The Nation Newspaper

Category: Friday

  • FAAC disbursements, IGR and Fed govt interventions to states in 2024

    FAAC disbursements, IGR and Fed govt interventions to states in 2024

    Since the assumption in the office of President Bola Ahmed Tinubu in May, last year (18 months), the revenues and federal government interventions to the 36 States and the Federal Capital Territory (FCT) have increased by over 90% (almost double) what States were receiving during the administration of President Muhammadu Buhari. This is largely due to the immediate removal of the subsidy on Premium Motor Spirit (PMS or Petrol), whence the money used hitherto used for the payment of the PMS subsidy was shared as part of the Federal Allocation in line with provisions of the 1999 Constitution of the Federal Republic of Nigeria. Consequently, between June last year and to date, the Federal, State, and Local Governments in Nigeria have collectively received about N25 trillion or more as monthly FAAC (Federation Account Allocation Committee) disbursements. The latest disbursement of N1.727 trillion was made last week to the three Tiers of Government, for the month of November 2024. The November distribution is 22.5% higher than N1.41trn shared at the last meeting for the month of October 2024.

    Furthermore. President Bola Tinubu has been approving hundreds of Billions of Naira to the tune of over 500 billion Naira (in cash and commodities) that were disbursed paid so far over the period of the past 18 months -almost every quarter to all the States in Nigeria; as “palliative interventions” to States to cushion the effect of the removal of fuel subsidy on Nigerians. This is in addition to additional interventions that Mr. The President has been providing to States that face or that are facing natural disasters like terrorist attacks, flooding due to the overflow of Lagdo Dam in Cameroon (which occurred last year and this year), the bursting of Alo Dam in Borno State, Bomb, and Fire disasters, etc. The additional support from the federal government is to further alleviate the sufferings of Nigerians, especially the multi-dimensionally poor. This is apart from the N573bn shared with states in August (about 2 months ago) which was the World Bank loan (zero interest) received by states for infrastructural development.

    It is therefore true that the States across Nigeria have been receiving the highest amounts of revenues and interventions in the past 18 months – more than any other administration in the past 25years since the beginning of the 4th Republic.

    Read Also: President Tinubu committed to Nigeria’s growth – aide

     Interestingly, some states are yet to implement the recently approved new minimum wage of N70,000. Indeed, there are State Governors who have stated that they will not be able to pay the newly approved minimum wage, as organized labor unions in those States have initiated Strikes in those States to protest the inability of the States to pay the minimum wage. Many of the State Governors are still complaining about the shortage of funds to sustain the States. 

    Indeed, the increase in the monthly FAAC allocation should reflect on the socioeconomic impacts of States; and should be visible in terms of infrastructure, and the quality of life of citizens. Suffice it to say that we have some outstanding State Governors, who have demonstrated prudence, value innovation, effective utilization of resources and, they are making tangible impacts in their respective States. But by and large, if you take it across the board, I don’t think it would be wrong for me to say that a lot, leaves much to be desired in the overall performance of all the States in Nigeria. For example, let us remember that as part of the aforementioned federal interventions, around July this year (about 4 months ago), Mr. President approved an intervention of over N180 billion, which was been shared across the 36 states as FCT, as follows; N5 billion per state, and then bags of rice and bags of fertilizers. I believe that going forward, in the year 2025, we should expect to see governors stepping up the quality of governance in their States to really deliver tangible evidence of good governance to the citizens across states. We need to see that clearly over and beyond mantras, PowerPoint presentations, and photo shoots.

    In 2025 citizens should also direct their attention to the state governors’ performance, and hold the governors to account to ensure more qualitative governance at the State level, especially given the fact that President Tinubu has achieved the laudable autonomy of local government areas. It is time to stop buying the gimmick of governors who continually point to the Federal Government or Mr. President for all the responsibilities of governance. This is misleading and sometimes mischievous. The scope of responsibility and accountability of Federal, State, and Local Governments are very clear. Hence it is time for citizens to demand good governance and accountability from state governors in line with their scope of responsibilities and accountabilities. In my opinion, the State Governors have been responsible for the overall 45% underperformance of our national economy in the past 25 years since the return of Nigeria to democracy.

    Most state governors claim that the increase in the monthly FAAC disbursements has been negated by the decrease in the value of the Naira. Yes, it’s a good defense, but it shouldn’t be an excuse. When politicians campaign for elections, they promise milk and honey that would be flowing in their states, local governments, or even at the federal level. Some of them even tell citizens that we should give them the job regardless of the challenges promising that they will deliver the mandates. Therefore, elected political leaders know the numbers before they take the mandates; be it at federal, state, or local government levels. So, coming now after taking more allocations and saying that inflation has swallowed the value of the money received, which to some extent is true, should not be an excuse. When you inherit an administration, you inherit the capital and the liabilities. And if we are going to use that excuse, then some people should have no business holding political offices. Because the reason why we are in office is to provide value and to create wealth. So, for example, what if there was no inflation? Or what if, for example, with the inflation and then the revenue did not increase? It is time for our Governors to face the reality and to act accordingly. 

    Moreover, in the case of the Internally Generated Revenues in states, most states are lagging behind and there is the need to upscale the IGRs in those States. A classic example is my state, Kano – the commercial hub of not just Nigeria, Kano should also be the commercial hub of the Sahel region of Africa. Yet strangely for over 5 years, Kano has been lagging behind, hovering around 6th position in terms of IGR in Nigeria for the past 3 years. Hence, Kano needs to step up its IGR drive. Lagos State has been blazing the trail of IGR volume and growth trajectory in Nigeria for a long time. According to the Nigeria Bureau of Statistics (NBS), Lagos is leading all the States in Nigeria having generated N815 billion IGR in 2023, followed by the Federal Capital Territory with N217 billion, and then Rivers State with N195 billion 

    How IGRs are utilized for the betterment of the people is critical. How Governors efficiently and effectively use IGR to complement the FAAC allocations in delivering good governance is also important. How Governors are investing or applying the IGR and the FAAC in trying to build infrastructure, invest in human resource capacity, build their Agriculture value chain, harness the States’ solid mineral capacity to deliver or upscale qualitative governance is what remains to be seen for us to now properly evaluate and say the impacts are good and the utilization is also effective.

     Let me remind some of our State Governors of some critical things that they should do to achieve a sustainable increase in IGR. First of all, it is to block leakages to ensure that the monies collected are actually credited into the accounts of the government and are not siphoned away. The second one is creating means of generating revenue without choking your citizenry or killing them considering the current socio-economic headwinds across the Country. It’s very important to create new ways to generate revenue, not necessarily by inflicting more levies/ hardships on the citizenry; for example, through PPPs, through investments as I mentioned earlier, through synergies and collaborations even amongst the states. Those are some examples of how in the short-mid to long-term the Governors will actually increase their IGR. but more importantly, utilisation and impact are very important to measure the effectiveness of wealth creation, socio-economic development, and sustainability.

    The Fiscal Policy and Tax Reform Bill is also a key game changer that will ensure balance, equity, and ultimately better performance at sub-national levels in Nigeria. The Fiscal Policy and Tax Reform is a wake-up call to States to face the reality that as States, we will eat what we earn or produce. Almost everywhere you stand in Nigeria, you are stepping on wealth in Nigeria i.e. human capital, agriculture value chain, and other solid minerals.

    Essentially, state governors in Nigeria have no excuse to fail.

  • It is not just about Tax reforms, it is also about Fiscal Reforms

    It is not just about Tax reforms, it is also about Fiscal Reforms

    “A nation is great not by its size alone. It is the will, the cohesion, the stamina, the discipline of its people and the quality of their leaders which ensure it an honorable place in history.”- Mr. Lee Kuan Yew – the First Prime Minister of Singapore.

    As the controversy, and debates continue to rage on with regard to the Fiscal Policy and Tax Reforms Bills before the National Assembly of the Federal Republic of Nigeria; most Nigerians including the political leaders (strangely so) are more fixated on the Value-Added Tax (VAT) part of the reform, such that we may end up throwing away the baby with the bathwater if we allow the Bill to fail to go through the proper legislative process. Because, it appears as if the politicians that are against the Bill are almost succeeding in diverting the attention of Nigerians from other very important aspects of the Bill, as a deliberate ploy to “kill” this landmark proposal.

     Let me remind you that the proposed reform is not just about VAT. There are other very important elements of the Bill that include a new fiscal policy on how our collective resources will be better managed with better accountability and prudence.

    The key components of the omnibus Bill include:

    1.  Nigeria Tax Bill (Income Tax, VAT, Excise and Stamp Duties, etc.)

    2. Tax Administration Bill (Registration, Filing, Assessment, Payments, Technology in Tax Administration)

    3. Nigeria Revenue Service (Establishment) Bill

    4. Joint Board Bill (Establishment), Bill (Joint Revenue Board, Tax Appeal Tribunal, Tax Ombudsman Office)

     The above-mentioned Bills are key to the reform of Nigeria’s National Fiscal Policy. The National Fiscal Policy outlines how national income will be spent by Governments in terms of priorities for example health, education, living standards, employment, security, infrastructure, etc.

    The Nigeria Revenue Service as a Critical Success Factor of the Reforms

    It is also worthy of note that the Nigeria Revenue Service Bill is crucial to the entire Fiscal Policy and Tax Reform, i.e. 1,2,4, and 5 listed above. If passed into law, the Nigeria Revenue Service will streamline our entire national tax and revenue collection governance framework, block leakages, remove red-tapism, eliminate multiple taxation, and achieve transparency and accountability by providing a system that will be more efficient, effective, and impactful. This will be the game changer for Nigeria’s economic transformation.

    SOME KEY POINTS TO NOTE

     Why should political leaders in the executive and legislature refuse to review or evaluate a proposal? A proposal is not yet law or sacrosanct, and since Nigeria is a democracy what is the job of the legislature if not to evaluate Bills (proposals) and effectively pass or reject them? Therefore, it is not strategic for a section of the country to out-rightly reject a proposal without reading it while other parts of the Country are reading, evaluating, and taking a common position.

    Indeed, it is in the best interest of Northern Nigeria, if we, as northerners, assert ourselves based on reason, logic, and strategy, but not based on the deception of some politicians who only cry wolf when things are not serving their vested interests. What is even more worrisome is that it appears as if they have also been able to hoodwink/ trick some of the intellectual academics, and Islamic clerics in northern Nigeria into believing them.

    Henceforth, we should be suspicious of the antics of politicians who most times throw the citizens under the bus so long as they get what they want, and I can give many examples! Northern Nigerians should not suffer selective amnesia of the behavior of our political leaders at this critical moment in our political history, if we do so then it will be at our own peril!

    Governors have suddenly become selective Activists:

    I have also noted the recent changing in tones of some of the Northern Governors stating that the Bill is a wonderful Bill, only that there is a need for more consultation in areas some areas, which is a clear departure from their position of the last two weeks; when the Governors’ position was that President Bola Tinubu should withdraw the Bill from the National Assembly for “further Consultations”. My position, as it is the position of some notable Nigerians, is that this consultation should have been ongoing for the past 1 year since the inauguration of the Presidential Committee on Fiscal Policy and Tax Reforms; but better late than never. In my view, this consultation could still continue as part of the legislative process. Notwithstanding, I commend President Tinubu for directing that the Ministry of Justice should engage critical stakeholders to address key concern areas as consultations continue.

     When the Petrol (PMS) subsidy was removed last year by Mr. President, the Governors and legislators loudly accepted the change, as the Governors were collecting almost double the monthly FAAC allocations to the respective States with no significant impact to show the citizens in most of the states across Nigeria especially the North, except for a few outstanding Governors. When Mr. President was approving Hundreds of Billions of Naira almost every Quarter since he came into office last year, as palliative interventions to all the States across Nigeria and FCT; to cushion the effect of subsidy removal and other natural disasters, the governors have been collecting the huge sums of money with no transparency, accountability, or tangible impacts by most governors including those in the north.

     But when Mr. President secured autonomy for Local Governments in Nigeria vide the Supreme Court judgment, a lot of the State Governors kicked against the development, for the obvious reasons that they didn’t want to hands-off the local governments’ financial allocations/ financial autonomy; which amounts to about 25% of the total national income – which a lot of the Governors have been misappropriating for decades! Some former Governors are facing prosecution for misappropriation of state funds.

     Furthermore, 19 State Governors (though 3 withdrew), most of them from northern Nigeria, went as far as going to the Supreme Court to dissolve the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences (ICPC), and the Nigerian Financial Intelligence Unit (NFIU); which was clearly an attempt to kill the anti-corruption war in Nigeria for obvious reasons.

     As if that was not enough, some of the Governors and their co-travels in the legislature are now behaving like Civil Society Activists for the “good of their people”, simply because the Fiscal Policy and Tax Reforms will sanitize the Fiscal space of governance and bring about more transparency and accountability, bloc leakages, move some of the VAT funds from the control of the state governors to empower the local government, etc. So, Northern Nigerians should “shine their eyes” and read in between the lines.

     Apart from increasing Tax Collections, the reform will transform the entire fiscal policy direction and will lead to better Fiscal Discipline. Unless there is Fiscal Discipline, monetary and fiscal policies will not be effective and consequently Nigeria will not get out of the socio-economic doldrums.

    Read Also: INEC to seek amendment to Electoral Act 2022 over election results transmission

    However, it is worthy of note that there are some key governance imperatives that are critical to the achievement and sustenance of the social and economic objectives of the Fiscal and Tax reforms, which include:

    •Quintessential leadership at the top

    •Cutting/ containing the cost of governance

    •Prudence in government spending at the top, across, and to be cascaded down the structure and system of governance

    •Blockage of leakages in the entire government (Federal and State levels). Because the more you get money and throw it into a bottomless purse, you cannot retain anything. Therefore, if we do not take seriously the issues of leakages/ wastages and prudence and Government behavior with regard to governance.

    •Sincere, objective, result-oriented, and transparent fight against corruption. Because if we do not deal with these fundamental issues, all the objectives of the reforms will not be achieved.

    •Zero tolerance by Mr. President for non-performance by the regulatory agencies/ agents that are found to be in cahoots with the culprits that allow our revenues or incomes to leak away which is a form of economic sabotage.

    •Zero tolerance to non-performance across all MDAs

    •Total stoppage of budget padding between the Executive arm and the legislative arms of government at federal and sub-national levels, whereby, according to the Independent Corrupt Practices and Other Related Offences Commission (ICPC); in the 2021 budget, a budget padding of about N300 Billion was inserted in the Budget, while a budget padding of about 100 Billion was inserted in the 2022 budget by MDAs.

    •In the case of the Private Sector, for the Government to ensure that those in Government who play with operators in the private sector circumvent the system to help “big businesses”, including the multinationals who do not pay tax or undercut the tax they pay and rein-in our revenue.

    •Zero tolerance to all forms of economic sabotage

     I hope that the consultations and robust debates will lead to the passage of excellent Fiscal Policy and Tax reform laws that will be in tune with the yearnings and aspirations of Nigerians and Nigeria. God Bless the Federal Republic of Nigeria.

  • Why northern Nigeria should not reject tax reforms

    Why northern Nigeria should not reject tax reforms

    Is Tax Reform against islamic law? Will VAT be charged on muslim inheritance?

    May, I will refer us to the Holy Quran, the Holy Book that guides (with the support of Hadith) our actions as Muslims; Al-Qur’an is the word of Allah SUBHANAHU WA TA’ALA – incontestable, unambiguous, and undeniable. In the Holy Quran, in Surah Al-Anbiya (21:7), Allah SWT Tells Muslims to seek for knowledge and understanding on matters that are beyond their understanding. The Tafsir of Ayat as also elaborated by Hadiths, is very succinct and clear with regard to how Muslims should engage in things that are beyond our understanding or areas of specialization. To that extent, I urge our religious leaders, that when matters that have to do with economics, politics, or indeed areas that require specific specializations, which are beyond their scope or understanding, then they should contemplate and proceed with this Ayat in mind. We have very sound and intelligent Northern Nigerians who can objectively do evaluate to such specialist areas. More than that we should also be able to get multiple opinions on such matters. Indeed, I will also suggest that religious leaders and traditional rulers, should speak last on such matters or midway into the matters, such that they would have gotten full briefing from diverse opinions, which will guide their contemplations as they guide us all. Certainly, the religious leaders and traditional leaders are supposed to be the guides of the conscience of our societies, and they are also the beacons that shine the light to the right pathways we should follow. That is why in my opinion, sometimes rushing to be in the forefront to speak on sensitive matters without adequate research and contemplation, may be counterproductive. Indeed, I totally align with the fact that our Clerics (the Ulamas) need to rise to the occasion, whenever such thorny issues come up, so as to guide people’s thinking and actions to ensure peace, stability and progress.

     That being said, I intend to shed some light on some grey areas in the proposed Tax Bill, in case it will help to give more perspectives that will guide the thoughts and decisions of our Ulamas, traditional rulers and also importantly the entire Muslim Ummah in northern Nigeria. 

     For example, the question about if the bill antithetical to Islamic injunctions? I have come across various write-ups by highly respected intellectuals and academics in northern Nigeria, erroneously referring to a section of the Bill, giving the notion that the bill will charge tax on inheritance, after the reform is done. Those respectable scholars are making specific reference to chapter 2, part 1, section 4, sub-section 3 of the National Tax Bill; titled “Income, profits or gains chargeable to tax”. This section states and I quote; “Income of a family recognized under any law or custom in Nigeria as family income in which several interests of individual members of the family cannot be separately determined”. The section is clearly referenced in error, because the section is not speaking about “inheritance”, but about “income”. In the entire Bill there is no proposal to tamper or deduct tax from inheritance which is forbidden in Islam.

    Read Also: High rate of cervical cancer in Nigeria unacceptable, says Katsina First Lady

     Is Tax Reform anti-north?

    90% of the vulnerable Nigerians, and all low income (minimum wage) earners will be exempted from this Tax in the proposed Bill. So, as a northerner, where about 70% of the about 133 million multidimensionally poor Nigerians are residents and surviving and struggling under the vagaries of socioeconomic headwinds, the reform should be pleasing to us.

     In the case of VAT. I am a strong proponent, allocation by derivation or allocation by consumption. Because that is the sharing formula that will ensure balance and equity and not the current VAT sharing arrangement which favors only Lagos and Rivers States to the disadvantage of the other 34 States and FCT. For instance, for Sokoto where BUA is producing Sokoto Cement, the current policy says because the headquarters of BUA is in Lagos, almost the entire VAT goes to Lagos. The new VAT law proposal is telling us that a chunk of VAT will be paid back to Sokoto State, and not Lagos. Is that anti-north? In my own opinion by simple arithmetic, the people of Sokoto should be happy that now they have an opportunity for them earn significant increase in income.

     The same scenario applies to my state, Kano State. If you look at MTN subscriptions, as an example. According to NBS, for MTN subscribers in the first quarter of last year, 2023;

    Lagos had 26 million subscribers, Ogun State was next with over 13 million, then Kano State with over 12 million, Bayelsa had 1.6million, while Ebonyi State had 1.6million subscribers. What the proposed reform is telling us, is that, MTN will now not pay the chunk of VAT that accrue from all the subscriptions in the entire Country to Lagos. But the in the new arrangement, each State will get the chunk of the VAT that accrued in that state based on the subscriber usage in State, i.e. It means that the VAT paid by those 12 million subscribers will be accounted for and prorated and be sent back to Kano State (which will increase the income). Whereas as it is today, almost all the states in Nigeria lose to Lagos just as an instance. Is that anti-north? The answer is, No.

    Northeast development Commission (NEDC) is the only Development Commission in Nigeria funded with VAT

    Its worthy of note that it is only North East Development Commission (NEDC) is the only Development Commission in Nigeria that is funded with VAT. 3% of the Gross annual VAT collection in the entire Country is deducted (before sharing) is paid directly to NEDC “as first line charge, to accrue to the Commission for a period of 10 years, notwithstanding the provisions of any other law” as one of its source of funding, in line with the provisions of the NEDC Act.

     Interestingly, President Tinubu asked that the provision should not be tampered with, nor should the NEDC act be amended. All the other regional development commissions i.e NDDC, SEDC, and SWDC, and even the NWDC that is undergoing legislation are being funded or to be funded from the “monthly statutory allocations due to member States from the federation Account – his being contribution of the Federal Government”, in line with provisions of the respective Acts of the regional commissions.

     With a Budgetary allocation of about N131bn in 2024 NEDC alone, recognizing the impact of Boko Haram insurgency to the region and the need to revitalize the region with such provision; how could we say that the reform is anti-north. This is so especially when other regions are not protesting this deduction from the VAT as a first line charge. Is this also anti-north? Certainly not!

    Conclusion

    The integrity of the process is a critical success factor. Therefore, the parliamentary process must be proper and it must follow due process. Therefore, the Federal Government should not give the impression that the bill is being forced down the throats of Nigerians. To that extent, I commend President Bola Ahmed Tinubu for directing the Ministry of Justice to engage stakeholders and ensure that all the necessary inputs are made. I advocate that the consultations should on pari passu the legislative process; because time is of essence.

    I strongly advise all well-meaning Nigerians to read the Bill, and not to wait until they are told about the bill by politicians. We need to go through the proposal and where we don’t understand, we should seek understanding from those who may be subject matter experts.

     I am of the view that the Bill is worth a review and evaluation by northern Nigerians. There are areas that we need to look at and address critical issues and negotiate where necessary. However, I believe that allowing politicians to push us to reject the bill will not be in the interest of Muslims, northern Nigerians, and Nigerians in general. We should go through the bill so that we can consult, engage, debate and negotiate (if need be). That is the essence of democracy.

      God Bless the Federal Republic of Nigeria.

  • The inevitable renewal agenda for NAHCON

    The inevitable renewal agenda for NAHCON

    In perfect confirmation of the Islamic perception of indecent people who lack shame and are always ready to act out their recklessness, the propagandists are again at work. They wanted to skew the information about the National Hajj Commission of Nigeria, NAHCON, such that the leadership that is just berthing is bedeviled?  In what worse manner could the immediacy and virality of online information be optimally exploited for deceit and ironically for matters relating to the deen of Islam? The alleged sleaze, so saddening, of the immediate past NAHCON leadership was rather too humongous and too recent to be easily swept under the carpet, its worth noting.

    Alhamdulilah for the reassuring divine assertion of the Almighty Allah to the effect that that after hardship shall come relief. Certainly, the wish  of every sincere Muslim in Nigeria with a fair knowledge of the situation with Hajj management is the restoration  of wisdom and even enhancement of same. Only Allah  has the capacity to make good things happen.

    It was almost a completely hopeless situation until the Federal Government finally took the renewed hope agenda to the National Hajj Commission, NAHCON after suddenly retiring the versatile hajj management czar, Ustaz Zikrullah Hassan. Till date, Polyglot Hassan is the only Chairman of NAHCON who has had a most respectable mix of experience of managing hajj successfully in both the private and public sectors.  Indeed, he managed Osun State Hajj Board without any board constituted for eight years and the pilgrims all over the state remain in awe of Ustaz till date. Beyond the Osun pilgrims, Hassan’s fellow chairmen of hajj boards in all the 36 states of the federation and Abuja also conceded leadership to him on account of visible sterling qualities

    While at NAHCON therefore, Ustaz Hassan had commenced institutionalizing structures that should endure for ages. As a thoroughbred professional (he’s a lawyer and business management expert) with strong inclination for creativity  as well as continuity where necessary, he ran 2022 and 2023 hajj operations harmoniously. Such was the glowing performance that the leadership of the hajj boards of all participating West African countries adopted him as their leader! (https://www.premiumtimesng.com/opinion/546419-the-nahcon-intervention-in-nigerias-diplomatic-profiling-by-tunde-akanni.html?tztc=1)

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    Resplendent in sheer exhibitionism of a bad salesman, the succeeding regime took off on a lousy note characteristic of toddlers learning to tread with large army of idlers anxious to flaunt their pathfinding role. The path they found turned out to be the road to perdition with the detailed disservice done the ummah playing out till date.

    The choice of a professor therefore was a most fitting reinforcement to the glorious era of Ustaz Zikrullah Hassan which ended abruptly just when the preparation for 2024 Hajj started gathering momentum. 

    Why should Professor Saleh Usman Pakistan not glorify professorship further by replicating the performance of the brother Professor at the Joint Admissions and Matriculation Board, Is-haq Oloyede described by their shared principal, President Bola Tinubu, as an uncommon scholar and an icon of integrity? Like Oloyede of JAMB, Pakistan’s academic affiliation is Arabic and Islamic Studies. Pakistan’s fortune is probably stronger with the presence on the NAHCON board, a heavily credentialed scholar and two-time vice chancellor of impeccable integrity, Prof Mahfouz Adedimeji, ably representing the Nigeria Supreme Council for Islamic Affairs, NSCIA.

    What will Pakistan do wrong by emulating his contemporary’s good qualities to earn himself and families, earthly applause as well as Allah’s favours confidently and most importantly present Islam in the best mould to the world?

    Transparency matters a lot.  As is the case with Universal Tertiary Matriculation Examination, UTME, of JAMB,  operators in the Hajj sector are quick to tell anyone interested that the preparations for the next Hajj commences almost immediately the one just concluded was over. Annually, JAMB is never contented with keeping mum over its trials and triumphs.    It presents the scorecard of her performance  to the world for proper understanding. The world can therefore comment competently on JAMB matters even as some comments are informed and some others may not be necessary at all being unfounded and completely irrelevant.

    Transparency pays all stakeholders and enables all to aspire to act right and promptly too. It signals accountability and attracts a lot of respect to those officials who are compliant. The ummah in Nigeria is anxious to see NAHCON rise gloriously back to the path of honour.

    As a public trust, the commission should endeavour to earn the confidence of pilgrims from all parts of the country in ways most harmonious. The President has unmistakably demonstrated the importance of this most convincingly.  What with the recent ‘transplanting’ of whole council team of the Federal University Oye Ekiti to Federal University, Lokoja and that of Lokoja to Oye Ekiti? The idea was to ensure a pan-Nigerian outlook for the leadership of the two universities, the press statement announcing the change stated.

    The Saleh Usman leadership should be able to build on the sincere growth and developmental efforts of Ustaz Hassan especially now that Hassan stands vindicated in spite of blackmailers campaign against him like they are already up in hostility against Saleh Usman even before seeing him settle.

     Though not a media professional, Hassan appreciated the need for a code of practice for journos that may be enlisted to cover hajj for NAHCON. For the first time in 2023, the code was introduced. The code may need to be updated and perfected but will surely help substantially in the coverage of hajj beyond sheer casual stringing.  This is particularly necessary because of the need for authenticated information on the sacred exercise as different from any social, political or ceremonial facet of human life.  This may therefore call for a thorough and coordinated orientation for all journos from across all state boards and even the private tour operators. Thankfully, there is ample technology to make this happen if NAHCON endorses this.

    The scholar that Saleh Usman is should even up the stake as someone familiar with research and development especially as applicable to the trend of radicalisation of the communication sector changing by the day with possibilities bourgeoning.  Documentation of hajj should enjoy trendy technological skills including livestreaming such that the media team should be made to realise that the new leadership will encourage team members to update skills as NAHCON may only patronize only the trendy ones. No media organisation should be made to believe that NAHCON cannot make any choice different from them as had been the practice over the years.

     The logic that Prof Saleh Usman should reckon with is that this is the same way digital media innovations have been multiplying and manifesting novel capacities to endear themselves to users fanning up stiff competitions with newer possibilities.

    Prof Saleh Usman hardly needs be told that hajj, with little or no subsidy as may be the case this year, calls for high grade prudence but this could even be done with more honour if NAHCON can simply adopt the stipulations of the protocols of Open Government Parnership, OGP, long signed by President Buhari, which will signal to the world that indeed this new leadership signals a very clear departure from that of the corruption ridden and grossly incompetent immediate past leadership.

    With Prof Saleh Usman’s pedigree, one may simply conclude that NAHCON will head for greater performance. 

    But how soon will this be? He has my best wishes.

    Akanni, PhD, associate professor of journalism at LASU, is a veteran hajj reporter. 

  • Tax reforms imperatives and citizens’ expectations

    Tax reforms imperatives and citizens’ expectations

    About 1 year ago, President Bola Ahmed Tinubu set up the Presidential Committee on Fiscal Policy and Tax Reforms with a mandate to overhaul the fiscal policy framework and system and also the overhaul of Nigeria’s Tax structure and system for better socio-economic performance and accountability. The decision by Mr. President came at a time that all Nigerians know that we are facing the vagaries of having to use about 96% of national income on payment of a rising debt stock over the past 10 years culminating in where we are today which largely due to corruption, dwindling revenue, lack of fiscal discipline, inefficient and unfair tax policy framework and system, and wasteful style of governments at Federal and state levels,  which lead to our inability to manage our resources and budgets and spending. The strategic objective is to bring in a significant increase in tax collections considering the fact that only about 40% of Nigerians and Nigerian businesses are taxed. 

    For almost 1 year since the inauguration of the Presidential Committee, the Committee has been doing its work under the Chairmanship of Mr. Taiwo Oyedele. The Committee has been briefing and enlightening Nigerians on the rationale behind the reforms and the benefits thereof. Interestingly until about one month ago, almost 11 months later, and only last month after Mr. The President transmitted the Bill for consideration of the National Assembly, the Nigerians Governors Forum and the National Economic Council asked that the Bill be withdrawn for “further consultation. In addition, the Northern States Governors, some legislators, politicians, and the northern elite have also suddenly been kicking against the Fiscal Policy and Tax Reforms proposal.

     I am from the North and I am very disappointed with the outlook and mindset of the leadership of the northern elites. In this particular instance, the northern governments have a highly transactional mindset and are not strategic. For instance, if you look at some of the arguments, particularly the issue of derivation; I am a proponent of the allocation of resources based on derivation. That is the only thing that will drive productivity. This rent-seeking commission collection attitude cannot move us forward in this nation. Allocation by derivation is the only principle that will chase out people who have no business in government. That way, anyone that wants to lead in Nigeria, must have the mindset of value creation, value protection, and value innovation, to successfully lead the people. Otherwise, there is no intelligence, brilliance, or value addition, if all that politicians can do is just go to Abuja and collect monthly allocation (FAAC), in many cases is not even utilized for the citizens of this Country.

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     Part of the argument that is being canvassed with regards to derivation that I am very okay with, as a Muslim, is for example, we say in Islam consumption and trading or benefiting from the trade in alcohol is forbidden (haram). But the governors go and collect it in the Agbada and put it and go away. Right? And if we are going to follow that Islamic doctrine, we will say oh some States that claim to be practicing some form of Shari’a, oh, in that case, they also eat “haram”? Or is it not haram anymore? In my view, this kind of position appears like double standards. It is also worthy of note that taxable components like betting and gambling, have been given a high notch of tax collection, which I consider a welcome provision. So in essence, overall, I see some kind of balance in the proposal. Are there areas that need some tweaks, deletion, or negotiation within the proposed Bill? My answer is YES. And that is why I expect the Governors through the Senators and members of the House of Representatives to push for those necessary points to be made so that there will be robust debates and intense negotiations to arrive at new Fiscal Policy and Tax reforms that will be acceptable to the majority of Nigerians, for the greater good. But the outright refusal to even read, digest, and debate this matter even at the Governors level in my opinion is not good for our polity.

     I expected that Governors, political leaders and elites to discuss at a subnational level, and push the actual people’s positions.  I was expecting robust and highly intelligent discussions, debates, and negotiations either through the Senate or through the stakeholders so that we can have a better tax system. For example, we should be having conversations about yes, how we should tax the rich more than the poor and ensure that it is truly and fairly applicable within the framework of that bill. For example, I disagree that 25% from someone who earns a monthly N1.5million is not supposed to be because as far as I’m concerned with what has happened since President Tinubu came to power, is that the value of N1.5 million is less than $1,000. So, these are the issues I would have loved to see us debating and trashing out and upscaling and finetuning. But we should throw the entire Bill out. It will be like throwing away the baby with the bath water.

     Meanwhile, let me offer some advice for the northern governors. Northern Nigeria is the food basket of the nation. Why don’t you sit down and look at the entire food value chain of the food Northern Nigeria produces for Nigeria, i.e. Grains, Mutton, Beef, vegetables like Onions, fresh pepper, etc.? About 65% or more of the food is consumed in Nigeria and also some parts of the West African sub-region. So why don’t we extract value out of that from a derivation point of view, for example, get consumption tax value from the food items out so long as the item is going out of a State like Kano, Kaduna or Borno or Benue or Niger for example? Those are the kind of conversations I would like us to be having. 

    That being said, I align with the position of Mr. President that the National Assembly should process the Bill in line with the provisions of the 1999 Constitution of the Federal Republic of Nigeria, as amended. We cannot reinvent the wheel. The Governors and all Nigerians have representatives at the Red and Green Chambers of the National Assembly. Nigerians are keen on the Governors or the “Elites” can influence the Legislators are representatives of Nigerians to ensure that whatever it is they want to happen in the interest of Nigerians, happens

     Urgent and drastic institutional reforms which hitherto could not be done by previous administrations of the past 10 years must be undertaken as a matter of priority, for any meaningful progress to be achieved in this dispensation.  The commendable decisive actions taken so far by President Bola Ahmed Tinubu are good step in the right direction as part of the steps to institutional reforms in the right direction, that could ensure that we get out of this socio-economic logjam and the best way forward for Nigeria.

      TAX COLLECTION WILL NOT BE ENOUGH

    However, it is worthy of note that the issues of revenue, debt, and resource management are beyond the FIRS. Therefore, to my mind, the issue of revenue collection and management should be expanded beyond tax. This is because when we focus so much on tax, it will appear that in the end the downtrodden citizens of this Country will be made to pay more. The strategy should be all-encompassing. The strategy should be all-encompassing.

     Increasing the tax net to go beyond the current 40% of the population, but by applying the principle of equity, fairness, and justice in considering the informal sector which constitutes almost 80% of Nigerians, albeit they are constrained by the current global and national insecurity and socio-economic headwinds. And to also note the over 133 multidimensionally poor Nigerians.

     The worries citizens and their expectations

    Dividends of Democracy: People need to see that the Government is actually using the taxes collected and other national and state incomes to add value to the quality of life and properties of citizens, add value to governance, and to and for the progress of and for the growth and development of Nigeria.

     The Communication Strategy of Mr. President and the MDAs in this case the FIRS should be transparent, show clarity, and be concise on what they are doing with revenues collected., That will engender confidence and trust in the citizens which will encourage citizens to see reasons why they should pay taxes

      Transparency and Accountability: Here again, transparency is critical, impactful projects and initiatives are critical, and constructive engagements with the citizens are key. If the big businesses and corporations pay the appropriate taxes people know that they are paying, and the government is delivering dividends or democracy, it is easier to make individuals, Nano, small, and medium-scale enterprises (NSME) pay taxes.

  • It is still dusk in Ogoni land…

    It is still dusk in Ogoni land…

    “Darkness cannot drive out darkness: only light can do that. Hate cannot drive out hate: only love can do that.” ― Martin Luther King Jr; Political Philosopher and Activist

    The tragedy of injustice and internal conflict

    It is now 29 years since the writer and activist Ken Saro Wiwa and eight of his comrades were tried by a military tribunal, and sentenced to death for incitement and murder. They were executed in what many believe was an act of injustice.

     While a lot of Nigerians believe that Mr. Saro Wiwa and other 8 other Ogonis, – were put on trial under the false pretext that the group had incited the murder of four Ogoni chiefs in May 1994, and that they were innocent on one hand; on the other hand, the relatives of the Ogoni 4 who were lynched and murdered by a mob that they believe was incited by late Mr. Saro Wiwa, feel deeply aggrieved that Ken Saro Wiwa, who was alleged to have been publicly critical of the Ogoni 4 and verbally denounced them with leaflets that were widely distributed, in which Saro Wiwa was alleged to have called them ethnic traitors, and evil government collaborators.

     At the crux of the crisis that ensued was the agitation led by late ken Saro Wiwa and the other Ogoni leaders called “The Ogoni 9” who were a group of nine activists from the Ogoni region of who opposed the operating practices of the Royal Dutch Shell oil corporation in the Niger Delta region.

     My heart goes out to all parties, i.e.; the family of the Ogoni 9 and the family of the Ogoni 4. This is a sad story that reflects our reality in Nigeria. A family tussle that culminated into a tragedy of brothers killing brothers, and we are where we are today with Ogoni land deeply divided and in agony. I totally agree with the fact that what happened to Ken Saro Wiwa and the other eight Ogonis was also a miscarriage of justice. Maybe if proper judicial process was followed, by the General Sani Abacha administration, maybe if Ken Saro Wiwa and others were alive; the family of the Ogoni 4, could have had the opportunity to seek justice, in which case Ken Saro Wiwa and the Ogoni 8 would have had a fair hearing and in the end, justice would have been served, or seem to be served. Ironically, the Ogoni 9 and the Ogoni 4 were all fighting for the betterment of their people, and now they are all gone, Nigeria has moved on, while the families of the Ogoni 9 and the Ogoni 4 are still agonizing over what happened. Importantly the state of mind of the Ogoni 13, the entire Ogoni family, and how they will be able to go through this painful process and get healing as a family is still a concern.

     There is no peace without reconciliation and healing

    Sadly, instead of the Ogonis being united in the fight for a better Ogoni land; 29 years have been wasted due to internal conflict, which has made the efforts of Ken Saro Wiwa and all the other Ogonis that died on both sides of the struggle – to be ineffectual. The vested interests have rather been beneficiaries of this unfortunate internal strife, as they will continue to enjoy while the Ogonis suffer. Indeed, there will be no unity without genuine peace, and there will be no peace without objective and genuine reconciliation. Therefore, due to the underlying issues, there are mutual suspicions, deepening acrimony, and building generational hatred amongst the Ogonis, and sadly so. With this situation a united, peaceful, and prosperous future for Ogonis is bleak.

    However, unless the underlying issues are addressed, the Ogonis will not get closure on the issues that are bedeviling them and their society, enjoy inner peace, and consequently continue to collectively fight for the betterment of their people. As the saying goes, “United, we stand, divided, we fall”. It is the responsibility of Government at the Federal and State levels to mediate a process that will lead to amicable resolution and closure, on both sides; like the ability of the Ogoni 4 to be able to locate their loved ones and give them proper burial and closure, the recognition of not just the Ogoni 9, but also the Ogoni 4 on equal terms by the Federal and State Governments with regards to national honors, compensation (if any), etc. A reconciliation process that will bring the families of the Ogoni 13 to at least learn from the mistakes of the departed leaders and build a better community, etc. is very important. Unless such a process is facilitated, the Ogoni’ will continue to suffer and continue to be easy prey to vested interests as they remain in disunity.

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     Furthermore, the current recalcitrant position taken by the current leaders of Ogoni is not helping matters. They should make efforts to achieve peace. Only then could governments or people of goodwill, could contribute to the peace process. External forces/ stakeholders will not bring peace to Ogoni land unless the Ogonis allow it. Peace cannot be installed by force or coercion, because if that happens, then, it is not peace but “uneasy combustible calm”. Accordingly, I say to the Ogoni elders; “you should not think of your selfish or political interests. Think of your children, your grandchildren, and great-grandchildren. Think of your community and your society – which is your collective identity. How could you collectively fight for better positions/ opportunities at the state and national levels in Nigeria, when you are so divided at the kit and clan level? As elders you can only leave legacies if there is peace and progress in Ogoni land. Otherwise what you will leave behind is a worsening toxic society full of hate and stories of infamy on both sides of an internal conflict that may be more catastrophic as your children grow, bottled up with issues that you are unable/ refuse to resolve during the remaining days of your lives. Please, I ask that you make all your efforts thus far in life worthwhile, and leave a collective lasting legacy such that united you can stand and succeed.

    Indeed, the tragedy of the killing of Ken Saro Wiwa and the other 8 Ogoni leaders, as well as the murder of the Ogoni 4 is unfortunate. I cannot imagine the trauma that the families of all the fallen leaders have been going through which will remain etched in their psyches and ways of life for the rest of their lives.

     Natural resources host communities deserve better in Nigeria

    The injustice and inhumanity of maltreating oil and gas communities and other natural resources host communities, as the nation basks in the wealth that is being drained from those communities, as the communities wallow in abject poverty, and environmental degradation with attendant physical, mental, and emotion health calamities, is pathetic and speaks loudly of “man’s inhumanity to man”. Those people and their communities deserve much better. I have seen in other countries where the people from whose land such wealth as Oil, Gas, etc. are extracted for national development are treated with respect, love, and care – so much so that they become the envy of their fellow citizens. Consequently, they feel a deep sense of belonging to their communities and nations and also feel a sense of pride in their Countries. In fact, even in cases where such locals had to be relocated, they hardly regret being removed from their ancestral lands due to the way their Governments take care of them and their families for their entire lives. Of course, the deep connection to their ancestral lands will remain with them. Therefore, the way that their histories are preserved by their governments gives them a sense of belonging, as efforts are continually made by their respective Governments to preserve their historical cultural heritage and values while containing the environmental impacts of the resources’ exploration and management.

     From my professional and business experience in the Gulf region particularly, the United Arab Emirates, Qatar, Bahrain, and Saudi Arabia; I have witnessed a classic example of how other Countries where the people from whose land such wealth like Oil and Gas are extracted for national development are treated with respect, love, and care. For instance, in the United Arab Emirates, particularly in Abu Dhabi and Dubai, where decades ago the Governments at subnational and national levels, undertook the process of Oil exploration, environmental impact management of the exploration, stakeholder management, and even when and if relocations of the locals took place how a holistic approach was undertaken such that the citizens were well taken care of to this day. It is such a beautiful example of how to treat our people.

     I wish that our Governments at the Federal and state levels will change the ugly trend, while I also wish that there will be peace and unity in Ogoni land and Nigeria in general.

  • To achieve sustainability of Nigerian airlines

    To achieve sustainability of Nigerian airlines

    In the last 4 weeks, stakeholders in the Nigerian aviation sector, particularly Nigerian Airlines, have been celebrating milestones of achievements; from the celebration of the 10years anniversary of the startup and operations of Air Peace Airline with the expectation of more new aircraft in the coming weeks to add to its growing fleet, to the receipt and commissioning of two Bombardier CRJ-900 net generation aircraft by Ibom Air, with 9 remaining Airbus A220-300S from airbus in the next 3 years – for domestic and startup of regional flights that will be taking-off from Uyo International Airport; United Nigeria Airlines took delivery of its first Embraer 190 aircraft to grow their fleets, XEJet Airline, a new Airline also commenced operations with its maiden scheduled flight from Abuja and Lagos, etc. This is cheery news for the Aviation industry and Nigeria because this signifies growth in an industry that has been resilient despite the challenges it has been facing pre, during, and post-COVID-19 pandemic.

     Therefore, I give kudos to the owners and leaders of Air Peace, Ibom Air, United Nigeria Airlines, and XEJet for their vision and determination in the face of harsh economic realities and tough operating environment.

     I also commend the Honorable Minister of Aviation and Aerospace Development, of the Federal Republic of Nigeria, Mr. Festus Keyamo SAN, for his consistent support of Nigerian Airlines and the Aviation sector in general, through policies, domestic and international stakeholder engagements, enforcement if regulations, and pushing for better opportunities for Nigeria Airlines and other operators in the aviation sector. The Honorable Minister has been very visible, vocal, and impactful in the past 1 year since he came into office. I look forward to the deepening, expansion, and sustained efforts by the Honorable Minister, and his team to ensure success. I also urge all industry practitioners to continue the good work of supporting the industry.

     However, in my view, one of the best supports that Minister Keyamo will give Nigerian Airlines is to come up with an all-inclusive approach to restructure, re-capitalize, and re-position Nigerian Airlines for better performance, resilience, and sustainability. This can only be achieved by crafting a proper strategy based on which new/ additional coherent policies that will support the strategy will ensure a re-solidified foundation, more capacity, better credibility, success, and sustainability. With profound respect, we can’t throw policies at all problems.

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     The sectoral overhaul has become necessary, in my view, due to the declining number of operational aircraft, high mortality rates of airlines in the past 25 years, and rising cost of tickets, which is sometimes a subset of rising cost of operations like the aviation fuel, due to global and national economic headwinds like inflation and multiple taxation, harsh operating environments, etc. The Honorable Minister was very clear in his statistics with regards to the rate of the death of the airlines, the numbers of the airlines that are not able to take up to the skies anymore and had to shut down over the years, while others are facing regulatory compliance issues. Additionally, others are struggling to turn around the maintenance of their aircraft, etc. Scale and scalability are critical success factors in the airline business

     Accordingly, it is time for us to have some forward-thinking conversations about why or how we can save this very important and value-adding player in the socioeconomic development of this country. How do we save the ailing airlines (if possible) to recover from the current situation? How do we put policies, processes, and systems in place to safeguard this type of “one step forward four steps backward”, trajectory of Nigerian airlines? Unless those questions are adequately addressed, we run the risk of having to face a reality we don’t want to face, which is; in the mid to long term, foreigners coming to invest and taking control and majority stake in the aviation industry just like it is happening in a lot of other sectors in Nigeria’s economy. For instance, it is so bad that we are not able to develop a capable competition with DSTV, MTN, etc.

    On the one hand, we need to support those very good Nigerians who are currently operating, albeit struggling to weather the strong socio-economic headwinds. Without prejudice to any airline in Nigeria, I use three Nigerian airlines as case studies in this conversation, and they are; Overland Airways, Air Peace Airline, and Ibom Air. These are 3 airlines that have come at different times, under different circumstances are adding critical values, interestingly, within very interesting niches. In my view, Overland Airways is the currently most sustainable airline, having been operating smoothly, and efficiently in the niche. Captain Edward Boyo, The CEO of Overland Airways; a veteran in the industry who had been efficiently running that airline for over 20 years. The Airline has demonstrated consistency for over 20 decades with a very good track record of safety. Captain Boyo has also demonstrated prudence, and excellent leadership in running the Airline.

     I congratulate Air Peace for celebrating 10 years of efficient, growing, and value-adding operations. Dr. Alan Onyema, the Chairman, and CEO, has added value to the industry in ways and means that have not been done before in the recent history of aviation in Nigeria. Dr. Onyema has gone beyond just operating in the industry to even adding value in philanthropy and where Nigerians need help outside this country, he has gone far and beyond to deliver those support services for Nigerians free of charge

     In the case of Ibom Air, here is the state government-owned airline, and the second government-owned airline after Nigeria Airways; that has been successful from startup. The Akwa Ibom State Government under the visionary leadership of the immediate past Governor, His Excellency, Mr. Emmanuel Udom was able to deliver this excellent project where even federal governments have failed. This is so, especially when the current Governor, His Excellency, Pastor Umo Eno has continued the good work by consolidating the position of Ibom Air and guiding the execution of the Strategic blueprint.  The success of Ibom Air is basically because the Government entrusts the leadership of Ibom Air under the leadership of Captain Mfon Udom as Chief Executive Officer, and Captain George Uriesi, as the Chief Operating Officer. These two aviation experts and leaders are indeed a classic case of “round pegs in round holes”.

    For the longevity, profitability, and sustainability of Nigerian airlines, we must deal with strategy, corporate governance, minimum acceptable standards in terms of leadership and management structure, Financial capacity, risk management, prudence, operational model/ excellence, etc.

     Therefore, the government needs to come from a strategic and policy point of view to recapitalize this industry and set standards such that people have to come together to form alliances and strategic partnerships to build strong airlines as institutions and bring the requisite capacities and competencies to run the airlines in ways and manners that will not just be operational, but they will be profitable, they will be value adding to the economy sustainable. This is a very important panacea for the turnaround of the Nigerian airline industry. 

    Based on the aforementioned points, the Ministry of Aviation and Aerospace Development needs to have a new or to fine-tune the existing aviation reform strategy. This will ensure that we have a strategy that fits into the international realities to grow our domestic airline business, and to make our domestic airline more robust and competitive in the domestic and international market.

     Just like what happened in the banking industry some years ago, based on which he banking industry is undergoing a third phase of recapitalization, Nigerian Airlines must also be restructured, recapitalized, and repositioned as such. With all due respect to the Airline owners; They can only guarantee the sustainability of their airlines if they consider and adopt strategic partnerships and collaborations. So, we would like to see synergies between the players. This can be achieved by the Airlines themselves for the federal government to make that happen or for the airlines. The Airline owners and leadership should review the situation from the strategic and profitability point of view or survival point of view; to realize that they are better off as partners or getting new partners to grow to have more a fleet of aircraft to have economic off-scale to grow but where you have individuals put in their funds The only thing that will happen maybe short, mid to long time is reality will hit us. Foreign investors will come, put in the money, and start eating into the domestic market, killing our own brothers and sisters who are invested.

     Moreover, they need partnerships local and international to grow. And for the government to bring in a regulatory fiat or regulatory framework to ensure that we have what I call “a recalibration” or “remodeling of the sub-sector for sustainability. I hope and pray that this reform will happen for the good of the industry and the Nigerian economy in general.

     In subsequent episodes, I will continue expounding on this important topic, including the economics of the reform, infrastructure, some prudential guidelines to ensure product quality, and quantity, regulatory shortfalls, some prudential guidelines, etc. Thank you.

  • The Dangote Refinery Vs. oil marketers battle

    The Dangote Refinery Vs. oil marketers battle

    Like many other Nigerians, I am observing with growing concern the ongoing corporate war that is brewing between Dangote Refinery (Dangote Petroleum Refinery and Petrochemicals) versus the independent marketers and key mid and downstream sector practitioners of the oil and gas sector in Nigeria. The issue is lingering with adverse effects on the citizenry and economy of Nigeria. More so it is also now an issue of litigation as Dangote Refinery sued the NNPC, NMDPRA, and some major Oil Marketers at the Federal High Court in Abuja; seeking for stoppage of some Oil Marketers from importation of Premium Motor Spirit (PMS) into Nigeria, which Dangote refinery is seeking declaration by the Court amongst other prayers that NMDPRA is in violation of its statutory responsibilities under the PIA for not encouraging local refineries such as the company.

    The Need for a change management framework for such a Paradigm shift

    The emergence of Dangote Refinery in a 50-year-old mid-downstream subsector in Nigeria has catalyzed a paradigm shift and therefore calls for transformational changes that should be larger in scale and scope which MUST be a departure from the status quo.

     The successful setup and operation of not just the first private refinery in Nigeria, but a $ 20 billion refinery of high capacity and one of the best in the world is no mean feat. Therefore, when you have a paradigm shift of such nature, whereby it will no longer be business as usual, there will naturally have to be teething problems, just like any kind of paradigm shift. The change management process could be tumultuous, but if managed properly, it will produce the desired outcomes. This is also bearing in mind that the PMS market is fully deregulated. However, deregulation does not mean that there will be no regulations and/ or interventions.

     We should note that Dangote Refinery and the marketers are businesses that have debts to pay and profits to make. It is the responsibility of the government to make life easy for Nigerians, by providing an enabling environment, well-thought-out interventions, enforcement of regulations and extant laws, etc.

     There must be a holistic approach to resolving this issue in the overall interest of Nigerians. The pains that Nigerians are currently experiencing due to the crisis are not acceptable.

    Therefore, the best approach to a lasting solution for this situation is from a Change Management perspective. This is because all the stakeholders are reacting to this new change in paradigm which is a major disruption of the status quo. Accordingly, I wish to propose a Change Management framework, as follows:

     I am of the strong opinion that a win-win model should be immediately facilitated by the regulator, i.e. the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). This is the best way to unlock this logjam between two strong, critical, and competing stakeholders. Allowing Dangote and the Oil Marketers to “sort out” themselves will lead to a protracted logjam that will continue to impact negatively on Nigerians. There must be an arbiter/ moderator to manage the negotiation and conflict. It is only a win-win model that will foster a good business handshake between Dangote Refinery and the Oil marketers so that PMS will be available to Nigerians at a fair pricing. This is because the imbroglio is impacting the citizenry, residents, and businesses in Nigeria. I urge all the critical stakeholders to look over and beyond personal/ business interests to look at the sustainability of the industry on the one hand, and the betterment of Nigerians and Nigeria on the other hand.

     In the 2nd of August 2024 (3 months ago) episode of this Column I advocated for support for the success of the Dangote Refinery, wherein I stated, “I believe that the Dangote refinery is a project that should be guarded jealously and be supported to succeed, and where there are issues, the issues should be handled professionally and strategically“. In another paragraph of the same publication, I also stated that, “For the avoidance of doubt, I am not advocating for unfair advantage to be given to the Dangote Refinery or Dangote group………..And where Dangote comes short of expectations, then the proper processes should be followed to ensure the rule of law and protection of our commonwealth and territorial integrity, in a way and manner that we don’t chase our development partners and good investments that we desperately need at this time….”

     It is also my view that Dangote Refinery also needs to be circumspect during the negotiations, at this stage of transition. I recall that Alhaji Aliko Dangote – the Chairman of Dangote Group, stated last week that for the product to remain in Dangote Refinery storage, it is costing a lot of money – and that’s true. Hence, business optimization, operational excellence, and quick turnaround are critical success factors for Dangote Refinery. Conversely, the same performance variables are also critical success factors for the Oil Marketers. So, the notion that the Dangote Refinery should solely determine key variables like pricing should not be the approach/methodology; otherwise, a bad precedent will be set, that will leave Nigerians pretty much where we are or even worse in the mid to long term. Accordingly, one party in this situation should not determine the standards or outcome of the negotiations. The outcome MUST be based on robust constructive engagements and must be based on a win-win approach. Otherwise, the template that will evolve will not be sustainable. I urge all parties to be circumspect.

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    Meanwhile, I am comforted to hear that the Oil marketers for instance IPMAN (Independent Petroleum Marketers Association of Nigeria) have stated that they have written a letter to Dangote Refinery asking for a business meeting to discuss modalities for the offtake of PMS. That is a good step in trying to sort out the problem. There must be a B2B (business-to-business) conversation for us to move forward. I’m very happy that President Bola Tinubu has asked that NNPC stand down in this conversation and negotiation. However, it is important that the NMDPRA as the regulator should act as a “moderator”. But if the NMDPRA is not showing enough gravitas at this point, I respectfully request that President Tinubu, should appoint a lean team of respectable Nigerians, as “neutral arbiters” to act as “moderators/ mediators” in this very thorny issue; so that we can make progress. The lingering issue where Marketers are not importing or are unable to buy from Dangote Refinery is increasing the hardships Nigerians are facing due to the continuing scarcity of PMS.

    How We Could Break the Deadlock

    I am also a believer in competition. Indeed, the Dangote Refinery has triggered a big competition to the Oil Marketers. Consequently, I urge that all Nigerians continue to support the Dangote Refinery to succeed by ensuring that its products are procured. Nevertheless, there should be a safeguard within the Change management framework to ensure that Dangote Refinery does not also hold the marketers to ransom. Going forward, finding a balance is very key to sustaining the availability and fair pricing of PMS in Nigeria.

    It is also worthy of note that while Dangote Refinery has the product, it currently does not own a single Filling Station in Nigeria. Therefore, Dangote Refinery needs the Oil Marketers the Oil Marketers need Dangote Refinery, and Nigerians can only access the PMS from the filling station – as far as the Nigerian market is concerned. One may argue that Dangote Refinery could as well just export all the PMS if the marketers do not/ refuse to buy at his price. In my opinion, if Dangote Refinery exports all the products, it will be violating one of the key justifications based on which it was awarded the license to refine Crude in Nigeria. Even though the Dangote Refinery is a Free Trade Zone one of the key justifications for granting the Crude Oil refining license to Dangote Refinery is that it will also supply the local market. It will also be a strategic mistake for Dangote in the mid to long term, to take a hardline position, which could likely backfire when the other private refineries become active. 

    Moreover, in providing safeguards in the negotiations within the Change Management Framework, a proviso should be included that if/when there are clear, cogent, and verifiable reasons that indicate that Dangote refinery is not providing what I call a “win-win” offer; then the oil marketers should be allowed to import PMS for an initial period of 3months and compete with Dangote’s product, so as “to test the competition” – so long as the imported products will be of verifiably the same quality, quantity, and less pricing. Competition is crucial to ensuring sustained PMS availability, price stability, and in the mid to long-term reduction in pricing when we have a glut (plenty supply) of petrol in the Country. However, allowing one party; either Dangote Refinery or the oil marketers to dictate or create a situation that will lead to a monopoly should be encouraged or acceptable. 

    In subsequent episodes, I will continue elucidating on this important topic, including the economics of short-term import (if necessary) to test the competition, some prudential guidelines to ensure product quality, and quantity, regulatory shortfalls, some prudential guidelines, etc. Thank you.

  • As Nigeria joins Brics

    As Nigeria joins Brics

    I am very excited, like many other Nigerians, to hear that Nigeria is now a member of the BRICS nations. On the 5th April 2024 (five months ago) episode of this Column, titled, “BRICS as a platform for economic sustainability”; I spoke about the need for Nigeria to join the BRICS Group as a strategic move to de-risk Nigeria’s economy amongst other benefits.

    The 2024 Summit which took place, from October 22 to 24, 2024, in Kazan, Russia; was the 16th annual gathering of the group, with a focus on enhancing economic integration with key emerging nations. It was at the Summit that BRICS officially further expanded its alliance, adding 13 new nations as partner countries, though not as full members. The countries are Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam. Accordingly, Nigeria has officially joined the BRICS as a partner country.

     Nigeria’s inclusion as a partner country aligns with previous statements in November 2023 by the Minister of Foreign Affairs, Amb. Yusuf Tuggar, expressed the country’s intention to join BRICS, leveraging its large economy and population.

    The BRICS countries are considered the foremost geopolitical rival to the G7 bloc comprising the leading advanced economies. BRICS is already implementing competing initiatives such as the New Development Bank, the BRICS Contingent Reserve Arrangement, the BRICS Pay, the BRICS Joint Statistical Publication and the BRICS basket reserve currency. All five initial member states are members of the G20. They have a combined nominal GDP of US$28 trillion (about 27% of the gross world product), a total GDP of around US$65 trillion (33% of global GDP PPP), and an estimated US$5.2 trillion in combined foreign reserves (as of 2024).

    With the aforementioned development, the group currently has a combined population of over 3.5 billion i.e. 45% of the world’s population. It has a combined economy of over $ 28 trillion which is about 28% of the global economy. BRICS countries will also be producing almost 50% of the world’s crude oil.

     BRIC is an intergovernmental organization comprising Brazil, Russia, India, China, and South Africa. The aforementioned Countries are the fastest-growing world economies, It is worthy of note that China is the second largest economy in the world. The objective of this organization is for strategic partnership and cooperation on investment opportunities, coordinating multilateral policies guided by the principles of non-interference, equality, and mutual benefit. BRICS was founded in 2009 and has since expanded in membership, regional, international, and intercontinental spread, and influence. Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates officially joined BRICs on the 1st of January, 2024. As of 5 months ago, BRICS had grown to 10-member nations, and according to Bloomberg, about 34 new Countries have expressed interest in joining BRICS. One of the key strategic objectives of the BRICS group is to dominate the world economy by 2050.

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    If one of the key reasons for the emergence of the US Dollar as the single global legal tender for international business was the “Petrodollar”, during the aftermath of the 2nd world War and the oil boom of the mid-1970s; then with the BRICS Block, have had membership of Countries producing over 50% of the world’s crude oil, speaks volume of the potential impact that the group will have on the mid to long term global geo-politics and economy. The BRICS strategy is certainly working.

    Therefore, I commend President Bola Ahmed Tinubu for taking the bold decision to join the BRICS. It is a forward-thinking move.

     Interestingly, this year’s BRICS summit is happening at the same time the 2024 Annual meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) are taking place in Washington DC of the United States of America; from Monday, October 21 to Saturday, October 26, 2024. The BRICS Group taking this critical step is indicative of the determination of the BRICS Group to actually provide an alternative to the US dollar, especially given the fact that the numbers are increasing with the likes of Nigeria joining. 

    Some people argue that this may be a “flash in the pan”; claiming that the BRICS project or getting an alternative to the dollar will not be viable. In my opinion, I say to those people, if you look back 70 years ago; a lot of things were things that were considered impossible have become possible in the past 30 years, from online banking to social media, the 4th Industrial Revolution – using AI – some even argue that the 5th Industrial Revolution is in the horizon, etc. Therefore, facing ALL the realities of the ongoing global political, social, and economic dynamics is crucial to development and sustainability. The pace at which the BRICS Bloc is moving with the interest that it is generating, and the wide spectrum of countries, especially, with more non-aligned countries including Nigeria, India, South Africa, Egypt, Iran, Saudi Arabia, Bolivia, Algeria, Cuba, Malaysia, Thailand, Belarus, Uzbekistan, and Vietnam joining the BRICS, is an indication of the growing significance of BRICS in global Geopolitics economy.

    So, I believe that it is strategic for forward-thinking countries that are to consider joining the BRICS. Indeed, as a proponent of Nigeria joining the BRICS Group, it is my strong opinion that the BRICS Group is one of the next global phenomena. The strategic question is, do you want it to happen when you have a seat at the table or do you want it to happen when you are outside the door knocking to be allowed into the room?

     There are a lot of conversations about whether the BRICS wants to create competition for the US Dollar, or is the strategic objective amongst others, to create an alternative to the US Dollar. In my view, the answer is that; the modalities and frameworks will be formed such that there will be the interchange of value within the framework of the various currencies of these countries, such that there will be significant retention of value of respective currencies of member nations. This will be against just one option of the US Dollar without any alternative. So, the alternative, in this case, is not a single currency, but an alternative payment platform(s)/ System.  A system, platform, and/or conditions will ultimately ease international trade and investment, and provide some level of independence regarding how countries transact. Countries within the BRICS will have modalities such that they can decide to do their trade without having to resort to using the US Dollar. Consequently, when one considers the number of countries that are joining the Bloc and the total GDP of the countries that have joined so far evaluates how impactful the Bloc will be.

     If we look at the global flow of trade and investment from China; especially if we consider; China’s flow of trade and investment with Countries across the world particularly the BRICS member-nations, there is a very interesting trend. For instance, the Crude Oil deal between India and Russia, whereby India procures Crude Oil from Russia (as Russia avoids sanctions) and pays with Indian Rupees instead of US Dollar or Euro – where reports indicate that so far this year, India has already bought more than half a billion barrels of crude, an almost tenfold increase since 2021, the year before the war, according to statistics collected by analytics firm Kpler (a platform for global intelligence). As a result, “an estimated $1 billion worth of rupees is landing in Moscow’s coffers each month.”. – It is clear that the BRICS Alliance provides a very double and veritable platform for Countries to de-risk their economy. For example, there is already an existing arrangement where Nigeria can do some swaps and transactions with China. Therefore, I believe BRICS would provide a more robust platform for the interchangeability of the value of currency during trade during economic interactions and relationships. This is a welcome development, and we will wait to see how things unfold in the next 12 months.

     Therefore, the interactions and transactions within the BRICS nations are already happening. Suffice it to say that they are getting the desired benefits and impacts, and that is why other countries are doing their research and joining.  In strategy, the more you have alternatives, the more you have leverage, and consequently the better your balance of power. So rather than being aloof or unbothered by the development around the BRICS, countries, including the United States of America, and its allies should be closely observing and taking note of what is happening for their own strategic considerations. 

    Our current economic situation requires that we diversify our options and de-risk our economy from the “choking effect” of the US Dollar. While it is true that the US Dollar will remain a globally dominant currency of trade, the current global socio-economic and political realities clearly call for forward-thinking countries to diversify their options of investment and trade; the growing membership of BRICS is the platform of that diversification. 

  • President Tinubu’s new cabinet

    President Tinubu’s new cabinet

    Two days ago, President Bola Ahmed Tinubu GCFR delivered on his promise to reshuffle and refresh the Federal Executive Council (FEC). Mr.  President relieved 5 Ministers of their duties, appointed 7 new ministers (subjected to Screening by the Senate), and re-assigning the portfolios of 10 Ministers.

     His Excellency also executed the following decisions:

    •Renamed the Ministry of Niger Delta Development as the Ministry of Regional Development; and moved all the regional development Commissions, like the NDDC, NEDC, NWDC, SEDC, and SWDC to operate under the Ministry.

    •Merged the Ministry of Tourism with the Ministry of Arts Culture and Creative Industry into one Ministry i.e. the Ministry of Arts, Culture, Tourism, and Creative Industry.

    •Activated the Ministry of Livestock Development by appointing a substantive Minister

    •Appointed a new Minister of Humanitarian Affairs and Poverty Alleviation to replace Dr.Beta Edu who was suspended 10 months ago.

    •Scrapped the Ministry of Sports and reverted the Ministry to the National Sports Commission under a Chairman.

    •Appointed Special Adviser to the President on Public Communication and Orientation working from the Ministry of Information and National Orientation,”

     Mr. President’s decision to refresh and re-organize the FEC will turn a new page on the Federal Executive Council’s structure and activities. This reorganization is also happening at an interesting time i.e., the last quarter of the year. It is also normal for organizations and Governments to plan their strategies for the forthcoming year. The last quarter of the year is also when Mr. President will prepare the budget for the next fiscal year. Therefore, the Cabinet reshuffle is timely, especially considering the fact that former President Mohammed Buhari spent eight years without a single reshuffling of his Cabinet until around the twilight of his administration, despite the glaring incompetence of some of these Ministers.

     It is also worthy of note that before the cabinet reshuffle, Mr. President took some hardline positions with regard to his cabinet members, when he had to suspend the former Minister of Humanitarian Affairs Dr. Beta Edu, based on allegations of corruption. He suspended Dr.  Edu, and that position had been vacant until this reorganization about 10 months after her suspension before she was replaced. Mr. The President took that position to demonstrate that he will not tolerate any act of malpractice in his Cabinet.

    I note that in re-assigning the 10 Ministers, Mr. President is re-balancing and optimizing the skills and competencies of his Minister for better performance. For instance, by moving Dr. Doris who was hitherto the Minister of Investment, Trade, and Industry to the Ministry of Finance, she is in a more familiar territory in terms of her sectoral expertise on decades of experience in the banking sector (banking sector a subsector of the Economic sector). In my view, the 7 news appointments are round pegs in round holes because Mr. President assigned portfolios to the Ministerial nominees that are areas of their expertise, experience, and track records. I expect that they will add value to the FEC and consequently to the administration of President Tinubu. 

    The input of the Ministers is the output of Mr. President. Some weeks ago, the President asked all the Ministers to go out there and inform the public or demonstrate to the public what they did or what they are doing and how they are impacting the performance of Mr. President. This is fair enough. But importantly also, we should remember that the biggest appraisers are the overall citizens of the country. Those, especially those who do not have the ability to go onto the internet and appraise ministers. Indeed, the 60% of Nigerian population that multidimensionally poor, are so distracted with hunger that they do not know there is a portal provided by the office of the Special Adviser to the President on Policy Coordination, Ms. Hadiza Bala Usman; where they are supposed to go and appraise the ministers or the government. The critical yardstick for measuring the performance of government at that level is hunger, strife, inflation, and insecurity. How are they reducing or increasing employment and all that will determine whether the government is performing or not? The farmer in the village wants to see why he was not able to go to the farm in the past six or seven months. He/ She should be able to go freely without paying any tax or levies to the bandits or terrorists. That for him is what he will use to appraise the government. 

    I am of the opinion that this is also a good time to review the overarching strategy of the administration and fine-tune the strategy, rejig it where necessary, and based on that, roll out a roadmap with an objective critical impact assessment framework to monitor the impacts of the strategy, policies, and initiatives on the nation. Importantly, I hope that Mr. President will tighten up the Key Performance Areas and Key Performance Indicators (KPAs and KPIs) for the Cabinet.  This is because there are a lot of expectations especially due to socio-economic headwinds. Therefore, Mr. President is under a lot of pressure, public scrutiny, and criticism to deliver. Unless he tightens the KPAs and KPIs of the ministers, Mr. President will continue taking the hits while the Ministers will be taking far fewer hits because the President is ultimately the one with the mandate of the people

    Ministry of Livestock – A Welcome Development

    I wish to commend Mr. President for setting up the Ministry of Livestock, which I believe is a move in the right direction to deconstruct the Ministry of Agriculture which has become a behemoth, albeit not so impactful over the years. By deconstructing the Ministry of Agriculture, Mr. The President has given a focal point to the respective Ministers, giving the opportunity to the Ministry of Livestock Development to focus on a very crucial part of our agricultural value chain, i.e. livestock; which I believe has the potential to add critical values to the GDP and Nigeria’s socio-economic development. With regard to social justice and social development, for instance, the incessant Fulani/ herdsmen clash with farmers and locals/residents issue, this Ministry will be a critical success factor in resolving this protracted national challenge.

     This development will give the Minister of Agriculture time to focus on the other key, very important aspects of our agricultural value chain. The Agriculture sector as a whole, which will include livestock, should be an area we should all pay attention to as citizens, and Mr. President, to push these ministers to deliver, because it’s a sector that is crucial to food security, economic recovery and sustainability.

    Ministry of Regional Development

    The consolidation of the regional development agencies or corporations under the Ministry of Regional Development is also a welcome development. I also commend Mr. President for that. The regional development Commissions will be streamlined, more organized, efficient, and effective.

    Ministry of Humanitarian Affairs

    A very key hire or appointment is the appointment of a Minister of Humanitarian Affairs and Poverty Eradication. This Ministry is a very key ministry that should have been driving the support of the vulnerable in the country. In the absence of a Minister, Mr. President has been providing most of the support and interventions through to the governors, which in my view have not been as effective as expected. Mr. President now has a minister who will oversee the Ministry. I hope that the new Minister’s administration will be data-driven, transparent and impactful, in line with the vision of Mr. President and in response to the earnings and aspirations of Nigerians.

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    Ministry of Sports now National Sports Commission

    Another welcome development is the scrapping of the Ministry of Sports and reverting it to the National Sports Commission (as it was first set up in 1962) under the leadership of a Chairman – as it should be. Placing Sports at the Ministerial level has politicized our sports over the years and that has significantly made our sports less strategic, less technical, less professional, and consequently less profitable. This development will remove or significantly reduce undue political interference in our sports sector. De-politicization of sports will also make Nigeria more compliant with international conventions and best practices.

    The need for effective interagency collaboration and coordination

    A critical success factor for the newly reinvigorated FEC is the need for effective interagency collaboration, and coordination in terms of strategy, policy-making, and alignment of objectives (where necessary). This will enable a more efficient, effective, and impactful Cabinet 

    In conclusion, I commend Mr. President for this cabinet reshuffle. I wish him well, and I hope all of us will see more improvements in the social and economic impacts going forward.