Category: Editorial

• Trade unions must insist govts and other employers insure their members’ lives

Under the Pensions Reform Act of 2014, group life insurance is compulsory for workers. This is an emergency savings expected to cover between three to six months’ expenses. Section four, subsection five of the Pension Reform Act (PRA) 2014, stipulates that every employer should provide a group life insurance “in favour of each employee for a minimum of three times the yearly total emolument of the employee and premium shall be paid not later than the date of commencement of the cover.”

Laudable and beneficial as this policy is, it is disappointing that only six of the 36 states in the country and the Federal Capital Territory (FCT) have complied with this provision of the act. This was revealed in the quarterly document released on the National Pension Commission (PenCom) website, as reported by The Guardian on March 22. The six states are Ondo, Lagos, Kaduna, Osun, Ekiti and Edo. The implication is that over 2.5million public workers are left in the lurch; being without any insurance cover whatsoever.

This is depressing. But it should not come as a surprise to many Nigerians. State governments’ usual culprit on matters like this is lack of funds. Yet, the real problem is the fiscal indiscipline that reigns supreme in most of the states. Many of them give all manner of excuses where monetary matters are concerned, especially when these have to do with their workforce or the general good.

We say discerning Nigerians would not be shocked about this violation of the PRA because it is the same attitude that many state governments adopt on pension and allied matters. The Federal Givernment, in 2014 enacted the PRA 2014 which replaced the PRA 2004. By the former, the Contributory Pension Scheme was introduced and this made it mandatory for workers in both the private and public sectors to contribute towards the workers’ retirement. Largely, it is also state governments that are still the major defaulters in pension remittances.

Yet, we see profligacy all around us daily; even in states that continue to complain that they don’t have money. We see wrong priorities all over the place. We see misapplication of funds and corruption, with many state governors prioritising payment of their own emoluments as well as their political aides’, whereas people who have served their entire lives in service are left to their own device at retirement.

There has to be a change of orientation in many of the states. Employers, particularly those in the public service, cannot afford to ignore the provisions of the PRA 2014 despite their rising recurrent expenditure. Not even the unfavourable economic climate is good enough a reason to fail in performing these welfare schemes.

It is the same attitude of the average Nigerian to insurance generally that the state governments are also imitating. The average Nigerian does not believe in insurance. Many are simply fatalistic; when it comes to insurance — be it life, fire, accident or what have you, they simply shrug it off and tell you evil occurrence is not their portion. Others give excuse of lack of money, forgetting that accidents don’t give notice before they occur and insurance comes handy when such unexpected things happen.

It is in the interest of all to ensure a fair and equitable reward system for workers because workers who know that they can always have something to fall back on in times of emergency, or when they retire are likely to be more dedicated to their duties. Productivity is better enhanced in such situations. But when there is no hope of something to fall back on in either emergency situations or at retirement, the tendency is for the workers to be complacent and try to help themselves to provide for the proverbial rainy day. This is at the root of the corruption in many workplaces, particularly in the public sector. It is the reason some teachers would use official school hours to do private lesson for those children whose parents can afford it, at the expense of parents who cannot, or do not think their children require such lessons. It is the same reason a civil servant comes to work in the morning only to disappear a few hours later in pursuit of buying and selling, in order to make ends meet. It is the larger society that pays for such lack of dedication to duty in the long run.

We urge trade unions to, as the Director of the Centre for Pension Rights Advocacy (CPRA), Ivor Takor, advised, compel employers to insure their members’ lives. This they must do simultaneously as they are fighting for increments, pension and better general condition of service.

The point must be made that state governments cannot continue to owe salaries, pensions and other workers’ benefits generally with impunity, as some state governments do. Pensioners don’t have to get their benefits in the grave. PRA 2014, definitely an improvement on the 2004 experience, can only work when its provisions are faithfully implemented. It is bad that state actors that should be the exemplars in its implementation are the very ones flouting them.

• We may run into problem again on Nigeria Air the way the Federal Govt is going about it

There is no doubt that the Minister of Aviation, Hadi Sirika, is quite passionate about the take-off of his pet project, the establishment of a national carrier for the country christened Nigeria Air, within the lifespan of the President Muhammadu Buhari administration, possibly as one of its defining legacies. This is a natural human inclination as he understandably wants to pursue the realisation of a project conceived under his leadership in the ministry to its logical conclusion before exiting.

Speaking during the 10th Aviation Stakeholders Forum in Abuja, last week, the minister announced that the proposed Nigeria Air would fly before the expiration of the administration’s tenure in approximately two months time, on May 29 specifically.

Sirika enthused that the project is nearly 98 percent complete, stressing that “All of the roadmap items, except perhaps the airline, which, in my opinion is in 98 percent stage will fly within these remaining two months by the grace of God. We will also finish the concession so all those things we said we would do when we came in, we did them. Before the end of this administration, before May 29, we will fly”.

The minister had in September last year told the press that Ethiopian Airlines had emerged as the core investor in Nigeria Air, with a 49 percent shareholding; an announcement that caused a stir within the aviation industry, with local airline operators filing a suit at the Federal High Court in Lagos to challenge and get legal sanction to stop the process. Last November, the court reportedly issued an injunction restraining the Federal Government from proceeding with the establishment of Nigeria Air until the determination of the suit before it.

At the stakeholders forum where he revealed the imminent take-off of the national carrier, Sirika gave an insight into the emergence of Ethiopian Airlines as the core investor saying “I was very happy that we got them (Ethiopian Airlines) to come. It was not my choice but I am happy now knowing what I know. They are a household name, strong and they have been in business for 70 years unbroken and they have over 200 aircraft. So I am very glad we are partnering with them and it is a reality”.

Even though the minister had observed that “Some airlines are in court and their grouse is that it can be any airline but not Ethiopian Airlines because, in their own way, they think the airline is a competitor”. But then in another interview the minister was quoted as claiming that he was unaware of any case in court as regards the national carrier. The grouse of the local airlines is that they can manage Nigeria Air better than a foreign airline and that the core investor would enjoy an unfair advantage over them. The nervousness of the local airlines is understandable given the fragile state of the aviation sector, especially in the light of the devastations caused by the Coronavirus pandemic which they are yet to emerge fully from, the skyrocketing cost of aviation fuel and the effects of the protracted economic crisis in which the sector is one of the worst hit.

Curiously, Sirika claimed that he had reached out to reputable international and domestic airlines to partner with Nigeria Air but none was willing to until the deal was struck with Ethiopian Airlines. But if so, why are the domestic airlines in court on the issue? In their suit, the airlines are asking the court to determine if the deal between the Federal Government and the core investor does not violate the Infrastructure Regulatory Commission (Est) Act 2005; the Federal Competition and Consumer Protection Act; the International Civil Aviation Organization (ICAO) Convention; the National Policy on Public Private Partnership; and whether the entire concessionairing process is not invalid, necessitating a fresh bidding exercise.

It is patently unwise for the minister to seek to rush the process through when the deal is still being litigated. We should also be wary of signing legal agreements with an international consortium in a hurry and without a scrutiny of the terms as the country has been known to pay heavy fines to foreign companies in the past for entering into shoddily drafted agreements with inbuilt booby traps. Furthermore, utmost care must be taken in picking a core investor in a sensitive sector like aviation, with a high risk component. Furthermore, it is important to ascertain if the necessary infrastructure, facilities and manpower are already in place. It is disturbing that when asked when exactly the national carrier would fly, the minister just said “very soon”.

Several years after the defunct Nigeria Airways was run aground largely through large-scale corruption and monumental inefficiencies, the country should not carelessly and cavalierly rush into establishing another national carrier without sufficient safeguards to guarantee its safety and sustainability. In this regard, it is noteworthy that the national carrier was first unveiled by the minister at the Famborough Air Show in England on July 18, 2018, but was suspended two months later when aviation experts raised questions about its viability.

The project is projected to cost $8.8 million in preliminary costs and $300 million as take-off costs. The government cannot afford to commit such humongous revenues to a project without the highest levels of diligence and meticulousness. The impression must not be created that there are surreptitious reasons for what may be perceived as an unholy rush to get Nigeria Air to begin to fly barely two months to the end of this administration’s tenure.

• Debtor-entities should be heavily sanctioned instead of throwing the entire country into darkness

Perhaps nothing better captures the inherent weaknesses in the nation’s electricity supply chain than the latest threat by the Transmission Company of Nigeria (TCN) to remove some key market operators from the grid. The entities, which include nine distribution companies (DisCos), and three generation companies (GenCos), including the Ajaokuta Steel Company, were last week given a 14-day ultimatum to either balance up their remittances and other deficits or have their systems taken out of the network.

The affected DisCos are Abuja, Benin, Enugu, Ibadan, Ikeja Electric, Jos DisCo, Kaduna Electric, Kano DisCo and Port Harcourt DisCo – all of which account for 70 per cent of the over 12 million registered electricity consumers.

The GenCos include APL Electric Company, Aba, Niger Delta Power Holding Company (NDPHC) plants, and Paras Energy. Of the lot, the NDPHC alone has at least seven active GenCos.

Accusing the market participants (MPs) specifically of non-compliance with the Conditions of Market Rules and Market Participation Agreements which mostly border on remittances of payment for ancillary electricity services, the TCN was unequivocal: “The market infractions committed by these MPs are threatening the operations and sustenance of service providers, including NERC.”

More than a desperate call by an embattled entity to get players in the chain to keep up with their financial obligations, the recurring issue, and which continues to throw the sector into cyclic spasms, may have long gone beyond an indictment on the privatisation exercise to what is now an unedifying culture of impunity in which corporate Nigeria is known to thrive. 

Surely, Nigerians must be embarrassed that such crass corporate malfeasances have not only persisted, but appear to have gone up-notch, long after the entities were taken over by private operators. The truth however is that such malfeasances are neither new in the industry, nor in the larger society. Good example is how federal and state governments are known to owe contractors and, failing to meet their obligation to them as at due dates, have thrown them into bankruptcy, with dire consequences in asset foreclosures, including what is now the phenomenon of ‘name and shame’.

Interestingly, the Association of Power Generation Companies had in July, last year, raised an alarm over a crippling N2trillion debt owed them by the DisCos while admitting to owing their suppliers N1 trillion. Now their members are, ironically, among those listed as owing TCN. So, where is the equity in the situation where those pressing their cases have themselves soiled their hands?

It goes without saying that a chain is as strong as its weakest link; the DisCos in particular have proven not just to be the weakest in the operational link, they evince all the symptoms of the notoriety that the industry has come to be renowned. Of course, when the breach of fiduciary responsibility to other stakeholders is added to the mix, the spate of arbitrary billings and other outlandish market practices right up to their extremely poor customer relations culture, Nigerians can only begin to wonder if there is anything of a redeeming grace left in the set of actors.

So what is the role of the Nigerian Bulk Electricity Trading Company (NBETC), the so-called manager and administrator of the electricity pool, in ensuring that operators play by the terms of the agreement? Harder to imagine is that a part of the funds in question actually belong to the industry regulator – the Nigerian Electricity Regulatory Commission (NERC).

More crucially however is – why should the DisCos after collecting billions of naira daily from the market, a good chunk of which no commensurate values are delivered – sometimes extorted as it were – from the hapless electricity consumers and yet, are unable to meet some of the most basic obligations to the system?

How do they expect other important players in the sector to be paid?

Throwing those delinquent players out of the grid, which means plunging the country into darkness, would seem a way too high a price for the already ill-served citizens to pay in the current circumstance. There should be other less disruptive ways to punish bad behaviour. Surely, those entities that are unable to discharge their obligations to other critical players in the chain deserve to be shown the way out if only to preserve the system. But only after the due process of applicable laws and regulations has been exhausted.

• Nigeria must fix power and do local refining for manufacturing — and other sectors — to burst alive

The Manufacturers Association of Nigeria (MAN) just restated the trite: that high cost of energy: both electric power and petroleum products, is stunting manufacturing.

But this is only a window into how high energy costs attack the manufacturing bottom- line.  Nevertheless, that sad tale is true of other sectors: banking and allied services, telecoms, agriculture and agro-processing, mining, transportation, nano, small and medium-scale ventures and every sector of the economy.

Energy is about the near-sole reason the Nigerian economy is less competitive.  These energy-pushed constraints also explain the limited job opportunities and the mass poverty plaguing the land.

By its Manufacturers CEO Confidence Index (MCCI) for 4th Quarter (Q4) 2022, MAN again underscored the imperative for competitive energy costs for the Nigerian economy.  The MCCI is the quarterly pulse of the economy, as gauged by manufacturing chief executives.  

Ranged from one to 100, any index point below 50 shows the sector’s lack of confidence in the general economy.  Any point above 50 is the contrary.  Of course, when the general economy booms, manufacturing too would be healthy and spritely. That composite score is called Aggregate Index Score (AIS).

For Q4 2022, the AIS was 55.0, marginally down from 55.4 points for Q3 2022.  MAN explains this decline to mainly the crisis in the energy sector, and therefore calls for policy improvements to boost that vital sector.

Aside from navigating the crisis with numbers, MAN’s observation is trite.  Indeed, no one needs to be an economic whiz to figure that out.  The solution, as MAN again rightly noted, is to do local refining and fix electricity supply.

The chronic fuel crisis was embedded with the structural adjustment programme (SAP), introduced in 1986.  It stresses imports, when it’s “cheaper”, than local production, brandishing seductive “globalisation” as its theory-in-chief.

The Obasanjo Presidency, as part of its economic reforms, would apply this grand theory to petroleum downstream.  Because the turn-around maintenance (TAM) of the four public refineries which the defunct Nigerian National Petroleum Corporation (NNPC) owned was steeped in chronic corruption, it opted to liberalise or deregulate petroleum downstream by exporting crude and importing refined petroleum products.

That product importation is unsustainable, since it could lead to economic collapse, has led to the clamour for local refining.  In  truth, that clamour has drawn great traction, especially in the last seven years, though action had lagged behind wishes.  

Still, Nigeria would appear on the cusp of local refining. Dangote Refinery and Petrochemicals (650, 000 barrels-a-day) is close to berthing.  It is the biggest of the new refineries.  

Also, some smaller-scale refineries, like the Edo Refinery, Ikhoba-Okha: 6, 000 barrels a day, are already in operation, though their capacities are making little dent on the fuel consumption demand.  Besides, the new Nigerian National Petroleum Company Ltd, (NNPCL) has embarked on TAM of the four public refineries, in different stages of progress, with the intent of boosting local refining capacity.

But until all of these projects come on stream and local refining is embedded again, neither manufacturing nor any other sector can breathe a sigh of relief — which is why the government must take MAN’s advice to not take its eye off the ball and swiftly complete these projects.

Still, local refining can only offer manufacturing and the general economy temporary relief — as alternative source of energy to power operations.  The ultimate solution lies in constant electricity.

The power reforms have been all but a mess.  The electricity distribution companies (DisCos) have been the weakest link in the chain, no thanks to the crony capitalism that brought most of them to life.  With DisCos, the basic electricity vendors’ failure to secure their revenue, generation and transmission, at the higher end of value chain, can draw neither fair nor full nourishment for their investment.

So, to fix electricity, fixing the DisCos is imperative.  It is scandalous that many of them lack funds to invest in as basic a thing as the pre-paid meter, the instrument that best secures their revenue. So, they resort to the fraudulent and grossly unfair estimated billing system.

The outgoing Buhari Presidency has made some inroads in improving the electricity sector.  But even its best efforts have still not met market satisfaction.  That is why the next government must treat constant electricity supply, at fair costing, as a life-and-death matter.

Indeed, it is virtual life-and-death for the economy.  It is the kiss of life that MAN craves; and every sector of the economy demands.

• The President’s assent to 16 bills for altering the grundnorm is a step forward even if  it’s not far-reaching enough.

News that President Muhammadu Buhari has assented to 16 bills passed by the National Assembly in pursuit of constitution amendment is welcome. At a point, it appeared that despite all the money spent on the process by both the 8th and 9th National Assembly, the exercise would end in futility. 

Although the President still declined assent to 19 of the 35 bills forwarded to him, we welcome the development, despite the shortcomings, especially because some of the new provisions that now constitute the fifth alteration to the 1999 Constitution were quite controversial, with many state assemblies reluctant to pass them.

We salute the leadership of the federal legislature and the committee saddled with the responsibility of the constitutional amendment for getting the job done at the nick of time. Bills for changing names of local government areas might not amount to much, but we know it was a tug of war to get state legislatures to endorse financial independence for the state lawmaking chambers and the Judiciary of the federating units. That the provisions are now part of the grundnorm is a leap forward for our democracy. 

It is also gratifying that chief executives at the federal and state levels will no longer take the country for granted by waiting all of five months to constitute the executive council as was the case when President Buhari mounted the saddle. The new provision is that the nominees’ names  must be forwarded to the legislature within 60 days of inaugurating the administration.

It is unfortunate that a bid to free the local government councils from the stranglehold of state governors failed. It is a critical provision needed to foster development at the grassroots. The tier of government closest to the people should play vital roles in disseminating information and thus mobilising citizens to play their roles in the country’s social development. Besides, if the local governments were alive, they would be assisting in gathering intelligence to combat all manner of insecurity in the land. We hope the 10th assembly will revisit this if President Buhari spurns the appeals being made to him.

For socio-economic development,  devolution of power to the states in railway transportation, electricity production, transmission and distribution is a giant leap forward. Moving those items from the exclusive to concurrent list will promote greater accountability as it is easier to monitor the expenditure of funds at the lower level.

The institutional arrogance that ostensibly informed the President’s refusal to approve the legislature’s power to compel the chief executive to deliver an annual state of the nation or state of the state address emanates from lack of understanding of the checks and balances inherent in the presidential system of government. Democracy is founded on the popular sovereignty of the people. It is patently wrong to limit popular participation of the people to election cycles. The leaders owe the public a duty of briefing them periodically and receiving feedbacks. The same principle informs the mandate that all lawmakers should have constituency offices where, during recesses, they could consult members of the constituencies. 

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Now that railway has been moved to the concurrent list, it behoves states to develop this much cheaper mass transit for intra-city transportation. Lagos State has blazed the trail, and the law now enables loose ends to be tidied up. Contiguous states could also enter into agreements to fund such projects that would boost trading among the people.

Similarly,  experts and industrialists have usually bemoaned the insufficiency of power supply to homes and businesses. Every Nigerian business must generate its own electricity if it must survive. Micro and small scale firms are being stifled by this, given the spike in the cost of premium motor spirit (petrol) and diesel. It is now more difficult for the common man to survive in Nigeria. The so-called privatisation of the sector has not helped matters as the country has never generated more than 5,000 megawatts. Transmission that remained exclusively in Federal Government’s hands is even less efficient. And distribution by the private sector has shown the privatisation process was flawed as those entrusted with the responsibility lack both technical and financial capacity. It is a shame that the power system in Nigeria lags far behind South Africa, Ethiopia and Egypt, among others, even in Africa.

Nigerians yearn for rapid changes, far more than successive governments have offered. We expect the incoming administration to advance the course of development much faster. Our best brains and leaders of tomorrow who have left to become second-rate citizens elsewhere should be enticed back. Nigeria needs them, but they will only return when things get better and hope of a brighter future Is rekindled.

It is obvious that this amendment, while in the right direction, has not gone far enough. It is incongruous, for example, that while autonomy has been granted state Judiciary,  the state that now has functional legislative, executive and judicial powers still lack a law enforcement body. This is one task that both  the incoming executive and legislative arms must pursue expeditiously. State police is so important that no time should be lost in granting it recognition. In other countries practising the federal system of government,  all tiers of government have their police force to give effect to local legislations and promote security. At the limited level that the Amotekun Corp has been allowed to operate under the extant law, one could see the useful contribution it has made to enhancement of law and order in the South West.