
OTHERS' VIEWS
The nation was only a few steps away from potential chaos and confusion on Tuesday. We had a taste of the gloom that has been staring the nation in the face for a while with Labour flexing its muscles and threatening social and industrial peace. Not without justifiable cause, I must say. What with reckless spending assailing our sensibilities you would think the engine of public spending has gone out of control, or indeed broken down. How can anybody justify the mindless purchase of Sports Utility Vehicles, alias SUVs, one costing N160 million for each of the Federal legislators? This is an Assembly in which my old friend, Adams Aliyu Oshiomhole, sits as a Senator. He felt uneasy at first at the thought and raised a feeble protest. He, indeed, apologized for the protest he raised on Channels Television when he got to the floor of the Red Chambers a few days later. How can anybody defend the endless stretch of the Presidential convoy of Bola Tinubu that was witnessed in Lagos—about twice now? I had thought it was President Joe Biden that was in town. I had thought that Joe Biden, menaced by the heat of desperate Mr. Trump that The New York Times has said again is unfit to be President, was here to cool off. The New York Times’ first unflattering testimonial for Mr. Trump was in 2015. As part of the insensitive posture and unthinking of the Administration is the plan to build a N15 billion official residence for the Vice-President.
All of last week, the Labour principally made up of the Nigeria Labour Congress (NLC) led by Joe Ajaero and Festus Osifo’s Trade Union Congress (TUC) was determined to bare its fangs to press home their agitation for a new minimum wage regime. All of last week, they had asked their members to be on standby for last-minute instructions for a showdown. As of Monday, the air was thick with a foreboding of chaos and confusion, and the nation was made to hold its breath. Their unassailable argument was that in the economic circumstances of today, with the cost of living shooting through the roof, the current minimum wage of N30,000 is no longer realistic. At first, Labour themselves shot sky-high pressing for N615,000 per month as minimum wage for a worker. Later the figure came down to N494,000. The Federal Government first offered N48,000; it moved it to N57,000, but Labour described the government’s offer as “unserious.” As is in the nature of negotiations, the Labour’s first salvo at negotiation was a demand of a maximum of N497, 000 and the Federal Government seemingly testing waters came off with an offer of N48,000, later it jerked it up to N54,000. It raised it again slightly to N57,000. Osifo then had to say: “Our N494K demand is not fixated.”
The NLC president, Joe Ajaero attributed the minimum wage of N615, 000 tabled to the current economic situation in the country and he blamed the breakdown of negotiations on the position of the government and the Organized Private Sector. In his words: “despite earnest efforts to reach an equitable agreement, less than reasonable action of the Government and the Organized Private Sector has led to a breakdown in negotiations.” Labour’s “cost of living estimate” shows that a worker would require N270,000 to feed for 30 days and transportation would cost him N110,000. The Director-General of the Federal Budget Office said the current personnel cost for 1.5 million workers is N5trillion. If the government accedes to the Labour demand of N615,000, it would bring the personnel cost of the Federal workers to N11 trillion. The Federal Government has shifted again a little; it will consider N60,000 as the minimum wage. But Labour is insisting that nothing less than N100,000 would be acceptable.
To bring a quick end to the strike, President Bola Tinubu said he was committed to implementing a National Minimum wage that might be higher than N60,000. How much higher it was not spelt out. Even if Tinubu was prepared to agree to a higher offer, the state governors and the private sector are to be carried along. This is because payment of a minimum wage has a nationwide application. It is the least any employer of labour throughout the country is expected to pay his worker. When in the language of Ajaero the strike was relaxed, not suspended or called off, it was agreed that negotiation would continue for a week to arrive at a figure acceptable to all the parties—the two tiers of government and the private sector. The Federal Government team was led by George Akume, an experienced administrator and former Governor of Benue State. With him is the National Security Adviser, Nuhu Ribadu.
For the strike to have maximum bite the nation was plunged into darkness as the national grid was shut down, the banks were closed, dockworkers shut the ports, and airport operations were paralyzed. The Railway is traditionally, indeed historically the home of national strikes. It came as no surprise that there were no train services. The existing N30,000 minimum wage was inherited from President Buhari who had also inherited N18,000 as minimum wage from President Jonathan whose Administration sanctioned it in 2011. I recall Buhari’s passionate plea to Labour in 2018 to get workers to return to work. He pleaded with them to show greater understanding, especially in the light of what he described as gargantuan problems his administration inherited. He made a particular reference to infrastructural development his Administration had embarked upon with very lean resources.
He spoke of missed opportunities between and 2015, when, as he was wont to say, the nation had huge resources at its disposal. He said: “There is no part of the country I haven’t been to, having attempted to be President four times. I know the conditions of our roads. The rails were literally killed: there was no power…” despite the humongous amount said to have been spent in the sector. Speaking for him during negotiations to avert the strike, Boss Mustapha, Secretary to the Government of the Federation, told the unions: “The concern is not only for the welfare of the workers but also every other thing should be taken on board…So, it is a balance of the welfare of the workforce with the effect of the new minimum wage and the economy. We yearn to go above basic social protection for Nigerian worker but also tie it to the ability to pay, because many states are even having difficulty meeting the basic minimum wage.” Boss Mustapha said as of the time, 27 states out of 36 are at the moment encountering difficulties paying the then minimum wage of N18,000. It is the same argument in government circles.
In my view, this is the crux of the matter; it is where the problem lies. There are compelling arguments on both sides. How can N30,000 carry anybody in the economic circumstances of today and the cost of living triggered largely by the withdrawal of petroleum subsidy with its ripple effects, and the intractable insecurity ravaging farming zones of the country? On the other hand, a government which owes arrears in the payment of the current one will see paying anything higher as a pipe dream. Unfortunately, government functionaries are not setting the right example and the right tone. There is a display of opulence everywhere. Our governors and even the President live at practically no cost to them. They are fed by the state; their vehicles are maintained and fueled by the state. Their lifestyle is obscene. In other lands, hardly can you tell a senior government official, a minister, or any other ranking public servants from the ordinary citizens. Sometimes, you have the feeling that they are emancipating! Whether it was Obama or George Bush, they looked more battered in office than before they went into the White House. Indeed, Obama became an old man in no time with grey hairs mushrooming all over his head. As I did ask in 2018 on this subject of public spending: In what way had UK Theresa May or Donald Trump changed since they got into office, whether in their manner of dressing or in their physical appearance?
But no sooner do Nigerians get into office than they begin to bloat with their complexion glowing and all potholes on their cheeks filled up. They overdress you would think it is their wedding day. I recall Peter Obi once revealing to us that when he assumed office as governor, he found that a cow was being killed every day for real, imagined, or anticipated visitors of about 50 persons to Government House. He had to stop the wastage. Enterprising newspapers should dig out photographs of our public functionaries before they were elected or appointed barely a year ago and how they look today.
Michelle Obama said to Oprah Winfrey in conversation over her book, Becoming, that President Obama got the bill every month for every dish that the White House kitchen served his family. “They count the number of peanuts and you get the bill at the end of the month. You pay for your guests and the food they eat…You get the bill.” In 2018 I accused President Buhari of being lily-livered for his reluctance to confront the National Assemblymen, who were and still are scandalously the highest-paid in the world. Professor Itse Sagay blew the lid to the whole world that each Nigerian Federal senator earns N29 million a month. The figure following the strike by the Labour Unions this week has been re-issued to circulate in the social media. The figure was never confirmed nor denied by the Senate, nor have they been outraged that both Prof. Sagay and former President Obasanjo “scandalized” them. Although Obasanjo did not give any figure, his language on the subject was unprintable! The only voice on it came from Senator Shehu Sani, the irrepressible activist, who put it at N14 million, exclusive of some allowances. In the United States, a senator is paid $174, 000 (US Dollars) a year, followed by Canada $154,000 (US Dollars) annually; and Germany $119, 500 (US Dollars) yearly. Britain pays an MP (Member of Parliament) $105, 400 (US Dollars) a year. I invite my colleague, Eddie Madunagu to convert the figures into Naira for us to see. Some other mathematician may wish to work it out and throw the Naira equivalent into our faces. I have not bothered to update the figures. These were 2018 payrolls. That year, the then US House Speaker Paul Ryan was sleeping in his office because he could not afford the rent to keep two homes. His family was living outside Washington.
With the opulence and indulgences of our public officials, executive or legislative, how can anyone persuade workers that Nigeria cannot afford N70,000 as minimum wage? It will be interesting to see how the debate will go in the National Assembly when an Executive Bill is prepared and taken there after the Federal Executive Council and the Council of State must have sanctioned what the new minimum wage should be.
Having said that, I hasten to state that the timing of a minimum wage in Nigeria today requires deep reflection. There are fears of inflation rippling through the land afresh should there be a raise in minimum wage heralded by so much noise-making. The unions have no control over inflation, rising prices, and the calculation of the market women and transporters who are keeping their ears to the ground waiting for the outcome of negotiations. There will be rejigging and restructuring in companies to be able to accommodate the new level of human capital costs. Companies will worry about asset replacement costs, taxes, and reserves. All that will in the end lead to price hikes, job erasure, and a bourgeoning labour market growing still, which will in turn have security implications. To curb insecurity, special incentives will have to be worked out for the security agents which may necessitate contemplation of higher taxes! According to reports about 300 companies have shut down and nearly as many are reassessing their continuing operations! In the end, the new minimum wage becomes a vicious circle—going round and round in circles but getting to nowhere in particular! Arguably, perhaps; but it is clear to me that the gains are all illusions. According to the Daily Times issue of November 16, 1979, the salary approved by the Senate for President Shehu Shagari was N50,000 a year, for Vice-President Alex Ekwueme, N30,000a year and for a Senator N17,000 annually. That was 45 years ago. We can all see where we are today. At the end of every struggle, the worker comes out worse. And he goes again in search of another elusive victory by declaring yet another strike. What then is to be done?
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Author: Kenechukwu Aguolu FCA, PMP, CBAP
Business Analyst | Project Manager | Chartered Accountant | Public Affairs Analyst
Abuja, Nigeria This email address is being protected from spambots. You need JavaScript enabled to view it.
I’m opposed to minimum wage. And I know I’m saying this at the risk of losing readers. The minimum wage hurts the poor and vulnerable in whose name and interest Labour claims to strike.
Sounds foolish, right? How can more naira in the pocket of the Nigerian worker currently on a minimum wage of N30,000 be bad?
In a country where each of 469 lawmakers earns N13.5 million monthly, minus allowances, and office holders in the executive branch use large convoys and maintain large personal staff at the public expense, why should there be any fuss about the government paying N494,000 monthly as minimum wage to workers?
Bad example
The obscenity of public sector waste has been one of the strongest arguments for a new minimum wage. On top of that, there has been the inflationary impact of the adjustments announced last year by President Bola Ahmed Tinubu, especially after the removal of the petrol subsidy and efforts to close the arbitrage in the foreign exchange market.
The argument for minimum wage is that if some folks, especially politicians, have assumed the prerogative of helping themselves to the treasury by ingenious means, what is sauce for the goose must also be sauce for the miserably impoverished gander.
Yet, a minimum wage is one slippery slope guaranteed to take the gander from economic misery to wretchedness. Basic Economics by Thomas Sowell makes the point very clear, and the lives of those who might disagree will bear out the evidence.
Wage law trap
One, minimum wage laws set artificially high wages that can lead to lower employment opportunities, particularly among low-skilled workers. Take Nigeria, for example. Of the estimated 80 million labour force, skills among the largest demographic of this population (those between 25 and 34 years of age) are inferior.
A 2022-23 study showed that only one in 10 workers are managers, professionals, technicians, clerical support workers or occupations that require high skill levels. Most need to be better skilled and would be seriously disadvantaged in competing for any opportunity that may attract relatively high wages.
Remember that the essentially overpaid, underworked, and yet restive public service – whether at the federal, state or local government levels – comprises only a tiny fraction of the workforce. Nearly 90 per cent of Nigeria’s workforce, which may be affected by any artificial wage adjustment, are in the informal sector, that is, outside white-collar jobs.
Cutting your nose
If employers are forced to make hard economic choices about hiring or firing due to artificially fixed wages, the low-skilled and vulnerable ones whose battle Labour claims to be fighting would be the first to go. Minimum wage laws do not necessarily guarantee jobs, yet they make it more expensive to hire or retain low-skilled workers that such laws are supposed to protect.
Two, minimum wage may lead to further increases in prices. In 1974, when the government of General Yakubu Gowon accepted the Udoji commission report and nearly doubled salaries across the board, taking primary school teachers from N540 to N1,080, for example, price levels skyrocketed, even before the government implemented the new wages in the public sector! It’s convenient to say it won’t get worse until your maize seller or maiguard hears you’re now on a monthly salary of N494k!
Third, another unintended consequence of minimum wage is that it might reduce job opportunities for young people because employers may be forced to prioritise experience and skills. Also, minimum wage laws could reduce the chances of employment amongst groups, like the physically challenged, for example, who may be perceived to be less productive.
Of course, there is the other side – those who argue that if left alone, the typical employer would squeeze the last productive juice from the worker before any wage adjustments.
Supporters of this position say that the fair thing to do to reduce income inequality, boost economic growth, reduce labour turnover, and promote social mobility, among other things, is to fix wages. Prominent economists Paul Krugman and Joseph Stiglitz belong here.
I don’t. And I have no regrets. Not that I don’t believe that fair is fair. My point is that that is not a lesson the government is competent to teach the market. If an employer – any employer – decides to mistreat its workers, it would only be a matter of time before such an employer would be out of business. In a free market, the skills and talents of the worker will, sooner than later, find better, more rewarding opportunities.
Other options
And who says minimum wage laws are the only way to encourage fairness and social mobility in the workforce? Earned Income Tax Credits (EITC), which target low-to-moderate-income earners or a more transparent variety of the Nigerian equivalent – conditional cash transfers (hopefully with a more reliable database) – is another way. Several African countries, including Kenya, South Africa and Ghana, have modified and adopted this system.
Also, market-indexed wages (here again, Ghana could serve as an example) remove the unending, disruptive cycle of national minimum wage negotiations and strikes. There are other options, including performance-based pay and flexing compensation.
Many workplaces today were built on the expensive brick-and-mortar model, which has become too costly and inefficient. Employers could consider flexible work hours or more remote options to reduce commute and overhead costs and encourage moderate wage compensations.
On whichever side you belong, the consensus among economists is that minimum wage laws increase unemployment among low-skilled workers, a bitter truth that Labour may be unwilling to face.
Of course, it’s not only minimum wage that is bad for jobs. Over-regulation concerning capital, high corporate taxes and levies, poor infrastructure and bureaucratic hurdles to contract enforcement are also bad for jobs, businesses, and workers.
Thatcher way
I don’t like Magaret Thatcher, primarily for her duplicity over apartheid. But she gets full credit in my books for saving Britain from the wild strikes of wild unions that brought the country to its knees.
Of course, it’s also fair to say that, unlike Nigerian governments, Thatcher did not break workers’ eggs to make her omelettes. She was not for the turning in her determination to free the economy from the shackles of unions and in her government’s example of austere living.
Yet today, Britain appears to be losing its competitive business edge. Partly a result of the resurgence of the unions and right-wing rhetoric, it falls among countries which have been worst for income in the last 15 years, with incomes across the board growing by just six per cent since 2009, making it a laughing stock among countries in its league.
Half-full
Nigeria is not listed among countries with the slowest wage growth at least in the last 15 years, a list which includes countries like South Sudan, Central African Republic, the Democratic Republic of Congo, Niger, Malawi and so on. Apart from bureaucracy and corruption, the main challenge for Nigeria has been the tendency, especially among states, the main power blocs, to prioritise rent and politics over creativity and competition.
The strikes and disruptions over wages are not funny at all. In the cauldron of Nigeria’s post-election politics, this may look, smell, and even feel like a continuation of the war by other means. But in the end, we all pay a price. And you know what? The serious world doesn’t care. It is moving on!
The attention of the Presidency has been drawn to two fiscal policy documents in circulation that are being given wide coverage by the mainstream media and social media platforms.
One of the documents titled Inflation Reduction and Price Stability (Fiscal Policy Measure etc) Order 2024 is being shared as if it were an executive order signed by President Bola Ahmed Tinubu.
The other is a 65-page draft document with the title "Accelerated Stabilisation and Advancement Plan (ASAP), which contains suggestions on how to improve the Nigerian economy. President Tinubu received a copy of the draft on Tuesday.
We urge the public and the media to disregard the two documents and cease further discussions on them. None is an approved official document of the Federal Government of Nigeria. They are all policy proposals that are still subject to reviews at the highest level of government. Indeed, one has ‘draft’ clearly written on it.
According to the Coordinating Minister of the Economy, Mr. Wale Edun, “It is important to understand that policymaking is an iterative process involving multiple drafts and discussions before any document is finalised.
“We assure the public that the official position on the documents will be made available after comprehensive reviews and approvals are completed."
Emanating from the two documents have been reports second-guessing government's policy on customs tariffs, fuel subsidy and other economic matters.
"The government wants to restate that its position on fuel subsidy has not changed from what President Bola Ahmed Tinubu declared on 29 May 2023. The fuel subsidy regime has ended. There is no N5.4 trillion being provisioned for it in 2024, as being widely speculated and discussed,” Edun stated.
The Coordinating Minister of the Economy further clarified: “As previously stated by government officials, including myself, President Tinubu announced the end of the fuel subsidy program last year, and this policy remains firmly in place.
“The Federal Government is committed to mitigating the effects of this removal and easing the cost of living pressures on Nigerians.
“Our strategy focuses on addressing key factors such as food inflation, which is significantly impacted by transport costs. With the implementation of our CNG initiative, which aims to displace high PMS and AGO costs, we expect to further reduce these costs.
“Our commitment to ending unproductive subsidies is steadfast, as is our dedication to supporting our most vulnerable populations”.
We call on the media to always exercise necessary checks and restraints in the use of documents that do not emanate from official channels so that the members of the public are properly informed, guided and educated on government policies and programmes.
Bayo Onanuga
Special Adviser to the President on Information and Strategy
[OPINION] Navigating the Labour Strike: Striking a Balance for Fair Wages - Suanu Natureal Nkipnee
AdminIn recent times, Nigeria has witnessed labor strikes as workers press for a substantial increase in the minimum wage to ₦459,000. While the demand highlights the struggles faced by many Nigerians, it's essential to consider the broader economic implications and strive for a balanced approach.
Economic Realities
Nigeria has faced significant economic challenges, including high inflation, currency depreciation, and fluctuating oil prices. As of May 2024, the inflation rate is 33.69%, and the exchange rate is $1/₦1,468.18. These factors have eroded the purchasing power of the average Nigerian worker.
The demand for a wage increase to ₦459,000 underscores the financial strain on workers. However, such a substantial hike may not be economically feasible.
The Demand: ₦459,000 Minimum Wage
Unrealistic Expectations
Inflationary Pressures: A sudden increase to ₦459,000 could worsen inflation as businesses pass on increased labor costs to consumers.
Economic Strain on Businesses: SMEs may face reduced hiring, layoffs, or closures, worsening unemployment.
Government Budget Constraints: Meeting such high wage demands could require significant tax increases or service cuts, harming the economy further.
A Realistic and Ideal Landing
Incremental Increase to ₦121,367:
Basis: This figure adjusts for inflation over the past 10 years, ensuring wages keep pace with the cost of living.
Feasibility: This increase provides meaningful relief to workers while being manageable for businesses and the government.
Steps Forward:
Structured Wage Reviews: Regular reviews and adjustments of the minimum wage based on inflation and economic growth.
Economic Diversification: Investing in sectors beyond oil to create more jobs and stabilize the economy.
Strengthen Social Safety Nets: Enhancing social programs to support vulnerable populations, reducing financial pressure on workers.
Improve Business Environment: Policies that support business growth, ensuring enterprises can afford to pay fair wages.
Conclusion
While the call for ₦459,000 minimum wage highlights workers' financial difficulties, it's crucial to balance this with economic realities. An incremental increase to ₦121,367, along with structured wage reviews and economic reforms, offers a realistic and sustainable path forward. By working together—government, businesses, and labor unions—we can ensure fair wages and economic stability for all Nigerians.
- Suanu Natureal Nkipnee, ACA, ACIPM
Nigerians are groaning under the weight of food inflation which in March this year stood at 41.1 % as a result of the devaluation of the naira and high importation of food items. It is the same with transport inflation which currently stands at about 30% because of government unavoidable removal of fuel subsidy scam costing the country N3trillion loss yearly and consequent increase in pump price of imported petrol. Government has continued to appeal to Nigerians for more sacrifice while assuring us of greater gains after the current pains.
While most enlightened Nigerians identified with government plea that we cannot have omelette without first breaking an egg, many believe Nigerians are being asked to pay for the sins of unpatriotic Nigerians especially in the oil and banking sector responsible for our current economic nightmare. It was for this reason government came up with some palliatives and also set up a tripartite body of 37 members with organized Labour to look at the issue of minimum wage in the country.
Unfortunately, as it has turned out, if Joe Ajaero who has not been able to distance himself from the Labour Party and his group are not playing politics, they are out rightly incompetent. While it often takes as much as a year to negotiate a minimum wage in other climes, what manner of Labour leader after two strikes in less than a year, would declare a third one, arrogantly labelled “indefinite strike” without a thought for the health of the economy of a nation in distress?
The immediate cause of Ajaero’s current indefinite strike was because of a stall in negotiation by the tripartite body set up by government that has offered N60,000 as minimum wage as against Organized Private Sector’s (OPS) N57,000 and Ajaero Labour’s unrealistic N476,000. Obsessed with the federal government headed by their political foe, Ajaero and organized labour forgot that besides the federal government, other stakeholders include the 36 states of the federation, 15 of who are yet to fully implement the N30,000 minimum wage approved by President Buhari in 2019 and 774 LGAs battling for survival.
For any competent labour leader, as observed by Daniel Bwala (Atiku’s former spokesman) on TVC programme on Monday, figures presented during wage negotiation must be based on available and verified government resources .The starting point according to him is to find out how much is accruing to government, its distribution and identifying sectors Labour believes can be starved of funds to accommodate its own demand.
In other words, Ajaero and his group ought to know that the main source of government revenue is taxation: (personal income tax, corporate tax, excise duties, export and import duties, royalties from oil and other minerals, government domestic borrowings through sale of government securities through stock exchange and external borrowings through bonds for long term government loans or borrowings from IMF or World Bank and foreign grants.)
The above revenue figures can be accessed by labour leaders during budget debate and budget public hearing while the concurrent and capital expenditures the revenues are to cover can also be scrutinized.
But instead of going through this constitutional process, what did Ajaero and his fellow politicians masquerading as union leaders do? They came up with arbitrary figures they claimed was based on cost of feeding an individual member of a family of six thrice a day for one month, citing the current price of imported bag of rice.
But we don’t need to be labour leaders to know that minimum wage is for starters and not for a family of six. In any case, when did the number of children a family decides to have become the criteria for fixing minimum wage in a nation operating a market driven economy? We can as well advance Labour’s sloppy argument by saying since Islam allows adherents to marry four wives and indeed a member of the federal legislature once displayed his four wives and some two dozen children on the floor of the house, we might as well settle for four wives and 22 children as the basis for arriving at a minimum wage.
It is surprising that in their overenthusiasm to shut the nation and its wobbling economy down indefinitely, over their proposed unrealistic figures of N475, 000 for a cleaner or a messenger, they forgot the monster we are currently fighting is inflation. Precisely because they believe they can intimidate the federal government and the state government including Imo State where they were once involved in fisticuffs with party rivals, they pretended they did not know that they cannot force private sector to give what they cannot afford or dissuade them from downsizing. A Senior Advocate of Nigeria invited to throw more light on the issue by ARISE TV on Monday evening did not weigh words. If asked to pay Labour’s unrealistic minimum wage, he would reduce number of lawyers in his chambers by half, he declared.
But more disturbing is the way Ajaero and his ill-trained labour leaders behave as if they are above the law. Their first strike just as this government was taking off was said to be illegal. Their current indefinite strike has been declared illegal by the well-respected Minister of Justice and Attorney General. And as if to confirm Ajaero’s penchant for behaving as if he is above the law of the land, last Monday in addition to ordering hospitals and international airports across the country be shut down, he also shut down the national grid, an illegal act that constitute a threat to national security.
President Tinubu is an avowed democrat who believes in the rule of law. And this is why he must ensure those engaged in illegal and callous shutting down of the national grid must be made to face the law. And with three strikes in one year, two of which were illegal, it is apparent, Ajaero’s goal is not workers’ welfare but destabilizing the country. We could not have suddenly forgotten that some members of his party called for military take-over following their electoral defeat in 2023.
Kano sibling spiritual wars
Lamido Sanusi’s sermon at last Friday prayers centred on the need for Muslims to accept their destiny for good or for bad: “We must believe whatever happens to us is predetermined and what we couldn’t have is also from God”. For those who claim religion is the opium of the poor, the Hausa masses who literarily worship their emir and spiritual leader are not complaining over their lot in life? On his path, by focusing on the theme of contentment, Sanusi is doing his job of preventing social dislocations by those who live in abject poverty while emirs live in opulence or as Fela put it. (Suffer suffer for earth enjoy for heaven while the Pope and Iman de enjoy for earth).
A few years back, Sanusi also paid glowing tribute to his grandfather who supervised the famous Kano groundnut pyramids and his father who attended one of the best universities in the world. Sanusi, the father or the son, didn’t need to be troubled that the children of labourers who laboured day and night to cultivate the groundnut farms while emirs sent their own children to the best universities in the world, ended up as labourers. After all the policy of feudalism is ‘labourers born labourers’. And precisely because emirs’ word among the ruled, rich or poor, is law, his admonition to Ado Bayero, the deposed cousin he replaced to accept his destiny, is in order.
The truth is, I do not particularly care about the words in the re-introduced national anthem that some people deem offensive. They consider words like “tribe” and “native” as derogatory and outdated, while the idea of a nation where people stand “in brotherhood” bespeaks its female gender as alien to its body politic. None of that bothers me, honestly. Even the idea of Nigeria as a “motherland,” makes a little difference to me. If Nigeria is a mother, she must be exhausted from giving without replenishment. The imagery of familyhood in the anthem does not move me. Some critics are rankled by the provenance of the national anthem, but not me. I remain unmoved by whether the anthem came from colonial masters or even Ancient Greece. Whatever!
What I find terribly amusing is the supposed objective of the anthem: to foster a united nation where everyone belongs. Now, that ideal is not only overly idealistic, but will be quickly discarded next cycle of election. None of the nice and cute words in that anthem will stand against the ferocious competition and divisiveness that typify our general elections. If you ask me, the song of fealty declaration to Bola Tinubu, “on your mandate we shall stand…” would have been a far more honest choice as the Nigeria national anthem than the farce of “Nigeria we hail thee” that will unravel when the general elections approach.
Why elections? Well, which other national event else brings out the beast in us? It is what our democracy solely boils down to, the ultimate determinant of our political personhood. For the political class, elections are a do-or-die affair because they calibrate their social relevance. You either deliver your constituency, or you die. To be a dead politician does not mean you stopped breathing. It simply means you cannot pull the required weight during an election season. For the underclass, the so-called “masses,” winning an election is imperative too. Elections do not guarantee that your material conditions will improve, but winning is a symbolic victory over other identity groups in the country.
We can still recall the triumphalism of Bola Tinubu’s supporters this time last year. Some were happy their tribe won; others celebrated their religion as the winner. Such joy is the sum total of their dividend of democracy. Democracy is a quadrennial cycle of conquest, the time we get to beat down the others wallowing in the same dysfunction as us for momentary self-validation. Anyone who thinks all of that sentiment will evaporate simply because the national anthem has a line about “tribes and tongues” has got another think coming.
In a pre-presidency interview, Tinubu mentioned that if he had his way, he would bring back the old national anthem because it “describes us better” and “we are one and one Nigeria.” Now, it is ironic that the election that allowed Tinubu to have his way and be in the place to change the national anthem actively pursued ethnic divisiveness as a winning strategy. Our public memory can be extremely short, but I do not think anyone could have forgotten the dirty details of their deeds so soon. At no point did Mr “We Are One And One Nigeria” publicly censure his attack dogs. They ran freely, digging their rabid teeth into the tender flesh of an already troubled nation. After the election, Tinubu appointed one of those e-hounds, Bayo Onanuga, as his media spokesperson. Such contradiction is their MO. They will gaslight you by preaching against toxicity in the same breath they use to spread it. Now that the Tinubu boys know that the current national fetish is “unity,” their new madness will be public payments of lip service to this idol.
Tinubu himself has been a politician enough to know that there are words, and there are also words without power. Uttered words can indeed have a perlocutionary effect if the circumstances around the speaker provide the necessary integrity. Without such galvanising context, words are just words, lacking any pronunciatory effect. Singing about building a nation “where no man is oppressed” in a country where the military can detain and torture you just because you wrote an article that one small big man in Aso Rock finds offensive is enough to douse whatever passion the anthem is supposed to inspire. For people to even call for the arrest of an activist who refused to stand up while the national anthem was being played means those clowns have not bothered to digest the anthem. Yet, they somehow expect the song to instigate unquestioning genuflections of loyalty. That anthem and the sense of national unity it is expected to foster is an intriguing example of magical thinking in contemporary Nigeria.
The anthem has words like “truth and justice,” but they are terms that have no corresponding meaning to the reality of our being Nigerian. They are words emptied of meaning; mere gibberish poor schoolchildren will regurgitate during their daily general assembly. Hardly anyone, especially those who introduced, “debated,” passed, and signed the bill for the former anthem to be restored, believes there is any charm to its composition that can make it foster unity. They demanded its re-introduction simply because they were struck by nostalgia. And what do you expect from old men whose debilitated minds have long dreamt the last of their dreams?
In fact, the 2027 election might be too far before the rubber of the virtues they want to signal through the anthem hits the road of the Nigerian political system. With the way people have been severely impoverished by the poorly conceived and ill-executed policies of this administration, do not be surprised if they testily peck at each other’s intestines earlier. By 2027, the All Progressives Congress will start fuelling and harvesting that toxicity to rally its supporters. Given their administrative missteps so far, it is not that hard to forecast how the next three years will go. It will be virtually impossible for them to sell Tinubu’s second term based on his performance, and they will need to fall back on their old gimmicks of ethnic and religious divisiveness.
You can expect that sometime in 2026, the agenda will start agending. Seemingly out of the blue, someone will restart the stale conversation about “Lagos is no man’s land” and the usual idiots will fall in line. Their choristers, presently buried in the sewers of social media, will be activated in their sleeper cells with chants of “Yoruba ronu!” Another clown will come up with a “Christianisation” agenda to mobilise Muslims who might have become disillusioned with a Muslim-Muslim presidency. Even though the present administration would not have done anything significant for Muslims, they will still stir religion by reminding Muslims of the possible loss of the presidency in which they at least get to claim some symbolic power.
As the invigorated partisans herd out to vote, guess what nobody will give a hoot about? Yup, the ideals of national unity despite diverse “tribes and tongues.” The utopic vision of a “nation where no man is oppressed” and where “peace and plenty” will one day exist will be distant in our minds. The next time you hear it will be during the swearing-in where it will be, once again, trotted out as another meaningless rite of nationhood; the things we are expected to mindlessly repeat like a digital voice assistant but which we would be dupes to believe. If those who brought back the anthem had truly believed the national anthem could potentially configure cohesive nationhood, they would have approached the whole exercise far more thoughtfully. They were shoddy because they—like most of us who will now be unfortunately subjected to mouthing meaningless words—are seriously cynical about the whole Nigerian project.
The National Minimum Wage Act that came into force on 18 April 2019 prescribed a five-year review cycle. For that reason, the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) had the law on their side for the strike that paralysed the country on Monday. But even if some of us have issues with shutting down the national grid and closing the airspace, workers were not just seeking to fill a requirement of the law. The current socio-economic realities in Nigeria have rendered the N30,000 agreed upon in 2019 almost worthless. If living in extreme poverty, going by World Bank parameters, means living on less than $1.90 (almost N3000) per day, it is indeed very telling that few Nigerians can now afford what amounts to 10% of the current minimum wage. ‘Subsidy is gone’ and merging the exchange rates are at the heart of the inflationary crisis that is depleting incomes and savings, fuelling suffering and despair across the country.
Today, millions of Nigerian families go to bed without any certainty as to where their next meal will come from. To compound their problem, prices of foodstuff are skyrocketing. Using a ‘cost of food basics’ analysis that compares the monthly minimum recommended spend on food per adult and average wage in 107 countries, a United Kingdom-based Institute of Development Studies, last year placed Nigeria as the second poorest country in the world in terms of food affordability. We don’t even have to seek external validation for the current suffering by most Nigerians. A recent and more comprehensive report on poverty by the National Bureau of Statistics (NBS) estimated that 133 million Nigerians were multi-dimensionally poor based on four indicators: food security, healthcare, education, and work.
With no conscious effort to cut down on the money spent on frills by political office holders at all levels, it is difficult to tell Labour that there is no money to pay whatever they demand as the minimum wage for workers. President Bola Tinubu, for instance, has a bloated cabinet of 45 ministers and the two budgets he has put forward in the past one year do not inspire anybody to believe he understands the gravity of the situation in the country. In the absence of concrete measures to tame food inflation, the obsession with all manner of revenue generating gambits that further pauperize the people makes it difficult to sympathise with the government. But there are still pertinent issues on minimum wage that should not be glossed over by critical stakeholders. An historical context may be important here.
In 1981, a minimum wage of N125 was agreed upon. Given the exchange rate at the time ($1.48 to a Naira), that translated to about $185 per month. Ten years later in 1991, the minimum wage was increased to N250. Going by the exchange rate of 8 Naira to a dollar at the time, that amounted to about $30. But that did not tell the whole story. As a National Youth Service Corps (NYSC) member in 1989/90, my monthly ‘allawee’ was N250 per month. Not only was it enough for my upkeep but I still had savings. That speaks to the Cost-of-Living Index (COLI) in the country and the purchasing power of the Naira at the time. In 2000 when the minimum wage was pegged at N5,500, the exchange rate was N84 to a dollar. Eleven years later in 2011, when the minimum wage was jarked up to N18,000, the exchange rate was N155 to a dollar. In 2019 when the new minimum wage became N30,000, the exchange rate was N305 to a dollar, but the COLI had started to go haywire. With the same exchange rate now about N1500 to a dollar, we can do the arithmetic to understand how hard things have become for the average Nigerian worker.
But what most people don’t understand is that the minimum wage is not about just government workers. It is meant for all workers in the formal sector except those on part time employment, or establishments with less than 25 persons. In a survey report titled ‘Labour Force Statistics’, released in February, the National Bureau of Statistics (NBS) revealed that about 92.3 percent of Nigerian workers are in informal employment as at the third quarter of 2023. The implication is that Labour is fighting for a tiny minority with their fixation on federal workers. So, this conversation is narrow and counterproductive.
Last week, the Organised Private Sector of Nigeria (OPSN) defended the initial N60,000 on offer by the federal government. “While it is important to note that socio-economic conditions over the years have rendered the N30,000 minimum wage inadequate, the same conditions have incapacitated many businesses, fatally affecting their sustainability and ability to pay,” according to the Nigeria Employers’ Consultative Association (NECA) and OPSN spokesperson on the minimum wage negotiation, Adewale-Smatt Oyerinde.
The OPSN is made up of the Manufacturers’ Association of Nigeria (MAN), National Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA), National Association of Small Scale Industries (NASME) and National Association of Small Scale Industrialists (NASSI) and NECA. “The offer of N60,000, which is a 100 per cent increase in the current national minimum wage was sacrificial on the part of the organised private sector,” said Oyerinde who harped on the need to protect jobs and ensure sustained growth in the economy. “The demand by organised labour at this period has the potential to cripple small and medium enterprises and push many other businesses into comatose.”
To understand our national dilemma, here are facts that should compel sobriety. As of June 1980 (44 years ago), a barrel of oil was selling for $37.24 and we were pumping 2.2 million barrels into the international market daily. The population of the country at that time was 73.44 million. Today, the price of oil is $85, and we are pumping roughly 1.3 million barrels a day. Several times in recent years we were pumping less than a million barrels per day. The implication is that while our population (currently estimated to be 229,152,217) has more than tripled, our earnings have not changed because we still rely on oil to run our economy. And with a penchant by succeeding administrations to create bubble jobs, we have almost five times the number of workers in the public service today than we had at the time!
Meanwhile, the process by which the Ama Pepple-led national minimum wage tripartite committee arrived at the figure of N30,000 was perhaps the most rigorous of any such undertaking in recent years. When they began work in December 2018, labour was demanding N66,500 per month while the organised private sector proposed N25,000. Incidentally, of the six governors, each representing a geo-political zone, that were in the committee, only Abubakar Bagudu, then governor of Kebbi, who represented the North-west, took the assignment seriously by attending the sessions. Bagudu is now Minister of Budget and National Planning and is involved in the current negotiations. Aside the institutional memory that he brings to the table, Bagudu understands the economic dynamics at play. But he also knows that these issues go beyond what the federal government can offer its workers.
Shortly before he retired after 15 years of meritorious service as founding Director General of the Nigerian Governors Forum (NGF), I sought to know from Mr Asishana Okauru the stand of governors on the minimum wage crisis. He gave me a highly revealing position paper prepared in January by the NGF secretariat. Market conditions, according to the NGF paper which relies heavily on figures from the NBS, “have become tougher amidst indications that the (federal) government did not have the fiscal headroom (the tripod of a robust external reserve balance, Excess Crude Account savings and revenue adequacy) to manage the fallouts of both policies (fuel subsidy removal and exchange rates merger) in the near term.”
Most countries, according to the NGF paper, set their national minimum wage “on the back of price movements such as inflation, cost of living, median earnings (average earnings of the middle half of earners) and the state of the economy.” With several graphs and charts, the paper then referenced the position of the International Labour Organisation (ILO) that “in many of these countries, except where collective agreements cover over 90% of employees, the coverage of collective bargaining as a norm for wage fixing is insufficient to provide protection of minimum standards to a broad majority of workers.” The NGF paper advocates for a decentralised minimum wage system. “This debate has risen in the context of broader economic and social concerns about income inequality, cost of living, labour market flexibility and the fiscal capacity of each state government. In other jurisdictions where this has been applied, two wages still exist, and the higher minimum wage usually applies.”
Citing examples from the United States and the United Kingdom, the NGF paper highlights where the government and Labour get the entire conversation about minimum wage wrong before delving into the challenge of the 36 states. Quoting NLC reports, the NGF paper admits that “many States are yet to implement the 2019 wage review, reflecting indications that they did not have the fiscal headroom to comply with the recommendations of the 2019 NMW review, and that they may not be in a good position to adopt another review in 2024.” The paper added, “In addition to the non-implementation of the 2019 NMW review, new governments still face the burden of legacy salary and pension arrears which had accumulated to N672.6 billion in 2021. It is unclear what the present value of these debts amounts to, but it is estimated at 10% of the total recurrent revenues of States.”
Fiscal reprieve expected from the removal of PMS subsidies has not been sufficient to accommodate a new minimum wage, according to the paper. “The upside of the Naira devaluation has been a sharp growth in exchange gain from dollar denominated revenues, but overall transfers to states have not significantly outperformed records in the first half of 2023. The smoothening of Federation Account transfers to the three tiers of government by fiscal authorities may be attributed to a posture of money supply tightening given the current level of inflation in the country.”
For many States, according to the paper, “it would be unrealistic to expect a full implementation of a wage adjustment in 2024” because current circumstances require additional measures, including “a budget review to identify non-essential expenditures that can be deferred or reduced, debt restructuring to free up the fiscal space, a wage freeze for selected personnel, phased implementation for the new NMW, and the introduction of social safety nets to provide a cushion for workers where job cuts are necessary.”
Given the state of the economy, the paper concludes, a new minimum wage will worsen employment outcomes in the public and private sectors – both in terms of current workforce retention and the potential to make new hires. “A wage hike may lead to higher prices for goods and services and exacerbate the cost-of-living crisis. This is particularly concerning for small and medium-sized enterprises (SMEs), as they are more sensitive to production cost increases. Of those employed, the NBS puts the number of workers in wage employment at 12% while the remaining 88% are self-employed.”
Following the suspension of the strike by Labour on Tuesday, President Bola Ahmed Tinubu directed his Minister of Finance and Coordinating Minister for the Economy, Olawale Edun, to come up with the cost implications of an affordable, sustainable and realistic new minimum wage. But we all know that Edun’s assignment is strictly limited to federal government workers. While the 2020 data on IPPIS Platform revealed that there were 696 Federal Ministries Departments and Agencies (MDAs) with 1,139,633 workers, the Director-General of the Budget Office of the Federation, Ben Akabueze, revealed last August that the federal government’s personnel cost had hit over N5 trillion, with 1.5 million workers on its payroll. Of course, we know that many of these would be ‘ghost workers’, but even at that, we are talking about far less than one percent of our population.
At a period, such as this, when most Nigerians are struggling to survive, it is difficult to fault the argument of Labour for a living wage. But outside the federal government that they can easily arm-twist with the shutdown of the national grid, they cannot enforce anything with the states or private sector. This, of course, is not an argument against minimum wage. It is to point out that no matter what Labour agrees with the federal government this week, most workers in the country will not earn it, and at the end, the people could be worse off.
What the situation in Nigeria today demands is a comprehensive and bold economic policy that increases our productivity and helps create jobs for our young people. That cannot be done when you take one step forward and three steps backwards, as is now the case in Abuja. “At current rates, expenditure on fuel subsidy is projected to reach N5.4trillion by the end of 2024. This compares unfavourably with N3.6 trillion in 2023 and N2.0 trillion in 2022,” according to the latest Accelerated Stabilisation and Advancement Plan (ASAP) presented to the president by Edun which officially confirms that the ‘Subsidy is gone’ claim is audio, as they say on the street. We also need targeted social interventions that include population control. Subsidising healthcare and education as well as other welfare programmes for the most vulnerable of our society is equally important.
In essence, as much as we require a new national minimum wage law, nobody should be under any illusion that it is a solution to the challenge of daily living in today’s Nigeria.
Turning your pain into gain
Your pain is becoming your testimony. You are being healed now! You are being located, rescued and restored. I said that you will not nurse those wounds again. You will no more pine away in that pain, hopelessness and regret. Our God specializes in turning wounds and pains into sweetness and greatness. Yes, pains, wounds and scars mark out generals. True. Show me a general and I will show you a man with scars and near-death experiences from battles. Do you want to be great? Then you must be ready to accumulate scars, wounds, enemies, deprivations, betrayals and battle stars. Even Jesus went through them all. God gave him a name that is above all names in heaven, on earth and under the earth (the waters), but that was not without scars. He went through robbing, wounding, abandoning and ultimately was killed. But he came back, rose again to become the sovereign, the indestructible, the immortal King of Kings and the Lord of lords. And today when you mention his name all things - principalities, powers, dominions, thrones, Satan, demons, situations, diseases, occult masters, and satanic agents bow. No scars no authority! In fact, the bible said that his wounds brought us healing - spiritually, emotionally and physically. And by his death, we have received life and victory! If he was not robbed, disgraced, bruised, betrayed and abandoned to die we would not have been saved and empowered today.
Now, there are many in the bible that went through this experience, but we will just pick one or two because of time and space. Look at the hopelessness of the paralyzed man that was abandoned at the Pool of Bethesda. His good health was taken away. He could not walk or help himself and he did not have anybody to help. Even when he lay near the solution, there was nobody to rush him into the water when it was stirred by the visiting angel. And he was in this situation for 38 years. He was virtually left there to die. So he also had no friends or relations? My God! Yes, friends and relations have a limit to what they can do for you at the time of trial. Don’t put your hope on people, trust God. Don’t trust things, rely on the creator. He is the one that will stay with you when everything has failed. He will stand with you when everyone is gone. The main problem of this man was that he had nobody to help him. As his situation got worse and complicated, everybody deserted him. Nobody, unless a God-sent will stand with you in such condition for 38 years. Nobody! Just few weeks every sympathizer is gone. And few more months, your relations and best friends will gradually start distancing from you. Only your children and a godly spouse, I repeat, a godly spouse will hang on with you when it gets too tough and too long. But I doubt if our friend here had kids and wife. Or they also abandoned him and vamoosed because it happens. It’s possible. Haven’t you seen such before? Human beings are unreliable and unpredictable. May you not over stay in that trial in the name of Jesus!
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[OPINION] An Impassioned Allocutus for the Preservation of Workers' Rights in Nigeria By Kayode Ajulo, SAN
AdminAs a proud and unyielding advocate of the rights of all in our beloved realm, I find myself utterly perplexed and deeply saddened by the mere suggestion that our esteemed National Assembly would seek to stifle the hallowed right of workers to engage in lawful strike action. This notion, I must adamantly declare, is one that I simply cannot bring myself to believe.
The fundamental entitlement to strike, bestowed upon the noble laborers of our land, has been affirmed by our courts, local and international and it is a sacred cornerstone of our social fabric – a cornerstone that must be safeguarded with the utmost vigilance. To even contemplate the subversion of this legitimate process would constitute a most worrisome development, one that would grievously infringe upon the basic rights of our hardworking citizens.
Strikes, I must emphatically state, are a rightful and crucial tool for our valiant workforce to negotiate for improved working conditions, fair wages, and the social protections they so rightly deserve. These actions are not merely a privilege, but a fundamental human right, enshrined in the very ethos of social justice and the principles of collective bargaining. Any attempt to criminalize this time-honored practice would undoubtedly undermine the very foundations upon which the International Labour Organisation (ILO) has championed – the bedrocks of social dialogue, collective bargaining, and tripartism.
Should the National Assembly, in a moment of unthinkable transgression, pursue such an egregious course of action, it would undoubtedly exacerbate the already strained industrial relations in our beloved Nigeria. Such a move would inevitably lead to further unrest and social upheaval, shattering the fragile bonds of trust between workers and their elected representatives. Nay, they must instead focus their efforts on addressing the underlying issues driving the justifiable demands of our workers, including the provision of fair compensation, decent working environments, and adequate social safeguards.
Constructive dialogue with labor organizations and all relevant stakeholders is the only path forward. Only through such earnest and compassionate engagement can we hope to find solutions that promote true social justice, fair labor practices, and the sustainable development of our nation. For it is only through the harmonious collaboration of all stakeholders that we can forge a future of economic prosperity and social harmony, where the unalienable rights of the worker are safeguarded with unwavering commitment.
However, I must also express my grave concern over the reported instances of criminality that have at times accompanied strike actions. The tampering with our national grid, for example, is a most disturbing development that cannot be tolerated, for there are certain essential services that must remain uninterrupted, even in the face of legitimate worker protests. While I staunchly defend the right to strike, I cannot condone actions that jeopardize the well-being of the broader populace.
It is my fervent hope that our esteemed lawmakers will approach this delicate matter with the utmost wisdom, empathy, and an unwavering commitment to the well-being of all Nigerians. For only through such steadfast dedication can we forge a future where the rights of the worker are not merely enshrined in law, but honored with the reverence they so rightfully deserve.
-Dr Olukayode Ajulo, OON, SAN
It was Freedom Day again in South Africa on April 27, a few weeks to the general elections held last week.
This year, South Africans actually celebrated a milestone: 30 years ago the first post-apartheid election was held and the heroic symbol of struggle for multi-racial democracy in the country, Nelson Mandela, was elected president. A new constitution was also introduced on that day.
It also happened that on that day of the first election in 1994, a child was born in the household of Mr. Ernesto Ubisi and Mrs. Mariama Ubisi, both Mozambicans immigrants in a poor village called Lillyade in the Mpumalanga province of South Africa.
The family of Ubisi elected to name the new arrival Vote. At 30, Vote now works as a waiter in the South African tourist industry.
Mr. Vote Ubisi spoke in a television interview on the Freedom Day as the campaigns were in full swing for the last week election. Vote was excited that he would vote in the election. Remarkably, Vote was hopeful about the future of South Africa. On the one hand, Vote cherished the fact of being born into freedom. As he put it, he had no memory of the odious past of apartheid. On the hand he commented that 30 years after apartheid potable water was not still available in the village. That was Vote’s graphic way of making the point that the dream of an equitable society was yet to be fully realised. For joblessness, inequality, violent crimes and official corruption are still the defining features of the South African society.
To be fair to the country’s leadership in a statement to the nation on the Freedom Day, President Cyril Ramaphosa honestly put the problems mentioned in the foregoing into a sharp focus.
In many respects, Vote’s views were representative of the electoral mood in the country. It was a mixture of a deep sense disappointment in many constituencies and flickers of optimism in several others.
Little surprise then that this trend was amply reflected in the results of the elections announced at the weekend. The African National Congress (ANC), the party of Mandela, lost the electoral majority for the first time in 30 years. The party that was once clearly dominant will now be compelled to go into a coalition to govern. Although the ANC still has the highest percentage of the votes, it is now in its weakest position politically in three decades.
The party needs 50% of the votes to form a government alone. Unfortunately, it scored only 40.2% as against 21.8% of the Democratic Alliance (DA); 14.9% of the uMkhonto we Sizwe (MK) party and the 9.5% of the youthful Economic Freedom Front (EFF). Both MK and EFF are breakaway political forces from the ANC. The MK is a political platform hurriedly put together for former President Jacob Zuma to return to power while the EFF is more ideologically opposed to the socio-economic policies of the ANC government. The DA has been a long-standing opposition with a liberal agenda. It has its provenance in the old National Party of the apartheid era.
Critics of ANC had long predicted this electoral decline of the great organisation which transformed most admirably from a liberation movement into a robust political party.
The failure of the ANC to tackle poverty decisively despite the party’s past electoral fortunes is, perhaps, the major factor for the downward trend in its popularity. The issues of the elections were the surging crime rates, poor power supply, official corruption and widening inequality. All these problems have persisted despite South Africa being rated as the economy with the largest Gross Domestic Product (GDP) in Africa for years. For some time, South Africa was the toast of the World Bank and the International Monetary Fund. As its economic managers embraced neo-liberal reforms, South Africa became a model of how to get things right in economic terms. Now, the lesson is that the application of market forces alone cannot solve the problems of poverty and inequality. If anything, neo-liberal excesses can only deepen poverty. The allies of ANC in the days of th struggle for freedom – the South African Communist Party and the Congress of South African Trade Unions (COSATU) – warned against this trend, which came to a climax under Ramaphosa. Party leaders such as the late Winnie Mandela pointed to the huge numbers of black people still in poverty and the increasing alienation of the ANC from a segment of its base.
All told, the good news is that democracy has triumphed again in South Africa despite Zuma’s criticisms of the results. The people’s will has prevailed and the election was conclusive.
As the ANC ponders its coalition options, it may need to also look ahead to correct the errors that produced the electoral mood of which Mr. Vote Ubisi ‘s commentary was a metaphor.
[OPINION] Heritage Bank’s licence revoked — what happens to depositors, shareholders? - Bunmi Aduloju
AdminOn June 3, the Central Bank of Nigeria (CBN) revoked the banking licence of Heritage Bank Plc, raising curious questions about how depositors and shareholders would fare in terms of getting back their funds.
The CBN had explained that its decision on the licence revocation was made due to the bank’s inability to improve its financial performance.
The regulator said Heritage Bank, which was nationally licensed, has not improved and “has no reasonable prospects of recovery”, thereby making revoking the licence the next necessary step.
According to the CBN, the Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the liquidator of the bank in line with Section 12 (3) of the Banks and Other Financial Act (BOFIA) of 2020.
A liquidator is an organisation with the legal authority to act on behalf of a company to sell the company’s assets before the said firm closes, in a bid to raise capital for various purposes such as debt repayment.
Following the licence revocation, the NDIC said it would pay a maximum of N5 million insured deposits to each customer of Heritage Bank.
However, the corporation said depositors with funds more than “the insured deposits will be paid as and when the assets of the closed bank are realised”.
Deposit insurance involves insuring a financial institution so that depositors are guaranteed against loss in the event the bank fails.
HERITAGE BANK NOT NEW TO REGULATORY ISSUES
This is not the first time the bank has run into issues with regulators.
Heritage Bank was founded in the 1970s as the Societe Generale. The CBN, in 2006 closed down the institution due to failure to meet new capital requirements of N25 billion ($155 million), after which the bank successfully challenged the closure in court. The CBN reissued the licence as a regional bank in December 2012.
Having acquired the banking licence, the new ownership rebranded the bank as Heritage Banking Company Limited and opened for business on March 4, 2013.
In October 2014, Heritage Banking Company met the requirements of Asset Management Corporation of Nigeria (AMCON) and the CBN for 100 percent shares in Enterprise Bank Ltd.
In January 2015, AMCON officially transferred ownership of Enterprise Bank to Heritage Bank.
With the bank now enmeshed in another regulatory woes, TheCable looks at the implications of Heritage Bank’s licence revocation on depositors’ funds and stakeholders.
WHAT HAPPENS TO CUSTOMERS?
According to the CBN, the NDIC is required to commence liquidation of the revoked bank’s licence and the payment of depositors.
The insured institution’s assets, according to the NDIC, must be available to cover its deposit liabilities, which will be prioritised over all other liabilities.
Payment of the insured deposit to customers of banks — in this case, Heritage Bank — is expected to be done by the corporation within 30 days of being appointed liquidator, according to Section 28 of the NDIC Act.
The payment can be made by cash or a negotiable instrument, and customers can also receive the specific amount payable via transfer to another financial institution.
The NDIC, at its discretion, would require proof of claim from all qualified depositors of the bank, the Act also states.
The corporation may also seek a final determination by a court of competent jurisdiction if it is not satisfied with the validity of a claim for an insured deposit.
According to Section 31 of the NDIC law, after payment of insured deposits, the corporation may make interim dividend payments from proceeds of realised assets of the failed insured institution.
The law, in Section 57, emphasises that shareholders and directors are individually liable after a bank’s licence revocation.
STEP-BY-STEP PROCESS FOR DEPOSIT REPAYMENT
In a statement on June 3, Bashir Nuhu, spokesperson of NDIC, assured that depositors would retrieve their funds, stating the process for such retrieval.
“Visit the nearest branch of the bank with proof of account ownership, verifiable means of identification such as driver’s license, permanent voter’s card, National Identity Card, together with their alternate account and Bank Verification Number (BVN) for the verification of their deposits and subsequent payment of insured sums” he said.
“Creditors are advised to visit the nearest branch of the bank to file their claims or via the online platform. Please note that the process of payment of creditors will commence immediately after all depositors have been paid.
“Debtors’ Repayment of Loans: Debtors who have yet to repay loans are advised to contact the Corporation’s Asset Management Department (AMD). Visit the NDIC website for more details.”
WHAT HAPPENS IF DEPOSITIORS DO NOT CLAIM PAYMENT?
Section 30 of the NDIC Act mandates that a corporation must give depositors at least three months’ notice to pay, either by mailing a copy to their last known address or publishing a general notice in at least two national dailies and electronic media houses, notifying them of the venue and dates for payment.
According to the regulation, any depositor who fails to claim the insured deposit within six years after the notice would forfeit such sums to the corporation.
To protect depositors, the NDIC could decide to appoint another financial institution to assume the deposits of Heritage Bank.
If the customers fail to claim or arrange to continue their transferred deposit with the new insured institution within six years, all of their rights against Heritage Bank and its shareholders will be reverted to the corporation.
The amount of any transferred deposit not claimed within six years will be refunded to the corporation.
Section 30(6) of the Act states that a court proceeding cannot be commenced against the corporation in respect of its obligation to make payment to depositors of the failed financial institution after six years.
CAN AGGRIEVED DEPOSITIORS, SHAREHOLDERS SUE NDIC OVER PAYMENT ISSUES?
Moreso, depositors or shareholders who, for instance, do not receive deposits or dividends from the NDIC after following due process, can sue the corporation.
According to Section 29(2) of the NDIC Act, in case of any suit against the corporation, what will be paid (remedy) to claimants would be limited to the amount of actual loss suffered.
For depositors, it is the maximum insured deposit, while shareholders get the nominal value of the shares in the insured institution. A group of shareholders will receive the nominal value of the aggregate of the shares in the insured institution.
Like depositors, financial institutions and its shareholders can challenge their licence revocation, according to the CBN.
However, aggrieved parties can only do so within a 30-day period after licence revocation.
In the BOFIA Act, Section 12(5) states that no action in respect of the licence revocation of a financial institution must be filed or maintained unless it is filed within 30 days from the date of the revocation.
It made a lot of sense that President Bola Ahmed Tinubu chose to mark, not celebrate, his first year in office. Celebration would have been termed insensitive by many, and the president would have been charged for profligacy and extravagance. Which serious or sane leader celebrates when the people he leads are in great and excruciating pains?
Truth be told, the suffering in the land beggars belief. In that, I am one with the critics of the president. But we part ways when they say one year is enough - or even more then enough - for Tinubu to have cleansed the country’s Augean stable.
The rains started beating the country a long time ago; unfortunately, we seemed not to have taken notice until it began to pour, if I must quote “Ogbuefi” Godwin Nzeakah (where are you?), my colleague on The PUNCH newspaper’s Editorial Board. Godwin was fond of saying it doesn’t just rain for him but that it pours!
Nigerians did not take notice of - or they ignored - the incremental damage done to the country right from Independence in 1960, through the time of the first military coup in January 1966, to the wasteful years of Yakubu Gowon, who was credited with saying that Nigeria’s problem was not money but how to spend it. Oil money that should have been invested in agriculture and industrialization, thus, was wasted.
Military ruler after military ruler continued where Gowon stopped, with the gap-toothed one, IBB, acclaimed for institutionalizing corruption and the “settlement” syndrome as well as destroying esprit de corps and discipline in the military. Since 1999, mention a Nigerian leader whose administration did not add heaps of rot on the country’s Augean stable?
Pardon me, I am not one of those who expect a miracle or magic from President Tinubu. I know it is easier to destroy than to repair or rebuild. So, I expect that more than one year is needed before we begin to see appreciable results. But my worry is whether or not the president is headed in the right direction; whether or not he is pursuing the right policies; and whether or not he is clear-headed and deeply-foresighted as to where he is taking us.
Are we heading farther into the dark tunnel? Are we sinking deeper in the miry clay? Is the president leaving the substance and chasing shadows? Unfortunately, two decisions of his which coincided with his first year anniversary got me deeply worried. The first was his decision to drag the 36 state governors to court over so-called autonomy for local governments.
I have said quite unambiguously in my “Nigeria: Federalism, unitarism, hybrid or what?” that what is needed is the total scrapping of the 774 local government areas and not strengthening them in any form. It is the duty of federating units to create, manage and fund local governments, not that of the Federal or Central Government. The question must also be asked: The 20 local governments and the additional 37 Local Council Development Areas created by Tinubu as governor of Lagos State (1999 - 2007) - did he let them enjoy the fiscal autonomy he (Tinubu) is now demanding from the present governors?
The second decision of the president that has made him the butt of cruel jokes is the return of the country to the old national anthem. Please, get me right: old or new, I am not a fan of any of the anthems. As my people will say, a man is engulfed by fire and you are still asking after his lush beards! Nigeria itself is on fire and some wailing wailers (apologies, Femi Adeshina) are bringing down the roof on our head over a common anthem!
If I may ask, which of the anthems is better than the other? There may, however, be a spiritual significance lurking somewhere; to wit, that the country’s glory years remain in its past! May we not know better yesterday! Ask Nigerians, they will tell you that this country has known better yesterday. My people say where going forward is impossible, going backward becomes inevitable.
Is that also what is playing out in Kano? Why the hullabaloo if not that our people have very short memories like Adolf Hitler did posit? How dare we easily forget the many lives lost to the fire of religious extremism stoked by this Emir, even if we overlook his shenanigans at our apex bank? Was he the rightful occupant the first time he was dashed the throne? And then he lost it the same way he had got it. A new Emir then got to the throne the same way the old Emir did. He, too, now lost it the same way the old Emir did. New/Old. Old/New. Game of musical chairs. What goes around comes around. Every usurper has his cup full some day. If the House of Uthman dan Fodio becomes like the House of Abraham in the land of Palestine, then, their cup of tea! Let them drink it!
Back to Tinubu! I read Bayo Onanuga’s “One year after: The legacy man and his strides” and Tunde Rahman’s “Tinubu’s silent and unreported achievements” and felt empathy for the two presidential spokespersons, who are both my friends and professional colleagues. They have a task to perform. And it is not an easy one. Besides, I agree with them that their principal has done a lot within such a short time. The chicken sweats but the feathers wont let us see.
The task before Tinubu is gargantuan. And one year is such a short time. When trees fall upon trees, you start by first pulling off those on top before you get to those at the bottom of the pile. In Nigeria’s present predicament, the trees on top are the powerful and mighty; those with a voice, and those we call the ruling class. We have seen how Tinubu has quickly attended to them. Those underneath, the underlings, the hoi polloi, the suffering masses, will have to be patient. It is turn-by-turn. Emilokan before Eyinlokan!
I am not a fan of Ayinde Wasiu but there is a song of his that I love so much: Nwon maa pe yin, ijo o ti kan yin/Ijo maa kan yin, nwon o ti pe yin! It is a song of appeal at a party to those rushing to take their turn on the dance floor that it is not yet their turn. Be patient! It will still/soon be your turn. The big masquerades are the ones dancing now. Lesser mortals, be patient. Has it not been said that the patient dog eats the fattest bones? But I heard it in my spirit: Not in Nigeria! Here, the fastest and smartest dogs eat the fattest bones!
But let us remind Onanuga and Rahman that what the people are saying is not that the President has not been working his arse out in the past one year. No, the people have eyes and can see their president working real hard. What they are saying is that he is not working in their direction yet. The great work the President has done in the last one year has not added value to the life of the majority of our people. Instead, they get more impoverished by the day.
Our people say if you give a mad man a hoe, he will make the first ridges to benefit himself. That is natural. What the people are saying is that, lest the suffering in the land kill them before it is their turn to enjoy the proverbial dividends of democracy, the President should quickly look in their direction - NOW! They are also saying that delay is dangerous. And they are not asking for the Moon!
Permit me to be their spokesperson as I list their demands as follows: 1. Tackle insecurity, which still struts the arena like a colossus 2. Curb inflation, which is making nonsense of every decent effort to eke out a living 3. Arrest epileptic power supply and bring down the cost, which is frustrating big and small businesses, and making life miserable for the people 4. Do something about the Naira that is rising and falling every day in the forex market 5. Resolve the lingering ASUU/FG dispute so our children’s stay in school is not unnecessarily prolonged with the attendant cost implication on parents; not to talk of the frustration it causes students and lecturers alike 6. Resolve the dispute with Labour once and for all so that the losses and damage inflicted on the economy and on individuals by incessant strike actions can cease 7. Drive a vigorous return to the land (agriculture) so that soaring cost of foodstuffs can be arrested. 8. Decrepit infrastructure, especially inland and township roads, should be addressed expeditiously as Tinubu has done the Lagos - Calabar coastal expressway. 9. The unemployment rate has become damn too alarming for comfort; the “Japa” syndrome is an ill-wind that blows the country no good. 10. A prayer that everyone prays these days is: May we not fall sick! The cost of medicine and medicare has soared beyond the reach of many. Our hospitals are bereft of quality hands and are now worse than the “mere consulting centres” of the military era.
I as a person appreciate our President. As our people will say, “Okunrin l’ada”. Tinubu is the Lion Heart. But now is the time for him to come to Macedonia and help the perishing poor!
I hope I have spoken well!