07/09/2024
Why is Nigeria paying more for fuel, and what are the solutions?
What Nigerians need to understand is that the government cannot fund us. Rather, we fund the government. There are only four ways by which a government can get revenue.
The first is by seizing the resources of the people and the state and claiming it as its own, which General Aguiyi Ironsi did with his Unification of Assets Decree Number 34 of May 24, 1966. The second is by taxing citizens and corporations. The third is printing money. The fourth is borrowing money. Other than these ways and means, governments do not have money that they generate.
We Nigerians are some of the most entitled people on Earth. We expect a lot from our government, yet we hardly pay taxes. Nigerians will watch a movie set in Europe and complain that we want what we see. European nations, like Germany, have a tax-to-GDP ratio of 39%, while Nigeria has a tax-to-GDP ratio of less than 10%.
If you earn €58.597 in Germany, you will pay 42% of your income or €24,610 as taxes. There will be riots if you ask Nigerians to pay this type of tax. So, where will the money to run Nigeria come from?
Oil? Saudi Arabia has a population of 35 million and makes $350 billion annually from oil. That is $10,000 per citizen. Nigeria has a population of 220 million people and generates approximately $36 billion from crude annually. That is $150 per person. At 2.6 million people, Qatar is just one per cent of our population. Yet, their annual revenue is $68 billion. Two and a half times that of Nigeria.
Nigeria is not "oil rich". We are oil-poor. On a per capita basis, Ghana is more oil-rich than we are. We produce 1.5 million barrels per day for a population of 220 million people. Ghana produces 200,000 barrels per day for a population of 32 million.
So, when Nigerians hardly pay taxes and our oil and gas revenue is insufficient to meet the demands of running our country, we are forced to borrow or print money, which means that inflation will increase.
And under this situation, we cannot afford to artificially reduce the price of fuel by paying subsidy. We will go bankrupt. Therefore, much as this annoys you, the only options are to allow market forces to control the price of fuel, just as it does other commodities, or we must be prepared to pay higher taxes.
Failing that, Nigeria will continue to borrow or print more money, fueling inflation and increasing commodity prices.
Protests and riots cannot change these economic realities. They will be just like a child's tantrum when his parents cannot afford to buy him a toy.
Reno Omokri
. Ruffler of the Feathers of Obidents. #1 Bestselling author of Facts Versus Fiction: The True Story of the Jonathan Years. Hodophile. Hollywood Magazine Humanitarian of the Year, 2019. Business Insider Influencer of the Year 2022.
What’s is your sensible and functional view towards this??
