By Mohammad Ibrahim

Kaduna (Nigeria) – Arewa Consultative Forum (ACF) has frowned at the rates of killings and communal crisis in Plateau, Benue and other States within the northern region of the country.

The group called on government at all levels to put a stop to such crisis which often claimed lives and property of innocent citizens of the region.

ACF in a statement by its National Publicity Secretary, Muhammed Ibrahim described the recent renewed clashes among various communities who have lived together peacefully over the years in Plateau and other states in the North as disturbing.

“It is not only of serious concern to Arewa Consultative Forum but disturbing, considering the huge destruction of lives and property. This has seriously affected the harmonious relationship among the communities and the general development of the areas.

“The initiative by the Plateau state Governor to involve all critical stakeholders to ensure reconciliation and restoration of peace in the LGAs affected should be emulated by other state Governors having similar communal problems.

“ACF in particular wishes to draw the attention of the Benue state Governor, Chief Samuel Ortom to the recent hostilities between the Tiv/Jukun and the Fulani/Kabawa communities of Gbajimba and Tse Kuncha in Guma Local Government Area of Benue state, where wanton destruction of community settlement took place.

“ACF urges Governor Ortom to promptly investigate the alleged killing and destruction of property and bring to justice those found to have aided and abated the carnage.

“Government should also set up a reconciliation and peace committee similar to that of Plateau to proffer a permanent solution to this incessant and unnecessary conflicts in the state.

“The Northern region has in the last six years had its fair share of insecurity problems such as Boko Haram insurgency, communal clashes, cattle rustling, etc which have affected its socioeconomic development.

“The change Nigerians voted for in the 2015 general elections is not only change in government, but also change in the way and manner the elected leaders provide adequate security and welfare for the people.

“ACF therefore calls upon the security agencies to be vigilant and proactive in arresting such ugly incident that destroy harmonious relationship among communities who have coexisted in peace for years.

“The traditional leaders in the areas must also play their fatherly role of mediation for peaceful coexistence and tolerance among various communities in order to put an end to the unwarranted violence,” the statement reads.

By Joseph Muraya

Nairobi (Kenya) — Security agencies have launched major operations in Lamu and Garissa Counties in pursuit of Al Shabaab terrorists following two failed terror attacks – one on Saturday evening and another on Sunday morning.

In Lamu, Inspector General of Police Joseph Boinnet says police are pursuing more than 170 Al Shabaab militia who escaped into Boni Forest following a foiled attack on a military camp in Baure area.

“The attack was swiftly and effectively repulsed with the enemy suffering huge casualties,” he said.

In Garissa, the police boss said the militants attempted to attack construction workers at Bula Gulam village but police officers repulsed them.

On Saturday, Boinnet had placed the country on high alert, saying intelligence indicated that Al Shabaab was planning attacks in the country during the Holy month of Ramadhan.

Curled from CapitalFM

Cape Town – South African power utility Eskom said it did not anticipate loadshedding on Monday.

“There is currently no loadshedding anticipated for this evening as Eskom has adequate generating capacity to meet the demand in electricity,” Eskom said.

The cold weather across the country did, however, mean a constrained power system during peak hours, from 5pm – 9pm.

Eskom appealed to its customers to reduce electricity usage throughout the day, particularly during morning and evening peak periods.

curled from Business Report

By Mohammad Ibrahim

Kaduna (Nigeria) – Motorists plying Kaduna- Zaria express way were stranded on Sunday night after a Soldier was alleged to have shot a trailer driver for refusing to offer him 500 naira bribe.

The incident occurred around 10 pm, at a temporary installed check point close to Mararrabar Jos, in the outskirt of Kaduna.

It was gathered that when the news spread to the city, his fellow drivers protested the shooting by blocking the highway with their vehicles for hours, making it difficult for motorists to get across.

The victim was rushed to saint Gerard’s Hospital in Kaduna by good samaritans that found him in pool of his blood.

The victim Abba Saminu, who spoke to Africa Prime News Correspondent, narrated how the incident occurred;

“We were on our way back to Kaduna with Irish potatoes inside the vehicle when we came across a check point mounted by the soldiers around 10 pm on sunday, close to Mararrabar Jos.

“They ordered us to park, as I was about parking by the roadside, one of the soldiers demanded 500 naira from me. I told him I can only afford a 100 naira. So he shouted at us and ordered us out of the vehicle,” he said.

According to Abba, as soon as he alighted from the vehicle, another soldier slapped him.

“When I turned to run, I heard a gun shot, so I fell down. They entered their vehicle and zoom off. It was some people that later came to rush me to hospital,” he said.

Abba’s employer, Alhaji Ibrahim who was at the hospital appealed to military authority and government to bring an end to harassment against drivers by soldiers on the highways.

He said drivers are always subjected to all kinds of intimidation and harassment by security agents stationed on high ways for refusing to offer them bribe.

“We know that their leaders didn’t send them to be harassing people, but the soldiers always demand bribe from our drivers on highways, if they refuse to give them, they are subjected to all sorts of harassment,” he said.

Alhaji Ibrahim described the soldiers attitude towards drivers as illegal, calling on government to put an end to it.

Special Assistant, Media and Publicity to Kaduna State Governor, Samuel Aruwan confirmed the incident.

According to him, the State Governor had directed his Deputy, Bala Bantex and State Commissioner of Police to visit the scene to plead with the drivers union to allow stranded vehicles access to road.

He pleaded with the citizens to avoid taking laws into their hands, saying they should always channel their grievances to the right authority.

Effort by our Correspondent to speak with Army, One Division, Public Relations Officer, Colonel Usman Abdul failed as he didn’t answer his phone.

By Omoh Gabriel, Business Editor
Eighteen out of the thirty-six states of the federation are technically bankrupt. This is because they have mortgaged their federation account allocations to contractors by signing irrevocable payment orders with various banks. As a result, payment to contractors and other debt instruments are deducted at source and have become first line charge on their lean resources.

 
The internally generated revenues of these states are also not enough to meet their obligations so they owe workers several months of unpaid salaries.

 
The states which owing workers, according to the Nigeria Labour Congress are Abia, Akwa Ibom, Bauchi, Benue, Cross River, Ekiti, Imo, Jigawa, Kano, Katsina, Kogi, Ogun, Ondo, Osun, Oyo, Plateau, Rivers and Zamfara.

 
This is not the first time states owe workers. In 2003, then Economic Adviser to President Olusegun Obasanjo, Professor Charles Soludo, said that most state governments have signed away their future statutory allocations to contractors whom they owe.

 
Explaining many states are bankrupt and cannot fund developmental projects, Soludo said that most states were technically bankrupt as huge deductions are made from their allocations to pay such creditors.

 
This, he said, was “the reason why a good number of states in the Federation owe their workers several months of unpaid salaries.” He said after such deductions from allocation to the states, they are left with little or nothing to operate with. As a result, most of the states are not able to perform their statutory obligations. Instead of telling the people the simple truth, they keep complaining of lack of funds.

 
Most of these states go into further indebtedness through heavy borrowing and undertaking projects they have no financial capacity to carry. “The problem of states in the Federation is their total dependence on the Federal Government. Their internal revenue drive and generation are so weak that no state can operate without federal allocation or grant in some cases.”

 
Reacting to the high indebtedness of states, Director-General, Securities & Exchange Commission (SEC) Mr. Mounir Gwarzo condemned the indebtedness of some state governments, which debts did not measure up with infrastructural development in their states as the agony of unpaid salaries haunt most of them. He described the indebtedness as a bad omen, more so, where there are no infrastructure in place to underpin their debts.

 
Gwarzo therefore urged the affected state governments to take advantage of equities, bonds or mortgage bond securities in the capital market to develop their states’ infrastructure. He urged governors to explore the opportunities available in the market to deliver infrastructural development to their people, saying it is better to borrow to meet infrastructural needs than to be content with just paying salaries.

 
He said:
“Indebtedness is not bad, what is bad is a situation where such funds are used for consumption. If there is commensurate infrastructural development on ground, there is no regret in borrowing. Even abroad, states borrow for development”. Senator Ben Murray-Bruce in a tweet, said: “I am deeply sad some state workers have not been paid for ten months. I think the Federal Government should pay them and collect the money back at source.”

 
He added that where states owe, should the National Assembly intervene and enact laws empowering federal government to deduct workers salary at source before remitting state’s allocations?
Analysts have blamed the inability of states to pay salaries on their over-dependence on allocation from the federation account. Thy are of the view that majority of the states had over the years failed to innovate, become lazy and had refused to look at alternative sources of generating revenue to drive their activities.

 
Effect of falling oil prices
Specifically, analysts at Cardinal Stone, in their outlook for 2015, predicted that the low price of crude oil in the international market will expose the structural deficiencies in the Nigerian economy and will plunge a number of states into a quagmire. They said: “With oil contributing about 70 per cent of Nigeria’s revenue, the drastic drop in oil price will significantly curtail government revenue and invariably, expenditure.

 
Also, with government (state and federal) as the biggest employer of labour in the formal sector, the expected pressure on state government finances has negative implications for income. Also, analysts at PWC warned that tougher times might still be ahead, especially with the persistent low crude oil prices. They said, “State governments could struggle to borrow from financial markets to pay their workers.

 
Some highly-indebted states may miss planned interest payments on their debt. Continuing, the analysts stated that the finances of majority of the states would be in a perilous state, as the declining value of the Naira will make it difficult for most of them to finance their external debt, which makes up a quarter of their overall debt stock.

 
According to the analysts at PWC, as revenues are diverted to service debt, most states will fall behind on wages owed to their workers, leading to significant worker strikes which would bring most state governments to a standstill while public services such as education and healthcare are disrupted and then all infrastructure projects, including road development and water and sanitation programmes, are abandoned.

 
Unable to raise short-term debt in increasingly illiquid and shallow national capital markets, some highly-leveraged states will miss scheduled interest repayments,” they added. Analysing the impact of the fall in oil prices on three different states— Kano, Delta and Lagos States, the analysts said:

 
“Kano is the sixth largest state by GDP and is heavily reliant on federal transfers, which make up over 95 per cent of 2014 budgeted revenues. Given its low tax base, Kano will struggle to find other sources of revenue if federal allocations dry up. Unlike the Federal Government, which spends the majority of its budget on current items such as payroll, Kano dedicates around 75% of expenditure to capital projects.
A squeeze on Kano’s state budget would see these capital projects come to a halt. For the economy, this could inhibit productivity growth: but for its population, this means uncompleted roads, and lower quality water and sanitation infrastructure.

 
“Delta is Nigeria’s premier oil-producing state with over 60% of revenues directly-related to oil production. Given a heavy reliance on federal and internally generated revenue from the sector, Delta would feel the pinch more immediately than Kano and the other states.

 
The squeeze on Delta’s budget would force significant cuts in both current expenditure and capital expenditure. Where these capital projects relate to the oil sector, this would inhibit state production levels further down the line.

 
Finance Commissioners criticize Governors
In April, the Forum of Finance Commissioners openly criticised state governors who owe workers’ salaries, saying that no governor had any excuse for owing their workers.

 
Chairman of the forum before the new government took over, and Commissioner for Finance of Ebonyi State, Barr Timothy Odaah, told journalists at the end of the Federation Accounts Allocation Committee, FAAC in April that those owing should have made payment of salaries a priority, rather than spending state funds on electioneering campaigns and should be held responsible by the workers and the public.

 
Some state governors have been accused of squandering their resources on unprofitable ventures such as hiring and flying private jets and excessive political appointments. Such governors did not use the resources at their disposal to develop their states’ economy. As a result they could not generate internal revenue to support the state.

 
Internally generated revenue
Internally generated revenue of states has been poor though rising in total amount. Lagos, Rivers, Delta, Edo, and Akwa Ibom are states that have recorded the highest internally generated revenue (IGR) in the years spanning 2010 to 2013. Available data from the National Bureau of Statistics (NBS) and Joint Tax Board (JTB) for the period showed that Lagos dominated in 2010, Rivers followed with N173.1 billion, while Delta realised N106.4 billion.

 
Edo raked in N53.53 billion, just as Akwa Ibom made N35.6 billion. On the other hand, Jigawa, Zamfara, Nasarawa, Borno and Taraba States dominated the bottom of the table having generated the lowest IGR among the 36 states of the federation. Jigawa recorded only N2.725 billion, while Zamfara accounted for N6.374 billion. Nasarawa, Borno, Taraba generated N5.982 billion, N6.83 billion and N7.571 billion respectively.

 
The IGR was realised from Pay-As-You- Earn (PAYE), direct assessment, road taxes and other revenue with PAYE accounting for the highest amount. A breakdown of the Lagos IGR in three years showed that the state recorded N149.9 billion in 2010, which increased to N202.76 billion in 2011 and rose further to N219.2 billion in 2012 and N384.259billion in 2013. Of the N219.2 billion in 2012, Lagos realised the highest revenue of N172.44 billion from workers through the PAYE.

 
A total of N4.36 billion came from road taxes, N1.89 billion from direct assessment of companies doing business while N40.513 billion was from other revenue sources. Lagos State realised about N120.25 billion from PAYE in 2011; N7.97 billion from direct assessment, and N74.54 billion from other sources, while N104.681 billion came from PAYE in 2010; N7.51 billion from direct sources, and N73.704 billion from other sources.

 
Rivers State, which came second on the table, realised about N49.59 billion in 2010; N52.711 billion in 2011 and N66.28 billion in 2012 and N87.91billion in 2013. The state raked in N55.1 billion through PAYE in 2012; N485.9 million through road taxes; N22.075 million through direct tax assessment and N10.668 million through other revenue sources during the year.

 
Delta State realised N26.1 billion in 2010, N34.75 billion in 2011, N45.5 billion in 2012 and N50.2 billion in 2013. PAYE fetched Delta State over N42.565 billion in 2012. Also, N244.195million was realised from road taxes, N123.4 million from direct assessment, while N2.635 billion came from other sources.

 
Edo State realised N10.651 billion in 2010, which increased to N14.764 billion in 2011 and to N18.88 billion in 2012 and further to N18.89 billion in 2013. Similarly, Akwa Ibom raked in N10.133 billion in 2010, N11.678 billion in 2011 and N13.517 billion in 2012 and N15.398 billion in 2013. Kano generated N6.6 billion in 2010, N6.618 in 2011, N11.051 billion in 2012 and N17.142 billion in 2013.

 
Kaduna was able to generate N11.564 billion in 2010, N9.781 billion in 2011, N11.531 billion in 2012 and N10.932 billion in 2013. In the same vein Enugu internally generated revenue stood at N13.7 billion in 2010 dropped to N7.287 billion in 2011, N12.209 billion in 2012 and N20.203 billion in 2013. Oyo state’s internal revenue which stood at N10.488 billion in 2010 dropped to N8.915 billion in 2011. It however rose to N14.598 billion in 2012 and further to N15.251 billion in 2013.

 
However, Jigawa State, realised N1.241 billion in 2010 and N1.482 billion in 2011, but no information was provided in respect of 2012 but figures for 2012 and that of 2013 were not recorded. Yobe which had N5.96 billion as internally generated revenue in 2010 saw its internal revenue plunge to N2.385 billion in 20111; N1.785 billion in 2012 and rose to N3.072 billion in 2013.

 
Borno, which is also among the states with the worst record in terms of IGR, have been suffering from terrorist attacks by Boko Haram. This development made the Federal Government declare a state of emergency in the state, along with Adamawa and Yobe states last May and to further renew the emergency rule after the expiration of the six-month period.

 
Over dependence on federal allocation
The poor internally generated revenue performance of states started with the discovery of oil in commercial quantity in the country. A cursory look at the revenue profile of state governments in 2002 showed that only Lagos State was able to generate the sum of N29.3 billion internally out of its N58.2 billion budget provision which represents 50 per cent of its 2002 expenditure profile.

 
It was followed by Rivers State which had a statutory allocation of N25 billion and internally generated revenue of N12.5 billion. The internally generated revenue of Rivers State represents 32.4 per cent of the state expenditure profile for 2002. In the same vein, Kano State generated a total of N7.35 billion while it received the sum of N18.5 billion as statutory allocation. Its internally generated revenue accounted for 17.9 per cent of the state expenditure profile for 2002.

 
According to statistics provided by the CBN, only five other states were able to generate internal revenue to the tune of N2 billion. The states are: Akwa Ibom N2.6 billion, Cross River N2.1 billion, Katsina N2.4 billion, Ogun N2.5 billion and Osun N2.33 billion. Ten states, however, managed to raise N1 billion and above internally in 2002. They are Anambra, Ekiti, Enugu, Imo Jigawa, Kaduna, Kogi, Ondo, Oyo and Zamfara. Others generated internal revenue of less than one billion in 2002.

 
From the revenue profile of state governments, they cannot finance on their own the overhead cost of running their states. This means that lack of performance of most state governors is caused by their over dependence on the Federal Government which also depends solely on revenue from oil. The pitiable condition of states in the country is attributable to the fact that they have not explored other avenues of generating revenues. States in a bid to meet their statutory obligations go into borrowing.

 
Depletion of excess crude account
The federal Government under President Olusegun Obasanjo had set up the excess crude account where the oil revenue above the budget bench mark was being saved every year for the rainy day. But state governors fought the decision and insisted that the money should be shared instead of being saved when prices of crude were high. The Federal Account Allocation Committee on monthly basis was taking from the fund to argument short falls in oil revenue accruing to the federation.

 
Nigeria’s Excess Crude Account, which at a time had about $20 billion has plunged to $2.45 billion as oil prices continue to fall. The balance in the dollar component of the excess crude oil revenue account depleted to about $2.45 billion in December 2014. The account, which stood at about $4.11billion in October, dropped to about $3.11billion in November 2014.

 
Details of the balance of the account released at the end of the FAAC meeting showed that the transfer to the account as a result of foreign exchange gain dropped from N1.767 billion to about N665 million.

 
The Accountant General of the Federation, AGF, Jonah Otunla, said in a statement at the end of the meeting that the balance in the account dropped from about $3.11 billion to $2.45 billion in December.

 
The new balance in the account followed the withdrawal of the equivalent of N15.631 billion to augment the shortfall in allocation available for distribution to the three tiers of government for the month. Former CBN Governor Lamido Sanusi Lamido and Dr. Okonjo-Iweala had argued that the account should be kept for a rainy period as this but state governor had their way in sharing the money. If there were enough funds in the account, it will not have been this bad for state governments.

 
External debt
State governors finding it difficult to finance their program went on a borrowing spree. The external debt profile of states has shown that Lagos State has the highest with a profile of $1.087 billion, followed by Kaduna State with a total of $234 million. Cross River State followed closely with an external debt profile of $131.469 million.

 
Other states with relatively large external debt are Edo $123 million, Ogun $109 million, Bauchi $87million, Enugu $62 million, Katsina $78 million, Osun $67 million and Oyo State $72 million. Based on the rising debt profiles of state governments, the Federal Government last year directed banks not to grant fresh loans to state governments until they got the relevant approval and clearance from the Federal Ministry of Finance.

 
The Federal Government had defended its decision to dissuade banks from granting unsecured loans to state governments, saying it was to protect the states from excessive accumulation of debts. The Minister of State for Finance, Bashir Yuguda, had said that the decision was not aimed at stalling the development efforts of the state governments.

 
The Minister said that most of the states have been experiencing difficulties in servicing their existing debts and it would not be advisable to allow them take fresh loans.