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  • 2019: Defusing fake news time bomb

    Many Nigerians have been exposed to the menace of fake news, misinformation and propaganda, particularly on social media and other online platforms. This has caused ethnic, religious and political tensions in some parts of the country. With a potentially-heated general elections coming in February, next year, what legal and other remedies can be deployed to check fake news? ROBERT EGBE asks.

    When the Nigerian Army began a medical outreach as part of the Operation Python Dance II, code-named Egwu Eke, in the Southeastern states on September 18, last year, its aims were to: offer free medical services in fulfiment of its corporate social responsibility.

    But, hours after the outreach began in Ozubulu, Ekwusigo Local Government Area of Anambra State, news began making the rounds that the personnel were forcibly injecting pupils with the Monkey Pox virus.

    Pupils in public and private schools in Anambra and the neighbouring Imo, Abia, Ebonyi and Enugu states abandoned their schools as the rumour went viral that the exercise was a tool by the Federal Government, led by President Muhammadu Buhari, a northerner, to depopulate the Southeast.

    Nearly a month later, despite a sustained national campaign of assurances by the army and Southeast governors, the Monkey Pox vaccination scare hit Edo, Dalta and Bayelsa states in the Southsouth.

    A parent, who identified herself as Mrs. Chiazor, explained on October 14, 2017, why she withdrew her child from school.

    She said: “I came to school because I heard that the killer vaccine was already at the Oredo Local Government Secretariat (Edo State) for onward transmission to schools.”

    Asked where she got the information from, Mrs. Chiazor replied: “It was on the radio. Children also died in Anambra after they were vaccinated.”

     Fake news sells…everywhere

    Nigeria is not alone in the fake news problem. A 2017 study by news website BuzzFeed found that fake news travelled faster and further during the United States election campaign.

    The President Donald Trump-administration has been dogged by allegations that he was partly aided into office, rather than his rival Hillary Clinton, by a Russian fake news campaign.

    According to BuzzFeed, the 20 top-performing false election stories generated 8,711,000 shares, reactions, and comments on Facebook, whereas the 20 best-performing election stories from 19 reputable news websites generated 7,367,000 shares, reactions and comments.

    Also, a 2016 BBC report titled “The city getting rich from fake news” traced many of the fake news websites that sprang up during the United States election campaign to a city in Macedonia, where teenagers fabricated sensationalist stories to earn cash from advertising.

    This suggests that tech-savvy Nigerian youths could be tempted to cash in on the same scheme, unless the country finds a way to stop them.

     Cambridge Analytica

    Another dimension was introduced to the fake news problem in Nigeria, last March when The Guardian UK revealed that a Nigerian billionaire paid £2 million to data firm Cambridge Analytica to help former President Goodluck Jonathan win the 2015 elections which he eventually lost.

    Will Cambridge Analytica style firms be recruited for the 2019 polls? There is no indication yet that this is the case, but eyebrows were raised on November 2, when it was revealed that The Peoples’ Democratic Party (PDP) had hired the firm of Brian Ballard, a top US lobbyist, ahead of the 2019 elections. The influential lobbyist has President Trump as one of his clients.

    Major recent fake news incidents

    Fake pictures circulating on social media which users are falsely claiming depict inter-communal violence are inflaming already high tensions in Nigeria

    In January, the presidency denounced a fake Twitter account which appeared to justify herdsmen attacks in Benue State to the anger of the public.

    A month later, a letter alerting the public to an apparent attack by herders on the Lagos-Ibadan Expressway, a major route in the country’s Southwest, went viral before the police issued a statement to deny it.

    What is the government doing to stem the tide?

    On July 18, Minister of Information and Culture Alhaji Lai Mohammed said the National Campaign Against Fake News has received a boost from the Social Networking Platform, Facebook, which plans to partner with the Federal Government to check the menace.

    To tackle the menace, he said: “We have launched a national campaign against fake news and hate speech. The aim is to sensitise Nigerians to the dangers posed by fake news; how to spot fake news and what to do”.

    On October 18, the Minister warned that the challenge posed by hate speech and fake news was a serious threat, not just to the peace and security of Nigeria, but to its very existence.

    A media adviser to President Buhari, Tolu Ogunlesi. has said the government has reported “hundreds” of fake news websites to tech companies since 2015, in an effort to stem the tide.

    “A particular case was that we had people impersonating the Minister of Finance on Facebook. They were using the account to financially defraud people,” he told AFP.

    “A lot of them run pay-for-job schemes. It’s a common scam, asking people to pay some money in exchange for a job.”

    Ogunlesi predicted that misinformation online will still increase as elections approach in February next year when former Vice President Atiku Abubakar will challenge Buhari.

    Are existing legislations adequate?

    Although the Cyber Crime Act 2015 appears to be more concerned with financial/ICT crimes and hate speech, it does tackle fake news, albeit in an indirect way.

    For instance, Sections 24 and 26 of the Act provides that any person who knowingly or intentionally sends a message or other matter by means of computer systems or network that is grossly offensive, pornographic or of an indecent, obscene or menacing character or causes any such message or matter to be so sent; or he knows to be false, for the purpose of causing annoyance, inconvenience, danger, obstruction, insult, injury, criminal intimidation, enmity, hatred, ill will or needless anxiety to another or causes such a message to be sent, shall be liable on conviction to a fine of not more than N7,000,000 or imprisonment for a term of not more than three years or to both.

    The Act also forbids the distribution of racist and xenophobic material to the public through a computer system or network (e.g. Facebook and Twitter). It prohibits the use of threats of violence and insulting statements to persons based on race, religion, colour, descent or national or ethnic origin. Persons found guilty of this are liable on conviction to imprisonment for a term of not less than five years or to a fine of not less than N10million or to both fine and imprisonment.

    In an article last August titled, “Nigeria has enough laws to curb hate speeches”, human rights lawyer Mr Femi Falana (SAN) addressed attempts by the National Assembly to enact new legislation to curb the related problem of hate speech.

    He said: “Before further energies and resources are dissipated by the government on the enactment of a new hate speech law it is pertinent to point out that the country has enough laws to deal with the menace. What is however lacking is the political will to arrest and prosecute those who contravene the provisions of the relevant laws.”

    Falana also observed that offences which include criminal defamation, inciting statements, breach of the peace, criminal intimidation, publication of statement, rumour or report which may disturb public peace, false publication etc, already attract penalties by imprisonment or payment of fines.

    He added: “Under Section 95 of the Electoral Act 2010 as amended, it is provided that no political campaign or slogan shall be tainted with abusive language directly or indirectly likely to injure religious, ethnic, tribal or sectional feelings.

    “Accordingly, abusive, intemperate, slanderous or base language or insinuations or innuendoes designed or likely to provoke violent reaction or emotions shall not be employed or used in political campaigns. A political party or persons who contravene the provision of this section is guilty of an offence and shall be liable on conviction- (a) in the case of an individual, to a maximum fine of N1,000,000 or imprisonment for the term of 12 months; and in the case of a political party, to a fine of N2,000,000 in the first instance, and N1,000,000 for any subsequent offence.

    ‘Laws not the problem’

    Activist-lawyer Chief Mike Ozekhome (SAN) shared similar views. Ozekhome, who warned the government against attempts to stifle free speech in the guise of curbing fake news, urged it to take a second look at the existing laws.

    He said: “We have enough laws that can deal with fake news in our criminal code in the southern part of Nigeria and in our penal code that operates in the northern part of the country, including Abuja. We have never lacked laws; what we have always lacked is the will to implement laws.

    “When a person decides to post a piece of news that is fake, both the person posting and the person who generated that piece of news are liable and should be prosecuted. It is like in the law of defamation or libel; the person who makes a libelous statement is as guilty as the peddler of that libelous statement. That is why if, for example, chief A makes a libelous statement, the newspaper that published it, has also committed libel. The vendor that sells the newspaper has also committed libel. So, it is therefore important that Nigerians should watch news that are posted to them before they themselves disseminate it.

    “But we do have enough laws in our statutes to deal with fake news. The Cyber Crime Act that was passed is there.”

    Director, Strategic Communications of President Buhari 2019 Presidential Campaign, Festus Keyamo (SAN), reasoned that because of the closeness of the elections, any attempt by the government to curb fake news, could be misinterpreted as a ploy to limit freedom of speech.

    He said: “For now, any legal intervention to try to curb fake news will mostly seen as an attempt to gag free speech. It is a big problem to try to balance the two, to the extent that, one, you allow free speech, and two, you ensure that you restrict fake news. Balancing both is problematic.

    “You would recall that recently, there was an attempt to enact legislation in respect of fake news, unverified news and Nigerians rose up and condemned it. The National Assembly was trying to criminalise it. If you look at the content of the bill, it talked about news that is untrue, unverifiable; whether we call it hate speech or not, the content of the bill was actually fake news, because the content of that bill was that you post something that you cannot verify, that is not true, then you will be subject to prosecution and fake news is all about stories that are untrue. So, we have a problem on our hands, the problem is how to allow free speech and at the same time curb fake news.”

    Keyamo noted that the reputable press organisations have a big role to play in exposing fake news because they have the tools to do so. He

    He said: “For now, an active, regular press must rise to the occasion. The normal, orthodox press that people still believe in; newspapers, television stations, electronic media, etc, must find a way to quickly respond to fake news publications, in order to ensure that people are not misled. This is because, for now, there is no way we can make any legislation between now and the election period.

    “Secondly, if the ruling party initiates anything like that now, it will be interpreted as trying to interfere in the elections and even curtailing the rights of Nigerians. There’s always mass hysteria about such things; nobody will listen to reason.

    “But I’m not giving up to say we have to live by fake news, I’m just saying that the regular press should be alive and not ignore any such news, because some of the fake news items will come as internet garbage, but whether it is garbage or not, I think we should respond, the regular news media should respond to such stories as quickly as possible.”

    Prosecuting fake news publishers

    Kaduna State stands out as the state which does not relent in using the law to solve the fake news problem.

    On April 10, the state arraigned the Vanguard newspaper correspondent in the state, Luka Binniyat, for alleged false reporting of the death of some students during a crisis in the southern part of the state.

    Mr. Binniyat was slammed with a two-count charge before a Kaduna State High Court sitting in Kaduna, the state capital, court documents show.

    He was accused of writing a false report in his newspaper and on the social media that about five students of College of Education, Gidan Waya, Kaduna State were ambushed and shot dead by Fulani herdsmen.

    The state also charged the president of Chocolate City music label, Audu Maikori, to court for distributing a similar report, although he later retracted and said he was misled.

    “After carrying out a detailed investigation that involved the police, I found out that my driver, who claimed that his brother was also killed in Southern Kaduna, lied to me to extort money”, Mr. Maikori said.

    While the Kaduna State government has defended the trials, saying they are necessary to prevent people from spreading false rumours and thus, worsening crises in southern Kaduna, its critics say such trials only distract from the security challenge facing the state.

    Scores of people have been killed in Southern Kaduna in clashes manly between migrant herdsmen and local farming communities.

    Lesson from other countries

    Germany: In June 2017, Germany’s Bundestag (federal parliament) passed the Network Enforcement Act (Netzwerkdurchsetzungsgesetz) 2017, which came into effect on January 1.

    The Network Enforcement Act is aimed at combating agitation and fake messages (fake news) in social networks.

    It requires companies like Google and Facebook to delete content considered hate speech or fake news, or face a fine of up to 50 million euros.

    Malaysia: Malaysia has taken stern measures towards combating fake news. It has enacted a law criminalising it, with a penalty of up to six years in jail. The law criminalised the dissemination of “any news, information, data and reports, which is or are wholly or partly false, whether in the form of features, visuals or audio recordings or in any other form capable of suggesting words or ideas”.

    Italy: Last November, two fake news items grabbed the public’s attention in Italy. The first claimed that a nine-year-old Muslim girl was hospitalised after being sexually assaulted by her 35-year-old husband.

    The second was a fabricated photo appearing to show Maria Elena Boschi, a prominent lawmaker and member of former Prime Minister Matteo Renzi’s ruling Democratic Party, at a funeral mourning the death of a mafia boss Salvatore Riina.

    In response to these and others, Italy launched a two-pronged measure. The first relied on Facebook. Last February, the social networking giant rolled out for its Italian users a new fact-checking programme aimed at identifying and debunking false information that appears on the site.

    The second was initiated by Italian lawmakers last October. They launched an experimental project to make media literacy—including how to recognize falsehoods and conspiracy theories online—part of the country’s high-school education curriculum.

    The Czech Republic: According to a 2016 report by a Czech think tank, European Values, about 2.6 million of the country’s 10.6million (2016 estimate) population are influenced by fake news.

    Last year, the Czech Interior Ministry set up a 20-person unit to monitor “disinformation campaigns related to internal security.” it also runs a Twitter account that shares tips on how to identify reliable news sources, promotes access to free media-literacy classes, and occasionally calls out specific information circulating online as untrue.

    China: In 2017, China’s first cybersecurity law came into effect; it requires Internet companies to allow even more surveillance of their networks, submit to mandated security reviews of their equipment and provide data to government investigators when requested, among other regulations.

    Kenya: President Uhuru Kenyatta, has signed into law the Computer Misuse and Cybercrimes Act 2018 that criminalises abuse on social media and the spread of false information. According to Reuters, the bill allows for a fine of up to $50,000, two years of jail time, or both, to be imposed on any person who intentionally publishes false information.

  • Shiites crisis a time bomb – Kasumu

    Sequel to the recent clash between the Islamic Movement in Nigeria (IMN) and the Nigerian Army in Kaduna, Dapo Kasumu, the House of Representatives candidate of the Social Democratic Party for Mushin 2 Federal Constituency in Lagos State, has raised concerns over what he described as the unnecessary bloodletting on both sides of the divide, warning that if not quickly curbed, the ongoing crisis portends great danger. Dare Odufowokan reports

    WHAT do you make of the incessant clashes between the Shiites in the north and security agents?

    In the last few days, social media has been awash with pictures of gruesome killings of Shiite protesters. In this era of fake news one will always take any information distributed on that medium with a pinch of salt. But alas, credible media sources depict the same pictures. I must confess I’m no expert in religious matters but there is something called conflict resolution.

    The bloodletting on both sides of this particular conflict, i.e. the military and Shiite protesters, is unacceptable, in saner climes a national day of mourning would have been declared but we have become norm to bloodletting in this country due to the frequency of occurrence, even news circle struggle to catch up when multiple conflagrations erupt simultaneously

    Let’s take a cursory look at this Shiite imbroglio; this crisis started some few years  back when  about 200, 500 or is it 1000 depending on whose number you want to believe, sect members, were killed by soldiers during an alleged blockade by the procession of the sect  and the subsequent  arrest of the sect leader, Sheikh El Zakzaky. Probably the thinking of the government of the day was let’s cut off the head of the snake, the snake will naturally die off.

    We saw how that panned out with Boko Haram that has left tens of thousands dead, millions displaced and billions of dollars worth of infrastructure and properties destroyed in its wake as a result of killing of their leader by some rouge element within the police allegedly. Just to be clear, this is not making any justification for the wanton destruction and bestiality inflicted on the Northeast by this sect

    Back to the Shiites issue, the sect took the most rational and legal option by going to court where they got multiple court orders granting bail to their leader but the government of the day, in flagrant disregard for the rule of law, disobeyed the court orders on the guise of national security. Well enough, the number one job description of the Federal Government is the security of lives and property of the citizenry.

    So you don’t think there is need to consider national security in taking such decisions?

    My question is the constant skirmishes between the sect, the military and police that have resulted in wanton deaths not a pointer that the policy is not working? Are the lives lost not Nigerians worthy of security? How has the continued incarceration of the sect leader ensured national security? We tend to never learn from history in our dear country. There is an adage that says “is only a mad man that repeats the same thing consistently expecting a different result”.

    There are conflict resolution mechanisms that can be deployed to de-escalate this impending conflagration and one of them is the release of the sect leader as a gesture of goodwill, amongst others. It does not make the federal government any less powerful but it gives her the moral high ground to make demands on the sect.

    Lastly, the use of live bullets to disperse protesters beats me hollow, the right to peaceful protest is constitutional and if it gets ugly, must we kill the protesters to disperse them? Why can’t the security agencies use rubber bullets, hot water cannons, etc., is it that human lives means next to nothing to us or the security apparatchik are under equipped hence they have no option than to use live billets. These are questions begging for answers.

    Why are you seeking a seat at the lower chamber of the National Assembly?

    From records available in the public domain, a whopping sum of 8 -10m is allocated to a member of the House of Representatives as running cost, apart from salaries and the constituency projects injected into the national budget annually. A rough estimate of this amounts to about 500 to 600m over a period of four years. This enormous amount should be put into good use for the people.

    Also from available records in our own constituency, we are yet to feel the impact of the huge amount we daily read about. That is why I want to give my people meaningful and impacting representation. And along with this, I pledge complete transparency. Resources allocated will be put to good use and accountable for the good people of the constituency via a constituency trust fund I intend to introduce.

    A community is strengthened when the youths are involved and engaged. We will, through various approaches, engage young people within the community in a manner that is productive and constructive. A state of the art co-creation technology hub will be built where youths can learn coding, programming and how to solve problems in the digital space and ultimately prepare them for jobs of the future.

    You speak a lot about empowering the constituents in many ways. How do you intend to do this?

    We shall provide seed funding of up to N1m to tech start-ups in the community with great potential and mentoring from tech industry experts. There will also be a skill acquisition and training centres that will constantly create skills and confidence necessary to secure a job, develop competencies that can make members of the community more efficient and sustainable.

    We shall provide start-up/equipment financing for outstanding students. This will strengthen Mushin community ultimately providing benefits for the youths involved, the community and country at large. We will also provide both school and community based mentoring for our young people. We believe an empowered woman can be an agent of change both for herself and for her community and country.

    Our traders and market women will be empowered through a soft loan of up to 100,000 with this empowerment woman will be able to elaborate and recreate what it is she can be, do and accomplish. We will provide health insurance to the senior citizens of our community; ages 65 and above and all pregnant women and infants up to five years of age as our budget can accommodate. We will create access to the most basic human rights for the members of our community to learn, lead, decide and thrive.

    Similarly, we acknowledge infrastructure is a very expensive area to dabble into, however, we will ensure regular and prompt clearing of drainage within the community and distilling of canals to reduce the perennial flooding and concomitant effects.

    Do you know Mushin and its people enough to meet their needs the way you plan?

    I know my people. I am no stranger to the constituency. I was born in the late 70s in the Lawanson area of Mushin. I started my early childhood living with my paternal great grandmother, late Mrs. Christiana Sanyaolu and was later transferred to my paternal grandmother Late Mrs. Olabisi Amosu all in Lawanson. I attended Mainland Preparatory Primary School and later attended St Finbarr’s College, Akoka.

    Upon finishing my SSCE, I gained admission into University of Lagos where I obtained a B.sc in Political Science and later a Master’s Degree in International Law and Diplomacy. I started my working career in the then Vmobile, now Airtel and had since worked in the banking and tech industry holding various positions. I am currently the Co-founder of Vas4africa Resourced Ltd. So, you will agree with me that I am well prepared for the task ahead.

  • N22.7 trillion public debt: Nigeria’s ticking time bomb

    Nigeria’s domestic and foreign debts stood at N22.7 trillion in March, according to the Debt Management Office (DMO). A large part of the debt was used to fund budgets and capital projects. COLLINS NWEZE writes that rising public debts remain a concern, and borrowing should be project-based, with funds deployed to revenue generating ones for payback.

    Discussions around Nigeria’s debt profile have been loud and clear. And when the country’s public debt profile hit N22.7 trillion based on Debt Management Office (DMO) statistics, the figure is of great concern to Nigerians.

    But the Federal Government is rather positive about the figure, assuring Nigerians that there is nothing to worry, insisting that its borrowings are to provide national assets that will boost economic growth and development.

    Federal Government’s domestic debt at the end of March stood at N15.9 trillion.

    Speaking at the International Monetary Fund (IMF) Regional Economic Outlook for Africa with the theme: “Domestic Revenue Mobilisation and Private Investment,” in Lagos, DMO Director General Patience Oniha said Nigeria took loans to fund the budget and put more funds into the capital projects.

    Oniha said with the level of reserves, oil production and population, Nigeria can’t be saying the country is an oil producing nation just like Saudi Arabia which is an oil producing nation.

    She said Nigeria is miles apart from Saudi Arabia in terms of oil being a source of its revenue. “We have since realised we should not be benchmarking ourselves against these countries. We borrow because there is revenue shortfall. The National Assembly passed the budget last week and we know it was higher than what the executive presented. So, as a debt manager, what I am looking for is to see where the funding of that incremental size may come in from,” she said.

    Oniha said the government would be borrowing to make up the shortfall in budget. “All of government’s borrowings were targeted at infrastructure development. Without borrowing, we won’t be able to deliver on the budget and I think we should be clear about that and a lot of that went into capital,” she said.

    She said Nigeria should not focus on the debt to Gross Domestic Product (GDP) ratio, adding that the debt strategy is not to crowd out the private sector.

    Oniha said the decline in interest rate means that there are about N200 billion out there in the market for private sector to invest. “You will also notice that we are retiring some of the Treasury Bills as they mature. The main challenge I am giving to the private sector is that why is all these money still sitting where it shouldn’t be? Why has it not reached the private sector because that was the key objective of our strategy.”

    The IMF’s Head in Nigeria Amine Mati said Nigeria and other countries in the Sub-Saharam Africa need three to five per cent Gross Domestic Product (GDP) growth to thrive.

    “We think that for the region, there needs to be three to five per cent GDP growth is needed. How do you get there? In Nigeria, you can remove a lot of exemptions and expand income taxes. If you look at all the various forms of taxation, you can take another look of property tax, then you can have tax administration and improving compliance. You know, in Nigeria, complying with many of the taxes is still very low,” he said.

    He urged Nigeria to double tax compliance to GDP ratio from 25 per cent to 50 per cent. Such measure, he said, can make the difference in increasing revenue mobilisation.

    He said raising growth is really key for the challenges ahead in Nigeria and Sub-Saharan Africa. “For the region as a whole, we can say the average growth rate on a per capita base is low. And a third of African countries, in 2017, with Nigeria as one of them, has seen a decline per capita GDP level. And we expect some of that to continue. To really make a difference, that trend needs to be reversed. So, the growth rate really needs to surpass its population growth to make a difference”.

    He said the interesting characteristics are that non-resource countries have higher private investments. “Oil prices have gone up and this is an opportunity for these countries to really use the opportunity provided by the pick-up in oil price to initiate some reforms that would encourage more private sector investments,” he said.

    According to the DMO, the combined debt of of the federal and the state government stood at N6.75 trillion. The new Debt Management Strategy (DMS), Ms. Oniha said, has brought about the restructuring of the debt portfolio, which “has resulted in reduced debt servicing costs, lowered interest rates in the domestic market and an improved availability of credit facilities to the private sector.”

    Explaining the motive behind the recent spate of borrowings, the DMO chief said: “It (borrowing) is essentially for financing capital expenditure and stimulating the economy. The funds injected through borrowing strongly supported the implementation of the Federal Government’s budget, which helped the country to exit recession in 2017.”

    Former Executive Director in Keystone Bank Richard Obire said when it comes to debt, what is important is not the figure, but the developmental projects that the borrowed funds are used to finance.

    Obire said: “I am not concerned about the size of the debt, but do such debts have the capacity for repayment? Also important is whether the debt is cash-flow friendly and of relatively low pricing. The problem with Nigeria’s debts is that when you look around, you will be searching for what the funds were used to do.”

    Obire said that at this level of borrowing, the road and electricity infrastructure, airport infrastructure, social infrastructure, such as health and education, and even broadband infrastructure, should be visible for all to see where the funds have been channeled to.

    “The problem with this high debt is that you cannot really justify the high borrowing. We need to channel the loans to productive sectors of the economy.

    “The government has to explain where the funds had gone to. Have you seen any new university, health care centre? I have not seen something dramatic. Overall, I have nothing against borrowing, but the funds must be channeled to good uses.”

    Besides, the government saw the recession which ended last year as an opportunity to widen its borrowing plan. There were approvals to borrow from the World Bank, African Development Bank (AfDB), Japan International Cooperation Agency (JICA) and Export-Import Bank of China. The DMO has a mandate to facilitate access to the funds from the multinational agencies.

    The move came on the heels of an approval for a three-year external borrowing plan. The government’s plan was to raise about $5 billion from Eurobond market and multinational and bilateral lenders.Regarding foreign debt, the strategy is to borrow on non-concessionary terms for projects with self-paying capacity, and/or job creation potential, and on concessionary terms and grants for social sector projects.

    The Director-General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. AkpanEkpo, explained that budgetary allocations alone may be inadequate to finance the infrastructure deficit with dwindling oil revenue.

    Prof. Ekpo described the borrowing option the most viable; pointing out that Nigeria’s rebased (Gross Domestic Product (GDP) economy has given it the leeway to borrow more to bridge infrastructure gap.Ekpo said the government can also borrow internally to achieve the feat, even as he disclosed that internal borrowing is always short-term while external borrowing has longer tenor.

    Ekpo said the DMO has the capacity and constitutional role to advise the government on the available choices. “The World Bank rates are cheaper with longer repayment term. The DMO can also leverage on the Nigeria Trust Fund with the AfDB to get a better deal on the loans needed to fund developmental projects”, Ekpo said.

    Nigeria has been grappling with economic crisis since crude oil prices dropped by about 43 per cent from an average of $100.35 throughout 2014 to an average of $65.20 presently.Specifically, the drastic fall in the prices of crude oil, which constitutes the largest component of the forex reserves has cut dollar earnings from about $3.2 billion monthly to about a billion dollar for the same period. Analysts believe that with the fall in crude oil prices, the government needs to borrow to support economic development, but the funds must be well utilised.

    OlakunleEzun, a currencies analyst with Ecobank Nigeria, said the DMO works closely with the government to manage the national debts. He said although funds from the domestic bond market are more expensive than the international bond market, investing in the local bond market is also in the best interest of the economy.

    The FGN Bonds, he added, helps the government in the funding of its deficits in a non-inflationary manner while providing the benchmark yield-curve for pricing other securities/bonds. It also engenders rational management of government’s fiscal and monetary operations.

    Ezun said that the debts, if well-spent, will boost liquidity in the economy and investment in key sectors like agriculture and mining, among others.

     

    Fresh $2.8b loan targeted abroad

    The Federal Government plans to raise $2.8 billion of debt offshore as part of its 2018 budget and will explore all options to lower costs,  Oniha said.

    The government has laid out plans to borrow abroad even though interest rates are rising in the United States which could see Nigeria pay a higher premium on this occasion compared with its most recent debt sale in February.

    She said the debt office has sent a request for a proposal to banks for an international bond offering, IFR reported, citing sources. “We will explore all options keeping in mind our twin objectives of extending the tenor of the debt stock and lowering costs,” Oniha told Reuters.

    The parliament needs to approve the new borrowing. Oniha in January said the DMO could tap capital markets or concessionary loans from the World Bank and would consider funding options after the 2018 budget had been approved.

    President Muhammadu Buhari last week signed a record N9.12 trillion budget for 2018 into law, aimed at fostering growth in Nigeria before elections next February, in which he will seek a second term.

    Growth rates in Nigeria have bounced back since the third quarter of 2016, when a recession, its first in 25 years, hit bottom. It exited that contraction last year, largely due to higher oil prices, with the country relying on crude sales for much of its revenue.

    However, growth slowed in the first quarter of 2018 for the first time since pulling out of recession as its non-oil sector struggled. Nigeria raised $2.5 billion through a dual-tranche Eurobond offering in February, selling a 12-year note at 7.1 per cent to raise $1.25 billion and a 20-year tranche at 7.7 percent. The February deal was the second international bond sale in less than three months, after the debt office raised $3 billion through an offering of 10- and 30- year bonds in November.

     

    Diversification to the rescue

    As worrisome as the economic indicators may be, analysts described them as temporary and surmountable setbacks when the government’s policy on diversification of the economy begins to crystalise.

    According to them, after diversification, growth would no longer be determined by the prices of crude oil even as the country has been unable to exploit up to 25 per cent of opportunities in agriculture.They said: “We need to achieve internal food security and have the opportunity to export agro-based products in processed form. Imagine the variety of food stuff from savannah to the deserts, all the various legumes, roots and others that can be grown from these environments.

    “If we effectively exploit agriculture, if and as we are making progress in agriculture, firstly, the major consumer of our forex like agro-based raw materials, rice, fish, poultry, wheat, will be taken care of and government will save billions of dollars from these imports.”

    To them, the government’s ability to borrow from a domestic debt market also has some strategic value. Besides, domestic debt reduces the exposure of the country to exchange rate risks and the limitations of the size of foreign reserves.

    The independence, they said, lies in the country having the option to exercise the choice to borrow from internal sources, external sources, or a mixture of both.”Sovereign borrowing from the domestic debt market encourages the development of a functional bond market, with the scope to introduce different instruments, which will encourage the habit of domestic saving, intermediation and investment. Such a functional domestic bond market will be tapped by the private sector to raise long-term funds for investment in the real sector and infrastructure projects. Nigeria has developed a deep and liquid domestic bond market where funds of up to 20 years tenor can be raised,” they said.

    Borrowing guidelines

    By law, the government may borrow from the capital market, subject to National Assembly’s approval. The government at all tiers shall only borrow for capital expenditure and human development on concessional terms,” the DMO guidelines said.

    Any government, or its agencies, can only obtain external loans through the Federal Government and such loans must be supported by a Federal Government Guarantee. The guideline stipulates: “No state, local government or federal agency shall, on its own, borrow externally. State governments and their agencies wishing to obtain external loans shall obtain Federal Government’s approval-in-principle from the Federal Ministry of Finance.”

    However, the borrowing proposal must be submitted to the Ministry of Finance and the DMO for consideration. The proposal must state the purpose for which the borrowing is intended and its link to the government’s development agenda.

    It must also state the cost-benefit analysis, showing the economic and social benefits to which the intended borrowing is to be applied; cash-flow statements of the Ministries, Departments and Agencies (MDAs), to ascertain their viability and sustainability.

    There must also be copies of the state’s executive council’s approval and the resolution of the State House of Assembly.Also, all banks and financial institutions requiring lending money to the federal, state and local government areas or their agencies shall obtain the prior approval of the minister of Finance and shall state the purpose of the borrowing and its tenor.

    Govt bonds still get positive rates

    The government recently announced that it priced its offering of $2.5 billion aggregate principal amount of dual series notes under its Global Medium Term Note Programme. The notes comprise a $1.25 billion 12-year series and a $1.25 billion 20-year series. The 12-year series will bear interest at a rate of 7.143 per cent, while the 20-year series will bear interest at a rate of 7.696 per cent, and, in each case, will be repayable with a bullet repayment of the principal on maturity.

    The offer is expected to close on or about 23 February 2018, subject to the satisfaction of various customary closing conditions.The country intends to use the proceeds of the notes for the refinancing of domestic debt. The notes represent the Republic’s fifth Eurobond issuance, following issuances in 2011, 2013 and two in 2017.

    The offer has attracted significant interest from leading global institutional investors with a peak order book of over $11.5 billion.  When issued, the notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market.  The Republic may apply for the notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange (NSE).

     

  • Rising public debt as ticking time bomb

    Nigeria’s domestic and foreign debt stood at N21.73 trillion at the close of last year, according to the Debt Management Office (DMO). Of the N7.2 trillion Budget 2017, N1.6 trillion went into debt servicing. The statistics showed that nine per cent of the cash was spent on foreign debts servicing and the balance on domestic debts. COLLINS NWEZE reports that stakeholders are worried about the rising debt profile, especially where borrowed funds cannot be matched with physical or social infrastructure.

    THE rising debt profile as contained in the latest Debt Management Office (DMO) statistics is worrisome, some analysts have said. But the Federal Government has assured all that there is no cause for alarm.

    Finance Minister Mrs. Kemi Adeosun said the government was embarking on a borrowing spree to provide national assets to aid the growth of the economy.

    Mrs. Adeosun’s explanation came less than a week after the DMO statistics put the debt portfolio at N21.73 trillion as at December, last year.

    About N1.6 trillion of the debt, according to the DMO, was spent on debt servicing and that the debt stock rose by N1.327 trillion between September and December 2017.

    DMO’s Director-General, Ms. Patience Oniha, said the Federal Government’s domestic debt at the end of last year, stood at N12.589 trillion. The 36 states and the Federal Capital Territory (FCT) had a domestic debt overhang of N3.348 trillion.

    The combined external debt of the federal and the state governments stood at N5.787 trillion. The new Debt Management Strategy (DMS), Ms. Oniha said, has brought about the restructuring of the debt portfolio, which “has resulted in reduced debt servicing costs, lowered interest rates in the domestic market and an improved availability of credit facilities to the private sector.”

    Explaining the motive behind the recent spate of borrowings, the DMO chief said: “It (borrowing) is essentially for financing capital expenditure and stimulating the economy. The funds injected through borrowing strongly supported the implementation of the Federal Government’s budget, which helped the country to exit recession in 2017.”

    Reacting to the DMO statistics, a former Executive Director in Keystone Bank, Richard Obire, said, when it comes to debt, what is important is not the figure, but the developmental projects that the borrowed funds are used to finance.

    Obire said: “I am not concerned about the size of the debt, but do such debts have the capacity for repayment? Also important is whether the debt is cash-flow friendly and of relatively low pricing. The problem with Nigeria’s debts is that when you look around, you will be searching for what the funds were used to do.”

    Obire said that at this level of borrowing, the road and electricity infrastructure, airport infrastructure, social infrastructure, such as health and education, and even broadband infrastructure, should be visible for all to see where the funds have been channeled to.

    “The problem with this high debt is that you cannot really justify the high borrowing. We need to channel the loans to productive sectors of the economy.

    “The government has to explain where the funds had gone to. Have you seen any new university, health care centre? I have not seen something dramatic. Overall, I have nothing against borrowing, but the funds must be channeled to good uses.”

     

    Debt stock composition

     

    The composition of the debt stock as at the end of last year showed that external debt was 26.64 per cent of the portfolio, up from 20.04 per cent in the preceding year. Domestic Debt was 73.36 per cent, down from 79.96 per cent in 2016.

    The key benefits of the restructuring of the portfolio, Ms. Oniha explained “are the reduction of the government’s debt service costs, lowering of interest rates in the domestic market and improved availability of credit facilities to the private sector.

    “The DMO repaid N198 billion Nigerian Treasury Bills (NTBs) in December 2017 with the proceeds of Eurobond issuances and the office has continued further implementation of the strategy this year, with the issuance of the $2.5 billion Eurobonds in February 2018, the proceeds of which is being used to repay maturing domestic debt, starting with N130 billion NTBs repaid on March 1.

    “The Total Public Debt (TPD) as at December 31, 2017, represents 18.20 per cent of Nigeria’s (Gross Domestic Product (GDP) for last year. This shows that Nigeria’s debt continues to be sustainable and is well within the threshold of 56 per cent for countries in Nigeria’s peer group,” Ms. Oniha stated.

    She assured Nigerians that the most important consideration for these borrowings was that the proceeds were being prudently applied to bridge infrastructure gaps occasioned by the decline in revenues.

    The figures showed that the DMS is achieving its objective of reducing the ratio of domestic debt in the portfolio, with a target of 60 per cent domestic and 40 per cent external.

    She said: “Our projection is that from two sources, the borrowing should be dropping in the medium term. The rate of increase will be much slower, and instead of borrowing 17-18 percent from the domestic market, we’ll do seven per cent from external sources.”

    Ms. Oniha said the government had to increase borrowing because the output and price of crude fell in 2014, which reduced government earnings and eventually plunged the economy into its worst-ever recession in 27 years.

     

    Recession as a blessing in disguise

     

    The government saw the recession which ended last year as an opportunity to widen its borrowing plan. There were approvals to borrow from the World Bank, African Development Bank (AfDB), Japan International Cooperation Agency (JICA) and Export-Import Bank of China. The DMO has a mandate to facilitate access to the funds from the multinational agencies.

    The move came on the heels of an approval for a three-year external borrowing plan. The government’s plan was to raise about $5 billion from Eurobond market and multinational and bilateral lenders.

    Regarding foreign debt, the strategy is to borrow on non-concessionary terms for projects with self-paying capacity, and/or job creation potential, and on concessionary terms and grants for social sector projects.

    The Director-General of the West African Institute for Financial and Economic Management (WAIFEM), Prof. Akpan Ekpo, explained that budgetary allocations alone may be inadequate to finance the infrastructure deficit with dwindling oil revenue.

    Prof. Ekpo described the borrowing option the most viable; pointing out that Nigeria’s rebased (Gross Domestic Product (GDP) economy has given it the leeway to borrow more to bridge infrastructure gap.

    Ekpo said the government can also borrow internally to achieve the feat, even as he disclosed that internal borrowing is always short-term while external borrowing has longer tenor.

    Ekpo said the DMO has the capacity and constitutional role to advise the government on the available choices. “The World Bank rates are cheaper with longer repayment term. The DMO can also leverage on the Nigeria Trust Fund with the AfDB to get a better deal on the loans needed to fund developmental projects”, Ekpo said.

     

    Between falling oil prices and borrowing

     

    Nigeria has been grappling with economic crisis since crude oil prices dropped by about 43 per cent from an average of $100.35 throughout 2014 to an average of $65.20 presently.

    Specifically, the drastic fall in the prices of crude oil, which constitutes the largest component of the forex reserves has cut dollar earnings from about $3.2 billion monthly to about a billion dollar for the same period. Analysts believe that with the fall in crude oil prices, the government needs to borrow to support economic development, but the funds must be well utilised.

    Olakunle Ezun, a currencies analyst with Ecobank Nigeria, said the DMO works closely with the government to manage the national debts. He said although funds from the domestic bond market are more expensive than the international bond market, investing in the local bond market is also in the best interest of the economy.

    The FGN Bonds, he added, helps the government in the funding of its deficits in a non-inflationary manner while providing the benchmark yield-curve for pricing other securities/bonds. It also engenders rational management of government’s fiscal and monetary operations.

    Ezun said that the debts, if well-spent, will boost liquidity in the economy and investment in key sectors like agriculture and mining, among others.

     

    Diversification to the rescue

     

    As worrisome as the economic indicators may be, analysts described them as temporary and surmountable setbacks when the government’s policy on diversification of the economy begins to crystalise.

    According to them, after diversification, growth would no longer be determined by the prices of crude oil even as the country has been unable to exploit up to 25 per cent of opportunities in agriculture.

    They said: “We need to achieve internal food security and have the opportunity to export agro-based products in processed form. Imagine the variety of food stuff from savannah to the deserts, all the various legumes, roots and others that can be grown from these environments.

    “If we effectively exploit agriculture, if and as we are making progress in agriculture, firstly, the major consumer of our forex like agro-based raw materials, rice, fish, poultry, wheat, will be taken care of and government will save billions of dollars from these imports.”

    To them, the government’s ability to borrow from a domestic debt market also has some strategic value. Besides, domestic debt reduces the exposure of the country to exchange rate risks and the limitations of the size of foreign reserves.

    The independence, they said, lies in the country having the option to exercise the choice to borrow from internal sources, external sources, or a mixture of both.

    “Sovereign borrowing from the domestic debt market encourages the development of a functional bond market, with the scope to introduce different instruments, which will encourage the habit of domestic saving, intermediation and investment. Such a functional domestic bond market will be tapped by the private sector to raise long-term funds for investment in the real sector and infrastructure projects. Nigeria has developed a deep and liquid domestic bond market where funds of up to 20 years tenor can be raised,” they said.

     

    Borrowing guidelines

     

    By law, the government may borrow from the capital market, subject to National Assembly’s approval. The government at all tiers shall only borrow for capital expenditure and human development on concessional terms,” the DMO guidelines said.

    Any government, or its agencies, can only obtain external loans through the Federal Government and such loans must be supported by a Federal Government Guarantee. The guideline stipulates: “No state, local government or federal agency shall, on its own, borrow externally. State governments and their agencies wishing to obtain external loans shall obtain Federal Government’s approval-in-principle from the Federal Ministry of Finance.”

    However, the borrowing proposal must be submitted to the Ministry of Finance and the DMO for consideration. The proposal must state the purpose for which the borrowing is intended and its link to the government’s development agenda.

    It must also state the cost-benefit analysis, showing the economic and social benefits to which the intended borrowing is to be applied; cash-flow statements of the Ministries, Departments and Agencies (MDAs), to ascertain their viability and sustainability.

    There must also be copies of the state’s executive council’s approval and the resolution of the State House of Assembly.

    Also, all banks and financial institutions requiring lending money to the federal, state and local government areas or their agencies shall obtain the prior approval of the minister of Finance and shall state the purpose of the borrowing and its tenor.

     

    Govt bonds still get positive rates

     

    The government last month announced that it priced its offering of $2.5 billion aggregate principal amount of dual series notes under its Global Medium Term Note Programme. The notes comprise a $1.25 billion 12-year series and a $1.25 billion 20-year series. The 12-year series will bear interest at a rate of 7.143 per cent, while the 20-year series will bear interest at a rate of 7.696 per cent, and, in each case, will be repayable with a bullet repayment of the principal on maturity.

    The offer is expected to close on or about 23 February 2018, subject to the satisfaction of various customary closing conditions.

    The country intends to use the proceeds of the notes for the refinancing of domestic debt. The notes represent the Republic’s fifth Eurobond issuance, following issuances in 2011, 2013 and two in 2017.

    The offer has attracted significant interest from leading global institutional investors with a peak order book of over $11.5 billion.  When issued, the notes will be admitted to the official list of the UK Listing Authority and available to trade on the London Stock Exchange’s regulated market.  The Republic may apply for the notes to be eligible for trading and listed on the Nigerian FMDQ OTC Securities Exchange and the Nigerian Stock Exchange (NSE).

    The pricing was determined following a series of short meetings and conference calls with investors.

    The Minister of Finance, Mrs. Kemi Adeosun, said: “Nigeria is focused on reducing the cost of our debt portfolio and ensuring we have the optimal mix between domestic and international debt.

    “The proceeds of the issuance, which would supplement the issuances we completed in 2017, will be used to re-finance domestic debt, which is high cost and short term, with lower-cost international debt, with a longer tenure. “We will have a range of Eurobonds in issue, encompassing five year, 10 years, 12 year, 15 years, 20 years and 30 years’ bonds, giving investors a full basket of options to participate in.”

    Commenting on the notes’ pricing, Ms. Oniha said: “With the successful pricing of our fifth Eurobond, Nigeria’s status as an Issuer of Eurobonds with a strong and diverse investor base has been further consolidated.

    “This time, Nigeria has priced a new 12-year bond at a yield of 7.143 per cent and a 20-year bond at a yield of 7.696 per cent, both of which are consistent in price with our existing portfolio.

    “I am particularly pleased that the issuance will enable us to refinance a portion of our existing domestic debt portfolio, with external debt at considerably lower cost, but also that the impact of the process has already led to a reduction in the cost of domestic borrowing, and so a double benefit for the cost of our broader debt portfolio. Lower domestic rates will also benefit corporate borrowers.”

  • ‘Not helping the poor is sitting on time bomb’

    The Imam of Zone 3 Mosque, Abuja, Shaykh Tajudeen Bello, has warned the rich against withholding their Zakat, saying it is a sin to do so.
    Shaykh Bello, who said Zakat balances the economic equation between the rich and the poor, added that the compulsory alms-giving establishes the bond of love between the haves and haves-not.
    He spoke during the Zakat distribution organised Jaiz Zakat and Waqf Trust Fund at the Conference Hall of the National Mosque, Abuja.
    No fewer than 1,119 beneficiaries received cash and materials worth N40,146,000 from JZWTF as zakat proceed.
    The beneficiaries were drawn from Southeast, Southsouth, Northeast and Northcentral (Abuja).
    According to Shaykh Bello, crime will reduce to the barest minimum if the wealthy assist the poor, saying “anybody who is rich and does not help the poor is creating problem for the society. Likewise, any society that does not take care of the poor is sitting on a time bomb.”
    Zakat, the scholar said, prevents money from being stagnant, rather ensures flow of fund and increases capital.
    “It is unfortunate that majority of our rich men are keeping their money in the bank without investing it or assisting the poor. These people are killing the economy and entrenching poverty in the society,” he said.
    In his goodwill message, a member of House of Representatives, Alhaji Yakubu Balogun, called on the rich to always support the poor to alleviate their sufferings.
    Balogun said Jaiz Zakat is worth supporting for its laudable stride.
    “I congratulate and commend Jaiz Zakat on the bold initiative. You are assisting the government to reduce poverty in the society. Aside that Zakat is mandatory on all rich Muslims; it also helps bringing stability to the society. We pray for more of this organisation in our country,” he said.
    JZWTF Acting Chairman Alhaji Umaru Abdul Mutallab said the cash doled out to the poor was to empower them and reduce poverty.
    Mutallab said Jaiz Zakat was poised to impact positively in the life of the common man as well as uplift the living standards of the poor.
    JZWTF Executive Secretary Imam Abdullahi Shuaib enjoined wealthy Muslims to pay Zakat so that the poor could benefit from their wealth.
    He said poverty level in the country was on the increase while access to qualitative and affordable housing, medical and educational services was far out of the reach of the poor, hence the need to assist them.

  • The unemployment time bomb

    SIR: If the immigration recruitment in 2014 and its attendant tragedy was a bad food with sour taste, the ongoing police recruitment has so far proved to be a wrong recipe that may end up as food poisoning if appropriate caution is not taken immediately and effectively.

    The reality of unemployment has reverberated in recent recruitment exercises by various agencies of the federal government. Over 300,000 applicants indicated interest for 3000 vacancies in the Navy.  The police website crashed less than 24 hours due to heavy traffic of applicants. Within three weeks, over 550,000 applicants had indicated interest for 10,000 available spaces in the Nigerian police, with three weeks left.

    Although unemployment is a global phenomenon, the Nigerian situation is a pandemic that calls for urgent attention. Every year our universities continue to churn out graduates (both employable and unemployable) into already saturated labour market. School leavers and drop-outs throng the streets in search for daily living.  In a bid to weather the storm in the ailing economy, companies are forced to retrench and downsize, hence, workers that were once gainfully employed have been thrown back into the labour market in search for jobs that are not available. The menace of unemployment keeps staring us in the face as a nation. It has become a vigorous threat to our corporate existence, as well as our growth and development as a people, yet we seem to dodge the reality of its consequences.

    Boko Haram was able to thrive because many of those recruited saw the financial inducement as a solution to their financial incapacity. Social miscreants and touts have become a profession for some in a land where social security is non-existent. Thuggery has become a means of survival for idle hands that end up as tools in the hands of devious politicians. Others in similar hopeless state have found a quiet haven in armed robbery and kidnapping, thereby becoming endangered species to a large proportion of the society.

    The parallel lines of existing vacancies and applicants continue to grow at unequal distances and they may never meet until a state of emergency is declared on unemployment. And this state of affairs has created another jamboree for recruiting agencies who continue to smile to the bank at the peril of hapless jobseekers, knowing that the Nigerian system is a feasting ground for such inanities as witnessed during the controversial immigration recruitment exercise in March 2014. The sham that characterizes recruitment exercises in our land is one that leaves sour grape in the mouth. The gullibility of the unsuspecting public, the desperation of job-seekers, and the deceit and incompetence of recruiting firms are dire consequences of the failure of the Nigerian state.

    Successive governments have not shown the political will to establish new industries that would employ the army of unemployed graduates whose potentials continue to waste away in the bin of hope that may never surface. Epileptic power supply, the recurring fuel scarcity and collapsed state of social and physical infrastructure is a deterrent on the path of small scale enterprise and aspiring entrepreneurs. It is a sad reality that unemployment will continue to thrive in Nigeria for as long as the government continues to take power supply with kid gloves. More companies are changing their direction to neighbouring countries in order to avoid operating at a loss. Although Nigerians now pay higher tariff for power, the supply is not anything near celebrating. Expectation are so high that the ‘super minister’ in charge of power, cannot afford to let down Nigerians, especially the youths who daily bemoan the hardship of a country with wings but cannot fly, and of scarcity in the midst of plenty.

    As Nigerian population increases, so will crime rate and other social vices. It is wise therefore to give the youths a job before they get a job that will not only inflict pain and distress, but also give the society sleepless nights; for an idle hand is the devil’s workshop. The sooner the present administration puts the horse before the cart and tackles this hydra-headed monster, the earlier it would prevent another insurgent or militant group. Otherwise, this ticking time bomb may have been calculated to bring self-destruct on the snoring giant of Africa.

     

    • Yinka Adeosun,

    Ondo, Ondo State.

  • Time bomb

    Time bomb

    •All hands must be on deck to address the problem before it explodes

    Just how grave the problem of unemployment is in the country was evident in the number of applications received from those seeking to enlist in the Nigeria Police Force (NPF). According to the Police Service Commission (PSC), it had received 705,352 applications as at April 19, to fill 10,000 vacancies! The force requires 500 cadet Assistant Superintendents of Police (ASPs), 500 cadet inspectors, 1,500 specialist officers and 7,500 constables to fill the 10,000 vacancies approved by President Muhammadu Buhari, to reinforce the police for better performance.

    We commend the president for this gesture which would boost police personnel in the country even though the number still falls far short of the requirements stipulated by the United Nations, which is about one policeman to about 450 persons. We urge the commission’s chairman, Mike Okiro, to build on the apparent smoothness of the exercise by seeing it to a logical conclusion.

    But that is not where we are going. Our concern in the present instance is about the situation of unemployment in the country as reflected in the number of applications vis-à-vis the number of vacancies in the police force.

    Definitely the PSC must have got beyond what it bargained for, with 202, 427 applications received for the position of cadet assistant superintendent of police (ASP), 169,446 for the position of cadet inspectors and 333,479 for the position of constables. Considering that the total number required by the force is 10,000, what the statistics tells us is that at least 70 persons would be scrambling for one vacancy. Scary as this might be, the truth is that it does not necessarily mirror the  unemployment situation in the country.

    It is far worse.

    There is no gainsaying the fact that the police force cannot be the first choice of many Nigerian job seekers due either to personal reasons or old prejudices, some of which are completely unfounded. We have no doubt that even among those who have indicated interest in joining the police force; many were forced to it by the harsh economic situation of the country. What we are saying in effect is that there are more Nigerians out there looking for jobs than the statistics by the police recruitment has revealed.

    This is dangerous.

    Indeed, it is particularly frightening when we realise that many of the unemployed are graduates and youths who have dreams that cannot be fulfilled unless they are gainfully employed. Youth unemployment is a problem anywhere, but particularly worrisome in our kind of environment where there are no social safety nets for the unemployed. We are sitting on a keg of gunpowder.

    The government must move fast to arrest the situation. The way the executive and legislative arms of government keep passing blames over the budget does not show that they know the time bomb that youth unemployment, among many other pressing national challenges, symbolises. We cannot afford the laidback approach being witnessed in government as if we have all the time in the world to put things right.

    Both arms of government must realise that with government as a dominant spender in the economy, quick passage of the budget will take off some of the heat in the country. Economic activities will kick off afresh and some of the unemployed will find jobs in the construction companies and other sectors of the economy, with their various spin-offs also helping to take away some of the unemployed from the larger unemployment queue.

    The long-term strategy though will be in having the statistics of the number of graduates churned out by our various higher institutions with a view to planning how they would be absorbed into the economic system. Of course there must also be the enabling environment to let everyone practice his or her trade, irrespective of the level of their education because that is the only way to ensure that we reduce the crime rate in the country.

    We should not forget the age-long maxim that “an idle hand is the devil’s workshop”. A stitch in time saves nine.

     

  • Nigeria’s unemployment rate is time bomb, says NECA

    Nigeria’s unemployment rate is time bomb, says NECA

    The Director-General, Nigeria Employers’ Consultative Association (NECA), Segun Oshinowo, has warned that if the high rate of unemployment in the country is not checked, it is a time bomb that would explode any time.

    He lamented that the rising unemployment trend in the country portends grave danger, adding that was akin to pointing a gun at head of the country which the trigger may be pulled at any time.

    Oshinowo said government’s projection on the economy was yet to synchronise with the reality, even as he faulted figures released by the Nigeria Bureau of Statistics (NBS).

    He said: “If we are talking about good governance, it is not figures that will showcase such, but quality of life of the people. We should be looking at things such as accessibility to health and additional jobs that had been created. To the best of my knowledge from interacting with Nigerians and observing happenings around, one cannot really say that there has been any significant improvement in this economy.”

    The NBS recently published new rates of unemployment for Nigeria’s economy from 2010 – 2014 based on a new methodology, which suggested that the economy is almost at full–employment, as the rate for last quarter of last year stood at 6.4 per cent. The rate as at  first quarter of this year was 7.5 per cent. One is not so much concerned about the methodology used because they are based on certain assumptions, so if any of the assumptions is relaxed, the calculated rate may be different.

    Oshinowo noted that the Gross Domestic Product (GDP) growth rate might be saying something to the contrary.

    He asked rhetorically: “Government might say that they have posted 6.5 or 7.0 per cent but when you really look at the facts on the street, how many jobs have we created? To what extent has the quality of life of Nigerians been significantly improved in the last six months? How many businesses have come on stream?”

    He added: “Currently, we have started a survey on the health of our member companies, especially those in the North, and from the discussions we’ve had with them, we’ve been told that sales had gone down by 25 per cent. And if the trend should continue by the end of the year, quite a number of them will have to downsize. So, the outlook is grim, I must say.”

    He wondered why Nigeria continues to experience unemployment growth despite its rating as one of the fastest growing economies in the world.

  • Time bomb

    Time bomb

    THE menace of chronic youth unemployment in Nigeria has at various times been described as a ticking time bomb. This implies that when the problem assumes an uncontrollable dimension, it will explode, with deleterious effects on the society. We are afraid that the challenge has become more urgent and dangerous than this ‘ticking time bomb’ imagery suggests. For, the explosives generated by unemployment are already sounding all around us, and we cannot pretend that the evil days are not here already.

    It stands to reason, for instance, that there is a clear correlation between the youth unemployment in the land and the reserve army of idle and ignorant hands that a sect like Boko Haram is able to recruit for its nefarious purposes. In the same vein, the ever increasing wave of armed robberies, kidnappings, mindless assassinations and other crimes perpetrated mostly by youths across the land, cannot be delinked from the spectre of mass joblessness. Again, the effects of such social vices like drug addiction, excessive alcoholism and prostitution, which breed diseases such as tuberculosis and HIV/AIDS are already manifest in our country on a large scale.

    The magnitude of the unemployment menace was, once again, brought to the front burner by no less a person than Chief Christopher Kolade, Chairman of the Subsidy Re-investment Programme (SURE-P) at a sensitisation forum for firms in Ilorin, Kwara State. Noting that 40 million Nigerians, i.e. 23.9 percent of the population, are unemployed, Kolade lamented the “inability of the system to absorb the approximately 300,000 graduates churned out of our tertiary institutions annually”.

    While we admire Kolade’s forthrightness in making public the dismal statistics of unemployment in the country, we believe that his figures may indeed, inadvertently, disguise the seriousness of the problem. In other words, the 40 percent unemployment rate he cites may not necessarily include the chronically underemployed such as casual workers, or those who are only employed seasonally due to the vagaries of the weather.

    We commend the Graduate Internship Scheme (GIS) through which the government aims to generate employment for about 50,000 unemployed graduates in 36 states and the Federal Capital Territory in one year. The objective of the scheme is to improve the skills of unemployed graduates through work placement in registered firms. Yet, this scheme too is not without its difficulties because, as Kolade observed, “only 35 percent of 2,000 registered firms had met minimum requirement for participation while over 96,000 unemployed graduates had applied”.

    This, of course, raises a number of critical questions. Was there proper coordination between the SURE-P and the organised private sector before this scheme was introduced? Again, what is the relationship between the GIS scheme and the National Youth Service Corps (NYSC) since the latter also entails graduates serving one year internship with various firms, with the government paying them a monthly stipend of N25,000 while participating firms will provide adequate opportunity for work, mentoring and personal accident insurance?

    Kwara State offers a graphic picture of the challenges confronting this initiative. Out of 46 organisations registered for the exercise, five have been approved to take interns. And out of 3,290 graduates registered, 21 have been matched to firms but only three have been hired. We can thus understand why Mr. Kolade passionately appealed to firms to partner with government in addressing graduate unemployment.

    But then, business firms are not philanthropic outfits. There is still no alternative for the provision by government of basic infrastructure such as motorable roads, an efficient rail network, efficient transportation and communication systems, adequate security and uninterrupted power supply that will expand opportunities for business, enhance their margins for profitability and enable them to hire more staff.

  • Illiteracy as a time bomb

    With the level of illiteracy in the country, we need no soothsayer to tell us that Nigeria is siting on a time bomb. Readers may not fully appreciate the enormity of the problem we have at hand because you can all read.

    Some of our leaders who live in affluence and have their wards in private schools within or outside the country do not cared if the larger percentage of the country’s population go to school. There are many country men who cannot read this article not because they do not have eyes to read but because they can only see the paper and cannot read the text.

    But if one takes out time to observe the situation around the country, one will better understand the fact that the nation sits on a time bomb and the timer is ticking very fast. I refer to illiteracy as a time bomb.

    Many writers have written about it time and again that any nation which decides to squander its future by not taking education of its citizen seriously would certainly be on its knees tomorrow.

    It is stale news now that our education system is in crisis. Available statistics show that we are three-decade backward given the level education has moved in today’s world. A critical assessment of the deplorable situation would leave one quietly admitting that we are off-track and there is very little hope of getting things to turn around any time soon.

    I speak about the deplorable state of our public schools. Our schools depict structures in war-ravaged countries with classrooms being shared with rodents and reptiles. Pupils learn various subjects on bare floor from ill-motivated teachers. Laboratories and libraries in our secondary schools have all disappeared.

    The poorly-remunerated teachers instruct the pupils through outdated materials in a rapidly advancing world. The pupils, who are already disadvantaged, will remain disadvantaged because the outdated subjects they are being taught.

    This time bomb stares at us in the face daily. While the elite’s wards are sent abroad to acquire quality education, the poor’s children are left to study materials, which cannot make them grow to become functional and transformational agents in a country that prides itself as the Giant of Africa.

    The result of the neglect of our education system is being felt already. We have many children, who are supposed to be in school, hawking various wares in the traffic. Many of them are ready to go to school but what kind of education do they want to receive from the system?

    Does it occur to our leaders that many future leaders have been rendered useless because of the bad system? Do they care at all? Will the ticking time bomb be stopped? Only time will tell.

     

    Sam, 400-Level Curriculum and Teaching, UNICAL