Monday, 26 October 2015

IGR: 5 Reasons Why Northern States Perform Poorly

Yesterday, We Posted a News on How Much all States in Nigeria Generated Internally (IGR) and majority of the States in the Northern part of Nigeria perform poorly.. Lagos generates the Most.. You can See the List HERE The purpose of this thread is not to encourage states in the Northern region to continue to perform poorly in terms of Internally Generated Revenue, but to identify factors that are causing the problem: with a view to eradicating it, and also to inform Nigerians so they can have a balanced perception. So here are the reasons: 1. Insecurity Businesses can only prosper in a safe and secure environment. It is from those businesses that government can raise revenue through taxation. With the activities of Boko Haram and dare devil Herd’s men, we have seen a dramatic deterioration in the security of lives and properties in the North. Hence, businesses activities have declined there and so also has IGR. Improve security in the North and watch investment flood in and watch their IGR skyrocket. 2. Poverty It is no rumour that states with the highest level of poverty are in the North. If poverty is high, how can their state government raise revenue from the people? Eradicate poverty and watch their IGR rise. 3. Emphasis On Crude Oil By Government Since 1976, successive Nigerian governments continue to see crude oil as a cheap and quick means of raising revenue. The result is that, development, improvement and investment in agriculture (this is where Northern states have comparative advantage) has declined over the years and so also has revenue that could have been gotten by state governors in the North from the agricultural sector. 4. Underdeveloped Tax System Relative to the South, tax system in the North can be described as underdeveloped. All factors listed above also contribute to this.issue. With an ineffective method of collecting, remitting and accounting for taxes collected in the Northern states, expecting their IGR to grow is like expecting a camel to pass through the eye of a needle. NOTE:- That the West, East and Southern states have high IGR is pointer to the fact that their tax system is improving. However, an IGR that is fuelled by double taxation and all other sorts of parasitic means of raising revenue by state government of these regions is totally unacceptable. 5. Capitalism vs Socialism I have observed that much of the IGR of the non Northern region is contributed by the private sector. This means that capitalism is gaining root in this region compared to the North. Although there is the inherent tendency of exploitation in a capitalist society, Northern state governments should continue to encourage private sector led growth in their region while providing an enabling environment for businesses to grow. This will help boost their IGR Feel free to contribute meaningfully to this thread.