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Does Nigeria care more about its debt profile than its citizens?

Editorial
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Does Nigeria care more about its debt profile than its citizens?

By, Paul Adeyeye

A recent DATAPHYTE occasional paper revealed that budgetary provision to some of the top five most critical sector’s of Nigeria’s economy accounted for only 17 percent of the initial 2020 budget. While these five key sectors (Agriculture, education, health, infrastructure [power, works and housing], and security) compete for less than a fifth of the total budget size, allocation to debt servicing was over 25 percent of the total budget size for the same year.

In the last five years, budgetary allocations to these key sectors average at 18.5 percent of the total budget. Except for 2018 where the allocation to these sectors exceeded a fourth of the total budget size, these sectors have not enjoyed as much as 20 percent of the annual budget share since 2016.

Comparatively, budgetary provision for debt servicing averaged at 24.02 percent between 2016 and 2020. Except for 2018 when only 19.73 percent of the budget was earmarked for debt servicing and 2016 that had 24.25 budget share for the same, the budget share for debt servicing has persistently occupied over a fourth of the total budget size since 2016.

But this background appears to be elusive of the reality that Nigeria’s debt-to-gross Domestic Product (GDP) ratio is not so critical and the huge investment in debt servicing may be mismatched. Not too long ago, the International Monetary Fund revealed that despite Nigeria’s rising debt level, its debt-to-GDP ratio, which stands at about 28 percent, is still below the average in Africa.

Unimpressive development indicators

On the other hand, Nigeria’s Human Development Index (HDI) measures considerably low. Also, the country’s performance by Quality of Life (QoL) measurement is staggering. The 2018 Nigeria Demographic and Health Survey report, revealed that as much as 42 percent of Nigeria’s rural population lacked access to safe drinking water. In urban areas, about 26 percent of the population lacked access to an improved source of drinking water. Also, about 44 percent Nigerian households did not use improved sanitation facilities. Electricity reach to Nigerian households was only about 59 percent. As much as 69 percent and 17 percent of rural and urban households respectively lacked access to electricity.

In addition to these, 36 percent of females and 27 percent of males in Nigeria have no education. The net school attendance ratio (NAR) was 61 percent at the primary level and 49 percent at the secondary level. Other HDI and QoL measurements do not indicate a much better outlook for the country. With 95.9 million Nigerians living in extreme poverty and the country’s unemployment rate of 33.5 percent, Nigeria has a gloomy outlook in its overall development performance.

The Role of the Nigerian Legislative Arm

Despite this gloomy outlook, Nigeria invests less in its critical sectors. This raises questions on the country’s budget process and its commitment to the course of development. Moreover, this low investment calls to questions the budget oversight role of the Nigerian legislature. This also generates a question on the items the National Assembly looks out for when ratifying the budget. It all appears the National Assembly has failed in delivering the best of life to the citizens.

Nevertheless, beyond the ‘failure’ is the urgent necessity of repositioning Nigeria’s revenue within citizen’s real needs. Already, the coronavirus pandemic continues to expose the failures of leadership in Nigeria as well as some of the limitations of Nigeria’s current operational framework. Yet, the National Assembly has said little in response to the crisis

What has to be done

Amidst the current global crises that have continued to show Nigeria many of its deepest sores is a calm appeal for the country to retrace its steps and redefine its realities. For instance, the recent oil market fluctuations have resulted in a more common consensus on the need for economic diversification. Similarly, the current pandemic has improved the government’s perception of the crises in its health sector.

To make the most of the time, Nigeria must make a deliberate effort to redefine its realities. This should involve prioritizing citizen’s critical needs. Budgetary provision for infrastructure, education, health, security, and the employment generating sectors should be increased.

In addition, the legislative arm of government should ensure diligence in the process of budget approval to guarantee maximum satisfaction of citizen’s critical needs. International conventions such as the Abuja Declaration of 2001 that recommends a 15 per cent budgetary allocation to the health sector, as well as UNESCO’s Education For All recommendation, should also be adopted in the budget process within practicable limits.

REPORT: Many controversial statements of MURIC’s Ishaq Akintola

Samad UTHMAN
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REPORT: Many controversial statements of MURIC’s Ishaq Akintola

ISHAQ Akintola, founder of Muslim Rights Concern (MURIC) several times has been in the eye of the storm, especially because of many press statements he issues on behalf of his organisation which according to him are in defence of the Nigerian Muslims.

Often, the professor of Islamic Eschatology has made spurious allegations as well as unguarded statements capable of causing disharmony and creating tension among people of different religious beliefs in the country. 

In this report, The ICIR compiles some of such statements made at different occasions by Professor Ishaq Akintola

Deaths in Kano meant to reduce Muslim population   

In April, Akintola alleged in a statement that went viral that the rising deaths in Kano State, which has now been confirmed to be from Coronavirus disease (COVID-19) by the Presidential Task Force, was a deliberate attempt to reduce the Muslim population in the state. 

In the statement, Akintola asked “Is this a deliberate attempt at debilitating the Northern population with its attendant impact on Muslim majority population in the country?

This comment made without evidence attracted condemnations from members of the public who described it as a ridiculous one coming from a professor who should understand better.

Despite the backlash that trailed his statement which many considered unguarded, Akintola again, in another press statement issued on May 5, said the death toll in  Kano from COVID-19 ought to be higher than that of Lagos, despite his previous attempt to downplay the number of death in Kano.

In the new statement he disagreed with the Nigeria Centre for Disease Control ( NCDC) and rejected the number of new cases of COVID-19 confirmed in Kano state. He questioned why cases in Lagos were higher than that of Kano after concluding that the deaths in Kano were tactics by the Federal Government to reduce the number of Muslim populace in northern Nigeria.  

“We beg to disagree. If all other figures are correct, that of Kano is unacceptable. Kano is presently known to be Nigeria’s epicenter of the pandemic. So how can Lagos be 62 and Kano is just 2? How can the figure for COVID-19 cases be 2 in a city where people are dropping dead? How can Kano’s figure be the same as those of Ebonyi, Nasarawa, Osun, Kwara and Plateau? We charge stakeholders to put their heads together on this simple logic.”

MURIC says Amotekun is ‘anti-Islam’ 

On January 17, 2020, Akintola was reported to have asked Southwest governors to change the name of the new regional security outfit recently set up to fight kidnapping and other crimes in the region on the ground that it was anti-Islam. 

Operation Amotekun was launched on Thursday, January 9, by the South-West governors in Ibadan, Oyo State. The South Security Network nicknamed Amotekun, a Yoruba word for leopard was an initiative of the Osun, Ogun, Oyo, Lagos, Ondo and Ekiti states government after countless cases of kidnapping and banditry in the states. 

Akintola’s MURIC argued that the name of the outfit as well as recruitment of its personnel was skewed against Muslims. He hinged his argument on the Bible’s Jeremiah 5:6 which says, ‘A leopard shall guard over their city’. He alleged that the name was chosen from the Bible verse thereby making it more of a Christian initiative.

Christians enjoy more holidays In Nigeria than Muslims  

Earlier in the same month, the founder of MURIC argued again that Christians in Nigeria enjoy more holidays than their Muslim counterparts.

“MURIC asserts clearly, categorically and unequivocally that Muslims are in bondage in this country. Why should one group get all the honey in the land while the other is ignored? We demand equal rights and justice,” Akintola had written in a press statement.

This came after the Christian Association of Nigeria (CAN) claimed that Christians were being persecuted in the country. 

However, The ICIR found out that while Christians enjoy four public holidays in the calendar year, Muslims have three out of the12 public holidays in Nigeria. Also, states like Osun and some northern states have declared Islamic first day of the lunar month as a public holiday, thereby making MURIC’s claim totally misleading.  

US working with CAN to create religious tension in Nigeria

While condemning the United States’ designation of Nigeria as a country that has engaged in or tolerated severe violations of religious freedom in December 2019, it was reported that Akintola through MURIC claimed that the United States was working with the CAN to create religious tension in the country. 

MURIC also said CAN has swallowed the bait of “religious persecution” which the US uses in international politics.

“CAN has only manifested its naivety in modern international politics. The US has thrown religious persecution as a bait. Unfortunately CAN has swallowed it, hook, line and sinker,” Akintola said.

“Our message to CAN is this, allow America to set fire to your country and we can assure you that it is not the Muslims alone who will face turmoil. Whether to avoid foreign interference in your country and live in peace with your Muslim neighbours while you watch your children and grandchildren play peacefully in the garden or to open the doors wide for an army of occupation which will bring general pandemonium, the choice is yours,” he added. 

The MURIC founder then likened CAN to a “mischievous housewife who beats up the husband but screams for help.”

MURIC threatens WAEC, warns against deliberate exclusion of female Muslims from exams

In February this year,  MURIC accused West African Examinations Council (WAEC) of being used by certain forces to retard the educational progress of Nigerian Muslims. 

He made this strong assertion without naming the “forces,” adding that the group has received inundated reports from Muslim students, their teachers, and parents about a face recognition software used during WAEC registration which refuses to capture hijab clad girls. 

He claimed that WAEC’s registration software was deliberately designed to automatically reject hijab but he did not give any technological backing to prove his point. 

Nigerians hate Fulani herdsmen because they are Muslims 

In one of his several controversial statements, Akintola in 2017 claimed in a statement that Fulani herdsmen were being attacked by Nigerians because they were Muslims.

He warned in the statement against “anti-Fulani sentiments” that were capable of inciting further ethnic violence across the country. His outburst was in reaction to the killing of 60 Fulani herdsmen in Shaforon, Kikem and Kodemti villages in Numan, Adamawa State.

He added that MURIC was “deeply disturbed by the rate at which ethnic violence was erupting in Nigeria. 

“We are equally constrained to blame the recent attack on authors of hate speech, particularly those motivated by anti-Fulani, anti-North and anti-Muslim sentiments.”

However, none of the reports of the notable civil society organisations checked by The ICIR aligns in any way with Akintola’s religious claim. 

In a report published by Amnesty  International in December 2018, almost 4,000 people have been killed and thousands displaced in fighting between herders and farmers in Nigeria’s middle belt in the past three years.

Amnesty, who started documenting clashes in January 2016, said the violence was increasing with more than half (57 percent) of the 3,641 recorded deaths in the past three years occurring in 2018, and that the government’s failure to curb the violence and prosecute the perpetrators, was exacerbating the situation.

Another report by the International Crisis Group (ICG) in July noted that the conflict had evolved “from spontaneous reactions to provocations to become premeditated scorched-earth campaigns in which marauders often take villages by surprise at night”, claiming six times more lives than the Boko Haram insurgency.

Many Nigerians, including Muslims, have repeatedly denounced  Akintola’s MURIC public and religious statement. 

“There is difference between agitation and rhetorical question” – MURIC

In response to some misleading claims made by MURIC in the past, Akintola expressed in a response mail to The ICIR that his statement about the death in Kano is just a rhetorical question posed to NCDC questioning if there is an agenda to reduce Muslim population and not an assertion.

“ I am surprised that we claim to be educated in this country but all we can parade are educated illiterates. How come we don’t know the difference between an allegation and a rhetorical question? We asked NCDC if there is an agenda to reduce the Muslim population. That is the language of action everywhere in the world. You use it when you want to create an awareness or compel action. NCDC ignored the high death toll in Kano. Instead of doing something, it locked up its office in the state and left. Perhaps what many do not know is that we do not just speak without receiving some information, sometimes from very high places. So that question should be thrown at NCDC. Let the agency tell Nigerians what efforts it is making to stop the unending chain of deaths,” Akintola said

He added that “ An asymmetrical section of the Nigerian media used a totally unprofessional caption for the Kano story. They forgot that such action exposes them as parochial. They even ignored the part in the same press statement where MURIC blamed the people of Kano for ignoring official instructions on COVID-19 pandemic” 

On the contrasting statements on Amotekun, Akintola maintained that MURIC’s statements were not contradictory and blamed the twist on the “enemies of peace”.

“We did not make contradictory statements. Our position has always been one. It is the enemies of peace who always deliberately twisted our statements. Our advice is that people should always endeavour to get our original statements. They can always get it on our website: www.muricnigeria.com”.

Akintola said his group objected to Amotekun and suggested  ‘‘Oduduwa Guards’ as an alternative, and also rejected the idea of using churches to register for the outfit, likewise the idea of collecting reference letters from pastors. 

“We also opposed the use of the initiative if it is for witch-hunting any particular tribal group. We remain adamant on our stand. We have not withdrawn this statement,” he added.   

However, a group known as Coalition of Progressive Yoruba Islamic Groups (COPYIG) has described Ishaq Akintola as a big threat to southern Nigeria over his comment on Amotekun with an agenda to tear the country apart.

Mukthar Okunade, the national coordinator of the coalition, said Akintola is promoting rebellion against Yoruba people.

“It is unfortunate that one Akintola who leads MURIC has consistently fanned embers of disunity in Yorubaland hiding under the guise of Islam to set brothers against brothers, communities against communities and men against women,” he said.

“Akintola has no followers. He is an extremist and a sadist. He appears to have a suicide instinct. We urge him not to attempt to drag the entire Yoruba along on his pathway of mischief and treachery against the Yoruba people.

“In his riotous mind, blind rage and in a show of complete lack of wisdom, he claimed Amotekun is a Christian outfit. This shows how shallow and irresponsible Akintola is,” he said.

 

 

US threatens to permanently stop funding WHO over alleged poor handling of COVID-19 pandemic

Amos ABBA
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US threatens to permanently stop funding WHO over alleged poor handling of COVID-19 pandemic

DONALD Trump, President of the United States, US, has threatened to permanently stop US donations to the World Health Organisation, WHO, over COVID-19 pandemic.

In the letter posted on his Twitter handle, President Trump issued a 30-day deadline to the global health body to make adjustments or risk the loss of its biggest donor and US membership.

The U.S. is the largest single donor to WHO but owes nearly $200 million in arrears on its obligations to the health organisation when Trump suspended payments last month.

President Trump accused WHO’s Director-General Tedros Adhanom Ghebreyesus of poor handling of the pandemic, blaming the health body for publicising Chinese findings on the nature of the disease, but ignoring clear warnings about the dangers of the contagion.

“The World Health Organisation has repeatedly made claims about the coronavirus that was either grossly inaccurate or misleading,” a section of the letter reads.

With 1.5 million confirmed cases of COVID-19, the US is one of the worst-hit countries which accounts for one-third of the world’s 4.8 million cases and has registered 90,000 deaths.

Trump stated that his decision could be reversed if WHO could backtrack on its alleged failings by demonstrating sufficient independence from China’s grip.

“It is clear the repeated missteps by you and your organization in responding to the pandemic have been extremely costly for the world. The only way forward for the World Health Organisation is if it can actually demonstrate independence from China.

“My administration has already started discussions with you on how to reform the organisation. But action is needed quickly,” Trump stated in the letter.

In response to Trump’s letter, Chinese Foreign Ministry spokesperson Zhao Lijian said the U.S. president was “trying to mislead the public, smear China’s efforts and shift the blame of U.S. incompetence to others.”

Trump had quoted The Lancet medical journal in his letter to Tedros, mentioning the journal’s criticism of the WHO in the letter.

“The World Health Organization consistently ignored credible reports of the virus spreading in Wuhan in early December 2019 or even earlier, including reports from The Lancet medical journal,” Trump wrote.

In response, the U.K.-based journal issued a statement saying its first reports on the coronavirus were published on January 24, rather than December 2019 when reports of the outbreak emerged.

“This statement is factually incorrect. The Lancet published no report in December 2019, referring to a virus or outbreak in Wuhan or anywhere else in China.”

More than 50 WHO countries have co-sponsored a resolution calling for a review of WHO’s response to the COVID-19 pandemic asking Tedros to begin an “impartial, independent and comprehensive evaluation.”

Tedros had acknowledged that there were lapses in WHO’s response and welcomes a review of its procedures.

“I will initiate an independent evaluation at the earliest appropriate moment to review experience gained and lessons learned, and to make recommendations to improve national and global pandemic preparedness and response,” he said.

Tedros had invited both Trump and Xi Jinping, China’s President to speak on the first day of a two-day virtual assembly, in the hope of resolving differences between the two leaders on handling the outbreak, but Trump did not take part.

Nigeria’s foreign exchange reserves would fall to $23.3bn by end of 2020 – Fitch Ratings

Paul Owolabi
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Nigeria’s foreign exchange reserves would fall to $23.3bn by end of 2020 – Fitch Ratings

FITCH a global credit rating agency has stated that Nigeria’s foreign exchange reserves would fall to $23.3bn by the end of 2020 from $38.6bn in December 2019.

The Central Bank of Nigeria (CBN) resistance to rebuilding the exchange-rate framework, will drive a fall in international reserves to $23.3bn by December 2020, Fitch rating revealed.

The rating agency has confirmed that this production cut would trigger a likelihood of a recession and fiscal deficits.

But the risk of disruptive activities such as interest rate and national productivity adjustment would persist, the agency added.

Recently, OPEC and its partners, led by Russia, a group called OPEC+, agreed in April to cut output by 9.7 million BPD in May and June, representing about 10 per cent of global supply.

Nigeria has also planned to cut down oil production by 417,000 to 1.41 million Barrels Per Day (BPD) in May and June, said the Minister of State for Petroleum Resources, Timipre Sylva.

The rating agency said the increased source of help in a difficult situation to concessional multilateral loans would ease near-term liquidity pressures.

According to Fitch, there are the assumptions that Nigeria will comply fully with the production caps under the OPEC+ agreement and have reduced their forecast oil output to 1.88 million BPD (including condensates) in 2020.

And 1.87 million BPD in 2021, compared with their earlier forecast of 2.1 million BPD for 2020 and 2021.

“We have adjusted our Gross Domestic Product (GDP) forecasts, and now expect Nigeria’s economy to contract by three per cent in 2020 before a recovery to three per cent growth in 2021.”

“Despite the OPEC+ deal, our oil price forecasts remain unchanged at $35/barrel for Brent on average in 2020 and $45/barrel in 2021,” Fitch added.

The rating agency revealed that the little depreciation of the Naira has made Nigeria’s foreign-currency reserves drop by $5bn from January to April 2020, the main reason why the CBN reflects moves to tighten foreign-currency access, containing capital outflows temporarily.

Corruption Allegations: Lawmakers commence probe of NBET Boss

Olugbenga ADANIKIN
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Corruption Allegations: Lawmakers commence probe of NBET Boss

LAWMAKERS in the House of Representative on Tuesday commenced an investigation into several corruption allegations against Marilyn Amobi, Managing Director, Nigeria Bulk Electricity Company (NBET) after weeks of repeated postponements of the hearing.

The allegations range from abuse of office and flouting of the Public Procurement Act (PPA) on awarded contracts.

The hearing which ought to hold on 5th May was postponed to 12th of the same month.

On 12th May, the motion was again raised by Femi Gbajabiamila, Speaker of the House but it was not discussed until today.

The House of Representatives, however, directed its committees on Anti-corruption, power and financial crimes to probe the firm from 2015 till 2020.

Mohammed Wudil, Rep member from Kano state, had raised a motion on the floor of the House regarding the allegation. The motion was seconded by Maria Onuoha.

According to him, the motion was borne out of several complaints against the company bothering on gross abuse of power which were forwarded to the House Committee on Power.

He said the prayer of the motion was to mandate the House Committees on Power, Anti-corruption and Financial Crime to carry out investigation on the allegations and revert to the House for further legislative actions.

The motion was, however, voted on and adopted.

“The Committee on Power in receipts of complaints against NBET since the inception of the agency necessitated this motion,” he stated.

Wudil emphasised that anti-corruption agencies such as the Economic and Financial Crimes Commission (EFCC), Independent and Other Related Offences Commission (ICPC) and Office of the Auditor-General for the Federation had earlier investigated the agency.

The Speaker, however, directed the Committees to investigate the matter and report to the House within two weeks for further deliberation and actions.

Investigation on NBET and Amobi has been on-going since 2019 when the House initially commenced probe against the agency and its head over alleged N90 billion fraud and flouting of the procurement law.

The ICIR, last year February also reported on the allegations against Amobi.

Some of the suspected fraudulent actions include overpayment to selected power generating companies – Olorunsogo and Omotosho power generating companies, undue payment to law firms and consultants.   

On 12th January, the NBET boss was also indicted in another N517 million graft.

A report by OAGF accused Amobi of contract splitting to Julius Berger, in different amounts, separate award letters within a short period.

Sale Mamman, the new Minister of Power, however, removed Amobi in January following the controversies but she was later reinstated by President Muhammadu Buhari.

Abuja, Lagos receive Save the Children’s N50m COVID-19 medical equipment

YEKEEN Akinwale
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Abuja, Lagos receive Save the Children’s N50m COVID-19 medical equipment

THE Save the Children International (SCI) Nigeria on Tuesday made a donation of Personal Protection Equipment (PPE) and Infection Prevention and Control (IPC) materials worth N50million to support the COVID-19 response to the Federal Capital Territory Administration (FCTA) and Lagos State government.

The humanitarian organisation said the donations would help address the immediate needs of front-line health workers who are providing care and treatment to people affected by the virus, either suspected, probable or confirmed cases.

Making the presentation of the items that were conveyed in two trucks to Abuja Central Medical Stores (ACMS), Utako, Nwamaka Ifionu, Deputy Director of Operations at SCI explained that since Nigeria recorded its index case, the organisation has worked with the Nigerian government to respond to the pandemic as a member of the COVID-19 Response Task Force at both Federal and several state levels and supporting the development and deployment of strategies to contain the spread of the disease.

“We hope that our donation can help in its way to break the spread of the virus and give resources to the front line workers to help protect the most vulnerable, especially the children,” Ifionu said.

The materials were received by Samson Eriba, Deputy Director at the FCTA Health and Human Services Secretariat who assured that the administration would judiciously deploy the items in combating the pandemic.

A similar presentation had taken place in Lagos too.

The items included protective gowns, eye goggles, facemasks, gloves and other vital health supplies.

A statement by Save the Children disclosed that the donation was made possible through the support of Femi Otedola through Cuppy Foundations.

Mercy Gichuhi, Interim Country Director of Save the Children International in Nigeria reiterated that the donation would enhance the government’s capacity towards containing the spread of the virus, and helps to sustain the ongoing health care response to patients already infected by the disease.

She explained that it was the responsibility of the charity organisation to protect vulnerable children and their families from the novel virus, noting that “we need to support our government partners who are at the front line in coronavirus response.”

“During infectious disease outbreaks, children face multi-dimensional risks, including exposure to the infection, indirect risks to accessing education and healthcare services; while the government’s priorities are focused on minimising contamination, and direct risks to their overall care and protection,” Gichuhi added.

DJ Cuppy on her part said, “the most vulnerable Nigerian children and their families are bearing the biggest burden of the COVID-19 pandemic.”

She stated that all stakeholders must ensure that children are protected from catching this deadly virus especially children who are malnourished or suffering from diseases like pneumonia that is the biggest killer of children.

“I am glad to see that many Nigerians are offering their support. Together with my family and The Cuppy Foundation, I am working with the government and Save the Children to provide materials urgently needed to fight the coronavirus. I reaffirm my commitment to the children of Nigeria because no one is safe until we are all safe.”

Taiye Babarinsa, Deputy Director Humanitarian Operations, Save the Children International Nigeria, said, “the organisation’s cash transfer, food voucher, and water provision programs continue across selected states with additional hygiene dignity kits shared to vulnerable families to accelerate cleanliness and sanitation actions in response to the pandemic.

He expressed hope that the innovative community sensitisation programs would help in making a positive shift in knowledge, attitude and practice across different locations in Nigeria and slow down the spread of the disease.

Save the Children International Nigeria called upon international donors, national and state governments to scale up investment in healthcare systems strengthening to allow the country to efficiently respond to the pandemic without compromising other health services, such as routine immunisation, and intensify public awareness-raising campaigns within communities to stop the spread of the infection.

It emphasised that prevention information, testing facilities and referral systems should be made available and accessible to the most vulnerable people, including children, people with disabilities, refugees and internally displaced people.

Support students with funds meant for purchasing cars for politicians – SERAP tells FG, governors

Paul Owolabi
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Support students with funds meant for purchasing cars for politicians – SERAP tells FG, governors

SOCIO-economic Rights and Accountability Project (SERAP) has urged the Presidency, National Assembly, Senate, and Governors to stop the purchase of new cars at this period, and use the amount saved to support students of tertiary institutions across the country as a way reducing the impact of COVID-19 and the lockdown on them and their parents.

According to SERAP, the COVID-19 pandemic has reinforced the urgent need for high-ranking public officials and politicians to demonstrate the constitutional oaths of absolute loyalty to the public interest and the common good.

As trustees of Nigerians’ public funds, your government, the National Assembly and governors are accountable to the public for the use of those funds, the group revealed.

The expenditure of public funds requires the highest degree of public trust, it is the constitutional duty of every public official to protect and preserve the public interest in public spending.

SERAP also revealed that imposing a ban on new cars by the presidency, ministers and encouraging the National Assembly and governors to do the same would serve the public interest.

And contribute to cutting the cost of governance.

“Copying the Namibia example will also show that public funds will be spent for the benefit of the people, and not as a prerogative for the advantage of the government or the benefit of public officials,” the SERAP said.

Namibia’s government had recently announced a five-year ban on buying new cars for senior politicians and government officials to help them fund to fight the COVID-19 pandemic.

This presidential directive is expected to save the country some 200 million Namibian dollars (US$10.7 million) which would then be directed to urgent priorities, specifically at a time when the country is dealing with the health and economic implications of COVID-19.

The group also urged the federal government to consider banning spending on generators in the presidency.

And also cutting spending on items like furniture and fittings, refreshments, catering services, and purchase of kitchen and household equipment.

The advice becomes useful in the light of the federal government’s decision to raise about $6.9 billion from multilateral lenders to help fund efforts to stop the spread of the COVID-19 pandemic.

Recently, the government took $3.4 billion from the International Monetary Fund (IMF) in a loan, $2.5 billion from the World Bank, and another $1 billion loan from the African Development Bank.

 

Covid-19, our lives and the big questions that matter

Editorial
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Covid-19, our lives and the big questions that matter

By ‘Yinka ADEOSUN

FORTY years ago, smallpox became the only human disease to be eradicated globally, as the World Health Organisation certified its eradication in 1980. Caused by one of two variants of the virus, the last case was diagnosed in October 1977.  Today, there’s no evidence of smallpox infection and transmission anywhere in the world. The virus however still exists officially only in research laboratories.

Who would have ever thought that the world would be locked down, shutting down non-essential commercial activities, restrictions in the airspace and many confined to life indoors? Have you ever imagined that the world will remain in abeyance for many weeks? Although no one could have predicted the current situation, history has shown that this situation is not entirely new. History has shown that the Spanish Flu of 1918-1920 was a pandemic that cut across the world. This undesirable but inevitable situation has revealed the many inadequacies of our hyper galloping globalised world. Many world leaders are caught between a rock and a hard place – bogged down with fighting an invisible enemy and ensuring economic survival of their nation-states.

These are not interesting times all over the world. COVID -19 is an unfolding pandemic with far-reaching effect on every sector of human existence. The economies of countries in the world have been affected. While some are yet to navigate their way out of the pandemic, others are strategically mapping out strategies to brave the odds. Although it caught many countries unprepared, they have been able to manage the pandemic to a proportion whereby there appears to be ray of hope after all. In Nigeria, this is not so.

Prior to the index case in Nigeria on Feb 27, Nigeria’s leadership behaved as if the country was insulated from the coronavirus. And when the COVID- 19 case was confirmed in the country, it took the president 58 days before he could address the nation on the issue. That in itself is a failure of leadership. Many leaders of the world, including neighbouring African countries, addressed their citizens as soon as there was a confirmed test case. Anyway, we have since moved on.

Aside the fatality on the economy and the difficulty in keeping people indoor without any form of respite or palliative, the primary outcome of COVID- 19 is that it has exposed the failings of the Nigerian system, especially our healthcare system. The wind has blown and the ineptitude of our leaders has been exposed. This has been an open secret anyway!

Only a mean person would deny that the Nigerian healthcare system has been in a comatose for a while. Not even the many industrial actions of the pressure groups in that sector would move the government. The doctors and the Ministers of health have always been involved in a series of unresolved issues with respect to Nigeria’s health care system. With the COVID-19 pandemic, the shame stares us in the face. Our incapacity to conduct these Covid19 tests has shown the ineffectiveness and indifference of the government. How we place little value on human life is an egregious sin that has robbed the country of avoidable deaths in times like this. Over the years, successive administrations have failed to take full responsibility for our own infrastructures or the dearth of it. They would prefer to go on medical tourism rather than develop a working healthcare system. Blockheads!

But for the support of the private sector and non-government organisations during the period of the lockdown, government’s support was a drop in the ocean as citizens groan at home while many people defy the stay-at-home order which was meant to limit the spread of the coronavirus infection. Although the government claims that it has capacity to test 50,000 persons daily for the virus, it is yet to test up to that number after more than two months since the first case was recorded. With daily increase in the number of infected persons, the government has also expressed her fear of inadequate isolation centres. This is sad!

The shame of Nigerian government and her insensitivity and heartlessness were taken to another height when COVID-19 patients in a Northern state took to the streets to protest their neglect and negligence in dealing in with the problem. According to the protesters, they were neither supplied food nor medical attention at the isolation centre. These patients who were supposed to be in isolation in a bid to contain the pandemic were left to fend for themselves. In the midst of the insufficiency, the government has ordered the importation of Madagascar’s solution (herbs) to COVID – 19, which, is yet to be certified by WHO. Moreso, with adequate support, we can also make right here and export to other nations, thereby boosting our forex. How disheartening!

From history, we now know that this is not the first pandemic. And it may not be the last. But Africa has never been prepared for any major emergency. Covid-19 presents an opportunity for Africa, Nigeria in particular, to take health care seriously. Primary health care must be upgraded to basic standard beyond the first aid treatment and pre and post-natal services which seem to be their specialisation. Secondary and tertiary healthcare must also be given adequate attention. There are many deaths that could have been prevented in our hospitals simply because we have remained contented with the crumbs of technological innovation with laid back personnel who have constantly been overworked beyond reasonable capacity. What a pity!

Human beings are animals of faith and fate. Unless there’s a superior force they believe they will survive every odd no matter how dastardly it may seem. The reality however is that no one is immune from emergencies. It, therefore, behoves a responsible government with the kind of peculiarities that Nigeria boasts of – demographic magnitude – to be always prepared for such. But how can our government make any meaningful preparation when our data and record-keeping is all over the place – grossly inaccurate and totally unreliable for any meaningful intervention. I wonder!

A sage says; “Don’t be sad that roses have thorns, rather be glad that thorns have roses.” In other words, don’t be sad that opportunities come with crises; rather, be glad that crises come with opportunities. With the realities that stare us in the face, hopefully, all levels of government would rise to the challenge of governance that Nigeria truly deserves. This is a wakeup call, a call to action, to turn around the fortune of Nigeria and bring out the beauty from the ashes of COVID- 19. In times like this, purposeful leadership is what we need, and it is urgent too. We must not waste this emergency.

Adeosun writes from Akure

In ten years, violence in Northwest claims over 8000 lives, displaces over 200,000 — Report

YEKEEN Akinwale
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In ten years, violence in Northwest claims over 8000 lives, displaces over 200,000 — Report

A NEW report on deadly conflicts in Nigeria’s Northwest has revealed that violence is responsible for the death of over 8,000 people since 2011 and displacement of over 200,000, some into the neighbouring Niger Republic.

“Violence has had a far-reaching humanitarian and economic impact on the region and created a domino effect of security problems,” said International Crisis Group in its latest report, Violence in Nigeria’s Northwest: Rolling Back the Mayhem.

“Over the last decade, more than 8,000 people have been killed – mainly in Zamfara State – with over 200,000 internally displaced and about 60,000 fleeing into the Niger Republic.”

According to the report, the Northwest is said to be suffering deadly conflict involving many armed organisations, including herder-allied groups, vigilantes, criminal gangs and jihadists.

It noted that violence is rooted in competition over resources between predominantly Fulani herders and mostly Hausa farmers.

The Brussels-based organisation in the report indicated that livestock and crops have been decimated, further depressing human livelihood indices that were already the lowest in the country.

The violence, it stated was aggravating other security challenges forcing more herders southward into the country’s Middle Belt, thus increasing herder farmer tension in that region and beyond.

It identified Zamfara as the origin of this conflict where gang violence took its roots and has since spread violence to five other nearby states, namely Kaduna, Katsina, Sokoto, Kebbi and Niger, the last of which is in North Central Nigeria.

The report says a durable peace remains elusive despite several security operations and dialogue efforts.

According to the International Crisis Group, the conflict has escalated amid a boom in organised crime, including cattle rustling, kidnapping for ransom and village raids noting that Jihadist groups were stepping in to take advantage of the security crisis.

It stressed that the federal and state governments should facilitate settlements between farmers and herders – easing friction by reforming livestock production.

“They should cooperate with Niger to stem cross-border flows of weapons and jihadists, as well as to better police lawless forests and gold mining areas. International partners should help address humanitarian needs,” the group said.

Guinness Nigeria cuts workforce by almost 600 as directors’ paychecks rocket in five years

Editorial
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Guinness Nigeria cuts workforce by almost 600 as directors’ paychecks rocket in five years

By Jennifer UGWA

THE Directors of Guinness Nigeria significantly increased their pay in the last five years, even as the drink company’s profit margin was virtually halved, its accounts revealed.

Guinness Nigeria which is among the top three breweries in the country is a subsidiary of Diageo plc, one of the world’s largest producers of spirits. 

In 2019, it was reported that 40 per cent of Guinness consumed worldwide is being drunk in Africa with the highest consumers of the alcoholic beverage on the continent being Nigerians. This places Nigeria as the second-largest market for Guinness beer in the world after the United Kingdom.

However, despite recording an increase in Nigerian sales over the last five years, the company has also seen a decline in its profit margin from 9 per cent recorded in 2015 to 5.4 per cent in 2019. Worthy of note is that prior to 2015, the company regularly reported profit margins in the double figures, before tax.

Notwithstanding its falling profit margin, the annual financial reports showed that the chairman and directors of Guinness Nigeria whose number ranges between  14 to 16 directors have seen their pay tripled from N245 million in 2015 to N963 million in 2018, excluding pensions or payments in shares, before it dropped to N489 million in 2019.

Meanwhile, the company’s workforce shrunk from an average of 1,371 workers in 2015 to only 780 workers in 2019, a 43 per cent workforce cut within the space of five years.

In 2015, the remuneration of the highest-paid director was about six times higher than the average worker and by 2019 his remuneration was seventeen times higher. About 40 per cent of the total benefits paid to directors, went to this one director.

Although the total pay of the company’s remaining employees recorded a 22 per cent increment since 2015, the sharp difference in wages between its top and bottom cadres is noticeable in the face of reduction of the labour force. 

A top senior government official who pleaded anonymity told the reporter: “Although companies preach the practice of the bottom to the top pyramid of work practice, it is never so in the real sense. We all know that these workers do more than the bosses but because of the titles that come with these jobs it becomes the norm of “monkey dey work, baboon dey chop.”

Comrade Mike Olanrewaju, Deputy General Secretary of the National Union worker of Food Beverage and Tobacco Employees (NUFBTE), said Guinness Nigeria laid-off workers based on “the challenges that the company is experiencing in connection with the downward performance of the company,” said  Olanrewaju.  “Sometimes, the reason is due to the automation of some kind that led to restructuring in staff strength.”

Nonetheless, he expressed displeasure with the outsourcing labour strategy used by the brewing company in ensuring that they continue to have a big workforce, whilst making it impossible for workers to be identified as permanent staff in the company. 

Portions: Related parties dues and tax returns

It is worth noting that Guinness Nigeria would have made more profit but for its payment to overseas companies, which are also owned by Diageo, for technical service fees and royalties.

Between 2015 and 2019 Guinness Nigeria incurred N10 billion in fees to related companies for the “know-how, manufacturing, distribution and marketing” of international brands belonging to Diageo, including Guinness, Harp beers, Guinness Malta, and Smirnoff vodka. 

Guinness Nigeria has also incurred payments of another N80 billion to related companies over the last five years for “purchases, promotional support and other services”. ( Although the company also earns some money by selling goods and services to other Diageo companies such as Guinness Ghana.)

Meanwhile, Guinness Nigeria reported just under N28 billion in profits before tax and paid just under N7 billion in corporate income tax to Nigeria on these profits in the same period.

The ICIR asked Guinness Nigeria by email in February why the company is still unable to provide these services for itself, despite having been in business in Nigeria for more than fifty-five years.  Until the time of publication, the company had not responded. 

These payments to related parties are so large that they have a significant effect on Guinness Nigeria’s taxable profits. 

Although there is no suggestion that such payments to related parties are illegal as Guinness Nigeria has certificates from Nigeria’s National Office for Technology Acquisition and Promotion which endorse its fee and royalty payments to related companies similar to its foreign-owned competitors Nigerian Breweries and International Breweries who also make large payments to related companies abroad.

However, concern has been growing around the world that such payments create a risk of tax avoidance.

Controversial parent and Tax havens – Diageo Plc

Multinationals have been able to legally shift some of their profits into tax havens by placing assets there, such as intellectual property like brands or software, then charging their subsidiaries elsewhere to use these assets, with the result that less profit is reported for tax purposes in countries like Nigeria. It is also common for multinationals to procure goods and services through tax havens.

So, when a company makes large payments from Nigeria to related companies in tax havens, it is reasonable to be concerned that Nigeria may be losing tax revenues. 

Guinness Nigeria’s accounts up until 2018 imply that most of its royalties and fees were paid to Diageo subsidiaries in Ireland, the Netherlands and the United States and to a UK company called Diageo Great Britain.

Ireland is the home of Guinness, so it is not unreasonable that Guinness Nigeria might source some services from there. However, Ireland is also a tax haven, as is the Netherlands. Diageo Great Britain’s accounts show that it pays a low rate of tax in the UK, while the accounts of the other subsidiaries have not been made public.

Although the Organisation for Economic Cooperation and Development is set to recommend new rules for taxing multinationals towards the end of 2020 which are meant to make it harder for profits to be shifted into tax havens, but, there are fears that these reforms may not work well for developing countries like Nigeria.

As a country heavily dependent on crude oil exportation for its major source of revenue, with the COVID-19 pandemic impact globally, Nigeria is undeniably experiencing an economic hiccup as the benchmark oil price of  $57 per barrel which the country based its 10.6trillion naira ($34.6 billion) budget for 2020 dropped to $26 within three months since the outbreak of the virus.

This economic negative shift makes it all the more important that the state collects all necessary revenue from taxes (especially from corporate bodies) as much as possible at a time when public funds will be most needed to cope with the impact of the pandemic. 

Guinness Nigeria parent company–Diageo plc–has a history of controversy over its use of tax havens which has been challenged in the past by tax authorities.

A recent Oxfam study of big UK companies’ tax payments from 1998 to 2017 concluded that Diageo “has consistently paid a very low cash tax rate” on its global profits. The report added: “Although there could be more than one reason for this, in the case of Diageo there is arguably strong evidence for tax avoidance being a factor.”

In addition, the company is reportedly paying an additional £143 million in tax in the UK in 2018 after being challenged over some of its internal transactions.

The government official that spoke with the reporter also confirmed that it would be almost impossible to determine the true position of the company tax status and the intricacies of its related parties transactions [from what is being reported in the company annual reports] as huge multinationals, including Guinness Nigeria, have people working in the tax service that ensures the tax position of the company remain good on paper for the company’s benefit considering the interest of stakeholders and other factors.

He also said that transactions between subsidiaries and their parent companies are not accorded the proper level of scrutiny required to avoid profit transfer. 

“A whole desk is dedicated in the FIRS that works on the tax matters of Guinness Nigeria, 7up bottling company and the rest of the huge brewery firms. It is these guys that can tell you what is really going on with these companies, If there is a suspected case of profit transfer too, I am sure they are aware of this,” he said.

Efforts made by the reporter to speak with the investigative department of FIRS including sharing the files to findings on the company reports in terms of its dealings with its related parties was futile as no response was received from the other party.

This story was supported by Finance Uncovered, a UK-based journalism organisation.

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