The 3 percent VAT for North-East development

WE strongly support the Senate approval of the allocation of three percent of the Value Added Tax (VAT) accruing to the Federal Government in the next ten years to the rebuilding of the North-East. It is a commendable initiative that deserves the support of all Nigerians.
With over 13,000 people killed, millions displaced and the destruction of many homes and public infrastructure in the region by the Boko Haram sect, the rebuilding of the North-East is an important responsibility to which the Federal Government, as well as the affected states and local governments, must commit as much resources as they can.
Beyond the three levels of government, all Nigerians of goodwill and the global community should contribute to the effort to address the devastation of North-Eastern Nigeria, which ranks among the greatest, man-made tragedies in recent times.
The Senate approval of the use of three per cent of VAT for the North-East followed the recommendations of the ad hoc committee on North-East Development Commision, which also proposed that the headquarters of the Commission be located in Maiduguri, the Borno State capital. Chairman of the committee, Sen. Sam Egwu, who presented the recommendations at a plenary session, said the committee also agreed with other funding arrangements proposed for the NEDC in the bill. Besides the three percent VAT over10 years, the committee also recommended the commitment of 15 percent of statutory allocations to the six North-Eastern states to the funding of the Commission. This is in addition to the 15 percent of the Ecological Fund due to the region. The committee is expected to reflect the approved funding arrangements and the location of the headquarters of the commission in the bill and bring it back for final passage.
No effort should be spared towards rebuilding this region and rehabilitating the Internally Displaced Persons (IDPs) now living in camps and in the neighbouring countries of Cameroun, Chad and Niger.  Total revenue from VAT in 2015 was N1.47 trillion, an increase of over N300 billion of the N802.95bn generated in 2014. VAT is a consumption tax payable on the goods and services purchased by government agencies, business organisations and individuals.
Going by the amount that accrued to government last year through VAT, the Northeast will get a substantial amount, which should go some way in rebuilding the region and ameliorating the plight of its people. While the amount that will accrue to the region from VAT may be inadequate to solve its problems, the money will be a good start towards the rebuilding of the North-East.
Recently, the North-East Recovery and Peace Building Assessment team estimated the cost of the impact of the conflict in the region at $9bn. The team also said $6bn would be required for recovery efforts.
According to the presidential aide on Internally Displaced Persons, Dr. Mariam Masha, Borno is the worst hit by the crisis with a loss of $6bn, being the main theatre of the insurgency. It is followed by Adamawa and Yobe States. Damage to houses alone is estimated in excess of $3bn, excluding livestock and agricultural activities. Over 1.8 million people have been displaced, according to government official records. The figure could even be more.
The magnitude of the destruction of this region is not in doubt. Huge resources and humanitarian efforts are required to rebuild it. According to the chairman, Presidential Committee on North-East Initiative, Lt.Gen. T.Y. Danjuma, it will cost at least N2 trn in the short term to rebuild areas devastated by Boko Haram insurgency. Undoubtedly, rebuilding the North-East is one of the biggest and most complex challenges that Nigeria faces today. It will require massive reconstruction of the physical infrastructure destroyed by the terrorists.
The rebuilding of the region will need the cooperation of all, including the governments of the most affected states, which are Adamawa, Borno and Yobe. We urge the various platforms set up by government for the reconstruction of the region to be carefully managed to avoid misuse of resources.
The current effort in the North-East requires a good strategy to ensure that the expectations of the victims of the insurgency and donors are met. It also requires considerable planning and coordination. It is through such means that donors will be encouraged to do more.
We recall that the World Bank has pledged to give $2.1bn to the Federal Government to help rebuild infrastructure destroyed by Boko Haram. The European Union (EU) and the United Nations (UN) have made similar pledges of financial assistance. Those who will be entrusted with the management of such funds must show good faith, accountability and transparency. About N6.5trn was reportedly spent on the fight against Boko Haram by the immediate past administration.
As the anti-insurgency operation in the North East code-named “Lafiya Dole” begins to yield dividends with the release of 21 Chibok schoolgirls last week, we maintain that the war against Boko Haram cannot be said to have been won until the entire region is rescued and the people rehabilitated. This is not something to be fixed in one day. It requires strategic planning to restore normalcy in the ravaged region. The ongoing effort should be divided into phases with clear timelines to ensure that the effort remains on track.
We commend the Senate and the ad hoc committee on North-East Development Commission for working in a bipartisan manner in arriving at the three percent VAT allocation for the region. The world is keenly watching how the Federal Government handles the massive reconstruction of physical infrastructure and the resettlement of millions of displaced persons from the region. This is one of the biggest challenges facing this administration. It must not fail in the onerous task.