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Editorial

Ways & Means debt: Probe into expenditure of loans must be credible

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Recently, the accumulation of Ways and Means debt incurred by the Federal Government began to generate controversies. Ways and Means is the money that the Central Bank of Nigeria (CBN) lends to the Federal Government in the meantime to augment spending based on the time the revenue is generated.

The debt is just one fraction of the spread of debts on the government. Recently, servicing debt has become a subject of concern, as records begin to show that over 90 percent of the Country’s revenue now goes into debt servicing.

However, more pressing has been the subject of how the loans acquired have been spent. Recently, the Ways and Means loans came into view as the subject of repayment began to come into view.

The Federal Government, very recently,  revealed it is working to audit a N23 trillion Ways and Means debt. Speaking to the development, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun had stated that  ”We have to stem liquidity. The Central Bank has led the way in pointing out that the Ways and Means have to be tailed down and eliminated and that is what we agree with. We are going in that direction, there was an inherited amount of N22.7trn in backlogs. We are auditing it and it is like when I am ready to pay a loan from a bank and I ask for an audit before finding the agreed sum to pay.

“But apart from that, how do you get your ways and means down? We have to get revenues up and expenditure reduced as much as possible.”

In reaction to the backlog in repayment, the Governor of the Central Bank of Nigeria, Olayemi Cardoso, had said that the apex bank will no longer give Ways and Means to the President until the previous loans are repaid. Olayemi had noted that it was one of the measures taken by the apex bank to curtail the economic downturn currently plaguing the country.

Trailing the controversies, the National Assembly has commenced a probe into over N30 trillion sum of Ways and Means debt acquired from the Central Bank. It is pertinent that such audit and probe be decisively and objectively driven. The problem of poor expenditure framework which permits leakages, even with borrowed funds, has left the country in a mire of embarrassing economic state, with debts which no concrete and tangible results can be shown for.

The era of ridiculous borrowings for spending to which no link of tangible results can be shown for, must be put to stop. The Federal Government must become prudent and decisive in its approach to borrowings with a strict framework to ensure expenditures are strategically tailored to make funds prudently utilised for the good of the greatest number.

The Country can no longer be subjected to a system of deficiencies with challenges that have exposed its fabrics to bleeding deformities.

The legislature and the concerned authorities of the executive must rise to the necessity to eliminate the porosity which has opened the floor for mismanagement in the Country. This necessity cannot be less emphasised given the overwhelming scourge of economic deformities the Country is currently enmeshed with.

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Editorial

Advent of PoS in Nigeria: A blessing or curse?

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When the Central Bank of Nigeria (CBN) introduced the Point Of Sales(POS) in 2013 in Nigeria, though there was initial skepticism by the citizens of the efficacy of the device, people later embraced it after a series of sensitisations.

People did not accept the POS operations wholeheartedly, until the Automated Teller Machine (ATM) and other terminal electronic transactions began to fail, with its attendant frustrations and inconveniences meted out on the users.

For example, failed transactions and incessant debit of the customers. Things got worse when ATM machines no longer bear cash as supposed to be. This ugly situation reared its head into the banking system of Nigeria, consequent upon the attempt by the former Governor of CBN, Godwin Emiefele to automatically replace the higher denominations of old Naira notes with new ones. A policy that almost collapsed the financial system of Nigeria, resulting in an all time cash crunch that forced Nigerians to buy their own money with more money from the POS operators.

The situation got so bad that a price tag of as much as N3,000 commission was placed to buy our own N5,000 from the Shylock POS operators. The heat was worsened by the last general elections in the country, where the politicians could not access money for campaigns and other logistics.

This probably made President Ahmed Bola Tinubu to fire the then CBN Governor on assumption of office. And worse still the then CBN Governor, Emiefele abortively attempted to contest for Presidency while still in office as CBN Governor.

Till date, the embattled ex-CBN Governor is still battling to wriggle himself out of the myriad of allegations of official misconduct preferred against  him by the Anti-graft Agency in the country,talking about the Economic Financial Crime Commission (EFCC).

It is a known fact that the primary reason for introducing POS and other terminal electronic transactions has been abused and defeated. According to the CBN, the basic reason for introducing the PoS is to reduce cash in circulation and the risk of carrying huge cash around. But what do we have today? ATM machines littered all over the streets of Nigeria, without cash and ironically, POS operators are buoyant with enough cash, planked on cut-throat commission.

The question now is who regulates the POS operations and where are they sourcing their funds, when virtually every ATM machine in town is empty and the banks are rationing the amount of withdrawals for their customers at the banking halls.

As if that is not enough, transaction failure is now the order of the day at the ATMs. To add salt to the injury, failed withdrawals are indiscriminately backed with debits and reversal that used to be automatic is now history. The implication is that the affected customers must now go to their respective banks and commence documentations of incidence forms and in most cases seven working days are given for reversal, which may never come.

There have been complaints from customers who waited for the elusive seven working days, which never came and they naturally lost count and hope and the money just went like that. We are no longer  talking about countless loss of manhours and its attendant inconveniences. So why are ATM machines not loaded and the POS machines are operational? Who should be held responsible for this sabotage or conspiracy?

Are bank customers no longer entitled to convenience, rights and privileges as customers? These are some of the questions begging for answers. At this juncture, it is pertinent to attempt to proffer solutions to this  macabre dance of the POS operators and the banks.

First and foremost, there is no reason why the ATM machines should not be loaded by the respective banks. In the first place, the terminal electronic transactions were introduced to discourage customers from flooding the banking halls, but the recent “no cash syndrome” at the ATMs has forced customers to start thronging banking halls for smaller transactions that would have been conveniently carried out without entering the banks. So the primary cure to this ailment is to load the ATM machines and make banking transactions seamless.

Again incessant debits  without payment at ATMs must be checked. If reversal is automatic as it used to be, customers will sweat less. Why can’t we improve in what we have started, via automatic reversal, if transactions must fail? This will save man-hours loss and stress of visiting the banks only to fill incidence/transaction failure forms. What effectively operates globally should equally work or operate in Nigeria. We don’t have any option, let it not fall under the derogatory terminology of ‘Nigerian factor’ or ‘African time’ as they call it.

The POS operations system is a beautiful concept that should not be allowed to die, provided it is done and regulated well by the CBN. We know that it is not too difficult to do the right thing, it is just a matter of determination, commitment and political will.

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Editorial

Let justice be done, though the world perish

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Despite what the 2023 press freedom ranking by Reporters Without Borders (RSF) says of Nigeria, it remains a bog of danger for journalists, who, in pursuit of truth, clash with the political leadership. While the ranking seems to have bumped Nigeria up six places from that of 2022, it undoubtedly reflects little of the experiences of journalists on the ground.

Even Reporters Without Borders did concede this, noting, “Nigeria is one of West Africa’s most dangerous and difficult countries for journalists, who are often monitored, attacked and arbitrarily arrested, as was the case during the 2023 elections.”

No better example then, than the case of Segun Olatunji, Editor of FirstNews, the latest victim of the lack of press freedom in Nigeria. On March 15, he was taken from his home in Lagos by military personnel all the way to the country’s capital for no just cause. This, the military denied, until it felt the heat of criticism, and admitted to the abduction.

Nigeria’s history is written with the blood of journalists who refused to kowtow to the greed of those in power. Fortunately, Segun Olatunji will not be added to the number thanks to the determination of his peers, and other human rights bodies, to avoid another Dadiyata archetype as experienced in Kaduna.

In order to avoid the refrain of blood in hallways of the press, the administration of President Tinubu must insist on countering this narrative. Renewed Hope, he says, and the journalists expect this in full. He must not succumb to the basest impulses as Former President Goodluck Jonathan did towards the end of his career, when the military accosted media houses across the countries, in a major clampdown against press freedom; a witch-hunt that could not undo his loss that was to come.

If the military is not brought under subjection, it risks thinking itself above the Executive. Lethargy on the part of the administration is dangerous due to the contagious nature of coups in Africa today. President Tinubu must side with press freedom to also protect his administration.

It is commendable the role played by bodies comprising of the Newspapers Proprietors Association of Nigeria (NPAN), Nigerian Press Organisations (NPO), Broadcasting Organisations of Nigeria (BON), President, Nigerian Guild of Editors (NGE), National President, Nigeria Union of Journalists (NUJ), Guild of Corporate Online Publishers (GOCOP), International Press Institute, Nigeria Chapter (IPI Nigeria), Media Rights Agenda (MRA), International Press Centre (IPC) and the  Socio-Economic Rights & Accountability Project (SERAP) in pursuit of prosecution of those responsible for the latest goof.

In the statement seen by Nigerian NewsDirect recently, the aggrieved bodies and associations demanded a speedy, public, transparent and independent investigation into this act of barbarism displayed by military personnel as well as the brazen disregard for the Constitution and the Government’s obligations under relevant domestic laws and international instruments.

They stated that all persons within and outside the military who are found to have been connected with this unacceptable violation of the rights of the journalist and the Constitution, including those who effected Mr. Olatunji’s arrest, detention and torture, those who directly commanded them, and those who ordered or instigated the action, should be prosecuted before the appropriate court and punished to the full extent of the Law.

Noting that the Chief of Defence Intelligence (CDI), Major General Emmanuel Undiandeye, reportedly ordered the operation that culminated in Mr Olatunji’s abduction, torture, and detention while the Chief of Defence Staff, General Christopher Musa, to whom the CDI reports, was also reportedly aware of the operation but joined the CDI to claim for days that the journalist was not in their custody. They need to be held accountable for their roles in the matter.

“The Federal Government should make an unequivocal public commitment to respect and defend the rights and freedoms of journalists and other media practitioners to carry out their professional duties in a safe and conducive environment in accordance with Sections 22 and 39 of the 1999 Constitution, as amended, and advise all law enforcement, security, intelligence, military and other agencies accordingly.

“Should the Federal Government fail to respond positively to all these demands within 14 days from today, the undersigned media associations and professional bodies as well as civil society organisations will pursue all available mechanisms at the national, regional and international levels to ensure compliance with our demands,” the statement read.

Nobody chooses martyrdom unless they are pushed to it. Nigerian NewsDirect trusts that this administration is not all talk and no action, based on the immediate removal of fuel subsidy from the first day of assuming power. However, lethargy must be kicked out. Prosecution need not be drawn out over years as is usually the case in Nigeria. The abductors of Segun Olatunji must be fished out and made an example of. To this we say, fiat iustitia, et pereat mundus: let justice be done, though the world perish.

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Editorial

Can Nigerians afford another electric tariff hike?

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Just few weeks ago the Nigerian Electricity Regulatory Commission (NERC) announced a substantial increase in electricity tariff for consumers who enjoy power supply for 20-24 hours daily.Speaking at a briefing in Abuja on Friday, Minister of Power, Adebayo Adelabu, said the recent increase in electricity tariff is a pilot in phasing out of electricity subsidy in the country.

He said the government plans to remove all subsidies in the sector to allow the thriving of investment in the power sector.

The Minister said, “This tariff review is in conformity with our policy thrust of maintaining a subsidized pricing regime in the short run or the short term with a transition plan to achieve a full cost reflective tariff for over a period of, let us say three years. I have mentioned in a couple of media briefings that it is because of government sensitivity to the pains of our people that we will not make us migrate fully into a cost reflective tariff or to remove subsidy 100 percent in the power sector like it was done in the oil and gas sector.

“We are not ready to aggravate the sufferings any longer which is why we said it must be a journey rather than a destination and the journey starts from now on, that we should do a gradual migration from the subsidy regime to a full cost reflective regime and we must start with some customers.”

It categorised such users as Band A, constituting about 15 percent of the total electricity consumers in the country. Consumers in Band A, according to NERC, will now pay N225 per kilowatt-hour, up from the N68/kWh being paid before. That is about 240 percent hike in electricity tariff in one fell swoop! It is yet unclear how the authorities arrived at this percentage hike without giving a thought to how the huge increase in tariff will impact the cost structures of manufacturers and businesses which constitute a significant proportion of the Band A category. And by implication, there is no consideration for the effect of the tariff increase on the prices of goods produced by these manufacturers.

Yes, this significant hike in electricity tariff will create shocks in the production plan and costing programme of producers, and ultimately, they will pass the increased cost of production to the consumers by way of higher prices of their products. Coming at an austere time when citizens are literally writhing in the pain and hardship inflicted on them by fuel subsidy removal in May last year, it is difficult to comprehend the intention of the government. Is it genuinely interested in propping up the tottering economy?

The country’s economic managers must realise that strict adherence to the Bretton Woods institutions’ economic prescriptions can sometimes be catastrophic, especially in a developing  economy that lacks proper structures that can engender resilience in times of volatility. Again, they should be wary of the usual advisory by multilateral institutions that developing economies be managed in a fashion that robs them of compassion. In other words, the official obsession for cancelling subsidy has to be rethought as there is hardly any economy in the world where citizens do not enjoy one form of subsidy or another.

As expected, manufacturers and the organised labour have kicked against the Federal Government’s 240 percent hike in the tariff payable by electricity users enjoying a 20-hour power supply. They insisted on electricity subsidy, warning that its removal would send manufacturers out of business and worsen inflation. The implication of the new tariff for consumers in Band A is that subsidy on electricity has been withdrawn completely from a category of power consumers who constitute about 15 percent of the total number of power users across the country. And surprisingly, the government declared that the decision took effect from Wednesday last week, the very day of its press briefing and announcement of a hike in tariff!

The country may witness yet another nationwide strike presently, as the Nigerian Labour Congress (NLC), too, has threatened to shut down the country if the government does not stop the implementation of the new tariff structure. And this time around, the organised private sector and the Trade Union Congress (TUC) are also kicking against the tariff hike. They argue that the hike would send manufacturers out of business, worsen inflation, and stifle small and medium enterprises, adding that no place in Nigeria enjoys up to 20 hours of power supply daily.

Yet, Band B and A power users are supposed to be those who get up to 20 hours supply of electricity daily and paid about N68/kWh before the implementation of this latest order by the Federal Government through NERC. Not a few Nigerians are finding it difficult to see what exactly the government has succeeded in doing for them beyond introducing policies that exacerbate poverty and misery in the land. The government keeps treating the idea of subsidy as anathema while doing next to nothing for the people.

What power are the discos supplying in the face of the incessant collapse of the grid and the grossly inadequate supply regime? At some point, something will have to give, as the hike in the electricity tariff is nothing but a double killer at a very austere time when the economy is in shambles. Why should the government increase tariffs on a product or service that is virtually not available on demand by consumers? What are they paying for? Industries run on generating sets with attendant huge cost implications for manufactured goods. Many medium and small scale manufacturing companies have closed down, relocated to neighbouring countries, or become accustomed to producing at non-optimal levels and rates due to the abysmal state of public power supply.

No doubt, the latest tariffs will further stifle the manufacturing sector, exacerbate job losses, and create socioeconomic dislocations. Meanwhile, the government keeps mouthing the imperative of the ease of doing business in the country, yet it is not only unable to supply adequate power infrastructure, which is very critical, but is also dispensing the little it supplies at prices which do not guarantee value for money. It needs to be remembered that the idea of band delineation and discriminatory pricing on the basis of the number of hours of power supplied daily is a serious indictment on its ability to address the power supply situation in the country despite the enormous resources that have been sunk into the power sector.

Why should anyone be talking of Bands A-E in Nigeria when citizens in saner climes are enjoying uninterrupted  power supply? The irony is that NERC’s band categorisation is not even exhaustive as there are many locations, even in cities, where citizens do not enjoy 30 minutes of electricity per day, yet NERC would have Nigerians believe that consumers in the least category, Band E,  enjoy 4-8 hours of power supply daily.

Nigerians are already bearing the burden of the Economic downtown therefore the government must do the needful by patronising other plans to ensure that the recent pronouncement of electricity tariff hike doesn’t affect the masses thereby putting more fuel in the fire.

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