Editorial

Saving The Naira

Published

4 years ago

July 5, 2021

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.

Editorial

No To Political Office Holders’ Salary Hike

Published

1 day ago

September 22, 2025

Uchechukwu Okwum

Nigeria’s Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has unveiled a gratuitous proposal to increase the salaries of political and public office holders in the country. This plan seeks to fatten the pay packets of the president, vice-president, governors, deputy governors, and members of the National and State Assemblies. At a time when the nation is struggling to steady its economy, the suggestion that political leaders should be rewarded with more money is not only misplaced but insulting to the sensibilities of the ordinary Nigerian.

What makes the proposal even more opprobrious is the dire economic condition under which citizens currently live. The cost of living crisis has worsened, inflation has eroded the purchasing power of workers, and the naira continues to tumble against foreign currencies. The majority of Nigerians are living hand to mouth, with many unable to afford basic foodstuffs, medical care, and education. Against this backdrop, political office holders, who already enjoy obscene allowances, perks, and privileges, should not even contemplate a salary increase.

It is, therefore, not surprising that the Socio-Economic Rights and Accountability Project (SERAP) has stepped in to challenge this development. SERAP has filed a lawsuit against the RMAFC to halt the implementation of this salary increment. This resolute move represents a voice of reason and accountability at a time when public anger against political insensitivity is palpable. The group is rightly insisting that the law must serve as a bulwark against impunity.

According to a statement issued by SERAP’s Deputy Director, Kolawole Oluwadare, the commission has been dragged before the Federal High Court in Abuja. Although a hearing date remains unconfirmed, the momentous step of seeking judicial redress reflects a determination to hold those in power accountable. SERAP has once again positioned itself as a guardian of public interest by challenging an elite-centric policy.

The case, registered as suit number FHC/ABJ/CS/1834/2025, specifically asks the court to determine “whether RMAFC’s proposed salary hike for the president, vice-president, governors and their deputies, and lawmakers in Nigeria is not unlawful, unconstitutional and inconsistent with the rule of law.” This formidable question goes to the very heart of democratic governance: can those entrusted with public resources decide their own pay rises without violating the constitution and moral order?

In its pleadings, SERAP argues that the proposed hike runs foul of both the 1999 Nigerian Constitution and the RMAFC Act. By seeking a judicial declaration that such a move is unlawful, unconstitutional, and inconsistent with the rule of law, the group has placed a spotlight on the tension between self-serving leadership and constitutionalism. To trivialise such an issue would be harum-scarum, for the constitution remains the supreme authority guiding governance.

We wholeheartedly commend SERAP for standing firm, while we roundly condemn RMAFC’s selfish proposal. Political office should never be an avenue for financial aggrandisement. Since our leaders often pontificate sacrifice to citizens, urging them to tighten their belts in the face of economic turbulence, the same leaders must embody sacrifice themselves. Anything short of this amounts to double standards and betrayal of trust.

The Nigerian economy is not buoyant enough to shoulder the additional cost of a salary increase for political leaders. Already, lawmakers and executives enjoy allowances that are grossly disproportionate to the national average income. These earnings are sufficient not only for their needs but also their unchecked greed. To even consider further increments under present circumstances is egregious, a slap in the face of ordinary workers whose minimum wage remains grossly insufficient.

Resources earmarked for such frivolities should instead be channelled towards alleviating the suffering of citizens and improving the nation’s productive capacity. According to United Nations statistics, about 62.9 per cent of Nigerians were living in multidimensional poverty in 2021, compared to 53.7 per cent in 2017. Similarly, nearly 30.9 per cent of the population lives below the international poverty line of US$2.15 per day. These figures paint a stark picture: Nigeria is a poor country by all measurable standards, and any extra naira diverted to elite pockets deepens this misery.

Besides, the timing of this proposal could not be more inappropriate. At a period when unemployment is soaring, inflation is crippling households, and insecurity continues to devastate communities, the RMAFC has chosen to pursue elite enrichment. It is widely known that Nigeria’s economy is in a parlous state, and public resources should be conserved and wisely invested. Political leaders must show prudence, not profligacy.

Another critical dimension is the national debt profile. According to the Debt Management Office, Nigeria’s total public debt as of March 2025 stood at a staggering N149.39 trillion. External debt obligations also remain heavy, with about US$43 billion outstanding by September 2024. In such a climate of debt-servicing and borrowing to fund budgets, it is irresponsible for political leaders to even table the idea of inflating their salaries further. Debt repayment, not self-reward, should occupy their minds.

This ignoble proposal is insensitive, unnecessary, and profoundly reckless. It should be discarded without further delay. Public office is a trust, not an entitlement to wealth accumulation. Nigerians deserve leaders who will share in their suffering, lead by example, and prioritise the common good over self-indulgence. Anything less represents betrayal of the social contract and undermines the fragile democracy we are striving to build.

Editorial

No To Political Office Holders’ Salary Hike

Published

1 day ago

September 22, 2025

The Tide

Editorial

Rivers’ Retirees: Matters Arising

Published

2 weeks ago

September 8, 2025

The Tide

The Rivers State Government deserves commendation for the manner in which it conducted the last biometric exercise for pensioners in the state. For the first time in many years, the verification process was not only efficient but also humane, a development that has brought relief to a category of citizens that often bears the brunt of neglect.

Unlike previous verification exercises that left pensioners exhausted and unattended, the latest exercise set a refreshing precedent. Retirees were given proper and sumptuous meals, and in addition, the government paid the sum of N10,000 into their accounts to cushion their transportation costs. Such gestures go a long way in demonstrating that those who had laboured for the state are not forgotten in their twilight years.

The measure was particularly necessary given that some pensioners had to travel long distances to reach their verification centres. For elderly men and women, such journeys come with physical and financial strain. By recognising these realities and easing the burden, the government has shown that pensioners deserve dignity, not disdain.

Beyond this laudable act of consideration, the authorities must reflect on the very structure of pension verification. The era of compelling retirees to be physically present for routine verification should be reconsidered. With digital tools and innovation, the government can adopt systems that capture and confirm data without the stress of physical assembly. This is crucial for pensioners residing in other states or even abroad.

While we acknowledge the importance of verification in cleaning up pension records, we cannot ignore the darker side of the matter. It is regrettable that some allowances continue to be paid to deceased pensioners, with relatives fraudulently collecting the funds. The latest biometrics, thankfully, exposed some of these sharp practices. The exercise, therefore, is not only about order but also about justice.

We urge families of deceased pensioners to be patriotic enough to inform the government of the deaths of their loved ones. It is deeply shameful that in some instances, individuals attempted to impersonate late pensioners during the biometrics. Such behaviour undermines the spirit of honesty and deprives genuine retirees of their due entitlements.

The exercise also revealed another important area of concern: the health of pensioners. It is reassuring to learn that the state government has reportedly promised to take over the medical treatment of some retirees who arrived for the biometrics in critical condition. This is a step in the right direction. Elderly citizens, after years of service, should have access to special health care facilities in the state. Setting aside hospitals or designated centres for the aged is not just desirable but necessary.

While pension payments in Rivers State have remained consistent, attention must now be directed towards gratuities. Senior citizens deserve to receive their retirement benefits without the bureaucratic hitches that have often marred the process. After years of loyal service, nothing is more demoralising than to see retirees languish for want of their gratuities. Every worker, as Scripture reminds us, is worthy of his wage.

Retirement, in any civilised society, should not be reduced to a sentence of suffering. In dealing with pensioners, government must consistently wear a human face. The humane manner displayed during this verification exercise should not be a one-off. It must become the norm in all dealings with retirees. Measures must continually be put in place to ensure that they do not feel abandoned by the state they served.

One welcome innovation has already been introduced. The Sole Administrator of Rivers State, Vice Admiral (Rtd) Ibok-Ete Ekwe Ibas, has altered the method of gratuity payment. Pensioners now receive their monies directly into their bank accounts, eliminating the cheque-based system that for years served as fertile ground for corruption. This reform is both pragmatic and forward-looking. Similarly, the implementation of the N32,000 pension harmonisation is also commendable.

Direct payments gratuities ensure transparency and drastically reduce the possibility of diversion of funds. More importantly, they restore confidence in the system and assure pensioners that their entitlements will reach them without interference. In this way, the government has not only safeguarded the process but also upheld the principle of accountability.

Seamless gratuity payment has a ripple effect on the workforce as a whole. When workers are confident that retirement will not plunge them into hardship, the temptation to falsify age in order to remain in service is eliminated. Such reforms, therefore, enhance efficiency, honesty, and productivity in the public service.

In sum, the Rivers State Government has struck a refreshing chord in its handling of pension verification. It has shown empathy, innovation, and accountability. However, the momentum must be sustained, and the focus must shift towards modernising verification methods and prioritising retirees’ welfare in health, gratuity, and dignity.

When retirees are treated with compassion and fairness, the message to those still in service is clear: faithful service to the state will not go unrewarded. The humane verification exercise, though a single event, offers a hopeful glimpse of what governance can look like when people, especially the elderly, are placed at the heart of policy.