Opinion
Cautious Optimism As Naira Rebounds
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 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, JPMorgan 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 remain 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 refining 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 litres of diesel crashed the price of the product from N1,700 to N1,350, with another batch of 100 million litres expected to crash prices further, while the company plans to supply petrol by next month, 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 tomatoe 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 financial 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 can not be any other thing, but a gamble.
By: Joseph Nwankwo
Opinion
FG’s Transport Support And Rivers Workers
The Federal Government’s approval of a N70,000 monthly transport intervention for public service workers for six months, beginning in November 2026, offers hope to employees struggling with the rising cost of living. The agreement with the Nigeria Labour Congress (NLC), reached at a conciliation meeting in Abuja on October 27, is intended to cushion transport costs and ease pressure on workers’ incomes. But for public servants in Rivers State, it raises a familiar question: will the State Government key into the intervention and ensure that its workers benefit? The agreement provides for N70,000 monthly across all levels, for six months. The Federal Government also approved peculiar allowance arrears effective from May 1, 2026, to be paid in three equal instalments beginning in November.
The parties agreed to reconvene after one month to assess implementation. Ultimately, the value of these resolutions will be measured not by announcements but by whether eligible workers receive the money. Transport costs consume a substantial share of many civil servants’ earnings before they can meet household needs. Support for commuting is therefore not a luxury or political favour; it is temporary assistance to help workers remain at their jobs without sinking further into hardship. For lower-paid employees, transport costs can turn modest salaries into a daily exercise in difficult choices and sacrifice.
The agreement also urges State and Local Governments to participate and unions to press for implementation. The federal agreement does not automatically guarantee that every State and Local Government employee will receive the support. State authorities must clarify how it will apply to their workforce, make the necessary arrangements and publish a payment timetable. Rivers State must approach the arrangement with urgency and transparency. The Government should State whether it will implement the intervention and when payments will begin. Any administrative or financial question should be addressed promptly with organised labour, not allowed to become excuses for delay.
The concern is sharpened by the earlier N35,000 monthly wage award introduced by the Federal Government in 2023 after petrol subsidy removal. It was intended as temporary relief pending a new national minimum wage. While several States negotiated and paid wage awards or related sums, implementation nationwide was uneven. Reports in 2024 indicated that many States had failed to pay the federal award, while others provided different amounts. In Rivers, labour and media reports raised concerns about implementation of the N35,000 award for State workers, amid separate announcements and arrangements concerning Local Government employees.
The wage award was meant to ease the immediate effects of subsidy removal, yet workers faced uncertainty over whether the promised relief would reach them. In February 2024, the Rivers State Government announced approval of the N35,000 award for local government workers, but subsequent reports showed that implementation across worker categories remained a concern. The lesson is clear: approval and implementation are not the same. A declaration at a meeting offers little comfort to a worker whose account does not reflect the promised payment. For workers who travel to their offices daily, the implications of delayed support are significant. Transportation expenses compete with food, rent, school fees, healthcare and other essential household needs.
As fares rise, employees may be forced to reduce spending on necessities or borrow to sustain their families. A timely transport intervention would therefore provide practical relief and demonstrate that government understands the economic pressures confronting its workforce. Its temporary nature makes prompt implementation even more important. It is fair to acknowledge that this transport intervention is a new agreement and that its administrative details may require clarification. Rivers State should not be condemned in advance for a failure that has not occurred. Nevertheless, the earlier experience gives workers legitimate grounds to seek assurances before the November commencement date. The State should avoid allowing uncertainty to persist until workers begin asking why the promised assistance has not arrived.
The NLC and unions in Rivers State should engage the State Government immediately and seek a written commitment, an implementation plan and a process for reporting missed payments. If clarification from the Federal Government is needed, the State should seek it without abandoning the goal of providing relief. Labour leaders must also keep members informed about progress and insist that any agreed arrangements are applied fairly and transparently. The Rivers State Government should treat this intervention as an opportunity to rebuild confidence. Timely support would show that workers’ welfare is more than a talking point and that the State recognises the economic realities confronting its employees.
Silence, delay or selective implementation, by contrast, would revive frustration over earlier relief measures and weaken trust between government and labour. Every month lost to administrative delay leaves workers facing the same transport burden without the intended assistance. The State should consult labour, publish arrangements and pay eligible workers on time. Rivers workers should not have to wonder whether federal relief will reach them. The Federal Government has announced the support; now the State must make its position clear. We hope the N70,000 monthly transport intervention will not follow the troubling path of the earlier wage award. Rivers State should learn from that experience and ensure that this time, relief is not merely promised but delivered.
Sylvia ThankGod-Amadi
Opinion
Ancestorial Worship: My Take (1)
Everyday, Christians call on Abraham, Isaac and Jacob as they pray to God in the privacy of their homes across our multicultural, multiracial and multiethnic world. On Sundays and almost everyday of the week in the new-found full freaking fanaticism in Pentecostalism, they gather in the more than four million churches or congregations in the world to worship God, invoking the spirits of the ancestors of Jews. Meanwhile, in the scaremongering antics of institutional religion, the African has allowed himself to be hoodwinked into believing that invoking the spirit of his ancestors in prayers is idolatry and patently evil. He is mind-controlled into believing that indulgence in what the Christian clergy calls ”Satanic Act” is a sure ticket to Hell, where the individual is tormented, burnt and charred till eternity on the orders of a loving Father; what a laughable irony.
Come with me on my experience of what the Christian clergy contemptuously calls ancestorial worship. One Monday in September 1988, I drove from Port Harcourt to Owerri, accompanied by Chief AM Abasi who was the general manager of Delta Holdings Ltd, a company owned by Chief Ranami Abah, (Abadifeni III). Our mission was a meeting with Mr. Nwaorgu, the marketing manager of 33 Breweries Ltd for a dealership for Mrs. Alice Abah, whose husband, Chief Ranami Abah, had substantial equity shareholding in 33 Breweries Ltd. At the end of the meeting, we agreed to return on Wednesday with Mrs Alice to sign a contract for the dealership. When Chief Abasi and I stepped out to the parking lot, it hit me that I could not recollect how I drove from Port Harcourt through Igwuruta, Isiokpo and Elele to Owerri.
First, I waved the feeling off, ascribing it to the aerodynamic and slippery nature of the super slick German machine, a Mercedes-Benz 280 SLC convertible owned by Chief Ranami Abah. But on a second thought, I sensed a premonition; an ominous feeling. Then a sense of foreboding hit me, leaving me with the chilly feeling that something wrong was in the air. For a person who does not know fear as a result of having had out-of-body experience (OBE) in 1975 and considering the threshold of death the most beautiful experience in my life, it was a very worrisome feeling, to say the least. I quickly shook those thoughts out of my head, engaged the gear of the ever-ready German machine and zapped through Owerri traffic, attracting the same attention that trailed us all the way from Port Harcourt.
At Control Post, an inner voice instructed me not to return to Port Harcourt through the route we came. In reflexive obedience to the mysterious inaudible voice, I turned right (northwards) and stepped heavily on the gas. The straight six-cylinder engine roared in dutiful obedience; the automatic transmission immediately dropped into a lower gear, thereby giving the engine a very powerful pull that enabled the small-bodied car to dust every other vehicle on the road. Through the rear view mirror, I saw the vehicles we overtook recede speedily and virtually disappear behind us. In almost a whisper, Chief Abasi asked if I wanted to visit the 33 Brewery factory at Awo Omamma; I said ”no” without explaining the movement in the opposite direction of our journey.
Strangely, Chief Abasi did not pry further. We raced on, northwards; in thunderous silence. At Ogbaku junction, I turned left, drove westwards past Ejemekwuru and Izombe, turned left at Oguta and headed southwards on the Oguta Lake–Egbema–Omoku–Ahoada Federal Road. Carefully navigating the potholes that generously punctuated the road vis-a-vis the very low clearing of the car, I entered Egbema territory at Opuoma, drove through Mmahu, Abacheke, Okwuzi and turned eastwards to Mgbede, my home town. There, I quickly introduced Chief Abasi to my parents, left him with them and briskly walked a few metre to the grave of Osai, my grandfather. At the graveside, I solemnly told Osai that I sense something wrong in the air.
Then, in furious rage, I threatened him and my uncle, Lazarus, who lay beside him, that if they remained sleepy-eyed in that dimension and I am forced out of this world, that I will scatter their ribcage with penknife. My cousin and age mate, Luke Ofere, came out of his house and asked what was wrong and why I was in tears. With hot tears running down my cheeks, I turned around and left the graveside without a word to him; shock, surprise and confusion were boldly written on his face. On my way back to my father’s house, Nze Romanus Ogboh caught up with my brisk strides and, viciously pulling his right ear, he warned me to be careful on the road; that he dreamt that I died in a motor accident but that he administered a potion on me and I came back alive.
He was completely confused when I replied ”I know” and continued walking in tears towards my father’s house without a further word. Still in the holy rage, I called out Chief Abasi to join me in the car. Back to Port Harcourt through Omoku, Ahoada, Elele Alimini and Emohua, I told my spouse that something wrong is certainly around the corner. As we planned, Chief Abasi travelled to Calabar on Tuesday to inform Auntie Alice of the development and request her to come to Port Harcourt on Wednesday for onward journey to Owerri to effect the dealership contract. On Wednesday, I waited for them but they did not show up. I called Chief Abah and complained about the development. Thursday morning, they pulled up in front of my apartment in a blue Peugeot 504.
To be continued in our next edition.
Jason Osai
Osai lectures in Rivers State University.
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