Nigeria’s unemployment cancer

[MrVan]

I ATTENDED the last District Conference of Rotary International District 9140 recently. A team of Argentine nationals led by Rotarian Ricardo Cravero, a chemical engineer, was at the Conference as Group Study Exchange, GSE, and they lectured Rotarians on some salient issues about Argentina.

We were all jolted when a member of the GSE team, Rotarian Juliana Albertengo, a pretty young agronomic engineer, told the audience that "education is free and compulsory from the kindergarten to university in Argentina". She went on to say that "the unemployment rate in Argentina is a paltry 12 percent".

These two disclosures sent all of us at the Conference thinking. We looked at the natural endowments of the two countries and what the leaders of the two countries were able to do over the decades, with such God-given assets. This thought necessitated this piece.

Why is education not free at all levels in Nigeria? Why has unemployment remained a festering cancer in Nigeria? Why can't Nigeria harness all its endowments to the benefit of its teeming citizens, especially the unemployed? Why can't we take proper care of our aged and retirees? The questions are many and varied.

The Vice President, Enugu Zone of Manufacturers Association of Nigeria, MAN, Dr. Frank S. U. Jacobs, made a spirited attempt at providing some answer during a recent one-day sensitization forum on taxation reform in Owerri.

We have severally been told that government has no business being in business and this clearly explains why all government-owned business concerns were recklessly managed. They closed shop usually not long after commencing operation. Workers engaged in such establishments ultimately get thrown into the job market again.

Irked by the prevailing unfriendly business environment, MAN, with technical support of the Centre for International Private Enterprise, CIPE, Washington, United States of America, conducted a research recently on the burden of multiple taxation on businesses in the three selected states of the South East geo-political zone: Imo, Abia and Anambra.

The essence of the study was to strengthen the capacity of the private sector to contribute more meaningfully to policy making process as well as enhance the capacity of local, state and Federal Government officials to appreciate tax policies and their effects on businesses.

It has since been established that the organised private sector that should ordinarily have come to the rescue of these unemployed seems not to be finding it easy to operate in the country. Delivering an address at the Owerri Conference, Dr. Jacobs lamented that multiple taxation or uncoordinated tax administration has been threatening the survival and growth of businesses in Nigeria.

"The incidence of multiple taxation is reported to be on the increase from year to year with the introduction of new taxes and levies all the time by various tiers of government. Currently, there is a consensus among business people in Nigeria that the tax environment is increasingly getting unfriendly and becoming a disincentive to businesses," Jacobs said.

There is also this mad quest to increase revenue for governments. Business entities and hapless citizens are often harassed by club-welding revenue touts engaged by various tiers of government. Sequel to this uncouth mode of operation, economic activities are sadly disrupted.

It is no longer news that company vehicles conveying products have severally been impounded by these revenue agents and huge sums of tax slammed on the companies. Those who can no longer accommodate this opted to relocate to other countries where the environment is more friendly and conducive for their existence. Again, workers are thrown into the job market.

Apart from the vexed issue of multiple-taxation, there was also the effect of insecurity on the business climate. Businesses either relocated to relatively safe zones or completely shut down. With this development, the manufacturing sector' contribution to the nation's Gross Domestic Product, GDP, declined significantly from 9.5 percent in 1975 to 6.65 percent in 1995.

Jacobs equally lamented that the GDP further dipped from 3.42 percent in 2005, but made a marginal increase to 4.21 percent in 2010. He similarly lamented that "manufacturing capacity utilization declined rapidly from 70.1 percent in 1980 to 29.29 in 1995", adding that 52.78 percent was recorded in 2005 but the figure declined to 46.44 percent in 2010.

"This scenario did not leave employment generation unaffected. A sample survey carried out by MAN through a random selection from over 2,000 companies, which spread across the 10 sectors in MAN, showed that in 2001, no fewer than 1,323,586 people were employed by the sampled companies. The number declined to 1,005,861 in 2006 and 966,395 in the first half of 2010", Dr. Jacobs said.

Addressing the participants also, the Permanent Secretary, Ministry of Planning and Economic Development, Imo State, Mr. Callistus Ekenze, commended MAN for its efforts to protect its members.

He however claimed that there is no real multiple taxation in Nigeria, stressing that most companies that operate in Imo do not pay tax "but what we have in Imo is multiple revenue obligation". He appealed to all agencies to first go through the tax laws with a view to knowing those that are applicable to them.

It stands to reason that unless tax collection is carefully delineated, multiple taxation eliminated and the environment made very friendly for businesses to thrive, the unemployment situation will remain high and a festering cancer in this land.

Mr. CHIDI NKWOPARA a journalist, wrote from Owerri, Imo State.

Vanguard Nigeria