Social contracts in transformation: Tax reform in Nigeria

Lead Research Organisation: University of Oxford
Department Name: International Development

Abstract

This application seeks to develop work on the evolution and impacts of new forms of direct and indirect taxation in Nigeria, an African federal polity hitherto heavily reliant on natural resource rents, which is now undergoing an emergent transformation towards direct taxation in many of its constituent states. By looking at how citizens and state actors perceive and interact with new revenue-raising initiatives by sub-national bodies, I seek to critically examine expectations of new forms of social contract between citizens and state, and to identify the emergent implications for modes of governance, using political anthropology as the central methodology.

The Nigerian state has been heavily fiscally reliant on oil revenues for the past four decades, producing a situation which has led to a mutual disconnect in accountability between citizens and state. Now, many of the Federal Republic of Nigeria's 36 constituent states are looking beyond their limited share of national oil resources to raise more money from direct taxes on the economic activities of people and businesses. Classical social theory on taxation and accountability suggests that as governments introduce direct taxation, publics will make more demands on government to show what is done with 'their' money, leading to a social contract in which taxation and representation are mutually productive.

Contemporary Nigeria is an ideal place to see this process in action and to test its assumptions. Ideas of social contract, or of the roles of government and public, and of state and political power more broadly, are strongly conditioned by historical experiences and cultural framings which mean that we cannot simply assume a normative idea of social contract. Current tax reforms are situated atop an accumulation of past practices and meanings, which implicate our consideration of precolonial, colonial and post-colonial administrative and coercive practices, communal identities, political loyalties and ideas of governmental authority and legitimacy, or the lack of it.

The research will build upon my previous research on policing in Nigeria, by adopting a similar perspective, working as participant observer not just with the public as they interact with revenue officials and become subject to new forms of taxation demands, but also working 'inside' the state with revenue officials themselves, to ascertain with what meanings they imbue their work, and what practices they evolve in pursuit of its goals, as an emergent transition in political economy gathers pace.

Planned Impact

There are a number of potential audiences for the outputs of this research. Academic direct beneficiaries in the UK and Nigeria have been recounted above. In addition, throughout this study, related teaching within my Department and elsewhere in the university (for instance supervising students considering dissertations in directly-related fields) will add some indirect academic impact in anthropology, African studies, African politics and development studies.

In the UK, there is a policymaker audience which has a direct interest in this field, building on the interest expressed by the Parliamentary International Development Committee cited above. As with my previous research on policing, I will actively follow up interested parties within the UK's Department for International Development (DfID) and Foreign and Commonwealth Office (FCO) and present findings to them at in-house round-tables. I will also make use of my existing linkages to the Royal Institute of International Affairs (Chatham House) to convene a policymaker and stakeholder discussion there on the themes raised by this research, and build on existing linkages with research staff supporting the All-Party Parliamentary Group on Nigeria, with a view to presenting selected research outputs to interested MPs who have a voice in policy processes affecting UK support for governance reforms in Nigeria.

Within Nigeria, the DfID country office in Abuja, having previously supported a South-West Nigeria Forum on Internally-Generated Revenue, now runs a number of projects related to sub-national revenue and to accountability, such as the £31 million State Accountability and Voice Initiative (SAVI), whose project and supervisory staff would have a direct interest in the findings where they inform the nature of their engagements. National civil society organisations working on fiscal governance and citizen participation may also be interested. But the most significant potential audience for these research outpus are the growing number of states engaged in internal revenue reforms, some of whom have already expressed interest in my proposed research. The core stakeholders to prioritise in dissemination are participating state authorities and their peers, mainly the Ministries of Finance in the states concerned and outside, who can use findings of my research to inform their ongoing policy work.

I have made preliminary enquiries of a number of states from my selected shortlist, and after discussion with the Commissioner for Finance, Ekiti State Government, I have a letter in support of my research expressing their willingness to collaborate and their interest in making use of relevant findings (see uploaded attachments). In designing this research I am also building on a successful record of collaboration between Oxford University and Lagos State Government, which has already made use of previous survey findings on attitudes towards taxation by the African Studies Centre/Centre for the Study of African Economies. I will also explore ways to reach other interested states via the influential Governors' Forum, a non-governmental public policy discussion body which brings together sub-national government executives.

In order to be as widely accessible as possible, working papers - accessibly-worded in-progress drafts of outputs - will be posted to the web. Although a dedicated website is not necessary for a project of this size, I envisage making use of the existing Nigeria Research Network sub-site hosted by Oxford Department of International Development, with its established specialist traffic. As web access in Nigeria is often limited by smaller bandwidth, the same materials and links will also be shared with a wider network of researchers in and on Nigeria by posting to the (separate) informal Nigeria research network Yahoo group, a frequently-used information- and data- sharing resource for researchers which this investigator was instrumental in setting up.

Publications

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Cooper-Knock S (2019) Government paper: the negotiated production and life of state documents in Canadian Journal of African Studies / Revue canadienne des études africaines

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Gatt, L. (2018) Direct Taxation and State-Society Relations in Lagos, Nigeria in Development and Change

 
Description The key finding of this award is that Nigeria is no longer an oil state; meaning that rather than being at the start of a transition to primarily non-oil sources of public revenue, we have found as a result of this research that an initial tipping-point has already been passed. The secondary discovery is that there is a policy lag in recognising that at many different levels of government. The third key finding is that tax policy currently is very uneven between different states in Nigeria, being most often geared towards simple maximisation, rather than optimising overall social and economic gains.
Exploitation Route As an evidence base for more realistic policymaking by practitioners, and as a guide to where useful areas of support or prioritisation may be for development partners and donors.
Sectors Communities and Social Services/Policy,Financial Services, and Management Consultancy,Government, Democracy and Justice,Security and Diplomacy

 
Description The findings from this award have been used to feed into the DfID-funded PERL (Partnership to Engage, Reform and Learn) programme in Nigeria in their emphasis on tax optimisation from 2016. They have also been used to plan the strategic areas for funding new research within the Bill and Melinda Gates Foundation's funding to the Nigeria Tax Research Network in 2018 and 2019. Currently US$90,000 of funding is allocated for grants under this new research area. They have also been used to present reseaarch on tax to the Nigeria Economic Summit of private and public-sector executives and policymakers.
First Year Of Impact 2016
Sector Communities and Social Services/Policy,Financial Services, and Management Consultancy,Government, Democracy and Justice,Security and Diplomacy
Impact Types Societal,Economic,Policy & public services

 
Description Consultancy via The Policy Practice for the DfID PERL governance reform programme in Nigeria - promoting tax optimisation as a more socially sustainable and beneficial agenda than narrow tax maximisation.
Geographic Reach Africa 
Policy Influence Type Influenced training of practitioners or researchers
 
Description FIRS research collaboration and capacity-building at NTRN event
Geographic Reach Africa 
Policy Influence Type Influenced training of practitioners or researchers
Impact Better usage of data in policy planning by tax authorities at a national level.
 
Description Consortium member for DfID funding for ICTD, Sussex
Amount £20,945 (GBP)
Organisation Government of the UK 
Department Department for International Development (DfID)
Sector Public
Country United Kingdom
Start 10/2016 
End 01/2018
 
Description Oxford Martin School Governing the African Transition
Amount £60,000 (GBP)
Organisation University of Oxford 
Department Oxford Martin School
Sector Academic/University
Country United Kingdom
Start 01/2017 
End 07/2018
 
Description ECAS panel 
Organisation University of Oxford
Department African Studies Centre
Country United Kingdom 
Sector Academic/University 
PI Contribution Together with Dr Nic Cheeseman of the ASC, who is also an advisor on this project, i co-convened a panel (The Changing Politics of Taxation in Africa) at the European Conference on African Studies in Paris on 8th July 2015.
Collaborator Contribution Co-convened, publicised and administered. Presenters included: 1. Wilson Prichard: The Prevalence and Relative Popularity of Informal Taxation in Sierra Leone 2. Pierre Englebert: Decentralization, Donors, and the Consequences of Partial Reform in the DR Congo 3. Kristof Titeca: "Real" taxation practices in the Congolese police sector 4. José-María Muñoz: How are taxpayers categorised and treated? The technopolitics of segmentation in Cameroon.
Impact We discussed a number of options for future collaboration; however as a number of the papers presented were already committed to other outputs, we were not able to put together a publication on the basis of the session.
Start Year 2015
 
Description ICTD and Sheffield collaboration 
Organisation Institute of Development Studies
Department International Centre for Tax and Development
Country United Kingdom 
Sector Charity/Non Profit 
PI Contribution I have brokered a collaboration with the International Centre for Tax and Development at their instigation as they put forward the research programme for their next five-year funding period. There are two planks. The first is to augment the activities on my FRL research project by leveraging ICTD's established track record and credibility with tax professionals by creating additional opportunities for technical data generation in the field; First, by executing short surveys in each place, to get descriptive statistics for comparison. Second is to conduct three technical specialist FGDs, one in each state in which my research will be carried out, which will function as a way of framing questions I ask both in the survey and ethnographic research. Third, there is a need for some RA time, either based here or in Nigeria, to collate data from tax revenues from documents in the states concerned, as I have discovered that despite early indications, these are not generally collated to anywhere near the extent I had expected when I wrote my FRL application. The total for these activities is around £5,800 in RA time and logistical support. The second collaborative project with ICTD also involves Dr Tom Goodfellow of Sheffield University Department of Urban Studies and Planning. In examining the Lagos leg of my research, I came to the realisation that land and property are essential axes of both economic activity and political citizenship. Dr Goodfellow has already studied these relationships and their effects on governance in Ethiopia and Uganda and we both felt that combining our expertise - his thematic, mine country-specific, we could do a better job than individually. This activity which includes two periods of additional qualitative fieldwork will be funded up to £35,000 between both of us and including logistics.
Collaborator Contribution On 2nd March it was confirmed that DfID support for ICTD's five-year programme has been renewed, meaning that we will move ahead with the two areas of collaboration above. The first will be due to begin around in consonance with other fieldwork, and the second will fit around collaborator availability with detailed planning and research design in June 2016 an initial period of dedicated fieldwork in September 2016, then again in January 2017. UPDATE: We carried out this project as planned, in collaboration with Dr Tom Goodfellow of Sheffield University Dept of Urban Planning.
Impact Further to the planning and research design I attended the ICTD conference in Addis Ababa from 10th to 13th February. We did two field trips collaboratively to Nigeria in 2016-2017, and prepared a working paper on our findings for ICTD, which has now been developed into an academic paper submitted to the journal Politics and Society.
Start Year 2016
 
Description Nigeria tax research network with ICTD, FIRS Nigeria and CPPA 
Organisation Bill and Melinda Gates Foundation
Country United States 
Sector Charity/Non Profit 
PI Contribution I will take on a role as Research Director to advise this new two-year Gates Foundation-funded partnership between researchers and practitioners on tax and revenue in Nigeria. The role will be about linking potential partners to each other and to wider research communities, and helping members evaluate the most viable areas to prioritise for working groups and papers. The role links Gates Foundation support, through ICTD (International Centre for Tax and Develoopment, Sussex) with a Nigeria-based civil society secretariat organisation, the Centre for Public Policy Alternatives (CPPA) in Lagos. It also links to key governmental partners including Nigeria's Federal Internal Revenue Service (FIRS). UPDATE 2019: I have maintained this role and we have held two successive conferences, attracting 460 members to the network, mainly in Nigeria. We have an active mailing list and blog, employ a full-time ccordinator in Nigeria, and have an MoU with the Federal Inland Revenue Service (Nigeria's national tax authority) which hosted our conference last year in their training school and paid for accommodation and catering for around 50 attendees.
Collaborator Contribution ICTD/IDS supply funding, mentoring and administrative support. CPPA supply secretariat and in-country coordination. FIRS hosted our conference last year in their training school and paid for accommodation and catering for around 50 attendees, and provide clearing-house access to government data for researchers.
Impact The first meeting and research workshop was held in Abuja, from 12-14th September 2017, and attracted approximately 60 participants. The second held in Abuja from 24-25th October 2018 with approximately the same number of participants. The network has used Gates Foundation money to fund four Nigerian research teams who have now delivered on one-year resarch projects, whcih will result in working papers for ICTD and planned academic publications.
Start Year 2017
 
Description Nigeria tax research network with ICTD, FIRS Nigeria and CPPA 
Organisation Centre for Public Policy Alternatives
Country Nigeria 
Sector Charity/Non Profit 
PI Contribution I will take on a role as Research Director to advise this new two-year Gates Foundation-funded partnership between researchers and practitioners on tax and revenue in Nigeria. The role will be about linking potential partners to each other and to wider research communities, and helping members evaluate the most viable areas to prioritise for working groups and papers. The role links Gates Foundation support, through ICTD (International Centre for Tax and Develoopment, Sussex) with a Nigeria-based civil society secretariat organisation, the Centre for Public Policy Alternatives (CPPA) in Lagos. It also links to key governmental partners including Nigeria's Federal Internal Revenue Service (FIRS). UPDATE 2019: I have maintained this role and we have held two successive conferences, attracting 460 members to the network, mainly in Nigeria. We have an active mailing list and blog, employ a full-time ccordinator in Nigeria, and have an MoU with the Federal Inland Revenue Service (Nigeria's national tax authority) which hosted our conference last year in their training school and paid for accommodation and catering for around 50 attendees.
Collaborator Contribution ICTD/IDS supply funding, mentoring and administrative support. CPPA supply secretariat and in-country coordination. FIRS hosted our conference last year in their training school and paid for accommodation and catering for around 50 attendees, and provide clearing-house access to government data for researchers.
Impact The first meeting and research workshop was held in Abuja, from 12-14th September 2017, and attracted approximately 60 participants. The second held in Abuja from 24-25th October 2018 with approximately the same number of participants. The network has used Gates Foundation money to fund four Nigerian research teams who have now delivered on one-year resarch projects, whcih will result in working papers for ICTD and planned academic publications.
Start Year 2017
 
Description Nigeria tax research network with ICTD, FIRS Nigeria and CPPA 
Organisation Institute of Development Studies
Department International Centre for Tax and Development
Country United Kingdom 
Sector Charity/Non Profit 
PI Contribution I will take on a role as Research Director to advise this new two-year Gates Foundation-funded partnership between researchers and practitioners on tax and revenue in Nigeria. The role will be about linking potential partners to each other and to wider research communities, and helping members evaluate the most viable areas to prioritise for working groups and papers. The role links Gates Foundation support, through ICTD (International Centre for Tax and Develoopment, Sussex) with a Nigeria-based civil society secretariat organisation, the Centre for Public Policy Alternatives (CPPA) in Lagos. It also links to key governmental partners including Nigeria's Federal Internal Revenue Service (FIRS). UPDATE 2019: I have maintained this role and we have held two successive conferences, attracting 460 members to the network, mainly in Nigeria. We have an active mailing list and blog, employ a full-time ccordinator in Nigeria, and have an MoU with the Federal Inland Revenue Service (Nigeria's national tax authority) which hosted our conference last year in their training school and paid for accommodation and catering for around 50 attendees.
Collaborator Contribution ICTD/IDS supply funding, mentoring and administrative support. CPPA supply secretariat and in-country coordination. FIRS hosted our conference last year in their training school and paid for accommodation and catering for around 50 attendees, and provide clearing-house access to government data for researchers.
Impact The first meeting and research workshop was held in Abuja, from 12-14th September 2017, and attracted approximately 60 participants. The second held in Abuja from 24-25th October 2018 with approximately the same number of participants. The network has used Gates Foundation money to fund four Nigerian research teams who have now delivered on one-year resarch projects, whcih will result in working papers for ICTD and planned academic publications.
Start Year 2017
 
Description Social life of state documents 
Organisation University of Edinburgh
Country United Kingdom 
Sector Academic/University 
PI Contribution A publication partnership with Dr Sarah-Jane Cooper-Knock to put together a special edition of the Canadian Journal of African Studies
Collaborator Contribution We co-authored the introduction, having previously co-convened a panel at the ASA conference in San Diego, and collaboratively sourced and edited author submissions.
Impact Publication pending
Start Year 2015
 
Description Addis Conference 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact I attended and contributed to the 5th Annual Conference of the International Institute for Tax and Development in Addis Ababa, Ethiopia, from 10th-13th Feburary this year and also participated in their day of debate on new research on property tax on 14th February. The event, which was hosted by the Ethiopian Revenue Authority, is held in Africa as the best way of embedding academic knowledge within the community of practitioners in the region, which formed the majority of attendees.
Year(s) Of Engagement Activity 2016
 
Description Advisory to Gates Foundation on how to best support tax reform in Nigeria 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Supporters
Results and Impact Providing professional advice to the Bill and Melinda Gates Foundation's team on how to best support tax policy reform in Nigeria.
Year(s) Of Engagement Activity 2017,2018
 
Description ECAS panel 2017 in planning 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Other audiences
Results and Impact This is an activity planned for June 2017 and will be a collaboration with Copenhagen University leading to a special edition of the Journal Politique Africaine.
Year(s) Of Engagement Activity 2017
 
Description Edinburgh seminar 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact Informal feedback informing further refinement of research design.
Year(s) Of Engagement Activity 2015
 
Description Nigeria Tax Research Network 2017 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact 12-14th September 2-day conference plus research training day in the Transcorp Hilton Hotel, Abuja, Nigeria.
Year(s) Of Engagement Activity 2017
 
Description Presentation at University of Lagos Dept of Urban Planning 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Presenting ongoing work on property tax in Lagos at UNILAG in front of Nigerian peers including academics, policy advisors, researchers on parallel projects. We gained a lot from their input and critiques and set up some avenues for future collaboration after hearing about their work.
Year(s) Of Engagement Activity 2017
 
Description Talk to Undergraduate International Development society 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Undergraduate students
Results and Impact Speaking to undergraduate students interested to work in international development.
Year(s) Of Engagement Activity 2018