The Nation Newspaper

Category: Letters

  • A modest proposal to stem unemployment and poverty

    A modest proposal to stem unemployment and poverty

    Sir: The country has so many needs that cannot yet be met and these provide opportunity for business development, especially in the area of housing, agriculture and transportation. The current estimate of the housing deficit of Nigeria, a country with over 220 million people, is 22 million housing units. This is without consideration for those living in substandard houses with water and paved or tarred roads.

    Food prices are soaring every day!  According to the National Bureau of Statistics (NBS), prices of beans, tomatoes, Irish potatoes, garri, yam and other food items witnessed significant price increases in June. The report found that the average price of 1kg of brown beans increased by 252.13 percent from N651.12 recorded in June 2023 to N2,292.76 in June 2024. “On a month-on-month basis, 1kg of brown beans increased by 14.11 percent in June from the N2,009.23 recorded in May 2024.” It also said that the average price of 1kg of tomatoes increased by 320.67 percent on a year-on-year basis from N547.28 recorded in June 2023 to N2,302.26 in June 2024. “On a month-on-month basis, 1kg of tomatoes increased by 55.97 percent from the N1,479.69 recorded in May 2024.”

    Adams Smith (1723 – 1790), a Scottish Economist, stated that there are three basic needs of man which are: food, shelter and clothing. He stated that “they who feed, clothe, and lodge the whole public (the working class) should have to be fed, housed and lodged well”. The three essentials of food, houses, and clothes are good issues to develop business opportunities around as their impacts will be conspicuously felt than any other. A hungry man, a homeless man and clothing-less man is not a man. Food and Agriculture Organisation (FAO) supports governments and partners to design the right policies and programmes to end hunger, promote food security and promote sustainable agriculture for millions of people around the world. Government can create business opportunities around agriculture by encouraging citizens to go into agribusiness!

    What late Chief Obafemi Awolowo did to position the Southwest as ‘numero uno’ and ‘primus inter pares’ in Nigeria was to establish farm settlements in the rural areas where cash crops where the focus for export. While citizens where building with mud, Awolowo built the houses in his farm settlements with blocks which were stronger and more attractive than building with mud. People were ready to take up houses in the settlement and contribute to the development of the region. The Southwest, thereby, became infrastructural hub of Nigeria with many firsts with proceeds from agriculture produce. Awolowo demonstrated that a strategy for sustainable development can be created around agriculture in Nigeria. It led to competition between the west, north which grew groundnut, cotton and beans’ and east/south-south which grew palm kernel, yam and vegetables.

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    It is hereby proposed that governments establish farm estates with two bedroom flats and minimum of four acres of land (about 16,180 square metres) each as farmsteads. The farmsteads will be located besides each other while the houses will be located near each other with infrastructure like tarred road, internet facilities, pipe borne water from central water system, clinic, schools for children and playing ground. 

    Governments will be using one stone to kill two birds if they can invest in farm estates to be established in all the states of the federation. The unemployed youths will be engaged and housing units will increase in the farm settlements. National assets will also increase as the farm estate will remain a public asset on lease.

    Lagos, Rivers, Bayelsa, Ondo, Ogun, Akwa Ibom, Kogi and Cross River States will have some fish farm estate. Those farm estates that specialise in cotton farming, mostly in the north, and central part of the country, will supply our textile industries with raw materials. This will rejuvenate our moribund textile industry and reposition Nigeria in textile manufacture. With the fact that Nigerians are generally underfed and fish import totalling $65 billion, this project alone has the potential of earning a trillion naira at the end of first year of execution.

    •ESV. Olufemi A. Oyedele,Lagos.

  • Mahama: The maturing of Ghana’s democracy

    Mahama: The maturing of Ghana’s democracy

    Sir: Ghana’s recent presidential election has sent a powerful message to the rest of Africa and the world that democracy can thrive even in the most challenging of circumstances. The victory of President-elect John Dramani Mahama, and the gracious concession by Vice President Mahamudu Bawumia, has showcased the maturity and resilience of Ghana’s democratic institutions.

    Mahama’s win, which was widely acknowledged as free and fair, marks a significant moment in Ghana’s democratic journey. The election was held amidst the country’s worst cost-of-living crisis in a generation, and many had feared that the economic challenges would undermine the electoral process.

    However, the Ghanaian people proved their doubters wrong, turning out in large numbers to exercise their democratic right. The election was marked by a high level of civility and respect, with candidates and their supporters conducting themselves with dignity and restraint.

    Vice President Bawumia’s concession speech was particularly noteworthy, as he acknowledged Mahama’s “emphatic victory” and pledged to support the new government. Bawumia’s words were a testament to the strength of Ghana’s democratic institutions, and the commitment of its leaders to upholding the principles of democracy.

    Mahama’s victory is also a testament to his own leadership qualities and his commitment to the welfare of the Ghanaian people. As a former president, Mahama has a deep understanding of the challenges facing the country, and has pledged to “reset” the economy and restore prosperity to the nation.

    As Mahama prepares to take office, many are optimistic about his ability to address the country’s economic challenges. With his experience and commitment to the welfare of the Ghanaian people, Mahama is well-placed to guide Ghana towards a more prosperous future.

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    Ghana’s democratic success story is a powerful inspiration to the rest of Africa, and a reminder that democracy can thrive even in the most challenging of circumstances. As the continent continues to grapple with the challenges of democratization, Ghana stands as a beacon of hope and a testament to the power of democratic resilience.

    In a region that has experienced extremist violence and coups, Ghana’s democratic success story is a powerful reminder that democracy can be a powerful tool for promoting peace, stability, and prosperity. As Mahama, the “Are Atolase of Offa Kingdom” takes office, he will face many challenges, but with the support of the Ghanaian people and the strength of the country’s democratic institutions, he is well-placed to succeed.

    •Shola Adebowale,Lagos.

  • Time to regulate traditional medicine

    Time to regulate traditional medicine

    Sir: The consumption of traditional medicine has become a widespread in Nigeria, with many people resorting to it as an alternative to orthodox medicine. However, the unregulated nature of the traditional medicine industry has raised serious concerns about the safety and efficacy of these medicines. It is high time the government take decisive action to regulate the consumption of traditional medicine in Nigeria.

    The traditional medicine industry is a multi-billion naira market, with thousands of practitioners and sellers operating across the country. However, the majority of these practitioners and sellers are operating unlawfully, without obtaining the necessary licenses and permits from the government. This lack of regulation has created an environment in which quacks and charlatans can thrive, putting the lives of millions of Nigerians at risk.

    One of the major concerns about the traditional medicine industry in Nigeria is the lack of standardization and quality control. Many traditional medicine practitioners and sellers use untested and unproven remedies, which can have serious side effects or sometimes result in fatalities. Furthermore, many of these remedies are being prepared in unsanitary conditions, which can lead to contamination and infection.

    The government has a critical role to play in regulating the traditional medicine sector. The National Agency for Food and Drug Administration and Control (NAFDAC) is the primary agency responsible for regulating the industry, but it has been struggling to keep up with the sheer number of practitioners and sellers operating in the country. The government needs to provide NAFDAC with more resources and support to enable it to effectively regulate the industry.

    Another major concern about the traditional medicine industry is the lack of transparency and accountability. Many traditional medicine practitioners and sellers make exaggerated claims about the efficacy of their remedies, and some even use fake or forged certificates to convince their customers. The government needs to take action to protect consumers from these unscrupulous practitioners and sellers.

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    The regulation of the traditional medicine industry is not just about protecting consumers; it is also about promoting public health. Many traditional medicine remedies are being used to treat serious diseases such as malaria, tuberculosis, and HIV/AIDS, but these remedies are often ineffective or even counterproductive. The government needs to take action to ensure that traditional medicine practitioners and sellers actually provide safe and effective remedies.

    To effectively regulate the traditional medicine industry, the government needs to establish clear guidelines and standards for the production, sale, and use of their remedies. The government also needs to establish a system for monitoring and enforcing compliance with these guidelines and standards.

    Furthermore, the government needs to provide support and resources for traditional medicine practitioners and sellers who are willing to operate within the law. This could include training programs, loans, and other forms of assistance. By providing support and resources, the government can encourage traditional medicine practitioners and sellers to operate safely and effectively.

    In addition to this, the government also needs to educate the public about the risks and benefits of traditional medicine. Many Nigerians are unaware of the potential risks associated with traditional medicine remedies, and they need to be educated about how to use these remedies safely and effectively.

    The government also needs to work with traditional medicine practitioners and sellers to develop new and innovative remedies that are safe and effective. This could include supporting research and development programs, as well as providing funding and resources for the commercialization of new remedies.

    The regulation of the industry is a critical issue that requires immediate attention. The government needs to take decisive action to regulate the industry, protect consumers, and promote public health. By working together with traditional medicine practitioners and sellers, the government can develop a safe and effective traditional medicine industry that benefits all Nigerians.

    •Aisha Abatcha Umar,Borno State University, Maiduguri.

  • Ghana’s general election: The lessons

    Ghana’s general election: The lessons

    Sir: At Independence in 1957, Ghana’s founding father Osagyefo Kwame Nkrumah asserted that “the independence of Ghana would be meaningless unless it was tied to the total liberation of Africa”. The foremost Pan-Africanist went on to lead Ghana in playing a central role in the decolonisation process and liberation struggles across Africa.

    Nkrumah in his usual impeccable use of words with such calm precision became the motivation for Africa’s long move from the decolonisation era, and this generation of Ghanaians have carried on this enviable bequest – this time becoming a leading light in addressing Africa’s challenge of peaceful democratic transitions, by demonstrating this is possible, over and over again.

    Today, the country has earned its pride of place in the global world order, and is celebrated as one of the models in the Global South, for economic stability, democratisation, and peaceful transitions.

    Undoubtedly, the West African country keeps strengthening her institutions and enacting enabling legislations that would ensure this legacy of peaceful transitions endure.

    For the records, John Dramani Mahama (JDM) is set to return as Ghana’s president after his main rival accepted defeat, even when the electoral authorities were yet to announce the official results.

    The enviable records and lessons for the other troubled nations of the continent of Africa particularly Nigeria, is its seamlessness unlike others. The General Elections were held in Ghana on December 7 to elect the president and members of parliament. The next day December 8, Vice President Mahamudu Bawumia, the ruling party’s presidential candidate, conceded defeat in the elections and congratulated former President John Mahama.

    “Let me say that the data from our own internal collation of the election results indicate that former President John Dramani Mahama has won the presidential election decisively,” Bawumia said

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    Furthermore, a few days before the election, the incumbent President Nana Addo Dankwa Akufo-Addo, had stated: “I came to office as a result of a peaceful and credible election, and I want to go out through the same process,” Akufo-Addo told the ECOWAS Election Observation Mission, led by former Vice President Mohammed Namadi Sambo, during a meeting at Jubilee House in Accra on December 3.

    Far too often, people learn from their experiences that one of the reasons why our well-deserved systemic change has continued to elude us is because of weak institutions, bad precedence, sentiments and not principles that guide our judgements and decisions.

    Finally, I’d like to share with readers a poignant, provocatively and profoundly incontrovertible statement by Nana Dankwa Akufo-Addo, President of Ghana.

    Said he: it is incomprehensible that Africa — a continent of 1.4 billion people — has no permanent voice in shaping decisions that affect global peace and security. “Yes, we are a continent rich in potentials and resilient in the face of adversity, but we have also been disadvantaged by a global system that has generally treated us as an afterthought,” adding that “the people of Africa are not asking for handouts. Rather, they are demanding opportunities in a new global architecture.”

    I join millions of our compatriots across the globe in celebration of the events in Ghana, particularly the victory in polls of Dr. Zanetor Agyeman-Rawlings who is the eldest daughter of former President Jerry John Rawlings, as a Member of Parliament for the Klottey-Korle Constituency.

    •Richard Odusanya,odusanyagold@gmail.com

  • A balanced approach to Nigeria’s tax reform

    A balanced approach to Nigeria’s tax reform

    • By Adeolu Oyebode

    Sir: No doubt, the proposed Tax Reform Bills represent a significant opportunity to modernise Nigeria’s fiscal framework, enhance revenue generation, and promote equitable economic growth. However, implementing these reforms has raised valid concerns that must be addressed to ensure they achieve their intended goals without disproportionately impacting vulnerable populations or stifling economic activity. The government must adopt a balanced approach that prioritises stakeholder engagement, phased implementation, and transparency to foster public trust and cooperation.

    A major concern is the potential impact of the reforms on state governments and their revenue autonomy. With Nigeria’s federal structure, states must retain control over their fiscal strategies while aligning with a harmonised national tax framework. A fair revenue-sharing formula must be established to ensure that states receive equitable returns from taxes collected within their jurisdictions. This will mitigate fears of over-centralization and reinforce federal-state collaboration.

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    Equally important is addressing the cost-of-living implications for Nigerians. The proposed VAT increase and new excise duties on telecommunications services could lead to higher prices for goods and services, disproportionately affecting low-income households. To cushion these effects, the government must introduce targeted subsidies, and tax exemptions for essential goods, and expand social welfare programs to protect the most vulnerable segments of the population.

    For businesses, especially small and medium enterprises (SMEs), the reforms could increase operational costs, potentially hindering growth and innovation. I urge the government to introduce phased implementation timelines for tax increases, coupled with incentives such as tax credits and grants for SMEs. These measures will help maintain a conducive environment for entrepreneurship and job creation, ensuring that businesses remain competitive in the evolving fiscal landscape.

    Public trust is essential for the success of these reforms. Nigerians need assurance that increased tax revenues will be used effectively to improve infrastructure, healthcare, education, and other critical sectors. To this end, I call for greater transparency and accountability in the management of public funds. The government should publish annual reports detailing tax revenue allocation and expenditure while strengthening independent audit mechanisms to monitor the efficient use of resources.

    Lastly, public awareness campaigns are crucial to dispel misconceptions and build support for the reforms. Citizens and businesses must understand the benefits of these changes and how they contribute to national development. The government has not done enough in policy communication. Clear communication will foster a sense of shared responsibility and collective effort toward achieving sustainable economic growth.

    The concerns of all stakeholders must be addressed for these reforms to fly.

    •Adeolu Oyebode,

    <adeoluoyebode@gmail.com>.

  • EFCC and the 753 duplexes

    EFCC and the 753 duplexes

    • By Kene Obiezu

    Sir: Another day in Nigeria, another jarring discovery in what is a herculean (maybe sisyphean) bid to clean up the Augean stables.

    The Economic and Financial Crimes Commission (EFCC) recently fended off a laughably misguided attempt by no less than 16 states to inter it at the Supreme Court. The commission which sometimes provides the rod for its back found conclusive solace in the judgment of the Supreme Court which preserved the founding legislations of the commission and ensured that the attorney-generals of about 16 states returned from their wild goose chase empty-handed.

    It may be too hopeful to think that the loss would chasten the attorney-generals enough to make them concentrate on the weighty business of pursuing justice in their states. Given the antecedent of politicians in Nigeria, it is only a matter of time before they go fishing for another bone to pick with whoever or whatever catches their fancy, frittering away scarce public resources in the process, and exposing their states to opprobrium.

    Weeks after the Justice Uwani Abba-Aji rebuked the states led by Kogi State, and with all his hiding places finally overturned, former Kogi State governor, Yahaya Bello, accused of diverting about N110 billion while he was governor, submitted himself for trial.

    Fresh from an audacious attempt to cripple it, the EFCC has continued with gusto it ardous  and audacious work of fighting corruption in a country that has somehow morphed into a metaphor for corruption.

    Just when Nigerians thought they had seen enough to confirm the colossal capacity some Nigerians have to be corrupted and to corrupt, the EFCC uncovered and recovered an estate it has described as its single biggest recovery since 2003.

    The estate, a sprawling collection of 753 duplexes in the Lokogoma area of Abuja, was being built by a former public officer whom the commission has refused to name.

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    Citing legalese, the commission has withheld the name of the public officer involved from Nigerians. The question is why shield thieves. In the midst of their man-made penury and poverty, Nigerians deserve to know those responsible for the crumbling primary school classrooms where venomous reptiles are threatening to bite their children to death. Nigerians deserve to know the names of those responsible for the bed-less hospitals where their pregnant wives die with their unborn children clinging to the sanctuary of the womb; Nigerians deserve to know those whose dereliction has dug the potholes that have become death traps on their roads. Nigerians deserve to know those whose unbridled stealing of public funds is sacrificing young soldiers and entire communities to terrorists in the Northeast and Northwest. Nigerians deserve to know those whose presence on their ship is provoking the storms now threatening to tear that ship apart. Nigerians surely deserve to know. Just like the government has hidden from Nigerians the list of those sponsoring terrorism in the country, to withhold such information from Nigeria is arrogance and criminal complicity in ignorance that is not bliss but bondage.

    On May 29, 1999, months after brutal dictator Sani Abacha sank like a stone into the dam of death, Nigeria triumphantly tiptoed its way back to democracy. It was hardly believable that it had been achieved given the amount of blood that had gone into the struggle for democracy.

    Twenty-five years later, Nigeria’s hard-won democracy is facing the sternest of tests from entrenched kleptocracy.

    For many Nigerians, any and every opportunity to serve their fellow Nigerians in government is quickly and mindlessly mined for insane personal enrichment and aggrandizement.

    This vice of unbridled plunder of public funds has become irresistible to many, leaving the country desperately short of selfless people to manage its affairs.

    It is from this pool of mindlessly corrupt Nigerians that the country continues to draw its leaders. Never has a single problem spelled such disaster for a country.

    •Kene Obiezu,

    keneobiezu@gmail.com

  • Building a stronger Nigeria through health, transparency, and human rights

    Building a stronger Nigeria through health, transparency, and human rights

    • By Ambassador Richard

    Sir: Every December, we mark three international observances that are at the heart of the U.S.-Nigeria partnership: World AIDS Day, International Anti-Corruption Day, and Human Rights Day.  While distinct, these commemorations underscore a simple truth – Nigeria’s path forward requires progress on health, good governance, and human rights.  The United States remains your steadfast partner on this journey.

    For two decades, the United States has stood with Nigeria in the fight against HIV/AIDS under the President’s Emergency Plan for AIDS Relief (PEPFAR).  The U.S. government has invested more than $8.3 billion in Nigeria’s health sector and provided life-saving anti-retroviral treatment to more than 1.5 million people.  These numbers represent improved life expectancy and quality of life for these Nigerians and their families. 

    In clinics across Nigeria, I’ve met dedicated healthcare workers who deliver HIV prevention, treatment, and care, supported by the resources of the American people.  This work has done more than save lives – using HIV as an entry point, Nigeria’s health system has also benefited.  As Nigeria’s health system is strengthened, this important work will be led by government and engagement with the private sector to sustain the gains. 

    This commitment was reinforced during Ambassador Nkengasong’s recent visit, where his discussions with Nigerian health officials focused on how the Government of Nigeria would sustain the HIV health programs with strengthened Nigerian leadership and local ownership.

     But positive health outcomes depend critically on good governance.  When medical supplies are diverted, when healthcare workers go unpaid, when facilities buy dangerous, counterfeit medications or lack resources due to mismanaged funds, it costs lives.  This is why the United States supports numerous initiatives, not only in the health sector, to enhance transparency and accountability in Nigeria.  Our programs work directly with government agencies and civil society organizations to strengthen fiscal responsibility with the goal of the state ensuring resources reach their intended beneficiaries.

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     The success of these efforts rests on respect for human rights and civic engagement.  When members of marginalized communities face discrimination in accessing healthcare, when citizens fear reporting blatant corruption like the need to pay for appointments or ‘free’ healthcare, or when vulnerable populations cannot advocate for their needs, development falters.  Through our partnership with Nigeria, we promote the rights of every person to access essential services and enjoy fundamental freedoms without fear or discrimination.

     These three areas – health, transparency, and human rights – reinforce each other.  Consider the results: U.S.-supported initiatives have helped strengthen pharmaceutical supply chains, reducing theft and ensuring safe medicines reach patients.  Our human rights programming has empowered civil society organizations to advocate for marginalized communities, leading to better access to health services.  Our health system investments have created platforms for transparency that benefit all sectors.  And, perhaps most importantly, according to a recent survey by the United Nations Office on Drugs and Crime, Nigerians are both more frequently refusing to pay bribes and reporting bribe seekers to investigative journalists and rule of law authorities.  A shift in norms is beginning to take root and must continue.   

    The U.S. Embassy stands ready to support Nigerian voices pressing the fight against corruption in Nigeria.  To Nigeria’s government officials, civil society leaders, healthcare workers, and citizens:  your dedication to building a stronger nation inspires us.  Together, we can continue to advance the interconnected goals of better health outcomes, good governance, and human rights for all Nigerians.  Challenges remain, but the work we’ve done together shows what could be possible on a larger scale across these crucial domains.

     As we mark these December observances, let us use this moment not just for reflection, but for renewed commitment and action.  The United States continues to stand with the Nigerian people as they carry out this essential work with their elected government.

    • Ambassador Richard C. Mills,

    U.S. Ambassador to Nigeria, Abuja.

  • Trade surplus and why naira remains weak

    Trade surplus and why naira remains weak

    Sir: National Bureau of Statistics (NBS) broke good news about Nigeria’s trade surplus/trade balance which grew to N5.81 trillion in third quarter of 2024. In 2023, Nigeria’s estimated trade surplus amounted to around $11.94 billion U.S. dollars according to Statista. Please note that the governor of the Central Bank of Nigeria, Olayemi Cardoso, revealed that Nigeria’s foreign exchange reserves have reached over $40bn, marking their highest level in 33 months. The question that goes thus, is $40billion foreign reserve sufficient for a country that has $362.8billion GDP and aspiring for trillion dollar GDP?

    Interestingly, considering the progressive strides of Nigeria’s exports against imports, one wonders why the Nigeria’s currency refuses to “roar” against the dollar or why the local economy is yet to feel any reasonable impact of the progress. The reason for this reality is because the trade surplus (5%-15%) is not enough for our current foreign reserve and dollar demands. Nigeria needs minimum of $100billion in its foreign reserve for fair strength of Naira (fixed or floating). Brazil enjoys $300billion+ in foreign reserve as at 2023 and Indonesia has $146.36 billion in foreign reserve according to CEIC. The comparison is necessary considering the population similarities and economic peculiarities. Indonesia obviously needs the Brazilian benchmark of foreign reserve to further save its weaker currency too.

    Unfortunately, Naira has lost its value by over 200% in the last 15 years and to take advantage of the unplanned weaker Naira, we need to be more aggressive with cheaper exports. Importantly, the increased exports for 2023/2024 are not intentional or coordinated but response to market dynamics and unfortunate realities (coping mechanism) which forced non-oil exporters to export more at the expense of the economy leading to more food insecurity. For example, the case of cassava and soya beans boosted exports at the expense of local sufficiency etc. However, oil exports still dominated exports for 2024.

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     Albeit, countries that have practiced weaker currency for export advantage do so intentionally and temporarily, e.g. China, South Korea etc. Some countries also risk such strategy after years of local currency stability and strength (Japan). Countries applying such weaker currency for export advantage are so intentional with aggressive exports to gain massive foreign reserve to later defend the currency against dollar with boosted foreign reserve, for example, Vietnam. Nigeria has no business in the last 20 years devaluing its currency when it has no deliberate plans for short-term or midterm aggressive exports.

    The trade surplus news is a progressive report but this progress doesn’t seem coordinated, organic or significant enough to sufficiently boost strength of Naira to N500 to one dollar for example. We need the trade surplus standing at $50billion annually (at least) to make significant positive impact on the strength of Naira. The trade surplus of Qatar for 2023 was $87billion plus (under 20million population). This implies that with $70billion trade surplus in 2025, I can conveniently predict N400-N600 to one dollar with fixed exchange preferably, to tame likely market instability and volatility peculiar to developing economies. International trade is a dynamic and strategic market game that needs intentional strategies targeting export promotion and not imports substitution.

    •Mujib Dada-Kadri Esq,Abuja.

  • The CBN’s new Monetary Policy Rate

    The CBN’s new Monetary Policy Rate

    The Central Bank of Nigeria (CBN), at the 298th meeting of the Monetary Policy Committee (MPC) announced a significant yet nuanced rise in the Monetary Policy Rate (MPR) by 25 basis points, elevating it from 27.25% to 27.50%.
    At the heart of the MPC’s decision is a relentless and concerning rise in inflation. The headline inflation rate in Nigeria soared to an alarming 33.88% in October, rising from 32.70% in September. Food inflation, a particularly pressing issue, ascended even higher to 39.16%, while core inflation increased to 28.37%. These figures illustrate the severity of price pressures eroding purchasing power and exacerbating economic inequality across the nation.
    The MPC attributed the rising inflation to multiple factors, including escalating energy costs, notably the recent hike in Premium Motor Spirit (PMS) prices. This increase in fuel prices has elevated production and distribution costs, which are then passed down to consumers in the form of higher prices for goods and services.
    The decision to raise the MPR aims to tighten liquidity in the economy, curb excessive spending, and theoretically ease inflation.
    However, a pressing question remains: does this approach adequately address the structural roots of inflation, particularly those linked to supply-side constraints such as food production inefficiencies and rising energy costs?
    Amidst these inflationary challenges, Nigeria’s economy has shown remarkable resilience, reporting a 3.46% year-on-year GDP growth in the third quarter of 2024. The growth figures suggest that the economy is gradually bouncing back from the multiple shocks inflicted by the COVID-19 pandemic and prior recessions. Encouragingly, both the oil and non-oil sectors have contributed to this growth. The non-oil sector expanded by 3.37%, buoyed by increased agricultural productivity and a robust services sector. Meanwhile, the oil sector demonstrated growth of 5.17%, although this marks a deceleration compared to previous quarters.
    This economic growth offers a sense of reassurance, indicating that recovery is on the horizon. However, sustaining this momentum will require navigating numerous obstacles, such as exchange rate volatility, a tighter monetary environment, and the ongoing issues of insecurity that have plagued various regions of the country.

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    The decision to raise the MPR to 27.50% reiterates the CBN’s commitment to combating inflation. However, the ripple effects of such a move warrant careful consideration. Higher interest rates inherently translate to increased borrowing costs for businesses and individuals. For a private sector already grappling with high operational costs coupled with sluggish consumer demand, these elevated borrowing costs could stifle growth and worsen unemployment figures.
    On the other hand, a tighter monetary policy could attract foreign investors seeking higher yields, potentially boosting capital inflows and, in turn, supporting the naira. This scenario highlights the delicate balance the CBN must maintain: tightening monetary policy enough to anchor inflation expectations without suffocating economic growth is a significant challenge.
    While monetary policy serves as a crucial tool for managing economic challenges, it is essential to recognize that Nigeria’s economic problems are deeply rooted in structural issues that cannot be adequately addressed through monetary tightening alone. For example, the issue of food inflation exemplifies a challenge that is not solely a monetary phenomenon; rather, it relates to numerous systemic inefficiencies, including challenges in agricultural value chains, insufficient storage facilities, and inadequate infrastructure.
    Moreover, the recent increases in energy prices, though deemed necessary for deregulation, underscore the urgent need for comprehensive reforms within the energy sector. Addressing these structural challenges requires substantial investment in renewable energy sources, enhancing refining capacity, and developing efficient distribution systems. The transition to more sustainable energy options is crucial to reducing dependency on fossil fuels and mitigating the adverse effects that price hikes have on ordinary citizens.
    As Nigeria navigates its economic landscape, it is imperative that policymakers adopt a comprehensive strategy that goes beyond monetary measures. Addressing inflation and fostering growth will require coordinated efforts across various sectors. Structural reforms in agriculture, energy, and infrastructure must be prioritized to tackle the persistent challenges that lie ahead.
    Furthermore, enhancing public investment in key areas, such as education and healthcare, can foster human capital development, which is essential for long-term economic stability and growth. Engaging the private sector in these initiatives through public-private partnerships can also help mitigate financial constraints and stimulate economic activity.
    By balancing monetary policy with strategic investments and comprehensive reforms, Nigeria can work towards a sustainable and equitable economic future that benefits all its citizens.
    •Isah Aliyu Chiroma,aliyuisahchiroma29@gmail.com

  • Need for equality, equity and fairness in tax reforms

    Need for equality, equity and fairness in tax reforms

    Sir: The proposed tax reform, involving four tax bills introduced by the federal government has received significant criticism. Notably, it was rejected by the governors’ forum but was still forwarded to the National Assembly. Unlike the various bold economic decisions made by this government, concessions will likely need to be made on these tax reforms, which involve legislative amendments and therefore cannot be imposed by the executive.

    One of the major purposes of taxation is to generate revenue for the government to finance its activities. A good tax system should raise sufficient revenue for the government to fund its operations, and support economic and infrastructural development. For any country to achieve meaningful progress, its tax-to-GDP ratio should be at least 15%. Currently, Nigeria’s tax-to-GDP ratio is less than 11%. The proposed tax reforms aim to increase this ratio to 18% within the next three years.

    A good tax system should also promote income redistribution and equality by implementing progressive tax policies. In line with this, the proposed tax reforms favour low-income earners. For example, individuals earning less than one million naira annually are exempted from personal income tax. Additionally, essential goods and services such as food, accommodation, and transportation, which constitute a significant portion of household consumption for low- and middle-income groups, are to be exempted from VAT.

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    In addition to equality, a good tax system should ensure equity and fairness, a key area of contention surrounding the proposed reforms. If implemented, the amendments to the Value Added Tax could lead to a significant reduction in the federal allocation for some states; impairing their ability to finance government operations and development projects. The VAT amendments should be holistically revisited to promote fairness and national unity.

    The establishment of a single agency to collect government taxes, the Nigeria Revenue Service, could reduce loopholes that have previously resulted in revenue losses, provided proper controls are put in place. It is logically easier to monitor revenue collection by one agency than by multiple agencies. However, this is not a magical solution. With automation, revenue collection can be seamless whether it is managed by one agency or several, as long as monitoring and accountability measures are implemented effectively.

    The proposed tax reforms by the federal government are well-intentioned. However, all concerns raised by Nigerians should be looked into, and concessions be made where necessary. Policies are more effective when they are adapted to suit the unique characteristics of a nation, rather than adopted wholesale. A good tax system should aim to raise sufficient revenue, ensure equitable income distribution, and promote equality, equity, and fairness.

    •Kenechukwu Aguolu,Kenerek1@gmail.com