Business
Stakeholders Demand Halt To Nigeria’s Rising Debt
Some stakeholders in Nigeria’’s economic sector have advised the Federal Government to take urgent steps to halt the rising national debt stock, saying it is fast becoming unsustainable.
The stakeholders, who spoke in separate interviews with The Tide’s source in Abuja yesterday, advised the Federal Government to look inwards and devise creative means of generating revenue rather than depending on borrowings.
Recall that the Debt Management Office (DMO) recently announced that the country’s total debt stock as at December 2021 was N39.55 trillion.
The DMO had also said that the debt stock was likely to hit N45 trillion in 2022, as the government planned to borrow additional N6.30 trillion to finance the 2022 budget deficit.
A financial expert, Mr Ibrahim Aliu, advised the Federal Government to devise creative means of generating revenue and move the country’s economy away from perpetual dependence on debt.
Aliu advised that any further borrowings by the country should be strictly expended on productive ventures that could grow the economy.
“The Federal Government should ensure that borrowings are minimal and that future borrowings are effectively expended for real economic growth,’’ he said.
A chartered accountant, Mr Sule Adebayo, said that in spite of the low Debt-to-GDP ratio, the revenue that went into debt servicing was still on the high side.
He urged the Federal Government to take necessary steps to improve on its revenue and reduce its dependence on loans.
According to an economist, Dr Tope Fasua, the government will need to optimise revenue generation to cut down on borrowings.
Fasua urged the private sector to always cooperate with the government in its revenue drive rather than antagonising such initiatives.
“The private sector kicks anytime government proposes a tax increase, no matter how insignificant. It has turned itself into an enemy of government, “ he said.
He, however, disagreed with the DMO that Nigeria had a “revenue problem” and not a debt problem.
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Ministries, Departments and Agencies of the Federal Government, alongside the Presidency, spent at least N1.99billion on foreign trips, training and estacodes in France between May 2023 and September 2024.
According to The Tide’s source, the findings are based on an analysis of data from GovSpend, a transparency platform by BudgIT that tracks public expenditure.
The funds covered airfare, hotel accommodation, visa processing, estacodes, training programmes and business meetings.
A substantial portion was spent on executive training programmes, study trips and international conferences.
One of the largest single expenses was N626.91m, paid by the Office of the Special Adviser to the President on Niger Delta for the training and type rating of 35 cadet pilots in South Africa, France and Nigeria.
The funds were transferred from the GIFMIS platform to the PAP Naira Transit Account at the Central Bank of Nigeria (CBN).
The State House also recorded heavy spending on foreign trips, including N149.79m for foreign exchange purchases for the First Lady’s trip to France on April 1, 2024.
Another N6.29m was allocated in March 2024 for the processing of a five-year multiple-entry visa for the Vice President.
Several MDAs incurred significant expenses on overseas trips. The National Merit Award spent N15.5m as an advance payment for course fees for eight participants in a Paris training programme from 14 to 20 May 2023.
The Centre for Management Development spent N34.3m for six of its officials, each receiving N5.71m, to attend training in France.
Some top officials were also beneficiaries of these foreign trips. The Director-General of the Federal Institute of Industrial Research, Oshodi, Adamu Jummai, and the former Director-General of the National Directorate of Employment, Nuhu Fikpo, were among those whose trips were fully funded for executive programmes in Paris.
The Nigeria Communications Satellite Limited spent N41.09m on multiple officials, including the Technical Adviser to the NIGCOMSAT CEO, Temitope Yoosuf, for business meetings with Airbus in Toulouse, France.
Jane Egerton-Idehen, its Chief Executive Officer, and Aisha Bantam, Head of Corporate Affairs at NIGCOMSAT, were also funded with N11.88m and N5.65m, respectively, to attend the World Space Business Week in Paris.
The Nigeria Football Federation spent N124.45m on flight tickets for Super Falcons players travelling between America, France, Spain and Nigeria for their Olympic Games qualifier against Ethiopia.
Other notable payments include N10.62m by the Independent Corrupt Practices and Other Related Offences Commission for airfare for three officials attending the G20 Anti-Corruption Working Group meeting in Paris.
The Fiscal Responsibility Commission also paid N7.90m for an officer to attend the 2023 International Bar Association Conference in France.
The Federal Ministry of Health paid N5.30m each for David Beine Atuwo and Olusola Ayoola to participate in the 11th EDCTP Forum in France, covering airfare and conference participation.
The Defence Intelligence Agency made two significant payments, totalling N574.52m, for the salaries of two seconded staff of the Nigerian Financial Intelligence Unit at Interpol in Lyon, France, and Egmont Group in Ottawa, Canada.
The spending comes amid growing concerns over government expenditure and the rising cost of governance.
With the economy grappling with high inflation, fiscal deficits and a weakening naira, there have been calls for greater accountability and transparency in public spending.
The source earlier observed that in Tinubu’s first six months in office, specifically between June and December 2023, the State House spent not less than N3.4bn on both his local and foreign travels.
Similarly, in the first three months of 2024, a total of N5.24bn was spent by the State House on local and foreign travel expenses of the trio of Tinubu, Shettima and First Lady, Remi Tinubu.
A sum of N1.35bn was spent as provision for presidential trips and other related expenses between January and March, N3.53bn was expended for the purchase of foreign currencies during 10 international trips, and N637.85m was disbursed to two travel agencies for the purchase of air tickets for presidential local and foreign trips.
It was also reported that major opposition parties have faulted Tinubu’s frequent travel abroad.
According to them, the President is more interested in globetrotting than addressing pressing issues in the country.
But the presidency said a leader who sought to bring foreign investments couldn’t afford to sit back when the harvest was out there.
A few months ago, the Minister of Foreign Affairs, Yusuf Tuggar, justified President Bola Tinubu’s frequent travel abroad, saying he needs to embark on more trips because of its inherent benefits.
When reminded that Nigeria doesn’t have the money required for such frequent trips, the minister disagreed.
“Nigeria has the money. How much does travelling cost compared to the benefits? Again, how much does it cost really when you compare it to some of the things that the President has already addressed?
“How much have we wasted on fuel, electricity and other subsidies? He was subsidising consumption instead of production and subsidising the real sector of the economy”, he said.
In the past 21 months in office, Tinubu has visited about 19 countries on 32 foreign trips.
Among the countries visited were Paris, France; Malabo, Equatorial Guinea; London, the United Kingdom; Bissau, Guinea-Bissau; Nairobi, Kenya; Porto Norvo, Benin Republic; The Hague, Netherlands; Pretoria, South Africa; Accra, Ghana.
Others included New Delhi, India; Abu Dhabi and Dubai in the United Arab Emirates; New York, the United States of America; Riyadh, Saudi Arabia; Berlin, Germany; Addis Ababa, Ethiopia; Dakar, Senegal; and Doha, Qatar.
A civil society organization, Rivers State Tax Justice Governance Platform (RSTJGP) has called for the abolition of multiple taxation in the state.
Coordinator of the group, Kelechi Amaechi, who made the call in an interview with newsmen during a Tax Walkathon sensitization rally in Port Harcourt, said incidence of multiple taxation is driving away businesses in the state.
Amaechi particularly urged the Rivers State Government to enforce the use of the *5224# digital tax payment platform with a view to eliminating all illegal and multiple taxations in the state.
The event has as its theme “Power of Voices Partnership Fair for All”, was organized by the organization in collaboration with CISLAC, with support from Oxfam Nigeria to raise awareness about fair tax practices.
He said citizens must not only pay their taxes, but must demand accountability from the Authority.
According to him, despite government’s introduction of the digital tax payment platform, implementation remains weak, leaving businesses vulnerable to multiple taxes and harassment from tax agents and task forces.
“The Rivers State Government has taken steps to address illegal and multiple taxation by introducing the *5224# platform, which allows businesses to pay their taxes easily. However, enforcement remains a major challenge.
“Many businesses still receive excessive demand notices and are forced to pay exorbitant levies to tax agents and task forces”, he said.
He stressed that harmonized taxation would promote business growth and job creation, ultimately reducing youth unemployment and crime in the state.
“We are urging the government to not only introduce these initiatives, but also enforce them. Businesses need a simplified and harmonized tax system to thrive, create jobs, and contribute to economic growth”, he stated.
Chairperson of the Chartered Institute of Taxation of Nigeria (CITN), Port Harcourt District Society, Victoria Okokon, who spoke to The Tide in an interview, said it has become important for taxpayers to know their rights by using digital platforms for tax payments.
She said the rally was attended by people being impacted by multiple taxation, adding that market women, bus drivers and others attended the rally.
Okokon said digital payment of taxes will eliminate quackry, but added that people must ensure that their taxes are judiciously utilized by the government.
According to her, “If taxes are paid digitally, it eliminates the need for intermediaries, ensuring that tax revenues go directly into government coffers. This will help curb illegal collections and double taxation.
“It is important for every taxpayer to know their right, know the right avenue to pay their taxes.”
Also, the Executive Director of LightHope Succor Worldwide Initiative and a member of the Rivers State Tax Justice and Governance Platform, Evelyn Williams, urged the government to ensure taxpayers see tangible benefits from their contributions.
“Many business owners, especially women and young girls operating in market spaces, lack basic amenities such as toilets, proper parking spaces, and waste management services. The government must ensure that tax revenues are used to improve these facilities.
“We really want to see that those things are being put in place to ensure the taxpayers get equivalent services for the tax payment”, she said.
Also speaking, Chairman of Nigerian Association of Small and Medium Enterprises, Mr. Dogara, said incidence of multiple taxation is driving businesses away from Rivers state.
He said the sooner the government tackle this problem the better it would be good for businesses in the state.
John Bibor
The Nigerian Content Development and Monitoring Board (NCDMB) has sealed a deal to acquire 20 per cent equity in a 100,000 barrels per day (bpd) refinery project being established by the African Refinery Group Ltd. (ARPHL), in partnership with the Nigerian National Petroleum Company (NNPC Ltd.).
The Tide learnt that the share purchase agreement for the investment was signed on Thursday.
The agreement, according to the Board’s Directorate of Corporate Communications and Zonal Coordination, will make the NCDMB a key partner in the ARPHL.
ARPHL is being co-located with Port Harcourt Refining Company Limited, operated by the NNPC Ltd, in Alesa Eleme, Rivers State.
Executive Secretary of NCDMB, Engr. Felix Omatsola Ogbe, signed the agreement at the Board’s liaison office in Abuja, while the Managing Director, ARPHL, Mr. Tosin Adebajo, signed on behalf of the company.
Ogbe stated that the equity investment is the first to be sealed under his leadership, confirming that the Board subjected the proposal through rigorous technical, commercial and regulatory reviews and decision gates in line with the NCDMB’s Commercial Ventures Investment Policy.
“The Board has instituted a robust corporate governance procedure that will safeguard its investment and ensure optimal performance of the refinery project.
“The deal is part of the Board’s commercial venture programme, which is supported by section 70 (h) of the NOGICD Act, where NCDMB is charged to assist local contractors and Nigerian companies to develop their capabilities and capacities.
“In furtherance of Nigerian content development in the oil and gas industry, the Board’s commercial venture investments are also geared to catalyze Federal Government’s strategic policies, provide job creation opportunities in the construction and operation phases, and add value to the nation’s hydrocarbon resources”, the NCDMB boss said.
The Tide further gathered that the shares for the ARPHL project were purchased under the Nigerian Content Intervention Company LTD/GTE, a company limited by guarantee, and wholly owned by the NCDMB.
Further details of the investment indicate that the NNPC Ltd. holds a 15 per cent equity investment in the refinery project, having executed a share subscription agreement in 2024.
The promoters of the project, African Refinery Group, had in 2016 won a competitive bid to co-locate a crude oil refinery within the site of the Port Harcourt Refinery Complex (PHRC), and it executed an agreement to run and operate a 100,000 BPD refinery on 45 hectares of vacant land within the battery limit of the refinery complex.
A statement from the Board’s Directorate of Corporate Communications and Zonal Coordination added that the company also signed a sub-lease agreement with NNPC in 2019, giving her a 45.466 hectares within the refinery complex for a tenure of 64 years.
The statement reads in parts: “According to the investment plan, NCDMB will divest from the refinery at the end of the seventh year, counting from the commercial operations date.
“Some of NCDMB’s investments in refining of petroleum products include the Waltersmith 5000 barrels per day (bpd) modular refinery located at Ibigwe, Imo State, Azikel group’s 12,000 barrels per day (bpd) hydro-skimming modular refinery, at Gbarain, Yenagoa, Bayelsa State, and Duport Midstream’s 2,500 bpd modular refinery at Egbokor, Edo State. They’re currently at different levels of operations and development.
“The Board’s investment with Waltersmith modular refinery was executed in 2018, and it served as the proof of concept. It operates optimally and provides refined petroleum products to its environs, creating hundreds of direct and indirect job opportunities.
“The project is also a commercial success, as the holding company, Waltersmith Refinery and Petrochemical Company Limited, posted a profit-after-tax of N23.6 billion in April 2024, for the year 2023, and total dividend of N4.5bn, pending final approval at the Annual General Meeting (AGM).
“NCDMB holds 30 per cent share in Waltersmith, and it received an interim dividend payment of N450 million out of the N1.5bn that was declared for the year ended 2023”.
Ariwera Ibibo-Howells, Yenagoa
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