By Omoniyi Ibietan
The Nigerian Economic Summit (NES) 31 has come and gone. The NES is Nigeria’s flagship platform for discourse by the public and private sectors on the economy. By all metrics, Season 31 was a great offering. Nothing human can be perfect, but the optics rekindles my hope. I had mentioned elsewhere about sterling performances, including Mr. Taiwo Oyedele’s. You can not listen to that man without giving Nigeria a chance on the ladder of prosperity. His understanding is profound, and he shares meaning with the clinical precision of a scalpel in the hands of an awesome surgeon.
So, I am hopeful about the implementation of tax reforms and the new law, which takes effect on January 1, 2026. Let me amplify with basic examples, the voice of those communicating the new tax regime. If you earn below 800,000 naira per annum, you will not pay personal income tax, and for those who earn more, tax is administered on extra earning after the ‘first’ 800,000 naira. In addition, for company income tax, “a company with less than 25-million-naira turnover pays nothing on profit.” I really wish our country well and hope the wiles of those who may try to pervert the spirit of this reform will be frustrated.
At the Summit, Olaniyi Yusuf, the Chairman of the Nigeria Economic Summit Group (NESG) spoke to the imperative of undertaking reforms courageously, engendering inclusive growth and ‘unwavering commitment to policy execution’, but he equally recognised the human cost and proceeded to advocate a focus on ‘broad-based, equitable and sustainable’ growth to cushion the effect of the burden of reforms. Dr. Okonjo-Iweala, Director General of the World Trade Organisation, also stated this euphemistically in diplomatic nuances when she visited Mr. President recently.
In a more concrete sense, Yusuf identified some key issues including industrialisation and enterprise growth, infrastructure for competitiveness (especially power, digital connectivity that bolsters education, enterprise and healthcare delivery), unlocking investments (through fair predictable policies that protect prospective investors), fiscal sustainability, enhanced inclusion, institutional strengthening, and of course the elephant in the room, tackling security challenges. According to Toni Kan, NESG anchors Nigeria’s aspiration on a trillion-dollar economy basically on Five ‘I’s – industrialisation, infrastructure, investment, inclusion, and institutions. This looks great.
I am not an economist, although I passed the subject both at ordinary and advanced level examinations. It was Karl Marx and Friedrich Engels who rekindled my interest in the subject (especially in its inextricable connection with politics) as I struggled to arm myself with the tools of dialectics. Then, I became fascinated with Adam Smith, David Ricardo, John Maynard Keynes and much later as I embraced development communication, I followed Joseph Stiglitz, Amartya Sen and others I would call humanistic economists, both of them winners of Nobel Prize in Economic Science. Stiglitz’s THE ROAD TO FREEDOM and particularly Amartya Sen’s DEVELOPMENT AS FREEDOM are great works. When I reflected on these treatises, I became aware that unregulated markets ultimately create Leviathan, a monstrosity. Michael Sandel, the inimitable American political philosopher at Harvard, hit the death knell on mindless capitalism in WHAT MONEY CAN’T BUY: THE MORAL LIMITS MARKETS.
So, I agree with Yusuf and his team at NESG on the path to follow. Equally, I agree with him and Okonjo-Iweala and those of their persuasion on the imperative of reforms and the need to humanise them. By my reckoning, we are on course, but we must periodically evaluate the impact of policies and tackle those who try to undermine the success of policies. For instance, the naira’s value in relation to the dollar is appreciating, even if marginally. The consistency in the rise in value of the Naira is gratifying. But what do we do to those impervious ‘dealers’, those taking more than their fair share of our patrimony, our common wealth. Yusuf and his great team talk of the need to build and strengthen our institutions. Yes, it is important. Independent institutions manned by ethical, informed leaders and teams are required in any polity or economy determined to grow. Daron Acemoglu and James Robinson have proved the value and centrality of incorruptible institutions to development in their breathtaking book, WHY NATIONS FAIL: THE ORIGINS OF POWER, PROSPERITY AND POVERTY, and they demonstrated this tellingly with their apt juxtaposition of the state of city of Nogales in Mexico and its other part in Arizona, in the US. It was indeed graphic to see how policies, enforcement, and compliance can be determinants of poverty and prosperity.
So, how do we stop the bad guys from acquiring money illegitimately, especially with devastating implications on our nation’s economy? Those buying houses per second in Abuja and elsewhere and leaving the houses unoccupied, where did they get the money to buy those houses? If they are funded by financial institutions and need to refund the loans, they won’t acquire those houses and leave them empty. Where are the institutions regulating housing sector and the realtors in our space? What is the position of NESG on housing? Nigeria does not have enough equitable houses, so there is a deficit. The reason we should not watch primitive capitalists turn housing policy to the kind of investments they have turned it to. Our housing and mortgage policies must be enforced to the last mile, and the state should ensure that workers objectively have befitting homes by the time they retire. This is one way to fight corruption. Otherwise, people will continue to steal public funds to acquire houses and homes ahead of retirement. The inappropriate, unregulated and sprouting of estates in Abuja and other cities is counterproductive. It is not prosperity, it is not growth, it is not development, and it is not sustainable. It is existential threat and practice, the kind Tim Jackson informatively described in his book, PROSPERITY WITHOUT GROWTH: FOUNDATIONS FOR THE ECONOMY OF TOMORROW. We need to fix our housing sector and do so as an emergency.
President Tinubu got the tax reforms right, and he got the Nigerian Education Loan Fund (NELFUND) right. The Nigerian Consumer Credit Corporation (CREDICORP) is fantastic. Those qualified for interest-free credit can access up to two million naira annually, but they must use the credit to purchase made in Nigeria goods. This is unprecedented and phenomenal. It is integrative because there will be patronage for locally produced goods, and our industries can be reflated in line with the projections of NESG.
I have mentioned just a few policies that are at the heart of human basic needs, even in a psychological sense, as contemplated by Abraham Maslow. Education, food, and housing are among the key obligations that ‘suck’ workers’ earnings. So, it is time to turn attention to housing because housing is central to building a prosperous and inclusive Nigeria by 2030 and we should take the turn with speed and precision, with objectiveness, fairness and equity.