‘Kayode Akinsola is Doctor of Business Laws and Corporate Governance, he speaks with our correspondent and task President Tinubu on a path to chart in revamping the Nigeria Economy.
1. There is a new political dawn and this time calls for more concerted efforts in the areas of generation of IGR, especially by State governments ,what is your suggestions on how this can be achieved ?
Akinsola: Without being economical with the truth, only four States in Nigeria can survive within six months with a recourse to the monthly federal allocation. In actual fact, some states in Nigeria cannot two months salaries and overhead of their monthly dues in their respective states. This has not only made the state Governors indolent, but less creative from looking inward as to the abundance of what could empower their financial independence. You will recall that former President Obasanjo refused to disburse the monthly allocation of the Lagos for several months, how many states could weather such storm? My suggestion on how their viability could be achieved is that the individual state must have their investment arm, which should be apolitical, such agency must be accorded with a status of common patrimony. Equally, there is no state in Nigeria with no natural or Human Resources, how to generate funds through these funnels should be considered to make their states buoyant and have more abundance of resources.
2. The new Electiricity Generation and distribution Law signed into Law by President Bola Ahmed Tinubu us another policy that guarantees the capacity of the states to enhance the capacity of small and medium scale businesses ad well as industrial concerns, how do you think this will translate to goodies for Nigerians?
Akinsola: Without mining words, it very difficult to survive in we had continued on the old order. The Generation and easy Distribution of power is a good step in the right direction that was made by President Tinubu, and this should be embraced by the State Governors. The privatization and deregulation in the power sector started under the leadership of former President Obasanjo, and beyond the purchase of the National Electricity Power Authority (NEPA) or Power Holding Company of Nigeria (PHCN), the Capitalists in conjunction with States should tap into the new Laws in making electricity available to the SMEs, thus it is good development.
3. The need to increase the minimum wage for workers to cater for the shortfall of expenses for the minimum wage has been one if the raging issues in recent times do you think some states would be able to muscle up the capacity to pay what would be regarded as living wage ?
Akinsola: Truthfully, majority of the State governments cannot afford the minimum wage being demanded by the Labour congress, but when the workers too take a cursory look on what the political office holders are earning as emoluments, it is natural for them to agitate. The end point of all these increment is inflation, and this has started growing by the day.
4 What is your assessment of the current IGR projections for states and what should be done to jump-start things ?
Akinsola: Majority of the States are not generating enough IGR, atimes they inflate their IGR and one wonders the reason for their inability to meet up with their financial obligations. Beyond the Federal Allocation and State Taxes, there are other mechanisms that could be set in motion to increase the IGR of each state, depending on their potential and peculiarities.
5. Apart from electricity which is the most popular , what other way can the Federal government be enjoined to release more powers to states in order to be more viable?
Akinsola: Majority of the powers that are resident in the exclusive list in our constitution today, ought to have been relinquished to the State Governments. Items like Mining, Waterways and major taxes. By doing this, the state governments will have more earning capacity.
6. What are the factors that determine the economic viability of states ?
Akinsola: There are many of them, but I will mention just few. The business environment and governmental policies of each state are determining factors, other variables are availability of Skilled and unskilled workers, infrastructures within the state, natural resources and access to capital.
7. What is your opinion about the free flow of the naira which is a new policy of the Federal government through the CBN?
Akinsola: Though, it looks like a wrong policy, it remains one of the best decisions ever made by President Tinubu lately. With the free flow, many fiscal uncertainties will reduced, exporters will now earn more money on their exports, which in effect aids our GDP and brings deflation. Diaspora remittance as well as moping up of excess liquidity of Naira in our system.
For me, it would also boost the revenue of the government through additional remittances of the exchange rate and excess to the federation account by the Central Bank of Nigeria. The goodies in some of these policies will be felt in less than a year, not immediately.
8. How should the fuel subsidy accrual be managed to ensure that everyone benefits ?
Akinsola: Everyone cannot benefit from the proceeds of Subsidy instantly. Nigeria as a Nation has been servicing debts over the years, and one advantage of its removal (subsidy) is that it will lower our debt burdens. With such, we can then begin to further create enabling environments that aids foreign investment, job creation among others.
9. Do you support restructuring and in what form?
Akinsola: People have come to argue that Changing or suspending the current Constitution is the only panacea to restructuring, and I have consistently differ on this. If the President and State Governors could put few policies in place, I am sure the restructuring would take place immediately. We all know that the majority of budget goes to recurrent expenditure and we import more than we export among other issues. I am of a great conviction that the viability and sustainability of each state will surely berth a new wave of restructuring.
10. Who is Barrister Kayode Akinsola ?
Dr. Kayode Akinsola is the founding Partner of Queens Attorneys and teaches Law at the Chrisland University in Ogun State.