The Nation Newspaper

Tag: hard times

  • Good news in hard times

    Good news in hard times

    •It is cheering that Lagos has joined the league of oil-producing states 

    These are hard and harsh economic times for Nigeria. A culture of waste, indiscipline,  mindless corruption as well as lack of planning and vision on the part of the leadership at all levels has made the country a helpless victim of the current drastic fall in the international price of crude oil. Most state governments are unable to pay workers’ salaries and meet other obligations while millions of Nigerians sink deeper into poverty. Yet, despite this inclement situation, there is cause to keep hope alive in the possibilities of a bright future for Nigeria.

    The revelation, for instance, by the Minister of State for Petroleum Resources and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Ibe Kachikwu, that the Federal Government is set to commence drilling activities for crude oil in the Chad Basin from the third quarter of this year is good news in hard times.

    With the decisive curtailing of the insurgency in the North East that had stalled the project, the minister explained that “a total of 1,962 square kilometres have been acquired and processed, interpretation is currently ongoing at about 90 per cent completion and drilling activities will commence by the last quarter of 2016”. Some of the benefits to accrue to the country from this development, according to the minister, is to increase the nation’s oil and gas reserves, enhance the hydrocarbon potential of the Nigerian inland basin, as well as creating new investment and employment opportunities.

    Equally heart-warming is the news that Lagos State is set to join the league of oil-producing states in the country. The wholly indigenous owned Yinka Folawiyo Petroleum Company Limited and operator of the Aje field located in Oil Mining Lease 113 offshore Lagos has announced commencement of crude oil production from the field. After over 25 years of exploratory, appraisal and development activities, the final hook-up procedures are reported to be in progress with a view to bringing the wells into production very soon. The Aje field reportedly has a production capacity of 40,000 barrels of oil per day and storage capacity of 750,000 barrels.

    Despite the present fall in the price of crude oil in the world market, petroleum and gas will continue to play a key role in the global economy and will remain pivotal to Nigeria’s economy. Yet, these  discoveries of petroleum resources in the North and Lagos should not stem our determination to diversify the economy and drastically reduce the country’s overdependence on oil revenues. The lesson should also not be lost on us that it is not really the revenues derived from oil that matters as much as our ability to productively and creatively utilise such funds to expand and modernise infrastructure as well as promote development and prosperity.

    Equally critical is the need to address fundamentally the concentration of the ownership and control of mineral resources in the Federal Government. This kind of unitary practice is a mockery of fiscal federalism and constitutes a major obstacle to the economic liberation and development of Nigeria. Apart from petroleum and gas, there are several other valuable mineral resources in virtually all states of the federation that are simply idle and untapped wealth because the states lack the constitutional authority to exploit such resources. It must be noted though that additional sources of revenue can only be beneficial to the vast majority of Nigerians if the current astronomical scale of corruption in the country is drastically curbed.

    This is why all patriotic Nigerians must fully support the present administration’s war against corruption.

  • Tough decisions as banks adjust to hard times

    Tough decisions as banks adjust to hard times

    Like other sectors of the economy, the banks are not completely insulated from the prevailing economic challenges. Little wonder some of them have since devised survival strategies aimed at withstanding the shocks. Ibrahim Apekhade Yusuf reports

    These are certainly not the best of times for the Deposit Money Banks (DMBs) and the reason for this is not far to seek. Majority of the banks are suffering a lot of privations, economic-wise, more than they are willing to admit.

    The result is that most of the banks have had to take  unpleasant decisions just to stay afloat. From available information, some of these stringent measures have had rippled effects on banking operations both in the short, medium to longer term.

    For instance, most of the banks have had to cut down on their staff strengths. The past 12 months have seen a lot of banks cutting jobs, closing branches in what industry sources say is fallout of the headwinds affecting the economy.

    Staff from the old and young generation banks have not been spared this bitter pill of job cuts. Sadly so.

    For a majority of the banks who have closed their book for the year end, the operating climate has been everything but encouraging.

    Tales of woes

    In his assessment of the state of banks, Matthews Mbachu, a financial analyst said: “Year 2015 for the most part was a challenging year for the banks, especially with the implementation of the Treasury Single Account (TSA) which saw over N2 trillion of deposits withdrawn from the banking system and greater foreign exchange controls from the CBN, with its impact on trade and foreign exchange related income.”

    “In the first three quarters of 2015, the banks also witnessed a continuous rise in the cash reserve ratio (CRR) stipulated by CBN, ending with a consolidation of public/private sector cash CRR to 31% before eventual reduction to 25%. The consequence of this policy was a persistent squeeze on net interest margins.”

    A senior bank manager at one of the new generation while giving a graphic picture of the situation at the bank said a lot of restructuring and reorganisation has taken place in the last few months.

    “In our bank for instance, most of the divisional heads have been made redundant with the closure of their branches. It’s just a matter of time before they would be eased out,” the source said.

    “We are unable to ascertain the actual figure of those affected, with initial report claiming no fewer than 1,200 were involved from all the bank’s branches, while a source close to the bank told Premium Times that about 240 people, including eight General Managers and 40 Assistant General Managers, were affected.”

    What is, however, clear is that the action swept away most of top management staff in a deliberate attempt by the bank to drastically cut down on its top heavy management structure.

    “With the current crisis in the banking industry in the country, it is incumbent on any bank that wants to growth to bend backwards to re-strategize and restructure its operations to expand and grow.

    “The number might not be as high as is being speculated. But, the decision is not by accident. It is a deliberate one, because the time is ripe for the bank to restructure the management and reposition its operations for greater efficiency and profitability both for shareholders and investors. The decision was inevitable that it had to happen.

    “If one looks at most of these banks, they are becoming top heavy, with many of the managers earning so much that could have been enough to support the business growth plans. With the action now, there is no doubt that a lot of money would be saved for the bank.”

    The source, however denied speculations about the mode of serving notification of sack on the affected staff, saying it was not true that they were informed through text messages.

    “A formal meeting was held with the affected staff since Monday this week, where details of their disengagement benefits were discussed and agreement reached,” the source explained.

    With the latest development, the bank joins the growing list of banks in the financial sector of the economy to embark on the restructuring of its staff as a strategy to repositioning for growth.

    Recently, one of the new generation banks which acquired one of the distressed banks in the wake of the bank consolidation policy, dispensed with the services of over 1,600 of its workers across the nation.

    The recent reorganisation at Ecobank Nigeria affected some senior staff was designed to strengthen the bank’s business across all markets.

    This is contained in a statement issued by the bank and made available to the News Agency of Nigeria (NAN) in Lagos.

    The statement said that the recent restructuring came after a review of senior staff bench strength and industry standards.

    It explained that it was necessary for the bank to realign its work force for better efficiency in line with best practices, adding that those who were affected by the exercise were adequately compensated.

    The statement said that the bank was committed to cost efficiency and investment in key initiatives in its transactions, banking, cards and e-banking businesses.

    It stated that the bank would continue to simplify its operations to better serve customers to be ahead of the competition in the industry.

    “The bank only recently promoted 300 staff, representing 10 per cent of the employees based on the bank’s commitment to recognising and rewarding excellence and exceptional performance,” it said.

    The statement said that the bank had commenced a selection process of converting qualified non-core staff to permanent staff.

    NAN reports that Ecobank recently sacked about 50 senior staff to reduce cost. The sack affected general managers, among others.

    CBN’s damning verdict

    In last assessment of the balance sheets of most of these banks, the Central Bank of Nigeria observed that energy companies in the country are indebted to commercial banks to the tune of about N3.673 trillion.

    This was in spite of several warnings by the CBN and other economic analysts, against the backdrop of declining fortune of crude oil in the international market.

    According to data produced by the CBN in its Statistical Bulletin for the First Quarter of 2015,the aggregate credit to the energy sector as at March 2015 stood at N3.673 trillion, dropping by N182 billion from N3.855 trillion recorded in February 2015.

    Giving a breakdown of the figures, the CBN stated that in the industrial segment, oil and gas firms’ aggregate credit stood at N2.153 trillion as at March 2015, compared to N2.3 trillion in February 2015 and N2.047 trillion as at December 2014. The oil and gas firms in this segment comprise downstream, natural gas and crude oil refining.

    Aggregate credit of the power and energy sector, comprising Independent Power Project (IPP) and power generating companies, stood at N282.7 billion, compared to aggregate credit of N294.085 billion recorded in February 2015.

    In the services segment, the CBN noted that the aggregate credit of upstream oil and gas services sector in the month of March stood at N1.073 trillion, down from N1.096 trillion, while power transmission and distribution companies’ aggregate credit stood at N163.93 billion, compared to N172.44 billion in February 2015.

    Generally, the CBN stated that aggregate credit to the domestic economy (net) stood at N17.15 trillion in March, representing a decrease of N54.2 billion or 0.3 per cent below the level recorded a month earlier, but an increase of N716.5 billion or 4.4 per cent when compared with the level at end-December, 2014.

    “Net claims on the central government stood at N3.455 trillion, representing an increase of N76.7 billion or 2.3 per cent above the level recorded in the preceding month. At N13.11 trillion, total credit to the private sector was N166.8 billion or 1.3 per cent below the level achieved in the preceding month,” the CBN stated.

    The CBN further noted that the total assets/liabilities of commercial banks in March 2015 (provisional) stood at N28.711 trillion, showing increases of N123.8 billion or 0.4 per cent and N1.185 trillion or 4.3 per cent above the levels recorded in February 2015 and at end-December 2014, respectively.

    Road to recovery

    Thankfully, most of the banks become very creative to make its fundamentals right. Speaking to Bloomberg in Lagos, Adesola Adeduntan, chief executive officer of First Bank of Nigeria, said the bank expects to boost its return on equity (ROE) – a key measure of profitability – to between 11 percent and 14 percent in 2016 from2015’s figure of 3 percent.

    First Bank also revealed that it is also targeting a cost-to-income ratio of 55 percent in two years’ time from 59 percent.

    “ROE will be much better than last year. At a minimum, we should triple it,” Adedutan told Bloomberg.

    “We do not shy away from taking difficult decisions. We used to have above 8,000 people. We’ll push it down, gradually, to 7,000.”

    The bank’s net profit fell from N86 billion in 2014 to N15 billion in 2015, following rising impairments on Nigeria’s economy, owing to falling crude oil prices.

    Gross domestic product (GDP) growth decelerated to 2.8 percent in 2015 – the lowest level since 1999- with the International Monetary Fund (IMF) projecting the economic growth to fall further in 2016 to 2.3 percent.

    First Bank’s non-performing loans ratio stood at 22percent at the end of March, compared with 3.8 percent a year earlier, with Adedutan saying the bank’s number one priority is reducing the figure.

    “The bank will do that by reducing the proportion of its lending to the oil and gas sector, currently at about 39 percent of total loans, and focusing more on blue-chip companies in other industries,” he said.

    Corroborating the CEO of First Bank, a source who spoke on the condition of anonymity confided in The Nation that the bank is determined to diversify its assets away from risks prone portfolio.

    “We’re focusing more on sectors that are less capital intensive but which can still increase our shareholders’ value.”

    Citing the just released results of the bank, the source the management is more favourably disposed to short tenor capital funding in other areas and move away from the usually volatile oil and gas.

    This year, the bank hopes to focus more on high income yielding assets by actually improving on its efficiency levels by putting in place efficiency measures to enable us channel our resources to key sectors, the source said.

    Pressed further, the source added: “We have building initiatives around efficiency and that includes optimising procurement to implement best practice, tightening budget controls and leveraging Technology such as process automation and the implementation of ERP and ERM framework and review of the operating model for greater efficiency.”

    A staff in one of the new generation banks who asked not to be named said the bank is gradually adjusting to the realities of the time.

    “We’re all moving with the trend. Even First Bank that you mentioned, it is not just now that they thought about laying off staff. There is virtually no sector that is not affected by the current economic downturn. All l can say is that everybody is trying to adjust one way or the other.”

    During its Annual General Meeting penultimate Friday, Ladi Balogun, Group Managing Director/Chief Executive Officer, First City Monument Bank Limited said the bank is doing everything within its powers to mitigate the challenges.

    “In spite of the adverse impact of the treasury single account (TSA), our balance sheet size remained fairly stable during the year as a result of our focus on retail banking. Our loan book declined 5% from N618 billion in 2014 to N593 billion in 2015,” he said.

    “The most significant item on our profit and loss statements were the impairments of N14.1 billion, an increase of 34% over prior year. Two specific items stood out: an impairment of N6.2 billion on a loan to major player in the oil industry; and N5.4 billion provisioning on a contractual obligation from the Asset Management Company of Nigeria (AMCON). We are pursuing the recovery of both items vigorously and have since tightened our credit underwriting standards to prevent a future recurrence.”

    Survival strategies for banks

    In the view of Tobe Nnadozie, Divisional Head, Innovation and Products, Heritage Bank Limited, banks need to adopt innovative measures in the face of the economic downturn.

    Speaking in an exclusive interview with The Nation, he said the parlous state of the economy has made it inevitable for banks to be ingenious in their ways.

    “Certainly because of the prevailing economic challenges banks have to look at more creative ways to grow their bottom line. You know in the recent past, banks had to rely heavily on FX-related businesses to generate the highest deposits. However, what they can do now is to try to add value to customers beyond what they used to do.”

    Specifically, he said banks need to give more value in terms of products and services to customers.

    “I’m talking of adding maximum value. You have to add more people products. You know most of the banks have products like internet banking and all of that. But you have to create products that build value chain around the customers. What banks have to do now is to help the states add value to their citizens. And this is not necessarily anything that has to do with CSR as the case may be.”

    Citing the experience of Heritage Bank, Nnadozie said, the bank in recent times have to drive a lot of innovation in the area of governance.

    “There are certain things, especially when you think of leakages in the system. In the public sector, for instance, there have been so many leakages in virtually all areas of governance. Take for instance in the area of fertilizer distribution. What we said is that farmers have potential to grow more crops if they get enough fertilizers. So we helped some states develop applications and measures to ease the process, especially to track how these fertilizers are delivered.”

    Pressed further, he said: “We’re helping the states to plug loopholes because we reckon that once we are able to help them plug these leakages they can save at least 40-60 per cent in IGR. In these day and time, banks, of course, have more fool-proof businesses. Most banks were involved in public sector business before now. But right now, there is no need to have over staff pursuing public sector. At Heritage Bank, rather than lay off people, what we have done is to reassign most of our staff to help drive innovations. And that is working.”

  • Hard times hit unpaid Bayelsa workers

    Bayelsa State civil servants have turned beggars, following unpaid salaries of five months.

    Civil servants can no longer meet their personal and family obligations, including children’s school fees and domestic expenses.

    For lack of fares, most of them no longer attend churches. Those who managed to go, end up begging for fares to return home.

    Some of them said they no longer go to work because they don’t have fares. They recalled that Governor Seriake Dickson promised to pay them on time, wondering why the governor is unable to do this.

    One of the civil servants, who spoke in confidence, said he stopped going to work because the government had not paid him since last November.

    “I work in the state-owned micro-finance bank but since November, I have not been paid. I can’t go to work because I need to look for something to do to feed my family. It has been tough; surviving in Bayelsa is difficult.

    “I wonder why an oil-producing state as Bayelsa cannot pay salaries. We learnt Ebonyi and Taraba, with one of the least allocations, still pay salaries. But here we are working in an oil-producing state without salaries,” he said.

    Two women working for the government were sighted yesterday on Imgbi Road, begging passers-by for N100 to return home after attending a church programme. Though many people turned them down, they leapt up in joy when a Good Samaritan gave the duo N500 to go home.

    It was learnt that the governor recently approved a month’s salary for civil servants.

    The state’s economy is in near comatose,  hit by the national economic meltdown.

    Projects are abandoned and many big contractors have left their sites. Many business concerns, shops and eateries have closed, with some relocating to other states.

    A food vendor, who identified herself simply as Emilia, said most of her customers no longer patronised her.

    Emilia said: “Before, my small shop used to be a beehive. I used to finish selling before 10 a.m everyday. But everything has changed. I have reduced the quantity I cook; yet, I can’t finish selling my food. I carry the remaining home. I am considering closing my shop.”

    It was learnt that many families have started relocating from the state, following their inability to cope.

    An angry resident, identified simply as Emmanuel, wondered why the government was claiming that the state was poor when Dickson said he opened a dedicated account where he saved for the rainy day.

    Emmanuel said: “The rain is now falling. People expect the governor to start using the savings of the state to pay salaries and rejuvenate the economy. Bayelsa is not supposed to be suffering. It is supposed to be a model state.

    “Dickson has a style of not releasing money into the economy, right from his first term. Remember, he was called a stingy governor, even when the state received in the first three years he was in office an average of N20 billion monthly allocation.”

  • Businesses battle hard times

    Businesses battle hard times

    Almost one year after the President Muhammadu Buhari-led administration took over the reins of power and with no clear direction of where the economy is headed, businesses have continued to pine under the yoke of stifling regulatory headwinds, report Ibrahim Apekhade Yusuf and Franca Ochigbo

    Most businesses out there are no longer at ease. And the reason for this is not far to seek: Many of these businesses are fighting the battle of their lives as their corporate existence is being threatened, no thanks to the rather hostile operating business environment.

    Although most of the businesses had anticipated that the new government in power would take awhile for it to gather steam, they had hoped that life would be back on an even keel in no time at all. But nearly after one year that hope has remained forlorn.

    Crux of the matter

    A number of policies have had rippled effects on businesses across the board, chief among which is the Central Bank of Nigeria (CBN) policy restricting the use of Naira cards abroad. This is the second time the CBN is putting restrictions on the use of naira cards outside the country — one of many other policies put in place by the CBN Governor, Godwin Emefiele who will stop at nothing to save the Naira.

    However, some speculators had warned at the time that if the authorities in charge are not careful, there may be another devaluation of the national currency very soon. Thus many entrepreneurs have been forced to wait for the economy to stabilise before they can continue carrying out their business.

    Last month, the CBN Governor said that the bank will not devalue the Naira again despite calls for the devaluation of the currency in times of economic turmoil.

    According to Mr Emefiele, the Naira is ‘appropriately priced’. So far, the CBN governor has tightened monetary policies and exchange rate rules as well as imposing a ban on 41 imports, limiting daily withdrawals by Nigerians with domiciliary accounts, which has affected several transactions.

    The CBN also issued a press release to the banks on meeting all forex demands for eligible invisible transactions as follows: Foreign ATM cash withdrawals will have a daily limit of $300, foreign transactions by POS or an e-channel will have no daily limit.

    Besides, it placed annual limit on ATM, POS and e-channel transactions to $50,000 just as people were instructed to only acquire foreign currency for eligible purposes such as BTA, PTA, medical fees, school fees, mortgage payments et cetera, through banks with the use of ‘Form A’ for invisible transactions and ‘Form M’ for visible transactions.

    In order to stop the Naira devaluation and currency speculation, Nigerian banks stopped the acceptance of foreign currency cash deposits into domiciliary accounts in August 2015.

    People were only allowed to withdraw cash in either foreign currency or the Naira equivalent from their domiciliary accounts. Banks were told to not accept cash deposits into domiciliary accounts but to receive inward FX telegraphic transfer from other banks.

    An instruction was issued to all deposit banks, microfinance banks and primary mortgage institutions, mobile money operations, switch and other payment system services concerning electronic payment system.

    Importers of a list of 40 goods and services were therefore denied access to foreign exchange in the Nigerian foreign exchange market in order to encourage local production of these items. The importation of these goods were not banned, thus importers desirous of importing these items were instructed to do so using their own funds without any recourse to the Nigerian Foreign exchange markets.

    Usage of Naira-denominated cards overseas

    In compliance with the CBN directive on the international restriction of Naira cards, on June 06, 2015, Naira-denominated Corporate Cards were no longer enabled for cross-border payments with immediate effect.

    This policy was to review the existing usage of Naira-denominated cards downwards from $150,000 to $50,000 per annum.

    Stakeholder voices

    Speaking at separate fora recently, President of Manufacturers Association of Nigeria MAN, Mr. Frank Jacobs and Director General of the Lagos Chamber of Commerce and Industry LCCI, Mr. Muda Yusuf, have described as stifling the prevailing operating business environment.

    The MAN President noted that many operators in the nation’s real sector closed shop in 2015 due to harsh operating environment characterised by poor infrastructure, low consumer demand and unfair competition from low quality products smuggled into the country, warning that many more firms would close down due to the foreign exchange policy.

    “These companies have invested heavily in plants, equipment and machinery worth several billions of dollars in the country and what the CBN is indirectly telling them is that it is not bothered about the challenges this policy has posed to our members with the attendant loss of jobs”, the MAN boss said.

    While calling on the Federal Government to have a rethink on the policy by making foreign exchange available for real sector operators that need to import raw materials, he warned that if not reversed, the policy will lead to the closure of more companies.

    According to Yusuf, the forex restriction policy has had great danger for the Nigerian economy, especially in the first quarter of 2016.

    One of the direct implications of the policy is that many firms would be left with only one alternative, which is to embark on a mass sack of their work force in a desperate move to reduce cost in order to remain afloat.

    Expatiating, he said: “The position of the LCCI is that we want the CBN to lift the ban on foreign exchange now because government needs to do something urgently to convince Nigerians, private sector operators and manufacturers. We believe that lifting the restriction on foreign exchange and adjusting the exchange rate of the naira will make substantial impact on the nation’s economic recovery.”

    Millions of jobs on the line

    The lull in business activities occasioned by the stifling operating environment is already taking its toll on businesses with millions of jobs threatened across the sectors.

    Leaders of Food, Beverage and Tobacco Senior Staff Association, FOBTOB, have raised the alarm that the nation may lose three million jobs in the sector if government does not urgently review its foreign exchange (forex) policy.

    The labour union stated this in Lagos on Wednesday at a press briefing, alleging that companies in the sector are on the verge of shutting down because of their inability to raise foreign exchange to import raw materials.

    According to the union, leading companies in the sector have invited labour for discussion on retrenchment of workers.

    These companies, FOBTOB said include Nigerian Flour Mills, Nigerian Breweries Limited, Guinness Plc, Nigerian Bottling Company, 7-UP Bottling Company Plc, Friesland Campina Wamco Plc.

    While calling on government to intervene to save the industry and millions of jobs, FOBTOB alleged that not less than 1,500 workers had been sacked in the last three months over the forex crisis.

    According to FOBTOB President, Quadri Olaleye, employers in the sector had come up with different reasons to sack workers and that about 3000 workers were sacked between 2012 and 2015.

    He said: “The current situation has reached a pathetic level, because it seems all the employers in our sector are in competition with each other on who can lay off the most workers.

    “Every company is now calling for a downsizing of the workforce, and this time under the guise of lack of foreign exchange due to the Federal Government’s recent policy on foreign exchange.

    “We are aware that not all the raw materials used in our industry can be sourced locally. Where they can be found, they are mostly not available in commercial quantity.”

    The union called on government, through the Central Bank of Nigeria, CBN, to take a second look at the policy on foreign exchange to avoid shutting down the companies in the sector.

    Need for action plan at the ministry

    The President, National Association of Nigeria Traders, NANTS, Ken Ukoaha has lamented that there does not seem to be any policy direction for the Ministry of Industry, Trade and Investment.

    Ukoaha who made this observation during a media capacity building in Abuja at the weekend, said inasmuch as he supports the present government, the previous government did a good work in giving Nigerians beautiful policies, though marred by corruption.

    He however, impressed on the present government, the need to borrow a leaf from the past policies as they can serve useful purpose.

    “We are calling on the new administration to give us a template to work with, an economic blueprint, so that after four years we can come to say this is the criteria for the benchmark given, this is where you passed and failed.”

    While noting that the transition agenda has elapsed in 2015, it will be one year in May 29th 2016, with nothing to show for it, he urged the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelama to be alive to his responsibilities.

    Ukoaha said the present budget should be critically looked at to ensure what happened with the padded budget that was cancelled does not happen again.

    N350b bailout to the rescue

    Meanwhile, the federal government has said that it will inject N350 billion budgeted expenditure to revamp the Nigerian economy in the next few months. Giving this assurance was the Minster of Fiannace, Mrs. Kemi Adeosun. According to her, the bailout funds will go a long a way in cushioning the effects of the long-suffering masses.

  • Hard times strategies in Kwara

    Hard times strategies in Kwara

    Rather than bemoan paltry allocations from the federal purse, the Governor Abdulfatah Ahmed administration of Kwara State is repositioning its revenue generation platforms for self-sustenance. ADEKUNLE JIMOH reports.

    The Kwara State government is bent on weaning its economic base off  the apron strings of the dwindling federal allocation. As a result, the state inaugurated its rebranded Internal Revenue Service (KWIRS). But it is not just about giving it another; it is about firming it up to ensure robust, efficient and effective tax collection.

    “Today, we take concrete steps towards making Kwara State more economically sustainable and financially viable amidst the challenges of a turbulent national economy,” Governor Abdulfatah Ahmed said at the inauguration of the service head office otherwise known as Revenue House in Ilorin, the state capital.

    “This event demonstrates our commitment to creating a diverse and solid revenue base for the state. It also underlines our resolve to continually meet our obligations and insulate our economy from the instability of global oil market.”

    Alhaji Ahmed said the state has the potential to generate N60 billion in revenue annually.

    The governor added, saying that from available records, the state loses N5 billion annually from its IGR due to leakages and inefficiencies.

    He said that KWIRS has been mandated to mobilise revenue, block leakages and expand the state’s revenue base with a monthly target of N5 billion.

    “This is a significant increase from the N800m we used to generate,” he said. “Indeed, some people are of the opinion that this target is unrealistic. I disagree. Kwara State, I am convinced, has the population, commerce, resources and opportunities necessary for achieving that target of N60 billion annually.

    “Let me also add that a desk review of the previous revenue collection process showed we were losing about N5 billion annually due to inefficiencies and leakages.

    “Therefore, through the newly established KWIRS we intend to plug loopholes in our revenue collection system and ensure that all revenues accruable to the state government are remitted accurately and promptly.

    “Our goal is to ensure that Kwara State is economically viable and self-sufficient, rising from our current position to achieve the second highest IGR per capita in Nigeria by 2019.”

    The governor added that: “The recent fall in global crude oil prices has led to a significant decrease in the funds available for distribution to federal, state and local governments from the federation Account.

    “In our case, monthly allocation has dropped from an average N3.4 billion to N1.4 billion monthly, leading to a N1 billion deficit in recurrent expenditure every month and leaving little for infrastructure. Yet, the state government requires N2.4 billion for workers’ salary alone

    The truth is no state can lay claim to self-sufficiency or deliver the required social good for citizens without an effective tax system.

    “Moreover, in our commitment towards ensuring proper distribution of social amenities to our people, I am pleased to inform you that the state government is introducing the Kwara Resident Identification Number (KRIN) today. This is a unique number allocated to all residents to enable them access government services while also serving as a form of identification.”

    He warned that “anyone who evades or avoids tax is breaking the law and will be punished according to those laws if found guilty. Also, anybody found obstructing the work of KWIRS will be dealt with appropriately.

    The governor added that “I solicit the support of all stakeholders in Kwara State towards the implementation of this new IGR drive as it will save the state from financial crisis and assist the government to further meet its obligations to the people. Let me also use this opportunity to reassure the people of Kwara state that KWIRS was not established to impose fresh taxes.

    Rather, its mandate is to make revenue collection and management more efficient. I urge all businesses and individuals in the state to perform their civic duty by paying their taxes.

    “We cannot aim for tax-driven prosperity and economic advancement while refusing to fulfil the obligations that create those standards we aspire towards.”

    “This administration had long envisaged that the global search for alternative sources of energy would lead to a possible drop in oil prices with the consequent multiplier effect on government revenues.

    “As a proactive government, we repositioned ourselves to focus on ways to increase our IGR as far back as 2013. One of the strategies we identified was to restructure our revenue collection system.

    Earlier, the Chairman of KWIRS, Dr Muritala Awodun said, “We have chosen to systematically move our revenue journey from the locomotive train that has dragged it from about N100m monthly to N600m monthly between 2003 and 2010, and to about N850m in 2014. As we embark on the journey we ask that you tighten your belt and enjoy your flight as we coast on the journey of a monthly average of N1 billion collection in the first quarter, N1.5 billion monthly in the second quarter, N2 billion to N2.5 billion monthly in the third quarter and N3 billion monthly by the fourth quarter of 2016 with a total collection target of N24 billion for the year 2016.”

  • Hard times and time for understanding

    The price of crude oil fell to US$36 a barrel recently and even at that Nigeria is even finding it difficult to sell its sweet crude oil. This is because of a glut in the global market due mainly to the fact of overproduction in Saudi Arabia where a nation of around 12 million is producing almost 10 million barrels of crude oil a day. This is also coupled by America’s self-sufficiency in energy because of its tremendous shale oil and fracking gas production. The USA used to buy about 60 percent of Nigeria’s production. It is today not buying any oil from Nigeria. In fact there is serious talk in the USA that it should begin to export oil. The USA is now so comfortable that it refused to allow a consortium of Canadian and American companies complete a trans-American pipeline that would have been taking crude oil across America to the Gulf coast from Canada. The refusal ostensibly was based on environmental considerations but in actual fact this was because the USA can now afford to play the environmental card because it does not need additional oil to compete with struggling American oil companies. The fact is that this project has merely been mothballed and would be resuscitated in the future particularly if the Republican Party wins the presidential election next year. Leaders of the party deny that the global environment has been abused because of industrial processes and therefore needs no abatement measures being taken. This is in the face of overwhelming scientific evidence. The import of this for Nigeria is that we have not seen how low the price of crude oil will drop. The slowdown in Indian and Chinese economies and consequent reduced demand for Nigeria’s export of hydrocarbons has created a buyers market and crash of oil prices. These two huge markets in Asia are critical to oil price regime. The oil-producing Middle East is right at their backyard and transport costs compared with costs in transporting African oil is lower. Furthermore, Iran is coming into the global market in 2016 in a big way following the agreement of that country with the international community to put a hold on its hidden nuclear weapons programme. Russia, the other big oil producer needs all the money it can get from oil to maintain the illusion of a major power and its military operation in Syria and because of these, it is producing as much oil as its capacity can bear. Current estimates put its production at about nine million barrels per day. There is therefore oversupply of the global oil market.

    What is to be done? If the Saudis can be persuaded that its strategy of driving aground American shale oil and fracking gas production is not working as expected even though some small companies have folded up, then appeal can be made to that country to reduce its oil production. This is a big If, because this desert kingdom and its innumerable princes have gotten so used to trillions of dollars of oil money for its political stability that it will be a Herculean effort persuading them to change course. OPEC should be persuaded to meet in extraordinary session to cut production. Countries like Mexico and Russia should be invited to coordinate their oil production with that of OPEC to save the industry in the interest of the global economy because at the end of the day, if the countries depending on energy production collapse economically with resultant political ramifications, the whole world will be destabilized. Cheap oil may be good for some but at the end of the day it is not good for the global economy. The world needs in the short term, huge financial resources to operationalize the COP 21 global agreement on climate change recently worked out in Paris. Critical to that agreement is innovation and adaptation and every country will need resources to carry out these mechanisms.

    We have been talking about economic diversification in Nigeria for decades but the easy oil money has dulled our collective brains. Now the chicken has come home to roost. Serious diversification and clean technology-led industrial production will take time. Our agriculture, neglected over the years of easy money cannot be revived by a wave of the hand. Even the ballyhooed solid minerals sector will need all effort at organization, correct legal regime and attraction of direct foreign investment. In spite of all these obstacles and impediments, we cannot just lie down doing nothing waiting for better times to come in an uncertain future. We must do something. A campaign to rationalize the use of foreign reserves must begin. Mbonu Ojike in the 1950s asked Nigerians to boycott what is boycott-able. We have to embrace that philosophy now. It will come with a cost. This is where communication comes in. Government at all levels must explain to Nigerians that the time of easy life has come to an end. No more champagne, red and white wine, brandies and whiskies, fancy suits and shirts. This is the time to make our tailors work and whoever is ashamed to wear made in Nigeria clothing must be ready to look for funds outside available scarce resources. The ministry of information and culture and indeed all ministries must help the president to pass the message to all Nigerians to be patriotic. Those who brought down the economy through outright looting and wastage of foreign reserves must be tried and jailed. Punishment must be sure, certain and swift. No more prevarication and wringing of hands about what to do about corruption. Whatever has been collected from looters must be made public and those involved publicly shamed. This is the only way to prevent recovered money being looted again as appears to have been the case in the Jonathan administration.

    Critics who are going around about Buhari not performing must be challenged to tell us what they would have done in face of a global economic meltdown we are facing where in Greece the rate of unemployment is 60 percent and the situation in southern Europe and the Balkans generally is just slightly better. While everyone agrees there is need for responsible opposition, but no one must be allowed to misinform our people that the president does not care or love his people or that he is punishing a section of the people because he is a hard man and an uncaring soldier! This uncouth criticism must be confronted head on. This government is our last chance to get it right. The difficult time we are facing is the right time to put us on the right trajectory so that when good times return we will be well set on a path of frugality, rectitude and integrity rather than on the path of waste, stealing and squander-mania which previously prevailed. In this regard all branches of government must show the light so that the people can find their way. The recent splashing of billions of Naira by the Senate to buy SUVs is not the right way to lead and the decision should be rescinded. This is also not the time for anybody to be agitating for any form of salary increase rather we should all be helping government and thereby ourselves to build a strong country with a virile and sustainable economy. Nigerians must learn to work and work hard. An economy based on unbridled importation of all sorts of junks from India and China and Indonesia is not a sound economy. We must learn to produce what we need.  We must not want what we cannot produce. An economy based on trading of other people’s goods is no economy. The time of political and economic frivolity is over – whether we like it or not!

  • Fayemi: hard times await illegal miners

    Fayemi: hard times await illegal miners

    Hard times now await illegal miners as the Federal Government has expressed readiness to invoke the extant laws to bring them to justice in its bid to diversify the economy.

    Solid Minerals Minister Dr. Kayode Fayemi, who gave the government’s stance yesterday, said President Muhammadu Buhari had given a marching order to rid the sector of illegal mining and generate more revenue into the nation’s coffers.

    Speaking with reporters in his hometown, Isan Ekiti in Oye Local Government Area of Ekiti State, the minister said the Mining and Mineral Act 2007 had provided the government the legal weapon to prosecute illegal miners and saboteurs.

    The former Ekiti State governor said the nation had the potential to become a global leading player in the sector with 44 key minerals, which, he said could be found in about 350 locations in the 36 states.

    He identified poor management of the sector in the last 55 years of independence as the reason why Nigeria had not gotten enough return in terms of foreign exchange, investment and job opportunities.

    The minister explained that solid minerals and agriculture were very dear to the president in his plan to widen the nation’s income base and provide employment opportunities.

    He added that nothing would be spared to restore vibrancy to the sector.

    Fayemi said: “President Buhari came into government with strong integrity. And we won’t allow the integrity quotient to reduce. So, whoever perpetrates illegality in the sector must start packing his load.

    “We are ready to tackle the cartels in the sector and those who think they can continue will face the maximum wrath of the law.

    “If you glean through what President Buhari said when he came into power, every comment is punctuated with preference for solid minerals and agriculture as areas of interest in his efforts to diversify the economy. So, Mr. President has put me in his area of interest and I thank him for reposing confidence in me”.

    He said the ministry is blessed with experts in geophysics, mineral resources, geology, metallurgical and material engineering, mineral engineering among others to translate the dream to reality.

    “Though, I may not be an expert in mineral resources management, but having superintended over every sector as a governor, I think I have the experience.

    “The task is not even about expertise, but service. I should be able to work with these experts to bring about the needed change in the sector.

    “Nigeria used to be a centre of excellence in solid minerals, particularly in Tin and Coal since 1903, that was before the First World War, when petrol came, we abandoned production of these two minerals. But we have come to realise our mistake.

    “We have coal in Enugu, diamond in Nasarawa, tin and columbite in Plateau and many other states. There is no state without a mineral. So, we have a lot of potential to tap and this we shall achieve,” Fayemi said.

  • Hard times for Delta radio, tv, newspaper

    There is disquiet  among members of  staff of state-owned media outfits in Delta State over alleged mismanagement and neglect by government.

    Delta State runs three separate media outfits, including the two broadcasting outfits in Warri and Asaba and the Delta Printing and Publishing Company, publishers of The Pointer newspapers

    The electronic media outfit Delta Rainbow Television Station (DRTV) in Warri has been epileptic while the Delta Broadcasting Station (DBS) based in Asaba, the State Capital have gone off air since July 2013.

    The Nation gathered that Delta Broadcasting Service (DBS), Asaba had earlier gone off air in July 2013 following the alleged theft of the vital thunder arrester reportedly worth N6 million and in the last four months the channel has gone off the air again.

    Lately, the television station in uptown Asaba went off the air about four months ago as a result of broken down equipment which the management has been striving to replace.

    An employee,  who would not want his name in print, said that staff morale has been very low as a result of the frequent break down and theft of equipment which most times result in the break of transmission.

    She said that it was cause for great concern that that the channel’s signal are very weak, a situation which results in poor reception even in Asaba where it is located.

    The General Manager, Mr. Godwin Eruobagha said that the management was determined to bring the station back on air soonest.

    Eruobagha said that a team of engineers was currently on site, working both day and night to ensure that the bad equipment is replaced.

    He assured: “We will soon be back on air. We are doing everything possible to make sure that we come back on air by weekend. Our engineers are working and will soon be through.”

    Similarly, workers at the Delta Printing and Publishing Company, publishers of The Pointer newspapers have had to work under treacherous conditions, following a breakdown of the only 250 K.V.A generating set.

    In the last one week, workers have had to resort to the use of an old 6.5 K.V.A generating set to power only a few computers to keep the journal on the newsstand.

    It was learnt that the fortunes of the once vibrant newspaper has suffered considerably since the assumption of office by the current management team 10 years ago.

    The Nation gathered that before the new management team came into office, the newspaper had a circulation strength that cut across many States of the federation including Lagos, Edo, Enugu, Anambra , and Abuja ,the federal capital territory.

    When The Nation visited the premises of the State-owned newspaper, workers expressed dismay over a lack of electricity and the stifling heat they have to endure to keep the journal on the newsstand.

    A source who spoke on condition of anonymity said the newspaper company has witnessed a downward slide since the inception ten years ago by the current management team.

    The source said that the newspaper, before the inception of the current management team sold 10,000 copies daily, stressing that currently it only sold a meager 2,000 copies.

    His words: “This is the worst moment in the history of The Pointer, as the paper has witnessed a steady decline since the assumption of office of the management team. We had a 330 K.V.A automatic generator given to use by ex-Governor James Ibori, but that one has since gone bad due to poor maintenance culture. We have to work under difficult conditions in the news room. There is no electricity. The newsroom lacks air conditioners as all of them have broken down, but go to the office of the management staff and witness the opulence. But the editorial staff is made to endure difficult conditions. It lacks an operational vehicle.”

    Delta Commissioner for Information blamed the problem experienced by the State owned media organisation on the growing shortfall in revenues from the federation account, adding that government is determined to get the both media outfits running in the shortest possible time.

    His words: “I have tried to sort The Pointer out with my little allocation, but State revenues have dwindled drastically. It is all about prioritising our needs. The governor knows and we are doing all we can to ensure that the media houses get back to life.”

  • Hard times hit poultry farmers

    Poultry producers must invest in capacity and standard for the industry to grow, the Director, Federal Department of Livestock, Ministry of Agriculture and Rural Development,Mr Joseph Nyanger, has said.

    Addressing a stakeholders’ meeting in Auta-balefi, Keffi, Nasarawa State, Nyanger said there must be standard to make poultry products competitive.

    The meeting, he said, would enable stakeholders to discuss and approve draft guidelines on how to improve the standard of operations.

    He recalled that in the last quarter of 2012 the Poultry Value Chain (PVC) team constituted an advisory panel to come up with standard of practice.

    The director said members of the panel met in Ibadan early this year and came up with a draft standard for the industry.

    He urged the stakeholders to proffer meaningful contributions that would enhance the poultry industry for the populace.

    The team leader of the Poultry Value Chain, Prof. Funsho Sonaiya, urged the stakeholders to be mindful of the kind of standards the industry needed.

    ‘’We should be keen about issues like how to improve efficiency of broilers and layers and how to improve production.

    ‘’And we should also look at ways to include 100 per cent value addition in poultry farming,’’ Sonaiya said.

    He said that there was no point creating the standards without enforcement.

    According to him, issues in the draft standards include provision of good quality breeder stock, provision of good quality day old chicks and availability of quality poultry feeds.

    Others are poultry health coverage, marketing, processing and value addition and research and innovations.

    President of the Poultry Association of Nigeria (PAN), Dr Ayo Oduntan, said the problem with the industry was how to enforce some of the laws to enhance better performance.

    He said some of the poultry farmers were going through difficult times,urging the Federal Government to assist in solving their problems.

  • Hit by hard times

    Isopako , a market that stock mainly plank and building materials had some of the traders speak with The Nation shopping blaming the low sale situation in the market on the poor state of the country’s economy. A trader Mr Babajide Owolabi is a nail seller, he said, “we are only here because we want to leave our homes in the morning and go to our places of work, we are actually not making sales. This democracy is not for everybody it is only meant for the rich people. People are not building houses any more, they are only renovating because of the economic situation we are presently facing in this country.”

    Mrs. Adejoke Shuaibu is a paint seller who thanked God for the peaceful state of the market. Though we are not making sales as at now, we only come here so that we will have something to eat at the end of the day, no matter how little, market is not really moving.” She said.

    The market which stocks mainly building materials, such as Planks, Pans, Nails, Wire, top-board, Pecks, and Flatmetals also have them in various prices, names, quality and functions.

    The planks have names like; Otara, Maoganic, Iroko, Akala, Mazonia, Ipin, Poroporo, Omosida, Ita, Sanmi, Osara, Obeche, and many more. They all come in different prices, depending on their measurement. For Otara wood its measurement are 1x12by 12 and it cost N1, 300; 2x2by 12 cost N300; 2x3by 12 cost N4, 50; 2×12 by12 cost N1, 800 . Iroko wood has 1×12 by 12 cost N1, 500; 2×12 by 12 cost N2, 200. Mahogany 1×12 by 12 costs N2, 100; 2 by 7 feet cost N1, 500; 2×2 by 12 costs N3, 200.

    Ipin, Obeche, Otako, and Omosida have the same price range depending on the inches 1×12 by 12 costs 1,100; 2×12 by 12 costs N1, 500; 3×8 by 12 cost N1, 600. The cheapest are Sanmi, and Arere with sizes like 1×12 by 12 costs N900; 2x12by 12 costs N1, 300; 2x3by 12 costs N300.

    Plywood has different sizes and prices with two types, the imported and local ones. For the imported type 1\8 inches cost N300; ½ cost N1, 500; half inch cost N2, 900; and 3/ 4 costs N4, 500. For the local one 1/ 8 cost N250; 1 /2 cost N1, 400; half inch cost N2,800; and 3 / 4 cost N4,400.

    Pans, peck and flat metals are bought by bundles and piece. Bundles of pans cost N10, 000 containing 20piece; a piece cost N500. Flat metals cost N2,000 per bundle.

    The market also stock paints of various colours, types and prices. We have Kaklus, Fine Coats, Jolak, Radiant, Daplux , and Soliguard. These paints, apart from Care and Soliguard which are the more expensive ones because they are imported and only come in glossy and packed in 4 litre. The rest of the paints have three variations such as emulsion, texcoat, and gloss mix. All these have their different prices. 20 litres of any brand of paint that is glossy cost N2, 500: Texcoat cost N4,000: Emulsion cost N2, 600. Four litres of glossy cost N500: Texcoat cost N1,000: Emulsion cost N500, 1 litre its cost N300.Paint comes in three packs which are in 20, 4, and 1 litre. The amount of litres to purchase should depend on the individual who is buying.

    Paint has different colours but has some special ones which are deep colours and more expensive, they come in 4 litre packs and sold for N3,100. They are orange, purple, silver and gold.

    Prices of nails vary too, they come in two bags, the 50kg which cost N5,000, and 25kg which cost N2, 500. For those who want to buy small quantity, N100 worth is available.

    Top-Board costs N70 for 200gm, N1, 500 goes for 250gm, 500kg is sold for N250, 1kg cost N400, 2kg cost N700, and 5kg cost N1, 200. All the aforementioned can be found at the Isopako plank market.