21 Nov 2016

CBN Governor will need Jesus to keep his job

To get Nigeria out of economic recession, Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, is proposing a tax on phone calls.

Speaking at the Annual Bankers’ Dinner in Lagos last Friday, Emefiele said the government could raise some N100B in additional revenue by introducing charges on the phone calls you make.
According to Emefiele,  “There are several ways we can raise additional revenue to finance the increased expenditure that is needed to engender fast and sustainable growth in the economy.
I think we can consider introducing a negligible telecom surcharge to be entirely borne by the initiator of a call. In order to protect the poor and vulnerable amongst us, we could structure it to only take effect after the third minute of talk.
“Some analyses have indicated that the government could earn about N100B per annum from this alone. Obviously this surcharge will mainly be borne by middle and upper class people since I do not know many poor people who make calls for more than three minutes!"
For Emefiele, only rich persons make phone calls beyond three minutes. "I do not know many poor people who make calls for more than three minutes", the CBN Governor said, glibly.
Of all the shallow ideas put forward to get Nigeria out of its self imposed recession, this should take the cake.
Subscribers already pay taxes on phone calls for every recharge card they purchase. It's called Value Added Tax (VAT).
Another attempt to tax call subscribers through the Communication Service Tax (CST) has been met with stiff resistance from stakeholders and consumer advocacy groups alike because that will amount to one tax too many.
The National Assembly will likely sound the death knell on the CST because it flies in the face of commonsense economics. You don't want to impose more taxes on folks who are barely getting by.
When Emefiele says only middle and upper class persons spend more than three minutes on a phone call, you have to wonder which country he resides in because the reality is different. There is even no middle class any longer in Nigeria. That a CBN Governor doesn't know this, is baffling.
Years of poor governance and corruption have all but wiped out the middle class, leaving the social strata badly deformed. There is just the lower and the upper classes right now in Nigeria--an anomaly for any society seeking economic redemption.
Government should be handing out tax breaks to the poor in a recession, not imposing more taxes and stifling growth from the bottom of the pyramid.
It is also curious that Emefiele proposes a tax on phone calls as some silver bullet for a country in recession when there are several other revenue streams for government if policy makers could just engage their mental faculties for once.
With policy proposals of this kind, it is little wonder that the CBN under Emefiele hasn't been able to stem capital flight and stave off increased depreciation of the local currency.
And to think Emefiele is a member of the economic management team of the Buhari administration!
Not one of Emefiele's policies as head of the administration's monetary unit, has helped a hemorrhaging economy. Not one.
Emefiele is really out of his depth as CBN Governor and his comments on taxing call subscribers should finally give him away.
At this rate, only Christ can save the man from kissing his job goodbye.



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