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Editorial

Taking The Housing Deficit Seriously

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The Minister of Housing, Mrs Amal Pepple has been talking about the huge housing deficit in Nigeria and how to reduce it quickly. She said trillions of naira would be required to meet the housing demand in the country.

As a way of addressing the crisis in the sector, the Federal Government is said to be considering reforms in housing finance among others. Knowing how housing needs are hardly  treated with the commitment it deserves, the current statements have failed to raise the needed hope and enthusiasm.

Yet, housing is about the most important of the three basic needs of man. It goes without saying that even after eating, man would be most unsafe without shelter. Indeed, a community ceases to exist the day all its houses go down.

The consequences of inadequate housing cannot be ignored. Apart from the way it frustrates security efforts and predisposes society to avoidable health challenges, the absence of adequate housing imposes a major drawback on the economy. Sadly, very few can see the relationship between lack of housing and some of the most devastating challenges of our time.

But what the states are doing to raise the housing stock is at best insignificant. Consequently, rent in some major cities have gone through the roof, while house owners freely play god in the lives of the masses, who must accept conditions that are inconsistent with dignity.

Ordinarily, citizens should call for the intervention of their government, but the seeming demise of the National Housing Scheme and the near impotence of the Federal Mortgage Bank promise, makes housing a matter of “everyone for himself and God for us all”.

While the dearth of housing at the rural areas build up its tower of woes, especially in the Niger Delta, housing challenge in the urban centres is becoming unbearable. About 70 per cent of urban dwellers now live under conditions that drain them of self-worth and predispose them to aggravated poverty.

In the Western world and even the state of Israel that is under constant threat, the state is always providing housing for the future. The reason is simple. Man cannot survive or be productive while he is exposed to the elements. It also helps the state to know where everyone lives.

It is true that Nigeria understands the need for housing and has often tried to act but often such attempts fall short. But that the average citizens, even those with requisite education and years of service to the economy cannot own houses must change.

In Rivers State, Government has developed a number of low cost houses and quarters for some civil servants, but it is like a drop in the ocean. Indeed, the expectation is that the Ministry in charge of housing and the Rivers State Property and Housing Development Authority would do more.

Even so, it is sad that housing estates built by government at Oriebe and Oromenike quarters in the D-Line areas of Port Harcourt and allocated to people that made deposits, are being run-down by illegal occupants from other states of the country, while legitimate allottees still await government’s assistance to take possession of their flats more than 10 years after.

Clearly, Nigeria cannot do worse than what is already obtainable in the housing sector. That is why the current government must change the course of events in the sector. Indeed, nothing short of declaring a state of emergency on the sector would do.

Until then, government employees all over the country should be considered for housing loans to build houses for themselves either at home or where they work. Similarly, an aggressive road development programme must be implemented to link more rural areas to urban centres.

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Editorial

Towards Minimum Wage Implementation 

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It is not surprising that organised labour is pushing for a wage review, as President Bola Tinubu’s economic re-
form has negatively impacted Nigerian workers. Since taking office last May, the economy has been in turmoil, leading to hardships for many employees. The need for a wage increase is vital as workers continue to bear the brunt of the economic downturn.
The implementation of minimum wages in Nigeria has historically faced several obstacles. Despite the government’s mandate to set and enforce a minimum wage for all workers, many employers, particularly state governors and in the informal sector, fail to comply. This widespread non-compliance undermines the objective of protecting workers from exploitation and ensuring a basic standard of living.
Numerous factors contribute to the challenge of implementing minimum wages in Nigeria. One major issue is the lack of effective enforcement mechanisms. The National Salaries, Incomes and Wages Commission (NSIWC) is responsible for enforcing the minimum wage, but its powers are often limited. Employers who violate the law often go unpunished due to weak enforcement and the high cost of legal proceedings for workers.
In the negotiations between the federal and state governments, a critical factor that must be considered is finding the right balance amidst the challenges posed by the country’s double-digit inflation rate, the growing national debt profile, and the pressing issue of ensuring timely payments from both state and federal authorities. Both levels of government must collaborate to address these economic concerns and come to a mutually beneficial agreement that prioritises the financial stability of the nation.
Things are not looking good. The organised labour, represented by the Nigeria Labour Congress and the Trade Union Congress, has proposed an astronomical jump from the current N30,000 per month to N650,000. While it is undeniable that the current rate of N30,000 is insufficient, the drastic increase to N650,000 is simply not realistic and may not be feasible for the government to implement. Both parties should find a middle ground that is fair and sustainable for all stakeholders involved.
The challenge before the minimum wage committee, which Tinubu inaugurated recently, is to find a realistic rate for all the parties concerned, including the private sector. This task is not an easy one, as there are various factors to consider when determining a fair minimum wage that benefits both workers and employers. The committee will need to take into account the cost of living, the current economic situation, as well as the financial capabilities of businesses, especially small and medium-sized enterprises.
Incidentally, the Nigerian economy is facing multiple challenges at the moment. With inflation at a staggering 29.90 per cent, a debt stock of N87.9 trillion, a high lending rate of 18.75 per cent, and a grossly devalued naira at N1,300 per $1, the cost-of-living crisis has worsened. The recent surge in food inflation, jumping to 35.41 per cent in January from 23.75 per cent the previous month has added to the economic woes. Moreover, the rapid price increases in petrol and diesel, essential for the economy, have further burdened the already distressed population.
Hence, the demand by labour for an upward wage review is justified given the rising cost of living and inflation. However, the government faces a dilemma in determining the appropriate rate of increment. Nigeria’s economic situation is dire, with debt servicing consuming a staggering 99 per cent of its revenue in the first quarter of 2023. Balancing the need to improve workers’ welfare with the constraints of the economy is a delicate task. The government must engage in constructive dialogue with labour to find a compromise that addresses their legitimate demands while ensuring the long-term sustainability of the economy.
Incidentally, the meeting between the Federal Government and the organised labour was deadlocked on Wednesday, as the government was reported to have offered a paltry N48,000 as the new minimum wage, which is a far cry from the N615,000 being demanded by labour.
Apparently irked by the Federal Government’s offer, representatives of labour were said to have stormed out of the meeting in protest. However, both parties still need to find a common ground to resolve this knotty issue. Constructive dialogue is key.
If the government succumbs to labour’s demands and borrows more to fund the wage increase, its financial stability will be further compromised. This could lead to a debt crisis, with severe consequences for the economy. The governing authorities must explore alternative revenue sources and implement prudent fiscal measures to address labour’s concerns without jeopardising the nation’s financial health.
Retrospectively, an excessively high minimum wage can pose challenges for States. When the wage was raised to N18,000 during the Goodluck Jonathan era, many States struggled to meet their salary obligations. As of October 2023, BudgIT reported that 15 states were still failing to pay the N30,000 minimum wage set by the Muhammadu Buhari administration in 2019. This situation has dire consequences for workers, who rely on their wages for sustenance.
The inability of States to pay the minimum wage is often attributed to their limited economic viability. Data from Economic Confidential indicates that only seven States are economically viable without federal allocations. This means that the majority of States rely heavily on federal support to meet their financial obligations. When the minimum wage is raised too high, States with weak economies may find it difficult to balance their budgets and fulfill their responsibilities to both workers and other sectors.
Any minimum wage that will be agreed upon should be sufficient to meet the needs of Nigerians. Unfortunately, many state governors have failed to implement the wage award approved by the Federal Government for civil servants, despite the high cost of living. This lack of action is unacceptable and shows a lack of appreciation for the struggles that public sector workers face. State governors should prioritise the well-being of their employees and ensure that they are able to make ends meet with the wages they receive.
We firmly advocate for the autonomy of state governments to streamline their workforce by retaining only those workers who demonstrate productivity. An example of this would be questioning the necessity of hiring typists in the era of advanced technology. Additionally, the rationale behind employing 20 drivers within a government agency deprived of operational vehicles may also be subject to scrutiny.
Many governors overlook the importance of paying their workers properly, which can have a positive impact on the overall productivity and economic growth of their States. States should have thriving industries that can create employment opportunities. Governors need to understand that low consumer demand can hinder the growth of businesses in their domains. They have to consider implementing efficient wage systems to ensure fair compensation for workers and foster economic development.

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Editorial

Diesel Price Cut, Building On Dangote’s Example

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In a critical move, the Dangote Refinery has announced a further reduction in the price of diesel, bringing it
down to N940 per litre for customers purchasing 5 million litres or more directly from the refinery. This represents a notable decrease from the previously reported N1000 per litre, offering significant savings for bulk buyers. The price reduction is a testament to the refinery’s commitment to providing competitive pricing and supporting businesses in Nigeria’s growing industrial sector.
The Refinery, once fully operational, is expected to have a significant impact on the Nigerian economy by reducing the country’s reliance on imported refined petroleum products. The refinery’s ability to produce vast quantities of high-quality diesel will not only meet domestic demand but also create opportunities for export, potentially generating valuable foreign exchange for Nigeria.
The reduction in diesel price is also expected to have positive implications for various industries that rely heavily on diesel as a fuel source. Industries such as transportation, manufacturing, construction, and agriculture are likely to benefit from the lower fuel costs, leading to increased productivity and efficiency. This, in turn, can contribute to economic growth and job creation throughout the country.
This was announced by the Refinery’s spokesperson, Tony Chiejina. The statement read in part:
“In an unprecedented move, Dangote Petroleum Refinery has announced a further reduction of the price of diesel from N1,200 to N1,000/litre. While rolling out the products, the refinery supplied at a substantially reduced price of N1,200/litre three weeks ago, representing over 30 per cent reduction from the previous market price of about N1,600/litre. This significant reduction in the price of diesel at Dangote Petroleum Refinery is expected to positively affect all the spheres of the economy and ultimately reduce the high inflation rate in the country”
Reacting to the price reduction, the Secretary of the Independent Petroleum Marketers Association of Nigeria, Abuja-Suleja Branch, Mohammed Shuaibu, said, “This is a welcome development and I am happy to hear this news because it will further increase competition in the downstream which will benefit many Nigerians. Such competition would create room for more price reduction and we are going to start seeing the positive impact on the cost of goods and services on the long run.”
Commending the company’s efforts, President Bola Tinubu described the move as an “enterprising feat” and said, “The price review represents a 60 per cent drop, which will, in no small measure, impact the prices of sundry goods and services.” In a statement signed by his Special Adviser on Media and Publicity, Ajuri Ngelale, Tinubu affirmed that Nigerians and domestic businesses are the nation’s surest transport and security to economic prosperity.
Dangote’s decision to reduce diesel prices has been met with widespread approbation and is expected to have vital positive impacts on the Nigerian economy. The price reduction has sparked a gradual decline in the prices of locally-produced goods, such as flour, as businesses are now paying less for diesel. This reduction in production costs is likely to trickle down to consumers, resulting in lower prices for essential commodities. Businesses will have more disposable income to invest in production and expansion.
Moreover, the trickle-down effect of this singular intervention promises to change the dynamics in the energy cost equation of the country, in the midst of inadequate and rising cost of electricity. The reduction will also have far-reaching effects in critical sectors like industrial operations, transportation, logistics, and agriculture. A lot of companies will be back in operation.
Aliko Dangote, Nigeria’s foremost industrialist, has a big role to play in alleviating the economic burden faced by Nigerians who rely on Premium Motor Spirit (PMS). By concertedly including the production of PMS in his business operations, Dangote can make a substantial contribution to reducing the nation’s dependence on imported fuel and easing the financial strain on its citizens. The business mogul’s vast resources and expertise in the manufacturing sector make him ideally positioned to lead this initiative.
Furthermore, local PMS production would stabilise fuel prices and protect Nigerians from the volatility of the global oil market. The country’s over-reliance on imported PMS has made it susceptible to price fluctuations, which have a ripple effect on the cost of goods and services. By producing PMS domestically, Nigeria can gain greater control over its fuel supply and mitigate the impact of external factors on its economy.
If truth be told, Dangote has built an image for himself as one among the few genuine and credible rich persons who have successfully synergised industry with philanthropy. Nigerian entrepreneurs and investors should emulate the iconic businessman by channelling ideas and resources into areas of the economy that stimulate growth, with long-term effect on job creation and poverty reduction. We laud the Dangote Group for the vision behind the refinery.
Nigerians, who have been granted licences to establish private refineries should make haste. The establishment of private refineries will create numerous economic benefits. It will reduce the country’s dependence on imported fuel, leading to savings in foreign exchange. Additionally, it will create jobs in various sectors, including construction, engineering, and oil and gas operations. Moreover, the increased availability of locally refined products will stabilise fuel prices and enhance energy security.
Delay in the establishment of these refineries could have adverse consequences. Nigeria continues to lose billions of dollars annually on refined fuel imports, draining its foreign reserves and putting pressure on the local currency. Furthermore, the scarcity of refined products often results in fuel shortages, causing economic disruptions and hardship for citizens. Therefore, it is crucial that the licencees expedite the construction and commissioning of their refineries.

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Editorial

Obaseki, Beyond The New Minimum Wage 

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In a move that has elicited both excitement and anticipation, the Edo State Government has announced a sub-
stantial increase in the minimum wage for its civil servants. Governor Godwin Obaseki made the declaration during the commissioning ceremony of the newly built Labour House. The new minimum wage, which has been raised from N40,000 to N70,000, represents a 75 per cent increase. The implementation of the new wage took effect from May 1, 2024.
This announcement has been met with widespread joy and relief among Edo State civil servants, who have long yearned for an upward review of their salaries. The increase is expected to go a long way in alleviating the financial challenges faced by many workers and improving their overall living standards. It is also seen as a testament to the Governor’s commitment to the welfare of his employees and his understanding of the economic realities faced by the workforce.
Recall that the upward review in the state’s minimum wage has been a forward-thinking decision. It all started with Senator Adams Oshiomhole, who raised it from N18,000 to N25,000 during his time in office. The current Governor jacked it up even further to N40,000. This gradual increase in the minimum wage shows a growing understanding of the necessity for adjusting wages to keep up with the increasing cost of living and to ensure a decent standard of living for all residents. The actions demonstrate a commitment to economic stability in the state.
The increasing inflation rates in Nigeria have sparked a dispute between the Nigeria Labour Congress (NLC) and the Federal Government over the national minimum wage. The NLC is pushing for a raise in wages to help workers cope with the rising prices, driven by the inflation rate reaching 33.2 per cent in March 2024, up from 31.7 per cent in February. Food inflation also climbed to 31.7 per cent in March from 30 per cent in February, adding to the urgency of the NLC’s call for a wage adjustment to match the cost of living.
The NLC and the Trade Union Congress (TUC) have jointly proposed a minimum wage of N615,000 for workers in the country. This demand was made after President Bola Tinubu, through Vice President Kashim Shettima, established a 37-member panel at the Council Chamber of the State House in Abuja on January 30. The panel is tasked with reviewing the current minimum wage and making recommendations for a new one.
Labour unions’ proposal is based on several factors, including the rising cost of living, inflation, and the need to improve the welfare of workers. They argue that the current minimum wage of N30,000 is no longer adequate to meet the basic needs of workers and their families. They also point out that the proposed N615,000 minimum wage is still significantly lower than the living wage, which is estimated to be around N800,000.
There is no formal response to the organised labour’s demand. However, negotiations are ongoing with the unions to find a compromise. The government may take into account the recommendations of the 37-member panel before deciding on the new wage. The outcome of the negotiations will greatly affect the lives of Nigerian workers. A higher take-home could give workers a necessary boost in income, helping them meet their essential needs and enhance their quality of life.
Governor Godwin Obaseki’s decision to increase the minimum wage for workers in his state is a testament to his commitment to improving the lives of the working class. This bold move demonstrates his understanding of the challenges faced by Edo civil servants and his determination to address their concerns. By ensuring that workers receive a living wage, Obaseki may not only be fulfilling his campaign promises but also setting a precedent.
Obaseki’s labour-friendly approach is a refreshing change from the past, when workers’ rights were often ignored. His willingness to engage with labour unions and negotiate a fair wage agreement even before a new national minimum wage is declared, shows that he values the contributions of the working class. The prioritisation of workers’ welfare will surely create a conducive environment for businesses to thrive and for the state to prosper.
In response to this generous act, Edo workers have a moral obligation to reciprocate by enhancing their productivity and demonstrating an unwavering commitment to their duties. They can justify the investment made in their welfare if they work harder. This enhanced productivity will benefit the state government and have a positive impact on the citizens they serve. Efficient and effective service delivery will foster a more conducive environment for advancement.
Beyond the commendable wage increase for workers in the state, the government has the responsibility to reposition the civil service for enhanced effectiveness and productivity. This strategic move would not only demonstrate the authority’s genuine concern for the well-being of its staff but also lay the foundation for a more efficient and responsive public service system.
Reforming the civil service entails implementing comprehensive reforms aimed at modernising its operations, streamlining processes, and fostering a culture of innovation and excellence. This can be achieved through initiatives such as digitalisation, capacity building, performance management systems, and merit-based promotions. These measures can empower civil servants with the tools and knowledge necessary to deliver exceptional services to the citizens of the state.
An effective and productive civil service is essential for the smooth functioning of any government. It is the backbone of governance, responsible for implementing policies, providing essential services, and ensuring accountability. The new minimum wage can create a workforce that is motivated, skilled, and committed to delivering optimal results. This, in turn, will enhance the government’s ability to meet the needs of its citizens and drive socio-economic development in the state.
In line with Obaseki’s actions, state governors should proactively review their employees’ salaries. It is unacceptable that many governors are still unable to meet the current N30,000 minimum wage requirement. This not only constitutes a blatant breach of the law but also signifies a grave betrayal of the trust entrusted upon them by the workers. Governors hold the pivotal duty of guaranteeing equitable pay for their employees to sustain a respectable standard of living. The failure of some of them to adhere to the minimum wage standards greatly contributes to the prevailing poverty and inequality in the nation.

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