“The richest man in Nigeria will take 42 years to spend his wealth at 1 million per day” – Inequality in Nigeria report by Oxfam, 2017
It’s a little over five months that we, and by we I mean almost everyone in the world, expressed shock over a report by Oxfam – the British humanitarian organisation that aims to tackle poverty – that eight men are as rich as half of the world.
So while we are still letting that sink in, the charity has released another report that hits close to home. In their words “the five richest men in Nigeria could end extreme poverty in the country yet 5 million face hunger”. The report titled “Inequality in Nigeria: Exploring the Drivers”, was released yesterday 17 May 2017 and has already ruffled some feathers in the corridors of power.
Nigeria’s Minister of State for Budget and National Planning Zainab Ahmed raised concerns over what she described as the “language tone and style of the report”. She further went on that the methodology of the report raised questions on whether it is for empirical or theoretical purposes, adding that Oxfam needs to state what it intends to achieve, plus a bunch of other concerns that aren’t of importance to the average Nigerian, such as “Who are the elites?”
The report is quick to cite that poverty and inequality in Nigeria are not due to lack of resources, but to the ill-use, misallocation and misappropriation of resources. It also identifies a political class that is out of touch with the struggles of average Nigerians and a deep-seated culture of corruption.
Outside the report, the latest transparency campaigns in having an open National Assembly have shown that it will cost taxpayers $540,000 to maintain each of Nigeria’s lawmakers as reported by Yomi Kazeem of Quartz Africa – who is paying whom?
The paradox of growth for Nigeria, a country that is still attributed as the largest economy in Africa despite the recession is that, the rich keep getting richer while the poor keep remaining poor with lesser accesses and opportunities to bridge the gap – essentially, the middle class has been shaved out of the population with the 90’s.
A critical assessment of the report paints a picture as made popular by late afrobeat legend, Fela Anikolapo-Kuti, “suffering and smiling”. Between 2004 and 2010, the number of poor Nigerians (those living below the international poverty line of $1.90 approximately N750) jumped from 69 million to 112 persons, representing 69 percent of the population.
Public resource mismanagement, policies that support favouritism and a regressive tax system both in the formal – where the rich pay less – and the informal sectors – where the poor pay more – have also played a part.
The report states “On one side, big multinationals receive questionable tax waivers and tax holidays, and utilise loopholes in tax laws to shift huge profits generated in the country to low tax jurisdictions. In some cases, these tax waivers have been captured by the economic and political elite and used expressly to garner political patronage. It has been estimated that every year Nigeria loses $2.9 billion of potential revenues to questionable tax incentives. This is equal to about three times the country’s total health budget in 2015. Other revenues are lost because some companies shift profits to shell offices in tax havens and countries with low tax rates. A recent investigation found that between 2010 and 2013 a major telecom company had transferred N37.6bn (about $119 million) of profits generated in Nigeria to its Dubai office where it had very negligible operations, to avoid appropriate tax aligned to profit levels made from the country.”
A finding that resonates with a report by another non-governmental organisation, Action Aid who had reported in 2016 that Nigeria lost 3.3 billion dollars from tax holidays given to the NLNG consortium made up of Shell, Total, Eni and the Nigerian National Petroleum Corporation [NNPC].
The report also gives credence to the World Happiness Report that was released in March 2017, placing Nigeria at 95 out of 155 using key variables such as GDP per capita, social support, healthy life expectancy, social freedom, generosity, and absence of corruption.
Inequality of all forms places barriers to empowerment and more so in a country like Nigeria where the teeming youthful population are eagerly seeking opportunities to make it.
One fails to see why the report is of any issue to the bigwigs in power given that the men mentioned in the report have yet to make any statements regarding the finding. However, it would be tricky to see what their standing would be. Would there be a gaffe that actually shows how disassociated they are from the realities on ground that average Nigerians face, or would there be concerted efforts towards evening the situation?
The men cited in the report by Oxfam were picked from Forbes magazine listing of the wealthiest Nigerians in the world, and they are:
- Aliko Dangote – $14.4 billion;
- Folorunsho Alakija – $1.55 billion; and
- Abdul Samad Rabiu – $1.1 billion
On its part, Oxfam is urging the government to take some of the following actions:
- Strengthen policies and laws for the economic empowerment of women, ensure the implementation of two key recently-adopted provisions: the National Gender Policy 2014 and the Violence against Persons Prohibition (VAPP) Act 2015, while also ensuring the Gender and Equal Opportunity Bill is passed as soon as possible.
- Make the tax system more progressive, close the loopholes in Nigeria’s tax laws that allow for tax avoidance and tax dodging, eliminate unfair, unnecessary tax waivers and tax holidays, reform the allocation of tax incentives.
- Bring down the high cost of governance and introduce measures to safeguard the policy-making process from capture by elites or vested interests.
- Urgently youth unemployment crisis and revive the Nigerian private sector.