The Nation Newspaper

Category: Issues

  • Deepening standards, quality reforms to boost export

    Deepening standards, quality reforms to boost export

    The Federal Government is leaving no stone unturned in its quest to position the economy to benefit bountifully from the African Continental Free Trade Area (AfCFTA), which implementation has since begun. Through the National Quality Council (NQC), it has prioritised the realisation of an effective National Quality Infrastructure (NQI) capable of raising the quality and competitiveness of made-in-Nigeria products and services and, ultimately, boosting the nation’s export-led growth and creating jobs, Assistant Editor OKWY IROEGBU- CHIKEZIE reports

    If recent developments in Nigeria’s quality infrastructure space are anything to go by, then the country looks good to enhance the competitiveness of locally made products and services and, ultimately, claiming a dominant position in global trade and commerce. Apparently aware that an effective National Quality Infrastructure (NQI), capable of raising the quality of made-in-Nigeria products and services, is key to attaining this position, the President Bola Tinuibu-led administration has moved to deepen quality reforms aimed at increasing Nigeria’s export-led growth and creating jobs.

    At the heart of the administration’s latest quality reforms, The Nation learnt, is the implementation of the Nigerian National Quality Policy (NNQP), which goal, essentially, is to strengthen and develop the National Quality Infrastructure (NQI) in order to achieve accelerated economic growth, increase exports, ensure supply of safe and quality products at competitive prices. The policy also aims at enhancing the competitiveness of made-in-Nigeria products and services locally, regionally, continentally and internationally, in order to contribute to poverty reduction and economic prosperity.

    Chairman and Chief Executive, National Quality Council (NQC), Mr. Osita Aboloma, put the administration’s renewed focus on quality infrastructure in perspective when he said the ultimate objective of the NNQP, which supersedes other provisions in any other national sectorial quality related policies, is to ensure that Nigeria is truly positioned to gain from the AfCFTA and to achieve increased inter-regional and intra-Africa trade that would yield economic development for the betterment of Nigerians and the continent at large.

    The NQC, which Abaloma heads, is charged with coordinating the NQI, ensuring continual improvement for greater efficiency and effectiveness, advising and supporting all regulatory authorities to consistently meet the requirements of the World Trade Organisation (WTO), SPS and TBT Agreements and the African trade instruments to raise the level of awareness in the business sector and among the population on the benefits of adherence to quality at different levels of businesses such as purchasing, manufacturing and supply.

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    The Council’s mandate also includes working with the public and private sector institutions and organisations to harmonize and rationalise existing quality infrastructure, bringing them to acceptable levels of acceptance globally, identifying gaps and advising the government on the best ways to close them in national interest.

    Encouraged by the Council’s mandate, Aboloma expressed confidence that Nigeria’s economy will grow over a longer period of time, at a higher level and with better quality and make new contributions to robust, sustainable and balanced growth of the global economy.

    “We have a lot of short-term plans, one of which is to ensure that the NQC is set up properly and has a structure to take-off effectively and efficiently,” he said.

    According to him, the structure requires that the NQC has a legal framework hence, the Federal Executive Council (FEC’s) approval of the NNQP leading to the set-up of the NQC has been gazette. He also revealed that the Office of the Secretary to the Government of the Federation (SGF) has provided functional accommodation for the Council at the Federal Secretariat, Abuja.

    Drawing strength from such executive backing, Abaloma said NQC has commenced collaborative activities with stakeholders including SON, the African Union Commission/Pan African Quality Infrastructure in the successful hosting of the maiden African Cassava Conference (ACC) in Nigeria. It is also collaborating with the United Kingdom High Commission, Abuja/British Standards Institute under the Standards Partnership Programme.

    There is also the ongoing Business Round Table on the implementation framework for the NNQP in conjunction with the Nigeria Agribusiness Group (NABG), among others. “There are a lot of things to be done. But basically, we have some things that we refer to as low-hanging fruits within the short-term plans. One of them is to convene a national discussion on the implementation of the NNQP and how it affects every facet of the economy within the shortest possible time in the six geo-political regions and across various sectors of the economy,” Abaloma said.

    As he explained, “The primary objective of the NNQP is to ensure that goods and services emanating from, imported into and traded in Nigeria are designed, manufactured, packaged, labelled and supplied in accordance with the needs, expectations and requirements of the purchaser and the consumer as prescribed in the applicable standards as well as the regulatory requirements in the local and export markets. The NNQP also aims to develop an environment in which both public and private sectors can achieve excellence for products and services.”

    The NQC boss, who was a former Director General of Standards Organisation of Nigeria (SON), sure spoke from the position of strength and understanding of the dynamics of international trade and commerce where quality plays a determinant role.

    According to him, “Globally, countries are putting policies in place to guide the development and growth of the national quality infrastructure, which consist of development, harmonisation and implementation of market-driven standards to facilitate local, regional, continental and international trade.

    Others, he told The Nation, are  Conformity Assessment Services  that include inspection, testing and products/systems certification to guarantee that products tested in Nigeria will be acceptable across its borders, beyond the West Africa Region, the entire African Continent as well as globally; Conformity Assessment Services  that include inspection, testing and products/systems certification to guarantee that products tested in Nigeria will be acceptable across its borders, beyond the West Africa Region, the entire African Continent as well as globally.

    That’s not all. There is also the Accreditation of Conformity Assessment processes to attain external recognition of adherence to a set of international standards to perform activity or hold a certain status thus, conferring global acceptance. The other leg of the National Quality Infrastructure, according to Abaloma, is Metrology, which is the science of measurement and accuracy (scientific, industrial and legal) for certainty and traceability in trade, locally and across regional, continental as well as international boundaries.

    In other words, the NQI consists of Standards, Conformity Assessment, Accreditation and Metrology. In view of globalisation, each of these legs of the NQI in a country must be efficient and effective to support the competitiveness and acceptance of products and services from that country both locally and across borders. For example, the applicable standards for products must meet minimum requirements of destination markets for export.

    Also, the Conformity Assessment services must have the necessary accreditation and international recognition to be acceptable beyond the nation’s borders, while the Metrology services must also have the necessary international affiliations and traceability for the measurements to be acceptable globally. The thing is that the NQI clearly defines how those things should be done in the best interest of the economy and the welfare of Nigerians.

    Interestingly, the Nigerian National Quality Policy took after what has been done in the Economic Community of West African States (ECOWAS), Africa and other continents of the world on how all issues relating to quality will be carried out to ensure the Nigerian clime is protected while achieving the objectives of the Federal Government, which is largely to ensure competitiveness of goods and services locally and internationally, thus enhancing the growth of the economy, protection of the environment and wellbeing of the populace.

    Giving more insights into why the current administration’s re-energized campaign to deepen its quality reforms has become a compelling proposition, Abaloma said, for instance, that when NQI services meet international best practices, the nation saves a lot in foreign exchange that is hitherto spent on procuring such services abroad or from foreign service providers.

    According to him, product and management systems certification services, accreditation, equipment calibration and harmonisation of national standards across regional and continental jurisdictions are huge money savers and foreign exchange earners that will facilitate seamless trading with the world at large.

    “Harmonisation and rationalisation of the NQI eliminates duplication of efforts, optimise outputs, improves competencies and drastically reduces turnaround times in service delivery, all of which will lead to greater efficiency,” he stated.

    Projecting into the future, Abaloma said NQC, in the long term, will guide the government on the need to align the laws that set up all the standard-related bodies, so that SON, National Agency for Food, Drug Administration and Control (NAFDAC), and the Federal Competition and Consumer Protection Commission (FCCPC) can develop and enhance their competencies to global acceptance and focus on different approaches in achieving the same national goal.

    According to him, the enhanced efficiency and effectiveness of the NQI constituted by the public and private sector players have the capacity to promote continual improvement in the competitiveness of Made-in-Nigeria products and services and also mitigate the rejection of her export products. He noted that this will substantially increase patronage of made-in-Nigeria products and services and thus reduce poverty and create greater wealth for the wellbeing of citizens.

  • A new era beckons for Nigeria’s oil industry amid current issues

    A new era beckons for Nigeria’s oil industry amid current issues

    Despite ongoing midstream and downstream challenges, Nigeria’s oil industry has significantly boosted crude production, enhanced security against theft and vandalism, and improved refining capacity

    Nigeria’s oil industry, long a cornerstone of its economy, stands on the brink of a transformative era. As the nation grapples with a myriad of persistent issues, including declining production, rampant theft and infrastructural deficiencies, a new chapter is emerging. This potential shift offers a chance to revitalise the sector and reshape Nigeria’s economic landscape. However, realising this promise will require addressing entrenched challenges with innovative solutions and strategic reforms.

    Before President Bola Tinubu’s cabinet took office on May 29, 2023, Nigeria’s crude oil production was rapidly declining due to rampant theft, insecurity in the Niger Delta, and low investment levels. The situation was exacerbated by International Oil Companies (IOCs) divesting from the sector, compounded by the global energy transition movement, which further stifled investment. Amid these challenges, the country faced an urgent need to boost production volumes. This was the pressing reality in the upstream oil sector.

    In the midstream sector, illegal refineries in the oil-rich Niger Delta were causing significant issues. The downstream sector faced severe shortages of petroleum products, particularly Premium Motor Spirit (PMS) or petrol. With only a handful of modular refineries producing Automotive Gas Oil (AGO), Household Kerosene, and Naphtha, there was a pressing need to increase domestic refining capacity, whether through national or private refineries. The Petroleum Industry Act (PIA) had fully deregulated the sector, intensifying calls to eliminate subsidies on petroleum products.

    When President Tinubu swore in Senator Heineken Lokpobiri as Minister of State for Petroleum Resources (Oil) on August 21, 2023, the oil industry was grappling with significant challenges. The sector was plagued by declining crude oil production, illegal refineries in the Niger Delta, and severe shortages of petroleum products. On assuming office, Lokpobiri pledged to address these issues head-on, stating, “Go and ramp up crude oil production,” which was the key directive he received from the President.

    Consequently, Senator Lokpobiri committed to being a frequent presence in the creeks—the heart of oil exploration and production—rather than operating remotely from Abuja. In his inaugural speech, he emphasised his hands-on approach: “I am here to work with the agencies to increase production on a sustainable basis… Even if you speak grammar from now to tomorrow, you won’t increase production; you have achieved nothing. You are the experts. I am here to provide the leadership so that we can go to the creeks. I am not going to spend more time in the office; I am going to spend more time in the fields so that we can achieve results.”

    Under Lokpobiri’s leadership, the Ministry of Petroleum Resources has faced significant challenges in reviving Nigeria’s struggling crude oil industry. When Lokpobiri took office, the industry was at a low point. Despite Nigeria’s capacity to produce up to 2 million barrels per day (mb/d), actual production had plummeted to just 1.181 mb/d in August 2023. This shortfall not only tarnished Nigeria’s reputation as Africa’s leading crude oil producer but also had a severe impact on national revenue.

    The industry was plagued by numerous issues, including illegal refineries in the Niger Delta, widespread theft, and insecurity, which hindered production efforts. Additionally, the downstream sector was grappling with critical shortages of petroleum products, further exacerbating the situation. Despite various measures to boost output, these efforts were largely in vain, leading to substantial financial losses for the country. Lokpobiri’s approach to addressing these problems involved a commitment to being present in the field rather than working remotely from Abuja. He emphasised his intent to provide hands-on leadership and focus directly on the creeks, the heart of oil exploration and production, in order to achieve tangible results and restore the industry’s performance.

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    Oil theft, pipeline vandalism, and illegal refining became glaring issues in the Niger Delta, reflecting the severe challenges facing the industry. High-profile investors like Tony Elumelu had previously raised alarms about Nigeria losing up to 95% of its crude oil production to theft, urging the government to expose those responsible. Despite efforts by security operatives to curb these illegal activities, illegal refiners continued their operations unabated. The perilous nature of their trade, which claimed many lives, only seemed to enhance the allure and profitability of their illicit activities.

    In essence, revitalising the oil industry to protect lives, the environment, and property was one of the most pressing issues confronting Senator Heineken Lokpobiri’s ministry. The Herculean task involved tackling the pervasive problems of oil theft and illegal refining, which required identifying and apprehending those involved in bunkering and illicit sales of crude at every stage of production. Ironically, accountability also posed a significant challenge, as the industry reportedly suffered from inadequate metering at wellheads and terminals, complicating efforts to monitor and manage production effectively. These formidable challenges were central to the mandate faced by Lokpobiri’s ministry as it sought to restore integrity and functionality to Nigeria’s oil sector.

    To address the urgent issues facing Nigeria’s oil sector, Senator Lokpobiri needed to act swiftly. Recognizing the necessity for a coordinated response, President Tinubu assembled a high-level delegation for a physical assessment of the battle against crude oil theft on August 26, 2023. The delegation included National Security Adviser Mallam Nuhu Ribadu, who led a comprehensive security team comprising the Ministers of State for Defence, the Minister of Defence, the Minister of State for Petroleum Resources (Gas), and the Permanent Secretary of the Ministry of Petroleum Resources. Also present were the Chief of Defence Staff, the Chief of Air Staff, a representative of the Chief of Army Staff, the Commander of Operation Delta Safe, a representative of the Director General of the Department of State Services (DSS), and the Special Adviser to the President on Energy. This collaborative effort aimed to address the multifaceted challenges plaguing the oil industry and enhance security measures in the Niger Delta.

    From the petroleum sector, the delegation included Mallam Mele Kyari, Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Engr. Adokiye Tombomieye, Executive Vice President Upstream, and Mr. Bala Wunti, Chief Upstream Investment Officer. The team engaged with key stakeholders, such as the management of Tantita Security Services Limited, which has been instrumental in pipeline protection in the Niger Delta. After inspecting illegal facilities in Delta State, Lokpobiri emphasized the Tinubu administration’s commitment to eradicating pipeline vandalism and oil theft. He stated, “We are here because of the problem of pipeline vandalism and illegal bunkering that is ongoing in the Niger Delta.”

    To address the persistent issues of pipeline vandalism and oil theft, Senator Lokpobiri acted on his promise by venturing directly into the creeks. He traveled to Bayelsa State, where he engaged with local traditional rulers to seek their support in combating these challenges. Lokpobiri paid a visit to the Pere of Ekpetiama clan and Chairman of the Traditional Rulers’ Council of Bayelsa State, King Bubaraye Dakolo, to emphasize the importance of collective action against pipeline vandalism. He also met with the King of Nembe Kingdom and former Minister of Petroleum, Edmund Daukoru, focusing on collaborative efforts to enhance pipeline security and tackle illicit activities. Additionally, he sought the cooperation of the Pere of Kumbowei Kingdom, Boloye Embareba, to bolster security and improve oil production in the region.

    In addition to these meetings, Chief of Defence Staff General Christopher Musa also visited the Minister of State for Petroleum Resources in Abuja to discuss strategies for curbing insecurity and boosting oil production. The efforts seem to have borne fruit a year later. Although Nigeria has yet to meet its Organization of Petroleum Exporting Countries (OPEC) quota, significant progress has been made. According to a report from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the number of oil rigs in the country had risen to 24 by June 2024, up from just 10 rigs previously. Engr. Gbenga Komolafe, the commission’s Chief Executive Officer, highlighted this improvement, noting, “As of June 2024, compared to 2022, when we had about 10 rigs, we now have approximately 24 rigs in the industry.”

    Engr. Komolafe also reported that Nigeria’s total crude oil and condensate reserves reached 37.50 billion barrels as of January 2024, marking a 1.4% increase from 36.96 billion barrels a year earlier. The industry has demonstrated a sustained improvement in performance, particularly in daily production. Last week, Mrs. Oritsemeyiwa Eyesan, Executive Vice President of Upstream at NNPCL, announced that crude oil and condensate production had surged to 1.7 million barrels per day (mb/d) in August. Additionally, she highlighted a successful reduction in production costs from $34 per barrel to $30 per barrel.

    In a notable development, Slumberger, which had previously exited the Nigerian market, returned in May 2023 to undertake a significant drilling project involving 100 wells, an investment worth billions of dollars. This marked a significant return to the Nigerian oil sector after a 12-year absence, as noted by Lokpobiri. “This morning, I was with a company and that company alone is saying they are happy (Schlumberger is back to town) and they have a drilling programme of drilling a 100 wells. You know what that means? That will be another major investment that will attract billions of dollars,” he said.

    In the midstream sector, the long-awaited production of petroleum products, particularly Premium Motor Spirit (PMS), from domestic refineries remains a key focus. Although domestic refineries are still primarily engaged in basic refining processes, there is notable progress. The Dangote Petroleum Refinery, with its capacity of 650,000 barrels per day, has commenced production of diesel, naphtha, and Jet A fuel. The refinery not only supplies these products locally but also exports to international markets, marking a significant milestone in both global and national refining history. Expectations are high that the refinery will soon start producing PMS.

    The enabling environment fostered by the Ministry has played a role in this achievement, with efforts underway to address the plant’s major challenge of feedstock shortages. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is enforcing the domestic crude supply obligation to ensure oil producers deliver the necessary crude oil to the refinery. Additionally, President Tinubu has directed that feedstock transactions be conducted in Naira, further supporting the industry.

    State-owned refineries are also showing signs of improvement. Despite public anxieties, progress is being made. Last week, Engr. Dapo Segun, Executive Vice President Downstream at NNPCL, revealed that the 60,000-barrel Port Harcourt Refinery is expected to receive approval for product distribution by September 2024. The refinery’s Crude Oil Distillation Unit (CDU) has been operational since early August, and while the plant is still not producing off-spec products for public distribution, it is progressing toward certification by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

    The lack of functional domestic refineries has previously hampered the industry, leading to reliance on imported products and sporadic shortages of PMS. However, the recent advancements in refining capacity signal a positive shift towards greater self-sufficiency in petroleum product production.

    During the period under review, the oil sector, guided by Lokpobiri, has achieved notable growth in the upstream segment. Despite persistent challenges in the midstream and downstream sectors, his leadership has driven substantial progress in the industry. This success, however, demands a continued, relentless effort to overcome any obstacles that might impede further advancements. The battle against issues like oil theft, pipeline vandalism, and inefficiencies in refining must persist to build on this success and ensure the sector’s continued improvement and stability.

  • Driving toward a cleaner future with CNG buses

    Driving toward a cleaner future with CNG buses

    • Despite initial challenges, Nigeria’s adoption of CNG technology as a key component of its sustainable urban transport strategy is crucial for economic transformation

    In a historic move that could redefine Nigeria’s transportation landscape, President Bola Tinubu has inaugurated 30 hybrid Compressed Natural Gas (CNG)-powered buses in Abuja. This bold step, part of the Presidential CNG Initiative, signifies more than just the launch of a new fleet of vehicles. It marks a decisive shift towards cleaner energy, economic efficiency, and a future where Nigeria can significantly reduce its reliance on costly and environmentally harmful fossil fuels.

    At the launch, the President said utilising natural gas to power the nation’s transportation industry would reduce transportation costs, enhance productivity and save the nation trillions of naira spent on the importation of petrol and diesel. “If we can enhance our energy competitiveness and bring about transformative changes like this, we will be able to achieve the prosperity we are working hard to accomplish for our people. These CNG buses are encouraging and promising to enhance our transportation system,” he said.

    Tinubu highlighted that commercial vehicles consume over 80 per cent of the nation’s petroleum supply, pointing to several countries that have transitioned to CNG for their transportation systems and are already enjoying significant benefits. “Countries like India have mandated CNG for all commercial vehicles since 2004. In Nigeria, commercial vehicles make up about 80 per cent of our petroleum demand, costing us trillions of naira every month. The solution is here. We have it. We will work on it. We promise you things will get better. Prosperity will be achieved,” the President said.

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    He praised Innoson Motors, the vehicle manufacturer, for their dedication to advancing his administration’s CNG initiative. The launch of these CNG-powered buses, generously donated by the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN) and the Nigerian National Petroleum Company Limited (NNPC), represents a crucial pivot in Nigeria’s energy strategy. Each bus, locally manufactured by Innoson Motors, can accommodate 100 passengers, making them a formidable addition to Nigeria’s public transportation system.

    This initiative comes at a critical time, just days after President Tinubu’s closed-door meeting with Mr. Innocent Chukwuma, the Founder and CEO of Innoson Vehicle Manufacturing Company Ltd. The discussions focused on expanding the availability of CNG buses to the Nigerian public, with Chukwuma expressing optimism that Nigerians will soon enjoy more affordable and eco-friendly transportation options. The partnership between Innoson Motors and the Federal Government is not just a business agreement; it is a powerful statement about Nigeria’s commitment to innovation, sustainability and self-reliance.

    Why embracing CNG technology makes economic sense

    In an era where environmental sustainability is no longer just an option but a necessity, the importance of clean energy solutions cannot be overstated. The global transition towards greener alternatives is gaining momentum, and Nigeria, with its unique challenges and opportunities, stands at a critical juncture. The introduction and adoption of CNG buses is not just a technological upgrade but a pivotal step towards a cleaner, more sustainable future.

    CNG technology offers a promising solution to Nigeria’s urban transportation woes, providing a cleaner, more efficient alternative to traditional fossil fuels. Unlike diesel or gasoline, CNG produces significantly lower emissions, reducing the carbon footprint of our cities and contributing to improved air quality. For a country grappling with the dual challenges of urbanisation and pollution, the shift to CNG is not merely a choice but a necessity. Despite initial challenges, Nigeria’s adoption of CNG technology as a key component of its sustainable urban transport strategy is crucial for economic recovery. The benefits of CNG extend beyond environmental advantages; they also promise economic resilience. As Nigeria continues to recover from economic downturns, the cost-effectiveness of CNG, combined with its potential to create jobs in the energy sector, makes it a strategic investment in the nation’s future.

    Moreover, the shift to CNG buses aligns with Nigeria’s broader commitment to achieving its climate goals. By reducing dependence on imported fuels and leveraging the country’s abundant natural gas resources, this transition supports national energy security while fostering a cleaner environment. The move towards CNG is a testament to Nigeria’s ability to innovate and adapt, paving the way for a future where urban transport is both sustainable and economically viable.

    President Tinubu has been vocal about the numerous benefits that this shift to CNG-powered transportation will bring. By utilising natural gas to power the nation’s buses, Nigeria stands to significantly reduce transportation costs, which in turn could enhance productivity across various sectors. The economic argument is compelling: Nigeria spends trillions of naira annually on the importation of petrol and diesel, a financial burden that exacerbates the country’s economic challenges. With CNG as a locally available and cheaper alternative, these costs can be dramatically cut, freeing up resources that can be redirected to other critical areas of the economy.

    Moreover, CNG-powered buses present a viable solution to the environmental challenges posed by traditional diesel and petrol vehicles. As President Tinubu pointed out, commercial vehicles account for over 80% of Nigeria’s petroleum demand. This heavy reliance on fossil fuels not only drains the nation’s coffers but also contributes to severe environmental degradation. The introduction of CNG buses could significantly curb the emissions associated with transportation, leading to cleaner air and a healthier population. Furthermore, Nigeria’s abundant natural gas reserves make CNG a locally sourced alternative that can boost energy security and reduce reliance on imported fuels. By harnessing this resource, Nigeria can also generate job opportunities in the CNG production and distribution sectors, further supporting economic growth.

    Learning from global examples

    Nigeria’s move towards CNG-powered transportation is not without precedent. Countries like India, which mandated the use of CNG for all commercial vehicles as far back as 2004, have already demonstrated the benefits of such a transition. The switch to CNG in India led to substantial improvements in air quality, particularly in urban centres like New Delhi, which had been grappling with some of the world’s worst air pollution levels. For Nigeria, the lessons from India and other countries that have embraced CNG are clear. The potential for CNG to transform the transportation sector, reduce environmental impact, and improve public health is immense. However, to fully realize these benefits, Nigeria must not only invest in CNG buses but also in the infrastructure required to support them, such as refuelling stations and maintenance facilities.

    A Leader in CNG adoption, the United States has been at the forefront of CNG adoption, particularly in its public transportation systems. Cities like Los Angeles and New York have invested heavily in CNG buses, recognising their potential to reduce greenhouse gas emissions and improve air quality. The Los Angeles County Metropolitan Transportation Authority (Metro) has one of the largest fleets of CNG buses in the world. Since the early 2000s, Metro has been transitioning its fleet to CNG, citing lower emissions and reduced operational costs as primary benefits.

    This shift has been supported by federal policies and incentives aimed at promoting cleaner fuels. For instance, the Clean Air Act and various grant programs have provided financial support for CNG infrastructure development. This comprehensive approach—combining policy support, investment in infrastructure, and public-private partnerships—has enabled the U.S. to leverage CNG effectively, showcasing its role in advancing environmental and economic goals.

    A model for CNG integration, Italy offers another noteworthy example of successful CNG adoption. The country has embraced CNG not only in its public transportation but also in private vehicles. The Italian government has implemented policies to promote the use of CNG, including tax incentives and subsidies for vehicle conversions. As a result, Italy boasts one of the highest concentrations of CNG-fuelled vehicles in Europe. Italian cities like Milan and Rome have incorporated CNG buses into their fleets to combat urban air pollution. Additionally, Italy has developed a robust network of CNG refuelling stations, making it easier for consumers to access this cleaner fuel. The integration of CNG into both public and private transportation sectors demonstrates the versatility and benefits of this fuel type, providing a model for other countries to follow.

    Expanding CNG infrastructure, Argentina presents a case of how CNG can be utilised to address both environmental and economic challenges. Facing high fuel import costs and severe air pollution in its major cities, Argentina turned to CNG as a viable solution. The Argentine government has heavily invested in CNG infrastructure, including refuelling stations and conversion facilities for vehicles. Buenos Aires, the capital city, has successfully transitioned a significant portion of its public bus fleet to CNG. This move has led to improved air quality and reduced fuel costs. The Argentine experience highlights the importance of developing infrastructure to support the widespread adoption of CNG. By investing in refueling networks and vehicle conversions, countries can facilitate the transition to cleaner fuels and reap the associated benefits.

    The Role of Nigerian innovation

    One of the most encouraging aspects of the Presidential CNG Initiative is the prominent role played by Nigerian innovation and entrepreneurship. Innoson Motors, the company responsible for manufacturing the CNG buses, is a testament to the potential of home-grown talent to drive the nation’s development. By choosing to collaborate with Innoson, the Federal Government is sending a strong message: Nigeria’s future lies in the hands of its own people, and the path to prosperity is paved with local ingenuity and resourcefulness.

    This partnership is about more than just vehicles; it’s about building a robust and self-sufficient industrial base that can compete on a global stage. As Winifred Akpani, Chairperson of DAPPMAN, noted during the launch, the hybrid buses are a product of Nigerian design, manufacturing and delivery. This not only enhances national pride but also ensures that the economic benefits of this initiative—job creation, skill development and industrial growth—stay within Nigeria.

    Challenges and the road ahead

    While the launch of the CNG buses is a significant milestone, it is just the beginning of what must be a sustained effort to overhaul Nigeria’s transportation system. The challenges ahead are substantial. For one, the initial investment required to scale up CNG infrastructure across the country is significant. Refueling stations must be built, and transportation agencies must be trained in the operation and maintenance of these new buses. Moreover, public awareness and acceptance of CNG as a viable and preferable alternative to diesel and petrol will be crucial in driving widespread adoption.

    Furthermore, while CNG is a cleaner alternative to traditional fossil fuels, it is not without its environmental drawbacks. Methane, the primary component of natural gas, is a potent greenhouse gas. Therefore, any leaks or inefficiencies in the CNG supply chain could offset some of the environmental gains. This makes it imperative for Nigeria to not only focus on the immediate benefits of CNG but also to invest in the research and development of even cleaner energy solutions, such as electric or hydrogen-powered vehicles, in the long term.

    By investing in CNG infrastructure, promoting public awareness and fostering strategic partnerships, Nigeria can make a decisive move toward cleaner, more sustainable urban transport. This initiative not only offers a practical solution to current problems but also paves the way for a greener, healthier future for generations to come. As Nigeria accelerates toward this transformative goal, it will undoubtedly contribute to a global movement toward more sustainable and resilient cities.

  • Team Nigeria’s poor run at the Paris 2024 Olympics

    Team Nigeria’s poor run at the Paris 2024 Olympics

    • Failure at the Paris 2024 Olympics highlights the urgent need for systemic reforms in sports administration, investment in facilities and grassroots development to turn future potential into podium success

    As the Paris 2024 Olympics draw to a close, Team Nigeria’s performance stands as a stark reminder of the challenges and complexities faced by sports teams from developing nations. The initial excitement and optimism surrounding Nigeria’s athletes have been tempered by a reality check as the Games concluded with dashed hopes and unmet expectations.

    For months leading up to the Olympics, Nigeria was abuzz with anticipation. Athletes and fans alike harboured dreams of medals and podium finishes, driven by the promise of success that often accompanies Olympic preparation. The country’s preparation included rigorous training, strategic planning, and substantial investments aimed at fostering a winning spirit. Yet, despite these efforts, Team Nigeria’s journey in Paris was marred by a series of setbacks that have left many questioning what went wrong. One of the most glaring issues has been the lack of podium finishes in key sports where Nigeria has traditionally excelled. In athletics, which has historically been a stronghold for the nation, the performances fell short of expectations. Sprinters, who once brought glory to Nigeria with their speed and tenacity, failed to deliver the results that had been hoped for. Similarly, in field events, athletes struggled to break through to the finals, let alone secure medals.

    While Paris 2024 may seem like one of Nigeria’s worst performances in recent years, following the medal-less result at London 2012, this failure is particularly striking given the N12 billion commitment by President Tinubu’s government for the Olympics and the upcoming Paralympics. As Minister of Sports Development, Senator John Owan Enoh, highlighted, “We have no excuse to fail,” emphasising the expectation for athletes to deliver on the significant investment and goodwill provided. “The President has approved the entire budget, and it is now up to us to reciprocate this goodwill by making the country proud. Expectations are high, and I have faith in the abilities of our athletes.”

    Between failure and success

    The failure to achieve medal-winning performances in these disciplines underscores a broader issue within Nigeria’s sporting framework. For years, there has been an ongoing discussion about the need for systemic reforms in sports administration, funding, and infrastructure. The disparity between the well-resourced training environments of competing nations and Nigeria’s often inadequate facilities is glaring. While countries with advanced sports programmes benefit from state-of-the-art training facilities, Nigerian athletes frequently contend with suboptimal conditions and limited resources.

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    Furthermore, the issue of internal discord and mismanagement within Nigeria’s sports bodies has also been a contributing factor. Reports of administrative inefficiencies, lack of clear direction, and inadequate support structures have plagued the preparation phases of the athletes. These challenges have often led to a lack of cohesion and focus, impacting performance at the international level.

    Team Nigeria’s experience at Paris 2024 also highlights a critical need for investment in grassroots sports development. While elite athletes receive significant attention and resources, many potential talents are lost due to a lack of proper nurturing and support at the grassroots level. A comprehensive approach that includes scouting, training, and development from a young age is crucial to building a robust pipeline of athletes who can compete and succeed on the world stage.

    Team Nigeria’s performance at the Paris 2024 Olympics was a stark disappointment, echoing the underwhelming results from London 2012, despite significant investments, including the N12 billion committed by President Tinubu’s government for the Games and the upcoming Paralympics. The athletes’ struggles were evident across all fronts—from the football field, where the Super Falcons, nine-time African champions, failed to win a single preliminary match, to athletics, where Tobi Amusan, the world 100m hurdles record holder, did not even qualify for the finals. Although there were moments of pride, such as the D’Tigress becoming the first African team to reach the quarter-finals of the Olympic Basketball Tournament, and notable performances by badminton player Anuoluwapo Opeyori and long jumpers Ese Brume, Ruth Usoro, and Prestina Ochonogor—who made history by reaching the finals—these were overshadowed by numerous setbacks.

    Favour Ofili’s exclusion from the 100m event due to administrative errors and Samuel Ogazi’s breakthrough in the 400m final were among the rare bright spots. However, traditional strongholds like boxing and wrestling were marked by disappointment, with boxing plagued by doping issues and wrestling failing to secure any medals. Table tennis, weightlifting, canoeing, taekwondo, and cycling also yielded no medals, underscoring a pervasive sense of missed opportunity and underperformance throughout the 17-day event.

    Our preparation for the Paris 2024 Olympics clearly fell short of the required standard, despite last-minute efforts by the Ministry of Sports Development under Senator John Owan Enoh. While it is tempting to criticise the minister for Team Nigeria’s poor performance, it’s important to note that he has only been in office for a year and was grappling with a deeply entrenched, chaotic system. The Olympics operates on a four-year cycle, but our approach has often been outdated and disorganised. Since Tokyo 2020, there has been no significant effort to overhaul this process, with most sporting federations only focusing on immediate competition preparation rather than long-term athlete development, as seen in other countries.

    The Ministry’s approach to Paris 2024 mirrored this outdated and reactive strategy. For example, the Super Falcons had a rushed two-week training stint in Sevilla before their opening match against Brazil, which they lost, while other athletes experienced similar issues with training being more symbolic than substantive.

    While some may view the Paris 2024 Olympics as a poor return on investment, the President Tinubu-led government deserves praise for approving the N12 billion budget for both the Olympics and Paralympics. Senator John Owan Enoh and his team also merit recognition for clearing all allowances due to athletes, including grants for both foreign-based and, for the first time, locally-based competitors. However, the Paris 2024 debacle highlights the need for a more systematic and strategic approach to sports funding. To compete effectively on the global stage, we must adopt the proven methods of successful sports nations like the USA, China, and Jamaica, and even learn from our African peers. Without such reform, our sports will continue to lag behind, as evidenced by our underwhelming performances at events like the Olympics and Commonwealth Games since hosting COJA in 2003.

    Countdown to Los Angeles 2028

    As one commentator pointed out, perhaps it is for the best that Team Nigeria ended the Paris 2024 campaign empty-handed, as it provides a stark opportunity to reset sports administration, which has long been marred by incompetence and mediocrity, in preparation for the 2028 Games in Los Angeles. The talent among Nigerian athletes is undeniable, as evidenced by their remarkable performances for other countries: Yemisi Ogunleye secured gold in shot put for Germany, Annette Echokunwoke, who switched allegiance from Nigeria to Team USA, won silver in the Hammer throw, Salwa Eid Naser (formerly Ebelechukwu Agbapuonwu) earned silver in the 400m for Bahrain, and Samu Omoridion (Spain) and Michael Olise (France) won gold and silver medals in soccer with their adopted nations.

    This should serve as a wake-up call that with modern facilities, competent trainers, and dedicated administrators, Nigerian athletes have the potential to excel at the Olympics, embodying the Games’ motto of “Faster, Stronger, Higher.” If we do not address the systemic issues that have long plagued Nigerian sports, we risk even greater embarrassment when the Olympics returns to the USA, where our most notable achievements include Africa’s first soccer gold medal and Chioma Ajunwa’s long jump gold at the Atlanta 1996 Games, along with three bronze medals.

    The emotional toll of unmet expectations cannot be overlooked. Athletes who have dedicated years of their lives to training and competing feel the weight of their nation’s hopes on their shoulders. The sense of disappointment is palpable, not only for the athletes but also for the supporters who believed in their potential. As the dust settles on the Paris Games, there are lessons to be learned from Team Nigeria’s experience. It is clear that while individual talent and effort are essential, they must be supported by a strong, coherent system that addresses the multifaceted needs of athletes. Comprehensive reforms in sports administration, increased investment in facilities, and a commitment to grassroots development are imperative to turn the tide for Nigerian sports.

    The hope for future Olympic success lies in addressing these systemic issues and ensuring that Nigeria’s athletes are equipped with the tools and support necessary to compete at the highest level. Only through a united and strategic approach can Team Nigeria hope to transform dashed hopes into future triumphs on the global stage.

    Finally, now is not the time to demand the resignation of the Minister of Sports Development, Senator Enoh, as some critics suggest; he has shown leadership, and improvements are possible under his guidance. The Paris 2024 Games present an opportunity for him to reform our sporting system—from administration to facilities and training—though it remains to be seen if we will embrace this chance for meaningful change.

  • Resolving intricacies of forex forwards

    Resolving intricacies of forex forwards

    As Nigeria confronts intricate web of foreign exchange (FX) forward obligations, the pressing need to address these outstanding liabilities has become increasingly apparent. In September last year, the Central Bank of Nigeria (CBN) Governor Olayemi Cardoso had signaled a strong commitment to resolving the backlog of FX obligations inherited from the previous administration. Analysts said resolving FX Forward obligations will translate to significant growth in businesses and stability of the economy. The CBN has however, said all valid FX have been cleared in line with its promises, writes Assistant Business Editor, COLLINS NWEZE.

    The current leadership of the Central Bank of Nigeria (CBN) led by Olayemi Cardoso has severally disclosed reasons why it prioritised the settlement of  over $7 billion FX backlog owed to businesses.

    At the recently held  BusinessDay CEO Forum 2024 with theme: “Leadership In Tough Economic Times” he said the settlement of the FX backlog was meant to build investors confidence in the domestic economy and create lasting credibility for the country.

    Speaking during the Fireside discussion at the event, the CBN boss said he was advised against making the backlog clearance a priority at the inception of his tenure, because of the impact it will have on the country’s dollar position.

    He said: “People thought, there was no need to prioritise the forex backlog clearance. But they failed to realise that the country was in a state of crisis, and loss of confidence. Even without that, it is important, that you hold high your integrity. As a bank, your yes, must be yes. That is a big major step in building credibility. It is very tempting to push that aside, but ultimately, I was convinced that if we did not do that at that time, we would pay the price as a country.”

     Understanding FX Forward landscape

    FX forwards are financial derivative contracts where two parties agree to exchange a specified amount of one currency for another at a predetermined rate on a future date.

    This contract, unlike immediate spot transactions, provides a mechanism for hedging against currency risk or speculating on currency movements. For the CBN, FX forwards are instrumental in managing foreign exchange reserves and influencing exchange rates. Yet, when these contracts remain unsettled, they become liabilities that can impact the broader economic landscape significantly.

    In September 2023, Cardoso announced a startling figure: an inherited backlog of $7 billion in FX obligations. Following a forensic audit by Deloitte, which exposed $2.4 billion of these obligations as invalid due to factors such as invalid import documents and non-existent entities, the CBN was left with a reduced yet substantial outstanding amount of $2.2 billion.

    However, as the country now stands at the cusp of a new economic phase, the resolution of these debts remains critical to restoring investor confidence and stabilizing the economy.

    CBN’s position

    The CBN has however  announced that all valid foreign exchange backlogs of $7 billion have now been settled, fulfilling a key pledge of Cardosoo.

    In a statement recently, the apex bank’s Acting Director, Corporate Communications, Mrs. Hakama Sidi Ali, in Abuja confirmed that independent auditors from Deloitte Consulting meticulously assessed these transactions, ensuring that only legitimate claims were honoured.

    She said that the CBN recently concluded the payment of $1.5 billion to settle obligations to bank customers, effectively settling the residual balance of the FX backlog.

    Read Also; The Message in Retrospect

     At a recent meeting, Governor Cardoso declared: “We made clearing the FX backlog a priority to restore credibility and confidence in the Nigerian economy. “It was important that we go through an independent and credible process that would determine the authenticity of those obligations, and, at this point, I can tell you that we have now cleared all genuine, verifiable transactions. This encumbrance to market confidence in the country’s ability to meet its obligations is now totally behind us,” he added

    FX investigations impact on economy

    The investigation into these FX forwards has been ongoing for over six months with no resolution in sight. This delay has intensified concerns among affected businesses, including corporates and SMEs, which face unresolved FX bids. These companies have utilized bank lines to open Letters of Credit, paid import duties, and settled suppliers through correspondent banks. The prolonged investigation is causing increasing anxiety among these stakeholders.

    The unresolved nature of these forwards poses immediate financial risks for companies, forcing them to seek less favorable spot market rates for their currency needs. If these forwards were intended to hedge against adverse currency movements, their non-settlement exposes businesses to higher costs and potential losses from fluctuating exchange rates.

    The broader economic implications are severe. Analysts warn that unresolved forwards could result in financial, operational, reputational, and regulatory challenges, potentially leading to losses estimated at N2.4 trillion over the next few years. This could strain federal government revenues and negatively impact profits.

    In emailed report to investors, Investment research Associate at Comercio Partners, Ifeanyi Uba, said the clearance of the backlog aligns with the CBN’s strategy to stabilize the exchange rate, mitigate imported inflation, and enhance confidence in the banking system and economy.

    He said: “Cardoso underscored the significance of this action in restoring credibility and confidence in Nigeria’s economy, signaling a positive stride towards a more resilient and stable financial landscape, thereby fostering confidence among investors and businesses”.

     FX reforms – how it started

    In mid-June last year, two weeks into the new administration of President Bola Tinubu, the Central Bank of Nigeria (CBN) announced collapse of all exchange rates into the Investors and Exporters (I&E) window, abolishing the prevalent multiple exchange rates regime.

    Cardoso promised that the forex market liberalisation policy implementation will promote free market entry and exit, transparency, boost dollar liquidity and create vibrancy within the forex market. The move he predicted, will attract   Foreign Portfolio Investments (FPIs) and Foreign Direct Investment (FDIs) inflows to the economy.

    The operational changes to the foreign exchange market also included the re-introduction of the “Willing Buyer, Willing Seller” model at the I&E Window- now the official market.

    Although many analysts warned against dangers in the policy, insisting that illiquidity in the forex market and perennial  forex abuses made naira’s fall inevitable, Cardoso pushed on with the reforms.

    The CBN has taken strategic steps to tame exchange rate volatility to achieve sustainable recovery for the naira.

    The regulatory directive to authorised dealers to pay personal and business travel allowances to their customers through  debit or credit cards instead of cash is expected to reduce round-tripping, wastages and boost dollar liquidity.

    The CBN also resumed forex sales to Bureaux de Change (BDCs) after nearly three years of suspension from the official forex window.

    The move was part of its broader efforts to achieve market-driven exchange rate for the naira and lessen the pressures feeding into the black market.

    There was also a government directive to the Nigerian National Petroleum Corporation (NNPC) and other Ministries, Departments, and Agencies (MDAs) to remit dollar revenues to the CBN to boost reserves and strengthen the naira.

    Stakeholders’ calls for action

    The Organised Private Sector (OPS) has been vocal in its demands for the CBN to resolve valid FX forwards without delay. Major organizations including the Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), and the Nigeria Employers’ Consultative Association (NECA) have urged the CBN to address outstanding forwards to avert further economic damage.

    Although some stakeholders argued that involving the Economic and Financial Crimes Commission (EFCC) may be unnecessary for what is fundamentally a financial issue, there is a clear consensus on the need for the apex bank to act swiftly in resolving the matter. The focus should be on direct engagement with banks to resolve these cases efficiently.

    Way forward

    Michael Obi, FX dealer based in Lagos, said that to ease pressure on the naira and stabilize the FX market, the CBN recently announced plans to sell dollars through a Retail Dutch Auction System on August 7.

    He said authorized dealer banks have been directed to submit comprehensive lists of outstanding FX demands from their clients by Tuesday, August 6th. This information will include details such as names, addresses, contact information, and the type of transaction.

     This measure aims to address the growing foreign exchange demand, exacerbated by seasonal factors and business import needs. The success of this initiative will depend significantly on the CBN’s ability to resolve existing FX forward obligations in a timely and transparent manner.

    As the naira faces significant depreciation, addressing the FX forward backlog is essential. The CBN’s proactive approach in settling these obligations, coupled with efforts to stabilize the currency, will be pivotal in restoring economic stability and investor confidence. Efficiently resolving these pending FX forwards is crucial for Nigeria’s economic recovery and long-term resilience.

    At FirstBank’s corporate customer engagement held in Lagos, its Head of Treasury Sales,  Mrs. Adeola Abioye, explained that the CBN is taking a back seat in supplying forex to the economy and that has affected access to forex at the official window.

    Abioye said tight  forex liquidity will persist as long as Nigeria’s ability to attract foreign capital continues to nosedive,  school fees payment for Nigerian students studying abroad continues to rise, and medical tourism persists.

    She advised businesses that regularly need forex to be  more deliberate and focused on non-oil export transactions that will earn them forex to fund their own operations.

    “CBN Forex supply has gone down from average of $1.2 billion to less than $100 million per month, at present. Unfortunately, the major contributors to the Importers and Exporters (I&E) window have been the exporters. Forex proceeds from exports account for about 15 per cent of the total forex inflows,” she said at the event held late last year.

    “And if the whole official market is now relying on export proceeds, then you can understand why the market liquidity has been so tight for so long. It is not looking like there is going to be any major shift in that for now.”

    Abioye recommended that businesses look into non-oil export. “We have seen a surge in the non-oil export, but the concentration has been on the agriculture. I think that businesses should be more deliberate and intentional about focusing more on non-oil export,” she said.

    “The body language is that we are not going to be seeing as much supplies from monetary authority as we were seeing in the past. The generation of forex supply will then lie in the market because we are not likely to be seeing the CBN playing the major role that they played in the past in providing forex,” she stated.

     “Businesses now have to get their own source of forex, and one way to do that is to be more intentional and deliberate, focusing on export business. Not just for companies that are traditionally within the export business but even for companies that are import dependent to look at export as a way of diversifying our businesses,” Abioye said.

  • Samoa agreement and media responsibility to truth

    Samoa agreement and media responsibility to truth

    • Contrary to reports in some media outlets, the new Samoa Agreement recently signed by Nigeria contains no LGBT clauses

    The recent friction between the Nigerian government and one of the country’s leading newspapers, Daily Trust, has sent ripples through the media and political landscape. The controversy centres on the Samoa Agreement, an obscure but evidently significant international arrangement, which Daily Trust reported on in a manner the government claims is misleading and damaging. This development raises pertinent questions about press freedom, government transparency and the role of the media in a democratic society.

    The Samoa Agreement, while not widely known to the general public, involves international cooperation in areas such as climate change, sustainable development, and trade. Signed by a coalition of countries including Nigeria, it aims to foster collaboration in tackling global challenges. The Samoa Agreement, formally known as the Samoa Natural Resource Management and Trade Agreement (SNRMTA), was established to create a framework for the sustainable management and equitable distribution of natural resources among its signatories. The agreement’s primary objectives include promoting environmental conservation, ensuring fair trade practices, and fostering international cooperation in resource management. While the intentions behind the Samoa Agreement are commendable, its implementation has been fraught with challenges and controversies.

    Daily Trust published a piece alleging that the Nigerian government’s involvement in the Samoa Agreement could have far-reaching negative implications for the country’s sovereignty and economic independence. The report suggested that certain clauses in the agreement might compel Nigeria to make concessions detrimental to its national interests, particularly in areas of environmental regulation and trade policies. The article quoted anonymous sources within the government and international bodies, insinuating that the agreement was pushed through with little public consultation or parliamentary scrutiny. Daily Trust’s tone was unequivocally critical, painting a picture of a government potentially compromising national interests in the guise of international cooperation. In response, the Nigerian government issued a stern rebuttal, accusing Daily Trust of misrepresentation and sensationalism. The government asserted that the Samoa Agreement is a benign and beneficial accord aimed at enhancing Nigeria’s participation in global initiatives addressing climate change and sustainable development.

    The Minister of Information and National Orientation, Mohammed Idris, led the charge, condemning the article as “reckless journalism” that could harm Nigeria’s international standing and investor confidence. He emphasised that the government had followed all due processes in signing the agreement and that the claims made by Daily Trust were unfounded and malicious.

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    At a press conference in Abuja last Saturday, Idris said the Federal Government under President Bola Ahmed Tinubu has maintained an open arm relationship with the media. It is in line with the philosophy of the President as an avowed democrat who spent a lifetime fighting for the entrenchment of democracy and human rights.

    “This administration has remained very tolerant of media criticism and guaranteed citizens’ rights to freedom of expression.

    “It is, however, disheartening that some elements are abusing this free environment guaranteed by the government. We are alarmed by the level of reckless reporting and statements by some media organisations and individuals that border on national security and stability.

    “While we sometimes view and treat those occasional reporting as part of media’s normal work, we have now seen a pattern that is difficult to be wished away as normal journalism. The insidious and inciting publications by the Daily Trust these past months have come across as nothing but a deliberate effort to brush the government with a tar. On many occasions we have restrained ourselves from believing that this was the case but the consistency of the jejune and mischievous publications leaves us with no option.

    “In the aftermath of the coup in Niger Republic, Daily Trust championed a jaundiced narrative that the Federal Government was driving the country into a war and twisted it with regional sentiment to cause disaffection. The same newspaper gave a banner headline to a baseless accusation that the Government was working on citing foreign military bases in the country. Neither Daily Trust nor originators of that imaginative allegation provided any shred of evidence.

    “Then, just two weeks ago, Daily Trust concocted and popularised a lie that the Federal Government had renamed the Murtala Mohammed Expressway in Abuja to Wole Soyinka Way. In all those instances all that the paper depended on were falsehood and hearsays. They also showed no remorse or the humility to recant.

    “We, however, did not envisage that Daily Trust and people behind it could descend to the reckless level of attempting to set the country on fire by falsely accusing the government of signing a deal to promote LGBTQ. We found that despicable and wicked because the allegation is nowhere in the document signed. Surprisingly, the paper put forward no evidence nor provided the agreement allegedly signed to prove their point.

    “The baseless and sensational story unfortunately formed a basis for khutba (sermons) by some of our respected imams who were misled by the story thereby raising tempers. On the part of the Government, we continue on the honourable path of civility by restraining ourselves from taking self-help or draconian measures. While past governments clamped down on the media for infractions much lower than this, we are, however, toeing the path of civility and the rule of law.

    “But, beyond this, the Federal Government is lodging a formal complaint to the NPAN Ombudsman on this irresponsible reporting. In addition, the Federal Government will use every lawful means to seek redress in the court of law. The Federal Government once again restates its friendly policy towards ethical media and free speech. We would however not take fake news and disinformation that would injure the peace of our country and its national security lightly,” he said.

    After fact-checking the Samoa Agreement signed by Nigeria, Premium Times found that the Daily Trust’s report, which was based on an opinion article by Lagos-based lawyer Sonnie Ekwowusi, was amplified by other news platforms such as BusinessDay, Vanguard and TheCable. These reports sparked a backlash against the Federal Government; with critics accusing it of compromising the country’s moral values in exchange for Western loans.

    Premium Times’ review of the 172-page document revealed that Ekwowusi’s claims, which formed the basis of the newspaper’s report, were false. Specifically, the lawyer misinterpreted Article 29.5, which states, “The Parties shall support universal access to sexual and reproductive health commodities and healthcare services, including for family planning, information and education, and the integration of reproductive health into national strategies and programmes.” Contrary to the lawyer’s assertions and the amplified media reports, there is no mention of LGBTQ issues in this article.

    The reviewed document and EU press statements clarify that the Samoa Agreement focuses on addressing global challenges. Its objectives include contributing to the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement under the UN Framework Convention on Climate Change. In conclusion, Premium Times found that there are no LGBTQ clauses in the Samoa Agreement recently signed by Nigeria. The Daily Trust report failed to present any clause in the agreement that mandates LGBTQ rights, relying instead on the opinion of Mr. Ekwowusi. This was despite the administrative secretary of the NSCIA stating that the council did not find any mention of same-sex marriage in the draft shared by the government before signing the agreement.

    Also, in his analysis of the controversies surrounding the Samoa Agreement, Farooq A. Kperogi criticised the Daily Trust for its journalistic shortcomings. Kperogi pointed out that the newspaper failed to cite the specific portion of the agreement mandating Nigeria to change its laws to accommodate LGBTQ-friendly policies. Instead, it based its headline and entire story on an unnamed report without providing evidence from the report itself. The paper then sought out individuals who would express outrage over this unverified information, thereby creating a self-reinforcing loop of misinformation, Kperogi explained in his column.

    According to Kperogi, the Daily Trust’s actions exemplify circular reporting.

    “Circular reporting, also known as false confirmation, occurs when a source fabricates a piece of information, disseminates it through multiple sources via interviews, and then presents the views of the interviewees as the original source of the information. Essentially, it involves creating something from nothing,” he wrote.

    Press freedom and democratic values

    This episode has sparked a broader debate about the state of press freedom in Nigeria. The country’s media landscape is vibrant but has often faced challenges, including censorship, harassment of journalists, and financial constraints. The threat to sue Daily Trust could be interpreted as an attempt to intimidate the press and stifle critical reporting, which is essential for holding the government accountable. Civil society organisations and international press freedom advocates have voiced concerns. They argue that while responsible journalism is crucial, the government’s approach could lead to a chilling effect where media outlets self-censor to avoid legal repercussions. This, they warn, undermines democratic values and the public’s right to be informed about governmental actions.

    The broader implications

    The media’s handling of the Samoa Agreement has broader implications for democracy, governance, and informed citizenship in Nigeria. A well-informed citizenry is essential for the functioning of a healthy democracy. When citizens have access to accurate and balanced information, they can make informed decisions, hold their leaders accountable, and participate meaningfully in public discourse. The media’s role in providing this information is thus integral to democratic governance.

    The government’s threat to sue Daily Trust marks a significant escalation in the dispute. Legal experts and media watchdogs are closely monitoring the situation, as it touches upon critical issues of press freedom and the legal boundaries of journalism in Nigeria. Should the government proceed with a lawsuit, it would set a precedent in how the state interacts with the media over contentious reporting.

    Public trust in the media is crucial for its effectiveness. When the media consistently demonstrates a commitment to truth and transparency, it earns the trust of the public. Conversely, biased or inaccurate reporting can erode this trust, leading to scepticisms and disengagement. Trustworthy media can bridge the gap between the government and the people, fostering a more cohesive society.

    The media’s influence extends to policy and governance. By highlighting issues related to the Samoa Agreement, the media can shape public opinion and pressure policymakers to act in the public’s interest. Investigative journalism, in particular, can expose corruption and malpractice, prompting reforms and accountability. In a diverse and pluralistic society such as Nigeria, the media has a role in promoting social cohesion. By providing a platform for diverse voices and facilitating constructive dialogue, the media can help bridge divides and foster a sense of national unity. This is especially important when addressing contentious issues like the Samoa Agreement, where different regions and communities may have varying perspectives.

    It is essential for the media to adhere to high standards of accuracy and fairness. However, when discrepancies or disputes arise, dialogue and corrective measures, rather than punitive actions, should be the preferred route. This ensures a balanced approach where the media remains robust and free, yet responsible.

  • Recruitment reopens festering police, PSC feud

    Recruitment reopens festering police, PSC feud

    • The constable recruitment crisis has brought to a head the need for the Presidency and National Assembly to step in and address the recurring clashes between the Police Service Commission and Nigerian Police Force, defining once and for all their respective powers and responsibilities

    The Nigeria Police Force (NPF) and the Police Service Commission (PSC) have been embroiled in a long-standing feud, particularly during recruitment processes. The crisis began in 2019 when former Inspector-General of Police (IGP) Mohammed Adamu assumed control of recruitment, contrary to the Supreme Court’s ruling that it was the PSC’s constitutional mandate.

    Despite court orders, the police proceeded with the 2019 and 2020 recruitment exercises. The PSC, led by retired IGP Musiliu Smith, faced internal strife, including a three-day strike by workers demanding the restoration of the commission’s recruitment powers, staff promotion, and annual training. In July 2023, the Supreme Court reaffirmed the PSC’s sole responsibility for recruiting constables for the NPF. A source revealed that N18 billion was budgeted for the recruitment of 40,000 constables over four years, approved by former President Muhammadu Buhari. The Constitution (Third Schedule, Part 1, Paragraph 30) empowers the PSC to appoint persons to offices in the NPF, excluding the IGP position.

    Further investigation revealed that the Police Act 2020, signed by former President Buhari, also empowers the Police Service Commission (PSC) to recruit police officers. However, the crisis escalated in 2021 when the Court of Appeal declared parts of the Police Act 2020 unconstitutional, nullifying the NPF’s powers to appoint, promote and discipline police officers. The court’s perpetual injunction restrains the NPF and IGP from interfering with the PSC’s constitutional functions, including recruitment, promotion and discipline. Currently, the PSC has the sole authority to recruit, discipline, and promote all police cadres, except the Inspector General of Police. Despite his role as Chairman of the Police Council, Buhari failed to address the crisis, allowing the NPF and PSC to undermine each other. The new IGP, Kayode Egbetokun, recently visited former PSC Chairman Solomon Arase, a retired IGP, to end the acrimonious relationship affecting national security.

    Insiders are of the opinion that the National Assembly should review relevant statutes to eliminate contentions and ensure effective policing. Surprisingly, on June 15, the Force Public Relations Officer, ACP Olumuyiwa Adejobi, alleged irregularities and corruption in the recruitment process after the successful candidates were announced. The power struggle between the Nigeria Police Force (NPF) and the Police Service Commission (PSC) continues, putting the recruitment process in limbo. The NPF has raised concerns over the PSC’s published list of successful candidates, alleging irregularities and corruption.

    Read Also: Tinubu calls for punishment of civil servants receiving salaries abroad

    According to the Force Public Relations Officer, ACP Olumuyiwa Adejobi, the list was scrutinised after receiving complaints from candidates about corrupt practices. The NPF discovered that some candidates who failed the computer-based test or physical screening exercise were included in the list. Additionally, some individuals disqualified due to medical issues were also included. Adejobi stated that the most concerning issue is the alleged financial dealings and corrupt practices that led to the selection of unqualified and untrainable individuals. The Inspector-General of Police, Egbetokun, had written to the PSC Chairman, objecting to the list and highlighting the discoveries. While the IGP acknowledged the PSC’s power to recruit, he emphasised that this power does not extend to recruiting unqualified individuals. The NPF spoke out after receiving numerous complaints from candidates and stakeholders about the irregularities in the exercise. Upon reviewing the list, the police found names of “successful candidates” who did not even apply or participate in the recruitment process.

    His words: “The published list contains several names of candidates who failed either the Computer Based Test (CBT) or the physical screening exercise or both. There are those who made it to the last stage of the exercise but were disqualified, having been found medically unfit through the standardized medical test, but who also made the list of successful candidates as published by the PSC. Most worrisome is the allegation of financial dealings and corrupt practices leading to the outcome where unqualified and un-trainable individuals have been shortlisted.”

    Egbetokun had on June 10, 2024 written a letter of objection on the list addressed to the Chairman of the Commission, citing the discoveries. Adejobi said the reaction of the IGP was without prejudice to the power of the Commission to recruit for the police as confirmed by the Supreme Court in a case between the two sides. He added that it is the police that bear the brunt of recruitment of unqualified individuals and not the PSC. “The same people who recruited anyhow for the police today will turn round to accuse the police tomorrow of inefficiency when their recruits start messing up,” he said.

    The police, according to him, have dissociated themselves from the published list and called for a review that will be transparent and credible. He said: “The Nigeria Police Force therefore takes exception to this unpleasant development and calls for a total review of the process with a view to recruiting qualified, competent, trainable and productive hands into the Nigeria Police Force, in line with the vision of His Excellency President Bola Ahmed Tinubu’s led administration on police reform. The NPF hereby reiterates that we are not unconcerned about the plights and ordeals of prospective recruits who have been subjected to all forms of rigorous screening exercise, assuring that it is our commitment to ensure that the process is thoroughly reviewed, stands fruitful and successful for the betterment of the Nigeria Police, and by extension the country.”

    The Joint Union Congress (JUC) of the Police Service Commission (PSC) quickly responded to the police allegations, stating that the recruitment process followed due process. In a statement signed by Ogundeji Remi and Adoyi Adoyi on behalf of JUC, the PSC accused the police of attempting to prevent the commission from exercising its constitutional power to appoint police officers, despite the clear provisions of the 1999 Constitution and the Supreme Court’s interpretation of those powers.

    “This clandestine scheming by the Inspector General of Police to usurp such powers is obviously an affront on both the Nigerian Constitution and judgment of the Supreme Court,” the JUC said. Continuing, it said: “The Commission is at a loss why it is only during recruitment exercises that police confrontation manifests, suggesting obvious hidden interests and corrupt tendencies. To address the issues raised by the FPRO in the above release, it is worthy of note that after the Commission got judgement from the Supreme Court on the 11th of July, 2023 re-affirming its powers to, amongst other things, appoint qualified Nigerians into the  Police Force as stipulated in the paragraph 30 Part 1 of the Third Schedule of the Nigerian Constitution thus: The Commission shall have power to (a) appoint persons to offices (other than the office of the Inspector-General of Police) in the Nigeria Police Force; the Commission to ensure inclusiveness constituted a Recruitment Board comprising of a Commissioner from the Police Service (PSC) as Chairman, Deputy Inspector-General of Police, Development and Training Department as Co-Chairman/Deputy Chairman, CP Hassan Yabanet representing Police Training Colleges (NPF), Deputy Commissioner of Police (DCP) Olabode Akinbamilowo as Secretary to the Board amongst others.

    “The Board had representatives from virtually all the stakeholders in the Police Sector such as The Commission, the Police, Ministry of Police Affairs, Federal Character Commission, the Police Colleges and the Police Trust Fund. The claim that the Recruitment Board was crippled and was not allowed to function was no doubt a fallacy as the Board severally met before the release of the list of successful candidates. The same Board met and endorsed the list that was released on the 4th of June, 2024 at their usual meeting point, PSC Corporate Headquarters, with the DIG Training, Mr Frank Mba and other Police representatives in attendance.”

    President Tinubu recently appointed retired Deputy Inspector General of Police, Hashim Argungu, as the new chairman of the Police Service Commission (PSC), replacing retired IG Solomon Arase. IGP Kayode Egbetokun addressed senior police officers in Abuja, clarifying the recruitment process and denying reports of a disagreement between the Nigerian Police Force (NPF) and the Police Service Commission (PSC). He emphasised the need for quality recruitment, stating that some listed candidates were untrainable or had disabilities. He cited a Supreme Court verdict, which he said did not exclude the NPF from the recruitment process. Egbetokun also clarified that the police support the recruitment of Persons Living with Disabilities (PLWD) and plan to accommodate them in future recruitment exercises.

    He said: “The judgment of the Supreme Court is sound and clear. I don’t have issues with it. The court did not exclude the police from participating in the recruitment process into the Police Force. It is expected that while recruiting into the police force, the commission should carry the Police along. The IGP leads the largest police force in Africa. Over 300, 000 police officers look up to him for guidance and leadership. He cannot sit down and see how the recruitment exercise is carried out anyhow. The IGP has a duty to ensure quality recruitment into the Police Force. And that is exactly what we are doing.

    “If we don’t pay attention to the recruitment, a disaster awaits us. That is why we are raising issues where there are issues. We have written to the PSC over the published names of the successful candidates. So, there is no fight between the police and PSC. The police will play their roles, the PSC will play its roles. We cannot allow individuals with bad eyesight. We cannot afford to recruit the deaf and dump them on the police. Don’t get me wrong, they are human beings. For now, the Nigerian Police Force does not have space for them. Maybe later in the future, we will start…… because modern policing is inclusive. By then we will have space for them so that they will come and function well in the police.

    “We do not want to recruit people who will come and commit suicide in the police. Police jobs are too sensitive; So, we have to be very careful. Anybody can call for my removal. Anybody who doesn’t like me can come out tomorrow and say remove the IGP; that is not a problem. We are all entitled to our opinions.”

    The Police Service Commission (PSC) has responded to the allegations made by the IGP Egbetokun, regarding irregularities and corruption in the recruitment of 10,000 constables. The PSC has asked the IGP to provide verifiable evidence to support his claims, stating that the recruitment exercise followed due process and all successful candidates were certified fit for the job. The PSC also suggested subjecting both lists of successful candidates to a forensic audit using the Joint Admission and Matriculation Board (JAMB) Computer Based Test (CBT) results. Ani said: “That the release of the confidential letter sent to the Chairman of the Commission by the Inspector General of Police on alleged lapses in the recruitment exercise to the media was a gross violation of the Public Service Rules with grave consequences. The Commission demands that the Police should provide verifiable evidence to prove the allegations peddled against it as it is obvious that it is a case of giving the dog a bad name in order to hang it.”

    The commission condemned the leak of a confidential letter sent to the Chairman by the IGP, calling it a violation of Public Service Rules with grave consequences. Stakeholders are urging President Tinubu and the National Assembly to intervene in the situation to prevent further escalation.

  • Row over duplications in shipping, port economic regulatory agency bill

    Row over duplications in shipping, port economic regulatory agency bill

    Stakeholders in the maritime industry have decried the duplications in the Nigeria Shipping and Port Economic Regulatory Agency Bill, labeling it as a contradiction of the presidential policy specifically aimed at reducing cost of governance. In this report, OLUWAKEMI DAUDA looks at how the bill that has passed through second reading in the House of Representatives may affect the  implementation of the Oronsaye Report and the mandates of NPA and NIMASA.

    • Core responsibilities of NPA, NIMASA affected

    Stakeholders, experts and port users in the maritime industry have decried the duplications in the Nigeria Shipping and Port Economic Regulatory Agency Bill, labeling it as oppressive and anti-people because it is a contradiction of the presidential policy specifically aimed at reducing cost of governance, implementation of the Oronsaye Report and make life better for millions of Nigerians.

    The House of Representatives Committee on Shipping Services and Related Matters, one of the stakeholders and maritime lawyer, Dr Dipo Alaska alleged that the Committee, had on Monday, May 27, this year, held a one-day hearing to gauge public feedback and input on repealing the Nigerian Shippers Council (NSC) Act (Cap N133, LFN 2004) as prelude to enacting the Nigerian Shipping and Port Economic Regulatory Agency Bill.

    The Bill, findings revealed, has passed its second reading.

    According to him, “the Nigeria Shipping and Port Economic Regulatory Agency Bill, in its present form,  is a contradiction of the presidential policy specifically aimed at reducing inflation and increase the purchasing powers of masses through proper and adequate reduction in the cost of governance and subsequent reduction in the cost of doing business at port.”

    Other stakeholders who spoke with The Nation in separate interviews insisted that the Bill is being sponsored  at a time when the Federal Government is reducing cost of governance and implementation of the Oronsaye Report, which recommended mergers of agencies whose functions overlap and constitute duplications.

    “Entrenched interest,” a maritime expert and analyst,  Yusuf Idris said, “are looking for mundane  opportunity to sabotage the laudable  efforts  of President President Bola Tinubu with the Nigeria Shipping and Port Economic Regulatory Agency Bill.”

    Investigation conducted by our correspondent, has shown  that the clandestine moves to force the Bill through the National Assembly has resulted to a muted squabble in the maritime sector as its regulators jostle for supremacy in a power play,  which Idris said, “is capable to undermine trade facilitation and afflict the nation’s maritime and shipping value chain with the unenviable status of an over regulated business environment.”

    Sadly, he said, “the House of Representatives appears to be evolving as an interest group on this ill-motivated enterprise that is not good for the general economic interest of the country.”

    Other stakeholders in the maritime sector have therefore,  called on President  Tinubu to carry on with his good economic policies and ensure full implement of the Oronsaye report to save Nigeria the huge cost of governance and make our ports attractive for business.

    However, one of the bill’s sponsors and Chairman, House Committee on Shipping Services and Related Matters, Abdussamad Dasuki, quoting a gazette, said the Nigerian Shippers’ Council was made the Port Economic Regulator in 2015 by the Federal Government, a status, the stakeholders said, needs formalising through legislation before it can become effective.

    “The federal government noted that the objective of the regulation is to create an effective regulatory regime for the Nigerian ports after the concession of the ports. Port does not mean the Nigerian Ports Authority alone. It also means all the stakeholders in the ports, for the control of tariffs, rates, charges and other related economic services” Dasuki said on February 14, 2024, while presenting the Bill to the House of Representatives.

    But he said further that: “The Shippers’ Council’s gazette is being implemented today as a regulation and not as an Act. The Regulations provided that the Nigerian Shippers’ Council shall perform the role of interim Port Economic Regulator with the administrative backing of the federal government.”

    Repealing the existing Nigerian Shippers’ Council Act, he added, is to empower the NSC to discharge its mandate as the Port Economic Regulator, adding that collation of memoranda from various stakeholders is ongoing prior to tabling a report before the House of Representatives for Third Reading.

    Row over the functions of the agency to be created from the bill

    Investigation revealed that there are contrary positions in various quarters, not necessarily against the passage of the Nigerian Shipping and Port Economic Regulatory Agency Bill, but against misrepresentation of the agency to be created from the bill in terms of its functions and jurisdiction vis-à-vis other agencies in the maritime sector.

    For example, a thorough examination of the Bill clearly indicates that the powers and functions of the Nigerian Maritime Administration and Safety Agency (NIMASA) have been duplicated, considering that such functions as shipping regulation, issuance of certificates, licenses, fees, charges, and levies fall within the exclusive jurisdiction of the Nigerian Maritime Administration and Safety Agency. The bill failed to indicate how it would be resolved.

    NIMASA, it was learnt,  has argued that the bill, in its present form, is a contradiction of the presidential policy specifically aimed at reducing cost of governance and implementation of the Oronsaye Report, which recommended mergers of agencies whose functions overlap and constitute duplications. There is need for revision, the agency said.

    NIMASA is not alone as other agencies under the Ministry of Marine and Blue Economy are also demanding for ‘revision of the existing approach of operation guiding the agencies over the years.’

    For example, the Nigerian Ports Authority (NPA), while not opposed to the bill, has highlighted the confusion that may ensue due to the combination of “Ports” and “Shipping” in a regulatory agency, and demanded for proper phrasing of the roles of the agencies to avoid encroachment and infringement. It also emphasised the need for the agency, which should be named the, “Nigeria Port Economic Regulatory Agency,” for clarity to avoid duplicating the functions of other players in the sector.

    In addition, the NPA, as the landlord of the port, is saddled with granting of concessions to the concessionaire, under the statutory regulation and monitoring of the Infrastructure Concession and Regulatory Commission, meaning that the review of concessions, and indeed collection of all or part of the concession fees as in Section 28 of the bill cannot be the business of the proposed new Ports Economic Regulator.

    A position paper presented by the NPA reads in part:  “The intent and import of the Nigeria Shipping and Port Economic Regulatory Agency Bill is POLICY. It therefore MUST be driven by the sector policy arm of the executive – the Federal Ministry of Marine and Blue Economy.  The function of parliament here is to facilitate seamless implementation of established policy by enacting the intent of the operators.”

    Conflict of interests

    It is worthy of note that following the port reforms programme and subsequent concession of the ports, there was consensus among stakeholders on the need to establish an economic regulator for the ports to provide a competitive and conducive environment for commercial activities in the industry.

    Therefore, various versions of a bill to create this agency were developed and presented for legislative action in the 6th, 7th, 8th and 9th National Assemblies. However, none yielded the desired outcome due to conflict of interests and narrow articulation.

    In response, the Federal Government in 2014 signed an Executive Order that made the Nigeria Shippers’ Council an interim economic regulator for the ports pending the enactment of an Act.

    Now, the process of enacting an appropriate law to streamline operational framework for the industry, particularly in port management, has become an exercise to overload the NSC with roles and powers well beyond the original purpose of an economic regulator.

    Given the possibility of hitting the crossroads again arising from contradictory positions on the bill, stakeholders have suggested that the status quo should be allowed to remain, while consultations continue in order to avoid the fate of previous versions of the bill, which failed to see the light of the day.

     No wonder that some of the stakeholders in the maritime industry have started to allege that personal gain, rather than national interest, underpinning the motivation pushing for the enactment of the bill in its present form.

    Contrary to experts view, the House of Representatives Committee on Shipping Services and Related Matters recently said the Nigerian Shipping and Port Economic Regulatory Agency Bill will curb arbitrary charges and other illegality of operators in the nation’s maritime industry when passed into law.Experts have denounced this, stating that the house needed to trash the bill as it will result to inter agency rivalry and confusion.

    Speaking with newsmen after a Public Hearing on the repeal of the Nigerian Shippers Council Act, Chairman of the Committee, Abdussamad Dasuki, explained that the Committee is still collating memoranda from various stakeholders on the bill before going ahead to present the report before the House of Representatives for third reading.

    According to Dasuki, the bill seeks to repeal a law preventing NSC from enforcing a presidential directive concerning economic regulation of the ports.

    “The bill is to repeal a law which is preventing the NSC from enforcing a presidential directive concerning economic regulation of the ports. The nation’s maritime industry is overdue for this, and we will see to its implementation,” he said.

  • CBN’s decision and Heritage Bank’s liquidation

    CBN’s decision and Heritage Bank’s liquidation

    • Unveiling the reasons: CBN cites breach of financial regulations

    In a statement released on June 3, the CBN cited Heritage Bank’s breach of Section 12(1) of the Banks and Other Financial Institutions Act (BOFIA) 2020 as the primary reason for revoking its license.  This section empowers the CBN to revoke the license of a bank that is unable to meet its financial obligations or has persistently failed to comply with regulatory requirements.

    While the CBN’s statement lacked specifics, financial analysts suspect several potential factors could have contributed to the bank’s predicament. Rumours suggest Heritage Bank might have faced chronic financial difficulties, such as low capital adequacy ratios because many of the bank’s customers could not withdraw their money over the counter or through the ATM, or a high incidence of non-performing loans.  Such issues can significantly impact a bank’s ability to meet its obligations to depositors and creditors.

    The CBN might have found that Heritage Bank’s management lacked a viable plan to address its financial shortcomings.  Without a clear path to recovery, the bank’s long-term viability could be jeopardised. The CBN might also have identified instances where Heritage Bank failed to adhere to regulatory requirements, such as anti-money laundering regulations or risk management protocols.  Breaches of this nature could undermine public confidence in the bank’s stability and integrity.

    The CBN’s primary responsibility is to maintain a sound and stable financial system in Nigeria.  Revoking a bank’s license is a drastic step, but it might be necessary when a bank’s continued operation poses a risk to depositors, creditors, and the broader financial system. By taking swift action, the CBN aims to protect depositors. Loss of a bank license can be alarming for depositors, but the CBN’s intervention aims to prevent a run on the bank and safeguard depositors’ funds.

    A robust banking system fosters trust and economic activity.  The CBN’s action sends a message that it will not tolerate non-compliance and is committed to safeguarding the financial system’s integrity. In addition, if a financially troubled bank is allowed to operate, its problems could cascade and destabilize other institutions within the sector.  The CBN’s decision to revoke Heritage Bank’s license aims to isolate the problem and prevent contagion.

    The revocation of Heritage Bank’s license will, undoubtedly, have a ripple effect on various stakeholders. The CBN has appointed the Nigeria Deposit Insurance Corporation (NDIC) as the liquidator for Heritage Bank. The NDIC insures deposits up to N5 million per depositor, and they have assured swift verification and payment of insured deposits.  However, some depositors with amounts exceeding N5 million may face challenges.

    Existing borrowers of Heritage Bank will need to work with the NDIC to determine how their loan obligations will be handled.  This could involve transferring loans to other banks or making arrangements with the NDIC as the liquidator. The fate of Heritage Bank’s employees has been sealed.  The NDIC will keep some staff it considers crucial to its Liquidation exercise, staff with valuable knowledge of transactions in the bank. However, most of the staff will laid off as in most bank crises job losses are a potential consequence. The revocation of a bank’s license can create anxiety within the banking sector.  However, the CBN’s swift action also sends a message that it will take decisive steps to address non-compliance and protect the financial system’s health.

    Looking ahead:

    The road to resolution

    The NDIC now shoulders the responsibility of effectively liquidating Heritage Bank.  This complex process involves identifying and valuing assets. The NDIC will need to identify all of Heritage Bank’s assets, such as loans, cash holdings, and real estate.  These assets will then be valued to determine the total amount available to repay creditors.

    The NDIC will prioritize settling debts owed to depositors, who are typically considered the most vulnerable stakeholders.  Once insured deposits are paid, the NDIC will distribute the remaining funds to other creditors according to a set hierarchy.  This process can be lengthy and complex. The NDIC may sell off Heritage Bank’s assets to generate funds for creditors.  This could involve selling loan portfolios, branches, or other holdings.  The NDIC’s goal will be to maximize the value recovered from these assets.

    The NDIC will work to ensure minimal disruption for borrowers.  They might attempt to transfer loans to healthy banks or negotiate new terms with borrowers directly.  The goal is to minimize defaults and maintain business continuity for creditworthy borrowers.

    Lessons learned and a more resilient banking system

    The revocation of Heritage Bank’s license serves as a stark reminder of the importance of strong financial regulations and responsible banking practices. Banks can expect heightened scrutiny from the CBN in the wake of this incident.  This could lead to stricter enforcement of existing regulations and the introduction of new measures to prevent similar situations in the future.

    Banks are likely to place greater emphasis on robust risk management practices.  This could involve stricter loan approval processes, improved capital adequacy ratios, and enhanced anti-money laundering measures. The Heritage Bank situation might accelerate consolidation within the Nigerian banking sector.  Smaller banks might feel pressured to merge with larger institutions to improve their financial strength and regulatory compliance.

    The recent revocation of Heritage Bank’s license by the Central Bank of Nigeria (CBN) and the ongoing bank recapitalisation exercise are two significant events impacting the Nigerian banking sector. While seemingly separate, these events could have some interconnected effects. The Heritage Bank situation could create a sense of unease among investors and depositors. This negativity might discourage some banks from actively participating in the recapitalisation exercise, especially smaller institutions facing financial strain.

    With the uncertainty surrounding Heritage Bank’s depositors and the ongoing liquidation process, other banks might prioritize maintaining high liquidity levels in the short term. This could limit the ir ability to raise fresh capital for the recapitalisation exercise.

    The CBN’s decisive action regarding Heritage Bank sends a message that it will not tolerate non-compliance. This could incentivize existing banks to strengthen their financial health and governance practices in anticipation of stricter regulatory scrutiny. Stronger banks with improved financial standing would be better positioned to participate effectively in the recapitalisation exercise.

    The Heritage Bank situation might accelerate consolidation within the banking sector.  Smaller or weaker banks might find it more attractive to merge with stronger institutions to meet the new capital requirements and benefit from economies of scale. Consolidation could ultimately lead to a more robust banking sector with fewer undercapitalised institutions, potentially enhancing the overall success of the recapitalisation exercise.

    The CBN can take steps to mitigate the potential negative impacts of the Heritage Bank situation on the recapitalisation exercise. It can provide clear and consistent communication regarding the recapitalization plan and its expectations for banks.  This will help to alleviate investor concerns and encourage participation.

    The CBN could consider a phased approach to the recapitalisation, allowing smaller banks more time to raise capital or explore potential mergers. However, this is unlikely because of the length of time the apex bank has given for the recapitalization programme. The CBN could offer incentives, such as tax breaks or regulatory relief, to encourage banks, particularly smaller institutions, to participate actively in the recapitalisation exercise.

    The ultimate impact of the Heritage Bank situation on the CBN’s recapitalization exercise remains uncertain.  While short-term challenges exist, the long-term effects could be positive.  A more stringent regulatory environment and potential consolidation within the sector could lead to a stronger and more resilient banking system in Nigeria.  The success of the recapitalisation exercise will depend on the CBN’s ability to manage these interconnected events effectively and ensure the stability and growth of the Nigerian financial sector.

    “Poor financial performance” might signal prudential guideline violations

    The CBN’s stated reason for revoking Heritage Bank’s license – the bank’s board and management’s inability to improve its financial performance does indeed raise questions about potential violations of prudential guidelines. The CBN establishes prudential guidelines to ensure the safety and soundness of Nigerian banks.  These guidelines essentially set minimum standards for banks to operate effectively and manage risk.  Some key areas covered by these guidelines include:

    This guideline dictates the minimum amount of capital a bank must hold relative to its risk-weighted assets, Capital Adequacy.  This ensures that the bank has sufficient resources to absorb potential losses and maintain solvency. This guideline requires banks to maintain a healthy balance between readily available assets (liquid assets) and their short-term liabilities.  This ensures the bank can meet its financial obligations as they fall due. The guideline focuses on the quality of a bank’s loan portfolio.  It sets limits on the amount of non-performing loans (NPLs) a bank can hold, encouraging responsible lending practices and minimizing the risk of bad debts. The guideline mandates that banks have robust risk management frameworks in place to identify, assess, and mitigate potential risks across their operations.

    Read Also: Mercy Eke cries out over N100m stuck in Heritage Bank amid financial crisis

    While the CBN’s official statement didn’t explicitly mention specific violations, persistent poor financial performance often suggests underlying issues related to prudential guidelines. If a bank consistently fails to meet minimum capital adequacy ratios, it could be a sign that it’s not generating enough profits or is taking on excessive risks, potentially jeopardizing its ability to meet its financial obligations.

    Speaking to the issue of poor financial performance or violation of prudential guidelines, Dr Wahab Balogun of Ambosit Capital Managers noted that “a significant increase in NPLs suggests that the bank might be engaged in risky lending practices or struggling with loan recovery.  This can significantly erode a bank’s profitability and threaten its liquidity. Persistent financial problems might indicate deficiencies in a bank’s risk management framework.  This could involve weak loan appraisal processes, inadequate risk provisioning, or a lack of effective internal controls.”

    It’s important to understand that the CBN’s expectations go beyond mere compliance with the minimum requirements outlined in the prudential guidelines. They expect banks to exhibit a proactive approach to financial management and demonstrate a clear path towards sustainable growth and profitability.

    The CBN acts as both an enforcer and a protector in this context. If a bank persistently fails to meet minimum standards or demonstrate an improvement plan, the CBN might take corrective measures, which could involve revoking its license as a last resort.  This ensures that only financially sound and well-managed institutions operate within the Nigerian banking system, protecting depositors’ funds and promoting overall financial stability.

    Public reactions

     A Twitter user once stated that some members of the staff of Heritage Bank allegedly took loans and left the country (Japan) without repaying them, which could be a contributing factor to the CBN’s decision to revoke the bank’s license. This is unlikely to be the sole reason.

    Dr Balogun said: “If a significant number of members of staff defaulted on their loans, it would contribute to Heritage Bank’s overall NPL ratio.  High NPLs can significantly impact a bank’s profitability and liquidity, raising concerns about its financial health.”

    “News of staff loan defaults could damage public confidence in the bank’s lending practices and internal controls.  This could lead to deposit withdrawals and further financial strain. Staff loan defaults could suggest weaknesses in the bank’s loan approval process or loan recovery mechanisms.  This could be a violation of prudential guidelines related to risk management.

    “However, the CBN wouldn’t likely revoke a bank’s license solely based on a few staff loan defaults.  The total value of these defaults would likely be a small fraction of the bank’s overall loan portfolio. The CBN is more concerned with broader issues affecting the bank’s financial health and its ability to meet its obligations to all stakeholders.  Staff loan defaults, while problematic, wouldn’t necessarily be a systemic issue.”

    The loan defaults by some members of staff might be a symptom of a larger problem within Heritage Bank. The bank might have a lax credit culture that allowed staff to obtain loans without proper due diligence or adequate risk assessment. The situation could indicate a lack of oversight or control within the bank’s management, allowing such loan defaults to occur. The staff loan defaults might be a reflection of the bank’s broader financial difficulties.  The bank might be struggling to generate profits, leading even its own employees to doubt its solvency and resort to such actions.

    NDIC to blacklist complicit board members

     The recent expansion of the NDIC’s powers to pursue loan defaulters and blacklist bank officials adds another layer of significance to the Heritage Bank’s situation. The NDIC’s enhanced ability to go after debtors, including legal action and potential imprisonment, could incentivize swifter repayment of outstanding loans to Heritage Bank.  This could help the NDIC recover a larger portion of the bank’s assets during the liquidation process.

    “The threat of legal repercussions might discourage future loan defaults across the banking sector.  This could improve overall loan repayment discipline and benefit the banking system as a whole,” Dr Balogun said.

    The NDIC’s authority to blacklist bank executives or board members found to be complicit in Heritage Bank’s collapse could serve as a powerful deterrent.  Bank officials will be more mindful of their actions knowing potential negligence or misconduct could result in blacklisting, hindering their future career prospects in the banking sector. The threat of blacklisting could encourage stronger corporate governance practices within banks.  Officials might be more diligent in their oversight duties and risk management practices to avoid being held accountable for bank failures.

    The CBN’s decision to revoke Heritage Bank’s license likely involved assessing the bank’s management’s competence and potential role in the bank’s financial struggles.  The NDIC’s expanded powers now provide additional tools to investigate potential misconduct and hold those responsible accountable. The NDIC might investigate the actions of Heritage Bank’s executives and board members to determine if their decisions or negligence contributed to the bank’s collapse. If the NDIC’s investigation uncovers evidence of wrongdoing, they could blacklist certain individuals associated with Heritage Bank, preventing them from holding similar positions in other banks.

    The expanded powers of the NDIC, along with the Heritage Bank situation, send a strong message to the Nigerian banking sector.  There will be stricter enforcement of regulations and consequences for mismanagement or non-compliance will be more severe. Banks might become more cautious in their lending practices and strengthen their risk management frameworks to avoid potential issues with loan defaults or regulatory breaches. A more robust regulatory environment with clear consequences for wrongdoing could rebuild public trust in the banking system.

    A watershed moment?

    The Heritage Bank situation and the NDIC’s expanded powers mark a significant moment for the Nigerian banking sector.  The focus on stricter loan recovery efforts and potential blacklisting of bank officials could lead to a more disciplined and more accountable banking environment, ultimately fostering a more stable and secure financial system in Nigeria.

  • Evolving solutions to save the naira

    Evolving solutions to save the naira

    The depreciation of the Naira underscores the importance of effective monetary and fiscal policy, as well as structural reforms to improve the country’s export competitiveness and reduce its dependence on imports

    The astonishing depreciation of the Naira has significant implications for the country’s economy. The devaluation of the currency means that it now has less value relative to other currencies; this has led to higher import costs for essential goods such as food, fuel and machinery which, in turn, has contributed to inflation, making it more expensive for consumers to purchase imported goods and potentially driving up prices across the board.

    Furthermore, a weaker Naira can also deter foreign investors and lenders, as it erodes the value of their returns in their currencies and raises concerns about exchange rate risk. This can lead to reduced foreign investment and capital inflows, which are critical for economic growth and development.

    The depreciation of the Naira also affects government finances, as it increases the cost of servicing external debt denominated in foreign currencies. This can strain the country’s budget and lead to higher borrowing costs, potentially crowding out other important government expenditures.

    Overall, the depreciation of the Naira underscores the importance of effective monetary and fiscal policy, as well as structural reforms to improve the country’s export competitiveness and reduce its dependence on imports. These measures are crucial for managing exchange rate volatility and supporting sustainable economic growth.

    Read Also; Wike, Akpabio to Nigerians: Tinubu’s policies only way out to address years of economic rot

    The key factors contributing to the Naira’s depreciation are Nigeria’s heavy dependence on oil exports for government revenue and forex earnings. When oil prices fluctuate, the Naira’s value is affected. The global economic slowdown has reduced investor confidence and foreign direct investment in Nigeria, leading to fewer dollars entering the economy and putting pressure on the Naira.

    High inflation reduces the purchasing power of the Naira and increases demand for foreign currencies. While intended to control inflation, high interest rates can discourage borrowing and investment, hindering economic growth and forex earnings. In addition, low reserves limit the CBN’s ability to defend the Naira by selling dollars in the market.

    CBN’s interventions for a stable Naira

    The Central Bank of Nigeria (CBN) has rolled out several measures to mitigate the crash of the Naira. Between December 29, 2023, to date, the CBN has issued nine circulars all targeted at saving the Naira.

    The CBN is adapting to market trends. Bank customers with domiciliary accounts can request to sell foreign currency through their banks, but the bank cannot force the transaction. The bank will notify other customers of the opportunity to buy at the agreed rate. If no buyers are found, the selling customer can adjust the rate.

    International Money Transfer Operators (IMTO) registration fees have increased from N500,000 to N10,000,000 for both foreign and local IMTOs. Guidelines have been revised to promote a fair market for all IMTOs, emphasizing a willing buyer-willing seller system.

    To prevent abuse of PTA and BTA funds on the parallel market, all payments for these allowances must now be done using cards, rather than in cash.

    A new policy requires all exporters to repatriate export proceeds to a designated account in Nigeria. Oil companies with global subsidiaries often pool their proceeds in foreign accounts, affecting Nigeria’s economy. The new policy allows IOCs to initially repatriate 50 per cent of their proceeds, with the remaining 50 per cent kept in Nigeria for 90 days before repatriation, boosting liquidity in the market.

    The apex bank has implemented various policies and interventions to address the depreciation of the Naira.

    About measures to curb black market activities, the collaboration with security agencies to crack down on illegal forex operators and restrict unauthorised transactions aimed at reducing black market activity and strengthening the official rate is commendable but enforcement can be challenging, with the possibility of pushing activities underground, which might create unintended consequences. Overzealous enforcement could also discourage legitimate transactions.

    The CBN’s interventions have yielded mixed results. While they have addressed some concerns, such as transparency in the forex market, sustained stability is yet to be achieved. This is because individual interventions might address specific symptoms, but not the underlying structural issues contributing to the Naira’s weakness.

    Amplifying public concerns

     The rumour that domiciliary accounts worth $30 billion would be forcibly converted into Naira caused a lot of worry among the public. There are several reasons for this amongst which are Nigerians have experienced policies in the past that have made them lose trust in financial institutions and their own savings. They remember times when the value of their money dropped and they couldn’t easily access foreign currency.

    Banks holding excess FX to stabilising the Naira

     The recent news that commercial banks are holding excess foreign currency brings another layer of complexity to the issue of stabilizing the Naira. It may seem contradictory to the long-term goals of the Central Bank of Nigeria (CBN), but it emphasizes the need for a multi-faceted approach.

    In the short term, the CBN has directed banks to release excess dollars to address the scarcity of foreign currency in the market. This could provide some relief by increasing liquidity and reducing pressure on the Naira. However, it’s important to note that this is a one-time measure and doesn’t address the root causes of the Naira’s weakness. It may also create temporary disruptions for  banks and their clients who rely on these reserves.

    To achieve long-term stability, broader strategies are crucial. Diversifying the economy by reducing reliance on oil exports and promoting non-oil sectors can reduce vulnerability to external shocks and create new foreign exchange earnings. Encouraging value-added exports can strengthen the Naira organically. Responsible fiscal and monetary policies are necessary to control inflation, protect the purchasing power of the Naira, and attract foreign investment. A market-driven exchange rate regime, with managed intervention, can reflect economic realities and attract investment, but careful management is needed to avoid excessive volatility. Transparent communication about policies and interventions is also essential for building public trust.

    The recent actions taken by the CBN to limit banks’ exposure to foreign currency have a complex relationship with stabilising the Naira. Although they are not a direct solution, these actions can create conditions that are conducive to a more stable currency in the long term.

    There are several potential positive impacts of these measures. Firstly, by limiting banks’ exposure to foreign currency, the CBN aims to reduce their vulnerability to sudden changes in exchange rates. This could lower the risk of bank failures and financial instability, which in turn fosters confidence and encourages lending, contributing to economic growth.

    Secondly, lower exposure to foreign currency by banks could lead to less speculation and volatility in the foreign exchange market, potentially making it more predictable and efficient. This increased predictability could attract foreign investment and indirectly stabilize the Naira.

    Lastly, the emphasis on robust risk management and accurate reporting could help banks identify and manage risks more effectively, including those related to foreign exchange fluctuations. This could contribute to a more resilient financial system overall.

    However, there are also potential challenges and limitations to consider. Meeting the new limits quickly may be difficult for some banks, impacting their ability to serve clients and participate in the foreign exchange market. This could have unintended consequences for businesses and individuals relying on these services.

    High-level meeting: A glimmer of hope for the Naira?

    The recent meeting between Finance Minister Wale Edun, and the Chairman of the Economic and Financial Crimes Commission (EFCC) Ola Olukoyede, and CBN Governor Olayemi Cardoso brought together important figures involved in Nigeria’s economy. Although specific details of their strategies were not disclosed, their public commitments provided some insights.

    They all emphasised the need to align monetary and fiscal policies for a coordinated approach to address economic challenges. This may involve managing government spending and borrowing in line with monetary policy goals. They also expressed a commitment to upholding the rule of law, suggesting a crackdown on illegal activities in the forex market such as the black market and money laundering.

    Finance Minister Edun reiterated the government’s dedication to economic stability and the rule of law, imply ing potential policy adjustments aligned with the CBN’s objectives. EFCC Chairman Olukoyede pledged support for initiatives enhancing financial regulation integrity, indicating increased efforts to curb illegal forex activities and ensure compliance with financial laws. CBN Governor Cardoso emphasised the importance of coordinated efforts, hinting at potential collaborations between the CBN, Ministry of Finance, and EFCC. 

    Based on public statements and expert analysis, potential strategies could involve enhanced transparency and communication to rebuild trust, collaboration among authorities to enforce regulations and crackdown on illegal forex activities, targeted interventions in specific sectors to boost exports and attract foreign investment, and long-term reforms addressing issues like inflation and dependence on oil exports through fiscal discipline and economic diversification.

    The effectiveness of their strategies will depend on concrete actions, transparency, and sustained collaboration. Open communication about proposed measures and their potential impact is crucial to rebuilding public trust and gaining support for their efforts.

    Multifaceted strategies for a stable Naira

    The fluctuating value of the Naira is a big problem for Nigeria’s economy. It is not enough to have just one solution. We need to take a multifaceted approach:

    The authorities need to diversify the economy away from relying too much on oil. By investing in other industries such as agriculture, manufacturing, and tourism, the country can reduce its vulnerability to volatile oil prices and create new ways to earn foreign exchange. This will require long-term commitment and investment in areas like infrastructure and skills development.

    The government and the people should promote exports and focus on producing higher-value goods instead of just raw materials. This can bring in more dollars and strengthen the Naira. To do this, we can give tax breaks, help businesses access financing, and improve trade logistics. They should also develop the country’s competitive advantage in sectors like processed agricultural products or light manufacturing. But it won’t be easy because they will need to invest in technology, skills development, and quality control.

    The authorities particularly need to address inflation, which reduces the Naira’s purchasing power and discourages foreign investment. This can do by being disciplined in government spending and borrowing, and by adjusting interest rates when necessary. It’s a tricky balance because nobody wants to stifle economic growth, but they also need to control inflation.

    Building up the country’s foreign exchange reserves is important because it gives the country a cushion against external shocks and allows the Central Bank to stabilize the Naira if needed. Strategies to do this include attracting foreign investment, encouraging diaspora remittances, and managing external debt responsibly. Earnings from exports and other foreign income sources can be used to build up reserves. But there is a need for a stable and attractive investment environment, as well as other development priorities to consider.

    There should be a market-driven exchange rate regime that allows the Naira to adjust to market forces. This can make the currency more reflective of economic realities and attract investment. However, the CBN needs to manage it carefully to avoid excessive volatility. A managed float system, where the Central Bank only intervenes to prevent extreme fluctuations or disorderly markets, can strike the right balance.

    In conclusion, stabilising the Naira requires a comprehensive approach that tackles multiple factors. Each solution has its challenges, so we need to carefully analyse the trade-offs and implement these measures in a coordinated way. The CBN should also focus on data-driven decision-making, collaboration with stakeholders, and a long-term perspective to achieve a stable Naira and a strong Nigerian economy.