FREE MARKET ECONOMY BY HALF

Akin Lawanson


If we start from resource control, it will be a good starting point. The federal government hands over the control of natural resources to the concerned states. This does not reduce much from government revenue but reduces much from government activities. How the states will solve the fresh tussle for resource control among states and their oil bearing communities is left to them to settle. Na their own wahala. This new system may ensure that all federal revenue is denominated in naira. And dollar auctions by the CBN will become a thing of the past. Only this will have a profound effect on its own. People holding dollars will be obliged to change it at their convenience and will be obliged to pay naira taxes. This will strengthen the naira against the dollar. And inflation will drop. The masses may smile for the first time in decades.

This can control/stop inflation but may not stop corruption. Corruption will dip as individual states continue to get more and more of their finances from their citizens via taxes. As people are being increasingly taxed, there will be an increasing need for accountability. Accountability will increase with increasing citizen contribution to fiscal resources. Our only fear is that unpopular governments may never muscle up enough wherewithal to tax their citizens.

On the alternative, state allocations should be in naira and dollar components as it accrued to the FG. The naira component of revenue may be shared in naira while the dollar component may also be shared in dollars. So that the burden of changing billions of dollars a year will not be solely borne by the federal government. This too may stabilize forex rates and keep the inflation rate at reasonable levels. Not at 11.5%.

Another alternative is to continue practising communal ownership of natural resources as is presently being done. But to make it more effective and reduce sharp practices, the government will do well to embrace communism as a state policy. If this is done all Nigerians will be banned from the ownership of any private property whatsoever and this will go a long way in solving our problem of corruption. We can not continue to practise capitalism and free market economy by half. God save Nigeria.