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Tag: Dakuku Peterside

  • The geo-politics of Nigeria’s insecurity – By Dakuku Peterside

    The geo-politics of Nigeria’s insecurity – By Dakuku Peterside

    In the past ten years, the South-East and North-East geopolitical zones, more than other geopolitical zones, have been sites of experiments on insecurity and militia reign. Either terrorists, kidnappers, or militias were testing the will of the government to see how long it would take for a determined state to take charge, or it was just a playground of absurdity. The result is known. Political leadership and the elite failed the people irredeemably. Admittedly, insecurity on a national scale abhors partitioning. The factors at play in a place may owe their origins to factors emanating from a totally different region, but there is good reason to focus on the two zones.

    In the two zones, the persistent violence had three distinct features: first, the impunity with which Boko Haram and its affiliates, and unknown gunmen have been allowed to operate; second, the helplessness of the residents; and third, the seeming indifference of the political elite. These defining features fuel existential anger among the people.

    Somehow, lately, it appears governors from both regions have found their mojo and courage to rise to the challenge, and that deserves examination and commendation. The source of this new energy and focus is unknown. One thing is clear: the federal government has done its best to redeem the situation, but its best is not good enough. The federal government just did not know how to deal with the situation beyond a military-centric option, and the military deserves commendation for the successes they have recorded so far. Both regions have never been safe places for residents and businesses.

    The connection between concrete development and the decimation of militia-led insecurity and related complications has long been established as a theoretical and practical fact. This has been lacking over the years in both regions. Save for a few cases, there has been a substantial disconnect between the people’s development aspirations and the area’s government. Actual development, especially education, helps fight violence, terrorism, and its like. Lately, we have begun to see development programs in a handful of states in both regions, which impacts insecurity in the area.

    Besides, the people, too, are beginning to resist the domination of their areas by these non-state actors. Community leaders are now more involved in intelligence gathering. The locals have started organising themselves into quasi-security formations and are beginning to be the first resistance point even before the organised formal security apparatus of the state is involved. This calls for more synergy between the informal and formal security structures and systems in these areas for better operations.

    Also, the people’s sensitisation to the fact that these non-state actors purportedly fighting for unknown causes are not doing so for the collective interest of the locals. Instead, the locals in their various communities are the casualties of the needless violence and murderous orgies meted out on them. This new consciousness must be harnessed efficiently to the advantage of the communities. The fight against insecurity is becoming local, and interestingly, the public sphere and media framing the conflicts as banditry and criminality rather than a fight for freedom, self-determination, or religious zealotry is helping matters. I sincerely think that even the perpetrators recognise the impact of this new approach and have turned to symbols of the state for their attacks to legitimise their acts as actions against the state when they are not.

    There is a temptation to believe that the insecurity in the northeast and southeast is a scam and a cash cow for interested parties due to its persistence and nature. Additionally, there is a general belief that the security establishment deployed to secure the southeast has found collaboration with criminals and conflict merchants to exploit the separatist agitation. In the northeast, we also find that Sahelian jihadist insurgency had been increased by socioeconomic pressures from the most impoverished states in the nation.

    The southeast represents a false agitation for self-determination, whereas the northeast’s insurgency is neither ideological nor religious. Both cases involve ordinary criminals acting as agitators and religious zealots. The criminal colonisation of both regions for an extended period is horrible and disastrous. The political and traditional establishments of both geopolitical zones, led by the governors and National Assembly members, must band together, seek support from wherever possible, and bring this tragedy, which is economically strangulating and socially demoralising, to a stop. Tomorrow is too late.

    Recent attacks have shown the ruthlessness of these criminals and demonstrated unequivocally the need for exorcising this evil madness from our communities. A pattern is beginning to emerge: shoot-and-run attacks on soft targets and targeting military/police personnel to instill fear in the people. Unknown gunmen, who were said to have been enforcing the sit-at-home directive of the proscribed Indigenous People of Biafra (IPOB), on May 21st opened fire on a military checkpoint in Obikabia junction in Aba, killing five soldiers. The response of the state government was decisive. The least we expected from the federal security apparatus was to fish out these culprits and use them to demonstrate the new vigor of fighting criminality posing as agitators. We seem to have lost this opportunity to prove a point. This applies to the recent twin bombing in Gwoza, Borno state.

    In Ebonyi state a few weeks ago, gunmen invaded Ishieke Divisional Police Headquarters and started firing sporadic shots. They killed and maimed people, although the report shows that five of the gunmen were killed. Hours before the attack in Ebonyi, gunmen wreaked havoc in Okigwe Local Government Area of Imo State where they killed six people. A few days later, gunmen killed two police operatives and injured two others in Aba, the commercial hub of Abia state. Between 22 and 26 May 2024, a non-state armed group attacked communities in Gujba local government area in Yobe State. The incident displaced 732 households and resulted in three fatalities and 12 injuries. Among the affected were 2,720 children, 1,038 women, and 976 men. These incidences are ongoing, and the casualties are increasing daily. There is a need to quickly optimise the power of collaborative strategy between the federal security apparatus, emerging regional architecture, state governments, and communities.

    On the issue of historical injustices, especially in the southeast, unfortunately, the FGN since 2015 has not addressed the grievances; they just looked away. However, the elite of the southeast have realized that there is a need to change their strategy. One of the manifestations of this change in strategy is the resolution by South-East Governors, supported by members of the National Assembly from the zone, to approach the president to release Nnamdi Kanu. Governors of the South-East had earlier resolved to fight insecurity decisively in the region, individually and collectively, in partnership with the federal government of Nigeria and other stakeholders. Though the details of how they intend to fight insecurity are scanty, at least they have found their voice.

    As Chief Security Officers of their respective states, governors must demonstrate significant commitment to confronting perpetrators of violence and resolving core causes of insecurity in their states and, by extension, the geopolitical zone. The sign that governors appreciate the enormity of the challenge is there. The next logical step is to confront the monster from its root. The battle is not just kinetic in nature. It is a battle to win the hearts and minds of people, both the perpetrators and their victims. The perpetrators of these heinous crimes are often community members and are known to the local people.

    The ideological prism which has held many people hostage to support the call for Islamic militancy or Biafra romanticism resonates with people who are disenchanted or dissatisfied with the existing system. This is rooted in deep-seated anger against a system they feel is holding them hostage and from perceived development. I am sure that when we put good governance and leadership that brings dividends of democracy such as economic and infrastructural development, social justice, and the rule of law, the level of agitation will reduce, and people will have little reason to want to upturn the system.

    It is time the states addressed the interconnected concerns such as unemployment, poverty, bad governance, injustices, resource competitiveness, and the development of an inclusive society. Effective governance at the state and grassroots levels is critical to resolving the issue of extreme violence and criminality. Regional cooperation among states and between states and the center is beginning to bear fruit, albeit only in terms of psychological effect and public perception.

    We must all work together, irrespective of geopolitical zones, to create a better future for the affected communities, states, and regions. Conflicts have their place in the agitation for change. However, as we see in these and other regions, permanent conflict will only reduce the affected areas to barbarism and put them further away from modernity.

  • Cholera in hard times – By Dakuku Peterside

    Cholera in hard times – By Dakuku Peterside

    Yemen, a West Asian country  in the Arabian Peninsula, reported one million cases of cholera in March 2018. The world shook. At that time, Yemen was in civil war, leading to the Stockholm Agreement between feuding parties. The cholera outbreak in Yemen was linked to conflict, lack of access to clean water, extreme poverty, and the collapse of the health system. An unholy marriage of a conflict and an infectious disease outbreak can render people and health systems powerless and defenseless. Compared to Yemen, Nigeria was recovering from COVID-19 in 2021 when it experienced cholera outbreaks in 29 out of 36 states, affecting 111,062 people. Key drivers of the 2021 cholera outbreak in Nigeria were flooding, poor health facilities, lack of access to clean water, reduced hygiene, and poverty, some of which are persistent challenges in Nigeria’s development equation.

    As of 2023, Nigeria has reported over 60,000 suspected cholera cases, resulting in several hundred deaths. The outbreak has affected multiple states, with the North bearing the highest burden. By mid-2024, Nigeria is still grappling with cholera outbreaks. While Nigeria is not in a civil war like Yemen and is not experiencing flooding in 29 states, the country is dealing with cholera outbreaks of alarming proportions. Following a dynamic risk assessment, the Nigeria Centre for Disease Control (NCDC) has activated its emergency center as the death toll from the recent cholera outbreak, prevalent in 31 states, reached 53 nationwide. The situation is urgent and requires immediate attention.

    Cholera is a severe diarrheal disease caused by the bacterium Vibrio cholerae, which can lead to dehydration and death if not promptly treated. Nigeria has faced recurring cholera outbreaks, often exacerbated by conflicts, displacement, and natural disasters. A multitude of factors contributes to the persistence and severity of these outbreaks.

    Firstly, conflict and displacement exacerbate the issue. Ongoing conflicts, particularly in the Northeast region, have displaced millions. Internally Displaced Persons (IDP) camps often lack proper sanitation facilities and clean water, creating ideal conditions for cholera to spread. Secondly, the rainy season (usually from May to October) frequently leads to flooding, contaminating water sources and increasing the risk of cholera. Flood-prone areas and communities living along riverbanks are particularly vulnerable. Thirdly, while urban areas might have better healthcare infrastructure, rural communities often lack healthcare, clean water, and sanitation infrastructure. This disparity increases the disease’s impact in less accessible regions. Fourthly, Nigeria’s healthcare system faces significant challenges, including limited resources, inadequate infrastructure, and shortages of medical supplies and personnel. During outbreaks, these weaknesses hinder effective response and treatment.

    The current cholera outbreak situation approaches emergency dimensions because the infection is spreading during an economically and socially challenging time for the nation. Hard times and infectious diseases are a devastating combination, making people more susceptible to infections. The poorest and most deprived are the most vulnerable. The challenge of hunger, malnutrition, lack of access to potable water, inability to pay for essential food items, and dearth of healthcare facilities is real in Nigeria. Unfortunately, our governors and federal government officials are engrossed in constructing roads and bridges that only the living can use. Somehow, we are deaf to the cries of poverty and hunger all around us. We only hear the sirens of politicians and the elite . Fighting epidemics like cholera and Lassa fever is not a priority.

    NCDC has been outstanding in its work. The agency has consistently demonstrated what a proactive and functional government department can achieve. We are also fortunate to have two ministers of health who have the clarity and determination to tackle the most complex challenges. However, fighting an epidemic requires addressing the social conditions that make people vulnerable. Hunger and poverty are health hazards in themselves.

    Current efforts in affected areas are primarily focused on seeking medical solutions rather than a combined approach. If people continue to consume unhygienic food and water, the risk of infections increasing to epidemic proportions and disease strains becoming more resistant is high. A combination of vaccination, access to potable water, food security, improved hygiene, enhanced nutritional value, and extensive public awareness is necessary. We must combat this cholera outbreak as if it were a war. Each of us has a role to play in this fight, from maintaining personal hygiene to advocating for better public health policies.

    Some states have been proactive and exemplary. Under former Governor Dave Umahi, Ebonyi maintained a high vaccination rate, and the current Governor, Francis Nwifuru, has elevated vaccination efforts. States like Akwa Ibom, Enugu, Nasarawa, Niger, and Rivers have prioritized the health of their people over petty political considerations. Jigawa State, according to UNICEF and the Federal Ministry of Health, was declared the first open defecation-free state in Nigeria. This is a plus in the fight against cholera. Lagos has been exemplary in public health education . Their efforts are inspiring and demonstrate that change is possible. The Niger Delta Development Commission (NDDC) has also intervened significantly by providing cholera vaccines for nine states, in addition to offering free medical services in rural areas.

    Vaccination offers immediate protection against cholera, reducing the likelihood of outbreaks and saving lives while also complementing long-term solutions. We must address the root causes of the issue—severe poverty, hunger, and the lack of clean water in 34 of Nigeria’s 36 states. These factors make people more susceptible to outbreaks like cholera. To break this cycle, we need targeted policies and initiatives to protect vulnerable populations while expanding health and social welfare services. It’s not just about treating the symptoms but addressing the underlying issues to prevent future outbreaks. It is also time we ramp up public health education as a crucial strategy for combating cholera. Apart from educating, it empowers people to take preventive measures and change behaviours that lead to a reduction in the spread of epidemics.

    Cholera has been a recurring problem in Nigeria for decades, with significant outbreaks recorded throughout the country’s history, often linked to poor sanitation, lack of clean water, and displacement due to conflict or natural disasters. Given its recurrence, Nigeria should have developed better ways to prevent or mitigate its impact. We should have learned numerous lessons from previous outbreaks that would position us well to tackle this epidemic. Unfortunately, this has not been the case. The factors contributing to these outbreaks persist, and little or nothing has been done about them.

    We only react when faced with an outbreak. We implement immediate measures, and once the outbreak subsides, we revert to our old ways, neglecting the long-term actions necessary to prevent cholera outbreaks. How can many cities in Nigeria lack clean, safe pipe-borne water for public use?

    Clean water is a luxury in Nigeria. The middle class can afford so-called “pure water” or bottled water that is anything but pure, given its sources and the poor hygienic conditions under which some of this “pure water” is produced. The working class and the poor still consume highly contaminated water, and many need to be educated on how to treat this contaminated water. The inevitable outcome is cholera outbreaks.

    Many poor Nigerians cannot afford safe water. One liter of bottled water costs about N200. For a family of six, consuming at least three liters per day, the family would spend N3,600 per day and about N108,000 per month on drinking water alone. As of my last check, the minimum wage in this country is still N30,000, excluding the cost of cooking water and other uses. It’s no surprise that there is a persistent and recurring outbreak of waterborne diseases like cholera.

    Addressing cholera in Nigeria requires a multifaceted approach that addresses both immediate needs during outbreaks and the underlying causes perpetuating the disease. The government must strengthen healthcare systems to improve outbreak response and treatment capabilities, enhance water and sanitation infrastructure (especially in rural and conflict-affected areas), increase community engagement and education to promote better hygiene practices, and tackle broader socio-economic issues such as hunger, poverty, and widespread illiteracy. We must decisively win the war against cholera once and for all.

  • Beyond national profligacy – By Dakuku Peterside

    Beyond national profligacy – By Dakuku Peterside

    Jonathan Tepperman’s book, “The Fix”, is about how some nations fixed significant social challenges like inequality, corruption, and civil wars using innovative leadership and policies. No one has yet written a book about how nations fix profligacy. Therefore, it is justifiable that Nigerian leaders have not bothered to read a book that does not exist. When such a book is eventually written, Nigeria’s chronicle of shameless profligacy will qualify as a unique case study. It is perceived as a culture our elite have come to embrace or tolerate as an acceptable national social habit. Profligacy, defined as reckless or wasteful extravagance, is a concern in various aspects of Nigerian society. It touches different levels, from personal lifestyle choices to government spending and business practices. This culture of profligacy, if left unchecked, will continue to drain our resources, hinder our development, and perpetuate a cycle of corruption and mismanagement.

    Social habits are ingrained behavioral patterns that shape societies and influence how things are done. It might have a good or bad impact. Andrew Sykes ,co-author of “The 11th Habit“believes that the collective culture of a people shapes their habits, and habits cyclically reinforce culture. The habits of a nation reflect its values. This habit of profligacy among Nigeria’s ruling cadre is interconnected with the culture of corruption, lack of accountability in public life, short-term thinking, and lack of personal stake in the Nigerian project. Most importantly, it is proof of a total disconnect from reality. Since the Nigerian civil war, a deeply ingrained culture of wasteful expenditure and consumption-driven governance has plagued successive Nigerian governments. However, this is not a fate we are bound to. With the right cultural shifts and systemic reforms, we can break free from this cycle and build a more responsible and prosperous Nigeria.

    There is substantial empirical evidence linking this culture of wastefulness to our oil economy, which provides the government with oil revenues at all levels without accountability. Oil receipts have increased spending, often on non-essential projects that do not benefit the citizens. With an abundance of oil money and less emphasis on accountability and transparency, an environment of profligacy became prevalent and is now a national social habit. This profligacy, in turn, fuels corruption and mismanagement, creating a vicious cycle that hampers our progress and development. It is crucial that we recognise and address this interconnectedness to pave the way for a more responsible and accountable Nigeria.

    There is no responsible public affairs management culture, which feeds the decadent habit of wastefulness that our elite has adopted. Our weak institutions encourage mismanagement since they cannot enforce laws and regulations. A political patronage and nepotism culture has made us prone to wrong priorities, and we need the ability to plan strategically. Oversight by the legislature is highly compromised. Decisions made by public authorities are now driven more by personal interests than by sustainable use of resources for common interests due to a combination of economic pressure and poverty.

    The Nigerian government is often criticised for high spending on non-essential items, such as luxury cars for officials, unreasonable cost of renovation of offices and accommodation, large delegation to foreign trips and frequent travel expenses. This is particularly controversial given the country’s significant economic challenges and infrastructural gaps . Corruption is a considerable issue, with funds frequently misappropriated or embezzled. High-profile cases of public funds being diverted for personal use contribute to a culture of extravagance among some officials. The civil service and government agencies often have large, inefficient workforces, leading to unnecessary expenditures on salaries and administrative costs.

    Examples litter our landscape to prove that there is nothing untoward in the culture of profligacy. For brevity and conciseness, I will give four examples. First, NNPC, the national oil company, spent $25 billion (over N12 trillion) over 20 years on turnaround maintenance of Nigeria’s four refineries, yet none can refine a drop of oil. The average cost of building a 350,000-bpd refinery is about $ 3.5-5 billion. This may not convince you about a national habit that has calcified. Between 2010 and 2020, crude oil theft led to the disappearance of 619.7 million barrels of oil worth N16.25 trillion, according to NEITI, an extractive industry transparency watchdog. None of these two high-profile cases resulted in arrest, prosecution, or national protest. It is normal and an acceptable national habit for the elite and average citizen.  You will be tempted to think that this habit of national profligacy is restricted to the oil and gas industry. You are dead wrong!

    Second, how can we quickly forget what qualified for a national embarrassment in 2023 when the government registered 1,411 persons—a mixture of court jesters, government officials, professionals, a sprinkle of environmental activists, academia, and political jobbers for COP 28 in Dubai? Nigeria had the third highest delegation to COP 28, even though we contribute less than 0.0001% to climate change and its minimal impact on us. A public uproar was raised, but it came down before long because it is our culture and an acceptable habit amongst the elite.

    Third, most recently, Nigeria’s delegation, according to The Cable ,a digital news platform , was the largest among 187 countries to the International Labour Organisation’s (ILO) 112th conference in Geneva, Switzerland. This is happening at a time when the economy of the country is in some form of life support.

    The final example that raised curiosity was the news that the government reportedly spent N90 billion to subsidise the cost of the 2024 Hajj pilgrimage for citizens. The arithmetic of a huge subsidy for what ought to be a private religious obligation in a period of economic distress required advanced economic numeracy to solve. The list of our profligate habits as a nation is unending.

    Profligacy is not only akin to the political class and government. We see a preponderance of activities that scream profligacy at personal and social life levels.  Nigerians are known for hosting grand and often extravagant celebrations, including weddings, birthdays, and funerals. These events can involve large guest lists, expensive venues, elaborate decorations, and abundant food and drink. There is a strong emphasis on displaying wealth and status, often through acquiring luxury goods such as high-end cars, designer clothing, and expensive jewelery. This can sometimes lead to excessive spending and financial strain. At social events, it is common to see money being “sprayed” or thrown at people, particularly the celebrants, as a sign of generosity and celebration. This practice, while culturally significant, is often seen as wasteful. EFCC is working hard to clamp down on this practice.

    There is often societal pressure to conform to specific standards of appearance and lifestyle, leading individuals to spend beyond their means. This includes pressures to host large, expensive events or to own the latest luxury items. Maintaining social prestige and not “losing face” in many Nigerian communities can lead to extravagant spending. This can involve keeping up appearances through high expenditure on clothes, homes, and social activities. Both the government and private individuals often accrue significant debts to finance their extravagant lifestyles or projects, leading to financial instability and long-term economic challenges. Resources are sometimes misallocated to non-essential projects or luxurious expenditures, neglecting crucial areas like healthcare, education, and infrastructure.

    In the business sector, some Nigerian corporations, especially those in the oil and gas sector, tend to pursue luxurious corporate lifestyles, including high-end office spaces, expensive company retreats, and lavish entertainment expenses. There are over-invoicing and kickbacks, where inflated contracts and procurement costs are used to siphon funds for personal gain.

    Our entertainment industry is the window for showcasing opulence and luxury. Our Nollywood and Afrobeat often feature extravagant displays of wealth. Music videos and films frequently showcase luxury cars, opulent houses, and designer outfits. Our celebrities, including musicians, actors, and influencers, often lead lavish lifestyles, displaying their wealth and success through expensive purchases and luxurious vacations. This creates a culture of aspirational spending among fans and the public.

    Understanding and addressing profligacy in Nigeria requires a multifaceted approach that includes cultural shifts and systemic reforms. Leaders have to led by example . We need to implement stricter regulations and oversight on government spending, enhancing transparency and accountability, and reducing waste in public sector expenditures; promote cultural values that prioritize modesty and prudent financial management over ostentatious displays of wealth; increase financial literacy among the public to encourage responsible spending and saving practices; and enhance corporate governance standards to reduce wasteful spending and corruption in the business sector.

    Early signs are that those in power today have not only adopted the worst practices of the past but have also positively embraced them. If we continue along the same path, we will be stuck in an endless economic crisis and stagnation. Nigeria and Nigerians deserve better leadership in combating profligacy! We must escape this vicious cycle that has brought us to the quagmire we are in now.

  • Sense and nonsense of Nigeria’s economic crisis – By Dakuku Peterside

    Sense and nonsense of Nigeria’s economic crisis – By Dakuku Peterside

    Nigeria is probably in the worst economic crisis of a generation, screamed The New York Times on June 11th, 2024. Two other influential global publications, Foreign Affairs and The Economist, had earlier said the same thing under different headlines. Although Nigeria’s economy is not yet in a recession, all other economic indicators have gone south, and the curve is not bending in the short run. Statistics on inflation (above 33%), youth unemployment (above 50%), poverty levels (over 133 million multidimensionally poor), the value of the Naira (over 200% decline against dollar in the past year), education (18.3 million out of school children), healthcare (inadequate health facilities and professionals), insecurity (144th position in the 2023 safest countries in the world ranking), and homelessness (24.4 million people without a home) are frightening. More than ever, Nigeria needs crisis leaders to turn things around.

    Great leaders have always come up to guide their countries out of the worst crises throughout history .The American people looked up to Barack Obama in 2008 to lead the nation through its worst economic crisis since the Great Depression. He conducted many consultations and made critical but well-considered decisions to lay a new economic foundation . We are in an “economic war’ and cannot use the tools applicable in normal times.

    Leadership during normal times is different from leading in the storm which is the subject of my forthcoming book. The expertise and skill set required for both cases are different. The dynamism and multiplicity of socio-economic and political factors converging to create the Nigerian volatile ecosystem are such that effective crisis leadership is needed at all governance strata.  Although required in normal times, these crisis leadership competencies are most relevant during a crisis. They include sensemaking, effective decision-making, team coordination, facilitating learning, emotional intelligence, and effective communication. It is the masterful use of these competencies that makes great crisis leaders.

    The commentariat have attributed our present economic crisis to a cycle of thoughtless policies, squandering as governance, negative or low investment in innovation, uncoordinated economic thinking and placing of politics above commonsense economic frugality. It is also true that our poor understanding of the interplay of global events and its impact on local economic factors also contributed. The consequence is the country’s inability to respond to vulnerabilities, shocks and opportunities.

    Nigerian leaders need to make sense of these complex circumstances. The situation requires a more focused perspective on historical and immediate causes and possible solutions to the current crisis. Sensemaking is critical to effective crisis leadership, especially in complex and diverse environments like Nigeria. Sensemaking involves gathering information and putting it in context, exploring different perspectives to develop a coherent narrative, and interpreting and understanding complex, ambiguous, and rapidly changing situations to guide decision-making and action. During this economic crisis, sensemaking allows leaders to comprehend its scope, identify its root causes, anticipate its impacts, and develop appropriate responses. This piece will focus on and explore sensemaking as the first step in crisis leadership.

    Our leaders must develop a contextual understanding and historical context of our economic crisis. Nigeria is characterised by significant cultural, ethnic, and economic diversity. Effective crisis leadership requires leaders to understand these complexities, how they influence the crisis, and the potential responses. Economic crises in Nigeria often have roots in historical issues such as colonial legacies, policy missteps, structural inequalities and global turbulence . Leaders must consider these historical contexts to grasp the crisis’s nuances fully. They must identify and interpret economic, social, and political signals.

    Furthermore, the way our leaders frame this economic crisis matters. We often have the tendency to reduce complex issues to one or two narratives . This is what my Kellogg Professor, Loran Nordgren calls ” narrow framing”.  Based on the robust content analysis we carried out, we identified the dominant frame of this economic crisis by the government as ‘inherited and requires tough actions that will cause some pain to the citizens in the short run, but the pain is necessary for achieving better economic prosperity in the medium to long term’. The danger of this framing is that it sounds more like an excuse than a creative strategy to upturn our economic woes. This frame lulls our leaders to the proverbial sleep of inertia – inaction when there is fire on the mountain.

    How this economic crisis is communicated to the public and stakeholders influences their perceptions and reactions. Effective crisis leadership involves framing  and communicating the situation in an understandable and actionable way for diverse audiences. Little wonder Nigerians are at a loss regarding our political class’s perceived poor choices. The government needs to rethink its crisis communication strategy.

    Since economic crises are by their very nature dynamic and unpredictable, leaders must update their understanding of the issues, modify their response strategy and adapt their strategies accordingly. Involving various stakeholders, including experts, community leaders, and affected populations, enriches the process, and ensures more comprehensive insights. This comprehensive insight allows crisis leaders to make informed decisions that cater to the greater good. Things like government being more prudent, quitting luxury spending, reducing taxes to encourage savings and investment, fixing insecurity to encourage inflow of investment and borrowing less from external sources, are easily intelligible choices.

    To illustrate the importance of deep insight in Nigerian leadership during the economic crisis, let us examine three recent crises. The first is the economic recession of 2016. The 2016 recession was triggered by a significant drop in oil prices and compounded by policy challenges and security issues. Our Leaders needed to interpret the interconnected causes, including global oil dynamics, domestic economic policies, and security concerns in the Niger Delta. The Economic Recovery and Growth Plan (ERGP) was developed as a response, focusing on diversification and stabilisation. While the ERGP provided a strategic framework, the process highlighted the need for consistent policy implementation and addressing underlying structural issues. This still needs to be done, and our leaders have yet to learn any lessons they could apply in subsequent crises.

    The second is the current economic crisis that has been exacerbated due to the implementation of fuel subsidy removal policy. Every Nigerian knows the need to remove fuel subsidies, but it takes work. Periodic attempts to remove fuel subsidies faced public resistance due to their impact on living costs and inflation. Our Leaders needed to balance fiscal sustainability with socio-economic impacts. Understanding public sentiment and economic realities was crucial in framing and communicating subsidy reforms. Subsidy removals were often met with protests, highlighting the need for transparent communication, phased implementation, and accompanying social protection measures.

    However, the hurried end of the subsidy without mapping the multiple scenario implications and making adequate provisions to cushion the impact threw our economy into a whirlwind of desperation, and the repercussions have been devastating, as indicated in the above economic statistics. Developing multiple scenarios based on different interpretations of the crisis helps prepare for various potential outcomes. Effective sensemaking includes proactive risk management and contingency planning. Lack of effective policy management is creating more public angst than the actual policy itself.

    The third is the unintended devastating impact of harmonisation of the exchange rate during a period of dollar crunch and scarcity without remedial provisions for the inflationary implications of a devalued Naira in an import-dependent economy. The Naira has collapsed by over 200% in the past year, forcing the prices of all imported goods to follow suit. The combo of exchange rate-induced inflation and subsidy removal inflation has resulted in the worst inflationary rate in a generation in Nigeria.

    Crisis leaders are problem solvers. They can adjust plans, policies, and responses as new information is gathered or situations change. This means listening to stakeholders, voices of reason, and experts. The reoccurring question throughout this economic crisis is: Where are our crisis leaders? Political leaders are poor crisis leaders because they fail to recognise the warning indications of impending challenges and rarely put the lessons they have learnt from past crises into practice.

    Decision-making in a position of leadership is challenging. It is more significant when a decision impacts the lives of numerous individuals. Our leaders at various strata have yet to appreciate this. Decisions are often made without the rigour of clear thinking or fall back to the narrow framing of A or B. Lack of strategic foresight and thinking abilities manifest in most of our decisions.

    Therefore, Nigerian leaders must deeply analyse the crisis’s economic, social, political, and cultural dimensions. This involves understanding both macroeconomic trends and grassroots realities. They should engage with various stakeholders to enrich the sensemaking process. Collaboration with experts, community leaders, and international partners provides diverse insights and fosters collective action. Sensemaking is not a one-time activity but a continuous process. Leaders must remain open to new information, willing to reassess situations, and ready to adapt strategies as the crisis evolves. Transparent and consistent communication will help them in managing public perceptions and reactions.

  • American democracy’s Trump test – By Dakuku Peterside

    American democracy’s Trump test – By Dakuku Peterside

    There is currently no evidence to support the claim that democracy is a perfect system of governance. However, humans still need to figure out a better means to guarantee the freedom and consent of the governed. Democracy remains the most practical choice available. We must keep working on it until it accurately reflects our goals because it’s an evolving idea even after many years. Because Nigeria, Africa’s largest democracy, is fashioned after the United States (US) model of liberal presidential democracy, whatever threatens democracy in that land becomes of interest to us. Recent unsavoury developments around the candidature of Donald Trump called for Nigeria to look inward and reflect on the ability of the institutions to prevail over considerations of status and sentiments.

    America, the flagship of democracy, may face its first real test of the elasticity of democracy and democratic institutions. For the first time in its history, there is a likelihood that Donald Trump may be campaigning from prison or as a convicted criminal to be elected as President of the US. A Manhattan Jury has convicted Donald Trump for falsifying business records to cover up a hush-money payment to a porn star. On July 11, a New York court will give him a sentence. This raises a moral conundrum, a constitutional issue, a dilemma for the party, electoral questions, and a logistics challenge.

    Some pertinent rhetorical questions merit consideration: can Trump run for office, and what does the US Constitution say?  Can the Republican Party replace Trump, and is there a precedence? Can the party system survive a deadly jolt in the event that the law eventually disqualifies Trump? Mr Trump is registered to vote in Florida, and the law of that state bars convicted people; can Mr Trump vote? Can Mr Trump be elected while in prison, and is there a constitutional provision to guarantee this? What if Mr Trump is convicted in other states where he is facing more criminal proceedings? What are the implications? These questions will test the US Constitution and presidential transition tradition as it has never done before.

    Although I will not attempt to answer most of these rhetorical questions, I boldly posit some facts that deserve attention. The US Constitution does not disqualify a person convicted from running for the office of President. Consequent to the preceding, a court’s conviction of Donald Trump will not prevent or disqualify him from running for the said office. In the case of Nigeria, Section 137 lists grounds for disqualifying a person standing for election to the office of President, and it includes a trial Court conviction that must have taken place within a period of less than ten years before the date of the election to the office of President,  and the said conviction must be in respect of an offence involving dishonesty or the person has been found guilty of the contravention of the Code of Conduct. In essence, not all court convictions apply in Nigeria. A sentence that does not border on fraud, financial crimes or forgery will not count or lead to the disqualification of a person running for President. We may recall that this issue arose at the last presidential election petition trial, and legal experts argued this point.

    Besides, the US Constitution overrides any State law, particularly the Florida State law prohibiting a convict from voting. This Florida State Law will only apply if such a conviction occurred in Florida or was made by a Florida Court. In this way, Donald Trump has not been convicted by the State of Florida, and the said Florida State law will not apply or be enforced against him. However, while a convict can still run and win a presidential election in the US, the nature of the sentence may prevent him from occupying the office.

    The implications of all of these are still on us. This marks the first-ever conviction of a sitting or former President in American history for a criminal offence. A triumph for accountability and the fundamental idea that no one in a democracy is above the law—not even the highest elected official—this momentous milestone is also a victory for soberness. Trump’s conviction shows how a working democratic system can achieve justice. It serves as a reminder that we cannot discuss democracy without bolstering the judiciary’s independence built on solid political culture and institutional resilience. This is a painful spot in Nigeria’s democratic journey right now. The only thing that can ensure the preservation of democracy and our freedom is an impartial, courageous, and independent judiciary.

    The stress tests American democracy faces reveal the resilience and fragility of democratic systems, especially the institutions. Learning from these challenges allows Nigeria to build a more robust and responsive democracy. This stressor provides valuable insights into the strengths and vulnerabilities of democratic governance, which can be instructive for countries like Nigeria, which has a complex democratic landscape.

    The first lesson is the supremacy of the rule of law. No one is above the law, and no matter how highly placed, they must be subjected to the accountabilities and dictates of the law. Reminding future generations that nobody is above the law in a democracy is essential, and we must strengthen our democratic institutions so they can withstand any bully. Creating strong institutional structures is vital to withstand the most heinous attacks on democracy.

    The second lesson is that we must fortify the other two arms of government – the legislature and judiciary against executive capture. Any attack on democracy from the executive arm, either still in power or out of power, must be resisted by the legislature and judiciary. The legislature must make clear laws that can easily overcome divisiveness, not opaque ones that become easy political tools. The judiciary must dispense justice equitably and responsibly. The weaker a legislature or the judiciary is, the easier it is for leaders from the executive arm to exploit the system, either to expand their power or to take down an opponent. Furthermore, weak institutions of democracy could manipulate facts like supple political stupidity.

    The third lesson is that the Nigerian state must declare a war on corruption and hold all corrupt people accountable. The fight against corruption should not be limited to politicians and politically exposed people but must cover corrupt businesses, public servants, and civil society. Like the case of Trump, his first conviction was not based on his action while in office but based on his seemingly private affair that hovers around how he handled his books and hush money for the porn star he was accused of having sexual entanglement. The question we must ask ourselves is, can a seemingly innocuous thing, albeit a crime, force a former president in Nigeria to be convicted of a felony? We know of media sleaze of infractions and alleged corruption by high-powered politicians, but after a while, we hear nothing again about the prosecution of the case, and sometimes we hear of such people receiving national awards or portfolios of office without being acquitted by a court of law for the alleged crime.

    The fourth lesson is that no criminal should be allowed to become the President of Nigeria. Americans did not foresee a future where a strong candidate like Trump would emerge as a party frontrunner with convictions hanging on his neck, but now it has happened. The example of Eugene V. Debs, a socialist leader who appeared as a candidate from prison and ran for the presidency, should have guided their legal framework, but America has a way with a history that their democracy does not fall apart. That cannot be said of an emerging democracy like Nigeria. Just like it happened to us during the death of Umaru Yar’adua and for days, lawyers were struggling with the instrument to use until the “doctrine of necessity” was invoked, this is the best time to review the constitution to amend any ambiguity in our laws to protect our democracy.

    The fifth lesson is that Nigeria must tackle economic inequality, which creates a huge class divide that makes some feel above the law. Policies to reduce economic disparities through education, healthcare, and social welfare programmes can strengthen social cohesion and democratic stability. Developing strategies that promote inclusive economic growth and providing opportunities for all segments of society is critical for maintaining long-term democratic health.

    Nigeria must fortify its democratic foundations and ensure a stable and inclusive political future.

    Building solid institutions and an excellent democratic political culture steeped in democratic principles and ethos deemphasizes the power of political agents, especially those so powerful that they exert a considerable influence on the entire political system. Everyone across the political divide must work collaboratively to defend our democracy. Encouraging dialogue across political divides and fostering a culture of bipartisan cooperation can mitigate polarization. Civic education that promotes understanding and respect for diverse viewpoints is essential.  We must protect our democracy at all costs!

  • South Africa: Economics above politics – By Dakuku Peterside

    South Africa: Economics above politics – By Dakuku Peterside

    South Africans voted in national and local elections on May 29, exactly one year after Nigeria inaugurated its current president. Since 1994, this election has been the most significant post-apartheid election and the most unpredictable in the country’s 30 years of democratic rule.

    The ruling African National Congress (ANC) lost its parliament majority for the first time, possibly paving the way for the country’s first coalition government.

    With voter discontent , leading opposition parties, including the Democratic Alliance (DA), the Economic Freedom Fighters (EFF), and newcomer umKhonto we Sizwe (MK), put pressure on the ANC through uninterrupted mass campaigns and countrywide rallies, promising sweeping reforms in hopes of swaying most registered voters to their side. Unlike in most parts of Nigeria, the elections proceeded smoothly, without violence, ballot snatching, or shootings.

    South Africans demonstrated discipline and respect for the law. This notwithstanding, the stakes were high, and ANC’s historical advantage was side-stepped. This election significantly shakes the existing political order and deepens democracy in South Africa.

    Economic concerns had a massive impact on the election’s result. South Africans shifted their focus from a “freedom-centric politics” to an “economy-centric politics”. Under the ANC administration, South Africa has had to deal with a high unemployment rate, the highest murder rate in 20 years, and pervasive corruption. Their economic concerns include a lower GDP per person than in 2008 and the state is becoming less effective.

    A case in point, in 1997, South Africa ranked 47th of 123 countries in the Economic Freedom Index, a ranking by the Fraser Institute, a Canadian think-tank, based on the size of the public sector and the extent of regulation, but by 2021 it had slipped to 94th, just ahead of Nicaragua; national debt as a share of GDP has more than tripled, from 24% in 2008 to 75%; a staggering unemployment rate of 33% with above 40% employment among youths and black people; massive infrastructural decay and deficiency.  Last year, Eskom, the state-run power company, with a generation capacity of 44,175MW, way above Nigeria’s 4,000MW, had to schedule a record number of blackouts because its generation fell so far short of demand, and customers lost almost 40% of piped water before it reaches customers.

    The railway system is dysfunctional. The World Bank reckons that crime costs South Africa at least 10% of GDP annually. South Africa was the seventh most crime-saddled country in the world, according to an index compiled by the Global Initiative Against Transnational Organized Crime.

    These issues played on the minds of many of the voters, who are predominantly young and black people and are a bit distanced from the Apartheid politics of freedom and liberation that helped ANC dominate the political space in South Africa. Although ANC won most parliamentary seats, it increasingly requires forming a coalition government because it is not getting the dominance of yesteryears in the political space. Their mismanagement of the economy and the high level of crime and corruption in the system have forced some party loyalists to move to other smaller parties, and voters are increasingly demanding a change.

    Although we may still have ANC in power, their dominance has eroded, and their power and authority are challenged. The more the generation that saw apartheid and is sentimentally attached to ANC as the freedom party fades away, the more ANC must rely on young voters who will vote based on the vagaries of the economy. Many young people interviewed after the elections pointed to economic reasons as the most crucial consideration in voting for candidates and parties.

    This is a new trend across Africa. In most African democracies, especially those with a high young population, the foremost considerations in the voting pattern are shifting from traditional religious, ethnic, or tribal considerations steeped in the country’s history to economic reasons. A cursory look at the core campaign issues and discussions indicates that they centred on the economy, poor governance, crime, and insecurity.

    This implies that politics in countries facing economic difficulties are increasingly making economic issues the main burner, although other factors may still be entrenched. What can we learn from the seismic shift in SA political landscape?

    The first implication is that Africans, especially young Africans, have started to expect and demand good economic development from their governments.

    This is a welcome development for the deepening of democracy in Africa. Young Africans are harshly affected by poor economic management by governments, and they have started to mobilise and understand that politics defines the economy because the people who handle the economy are elected to office by them.

    Although this is at an early stage, we hope it continues and takes root in our politics. The only negative aspect of this is the level of political apathy among the youth.

    The second implication is that the more the economy becomes the centre stage of political rhetoric and discussion, the more efficient management of the economy becomes the dominant political agenda. This is good for African politics. African nations need better economic managers now more than at any other time in their history. With the booming young population, substantial natural resources, and an emerging educated and upskilled workforce in science, technology, and the arts, Africans are poised to bring about sustainable economic development across the continent.

    The new politics of pro economic growth is the only hope for Africa if it must get it right and leverage its great potential, especially youthful population ,  to harness the greatness of its strengths. Here lies the paradox. These strengths and potentials are time bombs that, unless adequately managed by democratically elected leaders who are savvy in the economy, the crisis and doom it will turn to will shock Africa. The evidence of this is the level of increase in crime and insecurity in many African countries.

    The mix of economics and politics is the new order, and every serious party of any African nation must take note of this and reshape the vision accordingly. It spells doom when party leaders like Mr Ramaphosa repeatedly prioritised the interests of his party over those of the country. ANC has paid a hefty price for this mistake, and we hope they and other big parties across Africa will learn from it. Leave out the economy at your peril. Young people are looking for answers to Africa’s many problems, especially economic problems. They need solutions, not identification of problems. Everywhere in Africa, economics determines politics.

    South Africa has gone to the polls, and Nigeria must learn many lessons from them. First, the elections were free, fair, and well-organised, with citizens disciplined.

    Even when there were minor hitches, it did not undermine the integrity of the electoral process. In contrast, elections in Nigeria are always overly the opposite. The elections are not primarily free and fair because of many irregularities, which are too many to elucidate here. During elections, some Nigerians are lawless, undisciplined, and unpatriotic. In the words of Basil Odilim, “No nation has ever achieved development with citizens who are undisciplined, lawless, and unpatriotic.

    Consequently, Nigeria’s economic journey is on the road to nowhere.” We must put our economic journey on the road to somewhere. A patriotic, disciplined, and creative mindset is needed for economic growth. The best way to show patriotism is by participating in the electoral process and electing leaders who will manage our economy well and prioritise productivity over consumption and corruption. The election is the first step to getting good leaders in Africa.

    Every South African voter was concerned about a cocktail of widespread corruption, a high unemployment rate, electricity failure, and stifled economic growth. Nigeria’s democracy will focus more on economics and quality of life than on trivial matters as we cross the 25th anniversary of democracy and more young people join the political process. South African voters were concerned about the same issues we are dealing with in Nigeria. This speaks to Chinua Achebe’s “Things Fall Apart” proverb about an old woman being uneasy whenever dry bones are mentioned. The government’s inability to address economic issues and raise the standard of living for many South Africans was blamed for the ANC’s diminishing support.

    Failing to tackle the myriad economic problems that the majority faces is a call for political realignment compared to our fledgling democracy. Nigeria will soon have off-season elections for some states, and we hope that voters in these states will prioritise the economic knowledge skills of the candidates over pecuniary interests that are, at best, parochial. Just like in South Africa, young people must learn to use the election tool as the power to reshape their country and their future.

  • One year on: Words above action – By Dakuku Peterside

    One year on: Words above action – By Dakuku Peterside

    Amidst the initial fanfare, good feelings, and high expectations, a new era began on May 29, 2023, as a new president, vice president, and governors took oaths of office. However, as we approach the one-year mark, it’s clear that for many Nigerians, the end of the Buhari era was not the relief they had hoped for. The Buhari administration appeared rudderless and in need of more vigour. This sentiment was echoed in various states, where citizens felt betrayed by the lacklustre performance of their then-outgoing governors.

    This column in a piece written in March 2023, captioned Governors: Right versus Wrong captured  the general feeling about the state governors thus: “it is utterly absurd that instead of elected governors to focus on making their states economically viable and developing their states from down to up, many governors have turned the states into fiefdoms and domains where they rule as absolute dictators controlling not just the resources of the state, but all the state institutions with impunity. We see governors who unashamedly use public funds as their private funds and use it anyhow they want, with little or no accountability whatsoever”.

    There were high expectations and a renewed hope that the new administrations in the states would be different this time around and would use the state’s resources to develop the states. They made lots of promises to their people to tackle the myriad problems that have kept their states from developing. Some articulated visions and goals that are noble to the admiration of Nigerians living in these states. In many states, barring a few, these promises made on the inauguration day have become empty promises, the visions are largely blurred, and no overarching goals are pursued, much more being achieved.

    Sadly, many states are heading in the same direction of hopelessness and despair as in past dispensations. Leadership is lacking, and the status quo must be changed if Nigeria is to see meaningful development in the current dispensation. To address this, the governors must reflect on their performance in the last year and implement policies, structures and systems that will help them fulfil their responsibilities to the people.

    The state scorecards for the past year, as evidenced by dire and unpleasant statistics in aspects such as poverty, food insecurity, unemployment and underemployment, environmental degradation, poor business-friendly environment, and poor policy implementation, are, at best, suboptimal and, at worst, grim. Some states cannot demonstrate meaningful achievement in any one area and are not positioned to achieve anything in the future unless something drastic is done to redirect their leadership to the proper development direction. This lacklustre and self-defeating approach to growth and development occurs when the states enjoy unprecedented FAAC allocations and other internally generated revenues.

    Every month, according to the Federation Account Allocation Committee (FAAC), not less than a trillion naira is announced to have been generated and disbursed among the three tiers of government in Nigeria, at least since the removal of fuel subsidy, which has significantly improved the revenues of governments across the country. The statutory federal allocations to the coffers of the state governments alone are expected to increase by 69 per cent, from N3.3 trillion in 2023 to N5.54 trillion in 2024, based on the approved budget and revenue projection. Government fiscal statistics indicate that in the first four months of 2024, states have received approximately N1.548 trillion in disbursement. The internally generated revenue of many states has significantly increased in the past year, adding more funds to the state’s coffers for growth and development. This is besides the 13 per cent derivation revenue (for the benefitting states) and other funds accruing to states from different sources.

    The recent increase in state government revenue has not improved Nigerians’ quality of life. Revenue from FAAC has doubled, but living standards are getting worse. More money for the states has yet to translate to substantial improvements in infrastructure, healthcare services, education, job creation, or even security.

    Much has been written about the national government’s performance in the past year, and the verdict is nothing to cheer about. We frequently overlook that, in a federal system, the ways by which subnational governments create and implement development policies are essential to a functioning country. In Nigeria, many people are disappointed and dissatisfied with how subnational entities are run. This illustrates how deeply disappointed people are with the results of governance over the last 12 months.

    Despite modest progress in a few states, there is a systemic breakdown of public healthcare and education facilities at the state level. The public’s confidence in sub-nationals’ capacity to deliver social services and look out for the welfare of the populace has been severely damaged as a result. According to statistics, endemic poverty has spread and is now present in 28 of the 36 states in the country. The World Bank Nigeria Development Update Report states that as of 2023, the poverty percentage had risen from 40% in 2018 to 46% in 2023. It is projected that a combination of subnational ill-managed administration and inflation will have caused the poverty rate to surpass 50% by the end of 2023.

    State governments in Nigeria have failed to meet the task of ensuring food security by failing to invest appropriately and implement policies that would encourage agriculture. Several issues are to blame, including inadequate finance, insecurity, bad planning, and unfavourable policies that reduce farmers’ production. Few states have changed and turned farming into a commercial endeavour. A few more are promising.  This is true even though we have more arable land than the Netherlands—which has 29%—but the Netherlands exports ten times as much agricultural goods as Nigeria. Over the past year, there has been little substance but mostly talk about agriculture.

    With the significant resources the states have received in the past year, it’s disheartening to see that many states cannot account for how they spent the money. While we acknowledge the impact of rising inflation and a decline in the value of the Naira, it’s inexcusable for states to not demonstrate significant achievements with those funds. This lack of transparency and accountability at the state level is a key factor contributing to the suboptimal performance in many states. It’s crucial for citizens to demand and ensure transparency and accountability in governance to drive meaningful change.

    Insecurity still festers. Almost all elected chief executives promised to prioritise security, but it seems the more they promised, the deeper we go into insecurity. A few states are examples of using local and internal security systems to support external security systems and form a cohesive security system that has reduced insecurity in those states. However, in many states today, insecurity is worse, and there is no hope of effectively tackling it soon. Security, though mainly a function of the federal government, needs sustained and coordinated efforts from the state government to effectively secure the lives and properties of Nigerians living in various states.

    Many state governments need something to show in terms of infrastructural development. The level of infrastructural decay is palpable. Few or no new roads are constructed . State governments have been empowered to regulate the generation, transmission and distribution of electricity yet only few states have taken advantage of this constitutional amendment. The availability of pipe-borne water and other water systems is still a mirage, and medical facilities need to be put in place to cater to the needs of the people. The newly sworn-in governors promised their people these things, but one year later, there is little or no evidence that many are fulfilling them. Most of them will stagger into the second year without a concrete plan.

    At all levels, I hope our political leaders recognise the importance of redeeming democracy’s reputation. The average person is beginning to question the capacity of democracy to deliver dividends that can improve his life. It will take more than impressive rhetoric to convince citizens that our political officeholders are working for our interests. Actions must follow words and beautiful promises. The few states where the governors are doing well shine like illuminators for others to emulate. It is not rocket science to provide quality leadership for the people. The next three years are enough time to correct this harmful and unfruitful leadership anomaly in some states. The people deserve more, and that is what they must get!

  • The scourge of rising inflation – By Dakuku Peterside

    The scourge of rising inflation – By Dakuku Peterside

    An increasing number of Nigerians are being driven into poverty, not by choice, but by the current political and economic climate, shaped by stringent macroeconomic policies. These policies, such as subsidy removal, devaluation of Naira, and increase in electricity tariff, have had unintended consequences.

    For instance, removing subsidies has led to a significant increase in the cost of living, while the devaluation of Naira has made imported goods more expensive. These factors, combined with the high level of insecurity, have affected food security in Nigeria, and created a perfect storm of economic hardship. The signs of this unavoidable reality are readily apparent. The interventions to prevent this descent into poverty are either ineffectual or remedy the condition too slowly.

    An unprecedented rise in inflation has destroyed households’ disposable incomes and pushed many families into poverty. Spiralling inflation is having a devastating impact on all, but especially on households in the lower rungs of the working class, who in their millions are joining the already over 133 million multidimensionally poor Nigerians struggling to earn a living because high inflation has eroded the value of their income.

    As shown by the NBS Consumer Price Index of April 2024, published in May 2024, the headline inflation rate rose to 33.69% in April 2024 compared to March. The headline inflation rate was 11.47% higher in April 2024 compared to the previous year. During the same period, inflation in urban areas was higher than in rural areas. Even worse, the food inflation rate in April 2024 was 40.53%, increasing by 15.92% compared to April 2023. What does this mean for the ordinary citizen? More money can purchase fewer goods and services.

    We cannot dismiss the direct correlation between rising inflation and rising poverty in Nigeria. A household with a monthly income of N300,000 in April 2023 would have lost 33.69% of its real purchasing power if it earned the same amount in April 2024.

    This means that the same amount of money can now buy significantly fewer goods and services, putting a strain on the household’s budget. Imagine this household struggled in 2023 to make ends meet; how will it cope with less than 33% of its value in goods and services this year?

    It is little wonder many Nigerians are in despair and are calling on the government to tweak its policies and salvage the situation before it is too late. Families in the earning bracket mentioned above are even better than many whose total income is less than N100,000 if both parents in the household earn minimum wages per month.

    The government intervention so far, with the best of intentions, has yielded little result as inflation continues unabated. The monetary policies of increasing base interest rates to above 22%, improving the cash reserve ratio by banks to above 40%, and constantly engaging in the money market to mop up excess liquidity have yielded less than the expected result in curbing inflation.

    More is needed, and my little knowledge of street economics shows me that the Nigerian economy often defies some fundamental economic concepts that work in developed countries because of our economy’s informal and unregulated nature. The Nigerian government must creatively use other bespoke and practical fiscal and monetary measures to tame our raging inflation.

    Paradoxically, there is compelling evidence that inflation continues to rise because of critical government policies. Instead of providing more concerted anti-inflationary measures, the government has added more inflationary steps to the economy.

    The government cannot confront inflation while imposing limitless taxes, tariffs, and charges on the things that people spend money on daily. The impact of excess tax is on everybody, but the burden is more on people experiencing poverty whose purchasing power has been eroded by inflation.

    The government cannot tax itself out of our economic predicament. Increasing personal income tax is one way government reduces disposable income to curb demand pull inflation, but the inflation in Nigeria is not because of increase in household income, but caused by cost induced factors. So tax on people whose income have not increased in the past year is a recipe for hardship.

    Other factors also imperil government efforts to curb inflation. Imported inflation has been the bane of Nigeria, given the number of raw materials and goods imported into Nigeria from countries with high inflation rates. This is not helped by the new exchange rate regime that has seen the Naira fall to its lowest value in a generation.

    The government has been trying to control the erosion of the value of Naira to no avail. Increasing cost of energy has pushed  some  businesses to  pack up. These factors have exacerbated the rise of inflation, and unless the government starts tackling them, it cannot effectively win its fight against runaway inflation.

    The consequences of inaction are severe and far-reaching. The system requires a set of anti-inflationary measures to relieve the people and companies so that livelihoods can improve, and real incomes recover from shock to encourage people to live and save.

    Savings and prosperity will fire up investment, production, supply, and consequent demand. If inflation worsens, the economy will, at best, go into stasis, further regression, and possibly a depression. More manufacturers will quit, and unemployment will worsen with even more crime and insecurity. The picture I painted above is not far from us.

    Recent statistics about the hunger level in Nigeria occasioned by food inflation are alarming. There is a deteriorating food security and nutrition crisis in Borno, Adamawa and Yobe (BAY) states this lean season between May and September 2024.

    According to the Government-led Cadre Harmonise analysis released in March this year, in Borno, Adamawa, and Yobe states, some 4.8 million people are estimated to be facing severe food insecurity, the highest levels in seven years. Children, pregnant and lactating women, older persons, and people living with disabilities are among those who are most vulnerable. About 2.8 million of these people need urgent interventions.

    The prices of staple foods like beans and maize have increased by 300 to 400 percent over the past year because of a cocktail of reasons. Inflation is outpacing the ability of families to cope, making essential food items unaffordable. Furthermore, the report stated that “malnutrition rates are of great concern.

    Approximately 700,000 children under five are projected to be acutely malnourished over the next six months, including 230,000 who are expected to be severely acutely malnourished and at risk of death if they do not receive timely treatment and nutrition support.”  The Acting Representative of UNICEF Nigeria argues that “this year alone, we have seen around 120,000 admissions for the treatment of severe acute malnutrition with complications, far exceeding our estimated target of 90,000”.  This statistics are for only 3 states in the Northeast Nigeria. Imagine what it will be for the whole 36 States in Nigeria. There is real fire on the mountain!

    This rising hunger is not peculiar to the Northeast. From my knowledge of street economics, hunger and poverty is pervasive across all six geopolitics zones. Increasing poverty is directly linked with more severe economic outcomes.

    Increasing poverty can result in a more divided society, Issues with housing, homelessness, limited access to healthcare, nutrition poverty and poor living conditions that have a detrimental effect on one’s health. Children living in poverty have less access to education, which will reduce their chances in the future.

    More families facing poverty will experience conflicts, stress, and domestic violence. Poverty can set off a vicious cycle in which the effects of it act as catalysts for additional episodes of poverty. Increasing inflation and poverty are bad omens that blow us no good. They are bad for our economy. They are bad for our people. The government must pay attention to these factors and be more sensitive in our economic policy choices.

    Only some anti-inflationary measures that comprehensively capture the macroeconomic dimensions and provide solutions may work. Poverty alleviation measures are barely temporary and, at best, work in the short run to cushion the effect of heightened inflation and food insecurity. The government should provide solid medium- to long-term solutions to tackle these problems.

    They should re-evaluate some of their policies to see whether they are inflationary and jettison them to allow good policies to thrive. We can only imagine the unintended consequences of allowing poverty and inflation to fester. The increasing inflation and poverty are creating desperation among a portion of society, which is increasingly becoming despondent and seeing itself at the fringes of society. The implications of this are plausible.

    Many ordinary citizens are burdened by poverty, hunger, and severe inflation, which have made their lives miserable. The government must take action to alleviate this scourge and help Nigerians lead meaningful lives.

  • Bad law, needless levy – By Dakuku Peterside

    Bad law, needless levy – By Dakuku Peterside

    A few weeks ago, Nigerians were startled by a legislation that had largely escaped public awareness. This legislation, which has since undergone substantial amendment carries profound implications for the financial health of every Nigerian, sparking widespread controversy.

    The law raises several concerns regarding our legislators’ rigour, effort, and dedication to enacting laws. The legislation, which is known as the Cybercrime (Prohibition, Prevention, etc.) (Amendment] 2024 Act. Section 44 (2] (a] of the Act, mandated a levy of 0.5% of all electronic transactions value by businesses specified in the second schedule of the Act, which includes GSM service providers and telecommunication companies, Internet Service Providers, Banks and other financial institutions, Insurance companies and Nigeria Stock Exchange.

    To implement this law, the CBN, on the 6th of May 2024, sent a circular to all banks and financial institutions in Nigeria to charge a cybersecurity levy starting from the 20th of May 2024 on electronic transactions by customers, barring a few exemptions. Industry watchers have claimed that the government aimed to earn about N2 trillion per annum, judging by the over N600 trillion values of all such transactions in 2023. This caused an uproar in the country, and most civil society organizations, private sector businesses, labour organizations, and concerned Nigerians used all the media available to them to voice their condemnation of this imprudent law.

    The banks and other mandated institutions are to collect the levy and remit it monthly to a designated fund (National Cybersecurity Fund) at the CBN for transmission to the Office of the National Security Adviser (ONSA). The fund’s stated primary purpose is to provide financial resources for fighting cybersecurity crimes in Nigeria.

    There are many things wrong with this levy beyond the fact that Nigerians are discontented with government and non-governmental levies and fees plaguing the living light out of them. Some have argued about the interpretation of the law by CBN that the transactions to be charged should be on the businesses mentioned in the Act, not their customers or Nigerians. Others have questioned why this law, created, and signed into law in 2015 by the Jonathan administration, was amended now to include the cybersecurity levy and why the haste to implement it now, especially given the harsh economic conditions occasioned by good-intentioned policies that have had a devastating impact on Nigeria.

    The argument on timing is germane given the level of inflation and the devastating degradation of the value of the Naira and, by extension, the purchasing power of Nigerians. Some still argue about the increasing focus of government to use tax as a significant economic policy for revenue generation, especially in an increasingly volatile economic climate where productivity is low, and businesses are shutting down because of increasing cost of doing business, ranging from the cost of labour, energy, and raw materials. My take on this anchor on the morality behind the levy given Nigeria’s social contract with the state, procedural antecedents in institutional revenue collection for government, the burden on Nigerians on financial transaction-related charges, and the imperfections of our legislative processes.

    The pertinent question is why should Nigerians who pay personal and business taxes pay for security in whatever guise or nomenclature? Whether cybersecurity, physical security, or any form of security, it is the Nigerian government’s exclusive and primary responsibility, which is why we pay  tax to the government. Under the social contract between Nigerians and the state, we accept and give out our rights, especially the right to security of our lives, to the state and expect the state to protect us by whatever means necessary. The state provides the security infrastructure, architecture, and personnel to provide security for all. The government singling out an aspect of security and levying citizens to pay for it is tantamount to double taxation when we already pay income tax and allow the government income from our natural resources to provide this service. Unbundling security and taxing some is a prelude to other security tax forms. Should we expect a Banditry levy, terrorist levy, or armed robbery levy soon?

    The second question is, when did the office of the National Security Adviser become a revenue-generating and collecting centre? The Nigerian state has explicit provisions for regulatory agencies or public enterprises that provide public goods and services. The office of the NSA is not such and does not have such a mandate. It is an anomaly procedurally to saddle this office with the mundane task of revenue issues, and as a government unit coordinating security, it should receive its funding from the federal government budget. Enacting and implementing laws that go against established procedures affects the structures and systems of the state and sometimes goes against the mandate on which institutions are created.

    The third issue is why the national assembly members were screaming at the top of their voices against this law when the same body amended it. Does it mean that they did not understand the law they passed? Or is it that the law was amended and passed without the knowledge of many members passing through the due processes? Is the interpretation of the law by CBN not in tandem with the intentions of the lawmakers? Is there a problem with framing the law caused by language failure? Did the framers mean online or electronic transfer levy? It would be easier for the public to understand the levy if it had come outright as a transaction levy because many people cannot link their electronic transactions and cyber security levy. Where is the ‘cybersecurity’ in transferring legitimate money? The law does not resonate with many Nigerians of average means and education, and they cannot link their everyday transactions to cybersecurity.

    Granted, the legislation enacted by the National Assembly is not perfect. It sometimes has some flaws. They are subject to review, revision, or repeal. Because of this, the law is a living thing that changes with the seasons and the passage of time. Remember, errors are not uncommon when enacting laws. Had Magaji Tambuwal, the then-Clerk of the Nigerian Assembly, been successful in getting President Bola Tinubu to sign a version of the “Real Estate Regulatory Council of Nigeria 2023″—which is regarded as phoney—into law, he would have been inducted into the Hall of Fame. This demonstrates that sometimes, legislation approved and accented to by the president may not always accurately reflect the framers’ intentions. Numerous things occur in between.

    The fourth issue is the incongruence of the cybersecurity levy while the Taiwo Oyedele committee is working on the harmonization of multiple taxes, reducing unprogressive taxes and  the multiplicity of legislation that imposes taxes on business. Besides, the cybersecurity levy affects citizens’ living wages. We cannot stagnate household income and continuously increase all cost elements of a living wage (housing, transport, utilities, food) through more charges like cybersecurity levy and not increase poverty in the extreme or diminish consumption income in the main.

    The last issue is that the burden of bank-related levies and taxes that individuals pay in Nigeria is too much on them. It will be good for researchers to do a comparative study with other developing countries like Nigeria to determine whether we are in this alone. Bank-related levies include transfer fees, card maintenance fees, card issuance charges, stamp duties, VAT on SMS, and SMS charges for the receiver and sender. This cybersecurity levy will be one too many. Imagine the implication on the cost of doing business, especially post-subsidy removal, post-increase in electricity tariff, the collapse of the Naira, hyperinflation and many charges and levies on businesses.

    Existing business levies and taxes include Company Income Tax, Stamp Duties, Petroleum Profit Tax, Capital Gains Tax, Value Added Tax, Personal Income Tax, Withholding Tax, Tertiary Education Tax, one per cent of payroll contribution to NSITF, 10 per cent of Payroll Contribution to PenCom; one per cent of Payroll ITF Levy and National Information Development Levy. Others are Radio and TV Licenses; Police Special Trust Fund Tax levy; Niger Delta Development Commission levy; National Agency for Science and Engineering Infrastructure levy; Land Use Charge; Parking Fee; Consumption Tax; Road Tax; Standard Organization of Nigeria fees; Nigeria Content Development levy; NAFDAC levy; Nigeria Health Insurance Authority contribution; Signage Fees. Touts and street urchins are leveraging the multiplicity of taxes and levies to attack businesses. Businesses are getting it rough and do not need another levy straw that will break their backs.

    Cybersecurity levy is peculiar to Nigeria and is not applicable in many developing and developed countries of the world. President Bola Ahmed Tinubu acted well in suspending the cybersecurity levy; many Nigerians are happy about that. There are many reasons to repeal this law or quickly review it with broad-based consultations.

  • The minimum wage issue: Numbers vs value – By Dakuku Peterside

    The minimum wage issue: Numbers vs value – By Dakuku Peterside

    The issue of minimum wage or salary increase or by whatever nomenclature is a complicated policy issue. The wage increase is neither good nor bad, but as a policy choice, it must be tied to some ultimate objective and benchmarked on the projected cost of living and inflationary trends over a given period. A pay rise can improve employees’ motivation while giving them more purchasing power and disposable income. It may result in businesses being shut down, hyperinflation, joblessness, and a decline in the value of the national currency. At face value, salary increases are a tool to address inequality, poverty, and welfare or an incentive to check corruption. However, the issue is more profound than this surface-level discourse.

    Recently, the federal government announced a new salary raise for mainstream federal workers. This is not the new minimum wage; at least, that is what we are told. Some state governments followed suit with discordant tunes. The truth is that for the average Nigerian worker, with headline inflation at 33.2% by March 2024 and food inflation at 40.1%, the current wage is insufficient and cannot sustain any worker. This underscores the need for the government and all labour employers in Nigeria to review salaries. However, the government’s current economic realities and financial position make it challenging to create a salary increase that is not backed by increased value and productivity. While it may seem complicated, this measured approach is necessary to avoid harsh negative implications on the economy and the unintended backlash on people with low incomes and many on the fringes of our society.

    Expectedly a policy to help people experiencing poverty and create some semblance of equity within our socio-economic ecosystem, salary increases for government workers, albeit less than 25% of the workforce, will have ramifications. Given these difficulties evident in the new policy, the government and labour leadership must play a balancing act to midwife a new salary structure that is fit for purpose yet germane to the multifaceted nuances of our current economic reality.

    The wage increase will result in both negative and positive economic impacts. On the negative side, inflation will worsen, small and medium-scale businesses (SMEs) barely managing to survive will be hugely impacted, and the cost of doing business will skyrocket. How many SMEs can afford this increase? Most of the companies are struggling with paying the existing minimum wage, given the rise in the cost of doing business, interest in loans is over 40%, the cost of raw materials is over the roof, consumers with little income are squeezed to a pulp by the constant increase in prices. Besides, how many state governments can afford it? Most Nigerian states have failed to optimize their potential and go cap in hand every month to FAAC. Across a sizeable economic terrain like Nigeria, a uniform nationwide minimum wage may be foolhardy. Costs of living are divergent across the country. States should negotiate with labour unions for acceptable minimum wage structures in different states and geopolitical zones. There may be an urgent need to de-link the minimum wage issue from national politics.

    On the positive side, wages should increase in tandem with the cost of living. It will keep workers motivated and may even help the economy rebound. A living wage is not only desirable but expedient. What Nigerian workers earn today is a “symbolic wage” and has no practical bearing on reality. The federal minimum wage, currently at N30,000, was last raised in 2019 when the inflation rate was 11-12%. The purchasing power of the naira has since been eroded by 276% (compared to the 2019 rate). Nigeria is ranked 44th in Africa for minimum wage, according to Prof. Kemi Okuwa of the Nigerian Institute of Social and Economic Research. These factors indicate the need for a wage increase to address the growing disparity between wages and the cost of living.

    When implementing wage  increases, the government must exercise caution to ensure that its devotion to its responsibility   does not have the reverse impact. The government must develop a robust economic plan to  reduce cost of living as well mitigate the ripple effects on low-income workers, SMEs, and the macroeconomy. We remember the infamous Udorji’s Commission saga and its economic impact. Many economic historians have pointed to the significant shake-up of the salary structure by the Udorji Commission as one of the major problems of Nigeria’s economy in the 1970s that upended our pricing system and created significant price inflation in the economy. We must learn from history! A situation where the monetary reward for work is increased but not based on productivity will often lead to unwarranted inflation.

    Productivity and added value creation should be a significant consideration among many bases for ascribing monetary wage increases, not just policy or legislation. Can the government link the increase in public servants’ wages and salaries to measurable productivity? Any increase in the cost of production and labour at this point, with no corresponding increase in added value to production, is not sustainable and often is an aberration to the system. Therefore, a balanced approach that considers both the need for increased wages and the economic reality of our country is crucial. This will ensure that our wage policy is fair and sustainable in the long run.

    The problem with government-induced increase is that only a limited number of workers, civil servants at the federal level, will get the money; many states may claim they need the means to pay that. Even if the state civil services pay that, combined with the federal civil service, they make up less than 25% of the employed workforce in Nigeria.   Most of our workforce comprises low-wage workers, whom SMEs and Organized Private Sector firms employ. These small businesses are struggling to pay the N30,000 per month minimum wage, much more than the new minimum wage. This minimum wage will make these workers poorer if they do not get it like the civil servants because they all buy from the same market.

    Besides, making unenforceable laws does not make sense. In other climes, it is against the law not to pay the minimum wage. It is enforced with explicit punishment for breaking the law. In Nigeria, this is different. Nothing happens even if any tier of government fails to pay the minimum wage. Most businesses will completely ignore the new salary structure, and there will be no legal consequences. The government must put some teeth to the new minimum wage rule for equity and justice and at least make it stick across the board. It must also consult widely and make the minimum wage more realistic.

    I understand the need for an increase in salary because of hyperinflation that has eroded purchasing power. However, I am preaching caution and a measured approach to dealing with this issue by considering all the ramifications and putting measures in place to cushion unintended consequences. Our recent experience has shown that a salary increase may start a merry-go-round of cyclical inflation that begins with a salary increase, and then inflation eats up the value, and then we are back to where we started. In an economy with over 40% food inflation, all stakeholders must apply caution and careful measures in implementing a new salary structure. However, governments (federal, state, and local) cannot afford to play politics with the issue of “living wage”.

    The implications of creating new salary structures and increasing the minimum wage are complex and multifaceted, requiring careful consideration of various factors, including economic conditions, industry dynamics, and social equity goals. Although I advocate for workers getting a living wage and meaningful salaries, given our current economic realities, a more measured approach based on value addition, productivity, and accountability will suffice. As the new wages are implemented, a corresponding demand for increased productivity must be implemented by all stakeholders to make the system sustainable.

    I understand the need for government intervention in this, especially the political benefits to the government in terms of reasonable public opinion and support, good labour relations and collective bargaining dynamics, and the corresponding public and political debates and legislative actions this generates; however, the economic exigencies – potential job losses, negative impact on SMEs, and inflationary pressures – must be paramount and considered. A living wage is the right of every Nigerian, and we must fight for that to reduce income inequality gaps and fight multidimensional poverty. High productivity and less economic legislation are the way forward, and the current confusion in the debate over a minimum wage needs to be more holistic and better informed. All the variables must be on the table, devoid of political grandstanding.