The nine oil-producing states shared a total of N341.59 billion from the federation account, through the 13 percent derivation formula, in the first half of 2024.

The 13 percent derivation formula is a revenue-sharing mechanism used by the federation account allocation committee (FAAC) to distribute a portion of the country’s revenue to the oil-producing states.

This formula is rooted in Section 162 (2) of the constitution, which mandates that 13 percent of the revenue generated from natural resources, such as oil and gas, should be paid directly to the states where these resources are extracted.

Data from the National Bureau of Statistics (NBS) showed that Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Imo, Ondo, and Rivers were states that received the funds in the six-month period.

TheCable Index’s analysis of the report showed that Delta received the highest allocation, totalling N113.78 billion — representing 33 percent of the total disbursement.

Delta is followed closely by Akwa Ibom, which got N70.01 billion or 20 percent of the total disbursement.

Other states include Bayelsa (N64.04 billion), Rivers (N58.78 billion), Edo (N11.90 billion), Ondo (N10.05 billion), Imo (N5.72 billion), Anambra (N4.13 billion) and Abia (N3.19 billion).

OIL STATES STRUGGLE WITH DEBT AND INFRASTRUCTURE DECAY DESPITE DERIVATION FUND

In 2022, Delta and Akwa Ibom were the oil-producing states that received the highest amounts from the federation account, with Delta receiving N296.63 billion and Akwa Ibom receiving N222.52 billion.

In the first half of 2023, the nine oil-producing states shared N544.9 billion from the federation account, with Delta receiving the largest allocation of N180.1 billion, followed by Akwa Ibom with N130.8 billion.

Despite receiving these funds, the oil-producing states continue to face significant debt and poor infrastructure conditions.

According to the Debt Management Office (DMO), as of Q1 2024, Edo had the highest debt stock of N490.67 billion (domestic and foreign obligations) compared to other oil-producing states. Delta followed with N413.75 billion debt while Rivers recorded N340.25 billion.

The debt figures for other states were as follows: Imo (N265.98 billion), Abia (N232.17 billion), Akwa Ibom (N199.62 billion), Bayelsa (N182.17 billion), Anambra (N177.08 billion), and Ondo (N123.09 billion).

In February 2023, Edwin Clark, an Ijaw national leader and convener of the Pan-Niger Delta Forum (PANDEF), asked Ifeanyi Okowa, the immediate past governor of Delta, to spend more of the 13 percent derivation funds on oil-producing communities.

Clark, in a statement, alleged that the 13 percent derivation funds received by the state government were mismanaged.

He described Okowa’s administration as a “reign of unaccountability”.

The Ijaw leader said the state government had not spent the derivation funds on foremost areas and projects but on “favoured areas”.

Some graduates of Higher National Diploma (HND) academic programmes across the country are at the risk of exclusion from the national service due to the National Youth Service Corps’ (NYSC) latest policy of demanding Industrial Training (IT) certification for those seeking to fulfil their national service obligations.

It stated, “Graduates of Higher National Diploma (HND) are to provide evidence of completion of their one-year Industrial Training in addition to ND and HND Certificates/Statement of Results.”

With this mandate, polytechnic and mono-technic graduates mobilised for Batch B stream II without evidence of the mandatory one-year industrial training will miss out on the national service.

The policy shift means that without a valid IT certificate, HND graduates cannot proceed with registration in the camp. Thus, many graduates now face the task of securing proof of their internship experience and risk missing participation in the next orientation camp, scheduled for August 28, 2024.

LEADERSHIP reports that the one-year mandatory IT programme is a prerequisite for admission to the HND programme, as stated in the law.

According to the law, graduates of polytechnics and monotechnics must undergo the one-year IT with evidence of completion before applying for a HND academic programme, and institutions must confirm this before admitting them.

Unfortunately, our correspondent gathered that most of these HND awarding institutions do not confirm the IT-compliance before admitting students, thus graduating thousands of students who now face hurdles to participate in national service after being mobilised by the NYSC.

Our investigation further revealed that some polytechnic institutions have previously disregarded these regulations by enrolling students without the required one-year IT certificate.

Giving reason for its decision to enforce the law, the NYSC coordinator in Lagos State, Yetunde Baderinwa, said, “It has been noticed in recent times that some graduates of polytechnics and mono-technics do not observe the mandatory one-year IT before being admitted for HND programmes. The one-year IT is a prerequisite for HND.

“They must undergo the one-year IT with evidence of completion before going for HND, and institutions must confirm this before admitting them for HND.”

However, some affected HND graduates have called for leniency in their national service eligibility, pleading with the NYSC to intervene with their polytechnic institutions and allow them to serve the fatherland since they had already been mobilised for Batch B Stream II.

They argued that the institutions were to blame, as they admitted them without requiring the mandatory IT certificate, or alerting them to the need for it.

Some of them, who spoke with LEADERSHIP, expressed frustration that they do not have evidence of an IT certificate to proceed with registration when camps open this month.

A recent graduate from Kaduna State Polytechnic, who identified herself as Hauwa, said she was anxiously awaiting her national service posting after being mobilised by NYSC, until the recent pronouncement.
Hauwa faces a hurdle due to a new NYSC policy that mandates one year of industrial training certification for eligibility.

She said, “I’m excited to start my service, but I’m worried that I might not be screened (admitted) in camp due to this new requirement. My school did not let us know that we have to provide the mandatory IT certificate, and I fear this could disqualify me.

“I would like the Scheme (NYSC) to address this issue and find a way to accommodate those of us who this policy may have overlooked. It would be fair to work with our institutions to clarify our standing,” she said.

She stated that her schoolmates who were mobilised under Batch B Stream 1 were already in the service without any obstacles.

Hauwa’s case highlights a growing frustration among graduates caught between their enthusiasm for national service and the practical challenges of new regulations.

As the affected prospective corps members await further clarification on the issue, they hope for a resolution that considers their circumstances while the rule takes effect in subsequent years.

In a dramatic turn of events, Mr. Igiebor, the man whose wife was recently seen in a viral video tearing his international passport at the Murtala Mohammed International Airport in Lagos, has responded by narrating the full story of the incident for public scrutiny.

Mr. Igiebor, in his response, revealed that his wife had posted a video message earlier in the day, having gained unauthorised access to his social media account. “My wife posted something, I know she has gone far because she is very smart. She has gone far to get the password of this page and she posted something this morning,” he said. He added, “Since she wants us to do it this way, we will work on it together. I believe she will get tired.”

The embattled husband refrained from saying much about the cause of the incident but urged Nigerians to watch the complete video. He mentioned that the video had already garnered attention from various bloggers and even international media outlets like CNN. “Go and watch the video; I have the full clip. You’ll see something. She did not know that I gave somebody my phone,” he explained. “This is something that we can solve as a family, but she is trying to push it up. No problem, I’m following her and I will tackle it, and she will get tired.” 

LEADERSHIP reports that Mrs. Favour Igiebor, the woman at the center of the controversy, earlier defended her actions in a video released following the incident at the weekend. She criticised bloggers, including Tunde Ednut and Instablog, for jumping to conclusions without understanding her side of the story. “I’m not a mad woman who would just come and act like that,” she stated. “I have my reasons. I’ve gone through so many things. So many of you are just commenting on the video; friends and people who I haven’t spoken with for years are now calling me. I am not like that.”

Mrs. Igiebor also hinted at deeper family issues, expressing frustration with how her husband, who she claimed controlled most of her affairs, including her social media pages, has treated her. “I have gone through a lot of things, family issues here and there every time. My husband cannot speak. It took me a lot of time because he is the one handling a lot of things for me. He is the one handling my page for me. My email wasn’t attached to it; his email was attached to it too,” she lamented.

In the wake of the incident, the Nigeria Immigration Service (NIS) has launched a formal investigation. In a statement, the NIS confirmed that Mrs. Igiebor has been identified and invited for questioning. “If the allegations are substantiated, her actions would have constituted a breach of Section 10(b) of the Immigration Act 2015 (as amended), with corresponding penalties outlined under Section 10(h) of the same Act,” the NIS stated.

The video, which has spread widely across social media, shows Mrs. Igiebor tearing her husband’s standard passport, with torn pieces visible on the floor. When confronted, she defiantly responded in Pidgin English, “I tore it. Is it yours?” She was later seen walking away with her children, leaving her husband standing forlorn with a baby in a stroller.

The monies unremitted by Revenue Generating Agencies to the coffers of the Federal Government increased to N4.1tn as of June 2024, the Federation Accounts Allocations Committee has said.

FAAC stated that this was despite the agencies’ reconciliation and payment of outstanding debts of N94.96bn in May 2024.

The PUNCH reports that the unresolved amount is $165,067,714.53 (N178.52bn) and N3,917,340,180,696.84, compared to the initial amount of $36,329,376.24 (N51.88bn) and N2,977,561,881,021 recorded in May 2024.

The latest development was disclosed in a report by the Federation Account Allocation Committee post-mortem sub-committee meeting and signed by the Chairman of Revenue Mobilisation, Allocation and Fiscal Commission, Mohammed Shehu.

THE ROUNDTABLE: #Endhungerprotest - Govs, Ministers Meet To Stop Protests0.00 / 0.00

A breakdown of the agencies indebted to the government showed that the Nigerian National Petroleum Company Limited owes N940.62bn; Nigerian Upstream Petroleum Regulatory Commission and NNPC owe a combined amount of $23.81m and N1.94tn.

The Federal Inland Revenue Service and NNPC have an unresolved remittance of $141.25m and N1.04tn, while the Ministry of Solid Minerals Development and the Central Bank of Nigeria owe N48.75m.

Two months ago, The PUNCH reported that the government could lose over N3tn if revenue-generating agencies in the country do not reconcile unremitted earnings collected.

The Vice President of the Post-Mortem Sub-committee, who represented the committee Chairman, Kabir Mashi, at the meeting, said the outstanding amounts were still being reconciled with the relevant agencies at the monthly reconciliation meeting.

The Federation Account Allocation Committee disburses allocations from the revenues generated into the Federations Account, which comprises multiple accounts specific to a sector/ business type.

But giving an update in its June meeting, the chairman reported that the total unresolved amount due to the Federation Account from the reconciliation meeting held with the Revenue Generating Agencies in June 2024 was $165,067,714.53 and N3,917,340,180,696.84.

He said the outstanding amounts were still being reconciled with the relevant agencies at the monthly reconciliation meeting.

He added that the Nigerian National Petroleum Company Limited and the Nigerian Upstream Petroleum Regulatory Commission made the revenue reconciliation.

The report read, “Outstanding Federation Account Revenue Arising from Inter-Agencies Reconciliation Meeting held in June 2024: The total unresolved amount due to the Federation Account from the reconciliation meeting held with the Revenue Generating Agencies in June 2024 was $165,067,714.53 and N3,917,340,180,696.84.

“Assessing the impact of the FAAC PMSC on outstanding arrears of revenue inflows due to the federation account.

“For May 2024, the PMSC would like to inform the plenary that as a result of reconciliation with Revenue Generating Agencies, a total sum of $64,073,123.40 equivalent to N94,964,537,885.84 was reconciled and confirmed paid to the CBN designated accounts,” the report added.

The document further explained that the government had recovered a cumulative outstanding of N537.35bn in five months.

“The cumulative outstanding arrears reconciled and paid to the Federation Account from January to May 2024 stood at N537,353,864,835.67.”

“Members should note that these outstanding amounts are still being reconciled at the monthly reconciliation meetings between the agencies and the sub-committee. Furthermore, the sum of $180,230,895.02 and N2,535,352,533,190.87 outstanding payments from the Revenue Generating Agencies before June 2023, were referred to the Stakeholders Alignment Committee and the Sub-Committee awaits the outcome of the reconciliation soonest.

“The sub-committee is working with the Revenue Generating Agencies to ensure that the above outstanding amounts are paid to the Federation Account as soon as possible.”

Reacting, the commissioner of Finance, Kaduna State, Shizzer Bada, raised concern over the accumulation of outstanding arrears of revenue by RGAs against the Federation Account, which was running into trillions of naira between 2023 and 2024.

She, therefore, advised on the need to expedite action in concluding the reconciliation with Agencies.

A prophetess, Folake Olasode, 35, and a schoolteacher, Damilola Aboloyinijo, 31, were on Monday arraigned before a Lagos State Magistrate Court sitting in Tinubu for allegedly preparing a fake charm of protection and obtaining N8m from their victim.

The duo are facing five counts of conspiracy, stealing, obtaining, unlawful assault, and breach of public peace, preferred against them by the police.

The Prosecutor, Assistant Superintendent of Police Francis Igbinosa, told the court that Olasode and Aboloyinijo, whose addresses were not given, allegedly committed the offences sometime in May 2024.

Igbinosa said the defendants conspired to commit the alleged offences.

He said the incident took place at 7A, Jide Agbalaya Street, Chevy-View, Lekki area of Lagos.

The prosecutor said that the defendants and others at large obtained the sum of N8m from one Sarah Umeh under the pretence that they prepared charms, and batter and put incisions on her and her three children for protection, a representative they knew to be false.

Igbinosa also told the court that the defendants unlawfully assaulted the complainant, Umeh and her three children by using a razor blade to put incisions on their bodies with a representation that they were protecting them from death.

The defendants were further accused of conducting themselves in a manner likely to cause a breach of the public peace by burning charms contained in a calabash in the compound of Umeh.

According to the prosecutor, the offences committed contravened Sections 411, 314, 287, 172, 287, and 168 (d) of the Criminal Laws of Lagos State 2015.

The defendants pleaded not guilty to the allegations against them.

However, the defendants’ counsel, Moses Enema, applied for their bail and urged the court to grant his clients bail in the most liberal terms, saying they were first-time offenders.

Consequently, Magistrate Aderemi Gbajumo granted them bail in the sum of N750,000 each with two sureties each in like sum.

Gbajumo said the sureties must have a valid means of livelihood and a valid means of identification.

She further ordered that they must provide evidence of Lagos State Residents’ Registration and verification of their addresses to be carried out by the prosecutor.

The matter was adjourned till October 14, 2024 for trial.

The Association of Senior Civil Servants of Nigeria, ASCSN, has threatened to cripple the activities of states that refuse to implement the N70,000 new national minimum wage.

President of the Association Shehu Muhammed, gave the threat yesterday during the association’s 5th Quadrennial Delegates Conference in Lagos, where he emerged as the new president.

According to him, “For states not ready to implement the new minimum wage, let me tell you categorically, it is impossible. We are coming for them.”

He urged state governments to implement the new wage to improve the standard of living of their citizens since the incomes of state governments have continued to rise following enhanced allocation from the Federal Account Allocation Committee, FAAC.

Muhammed urged that states could achieve this by reducing wastages and blocking leakages of government funds, advising states to embrace the policy of indexing income to correspond with the rate of inflation.

ASCSN new President said “the most important priority now is to address the issue of the new minimum wage by constituting a committee to address the consequential adjustments towards implementation and the strategies to ensure workers have a living wage in Nigeria.

“The full implementation of the new national minimum wage and its consequential adjustments at both the federal and the 36 states of the federation will be the top priority of Organised Labour.”

Earlier, the Secretary General of the Association, Joshua Apebo argued that following the increase in allocation from the Federal Account Allocation Committee, FAAC, since the removal of fuel subsidy, the state governors should immediately implement the new minimum wage to improve the standard of living of their citizens.

He said “We request that state governments implement the new national minimum wage to enhance the standard of living for their citizens. This can be achieved by reducing wastages and blocking leakages of government funds. We also advise the government to adopt the policy of indexing income to match inflation rates, as recommended years ago by the Chief Ernest Shonekan committee.”

Delivering a solidarity message, the President of the Trade Union Congress of Nigeria, TUC, Festus Osifo, promised to support the new executives to ensure the interests of workers were protected.

He urged the new leadership to put the interest of the union first and those who elected them into office.

The federal high court in Abuja has dismissed an application seeking an interim injunction to restrain protesters from continuing the #EndBadGovernance protest.

Peter Lifu, the presiding judge, on Monday, dismissed the ex parte motion filed by Danladi Goje, Buky Abayomi, Adiza Abbo, and 13 other Nigerians.

In the application dated August 12, the applicants sought the enforcement of their fundamental rights against the organisations involved with the protests.

The organisations sued as 1st to 8th respondents are Take It Back Movement, Concerned Nigerians, Nigerians Against Hunger, Initiative For Change, Human Rights Co-advocacy Initiative, Nigerian Against Corruption Initiative, Citizens for Change Advocacy Initiative, and Timely Intervention.

The 9th to 19th respondents are Active Citizens Group, Students For Change, We Coalition, Total Intervention, Refurbished Nigeria, Tomorrow Today, Our Future In Our Hands Initiative, Youths Against Tyranny, Save Nigeria Movement, Omoyele Sowore, and Social Democratic Party (SDP).

Other respondents in the matter are the attorney general of the federation and security agencies.

In the court documents, Tsembelee Sorkaa, the applicants’ lawyer, said his clients’ rights to life, personal liberty, private and family life, and economic activities would be further breached if the 1st to 19th respondents continued the protest.

Sorkaa urged the court to restrain the 1st to 19th respondents from continuing with the protest pending the determination of his motion on notice.

The lawyer also appealed to the court to enforce the restraining order if it is granted.

In his ruling, Lifu said the #EndBadGovernance protest ended last week, noting that there was no evidence presented before the court showing that the protesters would reconvene later.

The judge said the applicants’ lawyer cannot rush his notice ex parte without providing the required affidavit to support the requests for an interim injunction and substituted service.

He dismissed the application for lacking merit and adjourned the hearing on the motion on notice to August 29.

From August 1 to 10, Nigerians took to the streets in some parts of the country to protest what they described as bad governance and rising hunger in the country.

In some parts of the country, courts granted interim injunctions restraining the protesters to some designated locations.

A Federal High Court, sitting in Lagos, yesterday, dismissed the applications by two Indian nationals, Prem Garg, Devashish Garg and a Briton, Marcus Wade, to quash a bench warrant issued for their arrest and extradition, issued against them on alleged of $42.485million fraud, for lacking in merit.

The two Indians, and the Briton who is the Chairman of Wilben Trade Limited, Dubai, and their companies, Agrico Agbe Limited, Wilben Trade Limited, Dubai, are being charged before the court by the office of the Attorney-General of the Federation, AGF, for allegedly defraud Ecobank Plc of the sum of $42,485,900, with the pretence of using the of money to purchase and import into India parboiled rice Nigeria.

Counts one and four against the defendants in the charge marked FHC/L/562C/2022, dated October 7, 2022, reads, “That you, Prem Garg, Devashish Garg both of Indian nationality, Agrico Agbe Limited (a company registered in Nigeria), Wilben Trade Limited, Dubai (a company registered in the United Arab Emirates, Dubai), Marcus Wade (Chairman of Wilben Trade Ltd, Dubai) of British nationality, sometime in the month of May and September, 2015, at Ecobank Plc, Lagos within the jurisdiction of this court conspired between yourselves to commit an offence thereby committed an offence punishable under Section 422 of the Criminal Code Act, Cap C38 Laws of the Federation of Nigeria, 2004.

“That you, Prem Garg, Devashish Garg both of Indian nationality, Agrico Agbe Limited (a company registered in Nigeria), Wilben Trade Limited, Dubai (a company registered in the United Arab Emirates, Dubai), Marcus Wade (Chairman of Wilben Trade Ltd, Dubai) of British nationality, sometime in the month of May and September, 2015 at Eco Bank Plc., Lagos within the jurisdiction of this court conspired between yourselves to commit an offence to wit: Cheating in that you caused Ecobank Plc to deliver monies to the tune of $42,485,900, which was intended by contract for the purchase and import into Nigeria India Parboiled rice but never utilized the sum of money for the contract and thereby committed an offence punishable under Section 421 of the Criminal Code Act, Cap, C38 Laws of the Federation of Nigeria, 2004.”

However, while the charge is pending, the defendants did not appear in court to take their pleas on the charges.

The development made the office AGF, through its lawyer, Dr. Pius Akutah, now Executive Secretary/Chief Executive Officer, CEO, of Nigerian Shippers Council, to file applications before the court for issuance of bench warrant and possible extradition against them.

The application was granted by Justice Akintayo Aluko, sometimes in November 2023.

But the defendants, through their lawyers, Dele Belgore and Dr. Dada Awosika, SANs, filed applications to quash the orders for their arrest and extradition.

The application was countered by the AGF through its lawyer, Mrs. Kehinde Bode-Ayeni, who inherit the case file from Dr. Pius Akutah.

Justice Aluko in a delivering, said that the proceedings before Magistrate Court in Delhi, Indian can not operate as a stay in criminal proceedings in Nigeria because its not purely a criminal proceedings, moreso, it a proceedings in Nigerian court as constituted by the Nigerian constitution.

The second issue is that an order of status quo granted by another court can not viciate the criminal charge pending in this court.

The position of the administration of Criminal Justice Act which regulate criminal proceedings in Nigeria have stipulated that the criminal and civil proceedings can be going simultaneously.

On the final note, Justice Aluko held, “There is no merit in the applications filed by the defendants.” The judge held that the two applications lack merit and same are dismissed.
Consequently, Justice Aluko the case to October 24, for report on bench warrant and further proceedings.

…80% others in low-capacity utilization

…Labour begs FG to intervene

Over 50 firms in the chemical and non-metallic products sub-sector of the nation’s economy are in a dilemma as multinationals, medium and small-scale enterprises, SMEs, and member companies are either exiting, on the verge of shutting down or operating at low-capacity utilisation.

It will be recalled that the employers, under the umbrella of the Chemical and Non-Metallic Products Employers Federation, CANMPEF, had a membership strength of no fewer than 100 firms,, comprising multinationals, medium, and small businesses, which employ about 350,000 people across the country.

But presently, Vanguard checks revealed that while over 50 of such companies have closed down, four are on the verge of shutting down, while 80 per cent of the remaining companies are operating at low-capacity utilization.

Industry sources told Vanguard that over 100,000 workers have lost their jobs directly and indirectly in the last year.

The firms in this sector produce medicals, pharmaceuticals, perfumes, cosmetics, toiletries, soaps, detergents and vegetable oil, hydraulics, cement, asbestos cement and concrete.

Other products include glass, ceramic, earthenware, clay products, basic industrial organic and inorganic chemicals, fertilizers, explosives, fireworks, footwear, leather, and rubber.

According to Vanguard’s checks, among the companies that have shut down are Glaxo SmithKline Beecham, Procter & Gamble, Mega Plastic Nig limited, Twinstar Nig limited, and Femina Hygienical Products Nig. Limited and Linda Manufacturing Company.

Those on the verge of shutting down include Unilever, PZ Industries, Prime Pack, and Reckitt & Benckiser.

One of the companies about to shut operations in Nigeria is Kimberly-Clark because of high energy costs, expensive raw materials, and reduced customer demand.

The company, it was gathered, has reduced shifts and implemented other cost-cutting measures in a bid to remain afloat.

The company’s $100 million factory, located in Ikorodu, Lagos State, was commissioned two years ago by former Vice President Yemi Osinbajo to produce diapers and sanitary pads, among others.

Firms lament

Lamenting the plight of the sector, Executive Secretary of CANMPEF, Mr Olorunfemi Oke, said the exits were painful, saying more worrying is the fact that challenges faced in the sector were inflicted by government policies.

According to him, the challenges confronting the sector are floating of the naira, depreciating currency and volatile exchange rate, fuel subsidy removal, high exchange rate for computation of import duty, high interest rate, epileptic power supply with the recent increase in tariff that has tripled electricity bills and made it unsustainable for businesses; and inadequate gas supply for firms, and high cost of diesel.

He also named poor road conditions, multiple taxations, a high inflation rate of over 34 per cent, weak consumer purchasing power, and insecurity across the country.

The executive secretary said: “The effects of the socio-economic challenges on the manufacturing companies are enormous. Most of our member companies are just managing to survive. We cannot access forex for purchase of raw materials and machinery.

“High import duty cost is discouraging importation of raw materials and machinery. High energy costs have resulted in high production costs. Unreliable power and gas supply disrupts production schedules and increases operation costs.

“We are experiencing high reduction in capacity utilization and increased production slowdowns, huge foreign exchange losses suffered by many member companies, especially the multinationals, and reduction of profit. Majority are recording losses.

“There is also declining market share and growth potential and inability to compete with imported products. High interest rates discourages business expansion. There is growing weakness in consumer purchasing power. Companies are shutting down some of their operations. This has led to retrenchment of employees. The hyperinflation has led to an increase in the cost of living of employees and an adversarial industrial relations climate in the sector.

Shutdown

“While I don’t want to sound alarmist, tens of member companies from the multinationals, medium and small scale companies have shut down. Some of the companies that have closed down are Glaxo SmithKline Beecham, Procter & Gamble, Mega Plastic Nig Limited, Twinstar Nig Limited, Femina Hygienical Products Nig Limited, and Linda Manufacturing Company. Similarly, among those on the verge of shutting down include Unilever and PZ industries.
‘’We are very pained by these developments. Let us take for example the case of Linda Manufacturing Company and Kimberly-Clark.

Linda Manufacturing Company which was producing synthetic hair attachments and other accessories was employing and keeping our young girls off the streets and criminality. Only God knows what these young girls will turn to now that they are out of jobs. And for Kimberley Clark which produces Huggies diapers, and sanitary pads, with the imminent shutdown of its Ikorodu production facility two years after investing $100 million in Nigeria. Remember that the former Vice President, Yemi Osibanjo commissioned the factory two years ago.

The company has been producing below-installed capacity since late 2023 because of the harsh economic environment in the country. If this company is allowed to exit Nigeria, it will add to the sad story of the worsening crisis in our sector. The pathetic situation of this firm is that in 2022, the company commissioned a $100 million production factory in Ikorodu, Lagos State which was inaugurated by then vice president to resume operations after an earlier closure of operations in 2019 following a review of its business. Apart from these woes, 80 per cent of the remaining member companies are operating at low-capacity utilization.

Job losses

While Mr Oke was not forthcoming on the number of job losses, Vanguard, however, gathered that no fewer than 100,000 Nigerians have lost their jobs in the sector.

Speaking further, he said: “As a Nigerian, it is sad and frustrating for me to talk about my fellow countrymen and women losing their means of livelihood in this manner.

‘’A lot of people have been thrown into the job market. The figure is huge. We are talking about direct and indirect employment, comprising suppliers, distributors, drivers, contractors, and traders among others. I do not want to give a figure. But I can tell you without mincing words that it is huge.”

Way forward

The CANMPEF scribe called on government to address challenges facing the sector by “giving concessions on the allocation of forex to the manufacturing companies, reduction of import duties for raw materials for an essential sector like the pharmaceutical industry, reduction in import duty charges, improving supply of energy and gas to manufacturers, reduction of the rate of energy charges by power distribution companies, DISCOs, stopping multiple taxes by the local, states and federal government agencies, signing and implementing the new national minimum wage bill to improve consumers’ purchasing power, focusing on rehabilitating selected roads to reduce logistics costs and fixing the nation’s refineries to enable access to petroleum bi-products that serves as raw materials for the chemical industries.

“The industry is import- dependent because of the nature of its products and its raw materials are chemicals majorly from the petro- chemical industries. ‘’The Federal Government should take urgent action to stop manufacturing companies from shutting down.

Government should support the companies to thrive and increase employment and reduce insecurity challenges in the country.

“The only member companies that seem to be doing well today are the cement manufacturing firms because of road constructions and other related businesses.”

Voda Paint MD reacts

Also speaking, the Managing Director, Voda Paints Limited, Mr Rotimi Aluko, blamed unreliable power, unstable currency, difficulty doing business, steadily rising inflation, insecurity, multiple taxation, and poor infrastructure, among others.

Aluko, who is also the Vice President of CANMPEF, said: “Like most of the sectors making up the Nigerian industrial landscape, the chemical, leather, food sectors are all struggling to survive economic hardship that, looking back now, has actually been long coming.

‘’It is, indeed, very hard to find any one sector of the economy that is not impacted by the numerous issues which those doing business in Nigeria have really been enduring, starting with unreliable power, unstable currency, difficulty doing business, steadily rising inflation, insecurity, multiple taxation, poor infrastructure, etc.

“Currency tweaking and the associated policies in concert with the removal of petrol subsidy and the floating of the naira, have helped to compound the pressure on industrial operations generally.

“The consequence on the consumers is depletion of disposable income, such that most households are in tight adjustment as their income is hardly coping with necessities.

“Most industries rely on bountiful discretionary income to survive. That is the crux of the pain in the sector. Demand has significantly dropped and so goes production and ultimately income.

“It is, indeed, very tough, especially for sectors outside of households’ eessential or committed expenses.

‘’Even those in essential expenses column are grappling with the consequences of reduced demand, owing to downward adjustments by consumers of quantities and quality of their purchases as a result of inflation-driven loss of purchasing power.

Survival mode

“I think how the sectors have been coping can easily be deduced from all the aforesaid; we are in survival mode. Sacrifice, cost-cutting as much as feasible, mounting bills, income stagnation, abandonment of key projects, reduced hours of operation/attendance rotation, etc. Everyone is scratching the ground as well as their heads for whatever will aid to keep them afloat.

Way forward

On ways out of the challenges, Aluko said: “Government action. It is all down to what the government chooses to do and not do. The truth starts with how the government views and treats manufacturing. If manufacturing is taken as the most strategic value-adding local content economic weapon that it is, Nigeria will transform into the league of leading nations of the world!

“Not even crude oil can come close. Why? It is manufacturing that can harness our immense reservoir of human talents to serve as an engine for the conversion of the bountiful contents atop and beneath our God-given land and those beyond our shores into products capable of becoming the biggest foreign exchange earners as experienced by China and several other Asian economies.

“Government just has to step forward to help get the necessary building blocks in place and put right the business environment, such that Nigeria will rank high among nations having very attractive level of ease of doing business.

“For this to be, the government has to make these investments and protect local manufacturing. This is non-negotiable. All advanced nations and those who have climbed up to join the top league did it at one point or another and are still doing it.

“The most powerful economic and military power in the world is currently engaged with China openly as an example.

“We have done it before with huge success when in 2007, Nigeria clamped down on the importation of cement by companies without local cement manufacturing investment. The result is huge.

“Before the implementation of the smart act of protection, Nigeria in 48 years of cement manufacturing preceding the protective action, only grew to about seven million metric tonnes of cement production per annum and in the 15 years succeeding the policy, has grown to over 60 million metric tonnes production/per annum.

“Do that across several sectors integrating farm produce conversion, petrochemicals, basic chemicals, natural resources, basic tools, electronics, etc, Nigeria will be an unstoppable giant. It has potentials.

“The government should declare a clear form of emergency in the manufacturing sector. It should subsidise consumption via manufacturing subsidy by way of tax relief, duty/tariff removal on agricultural and manufacturing inputs. The gains will come in many folds.

“First of all, our youths will be gainfully employed and stop idling away their lives or hawking things they should be producing in the first instance. Savings on social and security costs cannot be estimated.

“Government should put in place necessary administrative and legal firewalls against those who might truncate gains of the strive towards the achievement of good level ease of doing business across the country and sectors.”

Labour begs FG to intervene

On his part, the National Secretary, National Union of Chemical Footwear Rubber Leather and Non-Metallic Products Employees, NUCFRLANMPE, Joseph Dada, pleaded with the government to intervene immediately to save the sector from imminent collapse. He said: “Our industrial sector has been finding it extremely difficult to operate smoothly and effectively for the past two years.

‘’Bad government policies have negatively affected the running of our sector. Many of the industries have relocated to other African countries where they can do their business with ease and maximise profit.

“Our government, through the Central Bank, has increased the lending rate to over 30 per cent, which is not good for manufacturing and chemical industries to break even as most raw materials are imported. We cannot do backward integration.

Economic distortions

“The industries are groaning under the outrageous tariffs imposed by DISCOs and others responsible for the supply and distribution of electricity to the industries in Nigeria.

The tariffs are doing nothing other than kill the industries. This is compounded by the removal of the petrol subsidy that has turned the country upside down since last year. The consequences are part of the socio-economic distortions plaguing the nation.

“Some of the companies that have relocated to other African countries are multinationals, such as Procter & Gamble and GSK Pharma, Femina Hygiene, and Twinstar. Many others are on the verge of closing down any moment from now because of the unfavourable economic policies of our government.

“Hundreds of workers have lost their jobs as a result of management’s inability to provide raw materials in their various companies. Those that are managing to produce are producing below 20 to 25 per cent of installed capacities.

‘’We are still compiling the list of job losses. I can tell you it is mind-boggling in a country with very high unemployment figure.

Enabling environment

“We are pleading with the Federal Government to urgently halt this alarming trend and create enabling environment for industries to have access to foreign exchange from Central Bank of Nigeria for manufacturers to get forex to import raw material for industries to produce.

“The issue of unsustainable tariffs as well high cost of fuel regime must be addressed immediately to save our industries from total collapse. We are not equally unaware of the issues of excessive and multiple taxation from all levels of government, insecurity, poor state of our roads and very low purchasing power of most Nigerians. The government should come to our aid as renewed hope is gradually turning to sustained despair.”