Date: 2016-06-11

Dr. Muritala Awodun is the Executive Chairman of the Kwara State Internal Revenue Service. He tells SUCCESS NWOGU about the challenges facing state governments and how they can boost their Internally Generated Revenue

How would you assess the economic challenges facing the country?

The Nigerian economy is at a standstill. Most of the expectations in terms of economic activities are not moving in the direction that the people expected. Nobody can see clearly the direction the economy is going for now. This is simply because the Federal Government has not made a clear-cut economic pronouncement. If you have not made a clear cut economic pronouncement, a lot of things will be on hold. The way it is right now, most people doing business with Nigeria are not too sure the direction the Nigerian economy is going. For that reason, they have to keep many things on hold.

The state of the prices of crude oil is not favourable to Nigeria and that is the major source of our foreign exchange. As a result of that, you see what has happened to the foreign exchange rate. And because we are too much dependent on imported products, our economic activities have been affected. The state of the economy is not palatable. The reality is steering us in the face and as a nation, we just have to rise up to the reality.

Can you mention some of the ways the country can tackle these economic challenges?

To rise to the reality, the government and the people have a lot of things to do. The government must make things happen in the direction of that reality. It is obvious that there is no more free oil money. What that translates to is that the government will not get the kind of money that we used to see. So, efficient and judicious utilisation of the few amount of money that is available is very paramount.

Where we used to waste fund before, we cannot afford such wastage any longer. So we have to cut down on so many things and utilise our fund judiciously. In the past even when we had the oil revenue, if Nigeria earned a $100 for instance, what we got in terms of value as a nation was less than $40. The $60 went in form of waste, either through corruption or over-pricing of items, such that the value the people got from each dollar that was earned by the nation was less than the 40 per cent of what that $100 can actually provide in another economy.

Secondly, we should look inwards and face reality. There are so many resources in this country which have been abandoned. This requires a kind of critical thinking, innovation, hard work and application of technology that the Nigerian mentality does not support, because we had cheap alternatives; now the cheap alternatives are not there again. We should look in the direction of those other resources and begin to think of how to transform these other resources into wealth that can be used to develop and build the nation.

What are those resources?

We know that as a nation, we have minerals in abundance here and there. We have also abundance of arable land that we have left untilled for so long. We should look in the direction of those resources, such as solid mineral and land; how to use land appropriately and even the scorching sun which is there for us that could just be transformed into energy that we are just wasting. Also the gas we are flaring could be utilised well.

Stakeholders have stressed the need for state governments to shore up their Internally Generated Revenue. Is this a solution to the economic challenges facing the country?

That is part of facing reality. The IGR portion of our resources have been abandoned, they have not been given due attention. The economic reality is now making everybody to pay more attention to it. Developed countries pay attention to taxes and revenues that are generated internally. Due to the oil money in Nigeria, we have abandoned the IGR. We were not efficient in the collection of IGRs. The cheap money coming from Abuja has made us to forget it. But now we have to look at those things that we have neglected in the past.

Both at federal, state and local government levels, governments are beginning to move in that direction to see how they can improve on the processes of collecting IGRs such that they can get revenue from it or plug leakages that are actually taking those revenues from the sources through which government can utilise them. But the truth is that the matter is not all about collecting those revenues. What about the revenues that we got cheaply in the past? What did we do with them? It is more of when you efficiently collect those revenues, utilise them efficiently so that you can actually have the opportunity of collecting more. It is a cycle. Whether you like it or not, whatever you make, if you plough it into productive ventures, then it will give you the capacity to make more.

How can we ensure effective collection of revenues?

It is all about the people and the process of collection of revenue. Irrespective of the level we are talking about, it is when you have the right kind of people in an appropriate process that you get better result.

In the past, there had been lack of attention in those directions in most of the states and LGs. But now, some kind of concentration is being attached to the process of collecting and ensuring that the right kind of people who will ensure that the right kind of process is mobilised appropriately and efficiently are put in place. So you see, states do some kind of transformation of their IGR collection by changing their laws to make it independent of the civil service, try to get the right kind of people into the collection mechanism, and ensure that they tighten up the process of collection and introduce technology into the process of revenue collection.

What is the best approach?

There is no best approach. It is all about the most appropriate approach. If we decided that we are going to collect cash, and we put people in charge and they are well remunerated and trained, tutored and well cultured, you will get all your money. So you have to address the values because the value system is an issue here. If you put the best of technology and you put the wrong kind of people with the wrong kind of value, they will still mess it up and the money will not get to where it should get to. Technology has the capacity to bring about efficiency but it is when you have the right kind of people with the right kind of value working with the technology because ICT itself will not transform into increased revenue.

It is people who are going to drive those technologies and those people should have the right kind of training, value and understanding of the process for them to be able to do what you want them to do for you. So it is a combination of good technology, people and process that gives you the best. The best is a function of where you are; it is a function of the peculiarity of your state. What will work in Lagos may not in Kano and what worked in Kano may not work in Maiduguri what worked in Maiduguri may not work in Bayelsa. Yes there is a global aspect of it but the peculiarity aspect of it is still there.

So how is it working in Kwara?

As far as Kwara in concerned, what we have done in Kwara is to change our law to make the revenue service independent of the civil service such that it is more purpose-driven. The law has enabled the service to be able to stand alone, get its kind of people, remunerate them appropriately, train and discipline its own kind of people such that the efficiency of collection and the harmonisation of the collection system can be done properly. What we are doing in Kwara is transforming the revenue process but we cannot say that we are the first to do it. Other states, at least, not less than four other states had done it before Kwara so we had to borrow from those states that had done it before. But in borrowing from them, we also had to think of the peculiarities of Kwara and adapt whatever they have done to our own situation. Not just swallowing exactly what they have done but at least adapting it to our situation.

So is Kwara getting a lot of money from tax or IGR?

This is what we just started and the process has started changing. When government brought out this law and assented to it on June 22, 2015; it took government another three months after signing the law to put the people together. Upon putting the people together, we also had to put the technology and the process right, we had to train these people before we opened our door. What we have seen in the last three months of operation (because we started effectively operation from January) is a significant improvement of IGR collection. When the new law was signed in June, the total IGR collection in the state was about N700m monthly, it started dropping from that June, to as low as N300m monthly in December because of the transition. But effectively from January we moved from N953m in January to N1.05bn in February and to about N1.4bn in March. You can see a progressive rise again from what it used to be to what it is right now.

Never in the history of Kwara did the state have N1bn monthly. But we crossed the N1bn mark in February, just barely a month after we had started. Those are evidences of efficient collection because when you talk about collection, it is not reasonable unless there is a result to show for it. But beyond that, the people are also looking forward to what the government is going to do with this money. We are looking forward to a situation whereby the government will be able to, at least, begin to plough back these collections into improving the lives of the people of Kwara.