Mr. Peter Obi, former governor of Anambra State, has harped on the need for Nigeria to grow its revenue base through investment in small businesses.
Obi who spoke on Monday on Arise TV, pointed that while Nigeria’s budget is $150 per head, that of South Africa is $2,000.
He argued that Nigeria must invest in small businesses as according to him, it was the only way to pull the country out of poverty, even as he regretted that Nigeria still had the highest number of people living under the poverty line.
“The more you invest in small businesses; the more you can collect taxes and other revenues and the more you can pull the people out of poverty, the more money you make from income. People can’t pay taxes when they are in poverty. The more you invest in education, the more you can pull out resources,” ThisDay quoted him as saying.
“Nigeria is busy doing a show of shame when we should have been preoccupied with investment. South Korea for the first time in 20 years went into recession owing to COVID-19; they are four times our GDP of $1.6 trillion. Australia, which is about 25 per cent of our per capita, is already going through their highest budget deficit and all we are doing here is going through this drama, which is highly uncalled for at this critical time.
“Before now, we were the highest number of people living under poverty, the highest number of out-of-school children, and high youth unemployment. With post-COVID-19, the situation will be worst. We should by now be talking about how we are going to retool our economy and start solving some of our problems.”
Asked what is responsible for the pervasive corruption in the country, Obi said: “Corruption is deliberate but fighting corruption is not rocket science; you can fight corruption very easily if leaders are not corrupt, you reduce it by at least 70 per cent. We are going to question it and it will be properly scrutinised.
“The issue of fighting corruption should not be economic policy. From what has happened in the past, from all the monies being stolen, you can hardly recover 20 per cent of it. There are ways you can stop this. We can become more transparent in monies that you are releasing. For instance, if you know what you want to spend on students going for a scholarship, you can send it directly to the school rather than creating so much confusion.”
The former Anambra governor said state governments have to invest in critical areas of the economy in order to generate revenue and grow their economies. According to him, Nigeria’s budget remains low compared to other leading African countries.
“In Africa, if we look at the three biggest economies, our budget is $150 per head, second biggest economy is South Africa, and their budget is $2,000 per head. The third biggest is Egypt is $600 per head. The fourth one is Algeria which is $1,700 per head and Morocco is $900, so we are not even up to a quarter of those in the biggest five in terms of budgeting,” he said.
“Even if you come to West Africa, Ghana is $155 per head, Côte d Ivoire is $340 and Cameroon is $300, so we are not even up to 50 per cent of Cameroon in terms of budgeting. So, we are low.
“What did they do? Increasing your revenue is simple; you cannot withdraw money from a bank if you don’t pay in. You must invest in the critical areas of investment and fight poverty. You have to invest money in small businesses. The more you invest in small businesses, the more you can collect taxes and other revenues and the more you can pull the people out of poverty, the more money you make from income. People can’t pay taxes when they are in poverty. The more you invest in education, the more you can pull out resources.”
Obi according to ThisDay, recalled President Muhammadu Buhari’s announcement on how the country was able to earn $25 billion annually in the past three years from Diaspora remittances.
“If we are focused on tomorrow, it shows that Diaspora remittances now earn more than crude oil. Our crude oil revenue in 2016/2017/2018 was an average of $18 billion; so, that means in three years, we earn $75 billion in remittances as against $54 billion from crude oil. What do you do in a country that is serious and wants to focus on tomorrow? The new oil is on human resources. Today, our Diaspora population is 15 million which is about the same number of children we have out-of-school. We can invest N1 billion to N1.5 billion annually for the next 12 years just on this 15 million out-of-school children. Imagine putting another N15 billion to be remitting the same amount in the next 10 years, you double their income in that sector.
“This is at a time when oil revenues will be going down; this will be your new investment. Small countries like Philippines and Indonesia, and Bangladesh have been able to double their remittances within the past 10 years.
“When I went to Bangladesh in 2008, their remittances was about $6 billion, but today, it is almost $18 billion. So, it’s about investment. Small businesses in China do not only generate 60 per cent of the GDP, but in terms of taxes, they are about the same percentage. So you need to put money in it because if you have more revenue, you invest. All these monies being stolen by people are supposed to be invested in critical areas.”