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Labour to Begin Strike as FG Refuses to Back Down on Petrol Price, Electricity Tariffs

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Ayuba Wabba

Labour to Embark on Industrial Action to Force FG  to Reverse Increase in Petrol Price, Electricity Tariffs

The sudden increase in prices of fuel and electricity tariffs despite the negative impacts of COVID-19 on the Nigerian people has forced the Nigerian labour union once again to announce an industrial action to compel the Federal Government to emulate other economies easing COVID-19 impacts through various palliatives and measures.

Labour union on Tuesday set Monday for what it described as “unprecedented mass action” and “total strike” to get the government to reverse the hike in petrol pump price and the increased electricity tariffs.

At a meeting with members of the National Administrative Council, Presidents and General Secretaries, the Nigeria Labour Congress National Executive Council (NEC) agreed to embark on a total strike against what they described as anti-people policy.

While the ultimatum given to the federal government by Trade Union Congress (TUC) expired on Monday, TUC has extended it till Monday in line with NLC announced industrial action.

NLC President Ayuba Wabba, who read the communique of the meeting, said: “NEC resolved to reject in its entirety the issue of hike in electricity tariffs by almost 100 per cent as well as the fuel price increase in the name of full deregulation.

“This decision is premised on the fact that these twin decisions alongside other decisions of government including the increase of VAT by 7.5 per cent, numerous charges by commercial banks on depositors without any explanations will further impoverish Nigerian workers and citizens.

“Therefore, this increase, coming in the midst of the COVID-19 pandemic, is not only ill-timed but counter-productive.

“NEC also observed that the privatisation of the electricity sub-sector seven years down the line has not yielded any positive result. Whereas, the entire privatisation process, the entire sector was sold at about N400 billion, we are surprised that government within the last four years injected N1.5 trillion over and above the amount that accrued from this important asset.

“Therefore, NEC came to the conclusion that the entire privatisation process has failed and the electricity hike is actually a process of continuous exploitation of Nigerians.

“On the issue of the refineries and also the increase in the pump price of PMS, this particular issue had been on the table for more than three decades and the argument has not changed.

“Whether it is the name of full deregulation or subsidy removal, what is obvious is that it is fuel price hike and this has further eroded the gains of the N30,000 minimum wage because it has spiral effects which include the high cost of food and services and the reduction in the purchasing power of ordinary Nigerians.

“While demanding that our three refineries should be made to work optimally, NEC also concluded that government has business in doing business because the primary purpose of governance is about the security and welfare of the people and if in other countries, governments are maintaining refineries, and they are working optimally for the benefit of the people, Nigeria cannot be an exception.

“In the light of these, NEC decided to endorse the two-week ultimatum given to the Federal Government to reverse those obnoxious decisions and also pronounce that the action proposed by the Central Working Committee is hereby endorsed by the NEC that 28th of September should be the date that those decisions should be challenged by the Nigerian workers, our civil society allies and other labour centres.”

“We’ll meet. We don’t want anything that will cause more financial pain to workers.”

Speaking on the matter and the reason for industrial action, TUC’s  President Quadri Olaleye and Secretary-General Comrade Musa-Lawal Ozigi, urged to Nigerians to get ready for the “unprecedented mass action”.

TUC said it resolved to work with the NLC and civil society allies because of the magnitude of the situation. Hence, it suspended the previously planned strike to join force with NLC and others.

Consequent upon this, the ultimatum which should expire by midnight of today (yesterday) has been shifted to 28th September 2020 for effective and maximum effect.

“We want to use this opportunity to call on Nigerians, especially those in the informal sector, to bear with us while the industrial action lasts.

“There is no need for the pains we bear. It is a needless one. They ask us to tighten our belts while they loosen theirs. Services are not rendered yet we are compelled to pay estimated bills.

“You will recall that this government during its electioneering campaigns in 2014 told the world there is nothing like subsidy. We were told that they will build refineries. All that is history now.

“We run a mono-economy and any hike in fuel automatically will have an adverse effect on us, yet successive governments tow that path because they are not creative.

“As at today, about eight states are yet to commence the payment of new minimum wage and its consequential adjustment even though the President signed it into law on April 18, 2019. We have written letters to the governors and also engaged them in dialogue but all to no avail. Sometimes we wonder if these people have a conscience at all.

“The Congress hereby appeals to all Nigerians to get ready for the unprecedented mass action against corruption, obnoxious policies, rape and other violent offences, breach of the collective agreement, unemployment, etc.

“We also call on the USA, UK, Germany, Spain, etc to support our struggle by placing indefinite visa ban on our political leaders whose stock in trade is to loot and impoverish the masses and the country. We can no longer take it. Enough is enough!”

Is the CEO and Founder of Investors King Limited. He is a seasoned foreign exchange research analyst and a published author on Yahoo Finance, Business Insider, Nasdaq, Entrepreneur.com, Investorplace, and other prominent platforms. With over two decades of experience in global financial markets, Olukoya is well-recognized in the industry.

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Economy

FG to Hike VAT on Luxury Goods by 15%, Exempts Essentials for Vulnerable Nigerians

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Value added tax - Investors King

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has announced plans by the Federal Government to raise the Value Added Tax (VAT) on luxury goods by 15% despite the ongoing economic challenges.

Minister Edun made this known in Washington DC, during a meeting with investors as part of the ongoing IMF/ World Bank Annual Forum.

While essential goods consumed by poor and vulnerable Nigerians will not be affected by the increase, Edun, however, the increase in VAT will affect luxury items.

He said, “In terms of VAT, President Bola Tinubu’s commitment is that while implementing difficult and wide-range but necessary reforms, the poorest and most vulnerable will be protected.

The minister also revealed that the bill is currently under review by the National Assembly and in due time, the government will release a list of essential goods exempted from VAT to provide clarity to the public.

“So, the Bills going through the National Assembly in terms of VAT will raise VAT for the wealthy on luxury goods, while at the same time exempting or applying a zero rate to essentials that the poor and average citizens purchase,” Edun explained.

Earlier in October, Investors King reported that the FG had removed VAT on diesel and cooking gas, among others to enhance economic productivity and ease the harsh reality of the current economy.

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Economy

Global Debt-to-GDP Ratio Approaching 100%, Rising Above Pandemic Peak

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Naira Exchange Rates - Investors King

The IMF sees countries debt growing above 100% of global GDP, Vitor Gaspar, head of the Fund’s Fiscal Affairs Department said ahead of the launch of the Fiscal Monitor (FM) Wednesday (October 23) in Washington, DC.

“Deficits are high and global public debt is very high and rising. If it continues at the current pace, the global debt-to-GDP ratio will approach 100% by the end of the decade, rising above the pandemic peak,” said Gaspar about the main message from the IMF’s Fiscal Monitor report.

The Fiscal Monitor is highlighting new tools to help policymakers determining the risk of high levels of debt.

“Assessing and managing public debt risks is a major task for policymakers. The Fiscal Monitor makes a major contribution. The Debt at Risk Framework. It considers the distribution of outcomes around the most likely scenario. The analysis in the Fiscal Monitor shows that debt risks are substantially worse than they look from the baseline alone. The framework should help policymakers take preemptive action to avoid the most adverse outcomes.”

Gaspar said that there’s a careful balance between keeping debt lower, versus necessary spending on people, infrastructure and social priorities.

“The Fiscal Monitor identifies three main drivers of debt risks. First, spending pressures from long term underlying trends, but also challenging politics at national, continental and global levels. Second, optimistic bias in debt projections. And third, increasing uncertainty associated with economic, financial and political developments.

Spending pressures from long term underlying trends and from challenging politics at national, continental and global levels. The key is for countries to get started on getting debt under control and to keep at it. Waiting is risky. The longer you wait, the greater the risk the debt becomes unsustainable. At the same time, countries that can afford it should avoid cutting too much, too fast. That would hurt growth and jobs. That is why in many cases we recommend an enduring but gradual fiscal adjustment.”

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IMF Attributes Nigeria’s Economic Downgrade to Inflation, Flooding, and Oil Woes

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IMF - Investors King

The International Monetary Fund (IMF) has blamed the downgrade of Nigeria’s economic growth particularly on the effects of recent inflation, flooding and oil production setbacks.

In its World Economic Outlook (WEO) published on Tuesday, the Bretton Wood institution noted that Nigeria’s economy has grown in the last two quarters despite inflation and the weakening of the local currency, however, this could only translate to 2.9 percent in 2024 and 3.2 percent in 2025.

“Nigeria’s economy in the first and second quarter of the year grew by 2.98% and 3.19% respectively amid a surge in inflation and further depreciation of the Naira.

“The GDP growth rate in the first two quarters of 2024 surpassed the figure for 2023, representing resilience despite severe macroeconomic shocks with a spike in petrol prices and a 28-year high inflation rate,” the report seen by Investors King shows.

The spokesperson for IMF’s Research Department, Mr Jean-Marc Natal, said agricultural disruptions caused by severe flooding and security and maintenance issues hampering oil production were key drivers of the revision.

“There has been, over the last year and a half, some progress in the region. You saw, inflation stabilising in some countries, going down even and reaching a level close to the target. So, half of them are still at a large distance from the target, and a third of them are still having double-digit inflation.

“In terms of growth, it’s quite uneven, but it remains too low. The other issue is that in the region it is still high. It has stopped increasing, and in some countries already starting to consolidate, but it’s still too high, and the debt service is, correspondingly, still high in the region,” he said.

It also expects to see some changes in Nigeria’s inflation, which has slowed down in July and August before rising to 32.7 percent in September 2024.

“Nigeria’s inflation rate only began to slow down in July 2024 after 19 months of consistent increase dating back to January 2023.

“However, after two months of slowdown hiatus, inflation continued to rise on the back of an increase in petrol prices by the NNPCL in September,” the report said.

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