Undocumented economy sustains Nigeria – George Etomi

With the National Conference and the Lagos Economic Summit (EHINGBETI 2014) ongoing in Abuja and Lagos respectively, the constitutional and economic development of Nigeria is topmost on the agenda for many Nigerians in the public and private sectors.

In this edition, we continue our chat with Principal Partner, George Etomi & Partners and Pioneer Chair of the NBA Section on Business Law, Mr. GEORGE ETOMI, who started out last week giving us significant insight into the controversial Lekki-Ikoyi bridge; the court’s decision, tolls and taxes; economic development in Lagos State and other topical issues around the country.

This week we focus on the ongoing national conference; the task ahead for our leaders; challenges in the power sector amongst other things.

With an outlook on the national conference and the broken impasse early last week, Nigerians have continued to follow with keen interest, the happenings at the National Judicial Institute (NJI), venue of the ongoing national conference.

Speaking on the challenges that led to the deadlock; with specific reference to the debate on voting percentages, Etomi had this to say…

“The National conference should ordinarily afford us the opportunity to speak frankly. We have identified the areas of disconnect. It is the will to correct them.

As expected, the first challenge was one of majority vote for decisions to be made. The President did say 75% but I believe what he was aiming for was a near-consensus.

But if you look at the reverse picture, what it effectively does is that the one quarter that do not agree can hold the rest of us to ransom. So it is a tyranny of the minority. That is the reverse picture. On the other hand, delegates who advocated for two-thirds believed that this two-third was broad enough.

However, we could indeed have a two-third and yet not achieve the sort of spread required. Whereas, three-quarter would definitely have created mischief. It only takes one unreasonable person who has One-quarter to say “No…no and no”, and do so without reasons. How do we deal with such occurrences?

“Nigeria is built on a lie, and it will take all of us to correct that lie. This was the direct result of our association with the colonial masters, who put us where we are today and taught us most of what we know.

They told us what our number was, they gave us the distribution. We have never been able to plan in this country because we don’t know what our true number is; we don’t know the true distribution, and even when we come to know, we are almost helpless. For example, a system that admits that Lagos is the most populated state in Nigeria yet has fewer representatives than far smaller population.

This is because Nigeria was built on a mentality to share. So everything and every battle in Nigeria today is about sharing. We lie about our numbers because we want to get an extra share at the expense of someone else. The reason we quarrel over 20% or 30% derivation is because we want something ‘to share.’

The things that should ordinarily create balance for development, is cued in the opposite direction; so it is in our mindset. The British have long since gone. Nobody is going to do it but us.

Now because of this mindset to share, the trust bonds that hold us together is very weak. Really if there was generally good governance, it may not really matter where you come from. At the various levels of corruption where money is shared, there is never a challenge with where anyone comes from – be it North, South, East and West.

Let this conference be about rebuilding trust lines. This is what we really need. I am hopeful, because we have seen snippets of it in our history.

A classic example is that of Murtala Mohammed. The first impression you get of Murtala, whom everyone sings of today including the unborn generations, is that of a patriot. He was in power for only six months, but he left an indelible mark. Why? Because he did not see tribe, colour or creed. He got mowed down, but those six months were remarkable enough for Nigerians to make him a reference point for national consensus.

What this tells us is that what we want to achieve is indeed possible. The difference between building consensus in Nigeria for greater good as against what we see today is simply greed, and this cannot be blamed on a single tribe or an individual. It is the elite.

All of this is rooted in oil, which has turned us from hard working people to a lazy bunch. I was telling someone only this morning, that it is the undocumented economy that sustains Nigeria.

When asked to explain his last statement, Etomi offered, 

“The undocumented economy is made up of the market woman who goes to Cotonou; who goes to Lomé; who goes to Cameroun and all the other neighbouring locations to trade in wares; and it is that  child of  yours  who lives overseas and sends money on a regular basis to keep up what you do, this is what sustains the Nigerian economy.

There is a mismatch everyday between what we generate from crude and what we actually have; 90% of this money goes into running expenses; which is a nice way of concealing fraud.

Also described as the ‘informal sector’ or ‘shadow economy’, the undocumented economy is believed to be a diverse part of most developing economies. 

Etomi reiterated the contributions of the ‘undocumented economy’ and the need for government to unleash its potential. 

The average Nigerian in the rural area (with no clue about policies and what we do in the cities), wakes up early, goes to the market to trade their wares, or to the farm to till the soil and to feed the country. Nigerians are generally hard workers; and our leaders must help us unleash our full potentials by providing the means and apparatus to enable us function at optimum,” he stated.

He further decried the locked down potentials in the power sector, calling on the government to unleash these too.

I will always go back to the issue of power,” he said. “Having taken the bold decision to divest itself of control in the power sector, why is gas not available to power generating plants? What is holding up gas? Etomi asked rhetorically, and answered “The Petroleum Industry Bill (PIB).”

“What is holding the PIB? Sharing mechanisms. The same issue I talked about earlier in this chat. That is all we are about: sharing. “You cannot get 13%. If you get 13%, you must give me 10%. So round and round we go on the same issues. It is eight years now and we are still on about the PIB. Isn’t it just a sad case?

Yet we see in the telecoms example the difference and benefits a truly deregulated industry can bring to Nigerians. It has moved from an industry where telecommunication was a huge social divider, to one where the average Nigerian is now empowered; the vendor on the street, the market woman, the house keeper, the little child in school, and every other person around the country. And through this means, everyone now has access to information on the go. If this is not empowerment, then tell me what is?

This development brought down, what I’d call ‘Societal temperature’. Can you imagine if we had to deal with all of our power challenges as well as being a nation with no viable telecommunication system? It would have been disastrous, as we would have reached ‘boiling point’ this time.

The government must unleash the potential in the power industry. Let gas get its right pricing (which is what the PIB is about), and investors will come flooding in. This is what has happened to the telecoms industry.

This reform in the power sector if wholly achieved will see an all round growth in the economy. The development that will occur will spread like wild fire across the nation. A steady supply of electricity would create self-employment such that we have never seen in this country, and we will see the multiplying effect of this transition.

If we think telecoms were the biggest empowerment ever, then wait to see what power will do for this economy. Yet some people in their wisdom sought three quarters majority to pass resolutions because they have their sights set on revenue from oil, which will be minuscule if we unleash the potential in Nigeria by ‘releasing’ the PIB. When this happens, who would care if a state decides to withhold its minerals or whatever natural resources it has?

This is why I will continually use Lagos as an example. Why is everyone coming to Lagos? Because it is a city where if you have a good story to tell, you will most definitely find listeners.

On the structure of the National Conference, Etomi observes that Nigerians would have preferred a proper mix and balance of the younger generation with the older generation.

Hear him, “we need the older generation for guidance, history and sagacity and the younger generation; who are less prone to the hard-nosed divisions that have created the mistrust we see today, to be heavily represented at the Confab as well.”

“The much younger generation we see today, have no ‘Hard Links’ to ethnicity and these are the ones who will take over governance in no time.”

“To these ones, ethnic and tribal concerns are the least of their problems. They care less where their friends, wives, husbands and even business partners come from. They make decisions with little or no ethnic considerations. They think innovation against oil blocks. These are the ones we should look to, to chart a new course for a new Nigeria,” he concluded.

During our preceding chat last week with Etomi who is one of Nigeria’s leading lights in commercial law, the business lawyer gave insights on the issues of taxes and tolls, giving us a clear distinguish between both and why proactive governments levy tolls to further developmental goals.

He however highlighted the need for proper civic education in this regard – a process which according to him, is expected to explain why citizens should not only pay additional levies, but also why these levies and tolls are significant to development.

It was quite refreshing to hear the Former President of Georgia, Mikheil Saakashvili, who was the Guest speaker at the Lagos Economic Summit (EHINGBETI 2014), reiterate most of what Etomi talked to LEGALBUSINESS about only last week, particularly on the issue of taxes.

According to Saakashvili, “taxes are necessary to development. However, to change tax policies, you must first change the mentality of the people. They have to understand procedures and why they need this change. This is quite significant to the entire process,” he said.