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Nigeria Economy on a debt cliff

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Nigerian economy is on the stranglehold of debt. At the national, sub-national, corporate and individual levels, debts owed to banks have held the economy to a stranglehold impeding real economic growth though policy makers are not admitting same. Since the financial crisis of 2008, corporate indebtedness has almost wiped out the assets of companies in the country. Many of the companies operating are mere paper companies living on borrowed times of AMCON.  Of the existing ten largest depots in the country, eight are under the hold of AMCON. The airlines are not spared. The airlines flying in the country today are doing so by the grace of AMCON.

The same is the case with the manufacturing sector, where the largest of these firms owe the banks and their debts have been taken over by AMCON. If AMCON decides to liquidate companies owing it and sell all their assets to recover its money, Nigeria will have no company in existence. Take for instance the airline where only about three are flying now, if they are liquidated because of debt, the domestic airline industry will be dead in a day. If this happens, all the workers employed by these companies at the moment will add to the ever growing unemployment in the country.

Nigeria as a country has a domestic debt profile of above N6 trillion.

This debt is being serviced at very high interest rate. Resources that should have been spent on other services are being channeled to paying interest on debts to banks.

The concern of economist today is the cost of servicing this huge debt. Nigeria has one of the highest interest rates in the developing world and if there are high levels of debt, then debt servicing will become very expensive. The federal government is attributing the rise in the nation’s debt profile to wage increase and the government’s intervention to curtail the impact of the global economic and financial crisis of 2008. This implies that the debt is for consumption and not for productive activities. This makes the matter worst for the economy.

Besides, the Triple digit oil price which Nigeria has depended upon has encouraged development of U.S. shale oil, some of which now compete with OPEC’s crude. OPEC members had dismissed it as of little concern a year ago, but Nigeria Minister of Petroleum Resources, Diezani Alison-Madueke, has said it will have a major impact on Nigeria finances. Nigeria, along with Algeria, has already felt the heat from the U.S. oil boom, losing ground in its most lucrative export market and diverting sales to Asia.

Violence, unrest and investment hurdles are making Nigeria weakest supply link, helping prop up oil prices to the benefit of the group’s strongmen led by Saudi Arabia.

Oil supply in Nigeria has been underperforming for some time and little if any growth is expected in the medium term. This development has pushed many Nigerians into ravaging poverty that has hit the nation. Recent official figures show that 112 million Nigerians live below poverty line on less than $1 or N160 a day. Nigerians have come to the hard reality that the various government policies since 1980, have contributed to the rising level of poverty in the country despite claims that the economy has been growing. The poverty data released by the National Bureau of Statistics suggested that 112 million Nigerians are poor going by the economic situation in the country in 2011. While 100 million are in absolute poverty, 12.6 million are moderately poor.

The Nigeria Poverty Profile 2010 Report indicates that poverty and income inequality in Nigeria increased 3/2004. In addition, NBS estimates that this trend may have increased further in 2011 if the potential positive impacts of several anti-poverty and employment generation intervention programmes are not taken into account, but this can only be ascertained at the conclusion of the 2011 survey. The rising trend of poverty in the country is a direct reflection of public policy failure in Nigeria. In 1980, an estimated 27 per cent of Nigerians lived in poverty. By 1990, 70 per cent of the population had income of less than $1 a day more than two-thirds of the Nigerian people are poor, despite living in a country with vast potential wealth and the figure has risen since then. Poverty levels vary across the country, with the highest proportion of poor people in the northwest and the lowest in the southeast.

Yet the economy is said to be growing. It said that the Gross Domestic Product (GDP) in Nigeria expanded 6.60 percent in the first quarter of 2013 over the same quarter of the previous year. Historically, from 2005 until 2013, Nigeria GDP Growth Rate averaged 6.81 Percent reaching an all time high of 8.60 Percent in December of 2010 and a record low of 4.50 Percent in March of 2009.

With rising national and corporate debt that has pushed several otherwise viable companies into receivership with AMCON, decline in crude oil production and high cost of servicing domestic debt, the nation’s economy is hanging on a debt cliff. It can fall off the cliff if immediate steps are not taken

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Decemberissaveybe: Firstbank sponsors “the caveman concert” thrills audience 

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By Oladapo Sofowora
 
December is a particularly vibrant and deeply meaningful month in Nigeria, imbued with a palpable sense of excitement and celebration that permeates the air. As daily life slows down, this festive season offers a welcome opportunity for relaxation and togetherness. Families and friends gather to create cherished memories, participating in a rich tapestry of cultural activities that showcase Nigeria’s diverse heritage. The month is characterized by a colourful array of events, including theatrical plays, musical concerts, traditional festivals, operas, fashion shows, poetry readings, and various forms of performance arts, all reflecting the dynamic cultural expressions of Nigerian society.
 As December unfolds, the excitement continues to build, with streets and homes becoming vibrant displays of holiday spirit. Elaborate decorations adorn every corner, featuring colourful Christmas ornaments, twinkling lights, and festive paraphernalia that evoke a sense of wonder and joy. Evening skies light up with breathtaking fireworks, illuminating the night and further enhancing the joyous mood of the season. Year-end Thanksgiving parties have become commonplace, offering spaces for loved ones to gather, share meals, and express gratitude for the blessings and experiences of the past year. This period also allows Nigerians to reconnect with family and friends, many of whom travel from various parts of the globe to partake in these significant celebrations.
 As the year-end festivities for 2024 draw near, FirstBank has thoughtfully curated an exhilarating lineup of events under the DecemberIssaVybe program, aimed at enhancing the enjoyment of this festive season. A highlight of this initiative is the much-anticipated concert featuring The Cavemen, a celebrated musical duo. Which was held on Friday, December 27, 2024, at Muri Okunola Park, located along the bustling Lekki-Epe Expressway, the event brought Lagos to life with a captivating performance that seamlessly blends highlife, soul, and folk music. Attendees enjoyed an engaging experience filled with mesmerizing sounds for over an hour, keeping them on their feet and immersed in the rhythm.
 The atmosphere at the concert was electrifying, drawing a diverse crowd of enthusiastic youth eager to experience The Cavemen’s unique interpretation of highlife music—a genre deeply rooted in Nigerian culture and characterized by its rich, rhythmic beats and soulful melodies. The concert also featured an impressive lineup of other notable artists, such as the popular act Ckay, who collectively contributed to a night filled with remarkable entertainment and unforgettable performances. The stage witnessed a pulsation of energy as The Cavemen’s talented band propelled the evening forward, delivering an infectious performance marked by masterfully executed guitar riffs, powerful drumming, and enchanting vocals. Audiences found themselves wholly absorbed in the moment, as the music unites them in joy and celebration, showcasing the revitalization and redefinition of the highlife genre that The Cavemen have pioneered.
In addition to the music, the concert artfully integrates comedic performances, highlighting the vibrant and diverse creative entertainment scene in Africa. Acclaimed comedians took to the stage, drawing laughter and delight from the crowd, while emerging music also had their moment in the spotlight, receiving enthusiastic applause and encouragement from an appreciative audience. Recognising the profound impact of December in nurturing relationships and spreading joy, FirstBank has actively engaged its First@arts initiative to launch the annual DecemberIssaVybe campaign. This initiative is meticulously crafted to inspire and empower individuals across Nigeria to create and experience exhilarating moments throughout this joyous season. By providing fully sponsored access to premium concerts, theatrical performances, shows, and festivals featuring some of the industry’s top entertainers, FirstBank aims to alleviate the financial burdens that often accompany festive celebrations.
 In a time marked by economic uncertainty, FirstBank stands as a crucial support system for Nigerians wishing to celebrate without the weight of added financial stress. With a proud legacy spanning over 130 years, this esteemed financial institution has woven itself into the fabric of Nigerian life. FirstBank has long championed numerous festive concerts showcasing Africa’s music icons, including Kizz Daniel, Davido, Burna Boy, Asake, and Tiwa Savage, crafting unforgettable experiences for music aficionados across the nation.
The DecemberIssaVybe campaign encapsulates the essence of creating lasting memories during this festive season. It serves as a dynamic platform for both local and international audiences to immerse themselves in unique, culturally rich experiences tailored to the holiday spirit. Since its inception in 2018, the FirstBankIssaVybe campaign has quickly become a highly anticipated annual event, delighting participants with exhilarating moments designed to resonate and linger long after the celebrations are over. Olayinka Ijabiyi, the Acting Group Head of Marketing & Corporate Communications at FirstBank, emphasized the institution’s unwavering commitment to crafting a ‘Wow December to Remember’ experience for individuals of all ages. He stated, “FirstBank is devoted to facilitating memorable homecoming experiences this December through gatherings such as weddings, family reunions, and festive celebrations, ensuring that every moment spent together is cherished.” Through this commitment, FirstBank continues to play a pivotal role in the celebration of culture and community during this significant time of year.

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Deadly rice stampedes: Suppose President Tinubu bans rice?

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By Ikeddy ISIGUZO
Once President Bola Ahmed Tinubu addresses Nigerians it is clear that his silence is actually golden, as it gives chances to guess what the President feels about ordinary Nigerians, the hungry, the poor, the weak, those excluded from Tinubu’s concerns because they are not rich. The President rushing in with a media chat, after 18 months in office, and days after the “poverty stampede” in Ibadan, where mainly children died, was thought to be an opportunity to explain to Nigerians, elicit their support as they go through a crushing economic crisis that the President gloats about as if the entire purpose of his policies is to inflict pains. The deaths in Ibadan that were over 35, were followed by similar incidents in a church in Abuja, and an individual’s event in Okija. The deaths resulted from free distribution of rice to the needy. Poverty once personal, private, is now public, and deadly.
Just blame rice.
Are opponents using free rice to distract the President from focusing on his economic policies? The President should ban rice for more clarity. No rice, no stampede, no deaths. One of my teachers said the solution to headache was decapitation – no head, no headache, or any ache for that matter.
We remember Tinubu promised Nigerians “agbado (corn) and cassava”. Not rice. More people have fallen into poverty without the President’s permission. Should they? Could this account for the President not knowing about them? What really does the President know about Nigerians?
Does he know that more people would have died if they knew of these events? Food is beyond the reach of ordinary Nigerians. Tinubu does not feel the impact of his harsh economic practices of lavish spending on presidential consumptions, unproductive as they are. Some call the spendings reckless.
Would you blame them? In the midst of a drifting economy, soaring inflation, no jobs, hunger, anger, capped with insecurity, the President bought jets, including one for the Vice President, and maintains a bloated cabinet.
He used the presidential chat as a platform to defend his Ministers. They are performing. He sounded as if he needed more people like the bunch that maintains a distance from the daily challenges people face.
For the President to see “switching off things” as the solution to poor electricity supply – and the frequency with which the national grid collapses – was one indication that governance has become a joke. When the Minister of Power, months ago, held the same position on electricity, the public tore him to shreds. The Minister apologise. Tinubu blamed the organisers for the stampede, “I see this as a very great error on the part of the organisers.” He said he had been giving out foodstuffs, including envelopes, smoothly at his Bourdillon residence in the past 25 years. “If you do not have enough to give, don’t publicise it,” he advised organisers.
The organisers too are poor, and have no Bourdillon pedigrees. These things count.
Do not expect Tinubu to blame the new wave of incremental poverty his hope agenda has renewed. He did not. He will not. If Tinubu halts the slide to absolute poverty for more Nigerians, there would be no deadly rice stampedes, and no organisers to blame. Other Nigerians have organised these events for years without incidents. Large crowds would turn up and go home home safely. Was it not rice they shared? What is the difference now? People are out searching for something to eat, anything. Even if “pure water” is being shared, there will be stampede. Our people are living by the minute.
They have lost hope. Nigerians have no assurance that someone cares about their efforts to survive. Millions of our compatriots are ready to do anything to survive. While at it, insecurity is not allowing them to breathe.
Sadly, more of our people are falling into crimes with the times.
Employment opportunities are shrinking. The few jobs available are for relations of those in power, the rich, the very rich, the same ones who accuse us of greed. Do they have a different meaning for greed?
Last October, the Senate President, His Excellency Obong Godswill Akpabio on the floor of the Senate advised poor Nigerians, “Times are difficult, wherever you see free food, please endeavour to avail yourself”. Could the people have followed Akpabio’s perspective of the solution to poverty and the hard times? Mocking the poor is Akpabio’s favourite idea of enlivening Senate sessions.
“The prayer is that, let the poor breathe, and Senator Mustapha has seconded that the poor should breathe. Those who are in support of the additional prayer that the poor should be allowed to breathe, say ‘ayes’ and those who are against say ‘nay,’” Akpabio had said in July 2023 during a debate on the 15 per cent hike of electricity tariff. “The ayes have it! The poor must be allowed to breathe,” Akpabio concluded.
At a Niger Delta Development Commission event in July 2024, Akpabio mocked those who called for demonstration over the economic hardship. “Those who want to protest can protest, but let us be there eating,” the former Akwa Ibom State Governor had said. In Tinubu’s 18 months, poverty has pole-vaulted to dizzy heights that left Nigerians dazed.
The only thing worse is the President’s spectacular performances when addressing his failure to rein in inflation as he drives the economy with the enthusiasm of kids playing with new toys. People are hungry. Some people around the President call poor, hungry Nigerians “greedy”. Someone looking for what to eat is greedy? Have we fallen so low to justify the President’s unwillingness to accept that the problem is well beyond him?
Is he using his uncaring attitude as a buffer? He is the bigger problem by refusing to engage the people. Rather, he talks down on them when he decides to talk, well aware that he has nothing to say.

Take the tax bills, for instance, they have their merits. Tinubu thinks it is beneath him to discuss issues the radical bills raise. He sneers, the bills will be passed. He takes responsibility for nothing. Tinubu sounds like Rik Rok and Shaggy in their famous 2000 hit song, “It Wasn’t Me”. The President provides answers without addressing our concerns. The answers are always dismissive. The major lesson of 2024 is that Nigerians have to continue looking after themselves. It may even annoy those who are just discovering that they cannot decide when we should stop breathing.
Happy New Year, that is peaceful – prosperity will follow peace.
Finally… INFLATION to crash from 34.6% to 15% in 12 months, is what the President has promised in 2025. Safe trip, Mr. President.
FEDEERAL Capital Territory Minister Ezewoke Nyesom Wike said of those who accuse him of land grabbing, “Peo­ple say land grabbing, do you grab what you are in charge of? I am in charge of land in Abuja how will I go and grab what I am in charge of? Those, who are grabbing land are whom I am dealing with”. Wike, at the Port Harcourt event where he spoke, did not forget to call Governor Sim Fubara, “this boy”.
*ISIGUZO is a major commentator on minor issues

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Building a stronger Nigeria through health, transparency, human rights

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By Ambassador Richard M. Mills, U.S. Ambassador to Nigeria
Every December, we mark three international observances that are at the heart of the U.S.-Nigeria partnership: World AIDS Day, International Anti-Corruption Day, and Human Rights Day.  While distinct, these commemorations underscore a simple truth – Nigeria’s path forward requires progress on health, good governance, and human rights.  The United States remains your steadfast partner on this journey. For two decades, the United States has stood with Nigeria in the fight against HIV/AIDS under the President’s Emergency Plan for AIDS Relief (PEPFAR).  The U.S. government has invested more than $8.3 billion in Nigeria’s health sector and provided life-saving anti-retroviral treatment to more than 1.5 million people.  These numbers represent improved life expectancy and quality of life for these Nigerians and their families.  In clinics across Nigeria, I’ve met dedicated healthcare workers who deliver HIV prevention, treatment, and care, supported by the resources of the American people.  This work has done more than save lives – using HIV as an entry point, Nigeria’s health system has also benefited.  
As Nigeria’s health system is strengthened, this important work will be led by government and engagement with the private sector to sustain the gains.  This commitment was reinforced during Ambassador Nkengasong’s recent visit, where his discussions with Nigerian health officials focused on how the Government of Nigeria would sustain the HIV health programs with strengthened Nigerian leadership and local ownership. But positive health outcomes depend critically on good governance.  When medical supplies are diverted, when healthcare workers go unpaid, when facilities buy dangerous, counterfeit medications or lack resources due to mismanaged funds, it costs lives. 
This is why the United States supports numerous initiatives, not only in the health sector, to enhance transparency and accountability in Nigeria.  Our programs work directly with government agencies and civil society organizations to strengthen fiscal responsibility with the goal of the state ensuring resources reach their intended beneficiaries.
The success of these efforts rests on respect for human rights and civic engagement.  When members of marginalized communities face discrimination in accessing healthcare, when citizens fear reporting blatant corruption like the need to pay for appointments or ‘free’ healthcare, or when vulnerable populations cannot advocate for their needs, development falters.  Through our partnership with Nigeria, we promote the rights of every person to access essential services and enjoy fundamental freedoms without fear or discrimination. These three areas – health, transparency, and human rights – reinforce each other. 
Consider the results: U.S.-supported initiatives have helped strengthen pharmaceutical supply chains, reducing theft and ensuring safe medicines reach patients.  Our human rights programming has empowered civil society organizations to advocate for marginalized communities, leading to better access to health services.  Our health system investments have created platforms for transparency that benefit all sectors.  And, perhaps most importantly, according to a recent survey by the United Nations Office on Drugs and Crime, Nigerians are both more frequently refusing to pay bribes and reporting bribe seekers to investigative journalists and rule of law authorities.  A shift in norms is beginning to take root and must continue.    
 The U.S. Embassy stands ready to support Nigerian voices pressing the fight against corruption in Nigeria.  To Nigeria’s government officials, civil society leaders, healthcare workers, and citizens:  your dedication to building a stronger nation inspires us.  Together, we can continue to advance the interconnected goals of better health outcomes, good governance, and human rights for all Nigerians.  Challenges remain, but the work we’ve done together shows what could be possible on a larger scale across these crucial domains. As we mark these December observances, let us use this moment not just for reflection, but for renewed commitment and action.  The United States continues to stand with the Nigerian people as they carry out this essential work with their elected government.
*Ambassador Richard M. Mills is U.S. Ambassador to Nigeria

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