Boosting ease of doing business in Ogun
Recently, the media was awash with the news of Ogun State losing about N5 billion monthly to illegal haulage revenue collectors. This is a lot of money, especially in this time of economic crunch, when government needs all the funds it could muster to scale up the infrastructural development of the state. It is cheery that the news story was not just about revenue loss but the measures put in place to block the leakages. Ogun has made phenomenon progress in its Internally Generated Revenue in recent years, moving from an average of N750 per month by the previous administration to about N6.5 billion monthly within the six years of Senator Ibikunle Amosun as governor of Ogun State. The National Bureau of Statistics (NBS) has consistently rated Ogun in recent years as only next to Lagos State in terms of IGR. Analysing the same NBS report, BusinessDay had in September, 2017 observed as follows:
“Lagos and Ogun states are fast moving away from other states in the country in financial capacity, following their ability to generate over 60 per cent of their revenue internally. The two states generated 73 per cent and 63 per cent of their revenue internally in 2016. This means that in the event of a failure or shortfall in allocation from the Federation Account, the two states can internally generate at least N63 out of every N100 needed monthly.”
The economic success of Ogun State under the Amosun administration is also better appreciated against the backdrop of the state coming a distant 25 out of 36 states of the country in monthly allocation it receives from the Federation Account. If Ogun, under the present government, is Number 25 in terms of allocation it gets from the Federation Account, yet it is Number 2 in the country in terms of its Internally Generated Revenue, one wonders what the IGR will become if Ogun were to be among the first 10 states in the size of revenue from the Federation Account! This is because you also need revenue to generate more revenue.
One should mention at this juncture that the current Revenue Sharing Formula is unfair to Ogun State as it does not reflect the present realities. The template should be reviewed without further ado because as it stands today, Ogun is only next to Lagos in terms of its non-oil contribution to the Federation Account. Multiple taxation is a major headache of big businesses and small and medium scale enterprises (SMSEs). For the latter, multiple levies may sound the death knell or put the enterprise on tenterhooks for years. Multiple taxation adds to the cost doing business, which is transferred to the consumers. It impacts on profitability and ultimately leads to job losses in the name of right-sizing or down-sizing in order for the company to stay afloat. For developing economies such as Nigeria, the effects of multiple taxation are much worse.
Unfortunately, over 30 per cent of revenue from these levies end in private pockets, being illegally collected by touts in and out of uniform and is not available to government to improve infrastructure for the general good. Therefore, it is commendable that the Ogun State government has taken the bull by the horns, starting with the launch of Haulage Harmonization Tickets penultimate week in Abeokuta.
According to the state Commissioner for Finance, Mr. Adewale Oshinowo, the new initiative will, among others, “streamline the process of toll collection and ease of doing business in the state, end illegal and multiple taxation, reduce time wasting and unwarranted embarrassment by touts, reduce operational costs and leakages and increase IGR of the state.” As a testament to the economic achievements recorded by the present administration, Ogun State had from the last position in 2010 World Bank Doing Business in Nigeria report emerged in 2014 to be among the top five in the report of the global financial institution. The remarks of the World Bank remain evergreen and soul-lifting:
“Ogun improved on three of the four Doing Business indicators benchmarked. The construction permitting system was radically overhauled, with the state government authorities decentralising the approval system and a new committee monitoring delays. Building permit applications and payments can now be made simultaneously in district offices. Private professionals issue environmental-impact assessments in accordance with the conditions and templates set out in a framework agreement. The certificate of completion is issued on the spot, immediately following the final inspection.” To begin a business in Ogun State, according to the World Bank, “Entrepreneurs no longer need to travel to Ibadan or Lagos, thanks to the Federal Inland Revenue Service’s new stamp duty office in Abeokuta. In addition, the state Ministry of Commerce and Industry abolished the requirement for a physical inspection of the business premises – today, a proof of company address, such as a utility bill, is sufficient. A business premises permit is issued on the spot upon payment of the fee. Finally, Ogun’s Bureau of Lands digitalised property records with the aim of enabling electronic title searches and making property registration more efficient.”
The Amosun government has clearly lifted Ogun from economic obscurity to popularity. Today, there is hardly any industry worthy of note in Nigeria that is not in Ogun State. Ogun has become the industrial hub of Nigeria due to the friendly business environment created by the present government. There’s hardly any week that Amosun won’t be invited to inaugurate one multi-billion naira company or the other with potential for thousands of direct and indirect jobs being a source of joy for the state’s helmsman. There is no doubt that the new harmonisation policy on haulage revenue will further enhance the ease of doing business in the state and contribute further to the socio-economic well-being of residents.
• Soyombo, public affairs analyst, wrote from Abeokuta.
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