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AfDB boss laments poverty in Nigeria, says residents don’t enjoy basic amenities

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President of the African Development Bank (AfDB), Akinwumi Adesina, has said Nigerians do not enjoy basic infrastructure that should be provided by government despite paying taxes.

He stated this at the first national tax dialogue organised by the Federal Inland Revenue Services (FIRS).

He said residents provided their own electricity, road, security, water, among others, adding that the government must rise to its duty rather than allowing citizens bear such burdens.

“We must also distinguish between nominal taxes and implicit taxes – Taxes that are borne but are not seen nor recorded. Truth be told, Nigerians pay one of the highest implicit tax rates in the world — way higher than developed countries,” he said.

 “Think of it: they provide electricity for themselves via generators; they repair roads to their neighborhoods, if they can afford to; there are no social security systems; they provide security for their own safety; and they provide boreholes for drinking water with their own monies. That in incredulous in itself. Boreholes are not the way to provide water in the 21st century. Every household should have pipe borne water!

“Take for example that 86% of small and medium sized enterprises in Nigeria spend $14 billion annually on diesel for generators. Nigeria’s companies lose on average 10% of sales because they do not have access to reliable and affordable electricity.

“Governments, over time, have simply transferred their responsibility to citizens. When governments or institutions fail to provide basic services, the people bear the burden — a heavy implicit tax on the population.”

He said Africa’s gross domestic product (GDP) growth declined in 2020 by 2.1 per cent, the worst in two decades, while the cumulative loss to Africa’s GDP is estimated at $173-236 billion for 2020 and 2021, respectively.

“The (Nigeria) economy shrunk by 3% in 2020 on account of falling oil prices and effects of the lockdowns on economic activity. The pandemic has impacted on budgetary balances and increased debt burdens,” he said.

“Nigeria’s Debt-to-GDP ratio will push debt service payments beyond more than 60% of federally collected revenues. With shrinkage in oil revenues, debt service payments pose the greatest risk to Nigeria.

“To put a human face on the pandemic effects, we estimate that 28-40 million people in Africa are projected to fall into extreme poverty, and 30 million jobs would be lost due to the pandemic.

“We project that Nigeria’s economy is poised to recover to growth of 1.5% in 2021 and 2.9% in 2022, according to the African Development Bank’s soon to be released African Economic Outlook.”

Adesina said building back will require a lot more resources, adding that taxes form a significant part of government revenue.

He urged the federal government to focus on corporate taxes and ensure full compliance.

The AfDB president added that small and medium enterprises should be supported through tax exemptions or tax deferments.

 “It is crucial to ensure that the tax base expands. Given that over 60% of Nigerians are in the informal sector, priority should be to support measures to move a large part of this from informal to formal sectors,” he said.

“The government should focus a lot on corporate taxes, and ensure full compliance. But it is important to ensure that such taxes do not discourage investments

“Profit shifting, base erosion and tax avoidance by multinational corporations form a huge part of “Africa’s missing taxes”; and account for a large share of the over $60 billion illicit capital flows that Africa loses annually.

“If a company works in Nigeria, benefits from Nigeria, it should pay taxes in Nigeria. Small and medium sized enterprises should be further encouraged and supported, as they are the lifelines of earnings and the creators of jobs. Tax exemptions or tax deferments can be used to support their growth.”

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World Bank, FG move to end fuel subsidy

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The Federal Government and the World Bank have discussed further reforms to eliminate fuel and electricity subsidies in the country.

The Nigerian government had in March 2020 removed petrol subsidy after reducing the pump price of the product to N125 per litre from N145 on the back of the sharp drop in crude oil prices. But it re-emerged this year following the significant rise in oil prices.

The Federal Government’s removal of petrol subsidy and the increase in electricity tariff were in line with reforms being sought by the International Monetary Fund and the World Bank.

“The recent introduction and implementation of an automatic fuel price formula will ensure fuel subsidies, which we have eliminated, do not reemerge,” the Federal Government told the IMF in the letter of intent dated April 21, 2020 with respect to its request for emergency financial assistance of $3.4bn.

The Minister of State of Petroleum Resources, Chief Timipre Sylva, said in July last year that the Federal Government had reached a conclusion that it could no longer bear the burden of petrol subsidy.

The IMF said in February this year that Nigeria had expressed strong commitment to avoid the return of fuel subsidy and to put an end to electricity tariff shortfalls by June this year.

In a report after the conclusion of its Article IV consultation with Nigeria, the Washington-based fund said the authorities highlighted important recent reforms undertaken despite a difficult macroeconomic environment.

It said, “They expressed strong commitment to prevent fuel subsidies from resurfacing and to fully eliminate electricity tariff shortfalls by mid-2021.

“They believe that lifeline tariffs and other relief measures are adequate to protect poorer households from increases in electricity prices and highlighted the benefits from higher and more predictable availability.”

The President, World Bank Group, Mr David Malpass, met with the Minister of Finance, Budget and National Planning and the Governor of the Central Bank of Nigeria, Mr Godwin Emefiele, on April 8 and discussed Nigeria’s ongoing COVID-19 response, and the need for fast deployment of vaccines.

The president and the minister ‘also discussed further reforms to phase out energy subsidies, noting the importance of compensatory measures for the poor and vulnerable’, the World Bank said on its website.

The World Bank had said in October that the Nigerian government had ‘taken important steps to reform its subsidy regime’.

It noted that the Nigerian government had eliminated petrol subsidy and established a market-based pricing mechanism with no price ceilings.

“The gasoline (petrol) price is set monthly by the Petroleum Products Pricing Regulatory Agency from market-based costs. When international petroleum product prices start to recover, the PPPRA will allow price increases accordingly,” it said in its Africa’s Pulse report.

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Aviation

FG suspends Adeboye’s jet over expired documents

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The Federal Government through the Nigerian Civil Aviation Authority has grounded a private chopper belonging to Pastor Enoch Adeboye of the Redeemed Christian Church of God at the Lagos airport, investigations by Sunday PUNCH has revealed.

It was learnt that the aircraft, AgustaWestland AW139 chopper, with registration number 5N-EAA, was suspended from flying over two weeks ago, following the expiration of some of its papers and spare parts.

The suspension, officials said, would also allow the regulator to conduct vital safety checks on its safety-critical components, especially some spare parts that are due for replacement.

Adeboye had last Saturday during a special meeting with all ordained ministers of the mission at the RCCG, Region 21, in Ibadan, the Oyo State capital, called for drastic action against corrupt practices in all facets of Nigeria.

The RCCG leader, who flew a chopper to the venue, said he arrived late for the meeting because someone had requested a bribe from him to fly his chopper.

He said he had decided to embark on the trip via his chopper to avoid a possible gridlock on the busy Lagos-Ibadan Expressway.

The 79-year-old mathematician-turned-preacher said, “I don’t give excuses because I have discovered long ago that only failures give excuses. But you must pray for Nigeria.

“Something must be done about corruption in this nation. All I can say is that I am this late because somebody wanted a bribe. And you know if you are expecting a bribe from me, you have to wait forever.

“But the devil has failed. And the devil will continue to fail. I decided to come by helicopter so that there won’t be a traffic jam that would tie me down on the expressway because I know what the devil could do.

“Then, I ran into something else. But by the grace of God, we are here.”

Although Sunday PUNCH could not ascertain who requested the alleged bribe from the revered servant of God, investigations by the paper revealed that the cleric’s chopper was suspended from flying by the regulatory authority over safety issues.

Multiple aviation sources confirmed that Adeboye could not fly his chopper with registration number 5N-EAA to the Ibadan programme but had to fly another aircraft reportedly belonging to Bishop David Oyedepo of the Living Faith Church (Winners Chapel).

A top official of the Nigerian Airspace Management Agency, who is close to the operations of the two choppers belonging to the servants of God, said, “The team relating directly with Daddy G.O. should have told the man of God on time that his chopper had not been cleared by the NCAA and, as such, it couldn’t go on the Ibadan trip. They shouldn’t have waited till the last minute. The NCAA (aviation regulatory agency) that we have now is different from what it used to be. There is a new man in charge who always insists that things must be done properly as far as the safety of lives is concerned. The church’s protocol team should have told him that the NCAA has not cleared the aircraft and it may not clear it within a short time because certain procedure must be followed. As such, an alternative arrangement should have been made.”

The NAMA official, who chose to speak on condition of anonymity because he was not authorised to speak on the matter, further said, “On that last Saturday morning, when it later became obvious that the jet was not cleared to fly, they had to make an alternative arrangement with Bishop Oyedepo’s chopper. They had to quickly begin that process by filing the flight plan, etc. It was Bishop’s aircraft that Pastor Adeboye later flew to the event. He could not use his own.”

A top official of Omni-Blu Aviation, the airline operating the chopper for Adeboye, confirmed the development.

The official, who chose to speak on condition of anonymity, said a letter from Italy-based Leonardo, the manufacturer of Adeboye’s AW 139 helicopter, requesting the NCAA to grant a time extension on some spare parts that are due for replacement came late.

The spare parts due for replacement have been ordered from the manufacturer but they have yet to be shipped into Nigeria because they are usually produced on demand, according to Omni-Blu Aviation.

As such, the NCAA could not immediately grant the requested extension. Instead, the regulatory agency requested that comprehensive safety checks be conducted on the aircraft in line with standard aviation safety practice.

He said, “The NCAA that we have now is different from what it used to be. It always insists on standard. We don’t want any disappointing situation for anybody, especially for a globally reputed servant of God like Daddy G.O. It appears the man of God was not properly briefed. But we thank God an alternative arrangement was made to rescue the situation. Safety is first and paramount. No life is worth toying with, how much more that of a servant of God like Daddy G.O. As an airline, we won’t compromise safety no matter the pressure.”

The Omni-Blu official denied knowledge of any bribe request, either by the airline or aviation officials.

He, however, said it was not impossible that some people might have cashed in on the situation to demand a bribe.

“You know some people don’t fear God no matter what. They can even go to the extent of asking a servant of God for a bribe. So, it is not impossible. But on our part, I am not aware of such.”

As it stands, it is uncertain when Adeboye’s chopper will be allowed to fly.

However, findings revealed that NCAA had directed maintenance and safety checks to be conducted on the aircraft.

As such, the operator has secured a date for this at Aero’s maintenance hangar.

When contacted for comments, the Director-General, NCAA, Captain Musa Nuhu, confirmed that the regulatory agency had suspended flights on the aircraft for safety reasons.

According to him, the NCAA does not often deal directly with individuals or owners of aircraft but the operator.

In this case, he said the NCAA only had business with the operator of the aircraft, Omni-Blu Aviation.

Nuhu said, “There are safety-related issues that must be resolved before the aircraft will be approved for resumption of flights. Safety is the paramount consideration in all approvals given by the NCAA. No matter what, we must not sacrifice safety for flights; that is the whole idea.”

When contacted, the spokesperson for RCCG, Pastor Olaitan Olubiyi, said the matter was being resolved already.

On the bribery allegation, he said the church would not want to take issue with the aviation authorities on the matter.

Olubiyi said, “We will not want to take issue with the aviation authorities but I can assure you that an amicable solution is being found to the issue.”

-Sunday PUNCH

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Uber, Bolt drivers want fares increased, threaten strike

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The e-cab operators, under the aegis of Professional E-hailing Drivers and Private Owners Association (PEDPA), have threatened to embark on an industrial action from Monday April 19 over low fares and condition of service.

National President of PEDPA, Idris Shonuga, who spoke at a news conference in Lagos, called for immediate upward review of e-cab fares to reflect the current economic reality in the country.

He also demanded adequate welfare package for drivers and compensation for the families of those that lost their lives or are permanently disabled in the line of duty.

He said over 95 per cent of e-hailing transactions were done through Uber and Bolt platforms.

Shonuga also said that more than 15 drivers had lost their lives, while some had been permanently disabled in accidents in the course of the service.

More than 20 others had also lost their lives through kidnapping or killed by ritualists without any compensation from the operators, the association said.

Shonuga said that the association was considering taking legal action to seek remedies against the e-hailing companies if their demands were not met.

He said that the companies had refused to review its pricing despite unprecedented increases in the price of fuel, vehicles spare parts, food items, and other essential commodities in the country.

“In a quest to work and harmoniously at resolving some issues, the association wrote several letters to the companies which were not attended to, showing nonchalant attitude towards our plight.

“Your companies have failed, refused and neglected to honour our request for a meeting to discuss issues beneficial to all e-hailing drivers in Nigeria.”

“Instead of fixing a new and reasonable fare in line with inflation, the companies have recklessly continued to maintain the low fare, thereby, impoverishing hard-working young Nigerians who are diligently and lawfully trying to make a decent living,” Shonuga said.

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