Opinion: Tolls on the roads again! – By LEKAN SOTE
Many years after the cancellation of tollgates by the pretend populist government of former President Olusegun Obasanjo, the Minister for Power, Works, and Housing, Babatunde Fashola, just threw a tax curve at hapless Nigerians through a policy to reinstate tolls on Nigeria’s highways.
If you remember that Fashola is a lawyer, you will understand why he found refuge in the law, as he states, “The existing law allows us to collect toll, and we have gone back to pre-existing toll points where the previous tollgates were dismantled.”
Fashola argues that the Ministry of Works alone required N2tn to maintain federal roads alone in 2016, whereas only N433.4bn was allocated to the triple ministries of Power, Work, and Housing in the 2016 Budget.
Fashola’s explanation that “We are only waiting for the completion of these roads before we introduce the tollgates,” begs the question. Sooner or later, the tolls will be imposed, and Nigerians, already overburdened by high inflation rates, bank interest rates, and foreign exchange rates, will be the worse for it.
Imposition of road tolls will work like an increase in the price of petrol that increases the cost of doing business, and gnaws at the already meagre profit of struggling businesses. Those who will be worse hit by the expected toll road are the market mammies, who make little profit; transporters will eventually pass the cost to them.
It is needless to add that you, the hapless consumers, will eventually be the final victims in this chain of transferred costs. You may have seen “danfo” or combi bus conductors impose tolls on market women. Sometimes, you feel like weeping as these women resign to the impossible levies imposed by the bus conductors.
Paying tolls may be somebody’s idea of bringing more Nigerians into the tax net. If you do not pay income tax or company tax, you will at least pay toll road indirectly as long as you ply the roads or buy goods freighted on the roads, seems to be the argument. It looks like a way to actualise Benjamin Franklin’s quip that no one will escape death or tax.
Let it be understood from the onset that nothing is fundamentally wrong with collection of tolls on the roads. The only problem is that the macroeconomic policies of the President Muhammadu Buhari government are not helping Nigerians to earn enough income to be able to pay tolls for the use of federal highways.
There is no doubt that government will make a lot of much needed revenue from collection of tolls on the roads. This is because people must use the roads to transport themselves and freight their commodities and supplies. Even though the Federal Inland Revenue Service will not be the direct beneficiary, its Chairman, Babatunde Fowler, can confirm that.
But the inadequacy of infrastructure, like electricity, roads, railways, and lack of working macroeconomic policies that will provide funds, goods, raw materials, supplies, and spare parts, to commerce and industry, have constituted a structural constraint to the volume, revenue, and profit accruable to businesses. The demand to pay another toll or tariff is just another tax burden.
If the argument is that the big passenger companies, like Ekene Dili Chukwu; conglomerates, like Dangote; oil companies, like Total; and manufacturers of fast moving consumer goods, like Unilever, that haul volumes of commodities on the roads, and thus contribute to their spoilage, Fashola will have a legitimate argument.
But with the hardship of doing business in Nigeria, how much profit are these so-called industrial giants making? Say nothing about the small commercial houses. You need to listen to the stories of woes from Nigerians whose factories are dead silent like graveyards, just because the policies of past and present governments have prevented them from running the factories.
If all were operating profitably, they would have paid even more taxes to the coffers of government. This would have been converted to repairs of the roads, without extorting extra tolls from citizens. Anyone who argues that citizens pay tolls in other countries misses the point.
Nigeria’s Statistician-General Kale should publish the income and expenditure profile of average John Doe in Nigeria. The data will reveal that after regularly paying toll on the roads, the purchasing power of poor John Doe will receive further pummelling.
But some Fashola lovers are arguing that the government is trying to use the goodwill that Fashola enjoys with the populace to smuggle an unacceptable and unjustifiable indirect tax on the people. Maybe. Maybe not.
But Fashola should avoid holding the taxation can for a government that many have defined as clueless as former President Goodluck Jonathan’s. Fashola should not squander his credibility with the people for a hopeless case. Some think he is young enough to be considered for the Presidency of Nigeria in the future. Jesus said, “Let the dead bury their dead.” Fashola should let those with the responsibility to levy tax do it.
But if government would expand the railway system, and explore the waterways, roads will be less travelled, and will need less repairs, and Nigerians will not mind paying the contributory fare to maintain the railways.
Former President Jonathan started an ambitious renovation of the railway system. The least that President Buhari could do is to further expand the railway network. Yes, it’s going to be more expensive than constructing roads, but it’s going to freight more citizens, and industrial goods, faster, and safer. It will even be more cost effective on the long run.
Government knows the hubs of agricultural produce, mineral deposits, industrial manufactures, and their target markets. Railway lines should be constructed to connect these nodes. At this stage, one wonders what is causing the delay in laying the East-West railway line from Calabar to Lagos. What’s gwan, Minister of Transportation Rotimi Amaechi?
Government can take the opportunity of laying new railways lines to grow the economy, and create immediate employment opportunities. When citizens become relatively well off, those who prefer to drive their luxury cars on Fashola’s highways will have no problems in paying whatever tolls he may impose. It’s going to be like the luxury tax.
Roads and railways serve the same purposes; they provide the service of transport. Whereas increased use of railways can reduce the stress on roads, the use of automobiles leads to pollution, punishing traffic jams, and fatal accidents.
Citizens, who commute by railway, can live in more wholesome suburbs, and work in faraway business districts. Adam Smith has argued that “Good roads… put the remote parts of the country more nearly upon (the same) level with those in the neighbourhood of the town.”
In other words, roads can be a veritable agent of the mechanics of demand and supply, and can thus help to reduce the prices of commodities that they convey from the sources of supply to meet demand in the marketplace. Now, if roads can achieve this, consider the quantum of goods that railways can bring to the market.
Instead of travelling the tollgate route, government should get the Joint Tax Board to make the FIRS, and the tax collection agencies of the states and local governments to be more efficient, and give no blemish to Fashola.
- Twitter @lekansote1 Punch