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Category: Issues

  • N2b capital: BDCs weighing options

    N2b capital: BDCs weighing options

    The recent crash of the naira has prompted the Central Bank of Nigeria (CBN) to issue draft guidelines aimed at regulating Bureau De Change (BDC) operators. However, the guidelines have sparked both debate and intrigue.

    The Central Bank of Nigeria (CBN) is planning to unleash a new regulatory hammer on Bureau De Change (BDC) operators, by introducing stringent guidelines aimed at curbing their activities and bringing greater stability to the foreign exchange market.

    At the heart of the changes lies a staggering 5,628.57 per cent increase in licensing fees. Tier 1 BDCs, previously requiring N35 million, now face a hefty N2 billion hurdle, while Tier 2 operators must cough up N500 million.

    This dramatic shift comes amid a persistent foreign exchange crisis, pushing the Naira to an all-time low against the dollar. The CBN, led by Financial Policy and Regulation Department head Haruna B Mustafa, aims to address concerns about money laundering, speculation, and unfair competition within the BDC sector.

    The new guidelines impose a clear demarcation between BDCs and other financial institutions, prohibiting ownership stakes by banks, government agencies, and NGOs. BDCs’ activities are strictly limited to buying and selling foreign currencies, issuing prepaid cards, and acting as cash-out points for money transfer operators. Gone are the days of taking deposits, granting loans, or dabbling in gold or capital markets (as the draft guidelines suggest).

    Sourcing foreign exchange also faces stricter scrutiny. Authorized dealers, travelers, hotels, and embassies remain permissible sources, but transactions exceeding $10,000 now require a declaration of origin.

    Selling foreign exchange is similarly regulated, with BDCs restricted to approved purposes like travel, medical bills, and school fees, subject to annual customer limits. Notably, 75 per cent of all sales must be conducted electronically, promoting transparency and reducing cash transactions.

    The two-tiered BDC system persists, with Tier 1 operators enjoying national presence and franchise opportunities, while Tier 2 remains limited to one state with a maximum of three locations.

    Compliance measures are paramount. BDCs must verify customer identities, maintain detailed transaction records, connect to the CBN systems, and display clear exchange rates. Regulatory returns are still mandatory, records must be readily available for inspection, and adherence to the guidelines is non-negotiable.

    For Tier 1 BDCs venturing into franchising, specific standards covering policy, monitoring, and branding are outlined. Additionally, prudential requirements set limits on open positions, fixed assets, borrowings, and dividend payments.

    Anti-money laundering and counter-terrorism financing regulations will also be reinforced, demanding robust policies, monitoring, and reporting mechanisms from BDCs.

    These sweeping changes have sparked both applause and apprehension. While some view them as necessary for curbing speculation and enhancing transparency, others worry about the impact on smaller BDCs struggling to meet the increased capital requirements and adapt to stricter regulations.

    The CBN’s crackdown on BDCs, coupled with recent raids by security agencies on suspected illegal operators across the country, underscores the seriousness of the foreign exchange crisis. Whether these new guidelines will effectively stabilize the market and achieve their intended goals remains to be seen. One thing is certain: the BDC landscape in Nigeria is undergoing a significant transformation, with far-reaching consequences for operators and foreign exchange accessibility in the country.

    BDC shake-up: examining CBN’s draft restrictions

    The CBN has proposed draft guidelines for BDC operators, introducing significant restrictions on ownership and activities. While the stated goals aim to enhance transparency, stability, and fairness within the sector, a closer look reveals multifaceted complexities and potential drawbacks.

    The CBN’s primary concern centers around preventing BDCs, if owned by banks or large financial institutions, from inadvertently swaying the official foreign exchange market. This potential for influence, it argues, could disrupt market stability and undermine the integrity of both systems. However, critics counter that this rationale overlooks the potential benefits of increased capital and expertise that established institutions might bring to the BDC sector.

    Another key argument behind the restrictions is fostering a more competitive BDC landscape. Proponents believe that allowing banks to own BDCs creates an unfair advantage, leveraging their resources to dominate the market and potentially squeezing out smaller players. Restricting ownership, they argue, levels the playing field and encourages healthy competition, ultimately benefiting both BDC operators and customers through improved pricing and service.

    The CBN also emphasizes the need for enhanced transparency and regulatory oversight within the BDC sector. By removing entities like Governments at all levels; Non-Governmental Organisations; Cooperative societies; Charitable organisations; Academic and religious institutions; and Telecommunication services providers, all of who possess complex financial structures from ownership, the argument goes, the CBN gains greater clarity and control, potentially reducing opportunities for money laundering and other illicit activities. However, concerns exist that this approach might oversimplify the issue, neglecting the potential for robust compliance measures within even complex structures.

    If implemented effectively, these restrictions could yield positive outcomes. A more stable BDC market, less susceptible to external fluctuations, could lead to predictable foreign exchange rates for individuals and businesses. Additionally, a level playing field with fair competition could benefit both BDC users and operators through improved pricing and service. Strengthened regulatory oversight, if achieved, could enhance compliance and reduce risks within the market.

    However, the proposed restrictions also carry potential drawbacks. Excluding established financial institutions could restrict access to valuable capital and expertise, hindering growth and innovation within the BDC sector. Furthermore, concerns exist that limiting bank involvement could reduce market liquidity, making it harder for individuals and businesses to access foreign exchange. Implementing these restrictions effectively will require robust monitoring systems and clear criteria for identifying prohibited entities, presenting a complex challenge for the CBN.

    BDCs under the microscope: navigating the permitted and prohibited

    The CBN’s new draft guidelines for BDC operators have cast a spotlight on their activities, clearly delineating permitted and prohibited practices. While some might see this as a restrictive exercise, understanding the rationale and implications is crucial for navigating the changing landscape and ensuring BDCs contribute to a stable and transparent financial ecosystem.

    BDCs can procure foreign exchange through authorized channels like tourists, returning Nigerians with forex inflows, and businesses with legitimate forex earnings. This ensures the forex entering the BDC system is legitimate and verifiable. They remain authorized to sell forex for approved purposes like travel, medical expenses, and educational fees, subject to established limits per customer. This caters to the needs of individuals requiring foreign exchange for legitimate purposes.

    The proposed guidelines permit BDCs to maintain accounts with commercial or non-interest banks in both naira and foreign currencies. This facilitates efficient financial transactions and record-keeping, enhancing transparency and accountability. They are welcome to collaborate with banks for issuing prepaid cards that offers customers a convenient and secure way to manage their forex holdings, aligning with the CBN’s drive towards cashless transactions. BDCs can now act as authorized cash-out points for international money transfer operators thus allowing BDCs to play a role in facilitating legitimate cross-border transactions.

    The ban on roadside forex trading aims to curb unregulated activities and potential black market dealings, promoting a more formal and monitored BDC sector. Prohibiting BDCs from holding customer accounts or acting as safekeeping services prevents them from morphing into unofficial banks, ensuring they remain focused on their core function of forex exchange.

    In addition, engaging in activities like taking deposits, granting loans, or offering retail forex to businesses is strictly forbidden. This prevents unfair competition with licensed banks and ensures BDCs operate within their designated role.

    Restrictions on international money transfers, except for authorized cash-out points, aim to curb potential money laundering and ensure BDCs operate within the domestic forex market. Also, prohibiting BDCs from opening foreign accounts, having foreign partners, or conducting business outside Nigeria promotes transparency and regulatory oversight, preventing potential illicit activities outside the CBN’s jurisdiction. BDCs cannot hold onto customer forex for extended periods, requiring them to sell it within stipulated timeframes. This ensures forex circulation and prevents BDCs from hoarding or manipulating the market.

    The guidelines frown at BDCs engaging in risky activities like forwards and futures trading which are strictly prohibited and protects BDCs from potential losses and ensuring they focus on their core forex exchange function. Obtaining foreign currency from unauthorized sources is illegal, ensuring BDCs only deal with legitimate sources and preventing the entry of illicit funds into the system.

    Additional restrictions include BDCs barred from borrowing more than 30 per cent of their shareholder funds, ensuring they operate within prudent financial parameters and preventing excessive debt exposure. Dealing in gold, precious metals, or engaging in capital market activities are off-limits, keeping BDCs focused on their core mandate and preventing them from venturing into unrelated and potentially risky areas.

    When the guidelines become operational, BDCs must strictly adhere to the permitted activities outlined in the guidelines. Any future activities deemed “non-permissible” by the CBN will be prohibited, ensuring the BDC sector operates within a clear regulatory framework. They are prohibited from financing political activities, preventing them from influencing political processes and maintaining their neutrality as financial entities.

    Why the Rules?

    These restrictions are not simply about limiting flexibility, but rather about promoting a BDC sector that is transparent. By clearly defining permitted and prohibited activities, the CBN aims to increase transparency within the sector, making it easier to monitor and prevent illicit activities.

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    Limiting BDCs’ involvement in risky activities and ensuring they operate within defined parameters contributes to a more stable BDC sector, minimizing potential risks to the wider financial system. Restricting BDCs from overstepping their boundaries creates a fairer playing field for both BDCs and licensed banks, ensuring healthy competition and protecting consumer interests. Prohibiting activities like money laundering and unauthorized forex sourcing helps protect the financial system and the Nigerian economy from potential harm.

    While some BDCs might perceive these restrictions as limitations, they are ultimately intended to ensure their long-term sustainability and contribution to a healthy financial ecosystem. By understanding the rationale behind these guidelines and operating within the permitted scope, BDCs can continue to play.

    Expert weighs in

    Dr. Wahab Balogun of Ambosit Capital Managers, representing an informed perspective, acknowledges the risk-reduction potential of the guidelines. He sees limitations on ownership and activity restrictions as beneficial for financial system stability. He applauds the emphasis on customer identification, recordkeeping, and electronic transfers, viewing them as safeguards for both customers and operators. The two-tiered structure finds favour as a way to cater to diverse market needs.

    However, Dr. Balogun shares concerns about the burden on smaller BDCs. He warns that stringent compliance and costs could limit their competitiveness and hinder growth. He also cautions against unintended consequences, such as deterring certain segments of the population from accessing BDC services due to cash transaction limitations and reporting requirements.

  • Evolving solutions to save the naira

    Evolving solutions to save the naira

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

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

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

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

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

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

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

    CBN’s interventions for a stable Naira

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

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

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

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

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

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

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

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

    Amplifying public concerns

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

    Banks holding excess FX to stabilising the Naira

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    Multifaceted strategies for a stable Naira

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

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

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

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

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

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

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

  • Closing the gap on frightening cancer cases 

    Closing the gap on frightening cancer cases 

    • People who seek cancer care hit barriers at every turn, indicating an urgent need to eliminate health inequities by addressing their root causes so that everyone can have an unfettered access to treatment

    The world united yesterday to commemorate the World Cancer Day, with the slogan “Close the care gap,” and the call to unite voices and take action. Cancer, ranking as the second leading cause of global mortality, has emerged as a significant health challenge over recent decades. Operating as a silent threat, it frequently spreads insidiously in its initial phases before manifesting into noticeable symptoms. The crucial determinant for survival in the face of this formidable disease lies in early detection.

    Alarming statistics from the World Health Organisation (WHO) reveal a bleak outlook for global cancer cases. By 2050, the WHO predicts a staggering 35 million new cancer cases, marking a 77% surge from the 2022 figures, which reported 20 million new cases and 9.7 million deaths. The WHO attributes these concerning projections to factors identified in a survey conducted by its cancer research arm, the International Agency for Research on Cancer (IARC). “The rapidly growing global cancer burden reflects both population ageing and growth, as well as changes to people’s exposure to risk factors, several of which are associated with socioeconomic development. Tobacco, alcohol, and obesity are key factors behind the increasing incidence of cancer, with air pollution still a key driver of environmental risk factors,” the research said.

    In addition to the daunting cancer projections, the World Health Organisation (WHO) has shed light on the insufficient financial backing for essential cancer and palliative care services in a majority of countries surveyed. This underscores a critical gap in supporting these vital services as part of universal health coverage (UHC). The WHO’s findings emphasize the urgent need for enhanced global efforts to ensure accessible and adequate cancer care within the framework of comprehensive healthcare. “The estimated number of people who were alive within five years following a cancer diagnosis was 53.5 million. About one in five people develop cancer in their lifetime, approximately one in nine men and one in 12 women die from the diseases, ” WHO noted.

    The International Agency for Research on Cancer’s (IARC) global cancer observatory, spanning 185 countries and tracking 36 types of cancer, reveals a stark reality: ten types of cancer constituted approximately two-thirds of new cases and deaths globally in 2022. Lung cancer stands out as the most frequently diagnosed cancer worldwide, making up 12.4% of new cases and 18.7% of deaths. Following closely is female breast cancer, accounting for 11.6% of cases and seven per cent of deaths. These statistics underscore the significant burden posed by specific cancer types and the imperative for targeted intervention and prevention strategies.

    IARC reveals a staggering statistic: one in five people will develop cancer in their lifetime. Tragically, approximately one in nine men and one in twelve women succumb to the disease. Alarmingly, over 60 per cent of the world’s new annual cancer cases occur in low and middle-income countries, contributing to around 70 per cent of cancer-related deaths. This underscores a pressing need for global efforts to address the disproportionate burden of cancer in less affluent nations.

    The latest estimates from IARC highlight the significant impact of cancer on individuals under the age of 70, accounting for 57 percent of  new cases and 47 percent of cancer-related deaths. As the global cancer burden is projected to surge by approximately 60 per cent in the next two decades, it places an increasing strain on health systems, communities, and individuals. The three predominant cancer types identified by IARC in 2022 were lung, breast, and colorectal cancers. Lung cancer topped the list with 2.5 million new cases (12.4 percent), followed by female breast cancer (2.3 million cases, 11.6 percent), and colorectal cancer (1.9 million cases, 9.6 percent). Notably, in Nigeria, cervical cancer ranks as the third most common cancer and the second leading cause of cancer deaths among women aged 15 to 44.

    The research also highlights other prominent causes of cancer-related deaths, such as colorectal (bowel), liver, and stomach cancers. Cervical cancer, though entirely preventable, remains a pressing global health concern, ranking as the eighth most common cancer globally and the ninth leading cause of cancer-related deaths. In 2022, it accounted for 661,044 new cases and 348,186 deaths. The continued impact of preventable cancers underscores the importance of robust prevention and early detection measures in public health initiatives. “It is the most common cancer in women in 25 countries, many of which are in sub-Saharan Africa. WHO’s new global survey shed light on major inequalities and lack of financial protection for cancer around the world, with population, especially in lower-income countries, unable to access the basics of cancer care, ” WHO added.

    IARC’s findings reveal significant disparities in the cancer burden based on human development. Countries with a high Human Development Index (HDI) face a lower risk of cancer diagnosis, while those with a low HDI are at a higher risk and experience elevated mortality rates from the disease. WHO’s global survey further underscores these global disparities in cancer services, emphasising the urgent need for equitable access to comprehensive cancer care across different regions and socioeconomic statuses. Addressing these discrepancies is crucial for achieving universal health coverage and reducing the impact of cancer on vulnerable populations.

    The WHO report highlights pervasive global inequalities and insufficient financial protection for cancer care, particularly affecting populations in lower-income countries. Cary Adams, the head of the Union for International Cancer Control (UICC), emphasises that despite advancements in early detection and treatment, significant disparities persist not only between high and low-income regions globally but also within individual countries. The existing gaps underscore the pressing need for concerted efforts to bridge disparities in cancer care access and outcomes, promoting more inclusive and equitable healthcare systems worldwide.

    The staggering number of approximately 102,000 new cancer cases reported annually in Nigeria, coupled with widespread under-diagnosis and the financial barriers to treatment, underscores the critical imperative for comprehensive measures to enhance citizens’ access to quality healthcare in the country. In Nigeria, a nation with approximately 220 million people, complex health issues like cancer are increasingly emerging as significant healthcare challenges. Breast cancer stands out with the highest mortality rate, closely followed by prostate cancer. The WHO projects a worrisome 50 percent increase in the number of diagnosed cases, underlining the pressing need for effective strategies and resources to address this escalating health concern.

    Cancer, a diverse group of diseases, can originate in any organ or tissue of the body, characterised by abnormal cell growth that invades nearby structures and may metastasise to other organs. Metastasis is a key contributor to cancer-related fatalities. Globally, cancer ranks as the second leading cause of death, responsible for around 9.6 million deaths. The escalating cancer burden places substantial physical, emotional, and financial strain on individuals, families, communities, and healthcare systems.

    In Nigeria, the National Cancer Control Program (NCCP) reports an annual expenditure of approximately N12 billion on cancer treatment by Nigerians. Over the years, experts have underscored various suspected risk factors associated with cancer, encompassing age, alcohol consumption, chronic inflammation, dietary habits, hormonal influences, tobacco use, immunosuppression, exposure to infectious agents, and contact with carcinogens. While certain risk factors can be mitigated through preventive measures, the inevitability of aging remains beyond control. Regrettably, within the multifaceted challenges confronting Nigeria’s healthcare sector, cancer stands out as a prominent cause of mortality among women, contributing to 28 percent of all female deaths, as reported by the National Cancer Registry. Predominant cancers in this context include breast cancer, cervical cancer, and liver cancer.

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    Numerous studies have consistently demonstrated that healthcare systems in low- and middle-income countries face significant challenges in managing the increasing cancer burden. Globally, a substantial number of cancer patients lack timely access to quality diagnosis and treatment. In regions with robust healthcare systems, survival rates for various cancers have witnessed improvement, attributed to accessible early detection, quality treatment, and comprehensive survivorship care. Unfortunately, Nigeria lags behind in this regard. Addressing the brain drain in Nigeria’s health sector is imperative to bridge the cancer care gap. The nation’s leadership must develop effective strategies to retain healthcare professionals and counteract the migration of oncologists to high-income countries.

    There is a stark imbalance, with only 80 clinical oncologists catering to over 120,000 patients in Nigeria, underscoring the urgent need for intervention. Nigeria faces a critical shortage in its healthcare workforce, with just four medical doctors per 10,000 patients in 2021 and 15 nurses and midwives per 10,000 patients for a population of 220 million. Addressing this deficit in oncology professionals is paramount. While various cancer treatments are available globally, their affordability is a challenge. To make cancer care accessible, the Nigerian government should establish a health insurance scheme, ensuring financial support for treatment. This initiative can also contribute to the creation of more health facilities.

    Infrastructure and equipment, especially comprehensive cancer centres, are urgently required. With only three cancer treatment centres, Nigeria needs at least one comprehensive cancer centre in each of its 36 states to accommodate the population and the growing number of cancer patients. Adequate training programs for specialists and healthcare teams are essential, requiring collaboration between stakeholders in the health sector with government support. Furthermore, improving compensation, investing in graduate schools, and enhancing working conditions can help retain medical professionals in the country, reducing the mass exodus of skilled workers. Closing the cancer care gaps necessitates a holistic approach involving policy changes, infrastructure development, and workforce investment.

    In Nigeria, a cancer diagnosis is often viewed as a dire fate, primarily due to inadequate health facilities and subpar health outcomes. Consequently, heightened awareness is crucial, particularly in rural communities where 70% of the country’s impoverished population resides. The key objectives of World Cancer Day encompass dispelling myths, promoting early detection, and advocating for enhanced cancer care. Effective cancer prevention and control hinge on implementing evidence-based strategies across prevention, screening, early detection, treatment, and palliative care. By fostering awareness and understanding, we can combat the misconceptions surrounding cancer and empower individuals to take proactive measures for prevention and early intervention. World Cancer Day serves as a catalyst for instigating positive change and fostering a collective commitment to addressing the challenges associated with this formidable health concern.

    This year’s theme, “Closing the Care Gap,” underscores the imperative to intensify efforts at establishing essential infrastructure to confront health challenges, ensuring improved care for cancer patients and survivors. The rallying call is clear: no one should confront the challenges of cancer in isolation. Let’s persist in demonstrating empathy, care, love, and support for those affected by cancer, all while fostering awareness and advocating for enhanced service delivery. The collective effort to bridge the care gap aligns with the world’s shared commitment to a more compassionate and supportive healthcare landscape for all.

  • FIRS’ ambitious plan for 77% IGR increase

    FIRS’ ambitious plan for 77% IGR increase

    • Besides reshaping Nigeria’s fiscal destiny, an audacious 77% IGR surge in IGR will help the nation to break free from dependency on external borrowing and transform the economy

    In a landmark move that promises to reshape Nigeria’s fiscal landscape, the Federal Government has set its sights on a staggering 77 per cent increase in Internally Generated Revenue (IGR). This translates to over N22.3 trillion, a figure that dwarfs the current annual target and represents a bold gamble on transforming the nation’s financial future.

    But beyond the sheer audacity of the target lies a carefully crafted plan, hinged on a customer-centric organisational restructure, technological innovation and a renewed focus on taxpayer experience. At the heart of this ambitious endeavor lies the Federal Inland Revenue Service (FIRS), an agency undergoing a metamorphosis fueled by a vision of revolutionising tax administration in Nigeria. Gone are the days of cumbersome processes and disconnected departments. The new FIRS promises an integrated tax approach, leveraging cutting-edge technology at every step. This paradigm shift signifies a move away from mere adaptation to change, and towards spearheading it, positioning Nigeria as a leader in contemporary tax administration.

    The Executive Chairman of the FIRS, Dr. Zacch Adedeji, believes that “the cornerstone of this transformation is a customer-centric organisational structure.” This means taxpayers are no longer faceless entities navigating a labyrinthine bureaucracy. Ins tead, they are segmented based on their specific needs and thresholds, ensuring they receive customised services and streamlined interactions. Gone are the days of wading through a maze of departments for different tax categories. This simplified and tailored approach promises to not only ease the burden on taxpayers but also significantly enhance compliance. Technology sits at the forefront of this revolution. Digital platforms will be constantly refined, aiming to make filing, payment, reporting and communication seamless. A robust grievance redress mechanism will ensure the concerns of taxpayers are heard and addressed swiftly. Investments in staff capacity building will equip FIRS personnel with the skills needed to navigate the complexities of this new era.

    But ambition alone cannot fuel such a monumental journey. Expanding the tax net is crucial to achieving the audacious target. This will involve data-driven sector analysis, leveraging automation to identify non-compliant individuals and businesses, and bringing them into the fold. Withholding taxes will be used more effectively, and targeted educational programmes will raise awareness about tax obligations across different segments of the population.

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    Of course, no tax regime can thrive without robust compliance measures. The proposed plan encompasses a comprehensive compliance improvement strategy for all taxpayer segments. Data-driven risk-based audit selection will prioritise high-risk cases, and closing out audits within defined timelines will ensure efficiency and transparency. Enforcement activities will be strengthened, and collaboration with strategic stakeholders will be crucial in tackling tax evasion and avoidance. This bold vision, however, is not without its  challenges. Implementing such a comprehensive restructuring is a complex endeavour, and navigating potential resistance to change, both within the FIRS and among taxpayers, will require deft communication and unwavering commitment. Ensuring transparency and accountability throughout the process will be essential to maintain public trust.

    Despite the hurdles, the potential rewards are immense. Achieving the 77 per cent IGR target would provide the government with the resources to tackle critical infrastructure deficits, bolster social safety nets, and invest in human capital development. This, in turn, would fuel economic growth, attract foreign investment, and create jobs, paving the way for a more prosperous and equitable Nigeria. The success of this endeavour hinges on collective effort. Taxpayers must embrace the new system, fulfilling their obligations effectively and honestly. The FIRS must execute the plan with meticulous attention to detail, ensuring efficiency, transparency, and taxpayer-centricity. The government must provide unwavering support and create an enabling environment for this transformation to flourish.

    Nigeria’s 77 per cent IGR target is not merely a fiscal aspiration; it is a national mission. It is a bold declaration of intent to break free from the shackles of dependence on external borrowing and chart a course towards fiscal autonomy and sustained economic development. The road ahead will be arduous, but the potential rewards are worth the effort. This is not just an ambitious plan; it is a clarion call for collective action, a chance to write a new chapter in Nigeria’s economic history, and finally unlock the nation’s immense potential. The success of this audacious leap will not only reshape the fiscal landscape but also redefine the very fabric of the Nigerian dream.

    Strategies for achieving the N19.4 trillion FIRS target

    Amina Ado, Coordinating Director, Special Tax Operations Group painted a vivid picture of the strategies the FIRS will deploy in order to achieve the set target. Fueling this transformation is a multi-pronged strategy designed to not only meet the N19.4 trillion target for 2024 but also lay the groundwork for sustainable IGR growth in the years to come. Recognising the immense potential within key economic segments, the FIRS prioritises building stronger relationships and providing customised services to large taxpayers and sector contributors. Proactive engagement strategies will foster regular communication, ensuring these critical players feel heard and understood. Tailored services will address their unique needs and challenges, streamlining processes and maximizing revenue collection.

    Additionally, the FIRS will enhance its understanding of key sectors and their value chains, allowing for more informed policy decisions and targeted interventions. The days of taxpayers navigating bureaucratic mazes are behind us. The new FIRS is committed to creating a seamle ss and user-friendly experience. Digital platforms will be constantly refined, making filing, payment, reporting, and communication effortless. A robust grievance redress mechanism will ensure taxpayer concerns are swiftly addressed, building trust and confidence in the system. Investing in staff capacity building will equip FIRS personnel with the skills and knowledge needed to provide efficient and professional service. Regular taxpayer satisfaction surveys will identify areas for improvement, further solidifying the FIRS’ commitment to customer-centricity.

    Broadening the tax base is crucial to achieving the ambitious target. Data-driven sector analysis will identify potential non-compliant taxpayers, while technology solutions and automation will streamline the process of bringing them into the fold. Exp anding the use of withholding taxes will tap into previously underutilized revenue streams. Targeted taxpayer education programmes, delivered through various channels, will raise awareness about tax obligations and encourage voluntary compliance across different segments of the population. The FIRS will continue to develop and circulate publications tailored to the specific needs of various taxpayer segments, ensuring everyone has access to clear and accessible information.

    According to Amina Ado, a robust compliance system is the backbone of any successful tax regime. The FIRS, she said, will develop and implement a comprehensive compliance improvement plan for all taxpayer segments, leaving no stone unturned. A data-driven risk-based audit selection system will prioritise high-risk cases, ensuring resources are targeted where they are most needed. Closing out audit cases within defined timelines will boost efficiency and transparency, while improved enforcement activities in line with relevant laws will deter tax evasion and hold non-compliant individuals and businesses accountable. Finally, the FIRS will actively collaborate with strategic stakeholders, including other government agencies, financial institutions, and professional bodies, to create a robust network that strengthens compliance efforts and fosters a culture of tax responsibility.

    Nigeria’s quest for a robust IGR system hasn’t been a linear journey. For decades, reliance on oil revenue dominated, creating a vulnerability exposed by fluctuating global prices and limited diversification. Understanding the historical context of IGR challenges and previous reform attempts is crucial to appreciating the significance of the current 77 per cent target.

    The colonia l era taxation focused on indirect taxes, with limited em     phasis on income and corporate taxes. However, post-independence (1960s-1970s) oil boom propelled national income, leading to reduced focus on IGR. Reliance on oil revenue exceeded 70 per cent of the total budget. The economic crisis of the 1980 oil price slump exposed the dangers of overdependence on oil. IGR efforts intensified, with the introduction of Value Added Tax (VAT) in 1986 and various tax reforms. Between the 1990s-2000s, fluctuating oil prices and economic volatility highlighted the need for further IGR diversification. Reforms included the establishment of the FIRS in 2007 and the launch of the Integrated Tax Platform (ITP) in 2011.

    The 1975 Udoji Commission recommended tax reforms, including increased reliance on direct taxes and improved tax administration. Implementation faced various challenges. The 1999 NEEDS Assessment identified the need for IGR diversification and emphasised tax reforms. Subsequent policies aimed at broadening the tax base and strengthening tax administration. The 2004 Tax Harmonisation Act aimed to streamline and simplify tax laws across different states. Implementation inconsistencies hampered effectiveness while the 2007 Establishment of FIRS centralised tax administration and aimed to improve efficiency and transparency. Early successes have been mixed, with challenges in enforcement and informal sector integration.

    Challenges and persisting gaps

    A significant portion of the economy operates informally, escaping the tax net. In addition, w eak enforcement, corruption and bureaucratic hurdles have been known to impede IGR collection. Cultural attitudes, distrust in government, and complex tax systems also contributed to low compliance rates. Reliance on a few major contributors made the system vulnerable to fluctuations in specific sectors.

    Despite these challenges, the current 77 per cent IGR target  represents a bold step forward. The customer-centric focus, technological innovations, and comprehensive strategies laid out offer a fresh approach to overcoming entrenched obstacles. Dr. Wahab Balogun of Ambosit Capital Managers said “The sheer ambition of the target sends a strong message about the government’s commitment to fiscal independence. The customer-centric approach and focus on technology are positive steps that could significantly improve tax collection efficiency and taxpayer experience. Leveraging technology and data analytics is crucial for modern tax administration. The proposed strategies for expanding the tax net and enhancing compliance, if implemented effectively, could unlock significant revenue potential” he said.

    He added that “the proposed shift away from traditional tax categorisation is a progressive move. Tailoring services to specific taxpayer segments can simplify the process and potentially boost compliance, especially among small and medium businesses.” On a more cautious note, Dr. Balogun noted that “achieving the 77 per cent target will be a herculean task. Implementing such a comprehensive restructuring needs meticulous planning, effective communication, and strong political will. Addressing potential resistance from vested interests within the FIRS and among certain taxpayer segments will be crucial.”

    Mr Gbolade Idakolo, Managing Director/CEO SD&D Capital Management Limited said “the federal government is embarking on a drive to make Nigeria a $1 trillion economy with various policies and measures aimed at expanding the economy.  There has been positive developments in the oil and gas sector both upstream and downstream with Nigeria now witnessing more crude oil sales, the oil refineries are also coming on stream and major efforts are been made to curb corruption affecting tax revenues to government. The setting up of the presidential committee on tax reforms is a testament to the determination of the government to set the sector straight.

    “The focus of this administration is to reduce borrowing and increase revenue to fund its activities and the FIRS being a major driver of government revenues is condemned to perform. The N19.4 trillion target set by the FIRS for this year is achievable if all bureaucratic bottlenecks are removed and the corruption surrounding tax collection is nipped in the bud. The Nigerian economy has the capacity to generate the projected revenue and more if deliberate policies to expand the economy are properly implemented”.

    Overall, experts acknowledge the potential benefits of the 77 percent IGR target and the proposed plan, but also emphasise the significant challenges and risks involved. Success will hinge on meticulous implementation, stakeholder engagement, and unwavering commitment to transparency and accountability.         

  • Petrol under dispensing: A regulatory failure?

    Petrol under dispensing: A regulatory failure?

    Deploying simple tactics of distraction, including illegal adjustments of meters, among others, filling stations across the country have continued to shortchange motorists at the fuel pumps. And as consumers complain, these operators smile to the bank, albeit, from illegal earnings. Sadly, the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) appears to have turned a blind eye to this, allowing the extortion to flourish, MUYIWA LUCAS, JOHN OFIEKHUENA and MIKE ODIEGWU report.

    It is an age-long act – an act of shortchanging motorists at the fuel pumps. Petrol attendants, relying on old tactics and, in some cases, in connivance with their station managers, have made victims of motorists who buy fuel from their stations. This has introduced an unsavoury twist to the prevailing high cost of petrol in the country.

    To the inexperienced, the unsolicited friendly jokes and pleasantries put up by most filling station attendants depicts courtesy, but for the initiated, such pleasantries are nothing but  tactics meant to divert the customer’s attention from the fuel dispensing meter, aimed at dispensing less fuel than the unsuspecting customer would pay for.This, in addition to outright adjustment of the meter to dispense less fuel than is displayed on it, is a practice that has been going on for long. 

    Although many may have overlooked this incident in the past, the biting reality of the removal of petrol subsidy on Nigerians have  reawakened their consciousness to this nefarious act.

    “I have had ugly experiences in some of these petrol stations. I stopped buying fuel in some of them.The worst are these filling stations, whose prices are lower. They make up by seriously adjusting their meters to dispense lesser quantity at the same price of the actual quantity it should be,” Chris Adol, a motorist and resident of Port Harcourt, the Rivers State capital, told The Nation.

    According to Adol, most filling stations are deep in the act of selling below the standard gauge, making it almost impossible to pay for 10 litres of petrol and getting same quantity paid for in your tank at petrol stations.

    Although some consumers admitted that the rate of shortchanging has declined with the phasing out of subsidy, there were other respondents, who narrate to The Nation their ordeal at some retail outlets.

    In Abuja, it is a two-sided situation. Customers, including those patronising the Nigerian National Petroleum Company Limited (NNPCL) retail outlets, complained that the filling stations were under dispensing the product to them through adjusted meters.

    While a motorist, who simply identified himself as Sufianu, said most of the filling stations he had visited in the metropolis sell accurate litres, a taxi driver, who gave his name as Mubarak,  narrated an ordeal at different retail outlets in the city. “Most of the petrol stations between Deidei and Airport Road hardly dispense the full quantity,” he said.

    If a motorist at NNPCL, Arab Road, Kubwa, identified as Louis, had his way, perhaps he would have changed the name of NNPCL retail outlets in the axis to “black marketer.” He noted that he has battled with the petrol pump attendants over the under-dispensing of petrol at different times.

    His words: “Soon after the subsidy was removed, I suspected that the  measurement was not full. “Thereafter, I went there with a container to test them and discovered that their pumps were adjusted. After trying them for several times and realised they have adjusted their pumps, I now avoid the filling station, which unfortunately, I should be patronising because of its proximity to my house.”

    Further investigations indicated that petrol attendants are not alone in this shady business. They commit the heinous crime in connivance with their station managers and owners. This, according to investigation, explains why many attendants who have been caught engaging in such sharp practices express no remorse and still manage to retain their jobs.  The situation leaves a victim helpless because their superiors would rather plead with a customer than fire an errant attendant.

    “How would the manager of a filling station punish an errant attendant who knows that even the owner of the filling station has tampered with the reading of the dispensing machines?” asked Sola Oguniyi, the manager of a mega filling station in Ogun State.

    The deeds of errant filling station attendants have left bitter tastes in the mouths of many motorists. While a few muster the courage to challenge such attendants, others simply grumble and carry on without challenging them. But it is believed that the trend has caused unnecessary friction between many private car owners and their drivers, as the former often think that their drivers are the ones trying to play smart, especially prior to the subsidy removal regime.

    A mechanical engineer, Olukayode Sobowale, explained that petrol stations adjust their pumps to reduce their loss. According to him, because petrol is highly inflammable, it vapourises very fast, a loss for the business owner. This, he said, is why sometimes there is always a disagreement between a tanker driver after discharging its content into the storage of a filling station and it is found that what was loaded at the depot that the tanker driver signed for is not the same volume as what he discharges.  

    Sobowale explains: “There are losses to vapour because of the inflammable nature of petrol and someone has to pay for it. Besides, the long the product stays in the storage of a filling station, the more loss it incurs to vapourisation. This accounts for why meters are usually adjusted not to read the exact quantity. In most filling stations the best you can get from them is between 0.65 and 0.85 litres. Also, most filling stations, especially, independent marketers, tend to manipulate their dispensing pumps to discharge air and petrol together. This is done by the in-house engineer to distort the regular workings of the pump so that they can make extra money.

    “The technique is simple: adjust the hook of the pump and slack the spring or lever inside the pump, and educate the attendants on how to handle the pump so that the public will not suspect any foul play. That is the reason behind some stations dedicating some pumps to vehicles and others to jerry cans, because it is easier to detect the anomaly when you buy in a keg.”

    Another engineer, Olufemi Adebola, agreed that manipulating the fuel pump to the advantage of the fuel dealers is very possible.

    Adebola explained: “Yes, it is possible to adjust the meter calibration for a fuel dispenser at a filling station. The principle is quite easy for a technical person. You see, the principle of flow of fuel through the pump has a direct corresponding effect on the turning of the meter. The moving wheels can be re-calibrated without an individual buying fuel noticing it. This can be likened to the old meter used by PHCN where individuals can actually adjust the meter flow relative to the volume of electricity consumed.

    “Another instance where fuel attendants’ cheat individuals is when they operate the distraction tactics.The meter attendant might decide not to rub off the previous sales, especially if he had just made a marginal sale to, say an okada (motor cycle) rider or a 10-litre fuel in a keg. They go ahead to pump the fuel in your car after you have been distracted.”

    Operators react

    However, Sobowale’s submission was refuted by the Independent Petroleum Marketers Association of Nigeria (IPMAN), which defended that its members might no longer have the need to under-dispense petrol because there is no pump price ceiling.

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    The association’s National President, Alhaji Abubakar Maigandi, said since the independent marketers are at the liberty to sell the product at various rates, the marketers would prefer hiking their rates than under-dispensing the product.

    His words: “All I know is that it is very difficult for independent petroleum marketers to under dispense. This is because the price is not restricted. You can see some filling stations are selling at the rate of N620, N640 and above per litre. That difference will not make any marketer to under dispense the product, especially the independent marketers.”

    Similarly, the IPMAN National Secretary Chief John Okeocha, in a chat with The Nation, noted that under – dispensing of PMS attracts a penalty. He called on the NMDPRA to investigate and bring the perpetrators to book. He added that the organisation will always abhor such sharp practices since it is fraudulent and reduces patronage.

    His words: “The issue is that there is a penalty for under-dispensing. NMDPRA has a duty to investigate and know those who are doing foul business and call them to order. “Nobody, no group, no organisation can support irregularities in their transactions.

    “Anybody who is doing under dispensing is going against the law. Two, he is reducing his customership, he is into fraud. Nobody can support this kind of thing. So, the law enforcement agency has the right to discipline anybody who is defrauding the public.”

    Oversight failure

    But consumers are of the opinion that the regulator, the NMDPRA, is slumbering in this aspect. Until the scrapping of the Department of Petroleum Resources (DPR), motorists contended that the sharp practices by filling stations, though existed, but never was it at the present level. “I can remember that DPR used to supervise the activities of these petrol stations.That supervision and monitoring unit of the Department checked these practices. But after the scrapping of DPR, no authority is monitoring and supervising these stations,” Adol regretted.

    Adol’s position that no regulator has the authority to monitor and ensure that filling stations comply to standards and dispense accurate quantity to consumers may not be faulted given that the regulator saddled with this responsibility – the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) – seems to either be overwhelmed with other responsibilities such that it cannot pay attention to this, or that it has  failed in its duties, or has become a lame-duck regulator.

    At a major marketer’s filling station along Ojodu-Berger axis, in Lagos, last December, this reporter, upon noticing that petrol dispensed to him in a jerrycan did not equate the quantity it should be, threatened to report to the regulator. The Nation was, however, taken aback when the petrol attendant said: “Oga, don’t waste your time; you would only have helped lined their private pockets because their money is not more than N1 million when they come here and that is even if they come and it’s people like you that we will still recover the money we give them from.”

    For over a month, efforts to get a response from the NMDPRA has been futile as a code of silence has enveloped the Authority on the enquiries sent by The Nation. In fact, it is now easier for a camel to pass through the eye of a needle than getting clarifications on issues at the NMDPRA since the retirement of its former General Manager, Corporate Communications, Apollo  Kimichi.

    The most senior officer in the corporate communications unit, Seiyefa Osanebi, whom The Nation approached for response since last December, simply said: “The concerned directors were observing their Christmas and Year holiday.” Contacted again last Thursday, Osanebi said: “The directors were yet to provide me the information on the matter.”

    Another motorist, Azomdu Bassey, recalled that the Nigeria Security and Civil Defence Corps (NSCDC) used to monitor petrol stations to ensure their compliance with regulatory standard.

    Bassey said: “At least, when NSCDC discharged that function, it helped consumers to a large extent. But with the scrapping of DPR and the inaction of NSCDC, consumers are at mercy of petroleum dealers.”

    Bassey and Chris urged the Federal Government to establish an independent taskforce to check the sharp practices of petrol stations. “I suggest the establishment of Petrol Stations Monitoring Task Force by the Federal Government to protect consumer interest, especially in view of the high cost of fuel per litre,” Chris said.

    For now, the filling stations and their attendants enjoy a free reign of exploiting the public, who have been left at their mercy.

  • Super Eagles and the burden of expectations

    Super Eagles and the burden of expectations

    • The players, as ambassadors of the nation, bear a heavy responsibility that dwells in the emotions and expectations of millions of football-loving Nigerians who believe in the team’s ability to make the nation proud on the continental stage

    Amidst soaring expectations and a sea of emotions, the Super Eagles of Nigeria encountered a challenging opener against Equatorial Guinea yesterday. Victor Osimhen showcased his scoring prowess by netting a first-half equaliser, but despite Nigeria’s dominant performance, they were unable to capitalise on numerous opportunities, settling for a frustrating 1-1 draw against Equatorial Guinea in their Africa Cup of Nations Group A opener. The match, held in a sweltering Abidjan yesterday, highlighted Nigeria’s struggles to convert their pressure into a decisive victory.

     Although the result may have caused disappointment among some Nigerians, the steadfast support for the national team remains unwavering. Many believe that this setback is merely a minor detour on the path to ultimate glory. Football, much like life, is a journey of highs and lows, triumphs and tribulations. The Super Eagles, as torchbearers of the nation’s pride, carry the dreams and aspirations of millions with every kick of the ball. The disappointment of a draw serves not as a verdict on their capabilities but as a call to resilience and a test of their mettle as they face the host nation Ivory Coast (which won its opening match with an emphatic 2-0), Guinea-Bissau and Equatorial Guinea in Group A.

     Millions of Nigerians still hold firm in their belief that the players will surpass expectations, especially in fulfilling the commitments they made to Governor Babajide Sanwo-Olu when he graciously hosted them in Lagos before their departure for the tournament. At a time when uncertainty hung over some of his counterparts, particularly with pending make-or-break cases in the Supreme Court, Governor Sanwo-Olu remained steadfast in his dedication to steering the path of sporting glory for his homeland. His actions went beyond mere hospitality; this sports enthusiast inspired the team, urging them to clinch the coveted cup for Nigeria. In a landscape where promises can sometimes ring hollow, Governor Sanwo-Olu’s commitment to the Super Eagles not only emphasises his support for the team but also positions him as a visionary leader.

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    In the football-crazed landscape of Africa, where dreams are spun from the threads of passion and national pride, the Super Eagles find themselves at the centre stage of fervent expectations as AFCON 2024 unfolds. As the tournament kicked off, it’s not just about matches and goals; it’s about the weight of expectations that the Super Eagles carry on their shoulders — a burden that is both a testament to their storied legacy and a challenge to etch a new chapter in the annals of African football. For the players, AFCON transcends mere competition; it’s a seamless continuation of a legacy forged in the crucible of previous tournaments. With a history steeped in triumphs and near misses, the team shoulders the collective expectations of a nation that lives, breathes and dreams football – from the iconic moments of 1980 to the golden era of the mid-’90s and the resurgent victories in the 2010s.

    As custodians of past glories, the Super Eagles bear the burden of nostalgia and the fervent desire to reclaim the euphoria of those triumphant moments. Fans, adorned in the colours of green and white, yearn for echoes of history to reverberate once again across the stadiums of AFCON. The challenge lies not just in the pursuit of victory, but in the endeavour to recreate the indomitable spirit that defined eras of Nigerian footballing greatness. Tactical brilliance, astute substitutions, and team cohesion become the tools to alleviate the pressure. Nigeria, a football-crazy nation, expects nothing short of brilliance. The streets are alive with debates, the air is charged with anticipation, and every citizen becomes an armchair tactician. The burden is not just on the players on the field but on the collective spirit of a nation that yearns to celebrate, unite, and revel in the shared joy of football success.

    The Super Eagles squad as Africa’s most expensive team

    Among the twenty-four teams vying for glory in the premier football tournament in Africa, the Super Eagles squad stands out as the most financially valued national team. According to findings by UK-based betting site BettingSites.co.uk, the Nigerian football team boasts the highest squad valuation among the 24 nations gathering in Ivory Coast for a month-long football spectacle. Notably, the Super Eagles’ squad, led by star striker Victor Osimhen, holds a total valuation of €349.75 million, making them the most expensive team in the 34th edition of AFCON. Osimhen, who alone commands a market valuation of €110 million, constitutes nearly a third of the entire Nigerian team’s valuation, solidifying his status as the most valuable player. This valuation surpasses that of over fourteen teams participating in the tournament. Further adding to Nigeria’s wealth of football talent are players like Alex Iwobi (Fulham) with a market valuation of €28 million, Ademola Lookman (Atalanta) valued at €30 million, and Samuel Chukwueze (AC Milan) carrying a market worth of €23 million. These players contribute significantly to the overall value of the Super Eagles, making Nigeria the team with the highest squad valuation at AFCON 2023.

     Following a commendable performance in the 2022 World Cup, Morocco secures the second position on the squad valuation chart, boasting an impressive total worth of approximately €347.80 million—just €2 million shy of the Super Eagles’ valuation. Paris Saint-Germain (PSG) standout Achraf Hakimi leads the pack as the most valuable player in Morocco’s squad, holding a market valuation of €65 million, as reported by Transfermarkt. Contributing significantly to the Atlas Lions’ formidable squad value are players like Sofyan Amrabat (Manchester United) with a market valuation of €28 million, Noussair Mazraoui (Bayern Munich) valued at €30 million, and Nayef Aguerd (West Ham United) with a market worth of €38 million. As Morocco sets its sights on the AFCON glory, the team places its trust in key players such as Bounou, Hakimi, Saiss, and Amrabat to bring home the country’s second AFCON trophy in 47 years, following their victory in the 1976 edition held in Ethiopia.

     Securing the third spot on the squad valuation list for the 2023 AFCON, Ivory Coast, the host nation, boasts an estimated total squad valuation of €334.58 million. While still impressive, this valuation is over €15 million lower than that of the Super Eagles. The two-time AFCON champion team presents a dynamic blend of youth and experienced players, including notable figures like Franck Kessie (Al Ahli) valued at €20 million, Odilon Kossonou with a market worth of €35 million, and Evan Ndicka (AS Roma) carrying a valuation of €24 million, among others.

     The current African champions and reigning titleholders, Senegal, claim the fourth position on the squad valuation chart with a market squad worth €274.40 million. Leading the team is Al Nassr forward Sadio Mane, valued at €20 million. Senegal’s AFCON 2023 squad is enriched with players boasting Premier League experience, including Nicolas Jackson (Chelsea) with a valuation of €35 million, Pape Matar Sarr (Tottenham) valued at €35 million, former Chelsea goalkeeper Edouard Mendy (Al Ahli Jeddah) with a market worth of €10 million, and ex-Blues defender Kalidou Koulibaly (Al Hilal) carrying a valuation of €11 million, contributing to the overall Teranga Lions squad value of €274.40 million.

    Ghana, a four-time African champion and the continent’s third most successful team, after Egypt (7 AFCON) and Cameroon (5 AFCON) trophies, holds the fifth spot with a squad valuation of €196.08 million in the 2023 AFCON. Leading the Black Stars is West Ham United star Mohammed Kudus, their most valuable asset, with a market value of €45 million. Other key players in the Ghanaian squad include Inaki Williams (Athletic Bilbao) with a valuation of €25 million, Mohammed Salisu (AS Monaco) at €15 million, Antoine Semenyo (AFC Bournemouth) with a market worth of €10 million, and Jordan Ayew (Crystal Palace) valued at €4 million.

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     AFCON has a rich history, spanning decades of thrilling football competitions that have seen remarkable teams rise to the occasion and claim the coveted title. The Pharaohs of Egypt stand as the most successful team in AFCON history, securing the title a remarkable seven times. Their victories span from the inaugural tournament in 1957 to their latest triumph in 2010. Egypt’s dominance has been marked by a blend of exceptional talent and strategic prowess, making them a formidable force in African football. The Indomitable Lions of Cameroon have also asserted their dominance in AFCON with five title victories. Known for their physicality, skill and tenacity, Cameroon clinched their first title in 1984 and added subsequent triumphs in 1988, 2000, 2002 and 2017. Their resilience on the pitch has made them a perennial contender in the tournament.

     The Black Stars of Ghana have left an indelible mark on AFCON, securing four titles. Ghana’s victories came in 1963, 1965, 1978 and 1982, making them one of the most successful teams in the history of the tournament. Known for their flair and technical proficiency, the Black Stars have consistently showcased the footballing prowess that characterises West African football. The Super Eagles of Nigeria have soared to success on three occasions, lifting the AFCON trophy in 1980, 1994 and 2013. Nigeria’s victories have been marked by a blend of attacking flair and defensive solidity. The Super Eagles’ triumphs have solidified their status as a footballing powerhouse on the African continent. The Elephants of Ivory Coast have etched their name in AFCON history with two title victories. Their first triumph came in 1992, followed by a historic win in 2015. Ivory Coast’s success has been fuelled by a generation of talented players who have graced the tournament with their skill, determination and flair.

     The Desert Foxes of Algeria have celebrated AFCON victories on two occasions. Their first title came in 1990, and they added a second in 2019. Known for their disciplined play and tactical astuteness, Algeria’s success reflects the diversity and strength of African football. Bafana Bafana of South Africa secured their lone AFCON title in 1996, hosting the tournament and clinching the trophy on home soil. Their victory remains a landmark moment in South African football history, symbolizing the nation’s triumph over adversity. These past winners, each with their unique style and footballing heritage, contribute to the rich tapestry of AFCON. As the tournament continues to unfold, the quest for glory remains a driving force for both established footballing giants and emerging teams aiming to etch their names among the prestigious list of AFCON champions.

    Can Nigeria’s Super Eagles claim their fourth title?

    Under the guidance of Portuguese coach José Peseiro, the Super Eagles, champions thrice (1980, 1994, and 2013), remain undeniable heavyweights in African football. However, their last triumph in the prestigious continental tournament dates back over a decade, and they were absent from the recent World Cup in Qatar. Despite an impressive qualifying campaign, securing 15 points out of a possible 18 in Group A of the 2023 AFCON qualifiers, the Super Eagles’ recent performances, especially in their last two competitive fixtures, fell short of expectations. Notably, they faced a setback with a defeat to Guinea-Bissau, a team they encountered during the qualifiers.

     Heading into the 2023 AFCON, the Super Eagles find themselves in a challenging group that includes hosts Ivory Coast and Guinea-Bissau. The team’s success in reaching the knockout stages will demand a stellar performance. Peseiro and the Super Eagles he coaches have an opportunity for redemption on the grand stage of the Nations Cup. The expectations are high, and the Super Eagles, driven by the thirst for glory, should aim to rekindle their championship spirit under Peseiro’s leadership.

  • IGR as benchmark for states’ economic viability

    IGR as benchmark for states’ economic viability

    • Embracing IGR as a primary revenue source positions states on a trajectory toward financial autonomy and the ability to meet the evolving needs of their populations

    Nigeria, a country endowed with diverse resources, continues to grapple with economic challenges that vary across its 36 states and the Federal Capital Territory. One crucial indicator of financial health and autonomy is the Internally Generated Revenue (IGR) of each state. A recent report has shed light on the precarious financial situations of Bayelsa, Kebbi, Katsina, Akwa-Ibom, Taraba, and Yobe states. The analysis indicates that these states, facing insolvency concerns, heavily rely on the monthly disbursements from the Federation Account Allocations Committee (FAAC) for their financial sustenance. This dependence is underscored by their meagre internal revenue generation, which falls below 10 per cent of the cumulative revenue received from the federation account in 2022.

    In the same report by Economic Confidential, a subsidiary of PR Nigeria, seven states have been identified as the most economically viable in Nigeria for the year 2022. The states in this valued category include Lagos, Ogun, Rivers, Kaduna, Kwara, Oyo, and Edo. This disclosure was made by Zekeri Idakwo, the Assistant Editor of Economic Confidential, during a press briefing and the presentation of the 2022 Annual States Viability Index Report held in Abuja on Monday. The report’s credibility stems from its painstaking compilation, drawing on data released by both the Nigerian Bureau of Statistics and the Federal Account Allocation Committee. This comprehensive approach ensures a nuanced understanding of the economic landscape, considering factors ranging from fiscal management to revenue generation.

    The inclusion of states such as Lagos and Rivers underscores the importance of thriving commercial centres in contributing significantly to the national economic tapestry. Ogun, Kaduna, Kwara, Oyo, and Edo, by earning a spot on this list, showcase a diverse range of economic activities and effective governance practices. This unveiling of the most viable states serves as a valuable resource for policymakers, investors, and citizens alike, providing insights into the economic health of these regions. It also underscores the need for other states to draw inspiration from the successful models presented by the identified states, fostering healthy competition and collaborative efforts to enhance overall economic viability across the nation.

    Idakwo said: “The IGR of the 36 states of the federation totalled N1.8trn in 2022, which was above that of 2021, which was N1.76 trillion. The report further indicates that the IGR of Lagos State of N651 billion is higher than that of 30 other states put together whose Internally Generated Revenues are extremely low and poor, compared to their allocations from the Federation Account. A total Internally Generated Revenue of N1.5trn from the seven most viable states in 2022 was almost twice the total IGR of 29 states together that merely generated about N650bn.”

     A detailed breakdown of the report reveals significant variations in the Internally Generated Revenue (IGR) among states. Notable examples include Lagos, which, despite receiving N370 billion from the Federation Account Allocation Committee (FAAC), managed to generate an impressive N651 billion. Ogun received N113 billion from FAAC and generated N120.5 billion, while Rivers received N363.4 billion from FAAC and generated N172 billion. Kaduna received N155 billion from FAAC and generated N58 billion, Kwara received N99 billion and generated N35.7 billion, Oyo received N181 billion and generated N62 billion, and Edo received N147 billion in federal allocation and generated N47.4 billion.

     On the other hand, the report highlights the financial challenges faced by six states, including Bayelsa, Akwa Ibom, and Katsina, which are labelled as insolvent states. These states failed to generate up to 10% of the total allocations received from FAAC, indicating a concerning level of dependency on federal allocations and a need for enhanced strategies to boost their internal revenue generation. “The six states that may not survive without the Federation Account due to their extremely poor internal revenue generation of less than 10% compared to their federal allocations are Bayelsa, Katsina and Akwa Ibom, the home states of former Presidents Goodluck Jonathan, Muhammadu Buhari, and the current Senate President Godswill Akpabio, respectively. Others are Taraba, Yobe and Kebbi States,” the report added.

     Bayelsa found itself at the bottom of the list, having received a substantial allocation of N273 billion but only managed to generate a meager N15.9 billion, representing a mere 5.81% of the total allocations. Kebbi, although receiving N119 billion, generated only N9 billion (7.67%); Katsina received N165 billion and generated N13 billion (7.90%); Akwa Ibom secured N360 billion with an IGR of N34.8 billion (9.66%); Taraba received N103 billion and generated N10.2 billion (9.91%); and Yobe received N105 billion, generating N10.4 billion (9.91%). Idakwo emphasized that enhancing the states’ Internally Generated Revenue (IGR) requires a proactive shift toward economic diversification into productive sectors. This strategy contrasts with the current heavy reliance on monthly Federation Account revenues, which predominantly originate from the oil sector.

     The report further emphasised that these states might face considerable challenges in sustaining their financial stability without relying heavily on the monthly allocations. He pointed out that certain states struggled to attract investments due to a combination of socio-political and economic crises, including issues such as insurgency, kidnapping, armed banditry, and clashes between herdsmen and farmers. These adversities not only hampered economic growth but also deterred potential investors from engaging with these regions, exacerbating the states’ financial predicaments. Addressing these underlying issues is crucial for creating an environment conducive to economic development and attracting the necessary investments to bolster the states’ financial resilience.

    The recently unveiled seventh Annual States Viability Index (ASVI) report highlights a concerning reality: a multitude of states find themselves financially precarious and would struggle to sustain operations without the consistent monthly disbursement from the Federation Account Allocation Committee (FAAC), predominantly sourced from the oil sector. Internally Generated Revenues (IGR), crucial for state autonomy, are derived from various channels such as Pay-As-You-Earn Tax (PAYE), direct assessments, road taxes, and revenues from ministries, departments, and agencies (MDAs). The report underscores the indispensable role of FAAC disbursements in upholding the financial viability of numerous states, revealing a critical need for diversification and robust strategies to bolster IGR and ensure long-term fiscal sustainability.

    Upon closer examination of the data presented in the report, a more in-depth analysis by the International Centre for Investigative Reporting (ICIR) reveals additional insights: a significant number of Nigeria’s 36 states would find it challenging to cover recurrent expenditure, particularly personnel costs, without revenues from the Federation Account Allocation Committee (FAAC). Personnel costs in a fiscal budget encompass the total expenditure allocated to remunerate government employees. Its investigation reveals that 17 out of the 36 states may not be able to meet even six months’ worth of approved personnel costs from their Internally Generated Revenue (IGR) in the 2023 fiscal budget. To finance their budgets, these states would have to rely on alternative sources such as local or external borrowings, multilateral loans, FAAC disbursements, grants, and aids. The states facing this financial challenge include Abia, Adamawa, Akwa Ibom, Bayelsa, Benue, Borno, Cross Rivers, Ebonyi, and Imo, as well as Kastina, Kebbi, Kogi, Nasarawa, Niger, Plateau, Taraba, and Yobe.

     As an illustration, consider Bayelsa’s fiscal appropriation for 2023, which earmarked N81.78 billion for personnel costs, equivalent to N6.81 billion monthly. However, the state’s IGR stood at N15.09 billion. In the scenario where IGR is utilised to cover personnel costs, it would only be sufficient for two months, necessitating alternative financial strategies to bridge the shortfall.

     In a parallel scenario, Plateau State’s approved personnel cost for 2023 amounted to N105.12 billion (equivalent to N8.76 billion monthly). However, the state’s IGR only stood at N15.93 billion, capable of covering a mere two months of personnel expenditure. This underscores a substantial gap between the allocated personnel budget and the state’s revenue-generating capacity. According to the National Bureau of Statistics, the cumulative Internally Generated Revenue (IGR) for all 36 states and the Federal Capital Territory in 2022 reached N1.93 trillion, reflecting a 1.57% increase from the N1.896 trillion recorded in 2021. Interestingly, as reported by The ICIR, nearly half of this total IGR in 2022—49.25%—was attributed to Lagos, Rivers, and the Federal Capital Territory combined. This concentration of revenue in a few states accentuates the disparities in economic capacities and underscores the need for a more equitable distribution of resources for sustainable development across all regions.

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     Despite generating Internally Generated Revenue (IGR), a notable challenge persists in 13 states, as they were unable to implement 80 per cent of their 2022 fiscal budgets. This indicates a significant gap between revenue generation and effective utilisation in these states. Furthermore, many states with lower IGR levels heavily rely on the Federal Government’s allocation and resort to taking loans to sustain their operations. In contrast, states like Lagos, Ogun, and Rivers exhibit a more robust financial capacity. The ICIR’s analysis reveals that Lagos State’s 2022 IGR alone is sufficient to cover the state’s personnel expenditure for an impressive two years and ten months (34 months). Similarly, Ogun State’s IGR can offset 14 months of personnel costs, and Rivers State’s IGR is substantial enough to cover 16 months of personnel expenditure. This stark contrast underscores the disparities in financial resilience among states and emphasises the need for strategic financial management and economic diversification to ensure sustainability across the board.

     Challenges faced by states and implications for development

     The recently released report has shed light on the financial intricacies faced by various states. An alarming revelation is that a considerable number of states would struggle to offset recurrent expenditures, especially personnel costs, without relying on the monthly disbursement from the Federation Account Allocation Committee (FAAC). This dependency, as highlighted in the report, poses a significant threat to the economic viability of these states, leaving them susceptible to external economic shocks. The analysis of IGR across the states accentuates the disparities in economic capacities. Lagos, Ogun, and Rivers stand out as economic powerhouses, utilising their substantial yearly IGR to offset personnel costs for extended periods. Lagos, for instance, can cover personnel expenditures for an impressive 34 months, showcasing a level of financial autonomy that distinguishes it from many other states. Conversely, the report identifies states such as Bayelsa, Akwa Ibom, and Katsina as financially insolvent, failing to generate even 10% of their total allocations from FAAC. This stark dichotomy between states with robust IGR and those heavily reliant on federal allocations highlights the urgent need for a reevaluation of fiscal strategies.

     The inability of several states to implement a significant portion of their fiscal budgets despite generating IGR points to inefficiencies and mismanagement. It raises questions about the states’ capacity to invest in critical sectors such as education, healthcare, and infrastructure, hindering overall economic development. Addressing the challenges associated with IGR requires a multi-faceted approach. States must prioritise economic diversification, moving away from reliance on oil-dependent revenues. The promotion of private sector participation and investment-friendly policies can stimulate economic growth, fostering an environment conducive to increased IGR. Furthermore, states must implement robust financial management practices to ensure the effective utilization of generated revenues. This includes reducing wasteful spending, enhancing transparency, and investing in capacity building for revenue-generating agencies.

     As Nigeria navigates the complex terrain of economic viability, the role of IGR cannot be overstated. States must strive for greater financial autonomy by diversifying revenue sources, implementing sound financial management practices, and creating an enabling environment for investments. The disparities in IGR among states underscore the imperative for comprehensive reforms to ensure sustainable development and resilience in the face of economic uncertainties. The report should prompt a re-evaluation of strategies, emphasizing the importance of sound fiscal policies, efficient resource allocation, and proactive governance. The states recognised in this report serve as beacons of economic resilience and models for sustainable development in a rapidly changing global landscape.             

  • Siemens’ 12,000MW project as a solution for power sector puzzle

    Siemens’ 12,000MW project as a solution for power sector puzzle

    • This agreement, aimed at delivering energy for the greater benefit of the Nigerian people, has now been elevated to a new level

    The Presidential Power Initiative (PPI), which most Nigerians currently refer to as the Siemens Project, elicited controversy from inception. While stakeholders in the Nigerian Electricity Supply Industry (NESI) describe it as a ‘one man deal’, others tout it as ‘project for project sake’. Although the make – believe announcement was that it was consummated to increase electricity supply in Nigeria from 4,500MW to 25,000MW through three phases of various projects by 2025. Essentially, the project was targeted at delivery of 7,000MW in 2024 in the first instance. That year is now in sight.

    Recalling the urgency to address the energy gap in the country, measures to bridge it were actively pursued. On August 31, 2018, in Abuja, the Presidential Power Initiative (PPI), formerly known as the Nigeria Electrification Roadmap, was established through collaboration between Nigeria and Germany. This initiative took shape during a visit by the German Chancellor, Angela Merkel, and her business delegation, which included Joe Kaeser, the CEO of Siemens AG. The agreement aimed to explore cooperation between the two nations in resolving challenges in the power sector and expanding capacity to meet future power needs. Siemens Energy played a key role in facilitating financing for the project through the German Export Credit Agency (Euler Hermes AG), other ECAs, and additional financing agencies.

    Siemens Energy was brought on board to assess the situation in Nigeria’s power sector, and alongside other stakeholders – from Nigeria’s Ministry of Power, Bureau of Public Enterprise (“BPE”), Nigeria Electricity Regulatory Commission (“NERC”), Transmission Company of Nigeria (“TCN”) and Electricity Distribution Companies (“DisCos”) – decided the immediate priority is to close gaps in the system by enhancing the transmission and distribution segment of the power sector.

    The Presidential Power Initiative (PPI), also known as the Siemens Project, sparked controversy from its inception, drawing varied opinions within the Nigerian Electricity Supply Industry (NESI). Some stakeholders criticise it as a ‘one-man deal,’ while others view it as a ‘project for project’s sake.’ Despite claims that the initiative aimed to boost electricity supply in Nigeria from 4,500MW to 25,000MW by 2025 through three phases of projects, scepticism persists.

    Initially proclaimed to deliver 7,000MW by 2024, the project’s implementation has faced scrutiny. Formally established as the PPI on August 31, 2018, during a visit by German Chancellor Angela Merkel and Siemens AG CEO Joe Kaeser, the collaboration between Nigeria and Germany sought to address challenges in the power sector and enhance capacity for future needs. Siemens Energy, tasked with assessing Nigeria’s power sector, collaborates with stakeholders, including the Ministry of Power, Bureau of Public Enterprise (BPE), Nigeria Electricity Regulatory Commission (NERC), Transmission Company of Nigeria (TCN), and Electricity Distribution Companies (DisCos). The immediate focus is on strengthening the transmission and distribution segments to address gaps in the power system. As the project aims to deliver 7,000MW by 2024, the approaching year raises questions about the initiative’s progress.

    After extensive reviews and engagements on technical and commercial considerations involving representatives from TCN, NERC, BPE, the Ministry of Power, and all DisCos, the implementation agreement for the Siemens Project was signed in Abuja on July 22, 2019. The signing ceremony included President/CEO of Siemens AG, Joe Kaeser; Head of Strategy, Technology & Innovation, Industrial Applications Division at Siemens Energy, Onyeche Tifase; and Director General/CEO of Bureau of Public Enterprises, Alex Okoh, in the presence of President Muhammadu Buhari. However, despite the outlined narrative, some critics assert that the late Chief of Staff, Abba Kyari, unilaterally initiated and finalized the Siemens Project, with limited input from the Ministry and stakeholders in the Nigerian Electricity Supply Industry (NESI). During a recent workshop, Barrister Kunle Olubiyo, President of Nigeria Consumer Protection Network, expressed dissatisfaction with the project’s implementation, suggesting that Kyari solely initiated it and that the project is currently facing challenges.

    Olubiyo voiced concern over Siemens’ refusal to declare force majeure despite project setbacks. He pointed out that the contractor’s delays coincided with a surge in equipment prices, leaving the project in a state of uncertainty. His words: “Look at the Siemens Power Project. It was put together by the former Chief of Staff without the deep involvement of the ministry. It was not put together by the experts in the power sector. And what we have now is that there has not been any force majure, the rates of the equipment are increasing and contract is nowhere. It is neither here nor there.”

    Besides COVID-19, which significantly impacted the global economy and timelines, confidential sources within the industry disclosed last year that six months after signing the project, the government failed to fulfill its promise of releasing funds for its commencement, a major setback for the project. Additionally, when the much-anticipated 10 mobile substations arrived in the country at the end of 2022, several months passed before the Nigerian Electricity Management Services Agency (NEMSA) was tasked with inspecting and certifying the equipment.

    Due to the challenges in project implementation, on December 1, the Federal Government consolidated the effort with a renewed deal with Siemens, following up engagements by Bola Tinubu with the German government. The recent agreement, presided over by President Bola Tinubu and German Chancellor Olaf Scholz in Dubai, UAE, aims to increase the national grid by 12,000MW. However, the reasons for lowering the target from the initial 25,000MW in 2019 remain unclear. This adjustment may reflect considerations of the initial project’s feasibility and a realistic assessment of the current situation.

    During the signing ceremony, Federal Government of Nigeria Power Company Managing Director, Kenny Anue, represented the Nigerian government, while Nadja Haakansson, Managing Director (Africa) of Siemens AG, signed on behalf of the company. Anue highlighted that the Presidential Power Initiative (PPI) design incorporates support from partners Siemens Energy and financiers backed by the German government. Anue, addressing Tinubu, stated that the German government has nominated the mandated lead arrangers and financiers. He further mentioned that Siemens Energy successfully delivered 10 units of power transformers and 10 units of mobile substations. Joe Kaeser, Chairman of Siemens Energy Supervisory Board, in his remarks, traced the project’s history back to the Muhammadu Buhari administration in 2018. He expressed satisfaction that both parties have now been able to advance the process. On the fresh agreement, he said, “Now, after five years, I’m really happy that this agreement which has the spirit of supplying energy to the greater good of Nigerian people has been taken to new level. Thank you very much for doing that. And as we say in Germany good things take time as we have seen tonight.”

    Speaking on the project, the Minister of Power, Adebayo Adelabu, said the target of the PPI is to add 12,000mw of electricity to the national grid. He said with the signing on Friday, the process will now proceed apace to ensure constant supply of electricity to Nigerians. He said: “Of course, we knew that there were a lot of delays between 2018 and now that we have not really made significant achievement in terms of proceeding with the contract signed in 2018 because of a lot of factors, some were natural, some human, some were processes.

    “We also had COVID in 2020 which made the execution of the project slow. But now, it shows that we are now ready to move forward with the Siemens projects. It shows a commitment between the governments of both countries to proceed with this project, which we believe will go a long way in improving the performance of the power sector in Nigeria. This is an agreement that has to do with end-to-end fixing in terms of grid stabilisation of the entire transmission grid in the Nigerian power sector, which will eventually improve the power supply in terms of regularity, in terms of functionality and in terms of affordability in the years to come. We’re very happy that we’re able to sign this agreement tonight. And in the next couple of months we will witness a lot of activities on the presidential power initiatives project.”

    On the financial implications, he revealed that project is to be financed under the Government export credit facility that is being provided by a couple of German banks to Nigeria. He stressed that “The original agreement we had was for $2.3 billion. But what we have is up to date, just in region of $60 million, which has to do with the importation of the 10 transformers and the 10 power mobile substations, which Siemens have delivered to the country. They have been commissioned and we are in the presence of installation of these transformers. So far, it has cost us $60 million dollars.”

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    Adelabu, the relatively new minister in charge, provided a vague explanation of the contract, notably silent on the fate of the initial 25,000MW target and why expectations are diminishing at a higher cost. The viability of this new agreement may be questionable unless the Federal Government adopts a comprehensive solution to the challenges within the Nigerian Electricity Supply Industry (NESI). As of now, the industry boasts an installed generation capacity exceeding 12,000MW, with the last simulation indicating a transmission capacity of 8,500MW and distribution reaching no more than 4,700MW. According to the Independent System Operator of the Transmission Company of Nigeria (TCN), as of December 2, 2023, the Grid Performance Dashboard reported Peak Generation at 5,114.90MW, Off-Peak Generation at 4,322MW, and Energy Sent Out at 4,621.815MW. The disparities in these figures underscore the existing challenges in the power sector that need a comprehensive resolution for sustainable progress.

    According to the Nigeria Electricity Regulatory Commission (NERC), the second quarter of 2023 witnessed a -5.17% decline in total electricity generation, falling from 9,350.24GWh in the first quarter to 8,867.05GWh. This decline is attributed to reduced available generation capacity due to mechanical faults and gas constraints affecting gas-fired thermal power plants. Additionally, hydropower plants faced challenges from unscheduled maintenance, shutdowns, and water management issues stemming from dam reserve depletion. The current challenges in the electricity market, as highlighted by NERC, indicate that injecting another 12,000MW from the Siemens project may not significantly increase the supply unless the government addresses existing issues. The new Electricity Act and the demand for increased energy supply, especially from industrial sectors like the Manufacturers Association of Nigeria (MAN), emphasize the urgency for a solution. Some industrial clusters, such as Agbara, have opted out of the national grid due to unreliable power supply.

    The sector grapples with commercial and technical constraints, including the lack of cost-reflective tariffs, identified by players in the distribution and generation segments as a major issue. The frozen Multi-Year Tariff Order (MYTO) limits the revenue collections of the 11 electricity Distribution Companies, hindering their ability to invest in equipment and service delivery. The question arises: Where will DisCos raise funds to enhance performance with the 12,000MW underway?

    Furthermore, the government needs to address the salient question of whether it plans another power sector intervention to bridge the investment gap. There is also the consideration of applying the Eligible Customer policy to facilitate the sale of power directly to willing industrial buyers, bypassing DisCos in the process of wheeling power to these customers. The resolution of these issues is crucial for the success of the recent agreement with Siemens and the substantial increase in electricity supply. A holistic approach is necessary to ensure the effective implementation of the Siemens project and alleviate the persistent challenges in the Nigerian Electricity Supply Industry (NESI).

  • Banks on recapitalisation march again

    Banks on recapitalisation march again

    In a strategic move to fortify the financial sector, the Governor of the Central Bank of Nigeria (CBN), Yemi  Cardoso has articulated a compelling vision: Nigerian banks must recapitalise to align with the demands of a burgeoning economy. This directive signifies a proactive step towards bolstering the banking sector’s resilience, ensuring it becomes a steadfast pillar in supporting the nation’s economic expansion. The call for recapitalisation underscores the imperative of adapting to the evolving economic landscape. As Nigeria inches towards the milestone of a $1 trillion economy, the CBN believes that the financial sector must be fortified to withstand potential shocks and contribute robustly to the nation’s economic growth. Therefore, recapitalisation serves as a strategic tool to enhance the capacity of banks to navigate uncertainties and actively participate in the economic trajectory.

     The CBN, with a firm belief that the current capital base of Nigerian banks is not sufficient to support the desirable level of economic growth, has emphasised that the goal of recapitalisation is not just to ensure the stability of the financial system in the present moment, but also to prepare banks for the future. The CBN believes that a stronger banking sector will be better able to support the growth of the Nigerian economy and create jobs for Nigerians. “it is crucial for us to evaluate the adequacy of our banking industry to serve the envisioned larger economy. It is not just about the financial system’s stability in the present moment, as we have already established that the current assessment shows stability. However, we need to ask ourselves: Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1.0 trillion economy in the near future? In my opinion, the answer is “No!” unless we take action. Therefore, we must make difficult decisions regarding capital adequacy. As a first step, we will be directing banks to increase their capital,” Cardoso said.

     A well-capitalised banking sector is inherently more resilient. By increasing their capital base, banks fortify themselves against unforeseen challenges, providing a buffer that insulates them from economic volatility. This resilience is pivotal not only for the stability of individual financial institutions but also for safeguarding the broader economic ecosystem. As the backbone of any economy, banks play a pivotal role in facilitating growth. A recapitalised banking sector translates into increased lending capacity, allowing financial institutions to inject more capital into key sectors. This, in turn, fosters entrepreneurship, drives investments, and catalyzes economic expansion—a symbiotic relationship between a robust banking sector and a flourishing economy. In an era of interconnected economies, aligning with global financial standards is imperative. The call for recapitalisation positions Nigerian banks on par with international counterparts, enhancing their competitiveness on the global stage. This alignment not only attracts foreign investments but also reinforces the nation’s economic credibility in the international arena.

     The recurrence of a banking system recapitalisation in Nigeria echoes the events of 2005, where the primary aim was to fortify the banking sector and stimulate economic growth. The results of the exercise were a mixed bag, showcasing both positive outcomes and drawbacks. One notable success was the substantial increase in the capital base of Nigerian banks, rendering them more resilient to financial shocks. This fortified position translated into a decline in loan defaults, fostering an overall healthier banking sector. The augmented capital adequacy and reduced loan defaults, in turn, reinstated investor confidence in the Nigerian banking system for a considerable period. With an expanded capital base, banks ventured into increased lending activities, acting as a catalyst for economic growth and job creation. The triumph of the recapitalisation resonated globally, enhancing the international reputation of the Nigerian banking sector.

     However, the recapitalisation also brought about merger-induced disruptions, triggering a wave of mergers and acquisitions that temporarily disrupted the banking sector. The differential impact on banks underscored the need for a more comprehensive approach, addressing not only capital adequacy but also corporate governance and risk management practices. Subsequent to the recapitalisation, the Central Bank of Nigeria (CBN) took steps to fortify corporate governance structures across the entire banking system. Despite these efforts, the Nigerian banking sector grappled with persistent challenges, including non-performing loans and regulatory issues.

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     Reflecting on the 2005 banking system recapitalisation reveals its significance in fortifying the financial sector and fostering economic growth in Nigeria. While challenges and limitations were evident, the exercise achieved its primary objective of bolstering bank capital, leading to enhanced financial stability and increased investor confidence. This recapitalisation laid a sturdy foundation for a more robust banking system, contributing significantly to Nigeria’s economic progress in the ensuing years. As discussions arise about the potential need for another recapitalisation, avenues to raise new capital become paramount. Banks can explore options such as rights issues, private placements, and retaining earnings. However, economic uncertainties stemming from factors like the COVID-19 pandemic, geopolitical events, domestic insecurity, and regulatory changes pose challenges. Economic downturns increase loan defaults, inflation erodes asset values, and stricter regulations elevate costs for banks. The Nigerian political environment’s volatility, coupled with uncertainties in technology and cybersecurity landscapes, adds complexity to the recapitalisation landscape. Navigating these challenges necessitates a strategic approach, considering the economic recovery, regulatory dynamics, and technological advancements. As banks contemplate avenues to raise capital, the broader economic and political context remains pivotal in determining the success and resilience of the Nigerian banking sector.

     Speaking to the issue of technology specifically and the disruptions new entrants into the banking space will make, Cardoso stated that “technology will continue to play a critical role in delivering financial services and enhancing financial inclusion. However, recent developments in the payment services landscape have raised concerns regarding the use of technology and the existing licensing and regulatory framework. We have observed that some licensees are operating outside the approved activities, breaching the boundaries set for them. Any intentional or unintended non-compliance will be subject to sanctions, as operators have the responsibility to ensure that they are licensed for the activities they undertake,” he said.

    The banking sector in Nigeria faces multifaceted challenges, with competition from various financial entities like fintechs, microfinance institutions, and mobile money operators pressuring traditional banks to reconsider their fees and enhance customer service. As the largest economy in Africa, Nigeria’s continuous growth is anticipated to amplify demand for banking services, providing banks with increased profits for potential recapitalisation. Amid these challenges, the Nigerian government’s supportive stance toward the banking sector is a positive signal, suggesting ongoing assistance for banks engaging in recapitalisation efforts.

     To successfully navigate the recapitalisation landscape, Nigerian banks are leveraging technology to enhance efficiency, expand their customer base, and ultimately boost profits while minimising costs. While the overarching goal of recapitalisation is to fortify banks against shocks and support economic expansion, several hurdles must be surmounted for a seamless process. One significant advantage of recapitalization lies in the realm of enhanced financial stability. A fortified capital base empowers banks to weather financial shocks, reducing the risk of failures and systemic instability. This, in turn, facilitates increased lending to businesses and consumers, fostering economic activity and growth. Investor confidence is a natural byproduct of a well-capitalised banking sector, attracting additional capital and spurring economic development. Recapitalisation can also drive consolidation within the banking sector, with smaller banks merging with larger, more robust institutions.

     The ripple effects of recapitalisation extend to supporting economic growth by providing ample credit to businesses and consumers, fueling investment, innovation, and job creation. Expanding banking reach into underserved areas promotes financial inclusion and equal access to financial services. A well-capitalised banking sector translates to lower borrowing costs for businesses and consumers, further stimulating investment and economic activity. Importantly, a stronger financial system bolsters the economy’s resilience to external shocks, enhancing the country’s attractiveness for foreign investment and fostering global competitiveness.

     While recapitalisation is a pivotal step toward fortifying the financial system, its success in birthing new and larger banks hinges on various factors, including the economic environment, regulatory landscape, and competitive dynamics. Policymakers, by reinforcing banks’ capital bases, not only mitigate risks but also foster a resilient and inclusive financial ecosystem. Ultimately, recapitalization is a strategic maneuver to navigate the complexities of the financial landscape, ensuring the sector remains robust, adaptable, and conducive to sustainable economic growth.

     These potential outcomes of the recapitalisation exercise paint a diverse landscape for the banking sector. The scenario unfolds where smaller, less well-capitalised banks grapple with meeting the heightened capital requirements; their recourse might be merging with larger, more robust banks. This could pave the way for a banking sector consolidation, characterised by fewer but more formidable banks wielding greater market influence. Conversely, if the recapitalisation process opens avenues for new entrants, the industry may witness the emergence of fresh players, injecting heightened competition and innovation into the banking landscape. However, it’s plausible that the recapitalisation may leave the size and structure of the banking sector largely unaltered, with existing banks simply bolstering their capital bases to align with the new mandates.

     The economic backdrop plays a pivotal role in determining the success of new entrants. A robust economy provides a conducive environment for new banks, while a weaker economic setting may pose challenges to their viability. Regulatory policies further shape the landscape; supportive regulations foster an environment conducive to new bank formations, while stringent regulations can impede the entry of new players. The existing level of competition within the banking sector also stands as a determinant. In an already saturated market, new entrants may find it challenging to compete effectively. The recapitalisation of Nigerian banks stands as a transformative event with far-reaching implications for the banking sector and the broader economy. Whether Nigeria eventually witnesses the emergence of new, larger banks hinges on a nuanced interplay of economic conditions, regulatory frameworks, and the competitive dynamics at play.

    Challenges and opportunities

    While the mandate for recapitalisation presents challenges, it also unveils opportunities for innovation and strategic restructuring within the banking sector. Banks will need to explore diverse avenues, from optimising operational efficiency to embracing technological advancements, to meet the new capital requirements. This transformative journey could usher in a new era of agility and competitiveness. The success of the recapitalisation initiative hinges on collaboration between regulatory bodies, financial institutions, and stakeholders. A transparent and consultative process will be essential to navigate the complexities of this transformation. Engaging all stakeholders ensures a collective commitment to the vision of a resilient and dynamic banking sector. CBN’s call for recapitalisation marks a decisive chapter in Nigeria’s financial narrative; it is a visionary stride towards ensuring that the financial sector becomes a driving force in shaping a $1 trillion economy. As banks embark on this transformative journey, the landscape of Nigerian finance stands poised for innovation, resilience, and sustained economic growth. The recalibration of the banking sector is not just a regulatory measure; it is a strategic investment in the nation’s economic future, if well managed.

  • Why Nigeria must get its census right this time

    Why Nigeria must get its census right this time

    • Accurate census data serve as a fundamental pillar for national development, providing the necessary information for evidence-based decision-making

    President Bola Tinubu has affirmed his commitment to supporting the National Population Commission (NPC) in carrying out a credible population and housing census. This commitment is grounded in the recognition of the vital role accurate data plays in realising his Renewed Hope Agenda. Recently, the President appointed 20 federal commissioners for the NPC, including the reappointment of nine current federal commissioners for a second-term. During the launch of the Electronic Civil Registration and Vital Statistics System, as well as the National Geospatial Data Repository and the National Coordination Committee on CRVS, President Tinubu emphasised the importance of accurate data in crucial aspects of national planning. While expressing the administration’s support for the NPC in conducting the census, he did not disclose the new dates for the exercise. This underscores the significance he places on the accuracy of data for effective governance and national development. Tinubu said: “Population remains the greatest asset of the country in her development process. Collecting accurate and reliable information on the size, distribution composition and characteristics of the population is an essential governance activity that is consistent with our Renewed Hope Agenda. The commission will, therefore, be supported in the conduct of the next census. “The commission has made substantial progress in its quest to deliver the first digital population and housing census. It is my hope that the result of the census will provide the nation with the much-needed data for development planning and enthronement of good governance.” Accurate census data serves as the bedrock upon which nations build their developmental strategies and policies. A census, conducted periodically provides a comprehensive snapshot of a country’s demographic, social and economic landscape. This data is invaluable for governments, policymakers, and researchers in formulating informed decisions that drive sustainable development. Accurate census data provides a detailed understanding of a nation’s population structure, including age distribution, gender composition, and geographic dispersion. This demographic insight is crucial for planning social services, healthcare, and education systems. It enables governments to tailor policies to address the specific needs of different demographic groups, ensuring inclusivity and equitable development. Ideally, conducting a census every decade is recommended. This timeframe allows governments to accurately capture changes in population, age structures and population movements, providing crucial data for aligning public policy and making informed investment decisions. In the case of Nigeria, the last census was conducted seventeen years ago, creating a significant gap. This gap has given rise to various groups and organizations making estimations about the country’s population. Unfortunately, these disparities in data create confusion and hinder the ability of the government, private businesses, and international organizations to plan effectively. Census data holds immense importance in the context of Nigeria, playing a critical role in shaping policies, programmes, and development strategies. Nigeria is a highly diverse country with a large and growing population. Accurate census data helps in understanding the demographic composition, growth rates, and distribution of the population across regions. This information is essential for effective urban planning, resource allocation, and infrastructure development. With a clear picture of the population’s size and characteristics, the government can better plan and implement social services and welfare programmes. This includes education, healthcare, housing, and poverty alleviation initiatives. Census data allows for targeted interventions to address the specific needs of different demographic groups. Nigeria, like other countries in West Africa, has many pressing needs. These are insecurity, poor governance, infrastructure deficit, and forgone investment. Forces such as climate change may add pressure, causing food insecurity, economic disruption, and extreme harm from floods and droughts. The region is also shifting towards renewable and green energy, creating new job opportunities. With all these development challenges and opportunities, and limited resources, it is vital to know what to focus on. Census data is useful for making effective policy plans and tracking progress to reach goals. Census data is also crucial for planning educational systems and workforce development. It provides insights into the age distribution, literacy rates, and educational attainment levels across regions. This information is instrumental in designing education policies and skill development programmes that align with the needs of the population. Understanding the health profile of the population is equally vital for healthcare planning. Census data helps in identifying health disparities, disease prevalence, and healthcare access issues. This information guides the allocation of resources for healthcare infrastructure, the formulation of public health policies, and the implementation of targeted healthcare interventions. Accurate census data is a foundation for economic planning and development. It provides insights into the labour force, employment patterns, and income distribution. This information is essential for formulating policies that promote economic growth, create job opportunities, and reduce income inequality. Census data is instrumental in determining the allocation of political representation. It helps in the delimitation of constituencies, ensuring fair and equitable political representation at various levels. Accurate census figures also support effective governance by providing a comprehensive understanding of the population’s needs and priorities. Governments rely on census data to allocate resources effectively. This includes budgeting for infrastructure development, public services, and social welfare programmes. Accurate population figures are critical for ensuring that resources are distributed based on the actual needs and demographics of different regions. Census data serves as a baseline for monitoring and evaluating the impact of various policies and programmes over time. It allows for tracking changes in demographic trends, socio-economic indicators, and the effectiveness of government interventions. In summary, census data is indispensable for Nigeria’s development across multiple sectors. It provides the necessary information for evidence-based decision-making, enabling the government to address the unique challenges and opportunities presented by the country’s diverse and dynamic population.

    Back to the past

    Nigeria has undergone numerous population censuses, spanning from pre-independence to post-independence eras. The first census took place in 1866, followed by subsequent ones in 1871, 1881, 1891 and 1901. It wasn’t until the 1952/1953 census that Nigeria witnessed its first modern, national and meticulously planned population count. However, during this period, the principle of simultaneity was not strictly adhered to. The census in Northern Nigeria took place between May and July 1952, while in the West and Mid-West, it occurred in December 1952 and January 1953, respectively. In the East, the census extended from May to August 1953. This approach to enumeration created challenges in data comparability between regions, raising questions about the accuracy of the collected data. Additionally, this period coincided with the onset of the Second World War, fostering skepticism among citizens who believed the census aimed at conscripting soldiers for the war effort, leading to reluctance in participating in the enumeration process.

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     The first census that comprehensively covered the entire nation took place in 1962, conducted in May with substantial publicity. However, the results faced widespread rejection by regional authorities, citing high politicisation. The government’s refusal to acknowledge the 1962 census results prompted the 1963 population census. This subsequent census encountered even greater criticism than its predecessor, with some critics contending that the results were negotiated rather than accurately enumerated. The outcome of the 1963 census became the subject of contention in the Supreme Court, which ultimately ruled that it lacked jurisdiction over the administrative functions of the Federal Government. The 1973 Census, conducted between November 25 and December 2, encountered significant criticism and it was not published due to alleged intentional manipulation of census figures for political and/or ethnic advantages. The most scientifically conducted population census in Nigeria was the 1991 Census, carried out under Decree 23 of 1989, which established the National Population Commission (NPC). This census, conducted nationwide from November 27 to December 2, was considered highly scientific and widely accepted until another census was conducted in 2006. In March 2006, Nigeria undertook its first population and housing census, marking a historic shift by incorporating advanced technologies such as the Global Positioning System and Satellite Imagery for Geo-referenced Enumeration Areas (EAs). Machine-readable forms were also introduced for recording respondent information. Despite receiving some commendation, Nigeria has faced challenges in conducting subsequent exercises. The planned Population and Housing Census for 2016, one year after President Muhammadu Buhari assumed office, was hindered by the economic recession in 2017. Another attempt in 2020 was disrupted by the global Coronavirus pandemic. Despite these setbacks, the Buhari administration demonstrated determination by allocating N176 billion for the census in the 2022 budget. The first phase, involving trial house listing and house numbering, officially commenced in selected local government areas in 2022, with the nationwide census scheduled for April 2023, two months after the general elections. However, the hopes of Nigerians for a smooth, accurate, and widely accepted census were dashed when the past administration announced the postponement of the exercise.

    Why Nigeria’s census figures are always doubted

    Censuses in Nigeria have consistently been subject to political influence, primarily driven by the substantial impact population figures have on the allocation of federal funds to states and local governments. The belief that states with larger populations receive a greater share of the federation allocation incentivises attempts to artificially inflate population figures. Consequently, states and local governments often engage in efforts to exaggerate their census numbers, leading to instances where states or ethnic groups, perceiving figures as lower than their neighbors or historical rivals, reject the census results. This manipulation has undermined the reliability of census data for meaningful planning purposes.

     In the 2006 census, Nigeria’s population was reported as 140 million, but current rough estimates now place it between 211 and 215 million, ranking the country as the seventh most populous globally. However, the pervasive influence of political motives raises questions about the credibility of these claims. Population figures in Nigeria play a crucial role in the delineation of legislative constituencies, with the House of Representatives and State Houses of Assembly representation being determined by population size. While the Senate is based on the equality of states, allotting three senators to each state, the House of Representatives is proportional to population. For instance, Lagos and Kano, as the most populous states, have 24 representatives each, while Bayelsa and Nasarawa states have only five each. The distribution of members in state houses of assembly also follows population patterns, with Lagos and Kano having the highest representation. Beyond its role in planning, Nigeria’s population census is deeply intertwined with politics, prompting politicians to exert significant efforts in manipulating the figures to their advantage. Another significant challenge faced in conducting a census in Nigeria is the issue of accuracy. The census data has been widely criticized for being inaccurate, primarily due to concerns such as under-counting, double counting, and inaccurate enumeration. This lack of precision erodes trust in the reliability of census data, posing obstacles to its effective use for planning and development purposes.  All these issues can be addressed in the forthcoming census exercise. In conclusion, accurate census data is the cornerstone of national development, empowering governments to make informed decisions, allocate resources effectively, and design policies that address the diverse needs of their populations. A comprehensive understanding of demographics, economics, education, and healthcare derived from census data is essential for fostering inclusive and sustainable development. As nations continue to evolve, periodic and accurate census-taking remains an indispensable tool for steering the course of progress.