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OPINION

The Struggle Continues for the Deepening of Nigerian Democracy

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By Atiku Abubakar

Someone asked me what I would do if I lost my election petition appeal at the Supreme Court. In response, I said that as long as Nigeria wins, the struggle would have been worth the while. By that, I meant that the bigger loss would not be mine but Nigeria’s if the Supreme Court legitimises illegality, including forgery, identity theft, and perjury.

If the Supreme Court, the highest court in the land, implies by its judgment that crime is good and should be rewarded, then Nigeria has lost and the country is doomed, irrespective of who occupies the presidential seat.

If the Supreme Court decides that the electoral umpire, INEC, can tell the public one thing and then do something else in order to reach a corruptly predetermined outcome, then there is really no hope for the country’s democracy and electoral politics.

Obviously, the consequences of those decisions for the country will not end at the expiration of the current government. They will last for decades. I am absolutely sure that history will vindicate me. We now know what the Supreme Court has decided.

At critical points in my political life, I always ignored the easy but ignoble path and chose the difficult but dignified path, the path of truth, of morality, of democracy and rule of law.

I always chose freedom over servitude, whatever the personal discomforts my choice entails. When I joined politics, the critical challenge was easing the military out of power so that civilian democratic governance could be restored in Nigeria. It later became a very defining struggle, and, as one of the leaders of that struggle, I was targeted for elimination.

In one incident, nine policemen guarding my home in Kaduna were murdered in an attempt to assassinate me. I was also forced into exile for nine months. In addition, my interest in a logistics company that I co-owned was confiscated and given to friends of the military government. As Vice President in the civilian government that succeeded the military, I, again at great personal cost, chose to oppose the extension of the tenure of the government beyond the two four-year terms enshrined in our constitution.

In response to the official backlash against me, I instituted several cases in the courts, which led to seven landmark decisions that helped to deepen our democracy and rule of law. At the current historic moment, the easier option for me would have been to fold up and retreat after the mandate banditry perpetrated by the APC and INEC.

But I went to the Nigerian courts to seek redress. I even went to an American court to help with unravelling what our state institutions charged with such responsibilities were unwilling or unable to do, including unravelling the qualifying academic records of the person sworn in as our President and by implication, hopefully who he really is.

I offered that evidence procured with the assistance of the American court to our Supreme Court to help it to do justice in this case. I give this background to underscore that what we are currently dealing with is bigger than one or two presidential elections and is certainly bigger than Atiku Abubakar. It is not about me; it is about our country, Nigeria. It is about the kind of society we want to leave for the next generation and what kind of example we want to set for our children and their children.

It is about the reputation of Nigeria and Nigerians in the eyes of the world. We showed incontrovertible evidence that Bola A. Tinubu was not qualified to contest the presidential election because he forged the qualifying academic certificate, which he submitted to INEC. In fact, a simple check of Tinubu’s past records in its possession would have shown INEC that Tinubu broke the law and should not have been allowed to contest the election.

We showed irrefutable evidence of gross irregularities, violence, and manipulations during the elections. We showed incontrovertible evidence that INEC violated the Electoral Act and deliberately sabotaged its own publicly announced processes and procedures in order to illegally declare Tinubu elected. The position of the Supreme Court, even though final, leaves so much unanswered.

Even the rebuke by retired Justice Musa Dattijo Muhammad is a confirmation from within the apex court that all is not well with the Supreme Court. The court and indeed the judiciary must never lend itself to politicisation as it is currently the norm with nearly every institution in Nigeria. By the way, the strong rebuke of the apex court by the revered Justice, who had meritoriously served for more than four decades, should not be swept under the carpet.

The alarm raised by Justice Muhammad and recently, former INEC Chairman, Professor Attahiru Jega, offer Nigerians an explanation into why the electoral and judicial system have become the lost hope of the common man.

Judges are no longer appointed based on merit but are products of the interplay of politics and nepotism. Worse still, the appointment of electoral officials has also been hijacked by the ruling party, as seen in the latest nomination of Resident Electoral Commissioners, where card carrying members of the ruling party and aides to politicians in the APC are being appointed into INEC. When two critical institutions like the court and the electoral commission are trapped in an evil web of political machination, it becomes next to impossible for democracy to thrive.

As a stakeholder in the presidential election of 25 February, I, along with other well-meaning Nigerians have done my bit in ensuring that our democratic process enjoys the privilege of full disclosure of the character deficiencies of the current political leadership. I also believe that even if the Supreme Court believes otherwise, the purpose of technology in our electoral system is to enhance transparency and not merely as a viewing centre. We have to move with the world and not be stuck in time.

Implications of PEPC and Supreme Court judgments

I leave Nigerians and the world to decide what to make of the Supreme Court’s unfortunate decision. But here’s my take. The judgments of the PEPC and the Supreme Court have very far-reaching grave implications, including the following.

One is the erosion of trust in the electoral system and our democracy. Nigerians witnessed as the National Assembly changed the electoral law to improve transparency in the process. Of particular importance was the introduction of modern technology to help eliminate the recurring incidents of electoral manipulation, particularly during the collation of results. Nigerians and the world also witnessed as the leadership of the INEC, especially its Chairman and National Commissioner for Voter Education reassured Nigerians on national television multiple times that the use of that technology would be mandatory.

Yet, that same INEC undermined the use of that technology during the elections and collation process and declared as winner someone who clearly did not win the presidential election. They then went further to take sides in the courts in a dogfight to defend their illegality. Who would convince the millions of Nigerians to vote in future elections after they suffered endlessly on queues to register to vote, to collect PVCs and to vote, based on INEC’s assurances only to see their votes stolen and given to someone they did not vote for?

When people lose trust and confidence in elections, democracy is practically on life support. And by affirming and legitimising the continued lack of transparency in our electoral system, the courts are continuing to usurp the rights of voters to elect their leaders. The other grave implication is that contestants in Nigeria’s elections should do whatever is necessary to be declared the winner. That includes identity theft, impersonation, forging of educational and other documents, perjury, and violence.

And, as they do so, they should ignore whatever the law says and whatever assurances from the leadership of the electoral umpire about what the law says and what they would do in compliance. And they would do so knowing that our courts would approve of their behaviour or at best pretend not to take any notice of it. The third is that if you are robbed of victory, do not bother going to court for redress because your glaring evidence of the robbery will be ignored in favour of the mandate bandit.

Also, your lawyers, however distinguished and accomplished, may be ridiculed by the judges who may also go out of their way to make even a stronger case for the so-called “winner” than even their own lawyers were able to do. These are clearly self-help strategies and actions bereft of the law and constitutionalism. Only lawlessness and anarchy will result from such, with violence, destruction and implosion and loss of our country likely to follow.

I believe that we still have a small window to prevent these from happening. I still believe that we can rescue this country from the strange imposters that have seized it illegally and are holding it by the jugular. Let me caution that the leaders of those African countries that have completely collapsed into chaos never came together one day and agreed to collapse their countries. Rather their countries collapsed because of the incremental and compounding individual and collective utterances and actions of those leaders.

Nigerians know more about the person sitting in office as their President and how he got there, and the dangers that it portends for them and the country. It is for them, especially the younger generation whose futures are to be shaped by that man, to decide what they want to do with the knowledge.

OPINION

Renewed Hope: No Timetable?

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By Ogoh Alubo

When it became clear that Senator Bola Ahmed Tinubu would be sworn in as the president, there were all manner of accolades: hit the ground running, bold steps, renew hope in Nigeria. There are many more but nine months on the expressions are different: give BAT more time, be patient, the situation is like labour pain, the smile will come after the child birth.

There are no indications when, how or even whether the birth will take place.

Everyone knows Nigeria’s experience with maternal mortality for which we are second highest in the world after India.

Even among the fawning Tinubuists, the shouting from the rooftops is now muted as the expressions of high hopes, stretched almost to infinity now confront a different reality—hunger and more destitution.

The first public declaration of hunger became audible during the Christmas when the President went in long motorcade to a Lagos mosque. The crowd that lined the routes had a terse message: we are hungry. Then the public declaration of hunger in the land was heard in recent demonstrations in Kano, Minna, Lokoja and other locations.

These hunger protests, akin the SAP wars of 1988, became strident when the President was away in France on a “private visit”. It’s really an anomaly for the President—any president– to have a private activity, save when he is in the bathroom, or in the words of his predecessor “in the other room”.

With all the sermon about propriety, the president left the country for about 10 days without transmitting power to the vice as required by the constitution. Here then is one instance of the theory and practice of propriety.

The advertisements about a rosy tomorrow to be brought about by renewed hope agenda have continued; never mind that for the majority of the people, the lived experiences indicate betrayed hope. Prices increase on a daily basis, even for basic commodities. So, telling is how foodstuff like yams, cassava and grains like are rising even before the end harvest season. Still, we are told better days are coming so long as we believe in the renewed hope doctrine.

Every regime has a right to wrap its policies in some catchy packaging; remember the next level of Buhari’s second term? The ministers for Humanitarian Services and that for Aviation are being asked for explanations by the Economic and Financial Crimes Commission (EFCC).

The new slogan is unfolding, include Mr President dictum “I feel your pain”; and mobilisation for a happier tomorrow if the people diligently follow the renewed hope agenda. But with food prices hitting the roof and triggering growling stomachs and public protests, – as if the government was unaware before now- something over and beyond the botched palliatives has to happen. Recent resurrection of the SAP wars tells it all.

The unfolding events portend to be more disruptive. There are reports that a truck laden with yams was interrupted and looted in Lagos. This too is a most ominous sign of what could happen to hungry people.  The government must wake up and nip the emerging situation in the bud.

The knee jerk response to the public protests was the announcement that strategic grain silos will be open and grains would hit the market; 102,000 metric tons for the whole country: 36 states and the Federal Capital Territory and 774 local councils.  If and when grains are released, it would likely amount to no more than a drop in the bucket. What would be the sharing formula?

An important challenge to the Renewed Hope agenda is its imprecise timeline. There are regular references to a nebulous future: months, years, exactly when will the good times roll? This challenge of timing was the subject of a book I read in graduate school, titled Timetables: Structuring the passage of hospital treatment and other careers by Julius Roth. The author had just earned the PhD and by some cruel fate came down with tuberculosis.

He used the opportunity to deploy his methodological arsenal in recounting how each patient had a self-made timetable. The timetable came from interviews with patients who were there longer about the duration of time before key procedures like surgery, home visit all of which TB treatment in the era required. If any patient’s experience did not conform with the timetable, she would complain. Questions would be asked why a particular case did not follow the timetable. His conclusion was that all people in anxious situations need a timetable.

Nigerians now are in most anxious moments. Can the Renewed Hope Agenda indicate when food will become more available?  When will inflation abet? And wider context when will all the many multinationals that have japaed recently, return? Visiting foreign countries and throwing open invitation to would be investors may not do the trick.

The situation indicates that the security services are not adequately addressing the challenges of kidnapping, killings by unknown gun men in addition to the bandits and Boko Haram palaver. Each time the military spokesman addresses the press on the performance of troops against bandit and kidnappers, he carefully avoids when the war will be won.  The public display of new equipment does little until the menace is stopped. Here too there is need for a timetable.

There is the related problem of extent to which the security forces can be trusted. In the recent killings in Mangu LGA in Plateau State, residents said some of the military men were in cahoots with the assailants. General Lagbaja, the Chief of Army Staff, went there on a one- day visit and declared there was no basis to the allegations. Really? As the people hold their own views, one is reminded of the TY Danjuma doctrine— the military collude with the assailants they are not impartial.

The period ahead portends to be uncertain indeed. The immediate fissure is about food prices which must be situated in the broader context. When our Naira was floated, which led to the current free fall, the official spokespersons mentioned allowing market forces to determine its value. But there is hardly any country which does that to its currency. This mook is probably why the Central Bank Governor Mr Cardoso relied only on the notes written for him, rather than answer questions ad lib—in the engagement with the Senate the other week.

More problematic, indeed the immediate trigger of higher food prices, is the removal of subsidy on petrol. We all watched helplessly as the so- called bold decision brought untold misery to the same Nigerians who the President said he feels their pain. The initial promises of huge mass transit schemes have not only failed to roll out, even the propaganda talk about it has ceased. So, in the final analysis, how would inflation, including food prices be tamed?

We are all suffering the effects of ill- conceived and poorly digested neoliberal policies with scant regard for the people. We must look beyond the immediate reactions to when the situation will improve? The Renew Hope Agenda cannot continue to skirt around the question a time table.

Alubo is Professor of Sociology at the University of Jos.

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OPINION

Irukera: How Not to Reward Altruism

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By Tunde Olusunle

Monday January 8, 2024, Nigerians woke up to the news of the suspension of Betta Edu, who was formerly the Minister for Humanitarian Affairs and Poverty Alleviation. On the same day, Babatunde Ayokunle Irukera who was for six years Executive Vice Chairman of the Federal Competition and Consumer Protection Commission, (FCCPC), was relieved of his appointment.

Both developments compelled an essay which I titled “On Betta Edu and Tunde Irukera.

The article was generously ventilated by the media even as I attempted to draw comparisons between two public offices with different pedigrees and also different “misdemeanours.

” Evidence in the public domain attested to blatant disregard for public service rules and mammoth thievery by one of the two people I wrote about.
The other public servant was uncharacteristically innovative, transparent and altruistic in his approach to work. He literally excavated a government agency in the throes of asphyxiation and obliteration, to a world class organisation, to local and international aplomb.

Much unlike me, I had, just weeks before, written about Irukera following the recognition of the agency he superintended over as “Government Agency of the Year.” This was evidence to how very closely I followed the good works of Irukera. The honour in question came from *Leadership* newspapers one of Nigeria’s most reputable tabloids. FCCPC was selected for the acclamation for “promoting fairness, regulatory stability and consumer protection within the marketplace.” My piece alluded to the uncommon-ness of Irukera’s attitude to public service which is construed by many office holders as licence for the wholesale looting and holistic decimation of departments assigned to them. Haven’t we just been told that nine officers in the Nigerian Customs Services, (NCS) were recently fingered in a N12 Billion scam?

In pronouncing the FCCPC under Irukera as an authentic public service exemplar, *Leadership* noted that since his appointment in 2017, the organisation had pursued “a transformative journey reshaping and rebranding the erstwhile Consumer Protection Council, (CPC).” Further, the newspaper noted that the organisation had been refocused as a “proactive and consumer-centric FCCPC.” Irukera’s oversight of the commission’s transformation and operationalisation beginning from January 30, 2019, *Leadership* noted had been a game-changer. Further still, the awarding newspaper said: “Following the enactment of the FCCPC Act, Irukera has demonstrated “unwavering dedication to fostering a dynamic and responsive regulatory environment.” The FCCPC under Irukera it was observed “has recorded numerous milestones across diverse sectors including healthcare, digital finance and electricity.”

According to *Leadership,* “one of the standout accomplishments of Irukera’s FCCPC is the strategic development and implementation of the Patient’s Bill of Rights.” That initiative establishes a comprehensive framework empowering patients with essential rights such as informed consent, confidentiality and unrestricted access to their medical records.” The Patient Bill of Rights, *Leadership* observed, “serves as a charter of principles delineating the rights and responsibilities of patients, healthcare providers and the regulatory body.” This is “an approach which fosters a culture of transparency, accountability and patient-centric care.”

Irukera’s leadership at the FCCPC witnessed other strategic initiatives and impactful interventions in other sectors, notably in digital finance, the power sector and in the nation’s bureaucracy. FCCPC was also catalytic in shaping Nigeria’s business environment which became more cognisant of the emplacement of fairness, consumer protection and regulatory stability. Local and foreign investors have continued to experience the transformative impact of standardised practices instituted by the FCCPC. This congruence between national and international standards, in combination with rigorous process auditing and the development of guidelines and standard operating procedures, serves as an imprimatur of quality assurance in the Nigerian marketplace. These are identified perspectives about Irukera’s exertions in public service as dispassionately enunciated by one of Nigeria’s more serious newspapers.

Confident of his transparent governance approach, Irukera was never shy of media engagement. On the eve of the last yuletide therefore, Irukera hosted the media where he noted that the FCCPC under him, had become a wholly self-sustaining department. According to him, the FCCPC made history in 2023 by generating N56 Billion. The feat was achieved by the simple enforcement of compliance to existing laws vis-a-vis the payment of penalties by defaulting companies. This was a novelty by any standards in a milieu where many government funded establishments overdraw their allocations, expend their internally generated revenues, (IGR) and still prospect for supplementation. Irukera noted at that media interface that the organisation hired new staff in strict adherence to service procedures. This assisted the federal government in taking off young, qualified, unemployed people from the streets.

Perhaps if every ministry, department or agency under the thoroughly dysfunctional Muhammadu Buhari regime had transparently recruited qualified youths across board, the national despondency levels will be mitigated albeit marginally. Much of what we picked up in the media space was hush-hush recruitments into “A-grade” MDAs like the Central Bank of Nigeria, (CBN), the Federal Inland Revenue Service, (FIRS) and so on. After addressing staff emoluments, overhead costs and capital requirements, the FCCPC, Irukera noted gifted the federal government N22 Billion by way of remittances! This was a most un-envisaged precedence by a government agency which was picked up from the backwoods and transformed into a national model, even bride.

On Wednesday February 28, 2024, the Senate of the Federal Republic under the leadership of Godswill Akpabio, rubber-stamped the request of President Tinubu to sack Irukera. He was deemed inefficient! For those who have followed the quiet yet impactful revolution which Tunde Irukera has pursued in the past six years, nothing can be more preposterous. There wouldn’t be a joke more cruel, more malevolent, more unfeeling than such a testimonial to a man who has invested so much in service to nation at testy times such as we have been in the past decade. Irukera demonstrated that government concerns can be effectively and productively run. What do we make of an organisation like the National Board for Arabic and Islamic Studies, (NBAIS), which was in September 2022 reprimanded by the legislature for unjustified spending? The Senate Committee on Finance and Appropriation queried NBAIS for spending N8.5 Billion annually, on 6000 employees to administer examinations to 500 students. No heads have rolled ever since in the Professor Muhammad Abdullahi-led organisation.

The spiteful removal of Babatunde Ayokunle Irukera from office the way it has been done is gross injustice and colossal disservice to patriotism and sacrifice. There have been unfounded suggestions to the effect that Irukera was blackmailed as one of those who “substantially” supported former Vice President, Yemi Osinbajo’s bid to contest the presidential primary of the All Progressives Congress, (APC) in 2022. This is most farfetched for a technocrat like Irukera whose gaze is almost permanently fixed to his desk treating official correspondences, receiving briefs, holding meetings. In other climes, Irukera should by now have in the bag recognitions like the “National Productivity Order of Merit,” (NPOM) as well as a minimum investiture with a national honour in the category of “Officer of the Order of the Niger,” (OON). He chose, however, not to hunt for titular aggrandisement preferring to immerse himself wholly and completely in service to fatherland.

Irukera’s mistreatment echoes the manner Damilola Ogunbiyi who was Managing Director of the Rural Electrification Agency under the Buhari government, was unjustly treated in 2019. She has since moved on to the global heights of the “Special Representative of the United Nations Secretary General for Sustainable Energy for All.” She is also Co-Chair of UN Energy. Irukera always had a flourishing law practice in the United States before heeding the call to avail his country of his multiplex competencies and experiences. He is not a jobber like many whose only CV is “being abroad.” For as long as he remained in his job in Nigeria, he ran his family by telephone, virtually. The manner he has been treated will be a major disincentive to Nigerians out there who would otherwise be glad to come contribute their quotas to national development. In Irukera, Nigeria has a brand ambassador who should be engaged to hoist the nation’s banner across the world. He deserves to be genuinely apologised to, pacified and given his flowers.

Olusunle, PhD, poet, journalist, scholar and author is a Fellow of the Association of Nigerian Authors, (ANA)

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OPINION

Interest Rate Hike – Knee on Nigeria’s ailing Economy! 

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Nick Agule

Introduction

The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) yesterday, 27th February 2024 briefed the nation on the outcome of its meeting.

A major decision that was announced was to raise the Monetary Policy Rate (MPR) from 18.

75% to 22.75% (400 basis points).
The MPR is the rate at which the CBN loans money to the commercial banks.
The commercial banks in turn add their margins to the interest rate and charge higher rates on loans they extend to their customers. 

Here are the reasons why this is a wrong decision for Nigeria’s ailing economy and rather than being the “necessary steps to get the country’s fiscal and monetary health back to normal” as the CBN Governor announced, rather portends the killing of the economy:

  1. The CBN erroneously thinks Nigeria is suffering from inflation alone, but the country is suffering from stagflation which is a triple whammy of inflation, low output and massive unemployment.
    Tragically if a doctor gets a diagnosis wrong at the outset, the medication will be wrong and possible death of the patient becomes a reality! This is the situation Nigeria’s economy faces now!
  1. Inflation alone can be tackled with increases in interest rate because if there is too much money in the economy that’s fuelling demand for goods and services, if the MPR is increased, individuals and businesses will find it more expensive to borrow so the volume of money in the economy will be reduced. Also interest on savings will rise and individuals and businesses will find savings more attractive therefore demand for goods and services will fall. With the combined effect of less money in the economy and lower demand, prices of goods and services will fall (fall in inflation is achieved!). 
  1. With stagflation however, if you increase interest rates, you are doing more harm to the economy than good because you solve stagflation by increasing output hence creating more jobs. If you increase interest rate, it becomes more difficult for businesses to access credit to boost output. As businesses fold up, the unemployment situation worsens! To resolve stagflation therefore requires interest rates to be cut so that businesses can afford cheaper credit and boost supply which consequently boosts employment thus leading to economic recovery. Cutting rates risks increase in inflation but if the CBN is faced with the twin evil of inflation and low output/high unemployment, the economy stands a better chance of survival if there is a boost in output and a cut unemployment. If interest rate is hiked, the economy may never recover. But if interest rate is cut, output will rise and unemployment will fall and even if there is a side effect of increased inflation, it is a better outcome overall! 
  1. A rise in interest rates tackles demand-pull inflation. However, Nigeria’s inflation is not only demand-pull (rising prices due to demand). There is a massive cost-push inflation (rising prices due to increasing input/production costs) arising from the twin government policies of increase in fuel costs and foreign exchange unification. Due to the poor power supply in Nigeria, businesses are forced to run on generators and the increasing fuel costs are transferred to prices. Same for increasing transportation costs. Same for increasing costs of imported inputs. Even the increased cost of borrowing becomes inflationary as businesses transfer all these costs to the consumers! All these factors lead to rising prices without a change in demand. INTEREST RATE RISES WILL NOT RESOLVE COST-PUSH INFLATION!
  1. To make matters worse, the CBN increased cash reserve ratio (CRR) to 45% (which is the amount of deposits that commercial banks must transfer to the CBN) e.g. if a customer deposits N1m the commercial bank must transfer 450k to the CBN and only have 550k to loan to the economy. This curtails the bank’s ability to boost the economy which is in stagflation and badly needs a boost in output or slow death is imminent! Increasing interest rates in an economy that is struggling to breathe (low output and massive unemployment) is killing such an economy!
  1. Another major cause of inflation in Nigeria is supply shortages (from low output). Even if demand remains the same or even falls, if the supply of goods and services falls, there will be inflation! A good example is food. Because less food is being produced due to insecurity around the country’s farming communities and even where farming is taking place it is by manual labour that does not produce much, and imported food has become too expensive due to naira crash, and farm inputs have become more expensive due to forex crash, the supply of locally produced food to Nigerian markets has drastically fallen such that even if demand is held constant, the prices will rise. Demand for food and other necessities does not respond to MPR because people must eat therefore even if MPR increases to 100% consumers will not save because they must buy food to survive! The solution to the food crisis therefore is to reduce interest rates so that farmers can access cheap credit to produce more food! And urgent steps must be taken to mechanise agriculture and insecurity must be addressed! FOOD INFLATION WILL NOT RESPOND TO INTEREST RATE INCREASES!
  1. Ways and means. This is a process where the CBN prints money (credits the account of government without value) which throws a lot of liquidity in the economy which in turn fuels inflation. The same CBN then raises interest rates to try and control the same inflation they have caused! The CBN can best control this inflation by stopping ways and means! INFLATION WILL NOT RESPOND TO INTEREST RATE INCREASES IF WAYS AND MEANS CONTINUES! 
  1. Unemployment. With a massive unemployment approaching 50% and even those who are working are poorly paid or not paid at all, the CBN can provide data to support their conclusion that Nigeria’s inflation is demand-pull because empirical evidence suggests otherwise. At a minimum wage of N30,000 ($20), most households cannot even afford the basic necessities. Where is the demand the CBN is seeing? Interest rates increases in other economies have succeeded in taming inflation because 95% of the people are in jobs with money to spend whereas in Nigeria majority are living from hand to mouth! INTEREST RATE INCREASES WILL WORSEN THE UNEMPLOYMENT CRISIS IN NIGERIA!
  1. The CBN says interest rates increases will help with the foreign exchange crisis. However, those who are converting their naira balances into dollars will not stop even if interest rates rise to 100% because they want their money saved in dollars! Those who are looking for dollars to pay school fees and medical costs abroad will not stop because interest rate has gone up! Even if interest rate is 100% they will still buy dollars to pay the fees and medical costs! Interest rate increases rather does more damage to the foreign exchange crisis because as local businesses are unable to access cheap credit they will fold up or produce far less, Nigerians will thus continue to import goods including food thus worsening the exchange rate and exacerbating inflation. Only a boost in local production can support naira to become stronger and interest rate increases does damage to output!
  1.  To underscore that the CBN has been getting it wrong, since the interest rates have been increasing, inflation is jumping higher and higher and not slowing as expected. There is no other evidence that interest rates rises is the wrong solution because the patient (economy) is not responding to treatment (interest rate increase)! In other nations, interest rate increases have succeeded in slowing down inflation but not in Nigeria! Nigeria is suffering from typhoid (stagflation), but the doctor (CBN) thinks it’s malaria (inflation)!
  1.   With power supply at 3,000MW, the Nigerian economy is on life-support and cannot produce enough goods and services to meet even the basic demand. The Nigerian inflation is caused by low supply and not high demand as the CBN thinks! There can never be high demand when the people are multi-dimensionally poor! The solution is to boost power supply to at least 10,000MW in the first instance. Qatar where President Tinubu will soon be heading to are less than 3 million in population but delivery 12,000MW of electricity which is an average of 4,000MW per day to 1 million people but Nigeria is giving 3,000MW to over 200 million people! There is no way the Nigeria’s economy will do well with such abysmally poor power supply regardless of the interest rate! INTEREST RATE HIKES WILL NOT RESOLVE INFLATION FUELLED BY LOW SUPPLY WHICH RESULTS IN LOW EMPLOYMENT – STAGFLATION!

Conclusion:

To resolve Nigeria’s stagflation:

  1. The CBN is to STOP further rate increases and begin rates cut in line with President Tinubu’s pledge in his inauguration speech.
  1. The CBN is to reduce the CRR so that banks can have more liquidity to lend to the economy to boost ouput!
  1. Reduced rates will boost supply and cut unemployment leading to an eventual fall in inflation even if it rises at the first instance.
  1. Fiscal policy to release the power sector 100% into the private sector. Transmission company (a bottleneck in the power value chain) to be leased or sold to global power operators to boost the capacity. No sufficient power supply, no economy!
  1. Fiscal policy to mechanise agriculture, tackle insecurity, lease/sell steel plants, lease/sell the rail infrastructure, stop gas flaring and harness for power, domestic and industrial uses etc.

#ABetterNigeriaIsPossible

Nick Agule is an oil and gas expert and a public affairs analyst.

Twitter: @NickAgule

Email: nick.agule@yahoo.co.uk

Facebook: Nick Agule, FCA

28.02.2024

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Christian Gospel Musicians set for music festival in Jos to support IDPs 

ShareFrom Jude Dangwam, Jos Christian Gospel Musicians across Nigeria are set for a gospel music festival in Plateau State aimed...

NEWS54 mins ago

FG Approves 90-Day Regularising Duty Payment on Imported Vehicles 

ShareBy Tony Obiechina, Abuja  Determined to enhance compliance and streamline import processes, the Federal government has directed the Nigeria Customs...

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Kogi Doctors Get Hazard Allowance

ShareFrom Joseph Amedu, Lokoja  The Nigerian Medical Association (NMA), Kogi State chapter has commended Governor Ahmed Usman Ododo for keeping...

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