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Editorial

Subsidy Palliative Loan: Need For Caution 

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The Minister of Finance, Budget and National Planning, Zainab Ahmed, announced that the Federal
Government had borrowed $800 million from the World Bank. According to her, it would be used as a palliative before the total removal of petrol subsidies in June. This announcement sparked outrage among Nigerians. At the official rate, the borrowed amount is equivalent to N368.2 billion, while at the black market, it is N596 billion.
Petrol subsidy has been a cardinal topic in Nigeria’s public space and economy for over 40 years. Reductions in the subsidy and subsequent increases in petrol pump prices have led to nationwide strikes, protests and social upheavals since the late 1980s. These events have been led by trade unions, students, civil society organisations, and professionals. The cost and impact on public finances have been significant. Recently, there have been incremental reductions in the subsidy.
Economic and financial experts have expressed doubts about the viability of the subsidy that is currently being implemented in Nigeria. They suggest that the N368.2 billion intervention will not cushion the economic challenges that will arise from the removal of ‘under-recovery’, as stated by the government. Zainab has said that post-subsidy palliative plans will be distributed to 50 million Nigerians, which represents 10 million households.
The issue of subsidy could have been resolved if previous governments had addressed the root cause. Palliatives are only a temporary solution that barely scratches the surface since the underlying issue will resurface. Marketers and other groups in the downstream sector of the petroleum industry claimed that fuel prices might double once the subsidy is removed, creating a ripple effect on everything.
Debates about the implications of eliminating petrol subsidy have intensified. Those who oppose the withdrawal include labour, trade unions and some oil and gas industry experts. They argue that it would increase inflation and harm Nigerians. Organised labour has always insisted that the refineries must be functional before subsidy is taken off. The incoming government must be prepared to face challenges in sustaining or withdrawing the subsidy.
Nigerians are questioning the lack of transparency regarding the World Bank’s funding and raising concerns about the potential for it to be another fruitless endeavour. In September 2022, a report from the Nigeria Extractive Industries Initiative (NEITI) revealed that over the last 15 years (2005-2020), the country had spent N17.6 trillion ($74.386 billion) on fuel subsidies. Meanwhile, the nation’s total debt stock continues to increase, with the latest figure standing at N44.06 trillion, due to unequal revenue generation capacity.
In 2022, Nigeria’s revenue collection reached N10 trillion, according to Federal Inland Revenue data. The possibility of the country taking out an $800 million loan from the World Bank has caused concern among stakeholders. We believe that borrowing to finance post-fuel subsidy removal palliatives is not feasible. Hence, we insist that the incoming administration should handle fuel subsidy removal and palliatives.
In the past, the country funded palliative care through savings from subsidy removal without resorting to borrowing. That is why the current proposal to fund palliative care through borrowing is unacceptable and unconventional. Additionally, there are policy considerations that need to be taken into account when delivering palliative care. The government should explore fiscal and monetary policy options to encourage investment in sectors that can help alleviate the pain caused by subsidy removal.
Investors in various sectors, such as refineries, pipelines, petrochemicals, marketing, and fertiliser plants, can benefit from incentives that facilitate investment in the power sector and the use of autogas. The elimination of fuel subsidies would reduce the Federal Government’s debt burden and is necessary for the country’s economy.
However, the $800 million loan from the World Bank cannot alleviate the burden of fuel subsidy removal on Nigerians, who are already groaning loudly. The new government must prioritise restructuring the government’s revenue profile to boost foreign investment in crucial sectors of the economy.
The government must return the borrowed money if the fuel subsidy removal process has indeed been suspended as declared by the Finance Minister after the National Economic Council (NEC) meeting last month. Nigeria is at present in a calamitous financial situation, with records from both national and international financial and debt institutions indicating a State in crisis. Continuing to borrow money without a coherent plan for repayment only exacerbates the problem and puts the country further into a debt trap.
According to the National Bureau of Statistics (NBS), Nigeria’s public debt stock reached N44.06 trillion or $101.91 billion in Q3 of 2021. The debt might increase to N77 trillion with the addition of the Central Bank of Nigeria’s (CBN) Ways and Means expenses, which have caused controversy. In just three months, the debt grew by 2.84 per cent, rising from N42.84 trillion or $103.31 billion in Q2 of 2022 to N44.06 trillion in Q3.”
Following far-reaching corruption, the country’s subsidy system is currently unsustainable. It is crucial to carefully and gradually approach this problem to prevent resource waste and financial hardship. The Federal Government must be open about its strategy for removal.

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Editorial

For Peace In The M’East

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Tensions in the Middle East have been a cause for concern for decades now. The region has been plagued by conflicts, violence, and instability, with countries such as Israel, Iran, Iraq, Yemen, and Syria being at the centre of many disputes. The failure to resolve these concerns may have devastating consequences for the people living in the region. It also has what it takes to escalate into much larger encounters.
If the international community fails to act swiftly to end the hostilities, there is a real risk that a Third World War might ensue. The clashes in the region are perplexing and passionately rooted in historical, religious, and political distinctions. The inability to address these underlying matters and uncover peaceful solutions has only fueled the fire of discord and contentions among the nations involved.
The Middle East is a crucial geopolitical region, with significant reserves of oil and natural resources, as well as being a hotbed of religious and cultural diversity. The fracas in the region has far-reaching socioeconomic aftereffects. Any intensification in the brunt could have widespread upshot for global security, trade, and stability.
No one should take the probability of a Third World War arising from the region lightly. The use of nuclear weapons, the involvement of major world powers, and the potential for an expansive regional conflagration could have catastrophic backlash. The international community must unite to address the root causes of the apprehensions in the region and work towards sustainable solutions.
The ongoing feud between Iran and Israel suggests that there may be challenging days ahead for international peace. It is troubling that what started with Israel’s offensive on Iran’s consular building in Syria on 1st April may not end with Tehran’s Operation True Promise. The bombing in Damascus, which killed at least two top Iranian generals, resulted in the first-ever direct strikes launched against Israel from Iranian territory. The Jewish State’s recent reprisal for the Iranian onslaught may open a new vista in the conflict.
During the intrusion, Iran reportedly launched more than 300 missiles and drones. Almost all were annihilated by Israel’s air defences, augmented by forces from the United States, United Kingdom and Jordan. The Iranians had made their intentions clear, giving Israel and its allies time to prepare themselves, and quickly issued a statement at the United Nations in New York that their retaliation was over.
With the current war in Gaza between Israel and Palestinians, there are fears that the region is on the brink of an all-out war, with conceivably fatal aftermath. This is a defining moment in the Middle East. That is why it is right for world leaders to pressure Israeli Prime Minister, Benjamin Netanyahu, to exhibit restraint. Then both Israel and Hamas could engage in talks to free Israeli hostages and end hostilities.
In addition to the Israel-Palestine strife, the civil wars in Syria and Yemen have further exacerbated the crisis in the region. The fray has resulted in massive deracination of people, extirpation of infrastructure, and loss of lives. The international community must seek a political solution to these inessential wars and provide humanitarian abetment to those affected by the violence.
Moreover, the rise of extremist groups such as ISIS has also destabilised the region, posing a threat to global security. Nations in the locale and beyond should interface and combat terrorism and extremism. A coordinated effort is required to address the very causes of the commination, such as poverty, lack of education, and political marginalisation. Clearly, the status quo in the bailiwick is unsustainable. A new approach is vital to end the dire straits in the region.
Intense diplomatic endeavours, dialogue, and cooperation are cardinal in resolving the impasse in that portion of the world. The use of military force or unilateral actions will only further escalate the situation and increase the risk of a larger conflict. It is time for all parties involved to set aside their disparities, and build a stable future for the Middle East.
Global amity is indispensable for the well-being of all individuals and nations. It is the foundation upon which sustainable development, economic prosperity, and human rights can thrive. The United Nations was established with the primary goal of advancing peace and security among countries, and it is obligatory that the organisation achieves this objective.
Super powers should animate collaboration and diplomacy to attain harmony. These nations have the wherewithal to make necessitous strides in promoting stability and security on a global scale if they set aside political dissimilarities and focus on common goals. Through open communication and mutual respect, super power countries can lead by example and inspire other nations to follow suit in creating a more nonbelligerent world for present and future generations.
Efforts must be made to avert a Third World War. Its idea is deeply disturbing and contentious. It is one that evokes fear, uncertainty, and global disquietude. The possibility of such a cataclysmic event occurring is something that many would rather not think about, yet the signs and anxieties among countries are becoming increasingly apparent. States must be vigilant, proactive, and committed to building a better future for the world.

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Editorial

Governor’s Pension Law Repeal, Otti’s Example 

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Abia State’s decision to repeal the governor’s pension law is a momentous move towards cutting down on
the expenses of governance and focusing on the welfare of pensioners in the State, who were last paid in 2014. Governor Alex Otti’s bold action in overturning this law demonstrates a dedication to financial prudence and transparency. This resolve will help in reducing the financial burden on the State.
Pension for governors and their deputies has been a contentious topic in Nigeria, with concerns raised about the ethics and morality of providing lifetime benefits to public officials who may only serve a limited term in office. Abia State has taken a bold step by repealing this law, setting a positive example for other States to follow. This move has sparked a much-needed conversation about the need for accountability and responsible governance in the country.
Governor Otti’s argument for repealing the governor’s pension law to alleviate the financial burden on the State and address the issue of unpaid pensions for Abia’s retirees is compelling. By prioritising the needs of the people over political considerations, Governor Otti is demonstrating strong leadership and a commitment to serving the best interests of the citizens.
The Abia State Governors and Deputy Governors Pension (Repeal) Law of 2024 has been widely reproached for its excessive provisions for former office holders. Not only does the law guarantee former governors and former deputy governors 100 per cent of the operative salary of their successors, but it also includes the provision of three police officers and two Department of State Services officers for life. Additionally, the State is responsible for paying for their domestic staff and building mansions for them in both their home State and in Abuja.
Proponents of these benefits assert that they are necessary to ensure that former governors are appropriately provided for after their tenure in office. They maintain that these benefits are in line with the sacrifices and responsibilities that come with holding a public office. Furthermore, supporters of the entitlements contend that these provisions are intended to attract qualified individuals to compete for gubernatorial positions, with the assurance that their welfare will be looked after once they leave office.
Despite efforts to eliminate these schemes in some States, about 18 States still retain pension for their former leaders, which many Nigerians view as a form of political hedonism. Zamfara set a precedent in 2019 by eliminating its pension law, signaling a shift away from the traditional practice of providing lucrative benefits to former governors and their deputies. Many other States continue to operate this practice, allowing former leaders to receive substantial pension and other perks even after leaving office.
In 2020, both Lagos and Kwara States announced their intentions to scrap their pension laws, acknowledging the increasing public outcry over the issue. Kwara went a step further by officially abrogating the law in January, 2021, demonstrating a commitment to reforming the system and promoting accountability. Meanwhile, Lagos took a more gradual approach by reducing the benefits for former leaders by 50 per cent in August , 2021. This move was perceived as a compromise between completely abolishing the scheme and maintaining the status quo.
According to the World Poverty Clock and the National Bureau of Statistics (NBS), Nigeria has been listed as the poverty capital of the world, with millions of people living in extreme poverty. The fact that States would continue to record more ex-office holders after every tenure only adds to the financial strain of these pension schemes. With the number of former office holders increasing each year, the costs associated with their pension become unsustainable for many States.
The funds that could be allocated towards alleviating poverty and improving infrastructure are instead being spent on providing lavish retirement benefits for a select few. The current pension schemes for ex-governors in Nigeria are not sustainable in the long term, especially in the face of the present economic realities. Reforms are needed to ensure that public funds are used more efficiently and effectively, and that the needs of the most vulnerable in society are given preference over the comfort of former government officials.
Pension for former governors often result in the enrichment of the wealthy elite at the expense of the struggling masses. These politicians typically only served in office for a maximum of eight years, yet, they are able to secure generous pension that allow them to maintain a life of luxury. Some even go on to hold positions as Ministers or Senators, further perpetuating their unjustified wealth.
Curiously, the 10th National Assembly is home to more than 12 former governors who continue to benefit from these lavish retirement benefits. In stark contrast, many public workers dedicate 35 years of their lives to serving the public and the government, only to receive meagre pension or sometimes none at all. Tragically, some pensioners pass away before ever receiving the benefits they are owed.
Other States should look to Abia State as a model for promoting democratic values and accountability. The active participation of civil society organisations, pressure groups, taxpayers, and activists is critical in upholding the principles of democracy and ensuring that the government is accountable to the people. The scandalous pension laws that have been passed in many States are not only unjust but also a detriment to the democratic process.
Nigerians should engage with their legislators and demand the immediate annulment of these obnoxious laws that serve to enrich a select few at the expense of the public. Citizens can help ensure that their voices are heard and that their rights are protected by actively participating in the legislative process and holding their representatives accountable. Abia is a constant reminder that democracy is a continuous process that requires the active involvement of all.

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Editorial

Enough Of Legislative Rascality In Rivers

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The political deadlock in Rivers State is showing no sign of abating, with the State House of Assembly voting once more to nullify Governor Siminalayi Fubara’s veto of the Rivers State Assembly Service Commission Bill. This is in addition to the one that occurred in January, when the legislators went against some of the governor’s decisions about four other bills, claiming it could cause chaos and violate certain laws.
The four bills include the Rivers State Local Government Law (Amendment) Bill; Rivers State Traditional Rulers’ Law (Amendment) Bill; Rivers State Advertisement and Use of State-owned Property Prohibition (Repeal) Bill and Rivers State House of Assembly Fund Management Bill. Unlike before, the amendment to the Assembly Service Commission Law now permits the Assembly to appoint the chairman and members of the Commission, not the governor.
But legal experts say that the amended law violates the 1999 Constitution, which prohibits the Assembly from overstepping the governor’s authority to appoint the chairman and other members of the Commission. If that position is accurate, then the Rivers State House of Assembly Service Commission (Amendment) Law, 2024, is legally void. The question is: why is Rivers State different if the President, working with the National Assembly, nominates members of the National Assembly Service Commission?
In yet another controversial move, the State Assembly has passed a bill to amend the Rivers State Public Procurement (Amendment) Law No. 1 of 2021. The bill, which was put forward at the 127th sitting, aimed to delete Section 3 of the 2021 Amendment Law to limit mobilisation fees to suppliers or contractors to not more than 20 per cent. We condemn this ill-motivated enactment, as the same Assembly had previously amended the law in 2021 to allow for 100 per cent payment of mobilisation fees to contractors.
While the House maintains that the laws are intended to bring more balance of power, we perceive it as an audacious endeavour to humiliate the governor and diminish his position. This power contest between the legislative and executive arms is unsettling and detrimental to the state. It is incomprehensible why the same Assembly members failed to challenge any bills during former Governor Nyesom Wike’s tenure, which period they also served as lawmakers.
We advise the state lawmakers to be wary of their actions and always prioritise the well-being of Rivers people by operating collaboratively with Governor Fubara. They should set aside their deep-rooted prejudices and concentrate on enacting good legislation to benefit the citizens. We insist that the governor should be allowed to administer the state freely in line with his constitutional mandate to ensure stability and progress in the state.
It is time for our renegade legislators to pay attention to their duties and not allow their paymaster to manipulate them for his narcissistic purposes. We find it disappointing to see those in power succumb to high-level corruption and disregard the people’s needs because of politics. What we need now is unity and cooperation, not the constant harassment of Fubara to create tension and division.
When individuals who are supposed to uphold the law and safeguard the people’s interests are being used as pawns in a murky political game, it is a sad state of affairs. The lawmakers need to understand that they owe it to the people of Rivers State to buck any attempts to jeopardise their integrity and independence. The trust of the people they represent is undermined by letting themselves be controlled, which also erodes their credibility.
Repealing and re-enacting laws without careful consideration by these lawgivers is reckless and unacceptable. Their actions could cause a crisis in the state, making governance more challenging. They need to understand that any problem they ignite will not only affect the general public but also themselves and their loved ones. That is why the legislators must contemplate the repercussions of the laws they revoke or make and how such statuses will impact their interests and all residents of the state.
Speaker Martins Amaewhule and his cohorts are pushing the boundaries of their rascality too far. After elections, politics in most states ends, allowing for genuine governance to take over. Unfortunately, this is not the scenario in Rivers, where political turbulence is destroying the state’s economy. If these parliamentarians truly cared about the state in which interest they have always claimed to act, they would end the ardent political imbroglio and unnecessary power struggles causing divisions and increased insecurity
Political tenseness in a state can sidetrack the attention of the government away from enforcing impressive policies to tackle challenges and promote progress. It is estimated that Rivers State has lost about N2 trillion in public sector investments over the past 12 years due to unrest in the political arena. Numerous projects valued at over N1.91 trillion have been impeded, along with other economic activities that could have profited many.
Some of the losses include the N250 billion bond approved in 2010 to build listed projects. However, a political dire straits in 2012 compelled the state to resort to bridging loans from commercial banks, as opposed to Lagos State that took bonds. The World Bank water project, that was supposed to transform Port Harcourt into a modern city, was allegedly not endorsed by the Goodluck Jonathan administration following political upheavals in the state.
To transform Port Harcourt into a fast and efficient transportation centre, the government invested over N20 billion in the monorail project. However, once Wike became the governor, he abandoned it. Former Governor Chibuike Amaechi used to set aside N100 billion each year for the Greater Port Harcourt City project, but Wike, following political disagreements with his predecessor, neglected it and instead used it as a means to reward his supporters. The unstable political climate prevented the realisation of these public sector investments, which could have greatly expanded the state’s economy.
Rivers people are indeed fed up with waking up every day to distressing news from the political space. Amaewhule and his troublesome allies must be told that enough is enough. The inept lawmakers should put aside their personal interests and those of their principal and work with Governor Fubara, who has been brandishing the olive branch to advance the state. Rivers State needs peace and development.

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