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Category: Opinion

  • Fighting obesity through SSBs tax

    Fighting obesity through SSBs tax

    The latest data from the World Obesity Federation (WOF) show a significant increase in the prevalence of obesity in Nigeria and the rest of the world in the past decade. For instance, the data-published on the WOF website-projects that by 2035, 1.9 billion people out of an estimated global population of 8.8 billion will be living with obesity,
    almost 400 million of whom will be school-age children. In total, over 4 billion people, or one in every four persons, will be overweight or obese.

    In Nigeria alone, the WOF estimates that 8.2 percent of Nigerians are obese. World Health Organisation (WHO) projections might even be higher. As of 2020, the WHO estimated that there were more than 21 million overweight and 12 million obese people in the Nigerian population aged 15 years or older, accounting for an age-adjusted prevalence of about 20 per cent and 12 per cent, respectively.

    This should be a major cause for concern considering the country’s rising non-communicable diseases (NCDs) burden. According to Nigeria’s National Health Accounts, the government spends over ₦384.4 billion (US$1.26 billion) yearly on
    managing NCDs.
    Simply put, obesity results from consuming more calories than the body can burn through daily activity. Over time, these excess calories accumulate and contribute to weight gain. Various studies have shown that obesity is the major predisposing factor for NCDs. Excess calories are often found in Sugar-Sweetened Beverages (SSBs), commonly referred to as soft drinks.

    Evidence from several studies has shown that excessive consumption of added sugar is one of the risk factors predisposing individuals to diabetes. SSBs, as a major source of excessive sugar, were ignored until recently. Soft drinks are readily available, easily
    accessible, and affordable across the country. A litre of these drinks contains up to 14 cubes of sugar. Nigeria is reputed as the 4th highest consumer of SSBs in the world.

    Concerned about the health burden of these drinks and in line with global recommendations, the Nigerian government introduced a N10 per litre levy on SSBs in June 2022 through the Finance Act, aimed at reducing habitual SSB consumption. This praiseworthy effort, albeit inadequate to effect the desired consumer behavioural change, has sparked hostility from the SSB industry, which prioritizes profits above
    public health.

    To support the government’s policy initiative aimed at safeguarding the health of Nigerians and exerting pressure on the SSB industry to considerably lower the amount of added sugar in its products, a pan-African not-for-profit, Corporate Accountability and Public Participation Africa (CAPPA) has led an extensive campaign across various levels of policy engagement and embarked on a public awareness drive.
    CAPPA is urging the government to increase the SSB tax rate from N10/litre to N130/litre, following evidence from a simulation study of the potential fiscal and public health effects of such an increase. The study projects that an upward review of the SSB tax to a N130 levy per litre would not only greatly reduce SSB consumption but also promote the health of Nigerians and potentially raise about N729 billion in tax revenue for the government.

    Conducted in Nigeria in 2023, the study’s findings were released in February 2024 to aid policymakers in making well-informed decisions using data specific to Nigeria. The findings, in correlation with the global outlook from the WOF, also shatter the myth
    that obesity is associated only with high-income countries.

    According to the WHO, low-and middle-income countries face a double burden of malnutrition. While these countries, including Nigeria, continue to deal with the problems of infectious diseases and under-nutrition, they are also experiencing a rapid upsurge in NCD risk factors such as obesity and overweight. In Nigeria, urbanization drives
    the consumption of unhealthy foods.

    Poorer households are more likely to prioritize meeting energy requirements over nutritional quality, spending their money on less expensive items that are high in calories but offer little to no nutritional value. Urban dwellers have more supermarkets and fast-food chains, which provide a ready and abundant supply of ultra-processed foods, as well as energy-dense snacks and SSBs. Consequently, the prevalence of unhealthy diets is increasing among both rural and urban populations, leading to higher obesity rates in the country.
    Youths and young Nigerians, who traditionally constitute the highest SSBs-consuming demography, make up around 70 per cent of the population with an average age of 18 to 40. Addressing their struggles with unhealthy dietary habits is crucial, particularly through measures such as the SSBs tax.

    This intervention could significantly enhance their prospects of leading meaningful lives and avoiding the burden of NCDs in later years. Also, as Nigeria confronts these challenges, the collaborative efforts of all stakeholders will be essential. By fostering a culture of health consciousness through intentional policy efforts like the SSB tax, the nation can pave the way toward a healthier future for all its citizens.

     

  • INC-4: Growing Menace Of Industry Influence On Plastic Pollution

    INC-4: Growing Menace Of Industry Influence On Plastic Pollution

    Plastic waste pollution is a growing environmental menace that is affecting lives and livelihoods across the world.

    But the latest efforts to combat this problem through a global plastics treaty have exposed a worrying trend: the plastic industry’s growing negative influence on and its shunning of established science.

    The fossil fuel and chemical industries – source of the plastic industry – showed their intent between April 23 and 29 at the Shaw Centre in Ottawa, Canada, during the fourth session of the Intergovernmental Negotiating Committee (INC-4) to develop an international legally binding instrument on plastic pollution, including in the marine environment.

    Just like it did during INC-3 in Nairobi, Kenya last year, the industry deployed several measures – including registering an unprecedented number of lobbyists – to hijack the negotiation processes at INC-4 and tone down established narratives.

    Last year, an analysis by the Centre for International Environmental Law (CIEL) disclosed that 143 fossil fuel and chemical industry lobbyists registered to attend INC-3, gaining access to the negotiations at a time when talks on a global plastics treaty were entering a critical phase.

    The 143 fossil fuel and chemical company lobbyists at INC-3 outnumbered the 70 smallest Member States delegations at the negotiations.

    This year, the industry registered an unprecedented 196 lobbyists, representing about 37 per cent of the total attendees at INC-4, and as was to be expected, the lobbyists affirmed their determination to advance self-serving interests and stall positions that embrace the otherwise.

    These lobbyists not only vehemently resisted and shut down proceedings that exposed their fallacies, but they also influenced the plastic policies of parties and states that dared to question their stance. Their presence stalled the needed progress as they effectively reduced the event to a marketplace.

    Ninety-nine per cent of plastics are derived from fossil fuels. Fossil fuels account for over 75 per cent of all greenhouse gas emissions, meaning fossil fuel-generated plastics are directly tied to increases in greenhouse gas emissions annually. Fossil fuels disguised as plastics can be found everywhere in our lives.

    It is natural to expect the industry to leverage such a gathering to expand its coverage and deepen its hold on market share in emerging and vulnerable states. For them, INC-4 is nothing but interest and profits at the expense of human and animal survival, eco-sustainability, and societal well-being.

    The industry is not unaware of the significance of the outcomes of INC-4, particularly in advancing treaty texts that will be adopted at the final scheduled session (INC-5) in Busan, Republic of Korea later in the year, hence its unapologetic resolve to monopolise the process.

    To this end, the industry has been behind several false claims to downplay the negative consequences of plastic pollution.

    One such claim is that the consequences of micro- and nano-plastics, including growth inhibition, increased oxidative stress, and decreased feeding behaviour, among others, are not backed with facts. But this has been debunked as there are now over 20,000 peer-reviewed scientific publications on micro- and nano-plastics according to the Web of Science database.

    This database established that plastic products release dangerous micro- and nanoparticles at all stages of the plastics life cycle, including production, normal and intended use, waste management, and recycling, and that these microplastics can alter the natural environment both locally and on a global scale.

    Similarly, the industry’s claim that plastics’ effects on the marine environment are insignificant and suffer a dearth of evidence has also been proven to be untrue; scientific evidence has confirmed that microplastics affect terrestrial ecosystems and that human bodies are not protected from these exposures.

    According to recent studies published on ScienceDirect and thelancet.com, exposed humans show the presence of plastics in 100 per cent of blood samples, 80 per cent of saphenous vein samples, 84 per cent of lung tissues, all liver and colon samples, 33- 66 per cent of placentas, and 77 per cent of breast milk samples. Parkinson’s disease, inflammatory bowel disease, and respiratory infections are a few of the associated consequences of plastic exposure still under the discovery of science.

    Back home, with about 2.5 million tonnes of plastic waste annually, the World Economic Forum (WEC)’s Global Plastic Action Partnership ranks Nigeria ninth globally among countries with the highest contributions to plastic pollution. Unfortunately, over 88 per cent of the plastic waste generated in the country is not recycled. Instead, much of it ends up in water bodies – rivers, lakes, drains, lagoons and the ocean.

    In just Lagos State alone, plastics account for 15 per cent of the total generated waste. According to experts, the situation in Nigeria may get worse with the expected rise in the population to about 401 million in 2050. Furthermore, the production of plastic is growing.

    Dangote Refinery, the largest petrochemical refinery in Africa, has started operations in Nigeria and apart from refining fuel, will also produce plastic products.

    As a countermeasure against the plastic industry’s tactics, the United Nations Environment Programme (UNEP) can borrow from Article 5.3 of the World Health Organization Framework Convention on Tobacco Control (WHO FCTC) which frowns on conflicts of interest.

    These express guides in the WHO FCTC are templates that can be adopted to prevent the industry’s further capture of the negotiation space.

    Also, there is a need to close the gaps in prevailing national and sub-national policies that support the inclusion of corporate interests.

    Furthermore, fence-line communities suffering the impacts of plastic pollution from extraction of raw natural resources to manufacturing of products, recycling, and handling of wastes deserve more seats in the room and more platforms for expression.

    As the world waits for the progressive phase-out of these problematic and avoidable plastics, clear boundaries for corporations in the decision-making process will prevent potential mix-ups of financial and political interests with legitimate interests or biases.  In the same vein, policy audits and oversight procedures must be incorporated before and during negotiation processes to address imbalances, corporate overlay, poor representation, and undue considerations for corporate benefits and privileged interests.

  • Bad Law, Needless Levy

    Bad Law, Needless Levy

    A few weeks ago, Nigerians were startled by a legislation that had largely escaped public awareness. This legislation, which has since undergone substantial amendment carries profound implications for the financial health of every Nigerian, sparking widespread controversy.

    The law raises several concerns regarding our legislators’ rigour, effort, and dedication to enacting laws. The legislation, which is known as the Cybercrime (Prohibition, Prevention, etc.) (Amendment] 2024 Act. Section 44 (2] (a] of the Act, mandated a levy of 0.5% of all electronic transactions value by businesses specified in the second schedule of the Act, which includes GSM service providers and telecommunication companies, Internet Service Providers, Banks and other financial institutions, Insurance companies and Nigeria Stock Exchange.

    To implement this law, the CBN, on the 6th of May 2024, sent a circular to all banks and financial institutions in Nigeria to charge a cybersecurity levy starting from the 20th of May 2024 on electronic transactions by customers, barring a few exemptions. Industry watchers have claimed that the government aimed to earn about N2 trillion per annum, judging by the over N600 trillion values of all such transactions in 2023. This caused an uproar in the country, and most civil society organizations, private sector businesses, labour organizations, and concerned Nigerians used all the media available to them to voice their condemnation of this imprudent law.

    The banks and other mandated institutions are to collect the levy and remit it monthly to a designated fund (National Cybersecurity Fund) at the CBN for transmission to the Office of the National Security Adviser (ONSA). The fund’s stated primary purpose is to provide financial resources for fighting cybersecurity crimes in Nigeria.

    There are many things wrong with this levy beyond the fact that Nigerians are discontented with government and non-governmental levies and fees plaguing the living light out of them. Some have argued about the interpretation of the law by CBN that the transactions to be charged should be on the businesses mentioned in the Act, not their customers or Nigerians. Others have questioned why this law, created, and signed into law in 2015 by the Jonathan administration, was amended now to include the cybersecurity levy and why the haste to implement it now, especially given the harsh economic conditions occasioned by good-intentioned policies that have had a devastating impact on Nigeria.

    The argument on timing is germane given the level of inflation and the devastating degradation of the value of the Naira and, by extension, the purchasing power of Nigerians. Some still argue about the increasing focus of government to use tax as a significant economic policy for revenue generation, especially in an increasingly volatile economic climate where productivity is low, and businesses are shutting down because of increasing cost of doing business, ranging from the cost of labour, energy, and raw materials. My take on this anchor on the morality behind the levy given Nigeria’s social contract with the state, procedural antecedents in institutional revenue collection for government, the burden on Nigerians on financial transaction-related charges, and the imperfections of our legislative processes.

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    The pertinent question is why should Nigerians who pay personal and business taxes pay for security in whatever guise or nomenclature? Whether cybersecurity, physical security, or any form of security, it is the Nigerian government’s exclusive and primary responsibility, which is why we pay  tax to the government. Under the social contract between Nigerians and the state, we accept and give out our rights, especially the right to security of our lives, to the state and expect the state to protect us by whatever means necessary. The state provides the security infrastructure, architecture, and personnel to provide security for all. The government singling out an aspect of security and levying citizens to pay for it is tantamount to double taxation when we already pay income tax and allow the government income from our natural resources to provide this service. Unbundling security and taxing some is a prelude to other security tax forms. Should we expect a Banditry levy, terrorist levy, or armed robbery levy soon?

    The second question is, when did the office of the National Security Adviser become a revenue-generating and collecting centre? The Nigerian state has explicit provisions for regulatory agencies or public enterprises that provide public goods and services. The office of the NSA is not such and does not have such a mandate. It is an anomaly procedurally to saddle this office with the mundane task of revenue issues, and as a government unit coordinating security, it should receive its funding from the federal government budget. Enacting and implementing laws that go against established procedures affects the structures and systems of the state and sometimes goes against the mandate on which institutions are created.

    The third issue is why the national assembly members were screaming at the top of their voices against this law when the same body amended it. Does it mean that they did not understand the law they passed? Or is it that the law was amended and passed without the knowledge of many members passing through the due processes? Is the interpretation of the law by CBN not in tandem with the intentions of the lawmakers? Is there a problem with framing the law caused by language failure? Did the framers mean online or electronic transfer levy? It would be easier for the public to understand the levy if it had come outright as a transaction levy because many people cannot link their electronic transactions and cyber security levy. Where is the ‘cybersecurity’ in transferring legitimate money? The law does not resonate with many Nigerians of average means and education, and they cannot link their everyday transactions to cybersecurity.

    Granted, the legislation enacted by the National Assembly is not perfect. It sometimes has some flaws. They are subject to review, revision, or repeal. Because of this, the law is a living thing that changes with the seasons and the passage of time. Remember, errors are not uncommon when enacting laws. Had Magaji Tambuwal, the then-Clerk of the Nigerian Assembly, been successful in getting President Bola Tinubu to sign a version of the “Real Estate Regulatory Council of Nigeria 2023″—which is regarded as phoney—into law, he would have been inducted into the Hall of Fame. This demonstrates that sometimes, legislation approved and accented to by the president may not always accurately reflect the framers’ intentions. Numerous things occur in between.

    The fourth issue is the incongruence of the cybersecurity levy while the Taiwo Oyedele committee is working on the harmonization of multiple taxes, reducing unprogressive taxes and  the multiplicity of legislation that imposes taxes on business. Besides, the cybersecurity levy affects citizens’ living wages. We cannot stagnate household income and continuously increase all cost elements of a living wage (housing, transport, utilities, food) through more charges like cybersecurity levy and not increase poverty in the extreme or diminish consumption income in the main.

    The last issue is that the burden of bank-related levies and taxes that individuals pay in Nigeria is too much on them. It will be good for researchers to do a comparative study with other developing countries like Nigeria to determine whether we are in this alone. Bank-related levies include transfer fees, card maintenance fees, card issuance charges, stamp duties, VAT on SMS, and SMS charges for the receiver and sender. This cybersecurity levy will be one too many. Imagine the implication on the cost of doing business, especially post-subsidy removal, post-increase in electricity tariff, the collapse of the Naira, hyperinflation and many charges and levies on businesses.

    Existing business levies and taxes include Company Income Tax, Stamp Duties, Petroleum Profit Tax, Capital Gains Tax, Value Added Tax, Personal Income Tax, Withholding Tax, Tertiary Education Tax, one per cent of payroll contribution to NSITF, 10 per cent of Payroll Contribution to PenCom; one per cent of Payroll ITF Levy and National Information Development Levy. Others are Radio and TV Licenses; Police Special Trust Fund Tax levy; Niger Delta Development Commission levy; National Agency for Science and Engineering Infrastructure levy; Land Use Charge; Parking Fee; Consumption Tax; Road Tax; Standard Organization of Nigeria fees; Nigeria Content Development levy; NAFDAC levy; Nigeria Health Insurance Authority contribution; Signage Fees. Touts and street urchins are leveraging the multiplicity of taxes and levies to attack businesses. Businesses are getting it rough and do not need another levy straw that will break their backs.

    Cybersecurity levy is peculiar to Nigeria and is not applicable in many developing and developed countries of the world. President Bola Ahmed Tinubu acted well in suspending the cybersecurity levy; many Nigerians are happy about that. There are many reasons to repeal this law or quickly review it with broad-based consultations.

  • The Scourge of Rising Inflation

    The Scourge of Rising Inflation

    An increasing number of Nigerians are being driven into poverty, not by choice, but by the current political and economic climate, shaped by stringent macroeconomic policies.

    These policies, such as subsidy removal, devaluation of Naira, and increase in electricity tariff, have had unintended consequences. For instance, removing subsidies has led to a significant increase in the cost of living, while the devaluation of Naira has made imported goods more expensive.

    These factors, combined with the high level of insecurity, have affected food security in Nigeria, and created a perfect storm of economic hardship. The signs of this unavoidable reality are readily apparent. The interventions to prevent this descent into poverty are either ineffectual or remedy the condition too slowly.

    An unprecedented rise in inflation has destroyed households’ disposable incomes and pushed many families into poverty. Spiralling inflation is having a devastating impact on all, but especially on households in the lower rungs of the working class, who in their millions are joining the already over 133 million multidimensionally poor Nigerians struggling to earn a living because high inflation has eroded the value of their income. As shown by the NBS Consumer Price Index of April 2024, published in May 2024, the headline inflation rate rose to 33.69% in April 2024 compared to March.

    The headline inflation rate was 11.47% higher in April 2024 compared to the previous year. During the same period, inflation in urban areas was higher than in rural areas. Even worse, the food inflation rate in April 2024 was 40.53%, increasing by 15.92% compared to April 2023. What does this mean for the ordinary citizen? More money can purchase fewer goods and services.

    We cannot dismiss the direct correlation between rising inflation and rising poverty in Nigeria. A household with a monthly income of N300,000 in April 2023 would have lost 33.69% of its real purchasing power if it earned the same amount in April 2024.

    This means that the same amount of money can now buy significantly fewer goods and services, putting a strain on the household’s budget. Imagine this household struggled in 2023 to make ends meet; how will it cope with less than 33% of its value in goods and services this year?

    It is little wonder many Nigerians are in despair and are calling on the government to tweak its policies and salvage the situation before it is too late. Families in the earning bracket mentioned above are even better than many whose total income is less than N100,000 if both parents in the household earn minimum wages per month.

    The government intervention so far, with the best of intentions, has yielded little result as inflation continues unabated. The monetary policies of increasing base interest rates to above 22%, improving the cash reserve ratio by banks to above 40%, and constantly engaging in the money market to mop up excess liquidity have yielded less than the expected result in curbing inflation.

    More is needed, and my little knowledge of street economics shows me that the Nigerian economy often defies some fundamental economic concepts that work in developed countries because of our economy’s informal and unregulated nature.

    The Nigerian government must creatively use other bespoke and practical fiscal and monetary measures to tame our raging inflation.

    Paradoxically, there is compelling evidence that inflation continues to rise because of critical government policies. Instead of providing more concerted anti-inflationary measures, the government has added more inflationary steps to the economy.

    The government cannot confront inflation while imposing limitless taxes, tariffs, and charges on the things that people spend money on daily. The impact of excess tax is on everybody, but the burden is more on people experiencing poverty whose purchasing power has been eroded by inflation. The government cannot tax itself out of our economic predicament.

    Increasing personal income tax is one way government reduces disposable income to curb demand pull inflation, but the inflation in Nigeria is not because of increase in household income, but caused by cost induced factors. So tax on people whose income have not increased in the past year is a recipe for hardship.

    Other factors also imperil government efforts to curb inflation. Imported inflation has been the bane of Nigeria, given the number of raw materials and goods imported into Nigeria from countries with high inflation rates. This is not helped by the new exchange rate regime that has seen the Naira fall to its lowest value in a generation.

    The government has been trying to control the erosion of the value of Naira to no avail. Increasing cost of energy has pushed  some  businesses to  pack up. These factors have exacerbated the rise of inflation, and unless the government starts tackling them, it cannot effectively win its fight against runaway inflation.

    The consequences of inaction are severe and far-reaching. The system requires a set of anti-inflationary measures to relieve the people and companies so that livelihoods can improve, and real incomes recover from shock to encourage people to live and save. Savings and prosperity will fire up investment, production, supply, and consequent demand.

    If inflation worsens, the economy will, at best, go into stasis, further regression, and possibly a depression. More manufacturers will quit, and unemployment will worsen with even more crime and insecurity. The picture I painted above is not far from us.

    Recent statistics about the hunger level in Nigeria occasioned by food inflation are alarming.

    There is a deteriorating food security and nutrition crisis in Borno, Adamawa and Yobe (BAY) states this lean season between May and September 2024. According to the Government-led Cadre Harmonise analysis released in March this year, in Borno, Adamawa, and Yobe states, some 4.8 million people are estimated to be facing severe food insecurity, the highest levels in seven years.

    Children, pregnant and lactating women, older persons, and people living with disabilities are among those who are most vulnerable. About 2.8 million of these people need urgent interventions.

    The prices of staple foods like beans and maize have increased by 300 to 400 percent over the past year because of a cocktail of reasons. Inflation is outpacing the ability of families to cope, making essential food items unaffordable.

    Furthermore, the report stated that “malnutrition rates are of great concern. Approximately 700,000 children under five are projected to be acutely malnourished over the next six months, including 230,000 who are expected to be severely acutely malnourished and at risk of death if they do not receive timely treatment and nutrition support.”

    The Acting Representative of UNICEF Nigeria argues that “this year alone, we have seen around 120,000 admissions for the treatment of severe acute malnutrition with complications, far exceeding our estimated target of 90,000”.

    This statistics are for only 3 states in the Northeast Nigeria. Imagine what it will be for the whole 36 States in Nigeria. There is real fire on the mountain!

    This rising hunger is not peculiar to the Northeast. From my knowledge of street economics, hunger and poverty is pervasive across all six geopolitics zones. Increasing poverty is directly linked with more severe economic outcomes. Increasing poverty can result in a more divided society, Issues with housing, homelessness, limited access to healthcare, nutrition poverty and poor living conditions that have a detrimental effect on one’s health. Children living in poverty have less access to education, which will reduce their chances in the future. More families facing poverty will experience conflicts, stress, and domestic violence.

    Poverty can set off a vicious cycle in which the effects of it act as catalysts for additional episodes of poverty. Increasing inflation and poverty are bad omens that blow us no good. They are bad for our economy. They are bad for our people. The government must pay attention to these factors and be more sensitive in our economic policy choices.

    Only some anti-inflationary measures that comprehensively capture the macroeconomic dimensions and provide solutions may work. Poverty alleviation measures are barely temporary and, at best, work in the short run to cushion the effect of heightened inflation and food insecurity.

    The government should provide solid medium- to long-term solutions to tackle these problems. They should re-evaluate some of their policies to see whether they are inflationary and jettison them to allow good policies to thrive. We can only imagine the unintended consequences of allowing poverty and inflation to fester.

    The increasing inflation and poverty are creating desperation among a portion of society, which is increasingly becoming despondent and seeing itself at the fringes of society.

    The implications of this are plausible. Many ordinary citizens are burdened by poverty, hunger, and severe inflation, which have made their lives miserable. The government must take action to alleviate this scourge and help Nigerians lead meaningful lives.

  • One Year On: Words Above Action

    One Year On: Words Above Action

    Amidst the initial fanfare, good feelings, and high expectations, a new era began on May 29, 2023, as a new president, vice president, and governors took oaths of office. However, as we approach the one-year mark, it’s clear that for many Nigerians, the end of the Buhari era was not the relief they had hoped for. The Buhari administration appeared rudderless and in need of more vigour. This sentiment was echoed in various states, where citizens felt betrayed by the lacklustre performance of their then-outgoing governors.

    This column in a piece written in March 2023, captioned Governors: Right versus Wrong captured the general feeling about the state governors thus: “it is utterly absurd that instead of elected governors to focus on making their states economically viable and developing their states from down to up, many governors have turned the states into fiefdoms and domains where they rule as absolute dictators controlling not just the resources of the state, but all the state institutions with impunity. We see governors who unashamedly use public funds as their private funds and use it anyhow they want, with little or no accountability whatsoever”.

    There were high expectations and a renewed hope that the new administrations in the states would be different this time around and would use the state’s resources to develop the states. They made lots of promises to their people to tackle the myriad problems that have kept their states from developing. Some articulated visions and goals that are noble to the admiration of Nigerians living in these states. In many states, barring a few, these promises made on the inauguration day have become empty promises, the visions are largely blurred, and no overarching goals are pursued, much more being achieved.

    Sadly, many states are heading in the same direction of hopelessness and despair as in past dispensations. Leadership is lacking, and the status quo must be changed if Nigeria is to see meaningful development in the current dispensation. To address this, the governors must reflect on their performance in the last year and implement policies, structures and systems that will help them fulfil their responsibilities to the people.

    The state scorecards for the past year, as evidenced by dire and unpleasant statistics in aspects such as poverty, food insecurity, unemployment and underemployment, environmental degradation, poor business-friendly environment, and poor policy implementation, are, at best, suboptimal and, at worst, grim. Some states cannot demonstrate meaningful achievement in any one area and are not positioned to achieve anything in the future unless something drastic is done to redirect their leadership to the proper development direction. This lacklustre and self-defeating approach to growth and development occurs when the states enjoy unprecedented FAAC allocations and other internally generated revenues.

    Every month, according to the Federation Account Allocation Committee (FAAC), not less than a trillion naira is announced to have been generated and disbursed among the three tiers of government in Nigeria, at least since the removal of fuel subsidy, which has significantly improved the revenues of governments across the country. The statutory federal allocations to the coffers of the state governments alone are expected to increase by 69 per cent, from N3.3 trillion in 2023 to N5.54 trillion in 2024, based on the approved budget and revenue projection. Government fiscal statistics indicate that in the first four months of 2024, states have received approximately N1.548 trillion in disbursement. The internally generated revenue of many states has significantly increased in the past year, adding more funds to the state’s coffers for growth and development. This is besides the 13 per cent derivation revenue (for the benefitting states) and other funds accruing to states from different sources.

    The recent increase in state government revenue has not improved Nigerians’ quality of life. Revenue from FAAC has doubled, but living standards are getting worse. More money for the states has yet to translate to substantial improvements in infrastructure, healthcare services, education, job creation, or even security.

    Much has been written about the national government’s performance in the past year, and the verdict is nothing to cheer about. We frequently overlook that, in a federal system, the ways by which subnational governments create and implement development policies are essential to a functioning country. In Nigeria, many people are disappointed and dissatisfied with how subnational entities are run. This illustrates how deeply disappointed people are with the results of governance over the last 12 months.

    Despite modest progress in a few states, there is a systemic breakdown of public healthcare and education facilities at the state level. The public’s confidence in sub-nationals’ capacity to deliver social services and look out for the welfare of the populace has been severely damaged as a result. According to statistics, endemic poverty has spread and is now present in 28 of the 36 states in the country. The World Bank Nigeria Development Update Report states that as of 2023, the poverty percentage had risen from 40% in 2018 to 46% in 2023. It is projected that a combination of subnational ill-managed administration and inflation will have caused the poverty rate to surpass 50% by the end of 2023.

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    State governments in Nigeria have failed to meet the task of ensuring food security by failing to invest appropriately and implement policies that would encourage agriculture. Several issues are to blame, including inadequate finance, insecurity, bad planning, and unfavourable policies that reduce farmers’ production. Few states have changed and turned farming into a commercial endeavour. A few more are promising.  This is true even though we have more arable land than the Netherlands—which has 29%—but the Netherlands exports ten times as much agricultural goods as Nigeria. Over the past year, there has been little substance but mostly talk about agriculture.

    With the significant resources the states have received in the past year, it’s disheartening to see that many states cannot account for how they spent the money. While we acknowledge the impact of rising inflation and a decline in the value of the Naira, it’s inexcusable for states to not demonstrate significant achievements with those funds. This lack of transparency and accountability at the state level is a key factor contributing to the suboptimal performance in many states. It’s crucial for citizens to demand and ensure transparency and accountability in governance to drive meaningful change.

    Insecurity still festers. Almost all elected chief executives promised to prioritise security, but it seems the more they promised, the deeper we go into insecurity. A few states are examples of using local and internal security systems to support external security systems and form a cohesive security system that has reduced insecurity in those states. However, in many states today, insecurity is worse, and there is no hope of effectively tackling it soon. Security, though mainly a function of the federal government, needs sustained and coordinated efforts from the state government to effectively secure the lives and properties of Nigerians living in various states.

    Many state governments need something to show in terms of infrastructural development. The level of infrastructural decay is palpable. Few or no new roads are constructed . State governments have been empowered to regulate the generation, transmission and distribution of electricity yet only few states have taken advantage of this constitutional amendment. The availability of pipe-borne water and other water systems is still a mirage, and medical facilities need to be put in place to cater to the needs of the people. The newly sworn-in governors promised their people these things, but one year later, there is little or no evidence that many are fulfilling them. Most of them will stagger into the second year without a concrete plan.

    At all levels, I hope our political leaders recognise the importance of redeeming democracy’s reputation. The average person is beginning to question the capacity of democracy to deliver dividends that can improve his life. It will take more than impressive rhetoric to convince citizens that our political officeholders are working for our interests. Actions must follow words and beautiful promises. The few states where the governors are doing well shine like illuminators for others to emulate. It is not rocket science to provide quality leadership for the people. The next three years are enough time to correct this harmful and unfruitful leadership anomaly in some states. The people deserve more, and that is what they must get!

  • Nigeria’s Urgent Need for Increased Government Funding in the Water Sector

    Nigeria’s Urgent Need for Increased Government Funding in the Water Sector

    In Nigeria, walk two kilometres in any direction, and you’ll likely encounter at least three boreholes.

    Boreholes and wells have now become ubiquitous features in communities, symbolising the nation’s struggle with water access. But why, in a land abundant with water resources, do boreholes and wells define our landscape? Dry taps have become relics, haunting reminders of a time when public utilities provided intermittent water supply in the 1970s and 1980s. Today, even this limited public provision feels like a distant memory. Potable water remains an inaccessible luxury, especially for the poor.

    Nigeria’s significant water resources—estimated at 215 billion m³ of surface water and 87 billion m³ of groundwater—contradict the reality that many Nigerians face daily. Despite abundant rivers, lakes, and rainfall, the United Nations reports that only 13% of Nigerians have access to clean drinking water services.

    In rural areas, long treks to fetch water from questionable sources exacerbate issues of hygiene, economic disparity, and gender inequality.

    The urban landscape paints a similarly bleak picture as low- and mid-income earners rely on water merchants locally known as ‘mai-ruwas’ who set arbitrary prices, further straining already-lean household budgets. Even the economically advantaged have to rely on privately-dug boreholes to fulfil their daily water needs.

    These dismal statistics are closely linked to the chronic underfunding of Nigeria’s water sector by the government. Over the years, Nigerians have had to rely heavily on out-of-pocket expenses and donor funding to meet their water needs.

    While other nations have advanced their infrastructure and social indices, Nigeria has regressed, moving from a public water supply system to one dominated by private and donor-funded solutions. It’s time to ask, what are we doing? How did we get here?

    A 2018 WASH account by the World Health Organization (WHO) revealed that local expenditure in the sector amounted to N3.6 trillion, with households contributing 91%, government expenditure a meagre 4%, and the remainder donor-funded.

    This glaring imbalance underscores the urgent need for increased government investment in the water sector. International organisations and philanthropic foundations have poured dollars and euros into Nigeria’s water sector, while local governance and public investments have faltered.

    Relying excessively on donor funding for essential utilities like water often leads to unsustainable and ineffective solutions. While external funding provides temporary relief, it fails to address deeper issues of sustainable management and maintenance critical for long-term success.

    This approach is akin to using a band-aid to plug a leaking dam—it may offer a quick fix but does not resolve underlying issues. Sustainable solutions require robust systems and local ownership, achieved through increased government funding and community engagement. This demands a greater focus on developing local leadership, infrastructure, and accountability mechanisms to ensure the longevity of development projects.

    Donor funds for the water sector come from international and local non-profits and through grants and loans to state governments from External Support Agencies (ESAs). Over 18 of the 36 states in Nigeria have received huge external support in either loans or grants to support their water sector, with the biggest ESAs being the World Bank, the African Development Bank, and the United States Agency for International Development (USAID).

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    The World Bank estimates that Nigeria must quadruple its domestic public expenditure on water by 2030 to achieve Sustainable Development Goal 6. The internationally recommended benchmark for government funding of water is 15-20% of total public expenditure and 4-6% of GDP. Nigeria falls woefully short of this benchmark, with the Federal Ministry of Water Resources allocated only 1.11% of the 2023 budget.

    The 2024 fiscal budget has even taken it down a notch by allocating only 1.03% (N296.64bn) of the approved 2024 budget for water resources.

    More public funds need to flow into the water sector, nourishing it from the roots up. Increasing public funding for the water sector offers several advantages. First, when the government adequately invests in water infrastructure, it ensures that solutions are tailored to local needs. Public control means we can prioritise communities over headlines, ensuring sustainable and equitable water distribution.

    Increasingly, the Nigerian government is embracing public-private partnerships (PPPs) as financing models for basic utilities. Yet, history shows privatisation often prioritises profit over community needs.

    When Nigeria privatised electricity in 2013, we were delusively promised improvements in power supply post-privatisation. A decade later, we are paying more for pitch darkness. Darkness has never been this expensive. Water should not follow this path.

    As evidenced in a deep-dive report titled Africa Must Rise & Resist Water Privatisation by the civil society watchdog, Corporate Accountability and Public Participation Africa(CAPPA), public control of water utilities stands not only as the most viable solution for communities but also as a progressive solution for even governments, as case studies around the world have indicated dire consequences for governments that commodified water services.

    The case for democratic control of water infrastructure is further strengthened by the fact that public funds come with inherent scrutiny and accountability, enabling citizens to demand transparency and efficiency, which is not often feasible with distant donors.

    Under this governance approach, resources allocated for projects are viewed as coming from the collective purse, fostering a communal desire to ensure and interrogate their effective utilisation.

    Consider this: The World Bank hypothetically announces a $100 million loan facility to improve water access in Lagos State. The project includes constructing new treatment plants, repairing infrastructure, and extending pipelines.

    However, issues like lack of transparency, financial mismanagement, delays, and cost overruns arise, leading to public frustration.

    If funded by public money, the project would be subject to parliamentary oversight, detailed audits, and greater transparency. Citizens feel more empowered when their tax money is at stake, enabling them to pressure representatives and officials for efficient and transparent use of funds.

    Donor funds, if needed at all, should complement, not replace, robust and sound public funding systems. If Nigeria will have any hope of achieving SDG 6 and providing water for its teeming population, the government must boost domestic public funding of the sector.

    The current 1% of total public expenditure allocated to water resources is simply inadequate and frankly calls to question if Nigeria has any intention of ever providing clean, cheap water for its citizens at all.

    Sefa Ikpa is the Programme Officer, Water Campaign, Corporate Accountability and Public Participation Africa (CAPPA)

  • World Vape Day: Global alignment on health policy necessary for smokeless NigeriaHowever, widespread accessibility of these alternative products is essential for the success of THR. At present, this is being hamstrung by Nigeria’s limited access to these alternative tobacco and nicotine products.

    World Vape Day: Global alignment on health policy necessary for smokeless NigeriaHowever, widespread accessibility of these alternative products is essential for the success of THR. At present, this is being hamstrung by Nigeria’s limited access to these alternative tobacco and nicotine products.

    With renewed attention to smoking and vaping regulations around the world, now is the time for action to realise Nigeria’s smoke-free ambitions. Achieving this vision requires a collective consensus on an effective approach to creating sustained and lasting changes to consumer behaviour – Tobacco Harm Reduction (THR).

    THR represents one of the greatest public health opportunities today, providing a pathway for millions of smokers who would not otherwise quit, to transition from combustible tobacco products to smokeless alternatives. Countries that have recognised the opportunity THR presents and adopted supportive policies have seen striking success in reducing their smoking rates.

    The United States, United Kingdom and Japan are witnessing their lowest smoking rates on record, while Sweden is on track to declare itself smoke-free this year–defined as having fewer than 5 percent of daily smokers in the population–16 years ahead of the 2040 EU target.

    These remarkable transformations have been driven by widespread THR acceptance from policymakers, regulators, health officials, and consumers, enabling and encouraging smokers to migrate from combustible tobacco products such as cigarettes to vapour, oral nicotine pouches, snus and heated tobacco or herbal products.

    However, widespread accessibility of these alternative products is essential for the success of THR. At present, this is being hamstrung by Nigeria’s limited access to these alternative tobacco and nicotine product

    To fully realise the public health potential of THR, regulators in Nigeria should embrace evidence-based science to drive positive public health outcomes. This means implementing a supportive regulatory framework that encourages adult smokers who would otherwise continue to smoke, to switch, while protecting consumers with the right safety standards and preventing underage access.

    The success of THR in Nigeria also depends on governments and regulators correcting persistent misperceptions that these alternative products are more harmful compared to cigarettes. These misperceptions are not only flawed but also have significant implications for public health by actively discouraging smokers from making the switch to smokeless products.

    Greater efforts are needed to counter these misperceptions–an area that BAT is trying to tackle. As the world’s largest vapour company and a leader in smoking alternative products, BAT is committed to producing innovative products backed by world-class science and industry-leading product safety and quality standards.

    The Company’s THR approach is based on a growing body of research and a weight-of-evidence approach that substantiates our belief in the reduced risk profile of these products compared to cigarettes, which have been accepted by many international public health bodies. BAT publishes its science research to increase understanding of THR and raise awareness with stakeholders.

    Indeed, the industry developing and producing these products has a critical role to play. But to achieve the conditions required to make a success of THR, an inclusive, open and honest dialogue with all stakeholders is required. That includes policymakers, regulators, and the healthcare and medical communities. Unfortunately, this is not yet the case, with the industry all too often excluded.

    There is an opportunity to usher in a new smokeless world, grounded in scientific research and a firm commitment to public health. The solutions are available today. All that is required is for the relevant stakeholders to actively work together to prioritise THR and the well-being of millions of people worldwide

  • Beyond National Profligacy

    Beyond National Profligacy

    Jonathan Tepperman’s book, “The Fix”, is about how some nations fixed significant social challenges like inequality, corruption, and civil wars using innovative leadership and policies. No one has yet written a book about how nations fix profligacy. Therefore, it is justifiable that Nigerian leaders have not bothered to read a book that does not exist. When such a book is eventually written, Nigeria’s chronicle of shameless profligacy will qualify as a unique case study. It is perceived as a culture our elite have come to embrace or tolerate as an acceptable national social habit. Profligacy, defined as reckless or wasteful extravagance, is a concern in various aspects of Nigerian society. It touches different levels, from personal lifestyle choices to government spending and business practices. This culture of profligacy, if left unchecked, will continue to drain our resources, hinder our development, and perpetuate a cycle of corruption and mismanagement.

    Social habits are ingrained behavioral patterns that shape societies and influence how things are done. It might have a good or bad impact. Andrew Sykes ,co-author of “The 11th Habit“believes that the collective culture of a people shapes their habits, and habits cyclically reinforce culture. The habits of a nation reflect its values. This habit of profligacy among Nigeria’s ruling cadre is interconnected with the culture of corruption, lack of accountability in public life, short-term thinking, and lack of personal stake in the Nigerian project. Most importantly, it is proof of a total disconnect from reality. Since the Nigerian civil war, a deeply ingrained culture of wasteful expenditure and consumption-driven governance has plagued successive Nigerian governments. However, this is not a fate we are bound to. With the right cultural shifts and systemic reforms, we can break free from this cycle and build a more responsible and prosperous Nigeria.

    There is substantial empirical evidence linking this culture of wastefulness to our oil economy, which provides the government with oil revenues at all levels without accountability. Oil receipts have increased spending, often on non-essential projects that do not benefit the citizens. With an abundance of oil money and less emphasis on accountability and transparency, an environment of profligacy became prevalent and is now a national social habit. This profligacy, in turn, fuels corruption and mismanagement, creating a vicious cycle that hampers our progress and development. It is crucial that we recognise and address this interconnectedness to pave the way for a more responsible and accountable Nigeria.

    There is no responsible public affairs management culture, which feeds the decadent habit of wastefulness that our elite has adopted. Our weak institutions encourage mismanagement since they cannot enforce laws and regulations. A political patronage and nepotism culture has made us prone to wrong priorities, and we need the ability to plan strategically. Oversight by the legislature is highly compromised. Decisions made by public authorities are now driven more by personal interests than by sustainable use of resources for common interests due to a combination of economic pressure and poverty.

    The Nigerian government is often criticised for high spending on non-essential items, such as luxury cars for officials, unreasonable cost of renovation of offices and accommodation, large delegation to foreign trips and frequent travel expenses. This is particularly controversial given the country’s significant economic challenges and infrastructural gaps . Corruption is a considerable issue, with funds frequently misappropriated or embezzled. High-profile cases of public funds being diverted for personal use contribute to a culture of extravagance among some officials. The civil service and government agencies often have large, inefficient workforces, leading to unnecessary expenditures on salaries and administrative costs.

    Examples litter our landscape to prove that there is nothing untoward in the culture of profligacy. For brevity and conciseness, I will give four examples. First, NNPC, the national oil company, spent $25 billion (over N12 trillion) over 20 years on turnaround maintenance of Nigeria’s four refineries, yet none can refine a drop of oil. The average cost of building a 350,000-bpd refinery is about $ 3.5-5 billion. This may not convince you about a national habit that has calcified. Between 2010 and 2020, crude oil theft led to the disappearance of 619.7 million barrels of oil worth N16.25 trillion, according to NEITI, an extractive industry transparency watchdog. None of these two high-profile cases resulted in arrest, prosecution, or national protest. It is normal and an acceptable national habit for the elite and average citizen.  You will be tempted to think that this habit of national profligacy is restricted to the oil and gas industry. You are dead wrong!

    Second, how can we quickly forget what qualified for a national embarrassment in 2023 when the government registered 1,411 persons—a mixture of court jesters, government officials, professionals, a sprinkle of environmental activists, academia, and political jobbers for COP 28 in Dubai? Nigeria had the third highest delegation to COP 28, even though we contribute less than 0.0001% to climate change and its minimal impact on us. A public uproar was raised, but it came down before long because it is our culture and an acceptable habit amongst the elite.

    Third, most recently, Nigeria’s delegation, according to The Cable ,a digital news platform , was the largest among 187 countries to the International Labour Organisation’s (ILO) 112th conference in Geneva, Switzerland. This is happening at a time when the economy of the country is in some form of life support.

    The final example that raised curiosity was the news that the government reportedly spent N90 billion to subsidise the cost of the 2024 Hajj pilgrimage for citizens. The arithmetic of a huge subsidy for what ought to be a private religious obligation in a period of economic distress required advanced economic numeracy to solve. The list of our profligate habits as a nation is unending.

    Profligacy is not only akin to the political class and government. We see a preponderance of activities that scream profligacy at personal and social life levels.  Nigerians are known for hosting grand and often extravagant celebrations, including weddings, birthdays, and funerals. These events can involve large guest lists, expensive venues, elaborate decorations, and abundant food and drink. There is a strong emphasis on displaying wealth and status, often through acquiring luxury goods such as high-end cars, designer clothing, and expensive jewelery. This can sometimes lead to excessive spending and financial strain. At social events, it is common to see money being “sprayed” or thrown at people, particularly the celebrants, as a sign of generosity and celebration. This practice, while culturally significant, is often seen as wasteful. EFCC is working hard to clamp down on this practice.

    There is often societal pressure to conform to specific standards of appearance and lifestyle, leading individuals to spend beyond their means. This includes pressures to host large, expensive events or to own the latest luxury items. Maintaining social prestige and not “losing face” in many Nigerian communities can lead to extravagant spending. This can involve keeping up appearances through high expenditure on clothes, homes, and social activities. Both the government and private individuals often accrue significant debts to finance their extravagant lifestyles or projects, leading to financial instability and long-term economic challenges. Resources are sometimes misallocated to non-essential projects or luxurious expenditures, neglecting crucial areas like healthcare, education, and infrastructure.

    In the business sector, some Nigerian corporations, especially those in the oil and gas sector, tend to pursue luxurious corporate lifestyles, including high-end office spaces, expensive company retreats, and lavish entertainment expenses. There are over-invoicing and kickbacks, where inflated contracts and procurement costs are used to siphon funds for personal gain.

    Our entertainment industry is the window for showcasing opulence and luxury. Our Nollywood and Afrobeat often feature extravagant displays of wealth. Music videos and films frequently showcase luxury cars, opulent houses, and designer outfits. Our celebrities, including musicians, actors, and influencers, often lead lavish lifestyles, displaying their wealth and success through expensive purchases and luxurious vacations. This creates a culture of aspirational spending among fans and the public.

    Understanding and addressing profligacy in Nigeria requires a multifaceted approach that includes cultural shifts and systemic reforms. Leaders have to led by example . We need to implement stricter regulations and oversight on government spending, enhancing transparency and accountability, and reducing waste in public sector expenditures; promote cultural values that prioritize modesty and prudent financial management over ostentatious displays of wealth; increase financial literacy among the public to encourage responsible spending and saving practices; and enhance corporate governance standards to reduce wasteful spending and corruption in the business sector.

    Early signs are that those in power today have not only adopted the worst practices of the past but have also positively embraced them. If we continue along the same path, we will be stuck in an endless economic crisis and stagnation. Nigeria and Nigerians deserve better leadership in combating profligacy! We must escape this vicious cycle that has brought us to the quagmire we are in now.

  • China, Nigeria, and Hostage Aircraft

    China, Nigeria, and Hostage Aircraft

    Every story has two sides, but when a country’s reputation as  a sovereign and an investment destination comes under threat, it calls for immediate concern and action from its citizens and leaders. The recent unfolding of a concerning development has significant implications for Nigeria’s global standing as an investment hub.

    A Chinese company, Zhongshan Fucheng Industrial Investment Co. Ltd, secured a court order in France following an arbitration award  initiated in 2017, with the Ogun State Government over a contractual relationship  that dates to 2010. The arbitration panel ruled in favour of Zhongshan, stating that “It is clear that Zhongshan is the effective winner in these arbitral proceedings, in that it has proved its version of events is accurate, successfully resisted Nigeria’s jurisdictional and preliminary objections, established a valid claim against Nigeria under the Treaty, and obtained an award for substantial damages.” This is not just a legal victory for the Chinese firm, but a red flag for Nigeria’s global investment reputation that demands immediate attention and action.

    This ruling is a significant blow to Nigeria’s absolute sovereign status and the doctrine of sovereign immunity. The order has since been upheld by a US court, which dismissed Nigeria’s sovereign immunity defence in enforcing the $70 million investment treaty award. The US court was scathing in its judgment, asserting that Nigeria had “gruesomely” violated the Chinese firm’s fundamental and commercial rights. This ruling has led to the dramatic seizure of three Nigerian aircraft in France—aircraft that belong to the federal government. The seized jets include a Dassault Falcon 7X, a Boeing 737-7N6/BBJ, and an Airbus A330-243, all stationed at Paris-Le Bourget and Basel-Mulhouse airports.

    While initially a dispute between a subnational government and a private firm, this situation has spiralled into a crisis with broader and more severe implications for Nigeria. It raises critical questions about Nigerian subnational entities’ conduct and  the federal government oversight of international contracts.  Can subnational entities enter into agreements guaranteed by sovereign that do not include national assets or support? What level of due diligence should subnational governments observe before they engage in contractual relationship with foreign firms? More importantly, does this case reflect a more profound, systemic issue within Nigeria—a culture that lacks respect for contracts and international agreements?
    The case also casts a spotlight on the perceived weaknesses of Nigeria’s institutions, which need more authority or respect on the global stage.+

    This perception is troubling and raises the question: do foreign investors lack confidence in Nigerian  institutions ? These are not rhetorical questions but rather pressing concerns that demand a thorough investigation and straightforward answers. The implications are dire, as evidenced by this case, which has resulted in public embarrassment for the country and the potential loss of much-needed funds due to poorly negotiated and managed contractual relationship . A thorough investigation is crucial to restore trust and confidence in Nigeria’s international business dealings.

    This situation is not an isolated incident but part of a worrying trend. It calls to mind earlier cases, such as the P&ID arbitration ruling in 2010, where Nigeria was found tardy in a failed gas supply and processing contract. Though this was reversed but it left a scar .  Similarly, in  2019, a UK court awarded an Irish engineering firm $9.6 billion in damages against Nigeria over a failed gas project. In that case, the firm went so far as to instruct its lawyers to identify Nigerian assets worldwide that could be seized to enforce the arbitration award. These incidents paint a troubling picture of Nigeria’s handling of international contracts and the country’s reputation on the global stage.

    The ongoing dispute with Zhongshan Fucheng Industrial Investment Co. Ltd is likely to negatively impact Nigeria’s global standing, especially when the country is desperately trying to attract foreign direct investment. This case highlights the often poorly structured nature of Nigeria’s international contracts, where subnational governments and even private companies have found ways to entangle the federal government in their questionable and often poorly thought-out deals. The result is a further tarnishing of Nigeria’s already fragile reputation. Following the Dangote saga where there is perception that Nigeria could not treat its own businesses fairly ,this is another blow to Nigeria’s global image . The country already suffers from a prevalent negative perception regarding the sanctity of contracts, largely due to inconsistent adherence to contractual obligations. The federal government’s failures to uphold these commitments, particularly at the subnational level, only exacerbate the problem. This disregard for the sanctity of contracts contributes to a growing cynicism about Nigeria as a reliable destination for investment and business. It is crucial to uphold agreements and respect contracts to restore Nigeria’s reputation.

    The symbolism of this saga is still visible to us. Beyond the immediate damage to Nigeria’s national reputation, this incident brings broader issues related to leadership, business ethics, and the sacrosanct nature of contracts. It underscores the importance of continuity in government—where all governments inherit their predecessors’ assets and liabilities and should not cancel contracts arbitrarily. Moreover, this situation highlights the critical need to build solid, responsive, and trustworthy institutions that command respect locally and internationally and can handle the complexities of international business contracts. It is an anomaly that contracts involving Nigerian subnationals or firms and foreign businesses always situate arbitration in foreign lands when local institutions are available and ostensibly capable of fulfilling this role.

    This incident lays bare Nigeria’s leadership challenges and sensitivity to foreign investment disputes. If not resolved diplomatically and swiftly, such disputes could severely jeopardize Nigeria’s diplomatic relations and economic credibility.  I am happy the minister of foreign affairs is rising up to the challenge. The needless dispute between a negligent subnational entity and a private firm, which has dragged sovereign assets into the fray, could strain diplomatic ties between Nigeria and China. Recall that the root of this matter is the bilateral investment treaty signed by Nigeria and China in 2001 and since then we have seen progress in trade and investments on both sides. This recent imbroglio is  particularly concerning at a time when the federal government is expending billions of naira to woo foreign investors. The dispute has cast a stark light on the nature of business transactions in Nigeria, revealing the many dangers they pose to investors, especially when projects collapse or are mismanaged. The potential loss of much-needed funds due to poorly negotiated and managed  contractual relationship   is a stark reminder of the economic impact of such disputes.

    The recurring cases of Chinese companies taking advantage of Nigeria’s open business doors are increasingly worrisome. It is imperative that the federal government, particularly the Office of the Attorney General, take a closer look at international contracts entered by state governments to insulate sovereign assets from exposure. This situation raises significant constitutional questions: does the federal government have the constitutional authority to regulate or even approve contracts entered by subnational entities?
    The ongoing dispute between Zhongshan Fucheng Industrial Investment Co. Ltd and the Ogun State Government, which has now implicated Nigeria’s sovereign assets, is a stark reminder of the importance of upholding the sanctity of contracts and ensuring due diligence in international agreements. The federal government must take decisive action to safeguard Nigeria’s reputation as a reliable investment destination. This includes strengthening institutions, enforcing contractual commitments, and resolving disputes through diplomatic channels. Please government must  address these issues to ensure  good diplomatic relations and  not deter much-needed foreign investment, compromising Nigeria’s economic future.
    The time has come for Nigeria to reassess its approach to international business dealings. This reassessment must focus on restoring confidence among global investors, ensuring that all levels of government adhere to international best practices, and building institutions that are strong, respected, and trusted by domestic and international stakeholders. Nigeria can repair its reputation and safeguard its national interests in an increasingly interconnected global economy by doing so.

    This incident is more than just a legal or diplomatic issue; it is a wake-up call for Nigeria to realign its policies, practices, and institutions with global business demands. The country cannot afford to continue this path of negligence, laxity  and mismanagement. As this case has shown, the cost is far too high—not just in monetary terms, but in terms of Nigeria’s global standing, credibility, and future prosperity. It is imperative that Nigeria learn from this episode, take corrective action, and ensure that such incidents are not repeated in the future. The nation’s economic future and place in the global community depend on it. As for the foreign business sharks that aim to reap off Nigeria’s through dubious business deals  that cannot hold waters, it is time we isolate and deal with them and their Nigerian companions. Convicting some of these criminals will serve as a deterrent to others and help reduce such incidents in Nigeria.

  • From The DNC: Lessons For Nigerian Political Parties

    From The DNC: Lessons For Nigerian Political Parties

    Nigerians’ profound interest in US elections is no mere coincidence. The roots of this fascination lie deep in the historical and structural connections between the two countries’ political systems. Nigeria’s democracy, modelled closely after the US presidential-style system, naturally invites comparisons and draws parallels with American political practices. This connection is further deepened by the increasingly globalised nature of our world, where political developments in one nation can reverberate across continents, influencing governance, policies, and even public opinion in far-flung regions

    In Nigeria, this is particularly evident as US political dynamics, especially in the current digital age where social media amplifies voices and ideas, significantly impact the local political landscape.
    The strong economic and diplomatic ties that bind Nigeria and the United States further underscore the importance of closely observing events like the Democratic National Convention (DNC) and its counterpart, the Republican National Convention (RNC). These events are not just spectacles of democracy; they are pivotal in shaping US foreign policy, which invariably has significant implications for Nigeria. As the US navigates its complex political terrain, the decisions and policies that emerge from these conventions often ripple through its foreign relations, including with nations like Nigeria. In this context, the lessons that Nigerian political parties can draw from the DNC are not just valuable, but they are essential for the maturation and evolution of Nigeria’s democratic processes. These lessons have the potential to reshape the political landscape and inspire positive change in Nigeria.

    Political parties are the cornerstone of any functioning democracy. They serve as the vital platforms through which individual political aspirations are translated into collective action. This process is not just about enhancing electoral competitiveness, but also about ensuring that diverse interests within the society are represented and fostering a culture of political engagement among the populace. These functions are the bedrock upon which accountability and responsiveness in governance are built. For a developing democracy like Nigeria, where democratic institutions are still in the process of solidification, the institutionalisation of party structures is not just important—it is crucial.
    However, Nigeria faces significant challenges in this regard. The political landscape is often marred by a lack of effective party structures, which hinder parties’ ability to stimulate meaningful public dialogue or empower citizens to participate actively in the political process. This shortfall weakens the democratic fabric of the nation, leading to a disconnection between the government and the governed and often resulting in unresponsive governance to the populace’s needs and aspirations. It is urgent that these challenges are addressed, and it is the responsibility of all stakeholders in Nigerian politics to work towards a more inclusive and responsive system.

    Many Nigerians find themselves drawn to the Democratic Party of the United States for various reasons. These reasons range from the party’s historic nomination of a woman of colour, which resonates deeply in a country like Nigeria with its complex tapestry of ethnic and gender dynamics, to a general scepticism towards figures like Donald Trump, whose policies and rhetoric have often been perceived as divisive. There are also religious sentiments at play and an alignment with the broader policies and values that the Democratic Party espouses, particularly in areas such as social justice, healthcare, and immigration. This connection to the Democratic Party underscores why the DNC  is relevant to Nigeria’s political evolution. The convention is not merely a gathering of like-minded individuals; it is a platform where the party’s ideals, strategies, and future directions are showcased to the world. For Nigerian political parties, observing and learning from the DNC offers a unique opportunity to glean insights that can be adapted to strengthen their democratic processes.

    One of the most remarkable moments of the DNC  was President Joe Biden’s decision to step aside in the 2024 race, passing the torch to Vice President Kamala Harris. This decision was not just a political manoeuvre but a powerful statement about leadership and prioritising national interest over personal ambition. This act of selflessness and commitment to the greater good starkly contrasts the behaviour of much of Nigeria’s political elite, where prioritising personal and group interests over national ones is often the norm.
    Former President Olusegun Obasanjo has been vocal in his criticism of Nigeria’s leadership, describing it as plagued by self-centeredness—a significant impediment to the nation’s development. In Nigeria, political elites often wield power through political patronage and economic dominance, manipulating public opinion to align their interests with those of the country. This manipulation creates a dangerous dynamic where policies reflect the interests of the elite rather than the nation’s true priorities, leading to a disconnect between the government and the people. In this context, few Nigerian political leaders are willing to sacrifice their ambitions, even when they conflict with the common good. Biden’s decision to step aside offers a powerful example of what it means to lead with integrity and a focus on the nation’s collective well-being.

    The DNC  also highlighted the importance of unity and inclusivity in the political sphere. Despite internal differences and varying perspectives, all significant DNC members rallied behind Kamala Harris, presenting a united front. This unity was notable not just for its existence but for the way it transcended the divisions that often characterise political gatherings. There was no emphasis on Harris’s gender or race, no factionalism between “technocrats” and “professional” politicians, and no divisive rhetoric around religious affiliations. This starkly contrasts Nigeria’s political elite, who frequently exploit the country’s rich diversity;ethnic, religious, gender,  and social status—to advance their agendas. This exploitation often leads to feelings of exclusion and marginalisation among various groups, weakening the social fabric and undermining the potential for a unified nation.

    Another critical lesson from the DNC convention is the importance of consistency in policy positions. Vice President Kamala , in her address, clearly articulated her stance on a range of issues, including healthcare, housing, abortion rights, foreign policy, and the economy. The Party’s leading figures maintained a consistent and coordinated stance on these issues, united by a shared vision and policy goals. This consistency is crucial in a functioning democracy, as it provides voters with a clear understanding of what the party stands for and what they can expect if it comes into power.

    In stark contrast, Nigerian political parties often lack well-defined ideological beliefs and are instead defined by the personalities that dominate them. This absence of a coherent philosophy leads to frequent shifts in party allegiance, resulting in internal conflicts and inefficiencies in governance. Rather than focusing on meaningful policy dialogue, Nigerian political parties often operate within a patron-client framework, where loyalty is bought and sold and where policies are shaped not by the needs of the people but by the whims of influential individuals. This system stifles democratic processes and undermines effective governance, making it difficult for the country to move forward in a cohesive and coordinated manner.

    The DNC and RNC conventions also underscored the importance of respecting past leaders and celebrating the nation’s history and heroes. Both conventions paid homage to past presidents, civil rights leaders, and other figures who have shaped American history. This respect for tradition and the achievements of those who came before is a hallmark of a mature democracy. It reflects a commitment to continuity and recognition that the past provides a foundation for the future.
    In Nigeria, however, the narrative is often quite different. Successive leaders frequently seek to undermine their predecessors, showing little respect for the accomplishments of those who came before them. This attitude weakens the nation’s institutional memory and hampers efforts to build on previous successes. Current Nigerian political leaders often want to be seen and treated as demigods, believing their contributions are unparalleled and their legacies should overshadow those of their predecessors. This mindset stifles political progress and continuity, as each new administration needs to start from scratch rather than build on previous governments’ work.

    Finally, the DNC convention showcased a strong commitment to the peaceful power transfer to a new and younger generation of leaders. This was not just a rhetorical commitment; it was evident in how the convention provided a platform for young leaders to speak, presenting themselves as the party’s future. This is reminiscent of Obama’s 2004 DNC speech, which propelled him to national prominence and made his candidacy viable. The DNC’s approach to leadership transition reflects an understanding that the nation’s future depends on empowering the next generation and providing them with the tools and opportunities they need to lead.
    In Nigeria, however, the situation is quite different. Despite a youthful electorate,older politicians continue to dominate the major political parties. Patronage systems, which fuel entrenched interests, control these parties, preventing young people from playing significant roles beyond being tools for violence during elections. The failure to meaningfully involve young people in the political process deprives the country of fresh ideas and energy and perpetuates a cycle of stagnation and underdevelopment.

    Ultimately , the DNC offers a wealth of lessons that Nigerian political parties would do well to heed. These lessons are not merely theoretical; they are practical steps that, if implemented, could lead to a more vibrant, responsive, and effective political system in Nigeria. By adopting these practices, Nigerian political parties can play a pivotal role in the consolidation of democracy, ensuring that the nation’s political system is not only resilient but also reflective of the will and aspirations of its people.