Opinion
Satellite to mobile services and connectivity disruption
Sonny Aragba-Akpore
Elon Musk’s ambition to conquer technology and everyday living got a boost early in January 2024 when his SpaceX which owns Starlink satellite communications announced that it was introducing satellite to mobile communications services across the world.
> Its plan primarily was to provide ubiquitous services around the globe and give a run for money to other mobile network operators and telecommunications companies (telcos).
With its communication satellites,Starlink introduced disruptive technologies and with satellite to mobile,the company creates further disruption in telecommunications ecosystem.
> Musk’s foray into Nigeria fetched him six licences with a full bouquet capable of operating in many spheres and first received two licences, out of the six in May 2022 .
These were for International Gateway and the Internet service provider (ISP) licences, and began to trade as Starlink Internet Services Nigeria Ltd.
> According to the Nigerian Communications Commission (NCC), the International Gateway licence has a 10-year tenure, while the ISP licence runs for five years. Both licenses took effect from May 2022 and may be renewed after the expiration.
Starlink came with disruptive technologies that are already making a world of difference for consumers and we looked on as if nothing was happening. The company came prepared.
> With a total of six licenses from the NCC and various permits and approvals to flag off the business of internet services via satellite and equally signing Memorandum of Understanding (MoU) and distribution agreements with Nigerian companies including, Technology Distribution Africa (TD),a big distributor of major technology brands and promoted by a restless technology czar ,Leo Stan Ekeh, Starlink showed it meant business.
The company didn’t stop there ,it decided to take services to even the unserved and under served communities in Nigeria and parts of Africa .
With its technology it said it will deploy nearly $30b over time for the Nigerian operations alone.
> The government is excited that with the entry of Starlink,it may achieve 70% broadband connectivity by 2025 as enshrined in the National Broadband Plan (NBP) 2020–2025.
> Starlink,s six licenses include that for ISP, Gateway Service Provider,international Data Access (IDA),Sales and Installation Major,Gateway Earth Station and Very Small Aperture Terminal (VSAT) thus making it a mega player and a big threat to other players in the industry.
Starlink officially announced its presence in Nigeria in January 2023. The company, which initially quoted its prices in dollars at $600 for the hardware and $43 for the subscription, changed to naira upon its official announcement.
> “Starlink satellites provide Direct to Cell capabilities and ubiquitous access to texting, calling, and browsing wherever subscribers may be on land, lakes, or coastal waters,” it said.
“Direct to Cell works with existing long term evolution ( LTE) or fourth generation (4G ) phones wherever you can see the sky. No changes to hardware, firmware, or special apps are required, providing seamless access to text, voice, and data,” the company added.
In January 2024,Elon Musk’s SpaceX launched its first set of Starlink satellites to provide cell phone service anywhere in the world.
The company announced a milestone the billionaire warned can’t compete with terrestrial networks but will help plug cellular dead zones and boost global mobile connectivity.
> Six of the 21 Starlink satellites launched in January 2024 are capable of connecting directly to cell phones, SpaceX said.
“They are the firm’s first ever direct-to-cell satellites and are designed to function as “a cellphone tower in space,” according to Starlink’s website.
SpaceX said the satellites were first used to test its Direct to Cell service in the United States, where the company has partnered with T-Mobile.
Once activated, the service began to connect with ordinary, unmodified phones without the need for extra equipment so long as they are 4G LTE-compatible, a standard T-Mobile covered the “vast majority of smartphones” already on its network back in 2022.
Starlink said it plans to roll out a text messaging service using the technology later this year and broader voice, data and IoT—the network of connected devices called the internet of things—services in 2025.
Musk celebrated the successful launch and said the satellites “will allow for mobile phone connectivity anywhere on Earth.” However, he noted there are limitations to the technology.
“While this is a great solution for locations with no cellular connectivity, it is not meaningfully competitive with existing terrestrial cellular networks,” Musk said, pointing to the relatively limited bandwidth that is spread over a large area.
Starlink also notes the satellites will let users connect “wherever you can see the sky.”
It has entered a working arrangement with Africa Mobile Networks (AMN) ,a mobile network operator that has deployed services in Nigeria and other countries in Sub-Saharan Africa.
AMN has been deploying rural base stations in Nigeria since 2018.
In 2023, AMN signed a deal with SpaceX to use Starlink’s satellite backhaul connectivity for its remote base stations in Africa.
AMN has connected over 100 rural base stations in Nigeria to Starlink’s Low Earth Orbit (LEO) satellite network. This has resulted in a 45% increase in traffic across these sites.
As at April 2024, AMN owned and operated more than 1,600 base stations nationwide. They increased that number to 2,000 by the end of June.
AMN’s ARN technology allows base stations to support up to five simultaneous carriers.
The combination of AMN’s ARN technology and Starlink backhaul has increased the capacity of Base Transceiver Stations (BTS) without requiring changes to the BTS software.
AMN is privately owned by 18 shareholders, including founders, angel investors, a VC fund, and one strategic investor.
Starlink’s constellation is now providing satellite backhaul to over 100 of Africa Mobile Networks’ rural base stations in Nigeria.
AMN also expects to double the number of base stations plugged into Starlink’s constellation in the country by the end of the year. The operator says on average traffic has increased by 45% across all sites that have been migrated to use Low Earth Orbit (LEO) backhaul.
AMN and Starlink signed a commercial agreement to use the satellites to connect the operator’s mobile network base stations with broadband services in 2023, and in April this year the first base station to do so went live in Yebu, Nigeria.
Since then more than 100 terminals to other rural villages across the country have been hooked up, and AMN says that this means it is ‘able to unlock the full capability of the AMN Radio Node (ARN) to support the ever-increasing amounts of bandwidth and data volumes demanded by subscribers.’
The ARN is a multi-carrier and multi-technology (2G/3G/4G) radio node which can operate up to 5 simultaneous carriers in either 2G+ 3G or 2G+4G configuration, we’re told, and by using LEO backhaul in conjunction with it, AMN says it has been able to increase the BTS capacity remotely with no change to the existing BTS hardware on site.
“These numbers are particularly impressive given that prior to the installation of AMN’s base station, communities did not have access to any mobile network,” explains the release.
“The mobile connectivity AMN provides changes lives. Farmers can find information about market prices, a healthcare provider can consult with doctors in a larger town, money can be sent safely and securely into the village, and businesses can expand beyond their own community.”
Starlink aims to provide satellite internet connectivity to underserved and remote areas worldwide, where internet access has traditionally been limited or non-existent. The global network of Starlink satellites in Low Earth Orbit (LEO) is already providing a new ‘Direct to Cell‘ service to deliver a 4G mobile service to standard Smartphones.
Once the Direct To Cell service is fully up and running, the number of satellites will have increased significantly, and more powerful SpaceX V2 satellites will have been deployed. In essence, users can always access satellite internet service directly from anywhere on earth (if you’re on land, at least – for internet on the ocean, Starlink says it’s offering a dedicated separate maritime service).
The full ‘Direct to Cell’ satellite phone service is set for launch soon and should be compatible with 4G handsets by 2025.
Direct to Cell works with existing LTE phones as well as IoT devices using common LTE standards. Apps and changes to phone hardware or firmware aren’t necessary to access 4G mobile text, voice, and data.
In 2024, only texting will be supported, and a year later voice and data services, as well as IoT functionality, will be added.
The technology aims to extend mobile coverage to areas where traditional cell towers are not present or are ineffective. Unlike traditional mobile networks that rely on a network of cell towers, Direct to Cell connects mobile phones directly to Starlink’s satellites in orbit.
This eliminates the need for ground infrastructure like cell towers in remote areas. It can significantly expand the coverage area of mobile networks, providing connectivity in places that were previously unreachable by standard cellular services. Mobile operators can partner with Starlink to extend coverage without having to build new infrastructure.
Starlink’s satellite network covers the entire globe, which means this technology has the potential to provide universal mobile connectivity, even in the most isolated regions. Starlink satellites with Direct to Cell capability have an advanced eNodeB modem onboard. This acts like a cell phone tower in space, allowing network integration comparable to what a standard roaming partner might provide.
Compared to previous satellite telephone networks, Starlink offers two big advantages: the satellites operate closer to Earth (around 550 km as opposed to as much as 1,400 km) and SpaceX can launch larger satellites. This makes it easier for phones to connect.
However, the precise extent of the service offering and coverage in each region depends on variable such as local regulations, carrier partnerships, and ground stations. SpaceX is looking for cell phone companies to work with on selling the services and is currently already working with T-Mobile (USA), Rogers (Canada), KDDI (Japan), Optus (Australia), One NZ (New Zealand), and Salt (Switzerland).
Opinion
IBADAN, OKIJA, ABUJA AND THE DEATHLY FATE OF MEKUNUS
By Tunde Olusunle
Our ambassadors in the national parliament on Wednesday December 18, 2024, spontaneously broke into a chant, serenading Bola Tinubu Nigeria’s President when he presented the 2025 draft budget to the bicameral body. *On your mandate we shall stand* gained ascendancy ahead of the 2022 presidential primary of the All Progressives Congress, (APC). Today, it is probably at par with Nigeria’s national anthem in the circuit of the ruling political party. Recall the viral video of the Minister for the Federal Capital Territory, (FCT), when he performed to the rhythm on one occasion of his visit to the office of the Chief of Staff to the President, Femi Gbajabiamila a few months ago. The reflex resort of the congressmen to the “mandate” tune on that occasion was in reaction to Tinubu’s joke at the presentation of the budget for 2025. The President had erroneously announced that he was presenting a draft expenditure proposal to the “11th” assembly! He was promptly reminded that we are still in the 10th assembly, in 2024. Tinubu quickly humoured that it could just as well mean that the entire parliament had been reelected for the 11th assembly which begins in 2027.
Tinubu’s budgetary presentation had to be staggered by 24 hours for undisclosed reasons. Reports after the Wednesday December 18 eventual outing, however, suggested that the executive arm of government needed the 24 hours between Tuesday December 17 and the eventual presentation, for very robust, backstage engagements with the legislature. There were feelers to the effect that Tinubu’s budget would be expressly shut down because of his recent propositions on tax reforms which has not gone down well with sections of the country and their representatives. There are purported reports to the effect that while Members of the House of Representatives were advanced one billion naira each to augment the budgets for their “constituency projects,” Senators allegedly received a minimum of over 100 per cent more under the same nebulous heading. Such largesse should of necessity merit some singing.
While our parliamentarians decked in billowing robes and skyscraping headgears were clapping and caterwauling, giggling and guffawing that Wednesday December 18, 2024, deathly disaster struck in Ibadan, capital of Oyo State. The plan by a nongovernmental organisation led by Naomi Silekunola, a former wife of the Ooni of Ife, Adeyeye Enitan Ogunwusi which proposed to put smiles on the faces of a number of people this yuletide season, had gone awry. Silekunola and her team intended to gift 5000 children below 13 years of age with a cash gift of N5000 each and offer each of them a food pack. There was a stampede at venue of the programme at Islamic High School, Bashorun District, Ibadan. Poor planning which precluded adequate security cordon, the absence of a standby medical team, among others, precipitated the death of 40 children. Many injured people are still hospitalised.
As though an angel of death was on a yuletide prowl, Okija in Anambra State was its next destination. A magnanimous well-to-do, Ernest Obiejesi, under the auspices of his *Obi Jackson Foundation,* availed the community of a rice consignment to be shared amongst the womenfolk in the morning of Saturday December 21, 2024, for the commemoration of Christmas. The raw ration came in 10 kilogramme bags of rice, out of which many people received just handfuls in bowls and cups. In the ensuing melee, 36 lives were lost, bodies littering the scene. Many limbs were bruised and broken, they are being patched up in various hospitals.
Despite popular assumptions that the streets of Abuja are paved with gold, the Okija tragedy was replicated, real-time, right at the very heart of Maitama, abode of the *nouveau riche.* Still in the spirit of the season, the Holy Trinity Catholic Church arranged to distribute food items to the less privileged as Christmas knocks on doors. The Abuja Command of the Nigeria Police confirms that 13 people including four children died from the surging and trampling at the scene. Over a thousand people have been evacuated from the church, many of the wounded receiving medical attention at the proximal Maitama Hospital, just metres away from the church. Hunger for sure is a deconstructor of geography. Within four days in Nigeria this harmattan season, over 89 lives have lost while foraging for what to eat.
Instructively, a day before the Ibadan tragedy, loyalists and former aides of former President Muhammadu Buhari, flew to his hometown in Daura, to accord him an 82nd birthday surprise. Former Ogun State Governor, Ibikunle Amosun; Secretary to the Government of the Federation, (SGF), in Buhari’s regime, Mustapha Boss; Africa’s richest man, Aliko Dangote, all visited a man largely credited with plunging Nigeria into its seemingly irrecoverable abyss. Femi Adesina, Buhari’s media minder also sang his boss’ praises on the occasion. He described him as *ore mekunu,* a friend of the poor, an ascription I found totally out of sync with the realities of his boss’s stewardship. Let’s hope Adesina is seeing on the streets, the hordes of Nigerians, instalmentally transmogrified into pitiable sub- *mekunus* by Buhari’s eight-year dysfunctional leadership. About 100 Nigerians perished in four day not because of a natural disaster, nor at the theatres of insurgency and military curtailment. They died looking for just that measure of rice to placate their growling stomachs. They died just hours and days after Buhari’s beatification by beneficiaries of his prodigal rulership.
Nigeria has been plunged into the worst economic situation in a whole generation, since the advent of the All Progressives Congress, (APC) at the centre. Poverty has never been as grim and piercing as we’ve witnessed beginning from Buhari’s coming in 2015. Poverty has been ruthlessly weaponised, the poor ready to dance to the drum of a currency note, even a scoop of peanuts. The indicators have determinedly and consistently pointed southwards these past decade. Inflation is spiralling towards the 35 per cent mark, the unaffordability of basic food items driving *mekunus* to assured Golgotha in cross-country scrounging, scrambles and stampedes. The same way Nigerians hustle to scoop petroleum products when a tanker falls to the ground, is the same way they throw decorum through perimeters when they are being insulted with sachets of pasta in the name of “palliatives” and “stomach infrastructure.”
The Nigerian Bureau of Statistics, (NBS), is allegedly being bullied by the state to recant on its former announcement that *N2.3 Trillion* was paid out as ransom to bandits, criminals and kidnappers in the first 10 months of this year. The NBS which has belatedly announced that its systems were hacked, is in good company with the Independent National Electoral Commission, (INEC). INEC’s servers and terrestrial equipment are perennially compromised when election figures tend towards victory for the opposition. The President recently hailed the peaceful and transparent conduct of the presidential election in Ghana, recommending it as a model for Nigeria. Sadly, it should be the other way round. Other countries should take inspiration from the way we conduct our affairs in Nigeria.
Nigeria prides itself as the giant of Africa. Many African countries look up to Nigeria for guidance, for leadership. Our exploits in the liberation of countries like South Africa from apartheid, and the restoration of peace and democracy to neighbouring Gambia, Guinea, Liberia and Sierra Leone, are well documented. We recently offset our outstanding dues to the Economic Community of West African States, (ECOWAS), totalling over N150Billion. We do well at bragging and flexing our muscles, but fail where it matters the most. An essential characteristic of Ghanaian elections over the years, is the fact that the ruling party can be displaced by the opposition today. This allows the party so ousted to go re-strategise for the future. What do we do in Nigeria where election results are predetermined, where the electoral process is wholly corrupted, where true winners are intentionally dispossessed of their mandates and encouraged to seek redress in the judiciary? Didn’t a senior government official say in relation to Ghana’s exemplary election that a sitting government cannot be unseated in Nigeria? The stories of the backstage electoral thieveries anchored by INEC over the years will be told someday.
President Tinubu cancelled his official engagements for Saturday December 21, 2024, in honour of victims of the Ibadan, Okija and Abuja tragedies. Nigeria’s leadership must transcend the culinary indulgence and the merry-making occasioned by the yuletide to undertake very imperative introspection. There must be less dangerous, less dehumanising and less deathly avenues for lifting up the poor and indigent in our ranks. The President is celebrated as some economic whiz kid. Enough of the demeaning, insulting and dubious handouts always purportedly passed on to the less-endowed by ways of very opaque “cash transfers” and the “lorry loads of palliatives.” Can someone please show me a register of transfers to my constituents back home in my community? That scheme is wholly and totally a scam. Nigeria is not Somalia or Chad and similar countries ravaged by war and hunger, where the United Nations, (UN) and the Red Cross, drop dry rations from hovering helicopters into the hands of starving populations. Nigerians deserve a much, much better deal away from the most despairing *status quo.* Nigeria is too endowed to wilfully preside over the sustained pauperisation of its people.
*Tunde Olusunle, PhD, Fellow of the Association of Nigerian Authors, (FANA), teaches Creative Writing at the University of Abuja*
Opinion
SONNY ECHONO AT 63: BIRTHDAYS NOT REST DAYS
By Tunde Olusunle
Call him a double-barrelled personality and you will not be wrong. He is both an accomplished technocrat and a distinguished bureaucrat to wit. How else would one describe a professional architect of four full decades, who has also spent his entire working life in the public service? He rose to the very top of the leadership of the national umbrella body of his primary profession, and his occupation, respectively. He was national President of the Nigerian Institute of Architects, (NIA). He equally coursed all the way in the civil service to become a Permanent Secretary and a long-serving one. These attainments were bagged strictly on merit. His enterprise has not gone unnoticed as he has been deservedly decorated by the highest honours of his professional calling where he is a Fellow. He has also received national garlands in recognition of his good work, notably that of the *Officer of the Order of the Niger,* (OON). He retired upon grossing 35 memorable years in service, back in 2021. He was barely catching his breath when duty beckoned for him to return to avail the nation his variegated experiences in yet another capacity. This has been the story of his life.
Several decades in the ovens and furnaces of the public service have invested him with the archetypal reticence of a prototype bureaucrat. They are not given to much talk, the essential credo of his lifelong profession requiring public officers like him being “to be seen and not to be heard.” He is exceptionally, comprehensively grounded as a public servant who traversed nearly a dozen ministries, departments and agencies, (MDAs), in a most eventful and insightful career. What can be more all-encompassing and enriching with regards to cognate working experience than when an individual straddles the ministries of: Works and Housing; Defence; Water Resources; Agriculture; Power; Communications and Education, at the highest levels?
With the bifurcation of the erstwhile Ministry of Works and Housing, and the excavation of a “Ministry of Livestock” out of the extant Ministry of Agriculture, he can fittingly be credited with many more service addresses. And all of these preclude the lengthy list of national and international ad hoc responsibilities which garnish his cumulative experiential scope. He was in the earliest generation of civil servants who, with the return of democracy in 1999, was groomed in “Budget Monitoring and Price Intelligence.” This derived from the determination of the new regime to introduce more transparency in public procurement processes. He “evangelised” this credo in all his official bus stops.
It is Sonny Togo Echono’s birthday Monday December 16, 2024. When he’s addressed by the combination of the initials from his first two names, *ST,* he knows you come from years and decades back with him. It is supposedly a special day in the eyes of his family, colleagues, subordinates and friends. Customised greeting cards arrogate a section of his office at the Tertiary Education Trust Fund, (TETFUND) headquarters in Abuja, to themselves. For the Executive Secretary of the organisation, however, the day is a regular working day like every other. And there was plenty of work to be done. He prefers to operate from the conference table in a corner of his office which enables him ease of access to files and documents placed before him. He’s also able, with despatch, to attend to staff who desire his official guidance, as he looks up from papers placed before him from time to time. There’s no time for a meal as yet but he tosses a few nuts in his mouth from time to time.
TETFUND was established in 1993, and was initially christened the *Education Trust Fund, (ETF).* It is funded majorly from a two per cent tax on the assessable profits of companies registered in Nigeria. It was at inception, targeted to arrest the rot and degeneration in educational infrastructure, arising from long periods of neglect and miserly resource allocation. It was rechristened to its present nomenclature during the administration of President Goodluck Jonathan in 2011. TETFUND administers, appropriates and oversees resources so aggregated for the rehabilitation, restoration and consolidation of tertiary education in the country. It avails capital for educational facilities and infrastructure, including essential physical infrastructure for instruction and learning. TETFUND also supports research and development as well as the training and advancement of academics, among other segments of its responsibilities.
In a little over two years at the helm, Echono has striven to institute a new work ethic in TETFUND to ensure that it achieves its foundation mandate, especially against the backdrop of challenging economic headwinds. He has introduced sweeping reforms which has upset the preexisting apple cart in several ways. Echono has been very fastidious on issues of due process and effective service delivery. The system he inherited was fraught with entrenched power blocs which determined the running of the organisation to the detriment of its core vision. Echono has been uncompromising in his insistence that the institution must be run strictly according to the books. This is one resolve which was bound to unsettle the “indigenes and landlords” within, and their external allies, who hitherto, construed the organisation as a potential “automated teller machine,” (ATM).
Echono clarifies: “There were cartels in charge of TETFUND projects. They collaborated with all manner of political leaders to come to the organisation to collect ”special intervention projects,” as it is referred to. “There were no defined modalities in place which enhanced operational opacity.” Speaking further, Echono notes: “When I was asked to come here, I was given a very clear mandate to clean up this place and I’m doing just that. The system is the better for it because we have substantially minimised waste and our stakeholders acknowledge this much.” A confident Echono said he had indeed invited the Independent Corrupt Practices and Related Offences Commission, (ICPC), to check through the operations of the organisation: “I invited the ICPC to come and inspect our systems. They’ve visited us twice and are satisfied with how we are straightening up the system.”
Echono is aware that he has stepped on toes while trying to do the right thing. He insists there is no backing down on his mission. His words: “I’ve made enemies on this job. But we have a duty as people privileged to serve, to help in salvaging our country.” Discreet findings indeed reveal that there are internal mumblers and external discontents on his case. There are those who supposedly feel entitled to a perpetuation of their term in office. There are also as those who fancy being gifted the leadership of the organisation as political gratification. Some of them reportedly, had begun to make reassuring commitments to friends and associates, thereby preempting their consideration for the job and the express approval of the President. There are also suggestions about internal saboteurs who are in the habit of trading in classified information concerning the organisation. Some of them are indeed said to be politically exposed persons, fantasising about deploying the organisation for the advancement of their vaunting political aspirations.
While Echono is contending with this hydra, a certain Emeka Marcel Nweke has created a Facebook page with Echono’s name to defraud members of the public. Benneth Igwe, the Assistant Inspector General of Police, (AIG) in-charge of Zone 7 Police Command Headquarters on Tuesday December 17, 2024, disclosed this to newsmen. Echono it was who wrote a petition to the police about “criminal conspiracy, impersonation, fraud, false representation, cyberstalking, obtaining money by false pretence and threat to life,” upon which the police acted. Nweke was reportedly tracked to Awada, Anambra State and was found to have fleeced unsuspecting members of the public of over N10 million in the month of August 2024, alone. Such are the issues he’s multitasking to address.
Echono’s enterprise thus far, has accorded renewed respect and visibility to TETFUND. More and more high profile institutions and individuals, home-based and from the diaspora, regularly engage with the organisation in recent times to discuss partnerships. These include even the military establishment which is in the business of revolving tune-ups for its human capacity, consistent with global dynamics. The multidimensional Echono is equally very busy on lecture circuits these days, regularly called upon to chair, speak or to deliver papers at various events. His trophy-chest brims with glittering medals, gleaming plaques, glossy trophies and beaming mementos, awarded to him by several groups and associations, through the years. These acknowledgements are for inimitable altruism, selfless leadership and exemplary corporate governance, despite the odds.
*Tunde Olusunle, PhD, Fellow of the Association of Nigerian Authors, (FANA), is an Adjunct Professor of Creative Writing at the University of Abuja*
Opinion
Tax Reforms: A Double-Edged Sword for Nigeria’s Economy
By Lukman Laleye Babalola.
When President Bola Ahmed Tinubu announced his ambitious tax reform agenda, it was clear that he intended to reshape Nigeria’s fiscal framework. The reforms, targeting personal income tax, corporate tax, and value-added tax (VAT) distribution, are undoubtedly bold and necessary. But like any sweeping policy change, they come with both promises and pitfalls.
As someone deeply invested in Nigeria’s socio-economic progress, I see these reforms as a double-edged sword—a tool for much-needed transformation, but one that requires careful handling to avoid cutting too deeply into the fabric of our fragile federal system.
Let us not downplay the potential benefits. The proposed exemption of individuals earning up to ₦800,000 annually from personal income tax is a welcome relief for low-income earners who have borne the brunt of rising inflation. Similarly, the reduction in corporate tax rates from 30% to 25% is a lifeline for businesses struggling to stay afloat in a challenging economic climate.
The overhaul of VAT revenue sharing, which allocates 60% of VAT revenue to the state where goods and services are consumed, aims to promote fairness and encourage states to boost their economic activity. For consumption-heavy states like Lagos and Rivers, this is a much-needed windfall that could translate into better infrastructure, healthcare, and education for their residents.
But these gains are not without costs. Nigeria’s regional disparities could deepen under this new tax regime. Northern states, with lower consumer activity and VAT contributions, stand to lose out, raising concerns about fairness in a nation already grappling with economic inequalities.
The implementation process is another hurdle. Overhauling a tax system is no small feat, and Nigeria’s tax collection mechanisms are notoriously inefficient. Without significant investment in infrastructure and human capacity, the reforms could collapse under their own weight.
Then there is the issue of political resistance. Many lawmakers and regional leaders, particularly from the north, have voiced concerns about the potential loss of revenue under the revised VAT formula. Balancing these competing interests will be a test of the administration’s political acumen.
Under the proposed tax reforms, states like Lagos, Rivers, and others in oil-producing regions stand to benefit significantly. With 60% of VAT revenue allocated to the state of consumption, high-consumption states like Lagos and Rivers are poised to see a substantial increase in their revenue. Lagos alone generates over half of Nigeria’s VAT, and retaining a greater share will empower the state to fund critical projects.
For oil-producing states, increased revenue can be invested in non-oil sectors such as agriculture, manufacturing, and tourism, helping them reduce dependency on crude oil and build more sustainable economies. The additional funds can be used to improve infrastructure, healthcare, education, and other public services, directly benefiting citizens in these states. The reforms also encourage states to create business-friendly environments to attract investments and increase consumption, further boosting revenue generation.
Members of the National Assembly are tasked with ensuring these reforms benefit all Nigerians equitably while addressing regional disparities. Legislators must address the fears of less economically vibrant states and push for transitional mechanisms, such as a redistribution fund, to support regions with lower VAT contributions. They must oversee how states utilize their increased revenues, ensuring the funds are invested in projects that directly benefit the public.
By engaging their constituents, lawmakers can explain the benefits of the reforms, address concerns, and secure public support, thereby easing tensions surrounding implementation. National Assembly members must also facilitate the passage of laws to strengthen tax administration, close loopholes, and ensure effective implementation of the reforms. Legislators from wealthier and poorer states alike must work together to ensure the reforms foster national unity and equitable development across all regions.
The National Orientation Agency (NOA) plays a critical role in ensuring public acceptance and understanding of the tax reforms. The agency must continue to simplify and disseminate information about the reforms to the grassroots, helping Nigerians understand how these changes will benefit them in the long run. By launching campaigns, the NOA can counter rumors and fears about the reforms, especially in regions where there is resistance due to concerns about inequitable benefits.
The NOA should encourage citizens to ask questions and provide feedback on the reforms. This engagement will foster trust and ensure the government remains accountable to its promises. The agency must also address regional concerns by showing how the reforms can be tailored to benefit less economically vibrant states through collaboration with local governments.
The Federal Inland Revenue Service (FIRS) is central to the success of the reforms, as efficient tax collection and administration are critical. The FIRS must invest in modern technology to improve tax collection processes, reduce leakages, and enhance compliance monitoring. Bringing the informal sector into formal taxation while ensuring compliance is not burdensome will also expand the tax net.
Training and equipping tax officers to handle the new tax structures efficiently will be crucial to prevent administrative bottlenecks. The FIRS must regularly publish reports on tax collection and utilization, fostering public confidence in the system. By collaborating with state governments, the FIRS can provide technical assistance to ensure states maximize their VAT collections under the new sharing formula.
As a nation, we cannot afford to shy away from difficult reforms. For too long, Nigeria’s tax system has been inefficient, inequitable, and unable to meet the needs of our growing population. These reforms, though imperfect, represent an opportunity to address these shortcomings and lay the groundwork for a more sustainable fiscal future. However, the government must tread carefully. Transparency, inclusiveness, and stakeholder engagement are non-negotiable. Addressing regional concerns and ensuring efficient implementation will be critical to the success of these reforms.
President Tinubu’s tax reforms have the potential to transform Nigeria’s economy, but they also carry significant risks. Agencies like the NOA and FIRS, along with the National Assembly, must work together to ensure the reforms deliver on their promise of a fairer, more prosperous Nigeria.
As we navigate this critical moment in our nation’s history, let us remember that true reform is never easy, but it is always worth pursuing when done with the greater good in mind.
*Lukman Laleye Babalola,is Publisher/Editor-In-Chief,Emporium Reporters online and Emporium Magazine.can be reached on [email protected], [email protected]
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