Tuesday, November 17, 2015

On Ben Murray-Bruce and the N5k Social Benefits Scheme...


Ben Murray-Bruce, Federal Senator representing the Bayelsa East Constitutency, recently tweeted this while sharing his ideas to fund a social benefits scheme for unemployed graduates in Nigeria.

I don't agree with his plan and I don't think Nigeria can successfully implement this scheme as things currently stand. Here's why:

1. There is NO confidence that the extra tax will be used for the intended purpose. This may be the most basic issue with taxes in Nigeria. If we disregard the other issues with this proposal for a moment and assume 'salary earners' agree to fund the social benefits scheme from their earnings - it comes down to trust. I, and many other Nigerians, simply don't trust elected officials to manage funds judiciously. And why would we? News media is rife with reports of misappropriated funds. We don't see results of the taxes we already pay!

2. The Social Security Net is a Federal proposal; Personal Income Tax is paid to State Governments. State Governors did not promise N5k for unemployed graduates, the Federal Government did. Except the Nigerian Tax system is overhauled, which opportunity we should frankly seize for more productive ideas, increased Income Taxes simply mean more revenue to the State Governments. States, most of which are already struggling to meet their obligations, would happily jump at the extra income and throw it down the recurrent expenditure drain!

3. Data. Or, the absence of it.

Uncle Ben's ideas for identifying unemployed graduates will not work. Neither the BVN nor the PVC registration process collects information about education, and the National ID Card database does not 'talk to' the BVN or PVC databases. It should also be noted that fewer than a third of the country has been issued with National ID cards, and the National ID registration process does not verify educational qualifications.

Even if the Federal Government manages to raise the money, Nigeria does not have a way to identify unemployed graduates at scale today.

*****

It is probably all too easy for me to say - but I would rather have the Federal Government spend the money cleaning up the Aegean Stables that constitute the business environment in Nigeria. Fix power, facilitate high-speed internet, fix infrastructure, facilitate micro-credit, simplify the process to register a business, reform the foreign exchange and tax system etc etc - and watch businesses rise to the challenge of providing employment.

Easier said than done... I know.

Cheers to the rest of the week!

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