Home Analysis Edo state drive for higher IGR, need for public private sector partnership

Edo state drive for higher IGR, need for public private sector partnership

by Business News Report

When Comrade Adams Oshomole mounted the soap box to context the governorship of Edo state many did not give him any chance. Those who did were skeptical about his ability to deliver on his promises. Many said he is an activist and that what activists know how to do well is talk, call out labour on strike and protest against government policies. Some cynically said very soon he will protest against himself. Three years down the line as governor of Edo state, he has proved many critics wrong. He has shown that with little available resources, a determined government can make a difference in the life of a people. Many who had spent time in Benin the Edo state capital in the 70s, 80s and 90s are surprised at the changings going on in Benin and other parts of the state.

Most of the major roads in Benin have been reconstructed with viable drainage that can take flood water off the streets in no time. Several schools across the state have been renovated and hospital equipped. The popular Kings Square, known as ring road which used to be an eye sore is wearing a new look and a beauty to behold at night. The Oba market and its environs transformed.

Oshomole is not the only Governor making impact in his state. Amachi in Rivers is doing great things with the greater Port Harcourt project; Babatunde Fashola is improving infrastructure and other social services in Lagos. It is the same story in Akwa Ibom, Anambra, Cross River ETC. If the level of commitment of some state governors has been around the nation a decade ago, there would have been a great measure of confidence in the leadership in the country or if happenings in some states are replicated at the federal level no body will border about where the president or governor comes from. There is certainly some measure of progress around the country.

Edo state is of particular interest because prior to the emergence of Oshomole, the eight years preceding him were wasted years in which it was a tale of a poor state that uses all the allocation to it to pay salaries. But the Oshomole administration in Edo state has grown the state’s internally generated revenue by over 200 per cent in the last three years. The state in a bid to meet its commitment to the people through the delivery of the dividend of democracy is planning to further grow its IGR to finance the ongoing projects in the state. The state internal revenue which stood at N750 million in 2008 has risen to N1.3 billion a month as at August 2011.

The state, like it is in Lagos which has become a model for others, has introduced consumption tax. The chairman of the state Internal Revenue Board Mr Oseni Elama said that there are 150 projects that are being executed across the state. The projects are located in the 18 local government area of the state. The various projects have generated lots of employment for the indigenes of the area where they are located. Some of the projects include road construction, renovation of schools, constructions of hospitals etc.
The state government started the tax drive by ensuring that all civil servants in the state are paying the right taxes.

Adams Oshomole in his quest to bring development to the door steps of the Edo people has to cut down on the cost of governance in the state starting from his office and by so doing the state government was able in the first year of the governor’s assumption of office to save N7 billion which was like the seed money with which he started infrastructural development in the state the second year. The state has so far succeeded in blocking some of the revenue leakages and has ensured that such monies that were going to wrong hands and private pockets in the past goes into government coffers.

Increasing internally generated revenue is certainly the way forward to all the states in the federation and the federal government itself. Now, Edo citizens like their Lagos counterparts are seeing what the money realised from the state, which lacked development in the past, is being used for; it has become imperative to ask for their understanding, support to pay all due taxes to enable the state move forward in the provisions of infrastructure.
Edo indigenes, no matter their political persuasion, should support the state revenue drive in order for the state government to take development to all nooks and cranny of the state. Payment of taxes will boost its internally generated revenue. By introducing consumption tax the state is simply asking for support of the indigenes to bring development to their door steps.

Consumption tax which is an indirect one will focus at the start on hospitality industry in the state. The state assembly has already given its approval to the law which was signed by the Governor on the 30th of June 2011. The law imposes a tax of 5 per cent on goods and services rendered in hotels, restaurants, and events centers and other facilities in the state.

The law which took effect last Thursday, 1st of September is to be cited as the Hotels and Events Centers occupancy and restaurants consumption law of Edo state. The tax according to the law will be paid by an hotel guest or any person who makes use of a hotel, restaurant, events centers or a hotel facility as well as those who use halls, auditoria, fields and places designated for public use for a fee.

The tax is not targeted at the owners of these properties but users and services rendered by them. According to the state government’s calculation there are close to 892 such places in the state at the moment from which it hopes to generate addition revenue to beef up its internal revenue to the tune of N2 billion per month. With IGR at N2 billion per month the state will be able to realize about N24 billion a year from internally generated revenue.

The plan of the state government it was gathered is to ensure that by the end of the 4th year of the Oshomole’s administration at least every primary school in the state will be renovated. Already several primary and secondary schools have been rehabilitated and massive road constructions are going on in the state capital Benin and other parts of the state.
The state government means well but it has a lot more to do. So far not much is being done to encourage the private sector to set up industries in the state. The state will generate more revenue from payee if more industries are attracted to the state. The Governor must work in collaboration with Edo state private sector. The Governor should develop a working relationship with the Benin Chamber of Commerce and Industry, the Manufacturer’s Association of Nigeria Benin Chapter and other private sector bodies in the state to grow the state economy. Public Private Sector partnership is key in the state drive to increase its internally generated revenue.

Given the fact that Edo state pride itself as the big heart of the nation, it allowed a governor who failed his political career examination to repeat the political class. The same state should promote Adams Oshomole who has shown commitment and willingness to develop the state to the next political class for him to complete his vision for the state.

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