Editorial
Sell Refineries, Now!
About a forthnight ago, Nigerians were shocked with the news that the four refineries owned by the Federal Government recorded a total loss of N406.62 billion in two years. In fact, the audited report of the refineries located in Port Harcourt, Kaduna and Warri with a combined capacity of 445,000 barrels per day have been running at a loss for more than 10 years now.
Apart from operating far below their installed capacity over the years, forcing the country to rely largely on importation of refined petroleum products, they have become huge drain pipes for the country. They also, have remained in a state of disrepair for many years despite several reported repairs and the often bandied Turn-Around-Maintenance, TAM.
According to the latest audited financial statements of the plants, the Kaduna Refinery recorded a loss of N64.34 billion in 2018, down from N111.89 billion in 2017, while the Warri Refinery posted a loss of N44.44 billion in 2018, compared to N84.60 billion in the preceding year. Port Harcourt Refinery on its part lost N55.76 billion in 2017 and N45.59 billion in 2018.
To add insult to injury, the Group Managing Director, GMD, Nigerian National Petroleum Corporation, NNPC, Mallam Mele Kyari last week at a summit organised by Seplat told the country that all the refineries were idle.
“Today, unfortunately, all our four refineries are down. “In Nigeria today, we are importing practically every petroleum product that we consume in this country. “But are working to make sure that we are able to fix our refineries”, the GMD told the summit.
Unfortunately, The Tide does not agree with Mallam Kyari. We believe that the nation has had enough of trying to fix the refineries. Past experiences have shown that such endeavours would be efforts in futility, an exercise that would end up frittering away scarce resources and lining the pockets of private individuals, while the refineries remain comatose.
We are also worried by the GMD’s pronouncement that plans were on to repair the refineries again. Indeed, past attempts to repair or turn around the refineries have left the plants worse than they were and billions of naira spent to no positive effect. This sad merry-go-round has left the national assets as huge liabilities and drain on the economy. Moreso, the idle and moribund refineries are monthly serviced with humongous grants, imprest and other expenses with staff earning luxury salaries, while contributing next to nothing to the national economy. In addition, staff of these plants still draw on national resources for estacodes for mostly phantom seminars, workshops and trainings across the globe.
That is why The Tide believes that it is time that the refineries are privatised or sold outrightly, without further delay. We say so because government, especially in Nigeria, has proven not to be a good businessman. Rather than sink another round of billions of naira that would serve better in other areas of our national economy in the refineries, only to continue to depend on importation for our domestic needs, the Federal Government should divest in the refineries without delay.
We expect the government to immediately put in motion machineries that would lead to the eventual sale of the bleeding assets. We think that rather than contemplate further investment in the refineries under any guise, the Federal Government should take a second but critical look at the issues surrounding the inability of private investors to build refineries, especially, the modular model in Nigeria.
According to the Department of Petroleum Resources, DPR, there are a total of 38 proposed modular refineries with capacities ranging from 5,000 barrels per day to 30,000 bpd, and a total capacity of 1.35 million bpd. However, out of the 44 refinery licences given out to private investors over the years, only a couple of projects, including the one being built by Dangote Industries Limited in Lagos, are underway.
It is therefore, pertinent that the Federal Government seeks ways to motivate the private investors to get to work and set up refineries that will not only service domestic needs but meet demands from other countries, rather than recycling the ineffective and wasteful venture of the government-owned refineries.
Indeed, the process of divesting and eventual sale of the refineries would neither be easy nor without turmoil. But the government must muster the political will and boldness to deal with the situation. Afterall, former national institutions like the NICON-NOGA Hilton, National Electric Power Authority, NEPA, NITEL, among others have been privatised or sold off.
We expect the appropriate authority to commence serious engagement with relevant stakeholders on the modalities of ending government’s involvement in the moribund refineries. We take this stand with the belief that the country can no longer afford to waste scarce resources and indirectly patronise private individuals who feed fat on the malfeasance that are Nigerian refineries, while ordinary Nigerians bear the brunt of the vicious circle.
Editorial
Opobo And The Proposed Higher Institution
Editorial
A New Dawn For Rivers’ Workers
Workers in the Rivers State civil service have been eulogising Governor Siminalayi Fubara for delivering on his promise to implement a new minimum wage of N85,000, which was reflected in the salaries paid for November. This increase is N15,000 higher than the national minimum wage of N70,000. This represents not only an enhancement in the financial welfare of civil servants but also a recognition of their hard work and dedication to public service. The raise has been met with widespread jubilation among the workforce, who have long advocated for a better wage to cope with rising living costs and economic challenges.
As the news spread, offices filled with laughter and sigh of relief, as employees exchanged stories of how this financial boost would positively impact their families and dependants. The new minimum wage is not just a number; it symbolises the government’s commitment to improving the standards of living for civil servants and fostering a more equitable workforce. Many workers expressed their gratitude for the governor’s timely intervention, highlighting how important it is for public servants to feel valued and adequately renumerated.
Governor Fubara’s decision is expected to reinforce morale within the civil service, fostering greater productivity and dedication among employees who contribute significantly to the state’s development. With the new wage in place, there is a renewed sense of optimism among civil servants, who now feel more empowered to serve the government and the citizens with greater enthusiasm and commitment.
The Governor had declared an increase in salaries for state workers, emphasising that this adjustment is not only a reflection of the government’s commitment to improving the welfare of its employees but also a strategic move fueled by the state’s enhanced Internally Generated Revenue (IGR). He assured workers that the financial backing for this increment is sustainable, stemming from the state’s focused efforts to bolster revenue through various initiatives, including tax reforms and enhanced efficiency in public service delivery.
Furthermore, the governor’s promise of funding the increment solely through increased IGR signifies a commitment to fiscal responsibility and transparency. It reassures the people that the government is proactively managing resources while investing in their future. As the state continues to explore opportunities for revenue enhancement, Fubara’s administration remains focused on ensuring that these initiatives translate into tangible benefits for the workforce, ultimately fostering a more motivated and dedicated public sector.
The decision by Fubara to be the first in Nigeria to implement the new national minimum wage is a commendable step that reflects a proactive approach to governance and an understanding of the pressing needs of the workforce. In an economy where many families struggle to make ends meet, especially in the face of rising living costs, this enterprise will improve the quality of life for workers and also set a precedent for other states to follow.
In recognising the various drives and support provided by Fubara’s government, it is necessary that the workers reciprocate by embodying a spirit of productivity and commitment to the current administration’s goals. They should align their daily operations with the administration’s objectives to enhance effectiveness and foster an environment of collaboration and trust. This reciprocal relationship can lead to innovative solutions and efficient service delivery, ultimately benefiting the state and strengthening public trust in government institutions.
Surprisingly, despite the political challenges the government has been navigating, alongside the myriad of ambitious projects it is embarking on, it has managed to raise funds to implement a minimum wage of N85,000 This achievement reflects a commendable level of resilience and resourcefulness within the government’s fiscal strategies. In a nation often marred by economic volatility and political discord, finding a way to sustain and even elevate the livelihoods of its employees is no small feat.
Workers in the state have truly found themselves in a remarkably advantageous position under this administration, especially when compared to the previous regime. The immediate past government’s blatant refusal to implement the minimum wage of N30,000 left many employees disheartened and struggling to meet their basic needs. What was even more disconcerting was the absence of meaningful negotiations with labour representatives, leaving workers feeling unheard and undervalued. In contrast, the present administration has prioritised dialogue and engagement with labour unions, recognising the importance of fair wage for workers’ contributions to the state’s economy.
With the current government’s commitment to improving wages and working conditions, it is clear that a major shift has taken place. This renewed focus on the welfare of workers empowers them and instils a sense of hope and optimism for the future, as they can now look forward to a more equitable and supportive work environment. Ultimately, the ongoing trajectory suggests a promising era for labour relations in the state, one where workers are valued and their rights upheld.
Siminalayi Fubara has consistently demonstrated his dedication to workers’ welfare since taking office in May last year. Unlike his predecessor, who left many employees feeling overlooked and unsupported, Fubara wasted no time in addressing the longstanding stagnation of promotions that had plagued the workforce for eight years. He took further steps towards financial justice by initiating the long-overdue payment of gratuities that were neglected during the last administration.
Similarly, we urge the governor to take another step forward by reviewing the stipends received by pensioners. The current pension amounts have become woefully inadequate, leaving many of them who dedicated their lives to public service struggling to make ends meet. These dedicated individuals who have contributed to the development of our dear state now find themselves in a precarious financial situation, receiving stipends that are alarmingly low and insufficient to cover basic living expenses. The rising cost of living has rendered their pensions nearly meaningless. Therefore, a comprehensive reevaluation of these stipends is a required measure to ensure that those who have served our state with honour can live their remaining years with dignity and security.
Editorial
Another Look At Contributory Pension Scheme
In a report from the National Pension Commission (PenCom), it was disclosed that only 26 states in Ni-
geria have implemented the Contributory Pension Scheme (CPS), two decades after the Pension Reform Act (PRA) 2004 was passed. The report highlights the inconsistent espousal of the CPS across states, with some states partially adopting the scheme, others not yet participating, and some facing challenges in getting the bill approved in their state legislative assemblies.
In 2012, the Rivers State Government, under the leadership of former Governor Chibuike Rotimi Amaechi, embarked on a critical initiative by enforcing the Contributory Pension Scheme. This strategic move aimed to establish a sustainable pension system by requiring contributions from both the employer and the employee. The arrangement was designed to ensure that employees have a secured and reliable source of income post-retirement, fostering financial security and stability for the workforce.
Following the introduction of the plan, the government adopted a three-year transition that aimed to fully implement the scheme by 2015. During this transition period, the authorities focused on educating both employers and employees about the benefits and responsibilities of the CPS. This included workshops, seminars, and public awareness campaigns to ensure that all stakeholders were well-informed about the scheme.
The creation of the CPS represents an important milestone in the ongoing efforts to overhaul and enhance the state’s pension system, aiming to establish a more robust and secure retirement savings framework for its workforce. The primary objectives of the CPS are to effectively tackle the inherent shortcomings of the former pension system, including limited coverage, insufficient benefits, and financial uncertainty. This strategic framework is designed to ensure that employees receive sustainable and dependable retirement benefits.
However, to ensure fairness and protect the rights of all workers, it is imperative that the effective date of the contributory pension law be prospective, applying only to workers hired in or after 2012. This would allow those employed before 2012 to continue to benefit from the provisions of theDefined Benefit Scheme (DBS), while ensuring that new hirees are subject to the updated pension provisions.
Unfortunately, the pension programme has experienced several challenges. Despite monthly deductions being taken from civil servants’ salaries for their counterpart funding, the government has not fulfilled its obligation to contribute its share. This has impeded the advancement of the scheme and has left many civil servants without sufficient pension arrangements upon retirement.
As a result, the state pension law has undergone multiple revisions to address the issue of retiring civil servants who ordinarily should be covered by the contributory scheme. The amendments have aimed to accommodate these individuals within the DBS which provides a guaranteed level of pension, based on years of service and salary grade level.
The inability of the contributory pension scheme to gain traction has sparked worries about the long-term viability of the state pension system. The absence of government contributions has resulted in a funding shortfall that jeopardises the government’s capacity to fulfil its pension commitments to employees in the future.
Even if the CPS was created to address the perceived shortcomings and lack of sufficient funding of the DBS by combining funds from employers and employees’ contributions to pension funds custodians, retirees under the scheme have not experienced better outcomes than those who retired under the DBS. On the contrary, the execution of the CPS is different from what its advocates led employees to expect.
The complaints regarding the implementation of the CPS are varied and concerning. Retirees are underpaid despite years of dedicated service, with some having served for the mandatory 35 years. Corruption is rampant within the system, and many state governments and employers are not complying with the provisions of the Reform Act, 2014. Labour leaders in the country have criticised the scheme as being anti-workers and retirees welfare. The Association of Senior Civil Servants of Nigeria (ASCSN) has even called for the scheme to be scrapped, labelling it as a “huge fraud.”
Similarly, we urge the Rivers State Governor, Siminalayi Fubara, to completely abolish the contributory pension scheme in the state, as it will not benefit civil servants. We are particularly concerned about the future of workers who will retire under this scheme, especially since the current legislation allowing for the Defined Benefit Scheme will be obsolete in June next year, when the contributory pension law will be effective.
Moreover, the state government is deducting and remitting workers’ contributions to the pension scheme, but failing to contribute their own counterpart funds as required by law. This action is a violation of the rights of contributors as outlined in section 4(1) of the Pension Reform Act 2014. According to this section, employers are mandated to contribute a minimum of 10 per cent of an employee’s monthly salary to their pension fund administrators. Employers are also required to deduct a minimum of eight per cent from the employee’s salary and remit it to the fund administrator.
A government that supports labour rights, like the current one, should not allow workers to suffer from a failed retirement scheme. Workers who are close to retirement age should not have to face unnecessary challenges. The failure of the scheme is evident from the number of agencies that have withdrawn from it. Therefore, it is important for the state leadership to revoke the legislation.
Unlike previous administrations that may have disregarded the experiences of workers in the state, the present government has consistently recognised and appreciated their contributions. The labour-friendly policies of this government have shown its dedication to the well-being of workers. However, the failed retirement scheme remains a critical issue that needs to be addressed.
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