CONTINUED FROM LAST WEEK
It would appear that the Honourable the Financial Secretary, has a different idea as to what cure should be applied to the economic ailment of Nigeria, and I would like to say that the remedy proposed by him is due to the false premises which he himself has previously enunciated, and that is by merely stating that Nigeria is poor without looking closely into the underlying causes of the poverty and realizing that the poverty is due to the fact that 90 per cent of the population of this country are still wallowing in abject poverty due to the fact that they are unable to evolve an up-to-date method of cultivating the land.
I would like to say also that the method proposed by the Financial Secretary if adopted, would lead to disastrous consequences to the people of this country. When the time comes to debate the so-called ‘Pioneer Industries Bill’ I shall have more to say on this subject, but at present I would like to say that two conditions which are proposed to be given under the provisions of this Pioneer Industries Bill would certainly open the gate of this country to a flood of foreign investment which, as I said, would not be to the benefit of this country. The two conditions which are to be given under the provisions of the Bill are, exemption from taxation for a period of five years to people who are regarded as embarking on what is called’ Pioneer Industries’ and secondly, that these enterprisers would he given the indulgence or writing down their fixed assets for a period of five years a maximum of five years. I believe. Certainly any person who has a large capital to invest and knowing full well he is entitled to a period of five years during which he will pay no income tax at all during which he is allowed to write down his fixed assets so that he might convert these assets into liquid assets, would do his very best to take as much as it ever possible from the resources of the country. The dangers which I think are inherent in these proposals are as follows:
In the first place more and more people would be attracted from the rural areas into the factories and into the cities so that fewer and fewer people would be left on the land to produce food for the large number of people who would be demanding food. The consequence of that would be an acute shortage of food. We all remember the social evils which were attendant on the early stages of the industrial revolution in the United Kingdom, and I am sure that Honourable Members of this House are not willing that such social evils should rear their heads in this country. I is difficult to predict all the consequences; but I dare say one of the immediate consequences is going to be the plantation system for the purpose of producing food crops. Because the impact of industrialization on the agricultural economy of this country would be such that the farmers who are now using these ante-diluvian methods of cultivation would be unable to cope with the amount of food that would be demanded by those working in the factories; the Government would therefore be compelled to adopt such a system. For I am sure the suggestion would be made at that time that it would be necessary to import foreign capitalists for farm plantation in order to produce more food crops which are badly needed.
Secondly, there would be exploitation of the illiterate and ignorant people both by the capitalists themselves and unscrupulous trade union leaders who are bound to emerge as a result of the complications which would ex is: around these factories.
Thirdly, there would be an influx of a large number of white people on the pretext that they come to this country as skilled workers who are not available in this country. I have no doubt that Honourable
Members or this House will not wish to see d larger number of white people in this country, because it may be that some of them will decide to settle permanently in this country, and then we would be confronted with the same discriminatory situation which Africans are now experiencing in Malan’s South Africa (Interruptions).
As a matter of fact I have taken some time to discuss this so-called Pioneer Industry Bill, not because it is before the House now, but because His Excellency, during the course of his speech from the throne laid great emphasis upon it, and put it to this House as something designed to cure the economic ailment of Nigeria. The Honourable the Financial Secretary also dwelt upon it at some length in the course of his Budget Speech. I think it is in order, therefore, an indication having been given of an early introduction of such a Bill, to discuss it in the course of any speech on the economic and financial state of Nigeria.
Fourthly, as I was saying, this Bill would give an opportunity for foreign investors to exploit the resources of this country in a most unscrupulous and unconscionable manner. During the course of the five years when they would pay no tax at all, and when they would be allowed to write down their capital, they would strive to make as much as is ever possible from the country, If I were one of them I would certainly make as much profit as I could during those five years, and then do whatever I liked thereafter, especially as I am confident that at the close of the five-year period I would have converted all my fixed assets into fluid assets.
Fifthly, the launching of a large scale industrialisation by foreign investors now would not benefit us on the whole at present, and would deprive us of great opportunities in the future, and I would like to give some illustrations of what I mean.
At the moment all of us had the experience that in any industries in which foreign investors have entrenched themselves, it is almost impossible for a Nigerian enterpriser to make a venture into them. For an instance, you may take the Beer Brewery Industry, in Nigeria; I dare say that it would be extremely courageous for any Nigerian to try and venture into the Beer Brewery Industry. For those who are engaged in it have sunk such a large capital into it, that it is not easy for anyone in Nigeria to enter that field. Secondly, the Soap Manufacture, which may be referred to as a small scale industry.
I have no doubt that the African Development Corporation Limited must have been finding it difficult to compete in this field.
Thirdly, the Municipal Transport of the Municipality of Lagos – a lot of Nigerians have been finding it difficult to compete with the foreign investor who came into that field earlier than others. Take the Tyre Retreading Industry as a further instance.
Previously there was only one foreign investor in this field in this country. Only recently one Nigerian enterpriser came into the field to compete, but at this moment those who are aware of the facts know that this foreign investor is waging a war of cut-throat competition against this Nigerian enterpriser. Take the Cinema entertainment. Who are the Africans that would get together and be able to compete effectively with the Lebanese or Syrians, who have entrenched themselves in this particular industry? And if you like, take Tin Mining among others. I have not met any African or Nigerian who says he has flourished in the business of Tin Mining. All of these illustrations go to show that the moment you allow these foreign investors to invest in the various industries, you are shutting the door to Nigerians, and you are going to reduce the people of this country ‘perpetually to Clerks, Sub-Managers, Semi-Directors and whatnots to serve under foreign investors.
I would like to sound a note of warning. We must be vigilant in regard to what measures may be introduced to us as a means of curing our economic ills. Unless we are very vigilant we may find that we are throwing off political bondage in exchange for economic stranglehold which can be more harsh and more grinding than political imperialism.
But what is even of more immediate concern to us in this country is the introduction of a type of measure that the Honourable the Financial Secretary and His Excellency the Governor have envisaged in the course of their speeches. In the immediate present we would gain nothing, on the contrary we may lose a lot of things.
I said before that the revenue derived from the Companies’ Tax amounted to £4½ million. You may find that under Pioneer Industries Bill revenue would go down or in any event would not increase. I say it might go down because in the course of his speech His Excellency stated as follows. I am quoting from page 5 of that speech. “This will permit new companies to build up their liquid reserves more quickly than is possible at present, and will, we hope, induce Companies already established to replace old and worn out machinery by more up-to-date plant. ‘The only construction I put on this statement is that after the introduction of this Bill a number of Companies who are Operating in this country at present would be suddenly declared as ‘Pioneer Industries’ and will be exempt from paying tax.
Mr. President, Sir, I will not dwell further on the various aspects of this proposed Pioneer Industries Bill. I will bide my time and wait for the introduction of the Bill. But I would liketo close this aspect of my speech by saying that I agree entirely with His Excellence the Governor, when he said in the course of his speech that our agricultural problem is a problem which would have to be tackled by Regional Governments. I have no doubt that the Honourable Members of this House who have come from the Regions will leave no stone unturned, and tackle that problem effectively. I do hope that when the time comes for them to tackle this problem and to embark on plans for the introduction of mass education, I do hope, I repeat, that the Central Government will give them all the encouragement and inducement that it is capable of giving.
I would like to refer to the financial policy of Government, and in doing so I will confine myself to the revenue side of that policy. I shall leave the expenditure side to some other speakers to deal with later on.
On the revenue side one outstanding feature of Government policy is reflected on that side of the Budget. The policy of the Government is totally dominated by extreme and unwarranted caution, conservatism and traditional street-beggar economy.
I would like to say further that the policy as reflected on that side of the Budget is entirely unrelated to the vast potentialities of this country and the potential dynamism of the, people who inhabit it.
Now for a period of three years past there has been no increase at all in the revenue. When I say ‘at all’ I am speaking generally because in some respects you find a bit of increase, and in some other respects you find a bit of decrease. But whatever increase you may find in the revenue at all, is not due to any conscious effort on the part of the Government. It is due to the street-beggar economy which has been adopted. A street-beggar sits alongside the road and waits for fortune to smile on him. He gets what he can from passersby, and thereafter he tries to adjust his expenditure to his uncertain sources of income. That is precisely what the Government of this country has been doing.
From the introductory part of his speech, it would appear that the Honourable the Financial Secretary has been communing of late with Hugh Dalton, the great economist, through his well-known book ‘Public Finance’. But he has failed to prove a faithful follower of Hugh Dalton’s school of thought.
It is not enough that Government is able to adjust expenditure to income. It should be able to do much more than that.
The duty of Government, and that is the essence of planning on the part of the Government, is to try and work out the needs of the people however gigantic those needs may be, and having worked them out in detail, decide how much is required in actual cash to meet those needs. Then the next duty of the Government is to determine what portion of those needs could be met during the coming fiscal year. Having determined these things, that is looking at the general interests of the people, for the Financial ‘Secretary himself stated that the financial policy of a Government must be governed by what he described as ‘the principle of maximum social advantage’;.- therefore, the Government, having decided what is required for the fiscal year, it is then its duty to look for the sources of income to meet its expenditure.
The Government of a country must not behave like a street beggar. It may be necessary to impose some direct or indirect taxes for the purpose of meeting those requirements, or, if the taxes are beyond the capacity of the people, other sources like borrowing money to meet those requirements may be resorted to. But I say with all emphasis that it is beggarly for any Government; especially the Government of a country such as ours, to pursue a policy whereby every year all it does it to adjust expenditure to whatever income may come its way.
As I said before, the principle which is well known to all students of economics has been enunciated by the Honourable the Financial Secretary when he stated that a Budget should be governed by the principle of maximum social advantage. Now that principle has not been reflected in the Budget. Having been given this indulgence, I would like to say a few words about the expenditure side of the Budget. The only part of the expenditure which has been increasing during the past years has been that for personal emoluments and the expenditure on transport and various other allowances which are given to expatriate officers. It is true that the aim of the Govel11ment is to seek maximum social advantage for the people of this country, I should have thought that it would not have been necessary at all at any stage to have to institute a further inquiry into the method by which the Nigerianisation of the Government Service of this country could be effectively implemented. On the contrary the expenditure side of the Budget should have shown that Government is intent on carrying out the principle which has been laid down in the Foot Commission, that is, only in cases where local materials are not available should a foreigner be allowed to come to this country to work for Government. I say with respect, Sir, that the only means by which the Government can effectively Nigerianise the Civil Service is not by spending large sums of money on expatriation pay for expatriate officers, but by devoting a large part of the revenue to the training of our boys and girls in a large number, so that they can come back within two or three years to take over the various positions under the Government.
It is gratifying that the Government Bench are so afraid of what I am saying that they have to seek refuge under the Standing Orders. The only other thing I would like to mention is the economic planning of the Government as reflected in the establishment of the various Corporations.
Now these days we hear a good deal about Corporations – Nigeria Electricity Corporation, Production Development Boards, and so on and so forth. But I would like to sound a note of warning, and I do appeal to Honourable Members to study the functions of these Corporations and the composition of their Directors very very carefully.
To start with, in the case of Production Development Boards, I am alarmed to find that even though large resources, as much as £8 millions, are placed in the hands of these Production Boards, yet all that the Government of this country does is to appoint Administrative Officers, who have no experience at all of the functions of the Corporation, to be Chairman of these Production Boards. I am sure if the United Africa Company or Messrs John Holt have to spend half a million pounds on a project, they will search the whole world to make sure that the best me” are available to take care of that money. In this country Administrative Officers are capable of doing anything – if a Medical Officer suddenly dies, an Administrative Officer might be appointed to take his place temporarily.
Take Nigeria Electricity Corporation – that is the last I shall mention. I have been told by an expert and I am sure Honourable Members would like LO discuss this matter further, that it is proposed to have a big power station at Enugu which should light all the towns and villages all along the way from Enugu right down to Lagos. Experts have told us that in order to do this you require transformers in large numbers each of which must be of the capacity of 50,000 kilowatts, and these experts told us that this is five times the capacity which is required I or lighting Lagos and the mainland. It therefore follows that if this wonderful scheme materialises they are going to have transformers at lIe-I fe, Ondo, Owo, the size of which would be five times the size of the power which is used I or lighting Lagos. That would be a colossal waste. We are also told that whatever may be the strength of a transformer, the efficiency is only about ninety-nine per cent, that is, each transformer of 50,000 kilowatts will be losing 500 kilowatts from time to time, which I understand is the size of the power station at Ibadan. In other words, each of these various transformers which are dotted along the route from Enugu to Lagos will be losing what is required to light Ibadan from day to day.
Finally, we are told that there are other by-products which can be extracted from Enugu coal, for example wax, coal tar, and crude oil. But the economic line of action of the Government of this country is to the end that this valuable mineral should be burnt to produce electricity which is not required at all; and so We have a two-fold waste – a colossal waste in electrical power stations, and a criminal waste in the burning of Enugu coal.
CONTINUES NEXT WEEK
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