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TAX REFORM BILLS :TIME TO KILL THE PROVERBIAL COW
By: A G Abubakar
As the heated debate on Tinubu’s tax reform and the inherent derivation-based sharing principles of the VAT and related accruals ensues, it would be interesting to play the role of the devil’s advocate. Leaving experts, legislators and opinion leaders to pore over the technicalities, iniquities, and mechanics of the said bills.This position is by no means based on the merits or otherwise of the proposed reform itself, but rather on the understanding that the status quo has not worked for the ordinary man in the region.The North has been having a raw deal at the hands of its leaders over the past decades. Yes,things may get worse, with reduced access to the shareable at Abuja, but maybe that’s what was needed as a wake-up call for Northern politicians and opinion leaders in general. So let the shareable dry. Necessity, they say, is the mother of inventions/creativity.
Maybe, with emotions still running high, it was time to rave up work on Plan B; a holistic, binding, and workable Regional Transformation agenda for the whole North. Access to “cheap” Abuja funds has engendered dependency syndrome among many states in the region. Some forgot that the dependency phenomenon at times carry an expiry date. The ongoing tax reform could just be one of those times and also a harbinger of more difficult and troubling times to come. The North needs to start looking inward as it goes for equity at the center. No nation and indeed society gets ahead with developmental strategy that is largely based on palliative and political patronage. Or by getting people fitted into the life of deprivations due to dwindling volumes of the shareable. The approach should be jettisoned or even killed sooner A parable by Paul Simos, titled “Kill the Cow” may underscore this seemingly harsh inclination. And, not to reduce its full essence, the parable is hereby reproduced in verbatim.
Kill The Cow
A family lives on the outskirts of a small village on a plot of land. The family owned one cow. Each day, they lived on the milk of the cow. If there is little milk, they eat little. If there is lots of milk, they eat well. The life of the mother, the father, and the children depend on the cow.
One autumn, a lone traveller stops at the village. He is hungry. The family shared their milk. The traveller is grateful.
The traveller wishes to return the favour and help the family. He doesn’t know how to help the family. He hears that there is a wise man in the village. He walks over to the house of the wise man.
“I was hungry, and the family fed me. I would like to help them. How can I help this family?”
“The wise man said, “Kill the Cow. “
The traveller was nervous following such strange advice, but the reputation of the wise man was such that he went ahead and killed the cow.
A year later, the traveller happened to pass again through the village. He noticed new shops and a thriving market. He saw a new hotel that provided food to travellers who came for the market.
The traveller entered the hotel. Behind the bar, he found the eldest son of the family of the cow. The man was standing tall, smiling, and happy. The traveller greeted him and asked, “What happened?”
“We lost our cow. There was no milk.we had to go out and do something to eat. We set up a small market, and it grew. We set up this hotel, and it is growing. Without the milk from our cow, we had to try new things.”
Silently to himself, the traveller reflected on the power of the wise man’s words.
“Kill the cow.”
A Question Of Governance, Not Opportunities
The North may need to have its cow (VAT, FAAC, etc) killed before it can “try new things” within the context of its extensive potentials. It would however take good governance and accountability, which has been in short supply for decades, to get things turned around in most of the 19 states in the North.
1.Adamawa state warehouses one of best lands for both arable and livestock farming. The soil is rich and water in the Benue river last all year round in parts. The presence of the Nigeria’s premier sugar company, the Savannah Sugar Company, the Sebore Farms owned by former governor, Admiral Nyako (rtd) and the Ngurore Cotton Farms are testaments of Adamawa’s agricultural prowess. The Sebore Farm remains one of the earliest and foremost large scale private agricultural initiatives in Nigeria.
Adamawa, too, has a long contiguous border with the Republic of Cameroon where livestock activities thrive very well. Cross border trade between the two neighbours through Mubi, Marwa, etc, has been enormous for decades. After all, the present Adamawa Emirate border extends to parts of Northern Cameroon. The Lamido of Adamawa remains the paramount traditional leader of both sections. Cross border trade if streamlined can be a game changer for Adamawa state economy. It will however need a holistic strategy, backed a generous political will to this laudable goal.
2.Taraba state* can compete for the title of being “nature’s gift to the world” at least the Nigerian world, in view of its awe inspiring climatic and topographical contrasts, making it conducive for a wide range of economic activities. For instance, Taraba’s climate is almost temperate on the Mambila plateau and hot and humid in the low land areeas. The famous Highland Tea brand. The Mambil Plateau also boasts of cultivating crops like apple and cherry thrive very well.
The topography and geomorphology also support hydro-powered economic activities, including electricity generation, irrigation farming, and dairy production, on industrial levels. The corruption ridden Mambila Power Project initiated by the Federal Government is located in Taraba State.
The area of Taraba bordering Benue state is a prime land for the cultivation of yam. The availability of abundant war and pastures make state highly conclusive for livestock rearing. Infact the state’s livestock base is capable of supporting and large scale daily industry that can be a huge revenue earner. The underbelly of the Taraba highlands are equally loaded with a wide range of solid minerals being currently appropriated by illegal miners. However, to leverage these opportunities, there will be need to create an enabling policy environment and the political will to drive the process.
3.Borno State shares borders with three countries, namely, Cameroon, Chad, and Niger. Before the Boko Haram crisis, multi-million dollar worth of businesses were transacted daily with towns like Kirawa, Pulka, Malam Fatori, and Gamboru-Ngala, being the epicentre. The famous Chad Basin agricultural programme provided the needed backstopping services to the state’s agricultural sector along with the Borno State Agricultural Programme (BOSAP).
During the state’s past periods of peace, it ranked high in the production of wheat, millet, melon, groundnuts, cotton, etc. The Yau Agricultural Project in Abadam, in the Lake Chad basin in the 50s. Baga was an international fisheries centre equipped and supported by government with a training school and boat building facilities in the 70s and 80s.There was a cotton ginary in Biu owned by British Cotton Ginary (BCG) Ltd and run by Nigeria Cotton Board. An oil mill for processing groundnut and cotton seeds operated in Maiduguri.
In addition, there was a vibrant and strong livestock sector producing dairy (Gidan Madara), as well as hides and skin and providing employent opportunities in allied businesses. Borno’s economy was really on upswing but no more.These and similar initiatives could be revived to make Borno great once more.
4.Yobe State has constituent parts that used to be famous for the cultivation of groundnut and grains. The Nguru Oil Mills readily comes to mind. There was also the Nguru meat processing facilities in the town where hundreds of cows were slaughtered daily and the meat refrigerated and containerised for distribution to other parts of the country by rail. Some more were packaged for export, to earn foreign exchange in the 60s.
Potiskum and Fika Emirates and parts of Gujba were renown grain zones. Ngalda and Potiskum grains and livestock markets still keep the legacy. The Bade flood plains can support modern fish farming and potash-based fertiliser production. Yobe State has widespread deposits gypsum across parts of the state. The deposits are yet to be harnessed properly as the operations are dominated by illegal miners, with the output usually consumed by the neighbouring Ashaka Cement and others.
With enormous sunshine has the potential to be a solar energy and also an ICT development hub. It’s a quite and laid back environment. An appropriate policy in that direction has the capacity to transform state in the near future.
5.Gombe State, then Gombe Emirate was the location of one of the earliest irrigation projects in the North, called the Khayasi Farms. Its operations were along the Dadin Kowa river where fruits, vegetables and tomato were cultivated on a mechanised scale all year round. A tomato puree and mango juice factory called Vegfru was established at neighbouring Jauro Garga Town in then Biu LGA to process and can the farm produce. The Gombe cotton ginary was also a famous one.The Khayasi Farms may have gone under but the water body is still there, being utilised for electric power generation.
Gombe along its boarder with Borno (Biu), to their east, lie uranium deposits. It also shares in the crude oil finds along its western border with Bauchi in the Kolmani basin. The state has an extensive gypsum deposits too that has been feeding the famous Ashaka Cement factory. These are huge opportunities waiting to be harnessed to make Gombe state more viable
6.Bauchi State is home to Yankari, one of the premier tourist destinations in Nigeria. In the past, it attracted both international and local visitors, thereby boosting the state’s economy. The state currently boasts of huge gypsum deposits around the Alkaleri and Kirfi axis. With the discovery of oil along its border with Gombe, oil-related businesses are bound crop up and thrive in the state as a whole.
The agricultural activities along the Hadeja-Jama’are River Basin catchments in Northern Bauchi has for long been a major contributor the state’s economic health. The discovery of oil could be an added impetus.
With the right attitude Bauchi’s economic future shall certainly be great.
7.The Plateau State holds the honour of being the largest producer of iron ore (Kuza). The rise to prominence of its capital, Jos, was to a large extent attributed to the minning activities on the Plateau. The potential is very much still there. Plateau’s near temperate weather has made the state conducive for potato, “acchcha,” apple, and fruits cultivation on a large scale. Aside agriculture, tourism has been a huge earner of resources for the state until insecurity undermined it. Plateau State’s solid mineral potentials along with agriculture and tourism should be able to launch launch launch it into reconing, economically, given the needed political will and an appropriate policy framework. The glory of the Nasco Industry, the JIB, the Jut Bag Industry, etc, may yet be back.
8.Narasawa State is endowed with huge varieties of solid mineral resources, just like its next-door cousin, Plateau. Thus, Nasarawa state goes by the mantra, the “Home of Solid Minerals.” Aside minerals, the state is blessed with huge arable land that also qualifies it to take place among the food baskets regions in the North. Crops like maize, yams, rice, and sugarcane are heavily cultivated. The Dangote Group recently showed interest in undertaking large-scale agricultural production in the state. The success of Nagari Farm owned by Adamu Abdullahi is further proof of Nasarawa’s agricultural potential. The state’s proximity to Abuja, the Federal Capital, has had a huge impact on its economy via border towns like Mararraba, Nyanya, Masaka, Kuru, Keffi, etc. It only requires a little more commitment and right policies to strengthen the state’s economy.
9.Benue State undoubtedly remains one of the major contributors to the nation’s food requirements. It is the largest producer of yams. Yam markets like Zaki Biam and Katsina-Ala are well known both nationally and internationally as yam centres. Having derived its name from the famous River Benue, the state enjoys a huge capacity for the cultivation of palms, cassue, oranges, mangoes, and bananas too. So huge is the outputs that are traded outside Nigeria especially in the West African region. The agricultural sector in Benue state actually gave rise and sustained the famous Taraku Oil Mills before it went under. The state equally owned and a success of the Benue Cement Company, Gboko, before being acquired by the Dangote Group. With the right mindset, things can get right again.
10.Kaduna State ordinarily should have no business with deprivations. It is the successor entity/centre to the defunct Northern Region. The state, aside being the most cosmopolitan, inherited a huge stock of industrial base, physical infrastructure, and top security installations/institutions like the NDA, Staff College Jaji, DIC, Air force Base, Police College, etc.
In the areas of manufacturing, over fifty per cent of the textiles industries in the North are based in Kaduna. The state is also home to the Peugeot Car Assembly plant, now acquired by Dangote. Neighboring, Zaria City, too, used to host the defunct Nigeria Electricity Meter Manufacturing Co Ltd.
The land supports a wide range of crops ranging from ginger in the South (Kafanchan, Zonkwa, Kaura, etc) and grains in the Saminaka, Soba, Zaria, Giwa, Birnin Gwari zones. Tubers like yams, cassava, and potatoes are also cultivated on huge scales across the state. With a little push, imagination, and right policies, the economy of the state can get the right shot on the arm.
11.Niger State, like Kaduna, is rich in agriculture. It also enjoys the economies of the River Nigeria that houses both Kainji and Shiroro hydroelectric power installations. The state’s mantra fact is the “Power State.” Revenue wise, the state enjoys some derivation through the HYPPADEC to mitigate environmental challenges.
Fisheries and shea butter oil production are feasible activities among the communities living along the rivers. The potentials here are enormous though largely untapped. The upland areas of Kontagora, Mokwa to Badeggi support cultivation of both food production and cash crops like maize, guinea corn, yams, and rice. Badeggi, in Niger state, is the headquarters of the National Cereals Research Institute (NCRI economy, too.
With places like Madalla, Suleja, and Tafa being part of the Abuja conurbations, economic activities in such areas like housing, transportation, hospitality and other micro businesses have the potential to boost the state’s economy tremendously. It will however require a well thought out policy, and resilience on the part of the government to achieve it. But its doable. Moreso with two Big Brothers watching over former heads of state, Babangida and Abdulsalami. The latter’s Maizube Farms should serve as a model for local livestock farmers.
12.Kogi, the “Conference” State is the meeting point of the two iconic rivers that traversed the centre of Nigeria. These are the Niger and Benue. The two met at Lokoja, the Kogi state capital, before journeying to the Niger Delta region and, eventually, to the Atlantic Ocean. This made the state rich in fisheries and also agriculture. Palm oil production is a huge business in Eastern Kogi.
Aside agriculture that state is also rich solid minerals. It has huge deposits of coal in the Ankpa zone, that is now being illegally mined. Kogi state is host to two largest ventures ever undertaken in the nation’s developmental history before the Dangote Refinery, in Lagos recently. These are the multi-million dollar Ajaokuta Steel Company and the Dangote Cement at Obajana. While the steel venture is owned by government, Aliko Dangote owns the cement company. There is the Okene handwoven cloth that can compete with the Ghana “kente” even in the international market. A more appropriate policy measure will leverage enormous economic transformation.
13.Kwara state has the benefit of being a meeting point of culture and tradition, just like neighbouring Kogi. The old Western Region has had had enormous impact on Kwara in terms of manpower development and entrepreneurial spirits. The Adedoyins and Folawiyos, (in the realm of business), the Saraki and AbdulRazak as technocrats and professionals provided impetus for Kwara State’s development and the capacity to tap its natural resources. Kwara is endowed enormous agricultural potential, with the existence of Bachita Sugar Company, Jebba Paper Mills, and Shonga Farm project as testaments. Given a little more political will, the socioeconomic landscape of Kwara would change for the better. A dose of prayer from powerful men of God, like Bishop Oyadepo, the General Overseer Oyadepo of the Living Faith Church International (Winners), and a “son of the soil” from Omu-Aran, would also serve as a spiritual reinforcement measure.
14.Kebbi State qualifies as a food basket and agricultural hub, too. The Kebbi rice and onions are well known across the country. Buhari’s Anchor Borrowers programme was launched in the state. The Alero zone in Kebbi State is the largest producer of onions in Nigeria and indeed West Africa. The Yawuri-Zuru axis is a maize and other grains production zone.The prowess of Kebbi State attracted the attention of the current government and the immediate past one to use the state as a model/pilot for the federal government’s rice initiative.
The towns of Jega and Kamba are also well-known commercial centres beyond Nigeria. The former arguably holds the record for housing the largest concentration of businessmen in the defunct Sokoto state, with the exception of Gusau. Kamba border market and Customs Point promotes huge volume of international trade with the republics of Benin and Niger. The cross border activities impact the local economy greatly. The Argungu fishing festival remains one of the premier tourist events and a revenue source, as well. A modicum of appropriate reform and and a modicum of political willpower shall make a huge difference in moving the state forward.
15.Zamfa State has been in the news for both good and bad reasons. Good that its gold deposit is attracting positive attention. Bad that it has, among other factors, brought about a debilitating security challenges. Gusau, the state capital, was a major commercial and industrial centre during the time of the Sardauna, Sir Ahmadu Bello, the premier of the old Northern Nigeria. The Nigerian Railways’ western-line passed through Gusau to Kaura Namoda, a development that stimulated enormous commercial activities in the area. It impacted the local economy for decades.
Such industries like the famous Zamfara textile, Gusau oil mills, and hides and skin made Zamfara tick. Currently, the state ranks among top producers of gold in Nigeria, the bulk of which is mined illegally. The security challenges in the state and the nearby regions are believed to be partially fuelled by the illegal mining activities. A little bid of streamlining and containment could go a long way in changing the economic fortunes of the state.
16.Sokoto state may be facing ecological challenges, but agriculture and livestock still thrive well well. The efficacy of the Rima Basin Development Authority is there to be replicated. The Basin itself is also believed to seat on crude oil. Huge deposits of gypsum are as well found in Sokoto state. The findings actually influenced the establishment of the first cement company in the North the defunct Sokoto Province, namely, the Cement Company of Northern Nigeria in the Kalambaina area.
Like its other fourteen counterparts in the North, Sokoto State has an extensive international borders with Niger Republic. Millions of naira worth of goods and services traded daily, across the said borders but with little accountability. A lot of income could be harnessed by government under a given right policy environments, are diverted systematically by private interests.
17.Katsina state state has two distinct ecological zones that support different types of agricultural activities. The Funtua zone is the wetter part where large-scale farming thrives. Cotton production was a major cash crop that led to the establishment of textiles and allied ventures, which impacted the local economy enormously. The central and northern tips of Katsina are semi-arids, where livestock farming is a big vocation.
A steel rolling mill was established in Katsina in the early 80s, though moribund now. Katsina state has long border with Niger Republic to the north, with Jibia and Mai’adua being the most vibrant crossings. The border economy contributes positively to the state’s economy but for the challenges of accountability.
Incidentally, Katsina is the only state in the North that produced two former heads of state and a second in command, namely, Buhari, Umaru ‘Yar Adua, and Shehu MusaYar Adua respectively. The Katsina College equally produced most of the early technocrats that ruled the North under the Sardauna. With these rich pedigree a good policy strategy could spur Katsina towards to socioeconomic glory in a short time.
18.Jigawa state shares a similar ecological outlook with Katsina and Kano. The state experiences enormous rains in the southern part around Birnin Kudu and a lesser spell in the dry Sahel zones of Kazaure, Maigatari, Hadeja, and Gumel. Livestock thrives well in the latter, while arable farming is a big business in the former . Two former governors of Jigawa, namely Saminu Turaki and Sule Lamido, experimented with three projects that have the potential to transform the economy of the state but somehow got bogged down. Two of them, rain harvesting and ICT development, seemed to be ahead of their time. They were initiated by Turaki. Lamido introduced early maturing varieties of date palm. Jigawa state today remains one of the biggest producers of date (dabino) in the country, among other agricultural outputs. With a more appropriate policy framework, the state can transform itself in the shortest possible time, especially with Kano State as a source of market next door.
19.Kano state remains the commercial capital of North. It was a historic centre of trade centuries ago and still keeps the flag flying. Kano commands 60 per cent of manufacturing activities in the heyday of the North. The famous Bagauda textiles, the Groundnut prymids, the Raleigh Bicycle Manufacturing, the Fiat Trucks Assembly plant, the Bottling companies etc underscore Kano’s industrial prowess. The southern part of the state, has been determined to house uranium deposits in commercial quantities. Kano may therefore soon become a solid minerals producing state aside being an industrial hub.
Kano’s irrigation system is a model for dry season farming across the entire North. This is facilitated by a network of dams and canals where the bulk of the nation’s tomato, onion and other vegetables are produced all year round. The Hadeja-Jama’are River Basin Authority leverages Kano’s agricultural strides and complemented by private investors like the Anadariya Farms in Bebeji.
The icing on Kano’s leading position as industrial and commercial power was the emergence of two of its sons as the first two richest people in Nigeria. Dangote and Abdulsamad of BUA are estimated to have a combined total wealth in excess of $20 billion! Though Kano might have lost some of its glory, in recent times, but with the right policy framework and environment, the state has the potential to be great again and also lead other sections of the region along, in industrialisation terms.
Business Can Not Continue As Usual
The above is a bird’s eye view of the 19 states that constitute the North – a region where 10 out of the 15 heads of state come from. A zone that houses over 120 people with unquantifiable potential in terms of both human and natural resources, that include 74% of the nation’s landmass with 70 million hectares of it arable, according to FAO The North is also home to 90% of Nigeria’s 156 million herds of cattle.
Paradoxically, the largest dairy farm in Nigeria is in Odeda Ogun State and many others in Oyo State, areas traditionally not known cattle farming. The Lagos State government, too, has established Lagos Food Security System and Logistics Hub for major food processing, storage, and distribution. Located at Ketu-Ereyun, Epe LGA is believed to be the largest in Sub-Saharan Africa.
The North couldn’t leverage on it’s comperative advantages effectively, thus reducing the region to a shadow of itself. And now found itself locked in an “existential” threats, posed by a possible reduction in FAAC allocations. Maybe it’s time to kill the cow.
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The changing face of Nasarawa at 30
BY VICTORIA NGOZI IKEANO
victoriangozii@gmail.com 08033077519
Some 26 years after Nigeria’s Independence, a state named Nasarawa in the old northern region now in north central zone of Nigeria was established by then Head of state, General Sani Abacha. Nasarawa thus, shares same birth day as Nigeria, October 1. While Nigeria at 66 is a full, grown-up adult that is heading towards being an elder, Nasarawa state is now a young adult, well past adolescent age. The state itself is maturing gradually. Recall that time was when Lafia its state capital used to be referred to as a ‘one street capital’, defined by the very long stretch of Jos/Makurdi road. Before the state came into being, Lafia, was a sleepy city renowned more as a transit stop for long distance travelers and as a food market (melon, rice, yam, etc.) for big-time traders from especially the eastern part of our country. Then on October 1, 1996 it suddenly found itself bestowed with the status of a state capital; the responsibility seemingly heavy for it’s apparently naïve shoulders then. Findings showed that Akwanga which was considered more cosmopolitan at the time, was to be named the state capital but that General Sani Abacha brought his primordial links to bear in selecting Lafia for the prized crown. Whatever it is, I think the choice of Lafia is not misplaced because there is more value-added when a virgin or semi virgin land is developed than one that is already on the development highway.
Nasarawa state shares boundary with the Federal capital territory (FCT), Plateau, Benue, Kogi and Taraba states. It was carved out of Plateau state. Before then it was part of Benue-Plateau state. It was one of the six states established by late General San Abacha from Nigeria’s six zones on that fateful day of October 1 ,1996 while delivering his 36th Independence Anniversary speech. Others are, Ekiti (South West), Ebonyi (South East), Bayelsa (South South), Gombe (North East) and Zamfara (North West). Wing Commander Abdullahi Ibrahim superintended over the new state in its early years. On May29, 1999 Nasarawa got its first democratically elected governor in person of Alhaji Abdullahi Adamu, Turakin Keffi. The sole administrator’s main task was setting up administrative machinery for the new state. Notable is his construction of the Government House on Shendam road. This was later completed by then Governor Adamu enabling him to depart the two bedrooms flat at the presidential lodge that had served as his office. Over the years Nasarawa’s Government House which serves as both residence and office of the governor has undergone some touches and additions by the various administrations on its expansive land. It now accommodates a 1000-capacity banquet hall named after its second civilian governor, late Aliyu Akwe Doma. There is also now a Press Centre mainly for correspondents covering Government House activities, guest rooms, etc.
Each of the succeeding governments after the military administrator did the best as they could, adding their own unique building blocks to the now 30 year-old edifice called Nasarawa. Abdullahi Adamu laid the foundation stone. His efforts are most noticeable in construction of rural roads and education sector. Some 30 years ago, Nasarawa state had no institution of higher learning save the College of Education, Akwanga, inherited from old Plateau state. Alhaji Adamu (later Senator) established the Nasarawa state Polytechnic (now Mustapha Agwai Polytechnic) College of Health Technology, School of Nursing and of course, Nasarawa state University. There have been additional tertiary schools since then. Among them, the Federal Polytechnic (to be converted to Federal Institute of Mining Technology), Federal University, Lafia (FULAFIA). Federal University Teaching Hospital. Unlike all other governors that completed two terms, late Alhaji Aliyu Akwe Doma who took over from Adamu spent only one term. Nevertheless, he made a mark with especially his Badakoshi programme in which Nasarawa state was exporting yams to foreign lands, notably United Kingdom, thereby boosting the state’s agricultural sector.
Enter Governor Tanko Al-makura (later Senator) after Doma’s time. Alhaji Al-makura opened up the state’s capital with infrastructure, especially roads, giving Lafia a semblance of a capital city. The modernization of Lafia started with him. Current governor, Engineer Abdullahi Sule, a former managing director of Dangote Sugar company is taking Nasarawa state to the next level which is industrialization. In this connection he has attracted some industries to Nasarawa state, particularly in areas where the state has comparative advantage, namely agriculture. As a state that is endowed also with solid minerals (from where it derives the name, ‘Home of Solid Minerals’) Governor Sule is now turning attention to this sector. His legacy project here is the lithium factory built by investor. It is said to be the biggest in Africa and is yielding the government humongous amount of money in revenue. Indeed solid minerals a.k.a. rare minerals, is the future ‘black gold’ that would replace oil which is now gradually losing its importance as nations seek for cleaner energy. Lithium is used for the new technology of the 21st century as for example, chips of smart phones that are constantly evolving. Thus, states that are rich in various mineral deposits shall rank amongst the richest in future. Quite a number of states in northern Nigeria are so blessed. But the challenge is getting capable investors that would exploit these rare minerals for commercialization. And Governor Sule has set a precedent in this direction with establishment of the first and biggest lithium factory in Africa. Nasarawa’s landscape is changing from a mainly civil service state to one that is becoming an industrial hub with accompanying hustle and bustle of a thriving state.
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OPINIONThe Disturbing Facts Behind the Economy’s Beautiful Statistics and the Path Forward.
By: A G Abubakar
“Subsidy is gone!” So thundered Alhaji Bola Ahmed Tinubu at Eagle Square immediately after being sworn in as President of the Federal Republic of Nigeria on 29th May 2023. The terse declaration was intended to bring an end to one of the nation’s major cesspools of corruption. Months later came the unification of the various windows of foreign-exchange administration, where impunity, arbitrage and political patronage had held sway for years. That unification, in practical terms, meant the devaluation of the naira. About a year later, a new tax regime was introduced, ostensibly to expand the government’s fiscal space and strengthen its revenue base.
Taken individually and in principle, the three reforms are difficult to fault. They address deep structural distortions that have weakened Nigeria’s economy for decades and created enormous opportunities for rent-seeking, arbitrage and systemic corruption. But economic reforms, however necessary, are not self-executing miracles. Even sound reforms can produce severe and unintended consequences, particularly hyperinflation, joblessness and mass disillusionment, when they are poorly sequenced, inadequately cushioned or implemented without sufficient regard for the productive capacity and welfare of the population.
A reform process is like agriculture. Practitioners know that it is not enough to plant early-maturing, high-yielding seeds and expect a bumper harvest. The whole exercise has to be preceded by land preparation, the acquisition of the right fertiliser and chemicals, and a modicum of good luck—weather and rainfall—from Mother Nature. Otherwise, a potentially high-yielding seed planted in an unprepared field can still produce a disappointing harvest. The same principle applies to economic reform.
Removing subsidies, unifying the foreign-exchange market and expanding the tax base may correct serious distortions, but they do not, by themselves, create food, jobs, productive industries, affordable energy, secure livelihoods or purchasing power. Those outcomes require the productive economy to be strengthened alongside the reforms. Otherwise, the immediate burden of adjustment, such as galloping inflation, can become much heavier than the economy’s capacity to absorb it. Containing inflation and the effects of devaluation in a low-productivity economic environment is one of the hardest policy-management challenges in an economy.
Inflation, in an economy already suffering from weak productive capacity, does not merely raise prices. It erodes purchasing power, destroys savings, increases the cost of survival and pushes millions of people closer to the economic precipice. The problem becomes even more severe when rising prices are accompanied by declining production, high energy costs, currency depreciation and weak household incomes.
The situation is then compounded when the authorities, in an attempt to contain inflation, tighten the money supply through higher interest rates. While such measures may be intended to moderate demand and stabilise prices, their immediate effect is to increase the cost of borrowing, making investment more expensive and, in some cases, virtually prohibitive. Businesses that would otherwise expand production are forced to scale back, postpone investment or close altogether. Productivity consequently suffers, employment opportunities shrink, and the economy becomes even less capable of producing the goods and services its growing population requires.
The usual temptation is to fill domestic production gaps through massive imports. But this, too, places even greater pressure on scarce foreign exchange while simultaneously making local production less competitive and less attractive. The vicious cycle is thereby reinforced: currency depreciation raises the cost of imported inputs and finished goods; high interest rates suppress investment; weak domestic production increases import dependence; import dependence intensifies demand for scarce foreign exchange; and the resulting pressure on the currency pushes prices even higher.
The economy consequently becomes trapped in a cycle in which the very measures intended to restore stability can, in the absence of corresponding increases in production, deepen the pressures facing households and businesses. When these forces are allowed to play out without restoring the critical balance, citizens’ well-being takes the greatest hit: food, transport, housing, healthcare and education become increasingly difficult to afford.
This calls for an elaborate blueprint for safety nets, which is literally the first law of reform. Metaphorically, tents are mounted before the rain starts falling. And the reasons are obvious: reforms usually throw up unintended consequences faster than the antidotes to contain them. On account of time lags, economies normally take time to absorb the shocks created by reforms.
The government has not acknowledged this reality sufficiently. Instead, it has developed a penchant for rolling out statistics to rebut any opinion to the contrary. Functionaries have been too eager to cite improved foreign reserves, rising GDP growth, falling food inflation, increased FAAC allocations to states and even access to NELFUND. And lately, the improved figure for Foreign Direct Investment (FDI) into the country. The truth is that these achievements have not been felt by ordinary citizens. And for some obvious reasons.
The increase in foreign reserves above $54 billion, the highest since 2008, has not been achieved through improved domestic productivity or exports. It has been driven largely by external borrowing and fortuitous developments in the oil market. Records from the DMO indicate that Nigeria’s external debt rose from $45.98 billion to $51.90 billion in 2026, a net increase of $5.92 billion. The war in Iran, too, has pushed oil prices above Nigeria’s budget benchmark of $64.85 per barrel to around $100. The positive difference represents a “windfall” that has improved Nigeria’s external reserves without a corresponding rise in non-oil production. It is like a lottery. Economies are never sustainably run on lotteries.
The GDP growth at 4.43% is equally impressive, but it could just be “paper growth” because it has not translated into a general improvement in citizens’ well-being. It is common to have “jobless growth”—a phenomenon in which growth is concentrated in high-tech sectors or services rather than in industrial production, manufacturing or agriculture. These productive sectors are the major drivers of sustainable economic growth. They provide job opportunities for millions, create wealth and boost exports. This has not been the case with Nigeria’s GDP growth.
Falling food inflation is a welcome development at any time. It becomes a challenge when it is driven by imports. It is on record (CBN, NBS) that between 2024 and 2025, the government imported N6.58 trillion and N6.65 trillion, respectively, worth of food items, particularly grains. While the importation has forced prices down, it has inadvertently discouraged local production, the level of which was already down because of insecurity in most farming communities. This has triggered a fear of hunger, which Mr President had cause to say has been with us since before he was born.
The NELFUND is a good initiative in unqualified terms. The figure being bandied about—that more than a million students have benefited from the scheme—is impressive. But the finer details may indicate a different story. For communities dealing with low school enrolment, such as in the North, where about 16 million are out of school, or poor communities having to deal with poor educational performance, the immediate challenge may not be student loans. It is about putting education on the right footing. NELFUND, for now, could largely benefit the privileged who ordinarily could afford tuition.
Then comes the issue of enhanced FAAC allocations to the states, which may have accrued from tax reforms, improved oil revenues, savings from subsidy removal and other measures. Great as these initiatives have been in improving the government’s fiscal health, the paradox is that inflation arising from currency devaluation has eaten away almost 70% of the value of what is being allocated.
To put it plainly, the naira has lost around 70% of its value against the dollar. State governments are, therefore, now paying multiple times what they used to pay for the same goods and services before the devaluation. The increased FAAC is like adding water to a soup to serve more guests, and still insisting that the taste has improved too.
As for FDI, Nigeria recorded an improved level in the first quarter of 2026, to the tune of $10.37 billion in capital importation. Unfortunately, more than 95%—over $9.85 billion—was portfolio investment. Records indicate that more than 98% of the said portfolio inflows went into money-market instruments, including Treasury bills and government bonds. While such inflows can provide foreign exchange and temporary liquidity, they are inherently more mobile than direct investment. Nigeria needs more foreign capital, but that which a greater proportion should be stable, and long-term to expand productive capacity, creates jobs and strengthens the real economy.
As things stand, the reforms actually call for further reforms to make their outcomes more impactful. The path forward should start by reviewing some of the prescriptions of the neoliberal Bretton Woods institutions (WB/IMF) that emphasise spreadsheet balance over public well-being. The next necessary actions include repossessing aspects of the energy sector, stepping up the war on corruption, optimising the reinvestment of subsidy savings into job creation, and providing sustainable support for the MSME sector.
The 2012 privatisation of aspects of Nigeria’s electricity sector has not worked well. Apart from its abysmally low transmission of about 5,000 MW for a population of over 230 million, the Nigerian power sector is structurally inefficient, operationally constrained and unnecessarily burdened by a maze of encumbering regulatory and institutional arrangements. The transmitted volume is actually less than that of some single cities, such as Beijing (China), Tokyo (Japan), Delhi (India) and the like.
First, the gap between the estimated 12,000 MW or more generation capacity and the roughly 5,000 MW wheeling volume means that more than half of the available generation capacity is either stranded, constrained or otherwise unavailable to consumers. Second, the TCN’s transmission loss factor (TLF), at 7.96%, exceeds NERC’s regulatory threshold of 7%. Third, and more troubling, is the DISCOs’ Aggregate Technical, Commercial and Collection (ATC&C) loss rate of 37.44%, more than twice the regulatory target of 16.92%.
These have inflicted enormous financial losses and severely diminished economic opportunities, with far-reaching consequences for the productive capacity of the economy and the acceleration of its deindustrialisation.
The institutional architecture itself adds another layer of complexity. The sector involves a cacophony of stakeholders and institutions—including the GenCos, TCN, NISO, DISCOs, NERC, NBET, NEMSA, the ECN, the Rural Electrification Agency (REA) and the Federal Ministry of Power (FMP). Their mandates tend to overlap. They should be streamlined to remove bottlenecks.
Energy is an indispensable factor in economic transformation. For instance, in the USA, only 13% of the economy can function without electricity. In general, it is believed that a 1% increase in electricity supply can stimulate between 1.5% and 3% growth in GDP. The government should, therefore, reclaim the distribution segment (DisCos) of the power ecosystem to fast-track national development, as the private-sector-led model has not delivered yet. This is without prejudice to the current Electricity Act, 2023, as amended.
Besides power, greater attention should be paid to agriculture through the provision of subsidies on inputs, chemicals and fertiliser. Agriculture remains a mainstay of the economy, contributing between 20% and 26% to national GDP and employing around 70% of the rural labour force (NBS, 2026). It has been a veritable source of agro-raw materials for both local and foreign industries. Agriculture should be made attractive.
Support for the MSME subsector should be a matter of urgency. It harbours over 40 million units and, according to NBS, constitutes over 90% of the nation’s enterprise stock. These enterprises play a huge role in wealth creation. Poor power supply and limited access to affordable credit have, however, not allowed the sector to thrive as it should.
Another critical priority area that deserves greater support is direct job creation. The concept has been a good complement to macroeconomic reforms the world over. It is an indispensable labour sponge for economies under serious stress, as pronounced by great scholars like Keynes and later modified by Friedman and others. The US government under Roosevelt used it to revive the economy during the Great Depression of the 1930s. Called the New Deal, it aimed to equip jobless youths with skills to undertake various types of economic activities outside government. A similar approach was adopted in the rebuilding of Europe under the Marshall Plan (1948–1951).
Successive governments in Nigeria appreciated this dictum during periods of economic challenges and established agencies such as the NDE, NAPEP, SMEDAN, etc. However, over the years, some of their operations have lost steam when they are needed most. It is believed that, with proper support, the agencies could address the annual rate of 3 million youths discharged by the education system into the labour market, where only 10% are estimated to get formal employment.
The call for rejigging the existing agencies is not to downplay what is on the ground, such as the N75 billion BOI fund, the CBN’s development fund, SMEDAN’s ICSS and GROW Fund, etc., but rather to engender greater impact and reach. This is also without prejudice to existing schemes and/or programmes of NBTE, ITF and others. They should be made to work collaboratively, statutorily, along a national empowerment value chain that links skills development, entrepreneurship, funding and mentoring.
The resources to fund interventions are on the ground. They include redirecting the subsidy savings, a sustained reduction in corruption that currently takes 40% of the nation’s annual budget, and conventional allocations.
In the final analysis, reforms cannot be judged by the comfort of government balance sheets while citizens struggle to put food on their tables. Nigerians do not live on GDP growth, foreign reserves or impressive FAAC figures; they live on wages, jobs, affordable food, electricity, healthcare and purchasing power. The real challenge, therefore, is to move the reforms from the spreadsheets of government into the productive economy and the homes of ordinary Nigerians.
Until that happens, the government may continue to celebrate its numbers, but the people will continue to measure the reforms by the hardship they feel.
A. G. Abubakar
agbarewa@gmail.com
Uncategorized
Police Recover Two AK-47 Rifles From Commercial Vehicle In Kwara
Stephen Olufemi Oni, Ilorin
The Kwara State Police Command has recovered two AK-47 rifles, three magazines and 42 rounds of live ammunition from a commercial vehicle in Ilorin, leading to the discovery of a suspected gun-running network.
The weapons were intercepted during a stop-and-search operation along the Alapa–Okolowo axis of Ilorin, where police operatives reportedly found a bag containing the firearms and ammunition inside the passenger vehicle.
The police said a 30-year-old suspect, identified as Umaru M., initially denied ownership of the bag but later admitted to conveying the firearms and ammunition during interrogation.
According to the Command, the suspect’s statement provided a major breakthrough in the investigation, as he allegedly linked the weapons to another suspected member of the gun-running network, identified as Dan Yarubawa.
Umaru reportedly told investigators that Yarubawa handed the firearms to him for onward delivery to another individual, identified as Dahiru, outside Kwara State.
The Police Public Relations Officer, SP Adetoun Ejire-Adeyemi, in a statement issued on Monday, said efforts have been intensified to apprehend the other suspects and unravel the full extent of the alleged gun-running network.
The development, she said, was in line with the strategic policing vision of the Inspector-General of Police, IGP Olatunji Rilwan Disu, particularly the emphasis on proactive policing, intelligence-led operations and sustained efforts to disrupt criminal activities.
The Commissioner of Police, Kwara State Command, CP Adekimi Ojo, assured residents that the Command would continue to take proactive measures to identify and neutralise threats to public safety.
Ojo urged members of the public to support the police by providing credible and timely information, stressing that the Command remained committed to protecting lives and property across the state.
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