To achieve the Sustainable development goals, public-private partnerships (PPP) is not just an option for Nigeria but a necessity. That is because it is not possible for government alone to raise the kind of money needed for it.
According to Dr Joe Abah, Country Director, Development Alternatives Incorporated (DAI), the government needs to provide a safe and stable environment for the private sector to invest, and also restructure public-private partnerships in order to get more value out of it.
Speaking during a virtual conference on Saturday, he referred to a report from the United Nations general assembly which stated that Africa needs “an incremental amount from $200 billion to $1.3 trillion per annum to be able to achieve the SDGs”.
This, he noted, calls for restructuring of public private partnerships, to harness the strengths of both sectors towards sustainable development.
“We need to develop greater capacity for our public service to engage in public private partnerships. PPP is not a gift. The public sector is not charity and so you need to understand what you are doing with them.
“We need to monitor performances very closely and that is one thing that the private sector does very well that we don’t do in the public sector,” he stated adding that the public sector needs to have delivery target tied to remunerations.
Removing socio-economic constraints
In his presentation, chairman of Citibank Nigeria limited, Yemi Cardoso stressed the need to remove constraints that hinder people from thriving.
“In one of the studies done where they looked at 8 high-growth countries, they discovered that there were no identical policies in all of them, but there was a common theme – liberate people from their societal economic constraints and they flourish,” he said
He explained how tax rates and regulations that frustrate free enterprise could also impede a countries growth and pointed out countries that had removed such bottlenecks.
According to him, the negligible tax rates in Hong Kong are a source of encouragement to businesses, and so is the ease of doing business in Singapore.
“There is also Macedonia where the sectoral competitive strategy is focused on attracting foreign direct investment (FDI) in automotive industry. Malaysia has also reduced dependence on agricultural exports by paying attention to manufacturing,” he added.
If Nigeria could focus on her competitive advantage, tweaking it as the time changes and attracting strategic investments to the country, she would well be on her way to economic prosperity.
Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens
According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt.
Nigeria, Africa’s largest economy’s total public debt rose to $79.5 billion (N28.63 trillion) as of the first quarter of 2020, which is March 31, 2020. This represents a 15% increase from the figure that was recorded for the corresponding period in 2019, which was about $69.09 billion (N24.94 trillion).
This was disclosed in a latest publication by the Debt Management Office (DMO) on Friday June 3, 2020.
Nigeria has seen its debt stock rise sharply in recent years as the country tries to fund infrastructural and developmental projects and boost its fragile economy, which has been in and out of recession. The country’s economy has been projected to fall into recession again, due to the adverse impact of COVID-19 that has seen oil prices crash globally.
According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt. This represents 34.89% of the total public debt stock. Whereas, $51.64 billion (N18.64 trillion) is the total domestic debt, which represents 65.11% of the total public debt.
The Federal Government accounts for 50.77% of the total domestic debt, which is $40.26 billion (N14.53 trillion), whereas the State Governments and Federal Capital Territory account for 14.34% of the total domestic borrowing which is $11.37 billion (N4.11 trillion).
Nigeria has been under a lot of fiscal crisis following the crash of oil prices triggered by the coronavirus pandemic. The oil sector accounts for about 90% of the country’s foreign exchange earnings and about 60% of its total revenue.
The country, which had lined up a series of debt issue this year, had to halt the external commercial borrowing due to oil price collapse. The Minister for Finance, Zainab Ahmed, had last week disclosed that the country would no longer go ahead with its Eurobond debt issue.
The Nigerian government, for now, is focusing on the domestic markets and concessionary loans to help fund the 2020 budget deficit which is made worse by drop in revenue. In the recently approved 2020 revised budget, the federal government is expected to borrow N850 billion from the domestic market.
This rising debt has put a lot of pressure on the government’s resources as it spent $1.69 billion (N609,13 billion) to service its domestic debt in the first quarter of 2020 alone.
Nairametrics had reported that Nigeria’s global rating is at risk due to the sharp rise in the country’s sovereign debt and a growing finance gap. According to a report from the global rating agency, Fitch Ratings, this could trigger a rating downgrade as policymakers struggle to stimulate growth and deal with the impact of low oil prices and sharp drop in revenue.
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According to Fitch, the country’s debt to revenue ration is set to deteriorate further to 538% by the end of 2020, from the 348% that it was a year earlier.
Nigeria and US Authorities battle former Enron Nigerian Subsidiary over $80 million Yacht
Both Nigerian and American governments have opposed Enron Nigeria’s appeal.
19 years after the bankruptcy of Enron Corporation, one of the biggest corporate bankruptcies in American history, a former subsidiary of the company is battling Nigerian and American Authorities over the sale of a yacht valued at over $80 million acquired by Nigerian businessman Kolawole Aluko.
The yacht was seized by the US Government in 2018 after prosecutors say it was bought with the proceeds of bribes paid to Nigeria’s former Minister of Petroleum, Diezani Alison–Madueke.
The yacht was later auctioned for $37 million in 2019. The Nigerian government also dropped claims to the proceeds of the sale recently and a Texas Court ordered all proceeds should be retained by the US Government.
However, a former unit of the Bankrupt Enron, Enron Nigeria Power Holdings claims it’s entitled to the proceeds and demands $22 million in a bid to get an arbitration awarded to them against the Nigerian government for suspending a contract signed with Enron in 1999 to build and operate a Power plant.
Enron Nigeria claims the Nigerian government dropped claims to the proceeds of the yacht’s auction in an attempt to fraudulently transfer assets to stop creditors from accessing them. Saying Nigeria dropping its claims was “a recognition of the factual and legal basis” in a DOJ court filing.
Both Nigerian and American governments have opposed Enron Nigeria’s appeal.
Enron Nigeria Power Holdings Ltd is owned by ex-Enron staff involved in the negotiations for the Power Plant contract in Nigeria and was bought out of bankruptcy for $750,000 in 2004 by a Cayman Islands registered company.
An arbitration ruling in 2012 awarded Enron Nigeria Power Holdings $11.2 million including interest in damages against the Nigerian government.
The DOJ says Mr. Aluko bought the yacht for $82 million in 2013 and funded a lavish lifestyle for Alison Madueke in exchange for NNPC contracts valued at over $1.5 billion.
Aluko and his business partner, Olajide Omokore are also accused of laundering illicit revenues into and through the United States
Apapa Command’s revenue rises 10.59% to N227.3 billion in the first half of 2020 – Customs
Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges.
The Nigerian Customs Service announced on Thursday that its revenue for the Apapa Command rose by 10.59% from the previous year as it has generated N227.3 billion during the first half of 2020.
While disclosing this, the Customs Area Controller, Mohammed Abba-Kura said, “There has been a steady improvement in revenue collection all through the half-year except for the month of May which recorded a decline of about 3.531 billion, when compared between year 2019 and 2020. The command in the half-year of 2019 collected a total sum of N203.264 billion as customs duty and other charges like seven percent surcharge, Value Added Tax, one percent Comprehensive Import Supervision Scheme (CISS) among others.
“From January to June this year, the command collected a huge sum of N227,347,046,233.53, which represents an increase of N24,082,991,550.84 or 10.59 percent increase from the previous year.”
According to NAN, Abba-Kura also praised the Customs Service for its achievements in spite of multiple challenges they have faced this year.
“In spite of all challenges, the Apapa Area Command has maintained its tempo at ensuring that maximum revenue is collected in addition to trade facilitation and suppression of smuggling,” he said.
The Area Controller further disclosed that the Command seized 142 containers of various items during the period. The seizures were related to smuggling and were seized pursuant to sections 46 and 48 of the Customs and Excise Management Act (CEMA) which enforces laws related to forfeiture of goods that are illegally imported.
The seized goods ranged from luxury cars like Rolls Royce 2018 and a 2019 Lamborghini Hurricane. Others include pharmaceuticals, rice, clothes, assorted foodstuff, and other materials.
Meanwhile, in terms of exports, the value of exported products so far is about N52,369,506,770.90 – Free on Board Value, mainly Agricultural produce and Mineral resources.
Unfortunately, the Coronavirus pandemic has inevitably affected the operations of the Command this year.
According to Abba-Kura, “ten of our men in Apapa command got infected with COVID-19 and were sent to the isolation centre and as at today, they are all well now and we appreciate the Lagos State government and doctors at the Lagos University Teaching Hospital for their help.”
Note that the Customs revenue growth comes at a time of declining revenue for Nigeria, even as the Federal Government’s debt service as a percentage of revenue rose to 99% in the first quarter of 2020. Therefore, it is a good development.
Nairametrics reported the country earned N950.5 billion in revenue compared to a prorated budget of N1.9 trillion, representing a whopping shortfall of 52%. Oil revenue was N464 million representing a shortfall of 30% when compared to budget while non-oil revenue was N269 billion representing a shortfall of 40% in the first quarter of 2020.