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Editorial

FG’s tokenism of N8,000 as palliative should be reviewed

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The Senate had last week Thursday approved the request of President Bola Tinubu to borrow $800m loan from the World Bank. It also amended the 2022 Supplementary Appropriation Act to accommodate the provision for N500billion for palliatives to mitigate the effect of petrol subsidy removal on poor Nigerians.

The President requested the two approvals in separate letters read by the Senate President, Godswill Akpabio, at the plenary.

According to Tinubu, the $800million loan will be used to cater for the welfare of the vulnerable and poor households in the country under the National Safety Net Programme, while the sum of N8,000 will be transferred monthly to the bank accounts of 12 million poor and low income households for six months.

Nigerians across the federation are already agonising over the effects of the subsidy removal from the petroleum products which made the pump price per litre from the previous N190 per litre to jump to N500, the cheapest in some part of the country as the independent petroleum marketers sell for as much as N520 upwads per litre.

It will be recalled that the President Tinubu announced the end to subsidy payment to fuel importers and marketers at his inauguration on May 29, 2023.

Expectedly, the adverse effects of this policy on the day to day living of an average Nigerian had been so biting, even the rich and the privilege ones in the society are feeling the heat.

For instance, this policy has had a lot of telling effects in the ever rising cost of living in the country due to the rise in cost of transportation, cost of commodities and services among others. There is no doubting the fact that this policy which is making the people to spend so much more from their meagre income would worsen the already unacceptable level of poverty in the country.

And as a means of cushioning the biting effects of this subsidy removal which is also making the country to reportedly save a whopping N400billion monthly, President Tinubu announced the proposal to release N500billion as palliative from  which N8,000 would be paid 12 million poor households for six months. Out of this palliative fund, N70billion is said to have been earmarked for the new members of the national assembly totalling about 306 while another N40billion from the fund will be use to buy  exotic cars for these same parliamentarians.

Nigerians have however come out to strongly oppose proposal of N8,000 tokenism as form of palliatives to cushion the painful sacrifice they make everyday due to the subsidy removal. It is the opinion out there that the federal government should stop forthwith the distribution of this handouts because such cash transfer to the poor had failed in the past.

Aside the fact that N8,000 will have little or no impact on any poor household given the high cost of commodities in the country, the same programme like Trader Moni, Farmer Moni and conditional cash transfer of N5,000 to the poor under the immediate past government of President Buhari had largely failed. Many Nigerians who were supposed to benefit waited in vain as large chunk of these money ended in private pockets.

Allegedly, food palliatives that were supposed to have been distributed during the COVID-19 lockdown were just locked somewhere to rot away until the rampaging youths during End SARS protest of October 2020 looted these places.

As part of measures to counter this policy, workers have demanded for a pay rise suggesting as much as N200,000 as minimum wage as against the current N30,000, it is now left for the government to sit with the labour leaders and work out a living salary that could actually help them to survive.

Aside this, what about making courageous moves to build at least two brand new refineries in the country within the next four years? It is the strong opinion of the economists rather than these handouts, the government should be ready to make huge investment in having new refineries such that the crude oil gotten here is refined here and we shall ultimately shut the door against fuel importations which is the major reason why we are buying at this exhorbitant price.

The government should also sincerely and patriotically spend the huge savings from the subsidy removal on our power sector such that we shall put behind us the present epileptic power supply which is inhibiting growth of small medium enterprises that could help the country solve her hydra-headed unemployment hassle.

To cushion the devastating effect of the subsidy removal on transportation, the government can provide long buses in form of mass transit that will be highly subsidised to commute people.

Another area where government can channel these huge savings from the subsidy removal to is in the area of qualitative healthcare and improved access to qualitative education. Accessing qualitative healthcare given the level of poverty in the country most times could be very daunting, it won’t therefore be a bad idea for government to highly subsidise health care services so that many Nigerians will cease to be victims of so many avoidable deaths. Our healthcare could truly be equipped with adequate health personnel and medical equipment that could aid qualitative healthcare delivery and help check medical tourism that gulp millions of dollars from Nigerians annually.

There are really several options aside tokenism that are open to President Bola Ahmed Tinubu if indeed he wants to live up to the billings of his campaign mantra of coming around to renew hope of Nigerians and not make it another forlorn hope! Time to listen to Nigerians is now.

 

Editorial

Urgent action needed to stem rising violence in Nigeria

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In a recent high-level meeting convened by Inspector General of Police, Kayode Egbetokun, alarming statistics were revealed: in just eight weeks, Nigeria has witnessed a staggering 537 cases of murder.

This revelation, coupled with 141 incidents of terrorism/secessionist attacks, 26 cases of armed robbery, 214 instances of kidnapping, and 39 cases of unlawful possession of firearms, paints a dire picture of our nation’s security landscape.

The gravity of these figures cannot be overstated. Each number represents a life lost, a family shattered, and a community in mourning. It is a stark reminder of the pervasive threat to the safety and well-being of every Nigerian citizen.

As a nation, we must confront this crisis with unwavering resolve and urgency. The current measures in place to address this surge in violence are woefully inadequate. It is evident that mere rhetoric and half-hearted efforts will not suffice in stemming the tide of bloodshed that plagues our country.

Furthermore, cooperation and collaboration between the government, security forces, and communities are paramount in the fight against crime and insurgency. Only through a united front can we hope to achieve lasting peace and stability in our nation.

As a society, we cannot afford to be complacent in the face of such staggering violence. The lives of our fellow citizens are at.

Kayode Egbetokun, recently unveiled the stark reality of our nation’s security predicament – a harrowing tally of 537 murder cases, 141 acts of terrorism/secessionist violence, and a myriad of other criminal atrocities.

Yet, amidst the chaos, glimmers of hope emerge – 3,685 suspects apprehended, 401 kidnapped victims rescued. These are the valiant efforts of our law enforcement, battling against a rising tide of criminality that threatens to engulf our nation.

But behind these statistics lies a deeper malaise – the scourge of economic hardship driving desperate souls into the arms of crime. In the crucible of survival, patriotism wanes, and criminality becomes an industry unto itself.

As the specter of insecurity looms large, the response from our governments remains tragically predictable – hollow promises, ineffectual rhetoric. The blood of innocents flows freely, cries for help drowned out by the deafening silence of those tasked with our protection.

It is a damning indictment of our society’s fabric when the guardians of law and order are themselves shackled by inadequacy.

With a mere 300,000 officers to police a population of 200 million, our forces are stretched thin, unable to meet the demands of a nation in turmoil.

The expectations are clear – to enforce justice, safeguard lives, and stem the tide of criminality. Yet, the reality falls short. The wheels of justice grind slowly, convictions dwindle, and offenders roam free.

In this crucible of despair, the call for divine intervention rings loud. But it is not divine providence we seek, but rather a concerted effort from our leaders to confront the scourge of insecurity head-on.

For it is only through effective policing that the foundation of our nation can be secured. The safety of our citizens is non-negotiable, and it is incumbent upon our governments to rise to the challenge. The time for platitudes is over.

The National Human Rights Commission (NHRC) has highlighted a concerning trend of cases where offenders are not convicted due to gaps between the Ministry of Justice and the police. This failure to prosecute perpetrators undermines national security by allowing them to evade accountability for their actions.

The lack of consequences for criminal behavior fosters a culture of impunity and reinforces the belief that crime is a profitable endeavor. This is evident in the brazen acts of banditry, criminality among herdsmen, Boko Haram insurgency, and other criminal activities across Nigeria.

To address this issue, governments at all levels must prioritize the deployment of skilled and professional legal practitioners in the criminal justice system.

Additionally, we propose that governments at all levels should allow private legal practitioners who are inclined towards criminal prosecution to collaborate with the state in prosecuting criminal cases.

This collaboration could take the form of private consultancy, engagement on a private basis, or through pro bono services. We believe that this approach could potentially help alleviate the burden on the state by reducing the backlog of criminal cases pending in courts, particularly those related to awaiting trial and others.

The time for action is now. Law enforcement agencies must be empowered with the necessary resources and support to effectively combat crime and ensure the safety of all Nigerians. Additionally, there must be a concerted effort to address the root causes of violence, including poverty, unemployment, and social inequality.

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Editorial

Tackling Nigeria’s high food prices: Strategies for mitigating soaring inflation

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Amidst the vibrant composition of global commerce, Nigeria stands as a nation grappling with formidable challenges that threaten to stifle its economic aspirations.

The latest findings from Africa’s Pulse, a prestigious biannual survey conducted by a prominent global lending institution, cast a spotlight on Nigeria’s enduring struggle with exorbitant trade costs.

With trade expenses in Nigeria towering four to five times higher than those in the United States, the report paints a portrait of a nation hamstrung by systemic barriers to economic growth and development.

The primary culprits behind these exorbitant trade costs are identified as steep transportation expenses, inadequate road infrastructure, and pervasive insecurity. Addressing these entrenched issues demands urgent and concerted efforts from President Bola Tinubu, his economic team, and security authorities.

It’s worth noting that many of these challenges were inherited by Tinubu’s administration.

Insecurity, for instance, has long plagued the nation, with farmers abandoning their fields due to the threats posed by various forms of violence, including terrorism, banditry, and clashes with herdsmen.

The toll of this insecurity is staggering, with tens of thousands losing their lives and many more falling victim to kidnappings and displacement.

Coupled with Nigeria’s daunting infrastructure deficit, estimated at a staggering $100 billion annually over three decades, the consequences are dire, particularly reflected in soaring food prices.

Currently, food inflation stands at a staggering 37.2 percent, a sharp contrast to the modest 2.20 percent recorded in the United States during March.

Addressing these systemic challenges demands decisive action and innovative solutions to enhance Nigeria’s competitiveness on the global stage and unlock its full economic potential.

While grappling with longstanding trade challenges, President Bola Tinubu’s policies have inadvertently exacerbated the situation. Initiatives such as the removal of petrol subsidies and the floating of the naira, introduced shortly after his inauguration, have catapulted business costs, prices, and inflation to unprecedented heights.

The recent decision to eliminate subsidies for Band A electricity consumers further compounds the issue, with consumers facing a staggering increase from N68 to N225 per kilowatt hour, despite expectations of consistent power supply.

These policy shifts have cascading effects, significantly inflating the cost of production for both domestic and imported goods. Diesel prices, crucial for manufacturing due to unreliable electricity, have surged to an average of N1,600 per litre in the first quarter.

Meanwhile, the impending rise in petrol prices, post-subsidy removal, threatens to push costs even higher, amplifying the financial strain on businesses and consumers alike.

Compounding these challenges is the absence of a robust railway system to alleviate transportation burdens. Hindered by political constraints centralized at the federal level, the railway network remains underdeveloped, leaving a critical gap in Nigeria’s infrastructure landscape.

As the nation grapples with these complex dynamics, finding sustainable solutions demands a holistic approach that addresses both policy missteps and systemic deficiencies. Only through decisive action and strategic investment can Nigeria hope to chart a course towards economic resilience and prosperity.

In the intricate dance of trade dynamics in Nigeria, imported essentials like food, medicines, raw materials, petroleum products, and machinery have taken center stage, their prices soaring to astronomical heights. This relentless surge has dealt a heavy blow to countless organizations and small-to-medium enterprises, pushing many to the brink of closure.

At the heart of this economic opera lies the exorbitant lending rate, standing at a staggering 24.75 percent—a sharp contrast to the more modest 3.76 percent average witnessed in the Euro Area during the same period. This glaring imbalance in interest rates further amplifies the financial strain on businesses, stifling growth and innovation.

Yet, the cacophony of challenges doesn’t end there. Multiple taxation, sluggish port operations, and the stranglehold of government oversight on state-owned enterprises contribute to the symphony of woes plaguing Nigeria’s trade landscape.

Seaports have become bottlenecked corridors, with imported goods languishing in limbo as demurrage fees accumulate—a burden ultimately borne by consumers. Meanwhile, the choreography of trade is disrupted by a chorus of non-state actors, who levy tolls and extort fees from hapless owners seeking to unload their cargo.

In this tangled web of fiscal complexities, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has counted a staggering 200 taxes, a bewildering array that stifles economic vibrancy.

While the government officially collects 62 taxes—divided among federal, state, and local government authorities—another 108 informal or ‘nuisance’ taxes are levied daily by non-state entities, further entangling businesses in a web of financial burdens.

Oyedele center stage, poised to orchestrate a transformational shift towards simplicity and efficiency. With determination coursing through its veins, the committee sets its sights on streamlining the labyrinth of taxes, aiming to reduce the cacophony to a melodious single-digit harmony.

Yet, the fiscal symphony is not without its dissonance. State governments, echoing the Federal Government’s VAT collection efforts, persist in extracting consumption taxes from the same businesses—a redundant cacophony that stifles economic vibrancy.

Meanwhile, the haunting refrain of poorly managed State-Owned Enterprises (SOEs) casts a shadow over Nigeria’s economic landscape. Despite being Africa’s largest crude exporter, Nigeria finds itself importing petroleum and steel products—a paradox born of SOEs mired in a state of dormancy.

To strike a harmonious chord and alleviate the burdens weighing down Nigeria’s trade, President Tinubu must take decisive action. Accelerating efforts to streamline taxation, privatizing SOEs, and embarking on a fervent quest to rebuild infrastructure stand as imperative measures on the path to economic revitalization.

Furthermore, the melody of progress demands a deepening of electricity supply and a symphonic collaboration with sub-national governments to realize the vision of state police—a harmonious fusion of security and governance.

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Editorial

Addressing the fraudulent acts surrounding forex exchange

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It is a goodomen for recent policy introduced by the Central Bank of Nigeria (CBN) against the transaction with foreign currencies.

The apex bank has banned the use of foreign currency-denominated collaterals for naira loans. This was contained in a circular dated April 8, 2024 and directed to all banks by CBN’s Acting Director of Banking Supervision Department, Adetona Adedeji.

The apex bank official listed two exceptions to the rule as foreign currency collateral which are Eurobonds issued by the Federal Government or guarantees of foreign banks, including Standby Letters of Credit.

“The Central Bank of Nigeria has observed the prevailing situation where bank customers use Foreign Currency (FCY) as collaterals for Naira loans,” the circular partly read.

“Consequently, the current practice of using foreign currency-denominated collaterals for Naira loans is hereby prohibited, except, where the foreign currency collateral is:Eurobonds issued by the Federal Government of Nigeria; or”Guarantees of foreign banks, including Standby Letters of Credit

“In this regard, all loans currently secured with dollar-denominated collaterals other than as mentioned above should be wound down within 90 days, failing which such such exposures shall be risk-weighted 150 percent for Capital Adequacy Ratio computation, in addition to other regulatory sanctions.”

Meanwhile, the CBN, also on Monday, announced the sales of dollars to over 1, 500 Bureau De Change (BDC) operators to meet retail market demand for eligible transactions. The apex bank said it would sell $10, 000 to each of the BDCs at the rate of N1,101/$1, a move which has been seen as part of CBN’s efforts to maintain the gain of the naira over the dollar.

The naira has appreciated against the dollar in recent weeks, gaining over 40 percent, from about N1,900/$ to about N1,200/$1 now.

The Governor of the Central Bank of Nigeria (CBN), Olayemi Cardoso, has disclosed that the security agencies and the Economic and Financial Crimes Commission (EFCC) are currently investigating questionable foreign exchange allocations and forward contracts estimated at $2.4billion. The probe came on the heels of the forensic audit of $7billion debt reportedly inherited by the present leadership of the CBN from the previous one under Godwin Emefiele.

The Cardoso-led CBN had late last year engaged the services of Deloitte Management Consulting to unravel how the debts were incurred. Following the forensic audit report, CBN said it had provided the investigators with the relevant documents that will focus primarily on the details of the forex transactions that did not meet the standards of the regulatory agency.

Some banks’ Chief Executive Officers are expected to be invited for interrogation by the security agencies soon. It is not yet clear how long the probe will last. But the CBN said the Deloitte report revealed that a good number of the forex allocations did not meet the laid down criteria for payments, among other alleged infractions and discrepancies contained in the audit report. Let the probe of forex racketeering be transparent. It should not be used for witch-hunting.

Clearly, public confidence in the CBN went to all-time low following the ouster of the immediate past governor of the apex bank as a result of sundry allegations of abuse of office. According to the CBN governor, as of recent, all valid forex backlog amounting to $1.5billion had been cleared. Others need to be diligently verified. Undoubtedly, the credibility of the banks is very much in doubt. This makes every effort towards restoring public confidence in the banking sector very crucial. The current probe is coming after the CBN and the anti-graft agency accused the banks of series of financial malfeasance.

For instance, last month, the Chairman of EFCC, Ola Olukayode, indicted banks as being “linked to 70 per cent of the financial crimes in Nigeria.”  This is a weighty allegation that should be investigated. Speaking at the Annual Retreat and General Meeting of the Association of Chief Audit Executives of Banks, the EFCC boss, represented by the Director, Internal Audit of the commission, Mr Idowu Apajoye, claimed that the banking sector has “increasingly become a cesspool of fraudulent activities.”

He said the development has raised considerable challenges and concerns to the agency. Therefore, he calls for concerted effort of audit executives to tackle the challenges in the banking sector.

Probe of the forex racketeering in the banks is appropriate and timely. It will strengthen the regulation of the banking industry and make them comply with the extant prudential guidelines.  The banking sector is very vital in every plan to rescue the economy.

Unfortunately, the sector has witnessed fraudulent practices in recent times. Recent audit reports by the Nigeria Deposit Insurance Corporation (NDIC) have raised alarm over some infractions in the banking sector. Some of the insider abuses include outright selling of customers’ deposits or identity theft as well as unauthorised loan facility, forgery and several others.

However, those charged with the probe of forex racketeering must be patriotic in carrying out the assignment. Proper reconciliation of the banks’ accounts, with periodic checks, in accordance with accounting requirements, must be adhered to. The findings of the probe panel must be made public, and sanctions imposed on those found to have breached the relevant laws. There must be strict supervision of the banks by the apex bank. It is likely that inadequate supervision of the banks must have accounted for abuses in the sector, including the alleged forex racketeering.

While ensuring transparency in the financial services sector is part of the confidence-building process, there is a need to formulate policies that will make Nigeria’s business environment attractive to foreign investors. We advise the CBN and the federal government to meet the forex demands of the organised private sector and small-scale industrialists.

Let the CBN ensure that valid documentation of all forex allocations are kept to curb infractions such as the allocation of millions of dollars to fictitious entities, and the provisions of forex allocations without the corresponding naira value. This is one of the best ways to avoid the frequent forex racketeering.

The anti-corrupt agencies like the EFCC and ICPC are also in support by threatening to arrest and probe educational institutions that collect fees payment in dollars or other foreign currencies. It is important that stakeholders including the DSS, NFIU, should work collaboratively with the CBN to eradicate the menace surrounding forex racketeering in the country.

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