The curtain dropped on the Second Elizabethan Age this week: an era defined by the Cold War, globalisation and economic liberalisation, late stage industrialisation, and a rising social justice consciousness forcing a reckoning with the legacy of an imperial past amid the dying embers of empire. In her former possession, Nigeria, it was a week which saw the revelation of discomfiting insights on basic education, election integrity, fuel consumption, and capital investment, it would be understandable if one exercised the choice to opt out.
An estimated 20 million Nigerian children and youths are out of school, according to a new report by the United Nations Educational, Scientific and Cultural Organisation (UNESCO). The report published on the UNESCO website on Thursday shows that Nigeria has over 20 million of the 244 million out-of-school children around the world. War-torn Ethiopia, with 10.5 million out-of-school children, follows Nigeria while Congo and Kenya record 5.9 million and 1.8 million out-of-school children respectively. “Important data gaps have been filled in countries that have large out-of-school numbers but where no administrative data of good quality has been available for over a decade, such as Nigeria which has an estimated 20.2 million children and youths out of school, Ethiopia (10.5 million), the Democratic Republic of Congo (5.9 million) and Kenya (1.8 million),” UNESCO said. The report also shows “sub-Saharan Africa remains the region with the most children and youths out of school, with a total of 98 million children. It is also the only region where this number is increasing: ou-+t-of-school rates are falling more slowly than the rate at which the school-age population is growing.” “In view of these results, the objective of quality education for all by 2030, set by the United Nations, risks not being achieved. We need a global mobilisation to place education at the top of the international agenda,” Audrey Azoulay, UNESCO’s Director-General, was quoted to have said in the report.
Among the figures for out-of-school children released this year, this, released by UNICEF, is the most damning. In January, the agency put the figures at 10.5 million. In May, it pegged it further at 18.5 million. In June, then junior education minister Emeka Nwajiuba reported that Nigeria had an estimated 10,193,918 out-of-school children. The latest data now puts it at 20.2 million. What is common among the listed data sets, bar one, is that the numbers are climbing. This could be a result of several factors. To begin with, insecurity in many parts of the country has led to repeated and extended school closures. Jigawa last month was the latest to announce a similar measure following the actions of its neighbours over the past few months. Although there hasn’t been a mass, large-scale attack on schools in recent weeks, the attacks on secondary and tertiary education in some states in the North in late 2020 and early 2021 – led to the closure of more than 600 schools across seven states – had a lasting impact on the psychology of parents who are hesitant in sending their children back to school. Another factor is a high birth rate, which coupled with insecurity and worsening economic conditions means that many school-age kids are unable to receive any, let alone adequate early education. Per the National Bureau of Statistics 2021 Multiple Indicator Cluster Survey (MICS), only 26.8% of Nigerians between ages 7 – 14 could read functionally in any language and only 25.4% could carry out basic arithmetic. That poor start to a competent and productive career only diminishes as they get older – a full quarter of Nigerian kids who are of junior secondary school age drop out, according to the 2021 MICS. Furthermore, economic insecurity has meant that education is now seen as a luxury in many parts, with parents having to choose between feeding and staying alive, and pouring meagre resources into education with no guaranteed safety. Past attempts by state governments to legislate away the problem of falling school enrollment by penalising ‘erring’ parents for not sending their children to school have predictably not yielded the expected results. This is not due to enforcement issues but simply because any attempt to shift the burden of responsibility to the governed does not make enough sense as a sustainable policy stance. Substitute or alternative educational models, such as the Almajiri system in the north, have not been able to pick up the slack, themselves being plagued by the same challenges as formal education. Effectively, out-of-school kids in Nigeria and Sub-Saharan Africa will remain at elevated highs as the dominance of religious considerations in decision making, conflict, poor funding for basic education, inadequate child care support and poor child protection policy implementation persist. Religious stakeholders who promote anti-educational policies in addition to drivers of insecurity in the North, a culture of labelling children as witches in the South, and the system of abandoning children to the streets, for example, the Skolombo boys and Lacasera girls in the South-South all need to be addressed appropriately. Without the government taking a firm stance on these issues, the out-of-school problem will persist. It is a desperate situation in which one cannot simply call for the federal government to relinquish involvement in primary education to states, seeing how state governments are also struggling to get enrollment numbers up. All hands are needed to stop this talent bloodletting which is a harbinger of more consequential social ills.
The Nigerian National Petroleum Company (NNPC) Limited, through its official spokesperson, Garbadeen Muhammad, has disclosed that it paid a subsidy of ₦297 per litre on 68 million litres of petrol daily from January to August 2022. It said the average second quarter international market landing cost of petrol was $1,283 per metric tonne, approved marketing and distribution costs were ₦46 per litre while retail pump price translated to ₦462 per litre. The company explained that rising crude prices and petrol supply costs above the Nigerian Midstream and Downstream Petroleum Regulatory Authority cap had forced oil marketing companies to withdraw from importing oil since the fourth quarter of 2007. There is some disagreement within government circles on oil consumption data. Comptroller-General of the Nigeria Customs Service, Col. Hameed Ali (rtd), for instance, has faulted the figures. The NNPC recently said it supplies 98 million litres daily into the market, for which subsidy is calculated and paid. But in answering questions by the House of Representatives Committee on Finance on the Customs’s efforts to address reported petrol smuggling, a development the NNPC said is responsible for the huge subsidy payments, Ali on 1 September described the subsidy regime as “non-existing.” Ali said assuming NNPC was correct with the daily consumption of 60 million litres and supplies of 98 million litres daily, questions needed to be answered about how 38 million litres – the differential between estimated consumption and supply, which requires at least 500 trucks to load – is ostensibly moved out of the country daily.
At the heart of the seemingly never-ending joust over petrol consumption in Africa’s largest economy is one salient and unassailable fact – Nigeria is unable to measure the basic numbers of its largest export, oil, and its largest import, refined petrol. This basic incompetence is the fuel for the biggest cache of corruption in the country. Coupled with the lack of transparency in the administration of the subsidy and the fact that removing it is one of the closest things to a third rail in Nigerian politics, the opacity on the part of the NNPC has seen subsidy suspending rise astronomically. That does not negate the fact that it is bad economics. A 2021 Brookings Institute study lists four key reasons why energy subsidies are problematic. First, they create market distortions by artificially lowering the price of fossil fuels, which leads to overconsumption, particularly in energy and capital-intensive industries like power and transport. Second, subsidies create negative externalities, including adverse environmental and health impacts. Third, consumption subsidies are manifestly ineffective in alleviating inequity because most of the benefits accrue to wealthier households that already have high consumption levels. Finally, subsidies are not the best use of public finances, which can be better directed towards sectors like social protection, healthcare, education, and the environment. The piece further suggests that the reason why subsidies continue to be prevalent in countries like Iran, Nigeria, Saudi Arabia and Venezuela, is because subsidies have had decades of systemic support from consumers and producers alike and have amassed political power. Therefore, it is necessary to take a leaf from countries which have opted for time-limited direct cash transfers to citizens on their tax database to compensate for energy price rises. That requires data transparency, particularly from government-affiliated institutions or backed projects, which has become questionable over the years and remains a significant concern to Nigerians. Put plainly, there is a complete distrust between the government and her populace on information the government provides, specifically around revenue-tied data such as oil revenue, oil consumption, government expenditure, macroeconomic indicators, and social indicators, to name a few. Until we can ensure data/information transparency in government, ascertaining the credibility of Nigeria’s daily oil consumption and expenditure, amongst other revenue-related data, will be unattainable. More to the point, by removing the arbitrage between subsidised and market prices, cash transfers help to reduce corruption, improve distribution, and incentivise efficient energy use while cushioning the effect of market and price swings. The alternative is institutionalised bedlam. Nigerian petrol sells for half of the cheapest alternatives across West and Central Africa. The incentives are in favour of grand corruption that continues to bleed Nigeria in oil theft on the export hand and runaway subsidy payments on the import side. The only real solution, as we have said repeatedly, is to institute fiscal discipline of the first order. It starts with removing the subsidies.
Communications and Digital Economy Minister, Isa Pantami, has announced the suspension of the proposed five percent tax on telecommunications services. He said this during the inaugural meeting of the Presidential Committee on Excise Duty for the Digital Economy Sector. The minister, also the committee chairman, told the members that he explained to the president that the attempt will destroy the digital economy sector that is becoming the backbone of Nigeria’s economy. This comes as the National Bureau of Statistics reported that for the second quarter of the year (Q2 2022), in terms of sectoral contributions, manufacturing with 33.08 percent, information and communication 18.98 percent, and mining and quarrying 10.60 percent – were the top-three largest VAT contributors. Abuja generated the sum of ₦600.15 billion from Value Added Tax (VAT) in Q2 2022, up from the ₦588.59 billion recorded in the preceding quarter, representing a 1.96 percent growth rate and an increase of 17.16 percent from Q2 2021. Local payments accounted for ₦359.12 billion of total collections, while foreign VAT payments contributed ₦111.13 billion in the review period. Quarter-on-quarter, electricity, gas, steam, and air conditioning supply recorded the highest growth rate with 116.47 percent, followed by accommodation and food service activities with 42.44 percent. Activities of extraterritorial organisations and bodies had the lowest growth rate with –42.39 percent, recording a share of 0.05 percent while activities of households as employers, undifferentiated goods- and services-producing activities of households for own use represented -36.57 percent with the least share of 0.03 percent.
Following Mr Pantami’s comments, it was reported in the media that the finance ministry is adamant to proceed with the tax. In this case, Pantami is on the right side of the divide. Value Added Tax (VAT) is already charged when an airtime purchase is made. Charging another tax will amount to double taxation and will only result in making telecommunications, which is now viewed as one of the basic necessities by Nigerians according to a recent SBM study, significantly more expensive. VAT and such taxes only represent a line charge and are just a rider on trade activity in the economy. It is an outcome driven by this input, and the government’s role in growing tax should be predicated on its supporting these economic inputs. Nigeria does not do this well. In addition, this brings to the fore the uncoordinated nature of the current administration. In a recent high-profile case, there were conflicting pronouncements between the Presidency and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) concerning the approval of ExxonMobil’s sale of some of its Nigerian assets to Seplat. That embarrassing episode ended with the Presidency walking back on its initial ‘approval’ of the sale, which ignored substituting litigation on the issue and may have been in contravention of the Petroleum Industry Act. Passing through a potential tax increase should be important enough to discuss at the weekly Federal Executive Council meeting, which is attended by all ministers and where binding decisions are collectively reached. The current spat between two senior federal ministers over an administrative directive is yet another uncomfortable indication that this administration is at cross purposes with itself and a risk to the country as a going concern. President Buhari appears detached from the day-to-day running of the government and basically occupies a position of dispute resolver of last resort, an arrangement which incentivises the formation of competing cliques, cabals and power blocs. Considering how self-interested collectives have been at the heart of some of the administration’s most disruptive policy-making, keen observers, particularly in the telecoms sector, would be hoping the next nine months pass quickly and a new government begins the process of charting a more sustainable approach to policy making.
The FG has halted the construction of the Port Harcourt-Maiduguri Eastern rail line due to insecurity and vandalism of railway infrastructure on the corridor. The Minister of Transportation, Engr. Mu’azu Sambo, said this during the project inspection, on Friday, in Port Harcourt, Rivers State. According to the minister, China Civil Engineering and Construction Company (CCEC), the contractor handling the rehabilitation and reconstruction of the project, had complained of attacks on its workers in Abia State. Sambo, who was obviously very displeased by the acts, condemned them in strong terms, pointing out that in the history of Nigeria, no administration has invested more in rail infrastructure than the present administration of President Muhammadu Buhari. He used the opportunity to call on the media and the judiciary to collaborate with the ministry to ensure that economic saboteurs are not only exposed but prosecuted and sentenced speedily to serve as deterrence to others. On the report that the funds meant for the Eastern rail line have been diverted to other projects, the minister said it was fake news as the progress made so far is from the 15% of the counterpart funding by Nigeria while the 85% to be provided by foreign partners was still being negotiated.
A little economic history is important for appropriately understanding Nigeria’s present conundrum. Two major national economic and infrastructural corridors were created by the British during the years of colonialism and subsisted till war broke out in 1967: the western economic corridor also known as LAKAJI, which runs from Lagos in South West to the Nigerien border in Jibia (in modern Katsina) through Kano, hence the name; the second is the Eastern Economic Corridor (2NEC) which ran from Port Harcourt in the Niger Delta to Maiduguri. After the war ended in 1970, trade and economic activity in the Eastern corridor was abandoned and left to rot. A plan for the economic revitalisation of the region was not part of the post-war reconstruction plan. As a result of poor economic productivity and infrastructural rot, crime and insecurity soared. Most, if not all of Nigeria’s security challenges–kidnap, radical Islam, youth gang violence–originated in that axis and moved westward. Nigeria has effectively been surviving on the LAKAJI corridor since 1970. The Buhari administration’s attempt to fix infrastructure in that section of the economy is suffering the setbacks provided by the lack of foresight and vindictive politics by successive governments. This is not the first time in this administration’s lifecycle that its attempts to push its economic plans in the corridor would butt heads with security challenges. On 26 July 2017, Boko Haram abducted 10 staffers of the Survey and Geological Department of the University of Maiduguri who joined the Nigerian National Petroleum Company, NNPC on an oil exploration mission in the Lake Chad Basin. Two days later, the AFP reported that no less than 50 people were killed in that incident. Beyond Boko Haram, Abia, a commercial state in the South East that hosts Aba and Umuahia, major rail routes on the 2NEC, is dealing with a number of security challenges typified by unrest attributed to the separatist Indigenous Peoples of Biafra who have attacked government facilities and individuals working for the Nigerian state. These security problems on the rail line cannot be divorced from the fact that residents do not feel ownership of a project that may significantly improve the region’s economic fortunes. Furthermore, halting the project due to formidable security challenges must be seen for what it is, the government throwing in the towel in line with its inability to exert control on its territory. There is no guarantee that the security challenges in the area will improve anytime soon. As a result, anytime the government finds the political will to return to work, those challenges will be waiting.