Why Kano Generates Poor Revenue Compared to Lagos, Rivers, Kwara -Businessman
A Kano State-born businessman, Alhaji Ibrahim Shehu Dandakata, said the state will continue to generate poor revenue from major internal sources, unless it evolves an effective mechanism for tax collection.
He said the problem of low internally generated revenue (IGR) for Kano, stems from the absence of a robust mechanism for assessment and collection of tax from businesses and individuals, in the state.
According to the Economic Confidential 2019 Annual State Viability Index (ASVI), Kano was placed number 12, among the 36 states of the federation.
It received N181,737,995,194.82 from the Federation Account Allocation (FAA), while it merely generated N40,593,701,332.48 as IGR, representing 22%.
The magazine reported that Kano State occupied the 6th position in its 2018 ASVI, trailing Lagos, Ogun, Rivers, Kwara and Edo States, respectively.
In the 2018 index table, Kano, it was observed, got N183,422,664,625.55 as FAA, but it generated N44,107,375,284.25 as IGR.
Speaking in an interview with the Economic Confidential, Alhaji Yahaya, who is the Director of Ondu Roofing Nigeria Limited, said the decline in Kano’s IGR capacity and subsequent drop in states’ viability rating, is not unconnected with the fact that Kano Government lacks officials to properly access and collect tax for it.
According to him, since tax collection is directly linked with massive job creation and job opportunities, it is imperative that the State Government provides an enabling environment for ideas to be generated, and quickly evolve to become lucrative businesses.
He said: “Many residents of the state and businesses have an endemic fear over their money going down the drain after they pay tax. So, there is need to assuage their fear.”
Yahaya, also described as needless the obtaining of a fresh N299 billion loan from the Chinese Export-Import Bank by Kano State Government for a Light Rail Project.
According to him, what the government wants to use the loan for is not what people of the state need, at this particular time.
He observed that Kano’s transportation capacity, at the moment, is not even beyond the Bus Rapid Transit (BRT) mode, which is in place in Lagos State.
Hence, there is no justification for the government to insist on undertaking a light rail project, especially now that other developmental challenges confront the State.
Mr. Yahaya, stressed the need for the State Government to deploy the loan into investing in agriculture, through activating various dams across the state, for irrigation purposes.
“This will be more beneficial to the government itself, and people of the state, in general,” he noted.
He further maintained that nobody will move down to Kano for investment, without the necessary and solid-economic foundation been laid.
“So, all the jamboree of going to China and bringing in investors will not work. We must have a clear and definite agricultural and industrial policies. And the two must go together. They are the magic wands that will transform Kano’s economy,” he said.
The Ondu Roofing boss, stressed the need for the State Government to have a realistic database of persons and business organisations, statutorily expected to be paying it tax.
“They should also engage in massive advocacy, telling investors that Kano is a safe place to come and invest. Likewise, the relevant laws that are supposed to safeguard investment should be made evident to people and investors,” he said.
The roof merchant, equally called on traditional leaders, especially emirs of the five new emirates, to partake in helping the government generate massive tax for the socio-economic development of the State.
His words: “The Kano emirate system needs to be embraced as a tool for development, as it has somewhat come to stay. But there is need for the emirate system to be totally reformed, with the traditional leaders given formal jobs, tasks and roles to be doing or playing.”