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Governors: states should get 42% from Federation Account

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GOVERNORS

 

Governors of the 36 states have advocated 42 per cent of national revenue accruing to the Federation Account to states and 35 per cent to the Federal Government.

Ekiti State Governor and Chairman of the Nigeria Governor’s Forum (NGF), Dr. Kayode Fayemi, who disclosed this, said Nigeria was also ripe for restructuring.

Fayemi spoke at a national dialogue and book presentation in Abuja.

He said: “On revenue collection and sharing, the position of the Nigeria Governors’ Forum to which I subscribe is that the sharing formula should be reviewed in favour of the states, especially given the argument of devolved responsibilities to the sub-nationals.

“In the context of the-proposed new federal structure, governors have argued for a formula along the lines of 42 per cent to states, 35 per cent to the Federal and 2.3 per cent to local governments.”

Fayemi said the nation’s federal system has not served the best interests of Nigerians because it is devoid of devolution of power, decentralization and true federalism.

While arguing that the Nigeria has tried to run away from addressing these issues, he queried: ”For how long can we continue to run away from this issue and continue to pretend that somehow it would resolve itself someday?

The governor said that the main challenge confronting federalism in Nigeria is remodeling the union.

He said: “Caught in our politics of difference and otherness, devolution, decentralisation, restructuring and such other concepts have come to mean different things to different people, depending on the ethnic and regional toga they wear.”

Fayemi threw his weight behind the suggestion by former Chairman of INEC, Professor Attahiru Jega that “sooner than later, these matters have to be addressed squarely, but dispassionately. He said the challenge is how to address restructuring without upsetting the apple-cart; that is, without unleashing instability occasioned by the mobilisation of ethnic, regional and religious sentiments and identities”.

He stressed: “Our idea of restructuring must be motivated only by our generational responsibility to perfect our union and to build a nation where peace and justice shall reign based on an operative principle that true greatness lies in building a country that works for everyone, regardless of the language they speak, or how they understand and worship God.

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“The evolution of Nigeria’s federalism has not served our best interests and it is not surprising that we have witnessed protests at every attempt at constitutional reengineering.

“In my view, structural changes (like state creation and merger) would appear to me, unrealistic in a democratic dispensation. I also do not think we can easily go back to the pre-1966 regional structure or adopt the 54 federating- units proposal of the 2014 conference, which I find unrealistic, no matter the appeal or attraction.

“Rather, our preoccupations should be, how can we make the current structure work better for us in terms of, first our governance system; second, our economy and national productivity; and third citizenship and inclusion. There may be other issues that should be the object of our restructuring, but I consider these to be paramount.

“Therefore, in my view, restructuring should be less about redrawing the map of Nigeria, but about building a more efficient governance system that is capable of delivering the greater good to the greatest number of our people.

“In essence, our desire to build a more perfect union should be anchored on the principle of devolution of powers – that is, re-allocation of powers and resources to the country’s federating units. The reasons for this are not far-fetched.

“First, long years of military rule has produced an over-concentration of powers and resources at the centre to the detriment of the states. Two, the 1999 constitution, as has been argued by several observers, was hurriedly put together by the departing military authority and was not a product of sufficient inclusiveness.

“Part of the focus of such an exercise should be: what items should remain on the exclusive legislative list and which ones should be transferred to the concurrent list? Other topical issues include derivation principle; fiscal federalism and revenue allocation; land tenure, local government creation and autonomy; etc. All points considered, the fiscal burden of maintaining a largely inefficient and over-bloated bureaucracy is a metaphor for shooting oneself on the foot.”

“In arriving at a position on what ought to be in the quest for a more perfect union, I wish to further say that my sentiments are more associated with strengthening the sub-national units in the re-allocation of powers and resources.

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“Remaking Nigeria through devolution of powers and re-organisation of the federating units is an idea whose time has come.

He said “I sometimes ask the question as to how best we should approach the challenge of nation building that ails Nigeria. There are those who think the problem with Nigeria is her size, some others think it is the many ethnic interests conflating one another for domination. Others think it is all about bad leadership, while some others believe it is the constitution.

“There are those who blame poverty as the issue, while some pan-Africanists believe colonialism, foreign religions and intellectual imperialism are the reasons we are still lagging behind. The thirst for excuses and culprits to blame for our obvious challenges is an insatiable one.

“In the midst of these epistemological melee, there have even been more disillusioned solutions to how to end the problem – the loudest of these today are the clamours for secession and unending complaints about marginalisation, which is mutual anyway!

“I therefore tend to assume that the idea of “remaking Nigeria” itself stems from the mind-set that sees the country as a fallen or collapsing edifice rather than a country still in the hands of architects and builders.

“For me, the idea of remaking the nation should not suggest a strategic demolition for us to erect a totally new structure. The question that we must however be willing to answer is where the inhabitants of a nation as big as Nigeria take shelter if we must collapse it, because for many, the idea of remaking Nigeria includes unmaking?

“And if the problem with the current structure is less of the competence of the architects and structural engineers as much as it is with the estate managers and occupants, how will the new erection or the “remade” structure fare in the hands of the same occupants who are unwilling to change until every other person has changed?

“Whatever defects that currently ails our country can be corrected without having to collapse the whole structure. This is very logical if we understand that nation building is an endless endeavour and that no generation is ever satisfied with the work it has done, it is the generation that comes after that can truly appreciate the progress that has made when they begin to take for granted what was scarcely available for the generation before them.

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“Nation building is an unfinished business. To start with, there is no nation today that is wholly satisfied with its present status. Every nation at all times strives to better its best and reach new heights. For us as a people our focus should be about how we can reinvent our nation, work for the prosperity of our people and ensure their peace and prosperity.

“Indeed, few people would disagree with the view that there is a significant gap between our potential for greatness as a country, and the reality of where we are now. It is therefore a sacred duty for all of us to continue to seek every opportunity to make the dream of a great nation come to past.

Fayemi said: “The path to nation-building is peace, the path to peace is justice, and the path to justice is equity and inclusion. Even for Americans who coined the mantra, of a more perfect union, it was done out of the understanding that the work of nation building is never done.

“If a country like the United States, forged out of a common purpose and common consent, perpetually seeks to make a more perfect union, we have no excuse to give up on the task of nation-building in Nigeria.”

He stressed that ‘important as the power of leadership is, until and unless we recompose the Nigerian State and make it derive her original consent and legitimacy from the people, then we labour in vain. Contrary to the pretensions of neo-liberal economists, without a modern state there cannot be an economy or society.

“Therefore, before public governance, there must be a modern state in the real sense. A predatory state cannot give birth to proper public governance and a sense of justice and fairness.”

 

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Fitch upgrades Nigeria’s credit outlook to positive, cites economic reforms

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Fitch, a global rating agency, has reviewed Nigeria’s outlook to positive from stable.

A credit rating is a measure of how likely a company or government entity can pay back its debts, based on an independent assessment of its financial health.

Fitch, in a statement on May 3, said the positive outlook partly reflects reforms implemented over the past year to support the restoration of macroeconomic stability and enhance policy coherence and credibility.

 

“Exchange rate and monetary policy frameworks have been adjusted, fuel subsidies reduced, coordination between the ministry of finance and the Central Bank of Nigeria (CBN) improved, central bank financing of the government scaled back and administrative efficiency measures are being taken to raise the currently low government revenue, as well as oil production,” Fitch said.

 

Fitch said the reforms have lessened distortions stemming from previous “unconventional monetary and exchange rate policies,” leading to the return of sizeable inflows to the official foreign exchange (FX) market.

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“Nevertheless, we see significant short-term challenges, notably, inflation is high and the FX market has yet to stabilise, and the durability of the commitment to reform is to be tested,” the credit agency said.

“The CBN has stepped up efforts to reform the monetary and exchange rate framework following last year’s unification of the multiple exchange rate windows, and the large differential between the official and parallel market rates has collapsed.

 

“Average daily FX turnover at the official FX window has risen sharply from 2H23, and there has been clearance of USD4.5 billion of the backlog of unpaid FX forwards (the validity of the outstanding USD2.2 billion is being assessed by CBN), and weekly sales of FC to bureaux de changes (BDCs) have resumed (having been suspended since 2021).”

‘RETURN OF SIZEABLE NON-RESIDENT INFLOWS’

Fitch said increased formalisation of FX activity and monetary policy tightening has contributed to a notable rise in foreign portfolio investment inflows and a fast appreciation of the naira at the official FX window.

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According to the company, this followed the 71 percent “post-liberalisation depreciation between June 2023 and mid-March 2024”.

 

However, the credit rating agency said the exchange rate remains volatile.

Fitch said the continued lack of clarity on the size of net FX reserves is a constraint on Nigeria’s sovereign’s credit profile.

‘FURTHER MONETARY POLICY TIGHTENING ANTICIPATED’

In March, the Central Bank of Nigeria (CBN) raised the monetary policy rate (MPR), which benchmarks interest rates, from 22.75 percent to 24.75 percent.

 

Fitch said it expects further increases in the CBN monetary policy rate in the second half of 2024 and “strengthening of monetary policy transmission, after the recent resumption of open market operations at rates closely aligned to the MPR”.

“We project inflation, which rose to 33.2% yoy in March due partly to exchange rate pass-through and rising food prices, to average 26.3% in 2024 and 18.2% in 2025, still well above our projected ‘B’ median of 4.5%,” Fitch said.

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In December 2023, Moody’s, a US-based rating agency, also revised its outlook for Nigeria from stable to positive.

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Good Morning! Here Are Some Major News Headlines In The Newspapers Today: Yahaya Bello: Appeal Court stays execution of contempt proceedings against EFCC chair

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1. The Court of Appeal, Abuja Division, on Friday, suspended moves by the Kogi State High Court to commit the Executive Chairman of the Economic and Financial Crimes Commission, EFCC, Mr. Ola Olukoyede for contempt. The Appeal Court granted an ex parte motion for stay of proceedings of contempt application filed against the EFCC Chairman by the immediate past governor of Kogi State, Yahaya Bello.

2. An Ikeja Special Offences Court has adjourned the trial of the embattled former Central Bank of Nigeria, CBN, governor, Godwin Emefiele, to May 9 over filing of additional proof of evidence served by the prosecution. Justice Rahman Oshodi adjourned the trial after taking arguments from the defendants’ counsel over additional proof of evidence of over 60 pages served on them in the morning by the prosecution.

 

3. Efforts for better efficiency in the electric sector received a boost on Friday as the Nigerian Electricity Regulatory Commission, NERC, announced the unbundling of the Transmission Company of Nigeria, TCN, with the establishment of the Nigerian Independent System Operator of Nigeria Limited, NISO.

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4. The Minister of Information and National Orientation, Mohammed Idris has said that no journalist has been incarcerated under the Bola Tinubu administration for practicing responsible journalism, stressing that the media is largely free in Nigeria. He assured that the federal government would continue to protect the interests of journalists and will not compromise press freedom.

5. A Kano High Court has granted an ex parte order restraining the Inspector General of Police, IGP; Assistant Inspector General of Police, AIG Zone 1 Kano; Commissioner of Police, Kano, from arresting, and harassing the All Progressives Congress, APC, Ward officers at Abdullahi Ganduje Ward, Dawakin-Tofa local government area of Kano State.

 

6. The Benue State government has demolished 40 illegal shanties and structures in different locations in Makurdi, the state capital. The General Manager of the Benue State Urban Development Board, UDB, Tarnongo Mede, who led his team yesterday to carry out the demolition exercise, said it came as a result of shanties springing up in some parts of the state.

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7. Nigerian fintech companies have warned their customers against trading in cryptocurrency or any virtual currency on their apps, threatening to block any account found engaging in such activities. At least four fintechs— Opay, Moniepoint, PalmPay, and Paga communicated this development to their customers on Friday.

 

8. A man, Hamza Mohammed, has been sentenced to death by hanging for stabbing another man to death during a free-for-all in Niger State. Mohammed and one Baba Usman (now at large) were said to have chased after the deceased, Isah Mohammed, caught up with him and stabbed him several times until he died.

 

9. Ahead of the September 21 gubernatorial election in Edo State, the state chapter of the Peoples Democratic Party (PDP), on Friday, inaugurated a 363-member campaign council, with Governor Goodwin Obaseki describing the Legacy Group as disorganised. The Legacy group, headed by the party’s vice chairman, South-South, Dan Orbih, had vowed not to work with Obaseki and the party’s candidate, Asue Ighodalo, unless their grievances were looked into.

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10. The naira depreciated yesterday to N1,395 per dollar in the parallel market from N1,365 per dollar on Thursday. However, the naira appreciated in the Nigerian Foreign Exchange Market, NAFEM, to N1,400.4 per dollar.

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Court restrains NERC from implementing tariff hike for Band A customers

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A federal high court in Kano has issued an order restraining the National Electricity Regulatory Commission (NERC) and the Kano Electricity Distribution Company (KEDCO) from implementing the new electricity tariff for Band A consumers.

Ruling on an ex parte motion on Thursday, Abdullahi Liman, presiding judge, made an interim order restraining NERC and KEDCO from going ahead with the impending tariff pending the hearing and determination of the motion on notice before it.

The order also restrained the defendant from intimidating and threatening to disconnect the applicants’ electricity supply for non-acceptance of the new increased tariff.

 

The suit marked FHC/KN/CS/144/2024 was filed by Super Sack Company Limited and BBY Sacks Limited.

 

Others are Mama Sannu Industries Limited, Dala Foods Nigeria Limited, Tofa Textile Limited and Manufacturers Association of Nigeria Limited (MAN).

The motion ex-parte was moved by Abubakar Mahmoud, counsel to the plaintiffs.

 

On April 3, NERC approved an increase in electricity tariff for customers under the Band A classification.

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The commission said customers under the category, who receive 20 hours of electricity supply daily, would begin to pay N225 per kilowatt (kW) from April 3 — up from N66.

The sudden hike has been criticised by the house of representatives and other stakeholders who have asked NERC to suspend the implementation of the new tariff.

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