Business

Towards Repositioning NDDC For Greater Impact

Published

8 years ago

February 22, 2016

At the early stage of
his first tenure in office, President Olusegun Obasanjo, in his wisdom, established the Niger Delta Development Commission (NDDC) as an interventionist strategy to address the gross underdevelopment in the oil-rich Niger Delta region.
At the inauguration of the agency,Obasanjo noted that the aim was to ensure a principled, co-ordinated and focused approach to addressing the peculiarities of the region.
He said, “since the inception of our administration in 1999, we have consistently acknowledged the critical essence of the Niger Delta region to the economic well being of Nigeria, and commitedly striven to address the visible underdevelopment and neglect of the past in the region “.
About fifteen years after its establishment, can one say that NDDC has made such impact expected by those who initiated it? Can the approaches adopted be ascribed to as principled, coordinated and focused? And in general assessment has NDDC met its mandate?
While the agency can be said to have embarked on some meaningful projects across the Nine NDDC states, there have been avalanche of protests by people of the region who felt that the commission has not meaningfully met its obligations.
Some analysts believe that most projects executed were substandard, others think that most cannot be equated to the amount of fund tagged to them.
Yet others believe that while contractors have collected mobilization fund, they did below 25% per cent and abandoned the jobs hence resulting in thousands of uncompleted projects which today dot the nooks and crannies of the region.
One of the analysts, Mr Bon Obilor blamed the high incidents of project abandonment on political interference.
He said, “those appointed in the NDDC board were there to serve their political god-fathers. Most of the contracts are inflated such that kickbacks go back to their bosses above and even some of the contracts were ways of settling political supporters.
“So what you find is a situation where interest shifts from the real people for whom NDDC is set up to attend to them in terms of human and infrastructural development”.
The analysts who is an economic expert from the university of Port Harcourt believes that there is need to probe the activities of the contractors and deal with those who have defrauded the system.
The issue of contract abandoned in such agencies established to address Niger Delta region development precedes NDDC.
The Oil Minerals Producing Areas Development Commission (OMPADEC) which transformed to NDDC was a victim of huge contract abandonment. The then Managing Director, Chief Albert Horsefall, in his good intention had awarded huge contracts to mainly sons of the region, but ironically some of these contractors collected the contract funds and disappeared.
As a result, instead of developing the region the funds sank into the pockets of few fair weather contractors. The relics of OMPADEC was inherited by NDDC and instead of improving on that, the commission appear to have gone back to the old sore ways of defunct OMPADEC.
Apart from the negative impact of bad contractors to the interventionist agency, the activities of those appointed to oversee the well-being of the agency has become another concern.
Just like Prof. Eric Opia, a former managing Director of OMPADEC who disappeared into the thin air with the commission’s millions of naira, a one time Managing Director of NDDC, Amb. Sam Edem, was caught up in fraudulent practices and capped it up with voodoo expedition.
Edem went as far as paying native doctors whom he hired to protect his position in the commission with millions of naira, and later burnt tens of millions and used the ashes in preparing charm.
There are several allegations that some members of the board also used phony companies to sign out contracts and later destroyed documents that could lead investigators to trace their fraudulent activities while some such companies do not even exist in the records of the Corporate Affairs Commission (CAC).
The challenges frustrating NDDC from actualising the aim of its establishment are so many and the caliber of persons and institutions involved are beyond the imagination of the average Nigerians.
Most states LGAs and corporate organizations have failed to pay their own obligations of the counterpart funding of the agency while on its own part, the Federal Government which is the major financier is known to have held back billions due the agency.
The inability and unwillingness of these organizations and government to live upto their financial obligations to NDDC constitute largely to the failure of the agency towards effecting development to the impoverished people of the region.
In a recent meeting between the Senate committee on NDDC and the present management of the commission, the chairman of the committee, Senator Peter Nwaoboshi frowned at the huge debt owed the commission.
He said proper funding of the commission was critical to its mandate of addressing sustainable development in the region.
Nwaoboshi said, the challenge of developing the region is enormous and that all relevant contributors to the NDDC must play their roles diligently, promising that, as part of its oversight function, the committee will do all within its reach, including amending necessary laws where necessary, to ensure full compliance by agencies statutorily obligated to contribute funds to the commission.
The Acting Managing Director even shocked the world when she revealed that NDDC was yet to receive contributions from the Ecological Fund since its inception in 2001.
If since 2001 when established NDDC had not received any contribution from Ecological fund, the Federal Government had withheld hundreds of billions of naira budgeted to it while states, LGAs and oil firms are not willing to pay counterparts fund, how do you expect NDDC to effectively meet its mandate?
The decision by the Buhari-led Federal administration to reposition NDDC is indeed a welcome development. Only a diligent probe exercise of past activities of contractors and officials who have diverted funds and resources meant to intervene in developing the region to themselves can reposition the commission.
From what is filtering into the air, the wave of the probe appear to be causing some ripples in high places as a past official of the commission is said to had been arrested for attempting to bribe the Economic and Financial Crimes Commission (EFCC).
The said official was said to had enticed an official of the EFCC with the sum of N150,000.00 to buy recharge card for his phone. You can imagine how much such an official might have used in recharging his own phones and those of people close to him for past years. You can clearly see how they abandoned the interest of the people, mandate of the commission for frivolities.
For the repositioning of the new NDDC to succeed, there is every need for the new leadership of the commission to shun the shameful priorities of the likes of Prof Eric Opia and Amb. Sam Edem who sacrificed the public trust on them for other things that lack anything but honour.
The Acting Managing Director, Mrs Semenatari, as a woman, should take advantage of the failures of men on NDDC throne to make the difference and prove to the world that what men could not do, she is able to do. Not only the womenfolk who hunger for such situation but the impoverished natives of the region who had been disregarded would hold her in high esteem.
The repositioning should consider the constitution of those in the board and begin to include community-oriented persons as respected traditional rulers because as long as politicians control the board the mandate of the commission will continue to derail. NDDC should be seen as an agency meant to redress a lot of grudges and grievances caused by neglect by oil exploratory and producing companies.
The new NDDC must be one in which the Federal Government should be in the lead in terms of payment of counterpart funding instead of withholding hundreds of billions meant for the agency. It is only by so doing that the Federal Government can have the moral justification to enforce things in the commission. In like manner, the states, Local Government Areas and oil and gas companies must prove that they are responsible entities and pay up to the last kobo, what they owe NDDC.
The picture of the first oil well head Oloibiri must attract the attention and sympathy of the new NDDC leadership. It must transform to a museum of pride instead of its desolate posture that depicts that of a hopeless orphan, for there marks the beginning of our journey in oil production.

Chris Oluoh

Business

CBN Boss Assures On Inflation Decrease

Published

2 days ago

May 15, 2024

The Tide

Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has said members of the Monetary Policy Committee (MPC) would do whatever is necessary to check the country’s persistent inflation.
The CBN’s hawkish stance on inflation had become obvious from the first MPC meeting held in February, when the committee raised the benchmark lending rate by 400 basis points to 22.75 per cent, from 18.75 per cent. It has since been raised to 24.75 per cent.
The CBN boss, who stated this in an interview with the Financial Times on Monday, said this is an indication that interest rates would stay high for as long as necessary to tame inflation.
He told the Financial Times that there was “every indication” that the MPC would “do whatever is necessary” to keep soaring inflation in check.
“They will continue to do what has to be done to ensure that inflation comes down”, Cardoso said.
Meanwhile, ahead of the next MPC meeting scheduled to hold on May 20-21, there are projections of a rate hike from the committee, even as inflation is projected to go higher.
Analysts at Meristem Securities projected an uptick in the headline inflation for April to 34.43 per cent year-on-year (vs. 33.20 per cent YoY reported in March 2024).
Despite the current CBN’s hawkish stance, Cardoso said he hoped that high rates would not be for too long and discourage investment and production.
Noting that raising rates had been essential, he said, “Hiking interest rates has had a dampening effect on the foreign exchange market, so that has begun to moderate. It’s not a zero-sum game. You lose on one side, you get on the other”.
On fluctuations in the naira in recent times, Cardoso said investors, who were likely to exit the economy in response to currency fluctuations were now more comfortable with the market.
Cardoso said further that the apex bank was going to return to orthodox monetary policies.
“Let’s face it: for a long period of time, the CBN did not embrace orthodox monetary policies. We want to go back to using an orthodox method, and it will take us to where we want to go”, he said.

Business

IMF tells FG To Stop Electricity Subsidy

Published

2 days ago

May 15, 2024

The Tide

The International Monetary Fund (IMF) has called in Nigeria’s Federal Government to remove what it called implicit fuel and electricity subsidies.
This was contained in a recent report published by the IMF, in which it said the subsidies will take a whooping three per cent of the nation’s Gross Domestic Product (GDP) in 2024 as against one per cent in 2023.
In the report, the IMF commended the Federal Government for phasing out “costly and regressive energy subsidies”, among others.
It added that this was “critical to creating fiscal space for development spending and strengthening social protection while maintaining debt sustainability”.
Recall that President Bola Tinubu’s administration removed fuel subsidies during his inauguration on May 29, 2023.
Commenting of the fuel subsidy removal, IMF noted that “adequate compensatory measures for the poor were not scaled up promptly and subsequently paused over corruption concerns. Capping pump prices below cost reintroduced implicit subsidies by end-2023 to help Nigerians cope with high inflation and exchange rate depreciation”.
IMF also acknowledged that the price of electricity had tripled for high-use premium consumers on Band A feeders, 15 per cent of the 12 million customers who account for 40 per cent of electricity usage.
Following Nigerians’ agitation for the reversal of the Band A tariff from N206.80 per kilowatt-hour to N68, IMF said “the tariff adjustment will help reduce expenditure on subsidies by 0.1 per cent of Gross Domestic Product, while continuing to provide relief to the poor, particularly in rural areas”.
It continued that “once the safety net has been scaled up and inflation subsides, the government should tackle implicit fuel and electricity subsidies”.
The organisation also warned that “With pump prices and tariffs below cost-recovery, implicit subsidy costs could increase to 3 per cent of GDP in 2024 from 1 per cent in 2023. These subsidies are costly and poorly targeted, with higher income groups benefiting more than the vulnerable.
“As inflation subsides and support for the vulnerable is ramped up, costly and untargeted fuel and electricity subsidies should be removed, while, e.g., retaining a lifeline tariff”.
IMF projected that the implicit fuel subsidy could gulp as high as N8.4tn in 2024 from N1.85tn in 2023, N4.4tn in 2022, N1.86tn in 2021 and N89bn in 2020.
The electricity subsidy being paid to customers under Band B, C, D, and E was projected to stand at N540bn by the end of 2024.
The Tide’s source reports that the Nigerian National Petroleum Company Limited (NNPCL) and the Minister of State for Petroleum (Oil), Heineken Lokpobiri, have repeatedly debunked claims that the Federal Government was paying fuel subsidies through the back door.
The IMF’s call for the removal of electricity subsidy is coming amid protests from Nigerians who are calling on the Minister of Power, Adebayo Adelabu, to return the Band A tariff to the status quo.
For this purpose, the organised labour has threatened to stage a protest on Monday if Adelabu fails to heed their calls.

Business

PoS Operators Take CAC To Court

Published

2 days ago

May 15, 2024

The Tide

In response to the directive by the Corporate Affairs Commission (CAC) for Point of Sales (PoS) operators to register with it, the body, the “Association of Mobile Money and Bank Agents in Nigeria (AMMBAN)” says it has concluded plans to head to court to address the legality of the directive.
President of the association, Fasasi Sarafadeen, faulted the directive mandating PoS operators to register with the CAC, saying the move had forced the association to go to court to seek a redress.
Sarafadeen said the directive from the CAC violated the provision of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which “explicitly states that the commission has no jurisdiction over individuals not operating as a company”.
“According to section 863(1) of the Companies and Allied Matters Act, 2004, the order to enforce CAC directive on individual PoS agents operating under their name is wrong and will be challenged, as it contravenes the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which explicitly states that CAC has no jurisdiction over individuals not operating as a company.
“We shall challenge it legally. The court will have to intervene in the interpretation of the quoted section of the CAMA if individuals operating as a sub-agent (likened to a bank branch) must register with CAC.
“CBN is right, no issue, the memo is clear, it only applies to non-individuals, unlike the Corporate Affairs Commission who generalised. We are in talks with the lawyer representing the association already, and a league of human rights lawyers whom we are not disclosing who they are for now”, he said.
Explaining the categories, he stated that there were two categories of Point-of-Sale agents.
“CAMA only mandates registration of individuals operating as a company. There are two categories of POS agents: individuals and non-individuals. Individual agents operate under their names, such as Musa Caroline or Abubakar Audu, and are typically profiled with financial institutions under their names.
“Non-individual agents, on the other hand, operate under registered or unregistered business names, such as Wale Ventures or Johnson Enterprises.
“It is this second category of agents that the Corporate Affairs Commission can enforce the law on, as they are required to register their business names by the law”, Sarafadeen explained.
He noted that sub-agents are independent branches of a company already registered with the Corporate Affairs Commission.
“Sub agents are not carrying out as an independent company but branches of a company. For example, while commercial banks operate with bank branches across the country, Fintechs (MMO, super agents, and co) operate with a network of sub-agents.
“It is, therefore, lack of knowledge of the workings in a Fintech/agent banking industry to be tagging sub-agents as illegal”, he added.
According to the AMMBAN boss, the CAC should focus its efforts on addressing the high failure rate of registered businesses in Nigeria, rather than enforcing regulations on individual POS agents operating under their names.
“The Corporate Affairs Commission should prioritise addressing the alarming failure rate of registered businesses in Nigeria, rather than targeting sub-agents. With over 4.9 million businesses registered, 50 per cent of which fail every five years, this should be the focus.
“In addition, the Central Bank of Nigeria’s memo specifically addressed non-individual agents, not individual sub-agents, and CAC’s threat to harass sub-agents is unwarranted and excessive”, he added.
He noted that the clampdown on agent banking in the name of CAC registration was not in line with President Bola Tinubu’s renewed Hope agenda, which prioritises job creation and opposes policies that cause unemployment.
“We are aware that President Bola Ahmed Tinubu is not approved of any policy that will cause unemployment, noting that agent banking has created over 1.9 million jobs in the last few years. Clampdown in the name of CAC registration is not in line with the renewed Hope agenda of Mr. President and we are appealing to Mr. President, the Senate, and the House of reps to intervene as they did for the anti-masses policy of cyber security levy.
“CAC should be concerned about how 50 per cent of registered businesses in Nigeria fail within the first few years, resulting in growing unemployment year-on-year. Rather than embarking on policies that will eradicate entrepreneurs, escalate unemployment, and reverse the gains of financial inclusion in Nigeria”, he stated.
The Federal Government through the Corporate Affairs Commission had issued a two-month registration deadline for Point of Sales companies, to register their agents, merchants, and individuals with the commission in line with legal requirements and the directives of the Central Bank of Nigeria.
The agreement was reached during a meeting between Fintechs and the Registrar-General CAC, Hussaini Ishaq Magaji, in Abuja.
CAC said the move would curb kidnapping and payment of ransoms.
According to the Nigeria Inter-Bank Settlement System, there are over 1.9 million PoS terminals deployed by merchants and individuals nationwide.
This new directive came against the backdrop of frequent fraud incidents involving POS terminals and plans to stop trading in cryptocurrency or any virtual currency by the Central Bank of Nigeria. POS terminals accounted for 26.37 per cent of fraud incidents in 2023, according to a fraud report by the Nigeria Inter-Bank Settlement System Plc.
Last week, the CBN stopped major fintech firms like Kuda, Opay, PalmPay, and Moniepoint from onboarding new customers and instructed the companies to warn their customers against trading in cryptocurrency or any virtual currency on their apps, threatening to block any accounts found engaging in such activities.
The CBN’s move was linked to an ongoing audit of the Know-Your-Customer process of the fintechs, which have been under scrutiny in recent months over concerns around money laundering and terrorism financing.
Before the CBN’s directive, the Economic and Financial Crimes Commission had obtained a court order to freeze at least 1,146 bank accounts owned by various individuals and companies allegedly involved in illegal foreign exchange transactions.