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  • Nigeria’s debt to hit 44.7% of GDP in 5yrs — IMF

    Nigeria’s debt to hit 44.7% of GDP in 5yrs — IMF

    The International Monetary Fund (IMF) has projected that Nigeria’s total public debt will rise steadily to 44.2 per cent of Gross Domestic Product, GDP, by 2027.

    The IMF gave this forecast in its April Fiscal Monitor, released yesterday, in Washington, adding that the total fiscal spending of the General Government (Federal and state governments) will widen to 6.4 per cent of GDP this year, 2022, from 6.0 per cent at the end of 2021.

    According to the Debt Management Office, DMO, national public debt rose by 20 per cent, year-on-year, YoY, to N39.56 trillion in 2021 from N32.92 trillion in 2020.

    “With the Total Public Debt Stock to Gross Domestic Product (GDP) as at December 31, 2021, of 22.47 per cent, the Debt-to-GDP ratio still remains within Nigeria’s self-imposed limit of 40%”, the DMO said.

    The IMF however disagreed, stating that nation’s Debt-to-GDP ratio stood at 37.0 per cent at the end of 2021, and will rise to 37.4 per cent in 2022, 38.8 per cent in 2023, 40.2 per cent in 2024, 41.6 per cent in 2025, 42.9 per cent in 2026 and to 44.2 per cent in 2027.

    The IMF also projected that the General Government fiscal deficit would slightly improve from 6.4 per cent to 5.9 in 2023 and 2024, before deteriorating, once again, to 6.1 in 2025, 6.3 per cent in 2026 and 6.4 per cent in 2027.

    Meanwhile, the IMF has warned that the global community faced a general debt spike, food shortage-related unrests and energy crisis.

    The release of the April 2022 Fiscal Monitor, with the theme, “Fiscal Policy from Pandemic to War” was part of the on-going Spring Meetings of the World Bank / IMF Spring Meetings.

    The report said of Russia’s invasion of Ukraine, “Besides the death toll, human misery, and destruction of infrastructure, the war is causing costly displacement of refugees and loss of human capital, disrupting commodity markets, and further fueling inflation. Higher food and energy prices raise the risks of social unrest.

    “Emerging markets and low-income developing countries serving as net importers of energy and food will be hit by elevated international prices, putting pressure both on growth and public finances.”

    At a press briefing on the Fiscal Monitor, also yesterday, Vitor Gaspar, Director, Fiscal Affairs Department of the Fund, emphasised the risks of debt, food security and energy security, which the world faced.

  • Ukraine Economy Could Collapse If War Continues – IMF

    Ukraine Economy Could Collapse If War Continues – IMF

    Ukraine’s government continues to function, the banking system is stable and debt payments are viable in the short term, but the Russian invasion could plunge Ukraine into a devastating recession, the International Monetary Fund said Monday.

    And it warned that the war could have broader repercussions, including threatening global food security due to rising prices and the inability to plant crops, especially wheat.

    At a minimum the country would see “output falling 10 percent this year assuming a prompt resolution of the war,” the IMF said in an analysis of the economy in the wake of the Russian invasion.

    But the fund warned of “massive uncertainty” around the forecasts, and if the conflict is prolonged, the situation will worsen.

    Citing wartime data for conflicts in Iraq, Lebanon, Syria and Yemen, the IMF said the “annual output contraction could eventually be much higher, in the range of 25-35 percent.”

    The country’s economy grew 3.2 percent in 2021 amid a record grain harvest and strong consumer spending.

    But in the wake of the Russian invasion on February 24, “the economy in Ukraine dramatically changed,” said Vladyslav Rashkovan, alternate executive director for Ukraine on the IMF board.

    “As of March 6, 202 schools, 34 hospitals, more than 1,500 residential houses including multi-apartment houses, tens of kilometers of roads, and countless objects of critical infrastructures in several Ukrainian cities have been fully or partially destroyed by Russian troops,” the official said in a statement.

    Ports and airports also have been closed due to “due to massive destruction,” he said.

    Oleg Ustenko, economic adviser to Ukraine’s President Volodymyr Zelensky, last week estimated the damage at $100 billion so far.

    – ‘Hunger in Africa’ –

    Despite the extensive damage, the government and the country have continued to function.

    “Banks are open, working even during the weekends,” Rashkovan said in the statement dated March 9.

    As of March 1, the country held foreign reserves of $27.5 billion, “which is sufficient for Ukraine to meet its commitments,” he said.

    The IMF, which last week approved a $1.4 billion emergency aid program for the country, said given large reserves and significant financial support “debt sustainability does not appear to be at risk” in the short term, although there are “very large” uncertainties.

    Beyond the human and economic losses in Ukraine, the IMF cautions about the spillovers from the war to the global economy.

    Since the conflict began, the prices of energy and agriculture have soared and the fund warned they could worsen, fueling rising inflation.

    “Disruptions to the spring agriculture season could also curtail exports and growth and imperil food security,” the report said.

    Ukraine and Russia, considered the “breadbasket of Europe,” are among the largest wheat exporters in the world. Most Ukrainian wheat is exported in summer and autumn.

    The initial impact will be on prices, which would also push prices of other food like corn higher, according to the IMF.

    But an extended conflict could hit supplies if farmers are unable to plant.

    “War in Ukraine means hunger in Africa,” IMF Managing Director Kristalina Georgieva said Sunday on CBS.

    The UN World Food Program in a report Friday cautioned that “Export disruptions in the Black Sea have immediate implications for countries such as Egypt, which heavily rely on grain imports from Russia and Ukraine.”

    And countries that rely heavily on imported grain will also feel the pain, including “hunger hotspots such as Afghanistan, Ethiopia, Syria and Yemen.”

  • FG to Pay IMF $3.51bn in 5 years as Debt Service

    FG to Pay IMF $3.51bn in 5 years as Debt Service

    The Federal Government of Nigeria is expected to pay the International Monetary Fund a total of $3.51bn between 2022 and 2026 to offset a $3.4bn loan.

    This is according to information obtained from a webpage on the IMF’s website, titled ‘Nigeria: Financial Position in the Fund as of January 31, 2022.’

    In April 2020, the IMF disbursed a $3.4bn emergency financial assistance to Nigeria

    The loan was approved under the Rapid Financing Instrument by the Executive Board of the IMF on April 28, ‎to address challenges arising from the economic impact of the COVID -19 in the country.

    A statement by the IMF on the loan read, “The IMF approved $3.4bn in emergency financial assistance under the Rapid Financing Instrument to support the authorities’ efforts in addressing the severe economic impact of the COVID-19 shock and the sharp fall in oil prices.”

    It was also disclosed that out of four agreed loans, disbursement was made on only one loan.

    Under a section titled ‘Overdue Obligations and Projected Payments to Fund’, a breakdown of how much Nigeria is expected to pay each year is provided.

    The amount to be paid was provided in the Special Drawing Rights. The SDR is an international reserve asset, created by the IMF in 1969 to supplement its member countries’ official reserves.

    SDR1 is currently $1.39 based on the exchange rate provided by the IMF on its website.

    As a result, in 2022, Nigeria is expected to pay SDR26.91m ($37.40m), which includes only the interest fee on the loan.

    Nigeria is expected to pay a total of SDR639.81m ($889.34m) in 2023. This comprises a principal fee of SDR613.63m ($852.95m) and an interest fee of SDR26.18m ($36.39m).

    In 2024, Nigeria is expected to pay a total of SDR1.24bn ($1.72bn). This comprises a principal fee of SDR1.23bn ($1.72bn) and an interest fee of SDR15.29m ($21.25m).

    The country is expected to pay a total of SDR616.38m ($856.77m) by 2025. This comprises a principal fee of SDR613.63m ($852.95m) and an interest fee of SDR2.75m ($3.82m).

    The least amount is expected by 2026, which is only an interest fee of SDR0.28m ($389,200).

  • IMF warns FG Over Proposed N2.55trn Fuel subsidy spending

    IMF warns FG Over Proposed N2.55trn Fuel subsidy spending

    The International Monetary Fund (IMF) has warned that the Nigerian government will likely depend on overdrafts from the Central Bank of Nigeria to fund its proposed N2.55 trillion petrol subsidy bill if it extends it by 18 months.

    The IMF report titled, “Nigeria: Selected Issues Paper” was prepared by a staff team of the Fund as background documentation for its periodic consultation with Nigeria.

    It noted that the fuel subsidy negatively affects the country’s fiscal position, thereby increasing the country’s fiscal deficit.

    According to the Washington-based lender, “Implicit fuel subsidies have a significant negative impact on Nigeria’s fiscal position, which is estimated to increase the overall fiscal deficit by around one percentage point of the Gross Domestic Product in 2021.”

    It added that despite much higher oil prices, the general government fiscal deficit is projected to be significantly worse at 6.3 per cent of the GDP, compared to 4.7 per cent of GDP in the 2020 Article IV staff report.

    It said it is mainly reflecting the reemergence of implicit fuel subsidies and higher spending in the supplementary budget for security and vaccine costs.

    The report opined that the government would likely depend hugely on domestic financing sources, which include borrowing from the CBN, saying that fuel subsidy has been a substantial burden on the country.

    It assumed that implicit fuel subsidies exist only until mid-2022, as stipulated in the Petroleum Industry Act and assumed in the draft 2022 budget, pointing out that fiscal vulnerabilities remain elevated with public debt continuously increasing from 35 per cent of the GDP in 2020 to over 42 per cent in 2026.

    With limited IFI funding, the report stated that fiscal financing for large implicit subsidy costs is likely to depend heavily on domestic sources, including overdrafts from the CBN.

    It stated that the recent re-emergence of implicit fuel subsidies has levied a considerable burden on Nigeria’s fiscal position, that could have been spent more effectively on pro-poor interventions.

    The World Bank had, however, warned the Federal Government against financing its deficits by borrowing from the CBN through the Ways and Means Advances, saying that it puts fiscal pressures on the country’s expenditures.

    It observed that central bank financing and fuel subsidy regime tend to adversely affect investments in human and physical capital.

    The report said that the Federal Government’s total borrowing from the CBN through Ways and Means Advances had ballooned by 2,286 per cent to N15.51tn in six years, according to the central bank data, stressing that N15.51tn owed by the Federal Government to the central bank is not part of the country’s total public debt stock, which stood at N38tn as of September 2021.

  • IMF releases report on Balance of Payments

    IMF releases report on Balance of Payments

    The International Monetary Fund (IMF), yesterday, released its 2020 Annual Report on Balance of Payments Statistics, saying that the period witnessed negative net positions of 3 per cent of global Gross Domestic Product.

    It said in a statement issued in Washington, “Overall, negative net positions reached a historical high of 3.0 per cent of global GDP, partly reflecting the impact of the pandemic, which not only adversely impacted global GDP but also reduced the quality of source data.”

    The world body said that the COVID-19 pandemic crashed exports of travel services to above 63 per cent.

    It added that the unprecedented plunge in the tourism sector reduced exports of services by 18 per cent, while merchandise trade fell by 8 per cent.

    According to the organization, the report summarised the work of the IMF Committee on Balance of Payments Statistics.

    It highlighted a considerably negative effect of the pandemic on cross-border transactions in the period under review.

    It said, “With global economic activity disrupted, worldwide merchandise trade flows fell by about 8 per cent, year-on-year. The effect on trade in services was even more pronounced, as exports of services fell by 18 per cent, driven mainly by an unprecedented plunge in the tourism sector, where exports of travel services dropped by more than 63 per cent.”

    In contrast to trade, the report indicated, “global inflows of personal transfers—mostly remittances—to emerging and developing economies were little changed in 2020.

    “Cross-border financial assets and liabilities positions, rose by almost 12 per cent in 2020.”

    In March 2020, the update of the Balance of Payments and International Investment Position Manual, sixth edition (BPM6) was launched in coordination with the update of the System of National Accounts 2008 (2008 SNA).

    According to the report, “The BPM6 update addresses key economic developments, namely globalization (accounting for global production arrangements); digitalization (e.g., digital trade, FinTech, crypto assets); and the increased complexity of financial linkages and interdependencies between economies.

    “It also tackles growing policy statistical priorities, including climate change, inclusion, and sustainability.”

    The IMF launched its new international data initiative to collect and disseminate annual cross-border statistics on Special Purpose Entities (SPEs), in May 2021.

    It revealed that the first set of selected cross-border flows and positions for resident SPEs for the reference year 2020 would be released early this year.

  • DMO Faults IMF on Nigeria’s Debt Servicing Analysis

    DMO Faults IMF on Nigeria’s Debt Servicing Analysis

    The Debt Management Office (DMO) has faulted the International Monetary Fund (IMF) over its position on the nation’s debt servicing obligations.

    The Fund said in its 2021 Article IV, that the Nigerian Government could spend as much as 92.6 per cent of its revenue on debt servicing this year.

    That position was first aired by Agusto and Co. rating agency. However, the DMO, in a statement yesterday, said that although Nigeria’s debt and debt service levels may have grown over the years, the reports of the two bodies failed to take into consideration the last two recessions in the country, due to low revenue.

    It queried the analysis that failed to recognize the improvements in infrastructure, achieved through borrowing.

    The Office clarified that the federal government was already implementing policies towards increasing revenues and developing infrastructure through Public Private Partnership arrangements,.

    It said that the nation’s debt remained sustainable as revenue efforts were already yielding fruits.

  • Nigeria’s Debt Sustainability at Risk, Cause for Concern – IMF

    Nigeria’s Debt Sustainability at Risk, Cause for Concern – IMF

    The International Monetary Fund (IMF) has said Nigeria’s debt sustainability is at risk and causes a great deal of concern and unease in the long-term. IMF reiterated the need for the Nigeria government to implement timely fiscal reforms.

    IMF’s Mission Chief for Nigeria, Ms. Jesmin Rahman, said these yesterday, during a virtual media briefing on its Nigeria’s 2021 Article IV Consultation Staff Report.

    Rahman noted that the increase in public debt had grown rapidly in 10 years and was approaching a time when the country would spend all its income on servicing debts. She stressed the need for urgent fiscal reforms.

    Rahman explained, “But what we should remember here and the things that make Nigeria’s debt sustainability at risk are the following: we have seen a rapid rise in public debt in the last 10 years or so and this is being driven by fiscal deficits.

    “So, the dynamics is not that great. And there are a couple of other points that we should remember; which is that Nigeria’s debt carrying capacity is very low. For us, revenue levels are low comparing to a typical emerging market country that spends less than 10 per cent of revenues on interest payments.

    “In Nigeria’s case, that ratio, if you just take federal government, it’s over 80 per cent of revenues, if you take the consolidated, it is around a third, but the federal government is responsible for paying this debt service. So that’s one point.

    “The second point is on the access side. Market access for Nigeria, that is international market access, like Eurobond, etc., is highly dependent on what happens to oil prices, more so than some other commodity exporters and oil exporters. So that makes Nigeria quite vulnerable.”

    Rahman said going forward, IMF projected for Nigeria a continuous increase in public debt.
    “So, we are projecting you will see public debt to go up from 36 per cent of GDP to close to 43 per cent of GDP in the medium term,” she said. “And so, it is increasing and it is reaching that level where you should be concerned, everybody should be concerned,” she added.

    According to her, “Nigeria has favourable dynamics in the sense that high inflation and low interest rates are keeping these dynamics in favour of Nigeria, right. But if that were to change because growth rates are not high, you could see public debt growing up very fast.”

    Responding to a THISDAY inquiry on the impact fuel subsidy removal and value added tax (VAT) would have the masses, Rahman explained that tax reforms were a necessity to boost the country’s revenue.

    She also restated the need for the federal government to remove fuel subsidy, saying it is costly and regressive.
    Rahman stated, “A country that has little fiscal space to have a subsidy that benefits mostly the rich doesn’t make sense. So, there are economic and social grounds for removing this subsidy.

    “Of course, will it impact the poor because it’s a universal subsidy it affects the poor, too. So, removing subsidy would have impact on poverty.”

    The IMF official added, “And if you look at Nigeria’s past attempts to remove fuel subsidies, it has always been difficult. But it would be important that in addition to having social assistance, targeted social assistance for the vulnerable and the poor and it also will need strong political will and a well-designed public campaign to demonstrate the merits of this reform and a full transparency in the use of resources. Without this important reform there is risk of reversal again.”

  • IMF urges FG to remove fuel subsidy, official exchange rate

    IMF urges FG to remove fuel subsidy, official exchange rate

    Two weeks after the Federal Government suspended the removal of petrol subsidy, the International Monetary Fund has again urged the Nigerian government to stop subsidising fuel.

    The Washington-based lender also asked the Federal Government to remove the official exchange rate

    The Federal Government had on January 24 suspended its plan to remove fuel subsidy this year. It also proposed to extend the subsidy removal implementation period by 18 months, saying it would engage the legislature for the amendment of the Petroleum Industry Act.

    The IMF had in November last year stressed “the need to fully remove fuel subsidies and move to a market-based pricing mechanism in early 2022 as stipulated in the 2021 Petroleum Industry Act.”

    The IMF, in a statement on Monday at the end of its Article IV consultation with Nigeria, said despite the recovery in oil prices, the general government fiscal deficit was projected to widen in 2021 to 5.9 per cent of GDP, reflecting implicit fuel subsidies and higher security spending.

    According to the Washington-based fund, higher debt service to government revenues (through higher US interest rates and/or increased borrowing) pose risks for fiscal sustainability.

    Its executive directors noted that the country’s outlook remained subject to significant risks, including from the pandemic trajectory, oil price uncertainty, and security challenges.

    They emphasised the need for major reforms in the fiscal, exchange rate, trade, and governance areas to lift long-term, inclusive growth.

    The statement said, “Directors highlighted the urgency of fiscal consolidation to create policy space and reduce debt sustainability risks. In this regard, they called for significant domestic revenue mobilisation, including by further increasing the value-added tax rate, improving tax compliance, and rationalizing tax incentives.

    “Directors also urged the removal of untargeted fuel subsidies, with compensatory measures for the poor and transparent use of saved resources. They stressed the importance of further strengthening social safety nets.”

    The IMF welcomed the removal of the official exchange rate and recommended further measures towards a unified and market-clearing exchange rate to help strengthen Nigeria’s external position, taking advantage of the current favourable conditions.

    They noted that exchange rate reforms should be accompanied by macroeconomic policies to contain inflation, structural reforms to improve transparency and governance, and clear communications regarding exchange rate policy.

    The statement said, “Directors considered it appropriate to maintain a supportive monetary policy in the near term, with continued vigilance against inflation and balance of payments risks. They encouraged the authorities to stand ready to adjust the monetary stance if inflationary pressures increase.

    “Directors recommended strengthening the monetary operational framework over the medium term – focusing on the primacy of price stability – and scaling back the central bank’s quasi-fiscal operations.”

    The fund also welcomed the resilience of the banking sector and the planned expiration of pandemic-related support measures.

    The directors agreed that while the newly launched eNaira could help foster financial inclusion and improve the delivery of social assistance, close monitoring of associated risks would be important.

    They also encouraged further efforts to address deficiencies in the Anti-Money Laundering and Countering Financing of Terrorism framework.

    The directors called for stronger efforts to improve transparency of COVID-19 emergency spending.

    The statement said, “Directors noted that Nigeria’s capacity to repay the Fund is adequate. They encouraged addressing data gaps to allow timely and clear assessments of reserve adequacy.

    “Directors emphasised the need for bold reforms in the trade regime and agricultural sector, as well as investments, to promote diversification and job-rich growth and harness the gains from the African Continental Free Trade Agreement. Improvement in transparency and governance are also crucial for strengthening business confidence and public trust.”

  • Nigeria’s Capacity to Repay Our Loan is Adequate, says IMF

    Nigeria’s Capacity to Repay Our Loan is Adequate, says IMF

    The International Monetary Fund (IMF) says Nigeria has adequate capacity to repay its loan.

    The executive board of the Washington-based institution said this in a statement issued on Monday following the conclusion of its 2021 article IV consultation with Nigeria.

    At the onset of the COVID-19 pandemic, Nigeria received a $3.4 billion facility from the IMF in April 2020.

    The IMF board commended the proactive approach of Nigeria’s authorities to contain the COVID-19 pandemic and its economic impacts.

    It, however, said the country’s outlook remains subject to significant risks, including from the pandemic trajectory, oil price uncertainty, and security challenges.

    “Directors noted that Nigeria’s capacity to repay the Fund is adequate. They encouraged addressing data gaps to allow timely and clear assessments of reserve adequacy,” the statement reads.

    The directors emphasised the need for major reforms in the fiscal, exchange rate, trade, and governance areas to lift long-term, inclusive growth.

    “Directors highlighted the urgency of fiscal consolidation to create policy space and reduce debt sustainability risks. In this regard, they called for significant domestic revenue mobilisation, including by further increasing the value-added tax rate, improving tax compliance, and rationalising tax incentives,” the statement reads.

    “Directors also urged the removal of untargeted fuel subsidies with compensatory measures for the poor and transparent use of saved resources. They stressed the importance of further strengthening social safety nets.

    “Directors welcomed the removal of the official exchange rate and recommended further measures towards a unified and market-clearing exchange rate to help strengthen Nigeria’s external position, taking advantage of the current favourable conditions.

    “They noted that exchange rate reforms should be accompanied by macroeconomic policies to contain inflation, structural reforms to improve transparency and governance, and clear communications regarding exchange rate policy.”

    The directors recommended that Nigeria strengthen its monetary operational framework over the medium term — focusing on price stability — and scaling back the central bank’s quasi-fiscal operations.

    They also welcomed the resilience of the banking sector and the planned expiration of pandemic-related support measures.

    Speaking on the newly launched eNaira, the IMF directors said that it could help foster financial inclusion and improve the delivery of social assistance, but noted the importance of closely monitoring its associated risks.

    They also encouraged further efforts to address deficiencies in the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework.

    “Directors emphasised the need for bold reforms in the trade regime and agricultural sector, as well as investments, to promote diversification and job-rich growth and harness the gains from the African Continental Free Trade Agreement,” the statement adds.

    “Improvement in transparency and governance are also crucial for strengthening business confidence and public trust. Directors called for stronger efforts to improve the transparency of COVID-19 emergency spending.”

  • Nigeria Now Depends On IMF, W/Bank Loans To Pay Workers’ Salaries’

    Nigeria Now Depends On IMF, W/Bank Loans To Pay Workers’ Salaries’

    ​A Professor of Virology and member of the World Health Organisation’s Technical Advisory Group on COVID-19 Vaccine Composition, Oyewale Tomori, has lamented the refusal of successive administrations in Nigeria to invest in science and technology.

    Tomori said rather than investing in what would bring positive returns on, Nigeria, consistently invested in corruption and immorality stressing that the returns on these were the numerous problems facing the country.

    Speaking at the 79th Interdisciplinary Research Discourse of the Postgraduate College, University of Ibadan, put together by the Provost, Prof. Jonathan Babalola, on Thursday, Tomori said for Nigeria to get out of its woes, it needed to start massive investment in education, science and technology.

    He said, “While other countries are getting sumptuous results on their investments, we are wallowing in our own return on iniquity, and return on immorality. That is why we have 10.5 million of our children out of school, 4.5 million under-vaccinated, we become the poverty capital of the world.

    “We are investing hugely in corruption and disdain for science and technology, and we now depend on IMF loans and the World Bank to pay our workers’ salaries, to import food which we should be producing.

    “A recent study said the US government between 1988 and 2010 invested $3.8billion in the genome project and it is already generating $796billion. This is what is called return on investment.”

    To the renowned virologist, economic progress should be the direct result of advances in science and technology, saying everything used in communication, transportation, housing, clothing were products of investment in science and technology.

    He described science as the engine for human posterity while urging the Nigerian government to consistently invest in long term research in science and technology.

    “The money given to our science and technology goes to salary and emoluments in Nigeria. The money you put into education and science is what makes the difference in the countries that are doing well. The 2022 budget for science and technology is N202 billion but almost all of it is on capital project.

    “Allocation for research is specifically N6 billion and when you look at the details of what they put as research, it includes workshops, training, renovation of staff quarters, building of new hostels among others. That is what we call research in Nigeria and at the section they call miscellaneous, they are refreshments, honorarium, sitting allowance and what we call welfare package and put about N514 million for that.”

    “Now we have had 23 years of born again democracy in Nigeria and Nigeria remains the slumbering giant where fraud and crime stand in the brotherhood of decadence, depravity, excessive wastefulness, extravagance licentiousness.

    “No sector is free of this rot at home, in our schools, tainted political and traditional class, and then we have the culture of national immorality which permeates our country. There is no good or relevant science that can come under poor governance.”

    In his remarks, the Vice-Chancellor, University of Ibadan, Prof. Kayode Adebowale, stated that society determined which research should be encouraged or discouraged and how its resources were deployed to fund scientific research.

    He stated that the gown and town needed to form a synergy and foster a fruitful relationship for the positive transformation of Nigeria.