The administration of President Tinubu is eager to expand the government's revenue in order to realize its vision of a one trillion U.S ...
The administration of President Tinubu is eager to expand the government's revenue in order to realize its vision of a one trillion U.S dollar economy. However, it aims to achieve this without generating value, instead opting to take existing money from citizens at all income levels through the removal of subsidies, VAT, and other harsh tax policies. Progressive taxation typically encourages the creation of new wealth through existing value-generating activities, whereas the current government's so-called tax reform is aggressively focused on shifting existing funds from citizens' pockets to the government's coffers via excessive financialization of the economy, where bank profits are rising at the expense of the real economy by storing government funds as primary revenue collected.
It is only in recent times, with the arrival of the President Tinubu administration, that several major banks have surpassed the one trillion-naira profit mark, while the real economy, which includes manufacturing, agriculture, and small and medium-sized enterprises, continues to battle for survival. The government's ongoing efforts to take more money from citizens' pockets and develop additional methods to do so not only represent a backward strategy but also a lazy one, with significant implications for negative growth and economic decline in the near term.
Without poor or complete lack of thought, there are potential methods to generate new income, with consequences for both value creation and economic growth. There are easy opportunities to make money, and Nigeria's aviation and maritime industries are among the most profitable globally. The reality that Nigeria has no involvement in these sectors is not only a source of national embarrassment but also a sad oversight of a significant opportunity for generating new revenue, which would not only boost government income but also increase the economy's liquidity.
With a nearly completed airport renovation and the acquisition of a modern deep seaport, Nigeria should be able to take part prominently in these key sectors, not just for national pride and the image it projects, but also for the financial gains involved. Efficient handling of national assets such as air and shipping companies reflects national capability, and any country aiming for global recognition cannot afford to overlook this. Nigeria's strong desire for regional power status will remain ineffective if the government continues to fail in owning and managing critical national assets, whether in power, telecommunications, aviation, or maritime industries. However, beyond major national symbols, the aviation and maritime sectors represent a clear comparative advantage for Nigeria due to the size of the market. The lack of public sector involvement, caused by the severe inefficiency of successive governments—especially since the return of civilian rule in 1999—has led to a serious neglect of a valuable revenue source, with all its consequences for job creation and other positive impacts along the value chain.
Aviation accounts for approximately 6 percent of Ethiopia's GDP and supports over 1.5 million jobs, including 19,000 direct positions. By positioning itself as a key aviation center in Africa, and after recently inaugurating its Grand Renaissance Dam, which holds significant potential, the country is transforming into a sub-regional energy hub. Addis Ababa does not need to loudly proclaim its regional influence, as the nation's achievements in critical economic sectors inherently demonstrate its expertise in global matters, ensuring its presence at the international table.
A functional deep-sea port and extensive airport facilities could enable Nigeria's maritime and aviation sectors to generate new revenue and foster significant economic value, provided the Nigerian state, through its government, invests adequately and ensures effective management. However, the current president Tinubu's urgent efforts to boost revenue have not led to visible investments in areas that could drive rapid economic growth and returns. In an attempt to transform a 230 million population economy into a mere financial center, with all the associated risks both in the short and long term, banks and other financial institutions have turned into cash storage units, earning substantial profits not from rational investment returns but simply by holding cash. The tax system that has turned the recycling of existing money into an economic virtue is being praised as an innovation. Yet, merely holding recycled money—taken from citizens' pockets and stored in banks—does not create value, let alone add to it, and has driven the government to take on excessive external debt, worsening the economic situation and, more alarmingly, jeopardizing the chances of long-term recovery.
The primary key factor in the results of any economic management and development is undoubtedly the standard of living of the population. Each economic reform involves certain costs, but its direction must clearly demonstrate its possible consequences; otherwise, it turns into an abstract concept that only a select few who create and oversee it understand, and solely for their own benefit.
President Tinubu's economic reform strategy requires a comprehensive review, as its present form and direction are more likely to deteriorate Nigeria's economic situation rather than address its structural issues and misalignments. Economic reforms, particularly those involving structural adjustments, are too significant to be intertwined with excessive political ambitions. Instead, they demand serious reality assessments, where initial negative outcomes are expected but can ultimately be resolved through diligent effort and perseverance.
Mr. Charles Onunaiju sent a message from the Federal Capital Territory in Abuja.
Provided by SyndiGate Media Inc. (Syndigate.info).
