Former Vice President of Nigeria, Atiku Abubakar has warned that Nigeria Nigeria must stop borrowing for anything other than essential needs, he also added that very non-essential line items in the proposed 2021 budget must be expunged and others in a bid to kick start the economy from a recession.
Atiku disclosed this in a social media statement on Sunday, titled: “We Must Exit This Recession With Precision”.
Atiku said he received confirmation of Nigeria’s slide into recession for the second time in five years with a heavy heart. He urged that the poor economic environment could have been avoided if his ideas of cutting costs of governance were incorporated.
“This could have been avoided had this administration taken heed to patriotic counsel given by myself and other well-meaning Nigerians on cutting the cost of governance, saving for a rainy day, and avoiding profligate borrowing.
“Yes, the COVID-19 pandemic has exacerbated an already bad situation, however, we could have avoided this fate by a disciplined and prudent management of our economy.
” It serves no one’s purposes to quarrel after the fact. We must focus on solutions. Nigeria needs critical leadership to guide her back to the path of economic sustainability,” he said.
Atiku warned that Nigeria’s proposed 2021 budget is no longer feasible as the Federal Government does not have the budget to afford heavy luxuries. He, therefore, urged the government to expunge every non-essential line items from the budget.
“We must act now, by taking necessary, and perhaps painful actions. For a start, the proposed 2021 budget presented to the National Assembly on Tuesday, October 8, 2020, is no longer tenable.
“Nigeria neither has the resources, or the need to implement such a luxury heavy budget. The nation is broke, but not broken. However, if we continue to spend lavishly, even when we do not earn commensurately, we would go from being a broke nation, to being a broken nation.
“As a matter of importance and urgency, every non-essential line item in the proposed 2021 budget must be expunged.
“For the avoidance of doubt, this ought to include estacodes, non-emergency travel, feeding, welfare packages, overseas training, new vehicle purchases, office upgrades, non-salary allowances, etc,” Atiku said.
The former Peoples Democratic Party presidential candidate added that the budget must focus on essential items including human development investments and policies that increase the purchasing power of Nigerians.
” Nigeria ought to exclusively focus on making budgetary proposals for essential items, which include reasonable wages and salaries, infrastructural projects, and social services (citizenry’s health, and other human development investments)”
” Additionally, we have to stimulate the economy, by investing in human development, and increasing the purchasing power of the most vulnerable of our population. Only a well-developed populace can generate enough economic activity for the nation to exit this recession.”
Atiku called on a monthly stimulus package to poor Nigerians which he adds should be funded not by debt but by adding a 15% tax to luxury purchases.
He said, ” For example, a stimulus package, in the form of monthly cash transfers of ₦5000 to be made to every bank account holder, verified by a Bank Verification Number, whose combined total deposit in the year 2019 was lower than the annual minimum wage.
” How will this be funded? By more profligate borrowing? No. I propose a luxury tax on goods and services that are exclusively accessible only to the super-wealthy. A tax on the ultra wealthy to protect the extremely poor.
“A practical approach to this is to place a 15% tax on all Business and First Class tickets sold to and from Nigeria, on all luxury car imports and sales, on all private jets imports and service charges, on all jewellery imports and sales.”
“And above all, Nigeria must stop borrowing for anything other than essential needs. Again, for the avoidance of doubt, borrowing to pay salaries, or to engage in White Elephant projects, is not an essential need.
“If we keep borrowing, we stand the risk of defaulting, and that will make recession a child’s play because we will lose some of our sovereignty.
What you should know
Nairametrics reported that Nigeria’s Gross Domestic Product (GDP) in real terms declined by -3.62% (year-on-year) in Q3 2020, thereby marking a full-blown recession and second consecutive contraction from -6.10% recorded in the previous quarter (Q2 2020).
FG places high profile Nigerians under security watch for terrorism financing
The FG has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.
The Federal Government has said that it is currently profiling a large number of high profile Nigerians who have been alleged to have reasonable links to terrorism financing.
This follows the arrest of an undisclosed number of suspects recently after the convictions of some Nigerians on terrorism financing in the United Arab Emirates (UAE).
This disclosure was made by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, during a chat with the press at the Presidential Villa, Abuja on Friday.
What the Attorney General of the Federation is saying
The Minister said that the convictions of Nigerians in the UAE has given rise to wider and far-reaching investigations in Nigeria.
Malami in his statement said, “As you will actually know, sometimes back, there were certain convictions of Nigerians allegedly involved in terrorism financing in the United Arab Emirates (UAE).
That gave rise to a wider and far-reaching investigation in Nigeria and I’m happy to report that arising from the wider coverage investigation that has been conducted in Nigeria, a number of people, both institutional and otherwise, were found to be culpable, I mean reasonable grounds for suspicion of terrorism financing have been established, or perhaps has been proven to be in existence in respect of the transactions of certain high-profile individuals and businessmen across the country.
I’m happy to report that investigation has been ongoing for long and it has reached an advanced stage. Arriving from the investigation, there exists, certainly, reasonable grounds for suspicion that a lot of Nigerians, high-profile, institutional and otherwise, are involved in terrorism financing and they are being profiled for prosecution.
In essence, it is indeed true that the government is prosecuting and it’s indeed initiating processes of prosecuting those high-profile individuals that are found to be financing terrorism. It is indeed true.
However, Malami did not give the number of such suspects as he maintained that investigation was still ongoing until a conclusion is arrived at.
“As to the number, the investigation is ongoing and it has to be conclusive before one can arrive at a certain number, but one thing I can tell you is it is a large number and they are being profiled for prosecution.
It is indeed a large number and I’m not in a position to give you the precise number as at now because the profiling and investigation are ongoing.”
Malami warned that government will not hesitate to invoke the full wrath of the law on anyone found culpable in sponsoring terrorism in the country as nobody found culpable in terrorism financing will be spared.
What you should know
It can be recalled that in March 2021, the Association of Bureau De Change Operators of Nigeria (ABCON) confirmed the arrest of some of its members by security operatives over the investigation of some of their transactions which border on money laundering, terrorism financing and Know Your Customer status.
ABCON in its statement said that it considers these as serious allegations especially given the security challenges facing the country. It appealed to the authorities to expedite action to ensure that innocent people who have been caught up in this investigation can be released and so that they can return to their anxious families and resume their lives.
Top States in Nigeria with highest IGR per population in 2020
Nairametrics ranks the 36 states of the Federation, including the Federal Capital Territory, based on their IGR per population.
Nigeria’s states generated a sum of N1.31 trillion internally in 2020, representing a marginal decline compared to N1.33 trillion recorded in 2019, and an increase compared to N1.17 trillion in 2018.
The downturn is attributable to reduced state revenue as a result of disruptions caused by the covid-induced lockdown, while the crash in crude oil prices also hampered economic growth.
Internally generated revenue is regarded as income generated by various states in the country, independent of their share of the revenue from the Federation Account. However, apart from the clear exception of Lagos State, all others depend largely on statutory allocations to run their state affairs.
Nairametrics ranks the 36 states of the Federation, including the Federal Capital Territory, based on their IGR per population, taking into account the estimated population size of each state as at 2016 and 5% growth rate between 2016 and 2020.
In terms of IGR per population for the six geo-political zones in Nigeria, South West takes the lead with an average of N13,966, having generated a sum of N561.01 billion and an estimated population of 40.17 million people. The South-South region followed with an average of N8,694 and a total aggregate IGR of N263.17 billion.
On the flip side, the North-Eastern region, which houses states like Bauchi, Borno, Yobe, etc. recorded the lowest IGR per population of N2,061 closely followed by North West with an average of N2,855.
Here are the top 5 states with the highest IGR per population in 2020.
Lagos State – N31,794
Lagos State, regarded as the economic hub of the nation, with a total estimated population of 13.18 million people as of 2020, generated a sum of N418.99 billion as IGR in 2020. This represents an increase of 5.1% compared to N398.73 billion recorded in 2019.
- In terms of IGR per capita, Lagos State generated an average of N31,794 from each member of the population in 2020, as against N30,257 generated in the previous year.
- It is no surprise that Lagos State tops the rank, being a major epicentre for economic activities in the country. Lagos State is the largest city in Africa in terms of GDP, and the State is widely known for its large industries, with most corporations in the country headquartered within the state.
- It also houses major seaports in the country as well as the State Government’s aggressive taxation policies. These, amongst others, ensure the state makes more revenue internally compared to other states of the Federation.
- According to data obtained from the National Bureau of Statistics, Lagos State received a total of N115.93 billion as Federal allocation in the year 2020, representing 21.67% of the total revenue available to the state in the year.
- This shows the exceptional ability of the state to run its affairs, using its internally generated revenue with little or no support from the Federal purse.
Abuja – N24,600
The Federal Capital Territory generated a sum of N92.06 billion in 2020, the third-highest state IGR in the year. However, based on IGR per population Abuja seats in second position with an average of N24,600.
- This represents a 23.5% increase when compared to N19,925 recorded in 2019.
- Abuja is the capital territory of Nigeria, with a total estimated population of 3.74 million people across a 7,315km square area.
- The state houses a lot of Federal ministries, having been made the country’s capital in 1991. Abuja is also a major conference centre in the country, as it hosts various meetings and summits annually.
- A cursory look at the data showed that the state’s IGR only accounted for 57.85% of the total available revenue, indicating that 42.15% of its revenue was gotten from the Federation account.
Rivers State – N15,281
Rivers State, being a major oil-producing state in the country, generated a sum of N117.19 billion as internally generated revenue in 2020.
- However, with an estimated population of 7.7 million people, its IGR per population stood at N15,281 in 2020, representing a decline of 16.5% when compared to N18,307 recorded in 2019.
- Rivers State is in the Niger Delta region of the country with much of the businesses in the state being oil exploration companies.
- Evident from the data obtained from the NBS, Rivers State relies heavily on statutory allocations from the Federal Government as well as their share of the 13% oil derivatives as it received a total of N141.19 billion from FAAC, representing 54.64% of the total available revenue in the review period.
Delta State – N10,045
Delta state, another state in the Niger Delta region of the country, with an estimated population of 5.9 million, generated a sum of N59.73 billion as IGR, and an average of N10,045 as IGR per population.
- Delta State is a major oil-producing state and ranks second to Rivers State. The State supplies about 35% of Nigeria’s crude oil and some considerable amount of natural gas.
- Delta State in the period received a sum of N186.83 billion as statutory allocation in 2020, thereby taking a huge part (75.8%) of the total revenue available to the state.
- Its IGR only accounted for 24.2% of the available revenue in the period, while N46.11 billion was generated as PAYE.
Ogun State – N9,263
Ogun State, a neighbouring State of Lagos State, generated a sum of N50.75 billion. In terms of IGR per population, the State generated a sum of N9,263.
- The State’s average income per population decreased by 28.4% compared to N12,945 recorded in 2019.
- The State is strategically located, bordered to the East by Ondo State, to the North by Oyo and Osun States, to the South by Lagos State and the Atlantic Ocean, and to the West by the Republic of Benin.
- Ogun State also joins the list of states that are much dependent on FAAC allocations as statutory payments stood at N37.7 billion, representing 42.61% of the total revenue.
Katsina – N1,386
Jigawa – N1,416
Benue – N1,736
Niger – N1,804
Bauchi – N1,821
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.
- Cadbury Nigeria Plc set to hold 56th Annual General Meeting (AGM) on June 16.
- FCMB Group Plc appoints Muibat Ijaiya as Director.
- Afromedia Plc reports a loss after tax of N27.3 million in Q1 2021.