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FRANK TALK: VAT? Osun is coming!

By Steve Nwosu

There are many reasons why I’ll not be forgetting Governor Gboyega Oyetola’s Osun State in a hurry. And it is not just because His Excellency invited me for the state’s 30th anniversary colloquium.

Nor that Yours Sincerely had the rare privilege of sitting amongst a distinguished panel that included Dr. Yemi Farounbi, Prof. Niyi Akinnaso, Dr. Reuben Abati, Prof. Siyan Oyeweso, Babajide Otitoju, Zainab Okino, among  others, to discuss the keynote address of Baba Bisi Akande, a founding father and former governor of the state.

For me, the visit to Osun, and the subsequent interaction with Oyetola, further opened my eyes to the almost limitless possibilities and opportunities that exist for a state with thinking leaders, as personified by a mentally-stable governor.

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Visiting Osun against the backdrop of the raging national debate over VAT and dwindling government revenue, it is understandable that the icing on the cake of my three-day stay in that home state of my sister, Funke Egbemode, would the visit to the Omoluabi Badger Mines Ltd, Nigeria’s first gold refinery – a partnership between the Osun State Government (represented by Omoluabi Mines) and Badger, a foreign mining outfit. Yes, Osun has a gold refinery. But that is not the story.
The story is:
Last weekend, and for the first time in all my 53 years on planet Earth, I actually touched a real gold bar. Yes, the type most of us have only seen in films and still photographs. It was pure gold. Barely three inches long. Didn’t look any bigger than the regular Kit-Kat chocolate bar. But it weighed almost as much as your average day-old baby. Somebody said it was just two kilogrammes of solid gold, but that was not what caught my fancy about it.
What really aroused my interest was the estimated market value of the little bar: $60,000. For emphasis, that is; sixty thousand United States Dollars! Going by today’s exchange rate, that would be about N33 million.


And I could have thrown it into my pocket, and no one would know I had it. How many barrels of crude oil or refined petroleum products would one have to bunker in order to chalk up N33 million?
Now, just imagine that this little refinery, brainchild of Gov. Oyetola, has the not-too-ambitious projection of producing only 10 such bars every day. That would amount to about N330m daily. Extrapolate that for a whole year, and you’d probably be looking at figures in the neighbourhood of N100bn. Jackpot!!
Suddenly, the all-important Alekuwodo Ward network of five roads and the massive Olaiya Flyover, the Iragbiji-Kelebe road, the 58 kilometres of road completed in the heat of COVID-19 pandemic last year, and the iconic 201-hectare international market and bonded terminal project, which any other state government would ordinarily celebrate to no end, pale into insignificance.

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Not even their historical importance, nor the fact that they were completed in record time, and at a bargain cost, place these numerous projects anywhere near the gold refinery.
Unlike most politicians, Oyetola, after his election, embarked on a ‘Thank You’ tour of the state, during which time every community submitted request for its most needed project.
Those requests – roads, bridges, health centres, hospitals, security, schools and school buildings, abolition of the single uniform regime, general reform of the state education policy etc, became prioritised projects of the new administration. And last week, barely three years down the line, the governor’s Chief of Staff, Dr. Charles Akinola, confirmed most of the projects,  and more, have been delivered. And Osun, under Oyetola, has yet to borrow a dime from anywhere. Instead, it has repaid about N60 billion of the about N170 billion debt it inherited from previous administrations, cleared some of the outstanding arrears of salaries, and has yet to default again on the payment of salaries and pensions.
Incidentally, all of these have gone on without much of drama on the part of the governor. Rather than blow his own trumpet, Oyetola would rather you go to town on your own and make your own impression. Cool as cucumber and more patient than the vulture, Oyetola is one governor you’ll never be able to drag into any controversy, no matter the provocation. “I think a governor should just work and let the work speak for him”, he told one of the 30th anniversary gatherings.
Of course, nothing speaks louder than the silent revolution going on at the novel gold refinery in Osu.
Interestingly, Osu is just one little part of an expansive Ilesa mineral belt, in which the entire Ilesa, and adjoining communities, are literally sitting on gold. And that’s not all; there is even something better than gold still in the offing. The gold project had hardly got underway when the exploration team made other pleasant accidental discoveries. It discovered that Osun, in addition to gold, is also sitting on huge deposits of Platinum group metals (platinum, titanium etc.) which also appear to be in commercial quantities.
Now, although my arithmetic and economic projections may not win any prizes at Wall Street, there is enough reason to believe that states like Lagos and Rivers, who are in the vanguard of the renewed din over VAT, might soon become green with envy when they get to know that there’s more brewing in Gboyega Oyetola’s Osun than the Ilesa breweries. I see Osun moving from its current position among the bottom five on the revenue table, to the top five. Yes! Osun is coming.
But there is also a historical narrative to Osun’s golden strides of today. Several years ago, the administration of the then Governor Olagunsoye Oyinlola floated a limited liability company for the state. That company took advantage of the policy of National Council on Privatisation, under the supervision of then Vice President Atiku Abubakar, and secured some 17 mining licences. And the licences were not even for deposits in Osun State alone. Today, Osun has mining licences, and rights, for sites in Kogi, Ebonyi and Zamfara as well.
Unfortunately, subsequent regimes in Osun did nothing with the licences, and they were only a few months from elapsing and being lost forever, until the Oyetola administration flagged off the visionary Omoluabi/Badger partnership. That masterstroke has not only saved the Osun mining licences, but has also opened a completely new vista of economic development. It will explore, exploit, refine and market gold for the state government and its business partners, on a purely commercial basis. The enterprise has also set up the first and most advanced commercial buying centre in the country, to enable it offtake from artisanal miners – all coming with products at different level of purity.

In addition to this, the Omoluabi Badger Mines will also train Osun youths and support them with equipment leasing to enable them produce with better technology and in an environment-friendly manner.

Add this to the fact that these artisanal miners would also be captured in the tax net, and you’d be looking at an even larger tax basket. A win-win partnership.
What the snippets from Osun clearly show is that states like Kogi, Zamfara, Ebonyi, Sokoto, Ekiti, Jigawa, Taraba etc. have no business with poverty, let alone depending on the bowl-in-hand-economy that the federal allocation regime represents.
It means that rather than lazily sitting back, waiting for the Federal Government and the FIRS to wrest VAT revenues from other states and share to the rest of us, our governors could actually earn more for their respective states. It just takes a little creative thinking. But then, how many governors are ready to think?

So, while these other states are busy cursing Rivers State Governor, Nyesom Wike, and by extension, his Lagos (and Ogun) counterparts, for attempting to upturn the applecart of subsisting VAT regime, Osun is already thinking ahead.
Very soon, all those insultingly insinuating that Osun should be reduced to one or two local government areas and re-merged into Oyo State, or that it be officially recognised as an outpost of Lagos, would be forced to swallow their insults.  For, clearly, Osun is coming!

Ironically, while Osun is at it, many others are obstinately working underground, approaching the National Assembly, and the courts, rummaging through the statutes. Just to find one technical ground or the other that could help them retain the status quo.

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And what is that status quo? An arrangement whereby the FIRS and the Federal Government reward states for sitting their butts on their hands, doing absolutely nothing about internally-generated revenue, and yet receiving a lion share of taxes paid by other states, that are completely bullish about IGR. A case of having their cake and eating it.
Of course, it is nice to note that Kano State is also stirring; the state’s House of Assembly is calling for the sack of the head of the state’s Internal Revenue Service. In Gombe, the state government is still calling for a political solution for the impending VAT showdown.