Barely six months to the end of President Muhammadu Buhari’s administration, the Federal Government’s total debts and other financial liabilities have reached N71.46 trillion.

The figure does not include undocumented contingent liabilities to university lecturers, public school teachers and other public employees to whom government is indebted.

Analysts say these undocumented liabilities could run into several trillions. The figures also exclude other pending financial liabilities to non-lending bilateral and multilateral institutions. These include regional and global institutions the country subscribes to as a member. 

While the traditional debt stock of the central government has ballooned from less than N10 trillion as at June 2015, a month into the current administration, to N35.7 trillion in June 2022, FG has revealed that its debt obligations to road contractors are about N11.16 trillion.

During a recent budget defence, the Minister of Works and Housing, Babatunde Fashola, said government was committed to highway contractors to the tune of about N10.4 trillion even as a total of about N765 billion relates to unpaid certificates for executed works.   

Of Nigeria’s documented N42.8 trillion sovereign debts as at June, FG’s obligation was N35.7 trillion. The amount does not include the controversial Central Bank of Nigeria (CBN)’s estimated N20 trillion overdraft extended to the Federal Government.

Besides, government’s “contingent liabilities” to different institutions and projects was N4.6 trillion at the close of last year. The figure is projected to reach N4.98 trillion by December and jump by as much as 50 per cent to N7.52 trillion next year when the current administration is billed to hand over.

Items and organisations on the contingent liability list are Nigeria Mortgage Refinance Company Plc, Nigeria Ports Authority – Lekki Deep Seaport, pension arrears, NNPC – AKK Gas Pipeline Project among others.

The liabilities, interestingly, do not capture dues to the Nigeria Union of Teachers (NUT), Academic Staff Union of Universities (ASUU) and several other labour groups.

Obligations relating to the country’s ongoing bilateral and multilateral financial commitments are also not captured. These categories, according to Godwin Owoh, an economist and debt management consultant, add to the country’s real debts.

Effectively, Buhari’s administration will be passing well over N72 trillion in debt and contingencies to a new administration in May, next year. Other officially undocumented figures when added will push the sovereign debt towards N100 trillion.   

Apart from concerns about the cost of servicing the bloated CBN overdrafts, stakeholders are worried about government’s silence on how it intends to liquidate the supposed short-term facility.

Last year, Debt Management Office (DMO) said the facility would be converted to a 30-year instrument. This was to be done in line with the debt management strategy of the administration, which leans towards long-term maturing.

Minister of Finance, Budget and National Planning, Zainab Ahmed, followed up with confirmation of the securisation plan, but it drew a shocked reaction from experts who warned that the plan was alien to Ways and Means (W&M) management and runs foul of the CBN Act.

Section 38 of the CBN Act says the apex bank could extend overdrafts to the Federal Government to tackle a temporary shortfall in revenue. It, however, states that any outstanding overdraft shall not exceed five per cent of the previous year’s actual revenue of government.

It added that the amount lent should be repaid “as soon as possible” and that the power to extend the credit line shall not be exercisable subsequently, should the government fail in liability to repay at the end of the financial circle.

IMF had called on the apex bank to subject the facilities to the ambit of its enabling law. Other experts have also called on CBN to liquidate the amount and call off the lifeline to rein in inflation, which has crossed the 20 per cent mark.

 

The Federal Government, at the weekend, blamed its penchant for borrowings on oil theft. This might not be unconnected to the recent advice given to government by DMO as regards massive borrowing.

DMO Director-General, Patience Oniha, at a workshop for Senators and House of Representatives on Thursday, said revenue growth should be accelerated and loans obtained should be invested in revenue-generating infrastructure to service debt. She also advised government to prioritise revenue generation other than increase borrowing.

But Minister of Labour and Employment, Chris Ngige, who spoke at the eighth meeting of the National Employment Council in Abuja, said oil theft forced the current adminstration to resort to borrowing.

Nigeria has been unable to meet up with the OPEC product quota as a result of unprecedented theft in the oil sector.

This development, according to Ngige, has continued to hamper efforts of government towards providing necessary social services to the country’s teeming youthful population.

He said: “Now, we cannot even produce the 1.8 million barrels. We are hovering around 1.1 million barrels per day, and they told us that some people are stealing our crude oil. This is a very serious matter because it has made us become very mendicant. We are now a mendicant nation, resorting to begging for survival,” he added.

An economist, Pat Utomi, attributed the nation’s rising debt to poor management and inability to monitor implementation of projects at all levels.

“A new minister comes, awards contracts and does not monitor what was done; the minister’s boys play their own game. Now if you awarded a contract for road construction in naira last year, with the rising exchange rate, the money is irrelevant this year. 

“The corruption that is going on in the bureaucracy is so much, it has developed a huge bubble that they can not manage it again and this has added to our problem as a country.

“When you do not pay contractors, they lay-off workers and tax collection shrinks and unemployment increases and the economy cannot grow. These are the problems we are facing currently.”

To ameliorate the situation, Utomi said there is a need for a new government to adopt a zero-based model to put all the debt into proper context . 

“We need proper renegotiation and payment to spread over a particular period. The new government needs to look at a variety of options to deploy to achieve multiple goals and stimulate economic activities and deal with inflation.  

“There must be a new policy going forward to guide project management. Government does not need to award a contract that is not cash-backed, if you do, a successor may come and will not pay attention to them and the debt will continue to stockpile there.

“We need a fiscal responsibility act that covers all these. We need not go too far from achieving a balanced budget,” he added.

Former President of Chartered Institute of Bankers of Nigeria (CIBN), Uche Olowo, said government should be holistic on its comprehensive total debt before finding ways to tackle the problem.

He pointed out that the nation’s rising debt is surmountable if government can securitise the total debt to create an opportunity for a long-term repayment plan, to reduce the burden of repayment.

According to him, there is also the need for government to initiate policies that will encourage growth, boost productivity and jumpstart the economy.  

“Government must also create a value chain for agricultural development because the sector is a huge employer of labour. Then labour-intensive policies will also help.  

“Moreso, policies that will encourage the private sector to produce and invest are also key. We must find a way to ensure that the creative industry and other sectors that would stimulate growth and jumpstart the economy are prioritised. 

“The debt profile is rising because government is not generating enough revenue from taxation and they have to borrow to implement their policies and even with the borrowings, the economy is not growing.” 

Olowo also stressed the need for government to utilise borrowing for capital expenditures, become more transparent and cut all leakages to enhance rapid development.

“The debt is very high but with the right leadership and people at the helm of affairs, policies would be properly executed. Nigeria remains a frontier for growth,” he said.

 

Nigerian Medical Association (NMA) says two medical doctors have been abducted by gunmen in Cross River.

According to NAN, Felix Archibong, state’s chairman of NMA, confirmed the development on Saturday in Calabar, the Cross River capital.

Archibong said the medical doctors, who are members of the association, were kidnapped on Friday at the Ikomita area of the Calabar-Ikom highway.

He said two other persons were abducted alongside the two doctors, adding that the gunmen have demanded N100 million as a ransom for their release.

Also confirming the incident, Sule Balarabe, commissioner of police in the state, said the command is currently working to ensure the release of the abductees.

“We are going to comb the forest to secure their release. I assure you that the matter will adequately be dealt with. I am not just sitting in Calabar to give orders, I am also on the ground with my men,” Balarabe said.

“We have the cooperation of the locals, and I believe we will have positive results. I am on the ground with various units.

“We are hitting the nails on its head as I speak, we must make sure we secure the release of the victims unharmed.”

 

 

 

There was a drop of about 40 per cent in the number of imported vehicles that came into the country between January and October this year through the Ports & Terminal Multipurpose Limited compared to the figure for the same period of the previous year.

While a total of 192,287 units of vehicles came into Nigeria in the first 10 months of 2021, only 114,159 units were imported through the same terminal in the same period in 2022. The terminal is responsible for the importation of most vehicles coming Nigeria.

A document obtained exclusively by our correspondent from the Customs Public Relations Officer in charge of the PTML terminal, Muhammad Yakubu, showed that from January to October 2022, only 122 vessels berthed at the ports as against 167 vessels recorded within the same period in the previous year.

The document also showed that the terminal recorded a total number of 30,560 containers in the first 10 months of 2021 as against 24,181 recorded in a similar period of the current fiscal year. These figures showed a serious drop in activities in the terminal, which is known to be a Roll-On-Roll-Off terminal in  Nigeria where almost 85 per cent imported vehicles coming into the country come through.

Clearing agents operating at the nation’s maritime industry have blamed inconsistent government policies and the newly introduced Vehicles Identification Number for clearing of imported vehicles as reasons behind the decrease.

PTML chapter Chairman of the National Association of Government Approved Freight Forwarders, Thomas Alor, also blamed the levy imposed on imported cars by the government for the decline, adding that the VIN was not giving them the value they paid for.

He said, “The levy, which they imposed on imported used cars, is what is affecting car importation. What is causing the drop in importation of vehicles is the value in clearance. The VIN valuation is not giving us the value, which we are paying now.

“What made the value high is because of the levy imposed on older vehicles; it is the reason for the high cost of clearance of those vehicles. When we started the VIN valuation, we were paying normal duty with the percentage of the duty until the government now imposed levies on old vehicles, which now increased the prices.”

Though he admitted that the levy had been there before now, Alor, however, said it was not up to five per cent as against the 15 per cent the clearing agents were now being asked to pay.

He stated, “The levy has been there but it was below five per cent, but now, it is about 15 per cent. Any time we engage the Customs on the issue of value, they tell us that we requested for the VIN. And we are saying yes, we requested for the VIN, but the VIN was not well articulated the way we asked them to do it; they later imposed levies on it and the high levy is bringing the value up.

“Now, some vessels come with only 45 vehicles; some even come with less than that. The only time that they recorded a huge import of vehicles here was like two or three vessels that came with damaged vehicles. Following the introduction of the VIN and levy, vehicle importation has dropped drastically. There are times here at the PTML when nothing is happening and people just play around here. Some vehicles come through other terminals as containerised cargoes.”

A former Chairman of NAGAFF, PTML chapter, George Okafor, said the reduction in importation was more than 40 per cent.

Okafor stated, “It is no longer news that we have almost 61 per cent reduction in importation of vehicles, it is very clear and open, it is an open fact and it is caused by policies. The VReg (Vehicle Registration System) is causing problems; as I am talking to you now, to get VReg is hard and without it you can’t access anything. So, all these are making things difficult for clearing of cargoes and vehicles out of the ports; it is not a hidden thing.

“We are in a situation where a ship will come and will deliver almost everything in Cotonou and the little one we have here will be difficult to clear.”

He said smaller vehicles that cost about N500,000 to clear now required over N1m, which was  responsible for the high cost of cars in the market.

Okafor added, “The VIN is still affecting us because the values of some of the vehicles are high. You know Nigerians rely so much on older vehicles because they are cheaper. Most rich Nigerians go for higher vehicles, you know in Nigeria it is either you belong to the higher class or the lower class. And those in the higher class buy vehicles from 2018 upwards and they can afford to clear them, but the lower class relies so much on older vehicles. And those older vehicles now are very expensive to clear; the vehicles we used to clear with N500,000 or N600,000 are now from N1m upwards.

“The cheapest vehicle like Toyota Corolla is now very expensive to clear. So, after calculating the cost of purchase, shipping and clearing here in Nigeria, you will find out that the car will be very expensive for someone in the middle class to buy. And the car will hang because you are paying the same thing with what a 2014 model of the same car is paying, so it will be difficult to buy.

“So, the people who are importing these cars are not even keen again to do the business; if they bring in the vehicles, a lot of people may not have the money to buy the cars. If you go to the PTML in Mile 2, there is almost no one there, because that is where all these small vehicles come through and TinCan is where the executive vehicles come through. So, you can see how it is affecting the whole thing.”

The PTML chapter Chairman of the National Council of Managing Directors of Licensed Customs Agents, Abayomi Duyile, said, “The VIN and the 30 per cent levy are the causes of the whole problem. You know when they introduced the VIN, it was part of what we were saying before that it was going to cause problems, but the Customs introduced it saying that it would make their job faster and all that. About a month after they introduced the VIN, they came with a 30 per cent National Automotive Council contribution, and we protested, they now removed it and changed it to a levy.”

“So with all these things, you find out that over N2m has been added to the prices of vehicles. And when (former President Olusegun) Obasanjo was there, they allowed vehicles of 15 years old to come in, but now the Customs, in their own wisdom, said such were old vehicles. Now, for example, a 2008 model car has now been classified along with a 2013 vehicle in terms of duty payment.

“So, when you bring in a 2008 model of a vehicle and you are paying duty for a 2014 model, it will be very expensive. So, when you clear a 2008 modelled vehicle as 2013 or 2014 in Nigeria, you may go bankrupt, because there is no way you can sell such a vehicle when cheaply you clear at the rate of 2014; that is why you see the drop at the PTML.

“These are the two major issues when you say 2005, 2006 and 2009 vehicle importers should pay the same duty as 2013, it is not done anywhere else in the world. So, you can imagine the people that the system has affected, some of their vehicles are still in the port as we speak; some have also abandoned their vehicles because already there is no point wasting money to clear a vehicle you can’t sell. The ones that have been cleared take time to sell.”

Dealers lament

Meanwhile, car dealers have lamented a serious drop in patronage as cars now seem to be above the reach of ordinary Nigerians.

A car dealer at the popular Berger Automobile Market, Lagos, who gave his name as Chinonso Stainless, said most of the dealers hardly record any customer in months as against what they used to see, especially when the Christmas season was approaching.

He said, “My brother, there is nothing happening here again because of the high duty rate; people who are bringing in cars are not many again. So, there are fewer cars in the market and the prices are very high; the turn up of buyers is very low. The patronage is not the way it used to be, people hardly buy cars now.

“A 2003 Toyota Corolla that used to sell for N2.5m is now N3.5m, while the 2010 model of the same car is N4.8m. So, we are pleading with the government to bring down the duty on cars because as soon as the duty comes down, the prices will definitely come down.”

Another dealer, John Paul, said, “People now prefer to buy Nigerian used cars now instead of foreign used cars; even so, the Nigerian used car is also very expensive. You hardly see a clean Nigerian used car that is less than N1.5m; that is how expensive cars are now.”

The President, Association of Motor Dealers of Nigeria, Metch Nnadiekwe, did not take his calls as of the time of filing this report.

 

 

Enugu State was, literally, turned to shreds, at the weekend, as unknown gunmen struck, killing three police officers, a former commissioner and two others.

Three policemen were shot dead at Agbani, headquarters of Nkanu West Local Council of the state.

The incident occurred at a roundabout, close to the Agbani Divisional Police Station, a short distance from the town’s main market.

It was learnt that the policemen were on a stop-and-search duty on that spot. And, when the assailants sighted them, they immediately opened fire, which brought down the three security operatives.

The killer gang continued to shoot sporadically into the air, as they fled the scene, scaring the residents and traders, many of who took to their heels, only to return to discover the victims’ lifeless bodies on the asphalted road.

A video of the incident obtained, yesterday, showed sympathisers wailing and lamenting the incessant attacks on the policemen serving in the state by the ‘unknown gunmen.’

An unidentified young man was heard in the video crying and saying that one of the victims was his brother.

Meanwhile, on Friday night, a former Commissioner for Rural Development in the state and erstwhile Chairman of Oji-River Local Council, Gabriel Onuzulike and his elder brother, were killed at their Nkpokolo-Achi hometown by gunmen.

They were said to be returning from a burial ceremony when they were pursued by the gunmen, who were said to have waylaid and pummelled bullets into them.

The State Police Command, yesterday, said two of the assailants, who came from neighbouring Anambra State, were intercepted and neutralised by a joint Police and Army team, following a distress call.

The state Police Spokesman, Daniel Ndukwe, who gave an update on the Oji -River incident, in a statement, said: “Pending the receipt of a detailed report, kindly be informed that preliminary report reveals that two of the assailants, said to have infiltrated into Oji-River from neighbouring Anambra State community, in the evening of 18/11/2022, that attacked and murdered one Gabriel Onuzulike (identified as former Chairman of Oji-River Local Council and Commissioner in Enugu State Government) and his brother at Nkpokolo-Achi in Oji-River Local Council, were neutralised by a joint Police and Army team, who swiftly responded to a distress call on the incident, and intercepted the hoodlums at Inyi community of the same council, as they were escaping into Anambra State.

“The team recovered an AK-47 rifle with two magazines loaded with ammunition, while a Toyota Land Cruiser Jeep belonging to the victims, a Toyota Camry car the assailants attempted to snatch from another victim, and a RAV4 Jeep they used for the heinous criminal operation, among other incriminating items, were also recovered.”

“Meanwhile, manhunt of the assailants, many of whom escaped into a nearby forest with severe degrees of gunshot wounds in the ensuing gun duel, as a result of the superior firepower of the joint team, is still ongoing. Further development will be communicated, please.”