CONTINUED FROM LAST WEEK
A budget speech given in the Western House of Assembly, Ibadan, on 22nd March, 1955.
Without this additional revenue our surplus on the 31 SI March this year would have found it difficult to balance our Budget for the coming year.
It, however, took all the courage we could muster to carry these imposition through. We were misrepresented and maligned in a most unkind manner. The natural prejudices of our people towards the payment of tax were exploited ill some cases without scruple by the opponents of the Government. It is a happy thought, however, to find how much the Region stands benefited from the tax policy of this Government. But, speaking for this Government, what we have done in the past is all we propose to do in the way of tax imposition for the rest of our present tenure of office.
I have already pointed out that the manipulation of sources of revenue under Head 311 rests entirely with the Federal Government. In this connection also, I would like to say that though it is open to us to do so, yet we do not propose to apply or to associate with others in applying to the Federal Government for increases in the rate of duties under this Head. It follows, therefore, that during the next two financial years of 1955 to 1957 increase in revenue from the two groups of sources with which I have been dealing will depend entirely on the voluntary and inevitable results of economic forces operating in this Region. Ordinarily we will have the normal increase of some 10 per cent per annum on our revenue. The development schemes of the Government when executed will raise the productivity, and hence the earnings of our people. This in turn will be pound to reflect itself in a rise in our revenue.
Better and more roads, for instance, would encourage more traveling, would tend to stimulate and enlargement in the volume of road transport, and would enhance the incomes of farmers by bringing many more of them to their markets more cheaply and more quickly. These factors would reflect themselves in a larger yield from General Tax, from Motor Vehicle Licenses, and Duty on Motor Spirit: One or two more instances may be given. Already in various parts of the Region peasant farmers are being given loans so as to enable them to cultivate larger acreage of farms, and to do so more efficiently. In order to combat black pod disease, the ravages of which have resulted in a regular annual decline in the output of cocoa, Government has supplied and is still going to supply large quantities of spraying equipment to cocoa growers. Also in order to give greater incentive to efficiency to the labourers ‘employed by Government, the minimum wage of this class of workers numbering over 14,000 has been raised to 5s. The effects of all this would be to boost the revenue of the Region to some extent. It is common knowledge that when people earn more they tend to spend more. They will build new and better houses, smoke more and drink more, wear better clothes and eat better food. It is reasonable to expect, therefore, that this additional spending will bring about an increase in the duties on tobacco, on beer and on other imported dutiable or excisable articles in common use.
It would be self-delusion, however, to imagine that increases in revenue arising more or less automatically from these sources will be sufficient to meet all our future demands. I have already, in the course of this speech, referred to the International Bank Mission Report, to their projected five-year plan for Nigeria, and to their estimates of expenditure and the financial resources available to meet them. I have also pointed out that the schemes to meet them. I have also pointed out that the schemes to which this Government is already committed are’ in some respects more ambitious than those projected in the Bank Mission Report. In estimating the financial resources available to meet the schemes projected by them, the Bank Mission have taken into account the voluntary and inevitable accretion to our revenue to which I have already made reference. They also take into account revenue from reserves, Marketing Board surplus, and Colonial Development and Welfare funds. But in addition, and on the scale of expenditure suggested by them, they estimate that the Western Region will have to find during the next five years an additional sun of £6 million from tax revenue. I hasten to add that in the same connection the Northern Region ‘and Eastern Region are to find during the next five years an additional sum of £6 million from tax revenue. I hasten to add that in the same connection the Northern Region and Eastern Region are to find the sums of £4.5 million and £4.3 million, respectively, from tax revenue. Considering, therefore, that the scale of expenditure to which we are already committed is higher than the one projected by the international Bank Mission, it follows irresistibly that a ‘street-beggar’ financial policy which waits piously and hopefully for what Providence may bring without conscious and deliberate effort, will not get us over the financial hurdles that lie ahead.
There is a harmful tendency on the part of many of our people which all leaders of thought in this Region must unite to denounce and discourage. It is the tendency which manifests itself in a persistent clamour for amenities coupled with a definite reluctance to contribute towards their provision. It is a weakness inherent in all human beings to want to get the good things of this world for nothing if they could. But it is an inherent weakness which must be eliminated in the individual if he is to enjoy the respect of his fellow men, and in a political society if it is to enjoy the enviable status of true nationhood.
From time to time, events are bringing to light the tact that a large number of our people are notorious tax evaders. In Ogbomosho the estimated yield from tax assessments for the current financial year was £25,000. In the previous year the amount of tax collected was much less.
Recently the Regional Government had cause to intervene in a frivolous and subversive tax agitation there. The result is that very many more people than even before came forward to pay their tax. The target of tax yield is already exceeded by £ 17,000 and tax collection is still in progress.
In Oshogbo town with a community of 120,000, only 9,000 people (less than half of those eligible) ever pay tax. These are mere samples of what abounds in many parts of the Region.
It is a matter of the utmost importance and urgency that our people should be made to realise before it is too late that the price of progress and independence is a high one, and that it is mainly reckoned in terms of cash received by the Government directly or indirectly from the citizens according to their respective ability.
Now, what do we see from this peep into the future of our finances? It is not by any means a gloomy picture. But it is not a rosy one either. We have a virile community which is now passing through prosperous times. But it would appear that many of us are afraid of telling them the truth about their duty to their Government.
In the circumstances, we can only keep our fingers crossed, at least for the time being, hoping for the best and thanking our stars that by providential foresight, and in the face of violent opposition, this Government has had the courage to introduce and enforce a number tax measures, as a result of which we now have fairly good savings from which we could draw in the future if need be.
It must be borne in mind, however, that to draw on one’s savings for recurrent expenditure, without at the same-time taking steps to replenish the coffer, is to practice what economists aptly call in another connection ‘robber economy’. In such an event, the savings diminish with use and become quickly exhausted.
I would now like to say a few words about our economic problems in this Region and how the Government is trying to solve them.
The aim of Government is to create an enlightened, healthy and prosperous community, living harmoniously with one another. To my understanding, there does not appear to be any dispute between the two main economic schools of thought in this Region in regard to our objective. It is as to the means by which this end may be attained that opinions are sometimes divided. Some of us believe that emphasis should be placed on agricultural development as opposed to industrialisation, and others vice versa. Even so, in essence, the difference between the two schools is not so sharp as it seems on the surface. For the advocates of one method believe in the other.
But, Mr. Speaker, what does it matter whether some of us belong to Paul and others to Apollo? The over-riding objective is the welfare of our people. And besides, no matter where you lay the emphasis the practical problems that confront you are the same. Our economic problems may be summed up in two words which may be described as two I’s, Inefficiency and Inadequacy. These two l’s run right through the whole gamut of our economic activities in this Region.
The taste and outlook of many a farmer are changing fast for the better. His wants are much more numerous than those of his ancestors. He c1amours – and quite legitimately – for a better standard of living. But the method by which he cultivates the land remains unchanged since time immemorial. He still uses the same type of hoe and cutlass as his first ancestor used, and a simple agricultural economy like crop rotation or mixed farming is looked upon by him with suspicion. To make a bad situation worse, the land, because of soil erosion and bad methods of cultivation is losing its natural fertility.
All this is happening at a time such as this when the farmer has to produce enough to feed not only himself but also an increasing number of people who are engaged in non-farming occupations.
The problems of marketing his produce is not the least of the farmer’s difficulties. Road communications, as I have previously pointed out, are inadequate. The farmer himself, in spite of his changed taste and outlook, still suffers from inertia. Consequently, there is invariably a host of middlemen between himself and the consumer. In consequence, only a small proportion of what is paid by the consumer ever reaches the farmer. The net result of all this is that the farmer of today gets poorer results from a given unit of effort than his ancestors.
As Government sees it, the solution to these problems clearly lies in the adoption of scientific methods of farming, mechanization where possible, and co-operative marketing with these ends in view, the Ministry of Agriculture and Natural Resources is prosecuting its extension work as fast as it can. Experiments in crop rotation, mixed farming, and mechanised farming have been and are still being conducted in selected parts of the Region. And the Government is now striving hard through its extension work to pass on to the farmer the results of all these experiments.
The Ministry of Development is also intensifying campaigns for co-operative marketing, the aim of which is to bring the products of the farmer to the consumer without unnecessary intermediaries. It is not enough to teach the farmer what to do. If he has not the means – financially – to put what he learns into practice, all his knowledge is but naught. The agricultural loan scheme of the Government has been introduced to meet precisely such a situation as this, and to strengthen the capacity of and stimulate the farmers to produce more food.
So far, farmers have received small advances varying from £5 to £50 for the planting of increased acreages of foodstuffs. Of course, we cannot yet assess the success of this scheme. But we are sure that its operation will be greatly enhanced when independent Local Loans Boards can operate under the terms of the new Law. We have invited the aid of America in our drive for food production and have asked them to lend us a number of their experts, particularly those skilled in developing new strains of our staple food crops and also those who will help us to Control diseases which are now ravaging our staple food crops.
I am sure that all Hon. Members will agree with me that the core of our wealth in this Region is cocoa. It is the very life blood of our economy. But recent statistics show that, because of bad management, because of the ravages of capsids, and diseases like swollen shoot, and black pod, and because of ageing coupled with lack of rehabilitation, the output of this commodity is on the decline. The effect, of course, has been that the price of cocoa has for the past two seasons been on the high side.
As a short-term phenomenon this unusually high price is good for us though bad for the consumers. But as a long-term phenomenon it might spell disaster for our economy. For the consumers might be compelled to reduce their demand and look for a substitute, as they are in fact already doing in the United States of America which is the largest consumer of cocoa.
Furthermore, it has been realised by all of us for some time now, that an economy which depends mainly, as ours does, on a single export crop, is a precarious economy.
The government is fully alive to these dangers, and steps are being actively taken to remove them. The swollen shoot disease is being combated the best way we can, though with little success. Investigation into the behaviour of caps ids is being intensively conducted with a view to providing a means for reducing the damage which they do.
We have now, happily, discovered that chemical spraying is the answer to black pod disease. Last year, the Loans Board issued spraying equipment and chemicals to about 300 farmers, as distinct from those farmers who bought such equipment with their own money or who were provided with it through their co-operative Societies. I am pleased to inform the House that the money so advanced has almost been wholly repaid, and the result of the spraying have been astonishingly satisfactory.
In view of this initial success, and because of widespread demands by cocoa growers all over the Region, Government has advanced the sum of £250,000 to the Co-operative Supplies Association for the purchase of about 7,000 sets of spraying equipment for sale to cocoa growers. Farmers who are unable to find the money to purchase the equipment will be given loans to do so.
The work of rehabilitation and of establishing new plantations of cocoa has been undertaken with greater vigour than ever before. Individual farmers are being encouraged to grow more cocoa where suitable soil is available, and the Western Region Production Development-Board is making plans for expanding its own cocoa plantations. In order to make all this possible the Agricultural Department places its technical knowledge at the disposal of cocoa farmers, and supplies them with seedlings.
It is gratifying to report that the demand for seedlings now exceeds the supply and steps are being taken to increase the output ‘of seedlings.
In order to widen the base of our economy, Government has proceeded on two fronts. Farmers are being encouraged technically and financially to plant a larger variety of export crops like rubber, cotton, and citrus. In addition, a measure of industrialization has been undertaken by the Western Region Production Development Board. The Rubber Processing Factories in Benin and Delta Provinces, and the Citrus Canning Factory at the Moor Plantation, here in Ibadan, are examples of what is being done. Other industrial projects are under active consideration.
Our chief problem in the sphere of industrialization is not lack of capital, but lack of managerial and technical skill. Technicians we can train, and a large number of scholarships have been awarded for this purpose.’ But managers or business organisers are more or less born not made. In the meantime, the technicians and the organizers must come from overseas. Even over there they are not so easy to come by; and there are times when they are not so easy to come by; and there are times when they are inseparable from capital. If you want the technicians and organizers, you may be asked to take Ii substantial dose of capital as well. It is not my wish this morning to revive the controversy over the admission of foreign capital into Nigeria. The’ more appropriate forum for such an exercise is the House of Representatives and other platforms, In my recent address to the Lagos Chamber of Commerce I have restated my attitude to this suggestion and I have nothing to add to or subtract from what I said there.
All I wish to say now for the information of all concerned, is that though we have capital for the types of industry we want to engage in, if need be, in order to attract technical and managerial skill, we are quite prepared to negotiate for a fair dose of capital if the suppliers of the former insist on the latter being admitted as well. As a matter off act experience now shows that in certain types of industry, those who supply technical and managerial skill give of their very best only when they also have a financial stake in the venture.
It is needless for me to add, but I do so for the avoidance of doubt, that in all our industrial ventures we do insist on our own people being trained on the job to occupy managerial positions in the future.
The differing wage policies which exist between this Government on the one hand, and the Federal and the other two Regional Governments on the other, have evoked keen and spirited controversy among all classes of people throughout the country.
There are, in my humble opinion, many points in the Report of the Fact Finding Committee set up by the Federal Government which cry aloud for severe strictness. But; it is not part of my business on an occasion like this – when I am moving the Second reading of our Appropriation Bill – to criticize what other Governments have done. It is, however, my bounden duty to defend the action of this Government whenever such an action is impugned either directly or indirectly. When we raised the minimum wage of the unestablished staff of Government, otherwise known as the daily-paid workers, to 5/- a day, we did so with our eyes open, and with a full realisation of the consequences of our act.
For many years now, workers have been complaining about their low wages. In this Hon. House in 1953 a representative of the workers moved a motion calling upon the Government of this Region to raise the minimum wage of workers to 5/-. The motion was supported by the Opposition; but it was opposed by us mainly on the ground that, at that time, this Government was not competent to decide such an issue. Since October 1954, however, we have become vested with power to take a decision on the matter, and we did not hesitate to exercise that power. It is true that in taking a decision we did not set up a Fact Finding Committee as the other Governments did. Our reason for not doing so was that it would be a sheer waste of time to ask people to investigate the obvious.
There has always been a general and well-founded complaint that the output of our workers is low. At the same time, it has been shown that the average worker spends about 51 per cent of his wages on food and drink. So that the worker who receives 2/3d or 217d a day, spends a little less than 1/2d or 1/4d per day on his food. With this amount he can only afford to live mainly on starchy food which lacks most of the essential food value known to the science of dietetics. I need not speak about the clothing and housing of workers which, particularly in the big cities, are degrading in the extreme. For this class of workers, life is more or less a bleak episode. They enjoy very little comfort, if at all, in the present, and have no hope for the future. Their services are not pensionable; their meager earnings avail them only the bare necessities of life, and leave no margin for any savings whatsoever. The statistical analysis of how a worker spends his money bears out this point. It appears to me, therefore, too much to expect that workers who live under these conditions could ever really give of their best.
This Government, knowing the facts, raised the minimum wage of workers to 5/- in order thereby to raise the standard of their living, and to give them an incentive to greater efficiency and productivity. The reports which have reached us, so far, indicate that the majority of Government daily-paid workers in this Region are striving hard to justify the increase given to them. For, in addition to good wages, we give them continuity of service, hitherto unknown, by using direct labour on works which in previous times were given to contractors. For raising the minimum wage as we have done, a number of criticisms have been levelled at this Government. I propose to take them one by one and try to answer them.
In the first place, it is said that by almost doubling the wages of general labour, we were in effect inviting the other classes of labour, including the established staff, to make demands for increase in their wages and salaries in the same proportion. Events, however, have falsified this hypothetical criticism. The Region Wage Committee set up by this Government on which workers were themselves adequately represented, has made recommendations which show quite clearly that the other classes of workers have no intention whatsoever to demand 100 per cent increase in their wages. They recognise the fact that there is a minimum standard of living which it is the duty of Government to help its employees to uphold.
In the second place, it is argued that this rise in the minimum wage ff adopted by producers of cocoa in paying their labourers, would affect their profit, as it would. not be possible for them to pass on such increase in wages to consumers in a highly competitive world market. This criticism assumes that cocoa producers could procure labour at much below 51- per day. The fact is that on the average they pay a little more than 51- per day for the seasonal labour they employ on their farms or plantations. In the third place, it is pointed out that one of the immediate effects of this increase would be to bring about a sharp rise in the prices of locally produced foodstuffs, the quantity of which cannot be increase overnight. I do not share this view at all. The comparative graphs of wages and prices of foodstuffs prepared by the Federal Government do not support the case of our critics. The curves of the prices of foodstuffs have always behaved more or less independently of rises in wages. Furthermore, I have already pointed out that 51 per cent was spent on drink. There is no doubt that the workers would spend a little more of their increased wage on food. But it does not follow that the ratio of 46 per cent which the worker spent on food will be maintained with the 100 per cent rise in this wage. After a certain point the more a man gets in the way of wages or salary, the less the percentage of it which he spends on food, and vice versa. The labourer who makes only 1 s 3d per day probably spends 1S on food, whilst the one who earns 5/- a day spends Is 6d or Is 9d on food. This argument is further reinforced when it is known that only 4 per cent and 11 per cent respectively of workers; wages in the days before the 5/- minimum were spent on tobacco and clothing, and none at all is put by as savings. It is more reasonable to expect that the poor workers will now spend more on tobacco, drinks, clothing and a little bit of comfort. They might even want to set something aside for a rainy day for the purchase of a bicycle and suchlike amenities. In the “fourth place, it has been contended that the 5/ – minimum fixed by this Government for all workers throughout the Western Region does not take account firstly, of the proportional rise in the cost of living index, and secondly of the differing costs of living in different parts of the region.
The fallacy in the first criticism under this head is that it assumes that the wages paid in the basic year were adequate. The facts as we know them, that is, the conditions of the workers as well as their reaction to the rate of wages then fixed, do not bear out this contention. In any event, it is a point which must be amply demonstrated that the minimum wage paid in the basic year was adequate, and that it afforded the workers sufficient incentive to efficiency and high productivity.
The second criticism under this head overlooks the fact that differing wages lead to migration of workers from the areas of low wages to those of higher wages. I appreciate the fact that such a concentration of workers in cities would tend to force wages down, and that in consequence of economic forces there might be a dispersal of workers back to their homes. Vanity, which is ingrained in all of us, though in different degrees, makes it impossible for economic forces to bring about such a dispersal. Many such workers prefer to remain in the cities once they are there, hoping against hope for the best. Perhaps it pays some of the employers in the cities that the supply of labour should exceed demand, as indeed is now the case!
Furthermore, differing costs of living are never static. It has been shown by statistical figures that they fluctuate from time to time. This quarter, the cost of living in A may be higher than in B, C and D, and next quarter it may be higher in D than in A, Band C. Are we to make adjustments in wages from quarter to quarter? I think not. In any event it does not always follow that the cost of living in the cities is higher than in the rural areas. According to the recent information provided by the Statistical Department of the Federal
Government the cost of living in the fourth quarter of 1954 was higher in Ejinrin, Abeokuta, I1esha, Akure, Okitipupa and Benin, and much higher still In Ijebu-Ode and Warri, than in Lagos. Yet the Federal Government pays workers in Lagos 41 – whilst those in the provincial towns mentioned received much less. In view of the statistical figures, one would expect that the reverse would have been the case. I dare not suggest that the workers in Lagos have been paid this higher wage as a price of virile articulation.
In the fifth place, it has been argued that instead of raising the minimum wage, it is rents and prices of foodstuffs and other articles on which workers spend their money that should be controlled. I do not want to be drawn into theoretical argument as to whether or not this is the real answer to workers’ problems. Such an exercise may delight the academician, but it confuses the layman. The facts, however, as we know them from experience, are that both rent control and price control have failed in places and on occasions in which steps have been taken to enforce them. And present indications are that they will fail again if introduced in the present setting of our society. It is extremely uneconomic to argue that in normal circumstances you can control the price of anything which is progressively in short supply vis-a-vis the demand for it. The only thing that I know could conduce to the stabilization of rent, and of prices of foodstuffs is building more houses and producing more food.
For some time now, the Government of this Region has been considering a housing scheme, and hopes to have something definite to say about it before long. With regard to the production of food and the organization of its marketing, I have made abundantly clear Government’s activities in this direction.
But it would be ridiculous to suggest that rents and prices of food would necessarily fall when more houses are built and more foodstuffs are produced. We can only, at best, succeed in preventing them from rising. The peasant farmers deserve to get decent returns for their labour; and in any event the population of non- farmers is increasing every day. Furthermore, rents and prices of foodstuffs have riser. considerably since wages were increased in 1952, and I have already cast serious doubt on the adequacy of the wages fixed in the basic year.
It follows, therefore, that the needs of workers called for urgent satisfaction and we have not hesitated to respond. It was Bacon who said: ‘Rebellions are caused by two things: much poverty and much discontent. Rebellion of the stomach is the worst.’ In the sixth and last place, our minimum wage has been derided on the grounds (i) that it benefits only a handful of workers – some 500 in all; and (ii) that we did not compel other employers of labour in the Region to adopt the minimum in respect of their daily paid workers.
In regard to the first point, not less than 14,500 workers employed by the Western Region Government are receiving 5/- minimum wage. Besides, the Western Region Production Development Board has voluntarily applied this minimum to about 3,000 of its employees.
Concerning the second point, there are various reasons for not compelling other employers to adopt the minimum wage. Firstly, if we did so, many employers might resort to large-scale retrenchment in order to sustain the minimum wage. We could compel employers to pay a given number of workers. Employment with a little wage is undoubtedly better than no employment and no wage at all. An employer who voluntarily adopts Government’s wage policy would have counted the cost, and would not, therefore, be likely to retrench some of his workers. Secondly, it would be an act without precedent to compel employers to adopt a wage-rate’ paid by this Government. Thirdly, it would be unwise to compel Local Government Bodies to adopt-the minimum wage as has been suggested in some quarters. Local Governments are, financially and in respect of the labour employed by them, autonomous. What they pay their workers depends very much on the size of their respective purses. The Government does not think that it is right that they should be coerced into doing something which their financial capacity might not be able to bear and which might lead to retrenchments and increase in tax. But we do hope, however, that other employers of labour in the Region would take another look at the matter and follow the example of this Government.
One matter of interest and importance remains to be mentioned before I close this speech. It is the declared policy of this Government to encourage and help indigenous banking institutions so that they in turn may give financial aid to those of our businessmen (like importers and exporters for instance) who require and deserve such aid but who are not qualified for loans from the Loans Board. In pursuance of this policy the Government has placed a proportion of its banking work in the hands of the National Bank of Nigeria Limited. The terms on which the National Bank performs banking services for the Regional Government are the same as the terms on which the Dank ‘of British West Africa carries out the remainder of the Government’s business.
‘The glory of a King: says Amenhothep IV, ‘is the welfare of his people.’ Since its accession to power in 1952, this Government has constantly and consistently, with due regard for the unity of the Nigerian Federation, placed the interests and welfare of the people of this Region above all interests and welfare of the people of this Region above all other considerations. Its policy and programme have been designed to benefit and have in fact benefited rich and poor alike, sinner and saint, the peasantry, and the working class.
CONTINUES NEXT WEEK
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