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Editorial

Can Government remedy rising inflation rate?

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Despite frantic efforts by the President Bola Tinubu administration to stabilise the economy, the inflation rate has continued to rise on a monthly basis without drastic measures.

Following the trends of inflation report by the National Bureau of Statistics (NBS) you will begin to feel that the government has been rather inactive in managing the inflation situation. We have been applying only the orthodox approach which is all about increasing monetary interest rates. As much as we have increased the monetary policy rates by 5.5 percent in the last 12 months, inflation has climbed rather steadily to 28.92 percent today, with a slight dip some months back, followed by steady rises.

On Monday, the NBS disclosed that the inflation rate in Nigeria gained 7.58 percentage points in 2023 when it increased to 28.92 percent in December 2023 from 21.34 percent reported in December 2022.

The Consumer Price Index (CPI) reported by NBS showed that 28.92 percent in December 2023 is relative to the November 2023 headline inflation rate which was 28.20 percent.

According to NBS, “Looking at the movement, the December 2023 headline inflation rate showed an increase of 0.72 percent points when compared to the November 2023 headline inflation rate.

“On a year-on-year basis, the headline inflation rate was 7.58 percentage points higher compared to the rate recorded in December 2022, which was 21.34 percent.

“This shows that the headline inflation rate (year-on-year basis) increased in December 2023 when compared to the same month in the preceding year (i.e., December 2022).

“Furthermore, on a month-on-month basis, the headline inflation rate in December 2023 was 2.29 percent, which was 0.20 percent higher than the rate recorded in November 2023 (2.09 percent).

“This means that in December 2023, the rate of increase in the average price level is more than the rate of increase in the average price level in November 2023.”

NBS stated that the percentage change in the average CPI for the 12-month ending December 2023 over the average of the CPI for the previous twelve-month period was 24.66 percent, showing a 5.81 percent increase compared to 18.85 percent recorded in December 2022.

On urban inflation, the NBS report stated that “On a year-on-year basis, in December 2023, the Urban inflation rate was 31.00 percent, this was 8.98 percentage points higher compared to the 22.01 percent recorded in December 2022.

“On a month-on-month basis, the Urban inflation rate was 2.42 percent in December 2023, this was 0.19 percent points higher compared to November 2023 (2.23 percent).

“The corresponding 12-month average for the Urban inflation rate was 26.22 percent in December 2023. This was 6.83 percentage points higher compared to the 19.38 percent reported in December 2022.”

For rural Inflation, it said, “The Rural inflation rate in December 2023 was 27.10 percent on a year-on-year basis; this was 6.38 percent higher compared to the 20.72 percent recorded in December 2022. On a month-on-month basis, the Rural inflation rate in December 2023 was 2.17 percent, up by 0.18percentage points compared to November 2023 (1.99 per cent).

“The corresponding 12-month average for the Rural inflation rate in December 2023 was 23.25 per cent. This was 4.91per cent higher compared to the 18.34 per cent recorded in December 202.”

Unfortunately, whereas 2% – 4% inflation is considered to be healthy inflation (for matured economies), and we may run up to say 6% – 8% in our economy without any sense of panic, the Central Bank of Nigeria has set its inflation target at anything below double-digit. Let’s call that 9%. We are thus 13% above this target.

How else can we force down inflation? And what latitude can we entertain especially because high rates of inflation also usually come with high GDP growth rates? The contention here is that we should target much higher rates of growth in our GDP than the 2%-3% that we are doing and projected to do presently. It’s actually quite depressing when one sees such projections. Can we accommodate lower double-digit inflation as a price for much higher GDP growth rates? The new administration has gone all out to promise a GDP growth rate of between 8% to 10%. How can we achieve this without letting inflation run away any further?

I believe it is achievable though but that will require us discombobulating where our 22.22% inflation is coming from. First off, growing the economy much faster simply means getting rid of inefficiencies, ensuring that people actually get productive for whatever salaries they are paid, improving capacity utilisation in industries, getting companies to grow, encouraging new productive ventures, and generating considerable productive buzz in an economy.

We can look at other economies that have achieved this to be able to get an idea of what it takes. Many such countries – like China, India, and even other African nations which have grown at about 8% for some years, such as Cote D’Ivoire, Senegal, Egypt, and Ethiopia – saw real investments in infrastructure, evidencing healthy growth rates. I believe a focused leadership, resolute in enforcing a level of discipline, punishing and rewarding promptly to signal its direction, and with adequate performance monitoring of all sectors and its targets can put Nigeria on this same track.

The Central Bank of Nigeria, through its monetary policy committee (MPC), has adopted an orthodox approach permanently by continually increasing interest rates. Perhaps that’s the best the CBN can do, or else it is accused of extra-monetarism. The textbooks say once general interest rates are increased, inflation will slow down because people are better incentivised to save money, and to borrow less, thus money in circulation reduces and inflation follows suit. If we consider where Nigeria’s inflation is coming from – with a major portion stemming from food inflation – we will most likely conclude that we have cost-push inflation. This means that sellers are passing on the higher cost of bringing goods to the market.

However, if we are honest, we will find that Nigeria’s inflation is a multi-variable phenomenon — cost-push, illegal money in the hands of many people, bad data as a result of a large informal economy, inflation from our import-intensive economy, and price gouging by those who can exploit consumers. We should understand that Nigeria’s economy is a very loose system where people get away with all sorts. So, is there any direct intervention that can be made in the agricultural sector to slow down food inflation? That will require a careful and deliberate walk-through of the entire value chain. It is not enough to throw money at the problem by way of intervention funds, a lot of which goes to waste. A multi-sectoral approach is required, with strong executive leadership. We have no excuse for food inflation to be so high on a month-on-month basis. If we could intervene and begin to work down food and other inflation, this will have an immediate effect on our overall headline inflation numbers. We cannot afford to leave every sector to the shenanigans of players in such a growing economy. Perhaps direct government interventions to assuage the agonies of our farmers and transporters will help to tame general inflation.

Policies to increase the competitiveness and efficiency of the economy, putting downward pressure on long-term costs. At the end of the day, competitiveness and better regulation of sectors within the economy, are what guarantee the strength of an economy. Deregulation of markets is not the application of laissez-faire policies where anyone does what they like, but better, more transparent, and more scientific policies and regulatory approaches. This will then ensure that sellers in an economy think twice before playing games. Overall, too, the leaders in an economy have to be able to reduce the rat race by which people chase more money and more advantages for themselves no matter whose ox is gored. In most of Europe, people have since gotten to that level.

A higher rate of income tax could reduce spending, demand, and inflationary pressures. This is another approach to curbing inflation. Whereas Nigeria may not raise taxes at this point, what I propose we do is get serious about enforcing government revenue. The CBN is increasing interest rates in a desperate but thus far futile bid to slow down inflation, whereas the fiscal sector merely wrings its fingers at our low revenue-to-GDP ratio. I believe the former minister of finance must have given up since no support came from a disinterested president. There is a large room for tax compliance in Nigeria. And we are not talking about just taxes, but every revenue accruable to the government – rents, rates, duties, fees, fines, levies, and what have you. We cannot run such a slack society and expect glory to abound.

Also, there is no basis for reducing government expenditure at this point. Our people’s standard of living is still so low, such that the government must have a mindset to spend more – on education, health, security, infrastructure, electricity, and rail networks. However, the efficiency of this spending is what matters. Are we getting value for money? Is the spending getting to the people? Are we empowering Nigerians? If viewed this way, we will not be powering up unproductive inflation, but rather growing the economy (GDP). The real problem we have had in Nigeria is low growth and very high inflation. Growth must ramp up, while inflation goes down. As difficult as it may look, this is the only way forward that can be achieved through sincerity and deep thinking.

Ultimately, the government at the center should collaborate with the state government to put to the lasting menace of insecurity so all farmers have access to their farming activities and transport their food produce into the market. Infrastructural challenge is another nightmare that must be given urgent attention to boost economic activities in the country.

Editorial

Nigeria’s Human Rights conundrum: A call to urgent action

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Nigeria’s human rights landscape has long been a cause for concern, but the latest revelation by the National Human Rights Commission (NHRC) paints a particularly dire picture.

The shocking disclosure that 1,580 human rights violations occurred in March 2024 alone is a stark reminder of the precarious state of human rights in our country.

Even more disturbing is the breakdown of these violations, which reveals a disproportionate impact on the North Central region and a troubling involvement of state actors, including the police, military, and DSS.

This crisis of accountability and protection demands urgent attention and action from all stakeholders, and it is our hope that this editorial will contribute to a much-needed national conversation on this critical issue

The most vulnerable members of our society, children, were not spared, with 542 cases of rights violations recorded. Domestic violence, which is becoming increasingly rampant, accounted for 471 cases.

Non-state and private actors were also responsible for 32 and 36 violations, respectively, while three cases of rights violations were recorded against people with disabilities.

The NHRC’s report is a wake-up call to all stakeholders, including the government, civil society organizations, and individuals, to take immediate action to address these violations.

The fact that social, economic, and cultural rights accounted for 157 violations, and referred cases stood at 24, highlights the need for a comprehensive approach to addressing human rights issues in Nigeria.

It exposed 499 killings and kidnappings, 71 violations of the right to life, and 301 school children abducted in Kaduna State alone.

The commission’s Senior Human Rights Adviser, Hilary Ogbonna, revealed these shocking statistics, which include 40 people killed in Benue State and four deaths in Nasarawa State during palliative distribution.

The report highlights a broader pattern of human rights violations, including domestic violence, abductions, and children’s rights abuses. It’s alarming that the right to life is being violated in various ways, and human rights violations are escalating.

This is despite Nigeria’s adoption of the Universal Declaration of Human Rights and over two decades of democratic governance.

The Global Peace Index Report’s ranking of Nigeria as one of the least peaceful countries in the world (144th out of 163) is a damning indictment.

The report emphasises the gravity of human rights abuses in Nigeria, where basic rights like freedom from oppression, participation in decision-making, and access to fundamental needs like food, work, medical care, and education are frequently denied.

However, the Universal Declaration of Human Rights, adopted in 1948, enshrines fundamental rights like freedom from oppression, participation, and access to basic needs.

While many countries, including Nigeria, have incorporated these rights into their constitutions, the reality on the ground is starkly different.

In Nigeria and Africa, people face physical and mental torture, police brutality, domestic violence, kidnappings, and detention without trial.

Since its declaration, it has become fashionable for most countries of the world, Nigeria inclusive, to entrench the catalogue of rights in their constitutions.

But, regrettably, in Nigeria, and indeed Africa, people are usually subjected to physical and mental torture ranging from cases of accidental discharge and other forms of police brutality, domestic violence, kidnappings as well as detention without trial.

Also, insecurity, in its various forms, has become a pervasive issue in Nigeria, manifesting as banditry, kidnapping, terrorism, and communal conflicts. This has resulted in the loss of lives and property, highlighting the government and security forces’ failure to fulfill their social contract with citizens. The lack of remedies for victims, including compensation and access to justice, has further worsened the situation.

The Nigerian Constitution guarantees the right to personal liberty, a fundamental feature of any democratic setting.

However, persistent obstacles, including legislative constraints, societal prejudices, and systemic shortcomings, hinder the full realization of human rights. It is crucial to acknowledge these challenges and work collectively to dismantle them.

The myriad of challenges facing Nigerians includes insecurity, separatist agitations, torture, illegal detention, extortion, and extra-judicial killings by law enforcement agencies.

Limited access to justice, abuse of court process, and disregard for court orders, as well as the increased cost of living and deteriorating living conditions, further hamper citizens’ ability to lead safe and meaningful lives.

Human rights protection plays a critical role in fostering vibrant democracies, promoting social cohesion and diversity, and cultivating a conducive and peaceful living environment.

To address these challenges, we recommend strengthening the independence of the judiciary, press freedom, democratic rules and principles, human rights education, and public vigilance. This will help curtail human rights abuses and promote good governance in Nigeria.

We urge the government, civil society organisations, and individuals to work together to address these pressing issues and ensure that the rights of all Nigerians are respected, protected, and fulfilled.

We also call on civil society organisations and individuals to continue to advocate for human rights and hold those in power accountable for their actions.

We also urge the government to take immediate action to address these violations, investigate and prosecute perpetrators, and implement policies to prevent future abuses. We also call on civil society organisations and individuals to continue advocating for human rights and holding those in power accountable.

The time for change is now. We must work together to ensure that the rights of all Nigerians are respected, protected, and fulfilled.

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Editorial

Endless turnaround maintenance of Port Harcourt Refinery

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Since 2021 when the turnaround maintenance of the Port Harcourt Refinery started, there have been heaps of failed promises of the production commencement date.

First, it was former Minister of State for Petroleum, Timipre Sylva promising severally of commencement of productions of Port Harcourt Refinery, but these promises never came to limelight till he resigned for political calling.

Next was the Managing Director of Port Harcourt Refinery, Ahmed Dikko who at a time said the turnaround maintenance was 98 percent completed and would have commenced operations in December 2023. That promise again was unfulfilled.

The Group Managing Director of Nigerian National Petroleum Company Limited (NNPC Ltd), Mele Kyari equally said that Port Harcourt Refinery would start production in two weeks time, that elapsed in April, 2024. April has come and gone.

The Head, Corporate Communications of NNPC Ltd, Olufemi Soneye was also quoted to have said that the reason for non-commencement of operations of the Port Harcourt Refinery was regulatory and compliance tests. As it seems, all efforts to restart the operations of the Port Harcourt Refinery and by extension other refineries, have been futile.

Political watchers have adduced poor management, corruption, sabotage and lack of political will as some of the problems confronting smooth operations of our refineries. They particularly accused those benefitting from importation of petroleum products as being responsible for the non-functionality of the four refineries in Nigeria.

Political will, of course, plays a major role in shaping directions the policies go. Political will in this instance translates to good leadership, and in this case, the buck stops at the table of the Federal Government, particularly the President, who doubles as the Minister of Petroleum.

Petroleum being the mainstay of the country’s economy should be given all the attention it deserves. The reason being that virtually everything in the country is tied to the petroleum products situation.

Since the announcement of the removal of fuel subsidy on May 29th, 2023 by President Tinubu on assumption of office, life has not been the same in Nigeria. Cost of living has  risen astronomically, consequent upon the hike in price of petroleum products.

In the midst of plenty, courtesy of the abundant human and material resources, Nigeria is still often described as the poverty capital of the world. What an irony! Turnaround maintenance of the refineries subsists without end. Every hope is now placed on the Dangote Refinery, a private outfit. While the diesel price slash is commendable, how on earth will a single private entity take the whole country to Eldorado?

We cannot regulate what we do not produce, this is a natural principle that cannot be contravened. We only pray that Port Harcourt Refinery comes on stream someday.

We look forward to that time. Our position is that Government agencies saddled with the responsibility of providing fuel and other petroleum products to Nigeria must do their work and justify their pay.

This onerous task is mandatory and statutory to them and shall amount to disservice if they fail. Our prayer is not for them to fail, but that they fulfil their vows and make the country great for the overall interest of all.

Tecnimont, the Italian company undertaking the $1.5 billion rehabilitation project of the Port Harcourt Refinery has through its Local Managing Director, Gian Fabio Del Cioppo pledged to fulfil the terms of contract, so as far as we are concerned, there is nothing stopping the country from achieving the target of the turnaround maintenance project.

The only clog would of course be lack of political will, which we know could be cultivated. So let all hands be put on deck to achieve results.

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Editorial

Gas explosions: Nigeria and its avoidable tragedies 

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Nigerians die daily for reasons  so avoidable it would make  a 19th century peasant weep.  The deaths are often a product of systemic wickedness, nonchalance, and greed. Too often have gas explosions claimed the lives of Nigerians untimely. Whether it is the leaders refusing to enforce the checks and balances for personal gain, or citizens selling defective gas cylinders, it all balls down to a collective aversion for kindness.

The internet is rife with news of this tragedy occurring in a Sisyphean cycle. Jolted by the cries of the populace, the leaders promise reprieve, release press statements and in the weeks that follow, little to nothing happens. “One must imagine Sisyphus happy,” Camus wrote. Unfortunately, our Nigerian dead imagine nothing.

While people relaxed from their labour, were preparing for the Workers Day celebrations, nine people including a pregnant woman were injured in Tuesday’s gas cylinder explosion at Alaba Lane, Alayabiagba Community of Ajegunle-Apapa, Lagos.

“The fire explosion started around 1:30 pm and immediately, two tricycles were burnt, school children coming back from school were affected. A particular young man was seriously affected as his body was peeling off, but rushed to the Gbagada General Hospital,” according to reports.

The usual suspect is, of course, negligence, as the Director of Lagos State Fire and Rescue Service, Margaret Adeseye, puts it: “preliminary investigation revealed that several various gas cylinders traded within the neighbourhood have one triggered from a susceptible leakage leading to the snapping of a high tension cable and resultant Fire.”

The explosion razed down “four commercial tricycles, six lock-up shops, a bungalow part of properties, while salvaging adjoining structures including a major fuel service station.” Children were hurt, the future of the nation plunged, as usual into avoidable misfortune.

The way out is through. The press releases are wonderful PR statements but they do not bring back the dead, as was the case in Ogun State recently where a truck explosion cost the nation another life. The leaders must enforce the checks and balances put in place. The law is no decoration.

We mustn’t wait until a politician’s family member is involved in a tragic gas accident before “banning” (as is the default response of the Nigerian leadership). The leaders must realise that such misfortunes are contagious, and money is hardly a bulwark against 3rd degree burns in a nation where all its doctors are fleeing.

Renewed Hope requires renewed action. This is all that Nigerians ask of its leaders. All agencies responsible for monitoring trucks, cylinders need to work together to defeat this peculiar evil. Like COVID-19, gas explosions are no respecter of persons.

Of course, citizens too must do their part and resist the allure of profit over the death of others. A society without empathy is headed for a dystopia. It will not matter the price of petrol or electricity tariff, if all that matters is the pursuit of super profit at the expense of one’s neighbour. We owe it to the dead to live fully and graciously. To escape, as we should, avoidable tragedies.

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