Wale Ayodele‎: Kemi Adeosun: Nigeria’s minister of ghost workers?

If one is to rank the claimed achievements of the Finance Minister Mrs. Kemi Adeosun, the removal of 23,000 ghost workers from the federal payroll will easily top the list. But why would any serious Finance Minister gloat about such an achievement when the basic public finance infrastructure that made it possible was designed and implemented by her predecessor?

After over a year of occupying one of the most important ministerial positions in the constitution, this seems to be Adeosun’s only substantial achievement. At a time that the country is facing the most serious economic challenges of a generation, with businesses folding up, jobs drying up, key economic indicators down and families experiencing evaporating real wages, the obsession with ghost workers speaks volumes about the priorities of the Finance Minister.



Her voice has been largely absent in the search for innovative and practical solutions to the economic challenges that are making life so difficult for Nigerians. And the few times she has spoken, her ideas have been not only elitist but impractical. Small wonder the growing consensus is that Adeosun’s failure to do justice to her important portfolio is one of the central challenges of the Buhari administration as it tries to get the economy on an even keel and achieve sustainable economic development for the betterment of the average Nigerian.

Like all economic issues, the debate about the causes of the economic crisis and possible solutions that should be applied has attracted a wide variety of opinion and recommendations.

But there is agreement on one issue. So far no clear direction has been defined for the economy because, in spite of many attempts, the government has not produced a decent blueprint as a beacon to get the country out of the economic woods. Local and international experts, investors and even ordinary Nigerians have expressed their concern about this. And most has listed the failure of the Finance Minister to come up with a decent fiscal blueprint as a major deficit for the Buhari Government.

Granted, the combination of the more than 50% fall in revenues due to the steep fall in global oil prices and low national savings have had a significant effect on the nation’s finances. These shocks are exogenous and would pose a challenge to any finance minister no matter how smart or qualified. However, objective analysts have agreed that the real reason we are in recession today is not the shocks. Even now that we are in a recession, recovery can only happen largely through fiscal measures, rather than monetary, exchange rate, or even trade policies. In this regards, foreign investors and market watchers have pointed largely to the lack of a clear fiscal policy framework and Adeosun’s apparent lack of initiative and lack of useful innovative ideas as the main reasons for the persisting economic difficulties.
Consider tax. It is surprising that up till now, the minister has not done the most basic thing that should have helped to shore up government revenues with the least impact on poor Nigerians: push for the increase in VAT to about 10%. This would have significantly increased government revenues and helped to reduce the revenue gap. Instead of implementing a VAT increase, she keeps harping on her efforts to reduce ghost workers while the real workers are being owed months and months of salaries across many States of the Federation.
The case for an increase in VAT has been made by many analysts as a no-brainer. At 5%, Nigeria currently has one of the lowest VAT rates in the world and even amongst African countries. Madagascar and Morocco lead Africa with a VAT of 20% followed by Cameroon with 19%. Countries like Chad, Congo, Cote d’Ivoire, Guinea, Rwanda, Senegal, Tanzania, Tunisia and Uganda all have VATs of 18%. In contrast, Nigeria’s VAT rate is far lower than the average of 16% across these countries.
Interestingly, these countries are broadly in the same economic bracket, or worse than, Nigeria. Considering the fact that VAT mostly affects the rich who patronize supermarkets and shop online it beats reason and logic why the minister is not making its increase a priority action and making a strong pitch to the President for its implementation. Is she only interested in protecting people from her ilk? Adeosun’s inaction and lack of coordination has unwittingly created a confused and chaotic tax system where citizens are being punished with all kinds of taxes and levies, further compounding their miseries and the government’s unpopularity.



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