IGR: Why Lagos leads
At long last the scales have fallen from their eyes and they can now see clearly, very clearly, that carrying handout bowls to Abuja is not the right way to prosperity. The Governors of the 35 states have now decided that they can go to Lagos and find out what the Lagos State government has done right or wrong in internal revenue generation (IGR). The internal revenue generating pilgrimage has been long overdue but because the oil money was flowing, the State Governors felt cool and thought of no need to expand the generation of revenue in their own states.
The NNPC said recently that eventhough oil prices are going up, petrol import revenue is also going up because our four refineries are dead, stone dead. That means that petrol subsidy is back with vengeance. If petro; is to be consumed where there is no refinery, petrol must be imported. When it is imported all kinds of mago mago and wuru wuru may come into play.
Now our Governors have realised, a little late, that what may be put in their bowls by Abuja every month may become meagre and more meagre by the day. So they then decided, as an ugly way out, that petrol can be sold for 400 naira a litre or something like that. They didn’t remember that the Labour fellows will snipe at their feet by grinding the economy to a halt with wild cat strikes.
In any case, the amount of disposable income in most people’s pockets today is low, very, very low and if the price of petrol is raised astronomically the petrol attendants will be sleeping on duty with no customers to attend to. A few years ago when the price of petrol was raised I drove into one of the petrol stations to fill the tank of my car. When the attendant finished her job I did my own job too as evidence that our transaction had been successfully brought to a closure.
The attendant told me: “Thank you, thank you, thank you.” I thought that one “Thank you” was enough for being paid for what was being bought and sold. When she exceeded that I knew that there was something very wrong or something very right. The curiosity of the reporter woke up in me and I asked why she was thanking me very profusely. She explained that most of the motorists she had been attending to were just telling to her “put for 300 naira, put for 400 naira” and that I was the first person that day to say fill the tank. I felt like Aliko Dangote for a few seconds. Now the Governors have realised that we are in a catch 22 situation and they may not get much revenue from oil takings.
They have come to the happy place that they have avoided for many years. Now they are telling Lagos “Teacher, teach us how you do it.” For starters they must get this clear: none of them can make as much money as Lagos. Lagos is unique in many ways. It has three airports, three seaports, several beaches, an array of banks, telecommunications and manufacturing companies, the biggest breweries, the biggest flour mills, four football stadia, several tertiary institutions, a thriving entertainment universe, high grade hotels, a vibrant night life – Lagos never sleeps – a major media hub, loads of highly trained human beings. It is also an exuberant economic and political vortex with exceptional vitality, perspicacity, creativity; a city that is constantly reinventing itself. Kaye Whiteman who published the book Lagos: A cultural and historical companion described it as the “true city of imagination” while the famous poet Odia Ofeimun extols it for its “citiness.” Lagos makes money from land, air and water.
Now, rail has come into the mix. Eventhough none of the 35 states can be like Lagos they can pick up a few lessons if they are ready to be diligent students. Let’s look at the IGR trajectory of Lagos: 1999 (14.6 billion), 2007 (83.06 billion), 2015 (276.6 billion), 2020 (418.99 billion). Those figures show an upward swing from 1999 to today. Last year, the closest was Rivers State with N117.19 billion while the second runner up was Delta at N59.73 billion. There are several reasons why most of the 35 states are not doing well in IGR.
Some of the reasons include leadership battles between predecessors and successors. In one of the states in the south, a Science and Technology park established by a Governor was thoughtlessly abandoned by his hostile successor. Can you imagine? Who was hurt in the process? His government and his state. In Lagos Governor Babajide Sanwo-Olu is completing some of the projects initiated by his predecessor Ambode who waged a bitter battle against him. That shows decency on the part of the incumbent Governor. That shows focused leadership. That shows commitment to the public good. That shows broadmindedness. If you go to some of the states you will see many projects abandoned by successor-Governors who are fighting the shadows of their predecessors. That is small-mindedness, meanness, pettiness of the lowest rung. But that is the nature of our own brand of politics. Also the attitude of some public servants is a disincentive to prosperity of their states.
A few years ago a Governor in one of the Southern States thought I knew experts in various fields and asked me to bring them to his state for a seminar on IGR. I submitted a proposal which he promptly minuted to someone for implementation. The proposal went missing for six months. The day the Governor showed his anger the proposal reappeared from its hiding hole.
The next problem was the official asked to handle the proposal. He told me that the Governor had already approved consultants for IGR. I told him that the seminar was for experts in various fields to throw up various unconventional ideas that the consultants could turn into money. He did not budge. I went back to the Governor. Again, the Governor was angry and sent for him. When arrived at the Governor’s office and saw me there he was shaking like leaves in the wind. The Governor chewed him out and gave him a deadline to implement the project. He directed me to his Permanent Secretary, a lady who insisted that the lecture hall will have to be decorated. I asked her: Do you decorate lecture halls. She said “yes” I knew that corruption had just walked in on four legs.
On the day of the seminar I told this lady that I learnt that the Governor who was to open the conference was receiving people who had come on a courtesy visit and that we should begin the lectures but will break when the Governor arrives. She told me that would be a breach of protocol and that we could do nothing until the Governor arrived. I ignored her and started proceedings.
The Governor arrived when we were on the third lecture and he wasn’t angry with me. We stopped the lecture. He made his speech and declared the seminar open. When he left we continued. If I had allowed her that lady would have made her boss, the Governor, to keep the eminent people I had assembled to look at her boss as irresponsible or arrogant for keeping them waiting for hours eventhough he was the one that chose the time for the seminar. With people who think like that, there is a problem: wrong attitude.
Every one of the 35 states must find out what can work for them because of diversity. Extreme religiosity is a problem that is hindering development in some of the states. Lagos has a large Muslim population and even when it was run by Governors who were Muslims, the sale of alcohol was not an issue. Some governments in the world impose what they call “sin taxes,” taxes on such items as alcohol, cigarettes, cigar and gambling. Instead of breaking millions of bottles of beer every year in such states as Kano.
Why can’t they impose heavy taxes on such socially undesirable items. The advantages of that approach are three (a) they make money (b) they fight socially undesirable behaviour and they (c) they look good in a democracy. Nigeria’s advancement has been significantly hampered by bad politics. There is a Dr Njoku whose vaccine was approved by the WHO some years ago but local politics killed it. There is a Nigerian doctor who had a patent approved for diabetes treatment but politics killed it. There is a professor at Obafemi Awolowo University who had the patent for pounded yam machine but politics and our lack of appreciation for innovation took it away. Awka, the capital of Anambra State is the automobile haven in West Africa. Why are they not getting the needed patronage by all the States in Nigeria? Petty or ethnic politics is the answer.
The Lagos State Governor, Mr Babajide Sanwo-Olu says that technology is the new oil. Correct. He says the state is building the biggest technology hub in Africa to train start-ups that would develop tech solutions for technological advancement. “We are building a tech campus on a 22, 000 square metres of land in Yaba which we christen K.I.T.E. We are working with global brands in the technology space such as Google and Facebook to deliver the important technology hub.” Apart from building the technology the Lagos State Government supports start-ups with funding.
Last year it spent 250 million naira on different tech start-ups in the State. Technology is what has kept Israel many kilometres ahead of its neighbours. In their book titled The Story of Israel’s Economic Miracle, Dan Senor and Saul Singer have explained how Israel has produced more start-up companies than Japan, India, Korea, Canada and the United Kingdom. And Israel’s population is only about 7.1 million and they have enemies on every side of their border.
Their creativity, their innovation and their thrift have jointly saved them from extermination. Israel has become one of the prime incubators of technological innovation. Many states in Nigeria lack innovation and the ability to get value from their comparative advantage. For many years Nigeria has been exporting raw materials such as palm oil, palm kernels, piassava, coconut, cassava. Did anybody tell them not to process them and add value to them? Nobody. Oil just made us all lazy. Now we will begin to think. Let me make a few suggestions.
We waste waste (garbage) in this country eventhough we can transform waste to wealth. The University of Nigeria, Nsukka is generating electricity from garbage. Why can’t the states do the same thing with the garbage generated in their states? We send people to prison for minor offences. Why can’t we revise the laws and let those offences attract fines and manual labour? The Governor of Ondo State, Mr Rotimi Akeredolu has been canvassing for an approval for the cultivation of Indian hemp under some regulated arrangement. A lot of people are shooting down the idea without giving serious thoughts to the pros and cons of the proposal. New ideas are what can bring progress. Lagos is progressing because it is ready, has always been ready to embrace new ideas. States that remain in the past can never make significant progress. That is the most important lesson that Lagos offers.