With all its beauty, one of the biggest disadvantages of democracy is the decision on an issue by a presumed majority that lacks the requisite knowledge to decide properly. In Nigeria, where, more than half the population is illiterate, it is very easy to politicize thorny issues as long as the gullible majority is manipulated against government.
In the past four or so years, the freedom of expression often enjoyed in a democracy remained high, with all manner of views and actions that should have earned more knowledgeable handling. But because virtually everything in Nigeria, within the past two or so years, has been politicised, rarely has a reasonable common-ground been achieved on matters of important national interest.
One of such issues was the highly political public protest against deregulation of the downstream sector of the petroleum industry. Fondly remembered as the takeover Lagos’ protest which saw Nollywood stars and top musicians daily entertaining the jobless and gullible citizenry for free, the message was that government intended to remove subsidy on petroleum products and how that would affect livelihoods and the common man in particular.
Even the literate few, who ought to educate the illiterate many on the advantages of deregulation, played on the gullibility of the masses and ended up demonising the government. In the end, the unions, over-night civil society groups and countless other make-believe lovers of the masses, arm-twisted government into fixing the pump price of fuel at N97.
That was in spite of the fact that government explained that fuel marketers were shortchanging the country, to such extent that required urgent deregulation as was done in the telecommunication sector. With such exercise, prices of petroleum products would be determined by market forces and not left static while government continues to fund the greed of independent marketers.
With such deregulation, prices of refined petroleum products, especially the pump price of fuel would have been all time low by now, since the cost of crude has fallen below $50 per barrel. But trust Nigerians. They like to win every bet, whether head or tail. They are now asking questions, albeit, belatedly why prices should not fall.
They are asking why prices of petroleum products should fall in the United States of America (USA) and even nearby South Africa and Uganda, while Nigeria’s remain static. They have forgotten that what the Nigerian government wanted to do was what the affected countries did long ago without any, ‘Save Our Country’ strike by anyone.
Today, they are the better for it, … the worse. So, why can’t the price of petrol fall as it did in other lands?
Firstly, what Nigeria exports predominantly is crude oil while, it imports refined petroleum products to augment the little produced by our ageing refineries. Essentially, marketers either buy the finished products or refine the crude in other lands where, due to deregulation, it is much cheaper to refine than do so in Nigeria.
Under the subsidy regime, government undertakes the transportation cost, including other handling and insurance charges, explains Director of Communications at the Petroleum Equalisation (Management) Fund, PE(M)F, Mr. Goddy Nnadi. He said even when the products arrive Nigeria, there are other factors that go into the process which eventually further increase the cost, adding: “someone has to pay for all that, and thus, your prices remaining where they are in spite of what we find in other societies.
“Basically, Nigeria imports refined products, so she pays the cost of the crude which has come down globally now, and she also pays for the refined products, including the transportation and the inefficiencies that crop up in the system.
“All these combined, do not give Nigerians the real price of the product.”
“Also, issues like large vessels bearing refined products being unable to get to the ports due to their sizes and markets having to use smaller vessels to bring the products, bring added cost which would have been borne by marketers, if the sector had been deregulated, but borne by government.
“Another is the familiar issue of pipeline vandalisation. With the state of such pipelines which ought to transfer crude to the refineries, other more expensive modes of transportation have to be explored. Essentially, these are extra costs, which are very unnecessary but also add-up to the final cost of the product.
“If these extra costs are removed, then a reduction in prices of petroleum products will be feasible,” Nnadi explained.
The alternatives are to make local refineries work optimally and also encourage establishment of private refineries.
Unlike Nigeria’s refineries which are mundane and too capital-intensive to maintain and run, there are more modern refineries that are cost-effective that are used in other countries where public policies are friendly.
This, perhaps, accounts for why none of the many granted licenses to establish private refineries has taken off, while Nigeria’s existing refineries continue to operate below capacity.
To encourage the kind of competition that force down prices in the tele-communication sector, experts insist that deregulation is the solution. In such a case, price of petroleum products would be determined by market forces, like the fall in price of crude oil, determining price of fuel in South Africa and Europe.
Under such scenario, government needs not pick bills of marketers who, due to their inadequacies, incur more expenses in the name of subsidy.
Instead, what government ordinarily spends on such marketers could go into updating existing refineries or even building new ones, and through such competitive environment force down prices of products.
A situation whereby, Nigeria imports refined products at exorbitant prices while, her crude’s price slums below $50 per barrel, cannot automatically affect the pump price of petroleum products.
Rivers Chairman of the Trade Union Congress (TUC), Comrade Chika Onuegbu captured the scenario aptly when he said the fall in crude oil price did not automatically translate into fall in the pump price of petrol because in Nigeria, prices are fixed.
This means, even if the cost of refining petroleum products rises beyond N100, Nigerians must continue to pay N97, because government pays marketers the difference, while the fall in crude becomes a disadvantage because government’s earnings, sourced from the sale of crude to pay for extra cost of refined products, would not be available.
This, in short is the layman’s explanation to an otherwise thorny national issue. Many educated Nigerians knew all these but would rather incite labour and the jobless many against any form of positive reforms. They would rather repeat the familiar refrain, ‘government wants to remove fuel subsidy’ and will provide a long list of countries subsidizing the product for their citizens.
They would argue why Nigeria should import fuel when there are three refineries.
Basically, the orchestrated protests against deregulation were not against subsidy removal but against the Federal Government, mainly for cheap political gains. But here we are.
One expects those who pioneered the Lagos protests against deregulation to speak now against the static fuel price even when the price of crude is on a free fall. One expects political parties to articulate better alternatives to the present regime of fixing prices of petroleum products, but that’s what the parties are reluctant to dwell on.
So, here we are left behind by time and conventions of a trade in which, we ought to be major players, still wandering in the wilderness, with many more questions than answers.
My Agony is that those over-night socio-political elite, who, riding on the large crest of Freedom of Expression, manipulated the gullible citizenry to believe that government was indeed an uncaring demon, for insisting on deregulation, are not in a hurry to comment on the state of the industry, and why Nigerians are yet to experience any fall in pump price of petroleum products.
Perhaps, now is the time to champion the total removal of fuel subsidy and let the market stabilize on its own!
But in spite of all the challenges catalogued above, the Federal Government last night slashed petrol pump price from N97 to N87 per litre.
Soye Wilson Jamabo
$130m Fraud: Rivers Sues Saipem SPA, Saipem Contracting Firm, Others
The Rivers State Government has charged two construction firms, Saipem SPA and Saipem Contracting Nigeria Ltd, to court over an alleged conspiracy to cheat and with intent to defraud the state of the sum of $130million, being advanced payment for the construction of the OCGT power plant in Port Harcourt.
In a 16-count criminal charge filed by the Director of Public Prosecution, C.F. Amadi for the Rivers State Attorney General, the state alleged that after collecting the said sum as advanced payment between 2011 and 2018, the defendants have not kept their obligation under the contract.
Others charged alongside the companies were Walter Peviana; Kelechi Sinteh Chinakwe; Giandomenico Zingali; Vitto Testaguzza and Davide Anelli, who are directors and officers of the companies.
The defendants are charged with various offences ranging from conspiracy, cheating and obtaining credit by false pretence, contrary to Section 518 (6) and (7) and punishable under Section 518 of the Criminal Code, Cap 37 Vol. 2 Laws of Rivers State of Nigeria, 1999, section 419A and punishable under Section 419 (A) (1) (b) of the Criminal Code, Cap 37 Vol. 2 Laws of Rivers State, amongst others.
Already, the Rivers State Government has issued a fiat to the law firm of Godwin Obla (SAN) to prosecute the matter before the state High court.
The defendants are equally charged for the offence of false Statements by Officials of Companies contrary to and punishable under Section 436 (b).
The prosecution specifically accused the defendants of obtaining credit of $130million by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b); obtaining credit of $20,467,942.00 by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b), obtaining credit of N7,000,000,000.00 only by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b).
They are charged for obtaining credit of N318,640,173.54, by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b); attempt to cheat $97million contrary to Section 508 and punishable under Section 509; attempt to cheat $15million contrary to Section 508 and punishable under Section 509; conspiracy to receive a credit of $97million by false pretences contrary to Section 518 (6) and punishable under Section 518; cheating $11million contrary to Section 421 and punishable under Section 421; cheating contrary to Section 421 and punishable under Section 421; cheating N110, 097, 416.51 contrary to Section 421 and punishable under Section 421; cheating by collecting sums attributable to shared facilities already paid for in AFAM Phase I in AFAM Phase II contrary to Section 421 and punishable under Section 421.
Obtaining N20, 467, 942 contrary to Section 421 and punishable under Section 421; obtaining credit of $60,168,936.00 by false pretences or other fraud, contrary to Section 419A and punishable under Section 419 (A) (1) (b); obtaining credit of $1,512,034.00 by false pretences or other fraud contrary to Section 419A and punishable under Section 419 (A) (1) (b) all of the Criminal Code Law of Rivers State, Cap 37 Vol. 2 Laws of Rivers State of Nigeria 1999.
According to the Proof of Evidence attached to the charge and the statement made by the Head, Power Generation/Mechanical of the Rivers State Ministry of Power, one Mr Temple Azunda M., the facts constituting the case in hand are as follows:
Saipem SPA and Saipem Contracting Nigeria Limited and other officers of the duo, herein the Defendants, are Italian companies which services have been retained by the Rivers State Government, herein RSG, in several projects, prominent amongst which is the AFAM Phase II Power Plant Project.
By an initial tripartite agreement made on the January 20, 2010, the RSG under the auspices of the Rivers State Ministry of Power entered a contract with Saipem Contracting Nigeria Limited, Saipem SPA for the construction of the OGCT power plant in Port Harcourt at a total cost of $119million consequent upon which the Rivers State Government made advance payments, in instalments, to Saipem Contracting Nigeria Ltd and Saipem SPA amounting in total to a sum of $130million in all which the Defendants have acknowledged receipt of.
The Defendants were to be given an initial mobilization of 20per cent of the total contract sum which the RSG paid.
It was part of the initial agreement – and indeed a condition sine qua non – that, to access the 2nd tranche of payment of 25per cent from the Rivers State Government, the Defendants would mandatorily have installed the Gas Turbine into the foundations as referenced in ATTACHMENT 1 to VO 007 which states that:
CONTRACTOR shall be entitled to a payment corresponding to 20per cent of the VO No. 007 LS PRICE upon mobilisation to site and commencement of bush clearing activities at SITE.
Upon commencement of bush clearing activities at the site, the contractor shall issue the invoice relevant to the above payment and the owner shall pay such invoice within 14 days from its issuance.
The parties agree that no deduction for recovery of advance payment shall apply on the payment due to the contractor for invoices issued by the contractor in accordance with this paragraph.
Disregard Sentiment On More Law School Campuses, Wike Urges
Rivers State Governor, Chief Nyesom Wike has said approval for any new campus of the Nigerian Law School in the country should be based on needs assessment and not on political sentiment.
He noted that with the paucity of funds being allocated to the Nigerian Law School by the Federal Government, states with capacity to build brand new campuses of the institution should be encouraged to do so based on the model provided by the Council of Legal Education.
Wike stated this when members of the Senate Committee on Judiciary, Human Rights and Legal Matters led by its Chairman, Senator Michael Opeyemi Bamidele, paid him a courtesy call at the Government House, Port Harcourt, yesterday.
This is as members of the Senate Committee on Judiciary, Human Rights and Legal Matters have endorsed the Dr. Nabo Graham-Douglas Campus of the Nigerian Law School in Port Harcourt, and declared that it has come to stay.
The Rivers State governor observed that due to the current insufficient carrying capacity of the Nigerian Law School, there has been clamour for proliferation of more campuses across the country.
He, however, cautioned that this must not be done on the basis of political sentiment.
“Most of us attended the Nigerian Law School, Lagos, and even at that time, it was not easy to have accommodation within the school. But, at least, we were able to attend classes. So, it is reasonable for everybody to say there is need to increase the carrying capacity. But that must be done with objectivity; that must be done with facts that must not be done by sentiment.”
He explained that two years ago when he attended the call to bar ceremony at the Abuja campus of the Nigerian Law School, he was appalled by the decrepit infrastructure in the school.
According to him, this was what spurred the Rivers State Government to build 900 bed space hostels and 1,500 capacity auditorium for students in Yenagoa campus, and then, the subsequent construction of a brand new campus in Port Harcourt.
“From the record I’ve checked, they’ve (Nigerian Law School) never gotten more than N61million to fund the law school yearly. And I made a special appeal to support to Council of Legal Education to rehabilitate the campus in Abuja, and the Director General said no, we have more problem in Yenagoa, leave Abuja.
“You’ll never allow your slave to attend the campus in Yenagoa. And I want to thank the DG for being a true Nigerian. As I speak to you today, Rivers State Government is investing not less than N5.1billion in Yenagoa campus. What is our interest? Our interest is to contribute to the development of legal education in Nigeria.”
Wike said based on the Federal Government’s inability to sufficiently fund the Nigerian Law School, any state government that desires to have a campus should approach the Council of Legal Education for approval.
“I will appeal, in solving this carrying capacity problem, let’s not also create other problems. It is a professional school and so we must be guided. If any state wants to have a law school there must be a model.”
The governor explained that the construction of Nabo Graham-Douglas Campus of the Nigerian Law School in Port Harcourt will cost the Rivers State government N16billion.
According to him, every thing that is supposed to be in a law school would be found in the Port Harcourt campus when it is completed early next year.
“We are not just merely building a law school; we have acquired investment to handover to the law school to use to sustain the school here. This is a model that a law school should be.”
The governor also disclosed once the project is completed and handed over to the Council of Legal Education, the state government would also provide subvention to the council to run the campus for the next four years.
In his remarks, Chairman, Senate Committee on Judiciary, Human Rights and Legal Matters, Senator Michael Opeyemi Bamidele, said they were in the state to assess the progress of work at the Port Harcourt Campus of the Nigerian Law School.
“Your Excellency, when we were all privileged to study law in this country and just as we are doing graduation, the Nigerian Law School was waiting to absorb us. We have children in this country who graduated some two, three, four years ago and they are still waiting to be absorbed into the Nigerian Law School.
“Was it based on the refusal by the Nigerian Law School to so admit them, no. But based simply on the fact that the Nigerian Law School, as presently constituted and as funded, is lacking the capacity to be able to respond to the corresponding needs of the Nigerian public, given the number of universities that turned out law graduates every year.”
He commended the governor for his intervention to build a befitting campus of the Nigerian Law School in Rivers State.
However, members of the Nigerian Senate Committee on Judiciary, Human Rights and Legal Matters have endorsed the Dr. Nabo Graham-Douglas Campus of the Nigerian Law School in Port Harcourt and declared that it has come to stay.
The committee members gave the endorsement shortly after inspecting ongoing civil construction work at the campus as part of their oversight function in Port Harcourt, yesterday.
They were conducted round the project sites by the Rivers State Governor, Chief Nyesom Wike, first to the staff quarters beside the Hotel Presidential and then to the law school campus at Rumueme, Port Harcourt.
Chairman of the committee, Senator Michael Opeyemi Bamidele said they were, no doubt, impressed with what they have seen in Port Harcourt.
According to him, their colleagues in the Senate, including the leadership of the Senate who have invested so much trust and put them in charge of the committee were waiting to hear from them.
But, he emphasised, that what they have seen was consistent with global best practice standard when it comes to providing legal education.
“And we are really excited about this for the future of the legal profession which is our own primary constituency, because ours is a committee where virtually, all members are lawyers and members of this profession.
“It was important for us to come here because we are not going to just write any report and take any decision based on sentiment. I mean, this is a nonpartisan legislative action.”
Bamidele noted that Rivers State is boldly setting a standard for legal education in the country and it does appear to be a high one.
“After inspecting the ongoing works, the governor also took us to inspect existing property that have been acquired for the purpose of surrendering these same property to the law school to use as a source of revenue. That’s why I’m saying there’s a Rivers standard.
“And of course, when you now come to the quality of what is on ground, more than any of the law schools that have existed before the creation of this, we have seen quality here that will distinctly place this on the world map when you’re talking about law school campuses that can stand the test of time.”
Bamidele explained that having come to determine what actually is on ground and also to see the quality of work, they are fascinated to see about 750 workers on the construction site.
According to him, that is something that gladdens their hearts because at a time like this, the Rivers State Government was able to provide such number of jobs to its people.
“There is a need for us to engage in activities that will create employment opportunities for our people. We have seen a lot of artisans here at work, contractors are here at work.
“A lot of building materials are being brought to this site and the economic implication of these are far reaching for Rivers State and on the long run for the Federal Republic of Nigeria.
“We do not take that for granted. Beyond the employment opportunities that this is creating temporarily, we also know that an additional campus of the Nigerian Law School taking off in Port Harcourt would also mean a long term career job opportunities for people who will also work here as administrative staff.
“The number of lecturers that will increase, as career people. We feel that’s another reason why this deserve to be celebrated.”
Bamidele said except the Lagos campus of the Nigerian Law School that was created by an operation of law in 1962, the other five campuses were created by administrative action like the campus in Port Harcourt because it was approved by the President of the country.
RSG, Not FIRS, Entitled To Collect VAT, Related Taxes In Rivers -Court
The Federal High Court sitting in Port Harcourt has declared that it is the Rivers State Government, not the Federal Inland Revenue Services (FIRS), should collect Valued Added Tax (VAT) and Personal Income Tax (PIT) in the state.
The court, presided over by Justice Stephen Dalyop Pam, also issued an order of perpetual injunction restraining the Federal Inland Revenue Service and the Attorney General of the Federation, both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay to FIRS, PIT and VAT.
Pam made the assertion while delivering judgement in Suit No. FHC/PH/CS/149/2020, filed by the Attorney General for Rivers State (plaintiff), against the Federal Inland Revenue Service (first defendant) and the Attorney General of the Federation (second defendant).
The court, which granted all the 11 reliefs sought by the Rivers State Government, stated that there was no constitutional basis for the FIRS to demand for and collect VAT, Withholding Tax (WHT), Education Tax and Technology Levy in Rivers State or any other state of the federation, being that the constitutional powers and competence of the Federal Government was limited to taxation of incomes, profits and capital gains, which do not include VAT or any other species of sales, or levy other than those specifically mentioned in Items 58 and 59 of the Exclusive Legislative List of the Constitution.
The judge dismissed the preliminary objections filed by the defendants that the court lacks jurisdiction to hear the suit and that the case should be transferred to Court of Appeal for interpretation.
Pam, who also dismissed objection raised by the defendants that the National Assembly ought to have been made a party in the suit, declared that the issues of taxes raised by the state government were issues of law that the court was constitutionally empowered to entertain.
He declared that after a diligent review of the issues raised by bothplaintiff and the defendants, the plaintiff had proven beyond doubt that it was entitled to all the 11 reliefs sought in the suit.
The court agreed with the Rivers State Government that it was the state and not FIRS that was constitutionally entitled to impose taxes enforceable or collectable in its territory of the nature of consumption or sales tax, VAT, education and other taxes or levies, other than the taxes and duties specifically reserved for the Federal Government by Items 58 and 59 of Part 1 of the Second Schedule of the 1999 Constitution as amended.
Also, the court declared that the defendants were not constitutionally entitled to charge or impose levies, charges or rates (under any guise or by whatever name called) on the residents of Rivers State, and indeed, any state of the federation.
Among the reliefs sought by the Rivers State Government, was a declaration that the constitutional power of the Federal Government to impose taxes and duties was only limited to the items listed in Items 58 and 59 of Part 1 of the Second Schedule of the 1999 Constitution as amended.
The Rivers State Government had also urged the court to declare that, by virtue of the provisions of Items 7 and 8 of the Part II (Concurrent Legislative List) of the Second Schedule of the Constitution, the power of the Federal Government to delegate the collection of taxes can only be exercised by the state government or other authority of the state, and no other person.
The state government had further asked the court to declare that all statutory provisions made or purportedly made in the exercise of the legislative powers of the Federal Government, which contains provisions which are inconsistent with or in excess of the powers to impose tax and duties, as prescribed by Items 58 and 59 of the Part I of the Second Schedule of the 1999 Constitution, or inconsistent with the power to delegate the duty of collection of taxes, as contained in Items 7 and 8 of Part II of the Second Schedule of the Constitution, were unconstitutional, null and void.
Lead counsel for the Rivers State Government, Donald Chika Denwigwe (SAN), who spoke to journalists after the court session, explained that the case was all about the interpretation of the Constitution as regards the authority of the government at the state and federal levels to collect certain revenues, particularly, VAT.
“So, during the determination of the matter, some issues of law were thrown up like, whether or not the case should be referred to the Court of Appeal for the determination of some issues.
“The court noted that the application is like asking the Federal High Court to transfer the entire case to the Court of Appeal. In which case, if the court so decides, there will be nothing left to refer back to the Federal High Court as required by the Constitution.”
According to Denwigwe, the court refused that prayer, and decided that the case was in its proper place before the Federal High Court, and was, therefore, competent to determine it.
Speaking on the implications of the judgement, Denwigwe said it was now, unlawful for such taxes as VAT in Rivers State to be collected by any agency of the Federal Government.
“In a summary, it is a determination that it is wrong for the Federal Government to be collecting taxes which are constitutionally reserved for the state governments to collect. The implication of the judgement is that the government (federal and state) as an authority under the constitution,should be advised by the judgement that it is the duty of all government authorities to comply with and obey the law so long as the court has interpreted it and said what that law is.
“So, in other words, the issue of Value Added Tax (VAT) in the territory of Rivers State and Personal Income Tax should be reserved for the government of Rivers State.”
Counsel to FIRS, O.C. Eyibo said he will study the judgment and advise his client.
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