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Editorial

Rising Interest Rate And The Economy

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Since the Central Bank of Nigeria (CBN) increased interest rate on lending, speculations on the possible effect of the increase on the economy is worrisome. Already, the poverty rate in the country is reaching a breaking point and nothing should be done to worsen it.

Coming at a time when Nigeria is reported to have dropped in the best business environment rating, the increase in interest rate is capable of aborting some business endeavours that would have provided the needed support for the economy and the people in particular.

While we hope that the CBN knows what it is doing, the cumulation of some of the economic indices that appear negative might affect the ordinary people in ways that can be profound. In the face of this hostile business environment, the Naira, the nation’s currency also fell to its lowest level in years.

Indeed, it was also reported that Nigeria has the lowest volume of borrowed funds among the major economies of Africa. What this comes down to is that even the money available in the economy is not properly mobilised for the development of the country.

We think that this situation should worry the government and provide the reason for some deliberate steps to slow down the downward glide of the economy. This needs to be done because the average Nigerian is already a financial wreck. To bank on the famed resilience of the average Nigerian is to risk too much.

The tread holding some people to realism has become too worn out and tiny. Indeed for some, it has snapped and resulted in people taking desperate steps to silence the lion in the stomach. Should anyone still wonder why robberies, kidnapping and swindling are making a swift come back?

It is already bad enough that access to credit in Nigeria faces avoidable hurdles, the increase on interest rate would make it impossible for many businesses to even aspire. If the challenge keeps out new businesses, the development is a dis-service, but it could also limit existing business and even stifle them.

The increase in interest rate may not have been much, but may be the reason a business folds and throws many workers out of job. For those in agriculture and housing, the interest rate is particularly hostile. Of course, the ripple effect that would follow this can be rather far reaching.

But this is only one side of the problem. While the interest rate rose from 8.75% to 9.25% in the formal sector, some organisations ask for as high as 18 – 20 percent. The government should find out why many people cannot access credit from the banks and have to patronize shylock financiers.

Our country should also be worried that banks still report bad debts. While the genuine business people are denied credit under one guise or another, loans are given to politicians and high social figures to use on frivolities. Often, these funds cannot be paid back because it was not originally intended to be refunded.

But our country cannot become developed without credit funds that people need to finance business. Even for the worker, especially the public servant, whose pay falls short, no staff can provide housing, one of the most basic human needs, if credits are not available for them to access and at an affordable rate.

Indeed, that is why some governments, including that of Rivers State  have provided loans for staff to build houses and buy cars among others. An average Civil Servant may never be able to save N1m in years but if granted one, can be re-paid over a period of time.

Bank credits are very important for the economy. As a government that is committed to the Millennium Development Goals and faced with the urgent need to provide employment for its teeming youths, it cannot afford to operate a run-away economy and expose the people to un-bearable conditions.

Efforts should be made to redress the irony that Nigeria is a rich country and its people are extremely poor. Nigeria cannot declare millions of petro-dollars monthly and have no money to run its economy. Let the oddities in the economy be redressed quickly starting with the interest rate regime in the country.

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Editorial

Recovered Assets’ Agency

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Last week, the Attorney General of the Federation, AGF, and Minister of Justice, Malam Abubakar Malami (SAN) disclosed that the Federal Government has approved a new bill, the Proceeds of Crime Recovery and Management Agency Bill, for onward transmission to the National Assembly.
According to the AGF, the bill, which was first conceived in 2007, and rejected by the Federal Executive Council, FEC, of successive administrations, including the current cabinet before it was eventually approved, is geared towards securing a legal and institutional framework that will assist in harnessing proceeds of crimes that are currently scattered across several government agencies and bring them into one agency.
The Tide views this development as a pragmatic strategy in the Federal Government’s fight against corruption and commends the move as a positive one in the right direction. The initiative, we believe, will breathe a measure of air of people’s confidence in the crusade against corruption, which has been the fulcrum of the present administration’s agenda.
We are also happy to note the recent launch of the Central Database on recovered asset and the Central Criminal Justice Information System by the government. The database and information system will, no doubt, ensure transparency and accountability in the management of recoveries from proceed of crimes.
That these initiatives would help promote transparency, better information flow and management is not in doubt, or the impact it would have regarding accountability and trust, as far as recovered assets are concerned.
It is an open secret that public distrust and suspicion have trailed the fight against corruption and the subsequent announcements of recovered or seized assets. Indeed, Nigerians could not whole-heartedly vouch for the sincerity of government and safety of such assets and the situation went a long way to raise more questions than answers over the operations and candour of the anti-graft agencies and their personnel.
There have been numerous questions and calls by Nigerians regarding the exact figure and status of recovered loot by the anti-graft agencies, especially, under the present administration.
That is why we think that the National Assembly should as a matter of national importance consider the Recovered Assets’ Agency Bill and ensure its speedy passage. Passage of the bill and coming into effect of the agency, we believe, will not only ensure uniformity of process and real time access and information feeding, it will put Nigeria on safe pedestal with her membership of international organisations, inclusive of financial action task force, and openness targeted at deepening transparency within the context of United Nations Convention Against Corruption.
In addition, we are convinced that such agency would help block leakages and promote transparency in government. Importantly, also, effective tabs would be in place to secure recovered assets without any room for happenstance, while information on such assets would easily be accessed by Civil Society Organisations, CSOs, Non-Governmental Organisations, NGOs, the media, researchers and ordinary Nigerians. This will, at all times enable the people, particularly, the CSOs to be on the same page with government as far as the status and management of recovered assets are concerned, thereby engendering mutual trust and confidence.
With the agency on board, Nigeria can be in more productive synergy with other developed and transparent countries based on the existence of world accepted best practices.
However, in establishing the agency and choosing the personnel, especially, the management cadre, it is pertinent to ensure that due diligence is observed. It must not be a job for the boys or an opportunity for political, selfish and sentimental considerations. The task should be for not only the eminently qualified and capable individuals, but persons with impeccable antecedents to be able to live up to the demands of the office.
We expect that the agency should be set up and empowered in such a way that it would have internal-check mechanisms, be professional, independent and strong enough to keep a leash on other anti-graft agencies like the Economic and Financial Crimes Commission (EFCC); Independent Corrupt Practices and other related offences Commission (ICPC); and others.
This, we believe, will make the agency effective, accountable and ensure that recovered funds and assets are not relooted one way or another. The Federal Government and the National Assembly must ensure that no effort is spared to put the agency in place within the shortest possible time with all recovered assets put under its custody.
It is indeed time to put the fight against corruption on the table and make sure that it passes through and survives integrity and transparency test in Nigeria.

 

 

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Editorial

No To Water Resources Bill

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Barely a week ago, an affiliate of the Nigeria Labour Congress (NLC), the Amalgamated Union of Public
Corporations, Civil Service Technical and Recreational Services Employees (AUPCTRE), and a vocal civil society organisation (CSO), the Corporate Accountability and Public Participation Africa (CAPPA), rebuffed Federal Government’s plot to convince them, to support the controversial National Water Resources Bill 2020. This followed a meeting in Abuja between the Minister of Water Resources, Engr Suleiman Adamu, and his team with the leaderships of AUPCTRE and CAPPA designed to secure buy-in for pro-privatisation of all water resources in the country, and consequently undermine Nigerians’ free access to water and sanitation in line with the spirit of the United Nations resolution which recognises water and sanitation as basic human rights of citizens.
Addressing newsmen later, AUPCTRE’s National President, Comrade Benjamin Anthony, said: “Our meeting with the Minister of Water Resources was very frank. The minister advanced reasons why the Bill should pass but we drew his attention to the contentious clauses that must be addressed. We restate our opposition to this anti-people Bill and urge the National Assembly to trash it. The Bill fails to address human rights issues and does not enjoy the support of Nigerians. The Bill will dispossess Nigerian citizens of their inherited and cultural rights to water and should be discarded immediately”.
The CAPPA Director of Programmes, Philip Jakpor, was more succinct, “The contents of the Bill are against the spirit of the July 28, 2010, United Nations General Assembly Resolution which recognised in unmistakable terms, the human right to water and sanitation. Our position remains unchanged: President Muhammadu Buhari should use his good office to recall this contentious Bill from the legislative quarters and kick-start a fresh process which will entail consultation and input from Nigerians from the beginning through the entire process at the National Assembly.”
The Bill is titled, “A Bill for An Act to Establish a Regulatory Framework for the Water Resources Sector in Nigeria, Provide for the Equitable and Sustainable Redevelopment, Management, Use and Conservation of Nigeria’s Surface Water and Groundwater Resources and for Related Matters”. On July 23, 2020, referring to Order 12, Rule 16 of the Standing Orders of the House of Representatives, 9th Edition, the Bill scaled Second Reading in the House, and was referred to the Committee of the Whole House for third reading and final passage even as its presentation breached the Rules of Procedure and legislative convention of the House and the relevant provisions of the 1999 Constitution. Order 12, Rule 16 of the Standing Orders of the House states that “a bill from a preceding Assembly must be gazetted, with clean copies circulated”. But this Bill failed that test because its promoters are in a hurry to achieve a sinister agenda!
In 2017, the Buhari administration had forwarded this Bill, which seeks to transfer the control of water resources from states to the Federal Government, to both chambers of the National Assembly, with a request to pass it into law. But it failed to secure concurrent passage by the Eighth Senate, which threw it away at its first reading in 2018. Not satisfied, however, Chairman of the House of Representatives Committee on Rules and Business, Hon Abubakar Fulata, and his cohorts, while ignoring due process, rule of law and standard procedure for reintroduction of any Executive Bill, flagrantly presented the rejected Bill to the Ninth House, and demanded its expeditious passage.
Since its re-emergence, prominent Nigerians and groups have expressed deep concerns at the purpose and intent of the Bill, and advised the Federal Government to jettison it in the national interest, just as they did in 2017 through 2018. In fact, both AUPCTRE and CAPPA, on September 3, 2020, jointly signed a damning letter to President Muhammadu Buhari, cataloguing the obnoxious sections of the Bill and how they posed grave danger to the attainment of Nigerians’ rights to water and sanitation.
The Tide agrees completely with millions of Nigerians that this Bill must not see the light of day because it represents a dark era in Nigerian history, some of which relics include the Land Use Act, Petroleum Resources Act, among others. We are disappointed that lawmakers from the South voted in support of this evil Bill. To be clear, Section 13, states, that “the Bill empowers the Minister of Water Resources to formulate national policy and water resources management strategy to guide the integrated planning, management, development, use and conservation of the nation’s water resources and provide guidance for formulation of hydrological area resources strategies under Section 94 of this bill”. It further states, “In implementing the principles under subsection (2) of this section, the institutions established under this Act shall promote integrated water resources management and the coordinated management of land and water resources, surface water and ground water resources, river basins and adjacent marine and coastal environment and upstream and downstream interests.” Another obnoxious content of the Bill reads in Section 2(1), “All surface water and ground water wherever it occurs, is a resource common to all people.”
This simply means that the Bill seeks to empower the Federal Government to control all sources of water in Nigeria. By implication, the Federal Government can permit anybody or group from any part of the country to go and possess any water resource in another part thereof without the consent of the local communities. How else do we explain an ambitious government’s desperation to consolidate age-long policy of enslaving a free people, whose liberties have consistently and brazenly been trampled on by a particular ethnic group, which see themselves as hegemonic overlords?
First, they came with the chameleonic Rural Grazing Area (RUGA) initiative, the deceptively designed expansionist programme, aimed at gifting Fulanis ancestral lands belonging to other peoples, all over the country, in ‘new town’ settlements that would have looked more like Government Reserved Areas than herdsmen’s redoubt, complete with Fulani paraphenalia. When RUGA was rejected across board, they coyly and cleverly packaged National Livestock Transformation Plan, which was RUGA by another name. That too, was ferociously rejected by Nigerians. Now, they think they can hoodwink Nigerians to accept a draconian National Water Resources Bill that takes away their rights and freedoms? This is not possible. It won’t work!
We are gladdened by the fact that in its 17th teleconference meeting since the outbreak of the COVID-19 pandemic, the Nigerian Governors’ Forum (NGF), promised to take a position on the National Water Resources Bill 2020, after their State Attorneys-General and Executive Councils of States have brainstormed on the proposed bill and other similar relevant laws that have been generating controversies in the country. We urge the NGF to reject the Bill in its entirety, especially when they realise that the Water Resources Minister had clarified that the new bill is consistent with the vexatious Land Use Act. Even so, we task Senators from the South-South, South-East, South-West and North-Central not to capitulate but to unanimously vote against this Bill for the general good of the people and posterity.

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Editorial

Not Time For Power Tariff Hike

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As the economy of the country continues to tether (as indeed the global economy)
and living condition of the average Nigerian takes a suffocating bashing from the novel COVID-19 pandemic, electricity distribution companies (DISCOs) in Nigeria shocked consumers of electricity with a 100% hike in tariff effective September 1, 2020.
Labelled ‘Service Reflective Tariff’, the Nigeria Electricity Regulatory Commission (NERC) was said to have approved the increase on August 31, granting DISCOs the permission to raise the amount of money charged for units of electricity consumed according to hours of supply made available in a day.
By this development, electricity consumers who get supply for 12 hours and above in a day are to pay between 80% and over 100% more than their previous bills while consumers who receive less hours of electricity supply will not be affected according to the categories determined by the regulators.
To this end, consumers are categorised into Service Bands of A to E with A comprising those who enjoy up to 20 hours of power supply, B with 16 hours, C with 12 hours, D with 8 hours and E made up of those who see only 4 hours or less of electricity in a day.
While those who fall within the Service Bands D to E have their tariff frozen at N30.23 for one kilowatt unit of energy per hour (kwh), those in category A are to pay as much as N62.33 per kwh.
NERC explained that it approved the new tariff, taking into account the following: iInflation rate (the cost of living in Nigeria); Global Gas Price (that has increased since 2015); Naira exchange rate; Average Kilowatt sold by the DISCOs; Unit cost of power generation and Aggregate technical collection and commercial losses.
According to the minor review of Multi-Year Tariff Order (MYTO) 2015 and Minimum Remittance Order for the year 2020 for distribution companies published by NERC on its website, the commission has set projection for the cost-reflective tariff to begin January 1, 2021.
Of course, as expected, the increase in electricity bill has since elicited varied reactions from various stakeholders and interest groups in the country with most of them condemning, rejecting and describing it as a move that will neither help the economy nor the already traumatised mass of the Nigerian people.
The Nigerian Electricity Consumers Advocacy Network, accused the government of a policy summersault and inadequate consultation with a wide range of stakeholders in the sector before the announcement of the increase. The Nigeria Labour Congress (NLC) has vowed to resist the hike even as the Manufacturers Association of Nigeria (MAN) has said that the hike could precipitate economic recession in the third quarter of the year.
The NLC, in particular, has described the development as an ill-conceived agenda to further impoverish Nigerians, arguing that “Each hike in electricity tariff in Nigeria is trailed by huge leap in the hours of darkness, de-metering of more Nigerians, exponential rise in incidences of estimated billing, and increased burden on citizens for the procurement of equipment and facilities for public electricity supply amidst other devious methods by DISCOs to cheat, exploit and despoil poor Nigerians”.
While The Tide acknowledges the validity of the reasons proffered by NERC for the increase, we believe that the timing is wrong as it will only add to the yoke of already COVID-19 induced economically distressed, socially disorganised, physiologically disorientated and materially challenged citizenry.
We think that the new change in electricity tariff should be reversed and no increase contemplated or effected until all electricity consumers are metred, appreciable qualitative, stable power supply achieved and estimated billing completely eliminated with the provision of prepaid metres at affordable cost to all electricity consumers in the country.
It is believed that Nigeria’s investment in the sector is in the neighbourhood of $20 billion with the Federal Government still prepared to sink in another $6 billion while the power companies have failed to invest but continuously steal from the people through outrageous estimated billing, sale of pre-paid metres at exhobitant prices, poor electricity supply, poor response to customers’ complaints and incessant tariff hike.
Any attempt at resolving the abysmal energy supply situation in the country must be holistic as the current piece-meal approach to fixing the problem will never work in the interest of the people and, therefore, will continue to be resisted.

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