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Cautious Optimism As Naira Rebounds

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It has been good news since the past three weeks as our national currency, the Naira, continues to regain its lost value. The recovery follows frantic efforts by a government whose ill-advised, inaugural policies had set the legal tender, and the whole economy, tumbling.
The naira took an unprecedented plunge from last June and hit bottoms by the middle of March, 2024, following a hasty decision by President Ahmed Tinubu’s administration, to let it float freely on the market forces of demand and supply, in addition to removing petroleum subsidy, in disregard of the handicap of Nigeria’s import-dependence.
Without provisions to boost productions that satisfy domestic demands, or prime export capacities to balance import pressures on the local currency, a floating naira depreciated by 25 per cent in a single day in June, 2023, dropping to N1,950 per dollar in March, 2024, from about N750 per dollar earlier in May, 2023, while the price of petrol jumped overnight to 295 per cent, from N189 to N557. By December, 2023 overall inflation, according to official estimates, reached 28.92 per cent and food inflation shot beyond 33.33 per cent.
According to a World Bank report, whereas about 24 million Nigerians crossed the poverty line during the first half of 2023, in the twilight of the Buhari administration, situations got worse by the end of 2023, when accelerating inflations ushered-in by Tinubu’s hasty policies, pushed 63 per cent of Nigerians (about 133 million) into multi-dimensional poverty.
By the first quarter of 2024 hardships drove restive youths to near-uprising, which forced government into another haste – a concoction of palliatives – ironically, a form of subsidy, which it had earlier denounced as government wastefulness.
With the naira regaining its losses, it appears a panicky government has finally groped unto a solution. But if Mr President’s men are remorseful for the havoc done to Nigerians, they should be more sober this time in their computations to avoid distressing the country further.
The Federal Government has resorted to offloading dollar raised from sovereign bonds (in essence, loans), petroleum export proceeds and drawdowns from the external reserves, into the economy to reduce Foreign Exchange (FX) supply pressures, and to help it buy time in the hope of finding solutions to the wider unfavourable economic fundamentals bedevilling the economy.
On the dollar demand side, government has freed-up official restrictions that it believes created artificial scarcities that favour the black market. The Central Bank of Nigeria (CBN) has also cleared-off a backlog of FX obligations to assure investors, lifted the ban on sale of dollar to Bureau De Change Operators (BDCs), clamped down on currency speculators, closed down Binance, a crypto platform government accused of opaque dealings with money launderers, and borrowed dollar through short-term, sovereign bonds to ‘defend’ the naira.
Ever since, the CBN has offloaded dollar to BDCs at progressively reduced rates in the hope of prompting currency hoarders to cut losses and release supposed stockpiles. But in a clime where looted funds are desperately exchanged and exported, not much may be squeezed from hoarders, if surveillance is not stepped up. However, as at April 8, 2024, the CBN has offloaded a second tranche of $10,000 per BDC operator at N1,101 per dollar with a charge not to sell above 1.5 per cent margin. Many predict the CBN would offer the dollar below N1,000 in the coming weeks.
But for how long can the CBN go on with its bonanza to ‘defend the Naira’?  And what has been the cost of that defence? While the impact of a strengthening naira is yet to reflect on commodity prices in Nigeria, the nation’s foreign reserve has dropped within 18 days by $0.95billion, down from $34.45billion on March 18, 2024, to N33.50billion on April 3, which represents a daily average depletion rate of $52.78 million. This is despite the $3billion loan from the AFREXIMBANK and petro-dollar revenues also thrown into the fray. To sustain its strengths, reports say the federal government plans to take stabilisation loans by June, 2024, speculated at a tune of $15billion, through the issuance of domestic bonds denominated in foreign currency. FG seeks the loans within the window of short-term, volatile Foreign Portfolio Investment (FPI) bonds which may disappoint the country in times of crises, as against Foreign Direct Investments which are more reliable. According to Bloomberg reports, FG has contacted investment banks, JP Morgan Chase & Co, Goldman Sachs and Citibank NA, for advice on Eurobonds, but Nigeria’s Debt Management Office denies Federal Executive Council’s approvals for such.
Certainly, a stronger currency is beneficial to an import-dependent nation like Nigeria, but without strengthening national productivity to generate surpluses for trade-balancing exports, the pursuit of merely high currency valuation becomes a vain strategy. While the naira strengthens, the reality of the adverse economic fundamentals that erode its worth remains unchanged, implying that its buoyancy rides merely on costly FX floods being pumped by the CBN. It is easy to guess the result should the CBN halt supply.
For years, Nigeria relied on its petroleum sector which at present provides about 78 per cent of FX earnings, but constitutes far less than 10 per cent of its real Gross Domestic Product (GDP), implying that to stabilise, Nigeria needs to grow its non-oil sector of over 90 per cent of GDP. Even the petroleum revenue is endangered by sabotage, illegal bunkering, dwindling investments and insecurity.
The FG may have taken the bet that sustaining the naira could buy it time from hard-pressed Nigerians, in the hope that a number of tangible local productions might kick-off. Notable among the expectations is the Dangote Refinery which, with its 650,000 barrels per day refinning capacity, is expected to satisfy local demands of petroleum products to ease the huge FX demand in that front, and may hopefully earn FX through exports. Already, Dangote’s recent release of 100 million liters of diesel crashed the price of the product from N1,700 to N1,350, with another batch of 100 million liters expected to crash prices further, while the company plans to supply petrol by May, but government-owned refineries which have drained so much resources remain dysfunctional. Again, the recent break through against reprocity flight barriers between the UK and Nigeria by Airpeace, reportedly crashed ticket prices to UK by 60 per cent.
FG may also see reliefs in the successful take-off in Aba, of 24-hour power supply by the Geometric Group and the recent commissioning of 700 Megawatt Zungeru hydro-electricity station, a tomato processing plant in Nassarawa, and a steel mill in Kaduna. However, agricultural, petroleum and manufacturing sectors remain at  their lowest and beseiged by insecurity, while the finacial services sector appears to be strong but has incommensurate impact on industrialisation. If government does not encourage productivity in the real economy, its efforts in buoying the naira would be hopeless, while Nigeria falls deeper in debts. Already, as at December 31, 2023, Nigeria’s total debt stood at $106billion, while the 2024 budget of N28.7 trillion projects a deficit of N9.8 trillion to be debt-financed.
When public debt grows fast ahead of GDP growth rate, mounting debt service costs under-cut funds required for investment. That became the plight of Nigeria from Buhari’s era, when from 2016 to 2022 public debt grew by yearly average of 52.4 per cent, and GDP below 2 per cent. In that fateful 2022, debt service cost exceeded government revenue, which is why we are where we are.
The International Monetary Fund projects that Nigeria’s reserve would plummet to $24billion by end of 2024. Meanwhile, a nation’s FX reserve reflects the country’s balance of payments and its ability to settle international obligations. Severe declines in reserve may erode investor confidence and lead to downgrading of its credit ratings, which further worsens the nation’s borrowing costs.
Therefore the current approach towards buoying the Naira through loans cannot be any other thing, but a gamble.

By: Joseph Nwankwor

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Opinion

Time To Make Rivers State Work

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Rivers State, one of Nigeria’s most resource-rich regions, holds immense potential. Situated in the Niger Delta, it is home to a diverse population, abundant natural resources, and a bustling economy driven primarily by oil and gas. Yet, despite its wealth and strategic importance, Rivers State faces significant challenges. To unlock its full potential and ensure sustainable development, concerted efforts must be made to address these issues head-on. Firstly, the state’s infrastructure needs urgent attention. Poor road networks, inadequate power supply, and substandard healthcare facilities are prevalent. These deficiencies hinder economic activities and reduce the quality of life for residents. Prioritizing infrastructure development, with a focus on improving transportation networks, expanding access to reliable electricity, and enhancing healthcare services, will create a more conducive environment for business and everyday life.
Education is another critical area requiring investment. The quality of education in Rivers State lags behind national standards, with many schools lacking basic facilities and qualified teachers. By investing in education, the state can equip its youth with the skills and knowledge needed to compete in the global economy. This involves not just improving physical infrastructure, but also ensuring adequate training and incentives for teachers, and implementing policies that support academic excellence. Environmental sustainability is crucial for the long-term prosperity of Rivers State. The region has suffered severe environmental degradation due to oil exploration and industrial activities. Restoring and protecting the environment must be a top priority. This can be achieved through stricter enforcement of environmental regulations, encouraging the adoption of cleaner technologies, and initiating large-scale clean up and reforestation projects.
Economic diversification is essential to reduce dependence on oil and gas. While these industries will continue to play a significant role, developing other sectors such as agriculture, manufacturing, and tourism can create new job opportunities and stimulate growth. Encouraging entrepreneurship and supporting small and medium-sized enterprises (SMEs) can also drive economic diversification and resilience. Security remains a major concern in Rivers State. Kidnappings, armed robberies, and communal conflicts are all too common, undermining investor confidence and endangering lives. Strengthening law enforcement agencies, improving community policing, and addressing the root causes of crime, such as poverty and unemployment, are critical steps towards creating a safer environment for all. Promoting good governance is fundamental to achieving sustainable development. Transparent and accountable leadership can ensure that resources are used efficiently and that the benefits of development reach all citizens. This requires not only political will but also active civic engagement, with citizens holding their leaders accountable through participation in the democratic process.
Public health is another area that cannot be overlooked. The state needs to invest in healthcare infrastructure, provide adequate training for medical personnel, and ensure the availability of essential medicines and services. Public health campaigns targeting prevalent issues such as malaria, HIV/AIDS, and maternal health can significantly improve health outcomes. Empowering women and youth is vital for social and economic progress. Ensuring equal access to education, employment, and political participation for women can drive development and reduce poverty. Similarly, creating opportunities for young people through vocational training, mentorship programs, and access to finance can harness their potential and energy for positive change. Cultural preservation and promotion can also play a role in development. Rivers State boasts a rich cultural heritage that, if well-managed, can attract tourism and foster a sense of pride and identity among its people. Supporting cultural institutions, festivals, and arts can contribute to both economic growth and social cohesion.
Collaboration between government, private sector, and civil society is essential to drive these changes. Public-private partnerships can leverage the strengths of each sector, bringing together resources, expertise, and innovation to tackle the state’s challenges more effectively. To make Rivers State work, it is important to address corruption head-on. Corruption undermines developmental efforts and erodes public trust. Establishing strong anti-corruption institutions, ensuring transparency in government transactions, and promoting a culture of integrity are crucial steps in building a more just and equitable society.  Ofcourse. The role of technology cannot be overstated in modernizing Rivers State. Investing in digital infrastructure, promoting digital literacy, and encouraging the adoption of technology in government services, education, and business can spur innovation and improve efficiency across sectors.
Environmental education should also be part of the state’s strategy. Educating citizens about the importance of environmental conservation and sustainable practices can foster a culture of responsibility and stewardship, ensuring that future generations inherit a healthier planet. Housing and urban development need attention to accommodate the growing population. Ensuring affordable housing and developing urban areas with adequate amenities can improve living conditions and reduce slum proliferation. Healthcare services must be expanded to rural areas, where access is often limited. Mobile clinics, telemedicine, and community health programs can bridge the gap and ensure that even the most remote communities receive quality healthcare. Addressing the root causes of social unrest, such as inequality and marginalization, is essential for long-term peace and stability. Inclusive policies that promote social justice and equitable distribution of resources can help build a more harmonious society.
Finally, fostering a culture of innovation and research can propel Rivers State forward. Establishing research institutions and innovation hubs can drive advancements in various fields, from agriculture to technology, positioning the state as a leader in development and progress. In conclusion, making Rivers State work requires a multifaceted approach that addresses infrastructure, education, environment, economy, security, governance, public health, and social inclusion. By leveraging its resources and embracing sustainable development practices, Rivers State can achieve its full potential, ensuring a prosperous and equitable future for all its citizens. The time for action is now. Thus acknowledging that a distracted government can not be focused enough to actualise its goal and target.
Rivers State requires an atmosphere devoid of political acrimony and rancour  to be able to meet the yearnings and aspirations of the people.

Sylvia ThankGod-Amadi

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Opinion

Tinubu’s “Living Wage”: A Dashed Hope?

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It is  more than one year today, President Bola Ahmed Tinubu assured Nigerian workers that his administration will correct the anomalous hardship workers in Nigeria faced because he was irrevocably committed to doling out a “Living Wage” to them.
Nigerian workers under the two central Labour organisations: Nigeria Labour Congress (NLC), and Trade Union Congress (TUC) were captivated in an euphoria of Mr. President’s mouth watering promise. President Tinubu has whipped up the pleasant sentiment and sensation of workers to believing that at last a messiah in his person (the President Tinubu) has appeared and the era of the litanical, “ aluta, struggle continues” will be  consigned to history. Workers heaved a sigh of relief that a corrective and workers’ friendly regime that never was, is in the saddle at the centre. President Tinubu (then President -elect) had told workers in his goodwill message on the May 1 Labour Day, “In the Nigeria I shall have the honour and privilege to lead from May 29, workers will have more than a minimum wage. You will have a living wage to have a decent life, and provide for your families.
“On this special day as your President-elect, I extend my hand of friendship to Nigerian workers through the two central Labour unions- Nigeria Labour Congress and the Trade Union Congress. In me you will have a dependable ally and a co-labourer in the fight for social and economic justice for all Nigerians, including the working people. Your fight will be my fight because I will always fight for you. My plans for a better welfare and working conditions are clearly spelt in my Renewed Hope Agenda for a Better Nigeria. It is a covenant born of conviction and one I am prepared to keep”. In Nigeria today, can Mr. President say without iota of doubt that N54,000 is a “Living Wage”?
Today the  Mr. President’s covenant with workers is a mirage, it is translating to a delusion .
Workers under the President Tinubu seem to have suffered more hardship than in past administrations, civilian or military. Hope for a “Living Wage” seems dashed.
Considering the protracted dialogue on what is supposed to be a marked departure and turning point from previous  minimum wage regimes, Nigerians and workers can now decide if Mr. President really meant to give a Living wage to workers with the present Federal Government’s position on N54,000 against Trade Union Congress and Nigeria Labour Congress’ N500,000 as minimum wage.
When the nation’s House of Representatives proposed a N100,000 minimum wage many workers were dissatisfied with the proposal which they said was pre-emptive of the 37-members Minimum Wage Committee report. Workers had hoped the outcome of the negotiation would be more than N100,000 proposed by the House of Representatives. I believe workers can realize that the Representatives are empathetic and in touch with the plight of  Nigerian workers better than the Presidency.
It is crystal clear that  President Tinubu never meant what he said about a “Living Wage” for workers. While the Federal Government hinges its decision to pay workers on sustainability of new wage regime because of economic challenges the nation under the present leadership faces, one wonders how a nation grappling with multi-dimensional socio-economic challenges will be enmeshed in frivolous expenditures. For instance, the recent approval of N6 billion for a car park in Abuja, the N90 billion Hajj Subsidy, barefaced looting of public funds by some public officers, myriad of corrupt practices that are associated with some of those in Government and the extravagant expenditures by members of the National Assembly, some State Governors political office holders, clearly show that the Federal Government is not committed to a ‘Living Wage” to ameliorate the plight of workers.
Workers under the present administration of President Tinubu have suffered loss of purchasing power. In less than one year of President Tinubu-led administration, the prices of petroleum products have been increased several times. Today, premium motor spirit is about N900 a litre. And this unfriendly price regime rubs off negatively on every Nigerian, because at the centre of commercial and economic activities is petroleum products. For the first time in the history of Nigeria, prices of food items are outrageous, outside the reach of the common man: a  basin of garri sells for N18,000, rice, beans etc are food the rich only. House rent has gone up. A self contain that was between N60,000 and N80,000 is N250,000.
The adverse  social-economic realities informed the Labour’s insistence on N615,000, which they have reviewed downward to N500,000.
Breaking down the figure the National President of the Nigeria Labour Congress, Joe Ajaero said the N615,000 was a fair demand considering the socio-economic realities of the country.
Discussion on another minimum wage regime, therefore, should not be an exercise in futility, because since  the N30,000 Minimum Wage became a legal document in April 18, 2023 most State Governors and Local Government Area chairmen across the country, have refused to implement it. And the Federal Government could not enforce compliance.
It is also speculated that some governors who claimed to have implemented the National Minimum wage only paid the difference of what their predecessors were supposed to pay  workers consequent on the shortfall of financial benefit due workers.
With the veiled liberalisation policy of the National Minimum Wage which mandates the Labour unions in the State  to negotiate with their various State Governments on what is feasible for States to pay, based on their financial capacity, State governors now have the power to determine how much to pay their workers based on outcomes of negotiation with the workers under their umbrella bodies. That is why Labour-friendly Governments of Lagos, and Edo, among other States of the Federation have approved  N70,000 National Minimum Wage with effect from May, 2024, at a time some State Governors, such as Soludo of Anambra are foot-dragging to pay the old wage which expired April, 2024.
It is mind boggling that while elected officers and political office holders go home with mouth watering salaries at the end of every month and severance benefits, the civil servant wage is paltry, a peanut and they have to wait for years to access their gratuity and pension which cannot be compared to political officers salaries. Some never received after all. They died while waiting for their benefits.
While the Nigeria Labour Congress and its Trade Union Congress counterpart negotiate with the Federal Government’ on increase of Minimum Wage they should ensure that no stone is left unturned towards achieving a “Realistic” living wage.  A Living Wage, according to “investopedia” is “a theoretical income level that allows individuals or families to afford adequate shelter, food and other necessities.
Though the N500,000 minimum wage proposed by Labour is not realistic considering the economic realities in the country, the  least minimum wage the Federal  Government should consider is N100,000 proposed by the House of Representatives.
Most State Governors have refused to pay the expired N30,000 minimum wage on the unacceptable reason of unavailability of funds.
But if the looting instincts, leakages and frivolous spending of public funds were checked, an upwardly reviewed  wage could be paid with ease.
A situation where elected public officers build estates and leave  trans-generational assets for their children after eight or as the people’s mandate last, while the civil servant retires home after 35 years with virtually nothing, is repugnant to good conscience, equity and morality. In fact it is heartbreaking.
Both elected public officers and civil servants are exposed to the same socio economic realities.

Igbiki  Benibo

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Opinion

Rivers Desire Genuine Leadership 

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In the realm of political leadership, the true measure of a leader lies not in the ability to wield power but in the capacity to exercise restraint and demonstrate an unwavering commitment to the common good of the led. This requirement, which of course is  not  without a cost, is critical for fostering a stable and prosperous society. In politics, leaders do not die, but work tirelessly to remain relevant in the scheme of things; this is as they would cherish beyond everything else, an enduring political structure upon which the embers of their relevance is consistently fanned. However, this can only be achieved when they  choose  to exercise restraint and demonstrate an unwavering commitment to the common good of the led.  The transient nature of power is the reason the society is inundated with leaders, meaning that once any has controlled the baton of authority, the same becomes automatically enlisted among the roll of leaders whether he remains or ceases to be in control eventually.
The quest for relevance among political leaders has on many occasions, led to clash of interests betwee the formers and their successors with each trying to protect his own, sometimes at the detriment of the masses calling to mind the story of when elephants fight, the grasses suffer. This scenerio can only lead to a breakdown of  trust, respect and tolerance for one another which if sustained over a period unchecked, could nosedive into public discord and animosity, wooing sympathetic followers or public into taking sides. This deterioration, which is usually symptomatic of a broader issue within political leadership where personal grievances often eclipse the collective interests of the populace, can only be healed not with time, but also by sincere dialogue and  setting aside of personal grievances for the benefit of the state they all  pledged to serve.
Leadership, at its core, no doubt, involves engaging in sincere dialogue. Thus, leaders are  required  to transcend personal differences and focus on the common good. Unfortunately, the relationship between Governor Siminalayi Fubara and the FCT Minister, Nyesom  Wike, has been characterised by a public power struggle rather than constructive communication, a situation that has hindered their ability to collaboratively address the challenges facing Rivers State. A genuine commitment to the common good should supersede individual ambitions and personal vendettas. Could it be wrong to hyphothesise that the ongoing conflict between the two hitherto friends  is an indication of personal grievances  being prioritised over their pledge to serve the state?. This approach to leadership is counterproductive, as it shifts attention away from policy implementation and governance to personal disputes, no matter how the saner mind struggles to handle it.
Exercising restraint is a cornerstone of effective leadership. It involves acknowledging the importance of unity and prioritising the collective welfare of the people. Real leaders must not at any point demonstrate  a  lack of this essential quality. Public altercations and confrontations can only  deepen political divisions within the state, making it difficult to achieve meaningful progress. For Rivers State to thrive, its leaders must adopt a more collaborative approach. This necessitates Fubara and Wike putting aside their personal differences and working together for the state’s development. Engaging in sincere dialogue and showing a genuine commitment to the common good can pave the way for a more stable and prosperous future for Rivers State.
The unhealthy political relationship between Governor Fubara and his predecessor also highlights a broader issue within Nigerian political culture. Often, political offices are viewed as avenues for personal gain rather than platforms for public service. This mindset contributes to the kind of power struggles seen among political leaders of our time, where personal interests overshadow the responsibilities of leadership. Setting aside personal grievances for the sake of the state is not just an ideal but a necessity for effective governance. Leaders must prioritise the needs of their constituents over their own ambitions. In the context of Rivers State, this means Fubara and Wike must recognise the detrimental impact of their conflict and take concrete steps toward reconciliation and cooperation.
The public expects leaders to work harmoniously towards their  common good while a looming  discord between them  puts  this expectation at risk.  Citizens of Rivers State deserve and desire  leaders who can rise above personal animosities and focus on the larger goal of state development. This is the essence of true leadership – putting the people first. The political instability resulting from their feud has tangible consequences for the state’s governance. Development projects stall, administrative efficiency declines, and public trust erodes. These are serious repercussions that harm the very fabric of society and undermine the progress that Rivers State desperately needs.The resolution of this conflict requires humility and a willingness to engage in honest conversations.
Both leaders must acknowledge their roles in the dispute and commit to a path of mutual respect and collaboration. Only through such sincere dialogue can they hope to restore stability and foster an environment conducive to growth and development. Moreover, the political culture in Rivers State, and indeed Nigeria, must evolve to emphasise service over self-interest. This cultural shift is imperative for nurturing leaders who prioritise the common good and exhibit the restraint necessary for effective governance. Fubara and Wike have a unique opportunity to set a precedence in this regard. Their reconciliation could serve as a powerful example of how leaders can overcome personal differences for the greater good of society. It would signal a commitment to the values of democracy and the principles of good governance, thereby inspiring confidence among the citizens and setting a positive tone for future political engagements.
The media and civil society also have crucial roles to play in this process. By holding leaders accountable and advocating for dialogue and cooperation, they can help create an environment where political conflicts are resolved constructively. Public pressure can compel leaders to act in the best interests of the state. In conclusion, the unhealthy relationship between Governor Fubara and his predecessor, Wike, serves as a stark reminder of the importance of true leadership. Leadership that is not about wielding power but about exercising restraint, engaging in sincere dialogue, and demonstrating a commitment to the common good. For Rivers State to achieve its full potential, its leaders must embody these principles and work together towards a shared vision of progress and prosperity. Only then can the state overcome its current challenges and build a brighter future for all its citizens.

Sylvia ThankGod-Amadi

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