Comment
Stop Power Subsidy Removal
The International Monetary Fund (IMF) was founded after World War II to help rebuild economies that were devastated by the conflict. Over the years, the IMF has played an essential role in promoting global monetary cooperation and ensuring financial stability. One of its key functions is providing financial assistance to member countries in need. However, the IMF’s involvement in the domestic affairs of borrowing nations, like Nigeria, goes beyond just providing loans.
Undeniably, Nigeria has maintained a strong partnership with the global financial institution over the years. The organisation regularly guides economic and social policies to the giant of Africa in exchange for financial assistance. While these recommendations often focus on essential fiscal reforms, some critics believe they fail to consider the country’s specific socio-economic challenges, potentially worsening existing issues.
Historically, the Monetary Fund has been criticised for promoting strategies that prioritise Western economic interests over those of the recipient nations. This pattern has led to scepticism and accusations of neo-colonialism. Many believe that the Fund’s policies contribute to a cycle of debt, dependency, and economic vulnerability for the recipient nations, ultimately reinforcing the dominance of the West on the global stage.
Unfortunately, the global financial institution has been advocating for the removal of subsidies in Nigeria, claiming that they hinder economic growth and development. This argument has gained traction recently, with the institution urging the Nigerian government to eliminate all subsidies, especially in the electricity sector. According to the institution, subsidies create market distortions, promote overconsumption, and put a strain on government finances. They believe that removing subsidies would stimulate economic growth by promoting fair competition and reducing the burden on the government.
We strongly disagree with IMF’s proposal to take away subsidies, especially for those on power. These subsidies are essential for the well-being and security of ordinary Nigerians as they impact the cost of living and overall quality of life. In a country facing various socio-economic challenges such as low income, poverty, unemployment and gross income inequality, subsidies help alleviate financial burdens, particularly for those in low-income households. Removing them, as suggested by the IMF, could result in higher living costs, increased poverty levels, and heightened public discontent.
IMF’s admonition is akin to giving the President Bola Tinubu government a rope to hang itself with, given the possible outcome of such a move at this juncture of extreme hardship in the country. Because of the poverty-generating framework of the Nigerian economy, the attempts to completely commercialise the power market have been unsuccessful. Consequently, the Federal Government is obliged to provide financial support through the Nigerian Bulk Electricity Trading Company (NBET) to compensate for the deficit resulting from the inadequate revenue collected by the power companies.
An example of this is seen in 2023 when the power companies managed to gather N783 billion in tariffs out of a total bill of N1.06 trillion. To bridge the gap, the Federal Government had to provide N375 billion in subsidies. Removing this subsidy now would result in consumers having to pay more than 35 per cent extra compared to current rates. Additionally, consumers would need to brace themselves for unpredictable tariff hikes that power companies are eager to implement.
While some argue that full deregulation will attract investors, Nigeria’s experience has shown otherwise. For instance, despite the removal of the petrol subsidy almost a year ago, the promised benefits have not materialised. The Dangote and government refineries, which were expected to lower the cost of petroleum products, are not in production. This highlights the complexities of the Nigerian market and the challenges that come with full deregulation.
For the already terribly afflicted Nigerian masses, the elimination of power subsidies at this time would be very difficult. The withdrawal of fuel subsidy has already caused many businesses to shut down, as the value of the naira continues to decline. Elimination of power subsidy may be the final straw that breaks the camel’s back. The protests that have been occurring, which the government believes are sponsored, could escalate and become unmanageable.
Nigeria is already struggling with recent changes in electricity and exchange rates, so the Bretton Woods Institutions’ harsh demands are placing the nation in a risky situation. The additional burden of higher electricity tariffs could severely impact the competitiveness of the nation’s manufacturing sector, which is already facing defiances such as low productivity, high costs, and inadequate infrastructure.
Both the IMF and the World Bank have demonstrated insensitivity and hypocrisy in their policies towards Nigeria. They have failed to consider the impact of their suggestions on the welfare of Nigerian workers and the general population. They must understand that there is a correlation between the purchasing power of the people and their ability to afford essential services like electricity. The government must be cautious in heeding their advice, as the abdication of electricity subsidies could worsen the current economic crisis. Policies should be implemented with the well-being of the people in mind.
The official exchange rate for the dollar was N464.51/$1 before the removal of the fuel subsidy on May 29, 2023. Today, it is about N1,650 -$1 in the parallel market. This crisis has led to high inflation, pushing up prices of goods and foodstuffs. Therefore, Nigerian leaders should take advice that will assuage the sufferings of the citizens and better their lives. They have to address the economic remonstrances facing the country and find solutions that will benefit the people. Nigerians can no longer absorb any further shocks because of the difficulties of the times.
Comment
Halt Soaring Cost Of Drugs
Nigeria is currently grappling with a frightening health crisis. A critical concern that has dramatically escalated is the burgeoning prices of medicines, rendering them inaccessible to the majority of the population. The grim reality is that Nigerians battling various health challenges are in a perilous situation, their lives hanging in the balance owing to the soaring costs of vital drugs. Potential solutions do not lie in the government’s customary tokenism but demand a potent emergency response.
Since the assumption of office by President Bola Tinubu, the nation has experienced a steady depreciation of the naira against the US dollar and other major global currencies. The deregulation of the foreign exchange market has ignited a chain reaction culminating in several economic emergencies, one of the most severe victims being the healthcare delivery system.
Economic parity between the naira and other foreign currencies has resulted in the skyrocketing prices of necessary medications. The devaluation of the naira implies that importing pharmaceutical necessities has transformed into a cumbersome and expensive process. The deregulation of the forex market has only compounded the predicament. The pecuniary burden on the common man has intensified manifold as pharmacies and drug stores inflate the costs of medicines to retain their profit margin.
With the big pharmaceutical companies shutting their doors, the situation is getting worse. This is mostly because of the unfriendly business climate. This unfavourable milieu, twinned with other systemic challenges, pushes medical professionals, from doctors, and nurses to paramedics, to emigrate to Europe, the United States, Canada and Saudi Arabia, among others, in pursuit of improved remuneration and work conditions. The current era is posing a tough obstacle for those who fall ill in the nation.
As the drug manufacturing giants cease operations, the dearth of critical drugs, coupled with uncontrollable inflation, sees the expenditure on healthcare skyrocketing, and the country is bearing the brunt. Life-saving drugs such as antibiotics, analgesics, and hypertensive and anti-diabetic medicines have witnessed an unprecedented price increase between 400 and 500 per cent. What once was a common and affordable antibiotic, Augmentin, which used to cost a mere N3,500, now carries a staggering price tag of over N30,000.
Given the alarming scenario, for those who survive on the minimum wage, and the 133 million Nigerians recognised as multidimensionally poor, falling ill could well bring about the end of times. Their economic incapacity to afford such high drug prices leaves them with no resort but preventive measures. Becoming a victim of sickness amounts to being trapped in a troubling and implausible situation that might have no practical and viable solution.
The healthcare sector, particularly the pharmaceutical industry, is currently facing remonstrances such as a reliance on imported drugs and the departure of GlaxoSmithKline from Nigeria after 51 years of operation. This situation, combined with the instability of Nigeria’s economy, raises uncertainties about the availability of pharmaceutical products and their potential impacts. Multinational companies like GSK are finding it more and more difficult to repatriate their sales proceeds to their home countries because of the nation’s economic quagmire.
Statistics reveal that an alarming approximately 70 per cent of drugs consumed within the country are imported, as corroborated by the Pharmaceutical Society of Nigeria. Unveiled investigation exposes a ghastly reality about three interrelated problems; the deluge of fake and substandard products, comparatively weak regulatory oversight, and a combination of porous borders with corrupt customs personnel.
The ongoing decrease in Nigeria’s drug importation attributed to forex pressures creates a domino effect impacting the country’s public health directly. With food inflation also soaring simultaneously, the populace, already off balance, is left grappling with basic healthcare needs; consequently, they turn away from quality drugs and treatment to patronise quacks and fake drug vendors.
This scenario left unaddressed, can potentially snowball into an extensive and uncontrollable public health crunch, aggravating the existing socio-economic predicament. Thus, it is essential that the catastrophe is recognised accurately in all its dimensions and that relevant policies of the government focus on alleviating both the forex pressures and their resultant detriments to public health.
The authorities have a responsibility, with one of the most important being the health of its citizens. One issue that manifests as a poignant ‘cri de coeur’ is the affordability of prescribed drugs for ordinary Nigerians. Facing an uphill battle with the exponential rise in the cost of goods and services, the common man struggles to reclaim and retain control over one of the fundamental aspects of life — health. The prohibitive costs of necessary medications, and life-saving drugs, have snowballed into a national concern.
Our appeal to the Federal Government is straightforward; the high cost of drugs should no longer serve as a death sentence for citizens. Subsidising essential medications for Nigerians will allow them to combat serious diseases and regain hope, creating a more robust and healthier society. Therefore, those in authority must demonstrate their commitment by walking their talk to ensure that Nigerians have a fair chance at survival.
President Tinubu’s government must take immediate action to address the high drug prices in our nation. Prioritising healthcare accessibility, implementing price controls, supporting local drug production, and strengthening public healthcare infrastructure are essential steps that have to be taken. Nigerians urgently need improved access to health insurance, encouragement to the use of safe and effective generic drug s to reduce costs, and education on the issue including policy modifications.
Comment
Sylvester’s Death: Let Justice Prevail
Sylvester Oromoni was a Junior Secondary School (JSS) student of Dowen College in Lekki, Lagos State. He was 12-years old at the time of his demise. Reports that have been going viral from the family say that Sylvester was suspected to have been bullied by other students in the college which led to his death.
In a media report, his parents alleged that he was given a substance to drink by those who dealt with him. It was leant that five students were mentioned by the deceased to have been allegedly involved in giving him injuries before he died a week ago.
Dowen College, his former school, in a statement claimed that the deceased sustained injuries while playing football and was treated at the school’s sick bay. The college denied that he was not bullied by any student and said it had carried out a preliminary investigation that they claimed revealed that there was no case of bullying. The school also claimed that its policies were anti-cultism.
Dowen authorities should intensify efforts in unraveling those involved in the act if really the story is true. This is because no parent can be happy that after entrusting a child to a care giver, at the end of the day, that parent is told funny stories about the child.
Like the college claimed, if Sylvester had an injury from playing football and the school knew it could not handle the treatment properly, the parents should have been invited. Some of us have our wards in boarding schools and any situation that is above their care warrants parents’ attention, be it academic, health or social.
One of the reasons for choice of boarding schools for students is concentration and good moral upbringing as some of them can easily be distracted when they attend day schools. When parents hand over their wards to schools, they expect good news at the end of the day.
It is unacceptable and shocking that a parent sends his or her child to a school while toiling day and night to raise school fees and it turns out to be a waste. As far as secondary school education is concerned, no student should claim seniority to bully another, no matter the level of provocation. Simply, reports should be sent to house masters and mothers to settle whenever there is misunderstanding between students, especially in the dormitories. College authorities have the right to correct erring students though mildly.
The level to which a school can handle a child’s problems is limited; otherwise when serious issues come up, parents should be asked to pick up the child for more care.
I wonder why cult activities should be allowed to take place in schools under the watch of school heads. There must be proper check on students’ activities in the dormitories from time to time to fish out those who are not serious with the mission of being in boarding schools.
If truly Sylvester was given a substance which may have peeled his lips and gone to the extent of destroying his internal organs, where were the house masters? If in a school block, what about the teachers? Wherever the students may find themselves within the school environment, there must be a staff responsible for their activities.
The Federal Ministry of Education, Lagos State Ministry of Education, Lagos State Universal Basic Education Board and all relevant stakeholders, including security agencies and civil society groups should ensure that the truth about what happened to Sylvester is made public. Every child has the right for social protection.
About a year ago, the case of Don Davies, a former student of Deeper Life High School, Uyo in Akwa Ibom State, came up although he never died. His case was also about bullying and malnutrition.
If Master Davies, for instance, was not taking care of himself and personal belongings, he shouldn’t have been handed over to the senior students. The housemaster should have invited the mother. There is no doubt that there are things a school cannot handle for the children.
You discover that some of the students, especially new intakes, find it difficult to cope in boarding schools being their first time of leaving home. When you talk about malnutrition, some of them walk sluggishly to the refectory and sometimes reject a particular meal due to some inexcusable reasons. The truth is that when a child continues to skip meals, he or she must look malnourished.
If the information released by the deceased’s father on the social media is anything to go by, that the late son was given a harmful substance to drink, how did the five students get that in school?
We are in a digital era, parents and care givers should put more efforts at checking the activities their children are involved in. Are there no CCTV cameras in that school?
It is a welcome development as the Lagos State Government has shut down Dowen College due to the death of Oromoni who was allegedly maltreated by his seniors while investigation into the cause of his demise continues.
Earlier in the year, a 14-year old female student of Premier Academy, Lugbe in Abuja, who died of sepsis, is another case that cannot be forgotten soon. In her case, a substance was allegedly found inside of her which nobody knew what or who was responsible for that. It was reported that she could not explain anything about that before she died. One may not also know whether it happened in school or at home.
Cases like these call for concern because each time they occurred, there won’t be good explanation concerning the ugly incidents. It is surprising that students under various schools watch will be suffering all manner of assaults that can lead to death.
Colleges should be able to give account of their students whether in boarding or day school. Parents cannot continue to lose children in that manner. Children that would have been reared from infancy with high cost of education to the level where they can express themselves cannot be lost like that. Whenever similar incidents occur, thorough investigations should be carried out so that erring students can be punished to serve as deterrent to others.
Furthermore, there should be proper and regular monitoring and supervision of both public and private colleges, boarding or day in Nigeria by officials from both state and federal educational bodies; finding out the performance and attitudes in various schools. We are aware of attitudinal or behavioral change in students so it is important for relevant authorities to do the needful.
A lot of students may be suffering in silence since they may not be able to speak out, parents should always interview their wards especially the girl-child. We are talking about the ones that have been made public; there can be hidden ones which they may be apprehensive to speak about.
It is high time stringent measures were put in place by stakeholders in education to curb the menace of bullying, cultism and assault in our schools.
I am not debating whether boarding is better than day school, what we should be talking about first is consoling Sylvester’s parents. Investigation should continue till the cause and those were involved are unraveled. If names have been mentioned, they should be interrogated with their parents, although their parents were not in the college when the ugly incident occurred.
In fact, from now, college authorities and care-givers must be aware of happenings in the dormitories. Parents are out there toiling to ensure school fees are available. Who said there is no bullying in day schools? Pray it shouldn’t happen to anyone.
Let’s stop here as investigation into what exactly happened to Sylvester continues.
By: Eunice Choko-Kayode
Comment
Again, On VAT Collection
The judgment by Justice Stephen Pam of the Federal High Court in Port Harcourt on the lawful authorities to collect Value Added Tax (VAT) and Personal Income Tax (PIT) has continued to provoke fundamental issues in our polity. The court had on August 8, this year, maintained that only the Rivers State Government and not the Federal Inland Revenue Service (FIRS) was authorised to collect VAT in the state.
Pam had afterwards dismissed FIRS’ application for a stay-of-execution, holding that granting it would invalidate the principle of fairness. That prompted the Rivers House of Assembly to pass a bill on VAT collection. Rivers State Governor, NyesomWike, has also assented to the bill, making now a law in the State. Lagos State has followed suit while many other states have initiated processes of making similar laws in their states.
This goes hand in hand with the fiscal federalism that Nigerians have been calling for all along. Obviously, the VAT law will contribute enormously to an increase in revenue and to the development of infrastructure in the states.
However, soon after the passage of the VAT legislation, a three-man panel of the Court of Appeal sitting in Abuja led by Justice HarunaTsammani, in an appeal filed by the FIRS, ordered all parties to maintain the status quo and refrain from acting in a way that would give effect to the VAT judgment of the Federal High Court. But the stay-of-execution order by the court was mucked up in contention, with some legal experts including Mike Ozekhome (SAN) interpreting it to mean that Rivers State still had the power to collect VAT until determined otherwise.
But in a fresh twist, the Rivers State Government has entered an appeal at the Supreme Court to challenge the order of the Court of Appeal in the VAT dispute between the state and the FIRS. In the suit instituted by a Senior Advocate of Nigeria (SAN), Emmanuel Ukala, alongside three other senior lawyers representing the government, the state is imploring the apex court to set aside the order of the Court of Appeal which directed it to maintain the status quo on the collection of the contentious VAT pending the determination of an appeal filed by the FIRS.
It must be observed that the impudence and impunity earlier demonstrated by the federal agency in compelling firms in the state to remit VAT to it despite losing out in an application for a stay at the High Court are disgusting and reproachable. That act or the thought of it was ill-advised and provocative. Indeed, if the state had followed suit in implementation of the State’s Law on VAT, it would have created a state of anarchy and those who like to blow up issues to paint the state in unsavoury terms to run it down and favour their paymasters would have had a field day.
We therefore salute Governor Nyesom Wike and the State Government for the restraint and maturity exhibited in this matter despite the obvious provocation. As a Federal Government agency, FIRS must constantly ensure that its operations are regulated by the rule of law. After all, Rivers State acted in its right to demand and collect VAT and approached the court for relief and got it. FIRS cannot determine what court order to obey or ignore.
As the feud exacerbates over the VAT collection, the Federal Government has similarly approached the Supreme Court for an ultimate resolution of the row. What is ambiguous in this latest action is whether the suit will not amount to an abuse of court process, as it is already before the Court of Appeal for determination. Also, it is doubtful whether the apex court will assume jurisdiction in the trial, since it had declined magistracy in a related matter between Lagos State and the Federal Government.
Lagos State had sued the Federal Government in 2014, seeking a ruling to repeal the VAT Act because it was outside the legislative remit of the federal authorities to collect the tax. The court, however, ruled in favour of the preliminary objection of the Attorney General of the Federation that the Supreme Court lacked original jurisdiction in the matter as it was a dispute between a federal agency and Lagos State and not between the government in Abuja and the Lagos State Government. This is on the basis that VAT is collected by the FIRS, a federal agency.
Again, it emerged recently that the House of Representatives was contemplating legislation that would further empower states to receive VAT and as well control the resources domiciled in their territory. The bill is titled “An Act to Alter Item 39, Part 1 of the Second Schedule of the 1999 Constitution as Amended to Substitute and Move the Item from the Exclusive Legislative List to the Concurrent Legislative List”, co-sponsored by Hassan Usman Sokodabo and John Dyegh. This move might upset the applecart, as it is bound to strengthen the states in their dispute with the Federal Government.
Just as the disputations rage with court litigation, we uphold the cutting-edge action of legislators from the House of Representatives to side with the states. We recall reported attempts by the Federal Government and its agents in the wake of the VAT controversy to smuggle a bill into the National Assembly to place VAT collection on the Exclusive List. Governors should therefore give countenance to their representatives in the National Assembly in their quest for states to be self-sustainable.
The arguments made in certain quarters that collection of VAT by the states will impoverish many others in the federation are insufficient and do not hold up. Rather, it will promote the establishment of a suitable fiscal federalism.
We believe that the Rivers State Government has a strong case in the current legal wrangling and will surely attain justice if the matter is well adjudicated. Since the essence of the disagreement is about equity, justice and fairness, we also expect that the final court decision on the issue will also enrich the country’s jurisprudence and reinforce how citizens understand and partner with the law.
Indeed, the most outstanding message from the VAT judgment is that the instrumentality of the law which Governor Nyesom Wike exploited can be applied to correct many of the hoarded and accumulated wrongs in our federal structure. The Federal High Court judgment already indicates that the Federal Government has been exercising powers it does not have.
It is patently erroneous that the federal authorities impose VAT on the same goods and services, upon which state authorities still demand ‘state tax’. We likewise think as it is in diverse climes, that the tax on consumption which VAT represents cannot be collected by the Federal Government. We equally question the justification for distributing the proceeds of VAT generated from the sales of alcohol with states that have not only prohibited its consumption, but wilfully obliterate the products.
While we deplore the infinite recourse to ethnic baiting by those who define every question in North-South rhetoric, and perhaps, muddling the waters on the VAT judgment, this is the moment for the FIRS to turn on its thinking cap on how to cope with declining revenues beyond battling for every crumb with the states. The lesson the government in Abuja ought to learn from the reactions to the VAT judgment is any tax system that fails to meet the twin stipulations of efficiency and equity in a disparate nation such as Nigeria cannot survive.
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