VAT brouhaha: why the south east must wake up ||Caleb Onyeabor


While the commendable actions of Governor Wike of Rivers State have brought long held conversations on fiscal federalism, resource control and restructuring back to the front burner of national discourse, there has been a national hullabaloo championed by southerners voicing against the robbing Peter to Pay fiscal system that has been practised in Nigeria for many years.

The South has been funding Nigeria as majority of national revenues, both from oil and taxes is being generated in the region. The actions and comments of Governor Wike seeking to rebel against what is clearly an unfair system might be the much needed trigger and catalyst for the fight towards restructuring and true federalism. The recent issue is that Taxes collected in the south should not be used to fund the North. The question is who is this south ? Which of these southern states contribute this largest share and can boast of feeding the north with its tax revenues ?

I find it amusing when people whose states generate little less to nothing join the bandwagon of those whose states actually contribute the bulk of these monies.

The Federal Government system of allocation of monies generated from VAT has not been fair to only states that really contributes to the national purse in the South. The rest southern states are just hiding under the shadows of these bigwigs and they are as unproductive as some of the northern counterparts whom they mock.

This is the unfortunate situation of the south east.

Yes, Monies generated in the south should not be used to fund the North. But when other viable southern states are saying these words, states like Abia, Imo and Ebonyi should hide their heads because they are not different from some of the states in the North. It will interest you to know that the North West and the North Central generates more than the South East. There are states in the north that are more viable than Abia, Imo and Ebonyi.

In 2020, Zamfara generated 18.50 billion having a share of 1.42% of total IGR generated by states. Kogi had 1.33% with 17.36 billion IGR. Imo had 1.31% having generated 17.08 billion. Cross River had 1.24% with 16.18 billion IGR. Abia had 1.10% with 14.38 billion IGR. Kebbi had 1.05% with a 13.7 billion IGR while Ebonyi generated 13.59 billion with a 1.04%. Going by these figures, Zamfara is surprisingly more viable than Abia and Kebbi more viable than Ebonyi in terms of IGR generated in 2020.

Infact Ebonyi state that generated about 13 billion and Abia state that generated 14 billion were not far from some of the poorest states in the North. Borno state, despite being ravaged by war, generated 11.58 billion. Sokoto state generated 11.80 billion while Katsina generated 11.40 billion. In terms of IGR, with these figures, we can put Abia and Ebonyi in the same poor categories like Borno, Katsina and Sokoto.

The above figures are for internally generated revenue (IGR) of states in 2020.

Now let’s look at VAT generated and allocated in the last 8 months.

Only Lagos, Rivers and Oyo were given allocations lesser than what they generated. Lagos generated 429 billion and receive 139 billion. Rivers generated 90 billion and received 46 billion. Oyo generated 64 billion and received 45 billion. If any state should claim injustice, it should be these 3 states and this explains Lagos and Rivers are in the forefront of the battle for state collection of VAT.

Since the focus of this piece is about the South East, l will start by saying none of the States in the South East generated more than they were given. Anambra generated 5 billion and received 25 billion. Enugu generated 5 billion and received 20 billion. Ebonyi generated 7 billion and received 18 billion. Imo generated 1 billion and received 25 billion. Abia generated 2 billion and received 20 billion. This shows that the south east are benefitting from the lopsided VAT distribution at the expense of Lagos and Rivers.

Shockingly, Adamawa generated with 3 billion VAT generation generated higher VAT than Abia. Bauchi with 5 billion generated almost 5 times what Imo state generated. Gombe with 4 billion and Jigawa with about 3 billion generated more than Imo and Abia respectively. Kaduna with about 18 billion generated more than Enugu and Anambra combined. Even Katsina with 3 billion performed better than Imo and Abia. Yobe, a state ravaged by bokoharam, with 9 billion generated more than Enugu, it scored higher than Anambra, it scored higher than Imo and Abia. The only south Eastern state that came close to Yobe was Ebonyi with 7 billion. Taraba with 1.7 billion generated almost the same VAT with Imo. Sokoto with about 4 billion, generated more than Abia. Kano with 24 billion generated more than the entire South Eastern states.

This is the terrible condition the south east is in. When people say VAT of the south is used to fund the North, they should be specific because it is only Lagos, Rivers and Oyo that can beat their chests and make this claim.

While Lagos and Ogun are pushing for a revolution in the system of VAT collection and allocation, the states in the south east has been silent at best and at worst, as Ebonyi has done, spoken in favor of retaining the current system.

The South East since 1999 has been under a leadership curse. For instance, Abia state is home to at least two international markets and one commercial city of Aba with enormous economic potentials but the failure of successive state governments to pounce on that opportunity and build one of the greatest states in Nigeria is something that ought to be studied in a master’s degree course on terrible leadership. There are no roads in Aba. No drainages in Osisioma, absolutely nothing! From the thieving Governor Kalu who ruled between 1999-2007 to the “senior thieving” Governor Theodore Orji from 2007-2015 and now the Mr Biggs Governor Ikpeazu currently in power, Abia is to me, Nigeria’s biggest mess considering the wasted opportunity and potentials there.

Abia would have been in the league of Lagos and Rivers State, generating enormous internal revenue and VAT only if their governors had done some basic things.

Anambra state again is another tales by moonlight story. Some of the biggest businesses in Nigeria originated from there. The kind of economic activities that goes on in Nnewi shows that Anambra has the potentials of being another Hong Kong or Taiwan or even Nigeria’s California but their governors have other ideas. I was even shocked when I saw the first time that Enugu generates more than Abia and is more viable than Anambra despite being an administrative cum civil service state. As for Imo, it has been a case of motion without movement at best and movement heading backwards at worst.

The leadership in the South East has failed to harness the creative and enterprising spirit of the people in the zone towards building great economies. Billions have been allocated to the south East from the Federal Government since 1999, coupled with the billions raised as IGR within the same period. The south east is still nothing to write home about. Instead of investing in state’s infrastructure, promoting economic activities, providing basic conditions for businesses to thrive, developing moribund sectors among other activities that would boost the economy of the region, the leadership in the south east has been asleep. Confronted by the current reality of the oil doom and dwindling revenue to share from the Federal government, while other states are aggressively exploring alternative options, widening their tax bases, reforming tax administration, blocking leakages, ensuring enforcement to new fiscal measures, the leadership in the south East are still asleep and very comfortable with the crumbs that fall from the Federal government’s table.

Michael Okpara of the first republic built and was building a progressive eastern economy without relying on Federal allocation. The Eastern region was the fastest growing region in the world and much of the finances used to fund this development were generated internally. The Eastern region moved at high speed towards industrialization and self sufficiency under Okpara’s leadership. It is very unfortunate that the current set of Eastern leaders lack vision, will and every indices of good leadership needed to steer the affairs of the east in the presence of federal neglect.

Sam Mbakwe in the second republic demonstrated a kind of transformational leadership that put Imo state on the course of sustainable development. He built industries. He built the international airport, he built roads. He reformed schools and embarked on aggressive community development initiatives that were akin to Michael Okpara. It is pertinent to note that he did all these without federal allocation and a few years after, the war devastated the east and the marginalization followed.

Today, the east can boast of some of the most lazy, vision bereft and docile set of leaders in the entire country who rather than invest to transform and change the fortunes of their states, prefer to visit Abuja cap in hand to collect funds that ends in their pockets or vanishes into thin air.

Abia is an eyesore. Anambra is a pus. If you count the industries in Enugu, you would not exhaust your first five fingers. Imo has become a diseased leg that is being left to rot and decay. Surprisingly, Ebonyi despite the many weakness of its Governor has been the only light in the south east in the last 5 years. The infrastructural project done in Ebonyi state in the last 5 years is more than what was done in Abia in the last 12 years and yet Abia receives more allocation than Ebonyi.

The South East has the lowest contribution in the nation in terms of IGR despite having states with the potentials of being in the league of Lagos and Rivers.

This is why the governors are silent. Enugu and Anambra generates the most IGR in the South East but Enugu is perhaps the only state in the east that can survive without federal allocation.

Each time I am being told Enugu is the best among the South Eastern states and the capital of the east, I can imagine how bad others are because even the Enugu is not convincing enough. How then will the others be ? As the fight for the control of VAT is ongoing, the governors of the east are just mute because deep down they know that their states are like other parasitic states such as Katsina, Gombe, Taraba etc etc who depends on the VAT generated from Lagos and Rivers State to augment their finances. They are silent because deep down, they want to support Katsina and Gombe so that they will also continue to benefit from VAT generated in Lagos and Rivers because they have failed to make their respective states thrive.

Katrina is poor, is different from Abia is poor, because Katsina does not have the potentials Abia has and this is very sad.

The east can be an economic powerhouse if the state governments aggressively pursue the goal of economic development. Productive activities will thrive when favorable business conditions are created. The South East can raise enormous tax revenues from businesses and industries that will thrive in the region courtesy of good government policies. This VAT issue has exposed the region as one of the disadvantaged ones. I hope this is a wake up call.
©️Caleb Onyeabor

Caleb Onyeabor is a Nigerian intellectual, an avid advocate for political justice, social justice, and economic justice. Author of Diary of a Messed Up country. Follow him on Twitter via

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