Given the apparent dwindling fortune of the Naira, the House of Representatives recently asked the Central Bank of Nigeria (CBN) to quickly put in place a policy to check further devaluation of the Naira to the United States dollar and other international legal tenders. The House decried that while the Nigerian currency was relinquishing value, others in Africa were appreciating.
The CBN officially devalued the Naira to N410.25 per dollar after the country’s currency defied all interventions to retain its value. However, some financial experts have said that the new exchange rate would lead to inflation and increase the poverty level in the country. Justifying the diminishing value of the currency, Governor of the CBN, Godwin Emefiele, said that the drop in crude oil earnings and the associated reduction in foreign portfolio inflows significantly affected the supply of foreign exchange into Nigeria.
Curiously, while the value of the Naira relative to the dollar had declined by a whopping nine per cent in the last six months, the South African rand and Ghanaian cedi had appreciated by 11.4 per cent and one per cent, respectively. To save the Naira, the CBN adopted multiple exchange rates in 2020, in a bid to avoid an outright devaluation without success.
It has become profoundly disturbing that the frequent devaluation is already causing inflation since imports have become more prohibitive. Any imported goods or raw material increases in price and the increase in aggregate demand causes demand-pull inflation. Firms and exporters have less incentive to cut costs because they can rely on the devaluation to improve competitiveness.
It is equally unsettling that the long-term devaluation is already leading to lower productivity because of the decline in incentives. Also, the depreciation of the Naira makes it more difficult for Nigerian youths, especially in the Information Technology (IT) sector, whose businesses are online and must necessarily transact businesses in the US dollars. In a period of low wage growth, a diminishment that causes rising import prices will make many consumers feel worse off as is being experienced.
A hasty look at the direction of Nigeria’s international trade shows the problems of the strong currency syndrome in a single source foreign exchange earning dominated economy. In 2018, Nigeria exported a total of $59.5 billion worth of goods. Crude ($44,8bn) and petroleum gas ($8.61bn) alone accounting for nearly 90 per cent of export. In the same year, Nigeria imported goods totalling $48.7bn with refined petroleum ($9.95bn) alone accounting for over 20 per cent of all imports.
Similar trends were recorded before and even after the referenced year. It is, therefore, not difficult to see that there is nothing to achieve from devaluation since the main product we export (crude oil) is already priced in USD, and we will not relish any benefit from increase in demand following price drop, since our production volume is closed off in OPEC quota.
A former President, Association of National Accountants of Nigeria, Dr Sam Nzekwe, had declared that the regular devaluation of the Naira would result in imported inflation because importers would get more expensive forex from the Bureau de Change. He said, “Prices of goods and services will keep on going up; inflation will keep on going up because anyone who is importing, either raw material or finished goods, the prices will be very high. The agricultural sector that is supposed to be cushioning the situation, the people cannot do anything because of the insecurity issues. They cannot go to farm; so we are unable to take advantage of the comparative advantage in agriculture because of activities of bandits.”
Similarly, a Professor of Economics, Babcock University and past President, Chartered Institute of Bankers of Nigeria, Prof. Segun Ajibola, noted that the CBN had been trying to defend the value of the Naira to achieve some stability. However, he said there was little the apex bank could do because of the exposure to the foreign market. According to Ajibola, “The implication is, we are likely to witness cost push inflation because inflation will rise and they will pass that to the end users that are consumers, so the overall impact is that it will likely worsen poverty. The poverty index is likely to rise.”
Truth is, the greatest casualty of Naira’s incessant devaluation is our industrialisation drive which becomes more expensive to finance and further delays the take-off of the much desired private sector-led industrialisation. Former British Prime Minister, late Margaret Thatcher, in 1990, was once quoted to have said that “to destroy a country, first debauch their currency”. Regrettably, this is what we are ignorantly doing to ourselves.
Unfortunately, constant devaluation has put the Naira among the worst performing currencies globally in the last four decades. Despite the systematic devaluation in the last 40 years, Nigeria and Nigerians are yet to experience the benefits of currency depreciation advocates promised. It appears that Mark Carney, a former Governor of Bank of England, might be right when he emphatically stated that currency “depreciations are how you make the economy poorer”.
Economists and financial experts have often warned that currency devaluation is a bad monetary policy for a nation with no significant export industries. Knowing where we are currently in terms of power generation, logistics, infrastructure and technological know-how, Nigeria would not likely have a competitive export-oriented industry soon, more so when the huge domestic market is yet to be dominated by our home-based industries. Until Nigeria’s market is largely monopolized by locally produced goods, the nation is unlikely to see any gain in the continued devaluation of the national currency.
Stop Privatisation Of TCN, Others
The Trade Union Congress (TUC) of Nigeria is strongly opposing the Federal Government’s plans
to privatise the Transmission Company of Nigeria (TCN), Nigeria Post and Telecommunications Services (NIPOST), and Federal Medical Centres (FMCs) across the country.
The labour union said it was antithetical to the last-minute rush to privatise the assets, despite the previous administration having only a few weeks left to depart. At the union’s National Executive Meeting held in Abuja towards the end of President Buhari’s tenure. TUC President, Festus Osifoh, asked the Federal Government to halt the distribution of N8 billion which had been reportedly released for the asset unbundling of NIPOST until the incoming government took over.
TUC recalled that the previous privatisation of public resources during former President Olusegun Obasanjo’s administration lacked transparency and favoured regime officials and their cronies. Additionally, many of the privatised entities were unstable as the State continued to provide monetary assistance, particularly for the DisCos and GenCos.
We support the TUC’s stance on the privatisation of public assets. The decision to privatise should be left for the President Tinubu-led administration to handle. Privatisation, if executed properly, can bring in capital, expertise, and best practices for the administration of state-owned enterprises.
However, the privatisation of the energy sector in Nigeria, which took place 10 years ago, has not yielded the desired results. In fact, the power supply condition in the country has regressed. Despite a report by the Nigerian Electricity Regulatory Commission (NERC) that the Federal Government has subsidised electricity supply in the country with N35.27 billion, the position remains dire.
Nigeria’s electricity supply is currently oscillating between 5,000 and 7,000 megawatts, which is inadequate for a country with a population of over 200 million. The 11 DisCos and three GenCos are facing various challenges such as under-capitalisation, debts, and technical difficulties, which are affecting their ability to deliver expected services to Nigerians. Unfortunately, five of these companies have been taken over by banks because of their financial distress.
This current state of the power sector demands a complete review of the energy privatisation programme. It is evident that the intended objectives of the privatisation exercise have not been met. To resolve the issues plaguing the sector, it is crucial to acknowledge that a hasty privatisation of the transmission company may not provide a permanent solution. A repositioning of the sector is necessary to ensure better performance and meet the expectations of Nigerians.
The TCN’s technical and commercial inefficiency can be traced back to the public sector management that dominated the electricity sector before privatisation. The transmission system, or national grid, is inadequate to handle the total generation capacity, and the authorities have been slow to expand it.
The privatisation of the transmission arm of the power sector by the Federal Government should be approached with caution. The Tide has always advocated the sale of national assets with prudence. Developing economies require significant State intervention in infrastructure development because of their fragility. However, private-public partnerships can still play a role.
The DisCos have been frequently requesting bailouts, despite receiving enormous sums of government intervention. This shows that Nigeria is not yet prepared for full-scale capitalism. If the TCN is sold quickly, it will cause perpetual economic enslavement for the country. Therefore, any government asset privatisation must adhere to processes that encourage competition, enhance efficiency, and decrease direct government participation in their operations.
Since its inception in 2004, the Bureau for Public Enterprises (BPE) has privatised 142 enterprises, but regrettably, 37 per cent of them (52) are not performing well. The BPE has attributed this poor performance to the hostile business environment in the country, which has caused many private or privatised national enterprises to either close or move to neighbouring countries.
The Nigerian government has been attempting to privatise Nigeria Telecommunications Limited (NITEL) for almost a decade because of the poor state of its fixed-line infrastructure and high levels of debt. Despite Nigeria being one of the world’s fastest-growing telecoms markets, NITEL’s established lines have decreased to fewer than 100,000 from five times that amount in 2001. The total number of subscribers to its Nigeria Mobile Telecommunication (MTEL) mobile unit has dropped to a few thousand from over 1 million. The latest attempt to sell the firm is just one in a string of efforts by the government.
Unfortunately, the greed of past Nigerian leaders has raised questions about the efficiency of our privatisation programme. Clarity and accountability are crucial in privatisation, but Nigeria’s history of corruption has created distrust and suspicion. To address this issue, separate auditing and legislature oversight committees should be established to monitor privatisation deals and prevent fraud.
Transparency in privatisation can create a perception of honesty and accountability, reducing mistrust from citizens. If carried out with sincerity, divestment can benefit various groups. Workers become shareholders, consumers receive better services, fresh graduates and the unemployed can secure jobs following expansion, and the government is relieved of subsidies or subventions.
Towards Sustainable Food Security
On October 16, 1979, a global movement was initiated by over 150 countries to acknowledge the vital impact food has on human lives. World Food Day was established to raise awareness about food security concerns and foster unity in the battle against hunger. This year’s event took place on Monday, October 16, emphasising the importance of addressing food-related challenges.
Resently, the Federal Government added a new impetus to this clarion call with the recognition of and declaration of Nigerian Farmers’ Day to celebrate the hardwork and sacrifices of farmers across the country to provide much-needed food for every citizen of the country. This ties into the global effort to ensure food security for humanity.
The global challenges of climate change and the conflict in Ukraine have raised concerns about the security of supply chains, which has resulted in higher prices for food commodities. This increase in prices is causing worries, particularly in the Middle East and African nations where people are especially vulnerable to food crises. The situation is creating unease among communities as they face the potential consequences of limited access to affordable and healthy food.
Every year, World Food Day focuses on a different subject, highlighting the importance of various aspects of food production and consumption. In the past, themes such as ‘Family Farming’ in 2014 and ‘Our Actions Are Our Future’ in 2018 had been chosen. For the year 2023, the theme is, “Water Is Life, Water Is Food. Leave No One Behind.” It makes the vital connection between water and food. Without water, there is no food, and there is no food security without water security.
The Director-General of the Food and Agriculture Organisation (FAO), Dr QU Dongyu, rightly emphasised this when he highlighted the importance of prioritising water in policies and planning across various sectors. He outlined five key actions that need to be taken to achieve the Sustainable Development Goals (SDGs). He also called for stronger partnerships between governments, the private sector, academia, civil society, and all stakeholders to work together for a secure water future.
Over the years, Nigeria has been putting efforts aimed at ensuring food security. Part of it was the establishment of the Anchor Borrowers Programme (ABP) by the Central Bank of Nigeria (CBN), in line with its developmental functions as enshrined in Section 31 of the CBN Act 2007. The ABP was established to create economic linkages between smallholder farmers (SHFs) and reputable companies (anchors) involved in the production and processing of key agricultural commodities.
The core aim of the programme is to provide loans (in kind and cash) to smallholder farmers to boost agricultural production, create jobs, and reduce food import bills towards the conservation of foreign reserves. However, stakeholders and farmers alike have argued that despite the huge investment in the programme, Nigeria is yet to boast of food sufficiency, because the majority of the targetted audience of the programme who are farmers have not benefited from it.
Nigeria has ample resources and land for agriculture, allowing it to produce its food. To boost agribusiness, the government should prioritise improving its profitability and attractiveness. Technological advancements are needed to manufacture farm tools and equipment for mechanised farming. Additionally, addressing terrorism is crucial for creating a safe environment that allows farmers to resume operations.
Before crude oil discovery in 1956, Nigeria’s economy relied on agriculture as a primary source of foreign exchange. In recent years, the country has shifted its focus to agriculture as a revenue stream to reduce dependence on oil. During the 2016 recession, the agriculture sector grew by 4.1per cent, while the oil sector shrunk by 13.7per cent. However, Nigeria continues to grapple with food insecurity and meeting domestic demand despite this growth.
Interestingly, as the world observed the World Food Day, the Rivers State Governor, Sir Siminalayi Fubara, decided to revive the Songhai Rivers Initiative Farms, aligning with the United Nation’s goal of achieving Zero Hunger by 2030. This initiative aims to promote sustainable agriculture practices, provide farmer training, and enhance food security in the State. The governor’s investment in these efforts addresses immediate food security concerns and ensures long-term sustainability in the region.
The Songhai Rivers Initiative Farms, established in 1980, has encountered various challenges that have hindered its productivity. Fortunately, the governor has stepped in to tackle these issues and ensure the farms can flourish. Through the governor’s intervention, the necessary infrastructure, equipment, and resources are being provided to support the farms.
Revamping the Songhai Farms marks a momentous stride towards attaining food security in the state. This initiative, through the generation of employment opportunities and enhancement of agricultural productivity, will fortify its economy. Furthermore, it will elevate food security not only for the residents of Rivers State but also for the neighbouring states, propelling the state into a central role within the framework of sustainable food security.
The governor’s dedication to revitalising the farms is truly commendable, as it not only addresses local concerns but also aligns with global initiatives to combat hunger and enhance food security. In line with this, the United Nations has designated 2023 as the International Year of Fruits and Vegetables, emphasising the imperative of healthy diets in achieving sustainable development.
World Food Day 2023 is a critical event that underscores the importance of a sustainable food system capable of providing healthy and nutritious food for everyone. It serves as an opportunity for people to unite and explore strategies to eradicate hunger and enhance nutrition, particularly among vulnerable populations.
Therefore, the resuscitation of the Songhai Rivers Initiative Farms is laudable and appropriate, as it demonstrates the Rivers State Government’s commitment to enhancing food security within the State. This initiative not only aims to improve agricultural practices but also aligns with the United Nations Sustainable Development Goal of Zero Hunger by 2030.
Curbing Underage Prostitution
Needless to say, the reality of child abuse and prostitution is an apodictic phenomenon in Nigeria, as in many developing and developed countries. This development has become an agonising threat, with multiple correlated implications, in addition to denying the fundamental rights and dignity of children as acknowledged in the 1989 United Nations Convention on the Rights of the Child.
The attention this incident draws is based on the awareness of the prominence of children in families and societies as future generations and leaders of tomorrow. And as potential standard-bearers of any nation, they need to be properly cared for and nurtured, thereby providing an enabling environment for them to develop their potential to take on such great responsibilities.
Child prostitution has devastating consequences for children individually and society as a whole. Undermining these consequences can lead to serious and far-reaching problems, not only for individuals but for society as well. To address the threat, law enforcement agents have been conducting raids on brothels and residences across the country to apprehend those involved in the dastardly act.
For example, the police in Lagos State emancipated 24 ladies including a 13-year-old who were trafficked from Akwa Ibom State for prostitution. Four members of the syndicate that brought the girls, most of them from Oron in Akwa Ibom, were also arrested. The trafficked girls were rescued in shanties used as hotels around an abattoir area at Agege. Preliminary investigations revealed that the traffickers charged men N2,000 to sleep with the girls who were then given N5,000 at the end of the month.
Furthermore, the National Agency for the Prohibition of Trafficking in Persons (NAPTIP) arrested eight underaged girls in Benin, the Edo State capital, for allegedly contravening section 17 of the Agency’s Act. The arrest was made by the Benin Zonal Command of the agency, comprising Edo and Delta States. The arrest of the underaged girls followed a raid on two brothels in the Aduwawa axis of the state.
Similarly, the Rivers State Police Command recently said its operatives rescued three underaged girls and arrested three male suspects during a raid on a brothel at Azikiwe Street, Mile Two, Diobu, Port Harcourt, the state capital. Policemen from Rumuolumeni alerted the Azikiwe Police Division following a complaint from a relative of one of the underaged girls, who was compelled into prostitution. The list is endless.
Nigeria has numerous underaged girls living and making a living in the streets. This has been attributed to economic factors and exposure to all forms of risks. The result is the proliferation of prostitution among young people, with its attendant problems. The causes of child prostitution in the country are largely economic, sociological, and socioeconomic factors. The effects of prostitution are psychological reactions, psychosocial damage, and political implications, which dent the nation’s image.
NAPTIP recently lamented that about 60 per cent of the female sex hawkers in Italy were Nigerians. It described the situation as not only pathetic but “highly unacceptable.” In other words, there is no question about whether the population of Nigerian girls who are engaged in sex hawking in the European country is sizeable because it is indeed significantly so. This is awful and constitutes a monumental national embarrassment.
By the agency’s disclosure, it is evident that many of the federal and state governments’ intervention schemes to curb underage prostitution have been largely ineffective and inadequate. Many wives of the heads of subnational governments are also known to have pet projects whose objectives are partly woven around the curtailment of this menace, but those projects too have failed to achieve the desired results. This is disconcerting.
Many young Nigerians are discontented, and some of them do considerable atrocious things to survive. However, while it is true that the seemingly intractable socioeconomic challenges of the country pose a veritable allurement for people to take precipitate actions to survive, there are also the issues of weak moral fabric and warped value system that make some young people and adults alike to disparage ethical, moral and sometimes legal abuttals in their quest for survival.
The questions are: how did we get to this contemptible state? How come that young girls who ought to be at school are flaunting the major streets of Abuja, Lagos, Port Harcourt, Enugu, Ibadan and other cities, hawking their half-naked bodies to any willing buyer? Why has sex become the fad among many students of our institutions? Where lies the future of these young ladies, and what can society do to protect their nobility?
More irksome is the all-embracing organised sex trafficking, even within the country. Many young Nigerian girls are being trafficked from one state of the federation to the other just for sex. Recent research conducted by Sympathy Worldwide Foundation, a non-governmental organisation (NGO) fighting sex slavery and child trafficking, reveals that several young girls are being trafficked from the hinterland to the cities but as the promises of their “do-gooders” fail, the girls take to the streets to use the same means to help themselves.
We call on the government at all levels, anti-prostitution NGOs, parents, churches, mosques, the police and all relevant stakeholders to take concrete steps to end prostitution which is still a crime in our law. People trading in prostitution or keeping brothels should be prosecuted, while men patronising, defiling or seducing our young girls should be brought to justice. The relevant authorities should also intensify their spirited campaigns against the illicit act.
Since poverty and unemployment are the major causes of prostitution, our governing authorities should stop paying lip service to these deprivations. The family institution needs to be re-invigorated. If parents were at home performing their parental obligations, their daughters would probably not have taken to the streets. Nigeria possesses an enviable rich cultural and religious heritage which includes living a chaste life and respect for the body and soul.
We have ascertained that neighbourhood and peer influence, weak financial, emotional and spiritual support, and molestation experience are some causes of child prostitution. We all must deploy strategies to massively generate awareness of the consequences of engaging in multiple sexual acts among the girl-child. This will help dishearten potential child prostitutes in the country.
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