The Other Urgent issues that President Bola Ahmed Tinubu must confront Head on. Part One – Abayomi ODUNOWO
Subsidies are often seen as a tool for good governance, aimed at supporting and protecting certain industries, products, or services that are deemed essential for the well-being of a country’s population. However, the issue with subsidies lies not in their existence, but in the distribution and benefits they provide.
In the case of Nigeria, subsidies are primarily benefiting the wealthy and well-connected, rather than those in genuine need. For example, fuel subsidies are often manipulated by the rich, who take advantage of loopholes in the system to benefit from these subsidies, leading to significant financial losses for the government. These subsidies are not only failing to reach those who need them most, but are also draining the country’s resources, which could otherwise be directed towards much-needed development projects.
It is crucial for good governance to ensure that subsidies are well-targeted and reach the intended beneficiaries. In Nigeria, reforms are needed to ensure that subsidies for food, transportation, energy, and housing are redirected to those who truly need them, rather than lining the pockets of the wealthy. By doing so, not only can funds be recovered and redirected towards development, but the government can also fulfill its responsibility of providing essential support to the most vulnerable segments of the population.
The diversion of N40 billion from the Federation Account through the collection of the Combined Expatriate Residence Permit and Alien Card (CERPAC) Fee is a clear violation of the Nigerian Constitution and the provisions of the Immigration Act 2015. Continental Transfert Technique, the company hired to collect this fee, has been illegally sharing the revenue, with the Federal Government, Ministry of Interior, and the Immigration Service, in direct contravention of the law.
Despite a court ruling in favor of the complainant directing the Nigeria Immigration Service (NIS) to collect the funds and remit them to the Federation Account, the contractor and the federal government have continued to appeal the judgment and have persistently diverted the funds for their own gain. This blatant disregard for the rule of law and the misuse of public funds is both disappointing and unacceptable.
It is imperative that the relevant authorities take immediate action to end this illegal diversion and ensure that all revenue collected from the CERPAC fee is remitted to the Federation Account as directed by the court. This is crucial to safeguarding the integrity of the country’s financial system and upholding the principles of transparency and accountability in governance.
Secondly The passing of the amendment to the Deep Offshore and Inland Basin Production Sharing Contracts Act by the 9th National Assembly and its subsequent assent by President Buhari is a significant milestone for Nigeria’s economy. The amendment of this law is expected to result in an additional revenue of $1.5 billion payable to the Federation Account annually. This substantial increase in revenue will undoubtedly have a positive impact on the country’s fiscal position and its ability to finance critical infrastructure and social development programs.
The amendment of the law was long overdue, as the fiscal incentives given to oil and gas companies operating under the Deep Offshore and Inland Basin Production Sharing Contracts Act had expired in June 2014. Despite efforts to draw attention to this issue, it was not until the passage of the Bill by the 9th National Assembly that this important amendment was enacted into law.
The passage of this Bill demonstrates the government’s commitment to ensuring that the nation receives its fair share of revenue from the exploitation of its natural resources. It also reflects a proactive approach to addressing issues that have significant implications for the country’s economic wellbeing.
The additional revenue of $1.5 billion payable to the Federation Account will undoubtedly strengthen the government’s ability to meet its financial obligations and undertake critical development projects. It is a significant achievement that will contribute to the overall economic prosperity of Nigeria.
Thirdly issue of outstanding royalties in the oil industry is a matter of great concern for the Nigerian government and its citizens. The failure to collect the outstanding royalties of $62 billion from International Oil Companies has had a significant impact on the country’s economy. This failure represents a substantial loss of revenue that could have been utilized for the development of infrastructure, education, healthcare, and other vital sectors.
The Supreme Court’s ruling in favor of the collection of these royalties highlights the importance of transparency and accountability in the management of natural resources. It is crucial for the government to uphold the rule of law and take the necessary steps to ensure that these royalties are recovered and utilized for the benefit of the Nigerian people.
The refusal of the Federal Government to collect the outstanding royalties raises questions about the commitment to combating corruption and promoting good governance. It is imperative for the government to demonstrate its willingness to hold the IOCs accountable and to prioritize the interests of the Nigerian people.
the collection of the outstanding royalties of $62 billion is essential for the sustainable development of Nigeria. The government must act swiftly to enforce the Supreme Court’s ruling and recover these funds for the benefit of the nation as a whole.
Fourthly the blatant disregard for the rule of law and the hijacking of government contracts by corrupt public officers in Nigeria is not only disheartening, but it has also resulted in significant financial losses and compromised national security. The Cargo Tracking Note Scheme, which was introduced to protect international shipping and prevent the movement of dangerous cargo and arms shipments, has been repeatedly suspended and manipulated by individuals with selfish interests.
The recent incident in which President Buhari’s executive order to authorize a company to operate the Cargo Tracking Note was overruled by a group of government functionaries is a clear example of the extent of corruption within the Nigerian government. The fact that the successful company has had to resort to legal action against the federal government is a testament to the skewed and biased nature of the awarding of contracts in Nigeria.
It is estimated that Nigeria has lost at least $500 million due to the actions of these corrupt public officers, and the nation’s security has been compromised as a result. This level of corruption not only undermines the economic prosperity of the country but also poses a significant threat to the safety and wellbeing of its citizens.
The government must take decisive action to root out corruption within its ranks and ensure that contracts are awarded based on merit and transparency. The people responsible for denying the government revenue and compromising national security must be held accountable for their actions and face appropriate consequences. Only then can Nigeria move towards a future of integrity and prosperity.
Also The sale of public assets and enterprises by successive regimes has been a contentious issue in many countries. Privatization, which involves the transfer of ownership and management of public assets to the private sector, has been promoted as a means to increase efficiency, attract investment, and reduce the burden on the government. However, critics argue that the sale of public assets often leads to the concentration of wealth and power in the hands of a few, and can result in the exploitation of workers and depletion of natural resources.
In Nigeria, for example, the sale of public enterprises to members of the ruling class has raised concerns about asset stripping and the misuse of public resources. The Bureau of Public Enterprises reported that between 2004 and 2012, 142 public enterprises were sold to private investors, many of whom were closely connected to the government. Furthermore, the provision of shares for the staff of the privatised enterprises, as mandated by the Privatization and Commercialization Act, has been disregarded, with “core investors” taking advantage of this loophole.
This trend raises questions about the transparency and fairness of the privatization process, and the impact on the country’s economy and society. It is essential for the government to ensure that the sale of public assets and enterprises is conducted in a manner that safeguards the interests of the public and prevents exploitation and abuse of power by the ruling class. Transparent and accountable mechanisms for the privatization process, as well as measures to protect the rights of workers and communities affected by the sale of public assets, are crucial to ensuring that privatization serves the common good rather than the interests of a privileged few.
The decision by the Central Bank of Nigeria (CBN) to fix $7 billion in 14 commercial banks in 2006 raised eyebrows and sparked concerns about the transparency and accountability of the nation’s financial institutions. The fact that the deposit and accrued interest were not recovered from the banks only added fuel to the fire.
The failure to recover the funds and the lack of a clear explanation for this decision raised suspicions about the potential for corruption and mismanagement within the CBN. When the matter was reported to anti-graft agencies, the CBN’s response claiming that it had forgiven “the forbearance” only served to further muddy the waters and failed to provide a satisfactory explanation for the actions taken.
It is crucial for financial institutions, especially central banks, to operate with the highest levels of transparency and accountability to maintain trust and confidence in the financial system. The decision to fix such a substantial amount of money in commercial banks without a clear recovery plan or explanation raises serious concerns about the governance and oversight of the nation’s financial reserves.
Moving forward, it is imperative that the CBN and other financial institutions in Nigeria take proactive steps to address these concerns and demonstrate a commitment to upholding the highest standards of integrity and accountability in their operations.
The recent sale of Heritage Bank, Keystone Bank, Union Bank and Polaris Bank by the Central Bank of Nigeria (CBN) has raised significant concerns and controversy. These banks were taken over by the CBN due to financial distress and were subsequently revitalized with trillions of Naira in investments. However, the decision to sell these banks at significantly reduced prices has sparked a debate about the transparency and fairness of the process.
One of the most notable examples is the sale of Polaris Bank, which was created by the CBN after the liquidation of Skye Bank. The CBN invested N1.3 trillion in Polaris Bank, only to sell it for N50 billion, representing a massive loss. This has led to questions about the effectiveness of the CBN’s intervention and the rationale behind such a drastic devaluation of the bank.
Furthermore, the sale of these banks under the table has raised concerns about the lack of transparency and accountability in the process. Many stakeholders have called for an investigation into the sales to ensure that due process was followed and that the interests of the public and the financial sector were adequately protected.
Overall, the sale of Heritage Bank, Keystone Bank, Union Bank and Polaris Bank by the CBN has ignited a heated debate about the management of distressed banks and the fairness of the sales process. It is imperative for the CBN to address these concerns and provide clarity on the rationale behind the sales to restore confidence in the banking sector.
The theft of the nation’s mineral resources is not limited to crude oil, as solid minerals are equally at risk of being smuggled out of the country by highly placed criminal elements. Former Minister of State for Mines and Steel Development, Dr. Uche Ogah, recently revealed that private jets are being used by the rich for gold smuggling in Nigeria. This troubling revelation came to light during an investigative hearing on the estimated $9 billion annual loss to illegal mining and smuggling of gold, organized by the Senate Committee on Solid Minerals, Mines, Steel Development, and Metallurgy.
During the hearing, Senator Orji Uzor Kalu also disclosed that Nigeria had lost close to $54 billion from 2012 to 2018 due to the illegal smuggling of gold. This widespread and prolonged theft of valuable mineral resources has severe implications for the nation’s economy and development. The illegal mining and smuggling of gold are not only robbing the government of much-needed revenue, but they are also depriving the country of vital resources that could be used to drive economic growth and development.
The theft of gold and other solid minerals is a significant issue that requires urgent attention and decisive action from law enforcement agencies and government authorities. Stronger measures and enforcement are needed to combat this criminal activity and protect the nation’s valuable natural resources. Efforts to curb illegal mining and smuggling must be intensified to safeguard Nigeria’s mineral wealth and ensure that it benefits the nation and its people.
AMCON, the Asset Management Corporation of Nigeria, was established by the Federal Government in response to the impending collapse of commercial banks as a result of toxic loans taken by members of the rich ruling class. With trillions of Naira provided by the Central Bank of Nigeria, AMCON was tasked with buying off these loans to prevent catastrophic economic consequences.
However, despite the significant financial support provided to AMCON, the corporation has struggled to recover the outstanding loans owed by approximately 370 corporate bodies, amounting to a staggering N5.4 trillion. This massive amount of owed debt represents a significant burden on the Nigerian economy, with potential consequences for the stability of the financial sector and overall economic growth.
The failure of these wealthy individuals and corporate entities to repay their debts not only undermines the integrity of the financial system but also deprives the economy of vital resources that could be used for productive investment and development. Furthermore, it raises questions about accountability and the fair distribution of economic responsibilities within society.
In light of these challenges, it is imperative for AMCON and the relevant authorities to take decisive action to address this issue, ensuring that those responsible for the massive owed debt are held accountable and the outstanding loans are recovered to safeguard the stability and integrity of the Nigerian economy.
Otunba Abdulfalil Abayomi ODUNOWO
National Chairman AATSG
10th January, 2023