The recent aggressive revenue generation drive in Cross River State has become a double-edged sword, a worrisome trend, as the government seeks to bolster its Internally Generated Revenue. Meanwhile, local businesses are bearing the brunt of this pressure, leading to a silent collapse of enterprises across the state.
The outcome is not just economic decay, but a growing sense of disillusionment among the very entrepreneurs who form the backbone of the state’s economy.
Unarguably, revenue generation is a legitimate goal for any government, especially in an era where federal allocations are no longer sufficient to fund basic development. Cross River, like many other subnational entities in Nigeria, has legitimate aspirations to increase its Internally Generated Revenue (IGR) to fund infrastructure, improve public services, and reduce its dependency on federal handouts.
However, there is a crucial difference between broadening the tax base and choking the economy with uncoordinated levies and overregulation.
Across Calabar and other parts of the state, traders, artisans, SMEs, and even informal vendors are groaning under the weight of multiple taxes, levies, and fees imposed by both state and local government authorities. In some cases, these charges are duplicated or arbitrarily increased without adequate consultation or notice.
Some business owners are made to pay as much as ₦24,000 annually for permits or local levies, with little to no explanation of what services these payments fund. Business owners report instances of harassment, intimidation, and in extreme cases, confiscation of goods and sealing of shops over tax disputes that could have been resolved amicably. What was once a vibrant economic and tourism hub is now clouded by fear and uncertainty, as enterprise is no longer driven by innovation and profit but by survival.
Rather than cultivating a productive relationship with businesses, the state seems to have embraced a predatory model that sees private enterprise as a mere cash cow. This mindset fails to appreciate that taxation is not just about revenue collection; it is a social contract that must be built on trust, clarity, and fairness. When business owners do not see the value of what they pay when roads remain dilapidated, power is unstable, and security is tenuous, tax becomes a burden, not a civic duty.
Worse still, the state has not matched its aggressive tax efforts with ease-of-doing-business reforms. Investors are wary of bureaucratic bottlenecks, poor infrastructure, and a hostile policy environment.
The influx of levies without corresponding incentives or support services creates an imbalance that is driving businesses out of the state or into the shadows of informality. The loss is not just to the private sector; it is a long-term setback to the state’s development.
What Cross River needs is not just more revenue but smarter revenue strategies. The state must reimagine its relationship with the business community. Taxation should be seen as a partnership, not a punishment.
The government must consult stakeholders before new revenue policies are implemented, harmonize tax systems to avoid duplication, and provide clear, accessible information to all business categories. A tiered approach that considers the size, scale, and sector of each business is essential to avoid pushing micro and small businesses into extinction.
Moreover, there must be deliberate policies to support enterprise growth: access to credit, infrastructure upgrades, investment in skill development, and platforms for business incubation. A thriving private sector creates jobs, reduces crime, and expands the tax base organically. On the contrary, a suffocating revenue hunt shrinks the economy, increases unemployment, and leads to mass discontent, a scenario Cross River cannot afford.
It is time for the state government to pivot from its current extractive approach and embrace a more inclusive, business-friendly model. Revenue generation should never come at the cost of economic stability.
Cross River has the talent, location, and potential to become an economic hub in Nigeria’s South-South, but only if it prioritizes enterprise development over arbitrary revenue collection. The collapse of business is not just a statistic it is a slow erosion of hope, innovation, and future prosperity. The government must act before it is too late.
