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Businesses Groan as Lagos Roads Suffer Despite High IGR

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  • Businesses Groan as Lagos Roads Suffer Despite High IGR

Businesses in Lagos State, the nation’s commercial capital, have been hard hit by the poor condition of roads in many parts of the state, leaving stakeholders such as the Lagos Chamber of Commerce and Industry worried.

Last week, a petrol tanker was reported to have fallen at a bad portion of the Lagos-Badagry Expressway at Ojo Barracks Bus-Stop, leading to an explosion that killed two persons and destroyed six vehicles, including a truck conveying generators to the Alaba International Market.

Stakeholders, who spoke with our correspondent in separate interviews on Tuesday, lamented that many roads had worsened in the state despite the high internal revenue generated by the government.

In May last year, the Lagos State Commissioner for Finance, Mr Akinyemi Ashade, said based on the first quarter results, the state achieved an average monthly Internally Generated Revenue of N34bn in 2018, compared to monthly averages of N22bn, N24bn and N30bn in 2015, 2016 and 2017, respectively.

“Lagos’ IGR, when compared with other states, is relatively high. Her IGR as of the end of 2016 was N287bn, higher than its 2015 level of N268.2bn,” BudgIT said in the 2018 edition of its ‘State of States’ report.

It said Lagos accounted for approximately 35.86 per cent of the total IGR collected by states in 2017.

The National President, Association of Small Business Owners, Dr Femi Egbesola, said the bad roads in the state had negative impacts on business activities.

He said, “Lagos roads these days have become so deplorable that where you usually spend 30 minutes, you can spend one and a half hours now. That is a massive waste of time and human capacity.”

“The government needs to put more than usual attention to infrastructure. Some people are very reluctant to pay tax because they believe that the government is not doing anything that is worthy of paying taxes. We have a lot of abandoned road projects in Lagos and other states in the country.”

According to him, the Mainland, especially the interiors, has a lot of deplorable roads.

“Apart from the IGR, the state has got a lot of loans for roads and other infrastructures. Lagos needs to remember that it is already a metropolitan state and must set the pace for others,” Egbesola added.

The Director-General, LCCI, Mr Muda Yusuf, described road infrastructure as a major issue in the cost of operation of businesses.

He said, “This economy, whether it is at the state or national level, is dependent almost 90 per cent on roads for logistics – moving of persons and goods. So, to that extent, the shortcomings with our road infrastructure, whether they are bad, inadequate or have a capacity problem, affect the cost of operation.

“Transportation cost is a major component of the costs of many products in the country; and once your cost begins to go up, it affects your competitiveness, profit margin and capacity to sustain your business. It can affect your sales because if you want to transfer the cost to the consumers and your price is too high, the consumers will resist, depending sometimes on the kind of products that you are selling.”

According to Yusuf, many densely-populated areas in Lagos such as Badagry and Abule-Egba are contending with the issue of quality of roads.

He said, “It is tedious going to and coming out of those places. So, those areas require the government’s attention. Some of the roads are not maintained properly, while some have gone bad.

“I think the bigger issue with Lagos is not so much about the state of the road, but the capacity of the roads vis-à-vis the volume of vehicles, especially at peak period.”

An economist and Senior Lecturer, Lagos Business School, Dr Bongo Adi, said, “The major constraint to doing business in Lagos, apart from electricity, is logistics, which includes transportation and connectivity.”

He, however, noted that over the years, there had been some progress in terms of maintenance of roads in Lagos, with some roads currently undergoing repairs.

Adi said, “But we haven’t seen much in terms of expansion. It is not just the problem of bad roads; even if you fix all the roads in Lagos today, we will still be having a transportation issue.”

“In terms of IGR, Lagos ranks the highest in Nigeria. In terms of fiscal sustainability, I think it is only Lagos that can sustain itself; but that has not translated into adequate infrastructure generally.”

Adi stressed the need for political will to expand the road network and ensure standard roads in the state.

When contacted, the Commissioner for Works and Infrastructure, Mr Adebowale Akinsanya, told our correspondent that the government had embarked on rehabilitation of the major and inner roads across the state.

“We just finished the first phase, and we are now embarking on the second phase. That is a comprehensive work ongoing,” he added.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Economy

World Bank Lauds Kogi’s 2020 Financial Statement

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The World Bank has heaped praise on the Government of Kogi State concerning the state’s audited financial statement for 2020. The financial institution was said to have described the financial report as a standard to look up to concerning transparency and accountability in the public sector.

In a statement which was dated November 21, 2021 it was said that the bank made the commendation in a letter which was sent to the Accountant General of the state.

As said in the statement, the letter which was taken by the Kogi State Accountant General on November 2025 was signed by Deborah Hannah Isser, the Task Team Leader of the States Fiscal Transparency, Accountability and Sustainability Programme (SFTAS), Nigeria Country Office, Western and Central African Region.

SFTAS is a $750 million programme which has been set up to reward states for meeting any or every one of the indicators which demonstrate improvements in fiscal transparency, sustainability and accountability.

The indicators, which are nine in number were a byproduct of the former Fiscal Sustainability Plan of the federal government where States would be rewarded for meeting up to 22 targets.

The World Bank had previously backed the federal government to give incentives to the states in order to properly execute the 22-point Fiscal Sustainability Plan, which has now gone under a revamp as the nine Disbursement Linked Indicators under SFTAS.

Some of the criteria on which judgement will be based on are: improvement in financial reporting and budget reliability, improved cash management, increased openness, citizen participation in the budget process, reduced revenue leakages through the execution of State Treasury Single Account (TSA), a strengthened Internally Generated Revenue (IGR) collection, biometric registration and Bank Verification Number (BVN) used to reduce payroll fraud.

The World Bank commended the Kogi State government for preparing its audited financial statements in line with the basis of the International Public Sector Accounting Standards.

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Economy

Nigeria’s Rigid Forex Policy Discouraging Investors, Fueling Inflation – World Bank

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The World Bank has blamed the Central Bank of Nigeria’s rigid forex policy for the drop in Nigeria’s capital importation and rising inflation rate.

The bank disclosed in its November report, Nigeria Development Update.

Explaining modalities for its position, the World Bank stated that there had been constant pressure on the Nigerian Naira with the current forex policy, forcing the central bank to consistently increase its nominal official exchange rate in an effort to ease some of the pressure.

This, it blamed on the rigid foreign exchange management system of the Central Bank of Nigeria, saying the system has also been responsible for the rising inflation rate in Nigeria.

The report read in part, “The government’s exchange rate management policies continue to discourage investment and fuel inflation. Exchange rate stability is a key CBN policy objective, and to preserve its external reserves the CBN continues to manage FX demand and limit the supply of FX to the market.

“Pressure on the naira remains intense, and while the CBN has raised the nominal official exchange rate three times since the start of the pandemic (by 15 per cent in March 2020, five per cent in August 2020, and seven per cent in May 2021), FX management remains too rigid to respond to external shocks. Meanwhile, exchange-rate management has emerged as one of the key drivers of inflation.”

The World Bank further stated that the central bank foreign exchange system needs to be more flexible to withstand external shocks, especially given Nigeria’s mono-product nature. It added that the NAFEX rate does not reflect the true market rate but the central bank managed rate.

It read in part, “While the CBN supplied an average of $2.5bn to the Investors and Exporters forex window in the months just prior to the COVID-19 crisis, it only supplied an average of $0.5bn in the months thereafter.

“The NAFEX rate, which is now the guiding exchange rate for the economy, continues to be managed and is not fully reflective of market conditions. The parallel market premium over the NAFEX rate reached 29 per cent in August 2021 after the CBN cut off its weekly supply of $20,000 per bureau de change. The CBN has intermittently supplied forex to BDCs since 2005, providing ample opportunities for currency round-tripping.”

The institution however advised that Nigeria adopt a more predictable, transparent and flexible foreign exchange management system in order to attract and sustain private investment flows.

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Economy

Nigeria’s Non-oil Revenue Now N1.15 Trillion – Minister of Finance

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Mrs. Zainab Ahmed, the Minister of Finance, Budget and National Planning, has said that Nigeria’s non-oil revenue is now N1.15 trillion, representing 15.7 percent above the country’s target. This, she claimed, was a result of the federal government’s efforts at diversifying the nation’s economy.

Mrs. Ahmed disclosed this at the Institute of Directors (IoD) 2021 Annual Directors Conference which was held on Wednesday in Abuja.

According to the News Agency of Nigeria (NAN) the event with the theme: “Creating the Future: Deepening the Corporate Governance Practice through Multi-Sectoral and Multi-Generational Collaborations,” was meant to discuss economic development.

Mrs Ahmed added that the recent development was in line with President’s commitment to further diversifying the Nigerian economy which is heavily dependent on oil. She observed that Nigeria was showing resilience in recovery from recession from coronavirus (COVID-19) pandemic which intensely affected global economies.

The minister said the federal government alongside the private sector had implemented a wide range of monetary measures to stimulate economic recovery, growth and development, job creation and improved standards of living.

She also explained that the government was doing everything to improve and diversify Nigeria’s revenue generation.

Nigeria was quickly able to exit recession and is on her way to path of sustainable growth and we are intensifying efforts to grow and diversify our revenue sources to grow revenue from the current 8 per cent.”

“Our non-oil revenues have grown to N1.15 trillion, representing 15.7 per cent above set target. We are working on the 2021 finance bill and it’s nearing completion. Also, the recent approval of the medium-term national development plan is an important milestone of Buhari’s commitment to delivering sustainable growth and we require strong support and monitoring during implementation,” she said.

Mrs Ahmed reinforced the government’s decision to do something about infrastructure and reduce the cost of production for businesses in the country.

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