The house of representatives has thrown out a bill that sought to make it compulsory for presidential and governorship candidates to secure more than 50 percent of the total votes cast, to be declared winners.
The bill seeking to change the current simple majority system of electing the president and governors, suffered a setback on the floor of the green chamber on Wednesday.
Sponsored by Awaji–Inombek Abiante, a lawmaker from Rivers, the bill sought to make it mandatory for a presidential candidate to be declared winner only if he or she scores more than half of the total votes cast, where there are more than two candidates in the contest.
WHAT THE CONSTITUTION SAYS
According to the constitution, to win the presidential election, a candidate needs to obtain 25 percent of the votes in at least two-thirds of the 36 states and the federal capital territory (FCT), along with an overall simple majority.
If a candidate fails to meet both requirements, a run-off occurs between the candidate with the highest vote count and the candidate with the most votes across most states.
Section 134 (1) of the constitution states that a “candidate for an election to the office of President shall be deemed to have been duly elected, where, there being only two candidates for the election:
“(a) he has the majority of votes cast at the election; and
“(b) he has not less than one-quarter of the votes cast at the election in each of at least two-thirds of all the States in the Federation and the Federal Capital Territory, Abuja.
“(2) A candidate for an election to the office of President shall be deemed to have been duly elected where, there being more than two candidates for the election:
“(a) he has the highest number of votes cast at the election; and
“(b) he has not less than one-quarter of the votes cast at the election each of at least two-thirds of all the States in the Federation and the Federal Capital Territory, Abuja.”
Section 134 also stipulates same for governorship candidates.
THE NAYS HAD IT
But Abiante’s bill proposed that in a presidential race with more than two candidates, a candidate must secure a majority of the total votes — which constitutes over 50 percent.
The bill had not even been debated when lawmakers roundly rejected it.
Tajudeen Abbas, speaker of the house, called for the bill to be seconded after its presentation by Abiante.
However, as soon as the bill was seconded and put to a voice vote, it was rejected — with louder “nays” than “ayes”.
The bill’s rejection process was highly unusual, as bills are typically rejected after the general principle has been debated.
If this system had been deployed during the 2023 election, President Bola Tinubu would not have been declared winner of the election in the first ballot, as he did not secure the majority of total votes cast.
[TheCable]
The Nigeria Labour Congress (NLC), on Tuesday, made a 17-point demand to President Bola Ahmed Tinubu.
Naija News understands that the demands were made to assuage the poverty, hunger and mass suffering inflicted on the citizens by the policies of the federal government.
The demands were placed before President Tinubu-led government after the President of NLC, Joe Ajaero, called off the nationwide protest over hardship.
Here are the 17-point demands
– We suggest a reopening of land borders to allow food, cement and other essentials to come in.
– Emergency measures to ensure food security around the country, including ensuring that farmlands are secured so that farmers can return to the land.
– We propose an immediate removal of the collection of levies, fees, dues and tolls from petty traders across the nation by local and state governments.
– Immediate implementation of the October 2, 2023, agreement reached with your government.
– An immediate purchase and deployment of CNG/ electric buses across all states of the federation to be managed by stakeholders.
– An immediate deployment of large numbers of CNG conversion kits to all states of the federation to grant the citizenry easier access to conversion of their vehicles from PMS to CNG.
– Composition of a team of relevant stakeholders to monitor and supervise all Federal Government’s intervention funds in the interest of Nigerian people. The same arrangement is advocated at all levels to ensure that government interventions reach the poor and the vulnerable.
– Reversal and suspension of further increases in school fees across the nation;
– A drastic reduction and removal of import duties paid on essential drugs and medical consumables to relieve the current hardship being witnessed by the sick.
– Direct all state governments to immediately pay all owed wages, wage awards, allowances, gratuities and pensions.
– Cash Transfers to the vulnerable with verifiable and inclusive social register to begin immediately.
– An immediate tax holiday to all workers earning from N100,000 per month and below including a reduction in PAYE for all workers earning below N500,000/Month.
– A removal of VAT on basic consumer items.
– Direct the purchase and use of Made in Nigeria goods and services to stimulate local production and save jobs.
– Immediate reduction in the cost of governance in Nigeria at all levels to reflect the nation’s tight fiscal position.
– Halt immediately the implementation of all IMF and World Bank policies in Nigeria. They have not only worked anywhere but have brought extreme hardship which imperils our nation’s security and undermines our sovereignty.
– Speedy conclusion of the National Minimum Wage negotiation, ensuring that it approximates a living wage.
Amid the current economic hardship, a Senior Advocate of Nigeria, SAN, Mike Ozekhome, has warned that the naira may exchange for N4000 against the United States, US, dollar before the end of 2024.
Ozekhome explained that there was nothing on ground to show that the naira will improve against the dollar.
He disclosed this while appearing on Channels TV programme, Politics Today on Tuesday.
He said: “Before the end of this year, if we are not careful, the Naira may exchange for N4000 to the dollar because there is nothing in place.
”If we are not careful we will get to the situation in Ghana, where they were carrying cedis in baskets to the market to go and buy things and put in their pockets.
”Why do BDCs sit under the trees and tables to control our economy?”
The Central Bank of Nigeria says the country’s gross external reserves grew by $2.28 billion to $34.51 billion in February 2024.
Olayemi Cardoso, the Governor of CBN, disclosed this on Tuesday in a communique during the 293rd Monetary Policy Committee meeting.
The apex bank boss explained that Nigeria’s external reserves grew to $34.51 billion as of February 20 from $32.23 billion at the end of January 2024.
According to Cardoso, the improvement in the country’s external reserves was driven by reforms in the foreign exchange market and an increase in oil production.
“Gross external reserves stood at US$34.51 billion on February 20, 2024, compared with US$32.23 billion at end-January 2024.
“The improvement was driven by reforms in the foreign exchange market and an increase in oil production
amongst others”, he said.
Recall that the CBN had raised the country’s monetary policy rate by 400 basis points to 22.75 per cent from 18.75 to tackle the country’s rising inflation.
The National Bureau of Statistics said Nigeria’s headline inflation in January 2024 increased to 29.90 per cent.
Former Lagos State governor, Akinwunmi Ambode, has said President Bola Tinubu is not the originator of the current economic challenges in Nigeria.
He said Nigerians need to face the current hardship and economic challenges frontally.
The former governor said this when he addressed attendees at the 2024 Leadership Colloquium and Award hosted by the Akinjide Adeosun Foundation (AAF) at Alliance Francaise in Lagos.
The ex-governor said citizens would continue the blame game if they do not understand the fundamentals of the problems facing the country.
“It has nothing to do with the singular person called Mr President; but if we don’t understand the fundamentals, we will start playing the blame games. We need to face our problems frontally,” he said.
“The major issue is that we are even tired of not fixing our issues. Now, we have found somebody that has decided in person of President Tinubu.
“Until we decide ourselves to say that we should unite for the common cause called Nigeria, the security issues will not go.
“We don’t have to wake up in the morning and talk ill of Nigeria. We get what we profess about Nigeria.”
The long-awaited Central Bank of Nigeria 293rd Monetary Policy Committee meeting was held on February 26 and 27 amid the continued fluctuation of the Naira against the USD and economic hardship in the country.
The MPC is the highest policy-making committee of CBN, with functions including reviewing economic and financial conditions in the economy, determining the appropriate stance of policy in the short to medium term, regularly reviewing the CBN monetary policy framework and adopting changes when necessary.
At the end of the first MPC meeting since the appointment of Olayemi Cardoso as the Governor of CBN, DAILY POST highlights five critical decisions.
Interest rate hike to 22.75 per cent
MPC decided on monetary policy measures by increasing the country’s interest rate by 400 basis points to 22.75 per cent from 18.75 per cent.
The implication is that banks need to pay more when borrowing from the apex bank.
CBN said the move was to moderate inflation in the long and short term.
Adjust the asymmetric corridor around the MPR
The MPC adjusted the asymmetric corridor around the monetary policy rate to +100/-700 from +100/-300 basis points.
This is setting the upper and lower bound around MPR, that is, setting the rate ceiling and floor upon which deposit money banks borrow from CBN in the event of a shortfall in liquidity to meet up with cash reserves requirement and overnight borrowing from each other.
Raise the Cash Reserve Ratio from 32.5 to 45.0%
CBN raised the Cash Reserve Ratio to 45.0 per cent from 32.5 per cent.
The cash reserve ratio is the portion of reservable liabilities (deposits from customers) that commercial banks must hold in their vaults rather than lend out.
For instance, for every N100,000 deposit, banks must hold N55,000 in its vault.
Retain the Liquidity Ratio at 30 per cent.
The committee retained the liquidity ratio at 30 per cent.
A bank’s liquidity ratio is its ability to pay off its current obligations without raising debt capital. It represents the percentage of deposits a bank must keep in cash or near-cash securities before making loans to customers. The CBN is thus mandating that banks hold 30 per cent of deposits as cash in the vaults to meet cash requests by banks.
CBN fixed March 25 and 26 for the next MPC meeting
The apex bank fixed March 25 and 26, 2024, as the next Monetary Policy Meeting date.
President Bola Tinubu explained on Tuesday that the decision taken to remove subsidy on petrol was a challenging one but necessary to ensure a transparent and accountable energy sector.
The President, who spoke at the opening of the 2024 Nigeria International Energy Summit, NIES, in Abuja, acknowledged that the decision has led to hardship, especially amongst low-income earners, assuring that eventually the economy will improve and the benefits will manifest.
Represented by the Minister of Information and National Orientation, Mohammed Idris, Tinubu said energy security was a priority for his administration.
He said: The petroleum subsidy has, over the years, strained our economic resources, leading to inefficiencies and, most importantly, hindering our ability to invest in critical areas of energy security.
“By removing the subsidy, we are creating a more transparent and accountable energy sector. The funds that were previously allocated to subsidising petroleum products are now redirected towards developing and upgrading our energy and other social infrastructure.
“Furthermore, the removal of the subsidy has encouraged further private sector participation in the energy industry, with the potential to attract more local and international investors and foster innovation and competition that will drive down costs and improve the overall efficiency of our energy sector.”
Acknowledging the hardship caused by the decision, the President said: “I am acutely aware of the immediate impact this decision may have had on our citizens, especially those with lower incomes.
Therefore, in parallel with the subsidy removal, my administration is committed to implementing social intervention programmes to mitigate the short-term effects on vulnerable populations. These programmes will ensure that the burden of subsidy removal is shared equitably and that the most vulnerable among us are protected.
“The decision to remove the petroleum subsidy is not an easy one, but it is a necessary one for the long-term energy security and economic prosperity of our beloved nation. I call upon all stakeholders, including industry experts, policymakers, and the general public, to engage in constructive dialogue and collaboration as we navigate these challenging but transformative times.
“Together, we can build a resilient and sustainable energy future for Nigeria.”
Air-Conditioned Luxury Buses With Free Wi-Fi Hit Abuja Roads As Wike Commences Capital Transport Repositioning
Admin
With the introduction of 15 air-conditioned 60-seater luxury buses fitted with free wi-fi in Abuja yesterday, Minister of the Federal Capital Territory, Chief Nyesom Wike has begun a repositioning process for intra-city transport needs of Abuja residents, the Director of FCT’s ‘Transport For Abuja’ project, Dr. Yakubu Terry has said.
Speaking during the inauguration of the initial batch of 15 buses that will ply various parts of the capital city under a public/private partnership (PPP) programme, Dr. Terry stated that under the FCT Minister, renewed hope is manifesting for urban mass transit.
During a brief ceremony at the Eagles Square, both Terry and the FCT’s Mandate Secretary for Transportation, Mr. Uboku Nyah emphasised that with the ‘Transport For All’ (TFA) project, the FCT has commenced a secure, convenient and affordable transportation that is for all Nigerians across various locations in the city.
“Our vision for transport for Abuja is not just about buses and routes, it’s a commitment to building a connected, sustainable, and efficient transportation system that will elevate the quality of life for every resident. We envision a city where commuting is seamless, where people can rely on a modern and reliable transit system, and where transportation becomes a facilitator of progress.
“To turn this vision into reality, ‘Transport for Abuja’ has devised a strategic plan that focuses on key city areas and their environs and by connecting the dots efficiently. We aim to create a web of convenience that thread through the fabric of Abuja; our strategy is not just about the number of buses on the road, it’s about creating a comprehensive and accessible network that serves the diverse needs of our community.
“We will prioritize lucrative routes and leverage technology to optimize routes, reduce wait times, and enhance the overall commuting experience; as we strive for efficiency. A crucial aspect of our strategy is the introduction of cutting-edge digital payment offerings,” he said.
According to Terry, passengers’ convenience is paramount and the introduction of various digital payment methods and user-friendly mobile apps, will ensure that passengers can effortlessly purchase tickets and thereby eliminate the need for physical cash, reduce transaction time and speed up the boarding process with seamless and efficient experience for valued riders.
Aside from the free onboard wi-fi and air-conditioning for passengers, Terry said the buses are equipped with live surveillance features for passenger safety.
According to an official, Mr. Roy Kweku, who conducted government officials, including Zacharia Nyampa and other members of the House of Representatives on a short intra-city tour, the goal of TFA is to use innovative methods and ICT towards transforming urban transportation experience for Nigerians with a vision for more efficient, highly reliable, accessible and secure transportation system that can help towards improving citizens’ lives.
limits Ways, Means borrowing
The Senate on Tuesday proposed a six-year single term for the Governor and Deputy Governors of the Central Bank of Nigeria (CBN).
The Red Chamber also sought to limit amount the Federal Government can borrow from the apex bank under the Ways and Means Advances.
For external Directors appointed on the board of the CBN, the Senate proposed that they should hold office for a non-renewable term of five years (one year less than the six-year tenure of the Governor and Deputies).
This followed the second reading a Bill which seeks to amend the Central Bank of Nigeria (CBN) Act
The Bill, among others, also seeks to make the CBN comply with the provisions of the Fiscal Responsibility Act.
The Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Adetokunbo Abiru (APC – Lagos East), and 41 other lawmakers sponsored the Bill, titled: “A bill for an Act to amend the Central Bank of Nigeria, CBN, Act No 7, of 2007.”
On Ways and Means Advances, the Bill proposed that advances the apex bank can grant the Federal Government should not exceed 10 per cent of average government actual revenues during the preceding three years.
“For the purpose of determining the government’s actual government revenue, proceeds from asset sales shall be excluded to avoid capturing revenues from exceptional items.
“Also, such temporary loans should be repaid in full within three months from the date it is made available. In order to minimize default risk, any sum which becomes outstanding at the end of the expiration of the credit period should be held against and recovered from the proportion of the Federal Government’s FAAC Receipts,” he said.
Abiru, in his lead debate, noted that the current CBN Act of 2007, which charges the Bank with the overall control and administration of the monetary and financial sector policies of the federal government, “has not been amended for over 16 years despite growing changes to the Bank’s Balance sheet as well as challenges in monetary policy implementation occasioned by fiscal dominance and the rapidly changing financial landscape.”
The proposed amendments, according to him,
are aimed at strengthening the bank “to discharge its primary mandate of maintaining monetary and price stability in support government’s economic growth objectives as well as align its governance mechanisms with global best practices.”
According to him, “Section 8 (2) of the CBN Act currently grants the Governor and Deputy Governor’s tenure of five years and they are eligible for re-appointment for another term not exceeding five years.
“The Bill proposes to amend this provision to provide a single non-renewal term of 6 years for the Governor and the Deputy Governors.
“This is the practice adopted by many independent Banks such as the US Federal Reserve and the European Central Bank where their Chief Executive Officers serve only one non-renewable term.
“Empirical evidence shows that a single term for the members of the Executive and Board members of central banks helps to reduce political influence on monetary policy decisions and the time inconsistency problem associated with non-independent central banks.
“In addition, the Bill proposes that where a vacancy is created by the death or resignation of a CBN Governor or Deputy Governor, the President can appoint an acting Governor in the interim pending the appointment of a substantive Governor or Deputy Governor.
“Where a substantive appointment is made, such appointment will be for a fresh term rather than serving the tenure of the previous Governor or Deputy Governor.
“It can be observed that there is no mention of gender as part of the factors to be considered by the President in the appointment of the five external Directors. In line with inclusivity in the governance of the Bank, the Bill proposes to insert the word ‘gender’ in this provision.”
He added: “Section 10 (3) of the current Act stipulates that each Director appointed shall hold office for four years (one year less than the tenure of the Governor and Deputies) and shall be eligible for re-appointment for another term of four years.
“It is therefore proposed that the five external Directors should hold office for a non-renewable term of five years (one year less than the six-year tenure of the Governor and Deputies).”
For proper alignment of monetary and fiscal policies, Abiru disclosed that the new bill has proposed a Coordinating Committee for Monetary and Fiscal Policies to set internally consistent targets of monetary and fiscal policies that are conducive to controlling inflation and promoting financial conditions for sustainable economic growth;
“Applying caps to any fiscal deficit at a level that can be financed without having recourse to direct monetary financing from the Bank, that is Ways and Means; amongst other necessary measures,” he said.
Senators in their contribution supported the Bill and approved that it be read for a second time when it was put to voice vote by Senate President Godswill Akpabio.
Akpabio thereafter referred the Bill to the Senate Commiserated on Banking, Insurance and other Financial Institutions for further legitimacy action and to report back in four weeks.
The House of Representatives Committee on Public Accounts (PAC) has invited the Central Bank Governor Yemi Cardoso to appear before it on Tuesday, March 5 unfailingly over issues with leakages on the REMITA platform.
The Committee’s Chairman, Hon. Bamidele Salam, conveyed the invite in a letter to the CBN Governor titled RE: INVESTIGATION OF REVENUE LEAKAGES THROUGH REMITA PLATFORM AND NON-COMPLIANCE SUBSTANTIVELY WITH STANDARD OPERATING PROCEDURE AND OTHER ALLIED SERVICE LEVEL AGREEMENT 2023 (HR.373/11/2023).
The PAC Chairman stated that the CBN Governor’s failure to appear before the Committee and address the issues has significantly hindered the investigative process on revenue leakages through the REMITA platform.
According to him: “You are strongly advised to take advantage of this invitation and appear before the Committee on Tuesday, March 5, 2024, at 10:00 am in Meeting Room 446, House of Representatives’ New Building, to respond to the issues that will arise during the hearing session.
“You are also advised to bring along all relevant officers familiar with the issues at stake who may assist you in providing answers to any questions that could arise during the session.”
“Please refer to your representation before the Public Accounts Committee on Tuesday, February 27, 2024, by an Assistant Director without a written letter to that effect. Be advised that the Committee does not allow representation; all Chief Accounting Officers are to appear in person to defend their office.
“You will also recall that the Committee has sent several correspondences to your office on the same subject with Ref. Nos: HR/PAC/SCO5/10NASS/HR.373/11/2023/1/2, dated December 8, 2023; HR/PAC/SCO5/10NASS/HR.373/11/2023/1/31, dated January 19, 2024; HR/PAC/SCO5/10NASS/HR.373/11/2023/1/60, dated January 25, 2024, and HR/PAC/SCO5/10NASS/HR.373/11/2023/2/84, dated February 19, 2024. We observed your absolute disregard for its Constitutional mandate. Please find copies of the letters attached.
“Your failure to appear before the Committee and respond to the issues has significantly stalled this Committee’s investigative process on revenue leakages through the REMITA platform.
“Consequently, the Committee wishes to draw your attention to previous letters on various subject matters, to which you are yet to respond. Please find references below:
“HR/PAC/SCO5/10NASS/QUE.2/29 dated January 23, 2024; HR/PAC/SCO5/10NASS/FA/1 dated January 23, 2024; HR/PAC/SCO5/10NASS/SE.3/34 dated January 30, 2024, and HR/PAC/SCO5/10NASS/SE.3/35 dated February 22, 2024. Please also find copies of the letters attached.
“The Committee frowns at this and wishes to remind you of the relevant constitutional provisions in Sections 62 and 89(1) (a, b, c & d) & (2) of the 1999 Constitution of the Federal Republic of Nigeria (as amended). The Public Accounts Committee has the power to summon any person in Nigeria to give evidence, produce any document in his possession and under his control.
“It may also interest you to note that under Sections 89 (1) (d), the Committee has the power to issue a warrant to compel the attendance of any person who, after being summoned, fails, refuses, or neglects to do so.
“Failure to comply with this civil invitation may leave the Committee with no choice but to issue a warrant of arrest against you in line with Legislative Houses (Powers & Privileges Act 2017) (Sections 2 & 3) and the 1999 CFRN (as amended) in line with House Procedures.
“Consequently, the Committee resolved to grant you one last opportunity to appear.”
More...
The Senate on Tuesday, February 27, urged the federal government to introduce the Nigeria version of the food stamps programme as an interventionist measure to cushion the effects of food insecurity/shortage in the country.
This is even as the red chamber mandated the Federal Ministry of Agriculture and Food Security to liaise with development partners and other relevant stakeholders, especially the Lagos Food Bank Initiative, which introduced Temporary Food Assistance Programme (TEFAP), few years ago.
“This is with a view to working out practicable templates and implementable modalities for the actualisation of the programme,” Senate said.
These resolutions of the Senate followed its consideration and adopted of a motion titled: “Introduction of food stamps in Nigeria as an interim measure to address imminent food insecurity in the country” sponsored by Senator Ali Ndume (APC – Borno South) and co-sponsored by Senator Mustapha Saliu (APC – Kwara Central).
Ndume in his lead debate, said the Senate has noted that at the unveiling of the October 2023 Cadre Harmonise Analysis on food insecurity, it was projected that in 2024, Nigeria is expected to see about 26.5 million people, grappling with high level of food insecurity.
He further noted that the reason for the above projection was not far-fetched, “as several indicators, which include but not limited to the ongoing conflicts across the country, climate change impacts, escalating inflation as witnessed in recent time, and rising costs of both food and essential non-food commodities, due to fall in value of Naira in exchange market.”
He said he is worried that many hungry and angry Nigerians have been expressing their frustration and anger over the recent increase in food prices by demonstrating on the streets in several cities across the country.
According to him, the Senate is also aware that in other countries, like the United States of America, Food Stamp which is a government-issued coupon that is given to low-income and non-income persons and is redeemable for food, “have been used since 1933 to date as a measure to cushion the resultant hardships and sufferings on the poor/less privileged as well as low-income earners.”
He expressed concern that the clamour for wage increase and work support cannot alone guarantee a more effective way of addressing food insecurity without the introduction of time-tested public assistance programme, “as contemplated by this motion with particular emphasis on the need for immediate food support across the country.”
Senators in their contribution supported the motion.
On his part, Senator Asuquo Ekpeyong, described the initiative as laudable.
He however demanded that measures be put in place to guide against abuse.
Senator Abba Moro noted that “there is no better time than now to devise ways to deal with food insecurity.
“There is dire need for us to provide a system that is fool proof to provide for ordinary Nigerians. Let us give serious thought to this document and encourage the Executive to adopt it as a working document.”
Senator Suleiman Sadiq (APC – Kwara North) said: “This is so apt and we should encourage Mr. President. But we should ensure that people don’t take advantage of it. We should have a fool proof programme to ensure that only those who need the food get it.”
Senator Solomon Adeola (APC – Ogun West) called for deployment of modern technology to curb potential abuses.
“The question is how do we achieve this for over 200million population. Our data must be in place, to ensure that the real vulnerable Nigerians get it. I am in total support of this to take care of the vulnerable Nigerians.”
Senators approved the two prayers of the when they were put to voice vote by Deputy Senate President Barau Jibrin over presided over plenary during debate on the motion.
The Federal Government said it has fulfilled about 90% of the agreement it had with the organized labour last year.
Minister of Labour, Nkiruka Onyejeocha disclosed this in an interview with Channels Television on Tuesday.
Onyejeocha said, “We’ve done virtually everything in agreement. 90% of everything.”
According to the minister, the President of the Nigeria Labour Congress (TUC), Joe Ajaero, told government representatives at a meeting on Sunday that the protest was not about the government’s commitment to the October agreement but food inflation.
She said food security and economic prosperity were two of the priorities of the Bola Tinubu administration.
Onyejeocha appealed to Nigerians to be patient with the new government as the administration is in its planting season with harvests on the horizon.
She said the Federal Government had ticked about 90% of the 15-point memorandum of understanding it signed with the organized labour in 2023.
On the provision of high-capacity CNG buses for mass transit in Nigeria, the minister said funds had been released for the purpose, but “there are certain things you cannot control; you cannot control the number of days a shipment or a container will stay in the port.”
Recall that some of the agreements include granting a wage award of N35,000 to workers, the inauguration of a minimum wage committee, and the suspension of the collection of value-added tax (VAT) on diesel for six.
The Federal High Court in Lagos, through Justice Ambrose Lewis-Allagoa, has restrained telecommunication operators in Nigeria from deactivating or barring any line or SIM that has not been linked to the NIN by their subscribers.
Justice Lewis-Allagoa ruled on a suit filed by lawyer Olukoya Ogungbeje, who sought to stop the move to disconnect subscribers over NIN–SIM linkage, stating that it infringed on his fundamental rights.
Ogungbeje, in a suit numbered FHC/L/CS/667/23, named the Federal Government of Nigeria, the Attorney General of the Federation and Minister of Justice, MTN Nigeria Communications Plc, and Airtel Networks Nigeria Limited as respondents.
“That the respondents are aware of the appellant/applicant’s appeal to the Court of Appeal of Nigeria, as the respondents have since been duly served with the appellant/applicant’s Notice of Appeal.
“That despite the pendency of the appellant/applicant’s appeal, efforts are underway by the respondents, specifically on the 28th of February 2024, to ensure further and outright barring, deactivating, and restricting of SIM cards and phone lines of the applicant and that of Nigerian citizens.
“That the appellant/applicant’s appeal to the Court of Appeal of Nigeria has a high degree of success against the respondents.
“There is a need to preserve the rest of the subject matter of the appeal pending the hearing and determination of the appellant/applicant’s appeal at the Court of Appeal of Nigeria.
“That the appellant/applicant is desirously interested in diligently pursuing the instant appeal that has raised a novel and recondite issue substantially jurisprudential, constituting an exceptional circumstance in which this Honourable Court can grant an application of this nature.
“That the court has the power and jurisdiction to grant an application of this nature in the interest of justice,” he stated.
The naira gained against the dollar as the Central Bank of Nigeria (CBN) took more measures including delivering a massive hike in its benchmark interest rate on Tuesday in a bid to rein in rising inflation so as to stabilise the economy.
Following the conclusion of the two-day Monetary Policy Committee (MPC) meeting held in Abuja on Tuesday, the CBN hiked the monetary policy rate (MPR) to 22.75 percent from 18.75 percent.
The central bank also raised the cash reserve ratio (CRR) to 45 percent from 32.5 percent. The asymmetric corridor was widened to +100-700 basis points around the MPR from +100/-300 basis points set in July 2023. However, the liquidity ratio remained unchanged at 30 percent.
The naira strengthened to 1,420 per dollar at the Bureau De Change segment of the foreign exchange market from over 1,800/$. In the parallel market, commonly known as the black market, the dollar closed at N1,550 as against N1,900 on Friday.
However, at the Nigerian Autonomous Foreign Exchange Market, naira depreciated to 1,615.94/$ on Tuesday from 1,582.94/$ on Monday, data from the FMDQ indicated.
Bismarck Rewane, managing director/CEO of Financial Derivatives Company Limited, said the CBN was aggressive in its tightening and that this shows that the country is now in a high interest rate environment.
He said this development will strengthen the currency, deflate the stock market in the next few days, and bring some level of sanity in the markets. He expects to see massive appreciation of the naira in the FX market.
A former top official at the CBN said quick execution and steady nerves should bring inflows to stabilise currency and moderate inflation.
He said: “Now deputy governor in charge of financial system stability needs to keep a close eye on bank balance sheets. Higher lending rates may lead to higher loan defaults at a time of reduced real disposable incomes. Higher market rates may lead to losses due to market risk in the event of sell offs to shore up liquidity by marginal banks.
“But priority is to stabilise the macro and this decision is excellent. We just need to keep an eye on risks to bank balance sheets as we move from excessively loose monetary conditions to a more responsible stance.”
According to Abiola Rasaq, former economist and head investor relations at United Bank for Africa Plc, these transitory monetary policy measures reflect the inflation-targeting orientation of the new leadership at the CBN and overall monetary policy committee.
He said this would increase the cost of funds of banks and shrink net interest margin, albeit the MPC’s overarching interest is to stem the pressure on exchange rate and consumer prices.
He said the MPC sought to gradually narrow the negative real interest rate to attract foreign portfolio investors while also incentivising domestic investors as a way of stimulating appetite for naira-denominated assets.
Rasaq said: “It’s a double-edged sword that will hurt money supply and consequently undermine employment creation, but the MPC may have limited options at this time, hence I consider this measure as transitory douses to stem the current crisis.
“Banks profitability will be challenged, and indeed, the policy measure increases the probability of loan default in the banking sector, nonetheless, it’s a short term measure that hopefully will help to cool-off pressures and allow the monetary and fiscal policy authorities some time to reset the system and implement sustainable long term measures relevant for economic growth and development.”
Razia Khan, managing director and chief economist for Africa and the Middle East Global Research at Standard Chartered Bank, emphasised the critical need to stabilise Nigeria’s FX market as an immediate priority.
She highlighted the importance of fostering a better-functioning official FX market before considering the adoption of a formal inflation target.
Analysing the policy response, Khan questioned the adequacy of the tightening measures implemented.
She said the increase in the CRR to 45 percent, acknowledging it as a meaningful tightening move, particularly with the central bank shifting away from ad-hoc CRR debits.
However, Khan raised concerns about the lack of transparency surrounding the previous CRR regime and its effectiveness, making it challenging to assess the true impact of the tightening.
“The Monetary Policy Rate itself was raised 400 bps. The signal on the tightening intent that this sends is important, and we expect that markets will not dismiss it,” she said in an email to BusinessDay.
Reacting to the MPC’s decision, Kingsley Moghalu, former deputy governor of the CBN, said on X: “Correct move by the Monetary Policy Committee to dramatically hike the Monetary Policy Rate by 400 basis point to 22.5 percent. The situation calls for nothing less if we are to check inflation over 12-18 months. We did the same a decade ago to bring inflation from 14 percent to 8 percent.”
Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise, said the outcome of the MPC meeting would hurt the real sector of the economy that is already contending with numerous macroeconomic challenges.
He said the increase of MPR and CRR posed a major risk to the financial intermediation role of banks in the economy.
“The increase would constrain the capacity of banks to support economic growth and investment, especially in the real sector of the economy because the increases are quite significant,” he said.