The confidence to invest in Nigeria reportedly dropped drastically over the last three years, while investors withdrew more than N2.2 trillion from the economy in 2015 alone.
According to statistics from Nigeria’s Data Bureau (NBS), as quoted by Quartz Africa, investor confidence in Nigeria rose significantly between 2010 and 2013, only to take a little dive in 2014, and a drastic drop in 2015.
According to the sources, when former President Goodluck Jonathan was announced acting president of the country in 2010, following the illness and subsequent death of Umaru Yar’Adua, investing interest in Nigeria rose by N1.17 trillion. However, in Jonathan’s second year, and after a “successful” presidential election, investing interest rose by N396 billion to an approximate N1.6 trillion.
By 2013, investing interest in Nigeria had risen by N2.65 trillion to N4.22 trillion. In 2014, towards the build-up to the 2015 general elections, which predicted endless doom for Nigeria, some investors withdrew their monies from the Nigerian economy, leading to a drop from N4.22 trillion to N4.1 trillion.
In 2015, however, there was a drastic withdrawal of investment interest in Nigeria, and according to the NBS, investing interest declined by N2.2 trillion that year alone. Some investors blamed it on the uncertainties that surrounded the 2015 elections, while many others fingered the lack of policy direction in the first five months of President Muhammadu Buhari’s administration.
Data from the Nigerian Stock Exchange (NSE) also revealed that investors were voting their monies out of the economy prior to the election, but immediately after the relatively free and fair poll, they brought the monies back.
Then, three months before the election, NSE lost 8.40 percent of its worth, only to regain 8.30 percent in a single day after the election. By March 31, 2015 – while the election results were being collated – the NSE market capitalisation was at N10.718 trillion, but it rose to N11.62 trillion after Buhari’s victory. The bullish phenomenon was termed ‘Bullhari’.
As at December 31, 2015, the market cap was down from N11.62 trillion in April to N9.85 trillion.
Sources said no fewer than 598 advertisement trillions of naira that should have come to Nigeria in 2015 were unremitted. According to TheCable, about 600 government agencies, under-remitted revenues generated to the federal coffers.
“The Federal Government has nearly 600 agencies covering a wide spectrum of activities such as central and mortgage banking, insurance, oil and gas, maritime administration and safety, air and sea port management etc,” the report said.
“These agencies control trillions of naira, but paradoxically, they account for only 5 per cent of the Federal Government budget deficit financing…the record shows that none of them, except those managed by technical partners (NITEL, NIGERDOCK, NAFCON etc), make profits.” And in order to ensure effective and efficient remittance by public agencies, former President, Umaru Musa Yar’adua, signed the act mandating government agencies to remit 80 percent of their operating surplus to the Consolidated Revenue Fund (CRF) of the FG, while keeping 20 percent in the agency’s general reserve fund.
Though the FRA, which covered just 31 of over 500 agencies, was defective in its enactment, neglecting hundreds of revenue generating agencies, most of the ones listed defaulted in compliance. Since they were told to remit 80 percent of operating surplus, these agencies, began to post losses rather than surpluses, thereby remitting no amount to the federal purse. During Jonathan era, following the obvious disregard for the FRA, the federal government under Goodluck Jonathan, and the ministry of finance under Ngozi Okonjo-Iweala, in November 2011, directed agencies (particularly the revenue generating agencies) to remit 25 percent of their gross operations revenue to the CRF. This directive led these agencies to under-report their revenues, so they could remit less to the federal government.
For instance, in December 2012, NABRO claims that “the Financial Reporting Council expected to receive N1.61 billion as subvention from the government in 2013, generated N4.28 billion internally, and posted a surplus of N85.69 million”.
This happened across many of the agencies listed in the report. The N1.93 billion that the Council should have paid into the CRF of the Federal Government during the period was kept for future use.
The report said: “In effect, the council had neither regard for the provisions of the FRA, 2007 on remittances nor the directive of the Federal Ministry of Finance to remit 25% of its gross IGR to the CRF, however, the audited accounts and treasury receipts indicate that only N105 million of this amount was paid in 2011.
“The OAGF was surprisingly unaware of this as the NPA did not provide any evidence of this remittance, saying NPA ‘did not make any remittance in 2010 but made a total remittance of N1.1 billion in 2011 out of which the sum of N167.9 million was in respect of 2009 while the sum of N1 billion was on account of 2010’.
For the NNPC and its subsidiary NAPIMS (National Petroleum Investment Management Services), generated trillions of naira and failed in remittance. According to NABRO, NAPIMS “earned N9.58 trillion (excluding proceeds from crude oil and gas) between 2009 and 2011 and accumulated a surplus of N2.07 trillion. Hence, the NNPC ought to have remitted the sum of N1.65 trillion to the CRF. However, the sums of N338.26 billion, N572.22 billion and N746.17 billion (due to the Government) were retained and stated as having been transferred to revenue reserve in 2009, 2010 and 2011 respectively.”
The remittance shortfall of some of the other agencies according to the report are: “CBN (N45.56 billion); NIMASA (N35.89 billion); NPA (N26.9 billion); Industrial Training Fund (N15.2 billion); Nigeria Deposit Insurance Corporation (N8.7 billion); Federal Airport Authority of Nigeria (N6.92 billion); West African Examination Council (N4.5 billion); Nigerian Communications Commission (N3.8 billion); Nigerian Airspace Management Agency (N3.2 billion); National Agency for Food, Drug Administration and Control (N1.81 billion); National Broadcasting Commission (N627.0 million); Federal Mortgage Bank (N300.3 million); and the Federal Housing Authority (N221.1 million).” NABRO’s findings conclude that all the agencies under study generated the sum of N12.24 trillion internally between 2009 and 2012 (excluding NNPC and NAPIMS), but failed to remit a total sum of over N256.35 billion to the consolidated revenue fund.
In a related development, the African Development Bank (AfDB) has estimated that as much as USD 1 billion will be required to improve hydro-meteorological services in Africa. The Bank said a minimum of USD 100 million to 150 million per year will be needed to modernize regional systems.
“Faced with drought, flooding, and climate-resilient infrastructure, adequate hydro-meteorological services are necessary to support resilient growth across a range of sectors in Sub-Saharan Africa. But given 80 percent of such services on the continent are under-funded, have weak capacity and deteriorated infrastructure, collaboration is seen as the only viable solution to help turn the situation around”, AfDB disclosed.
It was revealed that the AfDB and the World Bank recently met to collaborate and discuss the way forward. Both teams exchanged information on Hydromet projects currently under implementation, preparation, and consideration. In an effort to streamline their approach, it was agreed that a comprehensive strategy and master plan tailored to individual country contexts would guide the process in the future.
Given the important role of Hydromet services in agriculture production, food security, water resource management, air and road safety and disaster management, the mission further highlighted the potential of mainstreaming substantial Hydromet components in regular agriculture and water projects.
Having agreed upon the programme’s objective, rational and approach, the next step will be formalizing the partnership in writing as discussion begins on the organization of a regional workshop.
“Given the scope of the challenge, the Africa Hydromet Programme will require a joint effort to mobilize sufficient resources to maximize its transformational impact,” said ClimDev Africa Special Fund (CDSF) Coordinator Justus Kabyemera. “Once the formal agreement has been finalized, a resource mobilization strategy will be developed.”
Both parties have discussed operations of its activities which focus on investment, technical assistance and capacity-building, possible synergies and available sources of financing.
– Newswatch
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