matters.

43. This measure has already strengthened our law enforcement agencies in obtaining evidence, investigating suspects and facilitating the recovery, forfeiture and confiscation of property implicated as proceeds of crime.

44. An example is the US$300 million recently identified as part of the Abacha money-laundering case, working closely with the Government of the United States of America. The Federal Ministry of Justice is working with the US Department of Justice to conclude a Memorandum of Understanding to expedite the repatriation of these funds.

45. The P & ID Arbitral Award has underscored the manner in which significant economic damage has been caused by the past activities of a few corrupt and unpatriotic Nigerians.

46. The policies that we are putting in place today are to ensure such criminal and unpatriotic acts do not go without consequences. Our renewed partnership with the 9th National Assembly will facilitate the swift passage of enabling laws that will institutionalize these anti-corruption efforts in our criminal justice system.

47. In this connection, I call upon our States to intensify their own efforts to instill greater fiscal transparency and accountability. And to ensure greater fiscal efficiency and optimum use of our very scarce resources.

48. The blight of Corruption is fighting back. Nevertheless, this is a battle that we shall see through and this is a war, which we shall win by the Grace of God.

49. I will also call upon all Nigerians, from every walk of life, to combat Corruption at every turn. By choosing to question and confront corrupt practices, by reporting unethical practices or through whistleblowing. Together, we can overcome corruption and will no longer be a country defined by corruption.

50. Fellow Nigerians, let me reiterate my call for unity across our dear nation.

51. Nigeria will emerge from our present challenges stronger and more resilient than ever – but only if all of us join hands to entrench Good Governance, foster Inclusive Economic Development, and defend and protect our Nation from all those who would wish us ill.

52. I thank you most sincerely and wish you a Happy Independence Anniversary.

53. May God bless you all, and may He continue to bless the Federal Republic of Nigeria.

 

Trump also sent a goodwill message to Nigeria

Dear Mr. President:

On behalf of the American people, I extend our warmest greetings and congratulate you on the 59th anniversary of Nigeria’s independence.

Nigeria is among our strongest partners in Africa. We share common goals of expanding trade and growing our economic relationship. We are allies in the global battle against terrorism, and we want to see Boko Haram and ISIS-West Africa driven out of the region and other insurgencies like them dismantled. The United States welcomes efforts by your administration to diversify opportunities for your talented, creative, and hardworking people to the benefit of both our countries, Africa, and the world.

I am pleased that following our meeting last year, our Vice Presidents are also building on our longstanding history of cooperation. I wish the people of Nigeria continued success as you mark another year of independence.

Sincerely,

Donald J. Trump

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2 thoughts on “Buhari’s “Severe Consequences” Oct 1 Speech, And Ghana’s Opportunity on Nigeria

  1. The truth is that Mr President is highly limited and deficient, as far as transforming Nigeria’s current economic situation is concerned; to argue otherwise is just to be politically correct.

    But when you have largely ignorant and knowledge-challenged people who see every question raised that is contrary to their small-mindedness as an attack on the person of the president, circling the him, it becomes very difficult to have a sound debate; and that’s very unfortunate.

    Growth mindset focuses first on increasing productivity level and revenue, not much on cost cutting. A government that wants to grow the economy must focus on creating bigger economic opportunities and activities, while efficient collection of tax receipts and blocking of loopholes will then serve as secondary or residual income sources. Even if no one steals N1 here, we will not still have enough money to tackle our myriads of challenges; this we must also understand.

    Again, modern performance management framework isn’t about reward and punishment, but rather it’s a real-time mechanism for feedback and feed-forward, making sure that inefficiency is detected and corrected immediately, and not a quarterly or annual reviews stuff.

    Too many things in my mind!

    Reply

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