Rains are from God, floods are from Governments

The Rains in Lagos have really started and as I type it's still raining. In Lagos this is bad news. Rains in Lagos, even the slight drizzle bring panic, not the usual panic to bring the washing in but the panic that you may lose your car, house and sadly even a kid to the floods that follow the rain. Lagos is after all surrounded by water, it's the land of "aquatic splendor", the land of regattas and bridges, but no other city in Lagos is so shut down when it rains than lagos. The fact is what we call Lagos i.e. Marina and the Mainland were simply small islands of planned developments surrounded by concrete unplanned slums. These was never any real planned water management system, not drinking water but waste water management. The open sewers or in Nigerian parlance gutters are simply holes dug in front of houses, they are not connected to channel rain water away from the concrete slums to the nearby lagoons and oceans. The town planning laws are also not just obeyed, they don't exist. In Lekki which is probably the most expensive peninsula in world, it's not unusual to see a school, next to a market, next to a factory next to a mass housing estate, next to a bus park next to a bulk iron rod trader, next to a brothel next to a bank etc. This mix of residential and industrial developments creates waste management issues and hampers planning. I mean on the monthly sanitation days who will clean the area of the school that is beside the housing estate that is beside the bank that is beside the brothel? In summary, Lagos is a maze, a maze of houses, and streets with no plan. When it rains, the water cannot flow in a planned manner, it simply accumulates and then percolates down via gravity. This is dangerous and unhealthy. This means the sewage, fecal and otherwise mix with the rain water are then carried into wells,streets and houses. It's a miracle there is no break out of cholera. The rains in lagos are not new, they are as seasonal, so the question is what have we done about it? The answer is not much. The AC government has governed Lagos since 1999, surly that is enough time to solve the perennial flooding in the mega city. This is a government that earns excess of N22b a month! Controls the House of Assembly and Councils in all 21 LGAs. The response of the state government has been to clear gutters every year in anticipation of the rains. That has not worked. The rains will come, we know that, what we need are drains, connected, covered storm drains to channel that excess water to the lagoons and oceans. open sewers aka gutters won't cut it anymore. We also need strict enforcement of zoning and planning laws to prevent houses being built on the natural flow of rain and flood waters. A cursory look in any gutter revels purewater nylon sachets and empty water bottles, all non biodegradable . the state should use it's tax collected from the pure water and polyethene bag users and manufacturers and fund the creation of a recycling programme. The state must start to discourage use of no degradable plastics if necessary ban them. The state should set up it's own recycle and collection regulations and encourage the private sector to create a system to collect waste plastic bottles, and nylon sachets etc . This greates lots of green jobs especially for the very poor. In India, the recycle business is big and helps to give the extreme poor something to earn daily. It's not Impossible to stop flooding in Lagos, the AC Govt stopped the Atlantic ocean flooding the Victoria Island, and I do not see flooding on Bourdillon Avenue when it rains, this shows it's an issue of priorities. The state has to ensure it solves the flooding problem, it owes that responsibility to the tax payers. It's our problem, we will fix it Kalu A. Aja

the Shale Shale in our Oil

Shale Gas, i.e. natural gas derived from share rock is probably more dangerous to Nigeria than Boko Haram, corruption and illiteracy put together. For every cubic metre of shale gas recovered and sold means one less barrel of oil sold by Nigeria to the US. Nigeria sells the bulk of her oil to the United States. Majority of the energy consumed in the US comes from fossil fuels i.e. oil. In 2009, the Energy Information Administration EIA data showed 37% of America energy came from petroleum, 21% from coal and 25% from natural gas. Nuclear power supplied 9% and renewable energy supplied 8%. The Economist reports that between 2005 and 2010, America’s shale-gas industry, grew by 45% a year. As a proportion of America’s overall gas production, shale gas has increased from 4% in 2005 to 24% today. The Economist reports that America produces more gas than it knows what to do with. Its storage facilities are rapidly filling, and its gas price (prices for gas, unlike oil, are set regionally) has collapsed. Shale production is projected to increase from 23% of total US gas production in 2010 to 49% by 2035. The maths is quite simple today, America energy comes from crude oil by 2035 it will be gas, not imported gas, but local shale gas. The implication? Nigeria will lose her biggest buyer of crude oil. Crude oil in 2011 netted Nigeria N6.816t in income (via crude oil sales, Petroleum Profits taxes, gas sales, Royalties,) and contributes the cream of our forex imports. If we lose the US, where will we sell our oil? Asia remains the biggest market but India and China are much further than Texas and the extra distance means Nigeria has to offer incentives (she already does) to crude buyers to import our low sulphur Qua Ibo crude. Also competition with clean gas will also reduce the markets we can sell our oil to. Already the Qatar gigantic LNG gas project which was built to supply America is now billed to go to Japan. No buyers mean no dollars, no dollars means we can’t print naira to spend. This means we can’t fund our police, polytechnics and politicians (wait, politicians that's a good thing right?). Ok now the bad news, it’s already started, the U.S. purchases of Nigerian crude fell to a five-year low in February 2012, already Nigeria can’t sell about 31 cargos of oil. If oil sales or price fall to $70, we are sitting ducks (consider that we import everything). For years we have put our prosperity eggs in one basket of oil and quite frankly the chickens are coming home to roost. Selling crude oil is cheaper and more profitable than selling palm oil. However, how many jobs does the oil and gas industry create? A few thousands how many does palm oil create? Hundreds of thousands. Nigeria got a seed in the form of crude but we have treated that seed like a harvest. It not yet curtains, Nigeria probably has 2 decades of selling crude oil before the combination of loss of North and South American markets (Brazil has a gigantic Salt oil fields), Asia (China has the greatest deposits of shale gas) conspire to take crude oil at $60 a barrel. The starting point is to go back to agriculture, then agro allied then manufacturing then services. To create a rich Nigeria, we have to create an educated Nigeria. Rural families, who are farmers, will only send their kids to school, if they get richer to afford school fees and buy mechanised farming equipment. Already agriculture employs 44% of the active labour force but we still do subsistence farm using the rainfall meaning for half the year almost half of the population are technically unemployed, thus poor. There can be no poverty elimination that will work unless it is built on the back of the agriculture. A good starting point is to repeal of the Land Use Act to get land cheaper and faster to the rural farmers and to pledge as collateral and attract credit from banks Land Reform is really more important than the PIB. The faster Nigeria opens up the agric space, eliminate subsidies and devolve powers to the states the better we are to withstand the shock that is coming. It’s our problem, we will solve it

FAAC for March 2012

The Federal Government has gotten N244.7684 billion as its share of the revenue accruing to the nation in the month of March. This was made known today by the minister of state for finance and the chairman of the Federation Account Allocation Committee meeting at the end of the committee’s meeting in Abuja. According to the minster, N235.13 billion will go to the Federal Government from the total statutory allocation, while it will get N9.6384 billion from the total N64.229 billion Value Added Tax revenue. “For the month under consideration, I am happy to announce that total funds available for distribution have increased. We collected N726.772 billion for the month of March which has exceeded the projected funds as per the 2012 budget by N224.216 billion. That shows that the revenue accruing to the federation account, the actual is higher than the budgeted because of the actual rise of the price of crude oil.  However, compared to last month, we have a slight reduction by fourty billion because of shortfall in the amount of crude oil that is exported.” “For the total distribution for the statutory allocation is as follows: Federal Government will get N235.13 billion. State governments will get N119.278 billion. Local Governments will get N91.958 billion. And we are distributing 49.908 as the derivation. For VAT, of the total N64.229, the Federal Government is getting N9.6384 billion and state governments will get half of it which is N32.115 billion. The local governments will get 35% of the VAT which is N22.48 billion.” “There is no need for any augmentation for the month of March. So, we didn’t withdraw from the excesses crude account because we have enough revenue to distribute to all tiers of government.” “We also distributed exchange gain. Over the years we have been accumulating exchange gains, and we have decided to distribute it. We are distributing N48.82 billion.” “Then the normal repayment from the NNPC has also been received, that the fixed N7.617 billion.” Ngama told reporters after the monthly Federal Account Allocation Committee meeting that the Federal Government, the states and the local governments shared N613.6 billion from the Federation Account in March. The figure was N7.041 billion lower than the amount shared in February, he said. The minister said the country received a total revenue of N726.772 billion in March compared with N766.772 billion in the previous month. A statement from the Accountant-General of the Federation, Mr Jonah Otunla, explained that the shortfall was due to a decrease in crude oil export for the month as a result of several ``operational issues and safety challenges’’ in Bonga, Brass, Bonny and Qua Iboe Terminals.’’   Also, oil revenue slumped to N586.631 billion in March from N631.959 billion in February. However, non-oil revenue increased to N90.141 in March from N74.813 billion in February, according to the minister. The total revenue shared to all tiers of government included Value-Added Tax (VAT), refunds by the Nigerian National Petroleum NNPC and exchange gain.    ``The total funds, statutory allocation, that are available for distribution is 496.308 billion and the total VAT collected which is also available for distribution for the month is N64.229 billion. ``These are almost the same with the actual collected for the month because the actual has 497.731 for the statutory allocation and the actual VAT collected is 69.529 billion, which is slightly below the budget. ``Because these two amounts are almost the same, there is no need for augmentation for the month of March so we didn’t draw from the Excess Crude Account (ECA) to augment any because we have enough revenue to distribute.’’ In addition, the minister said a total of N48.820 billion was distributed to all tiers of government from the exchange gain while NNPC refunded 7.617 billion. ``So the total distribution for statutory allocation is as follows: federal government will get N235.163 billion; state governments will get N119.278 billion and local governments will get N91.958 billion. ``We are distributing 49.908 billion as the derivation to the oil producing states. ``For VAT for the total of  N64.229 billion, the Federal Government is getting N9.634 billion and state governments will get halve of it which is N32.115 billion and local governments will get 35 per cent of it, which is N22.48 billion,’’ he said. Responding to questions, the minister said the balance in the excess crude account still stood at 3.6 billion dollars. The minister said for the months of February and March, the Federal Government did not draw funds from the ECA. Rather, it added N474.345 billion to the account. He said that the government had enough funds to distribute to all tiers of government within the budgeted allocation. ``The depletion has stopped. ``In two consecutive months, we are not augmenting because we have enough revenue to distribute and that tells you that one area of depletion has been taken care of and the other area is whether or not we distribute. ``Right now in this month of March, we are actually transferring to excess crude account N173.928 billion so it is actually increasing. ``The figure for last month we transferred N300.417 billion to excess crude. The excess crude account is actually growing,’’ he said.