Nigeria’s debt servicing cost has increased by 55.71 percent to ₦1.24 trillion in three months. According to data obtained from the Debt Management Office, between October and December 2022, Nigeria spent ₦406.77 billion on domestic debt servicing, while it spent $312.27 million (₦143.74 billion) on external debt servicing, giving a total of ₦550.51 billion. However, between January and March 2023, Nigeria spent ₦874.13 billion on domestic debt servicing, while it spent $801.36 million (₦368.87 billion) on external debt servicing, giving a total of ₦1.24 trillion.
Nigeria’s debt servicing situation is a major economic risk. Loans taken by the last administration were unproductively utilised. The portions of public revenue the government spends on debt repayment should be lowered, leaving less money for other essential services and needed investments in education, healthcare, and infrastructure. Earlier in the year, it was revealed that Nigeria spent 96.3 percent of its revenue on debt servicing in 2022 from 83.2 percent in 2021, a culmination of eight years of economic mismanagement by the Buhari administration. During that time, Nigeria struggled to generate revenues as oil production was depressed due to production shut-ins, oil theft, and the NNPC’s failure to remit funds to the government’s coffers due to petrol subsidies. These numbers are the final kicks of the Buhari administration. As previously opined, removing the fiscal and monetary distorters of fuel and FX subsidies are the first two crucial things the Tinubu administration needed to tackle. Right behind these two is the matter of debt management. As they are out, the Tinubu administration must roll out ways to ease Nigeria’s debt burden and inculcate fiscal discipline thrown out of the window under Buhari. The challenge is that Tinubu, like Buhari, has a history of raising debt. And there are fears that the Tinubu Administration will seek to drastically increase taxation coverage on an already poverty-stricken populace to deal with the gaps, but the Nigerian government is better off focusing on improving economic productivity rather than taxing people heavily to compensate for poor revenue. The government should reduce taxes and regulations on businesses to make it easier for them to operate and create jobs. The government can improve economic productivity and reduce its reliance on debt by taking these steps.
Five people have been killed and 11 others injured after suspected jihadists fired a rocket-propelled grenade at a town in Borno, two anti-jihadist militia commanders told AFP. One day, gunmen attacked two communities, Teng and Pwaskop, in Mangu Local Government Area of Plateau, killing two persons. They also abducted seven worshippers and killed the pastor of a Redeemed Christian Church of God (RCCG) parish in Ogun. Also, at least 50 people died from communal clashes in Karim Lamido local government. Also, a coalition of South-East youth leaders has asked Fulani herdsmen to vacate farmlands in the Assa community in the Ohaji Egbema Local Government Area of Imo State.
In what is undoubtedly an indication that Nigeria’s perennial struggle to contain the proliferation of small arms and light weapons is not yielding the required results, Boko Haram is improvising its operational methodology by targeting civilians and increasing its preference for rockets and mortars. During this year’s presidential election, the Islamic State’s West Africa Province (ISWAP) launched a mortar attack in Gwoza, injuring five voters. The multinational joint task force has confined the insurgents in the North East to squeezed-in territories with little loops for civilian attacks and military convoy ambushes. Whereas in Borno, the military’s new worry is how to limit the flow of semi-conventional weapons such as rocket launchers, general-purpose machine guns and mortars from getting into the hands of Boko Haram. In Taraba’s case, being in the same proximity with Borno, Adamawa, and Yobe means that it is a choice location for the buildup of weapons for insurgents fleeing Lake Chad, and we have seen this in clearer terms over the past two years as ISWAP attacks in the state have increased. Perhaps more than the threat from Boko Haram, Taraba suffers more intently from its inability to get its ethnic nationalities to get their acts together. Between 2018 and 2020, clashes between Jukun–in collaboration with the Fulanis–and the Tivs in Benue upturned stability in the Wukari section of Taraba State. However, that alliance has been broken in the past two years with the Fulanis turning on the Jukuns. The state government’s poor handling of the ethnic rivalries has allowed other below-radar sentiments to thrive. And last week, the months-long resentment between the Wurkum and Karimjo-speaking people of the state boiled over, claiming 50 lives, which could have been prevented if the government had seriously taken the 15 May violence in the area, which killed 20 people. Most of these ethnic conflicts can be linked to government failures, especially in law enforcement. This is why non-state actors are increasingly taking over, assuming government duties, and issuing ultimatums to armed non-state actors. The perfect reason why the youth leaders’ warning for Fulani herdsmen to vacate illegally-occupied forests is that the former does not immediately have the means to enforce that order, and the state government who instituted that order in the first place has not shown any interest in effecting it. Fulani-related security risks are a complex issue that requires a multi-faceted approach. Some countries have taken a military approach, while others have focused on mediation and dialogue. The best approach is likely to involve combining these methods and addressing the root causes of the problem, such as poverty, inequality and environmental degradation. The root causes of Fulani-related security risks can be abated by enforcing ranching rules. The government could provide financial assistance to Fulani herders to help them build and maintain ranches, work with Fulani herders to develop grazing plans that account for the needs of herders and farmers and establish a system of rangers to patrol ranches and enforce grazing rules. Enforcing ranching rules would not be a quick or easy solution, but it could help reduce conflict between herders and farmers. It is important to remember that the Fulani are not a monolithic group, and not all Fulani are involved in criminal activity. However, committing to the above curative measures will be a stepping stone to more permanent solutions.
Ebonyi communities have continued to boil as hoodlums set ablaze a police van at Ukwagba village and shot sporadically to scare citizens in a bid to enforce a seven-day sit-at-home order declared by a faction of the Indigenous People of Biafra (IPOB) led by Simon Ekpa. The hoodlums also stormed the Ishieke police checkpoint and shot sporadically, which, according to reports, caused police officers to flee. The Daily Post reported that the hoodlums also stormed the Afiaohu market along Abakaliki/Enugu Express and allegedly shot into the air to scare people, with business owners fleeing and leaving their wares behind.
The Indigenous People of Biafra (IPOB) is a separatist group that seeks to create an independent state of Biafra in Southeastern Nigeria. However, the group has been unable to hurt the federal government critically, so it has turned to hurting the people of the Southeast to show its power. This is a common tactic used by guerrilla groups, who often attack civilians they see as part of the establishment. The recent attacks in Enugu and Ebonyi are signs that IPOB could be looking to strengthen its control over the region and assert itself as superior to the state governments in the South East, but these attacks are likely to backfire, as they will only make IPOB less popular and drain most of its support. IPOB’s attacks have harmed the Southeast’s economy, as businesses have been forced to close and people have been afraid to go out. The attacks have also led to an increase in tensions between the people of the South East and the federal government. The government has been criticised for its poor management of the situation, with some arguing that it has not done enough to protect the people. In the past month, more elites have called on the federal government to release Nnamdi Kanu, IPOB’s founder, who has been held for treason. The newly elected governors have tried to curtail IPOB, especially in the area of the weekly sit-at-home by asking workers to ignore the separatist group and declaring sanctions to government workers who observe the sit-at-home. For the average political elite in the region, Kanu’s release from custody is the Hail Mary pass needed to end the South East’s problems. This sort of wishful thinking stems from ignoring the internal split within IPOB: This week’s violence in Ebonyi was carried out by Finland-based Simon Ekpa’s faction. The Anambra and Imo police occasionally put up reactive feeble responses to attacks by armed groups, most of which are linked to IPOB’s militant faction: the Eastern Security Network (ESN). This hardly happens in Ebonyi for obvious reasons: poor police security and welfare have corrupted the system, so criminals who attack state symbols of authorities do not see the police as a threat. Given the enormity of the situation, it is quite sensible for the police to let the status quo remain, but that posture is unsustainable in the long term: the days of large-scale military operations in the region appear to be over for now, and the Ebonyi state government has contracted the state security to Ebube Agu, a vigilante group accused of human rights abuses such as abductions and extrajudicial killings. This means the problem stays, with the police having the primary responsibility to face their nightmare. This is hardly limited to Ebonyi. A video surfaced online on Wednesday, showing a group of unknown gunmen beating primary school pupils and teachers in Enugu State for daring to take the mandatory Common Entrance examination on a sit-at-home day. Beyond wishing and declaring the problem away, a major way for the region’s governors to actionably downgrade the IPOB threat is to empower the police through better-coordinated efforts with community vigilantes under civilian-led oversight to ensure respect for human rights.
Petroleum tanker drivers under the Ghana National Petroleum Tanker Drivers Union (GNPTDU) declared a sit-down strike on Monday over the deplorable condition of the Tema Oil Refinery to Kpone Road. The union’s chairman, George Teye Nyaunu, said the strike will continue until the situation is addressed. In a related development, the Coalition of Individual Bondholders Groups, made up of the Individual Bondholders Association of Ghana (IBHAG) and Individual Bondholders’ Forum (IBF), has notified the Ghanaian government that members of the group will picket the Ministry of Finance from Thursday, 6 July 2023, to demand payments of their bonds.
The Ghanaian government has encountered a tumultuous start in July, as unexpected industrial actions have caused significant challenges. Strikes, picketing and threats of power cuts have plagued the government, demanding compliance with various agreements. The first blow came with the petroleum tanker drivers’ strike, which started due to the poor condition of roads used to transport petroleum products, which caused fuel shortages in some parts of Ghana and came after the GNPTRU had spent years demanding that the government fix the roads that were causing damage to their vehicles, putting drivers at risk of accidents, and making the supply of petroleum products harder and costlier. Although the strike was relatively short-lived, lasting less than 72 hours, it required the government to engage in two hours of intensive negotiations with the Tanker Drivers Union to bring the industrial action to an end. It is worrying that a federal government has to face a strike action to be persuaded of the importance of maintaining crucial infrastructure that keeps its economy running. Unsurprisingly, the government’s respite was short-lived, as a coalition comprising the Individual Bondholders Association of Ghana (IBHAG) and Individual Bondholders’ Forum (IBF) announced their decision to picket at the finance ministry. Their demands centred around the government fulfilling payments for maturing coupons and principals. Initially granted voluntary exemption from participating in the Domestic Debt Exchange Programme, the coalition insisted on a complete exemption similar to the type given to pension funds. Despite weeks of protests and negotiations, the group was informed that its members could voluntarily choose not to participate in the debt treatment scheme. Financial experts expressed concerns over the challenges of paying coupons and principals to individuals and institutions opting out of the programme. Data from the finance ministry revealed that over 31 billion cedis ($2.8 billion) worth of restructured bonds were expected to mature this year, accompanied by associated interest payments. But for a successful domestic debt treatment, the Ghanaian government was obligated to service interest payments on domestic loans, amounting to over 31 billion cedis in 2023 alone. Consequently, the government faced an expenditure burden of 62.3 billion cedis ($5.7 billion) solely for domestic debt servicing in the 2023 fiscal year. The amount required to address Ghana’s debt crisis in 2023 alone is nearly twice the anticipated sum to be received under the three-year International Monetary Fund (IMF) Extended Credit Facility Programme. This places Ghana in an exceedingly precarious fiscal position. To overcome this substantial debt burden, Accra must take proactive measures to reach agreements with all domestic and external creditors. Failing to do so would likely lead to further downgrades from credit rating agencies, exacerbating the country’s financial challenges
Culled from SBM Intelligence
OBLONG MEDIA UNLIMITED 
Leave a comment