Connect with us

Feature/OPED

Data-driven Economy in Nigeria: Perspective, Orientation and Opportunities

Published

on

Timi Olubiyi Data-driven Economy

By Timi Olubiyi, PhD

In most African countries like Nigeria, individuals are typically born, grow, live through adulthood, retire, aged, and die without the government’s knowing or being aware of their existence.

This happens more in the remote villages and more within the informal sector and within the unbanked population.

Noticeably, due to lack of political will, successive governments and heads of nations in these African countries have ignored the lingering need for a data management system to improve the political, societal, and economic development landscape.

Big data analytics has been the technology drive that many nations of the world are adopting for improved governance, Africa should not be an exception.

A clear instance in recent time was in Nigeria, the biggest economy in Africa, where millions of the citizens were expectant on palliative care from the government but due to logistics and lack of national data bank, it was difficult to achieve a seamless reach to the citizenries.

The distribution could have been more effective with an efficient database and social welfare systems instead of the eventual looting of the stored palliative items that ensued. Social welfare protection is key to provide citizens with an economic safety net during periods of illness, and economic hardship.

Records indicated that the social welfare system in the form of insurance and assistance programmes to the public emerged in Europe in the 1800s to majorly support the vulnerable and it has been driven largely by adequate data management.

This is the 21st century, yet Africa is still struggling with a data-driven economy. It is significant to state that most of the major decision-making or policies in western countries from the USA, Canada, Australia, and most European countries, these days are largely data-driven.

For instance, the Canadian government announced COVID-19 aid in the form of a one-time payment of up to $500 for eligible seniors to offset any increased living expenses they have incurred as a result of the pandemic.

In the same vein, such government supports and economic stimuli are applicable in the USA and the UK to save jobs, businesses and to minimize the economic impacts of the pandemic.

In Africa, it has been a difficult task and the issue has been mainly due to the lack of adequate citizen information, thereby increasing economic hardship and poverty.

Consequently, a national database is vital, it would provide insights into population demographics, unemployment rate, age distributions, births, deaths, mortality, marriages, and infrastructure gaps.

It can also help in developing the right targeted policies to fix or alleviate social issues such as corruption, inequality between the wealthy and poor, level of education and rate of unemployment among others.

Under international human rights law, Nigeria’s government has an obligation to protect people’s rights and to ensure a meaningful standard of living, including adequate food and nutrition, the highest attainable standard of health, and the right to social security.

To conveniently achieve this all-important mission, agreeably a national database is required.

In addition, to address the obligations especially the unemployment rate distribution across the country especially can be addressed, the national database is key and can help in a lot of national planning.

The process of capturing and storing citizen information backed with a data protection bill in the National Assemblies is highly desirable and seemingly necessary, particularly in Nigeria.

This national database can be used for so many verifiable and evidence-based statistics, evaluations, and a lot of inferences can be derived from it.

At this point, post-COVID-19 has presented an opportunity, which is the creation of a national database in these African countries. It is highly desirable and the benefits outweigh the costs meaningfully.

When a national database is in place it can be accessed, analysed and contact tracing can be made a lot easier. Agreeably, it can help in a variety of other ways, such as public service improvement, designing of policies, public health development, public safety, national security, national development, and poverty reduction.

It can also help in developing empirically-proven techniques for fostering human and capital development. No nation attains sustainable economic growth without developing a national database necessary to drive such growth. The national database methodology is a less expensive option to performing a physical census because it is a register-based census.

So far, the year 2020 has been filled with disruptions due to the novel coronavirus (COVID-19). Despite COVID-19 being a health issue, has continued to have a high-impact and severity on the economy, business, and lifestyle globally.

It continues to reshape the ways of doing things and high disruptions across the remains across all sectors and countries.

For a developing country like Nigeria and as obtainable in most African countries, the disruption level is higher, stern with fragile economies across the continent.

The majority of the African populace lacks a reliable social welfare system; therefore, the socio-economic impact of the COVID-19 has been more severe on the continent.

It is, therefore, recommended that concrete policy adoption be considered for the management of national emergencies, humanitarian responses, reduction of the impact of the current pandemic, and the attendant looming economic recession.

Returning to business of lack of a strong data management culture and lack of sound data for governance Post COVID-19 will only further retrogress the continent’s development and living of the over 1.2 billion population. In fact, solutions to social and economic problems are often inseparable from the data

Broadly speaking with COVID-19, the number of incidences keeps increasing, consequently, flattening the curve or having a drop in the reported cases is still a mirage at least for now mainly because of lack of effective data-driven decisions.

Therefore, measures to preserve the livelihoods of workers and businesses and ensure they get by conveniently during this period are vital. This is supported by the World Bank’s stipulation in their 2005 report, which recommends that countries should design, finance, and deliver social welfare accordingly with a data management system.

The methodology to adopt as part of the post-COVID-19 recovery policy and national development is for the countries to introduce a data-driven economy and effective national data management platform. In my opinion, data is a developmental infrastructure that can provide critical insights into the trend of human actions, practices, behaviours, and social impacts.

The government cannot improve on school infrastructures without adequately knowing how many children need to be enrolled. Therefore, when citizen data management is properly earnest, it holds tremendous potential to stimulate economic growth and measurable development.

In light of the many African nation’s desire for accelerated economic growth particularly Nigeria, a national database is necessary as part of the post-COVID-19 policy priority.

Nevertheless, if it is open, integrated, unified, and harmonized amongst all the tires of government it will be an enabler for transparency and accountability, as well as reduce crime and criminality in Africa.

A low number of African countries including South Africa, Namibia, Mauritius, and Lesotho have some form of social package much can still be achieved in education and health which are two widely acclaimed barometers used to measure economic growth.

The citizenry should be catered for especially the vulnerable, through an adequate social welfare system. The COVID-19 experience exposed this inadequacy in Africa and this can be corrected easily by initiating and achieving an acceptable national database in each country.

From adequately capturing birth registration, education enrolments, adulthood, citizens in diaspora, retirees, to the closure by death registration, the citizenry must be known, captured, and catered for adequately in Africa.

Nonetheless, the COVID-19 relief programs across Africa just go to show how far behind the continent is with the data-driven economy and national database development, especially in Nigeria. The vast majority of people in Africa are most vulnerable according to context observation, and many of the countries are still grappling to protect their citizens from the negative impact of the COVID-19 pandemic.

That said, the fertility rate in Nigeria is very high with a population forecast of 400m by 2050 according to reliable data from Worldometer.

Tackling poverty in the land and reducing the high rate of unemployment has only received low attention by the successive government based on historical trends. With a national database in place, enactment of specific, and targeted policies to improve the lives of its citizens and its economy can be easily achieved.

Recall, the Minister of Humanitarian Affairs, Disaster Management, and Social Development in Nigeria, Ms Sadiya Farouq, expressed recently that her Ministry was tasked with the responsibility to address some of the underlying causes, drivers, and consequences of humanitarian crises and underdevelopment including COVID-19 impact management in the country.

She said this included the management of the relatively high level of poverty nearly half (90 million) of the country’s 200 million population.

Further to this, the President of the country, Rtd General Muhammadu Buhari, directed the Humanitarian Affairs Ministry to also develop a strategy to maintain the school feeding social program during the lockdown.

These tasks have been difficult to achieve in Nigeria, especially with identifying and reaching out to the very vulnerable citizens amongst the over 200m populace.

One of the significant reasons has been due to the high variety of datasets and the lack of a reliable, verifiable, harmonized, and efficient national database.

In Nigeria, many government institutions and agencies generate populace personal data daily. This includes: (i). Federal Road Safety Commission (FRSC), responsible for drivers’ license and vehicle number plates; (ii). Independent National Electoral Commission (INEC), responsible for voters registration exercise; (iii). National Bureau of Statistics (NBS), responsible for the production of national official statistics; (iv). National Identity Management Commission (NIMC), which is responsible for the national identity database; (v). National Population Commission (NPC), in charge of national demographic data; (vi). Other organizations including the banks in the financial sector and telecommunication companies in the telecommunication sector such as MTN, 9mobile, Globacom, Airtel, etc.

Most of the data collected by these agencies are structured in nature but the big issue is that the data remain unharmonized with no centralized platform. Citizens are made to provide the same information at different times to different agencies causing lots of time wastages and duplications.

Though according to records, the existing Bank Verification Number (BVN) database in Nigeria has captured just about 25 per cent of the population, which are largely citizens with bank accounts, leaving a large chunk of the population who are unbanked.

Besides, only 42 million of the 200 million population are also captured in the country’s National Identity Database, the National Identity Management Commission (NIMC), according to the Director-General of NIMC, Aliyu Aziz.

The DG further asserts that the enrolment of people into the National identity Database, the commission was only able to successfully harmonize 14 million BVNs with National Identity Numbers (NIN) nationwide.

Consequently, a broader, consolidated, and harmonized national data management platform is necessary, which should be in line with the global best practice of data management devoid of any preference. Such a national database can also benefit from periodic reviews and research to guarantee relevance, reliability, and utility at any time.

Significant to note, most of the development and decisions in the world economies are data-driven, the pandemic has presented an opportunity to the public sectors in Africa and Nigeria, in particular, to embrace technology and data management system to aid national planning effectively.

With no enough infrastructures to manage the level of population growth in Africa, the infrastructures are likely to be overstretched without a reliable data-driven decision-making system, projections, and technological development.

The effect of the lack of this key decision-making tool is unimaginable, and the continued suffering of the majority of the population in Africa is likely to continue without it. Hence, with a good grasp of the relevant citizen data, demographics, and information, governments in Africa will be in an excellent position to drive a digital economy, achieve citizen engagements easily and also formulate enabling developmental policies that will improve e-govenance. They will also be able to measure the impact of these policies and also get aids when required from agencies like The World Bank (WB), The UK Department for International Development (DFID), The United States Agency for International Development (USAID), World Trade Organization (WTO), World Health Organization (WHO), International Monetary Fund (IMF), United Nation(UN) and its agencies among others.

The  Nigerian government and other African governments need to consider the establishment of a specialized agency “Big Data Management Authority” saddled with the responsibility of implementing the framework discussed in this piece and much more. Good luck!

How may you obtain advice or further information on the article?

Dr Timi Olubiyi is an Entrepreneurship and Small Business Management expert with a PhD in Business Administration. He is a prolific investment coach, business engineer, Chartered Member of the Chartered Institute for Securities & Investment (CISI), and a financial literacy specialist. He can be reached on the Twitter handle @drtimiolubiyi and via email: drtimiolubiyi@gmail.com, for any questions, reactions, and comments.

Feature/OPED

A Journey Through Policy: My Personal Experience

Published

on

policymaking

By Saifullahi Attahir

If there was ever anything that gave me goosebumps and immense pleasure, it was being surrounded by intellectuals and mature minds absorbing facts and figures about governance, economics, public health, policymaking, national security, and international relations. In such situations I easily lose myself, forgetting almost all other things.

Even at medical school, my best lectures were those with frequent digressions, whereby the lecturer would discuss the pathogenesis of diseases for 30 minutes and later sidetrack into discussing politics, governance, or other life issues. I always enjoyed classes led by Prof. Sagir Gumel, Dr. Murtala Abubakar, Dr. Rasheed Wemimo, Dr. Aliyu Mai Goro, and co.

During such lectures, I often observed some of my colleagues disappointment for such deviation. I rather casually show indifference, for I was eternally grateful for such discussions due to the stimulatory effect they had on my mind.

After such classes, I sometimes followed up with the lecturer, not to ask about a medical concept I did not grasp, but to ask for further explanation on policy making, project execution, budgetary expenditures, why African countries are left behind, and similar pressing issues.

In situations where I can’t catch up with the lecturer, I jotted down the questions for further deliberation.

One of the manifest feature I know about my greediness was at reading books. I can open five different books in a day. I lack such discipline to finish up one before another. I can start reading ‘Mein Kampf’ by Adolf Hitler, and halfway through 300 pages, I would pick up ‘My Life’ by Sir Ahmadu Bello, and would have to concurrently read both until the end.

I often scolded myself for such an attitude, but I can’t help myself. The only way to practice such discipline was to at least read two different books in a day. Such was a triumph in my practice of self-discipline. This was apart from my conventional medical textbooks.

To some of my friends, I was called an accidental medical doctor, but actually it was a perfect fate guided by the merciful Lord that I’m studying medicine.

 For it was only medicine that makes reading books easier for you. Although time is precious in this profession, but  one finds it easier to do anything you are passionate about. The daily  interaction we have  with people at their most vulnerable state was another psychostimulant. Seeing humans suffering from disease conditions is heartache. Some of the causes are mere ignorance, poverty, superstitions, and limited resources.

The contribution one can give couldn’t be limited to just prescribing drugs or surgical procedures that end up affecting one person. It’s much better to involve one self in to position that may bring possible change to the whole society even in form of orientation.

What also motivated me more was how I wasn’t the first to traverse this similar path. Bibliophiles were common among medical students and medical professionals.

At  international level, the former Prime Minister of Malaysia, Dr. Mahathir Muhammad, was a physician.

Most of the current economic development of Malaysia was attributed to him. The South American revolutionary figure Che Guevara was a physician. Atul Gawande was an endocrinologist, health policy analyst, adviser to former President Obama, campaign volunteer to former President Bill Clinton, and adviser to USAID/WHO on health policies.

Frantz Fanon was another physician, psychiatrist, racial discrimination activist, and political writer. Dr. Zakir Naik was a renowned Islamic scholar, comparative religion expert, and physician.

At the national level, Prof. Usman Yusuf is a haematologist, former NHIS DG, and currently a political activist. Dr. Aminu Abdullahi Taura was a psychiatrist and former SSG to the Jigawa state government. Dr. Nuraddeen Muhammad was a psychiatrist and former cabinet minister to President Goodluck Jonathan.

During ward rounds and clinics, my mind often wanders to enquire not just  about the diagnosis but the actual cause of the disease condition; why would a 17-year-old multiparous young lady develop peripartum cardiomyopathy (PPCM)? Why would a 5-year-old child develop severe anaemia from a mosquito bite? Why would a 25-year-old friend of mine develop chronic kidney disease, and his family would have to sell all their belongings for his treatment? Why are our Accident and Emergency units filled with road traffic accident cases? Was it bad road conditions or lack of adherence to traffic laws and orders?

Why are African countries still battling with 19th century diseases like Tuberculosis, filariasis, and malarial infections? Why issues of fighting cervical cancer and vaccination campaigns are treated with contempt in our societies? Why access to basic primary healthcare in Nigeria was still a luxury 50 years after Alma Ata declaration?

The questions are never-ending…

Answers to these questions could be found not in the conventional medical textbooks like Robbins/Cotrand, Davidson, or Sabiston. Answers to these questions are there on our faces. Answers to these questions are tied to the very fabric of our social life, our public institutions, our culture, and our life perspectives.

In order to make any significant contribution towards the betterment of this kind of society, it would be quite easier as an insider rather than an outsider. You can’t bring any positive outcome by just talking or commenting. It was rightly stated that a cat in gloves catches no mice.

The real players in a game are always better than the spectators. A player deserves accolades despite his shortcomings, frequent falls, and inability to deliver as planned theoretically. For the player has seen it all, because so many things in public life are not as they appear. It’s only when you are there that the reality becomes visible. This is the reason why many leaders who have goodwill and enjoy public support appear to have lost track or contributed insignificantly when elected or appointed into office.

But despite all these challenges, one can’t decline to do something good just because something bad might happen. The risk is worth it….

Attahir wrote from Federal University Dutse

Continue Reading

Feature/OPED

A Healthier Future: President Tinubu’s Drive to Improve Nigerian Healthcare

Published

on

Letter to President Tinubu

By Victor Benjamin

Health is wealth,” a common adage echoing through Nigerian communities, encapsulates the fundamental importance of well-being. President Bola Tinubu’s administration appears to have taken this sentiment to heart, demonstrating a bold commitment to revolutionising Nigeria’s health sector.

Through a multi-pronged approach focused on strengthening infrastructure, upskilling manpower, and ensuring efficient healthcare delivery, the administration is signaling a new era for healthcare in Nigeria. This ambitious agenda, backed by tangible initiatives and achievements, holds the promise of a healthier and more prosperous nation.

President Bola Ahmed Tinubu’s administration has launched a comprehensive and ambitious agenda to transform Nigeria’s healthcare sector, signaling a new era of progress and commitment to the well-being of the Nigerian people. This multi-pronged approach focuses on strengthening infrastructure, upskilling the healthcare workforce, enhancing system efficiency, and addressing critical public health challenges. The administration’s actions are demonstrably moving towards a more robust and accessible healthcare system.

A cornerstone of this transformation is the aggressive expansion and upgrade of healthcare infrastructure. The federal government’s decisive action to convert the General Hospital Kumo in Gombe State into a Federal Medical Centre (FMC) is a prime example. This strategic upgrade, the second federal medical institution in Gombe, will significantly improve healthcare delivery in the Northeast region. Moreover, the upgraded Kumo FMC will serve as a teaching hospital for the Federal University of Kashere and Lincoln University, Kumo, contributing to the crucial training of future medical practitioners.

Furthermore, the administration is committed to dramatically increasing the number of functional Primary Healthcare Centres (PHCs) from 8,809 to over 17,600 by 2027. This expansion aims to bring quality healthcare closer to communities, particularly in underserved areas. To support this, the Basic Health Care Provision Fund (BHCPF) is being redesigned to provide more Direct Facility Funding to healthcare facilities, increasing from N300,000 to N600,000-N800,000 per quarter. The federal government has also identified 577 primary healthcare centres for immediate revitalization, indicating a focused and actionable plan.

Recognising that a strong healthcare system relies on a skilled workforce, President Tinubu has prioritised investment in human resources for health. The approval of 774 National Health Fellows, selected from each local council, aims to foster sustained improvements and cultivate future healthcare leaders. The administration has also set out to train 120,000 frontline health workers over 16 months, with 40,240 already trained, addressing critical manpower gaps in PHCs.

Additionally, the enrolment capacity of accredited nursing and midwifery institutions is being increased to meet the growing demand for healthcare professionals. A community health programme is being redesigned to create 126,000 jobs for community health workers, extending essential health services to remote and underserved communities.

Strengthening healthcare systems and efficiency is another critical aspect of the administration’s agenda. The Nigeria Health Sector Renewal Investment Initiative (NHSRII), launched in December 2023, serves as a strategic blueprint to improve population health outcomes through primary healthcare and enhance reproductive, maternal, and child health services.

The National Primary Health Care Development Agency (NPHCDA) is developing a three-year digitalisation agenda, encompassing facility functionality, supply chain management, financial management, and the community health information system.

This initiative promises improved efficiency and data-driven decision-making. Nigeria’s active participation in the Collaborative Active Strategy (CAS) further streamlines health campaigns and strengthens the overall health system.

Addressing critical health challenges is also a priority. First Lady Senator Oluremi Tinubu’s strong advocacy campaign against tuberculosis (TB), declaring it a health emergency and committing an additional N1 billion through the Renewed Hope Initiative, highlights the administration’s focus on tackling significant public health issues. The nationwide rollout of HPV vaccination, with over 12 million girls vaccinated, demonstrates a proactive approach to preventive healthcare.

The international community has recognised the administration’s commitment. The World Bank has approved $1.57 billion to support the health sector in Nigeria, focusing on strengthening human capital through better health for women, children, and adolescents. This significant financial support underscores the global confidence in the administration’s vision and execution.

President Tinubu’s comprehensive health agenda promises substantial benefits for the Nigerian populace. Foremost, it aims to drastically improve access to quality healthcare, particularly at the primary level, ensuring that even remote communities receive essential medical services.

This is complemented by a concerted effort to build a more robust and better-trained healthcare workforce, effectively addressing critical manpower shortages and ensuring adequate staffing across facilities. Simultaneously, the administration is focusing on strengthening healthcare infrastructure and equipment, upgrading existing facilities and constructing new ones to provide healthcare providers with necessary resources.

Furthermore, the agenda prioritises the creation of more efficient and transparent healthcare systems through digitalisation and improved financial management, streamlining processes and optimising resource allocation. Crucially, it demonstrates a strong commitment to tackling critical public health issues, such as tuberculosis and immunisation, through focused attention and targeted interventions. These multifaceted efforts collectively pave the way for a healthier nation, enhancing the overall well-being of the Nigerian people.

This comprehensive approach underscores President Tinubu’s understanding of the critical role of a strong healthcare system in national development. By prioritizing infrastructure, workforce development, system efficiency, and targeted interventions, the administration is laying the foundation for a healthier and more prosperous Nigeria. This narrative presents a compelling story of progress and commitment in the Nigerian health sector, marking a significant step towards a brighter future for the nation’s healthcare.

Victor Benjamin is the West/South South Director for Young Professionals for Tinubu (YP4T)

Continue Reading

Feature/OPED

Tax, Inflation, and Still Broke: The Economic Divide

Published

on

Chiamaka Happiness Madueke Economic divide

By Chiamaka Happiness Madueke

What’s worse than being taxed? Being taxed invisibly and twice.

When the government tightens monetary policy; hikes taxes, and removes subsidies, all in one breath, you would expect the economy to breathe easier. But in Nigeria, the air seems to feel thinner.

Over the past few years, Nigeria has embraced a series of bold economic reforms; floating the Naira, removing fuel subsidies, and pushing revenue generation targets. These actions can generally signal fiscal discipline and long-term growth.

For example, the Nigerian government reportedly saved N3.6 trillion from subsidy removal in just the second half of 2023, but beneath the policy headlines lies a quieter story: one where debt servicing, inflation, taxation, and informal charges collide to create an invisible burden on everyday transactions.

Yes, between visible taxes, invisible inflation, and unofficial levies collected by everyone and no one, low-income Nigerians allegedly seem trapped in a system that squeezes them from every direction.

Let me digress for a second, but I’ll bring it back in a bit, I promise.

At first glance, taxation and inflation may seem like two separate forces: one a fiscal tool, the other a macroeconomic consequence. But in Nigeria’s current climate, they’re colliding in real time, shaping the daily experience of citizens and businesses alike.

The Taxation Puzzle

Nigeria’s tax-to-GDP ratio remains among the lowest globally; just 10.86 per cent as of 2022, according to the Federal Inland Revenue Service (FIRS). That’s well below the 15–25 per cent global average, and even lower than the African average. Yet, the informal economy, which contributes nearly 58 per cent to GDP, bears much of the untracked tax burden through local levies and fees.

This mismatch reveals a chronic revenue problem and this challenge becomes even more critical when you consider the growing cost of debt. But borrowing isn’t inherently bad; in fact, strategic debt can stimulate growth if channelled into things like power, roads, manufacturing, or digital infrastructure, projects that have a way of boosting the economy.

In an interview with Arise News, the CEO of Sterling Bank, Mr Abubakar Suleiman, said, “If you are not collecting enough revenue to service a debt, that is a problem”. But it is even worse when you’re not using that debt for productive, economic reasons; that’s a structural problem.

Then I ran the numbers, in 2022, Nigeria reportedly spent a large per cent of its revenue on debt servicing. That means most of what we earn do not go to schools, hospitals, or industrial development, they go to paying back interest. That’s like living on a credit card and using it to buy lunch, not build a business that would make profit.

In 2023, 64.5 per cent of the federal government’s total revenue was used for debt servicing, according to a BusinessDay analysis of data from the Budget Office.

Although this was higher than the 48.5 per cent in 2022, it was still less than the 71.8 per cent in 2021. In 2023, actual revenue was N11.88 trillion, slightly above the predicted N11.05 trillion, while actual debt service costs were N7.66 trillion, 16.9 per cent higher than the projected N6.56 trillion.

In comparison, Nigeria’s revenue for the fiscal year 2022 was N7.76 trillion, falling short of the N9.97 trillion projection. The fact that debt servicing increased to N3.76 trillion from an anticipated N3.69 trillion in spite of this shortfall shows that debt obligations are an unavoidable burden even in cases where revenues are below budget.

This pattern emphasizes how little financial flexibility the government has, particularly when it comes to financing infrastructure or social projects.

By September 30, 2024, Nigeria’s total public debt had climbed to N142.3 trillion, reflecting a N8.02 trillion increase from N134.3 trillion in June 2024. This 5.97 per cent rise was attributed not only to additional borrowing but also to the depreciation of the Naira, which significantly inflated the naira value of external debt.

The surge in debt has not been matched by a proportional increase in productive investment, raising questions about the sustainability and strategic intent of government borrowing.

Adding to the concern, the total debt service cost reached an estimated N3.57 trillion in just the third quarter of 2024 alone.

With limited income from formal taxation, the government allegedly struggles to adequately fund infrastructure, education, healthcare, and essential services.

In response, efforts are underway to:

  • Widen the tax base by formalizing more of the informal sector,
  • Improve compliance through digital platforms and data integration,
  • Rationalize outdated and inefficient tax incentives.

However, increasing tax pressure and its enforcement especially now can be politically unpopular and economically dangerous. Why? Because inflation is already eating through household budgets.

The Inflation Squeeze

Nigeria’s inflation rate has remained stubbornly high, largely driven by the rising cost of food prices, currency depreciation, removal of fuel subsidy and Monetary policies like floating the Naira.

As of early 2024, inflation was between 28–30 per cent, with core inflation also climbing. This diminishes buying power, worsens poverty, and increases the expenses of conducting business.

Essentially, inflation operates as an unnoticed tax, one that hits the vulnerable the hardest, especially low and middle-income earners whose wages aren’t keeping pace.

One key statement caught my attention in recent times, “We must choose between Taxation or Inflation.”

At first, that sounded a bit extreme. But the more I thought about it, the more it made sense.

Taxation is visible, structured, and can be progressive. Inflation, on the other hand, is unpredictable and regressive, a silent thief that spares no one, but affects the poor more because they have less to spend.

For low-income Nigerians, a controlled tax system paired with targeted public investment, might be more manageable than the current wave of inflation that raises the price of garri, beans, and palm oil every other week for Aunty Onyeka and thousands like her.

The “Other” Taxes We Don’t Talk About

But this brings me to a creeping question. What about the unofficial taxes? The ones no one talks about?

How are the indirect taxes collected from public transporters by local levy collectors accounted for? The levies collected from Mama Basirat who hawks around Oshodi market selling cooked food has watched the price of palm oil jump three times in six months while still paying a N500 “market ticket” every morning before selling a single plate of rice. Who tracks that revenue?

Yes, the most shocking revelation for me has been realizing that even hawkers – hawkers, who sell sachet water or fruit walking down roads and the street corners are being taxed in some areas.

Or rather, charged daily levies by local agents. And no, I am not condemning that, just that this issue raises some serious questions in my head:

  • Where does this money go?
  • Is it remitted to any official government account?
  • What public service is being provided in return?

If we zoom out, the irony becomes obvious. We keep saying Nigeria’s tax-to-GDP ratio is too low. Yet, many of the poorest Nigerians are already being taxed, just not in ways that show up in FIRS data.

They’re taxed by local councils, market unions, transport associations, and sometimes even self-appointed local revenue agents. Is this form of taxation? It’s neither progressive nor transparent, nor accountable.

So, What Are We Really Talking About?

When we push for increasing tax revenue, we often picture corporate profits or high-net-worth individuals. But the reality? Many of the levies, fees, and informal charges disproportionately hit those in the informal sector; drivers, traders, hawkers, the same people inflation is already punishing the most. It’s a vicious cycle.

Drivers hike transport fares to meet the levies. Hawkers bump up prices to stay afloat and somewhere in the middle, people start paying more for food, transport, and basic needs. So, yes, taxation may be more beneficial than inflation but only if it’s fair, formal, and genuinely

used to improve lives. Until then, we seem to remain stuck in a system where the poorest pay the most, twice over: Once through rising prices that their income can barely meet, and again through levies that don’t even show up in the books. The informal sector is already contributing indirectly through taxes and levies. But where that money goes, that’s the real mystery.

The discussion about taxation in Nigeria must expand beyond the official tax system to consider these informal levies. And that, more than anything, is what really got my thinking juices flowing.

Maybe the conversation shouldn’t just be about taxing more, but taxing better, and ensuring value for those already overburdened.

Continue Reading

Trending