Displaying items by tag: President Muhammadu Buhari

Nigeria has not increased gasoline pump prices, its fuel regulator said on Friday, after sparking confusion at fuel stations and a public backlash by apparently flagging a big rise was on the cards.

"There is no price increase. The current (gasoline) price is being maintained while consultations are being concluded," the Petroleum Products Pricing Agency (PPPRA) said in a statement.

On Thursday, the regulator posted an online notice listing the "guiding price" for "ex-depot", or wholesale, gasoline at 206.42 naira per litre - well above the previous pump prices of around 167 naira.

After local media reported the post, some consumers flocked to fuel stations, prompting a sharp rise in prices at some, and others to stop selling amid the confusion.

In Lagos, at least two stations were charging 248 naira per litre, compared with 167 naira on Thursday.

Nigeria is struggling to balance a promise to eliminate costly fuel subsidies with public anger over more expensive fuel.

Oil prices have risen about 25% since the beginning of February, but state oil company NNPC vowed prices would not increase in March, meaning that it could be losing millions daily on gasoline imports.

Following the public backlash - and statements from NNPC, the petroleum minister and a presidential spokesman that higher prices were not approved - PPPRA removed its post about the guidance for ex-depot prices.

NNPC is currently the only gasoline importer due to the state-controlled ex-depot price that is keeping levels artificially low. It has said it is consulting with unions to agree a formula that allows gasoline prices to float, but still protects consumers.

In mid February, fuel marketers estimated gasoline was costing NNPC some 1.2 billion naira ($3.2 million) per day, a huge risk to government finances. Eliminating subsidies was among conditions for a $1.5 billion World Bank budget support loan.

 

Reuters

Published in Engineering
Thursday, 25 February 2021 05:55

Nigeria successfully exits recession

Nigeria’s economy has bucked a global trend and has successfully exited recession in the fourth quarter of 2020.

According to data from the country’s National Bureau of Statistics, GDP increased by 0.11% in the period October-December, supported primarily by growth in agriculture and telecommunications, which expanded by 3.4% and 17.6% respectively.

While increased global oil prices contributed to the growth, the figures also demonstrate the increasing importance of the non-crude sector for Africa’s most populous nation and the diversification of the country’s economy. Analysts note that the figures may indicate a sustained period of faster growth, as the world watches on to see which countries achieve a V-shaped recovery following the pandemic.

Growth in domestic product was also supported by the country’s Economic Sustainability Plan, an ambitious set of policies announced by President Buhari’s administration in June 2020 to address the immediate challenge of the COVID-19 pandemic.

Already, the focus on infrastructure and job creation in the agricultural and other labour-intensive sectors have borne fruit, and the Economic Sustainability Plan is soon to enter a new phase, with the installation of solar power in 5 million homes further boosting employment opportunities and access to power.

Femi Adesina, Special Advisor to President Buhari on Media, said “Infrastructure is where Buhari will leave his biggest footprints. Bridges. Rail. Airports. AKK gas pipeline. All to be delivered before the administration exits in 2023.”

In parallel, a new job creation initiative aimed at the country’s youth was launched in January, providing placements for over 700,000 unemployed young people.

Nigeria’s GDP numbers at the end of 2020 challenged the expectations of international organisations as well as global trends. Countries with larger stimulus packages, such as the USA and Japan, saw lower quarter on quarter growth than Nigeria over the period. In Europe, Spain and Germany also experienced unexpected increases of 0.4% and 0.1% respectively, while France’s GDP fell less than was forecast but remained negative.

This week also saw reports that corruption in Nigeria has fallen dramatically, with BudgIT, a civic advocacy organisation focused on budget and public finance issues, reporting the payment of public funds into personal accounts has declined by 94.75 percent.

While the trend in Nigeria is no doubt positive, risks of further waves of infection and a slow vaccine roll-out threaten the country’s sustained recovery, and are difficult to mitigate. Nigeria’s National Agency for Food and Drug Administration and Control (NADFAC) recently approved the AztraZeneca vaccine for the country and has requested 10million doses from the World Health Organisation’s Covax programme. However, it is unclear when these vaccines will arrive and be rolled-out across Nigeria.

 

Credit: EU Reporter

Published in Business

In countries with weak governance institutions, natural resource wealth tends to be a curse instead of a blessing. Where citizens are relatively powerless to hold ruling elites to account, resource wealth undermines development prospects.

On the contrary, where citizens are able to exert constraints on executive power, resource wealth can generate development that benefits ordinary citizens.

Development scholar Richard Auty first coined the term ‘resource curse’ in the early 1990s. He used the phrase to describe the puzzling phenomenon of resource wealthy countries failing to industrialise. Manifestations of the ‘curse’ now range from widespread corruption to civil war to deepening authoritarian rule.

Literature on the resource curse has done an adequate job of describing the general nature of the relationship between resource dependence and underdevelopment. It now needs to focus on understanding specific manifestations.

In my latest book, I detail what these are in relation to oil in Nigeria and Angola, sub-Saharan Africa’s two largest oil producers.

My book shows that the resource curse manifests differently in different contexts.

Why does this matter?

If governance interventions are to be useful, it’s important to understand the context. Otherwise, policy interventions won’t gain traction. If political dynamics play a determinative role in long-run economic outcomes, we must understand them better.

Two countries, two stories

In 2018, Angola’s fuel exports constituted 92.4% of the country’s total exports. Oil rents – the difference between the price of oil and the average cost of producing – accounted for 25.6% of the country’s Gross Domestic Product (GDP). In 2019 the country ranked 148th out of 189 countries in the UN’s Human Development Index.

Nigeria’s oil exports in 2018 were 94.1% of total exports, oil rents amounted to 9% of GDP. In 2019 it ranked 161st on the human development index . As is clear from the graph above, sub-Saharan Africa’s major oil producers are clustered around the lower end of the human development spectrum and are mostly autocratic.

Both Nigeria and Angola have been characterised by one form or another of autocratic rule for most of their post-independence histories. Autocracy invariably undermines a country’s development prospects.

Angola was plunged into a civil war shortly after independence in November 1975. It then suffered an unsuccessful coup attempt in 1977.

In Nigeria, the balance of power at independence in 1960 was just as precarious as Angola’s. Nigeria suffered two military coups in 1966, and a civil war from 1967-1970.

But why does oil fuel the consolidation of autocratic rule in one context, but not necessarily in another?

It all comes down to how the leader of the ruling coalition extracts and distributes the oil rents. In my book, I employ a game theory model developed by Princeton political scientist Milan Svolik to explain these divergent political outcomes.

Angola

Jose Eduardo dos Santos came to power in 1979 as served as president until 2017, grabbing power early and repeatedly. Svolik’s model predicts that rulers who can do this at the same time as limiting the probability of a coup being against them manage to entrench their rule.

Within six years, dos Santos had consolidated power. He eliminated internal threats by subverting power sharing institutions and purging key individuals. For instance, in 1984 the central committee of the ruling Movimento Popular de Libertação de Angola (MPLA) – created a ‘defence and security council’, chaired by dos Santos. As I note in the book, it became an inner cabinet, “effectively eclipsing the Political Bureau as the country’s top decision-making body”.

A year later, dos Santos dropped Lúcio Lara, the party’s stalwart intellectual, from the Political Bureau, thus removing the last potential threat to his rule. Simultaneously, he used the extensive oil rents at his disposal – and the cover of civil war – to either co-opt or eliminate opposition.

He did so by ensuring that the state oil firm, Sonangol, was proficiently run. It soon became Angola’s shadow state through its vast web of subsidiaries. After the civil war - 1975 to 2002 - Sonangol became the driver of (limited) development, but also the key distributor of patronage to cement dos Santos’s power. He not only bled it to enrich his family dynasty; he also used it to appease his inner circle.

Dos Santos ended up ruling for 38 years. But, his key strategic mistake was placing his children in plum Sonangol positions ahead of loyalists.

In 2017, João Lourenço, a former Defence Minister, became the new Angolan president. Dos Santos was to remain head of the MPLA until 2022. But, he was ousted through what was essentially a bloodless coup in 2018, engineered by his former loyalists like Manuel Vicente, the long-standing former head of Sonangol.

The Politburo appointed Lourenço president of the MPLA. He has since purged the dos Santos children from plum positions. Angola is still heavily dominated by the ruling MPLA, though. Prospects for a more competitive political settlement appear limited.

The case of Nigeria

Within six years of independence from Britain on 1 October 1960, the military launched a coup. This initiated a long period of military rule. Seven coups occurred between 1966 and 1993. Military rule was largely uninterrupted from 1966 to 1999.

But neither the coups nor the civil war were driven by oil.

Oil wealth only became a major factor in Nigeria’s political economy in the early 1970s, when the price rocketed as a result of the global supply crisis. Windfall oil wealth exacerbated the preexisting fragility. The state run oil firm, the Nigerian National Petroleum Company, was inefficient compared to Sonangol. Nonetheless, it served as the country’s cash cow, milked to extend patronage.

But, unlike in Angola, no aspirant Nigerian autocrat was able to monopolise personal control over the national oil company. As I detail in the book, oil exacerbated fragility in Nigeria. While Angola’s dos Santos maintained a stable bargain among elites, Nigeria’s balance of power remained precarious.

In 1975, another military coup toppled Yakubu Gowon who had ruled Nigeria through the civil war. Murtala Muhammed came to power but was assassinated in a coup attempt six months later, which brought Olusegun Obasanjo to power in 1976. Obasanjo guided a transition to civilian rule in 1979 but this only lasted four years.

A 1983 coup brought current President Muhammadu Buhari to power and another ousted him two years later. Ibrahim Babangida then ruled until 1993. After a brief attempt at civilian rule, Sani Abacha came to power through yet another coup that same year. He died in office in 1998. His successor, Abdulsalami Abubakar, returned the country to civilian rule a year later.

Former military ruler Obasanjo – who had been imprisoned by Abacha – won the 1999 elections but attempted to grab a third term as president in 2006. Despite alleged oil-funded bribery to lobby party members to support his cause, they held fast to the constitution’s term limits.

The importance of that moment cannot be overstated. It has resulted in a more open and competitive political settlement in Nigeria. Maintaining constitutional term limits can stop autocratic entrenchment in its tracks. Unfortunately, this has not guaranteed stability in Nigeria. Post-2015 fragility has deepened considerably.

Where to from here?

As my book shows, oil rents grease the wheels of political dynamics very differently in Angola and Nigeria.

Existing explanations for different manifestations range from ethnic fragmentation, inherited colonial structures, the role of foreign actors and how lootable the oil is.

More attention now needs to be paid to how aspirant autocrats use natural resource rents to accumulate power for themselves. This can lead to policy practitioners developing an early warning system that may help citizens to nip power-grabs in the bud.

This may serve, in conjunction with other policy interventions, to ultimately reverse the curse.The Conversation

 

Ross Harvey, Senior Research Associate, Institute for the Future of Knowledge, University of Johannesburg

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis

Nigeria’s President Muhammadu Buhari cleared the way for the launch of an infrastructure company with initial seed capital of a trillion naira ($2.4 billion) as Africa’s largest oil producer attempts to steer itself out of a likely economic contraction.

The company, named Infraco, which is being set up in partnership with the private sector, is expected to grow its capital and assets to 15 trillion naira over time to fund public projects like roads, rails and power, Laolu Akande, the vice president’s spokesman, said in a statement on Friday.

The government of Africa’s most populous country is seeking to expand investments to stimulate recovery in an economy facing its second recession in four years. Nigeria requires at least $3 trillion over 30 years to close its infrastructure deficit, Moody’s Investors Service said in a November report.

The start-up funding will come from the Central Bank of Nigeria, the Nigerian Sovereign Investment Authority, and the Africa Finance Corporation.

Vice President Yemi Osinbajo will head a committee charged with getting the company started, while central bank Governor Godwin Emefiele will chair Infraco. The managing director of the NSIA, the president of the AFC, representatives of the Nigerian Governors Forum, and the ministry of finance will also help form the board, along with three independent directors from the private sector.

Published in Engineering
Monday, 14 December 2020 06:09

The wealthy Nigerians buying citizenship overseas

Every year an increasing number of Nigerians flee poverty and unrest at home. Now, rich Nigerians are planning their escape too. And they’re taking their money with them.

Dapo has spent too long at home in Lagos, Nigeria. Back in October, protests against the SARS police unit kept him from going to his office. “First, we were told to stay at home because of the coronavirus. Then this,” he says.

A wealthy Nigerian, Dapo, who is in his late 30s, does not want to make himself identifiable by giving his surname and age, lest it draw unwanted attention.

He has had a “backup plan” for getting out of Nigeria for some time, he says. “I have Maltese citizenship. I can leave for there any time.” With one small obstacle – a 14-day quarantine upon arrival – Dapo could be permanently in Malta any time he pleases. He is not planning to go imminently, but describes it as his “plan b’’.

Dapo is one of a rapidly growing number of Nigerians who have bought so-called “golden visas” or foreign citizenships-by-investment this year. In his case it was Malta, the Mediterranean island where citizenship can be acquired for a minimum investment of 800,000 euros ($947,180) through the Malta Citizenship by Investment Programme.

An aerial view over Malta Freeport in Valletta, in March 2018 [File:Getty Images]

Not that he has any special love for Malta. A record 92 countries around the world now allow wealthy individuals to become residents or citizens in return for a fee, sometimes as low as $100,000 but often several million dollars. It is billed as a “win-win”: The country gets much-needed foreign investment and, in return, the new citizens have new passports that open up more of the world to travel or live in.

 

Golden visas are the lesser-reported side of the Nigerian migration story. Every year thousands of Nigerians make their way to Europe via perilous crossings over the Sahara and Mediterranean. Now their wealthier counterparts are also making their way to Europe but via a different route.

A record year for golden visas

Whether rich or poor, the reasons for leaving one’s home country are often the same. Fear of political uncertainty at home and hope for better opportunities elsewhere. But 2020 has been exceptional.

Like Dapo, Folajimi Kuti, 50, was watching the #EndSARS protests from his home in Lagos in October. “I have children, they’re teenagers, and they’re asking me questions like, ‘How did we get here?’” he says, referring to the violence that accompanied demonstrations against the controversial Special Anti-Robbery Squad (SARS).

Kuti says he has believed for some time that social unrest would boil over in Nigeria, because of issues of poverty and police brutality. “It had been clear for the past two or three years that something was going to happen. It’s happened now in 2020 but, frankly, we’ve been expecting this outburst for a while so it wasn’t a matter of ‘if’. It was a matter of ‘when’.”

An aerial view shows the central business district in Nigeria’s commercial capital, Lagos in 2009 [File: Reuters]
Citizenship or residency abroad has become appealing, he adds. As a financial adviser to the wealthy, Kuti knows the process of applying for one having walked clients through it before. Most of his work involves advising Nigeria’s growing number of millionaires about investments and wealth planning. But now they are asking about foreign citizenships and Kuti himself is tempted by the idea. “Just knowing that if you need to go you certainly could and move without any restriction.”

The rush for golden visas among rich Nigerians started before October’s SARS protests. At London-based Henley & Partners, one of the world’s largest citizenship advisory firms, applications by Nigerians increased by 185 percent during the eight months to September 2020, making them the second-largest nationality to apply for such schemes after Indians.

More than 1,000 Nigerians have enquired about the citizenship of another country through Henley & Partners this year alone, which Paddy Blewer, head of marketing, says “is unheard of. We’ve never had this many people contacting us”.

Many, like Kuti, saw political problems ahead and wanted an escape plan. Others were focused on coronavirus: What if the pandemic overwhelms Nigeria?

“There is a lack of primary healthcare capacity that would be able to manage with either a second wave or whatever happens in, say, 2025,” says Blewer. “Let’s say there is COVID-21 still going on in 2025 that is of an order or magnitude worse. It’s, ‘Do I want to be based here and only based here, or do I want an alternative base of operations where I believe I will be safer and I will be able to run my global businesses’.

“And, I think, that’s what COVID has driven.”

The Victoria Island waterfront is seen from the affluent Ikoyi neighbourhood in Lagos, in June 2014 [File: Reuters]
It was in July, when the number of COVID-19 cases in Nigeria escalated, that wealthy Nigerians started looking more seriously at citizenship abroad, experts say. “Those with medical conditions that could not fly out – a lot of them are buying passports just because if there is any problem they can fly out,” says Olusegun Paul Andrew, 56, a Nigerian entrepreneur and investor who spends much of the year in the Netherlands.

“Flying out” of Nigeria is hard and not just because of the coronavirus pandemic. Just 26 countries allow Nigerian passport holders visa-free entry, many of them part of West Africa’s ECOWAS arrangement. Both the United Kingdom and Europe’s Schengen zone require Nigerians to obtain visas ahead of travelling.

For the wealthy, this is too much hassle. “They don’t want to be queueing for visas for any EU country or whatever,” says Andrew. Instead, why not purchase the citizenship of a country with visa-free access to Europe?

To Europe, via the Caribbean

Bimpe, a wealthy Nigerian who also does not wish to give her full name, has three passports. One Nigerian, which she says she never uses, and two from Caribbean nations: St Kitts and Nevis; and Grenada.

The St Kitts and Nevis passport, which cost her $400,000 via a real estate investment programme, was useful when she travelled between London and New York on business as it allows for visa-free travel to the UK and Europe. But now that she has retired in Abuja, Bimpe, whose husband has passed away, wants her three adult sons to have the same opportunities to travel and live abroad.

“My kids were interested in visa-free travel. They are young graduates, wanting to explore the world. So that was the reason for my investment,” she explains.

A general view of Grenada taken in March, 2019 [File: Getty Images]

Her investment to gain a Grenada passport for herself and her sons took the form of a $300,000 stake in the Six Senses La Sagesse hotel on the Caribbean island, which she bought in 2015 through a property development group called Range Developments. Like most countries offering their citizenship for sale, Grenada allows real estate investments to qualify for a passport.

Bimpe’s family has lived overseas before – spending nine years in the UK between 2006 and 2015. Of her three sons, she says: “One, for sure now, is never going to leave Nigeria. He loves it here. The second one lives in England. He’s been in England long enough to get British residency. My youngest – for him, living abroad is a very, very attractive option. He’s not very happy [in Nigeria]. He went to England very young – at age 12 – and he’s had a problem adjusting since. He’s been back in Nigeria five years and he’s still not settled.”

Now aged 26, Bimpe’s youngest son is looking at settling in the UK or in the US where, thanks to his Grenada citizenship, he qualifies for an E-2 visa, something not available to his fellow Nigerians since President Donald Trump’s ban on immigrant visa applications in February. Bimpe believes his career opportunities in acting – he studied Drama in the UK – are better abroad, and therefore considers the Grenada citizenship to be a worthwhile investment.

Neither Bimpe nor her sons have ever been to Grenada even though their investment allows them to stay on the Caribbean island, once known as The Spice Island. “I intend to go. I would like to go,” she says. “Just when I did [the investment], it was soon after my husband died and I wasn’t in the mood for travel and then I got my passport but there was no good reason for travel due to the pandemic.”

The Six Senses La Sagesse is being constructed by Range Developments, whose founder and managing director, Mohammed Asaria, says it is not unusual for investors never to visit. In fact, since there is no obligation for citizenship investors to visit Grenada, interest in the scheme has ballooned among Nigerians.

An aerial view of the Six Senses Grenada [Photo courtesy of Range Developments]

“We have between high single figures and low double-digit sales of hotel units on a monthly basis to Nigerians. The average investment is just under $300,000,” says Asaria. “It’s a big market for us. And it’s going to get bigger. There are 300 million people [in Nigeria].” Of these, more than 40,000 are millionaires and, therefore, potential customers for golden visas, according to the Knight Frank Wealth Report.

It is a similar story across the Caribbean. Arton Capital, a citizenship advisory group, says demand from Nigerian families for Antigua and Barbuda citizenship is up 15 percent this year compared with the last.

St Lucia has also seen a record number of Nigerians applying in 2020. “It’s more than it’s ever been over the past four years,” says Nestor Alfred, CEO of the St Lucia Citizenship-by-Investment Unit.

The citizenship market is not exclusive to the Caribbean, but these are the cheapest and they maintain that all-important visa-free access to Europe that their clients are hankering after.

Tax incentives

“I’m rich but I’m not a Donald Trump. I wasn’t looking for a tax escape,” says Bimpe.

Investing in a foreign citizenship is not illegal for Nigerians, but the issue of wealthy citizens moving their assets overseas is a thorny one in Nigeria, where about $15bn is lost to tax evasion every year, according to the country’s Federal Inland Revenue Service. Much of that money finds its way to the Caribbean, as was highlighted in the leaked documents that formed part of the Panama Papers in 2016.

The tax benefits of an overseas citizenship are undoubtedly attractive. Citizens can become tax residents of countries like Dominica, where there is no wealth or inheritance tax, or Grenada which offers “corporate tax incentives”. In Europe, Malta has long been courting hedge funds with its light-touch regulations.

Tourists take photographs down a typical street in Valletta, Malta in 2018 [File:Getty Images]

Being a citizen of a country with a more stable currency is also appealing to the wealthy. “Second citizenship helps with capital mobility. Pull up a graph of the Naira. If you look at the Naira for the last 10 years it’s been a horrible journey,” says Asaria. Better, therefore, in the minds of the wealthy, to own assets in euros or even East Caribbean dollars which are pegged to the US dollar.

“Businesses are struggling, inflation on the rise, insecurity, and a host of other issues. These issues have prompted an increase in citizenship or residency-by-investment from wealthy Nigerians in a bid to secure a better future for their families in developed countries,” says Evans Ahanaonu, a Lagos-based representative for High Net Worth Immigration, a citizenship advisory firm. Grenada and Turkey are popular for clients wanting quick access to Europe, he adds, while some go straight for the UK Innovator Visa which means setting up a business in the UK.

Given the number of applications processed by the citizenship advisory firms interviewed just for this article, a conservative estimate would put the amount invested by Nigerians into citizenship schemes at more than $1bn this year alone.

Where rich and poor migrants meet

The loss of wealth from Nigeria has severe implications for levels of employment in the country. With wealthy businesspeople investing their capital outside Nigeria rather than in it, there is less funding for local businesses or government projects which might otherwise generate employment. This, in turn is causing more poorer Nigerians to want to move overseas as well, in search of better work opportunities, a trend backed up by the findings of a 2018 survey by Afrobarometer, the data analysis group.

Just before the pandemic struck, Kingsley Aneoklloude, 35, was able to make his way to Europe, but via a very different route.

He was working as a mechanic in his village in Edo State, one of the country’s poorer provinces which have been untouched by oil wealth, where he earned 1,500 naira ($3.95) a week.

The salary was poor but the final straw was police brutality. Aneoklloude was briefly employed as a local election monitor during the 2015 presidential elections. He says he was pressured by representatives of a political party to manipulate ballot papers, but refused, after which he became afraid for his safety. “I left because they were chasing me. Honestly, they come and chase me,” he says.

In a photo from 2019, migrants fleeing from Libya on an overcrowded wooden boat wait to be rescued in the Mediterranean Sea [File: AP]

First, he went to Kano State in the north of Nigeria. Then, in December 2019, Aneoklloude made the dangerous journey to Europe via Niger, then Libya, “where there was a heavy war in Tripoli”, before crossing the Mediterranean.

While adrift on the Mediterranean Sea, his small boat was rescued by Open Arms, an NGO which helps refugees and migrants crossing the Mediterranean. Their ship docked in Lampedusa, one of the Italian Pelagie Islands, where Aneoklloude’s asylum application for Germany was processed.

Now in Potsdam, Germany, he is waiting to hear the outcome of his application for new citizenship and a job. “I have a nine-month contract for work, but they need the immigration officer to sign the contract before I start,” he explains.

At 35, Aneoklloude is just a few years younger than Dapo. Both have witnessed police brutality from different angles, and both saw the Mediterranean as their way out.

But now, with Nigeria’s economy officially in another recession, more will likely follow. It is a dangerous spiral: The more wealth taken out of Nigeria, the fewer jobs available to its poorest.

 
Published in Business

Protests in Nigeria against police brutality and specifically the Special Anti Robbery Squad, a police unit accused of human rights abuses, have mostly been by young Nigerians, aged 30 and below.

This age group, which forms close to 70 percent of the country’s population, have bore the most impact of bad governance. For instance, unemployment figures stood at 21.7 million in the second quarter of 2020. The youth account for 13.9 million of this. So, beyond the campaign to end police brutality, current protests have other underlining factors. To better understand these factors and what Nigeria can do to fully benefit from the strength of its young population, Adejuwon Soyinka asked Uche Isiugo-Abanihe, Professor of Demography and Dr. Funke Fayehun, senior lecturer and population scientist, both at the University of Ibadan, to unpack the issues.


How would you characterise the demographic profile of Nigeria?

Nigeria, with an estimated population of about 206 million, is the seventh most populous country in the world. The high growth rate of Nigeria’s population, about 2.6 percent, is a product of persistent high fertility over time and consistently declining mortality. Nigeria’s total fertility rate is 5.3 with crude birth rate of 38 per 1000 population. With the high growth and fertility rates, the population is projected to increase to 263 million in 2030 and 401 million in 2050 when Nigeria would become the third most populous country in the world. That would be a jump of about 49% in 20 years

According to population projections by the United Nations for 2020, about 43 percent of the Nigerian population comprised children 0-14 years, 19 percent age 15-24 years and about 62 percent are below age 25 years. By contrast, less than 5 percent is aged 60 years and above. This makes Nigeria a youthful population with a median age of about 18 years, which is lower than African and world estimates of 20 and 29 respectively. Children and adolescents make up a large segment of the population, a product of many couples having too many children.

What role would you say the fact that 70% per cent of Nigeria’s population is under age 30, played in the ongoing #EndSARS protests?

The protests that are being held in major cities in Nigeria are led by youths. Young Nigerians between the ages of 18 and 30 years are the major victims of extortion and police brutality in the country. They are often framed as lazy and fraudulent and are constantly harassed by the police. This, coupled with the fact that 34.9 percent of Nigerian youths are unemployed, has led to outcries about the disbandment of the Special Anti-Robbery Squad (SARS). Unemployment stood at 21.7 million in the second quarter of 2020. The youth account for 13.9 million of this.

The alleged brutality of the SARS unit of the Nigeria Police Force include ill-treatment of young Nigerians, torture and extra-judicial execution and have made earning a living difficult for young entrepreneurs. The protests have, to a large extent, influenced government to dissolve SARS, replacing it with the Special Weapons and Tactics unit almost immediately.

Why do you think the ongoing protest has been largely driven by young Nigerians?

Nigeria has been unable to maintain a trajectory of improving economic development (currently about 2 percent to match its population growth of close to 3 percent). Hence, the country’s inability to provide the education needs, create more jobs for the expanding workforce, and provide basic infrastructure and services such as roads, electricity, and stable food supplies.

A possible result of remaining trapped in this state is that the government may reach a state of “demographic fatigue”. This is a condition where the state lacks the financial resources to stabilise its population growth and the capacity to manage available resources. It becomes unable to deal effectively with threats from diseases and population-induced crises such as communal clashes, banditry, insurgency and insecurity. The recent protests suggest that Nigeria may have reached this state because there is a huge backlog of youths whose capacity was not developed over the years and high rates of unemployment. These are compounded by lack of political will by the government to address the needs of the youth. This has led to discontent and frustration which are expressed through this protest.

How do you think Nigeria should handle its youthful population?

Large numbers of young people in Nigeria can represent great economic potential, known as demographic dividends. However, this can happen if families and governments can adequately invest in their health and education, and stimulate new economic opportunities for them.

The government should, as a matter of urgency, prioritise pro-poor policies. It should invest massively in education and youth empowerment, as well as health programmes for children and women that include an efficient family planning initiative. And it should implement sound economic and governance policies to create new business and economic opportunities. It goes without saying that carrying out these policies can be challenging for Nigeria’s social and government structures, making it difficult for Nigeria to take advantage of a demographic dividend in the next few decades.

In fact, simulation models constructed by Scott R. Moreland suggest that Nigeria can enter the ranks of lower middle income economies and obtain a demographic dividend only by 2050, if it adopts appropriate family planning, education and economic strategies. Meanwhile, the total population would have almost doubled to 401 million on the same total land mass of 910,770 sq. km (or 351,650 sq. miles). Only decades of purposeful, proactive and well-informed statesmanship can avert the impending catastrophe that will befall Nigeria.The Conversation

 

Funke Fayehun, Senior lecturer, University of Ibadan and Uche Isiugo-Abanihe, Professor of Demography, University of Ibadan

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Published in Opinion & Analysis

Nigeria's President Muhammadu Buhari has said he is determined to end police brutality, introduce reforms and bring "erring personnel... to justice".

His comments came after two days of protests sparked by a video of a man allegedly being killed by police.

The protest movement initially targeted the federal Special Anti-Robbery Squad (Sars), widely accused of unlawful arrests, torture and murder.

The protesters say they want the unit disbanded rather than reformed.

Previous commitments to change the behaviour of the police have not had an effect, critics say.

In a series of tweets, the president said that his government's "determination to reform the police should never be in doubt".

Nigeria Buhari Twitter Response

He added that he was being "briefed... on the reform efforts ongoing to end police brutality and unethical conduct".

But he called for calm and emphasised that most police officers were committed to protecting Nigerians.

On Friday, in the capital, Abuja, police fired tear gas at protesters who were highlighting police harassment and brutality.

Nigeria EndSARS Protest2

                                                                                    On Friday, protesters could be seen running from tear gas in the capital, Abuja (Reuters)

A police spokesman said minimum force had been used but demonstrators told the BBC that some people had been beaten and one said she had heard gunshots.

The hashtag #EndSARS was trending worldwide on Twitter on Friday with celebrities including the Nigerian superstars Wizkid and Davido tweeting their support for protesters.

British-Nigerian Star Wars actor John Boyega has also expressed his backing on social media.

'Targeted for being flashy'

The #EndSARS hashtag was first thought to have been used in 2018, but it emerged once again a week ago following the alleged killing of a young man by officers from the Sars unit.

Many people were using the opportunity to share stories of brutality attributed to the police unit, which has developed notoriety for unduly profiling young people, reports the BBC's Nduka Orjinmo from Abuja.

Those considered "flashy" often attract the Sars officers' attention and very few walk away without having to hand over money, while others are arrested or jailed on trumped-up charges and some have been killed, our correspondent adds.

Nigeria EndSARS Protest3 Getty

On Sunday, Nigeria's inspector general of police Mohammed Adamu banned the Sars unit from carrying out stop and search duties and setting up roadblocks.

He also said members of Sars must always wear uniforms and promised the unit would be investigated.

But protesters want the unit disbanded completely.

Past promises

Two years ago, Vice-President Yemi Osinbajo tweeted that he had directed that the "management and activities of Sars" should be overhauled "with immediate effect".

Then last year, a specially formed Presidential Panel on the Reform of the Special Anti-Robbery Squad recommended reforms along with the dismissal and prosecution of named officers accused of abusing Nigerians.

At the time, President Buhari gave the head of police three months to work out how to implement the recommendations, but critics say little appears to have changed.

 

Source: BBC

Published in Economy

Nigeria’s long-awaited oil reform bill would privatise the Nigerian National Petroleum Company (NNPC), amend changes to deepwater royalties made late last year and scrap key regulatory agencies in favour of new bodies, a copy of the bill seen by Reuters showed.

President Muhammadu Buhari has sent the bill to the Senate, two sources told Reuters. It, along with the House of Representatives must sign off on it before it can become law. Nigeria is Africa’s largest crude exporter.

The legislation has been in the works for the past 20 years and looks to revise laws governing Nigeria’s oil and gas exploration not fully updated since the 1960s because of the contentious nature of any change to oil taxes, terms and revenue-sharing.

The bill proposes turning the NNPC into a limited liability corporation into which the ministers of finance and petroleum would transfer NNPC assets.

The government would then pay cash for shares of the company and it would operate as a commercial entity without access to state funds.

The changes would in theory make it easier for the struggling company to raise funds.

The legislation would also amend controversial changes to deep offshore royalties made late last year by cutting the royalty for offshore fields producing less than 15,000 barrels per day (bpd) to 7.5% from 10%.

It would also change a price-based royalty so that it kicked in when oil prices climbed above $50 per barrel, rather than $35.

 

- Reuters

Published in Engineering

The leaders of the military coup in Mali have told a delegation of West African mediators that they want to stay in power for a three-year transition period, Nigeria said on Wednesday.

Negotiators from the Economic Community of West African States (ECOWAS) were sent to Mali at the weekend to discuss a return to civilian rule with the military officers who ousted President Ibrahim Boubacar Keita in the Aug. 18 coup.

But three days of meetings ended without a decision on the structure of a transitional government.

The junta leaders said after taking power that they acted because the country was sinking into chaos and insecurity which they said was largely the fault of poor government. They also promised to oversee a transition to elections within a “reasonable” amount of time.

The Nigerian presidency said the mutineers were now seeking to oversee a three-year transition before elections. Earlier, ECOWAS envoy Goodluck Jonathan had given an update on talks to Nigerian President Muhammadu Buhari.

“We also told them that what would be acceptable to ECOWAS was an Interim Government, headed by a civilian or retired military officer, to last for six or nine months, and maximum of 12 calendar months,” the presidency quoted Jonathan as saying in a statement.

The coup has raised the prospect of further political turmoil in Mali which, like other countries in the region, has faced an expanding threat from Islamist militants and civil unrest.

Coup leaders have held Keita since his overthrow, declining an ECOWAS request for him to be moved to his own residence.

“They said he could travel abroad, and not return to answer questions they may have for him,” Jonathan was quoted as saying.

The bloc has taken a hardline on the coup, shutting borders and halting some financial flows.

“The military leaders want ECOWAS to lift sanctions put in place, as it was already affecting the country,” it said.

Leaders of the 15-nation bloc are scheduled to hold a summit on Friday to discuss further steps.

 

Reuters

Published in Economy
Wednesday, 12 August 2020 06:32

Chinese loan and Nigeria’s sovereignty

In the past few days, the public space has been awash with comments and outrage on the hearings at the Federal House of Representatives concerning the Chinese loan agreements Nigeria entered into to the tune of $500 million for the part-financing of its rail projects said to be valued at about $849 million.

This is borne out of the fact that the House of Representatives Committee raised the alarm over the alleged waiver of Nigeria’s sovereignty. These hearings in which the Minister of Transportation, Chibuike Amaechi was invited, laid bare some perceived inconsistencies in public debt procurement process in Nigeria with noticeable gaps. For the rail project loan in question, issues have arisen concerning the drafting of the agreement, the processing of the documents as well as the involvement of the Minister of Finance and the Attorney-General of the Federation respectively.

These gaping questions become very disturbing when the lender in question here is China, which has been associated with opaqueness in granting loans to countries in global context.
 
In investigating the processing of the $500 million Chinese loan from the Export-Import Bank of China, the Federal House of Representatives, as part of its oversight function, discovered that the loan agreement contained a clause in which Nigeria’s sovereignty was supposedly traded off. According to reports, this discovery was made because the agreement entered into, was written in Mandarin, the official form of the Chinese language with the Nigerian officials signing without understanding the full content of the loan document. If that is the case, it strengthens the narrative of the reported opaqueness of typical Chinese loan agreements.

The controversial clause in this loan case, states that, “the borrower hereby irrevocably waives any immunity on the grounds of sovereign or otherwise for itself or its property in connection with any arbitration proceeding pursuant to Article 8(5), thereof with the enforcement of any arbitral award pursuant thereto, except for the military assets and diplomatic assets.” The question that arises here is whether there is no law that requires that the terms and conditions of loan agreements be submitted to the National Assembly for approval. In response to this raging controversies, the Chinese Foreign Ministry denied that China had any clause in the contract ceding Nigeria’s sovereignty and that it followed its “five-no” approach in loan agreements one of which is “no imposition of our will on African countries” and that it gives full consideration to debt sustainability.  

The response of China on this issue notwithstanding, the history of China’s relations with different countries on loan agreements largely leaves a sour taste in the mouth. China has been severally accused of undertaking a global colonisation policy with its debt-trap diplomacy. For most of the countries that China has extended loan facilities to, there has been tales of woe and lamentations. Chinese loans to Sri Lanka, Papua New Guinea, Maldives, Pakistan, Malaysia, Mongolia and Republic of Kazakhstan, among others have been followed with cases of default and takeover of these countries’ assets by China.

These loans are usually given out with very attractive conditions and without thorough due diligence for which these countries find it difficult to resist. What follows is a loan default and then the taking over of major assets in the borrowing countries with these takeovers not limited to the projects for which the loan is procured. By its “Belt and Road” Initiative, China targets countries that have some form of natural resources or something to offer which may not necessarily be cash. One commonality in these assets is that all the infrastructure of roads, ports, highways and airports, among others, financed with these loans all connect to China in what has been aptly described as the “new silk road.” Opaqueness has been one clear characteristic of Chinese loans across many jurisdictions globally. In Africa, the story is not different.

China appears to have taken a strategic position on the continent by willingly donating a mighty Secretariat to the African Union Commission in Addis Ababa, Ethiopia, probably as a good launching pad to gain easy access to virtually all African countries in pursuit of its global expansionist policy. China has extended irresistible loans to many African countries with Angola, an oil rich nation, having the largest Chinese loan exposure on the continent with a portfolio of about $25 billion. This is followed in that order by Ethiopia, Kenya, Republic of Congo, Sudan, Zambia, Cameroun, Nigeria, Ghana and the Democratic Republic of Congo, (DRC).

Most of these loan transactions have run into some trouble with Zambia representing the worst case in Africa where China has taken over their National Power Corporation and the Broadcasting Corporation due to loan default. It is little wonder why these countries wouldn’t default given that the loans are largely concessionary with lots of suspected undercover dealings and perks in favour of African government officials in form of huge kickbacks, which largely do not go through the banking system. Many have dubbed this as China’s new colonial strategy, which it executes by first encouraging indebtedness on very concessionary terms; taking over strategic assets or the commanding heights of the economy on default. The focus is largely on very corrupt countries with very weak governance structures. Given these antecedents, there is a great need for these issues to be addressed in the Forum on China-Africa Cooperation (FOCAC) meetings. 

The Debt Management Office (DMO)’s response on this raging issue has also left much to be desired. It addressed the pedestrian issue of how little China’s $3.121 billion loan exposure to Nigeria is, that it represents only 11.28% of the total external debt stock of $27.67 billion or 3.94% of overall total public debt burden of $79.303 billion. By this submission, the DMO stated that China is not a major source of funding for the Nigerian government. The DMO highlighted the fact that the loan is a concession of 20-year tenor with a seven-year moratorium. The DMO prided itself that its law, the Debt Management Office Establishment (ETC) Act 2003 as well as Section 41 (1a) of the Fiscal Responsibility Act 2007 were duly followed in the loan agreements in question.

However, the issue is really not in the quantum of these Chinese loans but on the commitments made by our government officials. The DMO response did not guarantee whether transparency was followed in the negotiating process –particularly with reported incidences of corruption in other jurisdictions. It also did not clearly state whether the unpalatable experiences of other countries in dealing with China on borrowing were factored in nor did it address the issue of sovereignty or whether the agreement was written in Mandarin or not nor how the repayment will be made from proceeds from the projects over the 20-year loan period. How come the National Assembly, which should have approved the loan in the first place is just getting to know about this sovereignty clause after the fact? The DMO needs to provide further explanations on these issues.
 
On the sovereignty issue, it needs to be noted that, the controversial clause would only come into effect when there is a case of default. It needs to be put in proper perspective that for an economic or commercial transaction, Nigeria would find it difficult to plead its sovereignty in the event of default and would thus need to go for arbitration. Hence the hue and cry on loss of sovereignty for a purely commercial transaction may have been misplaced. This, however, differs in the case of political relations where the ceding of sovereignty is not tolerable. It is proper to understand that for an economic or commercial transaction such as this, the key issue is to avoid a loan default else the case of arbitration cannot be avoided.

The critical point to make is whether Nigeria is safe with this preponderance of loans, particularly from China, given our track record in public debt management since independence.
 
It can be recalled that Nigeria had to exit the Paris Club debt during the Obasanjo administration by paying off $12 billion at a go and getting a relief of $18 billion totalling a reduction of our public debt by $30 billion. Are we sure there would not be a default again given our unenviable track record in loan repayment, particularly with the global oil market highly volatile and foreign exchange earnings dwindling. Corruption or kickbacks by government officials across the continent indicate that the actual investments in projects actually fall far short of negotiated loan amounts. This is a cause of worry concerning future default on these Chinese loans. This is where the sovereignty issue becomes obviously threatened.
 
Finally, does Nigeria actually need these many loans it has been taking particularly in the past five years since the inception of the Buhari administration in May 2015?
 
This government is known to have more than doubled the size of the public debt from about N12.118 trillion in May 2015 to N27.401 trillion in 2019 and in excess of N30 trillion at the moment. With the new borrowings of $3.4 billion from the IMF, $750 million from the World Bank, N162.5 billion Sukuk bond and another $1.5 billion from the World Bank, the Buhari administration is setting an inglorious record of ensuring that the future of the present and future generations is thoroughly mortgaged with dire consequences for the ordinary man. Currently, the cost of governance hasn’t been reduced and many stakeholders such as the Nigerian Labour Congress (NLC), the Trade Union Congress and many other stakeholders have called on the Buhari administration to make full disclosure of all the loans it had obtained. A stitch in time saves nine. The House of Representatives as well as the Senate should dig deep into these vexatious issues concerning Nigeria’s loans so that the current race on the road to economic and political perdition can be reversed.
 
1 USD = 386.594 NGN
 
Published in Opinion & Analysis
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