HEADLINE
Fuel subsidy removal will increase unofficial payments collection by ‘agberos’ in Lagos – Funso Doherty
Article summary
- Fuel subsidy removal has compounded the harvest of unofficial payments by road transport workers to the ‘agbero’ network in Lagos state.
- Lagos state also has other vulnerabilities to fuel subsidy removal. There are limited mass transit options in the state, meanwhile, traffic congestion in the state is legendary and remains one of the highest in the world.
- Among other solutions, the Lagos state government needs to introduce personal income tax relief for low-income earners in Lagos state to raise the taxability threshold and provide relief for the most vulnerable taxpayers.
The Governorship candidate of the ADC in the March 18 gubernatorial election in Lagos State, Funso Doherty has said that although he agrees with the fuel subsidy removal, Lagos state will most likely be hit hardest following the implementation of the policy.
In an open letter dated June 6, 2023, Doherty said the fuel subsidy removal has compounded the harvest of unofficial payments by road transport workers to the ‘agbero’ network in the state. According to him, Lagos has an entrenched system of extortionate payments that are collected from road operators on a daily basis.
He wrote:
- “This practice by itself already imposes a regressive burden that subjects low-income earners to high effective tax rates that are reflected in their transport fares.”
Doherty also gave other reasons why he believes Lagos will be hardest hit by the fuel subsidy removal. According to him, Lagos is a dense urban community with a large population, many of whom commute daily using korope, Keke, and Danfo buses, all of which run on fuel.
He also highlighted the fact that there are limited mass transit options in the state, meanwhile, traffic congestion in the state is legendary and remains one of the highest in the world. He stated further that the state has not managed its resources judiciously in the last 24 years and needs to do better.
Doherty suggested the following short-term solutions to tackle the challenges as regards the impact of fuel subsidy removal:
- Dismantle the informal ‘agbero’ system of levies and taxes collection and the foot soldiers should be redirected to manage the social impact. Technology should be introduced to administer compliance and enforcement.
- Introduce personal income tax relief for low-income earners in Lagos state to raise the taxability threshold and provide relief for the most vulnerable taxpayers.
- Implement cost of living salary adjustment for Lagos government workers, which prioritizes low-income earners. The government must also encourage private-sector businesses to do the same.
- Review the planned $12 billion proposed 4th mainland bridge project to confirm that it remains an appropriate use of capacity in the context of heightened urgency to deliver effective multi-modal mass transit in Lagos over the next 10 years.
- Scale up ferry service on key water transport routes like Ikorodu to Lagos Island.
- Review all existing mass transit arrangements and scale up BRT services by eliminating all constraints. Eliminate conflicts of interest to ensure quality and accountability.
Meanwhile, in the longer term, Doherty suggests that the Lagos state government should:
- Ensure that within 10 years, the Lagos Metropolitan Area is effectively served with efficient and cost-effective multi-modal mass transit and more rail lines should be introduced on an accelerated timeline.
- New town planning and development efforts should be accelerated featuring integrated mass transit, infrastructure, and affordable housing plans to achieve distributed and decentralized development of vibrant communities spread across Lagos.
- Government must have an overall vision for a broad-based, inclusive, productive, and prosperous economy with actual outcomes that improve living standards for residents across the socio-economic spectrum.
