Category: Saturday Magazine

In 2018, former President Muhammadu Buhari declared a state of emergency on open defecation, with the launch of the National Action Plan to end open defecation by 2025. With less than two years to the target year, records show that 48 million Nigerians still defecate in open fields, bushes and water bodies. However, two local government areas in Borno State, Biu and Shani, have been declared open-defecation-free. How did they achieve this feat? MOSES EMORINKEN reports.

For years, the putrid and offensive stench from faecal deposits troubled the residents of Biu and Shani local government areas (LGAs) in Borno State.

The disgusting odour wasn’t the only menace the Northeastern communities had to grapple with; water-borne diseases such as cholera, diarrhoea, and others launched repetitive onslaughts on the people, particularly on children; threatening to snatch their lives and vitality.

 Every week, men and women, especially children, suffer from life-threatening infections. More worrisome is that children are often rushed to nearby health facilities for treatment.

The communities also lacked access to clean water for their domestic and environmental activities. Residents literally trekked several kilometres to access streams which they shared with animals. It is from the same nearly stagnant stream where they fetched water to drink, that they also had their bath; some even urinated and defecated in the same stream. Waterborne diseases were also rampant.

However, with cooperation and sheer determination to better their lot and improve their health and well-being, the residents of Biu and Shani turned their story into one worthy of emulation.

They were declared open defecation free (ODF) by the National Task Group on Sanitation in November 2022.

 The United Nations Children Fund (UNICEF) played a critical role in providing Water, Sanitation and Hygiene (WASH) facilities for the communities.

One thing that one quickly notices when one visits Biu and Shani council areas, especially as a stranger, is that one will not find a single soul defecating in the open, be it in the fields, bushes or on water bodies. It has become a ‘taboo’ to defecate in public spaces, regardless of how pressed one may be.

 However, if one urgently needs to ease oneself, there are public toilets one can easily patronise for a token. This, not only ensures that the people do not defecate in the open, but also prevents diseases from unsanitary environments. It further provides jobs and livelihood for the owners of the toilet business.

 The majority of the residents of the two councils, although averagely educated, are very cultural and religious, and pay premium attention to environmental hygiene. They care about sanitation, not because the ‘gods’ will punish them, but because of their desire to live healthy lives as a people.

 One thing that is also of interest is that virtually all the households in the two councils have toilets. In fact, The Nation learnt that while every household is encouraged to build a toilet, if for any reason, a household cannot afford it, the community makes voluntary contributions to help them to build one.

 There are also laws laid down by the Community/Village Heads against defecating in the open. Should anyone violate such laws, there are punishments.

 Emmanuel Some, a middle-aged man and a resident of Madiya, a small community with over 300 people in Biu council said he saw it all; the environmental pollution, degradation, infections and eventual salvation of his people.

 “Before now, we, both young and old, defecated in open spaces. You could hardly trek reasonable distances without stepping on faecal deposits. We also did not have water facilities in our communities; we trekked long distances to get water from streams. As a result, most of our children could hardly get to school on time or even attend school at all because the stream was several kilometres away from our homes.

 “We shared the same streams with animals. We washed our clothes in the same stream where we fetched water for drinking and cooking. The situation became worse during the dry season, as the streams would become stagnant. The situation was pitiable,” he said.

Worrisome open defecation situation in Nigeria

Nigeria is ranked among the top five open defecators in the world, according to a report by the World Health Organisation (WHO) and UNICEF.

 What is worse is that Nigeria has been in the top five open defecators’ league for the past 15 years; moving from 5th place in 2003, to 2nd place in 2015, and now 1st place in 2023.

According to the report, 48 million Nigerians defecate on open fields, bushes, and bodies of water. It is closely followed by Ethiopia with 20 million, Indonesia with 17 million, Pakistan with 16 million, and Niger Republic with 16 million open defecators.

 Also, according to the 2021 Water, Sanitation and Hygiene: National Outcome Routine Mapping (WASHNORM) reports, in Nigeria only 102 out of 774 local government areas (13 per cent) are certified as open defecation-free (ODF).

 By implication, only 13 states have, at least one council that has attained ODF status. The 13 states and the number of their ODF councils are: Jigawa 27; Katsina 24; Kano 11; Benue, nine; Bauchi, seven; Cross River, six; Kaduna, five; Zamfara, three; Anambra, three; Borno, two; Akwa Ibom, one; Yobe, one; and Osun, one.

 Sadly, 24 states and the Federal Capital Territory (FCT) are yet to have ODF-validated councils.

 Jigawa State is the first and only state that has attained ODF status in Nigeria. Katsina State, with 24 councils that are certified ODF, is poised to achieve state-wide ODF this year, with 74 per cent coverage. Borno State, with BIU and Shani councils, is the latest entry into the league of states with at least one ODF council.

 According to the WASHNORM report, 95 million people across the country are without access to basic sanitation services. Also, 70 per cent of schools, that is, seven out of 10 schools lack access to basic sanitation services such as toilets and water, among others.

On the issue of lack of toilets, 39 per cent of schools lack toilets. Hence, young children are forced to defecate in the open.

 Furthermore, 88 per cent of health care facilities, that is, eight in 10 health facilities are without access to basic sanitation. This is paradoxical, as health facilities are supposed to be available for safe hygiene, where patients can receive care and not fall sick by visiting them.

With regard to the availability of toilets in health facilities across the country, 18 per cent of them lack toilets. As a result, sick people have to defecate in the open or are discouraged from seeking medical aid.

 Again, 80 per cent of markets and motor parks spread across Nigeria don’t have access to basic sanitation; hence, the high prevalence of open defecation in the society.

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 Sadly, six states have the highest number of people defecating in the open, according to the WASHNORM report. They are Kebbi (50 per cent), Kwara (50 per cent), Oyo (54 per cent), Kogi (56 per cent), Plateau (56 per cent) and Ebonyi (73 per cent).

Is Nigeria on track to end open defecation by 2025?

To end the menace of open defecation in the country, President Muhammadu Buhari, in 2018, declared a state of emergency in WASH and launched the National Action Plan to end open defecation by 2025.

 However, with less than two years to the 2025 target to end open defecation, the question is: Is the country on track to end open defecation by 2025? On this, UNICEF’s view is negative.

The UNICEF, quoting WASH Specialist, Ogochukwu Adimorah, said: “At the current rate, Nigeria is not on track to end open defecation by 2025. We only have until 2025 to achieve this, according to the National ODF Roadmap. Therefore, we need to achieve at least 224 open defecation-free councils annually between now and 2025, or 84 councils per year until 2030.

 “In 2016, only one council was open defecation-free. In 2018, it increased to seven. In 2019, it rose to 17. In 2020, the figure increased to 44. In 2021, 72 councils were open-defecation-free, while the number increased to 100 in 2022.

 “At the current rate and trend, Nigeria is not on track to end open defecation by 2025. Using a linear forecast, Nigeria is set to achieve an ODF by 2059, that is, in 36 years from now.”

Health, economic, other costs of open defecation

Open defecation has a number of implications for the country, especially for health and well-being, education, nutrition, dignity and increased risks for environmental contamination and degradation and economic losses.

 Concerning health and well-being, disease such as diarrhoea, according to UNICEF, is among the top five causes of death and disabilities among children.

 Other causes are hepatitis and typhoid, among others. There is also the increased risk of cholera outbreaks with high attendant mortality and morbidity.

Open defecation is also a major cause of hospital-acquired infections, neonatal and infant deaths, and Neglected Tropical Diseases (NTDs), according to the Global Health Estimates of 2016 by the WHO. More than 60,000 deaths occur each year in Nigeria due to poor water, sanitation and hygiene (WASH). It also has implications for environmental contamination and degradation.

 In terms of nutrition, the report revealed that poor WASH causes a disease cycle leading to malnutrition and underdevelopment. In education, open defecation is linked to poor educational outcomes due to absenteeism, dropout, low productivity and poor performance.

 The WHO report further revealed that, as far as the economic effects of open defecation are concerned, about 1.3 per cent of the Gross Domestic Product (GDP) of the country, which is equivalent to (N455 billion in 2012), is lost annually due to poor access to sanitation-health, healthcare savings and productivity.

 Hence, the WHO posits that every dollar invested in water and sanitation results in economic benefits ranging from $3 to $34.

How community ownership led Biu, Shani councils to become open defecation-free.

 Biu and Shani councils would not have been able to achieve an open defecation-free (ODF) status without the buy-in and collective ownership of the process by the residents.

 Biu and Shani councils are estimated to have populations of 175,760 and 100,989 respectively, according to the 2006 census by the National Population Commission (NPC).

 However, based on a 2.4 per cent annual population change, City Population, a population research firm, puts the projected population of Biu and Shani councils at 275,500 and 148,000.

 As the latest entrants into the ODF “Hall of Fame” in Nigeria, the Community-led Total Sanitation (CLTS) approach, which was adopted by relevant stakeholders, including the government, the UNICEF, traditional and community leaders, and the people, played a significant role in achieving the new-found hygiene status.

According to 2021 data from the WASHNORM, while the national figure for open defecation is at 23 per cent, and the Northeast records 17 per cent, Borno State is well on its way to achieving an ODF status with only two per cent of its population, that is, about 125,318 people still practising open defecation.

  Although there is still work to be done in terms of the availability of modern hygiene and sanitation infrastructure, the presence of development partners such as the UNICEF has brought succour to the people through the installation of solar-powered water pumps and modern toilets.

 What is interesting is that while the provision of water pumps has helped the community a lot in accessing clean water for their domestic and personal needs, the continued functioning of the water pumps in terms of repairs and maintenance is strictly managed by the community.

 In a chat with The Nation, Garba Julde, who is the Secretary of the Water, Sanitation and Hygiene Committee (WASHCOM) in the Madiya Community, explained that his people make voluntary contributions towards the maintenance of the boreholes.

He said: “I take note of every spending in our book. We started contributions in the last three years. This is for the maintenance of the borehole. At the moment, we have about N30,000 in our purse from the contributions.

 “Most of our children are healthy now. Before this intervention by UNICEF, we could have 10 children taken to the hospital for treatment. Now, for two weeks, no child will fall ill. However, we need more support.”

 Also, the Chairman of WASHCOM in Shani council, Bukar Shettima said: “We have been encouraging the people to desist from open defecation. They have largely cooperated with us. We sensitise them to the dangers of open defecation; telling them that not defecating in the open is for our own good and for our health and well-being.

“Before now, the situation wasn’t good. We did not have access to water, even during the rainy season. But now, each household has built a toilet. We also have water pumps to help with our domestic and sanitation needs.”

 Maryam Malum, who is a community volunteer in Walama, a community in Shani council, explained that she and other volunteers regularly visit households and public places in the community to ensure that they are clean, and residents have imbibed healthy lifestyles.

 “We educate our people, especially women folk on the importance of hygiene and ensuring that toilets are clean regularly. We also educate them to wash their hands and that of their children with soap and water after using the toilets. I am happy to tell you that they have all embraced the practice,” she said.

 Aside from providing water pumps for the communities, UNICEF also trained some members of the communities as Local Area Mechanics (LAMs) for the repair and maintenance of the water pumps. These LAMs, after completion of their training, were provided with tool kits for free. This initiative created employment for them.

 They, in turn, go around the communities to fix broken boreholes and water pumps for a token, as low as N1,500.

 Abubakar Ibrahim, a LAM for the water pumps in the Walama community, said: “We charge N1,500 for maintenance. This is being subsidised through community support. However, depending on the problem, the price we charge changes. For problems involving pipes, we charge N4,500. We are six in number; four specialise in hand pump repair, and two specialise in solar-powered pumps.

“In a week, we can repair four to five pumps, and in a month, maybe 20, depending on the level of damage.

 “We are getting blessings and economic benefits from the work we do. Once the borehole breaks down, children go to fetch water in the stream which leads to school absenteeism. Now, they don’t have to be absent from school. Also, the disease burden from drinking contaminated water in the community has reduced.”

The councils’ strategy is simple: implement CLTS and motivate households to own and use improved toilets.

 The CLTS approach builds a business model around sanitation by creating demand for sanitation business expansion by high-performing Toilet Business Owners (TBOs). These TBOs, which are run by members of the community, are supported by the government to access loans to start and expand their businesses. Also, households that want to build toilets are helped to access loans.

 As a result, these TBOs build commercial toilets across the LGAs, create wealth and livelihood for themselves and workers, and improve the overall hygiene and sanitation of the people.

 In a chat with The Nation, a resident of the Madiya Community and TBO, Mohammed Isa said: “I started this business at the arrival of the project. Before, most of us went to the outskirts or nearby bushes to ease ourselves. With the coming of the water pump project, we were mobilised and encouraged to build toilets. When my people showed interest in building toilets, I took up the job of building, cleaning and maintaining them.

 “We don’t charge the resident for the service we provide. However, the residents come together periodically on their own to make contributions to encourage us.

 “There is a law on open defecation in my community. Anyone found urinating or defecating in the open will be arrested and fined. It is good to mention that since the law was enacted, nobody (adults) has been found wanting, except for the children who sometimes urinate and sometimes defecate in public.

 “If you want to build a toilet, you will have to spend about N100,000 per household because the challenge is the ground, it is a rock-prone area. If a person cannot afford to construct the toilet, the community can come together to assist.”

Roles of traditional leaders, village/district heads

Traditional leaders are not left out of the success mix, as they are one of the largest singular reasons for the abolition of open defecation in the Biu and Shani councils. Their followers and subjects believe, listen to and respect them and their opinions shape the behaviour of the people.

 Also, in Nigeria, past experiences have shown that to get the people to embrace a product, service or change in behaviour, it is best to involve traditional and religious leaders. An example is the role that traditional leaders played in the eradication of wild poliovirus in 2020.

 In a chat with reporters during a field visit to the Biu council, the Emir of Biu, Alhaji Mustapha Umar Mustapha II expressed his commitment to ensuring that the other three councils under his kingdom, which are Kwaya Kusar, Hawul and Bayo are open defecation-free.

 He said: “Personal and environmental hygiene and sanitation are not only good for the health and well-being of any person, but it is also for the spiritual good of the people.

 “I will continue to give the needed support to ensure that the remaining three local governments under my kingdom achieved the open defecation-free status. I will personally visit the areas where open defecation is still being practised. I will also use my good offices to sensitise the people to embrace and accept the good practice.”

 The Acting General Manager of Borno State Rural Water Supply and Sanitation Agency (RUWASSA), Alhaji Baba Saad said: “Some of the key factors in the achievement of the open defecation-free status by Bui and Shani local government areas, include joint funding of projects activities between the government with UNICEF/donors; the state and councils providing an enabling policy that supports the projects.

  “The role of traditional leaders in encouraging the community members in taking ownership of the WASH facilities provided, particularly the Emir of Biu.”

The Bulama (District Head) of Madiya Community, Julde Adamu told The Nation that he had to get the buy-in of his community for them to be able to embrace the practice of sanitation and not defecating in the open.”

  “When UNICEF came and explained to me their mission, I insisted that what they are coming to my people with is a blessing; that it is for the health of my people and improves our hygiene. After the project, I mobilised every resident to ensure that they have toilets in their houses.

 “This stopped them from going outside to either defecate or urinate. This intervention was so successful that every household was able to build a toilet. This is evident, and anyone can go and verify.

 “There were challenges on our way to achieving a clean environment. Some people were uncooperative. I had to approach the Emir of Biu, who came to intervene by giving a sanction that whoever disobeys his authorisation will be dealt with according to the law.

 “The population here is about 300 people. In building the toilets, my people did not seek support from anybody. We built the toilets on our own. The sustainability of this, therefore, lies in the unity and cooperation of my people.

 “In the past, there were outbreaks of cholera and other diseases as a result of open defecation. With this project, it has reduced drastically to almost none. We appreciate UNICEF for providing us with water pumps.”

 Also, in a chat with The Nation, the Hakimin (District Head) of Walama, Alhaji Muhammad K. Walama explained that before the solar-powered borehole intervention by UNICEF, his people would trek for more than two kilometres to get water. However, the installation of water pumps brought huge relief to his people.

The President Bola Tinubu-led administration has shown promise with its fiscal and monetary policy changes, which have garnered positive feedback from the Organised Private Sector (OPS) and other businesses. These policies have created hope for de-risking domestic manufacturing and ensuring that businesses are not burdened with unfavourable policies. If these policies are maintained, they hold the potential to address the concerns of private operators effectively. However, amidst the optimism, some controversies have arisen, particularly in managing the unintended consequences of these policies. The hotly-debated issue of post-subsidy palliatives has put operators’ optimism on cautious mode, raising questions about the effectiveness and implications of such measures, Assistant Editor CHIKODI OKEREOCHA reports

A wind of optimism, though slightly cautious, is sweeping across the nation’s manufacturing sector in particular and the business community in general, triggered by an avalanche of business-friendly fiscal and monetary policies and changes churned out by the current administration since it mounted the saddle on May 29, 2023.

Indeed, less than three months in office, the economy has been the focus of a barrage of bold, decisive and game-changing fiscal and monetary policy measures by the President Bola Tinubu-led administration aimed at forcing the economy’s speedy rebound, driven largely by a reenergized private sector.

 From the removal of fuel subsidy to the unification of the exchange rates, the signing of four executive orders to address the tax-related concerns of manufacturers, businesses and other stakeholders, and to last week’s marshaling out of initiatives and interventions to tackle the unsavoury fallout from its policies, the Federal Government has left no one in doubt of its determination to remake the economy.

According to industry operators and financial market analysts, some of these strategic policy changes and decisions signal an optimistic beginning in the management of the nation’s public finance as well as addressing some of the issues clogging the wheel of progress in the manufacturing sector, for instance.

Already, members of the Organised Private Sector (OPS) are upbeat that if the current momentum in the fiscal and monetary policy environment is intensified and sustained, the economy looks good for a quick rebound, in line with the President’s vow to expand the economy by at least six per cent a year, lift barriers to investment, create jobs, unify the exchange rate, while also tackling pervasive insecurity.

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 The latest of such policies and interventions aimed at putting the economy on the recovery path was the Monday, July 31, 2023 State of the Nation address by President Tinubu, wherein he articulated measures to tackle the short-term economic hardship resulting from subsidy removal and exchange rate harmonization.

 Recall that the President had in his inauguration speech on May 29 emphatically declared that “fuel subsidy is gone” and also announced the unification of the exchange rates to allow the floating of the local currency, the Naira.

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 The Director/CEO, Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, welcomed the the unification of the naira exchange rates, describing it as “a bold step.” According to him, it would unlock the huge potential for investment, jobs, and capital flows.

However, these policies, specifically the scrapping of fuel subsidy have not come without pains to Nigerians. For instance the removal of fuel subsidy forced a steep increase in fuel prices across the country by over 200 per cent, with the product currently selling at between N617 and N700 per litre.

Unsurprisingly, this has pushed up inflation and impacted businesses and households, as costs of transportation as well as basic food items have since hit the roofs.

But, in an apparent move to bring succour to Nigerians, President Tinubu, on Monday, announced a number of interventions and initiatives covering most of the strategic sectors of the economy.

For instance, to improve public transportation, the president announced N100 billion for the procurement of 3,000 20-seater buses to run on Compressed Natural Gas (CNG) for distribution across the country, as well as the provision of buses to tertiary institutions across the country for the use of students to cushion transport costs.

Operators in the manufacturing sector also got a shot in the arm, following government’s plan to spend N75 billion between July 2023 and March 2024, to strengthen the sector, increase its capacity to expand and create good paying jobs. “Our objective is to fund 75 enterprises with great potential to kick-start a sustainable economic growth, accelerate structural transformation and improve productivity,” the president said.

 He said each of the 75 manufacturing enterprises will be able to access N1billion credit at nine (9) per cent per annum with maximum of 60 months repayment for long term loans and 12 months for working capital. He also said in recognition of the importance of MSMEs and the informal sector as growth drivers, “We are going to energise this very important sector with N125 billion.

The president said out of the sum, government will spend N50 billion on Conditional Grant to 1 million nano businesses between now and March 2024, adding that the administration’s target was to give N50,000 each to 1,300 nano business owners in each of the 774 local governments across the country. “Ultimately, this programme will further drive financial inclusion by onboarding beneficiaries into the formal banking system,” Tinubu stated.

Similarly, government will fund 100,000 MSMEs and start-ups with N75 billion. Under this scheme, each enterprise promoter will be able to get between N500, 000 to N1million at 9% interest per annum and a repayment period of 36 months.

Food and agriculture were not left out. The president said that to further ensure that prices of food items remain affordable, government has had a multi-stakeholder engagement with various farmers’ associations and operators within the agricultural value chain, on the basis of which 200,000 metric tonnes of grains from strategic reserves will be reeleased to households across the country at moderate prices.

Other interventions targeted at the agric sector include the release of 225,000 metric tonnes of fertiliser, seedlings and other inputs to farmers as part of the food security agenda; plan to support the cultivation of 500,000 hectares of farmland and all year farming; N50 billion to support cultivation of 150,000 hectares of rice and maize; N50 billion to support cultivation of 100,000 hectares of wheat and cassava.

Expectedly, the intervention and indeed, others before it resonated with members of the OPS. For instance, LCCI President/Chairman of Council, Dr. Michael Olawale-Cole commended the president, noting that his address showed leadership, responsibility, and accountability.

He also said the president demonstrated empathy as he unveiled a broad plan to ease the cost of living pains for Nigerians, while also providing clarity on the palliative measures and strategies for implementation.

“These plans demonstrate that the President is listening to Nigerians. The Chamber supports the move to invest in the manufacturing sector,” Olawale-Cole said, in a statement, which was made available to The Nation.

 The LCCI chief, while commending the administration’s effort to kick-start sustainable economic growth and improve productivity, said “We believe that if this plan is rigorously pursued, economic growth through the real sector would be achieved and could revive Nigeria’s sluggish industrialisation and expand the Gross Domestic Product (GDP).”

He, however, said it would be pertinent to consider more enterprises as 75 enterprises would not significantly impact the economy, adding, “Government would need to closely monitor the banking sector in the provision of loan facilities so that the eventual cost of funds is not above 9% from other banking fees and charges. It may be judicious to stipulate that the total costs of funds are benchmarked on 9% regardless of the charges and fees.”

Dr. Olawale-Cole also nudged the government to share in the sacrifice made by Nigerians by reducing the high cost of governance in all its tiers and ensuring fiscal leakages and corruption are strategically dealt with. His words: “As we commend the government’s courage in enacting a series of policies, we trust that government would be courageous enough to cut the cost of governance.

“This will demonstrate to Nigerians that the leaders share in the suffering and sacrifice of the people. The perks available to public office holders are so enormous that it is difficult for the average Nigerian to understand why they suffer so much and those in leadership are unaffected. We urge Mr. President to do the needful, and we expect further announcements on the measure to cut the cost of governance.”

The LCCI boss also shared his perspective on the fuel subsidy removal. Describing the fuel subsidy regime as a scam, he said this was due to the opaqueness and lack of integrity of the arrangement, and that it has indeed become a burden on the economy and a source of enrichment for a select group of individuals.

He, however, called on the government to make the required effort to identify and investigate the select group of individuals that plundered the national wealth and enriched themselves through the fuel subsidy regime.

 “They should be brought to book to prevent a recurrence of such criminal actions that have destroyed our economy. Going forward, the system should also have sufficient transparency, accountability, and integrity, particularly with product pricing,” Olawale-Cole stated.

Why fuel subsidy removal became imperative

More than any other policy, the scrapping of the obnoxious, corruption-ridden and unsustainable fuel subsidy regime underscored government’s determination to take hard decisions necessary to turn the economy around.

Arguably, one of the most controversial and volatile issues in Nigeria today, operators in diverse sectors and Nigerians generally have been on the same page on the need to do away with fuel subsidy.

The reasons are not far to seek. Since its introduction in the 1970s as a tool to cushion the huge landing costs of imported refined petroleum products, as a result of the Turn Around Maintenance (TAM) of the nation’s moribund refineries, the subsidy regime is said to have been digging a hole in Nigeria’s purse.

For instance, in 2021, Nigeria spent ?1.77 trillion on fuel subsidies, which represented a 477 per cent increase from the ?307 billion it spent in 2015. Again, in 2022, Nigeria, through the Nigerian National Petroleum Corporation Limited (NNPCL), splashed a staggering ?4.39 trillion on fuel subsidies.

This was more than 24 per cent of the country’s total expenditure. Meanwhile, Nigeria’s expenditure on capital projects for the 2022 financial year, which would have impacted the socio-economic lives of Nigerians more, was only ?4.95 trillion.

As if that is not enough to swell the rank of those that called for fuel subsidy removal, the opaqueness in the payment of fuel subsidies, before it was finally scrapped, was a turn in the flesh of Nigerians.

It was so shrouded in secrecy and fraught with corruption, with many concerned Nigerians alleging that the humongous amount spent by successive administrations in the guise of subsidy payments is literally being used to subsidise inefficiency, corruption and consumption. 

It was against this backdrop that the removal of fuel subsidy was well received by not a few members of the Organised Private Sector (OPS) and other players in the business community. Their hope was that this will free up scarce resources to be channeled to other critical sectors.

The Federal Government is said to have saved over N1 trillion in the last two months from removing subsidy, with the Director General of Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadir, saying, for instance, that the funds from subsidy payments should be redirected to the real sector that produces and exports to generate more foreign exchange for the country.

Ajayi-Kadir, who has been quite vociferous in calling for a halt in fuel subsidy, arguing that it had become unsustainable, said he expects the Federal Government to utilize the enormous budget allocated to fuel subsidies to fund the provision of infrastructure, for instance.

Similarly, his counterpart at Nigeria Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde, said funds being expended as subsidy payments should be judiciously used for more productive activities that will directly impact the lives of citizens, most especially provision of infrastructural facilities.

The NECA boss, who noted that the subsidy regime had become unsustainable and had been characterised by fiscal loss and recklessness, said Nigerians, under the scrapped subsidy regime, were not buying petrol at a subsidised rate.

Indeed, after President Tinubu took a decisive stand and abolished fuel subsidy, there has been persistent call by operators and other critical stakeholders for a transparent and judicious use of the saved funds, which, according to them, should be redirected into healthcare, education, agriculture, and infrastructure investments etc.

Signing of 4 executive orders is breather

In order to provide the necessary buffers and headroom to businesses in the manufacturing sector to continue to thrive and expand, President Tinubu, on Thursday, July 6, 2023, signed four executive orders deferring the commencement of tax changes as contained in the Finance Act and Customs, Excise Tariff (Variation) Amendment Order.

The executive orders bordered on the tax exchange rates to make manufacturing and other businesses easier.

 One of the four executive orders announced by the Special Adviser to the President on Special Duties, Communication and Strategy, Dele Alake, at the Presidential Villa, Abuja, was the Finance Act (Effective Date Variation) Order, which deferred the date of commencement that was contained in the Act from May 23, 2023, to September 1, 2023.

The second executive order was the Customs Excise Tariff Amendment Order, 2023, which moved the commencement of the date of tax changes from March 27, 2023, to August 1, 2023; the third one was five (5%) Excise Tax on Telecommunication, which stopped the 5% Excise Tax on telecommunication services and the excise duty on locally made products.

The fourth executive order was the Suspension of Green Tax, under which the newly-introduced Green Tax on single-use plastics and Import Tax Adjusted levy on certain vehicles were suspended.

Ajayi-Kadir described the signing of the four executive orders suspending the obnoxious aspects of the 2023 Fiscal Policy Measures, which arbitrarily imposed additional tax burden on the manufacturing sector, as “a welcome development.”

According to him, “The unwarranted and clearly disingenuous escalation of excise and introduction of new taxes in the 2023 Fiscal Policy Measures had the potential to truncate the business projections of producers and assaulting the purchasing capability of the average Nigerian.”

Ajayi-Kadir, in a statement, which was made available to The Nation, said “It is, therefore, worthy of commendation that President Tinubu took due and far-sighted notice and consideration of the concerns of manufacturers, in keeping with the trend of positive policy initiatives that we have seen with his administration.”

His commendation wasn’t without justification. He stated, for instance, that “The development has removed a looming clog on manufacturers’ operations and productivity, as manufacturers in the affected sectors can now reconnect with our projections and plans made in the beginning of the year.”

The MAN DG, however, said the Association expects that the Nigerian Customs Service (NCS) will now stand down the requirements for compliance with the excise escalation and the registration for the green tax.

As he recalled, the immediate past administration had revised upward the excise duty as contained in the 2023 fiscal policy measure without any impact assessment and adequate consultation with stakeholders in the manufacturing sector.

He listed some of the added tax burdens in the 2023 fiscal policy measures to include the arbitrary introduction of a green tax and escalation of the excise duty on alcoholic beverages, wines and tobacco in violation of subsisting government approved roadmap.

“These clearly contradicted government’s commitment to maintaining policy stability to boost investment and enhance business confidence in the manufacturing sector. We indicated that the policy was an additional burden too high to bear, as we were also struggling with low patronage, high borrowing cost, and huge energy costs in a highly inflationary environment,” he said.

Ajayi-Kadir, however, said going forward, MAN will continue to value fruitful dialogue and engagement with the government, with a view to improving the manufacturing environment in particular and the economy in general.

 As he said, “The manufacturing sector is already strained by several familiar challenges, including high interest rate and inadequate long-term fund, poor infrastructure, low demand for locally manufactured products, high energy cost in the face of low energy supply, multiple taxation etc.

“We look forward to further engagements that will give fillip to the new policy measures President Tinubu has enunciated, so that the challenges that would emerge could be effectively mitigated. For instance, one can see the possibility of inadequacy of forex and a lot of pragmatism is needed to ensure a massive inflow and strategic release.”

Ajayi-Kadir said while he realizes that government needs funds, it is advisable that it focuses on expanding the tax base by developing a strategic framework that will bring a substantial number of taxable individuals and businesses that are not in the tax net into the fold.

“The pursuit of tax increments on already tax-burdened industries is inimical to the growth of the manufacturing sector and not in the overall interest of the citizens who are the ultimate consumers,” he insisted.

However, the recent approval by the president of the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms to remove all barriers impeding business growth in Nigeria may help resolve the issue of multiple taxation agitating the minds of manufacturers.

The committee, which will be chaired by Fiscal Policy Partner and Africa Tax Leader at Price WaterhouseCoopers (PwC), Mr. Taiwo Oyedele, will comprise experts from both the private and public sectors. It will have responsibility for the various aspects of tax law reform, fiscal policy design and coordination, harmonisation of taxes, and revenue administration.

The National President, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dele Kelvin Oye, is no less excited by the Federal Government’s recent interventions on some recent tax changes, powered by the executive orders.

 Describing them as a “welcome development,” he said: “NACCIMA appreciates the administration’s commitment to ensuring that Nigerian businesses are not unduly burdened by unfavourable policies.”

Although, the policies, admmitedly, have not come without some pains, Dr. Olawale-Cole, however, urged Nigerians to exercise some patience, as emphasized by the President. According to him (Olawale-Cole), the degradation of the economy occurred over several decades and it cannot be reversed within a few short months.