Archive | March, 2016

Buhari’s A’P’C Stealing From Nigeria’s Poor

23 Mar

David O. Kuranga, Ph.D.

The author is the Managing Director and Principal of Kuranga and Associates, a full-service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. He is also the author of The Power of Interdependence with Palgrave Macmillan Press.

The APC Administration under President Buhari has embarked on a decisive quest to rob poor Nigerians of their basic sustenance and make the cost of living on the average person unbearable. While understandably, the government needs to raise internal revenue in Nigeria, outside of petroleum, it is not necessary that the government raise this revenue on the backs of poor Nigerians while refusing to require Nigeria’s wealthy to pay anything more whatsoever. The APC during thier campaign pretended to be a “progressive” party of the common man, but since they have taken power, their fangs and devil horns have unmasked themselves revealing their demonic vendetta to rob poor Nigerians.

FIRST the APC-led government under President Buhari, through the ministry of power led by former Lagos Governor, Babatunde Fashola, chose to implement a nation-wide tariff or tax on electricity of 45%. Needless to say, implementing taxes such as this indiscriminately nationwide, raises the cost of living on everyone, including those who can afford to pay and those who–most certainly–cannot. It is a prime example of a regressive taxation policy that has a greater impact on the poor and laboring classes than it does on the wealthy. Such massive hikes in basic power costs like this, is so damaging and regressive that it is even a violation of agreed UN global standards, to which Nigeria is party and a signatory. Labour unions across Nigeria have been out in force protesting the developments and calling for the Minister of Power to repeal the power tax increases. Their calls have fallen on def ears, all the while the president continues to smile and remains silent.

SECOND the Central Bank of Nigeria, implemented a nationwide 50 naira stamp tax on all deposits over 1000 naira. These taxes are collected from every Nigerian that owns a bank account and makes regular deposits, irrespective of the size of the individuals account, total annual earnings or any other safeguards. Needless to say again, implementing fees such as this is yet another prime example of a regressive taxation policy that has a far greater impact on the poor market women, common street hawkers, okada, trike, and danfo drivers, merely depositing their meager days earnings, often several times daily to keep from being robbed. By dipping into their earnings every time they make deposit the CBN discourages them from using banks, recording their income, paying taxes, and becoming bankable businesses and self-employed persons with verifiable income. This will make it harder for them to get credit, and will undoubtedly roll back progress made through SME and national banking initiatives to increase the number of people and businesses nationwide who use the banking system. Even worse, the policy continues to steal from the nation’s poor, futher punishing them for the countries financial woes while leaving the wealthy to pay almost nothing.

FINALLY as if the latter two initiatives were not bad enough, the demonic forces orchestrating the APC’s national heist of the nation’s poor, have now set in motion plans to level a tax on all telecommunications nationwide. The tax is being collected from every ordinary mobile phone and mobile internet user throughout the nation. Once again, given that access to these basic communication tools is a necessity for many Nigerians to survive and do their daily work, for the government to propose taxing them every time they make a call or use the internet they are yet again making it even more expensive for ordinary Nigerians to live on a daily basis! Their electricity is skyrocketing, fuel is skyrocketing, now cellular communications costs are skyrocketing, and their earnings being robbed when they take them to the bank! None of this has much of an impact on the elites in the country who run the APC and can all afford this. Yet either they are purely evil demons, or completely aloof to the struggles of ordinary Nigerians. Either way, from the top down they are frauds, thieves, and categorically unfit to occupy their positions given what they have all decided to do.

LET ME BE VERY CLEAR, regressive taxation measures ARE NOT the only means for the government to increase revenue. There are many progressive tax schemes that they could have implemented by now. Progressive tax measures to target the elite in Nigeria with (MANSION TAXES, LUXURY CAR & VEHICLE TAXES, LUXURY FOREIGN GOODS TAXES, DOLLAR HOARDING TAXES, among other measures). However the administration has not so much as lifted a finger to implement any of these measures despite the fact that Nigeria is among the most unequal nations in the world in terms of wealth inequality. With all things being considered, lets stop calling them the (APC), All “Regressive” Congress (ARC) is demonically pushing such damaging regressive policies all while shunning progressive measures protecting the nations elite who are part of the problem hoarding dollars and foreign exchange! Just like the PDP, the ruling party in Nigeria today is equally as elitist, class insensitive, and completely aloof to the hardship that the masses in Nigeria face, from the office of the president down. The compound impact of this systematic theft of the nation’s poor will have the identical impact on the masses in Nigeria as if the government continued stealing and pocketing oil revenue.

Nigeria does need to increase taxes and raise money, but not on basic electricity, calls, and deposits for everyone, but on foreign wine and champagne that the elite across Nigeria consume. On the foreign films and satellite tv that the elite across Nigeria watch. On the business-class flights and private jets that the elite across Nigeria hire. Taxes need also to be collected on the existing fleets of luxury and foreign cars that elite in Nigeria currently own even more so if they own more than 1, and on their aquatic yachts also. Luxury property taxes should also be collected on the multiple mansions and luxury flats valued over N50 million that elite across Nigeria own, even more so if they also own property abroad or more than 1 home in Nigeria. This is not radical or revolutionary, it is simple common sense in a society plagued with massive wealth inequality like Nigeria. THESE SAME POLICIES EXIST in the US and the UK. After sweeping to power with a charade of mischaracterizations, they continue the policy of robbing poor masses of Nigeria blind, this time using the weapon of taxes directed at the poor masses instead of looting their oil revenue. It is among the most shameful and disgraceful displays of bad governance on the planet today.

Kuranga and Associates Limited is an investment management advisory firm and an asset manager with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2016 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Dr.Kuranga

David O. Kuranga; Ph.D.
Managing Director
Kuranga & Associates Limited
Phone: 212.363.0936
david.kuranga@kaglobal.net
https://kurangaandassociates.wordpress.com
http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga

Rivers Monorail Quagmire

16 Mar

David O. Kuranga, Ph.D.

The author is the Managing Director and Principal of Kuranga and Associates, a full-service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. He is also the author of The Power of Interdependence with Palgrave Macmillan Press.

Over the last 24 hours I have received a great number of inquiries about the irregularities regarding the uncompleted Rivers State monorail. One of the charges that has been leveled against the current transportation minister, Rotimi Amaechi, by his successor, Governor Wike, has been how he spent over 400 million dollars of his states money on a monorail that he never completed.[1][2][3] The monorail project in Rivers, is a system designed by Intamin, and is similar to the monorail that was constructed in Moscow Russia for 240 million dollars by the same monorail manufacturer.[4][5] The two companies building the pylons and track work designed by Intamin in Nigeria were; ARCUS GIBBS Nig Ltd and TSI Nig Ltd. Between the two partners and contractors with Rivers State, at least 40 billion naira (270 million dollars) was spent. In addition, Intamin, the manufacturer of the monorail, designer and primary developer of the locomotives, rolling stock, and other technical signaling elements has taken an additional funds. Standard infrastructure adjustments were made in Port Harcourt to clear way for the new system, including roads and traffic adjustment which also was given additional funds all totaling up to 20 billion naira from Rivers State budget (135 million dollars) according to Governor Wike that said over 60 billion naira was spent.[6] Despite this, in Rivers state the same system has not been completed after spending far more than the amount that the City of Moscow spent building fully operational system by the same company. In fact, the Moscow system that connects to the Moscow subway is arguably more extensive than the Rivers system with more frequency of traffic and sophistication.

Right next door to Rivers, in Calabar Cross River State, Intamin partnered with the government there to build a monorail system for N5 Billion (36 million dollars)! The Calabar system is reportedly already functioning and is now conducting test runs.[7] The system in Calabar is very similar to the monorail in Rivers state which cost 1/8 the amount that was spent in neighboring Rivers State on their monorail system that is not even working! Given all that was spent in Rivers State, almost double what was spent in Moscow (which like Nigeria also records high-levels of corruption[8]), and 8 times what was spent in neighboring Calabar, it makes absolutely no sense whatsoever that today Rivers State is still without a functioning monorail, given that the government in Russia was able to construct a monorail system from the same manufacturer for about half of what has already been spent in Rivers State, and Calabar for 13% of what Rivers Government has spent on a non-functioning system. What is most disturbing about this is that, given these serious irregularities, it was somehow deemed that Rotimi Amaechi was the person best suited to be the honourable transportation minister. In his current role, the honourable Minister, who was nominated by the president and approved by the senate, will oversee the procurement of other contracts for roads, bridges, airports, the national railway, ports, and rivers throughout the entire federation!

A responsible and competent Senate would have asked specifically for definitive answers about the irregularities in the uncompleted Rivers monorail project compared with the identical far less-expensive completed monorail in Moscow Russia, and the incredibly inexpensive monorail in Calabar! The EFCC, if they were not politically compromised, would have conducted an extensive investigation into the Minister, given the amount of power and influence that he now currently has. Their hastily conducted probe into the matter undermines the credibility of the entire organization, if it had any to begin with. Even now that the minister has been approved as a minister, if the individual Senators who chair the committee on transportation and state and local government were responsible and competent, namely Sen. Ashafa Bareehu, and Sen. Abdullahi Gumel, they would have still summoned the minister for hearings on the matter. Further members of the House who chair transportation committee namely Hon. Aminu Isa, would have also summoned the honourable minister for hearings to get answers. Perhaps most significantly, and the height of irresponsibility and unprofessionalism are the numerous journalists and media outlets who have all had the opportunity to speak with the minister, and still till today, NOBODY, not one single Nigerian journalist, has ever asked the honourable minister to explain the gross irregularities between the still unfinished monorail in Rivers State and the fully completed far less expensive larger system in Moscow Russia, and even less expensive system in Calabar, all by the same manufacturer. Anyone who interviewed him should be ashamed.

What this tells us is above all, Nigerians have to decide whether they are serious about good-governance and being free the gross mismanagement in the public sector. Freedom is not given to anyone, rather it is the prize of those who take it. Our government will never be accountable to us unless we as a people stand up and demand it. Believing that any politician or political party will do what’s in our best interest without us forcing them is naive and history and our present reality is telling us clearly that that is not the case. By ignoring the real issues that actually matter, our highly unprofessional media establishment, has failed to press for answers to these serious irregularities ongoing in our governing system. To allow a serving honourable minister to get away without ever explaining the over 400 million dollars squandered on a still uncompleted project by his administration on what by all estimates should not have cost anywhere near that amount is a harsh indictment on the state of governance in Nigeria, the state of our unprofessional journalist and media, and the state of our society that is watching it and saying nothing.

CITED:
1. http://www.riversstate.gov.ng/index.php?option=com_content&view=article&id=543:monorail-project-to-be-completed-in-amaechi-s-administration&catid=91&Itemid=512
2. http://guardian.ng/news/rivers-monorail-project-no-longer-tenable-after-gulping-n33-9b-says-technical-partner/
3. http://businessdayonline.com/2013/05/rivers-n150bn-monorail-project-to-be-completed-2015/
4. http://www.liquisearch.com/moscow_monorail
5. http://sputniknews.com/russia/20150913/1026950290/moscow-monorail-closure.html
6. http://newstage.com.ng/2016/01/29/amaechi-must-account-for-over-n3trn-rivers-govt/
7. http://www.calabarblog.com/calabar-monorail-to-commence-operation-before-easter/
8. http://www.themoscowtimes.com/news/article/russia-improves-position-in-international-corruption-rating/557032.html

Kuranga and Associates Limited is an investment management advisory firm and an asset manager with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2016 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Dr.Kuranga

David O. Kuranga; Ph.D.
Managing Director
Kuranga & Associates Limited
Phone: 212.363.0936
david.kuranga@kaglobal.net
https://kurangaandassociates.wordpress.com
http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga

Missing Transportation Minister?

14 Mar

David O. Kuranga, Ph.D.

The author is the Managing Director and Principal of Kuranga and Associates, a full-service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. He is also the author of The Power of Interdependence with Palgrave Macmillan Press.

One of the more controversial nominees in the cabinet of President Buhari, is the Honourable Minister of Transportation, Rotimi Amaechi. There was a degree of opposition to his nomination and numerous petitions were filed against him. Now after being installed there are even greater questions surrounding his competence and focus as the serving Honourable Minister of Transportation. When he began his tour of the national railway system, the honourable minister stated that he did not even know that Nigeria still had a railway system. His admonition throws into serious question his capacity to do the job that he was assigned by the president. In late 2015, he indicated that the government would create and implement a transportation master plan which has not been completed. Before his appointment the president initiated a review of the national carrier, to date, the ministry is still working on this according to the honourable minister. Seven months ago I tabled a plan to revamp the national aviation sector that the government remains heavily invested in through AMCON and NEXIM bank. It seems from these developments that the honourable minister has a number of uncompleted assignments and a lot of learning to do with respect to Nigeria’s transportation system.

Despite this, today the honourable minister is back in his home state, where he remains heavily involved and focused in the local affairs of the state he used to govern while neglecting the nations transportation portfolio he was assigned by the president. The relocation of the minister away from his office headquarters in Abuja to focus on local affairs of his home state, given the current state of uncompleted assignments on his desk, is a gross dereliction of duty, to say the least. If the ruling APC truly needed a representative to go Rivers State, there are other people it could send than a serving honourable minister to go and meddle in the affairs of his home state and ignore his national responsibilities in the capital. The question is, why does the minister have such a vested interest in the local politics of the state he used to govern?

One of the charges that his predecessor, Governor Wike, has been leveling at him is how he spent 500 million dollars of his states money on a monorail that he never completed. The monorail project in Rivers, is a system designed by Intamin, and is identical to the monorail that was constructed in Moscow Russia for 240 million dollars by the same monorail manufacturer (SEE: http://www.liquisearch.com/moscow_monorail). Despite this, in Rivers state the same system has not been completed after spending more than double this amount–SEE:
1. http://guardian.ng/news/rivers-monorail-project-no-longer-tenable-after-gulping-n33-9b-says-technical-partner/
2. http://businessdayonline.com/2013/05/rivers-n150bn-monorail-project-to-be-completed-2015/

Given these irregularities, it makes no sense that today Rivers State is still without a functioning monorail, given that the government in Russia, which like Nigeria also has high levels of corruption, was able to construct an identical monorail system from the same manufacturer for less than half of what was spent in Rivers state. What is more disturbing is how, given these serious irregularities, it was deemed that Rotimi Amaechi was best suited to be the honourable transportation minister? His acknowledgement that he did not know the state of the national railway and current decision to run away from his responsibilities at his ministry to relocate to his home state speaks volumes about where he is in handling this very critical portfolio.

It is not clear what the ultimate goal of the honourable minister is by relocating to his home state and ignoring his national responsibilities. If his ultimate goal is to silence his critics and hide his record, particularly on the still uncompleted $500 million dollar monorail project, already more than double the cost of the identical fully-completed Moscow monorail, there is nothing that abandoning his ministry will do to hide these gross irregularities he has on his record back in his home state. Going forward, given the serious issues the president has already had with personnel in the budget ministry, it may be time to reevaluate a personnel shift at the ministerial level in the transportation ministry as well. Given that the minister is more focused on the affair in his home state, perhaps he is signaling his preference to be the honorable minister of Niger Delta Affairs and not the transportation minister. Certainly given his background and record, he arguably has a much stronger case to make for the Niger Delta portfolio than for the transportation portfolio.

Kuranga and Associates Limited is an investment management advisory firm and an asset manager with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2016 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Dr.Kuranga

David O. Kuranga; Ph.D.
Managing Director
Kuranga & Associates Limited
Phone: 212.363.0936
david.kuranga@kaglobal.net
https://kurangaandassociates.wordpress.com
http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga

Taxing Dollar Hoarding

3 Mar

David O. Kuranga, Ph.D.

The author is the Managing Director and Principal of Kuranga and Associates, a full-service investment, political and economic risk consultancy, and asset management firm that specializes in Africa. He is also the author of The Power of Interdependence with Palgrave Macmillan Press.

Given the present budget crisis in Nigeria the federal government initiated a number of capital controls as well as measures designed to increase government revenue independent of oil. One revenue-generating measure implemented by the Central Bank of Nigeria was the stamp tax on all deposits over 1000 naira (5 dollars) in Nigerian accounts. They also suspended deposits of dollars in dollar-denominated Nigerian accounts called domiciliary accounts. These measures have helped increase government revenue while increasing the supply of dollars on the open market. However despite this, massive hoarding of dollars has been reported and it is widely known that a select few in the country are in possession of over 20 billion USD of foreign currency in just a few domiciliary accounts. These accounts hold the equivalent to the amount of foreign reserves held in the entire Nigerian national treasury, that is dwindling daily.

The stamp tax that the CBN initiated on all deposits over 1000 naira is a regressive policy that takes money out of the hands of ordinary Nigerians like bread sellers and market traders when they deposit their meager days earnings. In essence it’s taking the same 50 naira from average Nigerians as is being taken from those holding billions of foreign currency and making deposits of substantially more than 1000 naira. Since the hoarders of dollars are the real problem it would make more sense if the CBN initiated a stamp tax that was targeted at Nigerian individuals that currently hold over 1 million USD of foreign currency in their domiciliary accounts. The tax should be taken in dollars, of up to 7 percent of their total account size annually. Alternatively, those who seek to avoid this tax can reduce their accounts to under the taxable limit by exchanging their dollars with the CBN for naira. A policy like this would go a long way to target hoarders as well bring the official price of naira (200-1) equivalent to the price of naira on the black market now (330-1). It would also increase the governments foreign reserves almost overnight. Not only would this policy work, it would be the fair thing to do, targeting those who are causing the problem and who can afford to pay.

Recently, a prominent Nigerian businessman announced that he had a strategy to bring the value of naira on the black market to the same level of the official naira value of 200 to 1 dollar. While he refused to disclose what his strategy was, perhaps it was something along these lines. The CBN knows the identities of individuals who own accounts that are holding millions and even billions of USD in foreign currency, the BVN even allows for those accounts to be linked to their owners if they are spread across multiple banks. They have the authority to tax these accounts as they showed with their regressive stamp tax measures leveled against common Nigerians (as if they are the problem). The only thing that is missing is the political will to do the right thing and stop allowing political and economic elites in Nigeria to hoard billions of dollars in foreign currency, thus ruining the growth trajectory of the whole nation. Given the disposition of the CBN, who favors attacking the pockets of average Nigerians, and the disposition of the Buhari administration that has shown it favors regressive electricity taxes that is further financially crushing the common people in basic living costs, the deficit of political will in Nigeria to implement progressive growth-oriented policy like this is the real barrier holding the nation back. The election of a party that even parades around with “progressive” in their name yet does the precise opposite in terms of policy (APC), exposes this moral political deficit even more.

Dollar hoarding in Nigeria can be brought to an end if President Buhari and his government had the desire to end it. It continues because they allow it and because they tacitly support those (Nigerian elites) who are doing it. If they did not they would and could have easily done something to end it by now.

Kuranga and Associates Limited is an investment management advisory firm and an asset manager with a principle practice area of Africa. To learn more about Kuranga and Associates go to www.kaglobal.net. © Copyright 2015 David Kuranga. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Dr.Kuranga

David O. Kuranga; Ph.D.
Managing Director
Kuranga & Associates Limited
Phone: 212.363.0936
david.kuranga@kaglobal.net
https://kurangaandassociates.wordpress.com
http://us.macmillan.com/thepowerofinterdependence/DavidOladipupoKuranga