Dr Kalu Idika Kalu responds to El Rufai's reply to Bill Gates observations on FG's economic policies.

Am surprised that my friend, El Rufai, had reasons to disagree with Bill Gates’ summary observation!
Our well known abysmal performance in revenue/ budget GDP ratio merely mirrors the very low “ social mobilization “ effort in the Deutsch sense!
Our government has a low “ du contract social “ in the Voltaire sense , and by not engaging fully to deliver services efficiently through a more ample collaboration with the citizenry, the commitment to raising revenues remains rudimentary.
We introduced the VAT at 5 % under my charge as Finance Minister in 1994, and till date, the government could not bring itself to raise that rate! By contrast the new South African government has raised the Vat rate from 15% to 17%! Our “ excuse” was the strange notion that it would “ impoverish “ the poor!!! But our foreign exchange policy, by depreciating the naira from 199 N/$ to nearly 400/$ , actually impacts far more severely on real incomes of the poorer income groups, not to mention so many other direct losses from leakages and rampant mismanagement!
Of course , taxes are meant to pay for services, and should not be seen as an unrequited withdrawal of income without the compensation of services provided!
Another perennial underfunding from the age old paranoia of IMF credit has forced the government to revert to far more expensive, massive, and still inadequate loan funding for viable projects!
The multiple discretionary monetary, credit. and inefficient foreign exchange slotting that the IMF recently cauctioned against , are among other indications of an appropriate policy package thrust that Bill Gates is talking about!!
Our “ recession “ recovery is way too slow and insignificant in relation to the basic strength of the Nigerian economy. With our massive real sector deficiencies (agriculture, mining, manufacturing and utilities. . power, rails, roads and communications, despite recent spectacular gains in capacity, ) the talk about exiting recession is just that. . talk! Our growth is still too low to affect discernible growth in real incomes , as population growth remains high; and the distribution of incremental income remains more skewed in Favour’s of the few rich thus aggravating the profile of overall income distribution!
A new thrust in economic thinking is long overdue to reverse the basic mistakes of misguided notions that have been with us since the mid 1980’s when these essentially erroneous anti- market notions countermanded our first stab at a thorough- going restructuring of the Nigerian economy. .We are yet to get back on track to enable the economy to grow robustly at a rate that is truly commensurate with our capacity!

Dr Kalu Idika Kalu