The Nigerian National Petroleum Company (NNPC) once more failed to remit any money to the Federation Account, a joint pool operated by Nigeria’s federal, state and local governments in March. With the inability of the national oil company to contribute last month, it means that since this year, the NNPC has not funded the statutory joint account at all. On Wednesday, the Federation Accounts Allocation Committee (FAAC) shared a total sum of ₦725.57 billion among the three tiers of government, as federal allocation for last month. The amount was a 23 per cent increase from the ₦590 billion shared by the three tiers of government in February, with statutory revenue representing ₦521.16 billion and Value Added Tax (VAT) being ₦204.40 billion. At the meeting, the federal government received ₦277.10 billion, states got ₦227.2 billion and the local government areas got ₦167.91 billion. But of the amount, although the NNPC did not pay anything, Petroleum Profit Tax, Oil and Gas Royalties contributed to the FAAC distribution while Import and Excise Duties, Companies Income Tax and Value Added Tax all recorded increases. An analysis of the NNPC presentation to FAAC showed that while subsidies would gulp ₦671.88 billion in April due for sharing in May, the oil firm has failed to pay anything out of its budgeted annual ₦1.473 trillion. It showed that the NNPC spent ₦210.38 billion, ₦219.78 billion and ₦245.77 billion as subsidies on petrol in January, February and March 2022 respectively.

There are rising complaints from public sector workers and pensioners in Nigeria’s states about a rising cash crunch in the country with many state governments failing to ensure regular payment of salaries, gratuities and other entitlements. Labour leaders in Abia, Benue, Edo, Ekiti, Kano, Ogun, Ondo and Rivers noted that pensioners were hardest hit by the failure of governors to meet their fiscal responsibilities. According to reporting by the Punch, deductions by the Nigerian National Petroleum Company Limited from the Federation Account Allocation Committee had continued to deplete the funds being shared by the three tiers of government at FAAC meetings. The NNPC has explained that its deductions from FAAC were due to a sharp rise in subsidy spending. The state Chairman of the Nigeria Labour Congress (NLC) in Benue, Godwin Anya, said that state and local government workers were groaning due to staggered payment of salaries. In his words, “Local government workers in the state are owed nine months, primary school teachers are owed 10 months, while at the state level, it is five months. These are arrears for 2017.” On its part, the Nigerian Union of Pensioners (NUP) in Kano says Governor Abdullahi Ganduje owes retirees ₦25 billion. In Ekiti, the Trade Union Congress (TUC) Chairman, Sola Adigun, said the state government owed workers between two and five months of salary arrears. He called on Governor Kayode Fayemi to honour his agreement with workers to pay their arrears before handing it over to a new government in October. In Rivers, state NLC chairman, Mrs Beatrice Itubo said “pensioners in Rivers State have not been paid gratuities since this administration came on board. No pensioner has been paid a dime.” The Ogun State TUC Chairman, Akeem Lasisi said the state government owed workers 150 months of unpaid contributory pensions. He added that the state government owed gratuities to local government workers from 2011 to date and from 2014 for the state workers. Speaking at this year’s May Day celebrations, Ogun Governor Dapo Abiodun insisted his administration had paid ₦8.4 billion out of the ₦14.4 billion owed workers from May 2019 to March 2022. Borno’s NLC and TUC called on the state government to urgently implement the ₦30,000 minimum wage for local government workers and teachers while Ebonyi labour leaders say an urgent review of salaries of civil and public servants to “enable us to cope with the existing economic realities.”

Nobel laureate and academic Wole Soyinka arrived in Cotonou, Benin Republic, on Sunday to meet the Yoruba nation activist, Sunday Adeyemo (popularly known as Sunday Igboho). Mr Soyinka crossed the Seme border around noon into Cotonou. A crowd mobbed him while he was waiting to complete immigration formalities, repeatedly asking about his destination. Mr Soyinka responded he was visiting Mr Igboho to “break the Muslim fast with him.” He said even though they are both non-Muslims; it made no difference because he wished to see Mr Igboho, to sympathise with him. ”Ramadan is as good as any other season to express non-denominational solidarity,” he added. Mr Igboho and his wife, Ropo, were arrested on 19 July 2021 by the International Criminal Police Organisation at the Cadjèhoun Airport in Cotonou on their way to Germany. Beninoise officials later released his wife but Mr Igboho remained in detention until March this year, when they released him on the condition that he remain in the country “for the time being under full security,” according to his lawyer, Yomi Alliyu. Last year, Mr Soyinka condemned the invasion of Mr Igboho’s home in Ibadan by armed officials of the State Security Service (SSS). At least two of Mr Igboho’s supporters were killed during the incident.

Nigeria’s government is actively considering a demand by terrorists who attacked a train in northern Nigeria in late March 28 for a prisoner-passenger swap, the Punch reported on Tuesday. Armed gangs who kidnapped dozens of passengers are using civilians as human shields, making it difficult for the military to carry out a rescue mission, President Muhammadu Buhari conceded on Monday. The gangs have demanded the release of some of its detained commanders and financiers in exchange for the abductees. Nigeria’s state railway company said last month that 168 people were missing following the 28 March attack. About eight people were killed and 26 others injured when the gunmen bombed the rail track and fired gunshots at the train which was heading to Kaduna from Abuja. Nigerian media last week showed a video of victims of the kidnap, including a baby recently born to one of the abducted women. Buhari said the government, which has been criticised for not doing enough to rescue the passengers, was trying to avoid a “tragic outcome” in any rescue operation. In neighbouring Zamfara, two Emirs and a district head have been removed by the state government over allegations of aiding the activities of bandits terrorising communities in the state. The Emirs are the Emir of Zurmi, Abubakar Atiku and the Emir of Dansadau, Hussaini Umar, while the district head is Sulaiman Ibrahim of Birnin Tsaba. The state information commissioner, Mr Ibrahim Dosara, who made the announcement in Gusau, the state capital, said all land titles issued by the affected traditional leaders are revoked. “The State Executive Council has also directed the state Ministry of Justice to issue an executive order to back up the council’s resolution,” he added. The deposition of the traditional leaders comes 10 months after they were suspended by the state government. It also comes days after the submission of the reports of the committees set up by the state government to investigate the allegations against the affected traditional rulers.

Commentary

  • The NNPC’s failure highlights the structural deficiency of the Nigerian economy. In true federalism, the expectation is that the states should have economic rights over their mineral resources, fix rates of and charge VAT and other taxes, control power generation and distribution, control the police and pay a percentage of their earnings to the central government. In Nigeria, the reverse is the case, and all states are joined by the hip to the centre and to each other, which is a legacy of Nigeria’s military past. Consequently, the decision of the centre to prevail with an ill-thought-out petrol subsidy regime affects us all. It is important for Nigeria to realign with the present realities – prior to now, most reports would claim that Nigeria’s government is funded by oil revenues and that the country gets 90% of its foreign exchange from oil and gas exports. The current reality is that Nigeria’s national oil company is unable to provide oil revenues to the government’s coffers anymore, and for the first quarter of the 2022 fiscal year, it has remitted nothing. Nigeria’s inability to secure a windfall from current high crude prices stems from its inability to invest in critical infrastructure in past years, partly due to three things: lack of funding, lack of foresight and corruption. Nigeria’s oil revenues have been cornered by an elite few – first by those who have decided to help themselves to it by simply stealing the crude oil from source – the highly organised oil thieves. Second, by a small elite who now enjoy the spurious income from the bloated and opaque petrol subsidy payments. The Nigerian government, and by extension, the Nigerian state is left with nothing from the oil and gas produced in its territory. It is a sad and sorry state of things that will continue for as long as the state refuses to restructure and allow resource control in the host communities, and also continue the bogus fuel subsidy regime.
  • It is important to point out that owing salaries is a widespread problem in Nigeria. An SBM Intelligence report, published in October 2021, surveyed more than 3,000 informal sector workers showing that 40% of the respondents are owed their salaries for months. However, the most visible expression of this issue is found in the government where workers are owed for longer and pensioners are owed for years. In 2004 the Obasanjo administration signed into law the Pension Reform Act. This introduced to Nigeria a contributory pension scheme to replace the defined benefit (DB) scheme. The DB scheme, which was based on how long the employee had worked and the last position he occupied, required the government or employer to put funds aside and manage those funds unilaterally. However, it was fraught with corruption and inconsistency. The new contributory scheme had independent pension managers and custodians, and employees, along with their employers, made part payments to their pension accounts which is beyond the reach of unauthorised parties. However, while the federal government and private businesses have adopted the new scheme, many state and local governments have refused to sign up. This means pensioner accounts remain unfunded in most cases and they rely on the goodwill of the governors and local government chairman to receive their monthly pension payments. Now, with dwindling FAAC payments, these pensioners are down the priority ladder. Owing workers has become such a norm, that a governor is deemed to be a performing governor if he manages to pay salaries, and is hailed if he is able to pay pensions on top of this. Yet this present issue is one more expression of the fiscal problems of the Nigerian state coming to a head. In addition, one of the biggest financial coups the current administration executed is moving the petrol subsidy from a budgetary item that is thoroughly debated, to one which is essentially an administrative expense deducted before funds hit the Federal Allocation accounts. The states will continue to grapple with this fiscal squeeze, enabled by a lack of recourse for those that are owed beyond strikes and protests, while the subsidy waste continues. The petrol subsidy removal must be a top priority of the next administration, as it is politically impossible for the Buhari government to remove it before it leaves in 2023. Until subsidies are scrapped and various sub-national governments adopt the new pension schemes and fund those accounts, not much will change.
  • In Benin next door, a Nigerian citizen is detained for nine months. It is safe to assume that this was done with the tacit approval of the Nigerian government. Mr Igboho has now been released, with limited freedoms. There are some parallels to be drawn between Sunday Igboho Adeyemo and Nnamdi Kanu in light of their treatment at the hands of the Nigerian state. Both men are secessionists with different approaches to the same goal. Mr Igboho’s methods differ greatly from Mr Kanu’s as he preferred rallies and the support of local institutions and intellectuals while although Mr Kanu resorted to violence after provocations from the government, it must be pointed out that from the beginning, his rhetoric was inflammatory, and indeed his first arrest stemmed from him being caught on video requesting for funding to buy arms. Unfortunately, the Nigerian state did not handle Mr Kanu with the delicacy the situation called for and seeing the way he has been lionised due to the manner the Nigerian state conducted his arrest and has carried out his detention(s) and prosecution, it is important for key voices and intellectuals to continue to engage with Mr Igboho to manage him and keep the potential for the emergence on any IPOB-like organisation in the country’s South West. Prof Soyinka’s visit is representative of the protection many leading Yoruba figures have lent to Mr Igboho but not necessarily his cause, while on the other hand, Mr Kanu has, with his utterances, burnt bridges with leading politicians and intellectuals from South-East Nigeria who tried to stand in for him–Abia Senator Enyinaya Abaribe stood surety for him during his treason trial in 2017 but he violated the terms of his bail, putting Mr Abaribe in some trouble; leading South-East intellectual, Prof Ben Nwabueze, despite standing up for Mr Kanu was eviscerated, and Osita Chidoka, a former federal minister, who helped convey Kanu from prison was left red-faced during the 2017 Anambra governorship race when Kanu literally pulled the rug from under his feet, an event we touched upon in a report which foresaw this very outcome with regards Mr Kanu. For any regional agenda to survive a federal onslaught in Nigeria, it is important that it has a considerable appeal among the regional elite. Consensus building amongst elites is an important feature of Nigerian politics that Mr Kanu has failed to learn, but to be fair to him, the literal orphanage of most South-Eastern elites given the severe alienation from their people does not exactly help such causes in that region. While many may think that an IPOB-like organisation in the South-West is impossible due to the culture of the area, the emergence of IPOB and other violent groups in the South-East in spite of the earlier belief that the culture in the area would forestall such organisations clearly shows the dangers in not taking deliberate steps to manage such actors, and it is in this light that Prof Soyinka’s visit to Mr Igboho must be looked at. It may not change the current status of things as Mr Igboho’s Yoruba Nation agenda seems effectively dead for now, but it does demonstrate the primacy of regional and ethnic interests in a multinational country like Nigeria.
  • The suspension of the traditional rulers in Zamfara by the state government and the revocation of land titles issued by them speaks to a root cause of banditry: the abuse of land administration powers by traditional rulers in the state which led to a displacement of nomadic Fulani herdsmen and was a factor in triggering conflicts in the area. This shows that force alone cannot end the cycle of violence in the region but it is also important to look at such root causes with a view to solving them. Although it is not clear if any crimes were committed by the former traditional rulers, it is critical that the government should charge them to court in the event they establish the commission of crimes. In the wider region, the demand by the terrorists shows a significant level of coordination among bandits that have previously operated in a relatively loose structure. While the terrorists are yet to be officially identified, we believe that the group responsible for the train attack is most likely the Vanguard for the Protection of Muslims in Black Africa, better known as Ansaru and less commonly called al-Qaeda in the Lands Beyond the Sahel, a splinter group (with Al Qaeda support) from the more prominent Boko Haram. The Daily Trust reported that the group was responsible for an attack on the Abuja-Kaduna rail track in October 2021–an action in which the Islamic State West Africa Province was also fingered. We believe that one of the commanders most likely to be requested is Sheikh Khalid Al Barnawi who was arrested by the State Security Service (DSS) in Lokoja, Kogi State in 2016. It is not exactly clear if he is alive as the government is yet to confirm but any such prisoner swap would have considerable repercussions on Nigeria’s security. The military has, over the past two years, intensified its campaign against armed groups by targeting senior leaders with commands through aerial raids by the airforce. The strategy has proven reasonably successful in the North-East given how much leadership both Boko Haram factions in the area have lost, with ISWAP leader Abubakar dan Buduma being the latest victim (killed in late April by the military) of that strategy. Starving terror groups of experienced leadership is an important tactic; releasing the arrested back into the wild would reverse years of hard work which would give armed groups the upper hand and could cause dissent in the security services, especially within military circles. Additionally, success in obtaining their demands from the government could attract other armed non-state actors in the region to join the terrorists and strengthen their ranks. This could increase the security challenges in the region in terms of the scale of attacks they will be able to launch. Given the lack of options before the Federal Government, it is very likely that the demands of the bandits will be met, either in part or in full. If this happens, it is critical for security agencies to intensify intelligence-gathering and anticipate new attacks from the terrorists who will likely be emboldened by their success.