COVID-19 Economic recovery plan: Dissecting states’ initiatives
When the federal and state governments introduced drastic measures to curb the spread of COVID-19 in the country, which included the lockdown of economic activities except for essential services, it was obvious to discerning minds that hard times were around the corner.
President Muhammadu Buhari took note of this during his nationwide broadcast on March 29, 2020, and introduced some initiatives to cushion the effects of the lockdown on the citizenry. These included the deployment of relief materials to ease the pains on Nigerians; sustenance of the school feeding programme during this period and granting of a three-month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans. The president had also directed that a similar moratorium be given to all Federal Government funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.
“For on-lending facilities using capital from international and multilateral development partners, I have directed our development financial institutions to engage these development partners and negotiate concessions to ease the pains of the borrowers. For the most vulnerable in our society, I have directed that the conditional cash transfers for the next two months be paid immediately. Our Internally Displaced Persons will also receive two months of food rations in the coming weeks,” the President added.
Also, in March this year, the House of Representatives passed the stimulus package bill aimed at stimulating the economy and discouraging employee furlough among other intentions. The Bill grants an income tax credit at 50 per cent of annual Pay As You Earn (PAYE) for employers (excluding upstream petroleum employers) who retain employees between March 1 and December 30, 2020. The second incentive included a waiver on import duties related to medical equipment and personal protective care, among others.
Furthermore, the government has been forcefully driving a job scheme that is aimed at providing palliative to unemployed persons in the country tagged ‘Extended Special Public Works Programme’. Under the programme, the Federal Government would temporarily employ 1,000 persons each from all the 774 local government areas of the country during the dry season. The programme, which would kick-off next month, is not entirely new to Nigeria as the National Directorate of Employment (NDE) in collaboration with International Labour Organisation (ILO) had introduced it in the mid-90s.
According to the Development and Technical Labour Department of the ILO, such programmes were used during the Great Depression by industrialised nations to immediately respond to grinding poverty at the lowest level of the society that normally bears the brunt of such economic upheavals. It was also effectively used during colonial Africa to quickly respond to situations such as drought and famine by mobilising the unskilled populace to engage in other labour intensive infrastructural projects as a means of immediately alleviating their situation.
Nevertheless, Nigerians are yet to feel the impact of these measures as the second quarter (Q2) Gross Domestic Product (GDP) report recently released by the National Bureau of Statistics (NBS) showed. According to the report, Nigeria’s GDP in real terms declined by 6.10 per cent (year-on-year) in Q2 2020, thereby ending the three-year trend of low but positive real growth rates recorded since the 2016 to 2017 recession.
The numbers contained in the report showed that the performance recorded in Q2 2020 represented a drop of 8.22 per cent points when compared to Q2 2019 (2.12 per cent), and 7.97 per cent points decline when compared to Q1 2020 (1.87 per cent).
The NBS had also recently released an ‘Abridged Labour Force Survey Under COVID-19 for August 2020’, which gave the breakdown of unemployment rates in the country after a 20-month interval. The report indicated that 21,764,617 Nigerians were unemployed, with Imo State recording the highest rate of unemployment at 48.7 per cent.
The Bureau said unemployment rate during the period in reference represented a 27.1 per cent rise from the 23.1 per cent recorded in the third quarter of 2018.
“A rise in unemployment generally means the number of people searching for jobs has increased, which can occur because people previously outside the labour force have decided to join the labour force and are now in search of jobs. Or people previously working have lost their jobs and are now in search of jobs. Often, it is a combination of these two,” the NBS said.
These gloomy figures, no doubt, reflect the negative impacts of the disruption caused by COVID-19 pandemic and crash in oil price on the economy. But they are also ominous signs that should government, at all levels in the country fail to up their economic sustainability strategy amid the pandemic, Nigerians would be worse off in the coming months.
To further confront the realities, the Federal Government last week approved very substantial increases in the pump price of petrol and electricity tariff, saying it could no longer borrow to subsidise public utilities. There have been outcries against the move across the length and breadth of the country by suffering Nigerians who perceive it as rubbing salt in the wound.
But the question is what are the states doing to help the poor masses under the present circumstances or they are waiting for directives from Abuja? In states where some initiatives have been introduced, how effective are they? How could such policies be tweaked for better outcomes? The answers to the above posers are contained in the reports below
Amid Tax Reliefs, Lagos, Ogun Residents Groan Under High Cost Of Transportation
By Maria Diamond
As part of measures aimed at reducing the burden on taxpayers amid the COVID-19 pandemic, the Lagos State government has adjusted its tax policies for at least three times between March 2020 and now. In March, the government announced a three-month extension of the deadline for filing Annual Tax Returns from March 31 to May 31, 2020. Towards the end of May, the government again extended the deadline from May 31, 2020, to June 30, 2020.
In a statement by the head of LIRS’ Corporate Communications Department, Monsurat Amasa, the agency urged taxpayers to take advantage of the magnanimity of the government and file their returns.
The statement quoted the Executive Chairman of the LIRS, Mr. Ayodele Subair, as explaining that, “we constantly debated what other measures could be taken as an organisation to support individuals and businesses at this time, hence, the additional one-month extension from June 1, to June 30, 2020.”
Recently, the government announced additional tax incentives and reliefs for businesses and individuals in the state, which included allowing, on a case-by-case basis, the payment of outstanding liabilities in installments to ease cash flow challenges that may affect taxpayers; waiver of penalty for late payment of liabilities under PAYE that were due during the period when the state was under lockdown (March-May 2020); waiver of penalties due on late filing of 2020 annual tax returns (Form A); waiver of interest and penalty components of outstanding tax audit liabilities from 2009 to 2015 for entities that present and keep to a structured payment plan that terminates on or before December 31, 2020; grant of tax credits of 20 per cent of cash and kind donations made for COVID-19 by resident individuals to Lagos State government for the 2021 Year of Assessment only subject to a cap of 35 per cent of tax due; increase of payment channels to make payment of taxes easier, simpler and more convenient for all and adoption of video conferencing as the default mode for conduct of Tax Audit Reconciliation Committee (TARC) meetings in consonance with social distancing advisories from government and other relevant authorities.
The government expressed hope that all residents of the state would take advantage of the palliatives and reciprocate the gestures by discharging their civic responsibilities by promptly paying their taxes and levies to the state.
The Ogun State government also adopted similar relief packages for individuals and businesses in the state. Governor Dapo Abiodun, who announced the measures through a statement, urged taxpayers in the state to make use of the relief packages, which included a six-month extension of the 2019 income tax returns the deadline for self-employed residents from March 31, 2020, to September 30, 2020.
He also granted an “eight-month extension of filing of 2019 annual PAYE returns by PAYE operators/tax agents from January 31, 2020, to September 30, as well as complete waiver of interest and penalty for late filing for the extension period.”
Other packages include a total waiver of interest and penalties for late remittances of PAYE for the extended period and a waiver for late payment of Personal Income Tax, which would run from January 1, 2020, to December 31. The state also granted a waiver on weekly tax payments by operators of betting and pool businesses from April 1 to June 30, 2020.
This is as the governor stated that the state’s Tax Audit Reconciliation Committee (TARC) would run its operations through video conferencing to “continue ensuring ease of doing business while maintaining physical distancing.”
Many residents of the two states, however, told The Guardian that the high cost of living was gradually becoming unbearable for them despite these measures. They particularly cited the high cost of transportation as their major concern, urging the two-state governments to introduce policies that would make public transportation affordable to the common man.
“Sanwo-Olu should pity us. There is hardship in the land. If the rich are complaining, the governor should know what the poor are going through. There is a high level of unemployment; most of us are managing. As a private school teacher, I received full salary last in February.
“The March salary was half payment. So many have also got a reduction in their salaries. We need assistance at this time not a step that will multiply hardship,” said Miss Janet Osinimu, a private school teacher, in reaction to the recent fares hike approved for Lagos Bus Service Ltd (LBSL) by the governor.
Enugu LG Officials Flout Tax Relief Policies
From Lawrence Njoku, Enugu
At the height of the ravaging Coronavirus pandemic in June this year, the Enugu State government announced some measures to cushion its effect on residents. It granted tax relief and incentives to taxpayers and other categories of persons in the state.
Chairman of the Enugu State Internal Revenue Service, Emeka Odo, had stated that the tax reliefs was part of the administration’s pro-poor policies aimed at ensuring that residents do not suffer much during the period of the pandemic.
These, he stated, were different from other palliatives like food items that the government was distributing to “all households” in the state.
The statement by Odo added: “The deadline for the submission of Form A for employees and Annual Returns in accordance with Section 41 (3) and 81 (1-3) of the Personal Income Tax Act (PITA) 2011 as amended for companies and institutions operating in Enugu State has been extended to July 30, 2020.
“A waiver of penalty and interest charged for late remittance of PAYE deductions is hereby granted from January to December 2020 for all sectors. A 50 per cent discount on all assessed Capital Gains Tax (CGT) from now till December 2020. A 50 per cent discount to all Personal Income Tax Assessment issued to owners of schools and hotels for the year 2020.
“A 50 per cent discount of all assessed Land Use Charge payments for the year 2020. This discount will expire on December 31, 2020. A waiver of penalty and interest on Land Use Charge for years 2018 and 2019 once payment is made before December 2020.”
He added that, “all our esteemed taxpayers are encouraged to obtain their Enugu State Social Benefit Number (ESBN) as it remains the unique identity prerequisite for obtaining electronic Tax Clearance Certificate (e-TCC),” stressing that “ESBN is free”.
“Our liaison offices at Abuja and Lagos are open on a daily basis except for weekends and public holidays for easier access to taxpayers,” he said.
According to him, the government had since inception in May 2015 waived the payment of Personal Income Tax as well as Market Tax for all traders in the major markets of the state.
Despite the waivers, however, officials of local governments still move around to demand payment of certain fees from shop owners in the state. These officials who move about in buses collect such payments as Container Permit, Environment Development Levy, Business Premises, ESWAMA Fees and Caption Rates.
Late last month, farmers in Enugu East local council took to the streets to protest against indiscriminate levies imposed on them by authorities of the council. Each farmer in the area was subjected to paying as much as N50,000 as Youth Development Levy to enable them do poultry business in the area, among others.
It took a petition from a non-governmental organisation, Global Society for Anti-Corruption (GSAC) to the state governor, for the collection of the levy to be suspended. Governor Ifeanyi Ugwuanyi was quoted to have said he was not aware of such a collection.
It is not clear what other measures the state government intends to adopt to stabilise the economy going by increasing hardship caused by hikes in petrol price and electricity tariff. Since the hikes, prices of food items have skyrocketed, making it difficult for most families to survive. But the government was yet to announce plans to cushion such, though certain businesses that were closed in the height of the pandemic are reopening.
Country Programme Director, GSAC, Mrs Amaka Nweke, told The Guardian that the government must as a matter of urgency initiate empowerment programmes that would help families overcome increasing hardships.
She lamented the rise in prices of food commodities caused by the recent hike in electricity tariff and pump price of petrol, stressing that “the people are not finding things easy”.
On how she thinks the government could further help families recover as schools reopen in the state, Nweke, who commended the state government for the much it had done so far in helping the masses, added that the government could provide other educational materials for the children.
Explaining that operators of private schools were worse hit by the ravaging pandemic, she said the government should monitor the schools to ensure that pupils/students are not made to pay arbitrary levies.
Residents, Plateau Government Differ On COVID-19 Relief Initiatives
From Isa Abdulsalami Ahovi, Jos
A retired civil servant in Plateau State, Elder Simon Musa, has said that the state government has not done enough towards restarting the economy after the COVID-19 pandemic lockdown.
According to him, since the outbreak of COVID-19, the government has succeeded only in giving out palliatives such as maize, rice, toothpaste, toiletries and noodles to some residents.
Musa said the palliatives did not constitute even one per cent of the demands of the people, stressing that there was an instance where a tuber of yam was given to a whole community in Jos North local council.
“There was another instance where one toothpaste was given to the community leader of Jenta Adamu and three ‘mudu’ of rice was given to Fraka community in Lamingo ward. Some families got just a cup each.”
He lamented that the increase in the pump price of petrol and electricity tariff has resulted in high cost of transportation and food items.
“People are helpless and frustrated. One meal a day is not easy to come by. Some families now boil water to drink as milk.”
Musa said that the government was yet to introduce any policy aimed at cushioning the economic effects of the pandemic on residents. He noted that residents would be worse off financially now that schools are about to reopen, adding that the state does not have a free education policy, which would have helped parents to cope.
“What the government does is to place a heavy burden of taxation on private schools. Few children go to school nowadays. Even the feeding programme by the Federal Government is a smokescreen. We only hear about huge sums of money spent on the programme but there is nothing on ground to show for it.
“The state government is not prepared to restart the economy. We pray this does not cost us when the pandemic is over. But the way we are going now, we may maybe take unawares,” he added.
The Plateau State Commissioner for Commerce, Mr. Joseph Aku, however, said the government has been working hard to ameliorate the pains residents were having as a result of the COVID-19 pandemic.
According to Aku, the governor recently commissioned a stock investment centre. “This is in preparation for the post-COVID-19 economy. The governor had also recently signed a Memorandum of Understanding (MoU) with Max Airline to ensure that they fly to the state. When it starts operation, it will be three days in one week - Monday, Wednesday and Friday. Palliatives donated to the state were equitably distributed. No one is complaining about the distribution,” he explained.
He stated that Musa’s view was an indication that he was ignorant of how the government was planning to restart the economy after the pandemic.
Taraba Absorbs Casual Workers In MDAs, Supports Farmers With Seedlings, Fertilisers
From Charles Akpeji, Jalingo
Since the outbreak of Coronavirus pandemic, which has no doubt hit hard on the economy and affected people’s means of livelihood, the Taraba State government has been unrelenting in its efforts to help residents successfully navigate through effects of the pandemic.
The government has introduced several empowerment programmes, which included the absorption of casual workers in the Ministries, Departments and Agencies (MDAs) and giving supports to farmers in order to boost agricultural output, among others.
The initiatives have also helped the government to address the problem of youth restiveness in the state, as many of the youths were engaged and now smile home with their monthly stipends.
Some beneficiaries of the various programmes told The Guardian that such initiatives were long overdue, stressing that they have become more responsible as a result.
A beneficiary, Bala Sani, who lauded the government for deeming it fit to engage the youth, called on corporate organisations in the state to take a cue from the government by initiating similar programmes.
Meanwhile, with schools about to reopen, an educationist in the state Ministry of Education, disclosed that discussions were ongoing on the possibility of extending helping hands to parents by revisiting the issue of school fees in both public and private schools in the state.
The educationist noted that the COVID-19 pandemic has severely affected the finances of residents, adding: “We are considering forwarding a written document through our Commissioner to His Excellency on the need to reduce school fees especially those of the higher institutions.”
He acknowledged that the ministry has no right to dictate the fees of private schools, but noted that the ministry was planning to engage private schools owners on the need for them to reduce their fees given the circumstances of the moment.
The Commissioner for Information and Orientation, Danjuma A. Adamu, said the various policies of the Governor Darius Dickson Ishaku administration have “helped greatly to reduce the high level of unemployment in the state.”
His words: “It has helped in checking youth restiveness and social vices. The governor has also gone extra miles to give priority to agriculture in order to boost agricultural output, ensure food security and the increase income of farmers. So, the governor has since the outbreak of the virus encouraged mechanised farming through the provision of tractors to farmers at subsidised rates. The administration has also provided the needed farm inputs like seedlings and fertilisers to farmers at the appropriate time.”
The commissioner affirmed that the government was aware of the hardship the people were facing as a result of the virus, noting that administration would continue to work round the clock to initiate more programmes that would help to assuage their pains.
Tax Reliefs To Formal, Informal Sectors Strictly Implemented
From Ann Godwin, Port Harcourt
Some residents in Rivers State are experiencing severe economic downturn which was triggered by the Coronavirus pandemic and the recent increase in petroleum pump price and electricity tariff. While residents were trying to grapple with the economic woes occasioned by the pandemic, the recent upward review of the pump price of Premium Motor Spirit (PMS) has further added to their economic woes as the cost of transportation and food items have consequently gone up.
Some residents have even argued that life was better during the COVID-19 lockdown than now. For instance, between March and May, this year when the state was under lockdown, a local bag of rice cost between N24,000 to N25,000 but the same bag of rice now costs N30,000. The prices of other staple foods and condiments like garri, pepper, onions and tomatoes, among others, have also gone up astronomically.
Painfully, many residents lost their sources of livelihood during the lockdown. Some companies sacked their employees because of the inability of their management to meet up with payment of salaries while many businessmen and women dissipated their capitals because there was no turnover during the lockdown period and they needed to sustain their families.
For instance, the major markets in the state were shut down for over six months. When they were recently re-opened, findings by The Guardian showed that a lot of traders lost their goods because they expired during the period of the lockdown. Some of them have not resumed business due to lack of capital till date.
However, Governor Nyesom Wike has been striving to provide incentives to cushion the harsh economic effect of the pandemic on residents. The governor had set up a Food Purchasing Committee headed by the Secretary to the State Government (SSG), Dr. Tammy Danagogo and released the sum of N2 billion to buy up all the produce from Rivers farmers and fishermen.
Also a palliative team led by Desmond Akawor was set up for distribution of the palliatives but most residents expressed reservations on the initiative, with some alleging that they did not benefit while those who benefitted lamented that the packages were not able to sustain their family for three days.
The latest of the measures, however, was the grant of tax reliefs and incentives to taxpayers in the state and a waiver of 50 per cent on all assessed Capital Gains Tax (CGT) until December 2020.
According to the state Commissioner for Information and Communication, Paulinus Nsirim, “the most important of all was the fact that the governor also announced the suspension of all informal sector tax drive for the year 2020 because he was very much aware that the informal sector was the worst hit in terms of the economic impact of the COVID-19 pandemic.”
He explained that those in the informal sector that would enjoy the tax relief were market stalls, hair and barbing saloons, mini supermarkets and kiosks, technicians, mechanics, artisans, passenger vehicle operators (taxis and buses running town service), welders, vulcanisers and all related small businesses.
The state government equally suspended all local government taxes and levies for the 2020 tax year except tenement rate, warning that nobody should pay or collect any levies from Rivers people who were managing to eke out a living.
Also, a 20 per cent discount was granted on all Personal Income Tax (PIT) assessment issued to owners of schools, hotels, pharmacies and hospitals, as well as other allied businesses in the year to December 31, 2020. Wike’s directives on the tax reliefs were contained in a statement issued by the Executive Director, Rivers State Internal Revenue Service (RIRS), Adoage Norteh.
The statement further announced the extension of the deadline of self-assessment and annual returns by individuals and companies operating in the state to December 31, 2020.
The statement read in part: “The COVID-19 pandemic and the related lockdowns have resulted in major disruption in economic activities, resulting in negative economic impact, particularly on micro, small medium-sized enterprises (MSMEs). Most of these MSMEs operate in rural areas, with many having limited online connectivity to be able to file and pay their taxes electronically.
“It has, therefore, become expedient and equitable for the Rivers State government to ease the compliance requirements for taxpayers, giving them waivers on penalties and interest for late filing and payment of taxes to the extent that they are related to the COVID-19 pandemic.”
The strict warning given to traders at the Ogbum-nu-Abali Fruit Garden Market not to have any dealing with anyone who claims to be acting on behalf of Port Harcourt Local Government Area was a clear indication that the administration would not hesitate to sanction anybody who flouts the directives.
Also on May 27, 2020, the State Executive Council had approved the implementation of a Free Bus Scheme to address the problem of public transportation in the state and check the spread of coronavirus.
The implementation of the scheme began on June 1, 2020, with luxurious buses deployed to operate in Obio/Akpor, Port Harcourt, Oyigbo and Eleme LGAs from 6:30 am to 7:00 pm daily, picking and dropping passengers at designated bus stops free of charge.
Nsirim said the tax reliefs and waivers till the end of the year were in line with the avowed commitment of the governor to device creative and operational ways of cushioning the harsh economic effect of COVID-19 on the people.
While noting that the governor was committed to providing necessary incentives to cushion the economic hardship the people were facing, he urged residents to be more vigilant and take personal responsibility by obeying the relevant protocols.
“With the tax suspensions, reliefs and waivers now put in place to add to other incentives to assist the people in these times of great challenge all over the world, Wike’s administration is making sure that the lives and interests of Rivers people are secured and protected,” he added.
However, a taxi driver, Mr. Akpan Friday, said: “The suffering is increasing daily. We were trying to recover from COVID-19 challenges but the increase in fuel price has added another blow to us. We are dying in this country.”
Also, a trader at Rumokor market, Mrs. Faith Ngwu said, “the prices of everything have gone up and it is very difficult to feed yet our leaders are doing nothing. This is my worst time in life.”
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