The International Monetary Fund (IMF) recently projected that Nigeria’s economy would soon witness its worst recession in 30 years.
This projection was part of the Fund’s April 2020 World Economic Outlook report released penultimate Tuesday in Washington DC, United States at the commencement of its 2020 Spring meeting held through video conferencing.
The IMF further said that Nigeria’s economy will recede by 3.4 per cent in 2020 due to the COVID-19 pandemic, which has disrupted the global supply chain of most commodities, including the country’s main export commodity, crude oil.
It noted that this would be the worst economic setback in 30 years for Africa’s largest economy, after a negative economic growth of 1.51 per cent in 2016.
According to the IMF Chief Economist and Research Director, Gita Gopinath, the impending global recession would be the worst since the Great Depression between 1929 and 1932 when the advanced economies shrank by 16 per cent.
While Nigeria’s Gross Domestic Product (GDP) is expected to shrink by 3.4 per cent and land her in another recession, the Fund’s projected outlook for Africa’s most advanced economy (South Africa) is even worse at 5.8 per cent, from a 2019 growth of 0.2 per cent.
Nigeria was hoping to improve on her 2.2 per cent 2019 growth rate before the advent of the Coronavirus pandemic which saw the global oil price of petroleum tumbling. In fact, while oil prices were taking a bashing (no thanks to the muscle flexing between Russia and Saudi Arabia), the COVID-19 pandemic simply aggravated the situation. Currently, North Sea Brent crude is reported to be trading at USD 31.48 per barrel while Western Texas Intermediate sells for around USD17.75 per barrel. OPEC Basket is USD12.22.
To say that Nigerians did not see this coming will be the height of insincerity as there had been suggestions to nearly every administration to diversify the nation’s economy as to move the country away from its over dependence on petroleum as main revenue earner.
The Tide is deeply troubled that this gloomy projection is coming at a time when the average Nigerian is wishing that the trauma of the 2016 recession would soon be over and for things to return to normal.
The effects of job losses, high cost of living, border closure, herder–farmer clashes and the rising crime rate had led to a worsening of the nation’s misery.
We are also not unaware of the latest warning by the United Nations World Food Programme (WFP) in which Nigeria was listed as one of the 10 countries that would soon experience severe famine of biblical proportion.
With these projections indicating impending national calamities, we fear that the government and, indeed, Nigerians hardly have the time to make any meaningful preparations.
Already, the USD 57 per barrel crude oil benchmark in the 2020 budget has been reviewed downward, even as today’s oil price still makes nonsense of that review. Also, capital expenditure has been severely downsized. This is even as the nation’s USD 1.5 billion debt servicing pledges have become impracticable and need to be renegotiated.
Inflation rate has already entered double-digit while the steady depletion of the external reserve piles pressure on the naira’s worth. What’s more, with COVID-19 came the adoption of national and interstate border closures as part of containment measures. The intra-city lockdowns that also followed led to a halt in economic activities with the attendant negative effects on Gross Domestic Product (GDP).
The nation may therefore begin to reconsider redenominating her currency as was successfully done by Ghana some years ago, after decades of economic doldrums. Debt forgiveness is already out of any consideration for Nigeria because she is no longer in the world’s list of Highly Indebted Poor Countries (HIPCs), especially since after rebasing her economy in 2013 and emerging as the largest economy in Africa. She is now considered a middle income nation.
Efforts should be geared to better manage the nation’s available income. This period should be likened to a war situation when emphasis should be reduced in infrastructural development, rather efforts should focus on amassing weapons to attack the common enemy which in this case comprises Coronavirus, corruption, misery, hunger, climate change, among others.
There is no doubt that COVID-19 lockdowns have eroded whatever savings that were available for investment to the Micro, Small and Medium Scale Enterprises (MSMEs) in the country. In fact, some have had to convert their present stocks of goods for their daily consumption and survival. And this renders a serious blow to the nation’s GDP.
We commend the IMF for, as usual, alerting most vulnerable countries like Nigeria on the difficult times ahead. We also believe that, as it had always done in the past, the Fund will follow this up with a list of some necessary steps that need be taken by the government in order to curtail the extent of these difficulties.
And to the government, the call for a resort to mechanized agriculture and massive food storage has never been more expedient for a country of about 200 million people than now.
NDDC: Cleansing The Augean Stables
Recently, the Chairman of the COVID-19 Palliatives Distribution Committee of the
Niger Delta Development Commission (NDDC), High Chief Soboma Jackrich, cracked the atmosphere, saying the N6.2 billion approved by the Presidency as palliative to the oil region was diverted. He called for Senate’s probe again.
Jackrich, in a 12-paragraph petition dated August 3, 2020, sent to the President of the Senate, Ahmad Lawan and Speaker, House of Representatives, Femi Gbajabiamila, averred that the N6.2billion scam was different from N1.5 billion relief funds shared to over 4,000 workers of the commission and high command of the Nigeria Police Force by the Interim Management Committee (IMC) in April this year.
He said: “Today, all of that can be regrettably described as a show of shame and a scam. The N6.2 billion that was magnanimously approved by Mr. President to help the poor and indigents of the Niger Delta during this difficult period of the pandemic as palliatives has curiously been misappropriated and embezzled by the IMC of the NDDC and their co-conspirators.
“As the Chairman of the Palliatives Distribution Committee, my finding is not only that the money cannot be accounted for, but there is nothing on ground to show that N6.2 billion of our hard-earned tax payers’ money was invested for its original purpose, which the President approved,” Jackrich said.
Reacting to the allegation, the NDDC said the chairman knew nothing because the action was taken over by state governors who allegedly insisted on distributing the palliatives in their states. “Only two of the nine oil states are controlled by the ruling All Progressives Congress (APC) that approved the fund and runs the commission. The other states are controlled by the opposition Peoples Democratic Party (PDP) and the governors wanted to decide the distribution activity,” NDDC spokesman, Charles Odili, said.
Ironically, since the probe of the Niger Delta Development Commission (NDDC) began few weeks ago,various allegations and counter-allegations have been flying across tables on the financial operations of the commission.
Shocking beyond words, is the revelation that the commission spent N81.5 billion in eight months without tangible project to point to. A breakdown of the expenditure as claimed by the commission showed that N1.3 billion was expended on community relations; N122.9 million on condolences; N83 million on consultancy, N3.14 billion on Covid-19; N486 million on Duty Tour Allowance (DTA); N790.9 million on Imprest; and N1.956 billion on Lassa fever.
Also other frivolous expenses were legal services, maintenance, overseas travel, Project Public Communication, security, staff-related payment and stakeholders’ engagement, all of which gulped a whooping N11.313 billion.
The Tide is saddened that the NDDC management since inception has made mockery of the dearth of infrastructural development in the Niger Delta region with hundreds of irrelevant and uncompleted projects that litter the region, yet, an Interim Management Committee set up to oversee the commission all through the period which the forensic audit ordered by President Muhammadu Buhari would take place, after the previous management was sacked for financial irregularities, would be enmeshed in similar financial mess.
In response to the agitation by the people of the region since independence, for government attention to environmental degradation, insecurity, oil bunkering and other forms of crimes heightened by lack of education, skilled labour and empowerment for the youth, the NDDC was established by Act 6, 2000 as a successor to the defunct Oil Minerals Producing Areas Development Commission (OMPADEC) to among other things ‘‘formulate guidelines for the development of the Niger Delta’’ and ‘‘conceive, plan and implement, in accordance with set rules and regulations, projects and programmes for the sustainable development of the Niger Delta region in the areas of transportation, including roads, jetties and waterways, health, education, employment, industrialisation, agriculture and fisheries, housing and urban development, water supply, electricity and telecommunications.’’
For this reason, the sum of N15.34 trillion has been received by NDDC since its inception. Sadly, the NDDC, which was created as a response to intense agitations have fallen into the hands of unscrupulous political appointees who scramble for positions only for their personal interests.
It is rather shameful that 20 years after the commission was set up by former President Olusegun Obasanjo to empower restive youths in the region and provide infrastructural development, the region has long deviated from its core mandate and become a milking cow by politicians, civil servants and contractors.
For a region that produces the oil that provides revenue and foreign exchange for which the Nigerian tripod stands, that the Niger Delta is littered with abandoned projects and half-baked infrastructures that dilapidate as days run into months, is regrettable, to say the least.
It is against this backdrop, therefore, that The Tide supports the forensic audit and urges the panel to leave no stone unturned in the discharge of its assignment. We demand that the forensic probe must get to the bottom of the institution’s corruption morass.
We demand that all politicians must be made to give way and allow independent experts check NDDC’s books since it was founded and tell the public how the trillions of naira voted for the development of the Niger Delta were spent.
We also urge President Muhammadu Buhari to make the findings of the audit public. The NDDC must be run on a new, transparent and accountable template that delivers results. The forensic audit is a task that must be done to cleanse the commission’s Augean Stables.
Chinese Loan: Need For Caution
The Minister of Transportation, Mr Chibuike Rotimi Amaechi, is expected to appear before the
House of Representatives Committee on Treaties on Monday, August 17, 2020, to provide detailed answers on the $500 million loan to be sourced from the Export-Import Bank of China for railway lines in the country among others. To appear alongside the Minister are his Communications and Finance counterparts, Dr Ali Isa Pantami and Mrs Zainab Ahmed respectively, including the Director-General of the Debt Management Office (DMO), Ms Patience Oniha.
Issuing the invitation order on Tuesday, July 28, 2020, the House Committee on Treaties under the Chairmanship of Rep. Nicholas Ossai raised the alarm over alleged waiver of Nigeria’s Sovereignty in the Federal Government’s concessions loan agreement on Nigeria National Information and Communications Technology Infrastructure Backbone Phase II project between the government of Nigeria, represented by the Federal Ministry of Finance (borrower) and the Export – Import Bank of China (lender) dated September 5, 2018.
The Committee specifically cited Article 8 (1) of the agreement which states that “the borrower hereby irrevocably waives any immunity on the ground 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”.
As the nation waits to get clarification on the issues from the federal authorities under legislative scrutiny, not a few strategic stakeholders and other well-meaning groups and individuals have volunteered critical opinions and informed views on the matter.
The main opposition political party in the country, the Peoples Democratic Party (PDP), has berated the Federal Government and the ruling All Progressives Congress (APC) for the development, describing it as offensive and a “reprehensible pawning of our sovereignty to a foreign interest”, adding that “the gambling with our sovereignty amounts to unpardonable treachery against our nation and the future of our generations yet unborn”.
While expressing the view that such stringent conditions in a contractual agreement indicated a loss of confidence on the President Muhammadu Buhari-led administration by the international community, the PDP insisted that the nation cannot afford to cede our sovereignty or mortgage any part of the country under any guise as condition for accessing any loan.
The Socio-Economic Rights and Accountability Project (SERAP) took its reaction a notch further by instituting a legal action in suit number FHC/ABJ/CS/785/2020, seeking “an order of mandamus to direct and compel President Muhammadu Buhari to tell Nigerians the names of countries and bodies that have given the loans, specific repayment conditions, and whether any public officers solicited and/or received bribes in the negotiations for any of the loans and if there is plan to audit the spending of the loans, to resolve any allegations of mismanagement and corruption”.
While SERAP acknowledged that access to loans could provide badly needed resources, the body expressed worry that “the massive and growing national debts have continued to have negative impacts on socio-economic development and on Nigerians’ access to public goods and services, including quality education, adequate healthcare, clean water, and regular electricity supply”.
Accordingly, the view has been expressed in many quarters that Nigerians have, over time, lost confidence in government when it comes to international agreements as exemplified in the on-going case between Nigeria and Process and Industrial Development (P&ID) in which the sum of $9.6 billion is still pending against the country due to an agreement signed by government officials.
According to Dr Reuben Abati, a veteran journalist and former Chief Press Secretary to former President Goodluck Jonathan, “in the case of China, the aforementioned Article 8 (1) refers to such words as “arbitration”, “property”, “enforcement of arbitral award”. These are the same key words in the P&ID case”.
He pointed out that “China helped Sri Lanka to build the port of Hambantota. Both countries signed an agreement similar to the one Nigeria signed with the Export-Import Bank of China. Today, China runs that port with Chinese personnel. “In Djibouti, the Chinese are in charge of the ports too, just because Djibouti borrowed money it could not pay back.
“In Zambia, for similar reasons, China is now controlling the Zambia National Broadcasting Corporation. China is also planning to take over the Zambia National Electricity Corporation. “There have been issues as well with China’s relations with Kenya, Democratic Republic of Congo and other African countries”.
While The Tide acknowledges the huge deficit in critical infrastructure in the country, the lack of desperately needed resources to address the situation and the acquisition of loans from willing creditors as a veritable source of finance, concession agreements with clauses that could further encumber our already distressed economy and put the socio-economic wellbeing of present and future generations of Nigerians in jeopardy should be outrightly rejected.
This is why we agree with well-meaning Nigerians that the explanations by the Federal Government through the Attorney General of the Federation and the Minister of Transportation that Nigeria’s existence as an independent nation with full authority of self-determination is not at risk in the country’s loan agreement with China gives very little comfort, consolation and confidence.
The Tide insists that the China loan agreement, and indeed every other loan agreement entered into on behalf of the Nigerian people by the Federal Government and other international bodies, should be critically reviewed with a view to identifying and expunging clauses and articles that could hurt the country, even as we urge the central administration to ensure that only competent and patriotic hands are engaged to sign international agreements on behalf of the country.
Against Amnesty For Repentant Terrorists
Last Wednesday, the Federal Government made spirited efforts to counter opposition
against the move to grant repentant Boko Haram terrorists amnesty.
Many Nigerians, including victims of insurgency in the North East, have kicked against the de-radicalisation and rehabilitation of repentant Boko Haram members, saying the programme was a way of rewarding those who had shed innocent blood.
But the Federal Government, in a statement by the Senior Special Assistant to the President on Media and Publicity, Garba Shehu, said the programme followed “an established example of countries with similar experiences”.
It said the programme enjoyed the support of international organisations such as European Union and the United Nations.
According to the Presidency, the former combatants had repented and were better citizens, imbued with genuine nationalism; therefore, the society had the duty of accepting them.
The presidential aide also faulted claims that the current regime was absorbing repentant Boko Haram terrorists into the military through the programme, describing such claims as fake news.
The statement read, “None of the 601 former Boko Haram members who voluntarily laid down their arms, and have recently graduated from the Federal Government’s de-radicalisation and rehabilitation programme, is going into the military. This is the fourth of such graduation of repentant Boko Haram fighters and not one of such graduates has been absorbed into the military.
“The public needs to be reassured that the de-radicalisation, rehabilitation and reintegration of violent extremists of the Buhari administration code named ‘Operation Safe Corridor ,’ follows an established example from countries with similar experiences, and is supported academically and materially by the European Union and the United Nations”.
Hard as the Federal Government tries to justify the planned amnesty programme for Boko Haram terrorists, the reasons adduced for it fall flat on the face. Many Nigerians, including The Tide, find it extremely difficult to understand why the government would reward killers with freedom and funds. Granting the so-called repentant terrorists amnesty would amount to a great injustice against the victims of insurgency who have borne the brunt of their mindless bloodletting.
While we agree that there is an urgent need for peace in the North East, because the region is falling behind in terms of economic progress and development, we are of the opinion that the failure to punish perpetrators of crime deforms the authority of law and would encourage impunity which is fast becoming a culture in Nigeria. It will also undermine the legitimacy of the government and breed cynicism towards civilian institutions.
In addition, we believe that it is the prosecution of Boko Haram members, and not their reintegration, that will expose the truth about their violent crimes and terrorist activities.
So, rather than spending public fund to rehabilitate blood thirsty monsters, we insist that their trials and prosecutions could inspire Nigeria to reassert the fundamental principles of respect for the rule of law, freedom of religion and the inherent dignity for human lives.
Besides, we are yet to be convinced that the so-called repentant religious extremists would not go back to pick up arms against the people after their reintegration.
We recall that in April 2013, former President Goodluck Jonathan set up a committee to look into the possibility of granting an amnesty to Boko Haram militants, but the sectarian group rejected the offer. This confirms that the sect is made up of hard boiled, ideologically hardened terrorists that may never be persuaded by rehabilitation and reintegration.
We are not also persuaded by the argument that a similar programme offered the ex-militants of the Niger Delta by the administration of late President Umar Yar’Adua restored peace in the region. This is because the insurrection that culminated in attacks against oil installations by militants of the Movement for the Emancipation of the Niger Delta (MEND) was anchored on growing poverty, unemployment, and environmental degradation in the Niger Delta. Boko Haram terrorists do not have such reasonable justifications for their bloodletting actions.
All indications, including their modus operandi, clearly show that unlike the Niger Delta agitators who formed a vanguard against further degradation and neglect of their region, Boko Haram terrorists are mere blood thirsty goons that kill innocent people without reasons.
Granting amnesty to such mindless monsters would not only defeat one of the key programmes of the Buhari administration, it will also raise the fear of social injustice in Nigeria; which is that the victims of violence are neglected while perpetrators of crimes are rewarded.
Again, rewarding the rebels financially for surrendering their arms is likely to attract other young people to join the sect.
Meanwhile, we observe that Nigeria currently lacks the institutional structures for rehabilitating, reabsorbing and reintegrating terrorists in its midst. In fact, one of the critical points for the failure of the Niger Delta amnesty was the inadequate rehabilitation programme designed to give the ex-militants social and job skills.
We, therefore, urge the Federal Government to perish the idea of granting amnesty in whatever disguise to Boko Haram insurgents. We advise the government to deploy the resources meant to rehabilitate the insurgents into total decimation of the sect. This should be the major priority of the Buhari government, and not amnesty.
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