The Senate stirred the hornet’s nest recently when it suggested that the federal government should set aside one percent of the Value Added Tax (VAT) proceeds as compensation for Lagos and other states that suffered vandalism as a result of the #EndSARS protests. According to reports, the upper legislative chamber also asked the government to set up a visitation panel to evaluate the extent of damage in the affected states.
The Senate resolutions were sequel to the adoption of two motions moved by Senator Olujimi Abiodun and Senator Gershom Bassey calling on the National Assembly to compensate states affected by the crisis.
We recall that hoodlums, last month, took advantage of the #EndSARS protests to unleash terror, wanton destruction and looting in some states of the federation. These states are now counting their losses perpetrated by the hoodlums.
Lagos State Governor, Babajide Sanwo-Olu, has put the total economic cost of the destruction and vandalism in the state at about N1 trillion. On his part, Cross Rivers State Governor, Ben Ayade said the state will require N5 billion to repair the Calabar International Conference Centre (CICC) vandalised by hoodlums. Some other states were also affected and suffered severe damages to their properties by the hoodlums.
In the considered opinion of this newspaper, setting aside one percent VAT to fix Lagos and some other states is a bad idea and should be jettisoned by the government. What happened was not a natural disaster and should not attract the collective resources of the federation
Granted, Lagos State was the worst hit by the crisis and is a major contributor to VAT in the country, the move may generate another controversy and exploit our fault lines in the country.
For instance, what would governors who staked everything to frustrate the #EndSARS protests from happening in their domain be saying if the federal government would now be the one to pay for the destruction caused by the protesters?
We strongly suggest that for the federal government to stave another round of controversy on the matter, it should stay away and allow the states to task their creativity and ingenuity to rebuild damaged infrastructure leveraging on the support and influence they exert on private organisations and individuals.
It is gratifying to note that the Central Bank Governor, Godwin Emefiele, has said that the Coalition Against COVID-19 (CACOVID) will rehabilitate all the police stations that were damaged in the country. “To further strengthen the security apparatus in the country, CACOVID has committed to provide over N100bn to procure equipment and gadgets for the Nigerian Police Force over the next two years; as our contribution to fully modernise the Nigerian Police,” the coalition has said. This is the way to go”, he said.
To be sure, almost every state in the country is facing one challenge or the other. While Insurgency has destroyed the economy of the north east, the North West economy is haemorrhaging under the constant attacks by bandits. The North central is also not spared from activities of bandits.
Accordingly, we suggest that the federal government, if it decides to go ahead with the idea to set aside the one percent VAT, it should take into account the plights of states ravaged by Insurgency and banditry and sundry tragedies. We recall that the presidency had said in 2016 that at least N1 trillion is needed for immediate and short-term stabilisation and recovery of the North-East. The assessment and validation of multi-lateral institutions has shown this to be correct. Nigeria’s North-East region has suffered damage put at about $9billion.
Moreover, in a period where resources are scarce and the country is in another recession, setting aside the one percent VAT proceeds to compensate some states and leaving the others is not what the federal government should be thinking about at this time. We recall that the country has already lost about 60 percent of its revenue as a result of the crash in price of crude oil and the COVID -19 pandemic.
No doubt, VAT collections will not be at an optimum level due to the pandemic. To that extent, therefore, the priority of the government right now should be undertaking projects and policies to reflate the economy and quicken the country’s exit from recession.
This again brings to fore the arguments to devolve power to the states. Governors should begin to see themselves as Chief Executive Officers (CEO) of their states and start thinking outside the box on ways to increase revenue. The lazy idea of waiting for handouts from Abuja and increased taxation at the slightest opportunity should be discouraged.
