FINANCIAL CROSS ROADS

Add as a preferred source

Speech on the Supplementary Appropriation Ordinance given at the House of Representatives, Lagos, on August 16, 1954.

CONTINUED FROM LAST WEEK

There are two points arising from the Hon. the Financial Secretary’s speech on the Supplementary Budget on which I would like to make brief comments. The reduction in the export duty on cocoa is very welcome news. The formula which was used in computing this duty was so complicated to lay politicians like myself that the inequity which lurked in that formula did not become obvious until it came into operation during the past few months. The government, however, advised by their experts knew or ought to have known about the consequences of the operation of this formula if the price of cocoa were to rise suddenly as it did a few months ago.

But they did not guard against those consequences, which one might say was due to lack of foresight on the part of the government at the time. But, Mr. President, it may be contended that it is always easy to be wise after the event and I should like to say, therefore, that I am not necessarily laying the guilt for the inequity which has arisen during the past few months at the door of any member of the government. We all know that the art of government is the accumulation of past experiences and in any case, it is grantifying to note that the government has applied the experience which it has acquired from the recent behaviour of the price of cocoa to the other commodities like groundnut, cotton and oil palm. On the whole, Mr. President, all is well that ends well and I would like to commend the financial secretary for his prompt and sympathetic reaction to public criticism in regard to the duty on cocoa and also the council of ministers for giving him their support in his action. As Honourable members are aware, I have tabled a motion before this present session of the House, seeking for a reduction in the export duty on cocoa. The scales which I demanded, I must confess that they were not based on any strict mathematical formula, were that at the present price of £170 the duty on cocoa should be so fixed that the break-even price should be £200 in the world market, and also that on the price of £450 the duty should be only £80. It will be seen, therefore, that there is a slight difference between the scales of duty which I proposed in that motion and the ones which have been proposed by the financial secretary. I should like to say here and now, though this is not the appropriate occasion for it, that I do not think there should be any further quarrel between me and the financial secretary simply because there is a difference of £10 in the ceiling which he has proposed and that which I have proposed; and consequently, when the time comes I hope to refrain from moving the motion which I have tabled in respect of the reduction of duty on cocoa. I am doing this particularly because under the new dispensation, that is from the Ist of October, whatever duty is collected by the Central Government , 50 per cent thereof would go to the Regional Governments, and to that extent we too will be benefited in the Western Region.

Now, before I leave the question of reduction of export duty on cocoa I would like to say something about the windfall which has accrued to the Government on the export duty on cocoa. As a result of this exceptional buoyancy in the price of cocoa which prevailed about four or five months ago, the government has benefited to the tune of about £6 million. This is a windfall which was never at any time expected by the central government. I understand that about £3 million of this windfall has already been committed for certain purposes but there is a balance of £3 million in the hands of the Central Government. It does not require a financial expert or an economist to appreciate the fact that Central Government under the circumstances is very well off indeed. As a matter of fact, I think it can be said that they have more money than they can very well make use of. I am, therefore, strongly of the opinion, Mr. President, Sir, that the regional governments also should benefit from this unexpected windfall, and I therefore advocate that the Central government should be graciously disposed to allocate this £3 million to the regional Governments – not strictly on the basis of derivation but in the ratio of 40 : 30 : 30, to the West, the East and the North. I have made this suggestion not because I have departed or deviated from what I call my derivationist attitude to allocation of revenue, but because this windfall belongs to the Nigeria Revenue. And all I am urging is that since the Central Government is so well off, and since this windfall was never expected by them, it is only proper and equitable that they should pass some of this windfall to the Regional Governments so that the can use the money to meet their expanding education, health and social services. And 1 hope that in view of the prosperity of they Central Government no Honourable member in this House will have any inhibition at all in supporting this proposal of mine.

The second point arising from the financial secretary’s speech on which I should like to make some comment is contained in his peroration- the closing part of his speech. I dare say, Sir, that there must have been a sort of telepathic communion of minds between the financial secretary and myself. Newspaper readers would have noticed that of late an economic prophet of gloom had emerged, warning people about the disastrous future that awaits this country. But I do not share the view of that prophet. It is well known that during the past ten years the revenue of this country has increased with little or no effort on the part of any financial secretary by about 400 per cent. Of course, the expenditure has also increased correspondingly.

CONTINUES NEXT WEEK

READ ALSO FROM NIGERIAN TRIBUNE