Proposed tax reform bills necessary, in line with global practices —Economist, Akuns

Da Jonathan Akuns is an economist, convener of the Middle Belt Voice and a member of the Movement for National Reform (MNR). In this interview by ISAAC SHOBAYO, Akuns speaks on the tax reform bills, the state of the economy, complaints from the South-South over the scrapping of the Ministry of Niger Delta Affairs, among other issues.

The Northern Governors Forum and traditional rulers, at a recent meeting in Kaduna, frowned at the proposed tax reform bills and asked the National Assembly to reject them. What is your take on this?

My general view about the tax reform bills before it was submitted to the National Assembly by the President is that, first and foremost, tax is a function of productivity and the performance of economic units within a jurisdiction. Now, a lot of changes have taken place, generally in terms of improvement in technology, in changes in the way business is done and several other things, and the existing tax laws really need to be brought up to date. From newspaper reports, the issue is not about the tax rate being raised but rather an effort to harmonise the administration of taxes and bring them up to date, in line with global best practices for businesses and individuals as well. Tax reform is a continuous exercise, just like changes in any sphere of life that need to be upgraded. Today, you and I are talking on the phone using GSM, which never existed before. We have upgraded our telephone process from the manual system to the one that is now linked to the IGSF. So, if tax reform is intended to achieve a similar upgrading of practices, there shouldn’t be an issue at all.

I consider the reaction of the governors from the 19 states of the North as one first and foremost. The Governors’ Forum is a peer review platform where governors review their performances in administration. At the same time, operationally, it is a pressure group. Either as a peer review concept or as a pressure group, it is about a common interest. The question now that needs to be asked is, what is the common interest that binds the 19 littoral states of Nigeria that are in the northern flank of the territory of Nigeria? I believe that the states have individual and peculiar issues relating to the level of productivity in their jurisdiction. So, reviewing and taking a common stand against tax review, to my mind, appears to say less of what exactly the motivation is. I hear that their specific concern is about the VAT, the VAT derivation model, a derivation-based model that says you get from the pool based on what is derived from a jurisdiction. That shouldn’t be a problem. Everything is progressive, and we really need to move forward, more so that Nigeria is now part of the BRICS economic block within the South South Cooperation Council.

We should upgrade our taxation process to match global practices. Taxation is the only instrument by which the government generates funds to pay for governance. So, what is wrong with that? It’s not very clear to me. That’s my general impression. It is in line with ongoing changes globally, both at the household level and at the corporate level. So, for me, it’s a welcome idea, and I look forward to hearing a robust debate by the National Assembly, drawing attention to global best practices that are required to improve our own environment.

 

But one of the arguments is that you cannot receive proceeds from VAT, especially on the product you don’t consume. Do you subscribe to this notion?

For me, we are not running a socialist government in Nigeria where the mantra will be that to every one according to his needs and from everybody according to his ability. We’re not running a socialist government, and taxation, like I say, is a function of productivity. Is there the argument that some subnational jurisdictions are less productive in the area of their comparative and competitive advantage than other areas? If that is the argument, then it’s just natural, just natural. But derivation, particularly, which is a function of consumption, should be based on what you consume. If you don’t consume it, because that is, it’s a consumption tax. If I don’t consume a particular product, I don’t pay tax on that one to the government to which I’m a resident. So if I’m a resident of Plateau State, for instance, and I don’t consume a particular product that is sold in Plateau State, how do I need to pay tax on it? Only those who consume it will pay tax on that and benefit from the proceeds. So, I don’t think that should be a problem, except there are other stated objectives or motives that are not being made public. But we are in an era of a digital environment, and no information is hidden.

Let us not continue to look back to practices that were very relevant in the days gone by. Those days are gone. They remain for historical reference and, for me, to continue to come under the cloak of our northern governors, looking at the peer review process. What is common to the states that are on those peer review platforms? That is a divergent point. Nothing is common to all of them that one size must fit all. Every state must look at its own peculiar issues and address its matter, and so each state has its own representative in the National Assembly.

The debate will afford them the opportunity to raise peculiarities that affect the jurisdiction from where they come. But taking a one-size-fits-all approach, for me, tends to end up like a threat, and that’s not the way democracy is managed. Democracy is about dialogue and conversation. Okay, if the President and his team at the Federal Executive Council have presented a bill to the National Assembly, yes, the representatives of various states will bring their own peculiarities.

 

At the moment there is food insecurity in the country and it is more pronounced in some parts than others. How do you think the government can resolve the situation?

Food insecurity is a key issue; farmers are being kept off their farmlands, and so the productivity of farmland has significantly declined. As a result of that, the only way to make up for the shortage is probably through imports. So, to enhance food security, there is a need to eliminate those issues that are keeping farmers off their farms. It is generally about the security of farmers and their farm products. Within the ambit of the Middle Belt, it is common.

The Middle Belt is an agrarian society, and an agrarian society is competing with non-agrarian herdsmen on the utilisation of land for livelihood. So, a new policy needs to be put in place, and it is a competition between crop farmers and livestock breeders. The general problem is that livestock is currently bred based on open grazing. Open grazing means a requirement to have swaths of land to graze on, yet farmers need the same space to till and plant their crops for harvest. So, this conflict of interest about land utilisation needs to be squarely addressed by governments based on jurisdiction-specific requirements.

To enhance food security, we need a drastic approach. Technically, open grazing should be brought under control. Intensive livestock breeding practices should be brought to bear. Take, for instance, poultry farming, which has been modernised to an intensive care practice. Why don’t we replicate those practices in the breeding of other species of livestock? This has been a proposal that I have personally championed since 2018. In April 2018, when we had reason to meet with the head staff commander in Jos, I voiced that out, and I have pursued it vigorously by developing blueprints that have moved on to various governmental levels. But there’s a clear lack of political will to implement that. When we talk of livestock, we’re not just talking about a particular species. In Plateau State, there are categories of livestock that tend to create issues that lead to keeping farmers off the field. Cattle, goats, sheep and pigs are clear livestock that create conflict between competition for land utilisation, between livestock breeders and crop users in Plateau State. For instance, we could replicate poultry farming practices in livestock grazing. When we do that, it is a whole blueprint that I have developed and shared across the length and breadth that can help to put back farmers on the field and raise farm produce to safeguard food security.

 

How do you think the government can mitigate the current situation and help people in this time of economic hardship?

What I’m saying is that the government, especially at the Middle Belt and sub-national levels, needs to embark on substantial social support programs. These should particularly address the cost of transportation, food, and energy products, as energy and food are basic necessities of life. Most people are now managing with just one meal per day, which is a significant change from what it used to be. Today, I decided to take a walk to observe things for myself and saw a woman having to lap her three children. These are times when she cannot afford to pay for four seats for herself and her kids, so she has to make do with lapping them to pay for just one seat. Governments need to focus more on social protection than on anything else because people need to be alive to be governed. That should be the top priority for governments.

 

The people of the South-South region are complaining about the scrapping of the Ministry of Niger Delta Affairs. What is your opinion on this?

Well, I understand from the President’s pronouncement that each geopolitical zone will have a Regional Development Commission. Each commission will include various public institutions, agencies, and government departments to cater to the specific issues of each zone. The Ministry of Niger Delta Affairs is essentially just a renaming to create an institution overseeing all Niger Delta affairs. Previously, the Ministry and the Niger Delta Commission appeared to be doing similar work but under different names. Now, bringing them under one title should mean that they operate with clear, project-specific goals. I don’t think this restructuring should be seen as diminishing attention toward the Niger Delta; rather, it consolidates responsibilities into one arm for more effective project implementation.

However, the people in the Niger Delta are the ones most impacted. So, if they have issues, they should make their concerns known to the authorities. I believe the President and political authorities will listen and review the arrangement because no policy is set in stone. Every policy can be modified if the change doesn’t address citizens’ concerns. That’s my perspective on the matter.

 

Some groups, including yours, are advocating a return to a regional government structure. How relevant is that arrangement in present-day Nigeria?

Regionalism is essentially a political ideology aimed at increasing the influence of local identity for residents within a state. If we’re to discuss its relevance today, we should first consider how Nigeria came together as a single territorial entity. Before colonialism, Nigeria was a territory made up of diverse ethnic groups, each managing its own affairs with ethnic governance structures, usually monarchies. Colonialism united these different ethnic territories under one name, Nigeria, through war, law, and settler colonization. Due to the ethnic diversity, colonial authorities introduced federalism as a framework for managing this diversity. This process began with the initial colonial effort in 1861 with the cession treaty of Lagos, when Lagos became a colony. Subsequently, other territories were incorporated through the amalgamations of 1900, 1906 and finally 1914, leading to the formation of one territorial entity called Nigeria, with federalism as a way to manage the diversity within it.

Constitutional governance in Nigeria began in 1922 with the Clifford Constitution, which was amended over the years. A major turning point came in March 1953 when the Honourable Pa Anthony Enahoro moved a motion for Nigeria’s independence, setting off a sense of ecolonization. By October 1, 1960, Nigeria entered a decolonisation transition period, where ethnic nationalities participated in various constitutional conferences. Finally, in July 1963, an all-party constitutional conference was held in Lagos, where ethnic nationalities agreed on a federal system to manage the diversity within Nigeria. At that moment, Nigeria could either continue as a single federal entity or return to pre-colonial ethnic boundaries, and they chose the former, leading to the establishment of the 1963 Republican Constitution on October 1, 1963. From that point, Nigeria became a federal republic with four heterogeneous regions.

Unfortunately, that federal structure lasted only two years, three months, and two weeks. It was interrupted by a military regime on January 15, 1966, which suspended—but did not abolish—the 1963 Constitution. This means that, from January 15, 1966, to the present day, Nigeria has largely operated under military decrees from various administrations rather than a purely federal framework. Now that Nigeria has transitioned back to democracy, like it did from colonialism to independence, it’s time to return to true federalism. Under such a system, each federating unit would have its own constitution and autonomy to address unique issues, while the federal constitution would hold the country together as a republic.

For us advocating for regionalism, it’s not about going back to the four original regions but rather beginning with the 36 states we have now. Regionalism means that these federating units, especially those that are culturally or ethnically homogeneous, can merge into single federating units if they choose. Over the years, this discussion has been held in media interviews, on television, in newspaper columns, and in numerous write-ups. I could provide you with more materials to help flesh out what’s already been discussed on this issue. But in summary, we’re advocating for the federalism principles of the 1963 Constitution, in contrast to the military-draughted constitutions that have existed since January 15, 1966. Decree One, which suspended the republican constitution, should be repealed along with other decrees that have shaped governance to this day. Instead, let’s amend the 1963 Constitution to suit current realities.

Here are our priorities under this advocacy: Firstly, restore semi-autonomy to the federating units. Secondly, implement resource control and fiscal federalism, meaning the federating units should fund the central government rather than the current situation where the central government funds the federating units. Thirdly, return to a two-tier federation system. Around the world, federating systems typically have two tiers—central and regional—whereas Nigeria operates a unique three-tier system, with the central, state, and local governments. In a true federation, each federating unit should have the freedom to subdivide itself according to internal needs without needing three administrative tiers. Fourthly, security should be handled locally. Regionalism, with a focus on local identity, suggests that local governments can better manage the security of their jurisdictions. Our current system, shaped by Decree 34 of 1966, imposes a one-size-fits-all approach that doesn’t work effectively in a country as diverse as Nigeria. Policies made at the central level are applied uniformly across all areas, which often creates more issues than it resolves.

Returning to a regional system doesn’t mean reverting to the past; instead, we should start with our current 36 states, allowing each to retain a sense of local identity and autonomy.

And a final point: before colonialism, Nigeria wasn’t known by directional names like ‘South        West’ or ‘North East’—it was a land of ethnic territories. For example, you had Hausa Land, Kanuri Land, Yoruba Land, Igbo Land, Tiv Land, Jukun Land, Nupe Land and others. These geographic labels like ‘South South’ or ‘North Central’ are colonial constructs that dilute our identity. To reclaim our true identity, we should re-examine these labels as part of the move toward regionalism.

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