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Category: Special Report

  • Changing Kano parents’ immunisation perception

    Changing Kano parents’ immunisation perception

    After vigorous campaigns by the Kano State Government and the United Nations Children’s Fund (UNICEF), the just-concluded oral polio vaccination exercise for children under five years witnessed increased participation. FANEN IHYONGO, who visited some local government areas to chat with caregivers at some facilities reports

    Before now, Ungogo Local Government Area of Kano State had a record of 278 households that refused to participate in any immunisation programme. However, after intervention by a team of government officials, traditional rulers and the United Nations Children’s Fund (UNICEF), 225 of the households participated in the last polio vaccination exercise.
    The exercise was an oral polio vaccination for children under five (from 0-59 months) that lasted for four days.
    Hajiya Fatima Ibrahim, a UNICEF facilitator at Ungogo Council, told The Nation that “this polio vaccination exercise has recorded tremendous improvement, compared to two other previous rounds of immunisation.
    “In the past, we had over 1,000 non-compliant cases. However, this time around, we have only 53 households with 81 children with non-compliant records in the entire Ungogo.
    “Initially, some of them said they didn’t need immunisation; that what they needed was food and government palliatives, not the vaccine.
    “However, when we talked to the 53 non-compliant households, most of them availed their children for the immunisation,” she said.
    Some of the parents in Kano State are not aware that polio is a highly infectious disease that cripples children by attacking their nervous system and causing spinal and respiratory paralysis; in some cases death.
    Last year, out of the 240 cases of poliomyelitis recorded in the country, Kano State accounted for 80 per cent.
    This year, however, only seven cases have been reported from Kano, according to the Director-General of Kano State Primary Healthcare Management Board, Dr Mohammed Mahmoud.
    It was gathered that about 60 per cent of children in Kano are not protected since only 40 per cent take routine immunisation.
    To achieve nearly 100 per cent immunisation this year, a Media Briefing and Orientation on Polio Campaign was first held involving journalists.
    The media workshop helped the Kano community to know the importance of immunisation as polio remains a public health challenge.
    “If a child is paralysed, another child has to be assigned to look after the paralysed one. It, therefore, means two kids have been paralysed,” said Dr Mohammed Mahmoud, who added that “one child can infect about 200 children.”
    Thus, after much publicity about the resurgence of polio, the vaccination team moved from house to house to ask parents to avail all eligible children of the vaccination.
    The vaccination team also visited schools -private and public as well as Koranic schools, car parks and playgrounds, to vaccinate children under the age of five.
    The efforts brought about increased participation in immunisation. For this effort, UNICEF has received some accolades for creating adequate awareness of the need for the routine vaccination of kids against polio and other diseases in Kano.

    Twenty-eight-year-old Khadijat Hussein, a mother of three, said she was convinced to administer the polio vaccine to her children because of the UNICEF campaign and enlightenment programmes.
    She spoke at Panisau Health Clinic, Ungogo shortly after her two-year-old child, Amina, took this year’s dose of polio (nOPV2).
    “I am happy that I participated in this year’s polio programme. I was convinced to believe in it through campaigns and advocacy by UNICEF representatives. I will no longer allow my children to miss any form of immunisation because I know how important it is to their health.
    “I have been reaching out to my fellow women; sensitising them to the need to bring their children for immunisation.

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    “I confirm to you that in Panisau, our parents are glad to allow their children to be vaccinated,” Khadijat Hussein said.
    The Focal Person for Gawuna Ward in Nassarawa Local Government Area, Ibrahim Muktar also said the exercise went smoothly, with a higher turnout.
    “We have no record of non-compliance in our area; our people are wise. They willingly embraced vaccines,” he said.
    In a chat with The Nation at the Gwagwarwa Comprehensive Health Clinic, Brigade Quarters, Muktar stated that they recorded 3,179 out of the 6,315 Target Population (TP) of immunised children in Gawuna Ward.
    Mrs Binta Musa was at Hotoro North Primary Healthcare Centre in Nasarawa Local Government Area where she took her 13-month-old daughter for immunisation. The nursing mother said she approached the facility to register the birth of her daughter, Afiyah and simply took advantage of that opportunity to avail the baby of a dose of the polio vaccine.
    The Focal Person for Sabon Gari West Ward in Fagge Local Government Area, Yusuf Shehu also said the exercise was successful.
    He said they discovered a high level of non-compliance in the previous exercises but recorded high participation this year when they started the direct observation of the immunisation for the first two days.
    “We captured schools, markets, churches and other special sites because we wanted to ensure that all children under the age of five were immunised.
    “On day one, we immunised 2,168 children and on day two, we immunised 2,143 children. We are experiencing over 100 per cent increase in compliance compared to the previous immunisation exercise,” he said.

    Our correspondent also visited the Cathedral Church of Holy Trinity, the headquarters of the Anglican Church in Kano, located along Igbo Road Sabon-Gari. There, the wife of the Senior Pastor, Mrs Joy Silas called on the state government, UNICEF and other partners to intensify the campaign for compliance with polio vaccination, despite the recorded improvement.
    Mrs Silas said the Church authority was ready to partner with the government and UNICEF in creating awareness through members of the church.
    She said: “Most of the parents in Kano State refuse to allow their children to get immunised. I believe in the immunisation of children because I know that the government intends to save the lives of our children.”
    She expressed dismay that the Cathedral Church was one of the designated areas for the vaccination but many parents could not bring their children to be vaccinated until the church authorities preached to them about the importance of the immunization exercise.

  • National or federal government workers’ minimum wage?

    National or federal government workers’ minimum wage?

    Nigeria is grappling with a simmering standoff over the minimum wage. On one side stands a united front: the federal government, state and local governments, and the organized private sector (OPS). On the other, the labour unions, a formidable force historically known for their unwavering pursuit of better working conditions for Nigerian workers. Assistant Editor Nduka Chiejina reports.

    The crux of the issue lies in the question, what is a fair and sustainable minimum wage for Nigeria in 2024? This seemingly simple question has exposed a huge gap between the demands of labour unions and the economic realities presented by the government and private sector.

    Labour unions across the nation have been pushing for a significant increase in the current minimum wage of N30,000, arguing that it is no longer sufficient to meet the rising cost of living. Inflation in Nigeria has been steadily climbing, reaching a 17-year high of 33.69% in April 2024. This translates to the erosion of purchasing power, making basic necessities like food, housing, and transportation increasingly difficult to afford for many Nigerians, particularly those on minimum wage.

    Unions such as the Nigeria Labour Congress (NLC) and the Trade Union Congress of Nigeria (TUC) have called for an increase to as high as N615,000. While this figure has been revised downward during negotiations, the unions remain adamant that a substantial increase is essential to ensure a decent standard of living for Nigerian workers.

    The government and OPS paint a different picture. They acknowledge the rising cost of living but argue that a sharp increase in the minimum wage would be economically unsustainable. Their concerns include: businesses, especially small and medium-sized enterprises (SMEs), may be forced to lay off workers to offset increased labor costs. This could exacerbate unemployment, a major challenge in Nigeria.

    A significant wage increase could further fuel inflation, creating a vicious cycle where rising wages are quickly eroded by increasing prices. The federal government, already grappling with budgetary constraints, would face additional pressure to fund its own employees if the minimum wage is raised.

    Negotiations between labour unions and the government, facilitated by a tripartite committee, have been ongoing for months. However, significant hurdles remain. The government and OPS have proposed a more modest increase in the range of N62,000 which labour unions have rejected as insufficient. The recent breakdown in talks raises the specter of potential industrial action, a scenario that can cripple the Nigerian economy.

    There is a significant gap between what the unions are asking for and what the government and private sector are proposing. Everyone seems to agree that the current minimum wage needs to be raised to better reflect the cost of living in Nigeria. Government and the Private Sector are offering N62,000 which they believe is a more realistic increase that they can afford. The NLC and TUC are asking for much more, over N100,000, which they argue is necessary for workers to make ends meet.

    The government and some states are worried that a large increase would be too expensive. They fear they might not have enough funds left for other important areas like infrastructure or social programmes. Businesses, especially small and medium ones, might struggle to afford a significant hike in wages. This could lead to job cuts or even closures.

    Both sides may need to budge on their initial demands to reach a mutually agreeable figure. The minimum wage could be increased gradually over a set period.

    Minimum Wage Crisis Impact on Different Sectors

    Many Nigerian states struggle with limited fiscal capacity, primarily due to low internally generated revenue (IGR) and over-reliance on federal allocations. Implementing a higher national minimum wage can strain their budgets, potentially leading to delayed salary payments or reductions in workforce.

    The economic capabilities of Nigerian states vary significantly. Wealthier states like Lagos and Rivers may afford higher wages, while poorer states, especially in the North, might find it challenging. This disparity can exacerbate regional inequalities. To meet new wage demands, states may need to reallocate budgets, possibly cutting funding from other critical areas such as infrastructure, education, and healthcare.

    Local governments, similar to states, have limited revenue sources. Their dependency on state and federal allocations means any increase in the minimum wage without corresponding increases in allocations can lead to severe financial strain. Local governments are closest to the people and provide essential services. Financial strain can reduce their ability to deliver services effectively, impacting community development.

    Small and Medium Enterprises (SMEs) and Micro, Small, and Medium Enterprises (MSMEs) often operate on thin profit margins. Increased labor costs can reduce profitability, making it difficult to sustain operations. To cope with higher wage bills, businesses might increase the prices of goods and services, contributing to inflation. Higher wages might lead to reduced hiring or even layoffs, as businesses attempt to manage increased costs. This can increase unemployment and reduce overall economic activity. Smaller businesses might struggle to comply with new wage laws, leading to potential legal issues and fines, or they may continue paying lower wages unofficially.

    Affordability and Ability to Pay

    Nigeria is grappling with high inflation rates that are eroding the purchasing power of its citizens. While the proposal for a higher minimum wage aims to boost workers’ income, experts warn that if not managed carefully, it could exacerbate inflationary pressures.

    The country’s economic growth has been sluggish, impacting the ability of both the public and private sectors to afford increased wages. As an oil-dependent economy, Nigeria’s revenue streams are highly vulnerable to global oil price fluctuations, adding another layer of complexity to the wage debate.

    Public debt levels are already high, limiting the government’s capacity to raise wages without worsening fiscal deficits. To achieve sustainable wage increases, diversifying revenue sources is essential. Improving tax collection and boosting non-oil sectors are seen as critical steps, but these measures require time to take effect.

    There are also significant differences in labor productivity across various sectors. High-productivity industries like technology may find it easier to absorb higher wage costs, whereas labor-intensive sectors such as agriculture could struggle with the financial burden.

    The path to a higher minimum wage in Nigeria is filled with economic challenges that need careful management to avoid further destabilizing the economy.

    Considerations for Effective Wage Policy

    As Nigeria debates the implementation of a higher minimum wage, experts like Dr. Wahab Balogun, Managing Director and CEO of Ambosit Capital Managers proposes a phased approach to help both public and private sectors adjust without immediate financial strain. “Gradually increasing wages allows for smoother budget adjustments and reduces the risk of economic disruption” he said.

    To support small and medium-sized enterprises (SMEs) and micro, small, and medium-sized enterprises (MSMEs) in coping with increased labor costs, “the government should consider temporary subsidies. Additionally, offering tax breaks or incentives to businesses that comply with wage regulations could encourage adherence while easing financial pressures” he stated.

    Investing in skill development and training programmes is seen as a crucial step to enhance worker productivity, making higher wages more justifiable and boosting economic output. Encouraging businesses to adopt technology can further improve efficiency and help them manage wage increases effectively.

    Dr. Balogun noted that “strengthening the regulatory framework to ensure compliance with minimum wage laws is essential. This includes robust monitoring systems and penalties for non-compliance. Educating employers and employees about their rights and responsibilities regarding the minimum wage can also promote adherence and reduce exploitation”.

    These strategies aim to balance the need for higher wages with the economic realities facing Nigerian businesses and workers, fostering a more sustainable and equitable economic environment.

    Determining whether states, local governments, and private sector employers in Nigeria can afford to pay a higher national minimum wage requires taking a look at their financial capabilities and economic contexts.

    Nigerian states heavily rely on federation allocations, which are often unpredictable and influenced by fluctuating oil prices. This reliance creates financial instability for states. While some states like Lagos have robust IGR due to diversified economies, many others, particularly in the North, struggle with low IGR. This disparity impacts their ability to afford wage increases. Many states are burdened with high levels of debt, which limit their fiscal space for additional expenditures like higher wages. Servicing debt consumes a significant portion of their budgets.

    States have to balance wage payments with other critical expenditures such as infrastructure, healthcare, and education. Limited resources often mean that increasing wages would require cutting funding from these essential services.

    States with higher IGR and more diversified economies (e.g., Lagos, Rivers etc) are better positioned to afford higher wages, while states with low IGR and high dependency on federation allocations will struggle more to meet wage demands without compromising other essential services.

    Local governments have even fewer revenue sources compared to states and are largely dependent on state and federal transfers. Inefficient revenue collection mechanisms further limit their financial capacity, and local governments need to manage limited funds while providing essential community services. Increasing wages can severely impact their ability to deliver these services effectively.

    Local governments in urban areas might have slightly better revenue streams due to higher economic activity, but rural local governments, which dominate the landscape, will face significant challenges in affording higher wages.

    Many small and medium-sized enterprises operate on thin margins, making it difficult to absorb increased labour costs without affecting profitability. Limited access to affordable finance restricts the ability of these businesses to invest in productivity improvements that could offset wage increases.

    Also, businesses in high-productivity sectors (e.g., technology, finance) might manage wage increases better than those in low-productivity sectors (e.g., agriculture, retail). A significant portion of Nigeria’s workforce is in the informal sector, where enforcement of minimum wage laws is challenging. This sector might continue paying below minimum wage, complicating the overall impact assessment.

    Larger corporations with higher revenue streams and access to capital markets can better afford higher wages compared to SMEs and MSMEs, which will struggle more significantly. In addition, businesses in economically advanced regions like Lagos are more likely to cope with wage increases than those in less developed regions.

    The ability of states and local governments to afford higher wages is highly variable. Wealthier states and urban local governments may manage, while poorer states and rural local governments will struggle significantly without increased federal support or significant economic reforms.

    The private sector’s ability to afford higher wages varies greatly by business size, sector, and location. Larger, more productive businesses in economically vibrant regions can manage better, while smaller businesses and those in economically weaker regions will find it challenging.

    Labour’s Focus on the Federal Government

    In Nigeria, the focus of labour unions on negotiating with the federal government stems from several key reasons. Firstly, the federal government holds the authority to set national policies, making its decisions highly visible and influential across the country. This centrality in policymaking means that agreements reached with the federal government often set a precedent for other sectors to follow.

    Federal government workers also wield significant influence due to their organization through unions. This visibility and organized voice can overshadow the concerns of workers in state governments, local governments, and the private sector, who may not be as well-organized or represented in negotiations.

    Moreover, the federal government’s compliance with the national minimum wage serves as a symbolic leadership example. When the federal government upholds a high standard for wages, it pressures state governments and private employers alike to comply, thereby setting a benchmark for fair wages nationwide.

    Labour advocates for a comprehensive approach to minimum wage negotiations that involves multiple levels of engagement and consideration.

    Negotiations should be inclusive, involving representatives not only from federal bodies but also from state governments, local governments, and the private sector. This inclusivity ensures that all perspectives are considered, leading to more realistic and sustainable wage policies that reflect the diverse economic realities across Nigeria.

    Economic assessments play a crucial role in informing these negotiations. Detailed evaluations of different regions and sectors help determine minimum wage rates that are fair and feasible. By taking regional variations in the cost of living and economic conditions into account, policymakers can establish differentiated wage structures. For instance, regions with higher living costs may require a higher minimum wage, while less affluent areas could sustain lower rates.

    Ensuring compliance with minimum wage laws involves providing adequate support mechanisms.

    Financial support such as subsidies and grants can assist states and local governments in meeting minimum wage requirements without compromising essential services. Similarly, offering incentives like tax breaks or low-interest loans to small and medium-sized enterprises (SMEs) helps them adjust to higher wage costs, reducing the risk of layoffs or business closures.

    Capacity building is also essential. States and local governments can enhance their revenue generation capabilities through improved tax collection and diversification of income sources. This not only supports higher wage payments but also strengthens overall economic resilience.

    Encouraging productivity improvements and technological advancements in the private sector further aids businesses in managing increased wage costs effectively. By investing in skills development and training programs, workers become more productive, justifying higher wages while boosting economic output.

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    The ongoing debate over the minimum wage in Nigeria underscores the need for a balanced approach that addresses workers’ needs while safeguarding economic stability. Labour’s focus on the federal government reflects its pivotal role in setting national wage policies and influencing broader economic practices.

    By adopting a comprehensive strategy that includes inclusive negotiations, differentiated wage structures, and robust support mechanisms, Nigeria can navigate the complexities of wage policy with greater resilience. This approach not only promotes fair wages across sectors but also fosters sustainable economic growth that benefits workers, businesses, and the overall national economy.

    The Nigerian Labour Congress (NLC) and Trade Union Congress (TUC) are exerting pressure on the government to agree on a minimum wage increase that they argue is necessary to improve the living standards of workers. However, experts warn that if this push results in an unrealistic and unsustainable wage hike, the ramifications for the economy could be profound, affecting inflationary trends, social stability, and employment rates.

    The implementation of a nationwide minimum wage increase could exacerbate existing regional disparities within Nigeria. States with weaker economies may struggle more to meet higher wage mandates, potentially widening the economic gap between regions. In contrast, wealthier regions might find compliance more manageable, further accentuating disparities across the country.

    Rising unemployment coupled with an increased cost of living, without corresponding improvements in economic opportunities, could fuel social unrest. Discontent among the unemployed and those facing higher living costs may escalate into protests and strikes, posing challenges to social stability and governmental authority.

    Persistently high inflation and elevated unemployment rates resulting from an unsustainable minimum wage increase could hinder long-term economic growth. Businesses, especially smaller enterprises with limited financial reserves, may face difficulties absorbing higher labor costs. This scenario could lead to reduced investment in new ventures and expansions, dampening overall economic activity.

    Governments, both at the federal and state levels, may encounter increased fiscal strain as they contend with higher wage bills and potentially lower tax revenues from businesses grappling with increased operational costs. This fiscal pressure could constrain public spending on critical infrastructure projects and social welfare programs, further impacting economic development.

    The ongoing debate surrounding the minimum wage in Nigeria underscores the delicate balance between improving workers’ livelihoods and safeguarding economic stability. While a higher minimum wage can enhance income levels and alleviate poverty for many, it must be implemented cautiously to avoid unintended consequences.

    By adopting a measured approach that considers regional economic disparities, supports for small and medium-sized enterprises, and strategies to enhance productivity, Nigeria can navigate the complexities of wage policy with greater resilience. This approach not only promotes social justice but also supports sustainable economic growth that benefits all sectors of society.

    As discussions continue between labour representatives and government officials, finding common ground on a minimum wage increase that is both fair and economically viable remains pivotal for Nigeria’s future prosperity and social harmony.

    FAAC Disbursements and the Minimum Wage Debate

    As Nigeria grapples with the contentious issue of minimum wage adjustments, the Federation Account Allocation Committee (FAAC) disbursements have emerged as a critical factor shaping the economic feasibility and fiscal implications of potential wage increases across federal, state, and local governments.

    Established by the Nigerian Constitution, the FAAC is responsible for distributing revenue generated by the federal government among the three tiers of government — federal, state, and local. The revenue primarily originates from crude oil sales, import duties, excise duties, and Value Added Tax (VAT), highlighting its significance in funding governance and developmental projects nationwide.

    In 2023, the FAAC disbursed a total of N3,877,197,582,680.42 to the federating units, reflecting the critical role it plays in sustaining public sector operations and service delivery.

    The current debate over minimum wage adjustments underscores the financial constraints and opportunities presented by FAAC disbursements: Nigeria’s total revenue for 2022 amounted to N5,719,309,028,512.71, with recurrent expenditures absorbing N4,608,706,106,985.52. This leaves a net revenue of N1,110,602,921,527.19, illustrating the limited fiscal space for additional financial commitments such as increased minimum wages. The high proportion of recurrent expenditure underscores the challenge of accommodating higher wage bills without compromising other critical sectors like infrastructure, healthcare, and education.

    The impact of FAAC disbursements varies across states, influencing their fiscal capacity and readiness to implement minimum wage increases. Many states heavily rely on FAAC allocations to meet their financial obligations, given inadequate Internally Generated Revenue (IGR). Variations in oil prices and production levels contribute to revenue volatility, impacting states’ financial stability. States with higher FAAC allocations may have greater flexibility to consider wage adjustments, albeit with careful consideration of their long-term fiscal sustainability. Conversely, states with lower allocations face heightened challenges in meeting increased wage demands.

    Economic Consequences and Mitigation Strategies

    As Nigeria grapples with the contentious debate over minimum wage adjustments, experts and stakeholders are emphasizing strategic approaches to reduce the potential economic consequences. The implications extend beyond the federal level to include states, local governments, and private sector employers, all navigating the delicate balance between enhancing workers’ livelihoods and sustaining economic stability.

    One of the primary concerns surrounding minimum wage hikes is the potential for inflationary pressures. Higher wage bills can trigger cost-push inflation as businesses, particularly in sectors with thin profit margins, adjust by raising prices. To prevent this, economic policies and productivity enhancements are crucial. Effective policies could include targeted subsidies to buffer price increases or measures to boost production efficiencies, thereby moderating inflationary impacts.

    The prospect of layoffs looms large if wage increases outpace productivity gains or revenue growth, especially in sectors vulnerable to cost escalations. Balancing wage hikes with job creation initiatives becomes necessary to safeguard employment levels and mitigate adverse economic effects. Government-backed programmes aimed at stimulating job growth in key sectors can help alleviate these concerns and foster a more resilient labor market environment.

    Addressing the minimum wage conundrum necessitates a balanced approach that considers both immediate needs and long-term fiscal sustainability. Implementing wage increases gradually allows for smoother adjustments across sectors. This approach minimizes economic disruptions and inflation shocks, giving stakeholders time to adapt to new wage norms effectively.

    Enhanced Revenue Generation**: Boosting Internally Generated Revenue (IGR) through improved tax compliance and economic diversification is critical. This strategy reduces states’ and local governments’ dependency on federal allocations, enhancing their financial resilience and capacity to sustain higher wage levels.

    Recommendations for Affordability

    States, local governments, and businesses should consider phasing in wage increases to manage financial implications without causing severe strain on budgets. Diversifying economies and improving revenue collection mechanisms at the state and local levels can lessen dependence on federal allocations, thereby creating more fiscal space for wage adjustments.

    Providing subsidies or tax incentives to Small and Medium Enterprises (SMEs) and Micro, Small, and Medium Enterprises (MSMEs) can assist them in managing increased labor costs, thereby preserving jobs and economic stability. Enhancing efficiency in public spending and revenue collection processes can generate additional resources to meet wage demands sustainably. Broad-based economic reforms aimed at increasing productivity, reducing reliance on volatile sectors like oil, and creating a conducive business environment are essential. These reforms can enhance overall economic resilience and capacity to afford higher wages over the long term.

    Conclusion

    The debate over minimum wage adjustments in Nigeria underscores the complexity of balancing social welfare with economic sustainability. By adopting strategic measures such as phased implementation, enhanced revenue generation, and targeted support for businesses, Nigeria can navigate this critical juncture with resilience. Ensuring that wage policies align with broader economic goals and are supported by robust fiscal strategies will be pivotal in promoting inclusive growth and safeguarding the welfare of its workforce.

    As stakeholders continue to engage in dialogue and policy formulation, the focus remains on finding equitable solutions that promote economic stability while enhancing the quality of life for all Nigerians.

  • Insecurity in Southeast and the crisis of single narrative

    Insecurity in Southeast and the crisis of single narrative

    In its search for the return of peace in the Southeast, the Rule of Law and Accountability Advocacy Centre (RULAAC) recently unveiled a report in Enugu which identified some of the root causes of insecurity. The report also addressed the crisis that has allowed the situation to fester. DAMIAN DURUIHEOMA reports

    In her now-famous 2009 TED talk, where she warned against the destructive influences of a single story, popular novelist, Chimamanda Adichie might not have envisaged that more than a decade after that popular lecture, the story of insecurity in her homeland, Southeast Nigeria, would be told in the same single narrative.

    In that lecture, Chimamanda described a single story as an overly simplistic and generalised perception of a person, place or thing; a narrative that presents only one perspective, repeated again and again.

    According to her, the danger of a single story is that it can result in perspectives based on stereotypes.

    The Southeastern states of Abia, Anambra, Ebonyi, Enugu and Imo have long grappled with a complex web of factors that fuel insecurity and human rights concerns, mirroring challenges faced in the Northeast.

    The vibrant region, home to several millions of people and bustling commercial centres such as the Ariaria and Ochanja markets, bears the scars of historical and contemporary issues.

    Since the crisis of insecurity befell the Southeast during the administration of former President Muhammadu Buhari, the story outside Igbo land and sometimes within the region, has always been that everything insecurity happening in the has to do with secessionist agitations. To this end, it became difficult to understand why the Southeast governors, the Federal Government, security agencies and even some public affairs analysts did not want to adopt an open-minded and holistic approach to handling the insecurity in the region.

    Thus, any reported issues of insecurity in the region were always blamed on secessionist agitations represented by pro-Biafra agitators such as the Indigenous People of Biafra (IPOB), the Movement for the Sovereign State of Biafra (MASSOB), among others. This has, however, led to situations where the government relied on militarised solutions, which usually led to severe human rights abuses by security agencies and non-state actors with the innocent members of the society bearing the brunt.

    However, as part of the search for the root causes of the crises, a report on the security crisis in the region was unveiled recently in Enugu by the Rule of Law and Accountability Advocacy Centre (RULAAC) in partnership with Action Group on Free Civic Space (AGFCS) to identify some of the root causes of insecurity that had made the Southeast region almost unlivable.

    The report, titled “Unveiling the Roots of Insecurity, Healing the Wounds of Human Rights Violations in Southeast Nigeria: A Path Towards Peace, Open Democratic Space and a Prosperous Future,” according to the group’s Executive Director, Okechukwu Nwanguma was particularly inspired by the need to address the narrative challenge regarding the nature, roots and consequences of insecurity and to influence appropriate and informed government approach in responding to insecurity in the Southeast.

    According to him, the Federal Government’s single and prejudiced narrative was responsible for its failure to adopt an open-minded and holistic approach to responding to insecurity in the Southeast.

    The background

     While acknowledging that pro-Biafra agitation and insurgency were significant contributors to insecurity in the Southeast, the report insisted that attributing the problem solely to these factors paints an incomplete picture.

    RULAAC’s findings painted a bleak picture of public security policies in the region, heavily reliant on repressive police and military action, often with excessive force.

    The report documented instances where the police in the Southeast have acted in compliance with reckless directives such as the “shoot at sight” order by President Buhari in 2021 and the Inspector-General of Police’s subsequent order to go after IPOB, kill them and not worry about shouts of human rights violation.

    “The police embarked on indiscriminate mass raids and arrests, solitary detention, torture, public parade and executions of accused, mostly innocent people. Not a few people of conscience were shocked to receive the information that no fewer than 107 citizens were indiscriminately arrested from different locations in Owerri, Imo State capital, labelled IPOB members and arraigned, not in any court, but at the car park of the Shell Camp Police Division, Owerri and later shifted to the Conference Hall of the Commissioner of Police, Imo State with some magistrates presiding.

    “They were charged with offences of treason, including plots to overthrow President Buhari and Governor Hope Uzodimma and remanded at the Owerri Prisons.

    “The sheer number of people arrested and arraigned in one day by the police in Imo State for purportedly conspiring to overthrow President Buhari and Governor Hope Uzodimma was outlandish.”

    Another worrying dimension, according to the report, is the increasing control of media outlets by state governments in the region. This, it noted, had made monitoring human rights abuses taxing, which allowed the government and security agencies to control the narratives and conceal their abuses.

    Thus, the state government media also succeeded in pushing a single narrative by blaming every single incident of insecurity or killings in the region on the pro-Biafran group.

    Identified root causes of insecurity in Southeast

    Understanding the insecurity in the Southeast, according to the report, demands a detailed examination of historical grievances, economic hardship, institutional weaknesses and the interplay among state actors, armed groups and communities.

    The report blamed the unfortunate situation in the region on a complex web of issues such as mishandling of pro-Biafra agitation, insurgency, gun proliferation and criminal politics by a corrupt political class; cultism and occultism, as well as impunity in law enforcement and the criminal justice system in the region.

    It also noted that these internal problems were compounded by external factors, including state-sponsored vigilantes, misappropriated funds, and political-crime links.

    “A potent cocktail of criminal politics, economic hardship, high unemployment, and easy access to weapons creates a fertile ground for criminal gangs, cultism and occultism.

    “This, coupled with strained relations between police and communities and entrenched corruption, fosters an environment ripe for exploitation. The late 1990s witnessed violent crimes explode in major cities such as Aba and Onitsha, disrupting daily life and crippling economic activity.

    “Once-vibrant hubs of commerce, these two major commercial cities as well as surrounding towns and villages soon succumbed to a suffocating grip of armed robberies, extortion, and general lawlessness. Traders, the lifeblood of these markets, were driven away, leaving economic activity in paralysis.

    “In the aftermath, increased police presence and community-formed vigilance groups attempted to fill the security vacuum.

    “However, the emergence of IPOB in 2012 and its Eastern Security Network (ESN) in 2020 added another layer of complexity.

    “While proponents view the ESN as a response to armed herder threats, the Nigerian government sees it as a challenge to its authority, leading to military interventions and escalating tensions.”

    The report also noted that a major reason for the region’s violence lies in the restricted space for political participation and expression.

    “Citizens are often robbed of making informed electoral decisions through a cocktail of tactics such as vote-buying, intimidation, violence and even blatant rigging. The situation leaves them feeling disenfranchised and unheard. This political frustration fuels social unrest and creates fertile ground for violence and militancy to flourish.”

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    Another factor fueling the crisis of insecurity, according to the report, is that “elections are routinely rigged, silencing dissent and denying millions their voices.” This, RULAAC said, is not good for democratic competition in a republican environment such as Igbo land, but promotes “political violence, with gangs clashing for control.”

    According to the report, the consequences of rigged elections in the region go beyond just stolen elections but also lead to “mismanaged resources and squandered potential, thereby robbing the people of their future. This rampant corruption leaves communities mired in poverty, suffocated by the greed of people in power.

    “The 2023 elections offered no respite, sinking to new depths of depravity. Politicians, emboldened by impunity, openly armed and recruited gangs to terrorise opponents and citizens alike. These gangs, emboldened by their role in rigging the polls, further spread violence and insecurity across the region.

    “Impunity also pervades the criminal justice system. Basic rights are routinely disregarded, particularly towards those associated with pro-Biafra groups.

    “Torture, enforced disappearances, and extra-judicial killings are commonplace in the region, with estimates suggesting over 2,000 people executed or disappeared since 2015.

    “The economic toll of this insecurity is severe capital flight, business closures and skilled worker emigration which cripple the regional economy.

    “Sit-at-home protests championed by factions of the Indigenous People of Biafra (IPOB), in cahoots with elements of organised crime, further amplify the decline, pushing it to its lowest point,” the report said.

    It further stated that, failure to deliver good governance fuels grievances and fosters distrust in state authorities, leaving communities vulnerable to exploitation by armed groups.

    Another key finding in the report was that police personnel and infrastructure in the Southeast have not benefited from any Federal Government’s intervention, including the Police Trust Fund set up in 2019 to provide additional window for police funding in the face of Federal Government’s perennial inability to adequately fund the police.

    Burnt police stations in the region remained in ruins until when the affected communities, desperately in need of security presence, resort to self-help to raise funds to rebuild the police stations that were burnt down in their communities.

    “This demonstrates that the government is simply distant-if not absent-from the people in the Southeast,” it lamented.

    The report added that the Federal Government is simply not interested in listening to the voices of reason in or about the Southeast.

    “The Federal Government is simply driven by the mindset-as revealed by President Buhari during his interview with Arise TV in 2021- ‘to speak to the people in the language that they understand.’”

    Way forward

     The report suggested that to break this cycle requires a multifaceted approach that tackles not only the immediate threat of armed violence but also addresses the underlying issues of poverty, inequality and weak governance.

    The report added that addressing pro-Biafra insurgency is crucial but it must be accompanied by tackling these deeply-rooted internal conflicts such as dismantling the influence of cults, curbing the flow of illegal arms and mediating disputes over land and community leadership and initiating a comprehensive solution approach for them is the way to secure a prosperous future for the region.

    It urged the Tinubu-led administration “to take a significant step towards restoring peace, justice and accountability in the region.”

    Also, there is a need to address the issue of misinformation that attributes all crimes in the zone to insurgency. What is required isefforts and support from stakeholders, including the government, security agencies, monarchs, community leaders, and civil rights groups, among others, to seek deeper insights into the root causes and drivers of insecurity and make effective recommendations to curb them.

    At the event chaired by Professor Okey Ibeanu, the Regional Director, West Africa Ford Foundation, which provided financial support for the report, Chichi Aniagolu noted that the Southeast used to be a bastion of peace till insecurity crept in and changed the situation.   She called for necessary steps to be taken to address the situation, adding that the Foundation regards peace and security as vital tool for development; hence it’s decision to support the report.

    “The people of the Southeast desire and deserve an environment where the people and residents live in peace, safety, freedom and prosperity,” she stated.

    Reviewing the report, a Professor Emeritus, Obasi Igwe regretted that a large number of innocent citizens have lost their lives in the Southeast as a result of insecurity, adding that the killings were perpetrated by both state and non-state actors.

    While commending President Bola Tinubu for beginning as a democrat, he urged the Federal Government to continue to address the challenges of the country with human face.

  • Electricity Act: Will states walk the implementation talk?

    Electricity Act: Will states walk the implementation talk?

    With its decentralised state-level approach to finding solutions to Nigeria’s electricity supply woes, the Electricity Act 2023 holds promise of improving energy access nationwide and hopefully, cutting the country’s humongous economic losses to unreliable electricity supply estimated at $28 billion annually. Experts, however, say that implementing the Act by states will not be a stroll in the park; it will come with significant costs, from engaging legal and commercial advisors to investing in technology, human resources, and establishing state-level structures. Will state governments pluck the political will to seize the bountiful opportunities offered by the Act by conscientiously implementing it? Assistant Editor CHIKODI OKEREOCHA asks.

    It is not for nothing that industry experts and stakeholders in diverse sectors hail the Electricity Act 2023 as another refreshing chapter in Nigeria’s long pursuit of improved electricity supply. For them, the Act’s decentralised state-level approach to finding potential solutions to Nigeria’s electricity supply woes is the elixir for the beleaguered Nigerian Electricity Supply Industry (NESI).

    The Electricity Act 2023 consolidates all the laws governing the NESI and establishes a policy framework that grants legislative autonomy to the federating states on matters relating to the generation, transmission, and distribution of electricity in their respective jurisdictions. The Act was, therefore, widely acknowledged as a turning point, a watershed moment, and a chance to break free from past struggles in the power sector.

    Simply put, the Electricity Act 2023 transferred electricity from the Exclusive List to the Concurrent List. However, while the Act restored state governments’ authority in the power sector to pre-1999 levels, potentially clearing the coast for serious states to attract investments in improved power infrastructure, the adoption and implementation of the Act by states and private investors will not be tea party.

    Experts say that seizing the huge opportunities offered by the Act goes beyond the deluge of positive reception of the Act by state governments and merely passing laws in response to the legislation. Implementing the Act, they noted, will incur significant costs to the newly empowered sub-nationals, from engaging legal and commercial advisors to investing in technology, and human resources, and establishing state-level structures, for instance.

    Recall that President Bola Tinubu signed the Electricity Act 2023 (“The Act”) on June 8, 2023, repealing the Electric Power Sector Reform Act of 2005. This placed a robust, comprehensive legal and institutional policy framework that promises to turn around the fortunes of the troubled power sector.

    The new Act, which came after 18 years without amendments to the previous legislation, consolidates and updates several specific laws relating to the NESI and empowers state governments to enact laws for the generation, distribution, and transmission of electricity within their jurisdictions, including areas previously covered by the national grid.

    Can states rise to the occasion?

    However, the capacity of states to leverage the Act to address the challenges holding the NESI down and unlock new potential has come under scrutiny, with experts expressing fears that the envisaged turnaround in the struggling power sector, driven by states’ participation, will not manifest unless states muster the political will to commit substantial investments into the sector.

    The Commissioner of Legal, Licensing and Compliance, NERC, Dafe C. Akpeneye, brought the reality of the huge investment required by states to take advantage of the opportunities offered by the Act nearer home when he said: “A lack of investment, not flawed laws, hinders Nigeria’s power sector. People seldom understand the quantum of investment that is required.”

    The occasion was the 14th edition of PwC Nigeria’s Annual Power and Utilities Roundtable, themed ‘The Electricity Act 2023: Powering Nigeria,’ where Akpeneye, as one of the panellists, said, for instance, that between $500, 000 and $1.5 million is needed to bring one megawatt of generation capacity to the grid.

    “To build one kilometre of 330 kV line, you need about $1 million and for a kilometre of 132 kV line, about $400, 000,” the NERC Commissioner said, adding that given the limited expertise including legal and economic in the power sector value chain, there’s also a need to address issues of capacity building.

    Indeed, under the new decentralised electricity market, state governments must invest in building the technical and managerial capacity of their officials and employees involved in the electricity sector. This can be achieved through training programs, workshops, and knowledge-sharing initiatives.

    Experts also say that enhancing technical expertise, project management skills, and regulatory knowledge will strengthen the state’s ability to effectively participate in the sector. “The implementation of the Act by states requires investment in building local capacity through targeted education and institutions,” Akpeneye emphasised.

    The NERC Commissioner, while also stating that the electricity sector requires a dedicated funding institution, said that given the sector’s reliance on long-term investments, like infrastructure development, a dedicated power bank, similar to India’s, would provide the patient capital needed for sustained progress.

    According to Partner, Energy, Utilities & Resources, PwC Nigeria, Bimbola Banjo, the roundtable provided industry leaders, executives, and stakeholders with the opportunity to discuss the Electricity Act 2023, recommend solutions and shape the future of the electric power industry.

    Banjo, in the report on proceedings and outcomes of the roundtable, which was made available to The Nation, said it was important that state governments exercise caution and carefully assess their preparedness for implementation of the Act. “Adopting the Act will incur significant costs…,” he said.

    He, however, pointed out that to minimise these costs and maximise the potential benefits of the Act, “States should conduct a comprehensive evaluation of their electricity market and network infrastructure, accompanied by detailed technical and commercial feasibility studies.”

    Banjo said this rigorous assessment should cover key aspects like regulatory implications, financial resources, and technical capabilities, to ensure states are adequately prepared to implement the Electricity Act 2023 effectively and reap its full rewards.

    He also said to attract long-term investment to the electricity sector, “We need to continue fostering a stable and market-driven environment. This includes both renewable energy integration and utilisation of gas for base load generation.”

    Banjo said by implementing the nation’s Integrated Resource Plan (IRP), which is a planning tool used to identify a utility’s long-term energy resource strategy, states can achieve this balance and build a sustainable, reliable power sector for the future.

    Read Also: Report: Electricity Act 2023 could reduce $28b yearly losses

    The Chief Executive Officer of Ikeja Electric Plc, Mrs Folake Soetan, also said significant investment is crucial for adequate power supply. She, however, stressed the need for collaborations between state governments to create a business-friendly environment for investors.

    “This requires a robust legal framework, but more importantly, a commercial ecosystem that attracts investment and allows for healthy returns,” Soetan, who was also a panellist at the PwC roundtable, added.

    While noting that Electricity Distribution Companies (DisCos) struggle with energy theft, high cost of operation, and difficulty with recovering revenue and attracting funds for infrastructure upgrades, the Ikeja Electric boss said collaborations are required to tackle these challenges.

    “States and DisCos working together to address energy theft will significantly reduce losses and improve DisCos’ performance on collections,” Soetan emphasised. She also said while it is common knowledge that customers are willing to pay for reliable service, establishing an environment where investors can also directly recover returns from customers is vital.

    Soetan noted that some banks even prefer this approach to direct investments in DisCos. She, however, said the question is whether there is political will to implement these solutions. “Cracking down on energy theft with stricter penalties is essential. Deterrence improves operational efficiency, attracts funding, and benefits everyone,” she said.

    Section 209-224 of the Act talks about the power theft law in detail, with experts in power sector governance noting that this is an area where they expect states to establish power theft agencies. According to them, once this is done, investors’ confidence in investing in the sector will grow.

    The Director-General of the Manufacturers’ Association of Nigeria (MAN), Segun Ajaiyi-Kadir, could not agree less that the task before states under the new decentralized electricity market is quite enormous. “The power sector is highly capital-intensive,” he said.

    Ajaiyi-Kadir, while pointing out that “The success of the Act largely rests on its effective implementation,” said to avoid truncating the potential benefits of the Act, state governments should partner with existing agencies and operators in the power sector, as the costs of building new power distribution networks can render the investment less lucrative.

    He also stressed the need to reduce the lending rate to encourage private investments in min-grids and renewable energy, as well as tighten the nation’s security infrastructure as, according to him, no investor wants to do business in a terrorized economy.

    The MAN DG also harped on the need to render legal, financial and technical support to state governments yet to establish electricity market laws, including streamlining NERC and states’ regulations to avoid bottlenecks for multi-state investors, and addressing the uneven distribution of gas to avoid delay in states’ execution of mega-power projects.

    Why manufacturers are expectant

    It is easy to see why Ajaiyi-Kadir and indeed, other private sector operators are eager to see state governments successfully implement the Electricity Act 2023. The MAN D-G, for instance, described the Act as “A game changer” and “A major step in the right direction” to address the numerous constraints within the power sector.

    As he put it, the Act is “Another reflection of the boldness and commitment of the current administration towards the diversification and decentralisation of the power sector.”

    He said the empowerment of state governments and private investors, the adoption of renewable energy and the reformation of the governance structure of the power sector are capable of driving investment, improving electricity access and fostering economic growth.

    Ajaiyi-Kadir recalled that over the past decades, the power sector has encountered much turbulence in its electricity value chain due to poor policy enforcement, over-regulation, instability of gas supply and bottlenecks in its transmission network.

    “These problems have culminated into erratic electricity supply, frequent power out ages and persistent collapses of the national grid. For many years, the situation stunted the growth of the economy. Consequently, access to electricity has remained a hurdle for millions of Nigerians,” he said, in a statement which was made available to The Nation.

    The implication for the manufacturing sector is not lost on MAN and its members. “Shortage of electricity supply has been identified as a hindrance to the profitability of manufacturers with an annual economic loss valued at $28 billion, about N10.1 trillion or two per cent share of the country’s Gross Domestic Product (GDP),” Ajaiyi-Kadir said.

    The MAN DG, while insisting that the current power supply is inadequate to satisfy the energy requirements of the manufacturing sector and the entire population, said Nigeria currently occupies an unenviable position as the largest energy access deficit in the world. This unfavourable situation, he said, positioned Nigeria among the worst countries to do business with a rank of 171 out of 190.

    He, however, said the Electricity Act, if well implemented, promises to be a major game changer for the manufacturing sector and by extension, the economy. He said it was aimed at providing an all-inclusive framework which would serve as a guide to the decentralisation of the power sector to encourage private investment and build a competitive electricity market.

    Ajaiyi-Kadir listed some of the envisaged benefits of the Act including reduced cost of alternative energy to manufacturers, leading to a significant boost in profit margin; competitive and lower electricity tariff, as it will help actualize a cost–reflective tariff considering the healthy price competition it will bring between the states and private investors.

    Others include improvement in the inflow of Foreign Direct Investment (FDI) and manufacturing performance; increase in Internally Generated Revenue (IGR); improved infrastructure and less tax burden on manufacturers; more investment in renewables; backward integration and energy Security; stable power supply and proper planning.

    “A distorted business plan can be highly detrimental to manufacturing operations. Apart from causing sub-optimal capacity utilization, the amount of wastage can be highly unbearable. The new Act, if fully implemented, can re-write the story by stabilizing the supply of electricity to infant manufacturers and aid their planning for optimal delivery,” he said.

    States gear up for implementation

    Expectedly, the new regime of decentralised electricity market regulation devoid of the Federal Government’s monopoly, which the Electricity Act 2023 ushered, enjoys the overwhelming support of virtually all the state governments.

    The Director General of the Nigeria Governor’s Forum (NGF), Mr Asishana Okauru, put the positive reception of the Act by the governors in perspective when he said the Electricity Act 2023 represents a significant milestone towards achieving a stable, reliable, and efficient electricity supply for all Nigerians.

    “…we strongly believe that the growth in the electricity sector in Nigeria will inevitably catalyze economic development in our country and positively impact all the other sectors. It will provide a legal framework for private sector participation in the generation, transmission, and distribution of electricity,’’ Okauru said.

    The NGF D-G spoke at a two-day roundtable dialogue amongst stakeholders to explore regional and international best practices to implement sub-national electricity markets from countries with relevant electricity market structures, in Abuja, recently. It was themed “Electricity Act 2023: Implications and Opportunities for State Electricity Markets.”

    He said with the opening of the sub-national electricity market, “Our task, therefore, is to facilitate the simplifying of this very complex and highly technical endeavour in a way that both the government and the governed will fully appreciate what is happening, how it should happen and the benefits of it all.”

    Okauru stated that to achieve this, governors have held and continue to hold talks with development partners and international donor organisations that have shown remarkable interest in supporting efforts to ensure the success of the initiative.

    Kwara State Governor and Chairman of NGF, AbdulRahman AbdulRazaq, confirmed that the Forum will work together with development partners to implement the Act. He also said governors will go back to their various states to see how they can implement the Act and also interface with the existing structures, including how the states relate with the distribution companies.

    Some of the states that are said to have commenced the implementation of the Act include Lagos, Enugu, Osun, Akwa Ibom, Rivers, Delta, and Kogi. By taking steps to domesticate the Act at their respective state Assemblies, these states now have the power to regulate mini-grids, embedded power, and independent electricity distribution and transmission networks.

     Tangible actions, not merely passing laws key

    The Founder/CEO of Nairametrics, Ugochukwu Obi-Chukwu, also a panellist at the PwC roundtable, said several states are already collaborating with distribution, generating, and transmission companies to improve power supply within their regions.

    He said nevertheless, it is crucial for state governments to thoroughly understand the challenges associated with providing electricity in their states before passing legislation in response to the Electricity Act 2023.

    “There’s a need for enhanced collaboration between sub-nationals and DisCos. State governments should prioritise improving communication, understanding DisCos’ challenges, and working together with DisCos to address the unique issues impeding uninterrupted power supply within their jurisdictions.

    “State governments play a pivotal role in supporting distribution companies to tackle challenges like electricity theft, identifying failure points, managing feeder disruptions, and ensuring efficient collections,” Obi-Chukwu said.

    He also said recognising the substantial investments required in the sector, state governments must create appropriate incentives to attract investments, such as offering tax breaks or allocating land for power plant installations.

    “Their involvement in facilitating efficient collections is integral for the recovery of investment costs. Beyond merely passing laws, states should implement tangible actions, concentrating on practical measures that genuinely enhance power supply, with the ultimate goal of achieving 24/7 electricity,” the Nairametrics CEO said.

    A power system professional, Dr Idowu Oyebanjo, also said a key requirement for the existence of an electricity market is knowledge of technical and economic regulation of the market which is currently domiciled in the NERC.

    He said this has to be transferred to State Regulators who should also seek assistance from various regulatory agencies in the world of power systems, especially from the USA, Canada, Australia, and India.

    “An effective partnership between NERC and State Regulators will bode well for the decentralized Nigerian power system. To ensure this is the case, there will be a need to harmonize regulations, policies, operations, and others so that the implementation of the Act is not chaotic in any way, Oyebanjo said.

    He also said the Electricity Act should excite investors in the on-grid, and especially, the off-grid sector as a lot of emphasis is placed on improving the electricity access per capita in Nigeria by deploying significant levels of renewable and off-grid systems.

    Oyebanjo’s words: “Apart from the work already being done by the Rural Electrification Agency (REA), all states will now include renewables and mini-grids in their portfolio of energy sources to be utilised for electricity generation in their domain.

    “Also, GenCos and individual suppliers/traders have to ensure that a certain percentage of their supply is from renewable energy resources. The introduction of feed-in tariffs will make consumers become active players in the market as ‘prosumers’ who can sell excess electricity to the distribution network given the right pricing signals.”

    Dr. Oyebanjo was emphatic that “The birth of a decentralized power system in Nigeria is here. Citizens should shift focus to their state governments concerning the provision of electricity and demand the establishment of electricity markets, regional integration and effective integrated resource/power system planning.”

    He said only then can Nigeria grow its electricity access and witness economic development/industrialisation.

    One of the provisions of the Act that earned it the overwhelming support and endorsement by states and industry stakeholders as a game-changer is the fact that it is pro-renewables. It embraces a diverse range of renewable energy sources, including hydro, coal-based renewables, wind, and others, thereby helping to foster a cleaner and more sustainable energy future.

    By encouraging the adoption and development of a framework for widespread acceptance of renewables, the Act reinforced hopes of growing the nation’s electricity access, and it is one of the reasons a lot of pressure appears to have been put on states to ensure its full and effective implementation.

    Also, by encouraging partnerships between state governments and power utilities, the Act fosters a united front for sector development and improved service delivery. It was designed to improve electricity access, as the involvement of states is expected to improve remote access, especially with the involvement of the Rural Electrification Agency (REA) in collaboration with the local government.

    The Act is also vital to planning the country’s infrastructure needs in a coordinated manner, besides acknowledging the importance of collaborating with neighbouring countries within the West African Power Pool (WAPP). The WAPP promotes and develops power generation and transmission infrastructure as well as coordinates power exchange among ECOWAS member states.

    The Act also emphasises close collaboration between the NERC and state-level State Electricity Regulatory Commissions (SERCs) to ensure coordinated oversight, smooth transitions, and consistent regulatory standards.

    Over the past two decades,, Nigeria’s power sector has seen several reforms and initiatives driven by regulators, ministries, and industry players. For instance, there was the Nigerian Electric Power Policy in 2001. Then, came the privatisation of the generation and distribution sub-sectors in 2013. Thereafter, there were more recent interventions such as the launch of the Meter Asset Provider Scheme in 2018, the Service Based Tariff regime in 2020, and now, the Electricity Act 2023.

    However, while the evolution of the policy landscape in the power sector shows that significant progress has been made, challenges remain. The Electricity Act 2023 is, therefore, seen as an attempt to address some of those challenges and unlock new potential.

    This must be why PwC Nigeria did not mince words that “The Electricity Act 2023 will shape the future of Nigeria’s power sector. With the implementation of the Act, Nigeria could see a potential reduction of $28 billion in annual economic losses.”

    According to the professional services company, the Act has created the right investment vehicle, as it empowers states to establish state-owned utilities, ‘Successor Companies,’ capable of attracting long-term investment through innovative structures.

    It further stated that dedicated distribution and supply companies within states can act as Special Purpose Vehicles (SPVs), drawing capital from state resources or private investors through primary or secondary markets.

    The Act, PwC also noted, encouraged collaboration in fundraising, as many utilities require patient capital. “With the Power Consumer Assistance Fund (PCAF) serving as a joint federal and state mechanism for targeted subsidies, the Act facilitates collaborative fundraising efforts,” it said.

    However, it remains to be seen how states and private investors will seize the opportunities offered by the Act, by deploying the necessary investments to fully implement its provisions. This is particularly so considering that, as Dr. Oyebanjo said, “Citizens should shift focus to their state governments concerning the provision of electricity…”

  • Canada cuts back on student job hours as UK weighs expansion

    Canada cuts back on student job hours as UK weighs expansion

    Canada has announced a remarkable policy change. The change limits Nigerians and other international students to 24 hours of off-campus work per week beginning this Fall Semester. The shift in policy replaces the temporary allowance of 40 hours that applied during the COVID-19 pandemic. IBRAHIM ADAM explores the impact of this policy on students’ finances, academics and career prospects, alongside the United Kingdom’s potential plans to adjust or remove its working hours limit.

    The Canadian Prime Minister, Justin Trudeau enunciated the temporary policy which allowed students, especially, international ones, to work up to 40 hours per week. It was a response to labour shortages during the COVID-19 pandemic.

    The policy was initially a relief measure to help international students manage the high cost of living and assist industries suffering from labour shortages.

    The Canadian Minister of Immigration, Refugees and Citizenship, Marc Miller stated that with the waning effects of the pandemic, the Canadian Government has reverted to a more restrictive work limit, emphasising the primary purpose of student visas.

    “Students who come to Canada must be here to study. As such, allowing students to work up to 24 hours per week will ensure they focus primarily on their studies while having the option to work, if necessary,”

    Miller stressed that the Canadian Government’s primary rationale for the new regulation is to maintain the integrity of the student programme.

    “First and foremost, people coming to Canada as students must be here to study, not work. We will continue working to protect the integrity of our student programme,” he said.

    Miller also noted that the decision aligns Canada with best practices observed in other countries.

    “Canada needs to align with the best practices in other countries, else it would only attract those who intend to work and not study,” he said.

    The government’s decision, he explained, is a perspective for a broader intent to ensure that Canada remains an attractive destination for genuine students rather than those seeking to exploit student visas for work opportunities.

    Additionally, recent changes to Canada’s policies include increasing the cost-of-living threshold for study permit approval, aiming to financially prepare students for life in Canada and reduce dependence on work.

    Furthermore, new regulations will affect foreign students enrolled in specific college programmes, with those beginning after May 15, ineligible for post-graduation work permits.

    Financial implications

    Critics have raised concerns that allowing full-time work for international students could undermine the purpose of a study permit, potentially transforming it into an unofficial work visa.

    Conversely, many critics argue that the new policy does not consider the financial realities faced by international students.

    The Director of Advocacy at the Canadian Alliance of Student Associations (CASA), Mateusz Salmassi criticised the new rule, saying that reduced allowable work hours from 40 to 24 per week presents significant financial challenges for international students.

    He pointed out that students will lose significant income due to the reduced work hours.

    “On average, after this announcement, over 200,000 international students will lose at least $5,000 from their pocket annually,” Salmassi stated.

    The student body said many of these students rely on part-time work to cover their living expenses, which are often higher in Canada compared to their home countries.

    The CASA Director highlighted that the reduction will mean fewer international students from lower socio-economic backgrounds can afford education in Canada.

    “The 24-hour limit will mean fewer international students from lower socio-economic backgrounds will have the ability to receive an education in Canada,” CASA stated.

    Implications on academic performance

    While financial concerns are paramount, the Canadian Government has justified the reduction by emphasising the need for students to focus on their studies.

    The government said studies have indicated that students working more than 28 hours per week tend to show a decline in academic performance and a higher likelihood of dropping out.

    “Research has shown that there is a considerable decline in academic performance for students working more than 28 hours per week and that working more than 24 hours per week increases the chances that a student will drop out of their programme,” Miller explained.

    However, CASA has contested this claim, arguing that their research shows no significant negative impact on academic performance for students working additional hours.

    Work experience and career prospects

    Miller explained that while the new policy aims to ensure that students focus on their studies, it may inadvertently impact their ability to gain valuable work experience.

    Part-time jobs often provide students with practical skills and networking opportunities crucial for their post-graduation careers.

    “Working off campus helps international students gain work experience and offset some of their expenses,” Miller said.

    The Associations said the limitation could affect students’ eligibility for the Post-Graduation Work Permit (PGWP), especially for those enrolled in certain programmes under public-private partnerships, which are no longer eligible for the PGWP.

    By limiting work hours, CASA argued that the students may miss out on opportunities to gain practical experience in their fields, which is crucial for their post-graduation employability.

    The Association added that the reduced hours could mean fewer opportunities for students to engage in meaningful work experiences that align with their academic pursuits and career goals.

    Comparisons with international policies

    The recent decision by the Canadian Government is in contradistinction to such policies in other popular study destinations, potentially making it less attractive to prospective international students.

    For instance, Australia recently updated its regulations, allowing students to work 48 hours every two weeks.

    In the United States, international students on F-1 visas are typically limited to 20 hours per week during the academic term but can work full-time during holidays and breaks, similar to the policy Canada has maintained for scheduled breaks.

    Germany and Finland have more lenient regulations, where students can work up to 120 full or 240 half days per year, offering more flexibility.

    France allows students to work up to 964 hours per year, roughly translating to about 18.5 hours per week on average.

    Labour market considerations

    The temporary policy change during the pandemic was partly a response to labour shortages.

    Canada’s decision to reduce the maximum allowable work hours for international students from 40 to 24 per week could significantly impact the country’s labour market, particularly in retail, hospitality, and food services, which rely heavily on part-time labour.

    According to Labour Market analysts, the adjustment could have long-term implications for business operations and labour dynamics within these sectors.

    Read Also: Why I once disliked Canada, by Spyro

    “The reduction in work hours will shrink the labour supply in these sectors, potentially leading to labour shortages and increased competition for available workers,” they say.

    The analysts explained that this shift may compel employers to offer higher wages or better working conditions to attract domestic workers, thereby increasing operational costs.

    They said the economic contributions of international students, who spend a considerable portion of their earnings within local economies, could see a downturn.

    “Reduced working hours will limit students’ disposable income, resulting in lower consumer spending and affecting local businesses, particularly those in university towns,” they maintained.

    According to them, employers may face increased recruitment and training costs due to higher turnover rates, particularly in sectors that depend on part-time workers.

    “A re-evaluation of recruitment strategies, with a potential focus on attracting more domestic part-time workers or investing in automation and efficiency improvements,” experts say.

    Diplomatic relations and student numbers

    The Canadian Government’s decision to reduce the permissible work hours for international students holds significant implications for diplomatic relations and the number of international students choosing to study in Canada.

    However, the decision has sparked various reactions domestically and internationally, as it affects financial planning and the overall student experience.

    For many countries that send large numbers of students to Canada, such as India, China, and South Korea, this policy change could necessitate adjustments in educational agreements and diplomatic dialogues.

    These nations might view the reduction in work hours as a potential drawback for their students, who often rely on work opportunities to fund their education and living expenses abroad. The Canadian government might need to engage in more intensive diplomatic efforts to reassure these countries about the continued benefits of studying in Canada despite the new work-hour limitations.

    A recent report by a study abroad agency, Apply Board, highlights Nigerians as Canada’s fastest-growing international student population.

    The report states that between 2017 and 2019, the Canadian Government processed more student visa applications from Nigeria than any other country except India and China, albeit with an approval rate of less than 20 per cent.

    However, by 2023 approval rates for Nigerian students have “nearly doubled” to almost 40 per cent of over 43,000 study permit applications.

    “Nigerian student mobility to Canada is increasing at a momentous rate. Nearly 18,000 Canadian study permits were issued to Nigerians in the first six months of 2023, more than for any other country except India,” the report reads.

    It further notes that “Nigerians were Canada’s fastest-growing international student population from January to June 2023, with 44 per cent more study permits issued during that period than in the full year of 2022.”

    The report also emphasised the rising approval rates for Nigerian students, stating: “Study permit approval rates for Nigerians continued to rise across the first six months of 2023, to just fewer than 40 per cent. That’s more than double what approval rates were in 2020.” This trend signifies a growing recognition and acceptance of Nigerian students within the Canadian education system.

    While Ontario and British Columbia remain the top destinations for Nigerian students, the report reveals that students from Nigeria are less centralised in these provinces compared to students from other countries. “Ontario and British Columbia accounted for around 63 per cent of study permits issued to Nigerians in the first six months of 2023. This was well short of the nearly 84 per cent of students who chose those two provinces as a destination across all countries of origin,” the report further explained.

    Potential policy changes in the UK

     In contrast to Canada’s restrictive approach, Prime Minister Rishi Sunak and his government are considering increasing the work-hour limit for international students in the United Kingdom or possibly removing it entirely.

    According to educations.com, the UK was ranked the “Top Destination in the World to Study Abroad” in 2023.

    Currently, students on a Tier 4 visa are restricted to working 20 hours per week during term time, with extended hours allowed during holidays. However, this new proposal, which is still in its early stages, could see these limits lifted significantly, allowing students to work up to 30 hours or more each week.

    “Students would have the opportunity to work longer hours, which could provide much-needed relief to both their finances and the labour market,” Sunak told the Daily Mail in a recent interview.

    The Prime Minister emphasised that this measure is part of a broader strategy aimed at addressing the UK’s ongoing labour shortages.

    “Companies are crying out for workers. By lifting the cap on international student working hours, we are looking at a range of ideas to remove barriers and encourage more students to work,” Sunak added.

    According to the latest UK Labour Market Statistics, this proposed change comes at a critical time for the UK economy. The country is grappling with a labour shortage that has seen the unemployment rate hovering around 3.7 per cent, with 1.27 million people aged 16 and above currently unemployed.

    The hospitality and retail industries, in particular, are facing acute staffing challenges, and increasing the availability of part-time workers could be a crucial step in addressing these gaps.

    A second-year student at the University of Manchester, Priya Gupta said the prospect of increased work hours is a welcome one because any are struggling with the high cost of living, exacerbated by rising rent, food, and travel expenses.

    Priya said the financial burden of exorbitant tuition fees has left many students in need of supplementary income.

    “Being able to work more hours would significantly ease my financial pressure. It would allow me to cover my expenses more comfortably and focus better on my studies without constantly worrying about money,” Gupta said.

  • A new era for Oke-Ogun

    A new era for Oke-Ogun

    For the third time in five years, Oyo State Governor Seyi Makinde is attracting attention to Oke-Ogun area of Oyo State with the inauguration of the newly built Iseyin-Ogbomoso Road today. The unique road is named after a former governor of the state, the late Adebayo Alao-Akala, Southwest Bureau Chief BISI OLADELE reports

    Oyo State Governor, Seyi Makinde, has unequivocally demonstrated that the Oke-Ogun area of the state warrants special attention to harness its agricultural and agribusiness potential, driving economic prosperity for its residents. Within six months of his inauguration in 2019, Governor Makinde re-awarded the Ibadan-Iseyin Road project, addressing the contractor’s inconsistency and the resulting hardships for motorists and residents at the Ibadan end.

    Originally awarded by the late Governor Abiola Ajimobi’s administration towards the end of its tenure, the project saw little progress within the first six months. Recognising the urgency, Governor Makinde terminated the initial contract and re-awarded it. The road was completed within the promised 18 months, significantly alleviating the struggles of both Oke-Ogun indigenes and Moniya, Ibadan residents. Another notable project underscoring Governor Makinde’s commitment to Oke-Ogun is the reconstruction of the Iseyin-Oyo Road, commissioned last year. Previously impassable for decades, the road was revitalized by Makinde’s administration and inaugurated by former President Olusegun Obasanjo, much to the delight of Oyo and Iseyin residents. Less than two years later, President Bola Tinubu is set to inaugurate the Iseyin-Ogbomoso Road, further cementing the transformative impact of Governor Makinde’s infrastructure initiatives in Oke-Ogun.

    Why Iseyin-Ogbomoso Road is unique

    Iseyin and Ogbomoso indigenes, along with other residents, are highly enthusiastic about the latest infrastructure project. During a visit to the road over the weekend, this reporter witnessed widespread excitement among the locals, who praised Governor Makinde for achieving what they considered unbelievable. There are several reasons for this optimism. Firstly, accessing Ogbomoso from Ibadan, Lagos and Abeokuta has historically been a challenging journey for travellers. While the reconstruction of the Lagos-Ibadan Expressway has provided some relief, the Ibadan-Ogbomoso Road and the Abeokuta-Iseyin-Ogbomoso Road have continued to cause significant discomfort for commuters. The Oyo-Ogbomoso section of the Ibadan-Ogbomoso Road has been particularly problematic, subjecting motorists to severe hardships over the years. This section’s narrow, worn-out condition, combined with heavy trailer traffic to and from northern Nigeria, has led to numerous fatal accidents.

     Just last year, a tragic accident involving a trailer and a car carrying three traditional rulers resulted in their untimely deaths. Similar accidents are reported almost weekly. While the Federal Government has been constructing a new Oyo-Ogbomoso expressway for over 15 years, its completion date remains uncertain. Consequently, the construction of the new Oyo-Ogbomoso Road offers a vital alternative for travellers from Lagos, Ibadan and Abeokuta, significantly improving access to Ogbomoso. Secondly, the Iseyin-Ogbomoso Road is entirely new. Unlike the previous projects, which involved reconstructing existing roads damaged by age and usage, this third project is a completely new development. Before now, no government-approved road existed on 75 per cent of this route. Residents of Iseyin mentioned that while there had been occasional mentions of a proposed road connecting the two towns, no governor had taken concrete steps to realise it. For many, the idea of an Iseyin-Ogbomoso Road seemed like a fairy tale. Now, with its completion, it is a dream come true.

    Thirdly, because the road is entirely new, it has opened up a previously undeveloped part of Iseyin, stimulating local development. According to residents, land prices along the new road have risen since construction began. They anticipate the growth of businesses such as schools, hotels, petrol stations, and supermarkets along the road in both Iseyin and Ogbomoso. High Chief Ifasoji Fashola, who is completing a 22-room hotel in the area, expressed his delight: “I am very happy about this project. When I started the hotel on this route, many people advised against it, saying the area was undeveloped. However, as a diviner, I consulted Ifa, and Ifa foretold the construction of this road, though I did not know when. I purchased the land long ago and felt discouraged because the small road here before was impassable. Motorcycles would drop off passengers as the road became very slippery during the rainy season.”

     Fourthly, the road is a significant boon for lecturers and students at the newly established Iseyin campus of Ladoke Akintola University. It is also a welcome development for corps members mobilised to Oyo State, as the permanent orientation camp of the National Youth Service Corps (NYSC) is located in Iseyin. This infrastructure breakthrough will benefit traders, transporters, workers, investors, and tourists alike. Ogbomoso will similarly enjoy the economic advantages of the 76-kilometer road. Providing insight into the project’s conception, the Commissioner for Works, Prof. Daud Sangodoyin, explained:

    “The need for constructing the Iseyin – Apewo Village Junction – Ahoro Dada – Fapote – Ogbomoso Road, christened Adebayo Alao-Akala Memorial Expressway, stemmed from the current administration’s reliance on data, science, and logic. This approach aims to build infrastructure with the potential to expand the state’s economy, engineer a modern Oyo State, and consequently improve the socio-economic activities of its citizens.

    “The logic behind this road construction was predicated on facilitating intra-city, inter-city and inter-state movement of people, goods and services. Sustainable development of Oyo State is only possible through an all-round development across the length and breadth of Oyo State. The construction of Adebayo Alao-Akala Memorial Expressway was therefore an accomplishment of a great milestone in the drive towards sustainable development of Oyo State as the road is a direct link between Ogbomoso Zone and Oke-Ogun Zone in Oyo State, the two zones which hitherto are yet to have any direct link. This connectivity is in pursuance of His Excellency’s resolve to ensure that all the zones in the state are inter-connected and no section of the state is left undeveloped.

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    “The Iseyin-Ogbomoso Road has completed another triangle between the completed Ibadan – Moniya – Iseyin and Oyo – Fasola – Iseyin road and the on-going Federal A1 Oyo – Ogbomoso Road Project. Opportunity of existence of a direct link between Iseyin and Ogbomoso will ensure easy commuting between the main campus of Ladoke Akintola University and the College of Agriculture and Renewable Energy in Iseyin in addition to further development of agribusiness value chains through linking of our vast arable lands to the city centres and consequently leveraging on the State’s comparative advantage in agriculture by way of improved movement of farm produce from the farms to markets.

    “The new Adebayo Alao-Akala Memorial Expressway is also notable as it will reduce travel time for motorists who are Iseyin/Igboora/Abeokuta bound in the Southwest from Ilorin or  other parts of northern Nigeria. The ripples of economic benefits derivable from Iseyin – Ogbomoso Road transcends Oyo State as the project will also impact positively the economy of Kwara State through inter-state trade. In all of these, lives are also being saved through the alternative route to the ever-busy Oyo – Ogbomoso Road.”

    Sangodoyin revealed that the 76.67 kilometre road was awarded in two  lots which ran concurrently. “The road commenced from Ansarudeen Mosque, Iseyin in Iseyin Local Government Area and traverses through Apewo Village Junction, Ahoro Dada, Fapote and Yaku to end at Randa, Ogbomoso. At the Randa end, the road was extended by two spurs which link Iseyin – Ogbomoso Road to the Old Oyo – Ogbomoso (Takie) Road through Baptist Seminary at Ogbomoso and Ogbomoso (Takie) – Igbeti Road via Lagos Canteen Road. The first Lot (Lot 1) which is Iseyin – Apewo Village Junction Road (38.1km) was awarded to M/S Kopek Construction Limited while Lot 2 which is Apewo Village Junction – Ogbomoso Road (38.67km) was awarded to M/S Craneburg.”

    Speaking further on the general road construction projects of the Makinde administration since 2019, Prof. Daud Sangodoyin elaborated: “Governor Seyi Makinde assumed office on May 29, 2019, with a clear vision and purpose. He introduced an agenda titled ‘Roadmap for Accelerated Development.’ At that time, we conducted a comprehensive assessment of the state’s infrastructure and identified significant deficits. This assessment was the foundation for the roadmap. During Omituntun 1.0, in terms of road infrastructure, we achieved tremendous success.

    “To illustrate, the governor audited the roads constructed during the late Senator Ajimobi’s administration, totalling 73.95 kilometres of road across the state through the Ministry of Public Works and Transport. In contrast, during Governor Makinde’s Omituntun 1.0, we commissioned 184.37 ki lometres of road network, including two bus terminals and one junction improvement, all within the first four years.

    “When campaigning for re-election in 2022 to 2023, he presented a ‘Roadmap for Sustainable Development.’ This new roadmap ensured the sustainability of the state’s infrastructure. According to this document, we promised our people that in the next four years, we would focus on approximately 60 kilometres of feeder roads within the cities. However, upon taking office on May 29, 2023, we have already worked on 95.58 kilometres of feeder roads in Ibadan. Currently, we are working on 16 roads across Ibadan, surpassing the initial promise of 60 kilometres.

    “From May 29, 2023, to now, we have commissioned 76.25 kilometres of road, meaning that in less than one year, we have achieved more than half of what we did during Omituntun 1.0. Additionally, we are set to commission the Iseyin-Ogbomoso Road, named after the late Governor Alao Akala. This means that within one year of Omituntun 2.0, we have commissioned close to 156 kilometers of road, compared to 144.37 kilometres in four years. This demonstrates our commitment to delivering on our promises. Furthermore, within the first year of Omituntun 2.0, we have also completed a junction improvement at Gate, which is an additional success to what the Governor promised the people.

    “If you look at the percentage of what we have achieved compared to what we met, you will find that we are doing well. But again, like the governor himself has said, we want to leave institutions that can sustain this legacy. He has always said that once we have the infrastructure, all other things will fall in place. So, what is in his mind now is to improve on the transportation system in the state and beyond. He has achieved zonal connectivity across the state. From Ibadan, we both travelled from his house to Ogbomoso and we came back in less than five hours. With this, there is ease of doing business. And even security wise, it is okay.” It is hoped that Governor Makinde will continually fund the state’s road maintenance agency to keep all the road projects in good shape for years to come.

  • LUTH embraces solar energy to boost service delivery

    LUTH embraces solar energy to boost service delivery

    Amid rising electricity tariffs and unpaid bills burdening the healthcare sector, Lagos University Teaching Hospital (LUTH), Idi-Araba, is pioneering solar energy to ensure uninterrupted power. This innovative shift not only ensures continuous power for critical healthcare services but also underscores the vital role of renewable energy in Nigeria’s healthcare sector. Emmanuel Chidi-maha reports

    In an era where reliable electricity is paramount to the functionality of healthcare institutions, the Lagos University Teaching Hospital (LUTH), Idi-Araba, stands out as a beacon of innovation. As Nigeria grapples with electricity tariffs hikes and mounting unpaid bills by government agencies, LUTH has taken a bold step towards ensuring uninterrupted power supply by embracing solar energy. This strategic shift not only underscores the hospital’s commitment to patient care but also highlights the growing importance of renewable energy in the country’s healthcare sector.

    The backdrop to LUTH’s decision to go solar is a complex web of financial and infrastructural challenges faced by federal health institutions across Nigeria. With the Nigerian Electricity Regulatory Commission (NERC) announcing hikes in electricity tariffs, government agencies, including hospitals, have been struggling to keep up with their electricity bills. The Abuja Electricity Distribution Company (AEDC) recently threatened to disconnect power to the Presidential Villa and other top government offices due to unpaid bills amounting to N47 billion. Among the top debtors was the Nigerian Army, owing over N12 billion.

    This crisis has been particularly acute in healthcare facilities. The University College Hospital (UCH) in Ibadan, for instance, was plunged into darkness multiple times in March due to unpaid bills totaling N495 million. The disconnections severely hampered the hospital’s ability to provide essential services, posing significant health risks to patients and staff. The Chief Medical Director (CMD) of UCH, Prof. Jesse Otegbayo, highlighted the dire situation in a letter to the Minister of Finance, lamenting that the hospital’s monthly government subvention was insufficient to cover its various expenses, including electricity bills.

    Similarly, LUTH has faced enormous financial strain due to high electricity costs. According to the current CMD, Prof. Wasiu Adeyemo, the hospital spends up to N150 million on electricity monthly, while receiving a meager N14 million in government subvention for power. The previous CMD, Prof. Chris Bode, echoed these concerns, noting that the escalating cost of gas had jeopardized the hospital’s gas-powered hybrid energy system. These financial pressures have necessitated the exploration of alternative energy sources to ensure the continuous delivery of healthcare services.

    LUTH’s solar energy initiative

    In response to these challenges, LUTH has embarked on a pioneering journey to integrate solar energy into its power supply system. This initiative is part of a broader strategy to create a hybrid energy system that incorporates renewable and clean energy sources. The hospital management, led by Prof. Adeyemo, has demonstrated a steadfast commitment to leveraging solar power to mitigate the impact of electricity supply disruptions. The decision to adopt solar energy was driven by several factors. Firstly, the rising cost of gas made it increasingly difficult to sustain the hospital’s gas-powered energy system. Secondly, the frequent disconnections by electricity distribution companies (DisCos) due to unpaid bills posed a severe risk to the hospital’s operations. By investing in solar energy, LUTH aims to achieve energy independence, reduce operational costs, and ensure a reliable power supply for its critical healthcare services.

    The implementation of the solar energy project began with a test run, which was recently commissioned. This initial phase involves the installation of solar panels and the necessary infrastructure to harness solar power. The goal is to expand this system to cover the entire hospital, thereby providing a sustainable and uninterrupted power source. Prof. Adeyemo has expressed confidence that the project will be fully operational by the end of the year, significantly enhancing the hospital’s service delivery capacity.

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    During the test run, the alternative power source at the hospital’s Ward A provided 91.7% of the electricity needed, with the public supply accounting for only 8.3% over the course of one week. “Our partners have demonstrated capacity with the proof of consent and we are satisfied,” said the CMD who disclosed that the hospital has adopted a strategic plan to ensure uninterrupted power supply broken to three segments of immediate, intermediate and long term. “In addition to that, TNL has also donated 30 fans to ward A. What we have seen now is immediate; we also have our intermediate plan even before these current challenges that we are facing. So now we have this opportunity, we want to commission this and see how it works and some of us that are used to solar and inverter energy systems, you know that the technology has gone ballistic. There’s no gadget that cannot be powered by the solar system; so that is the reason why we are here today,” said the CMD.

    Prof Adeyemo disclosed that after conducting a power audit, the management decided to experiment with Block A, a medical ward that includes a private ward and wards A2, A3 and A4. The LUTH boss assured that the alternative power scheme would be financed through the hospital’s internally generated revenue and urged staff to prevent any misuse of the facility. Mr. Femi Numa, managing director of Taranis Novus Limited, the solution providers, stated that the company has delivered an all-in-one 20kw/40kwh energy solution based on solar renewable energy. This system ensures that medical and healthcare facilities will never face blackouts or power outages.

    “Today, as we activate this alternative energy solution, we are setting a new standard for clean energy production in this national centre of medical & healthcare excellence.  This solar solution is more than just an assembly of panels and batteries; it is a promise of a brighter, greener future. A future where our energy needs are met not by depleting resources but by harnessing the boundless energy of the sun.

    “The journey to this moment has been paved with challenges, but our collective resolve has turned those challenges into milestones. This project will serve as a model for others to follow, showcasing that renewable energy is not only viable but preferable,” said Numa.

    Mr. Kehinde Olaleye, deputy managing director of Taranis Novus Limited (TNL), explained that the system primarily draws energy from the sun, supplemented by installed lithium batteries. “The last place it will draw from is the grid, and that means whether it’s Band A or Band B, you don’t need to worry,” he said. The project specifications include a 20-kilowatt capacity inverter. During the pilot phase, the system will power basic lighting, fans, sockets for medical equipment, and a few air conditioners in critical areas.

    Head of Engineering at LUTH, Eng. Segun Ogunkeye, stated that the facility has a free energy supply of 20 kilowatts supported by eight lithium-ion phosphate batteries, each with a capacity of 48 volts and a lifespan of 10 years. He added that the pilot scheme will integrate energy from the national grid, solar panels installed on the rooftop of the building, and the inverter. “This is not the only place that we have an inverter in this hospital but this is the only place that we have inverter with panels. And my advice to all the users of this equipment is that misuse should not be encouraged. An inverter is not meant to power heating elements like a hot plate or boiling ring. We are appealing and also the engineering department has set up a task force that will be monitoring the misuse of this facility,” Ogunkeye advised.

    Benefits of solar energy for LUTH

    The adoption of solar energy promises numerous benefits for LUTH. One of them is cost savings. By reducing dependence on the national grid and gas-powered energy, solar project promoters said LUTH can significantly cut its electricity expenses and free up funds for other critical needs, such as medical supplies, staff welfare and facility maintenance. Besides cost savings, solar energy offers a more reliable power source compared to the frequently disrupted supply from DisCos. This ensures that essential medical equipment and facilities remain operational at all times, enhancing patient care. The project also feeds into environmental sustainability drive. Solar power is a clean and renewable energy source, which aligns with global efforts to combat climate change. And by reducing its carbon footprint, experts believe LUTH will be contributing to a more sustainable future for Nigeria and the planet.

    Nothing compares with energy independence. With its own solar power system, LUTH can achieve greater energy independence, reducing its vulnerability to external factors such as tariff hikes and fuel shortages. This will cascade into improvement in healthcare delivery, as a stable and reliable power supply is crucial for the effective operation of healthcare facilities. By ensuring continuous electricity, LUTH can provide better care for its patients, improve staff working conditions, and enhance overall service delivery.

    Challenges and future prospects

    While the shift to solar energy presents significant advantages, it also comes with its own set of challenges. The initial investment in solar infrastructure is substantial, requiring significant capital outlay. However, LUTH’s management is optimistic that the long-term savings and benefits will outweigh these initial costs. Additionally, the hospital must ensure proper maintenance and management of the solar power system to maximise its efficiency and lifespan. The success of LUTH’s solar energy initiative could serve as a model for other healthcare institutions in Nigeria and beyond. As the country continues to face energy challenges, the adoption of renewable energy sources like solar power could offer a viable solution for reducing operational costs and improving service delivery in the healthcare sector. Moreover, this initiative aligns with global trends towards sustainable energy and could attract support from international organizations and donors interested in promoting renewable energy and healthcare development.

    As the CMD said, LUTH’s decision to embrace solar energy marks a significant milestone in its efforts to overcome the challenges posed by Nigeria’s electricity crisis. According to him, by investing in a sustainable and reliable power source, the hospital is not only securing its operational future but also setting an example for other institutions facing similar difficulties. “As the solar energy project progresses, LUTH is poised to enhance its service delivery, ensure better patient care, and contribute to a more sustainable and resilient healthcare system in Nigeria. This bold move reflects our hospital’s commitment to innovation and excellence, demonstrating that even in the face of daunting challenges, proactive solutions can lead to transformative change. As LUTH lights the way with solar energy, it offers a hopeful vision for the future of healthcare in Nigeria and beyond,” he said.

  • How consumer credit scheme will reflate economy

    How consumer credit scheme will reflate economy

    With a robust financial sector that boasts various financial products and options, coupled with advancements in identity technology, Nigeria can leverage a Consumer Credit Scheme (CCS) recently approved by the Federal Government to reflate the economy. The Scheme, which starts with civil servants, according to experts and stakeholders, will stimulate local industries, leading to job creation and economic growth. This is because of its potential to help clear companies’ backlog of unsold inventories, forced by consumers’ weakened purchasing power due to the biting effect of inflation.  It will also push immense possibilities into the hands of Nigerians if diligently implemented and identified challenges addressed. CHIKODI OKEREOCHA, OKWY IROEGBU-CHIKEZIE, DANIEL ESSIET and EKAETE BASSEY report.

    It’s an intervention resonating with stakeholders in diverse sectors and Nigerians. The Federal Government’s approval of a Consumer Credit Scheme (CCS), to allow working Nigerians and small business customers to purchase products or services and spread the payment, is widely acknowledged as a much-needed, timely response to the prevailing economic challenges most Nigerians currently face.

    Recall that in what will probably go down as the most significant commitment by the President Bola Tinubu-led administration to improving the quality of life for hardworking, gainfully employed Nigerians, the Federal Government, on April 21 2024, launched the takeoff of the first phase of the CCS for workers across the country.

    The President’s Spokesman & Special Adviser, Ajuri Ngelale, in a statement issued about a fortnight ago, explained that the scheme was in line with the president’s directive to expand consumer credit access to Nigerians. He said the initiative, in collaboration with financial institutions and cooperatives nationwide, aims to broaden consumer credit availability.

    Already, the Nigerian Consumer Credit Corporation (CREDICORP), a federally-owned entity charged with boosting consumer credit availability to 50 per cent of Nigeria’s working population by 2030, is set to commence operations and has urged eligible Nigerians wishing to access loans for important purchases to apply via its portal for consumer loans before Wednesday, May 15, 2024.

    Following the rollout of the initiative, the preponderance of opinion is that the scheme came at a time the purchasing power of most Nigerians has been declining and essential product prices soaring. The government’s aim, therefore, is to latch on the initiative to alleviate economic hardship through accessible and affordable consumer credit.

    This explains why the intervention appears to bode well for stakeholders from diverse sectors and indeed, ordinary Nigerians who have naturally thrown their weight behind the scheme, apparently because of its obvious benefits to various stakeholders, including consumers, businesses and the economy generally.

    “The CCS is meant to reflate the economy and help boost demand for goods and services. It aligns with the social mobility and economic stability paradigm by enabling citizens to access goods and services upfront and pay responsibly over time,” President of the Lagos Chamber of Commerce & Industry (LCCI), Mr. Gabriel Idahosa, affirmed.

    Reeling out some of the scheme’s benefits, Idahosa said it enables ordinary Nigerians to access essential purchases such as homes, vehicles, education, and healthcare upfront while paying responsibly. “This accessibility enhances the quality of life for citizens, allowing them to pursue their aspirations and maintain ongoing stability despite economic challenges,” he stated.

    He also said the scheme will increase the demand for goods and services and stimulate local industries, leading to job creation and economic growth. “The scheme’s implementation will foster a conducive environment for businesses to thrive, contributing to overall economic development. It empowers individuals to build credit histories through responsible repayment, unlocking more opportunities for a better life,” he told The Nation.

    The LCCI chief further said by promoting financial responsibility and providing access to credit, the scheme serves as a pathway to social mobility, allowing hardworking Nigerians to improve their economic status and achieve their long-term goals. “Consumers’ ability to access credit easily allows a well-managed economy to function more efficiently and stimulates economic growth,” he emphasised.

    Idahosa also stated that for ordinary Nigerians, if the scheme is well developed and implemented, it will improve the standard of living and economic prosperity of the people. He added that as the cost-of-living crisis deepens and stretches household incomes, low-income Nigerians can seek consumer credit to help them get by.

    Moreover, the provision of consumer credit, according to Idahosa, can help consumers meet their financial commitments during periods of temporary financial difficulties if they are gainfully employed.

    A Research Fellow at the UK-based University of Salford, Dr Destiny Idegbekwe, is no less excited about the scheme’s prospect of reflating the economy and pushing immense possibilities into the hands of Nigerians. While pointing out that Nigeria’s middle class is fast disappearance, he expressed optimism that the CCS will herald the rebound of the middle class.

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    “If there’s anything that’s happening to Nigeria at the moment, it’s the fast disappearance of the middle class. What you have now is the very rich and the poor,” Idegbekwe told The Nation noting, however, that “The CCS will boost the middle class. The middle class would be stronger if there’s a consumer credit scheme to ensure that the working class can have their basic needs such as car financing, home ownership, and even going on holidays.”

    According to him, the introduction of such a scheme in Nigeria would help lower the country’s poverty rate and aid in closing the wealth gap by reviving the middle class/ working class. “There are so many things we’re not enjoying in life as Nigerians because we cannot afford them.

    Why real sector operators are upbeat

    According to experts, the CCS can help improve the sales and productivity of manufacturers and promote locally made goods as long as they are affordable, tailor-made to consumer needs and financial situations, and sold responsibly.

    For example, Idahosa said many big-ticket items, such as cars or technological products, are too expensive for most people to pay for at once. He, however, said with a credit scheme, paying for these items over time is possible. Furthermore, the scheme provides access to consumer spending data and the types and quantities of manufacturing goods purchased for investment decisions.

    Agriculture sector also

     The Secretary of the Agricultural Fresh Produce Growers and Exporters Association of Nigeria (AFGEAN), Adetiloye Aiyeola, expressed a similar sentiment. While welcoming the launch of the Consumer Credit Scheme, he told The Nation that in his opinion, “It has the potential to benefit the agricultural sector in several ways.

    Aiyeola said, for instance, that the intervention will help increase access to credit for agricultural workers and this could lead to investments in improved inputs, equipment, and technology, all of which will help boost productivity. “Additionally, this will increase the demand for agricultural products which will strengthen the market for farmers,” he added.

    A common thread that runs through the enthusiasm of real sector operators over the scheme’s capacity to deliver on its promises is the belief that Nigeria’s financial system is very sound and sophisticated enough to handle any volume of transactions in Nigeria and worldwide.

    This, according to them, is evident in Nigerian banks making waves in many climes worldwide, competing favourably. “Our banks are well-branded and have high ratings from international rating agencies like Fitch, S&P, and Moody’s,” Idahosa said, for instance.

    He also stated that the recent spike in the size of consumer lending, estimated at N1.5 trillion, persistent rise in inflation, and squeezed consumer income, among other things, shows that Nigeria is ready and ripe for a Consumer Credit Scheme.

    “With the right policy and implementation approach, the scheme is good with numerous benefits for the country,” he emphasized, noting that with the overall economy creating a high demand for goods and services and increasing productivity and employment creation, the scheme is expected to further deepen financial inclusion.

    It will also reduce the risks to the payment system, promote a cashless policy, and develop an e-commerce sector in the country.

    For the scheme to succeed

    But it is not the first time the Federal Government has rolled out a credit scheme albeit unsuccessfully to empower Nigerians. The LCCI President, recalled, for instance, that there had been several previous poverty alleviation and credit schemes in Nigeria, most of which were, sadly, riddled with fraud and corruption.

    Idahosa, while noting, for instance, that the last schemes were established by the last administration with good intentions to empower the youth, women, and Small and Medium Enterprises (SMEs), said unfortunately, such schemes did not record a good repayment profile.

    His words: “From the times of the People’s Bank of Nigeria (PBN) under the military government of Ibrahim Badamosi Babangida’s Structural Adjustment Programme (SAP) in 1989 to initiatives like the Anchor Borrowers Programme (ABP), we can always remember several previous poverty alleviation and credit schemes in Nigeria.

    “There is also the most recent National Social Investment Programmes (NSIP) under the Federal Ministry of Humanitarian Affairs and Poverty Alleviation (which were recently suspended and under special investigation for corruption.”

    Idahosa, therefore, insisted that “The current initiative should focus on strengthening Nigeria’s credit reporting systems through the CREDICORP, by ensuring that economically active citizens have dependable credit scores. I’m of the view that the government should learn from the failures of its predecessors.”

    Sharing his perspective on what may have led to the failure of previous schemes, and what needs to be done to make it work this time around, Paul Mgbeoma, a Lawyer, said at first, most businesses in Nigeria were not established to run on a credit scheme model. Rather, most of them were established to run on the pay-and-take-your-item or pay-for-your-service-as-it-comes model.

    He, therefore, suggested that to prepare businesses and the private sector generally to key into the scheme this time, “It would be the case of businesses going back to draw up new models to key into this new Federal Government scheme. They will have to establish their business in a way that it will allow people to buy, then pay in instalments or allow people to buy and pay later depending on the model.”

    The legal practitioner regretted that at the moment, most businesses in Nigeria do not operate such a model, as such, there will be a problem with the modelling. “Currently, I’m in the UK and I know that most Western countries are built on the credit system in such a way that you enjoy your life today and keep paying for your enjoyment probably until you die.

    “So you look out for the mortgage, you pay for 50 years. You look out for car finances; you pay for many years because they were developed in that form. So, in the UK and the US, yes, it’s well established and they have enabling laws for all of these,” Mgbeoma told The Nation.

    Flowing from the above, Mgbeoma questioned the  law via which the latest CCS scheme was introduced while expressing reservations about its eventual success. He argued that for the initiative to be recognised and binding, the President must collaborate with the National Assembly and sponsor an executive bill to establish a law supporting the scheme.

    His words: “First of all, under what law was the scheme introduced? If there’s no law backing it up, the President needs to work with the National Assembly and possibly have an executive bill sponsored to that effect. I doubt whether any private business owner will give civil servants goods on credit merely because the President feels it is a lofty idea that is good for the masses.”

    Mgbeoma pointed out that Nigeria is a capitalist economy and businesses are in business to make a profit. “No business wants to start running after civil servants or anybody for that matter to come and pay for goods taken on credit.

    “Using banks as an example, the volume of non-performing loans in Nigeria was one of the reasons that the Asset Management Corporation of Nigeria (AMCON) was created by law. Despite this, AMCON is still struggling to recover bad loans purchased from banks to date,” he said.

    Lessons from UK, US credit culture

    As Mgbeoma and indeed, other experts pointed out, the UK and the US already boast robust consumer credit culture, well established and with the enabling laws. “So, in the UK and the US, it (credit scheme) is well regulated to make sure that people follow the standard rules and regulations and consumers are protected in the long run,” Mgbeoma said.

    Idahosa corroborated him, noting, for instance, that in most developed economies like Germany, France, the UK, and the US, there are significant increases in buy-now-pay-later spending due to high inflation and the rising cost of living.

    Offering more insight into how the system works in the aforementioned climes, he said consumer credit schemes in the US and the UK operate almost similarly in many aspects, but there are also differences based on regulatory frameworks, market dynamics, and cultural factors when compared with Nigeria.

    He also said consumer trust in government frameworks can also be a factor of differentiation. “Both the US and the UK have regulatory bodies overseeing consumer credit to ensure fair practices and protect consumers.

    “In the US, this is primarily the responsibility of the Consumer Financial Protection Bureau (CFPB), while in the UK, it’s overseen by the Financial Conduct Authority (FCA),” Idahosa said.

    He further explained that both countries have credit reporting systems that track individuals’ credit histories. His words: “In the US, there are three major credit bureaus (Equifax, Experian, and TransUnion), while in the UK, the main credit reference agencies are Experian, Equifax, and TransUnion (formerly Callcredit).”

    The LCCI chief also said consumer credit in the US and the UK includes various types of loans and credit products such as credit cards, personal loans, mortgages, and auto loans, pointing out, however, that these products may have different terms, interest rates, and eligibility criteria.

    Idahosa offered more explanations: “The US and the UK have consumer protection laws to regulate lending practices, ensure transparency, and protect consumers from unfair or deceptive practices. These laws may include requirements for clear disclosure of terms and conditions, limits on interest rates and fees, and provisions for dispute resolution.

    “Both countries also have regulations governing debt collection practices to prevent harassment and abuse by creditors or debt collectors.  Both countries also promote financial literacy and education initiatives to help consumers make informed decisions about borrowing and managing credit.”

    The LCCI boss, however, said in Nigeria, “Our credit bureaus are still evolving. We believe that with the advancements made in identity technology, we can become more confident about the workings of credit schemes in Nigeria.

    “We need a very strong consumer protection agency with technological capabilities to track consumer abuse while dealing with service providers in Nigeria’s private and public sectors.”

    Will Nigeria borrow a leaf from other climes that have imbibed a credit culture? Will the newly established CREDICORP live to its billing of strengthening Nigeria’s credit reporting systems and also achieve its target of boosting consumer credit availability to 50 per cent by 2030?

    While some of these posers eloquently speak to the fact that Nigeria’s road to a vibrant consumer credit scheme capable of helping to reflate the economy will certainly not be a stroll in the park, aggressive awareness and sensitization of the private sector and Nigerians generally is one of the starting points.

    Idahosa alluded to this thinking when he said the private sector’s readiness for the scheme largely depends on their awareness and understanding of the CCS. “If they (private sector operators) are well-informed about the scheme’s objectives, mechanisms, and potential benefits, they will likely be prepared to key into it,” he told The Nation.

    He also stressed that effective communication by the government and relevant agencies is crucial in ensuring that the private sector comprehensively understands the scheme, adding that private sector entities, especially financial institutions, will also assess the risks of participating in the CCS.

    According to him, financial institutions will consider factors such as the creditworthiness of potential borrowers, the stability of the economy, and regulatory frameworks governing consumer credit. “Mitigating these risks through collaboration with the government and CREDICORP will be essential for their willingness to engage,” he stated.

    Furthermore, private sector organisations, Idahosa said, will evaluate how participating in the CCS aligns with their business objectives and strategies.

    “If they see opportunities for growth, market expansion, and enhanced customer relationships, they are more likely to participate in the scheme actively. Demonstrating the potential synergies between the CCS and their business goals can encourage their willingness to engage,” he added.

    Apart from a lack of public awareness and stakeholders’ buy-in and understanding, other hurdles that may stand in the way of the scheme’s success in Nigeria include poor infrastructure and technology gaps, trust and credibility, rising rate of fraud, and lack of effective prevention measures.

    Also, there are risks of misrepresentation of consumer credit. Irresponsible and exploitative selling practices of lenders can also lead to the risk of over-indebtedness, which negatively impacts consumers, the economy, and financial stability.

    Other possible challenges include access and distribution channels, late payment and default rates, attitude towards debt and perception of financial burden.

    However, to address these challenges, experts say that there must be adequate awareness and education of consumers, investment in technology and infrastructure, and the development of a comprehensive regulatory framework that will provide an anti-abuse rule that aims to curb credit claims inconsistent with the policy intent.

    Although Dr Idegbekwe does not hide his optimism over the capacity of the CCS to turn the fortunes of Nigerians and the economy around, he expressed reservation about its efficacy due to what he termed as Nigeria’s lack of a national standard database.

    His words: “Nigeria doesn’t have a good data management system, a good data management system that can track people to know where they are at different points in time. Immediately you come into the UK or US, they know that you are there, and they know when you came in, they know your address. The data also shows if you have a loan.

  • Delivering renewed hope agenda in affordable housing

    Delivering renewed hope agenda in affordable housing

     In Nigeria, housing scarcity persists, with over 22 million units needed. The Federal Mortgage Bank of Nigeria (FMBN) aims to bridge this gap. Under new leadership, led by Mr. Shehu Osidi, the FMBN prioritises technological innovation, financial stability and stakeholder engagement to enhance housing access. With unique housing products like the National Housing Fund (NHF) Mortgage Loan, Rent-To-Own, and Home Renovation schemes, the FMBN embodies hope for affordable housing solutions nationwide as envisioned by President Bola Tinubu. Associate Editor ADEKUNLE YUSUF reports

    In Nigeria, as in many regions worldwide, housing stands as a cornerstone of basic human needs and a pivotal factor influencing both individual well-being and broader socio-economic advancement. Despite its paramount importance, millions of Nigerians grapple with a stark reality: inadequate access to suitable housing. This predicament manifests in various forms, from outright homelessness to inhabiting substandard living conditions.

    According to the World Bank, Nigeria confronts a staggering housing deficit, with an estimated shortfall exceeding 22 million housing units. This disparity continues to escalate, propelled by rapid urbanisation, population expansion and insufficient investment in housing infrastructure. The repercussions of this shortfall extend far beyond individual households, permeating the nation’s economic landscape and social cohesion. The ramifications of inadequate housing are profound, fostering overcrowding, the proliferation of informal settlements and the rise of slums. These conditions not only exacerbate issues of poverty, inequality and social exclusion but also impede efforts to foster sustainable development.

    The United Nations Human Settlements Programme underscores the indispensable role of housing in achieving sustainable development objectives, emphasising its interconnectedness with health, education, employment and environmental stewardship. In Nigeria, the dearth of adequate housing undermines progress toward these pivotal goals, perpetuating cycles of impoverishment and marginalisation. Furthermore, inadequate housing conditions pose significant health risks, with millions of Nigerians residing in substandard dwellings lacking essential amenities such as clean water, sanitation, and electricity. This situation underscores the urgent need for governmental intervention and policy reforms to ameliorate the state of housing in Nigeria.

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    Despite various initiatives aimed at addressing the housing deficit, progress has been sluggish, impeded by a myriad of challenges. These obstacles include limited access to financing, land tenure issues, inefficient regulatory frameworks and institutional capacity constraints. Addressing these challenges demands coordinated efforts from both the federal and state governments, alongside collaboration with the private sector, civil society organisations and international development partners. Only through such concerted actions can meaningful strides be made towards ensuring adequate and sustainable housing for all Nigerians. Addressing this housing crisis is imperative for fostering inclusive growth and securing a brighter future for all Nigerians.

    The Federal Mortgage Bank of Nigeria (FMBN)

    One pivotal institution poised to spearhead efforts in addressing Nigeria’s housing crisis is the Federal Mortgage Bank of Nigeria (FMBN). Tasked with promoting the delivery of affordable housing finance, the FMBN holds the potential to drive investments in the housing sector, facilitate access to mortgage financing and bolster the development of affordable housing projects nationwide. Yet, to fully realise its potential, the FMBN requires adequate funding, operational efficiency enhancements, and increased transparency. The appointment of Mr. Shehu Osidi as the new Managing Director of the FMBN marks a significant juncture in the institution’s trajectory. With a wealth of experience and a distinguished track record in the financial sector, Mr. Osidi brings fresh perspectives and renewed vigour to the helm of the FMBN. His appointment signals a dedication to ushering in a new era of innovation, efficiency and accountability within the organization.

    Under Mr. Osidi’s stewardship, the FMBN’s new management team has embarked on a bold and ambitious agenda aimed at revitalizing the bank’s role in Nigeria’s housing sector. Recognizing the gravity of Nigeria’s housing crisis and the imperative for swift action, the management team has crafted a comprehensive roadmap to confront the myriad challenges confronting the housing sector. Central to this agenda is a steadfast commitment to harnessing technology to drive operational efficiency and elevate customer experience. The management team recognises that in today’s dynamic digital landscape, technology serves as a linchpin for streamlining processes, trimming costs and enhancing service delivery. By leveraging digital platforms and automation tools, the FMBN aims to simplify and expedite the mortgage application process, ensuring accessibility and transparency for prospective homeowners.

    Furthermore, the management team remains resolutely focused on fortifying the FMBN’s financial standing and bolstering its capacity to mobilise resources for housing finance. This entails initiatives to enhance credit quality, curtail non-performing loans, and explore innovative financing mechanisms to extend affordable housing finance to underserved demographics. Through sound financial stewardship and strategic partnerships with financial institutions and development agencies, the FMBN seeks to optimize its resources and amplify its impact in combating Nigeria’s housing deficit. In tandem with financial reforms, the management team is committed to enhancing the FMBN’s operational efficacy through refined project management practices and robust performance monitoring systems. By arming personnel with requisite skills and tools to execute projects punctually and within budget, the FMBN aims to bolster its reputation as a dependable and efficient housing finance provider.

    Moreover, the management team underscores the pivotal role of stakeholder engagement and collaboration in steering sustainable change within the housing sector. Through nurturing alliances with governmental bodies, real estate developers, community organizations, and other pivotal stakeholders, the FMBN endeavours to cultivate consensus and galvanise collective action to address the underlying causes of Nigeria’s housing crisis. As the Federal Mortgage Bank of Nigeria (FMBN) undergoes transformative reforms under the visionary stewardship of Mr. Shehu Osidi, the institution not only revitalises its operational prowess but also amplifies its capacity to furnish affordable housing solutions to Nigerians. At the heart of this initiative lie the bank’s array of distinctive affordable housing products, meticulously crafted to cater to the varied needs of aspiring homeowners nationwide.

    The National Housing Fund (NHF) Mortgage Loan

    One of the flagship housing products offered by the FMBN is the National Housing Fund (NHF) Mortgage Loan, which provides eligible contributors with access to long-term mortgage financing at single-digit interest rates. The NHF Loan stands out in the market due to its favorable terms, including extended repayment periods of up to 30 years and 6 percent interest rates, making homeownership more accessible and affordable for low and middle-income earners. Loans under N5million attract zero equity down payment while loans ranging from N5m-N15 attract and a contributor is qualified to apply after only six months of continuous contributions to the scheme. The terms and features of the NHF Mortgage loan are unbeatable in the market.

    For comparison, interest rates on housing loans in the open market range from 18 percent to 25 percent per annum while maximum loan repayment tenors hover between 10 – 20 years. Most commercial banks and mortgage lenders would also require that applicants provide between 30 percent to 50 percent equity contribution before loans are processed and possibly approved for disbursement.

    Rent-to-Own Product and Home Renovation Loan

    In addition to its suite of housing products, the Federal Mortgage Bank of Nigeria (FMBN) offers the innovative Rent-To-Own Housing Scheme, representing a groundbreaking approach to homeownership for Nigerian workers. This scheme provides an easy and convenient payment arrangement that enables individuals to transition from renting to owning their homes, thereby fulfilling their homeownership aspirations.

    The FMBN Rent-To-Own Housing Product offers a unique opportunity for Nigerian workers to instantly move into an FMBN-owned housing property as tenants and conveniently pay towards ownership of the property in monthly or annual installments over a period of up to 30 years. This flexible payment plan is designed to accommodate the financial circumstances of aspiring homeowners, allowing them to spread the cost of homeownership over an extended period while enjoying the benefits of residing in their own homes.

    One of the key advantages of the Rent-To-Own Housing Product is its affordability, with an interest rate of 9% over the repayment period. This competitive interest rate ensures that monthly or annual installments remain manageable for participants, making homeownership accessible to a broader segment of the population. By providing a path to homeownership that is both affordable and sustainable, the FMBN empowers Nigerian workers to achieve their dream of owning a home without experiencing undue financial strain.

    Moreover, the Rent-To-Own Housing Scheme offers participants the opportunity to enjoy the benefits of homeownership from the outset, including the security and stability of owning their own homes. By moving into an FMBN-owned housing property as tenants, individuals can begin building equity in their homes while enjoying the comfort and convenience of living in a property that meets their needs and preferences.

    Another innovative product offered by the FMBN is the Home Renovation Loan, designed to enable homeowners to undertake renovation and improvement works on their existing properties. This product addresses the pressing need for housing maintenance and upgrades, allowing homeowners to enhance the quality and value of their homes without the financial burden of upfront costs. With flexible repayment options and competitive interest rates, the Home Renovation Loan empowers homeowners to invest in the upkeep and modernization of their properties, contributing to the overall enhancement of the housing stock in Nigeria.

    Cooperative Housing

    Development Loan and Individual Construction Loan

    Furthermore, the FMBN offers the Cooperative Housing Development Loan, tailored to support cooperative societies in the development of affordable housing projects for their members. This unique product leverages the collective strength and resources of cooperative societies to finance the construction of housing units, thereby reducing individual financial burdens and promoting community-based homeownership initiatives. By facilitating the formation and operation of housing cooperatives, the FMBN empowers communities to take ownership of their housing needs and drive grassroots development initiatives.

    In addition, the Federal Mortgage Bank of Nigeria (FMBN) offers the Individual Construction Loan, a specialized financing solution designed to support individuals in the construction of their own homes. This product caters to the unique needs of aspiring homeowners who prefer to build their homes from scratch or undertake significant renovation and expansion projects.

    Specifically, the loan enables NHF contributors with unencumbered land, appropriate land titles, and approved building plans to undertake self-construction. The loan provides up to N15million to contributors to the National Housing Fund (NHF) scheme at a 7 percent interest rate. Beneficiaries can pay over a period of up to 30 years depending on their age and the number of years left in service. By providing access to long-term financing with favorable terms, the FMBN empowers individuals to realize their homeownership aspirations and invest in the construction of quality, sustainable homes for themselves and their families.

    The spirit of creativity and dynamism which Osidi has brought to the nation’s foremost mortgage institution aligns perfectly with the renewed hope agenda of the Bola Ahmed Tinubu Administration. On assumption of office, President Tinubu made it clear through his Renewed Hope Agenda to give Nigerians hope with regards to housing provision, kicking the ball rolling with strategic actions. From demerging the Ministry of Works and Housing and creating a new Ministry of Housing and Urban Development, to strategic appointments of experts to the new ministry, to larger housing budgetary allocations as well as continuously re-echoing the rights of Nigerians to decent and affordable housing and his administration’s commitment to this vision, he has left no one in doubt about achieving astounding success in this regard.

    As the FMBN continues to implement its transformative agenda and strengthen its capacity to provide affordable housing to Nigerians, its suite of unique housing products will play a pivotal role in driving progress towards the realization of the country’s housing aspirations. By offering innovative solutions that address the evolving needs of the housing market, the FMBN is poised to become a catalyst for positive change and a beacon of hope for aspiring homeowners nationwide.

  • Tackling Nasarawa’s housing deficit challenge

    Tackling Nasarawa’s housing deficit challenge

    Apart from food and clothing, shelter stands as a fundamental necessity of life, always emerging as a critical focus for both individuals and governments alike. In Nasarawa State, Governor Abdullahi Sule has underscored the significance of addressing this need by prioritising the establishment of housing units for low-income earners. LINUS OOTA reports that this initiative is being pursued through a strategic public-private partnership, aiming to facilitate accessible and affordable housing solutions for the residents of the state

    In the past four-and-a-half years, the Nasarawa State Government has evolved new approaches to tackle the housing crisis, particularly for low-income earners. Shelter, alongside food and clothing, stands as a fundamental human need. Its provision has emerged as a paramount concern for both individuals and governments, often serving as a litmus test for governmental performance at various levels.

    This imperative is underscored by Section 16 (1) (d) of the 1999 Constitution, which mandates the state to ensure suitable and adequate shelter for all citizens within the framework of fundamental objectives and directive principles of state policy. Despite the longstanding aspiration for affordable mass housing, particularly for civil servants, realising this vision has seemed elusive. Without bold housing policies, the prospect of homeownership remains distant, even for senior-level public servants, let alone those in mid and low-cadre positions.

    The absence of comprehensive housing policies has led to Nigeria’s staggering housing deficit, currently estimated at 17 million, with an annual increase of 900,000, as highlighted by former Finance Minister, Mrs. Kemi Adeosun. In a notable departure from this trend, Governor Abdullahi Sule took a decisive step in May 2021 to address the issue head-on. His administration initiated the construction of the Peninsula Hills Housing Estate in the Karu Local Government Area, marking a significant stride towards providing affordable housing for the residents of Nasarawa State. Governor Sule said the housing estate represents a strategic public-private partnership with Affinity Reality, effectively alleviating the burden of substantial equity contributions traditionally placed on the public. This initiative stands as a beacon of hope, demonstrating the potential for innovative collaborations to mitigate housing challenges and enhance the quality of life for citizens.

    “Two hundred and seventy hectares of land were marked for the project, but for a start, the government had given approval for only 100 hectares to be used for 4,400 houses. Aside from providing land, we have been able to construct some roads and other necessary logistics for the smooth execution of the projects,” he said.

    Governor Sule has emphasised that providing housing units stands among the paramount objectives of his administration, aiming to uplift the living standards of the underprivileged. His commitment to ensuring affordable housing for workers underscores the significance of this venture. The impetus behind this initiative gained momentum notably during the current administration, despite its inception dating back to 1992. This progress was catalysed by the Nasarawa State Government’s strategic partnership with Affinity Continental Royalty Limited, a prominent player in the real estate sector. This partnership breathed new life into the Peninsula Estate project located in the Karu Local Government Area, which was originally initiated by the former Plateau State Government.

    The Peninsula Project, as outlined by Mr. Sonny Agassi, the Director-General of Nasarawa Geographic Information Service (NAGIS), was conceived in 1992 as a pioneering public-private partnership venture. Mr. Agassi, who oversees the Peninsula Estate under his agency, also chaired the sub-committee established by the state government to oversee the solicitation and selection of investors for the development project. This collaborative effort exemplifies the power of public-private partnerships in driving transformative development initiatives.

    The history of the Peninsula Estate project traces back to its inception in 1992, under the auspices of the then Plateau State Government. In 1993, the project transitioned to the Plateau State Government’s administration, and upon the creation of Nasarawa State in 1996, it became part of the assets inherited by Nasarawa State. The state assumed full control of the project in 1997. However, significant progress was only glimpsed during the administration of Senator Umaru Tanko Al-Makura. Recognising the project’s economic potential and its capacity to bolster the state’s revenue, Al-Makura’s administration embarked on developing critical infrastructure across the sprawling 100 hectares of the Peninsula.

    Despite awarding contracts for site layout during the preceding administration, progress remained stagnant, primarily due to the focus on site and services, which entailed allocating land back to individuals for gradual development. Even after the infrastructure was put in place, the land remained largely undeveloped. The advent of the Sule administration heralded a turning point in the project’s protracted journey. With a committed investor pledging a substantial investment of N30 billion, the trajectory of the Peninsula Estate project took a decisive shift towards completion.

    For Governor Sule, the journey began in May 2019; shortly after he was elected. The vision for his administration was to break away from the traditional site and services and seek for a private developer to realise the Peninsula Estate project. He described the agreement signing as a happy day for his administration, especially for developing the Peninsula Estate located in Masaka, in Karu Local Government Area. “It’s not only in line with the policy of this administration to bring about development in the local government that is our gateway to the FCT, but it’s also in line with what we are trying to do in the state,” he said shortly after witnessing the signing of the joint venture agreement.

    According to the governor, the feat being celebrated through the signing of the Memorandum of Understanding (MoU) between the Nasarawa State Government and Affinity Continental was only made possible because of the innovations earlier introduced by his administration to create an enabling business environment. The two key interventions provided the enabling environment to sign the joint venture agreement, thus paving the way for development in Karu LGA.

    The setting up of the state Mortgage Board that will regulate mortgages, foreclosure and enforcement in real property, as well as the establishment of the Nasarawa State Investment and Development Agency (NASIDA), which is to serve as a vehicle for promoting, facilitating and coordinating investments were responsible for the success recorded. With this new arrangement where a developer invests in the project, rather than employing sight and services for the Peninsula Estate, Nasarawa State will earn N9 billion in revenue while possessing 30 per cent equity.

    “As a businessman, I am not going to come into the same arrangement. It’s one of the reasons we decided to change this and look for a housing developer to come in, with a new concept, new ideas to do that,” the governor said. Governor Sule said if his administration has gone ahead to implement the site and services, Nasarawa will most likely end up with only N2 billion as revenue. “By the time this housing estate is completed, Nasarawa State will now have a revenue of N9 billion, not N2 billion. Instead of getting the N2 billion now, it’s better to wait, develop the place, create employment for most of our people living in the area and create a lasting source of revenue,” he added.

    However, the governor was not only concerned with revenues. He expressed concern over the fate of genuine landowners displaced at the site for the project to take place. He took time to explain to reporters the genesis of the number of court cases about the land where the Peninsula Estate is located. “When we came in, we realised a contract had been awarded in May 2019 for the layout of the Peninsula site. The entire land is far more than 100 hectares. I want to emphasise that so that people will understand. We also realised that there were a few cases here and there because different administrations have allocated part of those lands to different people,” he stated.

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    The governor further explained that his administration completed the layout, with all the structures, the road network, lots of culverts, and semi-bridges while also using the opportunity to kick out some people that were encroaching on the site. He assured the people that even though the site was bigger than 100 hectares, the state government only allocated 100 hectares for the Peninsula Estate project; leaving out about 30 hectares more to be allocated to individuals with genuine claims to land ownership.

    “The idea is that once those people who have legitimate ownership come, their issues will be addressed. This is because they are going to be winners in a place where there is exactly no layout, no road network, no value whatsoever, to be given a piece of land,” the governor assured. He, however, warned that people will not be allowed to build houses anyhow on the Peninsula, stressing that they have to comply with specified standards, in line with what is exactly obtainable there.

    The process leading to the selection of Affinity Continental to develop the Peninsula Estate took several months of hard work. Mr Agassi appreciated the governor for sharing his vision for the Peninsula with them. “In line with that vision, we set up a committee which I led to oversee that. With other members of the committee, we invited investors, including some of the big names and players in the industry and they made their presentations,” he stated.

    Agassi said that based on the number of investors and capacity, Affinity Homes Limited/Urban Shelter was chosen to sign a joint venture agreement with the state government. Given the history of the area, he said, the government wanted to see an organised, sustainable living environment in Karu, instead of what has now come to be regarded as an urban slum. “We hope that with the signing of this agreement, that vision will be achieved with 100 hectares of land provided for Affinity, we are expecting something similar, if not better than Asokoro,” he stated.

    The Managing Director of Affinity Continental Royalty Limited, Muhammad Abdulmutallab, assured the state government that his company will execute the project according to specifications, stressing that Affinity Home is willing to spend N30 billion on the Peninsula Estate project. On the scope of the project, Abdulmutallab said the estate would comprise 4,000 units of low-income housing of two and three-bedroom units, together with facilities such as a hospital, schools, worship centres and other amenities.

    According to him, Affinity is a consortium, with a world-class team that cuts across various sectors, including experts in construction, infrastructure, finance, and the power sector, which he said are important. Abdulmutallab restated the commitment of Affinity to invest N30 billion in the Peninsula to realise the vision the Nasarawa State governor has for the place. “Our vision as a company is to change the face of real estate. What we have on offer is very unique for this kind of project because, other than just building and constructing, it has a lot of value-adding benefits. Karu as we know it is going to witness a lot of changes, beginning with the Peninsula,” he said.