THE Nigerian oil industry has continued to play a significant role in the nation’s drive towards economic growth and development.
Nigeria remains Africa’s leading oil producer and major crude oil exporter in the world. Although herpetroleum reserves, production and exports constitute only a small proportion of the world total, the contribution of the sector to the national economy is quite tremendous.
The sector has become the mainstay of the economy, pivoting other sectors and accounting for well over 90 per cent of the country’s foreign exchange earnings and well over 80 per cent of consolidated government revenues.
There is no gainsaying the fact that all the three tiers of government in Nigeria predicate their development agenda on revenue derived from oil and are therefore vulnerable to the vagaries in the international prices of oil. Indeed, it is to be noted that oil resources are not infinite, and the fear is already there that Nigeria's oil assets may dry out in less than 50 years.
The question has always been asked: Without oil, does Nigeria and by extension the component states have a future? No, if we maintain our current attitude of rent seeking from an enclave economy. Yes, if we look beyond the ephemeral oil present and diversify the economy.
It is gratifying to note that Delta is already looking inward and thinking ahead of the possibility of Nigeria without oil. The Governor of Delta State, Dr. Emmanuel Eweta Uduaghan, has successfully synchronized this into his Three-Point Agenda in the form of Delta Beyond Oil, DBO.
In point of fact, for His Excellency, the DBO is essentially ‘…an economic agenda; that will develop other areas of the economy, different from oil and gas but using the current funds coming from oil and gas to develop the other areas of the economy, especially in the areas of agriculture and solid minerals’.
The DBO initiative is also geared towards unleashing the alternative sources of revenue for the economy of the state, especially in terms of development of the dormant mineral resources, which the state is endowed with. The state is guarded by the fact that oil wealth is the catalyst that engenders corruption, kills creativity and also fuels low national productivity. This, as it were, has created what is called the resource curse.
In an event of the depletion of Nigerian oil resources, Delta State is one of the few states that can survive the fiscal fall-out. It is instructive to note that the Delta State Government through the Delta State Board of Internal Revenue, DBIR, is already factoring tax into the DBO mantra. This understanding underscored the theme of the 2013 DBIR retreat tagged: "Delta Beyond Oil: Implications and the Role of DBIR", which took place recently at the state capital, Asaba between May 13 and 17.
The excitement of the Governor was palpable when he declared the retreat open. He gave an expose of the concept of DBO and gingered participants by soliciting their perception of DBO. He also enjoined participants to be forward looking by being game changers in the new Delta Beyond Oil. The Chairman of the DBIR Joel-Onowakpo Thomas, in his welcome address, appreciated the Governor’s proactive thinking by approving the 2013 retreat. The Chairman was unequivocal about the Governor’s commitment to the needs of the Board and assured His Excellency of the Board’s unwavering commitment to the Delta Beyond Oil initiative.
At the plenary and technical sessions, the array of papers presented at the retreat was a clear manifestation of the fact that the Board is endowed with the right human capital to drive the renewed quest for tax to be a decisive variable in the new DBO. The utility of tax and taxation was laid bare while also dissecting the implications and the role of DBIR in the DBO.
Projections were made on vision of Delta when oil wells dry out and how Delta State can use the available oil resources to invest and prepare itself for the eventual non-oil economy period. The importance of a non-oil revenue base was emphasized as the way forward in diversification of the state’s economy through innovative strategies.
Taxation was noted as top on the agenda to solve the problem of dwindling oil revenues because a ‘life without tax is a lie’. ‘The very act of taxation has profoundly beneficial effects in fostering better and accountable government ‘.
One of the most basic advantages of taxes is that they allow the government to spend money for basic operations and stimulate economic growth through infrastructural development. Taxes also redistribute wealth between tax payers and individuals who receive government assistance. Instead of consecutive borrowing with its attendant accumulation of debt, it is salutary to look inward and employ tax as a veritable means of revenue generation.
What to note is that the 2013 DBIR retreat was for the Board and staff a time for sober reflection and introspection about their place in DBO. Right from the inception of the Uduaghan’s administration, it was noted that there has been a steady increase in IGR. This, to all intents and purposes, is a strong indication that Deltans are already tuned to adjust to the new dawn.
Their enthusiasm is propelled by the visible mega projects which are partly funded by tax payers in the state. The focus of the Delta State government on massive infrastructures such as the dualisation of the Asaba-Ughelli road, the Asaba International Airport and the expansion of the airport at Warri as well as the on-going Independent Power Plant at Oghara are loud indications that the state is prepared to provide enabling environment for industrialisation and its attendant diversification of the revenue base of the state.
The presence of up and running small and medium scale industries will engender taxation and by extension, increase in revenue for the state and less dependence on oil revenue. There is no doubt that Delta state is already at the next level as far it has elected to free itself from the petroleum incubus.
Mr. MIKE OSUJI, a commentator on national issues, wrote fromWarri, Delta State.
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