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Editorial

New minimum wage and the informal sector

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The Minimum Wage Act of 2019 signed by former President Muhammadu Buhari set the amount at N30,000. Five years later, not all governors are paying the current wage award which expired in April. The Act is to be reviewed every five years to meet up with contemporary economic demands of workers.

The informal sector has the dominant population of citizens, what provision is the government making to cater for them other than palliatives. The Muhammadu Buhari leg of the All Progressives Congress, APC, Federal Government failed to wave the magic wand they had promised during the campaigns towards the 2015 presidential election. Instead, the economy was left in utter ruin as Buhari handed over to Bola Ahmed Tinubu on May 29, 2023.

From day one, the current government deftly transferred the burden of petrol subsidy removal to Nigerians one month ahead of the supposed take-off time, skyrocketing pump price above 300 percent. The Central Bank of Nigeria, CBN, floated the Naira against its foreign counterparts, thus eliminating the differential between the official and black market rates. Within weeks, the Naira tumbled to almost N2,000 to the Dollar.

Businesses – the big, small and multinationals – started closing down or leaving the economy because of the astronomical cost of production. Unemployment and hunger worsened. Inflation hit the highest point in our living memory.

Not done yet, the Federal Government announced the hike of electricity tariff from 68kwH to 225kwH as from April 1, 2024. The CBN had also instructed the banks to collect 0.5 percent levies on transactions, until public outcry led to a paise of the instruction. As a result of these and other government-induced price increases, other service providers, notably Multichoice, have announced their own price increases.

Government policies, rather than fix the economy,  keep eating away the real income of the populace. The struggling middle class, meant to be the social safety buffer between the rich and poor, is near extinction.

All palliative measures announced by the Federal Government – salary awards, cash transfers, introduction of gas-powered public transport vehicles and release of food from the strategic reserves – are yet to produce meaningful economic impact. Yet, this government is responsible for the appointment of the highest number of ministers ever in Nigeria’s history.

Judging from the foreign economic trips and elements of the controversial Lagos-Calabar Coastal Highway contract, the controllers of governance live in a different world of their own. There exists a gulf between the leaders and the populace.

This disparity has not gone unnoticed. If we must tighten our belts to rebuild the economy, the leaders ought to set the example. Without being a part of the travail, how will the leaders be inspired or motivated to lead well and get us out of this mess?

Nigeria’s progress is dependent on the accountability of its leaders, and more importantly, their sense of humanity. History books are replete with demagogues in the guise of political leaders. The renewed hope agenda should prove its antagonists wrong. Nigeria can be fixed, its people are not hopeless. The ball is in the court of the elected leaders.

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Editorial

Democracy without attendant economic development

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Nigeria may have celebrated twenty-five years of unbroken democracy, but how have its citizens fared? It is no longer news that Nigeria and Nigerians are passing through one of the worst times in the history of the country, with high cost of living, abject poverty staring them in the face.

No wonder pundits and well-meaning Nigerians, especially the youths defied threats of harassment and possible arrest by. security operatives in Lagos, Ogun, Osun and Oyo States, among others to protest against hardship induced by bad leadership that has impoverished the entire nation since 1999.

It is important to mention that Nigeria gained independence from the British colonial masters on October, 1 1960 and has since been ruled by Nigerians. The first, second and third republics are testimonials to that claim. So celebrating just twenty-five years of democracy could amount to half truth.

But what has changed? The economic indices of  the 1960s are still very much with us today. Epileptic power supply, unemployment, inflation, insecurity, among several others that are still staring us on the face.

So what are we really celebrating? Yes, President Ahmed Bola Tinubu has catalogued the sacrifices made by Nigerians, some even paid supreme price with their lives to preserve democracy, but what have we, the immediate beneficiaries of the struggle done to protect it?

Everybody craves the preservation of democracy, often referred to as nascent in Nigeria, but a sixty-three-year old man cannot be said to be underraged. Let us therefore stop hiding under nascence to defend our inadequacy or outright failure.

We strongly disagree that at sixty-three, Nigeria should remain underdeveloped to the extent that electricity supply is nothing remarkable, unemployment holding sway, road networks deplorable, insecurity a perpetual challenge, and worse still, high cost of living at its peak.

What has happened to the resumption of production by our refineries, especially Port Harcourt Refinery? Dangote Refinery is on everyone’s lips. If an individual can build a refinery within a reasonable time frame, why can’t a nation do better? It amounts to absolute failure on the part of the leaders.

What has happened to the textile industry that employed a whole chunk of the population? What about manufacturing companies such as Michelin, Dunlop, Nigerian Engineering Works (NEW), CFAO, SCOA Motors etc?

If we cannot provide an enabling environment for business to thrive, which forces most of these foreign companies to relocate to other countries, let us establish our own local companies that can run without electricity.  It is disturbing that some fundamental projects that can serve as catalyst to Nigeria’s industrialisation, such as the Ajaokuta Steel Industry, Kogi State, Aluminium, Smelting Company, Ikot-Abasi in Akwa Ibom State have remained perpetually uncompleted and we are comfortable importing fuel and other petroleum products after throwing away our crude oil, in the name of exportation.

Nigeria is now battling with high cost of living, induced by the so-called removal of fuel subsidy. A custard rubber of garri now sells for N5,000, rubber of rice costs N7,500 to N850,000, a bottle of poorly refined kerosene sells at N2,000 and still salaries of workers remain static. How do we reconcile that?

We cannot talk of democracy without free and fair elections. That is the reason why well-meaning Nigerians are clamouring for free and fair elections. But the greatest resistance is coming from corrupt politicians, who do not have anything to offer in terms of leadership. It is important we enthrone true democracy, where election results will count and not one or two men sitting behind the bench to determine the fate of millions of Nigerians in the name of the judiciary. To achieve that faster, public offices should be made less attractive, so that anybody eyeing any elective office should know that he is going to render service and not planning to plunder public funds.

There must be stringent measures against corrupt officials serving or retired. Most successful countries of the world have adopted such an approach and the citizens are better for it. That is the reason corruption in Asia has become less common. Few public officers in the Asian Continent will dare to meddle into fraud, otherwise the hangman awaits such an officer.

Reverse is the case in Nigeria, or Africa at large. No wonder a politician seeking election will boldly tell us to go to court, provided he wins the election first. And true to it, this has been working out for them. The cases often last till the end of their tenure. If the court were to be the hope of the common man, such a thing wouldn’t happen.

It is also in Nigeria where perpetual injunction exists for public officers. This sounds strange, isn’t it? But it happens in Nigeria! A former president in Nigeria had identified the judiciary and the Independent National Electoral Commission (INEC) as his greatest headache in the war against corruption in the country and the duo lived up to expectations by frustrating every move he made to tackle corruption while his tenure lasted.

In other words, democracy is good, but Nigerian democracy has not lived up to its billing. It could rightly be described as a suffering and smiling kind of democracy, that makes it difficult for the people to experience the dividends of democracy. And democracy without dividends is worse than military dictatorship. At this juncture, it is important that we look at the way forward.

First and foremost, free and fair elections are sacrosanct in any given democracy globally.  Results or votes of such transparent elections must be allowed to count.  The judiciary is not meant to determine the outcome of elections in an ideal democratic setting, no wonder some credible winners of the nation’s elections have suffered a lot from law officers in the name of technicalities.

The judges now tend to play up technicalities far above evidence. No other thing to do other than ensuring that INEC conducts a credible, free and fair election, devoid of controversy that will not warrant the matter ending up at the court. We equally suggest that election riggers should be severely punished according to the law of the land. Where such laws are too light for possible electoral offenders, it should be amended to suit the purpose.

The current over-bloated bills on cost of governance should be cut down, the only attraction to public office should be knack for service. Again, power supply must be stable and constant to encourage investors, who will in turn create employment through their investments. Critical projects such as the Ajaokuta Steel Industry, Aluminium Smelting Company and the likes that are geared towards  industrialisation of the country must be completed and allowed to run optimally.

If the above stated measures are taken, Nigeria will vacate its third world country status, and  this is when celebration of democracy will make meaning for majority of the populace.

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Editorial

Is six-year single tenure for President Nigeria’s problem?

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Just yesterday about 30 lawmakers at the Green Chamber of the National Assembly proposed a six-year single tenure for President and Governors in the political architecture of this country among other sundry issues. The question that has been pondering on my mind at this critical period is that Nigerians’ problem?

These House of Representatives members whom are accorded esteemed regard by the people are fully aware of the lapses in the basics amenities like the skyrocketed inflation, epileptic electric supply, insecurity, high rates of unemployment, the lingering  issue of minimum wage and hunger lavishing the land but decided to give deaf ears to this outcries.

Last two weeks on May 29, the ruling political elite marked 25 years of the reinstitution of democracy in Nigeria after very difficult years of successive military dictatorship. We remember the enthusiasm and hope that accompanied the return of that system of government to the country. Nigerians who prayed for civilian rule, based on democratic principles, had hoped that at its silver jubilee, it should have brought success stories to the nation in all ramifications and the citizens would have a feel of the boundless wealth that the country is blessed with.

But as the nation awaits the rescheduled Democracy Day, June 12, the bliss that the citizens expected at the inception of this new era is increasingly diminishing with unprecedented speed because of poor governance inflicted on the people by political operators who emerged in public offices through a flawed process.

In our considered opinion, democracy as a system of governance is not to blame because in other climes it has yielded massive returns for the people in terms of social security, infrastructure development, political and economic stability, peace, security, science, technology and innovation.

We can draw examples from the People’s Republic of China, under communist democracy. The Communist Party of China (CPC) has, through strategic thinking, creativity and massive investment in human capital, recruited the abundant human intelligence and intellect of the people to build a prosperous nation, which is today one of the most important manufacturing hubs in the world.

There are other thriving examples of where democracy works for the people around the world including in African countries. The problem is not the system but the individuals who operate it. We acknowledge the fact that liberal democracy, in itself, may not necessarily guarantee good governance and economic development, but it remains a system that opens up bountiful opportunities for citizens to have the freedom to interrogate the aggregate values and variables of their society and create collective channels to attain greatness through effective leadership.

The challenge of democracy in Nigeria is lack of good leadership at multiple levels and this has enormous drawbacks on the lives of the people. Experts claim that there is a paradoxical relationship between democracy and development in Nigeria. In the 20 years of electoral democracy, poverty, inequality, unemployment, underemployment and insecurity have increased. The hopes of citizens that democracy would lead to improved living standards have been dashed. Social justice and inclusive sustainable development have also been elusive. This, in our opinion, is not a failure on the part of democracy as a system but the inefficiencies brought about by the fabled human factor.

Curiously, and in spite of the beauty of the ballot box, the Nigerian economy has remained dependent on oil and gas with very low value-added services. The aspiration that by 2020, Nigeria would become one of the 20 leading economies in the world has not been achieved essentially because of an abysmal lack of commitment by the political elite who have captured the state for personal gains.

We are appalled that 25 years of democracy has brought untold misery to Nigerians at multiple levels. The situation has become worse in the last nine years. Today, inflation has hit 33.69 percent according to the National Bureau of Statistics (NBS). This has caused a heightened increase in the prices of food and other essential commodities in the country putting most of them beyond the reach of the ordinary citizen whose income is miserably stagnated.

Furthermore, unemployment has reached alarming levels creating a system which provides solace only to relations of political office holders and their acolytes. It is not surprising, therefore, that the poverty rate is such that in 2023, Nigeria, officially, was rated as having 63 percent of its population suffering multidimensional poverty. Sadly, in our view, policies, such as the removal of fuel subsidy, are not helping matters when not done right. That policy, in particular, abruptly announced has worsened an already precarious situation due to lacklustre implementation, giving rise to an environment whereby citizens pay more for fuel and other items, whose prices have been pushed beyond limits by that otherwise good decision.

Another policy that has triggered a humongous crisis is the floating of the naira that grossly reduced the value of the currency vis-à-vis other international media of exchange and brought massive pain and hardship to bear on the lives of the citizenry.

Compounding this awkward scenario is insecurity which has so ravaged the country ranging from terrorism, banditry, farmers- herders clashes in the north and unknown gunmen and the menace of separatist agitators in the south.

Despite these seemingly insurmountable crises, we are of the opinion that the best is still possible for Nigeria.  But the citizens must come out and set a standard for electing leaders on personal merit and character instead of the so pervasive ethnic and religious motivated choices. The need for an urgent reversal of this mindset is immensely compelling because, in the long run, it is the entire populace that pays the price of any mistake of omission or commission

Pertinently, as President Ahmed Tinubu crowned his government with the celebration of Democracy Day today. The political elites have a rethink to reintroduce people interest programmes and policies that will serve as a succour to the lapses on the land.

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Editorial

Failure of estimated billing and the need for metering

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The country’s ailing power infrastructure and ecosystem are on the brink of collapse, threatening viable industrialisation and sustainable economic growth.

The electricity generation companies are drowning in a sea of debt, owed a staggering N3.17 trillion, with a funding gap of N1.7 trillion.

Liquidity challenges, unfavourable fiscal and monetary conditions, inflation, and foreign exchange volatility have pushed them to the edge.

GenCos are struggling to access forex for spare parts, facing huge electricity debt, and battling gas shortages.

The Federal Government’s failure to harness Nigeria’s robust gas reserves has resulted in underutilisation, with huge volumes flared during crude oil production.

The numbers are stark: despite having 206.53 trillion cubic feet of proven gas reserves, Nigeria generates a paltry 2,944-4,317MW, compared to Egypt and South Africa’s 58,000MW each.

The power sector’s decay is a national emergency, requiring a strategic and seamless solution.

The government must act now to rescue the sector, harness Nigeria’s gas reserves, and unlock the country’s economic potential. The future of Nigeria’s industrialisation and economic growth depends on it.

The government’s sole management of the national grid, ostensibly to protect sovereign assets, has led to persistent grid failures and inefficiencies, creating a dire situation.

The grid collapsed 46 times between 2017 and 2023, according to the International Energy Agency, and it has already collapsed six times in 2024. Privatisation and redesign with effective regulatory oversight are urgently needed.

President Bola Tinubu and his Minister of Power, Adebayo Adelabu, must urgently revisit the gas-to-power initiative of their predecessors to address the gas-to-power deficit.

Engaging Siemens Energy to overhaul the sector and eliminating bureaucratic hurdles, while adhering to global best practices, is essential.

The transmission segment of the power sector is also in disarray, plagued by vandalism.

In April, the Transmission Company of Nigeria reported that four towers on the Jos-Gombe 330 Kilovolt transmission line were vandalised, disrupting bulk power supply to Gombe, Yola, and Jalingo.

The Centre for the Study of Economies of Africa highlights that inadequate transmission lines, poor management, a lack of maintenance culture, and flawed grid design hinder the power sector.

The government’s current plan to split the TCN and create the Nigeria Independent System Operator of Nigeria Limited, another government-run entity, is counterproductive. The TCN should be privatised to ensure transparent management of existing assets, attract new investments, and boost productivity in the sector.

Meanwhile, the Goodluck Jonathan government’s privatisation of the power sector was a well-intentioned but poorly executed move. Local firms with little expertise acquired distribution licences, focusing on profit rather than investment in facilities. This deprived Nigeria of much-needed foreign investment and expertise.

To salvage the ailing DisCos, the Federal Government is repossessing and reorganising them. Some have been taken over by banks, while others are under government control.

Despite privatisation, the government continues to subsidise DisCos with N204.59 billion in the third quarter of 2023 alone.

Nigerians bear the brunt of the sector’s inefficiencies, subjected to estimated billing and exorbitant charges without accountability. The lack of meters has exacerbated the situation, with only 58.37 percent of registered customers metered. The government must mandate DisCos to implement metering, deducting costs from consumer bills. Metering complaints account for 53.40 percent of all complaints, highlighting the urgency for reform.

The power sector’s decay is a national emergency requiring swift action. The government must learn from past mistakes and prioritise expertise, investment, and consumer welfare to rescue the sector and unlock Nigeria’s economic potential.

The situation worsens as various ministries, departments, and agencies (MDAs) owe electricity distribution companies (DisCos) billions in unpaid bills. In February, the Abuja Electricity Distribution Company (AEDC) announced that 86 MDAs owed N47 billion, with Aso Rock alone owing N923.8 million. Following this embarrassing revelation, Aso Rock managed to pay N342.3 million.

On June 3, the AEDC issued another notice to disconnect 23 MDAs, including the Office of the Secretary-General of the Federation, military formations, the Federal Capital Development Authority, the Federal Ministry of Works, and the Federal Airport Authority of Nigeria. Additionally, the states of Kogi and Niger are among those indebted to the DisCo.

President Bola Tinubu should mandate the MDAs to negotiate a payment system with the DisCos and clear their debts using available budgetary provisions. Regulatory agencies and MDAs that fail to settle their bills undermine energy efficiency efforts and set a poor example for citizens, encouraging them to default on bill payments. This must be rectified.

Tinubu and his Minister of Power, Adebayo Adelabu, must develop a comprehensive and unified policy that addresses the sector’s numerous issues. They should offer clear solutions, provide robust oversight, and encourage foreign direct investment (FDI).

State governments should also take proactive measures. They should follow the example of the Aba Geometric Power Plant, which serves Aba, Abia State’s commercial hub. States should leverage the new law that permits them to enhance electricity provision within their domains.

Competent private companies should be encouraged to invest in the industry, and the government should incentivize investments in off-grid alternative energy sources.

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