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Tag: DEBT

  • Debt: Coalition backs Finance Minister’s reforms, tasks contractors on patience

    Debt: Coalition backs Finance Minister’s reforms, tasks contractors on patience

    The Coalition for Sustainable Fiscal Reform (CSFR), has thrown its weight behind ‘organic reforms’ being undertaken by the Minister of State for Finance, Dr. Doris Uzoka-Anite.

    The coalition said with the reforms underway, agitations over local contractors’ debt would soon be addressed.

    It, therefore, urged the protesters to engage the ministry rather than obstructing the process being put in place to clear the backlog. 

    On Monday, the local contractors resumed their protest over N4 trn debt backlog.

    Less than 48 hours, the Federal Government paid N152 billion out of the sum.

    Notwithstanding, the contractors vowed to continue their protest.

    However, speaking on Thursday in Abuja, the CSFR, a foremost contractors’ group, called dialogue.

    Their appeal came amidst the rising tide of fiscal anxiety and recent demonstrations at the Federal Ministry of Finance, where the contractors have vowed to continue their protect until their needs are met.

    But, CSFR, a prominent body of indigenous contractors and economic advocates, said the matter, being addressed by the Minister of State for Finance, Uzoka-Anite, was being looked into

    Leading the charge for a move to stabilise the narrative following calls for the Minister’s resignation, the coalition argued that the ministry is currently undergoing a “necessary surgical transition” from decades of erratic payment cycles to a permanent, transparent framework.

    According to the coalition’s National Coordinator, Dr Ridwan Kadiri, the Minister of State recently assumed her portfolio at a time when the nation’s debt management required a foundational reset.

    Read Also: Protesting contractors block Finance minister over N4tr debt

    “The frustration felt by our colleagues is valid, but the target of their protest is misplaced,” Dr. Kadiri declared. “We are witnessing a move away from ‘surface-level solutions’, those temporary palliatives that have historically failed to end the cycle of debt. Instead, the Minister is implementing an organic solution that addresses the problem from the root. This ensures that once a contractor is paid, the system is strengthened to prevent future arrears from ever accumulating again.”

    The coalition pointed to the Minister’s insistence on a rigorous verification exercise as a protective measure for genuine indigenous businesses. 

    It argued that by de-bottlenecking the system, the Ministry is ensuring that the N152 billion recently disbursed reached the hands of those who have actually delivered on their projects, rather than “ghost entities” that have historically drained the treasury.

    “Dr. Uzoka-Anite has brought a culture of accountability that was previously missing,” the group stated. “To demand a resignation at this critical junction of reform is to invite chaos. We cannot afford to restart the clock now when the machinery for sustainable payment is finally being calibrated.”

    CSFR urged the leadership of the All Indigenous Contractors Association of Nigeria (AICAN) to embrace the principle of “strategic patience.” The group emphasised that the 2026 fiscal roadmap already contains clear provisions for clearing the 2024–2025 backlogs, a feat that can only be achieved through administrative stability.

    “We are calling for a truce. Let the street protests be replaced by boardroom engagement,” the statement continued. “The Minister of State has shown the political will to face a problem that many of her predecessors ignored. We owe it to the stability of the economy to allow these organic reforms to mature. A sustainable future for Nigerian contractors is within reach, but it requires the steady hand currently at the helm.”

    The coalition concluded by reaffirming its commitment to monitoring the disbursement process, promising to work closely with the Ministry to ensure that the “Root-to-Branch” reform benefits every legitimate contractor across the federation.

  • Africa’s rising debt burden eroding funding for development

    Africa’s rising debt burden eroding funding for development

    Africa’s rising debt burden is eroding funding for sustainable development in the continent’s Least Developed Countries (LDCs), , says Economic Affairs Officer, at the Macroeconomics, Finance & Governance Division of the Economic Commission for Africa, Ms. Oyebanke Abejirin,

    Making a presentation on the opportunities and challenges for Africa’s Least Developed countries (LDCs), at the Second Session on the Committee on Economic Governance in Addis Ababa, Ethiopia,

     Ms. Abejirin explained that high debt servicing costs reduce capacity for SDG-related spending causing a real decline in health and education funding across many countries.

    She noted that debt distress worsens the public financial positions of African LDCs. Debt servicing reaching a record 11.6 per cent of the exports in 2022.

    In 2021, she said, African governments allocated 4.8 per cent  of gross domestic product(GDPs)to debt servicing compared to 2.6 per cent  for health and 4.8 per cent for education.

    “Social protection systems in Africa LDCs are severely inadequate; only 12-13 per cent  of population is covered,” she added and stressed that inclusive, robust social protection “is essential to shield the LDCs from global and regional shocks including post COVID-19 effects and climate change related disasters.”

    Ms. Abejirin highlighted that there is a need to strengthen domestic revenue generation to help close the significant gap in financing the SDGs in Africa.

    Read Also: FG unveils debt restructuring, revenue mobilisation plans

    According to Ms. Abejirin, African LDCs make up 33 of the 45 LDCs contributing to less than 1 per cent  of the global GDP despite having 10 per cent  of the global population.

    She emphasised the need for Africa to have a public debt sustainability framework that includes linking debt obligations to productive investment, improving fiscal and debt transparency and developing a framework for responsible borrowing.

    Sharing the Mozambique perspective on debt servicing, Ms. Pamela Mabanda, from the Ministry of Finance, said the country is experiencing a trade balance deficit, importing more than exporting with imports mainly consisting of intermediate and capital goods.

    The sustainability of the economy, she said, is threatened by the high proportion of expenditure  (almost 70 per cent ) going towards debt repayment, which limits resources for investment and support.

    Strategies are being developed to address these challenges and improve the fiscal space for sustainable development.

    “There is a need to improve domestic resource mobilisation and reduce tax evasion, especially for the main imports in the country,” noted Ms. Mabanda.

    She emphasised the importance of fiscal consolidation to reduce expenditure and increase revenues through diversification of financial funds and a proactive approach to macro fiscal risk.

    Chief Executive Officer ,Press Corporation in Malawi,Mr. Ronald Mangani, pointed out a perceived contradiction in the desire for as much aid as possible and the need for a clear understanding of what exactly is desired from development assistance so as to reconcile the various positions on these issues.

    Economic Affairs Officer, at ECAMr. Allan Mukungu, , discussed the inability of African countries to finance their needs due to fiscal deficits with an average public debt of 67 per cent  in 2024.

    “Nine African countries are in debt distress and 11 are at high risk, making them vulnerable to financing issues,” he said.

    “The focus should be on creating fiscal space to finance sustainable development and meet the Agenda 2063 aspiration.”

    Mr. Mukungu pointed out the importance of the integrated national financing framework (INFFs) for financing SDGs.

    “INFFs helps to unlock financing for national development priorities by aligning available financing with the national development plans.

  • Debt of a decade

    Debt of a decade

    Exactly today, November 12, 2014, my dearest father, Paul Oni Meduna, passed to the great beyond. As if in a movie playback, I could recall the bits of the details as if it happened yesterday. Three days before he slipped into the coma from which he never ‘returned’, I had spoken to one of the doctors treating him only to be told that he was doing ‘just fine’ as if that was any reassuring. With no visible signs of improvements days after, my siblings and I, convinced that the man deserved every care in modern medicine that money could buy, decided to move him from the place of his primary care in Kogi State to the University of Ilorin Teaching Hospital. Shortly after, I secured the ambulance to take him down to Ilorin the next day along with the temporary nursing aid taking care of him. I then told my driver to get ready for the trip from Lagos to Ilorin the next day. To ensure that nothing went wrong, I offered that he take my car home so he could arrive latest by 5 am for the six-hour long journey from Lagos to Ilorin.

    My mistake. I got ready at 4 am the next day and thereafter put a call to the driver only to have all his known telephone lines switched off! By 5 am, it was the same story. That I was in panic was an understatement. Not sure of what to do, I left the house confused. Twenty minutes later, I was on the way to the airport, where mercifully the 7 am Overland Airline was on tarmac ready for its early morning Ilorin trip. Somehow, I found myself on the flight and by 7.45 am, landed in Ilorin! I headed for the hospital to find the old man already settled in the ward. A gentle touch and the old lion stirred if only to acknowledge my presence, his first son.

    Meanwhile, the hired private ambulance from Kogi had, I was told, arrived some 25 minutes earlier, and, many thanks to some of the doctors who were my younger brother’s classmates in the medical school, the patient was immediately taken in to be followed by preliminary examinations.

    Soon after, my driver called to inform me that he had just arrived! This was long past 8 am! Without betraying any emotions, I quietly requested him to hand over the car keys to my wife, not forgetting to add that the trip was no longer necessary since I had already arrived at our agreed destination!

    And then my mission began, starting, expectedly with the bills; then the long to-do lists of tests, some to be conducted at the Kwara State government-owned diagnostic centre some 20-25 minutes away, and then ancillary instructions. Although past caring what the procedures cost or how much time it took, I managed in between, to steal furtive glances just to be sure he was still around.

    Sometime around 4 pm, we returned from the diagnostic centre to the hospital where the doctors took their turns to examine him. I then turned the nurse, who, by now, extremely fatigued from lack of sleep and the tortuous journey, could barely stand. I requested that she took out some time to rest till about 8 pm since she would have to spend the night at the hospital, after which I could retire to the hotel.

    Moments after being finally left alone with him, memories of everything he has been to me and my siblings came flooding in.

    Here was a man, who never saw the four walls, of a formal school, yet grasped the import and value of education in his adolescence. While his peers thought little of formal education, he taught himself how to read and write; did a number of correspondence courses in religious education with nearly a dozen certificates elegantly framed in his living room as attestation. He was a regular subscriber to the Yoruba Challenge, the Yoruba publication of the Jos-based Challenge Publications founded by the Sudan Interior Mission (SIM) better known now as Evangelical Churches Winning All (ECWA). A community leader, his life exemplified service. He would travel miles on his Raleigh bicycle to attend weekly community meetings and then stay behind for church service.

    A bridge builder and intense family man, he taught by his sheer force of example the virtue of sacrifice and giving. He was the go-to whenever knotty issues in the family and community arose. To his immediate family, he ensured they never lacked; his children’s education came first, second and possibly third in his order of priority. Often derided by his friends for spoiling them, he never took offence; his argument was that the choice he made was in farming – and so his children, being entitled to theirs, and having already made their resounding choice with their good grades, deserved every encouragement to stay the course!

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    Known to be strong willed and decisive – a firm believer in not sparing the rod of discipline no matter who was involved, I often took pride in being able to access the genial side of his intrepid personality.

    Did he laugh last?

    Lying there almost lifeless, I needed no medics to appreciate that the omens were far from good. Then, the tears came, slowly. Surely, at 84 and in a country where life expectancy was barely 50, it was not a question of being too young to exit. But then, I recalled that he had cheated death, not once but twice before this time.

    First was a ghastly motor accident on January 5, 1978 from where he not only emerged as a lone survivor but left him with a lifelong limp after several rounds of surgical interventions. The second, a gripping drama of sorts, could best be described as a case of quackery by a so-called doctor. That was in 2002. He had called to complain of being unwell and was immediately directed to see a doctor. The latter had put him on a drip, but rather than improve, his condition got worse. My younger brother Temitope, also a doctor, had called the doctor in charge (a private hospital) from his South African base to inquire not just about his condition but the course of treatment. He would call to request that I take my dad from that doctor of death – something to do with the doctor giving a patient with high blood sugar intravenous sugar solution!

    Was he going to be lucky the third time?

    This was the question on my mind as I left the hospital that night. Time was 9 pm. Arriving  the hotel 45 minutes later, I suddenly remembered that I hadn’t eaten all day and so immediately called the restaurant. No sooner had I dropped the intercom than my phone rang – and with it the message I dreaded to hear: Papa has gone to sleep.

    Just like that. And then the flood of tears came.

    It’s been 10 years since. His body was committed to Mother earth on April 3, 2015. Today, as my family celebrates the decade of his passing, there remains, for yours truly in particular, a pile of debts remaining to pay. From the people who freely gave of their resources to those who risked the trip amidst the heavily militarised highways as the 2015 elections reached crisis point, the moment affords me the singular opportunity to finally say – thank you. May God bless you all.

  • Fed Govt offers N150b bonds for subscription

    Fed Govt offers N150b bonds for subscription

    The Federal Government, through the Debt Management Office (DMO), has offered three FGN bonds valued at N150 billion for subscription at N1,000 per unit.

    According to a statement by the DMO yesterday, the first offer is an April 2029 FGN bond valued at N70 billion at an interest rate of 19.30 per cent per annum (five-year) re-opening.

    The second offer is a February 2031 FGN bond valued at N50 billion, at an interest rate of 18.50 per cent per annum (seven-year re-opening)

    There is also the May 2033 FGN bond valued at N30 billion, at 19.89 interest rate per annum (nine-year re-opening)

    According to the DMO, the FGN bonds are offered at N1, 000 per unit subject to a minimum subscription of N50million and in multiples N1, 000 thereafter.

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    It said that for re-openings of previously issued bonds, successful bidders will pay a price corresponding to the yield-to-maturity bid that clears the volume being auctioned plus any accrued interest on the instrument.

    “Auction date is Sep. 23, while settlement date is Sept. 25. Interest is payable semi-annually, and bullet repayment (principal sum) is done maturity,” it said.

    It said that FGN bonds are backed by the full faith and credit of the Federal Government of Nigeria, and are charged upon the general assets of Nigeria.

    “They qualify as securities in which trustees can invest under the Trustee Investment Act.

    “Qualify as government securities within the meaning of Company Income Tax Act and Personal Income Tax Act for tax exemption for pension funds amongst other investors.

    “They are listed on the Nigerian Exchange Limited and FMDQ OTC securities Limited,” the DMO said.

    It said that FGN bond are backed by the full faith and credit of the Federal Government of Nigeria and are charged upon the general assets of Nigeria.

  • Niger council chair beaten to pulp over alleged N1.3m debt

    Niger council chair beaten to pulp over alleged N1.3m debt

    Chairman of Katcha local government area of Niger State, Hon Danlamin Abdullahi Saku, has been reportedly beaten to stupor over alleged N1.3m debt. 

    The Nation learnt that the chairman allegedly borrowed the money over a year ago from an elderly person in his village whose moves to get back the money proved abortive.

    A source privy to the incident informed when the chairman arrived the village for the Sallah celebration, the elderly man sent his children for refund  from the Chairman.

    Read Also: UNCTAD urges action on rising public debt

    The source alleged the Chairman slapped one of the young boys asking him if he knew he was the Chairman of the council threatening to deal with them.

    It was gathered the boys and their friends, apparently angered by the attitude of the chairman, beat him until he lost consciousness and was rushed to the hospital.

    The source also said that while receiving treatment in the hospital, the Chairman has tried to pay up some of the money with a balance of N10,000 left. 

    Calls to the Chairman were not going through while text messages were also not responded to.

  • Firm CEO appeals to investors over N1.5b debt

    Firm CEO appeals to investors over N1.5b debt

    The Chief Executive Officer (CEO) Plan for Tomorrow Transport Investment, Johnson Solanke, has urged investors the company owes N1.5 billion they would be paid not later than December, 2024. 

    He dismissed insinuation he was planning to abscond with the investors money following closure of the Lagos, Abuja and Abeokuta offices of the firm.

    Solanke, who imports vehicles, tricycles and motorcycles, while addressing the media in Ibadan in company of owners of Yes FM, Yemi Sonde, CEO, Katawa Properties Ltd, Dr. Taiwo Kadri, a broadcaster, Mr Suleiman Adegbenro and others, appealed to investors to give him till December for payment of their money.

    He said ‘Plan for Tomorrow’, a subsidiary of Ogo Osupa Media Concept, will settle all debts by December 25, 2024.

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    The Abeokuta-born businessman said the closure of the offices of the firm became necessary after some angry investors allegedly attacked his staff and damaged some items in an effort to recover their money.

    He said: “Two of my staff are now in critical conditions where they were retrieving treatment. This will however not tempt me to run away, I promised my investors home and abroad to be patient and give the company  till December this year to facilitate their payments.”

    He lamented that what actually led to the debt was increase in exchange rate, which caused a serious crash in the naira value to dollar. 

    According to him: “The value of the naira collected from our clients before the exchange rate crisis could no longer meet with our profit and interest calculation, which forced us into debt.”

    “I want every investor and all Nigerians to know that my company is not a fraudulent company, I didn’t start the business to defraud people. The reason for temporary closure of our offices was not to run away but to avert breakdown of law and order.”

    Sonde pleaded with the investors of ‘Plan for Tomorrow’ to give Solanke time to settle the debt.

    The ace broadcaster assured Solanke would keep to his December promise to refund their money.

  • How to tackle national debt challenge, by experts

    How to tackle national debt challenge, by experts

    Continuing the implementation of ongoing fiscal and monetary reforms and a redesign of the national debt issuance strategy will curtail Nigeria’s public debts,  experts said  yesterday.

    Some of the experts  who reacted to the weekend release of new national debts figures, said while debts may be unavoidable, a restructuring of the issuance framework and ongoing reforms could make national debts more impactful and less burdensome.

    The Debt Management Office (DMO), which oversees issuance and management of Nigeria’s sovereign debts,  released its latest report, showing that the country’s public debts rose from N87.91 trillion in third quarter 2023 to N97.34 trillion or $108.23 billion in fourth quarter of 2023. This represented an increase of 10.7 per cent or N9.43 trillion within the three-month period.

    The public debt included N59.12 trillion domestic debts and N38.22 trillion external debts. The increase was mainly due to new domestic borrowing by the Federal Government to finance deficit in the 2023 Appropriation Act. Nigeria has been issuing sovereign debts at the domestic market on monthly basis to augment revenue shortages.

    Finance and economy experts agreed that the nation’s debt outlook remains manageable, especially in the light of ongoing reforms to improve the efficiency of national revenue generation and enforce the sanctity of the mandate and independence of the Central Bank of Nigeria (CBN).

    Read Also: Unions demand debt relief for African nations

    They called for a redirection of the bond issuance strategy from largely general-purpose, revenue bonds to project-tied issuances, with outlined and assessable benefits of the issuance and project to the Nigeria’s overall development.

    Professor of Capital Markets and President, Association of Capital Market Academics in Nigeria,  Uche Uwaleke said incurring debt is almost inevitable for a country, especially a developing one like Nigeria, but the debt strategy and overall economic management will to a large extent determine whether the debt is a burden or a catalyst.

    According to him, it will be difficult for a developing country like Nigeria to achieve strong and sustainable growth without borrowing, given the low revenue to Gross Domestic Product (GDP) ratio and the country’s huge infrastructure gap.

    “Against this backdrop, the best approach to deal with the debt challenge is to ensure that borrowing is long-term, from concessional sources, and loans should be tied to self-liquidating projects.

    “Over the years, we have relied so much on general-obligation  bonds in contracting domestic debt, and this has largely contributed to the present debt burden. Going forward, effort should be made to use more of infrastructure bonds such as Sukuk, which are project-tied,” Uwaleke said.”

  • FMDA confab focuses on debt sustainability

    FMDA confab focuses on debt sustainability

    The Director-General, Debt Management Office (DMO), Ms. Patience Oniha, is one of the top dignitaries who will be speaking on debt sustainability at the seventh Financial Markets Dealers Association (FMDA) annual conference slated for December 6, in Lagos.

    She will be speaking on the theme: “Developing Economies and Debt Sustainability – Sub-Saharan Africa’s Perspective”.

    Also expected at the event are Muhammadu Sanusi II, former Governor Central Bank of Nigeria,  Dr. Tunde Lemo, Chairman, Titan Trust Bank, among others. .

    The Role of Financial Market in Repositioning the Nigerian Economy will be analysed by other stakeholders at the conference.

    Acting Executive Secretary, Mary Gbegbaje,  in a statement, noted that the conference was designed to provide an opportunity for financial markets participants, regulators, investors, corporate organisations and other stakeholders to deliberate on possible ways of using financial markets infrastructure to reposition the economy for sustainable development.

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    Managing Director, GTBank, Olusanya will deliver the keynote address, Muhammadu Sanusi II, will speak on the Impact of Foreign Exchange Policies in the Nigerian Economy, Dr. Tayo Aduloju, Chief Executive Officer, Nigerian Economic Summit Group(NESG),  on Development of Real Sector for Economic Growth and Dr. Tunde Lemo on the Role of Central Bank in Financial Stability and Macroeconomic Supervision.

    The Financial Markets Dealers Association of Nigeria is a body of licensed Deposit Money Banks (DMBs) operating in the Nigerian financial market with emphasis on regulatory policy engagement, advocacy and professional ethics in the financial market.

  • Telcos to banks: no forgiveness of N200 billion USSD debt

    Telcos to banks: no forgiveness of N200 billion USSD debt

    Mobile network operators (MNOs) yesterday said deposit money banks (DMBs) should perish any thought of being forgiven the debt owed them over the use of the Unstructured Supplementary Service Data (USSD).

    Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Gbenga Adebayo, who spoke on behalf of the operators on the sideline of the first interactive session of the new Executive Vice Chairman/CEO, Nigerian Communications Commission (NCC), Dr Aminu Maida with the CEOs of telecom companies and other stakeholders in Lagos, said the debt has since risen to N200billion.

    He said the debt issue will not fizzle away until it is paid, adding that the banks must be living in illusion if they thought it will be written off as bad debt.

    “Banks USSD debts to telcos is now N200 billion. It will not go away. It will not be forgiven. It will be paid in full and we will not hesitate to block debtor banks. This is problem and if it’s not solved, it will continue to haunt the rest of the sector,” he said.

    The ALTON boss said the value of the debt would keep rising based on the fluctuating foreign exchange challenges in the country. He said there have been discussions around resolving the debt crisis, adding however that those conversations have not translated to a substantial repayment of the debt.

    Adebayo also told the EVC that the operators needed help in solving the historical problem of poor quality of services in Abuja. “It is also important to address the issue of access and infrastructure in different regions. It is crucial to tackle these problems to ensure the support of those who provide infrastructure,” he said.

    Also speaking at the event, the President Association of Telecommunications Companies of Nigeria (ATCON), Mr. Tony Izuagbe Emoekpere stated the importance of infrastructure in the country.

    “There is a real challenge in the growth of the infrastructure in our country and this we need help with,” he said, adding that there was need for connectivity in both urban and rural areas. He expressed concern about handling costs in terms of right-of-way.

        In his opening remarks, the EVC discussed the importance of delivering digital services and the need for multiple approaches to achieve this.

        “We need to get to the point whereby digital services can be delivered anywhere in the country. I think we need to have multiple approaches to get to as many as possible. There are some areas where we have to be a little bit more creative and innovative.  You are going to see a lot more integrated projects across the agencies under the Digital Economy Ministry whereby we can deliver more holistic solutions as opposed to what sometimes is often perceived as a sidelined approach. So, we’re going to need that foundation to enable us to deliver those applications and value-creating activities that the telecom infrastructure environment will have.”

        He also emphasized the importance of quality of service and the need to focus on the user experience.

        “I have spoken about quality of service. To me that is not negotiable. We are going to move more and more towards quality of experience. Let’s not just sit down with our infrastructure and say things are good. We need to move more towards listening to the voice from the end user,” Maida said.

        He said his attention will be devoted to driving the Renewed Hope Agenda of President Bola Tinubu and the blueprint of the Minister of Communications, Innovation and Digital Economy, Dr Bosun Tijani, adding that job creation will also be a major focus.

        He said his expectation for the industry to contribute more to the GDP and highlights the importance of hearing from industry professionals to shape the strategic direction of the regulatory body.

        He expressed his excitement and willingness to collaborate with industry leaders to move Nigeria forward.

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        Over the last one decade or so, USSD–a technology dating back to the 1980s, has gained traction by customers without smartphones to access digital banking services. By just dialing a code, holders of feature phones effortlessly carry out functions such as cash transfers, account balances checking and generating bank statements.

        According to the leadership of MNOs, the debt has continued to rise because some of the banks, especially the big ones are not paying and aren’t willing to pay.

        The dispute between the telcos and the banks began in 2019 when the former threatened to shut down the latter’s access to USSD platforms. They argued that banks should foot the bill for USSD sessions. The former CBN governor had argued that the MNOs were no longer investing a dime on USSD infrastructure because the initial cost was described as “sunk cost”.

        After the intervention of the NCC, CBN and the Federal Ministry of Communications and Digital Economy, there were protracted negotiations after which the banks agreed that they would pay and the price of at N6.98 to be remitted to telcos directly from customers’ bank accounts.

        The continuing dispute revolves around the technical definition of a transaction. The banks argue that fees are only charged after a banking transaction has been carried out but many customers end their session before one has taken place. The telcos argue that banks should charge customers as soon the relevant code has been successfully dialed.

        The banks are still refusing to pay, leaving the telcos burdened with a significant amount of accounts receivable related to USSD session fees.

        Group CEO, GTCo, Segun Agbaje had faulted the USSD technology which he described as archaic. Instead of USSD, he said data prices should go down so that people could do internet banking.

        He added that the company’s USSD value had dipped by 22per cent. The reason for this poor performance, according to him, is that “the N6.98 charge is a punitive cost and most people do not want to pay that just to use the USSD. That’s why it has stopped growing.”

  • $11bn P&ID judgement debt: How Nigeria can avoid contract scam

    $11bn P&ID judgement debt: How Nigeria can avoid contract scam

    Miffed by what he described as system failure arising from the now infamous $11billion judgement debt suit filed against Nigeria by the Process & Industrial Developments Limited (P&ID), Chief Moses Adediran, a lawyer and erstwhile director at the Central Bank of Nigeria (CBN) said if there were proper checks and balances the country would have been saved the embarrassment in the first place.

    While reacting over favourable outcome of the case in which P&ID lost its $11bn arbitration award against Nigeria last Monday in the United Kingdom, when the Business and Property Court in London halted the enforcement of the P&ID $11bn award against Nigeria in a case marked CL-2019-000752, Adediran said but for providence Nigeria would have lost out.

    It may be recalled that in the judgment delivered by Justice Robert Knowles, it was held that the process through which P&ID secured a 2010 contract to build a gas processing plant in Calabar, Cross River State, was fraudulent.

    According to him, there is a need to prevent the country from falling into such booby traps in the future. “Going forward, it is important for policymakers to be properly guided because when you look at the fact of that case, what P&ID went to court for it was that they had a contract and there were some preliminary things that ought to be done before they can negotiate the contract and that is the supply of gas by Nigeria when indeed they had fulfilled their own obligations. But the idea of people bribing came later.

    “By their very nature international contracts require all parties to be faithful, transparent as much as possible because you’re dealing with sovereign countries.”

    The technocrat who admitted that underdeveloped countries in Africa, including Nigeria usually falls prey to certain contract agreements based on their low economic power as donor-agencies or funders pass a fait accompli on them. 

    Adediran who enumerated the different categories of contracts said, “Most times some of these donor-agencies or investors knowing full well that you hold the short end of the stick as a struggling nation, they force you to either sign some contracts with obnoxious terms, or you leave. Then you have the one that people will consciously know what is wrong but then they will put their hands into it because of benefits that may accrue to them. There is also the other category of contract wherein the receiving parties are ignorant of some of these things or they are just cavalier in their attitude.”

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    Speaking from the point of view of a lawyer, he said, “Ordinarily what should be uppermost for you is to go into any transaction and be ready to protect the interest of your client or the party that you are representing. That interest should be very paramount in your mind; you must look at the terms that may be so adverse to that of the principal’s interest. These are the three types of contract scenarios you have.”

    On the way forward, he said at the implementation of policies conscious effort must be made to understand the terms of the contracts being signed.

    He further reiterated that policymakers must think through any policy briefs properly and look at the pros and cons with a view to understanding the obligations to be fulfilled.

    “If you at the P&ID contract there were supposed to be exchanges between both parties but everything was opaque either deliberately by those who were involved ostensibly for their own selfish aggrandizement. So, it is that kind of pitfall that we should guard against in the near future.”

    Pressed further, he said, “At the level of signing a contract, I think it must be streamlined, especially if it has to do with anything that would involve foreign currency. What I’m saying in effect is that so many ministries, departments and agencies must know about it. There must be institutional memory so that if any other government comes they will look at what has happened with regards to obligations, liabilities, assets, and all should be highlighted and put before whoever is taking over.

    “Above all, during the formulation of policies before the implementation, it is very crucial for the policies to be examined thoroughly to see the practicality, deliverability, and all because you really cannot rule out the human factor in everything.”

    He was however quick to admit that there are people with corrupt tendencies who may be persuaded to defraud the system, for such persons, he would rather they be put in check. “The only way we can put paid to all these issues of infractions and corruption plaguing us as a nation is for those we put in charge of critical assignments to be properly scrutinised to ensure that they live above board. At every level, there must be accountability and transparency so that things don’t turn out bad for the country in the end.”

    A situation where the Permanent Secretary, Minister and other people with reporting lines do not know about certain things or are not carried along when some crucial decisions are being made or deeds of contracts involving such humongous sums of money capable of setting the country backward in terms of loss of hard-earned foreign exchange, is appalling indeed, he stressed.

    “It’s not just limited to the P&ID alone; you will recall that in the immediate past administration some of the serving ministers then revealed that they were not aware of certain decisions taken in their ministries.”

    While disagreeing that there are no consequences he would rather such punishments are swift and not unnecessarily bogged down by bureaucratic bottlenecks as have been the case in most of the time.

    “Apart from having commensurate punishments for offences committed, it can even serve as a deterrent to others that this infraction you have committed and the spoils you have accumulated, you stand to lose them all.”