Tax and African prosperity – By Abimbola Adelakun

Sometime in 2022, we (some friends and I) were driving through a village in Kenya when I saw this giant billboard with the face of a presidential candidate named William Ruto. The tagline was, “Every hustle matters!” I thought it was a funny slogan for a presidential candidate, and a friend (who would vote Ruto) gave me a quick rundown of his candidacy. It boiled down to the usual platitude deployed to justify voting a candidate: he is on the side of the people, the masses, the common man (and whatever pejorative labels we assign). I recall thinking, I know how this ends. From Dr Goodluck Jonathan’s “I had no shoes” to Muhammadu Buhari’s claim of 150 cows, politicians like to frame what they have in common with the common man until they actually need to demonstrate it.

The belief was that Ruto who, having once hustled his way to the top, would empathise with the people eking out survival was punctured with the introduction of a tax bill that would increase taxes even on essential commodities such as bread, cooking oil, and diapers. During the stand-off between the leader and the led, it came to light how much Ruto had extended his legendary hustle to public funds. Out of the window flew the image of a man who, having once suffered, would innately understand what it meant to stretch the Kenyan Shilling until its frail edges cover up your nakedness. Ruto eventually backed down from signing the bill, but much had been lost. The protest took the lives of about two dozen protesters and fractured Ruto’s relationship with Kenyans.

Overall, the Kenyan protests should be a lesson for African leaders like Ruto and his Nigerian counterpart Bola Tinubu who think they can tax their way out of the economic troubles. To some extent, their resort to taxes is understandable. The prognosis of the post-COVID is—depending on the rung of the social ladder you occupy—a gloomy one. Africa, which was barely doing well before COVID, is now seriously reeling from the effects of the global pandemic. People are similarly facing dire times in countries around the world, and our social, political, and even spiritual lives are being rapidly upended by the reality of the economic crunches.

Even the United States, with its thriving economy, still presents the contrast of a post-COVID recovery. While the figures show that their economy is strong, millions (especially people of lower income range) are held down by inflation. African countries that were not doing that well before COVID are vertiginous from the global downturn. Countries are urgently looking to recapitalise, which is why leaders like Ruto came up with the very innovative idea of taxing people more. In Nigeria too, we have witnessed a similar strategy. In addition to abruptly withdrawing (at least going by official pronouncements) the subsidies on fuel and forex, the administration also stopped subsidies on electricity. Energy costs have since gone up, stratospherically increasing the cost of darkness. The same administration also introduced the Green Tax, Import Tax Adjustment Levy, Expatriate Tax, and the Cybersecurity tax, some of which had to be reversed either because it made no sense or was ill-timed.

Unfortunately, Africa cannot be taxed out of its economic morass. People are too poor—just too poor—and the national economic means are too singular for people to come up with the taxes necessary to bridge the gaps in revenue generation. The country has a lot of debt to repay, yes, but those borrowed monies never did anything for those being asked to contribute. If those loans had truly impacted their lives, we would not be groaning as much over the mounting tax regimes. Government officials are the ones who take hefty loans, mismanage them, make a public show of pursuing their cronies who stole the money, and after they deem everyone sufficiently amused by the drama of anti-corruption, they pass on the costs to those who had nothing to do with it. It is those who did not enjoy any part of the loans they took that are frequently squeezed to pay; never their friends, many of whom still living large from the stolen wealth.

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