THE LABOUR MOVEMENT AND SOCIO-ECONOMIC CHALLENGES IN CONTEMPORARY NIGERIA

THE LABOUR MOVEMENT AND SOCIO-ECONOMIC CHALLENGES IN CONTEMPORARY NIGERIA  [1]

By

Femi Aborisade

Labour Consultant and Attorney-At-Law

aborisadefemi@gmail.com

 

 

‘It cannot be said often enough, that overall progress remains too slow and too uneven; that too many Africans remain caught in downward spirals of poverty, insecurity and marginalisation; that too few people benefit from the continent’s growth trend and rising geo-strategic importance; that too much of Africa’s enormous resource wealth remains in the hands of narrow elites and, increasingly, foreign investors without being turned into tangible benefits for its people’
Kofi Annan, Chair, Africa Progress Panel

(in ‘Foreword’ to “Africa Progress Panel, Jobs Justice and Equity: Seizing opportunities in times of global change, Africa Progress Panel Report, 2012”[2])

 

INTRODUCTION

There is a relationship between poverty and politics. Politics creates poverty. In other words, the economic decisions on what to produce, how to produce and for whose interest to produce, are controlled politically. Though political decisions tend to be taken by the few who wield political power to dispossess the majority, the majority should strive to organize to influence the decisions that are made, while simultaneously organizing politically to ultimately seize political power in the future so they can rule in their own interests.

 

This paper identifies some of the key socio-economic issues and their current state. It goes further to proffer policies, which the labour movement may advocate and fight for.

 

The identified socio-economic issues are:

1. Privatization of public enterprises.
2. Non-payment of salaries.
3. The fight against corruption.
4. Health Care.
5. Education.
6. Housing, and
7. Water.

PRIVATIZATION

Privatisation is not just an economic policy. It is mainly a political objective. If economic reasons alone determine which companies to be privatized, then, companies that are self financing and generating additional funds for government should not have been privatized. I contend that privatisation has contributed in no small measure to the pauperisation of the poor and working class of the Nigerian society. For example, the entire workforce of NEPA/PHCN (about 48,000) were all disengaged, even though an insignificant proportion was re-engaged on fresh contract or casual basis.

 

If truly the APC President Muhammadu Buhari’s (PMB’s) administration is based on a programme of ‘change’, there should be a clear movement away from all forms of privatization in different guises in the language of “tion”/”sion” – privatization, deregulation, liberalization, commercialization, concession, and so on.

 

It is in this regard that the labour movement must call for the reversal of all previous privatizations and resist the call for removal of fuel subsidy and deregulation of the oil and gas sector by the newly appointed GMD of the NNPC, Dr. Emmanuel Ibe Kachikwu. This needs to be backed by the threat of indefinite strikes by relevant industrial unions (NUPENG and PENGASSAN), and, if necessary, the organisation of a general strike to demand the end of privatisation and the removal of Kachikwu as NNPC’s GMD.

Subsidy is not the cause of the crisis in the petroleum sector. Subsidy is in fact a consequence of corruption in two dimensions –inability to refine the crude domestically and in the process of disbursing the subsidy. If the PMB administration could develop the political will to fight corruption comprehensively and without discrimination, Nigeria’s crude could be refined domestically and petroleum products sold to generate surplus as was the case with the establishment of Petroleum Trust Fund.

 

Where the regime lacks the political will to fight corruption effectively, the labour movement should resist any attempt to make the masses of Nigeria, including the working class organized in trade unions, to pay for the consequences of corruption which the so called ‘subsidy’ represents.

 

In fact for most of the working class of Nigeria, the only benefit it gains from the oil resources is the fuel subsidy. Even then, the price of fuel is higher in Nigeria than all other country members of OPEC.

A fundamental paradigm shift from state centrism to the private sector being the engine of economic change occurred in July 1986 when the policy of privatization was formally declared through the introduction of Structural Adjustment Programme (SAP).

Swanson and Worlde-Semait[3] established that about 600 enterprises and 900 smaller ones were operating at the Federal and State/Local government levels, in the 1980s, respectively[4]. Reversing the privatization of those 1,500 enterprises is the ‘change’ the labour movement has a historic responsibility to fight for.

 

Petroleum Industry Bill (PIB)[5] & Privatisation

Sections 136(5), 324 (4), 324 (5) of the Petroleum Industry Bill represent the essence of the primary goal of the PIB as presently formulated - to implement a neoliberal privatization agenda under various guises – sale or divestiture of Federal Government’s interests and concession.

 

S. 136 (1) establishes the Nigerian National Petroleum Company Limited, otherwise called ‘’the National Oil Company’’. It shall be a limited liability company and shall be the successor company to the assets and liabilities of the Nigerian National Petroleum Corporation, NNPC. Section 136(4) provides that ownership of the National Oil company shall be vested solely in the Federal Government of Nigeria at the time of incorporation. But S. 136 (5) provides that the Federal Government may at any time after two years from the date of incorporation decide to divest itself of any amount of shares in the National Oil Company for sale to the Nigerian public on the Nigerian Stock Exchange.

 

S. 324(1) also provides for the establishment of National Transport Logistics Company which shall be vested with ownership of the products pipelines and depot systems currently owned by the Petroleum Products Marketing Company, and ownership of the gas transportation pipelines currently owned by the Nigerian Gas Company.

 

Concession as a Form of Privatization:

While S. 324 (2) provides that the National Transport Logistics Company shall be wholly owned by the Nigerian State, S. 324 (4) provides that the products pipelines and depot systems shall be divided into segments and each segment shall be concessioned out to facility management companies who shall be in charge of the management and operation of the said products pipelines and depot systems.

 

Licensing as a Form of Privatization:

 

S. 324 (5) provides that the gas transportation pipelines system shall be licensed out to a gas facility management company.

 

From the foregoing, privation of NNPC which successive regimes could not do executively is what is intended to be achieved legislatively through the PIB.

 

Let us recall that in the twilight of the regime of former President Obasanjo, there was a rushed cheap sale of two out of the four state-owned refineries, the Port Harcourt and Kaduna refineries, as well as some other national assets. The nationwide strike of June 2007, involving the two oil workers unions, the National Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), compelled the then newly elected regime of President Yar’ Adua to reverse the sale.

 

For the Nigerian labour movement, “Returning to our founding principles” in this context means embracing the programme of “Nigeria not for sale” drawn up in the early ‘80s by the NLC. Some of us made inputs into the development of the NLC position then. In fact, it was not a contentious position.

 

The Nigerian labour movement should therefore bring pressure to bear on the APC government and hold PMB to his promises, when he said:

 

“… Investigating corruption is a bigger priority than scrapping price caps on domestic fuel”.

“I have received …literature on the need to remove subsidies, but much of it has no depth. … Poor security, sabotage, vandalism, corruption and mismanagement - not necessarily subsidies – are the most serious problems of Nigeria’s oil sector.”[6]

 

It is only the pressure by the labour movement that can make PMB to sustain his anti-subsidy and anti-privatisation of the NNPC against the plundering politically powerful pro-subsidy removal and pro-privatisation forces in the APC.

 

NON-PAYMENT OF SALARIES: REJECT AUSTERITY PROGRAM

Under section 15 of the Labour Act, wages shall become due and payable at intervals not exceeding one month. Section 15 provides as follows:

 

 “Wages shall become due and payable at the end of each period for which the contract is expressed to subsist, that is to say, daily, weekly or at such other period as may be agreed upon:

 

Provided that, where the period is more than one month, the wages shall become due and payable at intervals not exceeding one month.”

 

The reality today is that about 22 or 23 State governments owe workers salaries of between 2 and 11 months.

 

Though the phenomenon of non-payment of wages and salaries started before the 2015 election, the campaigns and the conduct of the elections aggravated the situation. In other words, workers’ sweat and entitlement were used to fund electioneering campaigns, transfers to personal bank accounts of politicians and party leaders and inflated capital projects. The non-payment of salaries is therefore due to outright corruption and semi-legal corruption in terms of inflated capital budgets, apart from the drastic reduction in the budgetary allocation from the Federal Government on account of drop in the international price of oil.

 

Even after the bail-out by the Federal Government, the problem of non-payment of salaries has persisted. There is no evidence that the bail out was used exclusively for the purpose it was taken – payment of salaries. It is therefore imperative for labour to undertake concrete analysis of the situation in individual states, develop perspectives, strategies and programmes for fighting the phenomenon of non-payment of salaries.

 

A basic staring point is that Labour should neither accept bearing the burden of the crisis of the economy nor accept that the drop in the price of oil in the international market is sufficient to justify non-payment of wages.

 

According to the National Bureau of Statistics, (NBS)[7], Nigeria earned about N2.5 trillion from export of petroleum products (bituminous minerals, LNG and crude oil) during the second quarter of this year – April to June. As the NBS pointed out, the N2.5 trillion is about 56.8 per cent of the country’s N4.49 trillion 2015 budget.

 

It should be appreciated that the N2.5 trillion does not include revenues from custom duties and returns from the Federal Inland Revenue Services (FIRS) such as VAT and company income tax. By extrapolating the above stated revenue from oil exports alone, Nigeria stands to earn about N10 trillion for the year, just from one source of income, in spite of the drastic drop in the oil price in the international market.

 

While the labour movement should unconditionally support the PMB regime’s fight against corruption, the labour movement must insist that the fight against corruption must be non-discriminatory. The documentary evidence contained in all existing Probe Panel Reports must be acted upon without putting a time limit. All former public officers who obviously have means beyond their legitimate earnings must be invited to explain the sources of their wealth. As far as an allegation of corruption is concerned, the law should be reviewed such that anyone who lives beyond his/her legitimate earnings has the burden to show proof that such wealth is legitimately acquired. This requires all elected politicians and Permanent Secretaries/Directors or equivalent to declare publically their wealth before they take up their post, annually whilst in office and on leaving.

Within the framework of the above perspectives, the labour movement must vehemently reject the phenomenon of non-payment of salaries in the public sector and the NNPC’s GMD’s argument that “oil subsidy is not sustainable”. This needs to be backed up by indefinite strike action, with solidarity strikes by the central labour organisations, if salaries remain unpaid

THE FIGHT AGAINST CORRUPTION

While the labour movement has no discretion but to support the APC/PMB’s fight against corruption unconditionally, the labour movement must however develop an independent perspective of what corruption is and how it should be fought.

 

We urge the labour movement to adopt a broad perception of corruption which suggests that corruption is the abuse of public power for private benefit/profit. In this regard, violation of the constitution, rules and regulation for private benefit is a form of corruption, which should equally be punished. Unless corruption is defined in this broad perspective, the fight against corruption may itself be dubious and corrupt.

 

Our proposed definition of corruption brings the following forms of policies within the framework of corrupt acts:

 

• Privatisation of public enterprises: Where the Constitution of the Federal Republic of Nigeria, 1999, as amended, provides that the economic system shall not be operated in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group (CFRN, 1999, S. 16(2)(c).
• Public-Private Partnerships (instead of Public-Public Partnerships) through which public resources are used to empower the private sector while undermining the capacity of the public sector.
• Income inequality by which the elected and appointed public officers in the top executive and legislative arms of government live in opulence (through salaries and allowances that are out of proportion to the living standard of an average public sector worker) whilst the ordinary people wallow in abject poverty. Through income inequality, the top politicians, in and out of public offices are able to corrupt the pauperized masses, compromise law enforcement agencies, the judiciary and continue to nurture corruption and perpetuate themselves or their political sons and daughters in power.
• The operation of the unconstitutional Office of the “First Lady”/”Wife of the President/Governor” through which public funds are frittered away unconstitutionally at national, state and local government levels, as well as the legislature.
• Political or grand corruption through which awards of public contracts are made to cronies and public assets are ‘legally’ acquired or collection of public revenue outsourced to companies belonging to individuals. Transparency International (PI) has established that 20-25 percent of public budgets are consumed in corrupt contract awards and outsourcing.
• Failure and/or refusal to declare assets publicly before assumption of public office by elected public officers and the appointed Ministers, Commissioners, Advisers, Governing Board members, Directors, and their aides.
• Failure to pay the required taxes on income and other liabilities as required by the law.

The Nigerian labour movement should insist that the APC/PMB’s administration should not only move against those involved in bureaucratic corruption (the public service bureaucracy) but that the regime should also move, principally, against political/grand corruption, which involves politicians in and out of public office, irrespective of party affiliation.

 

The Nigerian labour movement should not be deceived by the World Bank’s/IMF’s concept of ‘weak institutions’ and lack of ‘good governance’ as causes of corruption. The truth is that neoliberal policies of privatization, deregulation, outsourcing, liberalization, etc constitute a massive drain on public resources and constitute strong structures for corruption and corrupting influences and consequences on the public sector.

 

INSTITUTIONALISE TRANSPARENT GOVERNANCE PROCESS AND THE FIGHT AGAINST CORRUPTION, THROUGH:

• Making it constitutionally mandatory for public sector officers (particularly those occupying elective offices and the top appointed officers, such as Ministers, Commissioners, judges, board members, directors and management cadre in all government bodies and state owned enterprises) to publicly declare their assets and interests annually.
• A commission such as the Code of Conduct Bureau should be created to administer the register of interests for senior public officers. The registers should be audited each year by the relevant Auditor General.
• The registers of interests and assets should be accessible to the public, e.g. by being put online and in libraries that are accessible to the public.
• Public projects to be executed through direct labour or Public-Public Partnerships, nationally or internationally.
• Where public projects have to be awarded to private contractors, such should be monitored by democratic bodies involving representatives of local communities, trade unions and professional bodies, in addition to the oversight role of the legislature.
• All procurement notices, received bids and contract awards to be published on local notice boards and on the internet.
• All procurement boards to include local representatives of trade unions and professional bodies.
• All service establishments, for example, public hospitals, health centres, primary schools, etc to publish accounts of money and goods received and how the money was spent, each month
• The Federal Inland Revenue Service and state inland revenue services should report full details of the revenue they collect each month and the tax paid by all rich individuals (with monthly incomes above N5million and/or around ten times average per capita GDP) should be published on the internet.
• Daily publication of earnings from sale of crude oil in the international market.
• All public sector salaries (particularly those of the executive and legislative arms of government) to be published on local notice boards and on the internet.
• Elected public officers to be on national minimum wage, provided incidentals are reimbursed.

 

HEALTH CARE

In 2012, the World Health Organisation estimated that the minimum spending per person per year needed to provide basic, life-saving services was at least US$44 (N7,000)[8] and that spending of a little over US$60 (N12,000 at the current exchange rate of $1:N200) per person per year by 2015 would be needed to achieve the Millennium Development Goals in the health sector. This translates to budgeting a minimum of over N2 trillion per year to achieve the MDGs. But the Federal Government only planned to spend less than 6% (or N1,700 per capita) of its annual budget on health in the Federal Budgets 2013 and 2014.

 

Increased funding for medical care is required to absolve the teeming unemployed and/or underemployed medical doctors so that the minimum world average of doctors/patients ratio may be attained. Out of about 70,000 doctors registered in Nigeria, only 27,000 actually work in Nigeria; 40,000 work in the US and others elsewhere. This means that there are less than 2 medical doctors (1.6 doctors[9] specifically) per 10,000 Nigerians compared to the worldwide average[10] of14 (specifically 13.9) for every 10,000 people. This means that the availability of medical doctors in Nigeria is just about 11 percent[11] of the minimum international standard.

 

National Health Insurance Scheme (NHIS): An assessment

The National Health Insurance Scheme (NHIS) is not founded on the recognition that access to health is a right. Ability to pay prescribed rates of contribution is a condition to be entitled to healthcare services. The NHIS is therefore an exclusionary policy. Employees working for an employer with less than ten employees are excluded, employees who do not earn enough as to be able to afford registering with the Scheme are excluded, the unemployed, poor farmers, the informal sector, children and the aged are equally excluded. The NHIS covers only between 4m and 5m contributors. This means that the Scheme covers only about 3% and excludes the remaining 97% of the population, based on 170million estimated population of Nigeria.

 

Funding Responsibility

The state should fund health care through revenue from national resources, direct budgetary allocations, including money sourced from national health insurance contributions by the working population. While the rates of contribution to the national health insurance schemes should vary by level of income, access to medical care should not be based on ability to contribute. Every level of government should allocate not less than 15% of their individual annual budgets to health. In the 2013 and 2014 Federal Budgets, average annual budgetary allocation to health was between 5 and 6% as against the minimum 15% recommended by the World Health Organisation (WHO).

One of the reasons why Buhari was elected was that in his Manifesto he promised that:

 

“I will increase national health expenditure per person per annum to about N50,000 (from the less than N10,000 currently).”

 

The NLC should monitor the extent to which this promise is implemented and, if necessary take action, up to and including an indefinite general strike to ensure that health services in Nigeria are adequately funded.

 

The labour movement should insist on cost-free comprehensive health care services to every citizen as a right, on demand, or at the point of need, without discrimination by socio-economic status. The state should have responsibility for providing cost-free health care in public health institutions and under mobile health care arrangements for those who cannot physically attend public hospitals without assistance. Every citizen, on a universal basis, should have the right to enjoy the best attainable state of physical and mental health.

 

Legislative prohibition of public officers accessing health care in foreign countries: Legislation should be enacted prohibiting any public officer, elected or appointed, from using public resources to access health care in foreign countries. Only this kind of legislation could compel and/or motivate those in position of authority to overhaul the country’s health care system.

 

EDUCATION

 

The state of education

There are at least 10.5 million out-of-school children in Nigeria[12]. In reality, however, there could be close to 20 million out of school children across Nigeria. This is founded on the 2006 national census figures which indicate that there were 42million of primary school age while the Universal Basic Education Commission indicates that only 23 million children were attending primary schools.

Current levels of funding:

On the average, less than 10% of the annual budget is spent on education in Nigeria as against 26% in South Africa, 24% in Singapore; 21% in Algeria; 15% in Cuba and 30% in Ghana. Budgetary allocations to education in Nigeria fall below the UNESCO conventional benchmark for developing countries that 26% of the annual budget or 15% of the GNP should go to financing education.  In addition, across Sub-Saharan Africa (excluding South Africa) the average allocation to education is 15% of government budgets.

Required minimum funding:

Education should be properly funded to provide conducive learning environment, classrooms, libraries, virtual library system, laboratories, recruitment of adequate number of teachers, training and retraining of teachers, and so on. Not less than 26% of the annual budget should be allocated to education.

Policy declaration recommended:

The labour movement should insist that cost-free education, at all levels, should be provided for every citizen as a birth-right. The state should have full responsibility for funding education in public institutions. School fees, cost sharing in the guise of Parents-Teachers Association’s levies, examination fees, and so on, should be abolished. The cost-free education policy should cover school uniform (at primary and secondary levels), tuition, books, feeding (breakfast and lunch)[13] during school hours, and accommodation (at the tertiary level of education).

As an immediate step towards realizing education as a right, the Education Bank Act, which provides that Education Bank shall make funds available for indigent students to finance their education should be implemented immediately.

 

PMB’s Manifesto stated that he would deliver:

“Targeting up to 20% of our annual budget for this critical sector whilst making substantial investments in training quality teachers at all levels of the educational system.”  and

 

“Provide One Meal a day for all Primary school pupils.”

 

The NLC needs to ensure that these promises are delivered.

 

HOUSING

 

The estimated housing deficit, according to official figures, is between 17million and 18million units, as at 2012.

 

The right to adequate housing is a fundamental human right. The right to housing is part of the right to adequate standard of living, which includes protection from eviction, without discrimination. The right to housing goes beyond shelter provided by merely having a roof over one’s head. Rather, it includes the right to live in security, peace and dignity, and guaranteed access to adequate basic infrastructure and facilities such as safe drinking water, energy for cooking, heating and lighting, sanitation and washing facilities, means of food storage, refuse disposal, site drainage, nearby schools for children, recreational facilities, health care facilities, emergency services and so on.

 

The labour movement should insist that governments at all levels have primary responsibility for mass housing provisioning without shifting responsibility to the private sector. Governments should develop policies for social and commercial housing. Commercial housing policy should fund social housing for the poor. In other words, as a matter of principle, cost free housing should be provided the vulnerable persons who lack the means to pay for it. For other categories, housing should be provided at affordable costs, depending on the individual’s level of income. Housing costs should be proportionate to overall income levels while subsidies should be made available for other low income earners. Tenants should equally be protected against unreasonable and/or arbitrary rent levels or increases.

 

Accessibility to land is critical in housing provisioning. All levels of governments, Federal, State and Local Governments, have a responsibility to acquire and allocate land for building houses free of charge to those who lack land and the means/money to buy. Government could acquire from landowners who have surplus or unused land for purposes of allocating to those willing and capable of developing them.

 

Housing loan schemes should be resumed such that workers and the poor self-employed can take government guaranteed loans, without collaterals, and repay over a long period of about 25 years. In addition, Nigerian governments – Federal, State and Local – should collaborate to develop optional housing financing which imposes roles on other institutions, in addition to budgetary allocations to public sector housing corporations. The banks, including the Federal Mortgage Bank of Nigeria and the other Primary Mortgage Institutions should be statutorily required to allocate verifiable portions of their loanable funds to housing at low interest rate and long repayment periods. The capacity of the FMB should be expanded to ensure borrowers are able to access funds at low costs.

 

Governments should be pressurised to build low cost houses for those who are not in a position to build houses of their choice. Houses for such categories (e.g. the unemployed, the aged, etc) should be rent free. If rent must be paid, then government should be prepared to give them financial social support in the form of unemployment allowance, from which such rents will be paid.

The Federal Housing Authority and States Housing Corporations should be empowered to provide functional low cost housing units. All levels of government (Federal, state and LGCs) should enter into agreements to undertake massive and large scale investment in housing through Public-Public Partnerships PUPs. To this effect, all levels of government should agree to set aside a Fund taken from the Consolidated Revenue Fund to provide housing units for the poor in all states of the Federation. Pension funds should also statutorily be required to be invested in public sector housing provision rather than being concentrated in company securities in the capital market.

 

WATER

It is estimated that almost half (specifically 47%) of the Nigerian population lack access to clean water.[14]

Internationally, there is a growing tension on how water should be perceived – as a human right or a human need? The perception that water is a human need is shared by Trans National Corporations and governments who hold that water is a commodity to be sold and bought at a profit and which by extension can be supplied by any entity at unregulated rates. The perception of water as a human right is held by the critical non-state actors, trade unions and other organizations of the poor. The notion of water as a right implies that the state has an obligation to provide it as a part of the global commons and a public trust[15]. The International Monetary Fund and the World Bank, including its lending arm, the International Finance Corporation, have been the protagonists and advocates of privatization of water in developing countries through the pernicious and coercive instrument of the structural adjustment programme, which makes privatization one of the preferred conditions for multilateral as well as bilateral aids and loans from international financial institutions (IFIs), which include the regional arms such as the African Development bank (AfDB), Inter-American Development Bank and the Asian Development Bank.

Labour and other civil society organizations should however consistently insist that water is a fundamental right. Water is explicitly mentioned as a right in Article 24 of the UN Convention on the Rights of the Child and as a right for rural women in Article 14 of the Convention on All Forms of Discrimination against Women.

In the colonial period, for political and economic reasons, water supply was focused on the colonial elite. Where the network was extended to local populations, it was on the basis of full cost recovery without the benefit of cross-subsidy[16].

After independence, a legitimation strategy was developed and adopted to justify the post-colonial regime change. This strategy placed a central role on the state to develop the economy and provide for the welfare of the citizenry. Within such a developmental framework, unprecedented investments in water and other social services took place.

In Nigeria for example, in all the four National Development Plans (NDPs) during the period 1962 – 1985, relatively improved attention was given to welfare components, including water. In the First National Development Plan of 1962 - 1968, the actual percentage allocation to water was 4.6%, placing water in the 9^th largest position of all sectoral allocations. In the Second National Development Plan, 1970 – 74, percentage actual allocation to water and sewage was 5.8, placing water in the 6^th rank of all sectoral allocations. The declared strategy of the Third National Development Plan was to develop the productive capacity of the economy and thus permanently improve the standard of living of the people.[17] In that vein, the Third and Fourth NDPs gave priority attention to sectors such as agriculture, health, housing and water supply ‘with a view to improving the quality of life in both the rural and urban areas’. Actual percentage allocation of 9.9% to water resources in the Fourth NDP ranked 4^th out of total allocations. Indeed, as Ayo (988: 20) indicates, in the preparatory conference for the Fifth NDP, which held in December 1984, reliance on the River Basin Development Authorities (for direct production in the agricultural sector) was reduced to the development of water resources (Ayo, 1988:20).  It should be recalled however that at the end of the Fourth NDP in December 1985, a one-year economic emergency programme was adopted in 1986. This was followed later in the same year with a two-year Structural Adjustment Programme, which formally altered the direction of social policy, from concern for welfare interests to a pro-capital programme.

 

Under the ‘change‘ government of the APC/PMB, labour has a responsibility to advocate that the state has a duty to supply water to the populace if the right to food, housing and health contained in Chapter 2 of the Constitution would be meaningful. The worldwide recommended average spending on water is 1.5 per cent of the GDP[18].

 

POVERTY ERADICATION AND WEALTH CREATION

In the context of pervasive poverty in the midst of plenty and the categorization of Nigeria as one of the countries in extreme poverty, the labour movement should support the following measures:

RAISE TAX RATIO BUT OPPOSE INCREASE IN V.A.T. RATE

• In Nigeria, tax ratio (that is tax revenue/GDP) for the period 1999-2003 was found to be around 7%[19] where the IMF’s least desirable rate is considered to be 15%.
• Though a higher tax may be desirable to generate more funds for public projects, this should be paid by the rich and big companies.
• A World Bank study found that low income households were paying more than 5% of their incomes in VAT compared with only 3.5% among high-income groups[20].
• The Federal Inland Revenue Service (FIRS) is threatening to increase the rate of Value Added Tax (VAT) from 5% to 10%. The VAT is a flat rate paid whenever commodities are bought in the supermarket or other formal retail outlets.
• Value Added Tax is a regressive tax because it places greater tax burden on poor people who spend a greater proportion of their income on necessaries for survival. This means that poor people tend to pay more VAT than the few rich people – this is contrary to one of the basic principles of taxation that stipulates that the rich should pay a higher tax.

INTRODUCE PROGRESSIVE TAXATION AND PREVENT CAPITAL FLIGHT

Introduce progressive taxation to raise the tax ratio by:

• Increasing property taxes, especially for land/buildings of more than 100ha or value of more than N5 million.
• Increasing import duty on luxury goods such as luxurious cars, building materials, and other goods.
• Reviewing costs and benefits of tax holidays and free zones and introducing greater controls to reduce capital flight.

• Raising the highest rates of company and personal income tax rates back to the 45% range[21] for monthly incomes above N5million or incomes around ten times average per capita GDP. Corporate Income Tax (CIT) for the most profitable companies should be increased from 30% to 50%. (About independence period, CIT was 45%, meaning that corporations pay now pay 15% less than they did 40 years back).
• It has been established that developing countries lose more money through private capital flight than they receive in donor aid[22]. The Federal Government therefore has a duty to establish capital control measures to curb capital flight.

ELIMINATE OR REDUCE INCOME INEQUALITY

In order to create surplus funds for public good, the labour movement should:

 

• Uncompromisingly oppose ‘wardrobe’ allowance of N9million for National legislators and/or similar perks of office for the state level legislators as well as those at the executive arms of government.
• Advocate reduction in pay differentials such that no-one in the public sector earns more than 12 times the minimum wage. (This idea was nearly won in the Swiss referendum in November 2014). The implication is that the maximum public sector pay would be N216, 000 per month (on the basis of the current N18,000 minimum monthly pay) so that resources would be available to provide basic needs for all.
• Mobilise for the realization of N66,000 minimum wage being canvassed by the TUC. There is a relationship between enhanced purchasing power and boosting of the economy.
• Canvass support for wage indexation so that salaries rise as inflation rises.

• National Minimum income security for older persons who can no longer work or who cannot get jobs even if they are able and willing to work.   

• National minimum income security for persons in active age who are unable to earn sufficient income in cases of:
  • Sickness (in which case the individual should be entitled to statutory sick benefits)
  • Unemployment (in which case the individual should be entitled to statutory unemployment allowance).
  • Maternity (in which case the individual should be entitled to statutory maternity benefits).
  • Disability (in which case the individual should be entitled to statutory disability allowance).

USE THE CONSTITUTION AS A SHIELD AND AS A SWORD

The Constitution should be used to as a shield to prevent denial of constitutionally guaranteed rights. The Constitution should also be used as a sword to promote and advance socio-economic rights by advocating implementation of the same constitutionally guaranteed socio-economic rights.

The poverty in the midst of plenty and the unprecedented insecurity into which ordinary people of this country have been thrown would attain more frightening dimensions unless labour movement insists that the constitutional guarantees for the wellbeing of poor people are observed.

The socio-economic rights constitutionally guaranteed include:

• Right to General welfare and security : the security and welfare of the people shall be the primary purpose of government (S. 14(2)( (b);
• Provision of Transportation: adequate facilities for movement of people, goods and services throughout the Federation (S. 15(3)(a);
• Provision of Physiological needs: suitable and adequate shelter, suitable and adequate food, reasonable national minimum living wage, old age care and pensions, and unemployment, sick benefits and welfare of the disabled are provided for all citizens (S. 16(2)(d);
• Right to employment: all citizens, without discrimination on any group whatsoever, [shall] have the opportunity for securing adequate means of livelihood as well as adequate opportunity to secure suitable employment (s. 17(3)(a);
• Conditions of work: [it shall be ensured that] conditions of work are just and humane, and that there are adequate facilities for leisure and for social, religious and cultural life (S. 17(3)(b); Also, the state is to put in place policies to ensure that  the health, safety and welfare of all persons in employment are safeguarded and not endangered or abused (S. 17(3)(c);
• Right to health: adequate medical and health facilities for all persons (S. 17(3) (d); The labour movement should pressurise PMB to fulfil his pre-election campaign promise on health when he said that: “I will increase national health expenditure per person per annum to about N50,000).”
• Gender sensitive rights - Right to equal pay: for equal work without discrimination on account of sex, or on any other ground whatsoever (S. 17(3) (e);
• Right of the child: children, young persons and the aged are [entitled to be] protected against any exploitation whatsoever, and against moral and material neglect (S. 17(3)f);
• Right to public assistance in conditions of need (S. 17(3)(g);
• Right to education, from cradle to grave: free, compulsory and universal primary education; free secondary, university education and adult literacy programme (S. 18(3)(a) to (d); and
• Right to a safe environment: The State shall protect and improve the environment and safeguard the water, air and land, forest and wild life of Nigeria (S. 20).

In order to ensure that the State has the capacity to fund socio-economic rights that require budgetary provision to execute, S. 16 of Chapter 2 of the Constitution of the Federal Republic of Nigeria, 1999, as amended[23], provides essentially for state ownership and control of the major sectors of the economy. That the state shall:

• manage and operate the major sectors of the economy, without prejudice to equally operating or participating in other sectors of the economy (S. 16(1)(c)
• protect the right of every citizen to engage in any economic activities outside the major sectors of the economy, even though any person may still participate in the major sectors of the economy (S. 16(1)(d);
• not operate the economic system in such a manner as to permit the concentration of wealth or the means of production and exchange in the hands of few individuals or of a group (S. 16(2)(c);
• ensure that the material resources of the nation are harnessed and distributed as best as possible to serve the common good; (S. 16(2)(b);
• control the national economy in such manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity (S. 16(1)(b).

 

HOLD PRESIDENT MUHAMMADU BUHARI (PMB) TO HIS PRE-ELECTION PROMISES[24]

The pre-election promises made by PMB can rightly be located within Chapter 2 of the Constitution. The attention of those who may argue that Chapter 2 is not justiciable should be drawn to sections 13 and 224 of the same Constitution, as well as Item 60(a) of the Exclusive Legislative List.

The labour movement should mount a counter-veiling pressure on PMB against the pressure of bourgeois politicians and contractors by insisting that there is a moral and constitutional duty on the PMB administration to implement the pre-election promises in order to convince ordinary Nigerians that he is actually for them as opposed to being for the corrupt politicians.

The PMB’s Manifesto, entitled “My Manifesto and Vision for Nigeria”[25], is appropriately prefaced: “This document sets out our side of the bargain: the things I as your future president, want to do to change Nigeria for the better”. The said Manifesto provides as follows:

On education:

“2. Targeting up to 20% of our annual budget for this critical sector whilst making substantial investments in trining quality teachers at all levels of the educational system”

“6. Provide One Meal a day for all Primary school pupils. That will create jobs in Agriculture, Catering and Delivery services”

 

On healthcare:

“2. …I will increase national health expenditure per person per annum to about N50,000 (from the less than N10,000 currently”

 

“5. Provide free ante-natal care for pregnant women; free health care for babies and children up to school going age and for the aged; and free treatment for those afflicted with infectious diseases such as tuberculosis and HIv/AIDS”

 

On the economy:

“12. Create a Social Welfare Program of at least Five Thousand Naira (N5000) that will cater for the 25 million poorest and most vulnerable citizens upon the demonstration of children’s enrolment in school and evidence of immunization to help promote family stability.”

 

“7. Require full disclosure in media outlets, of all government contracts over N100m prior to award and during implementation at regular intervals”.

 

“10. Amend the Constitution to require Local governments to publish their meeting minutes, service performance data, and items of spending over N10M.”

 

“9. Fully enforce the Freedom of Information Act so that government held data sets can be requested and used by the public and then such data sets be publish (sic!) on regular basis.”

 

OTHER PRE-ELECTION PROMISES

Other commitments publicly made by PMB include the following:

Post NYSC allowances

“Provide allowances to the discharged but unemployed Youth Corps members for twelve (12) months while in the skills and entrepreneurial development programmes”

 

“Equate N1.00 to S1.00”

 

On infrastructure:

“generate, transmit and distribute electricity on a 24/7 basis whilst simultaneously ensuring the development of sustainable /renewable energy, by 2019”

On medical tourism

“Ban medical tourism by our politicians from May 29, 2015”.

The labour movement should monitor PMB’s administration and ensure there are no deviations from these pre-election promises.

CONCLUSION

It appears clear that the key agenda facing the labour movement at the present time is to fight the twin curses of inequality and corruption.

We need to adequately appreciate that the ruling class in Nigeria has stolen virtually ALL the oil wealth. Estimates of amount stolen seem to equal the amount of oil wealth made since 1960.

We must fully appreciate that the oil reserves is estimated to run out in the next 20 to 25 years! Even before it runs out, the collapse in the oil price shows that Nigeria should be saying “bye bye” to oil wealth. Whenever it runs out, a nightmarish experience awaits the working class and the poor unless they are able to use their industrial and political muzzle to wrest as much share as possible from the ruling class, NOW!

Let organized labour (NLC/TUC) use the collective power of its six million or so membership to change society for the better and in the interest of the working masses. We should resist being diverted to fighting the cause of the ruling class such as revenue sharing formula, which is all about how the regional/state groupings of the ruling class will share the national loot.

As Nigeria’s oil runs out, time is running out before a new phase of massive immiserisation sets in, unless the working masses redeem Nigeria from the rapacious politicians!!!!

I thank you all for your attention.

Femi Aborisade, Esq.

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[1] Being Paper delivered at the NLC leadership retreat workshop under the theme “Returning to Our Founding Principles: The NLC and
the Challenges Facing it” Held at Tinapa Lakeside Hotel, Calabar, Cross Rivers State, on 25-27 August 2015.

[2] http://www.africaprogresspanel.org/publications/policy-papers/africa-progress-report-2012/ accessed on 24/8/15.

[3] Swanson, D. and Worlde-Semait T. (1989). Africa’s PEs Sector and Evidence of Reforms. World Bank Technical Paper No. 95.

[4] Similar findings were made by (UNCTAD (2009). Investment Policy Review: Nigeria. New York and Geneva: UN. Available online at http://archive.unctad.org/en/docs/diaes/diaepcb2008_en.pdf (at p. 3) and accessed on 20 May 2012.

 

[5] The analysis here is based on the provisions of the PIB as contained in the version that I accessed as at June 2010.

[6] Reported by Reuters at http://uk.mobile.reuters.com/articleidUKL5N0ZV3FO20150715?irpc=932 on 15/7/15 and accessed through Uhuru Times personal emails to me.

[7] Cited by Vanguard newspapers at http://www.vanguardngr.com/2015/08/nigeria-earns-n2.5trn-from-petroleum-products-export-in-3mths/ accessed on 22/8/15. It should be noted that the NBS figures, as published by the Vanguard, do not clarify whether the whole sum of N2.5 trillion belongs exclusively to the Federal Government or it has to be shared between the FGN/NNPC in the agreed ratio under the Joint Venture Agreements with the oil companies. In fact, other sources suggest that government revenue is actually running about 10 percent below the budgeted figure. However, even if the sum referred to does not belong to the Federal Government exclusively, our argument is that if corruption is curbed, Nigeria still has enough resources to pay salaries and implement a social security schemes to prevent extreme poverty, which is producing foot soldiers for the Boko Haram atrocities and other forms of unprecedented insecurity and criminality.

[8] [WHO (2012) Spending on health: A global overview - http://www.who.int/mediacentre/factsheets/fs319/en/
Basic WHO statistics on spending in each country:
http://apps.who.int/nha/database/StandardReport.aspx?ID=REPORT_COUNTRY_PROFILE]

[9] 27000 divided by 170,000,000 multiplied by 10,000.

[10] See http://kff.org/global-indicator/physicians/ accessed on 22/8/15. (The source indicates that the timeframe for the data is 2005-2012. Though the source states there are 4 medical doctors (physicians –American concept) per 10,000 persons in Nigeria, this ratio appears incorrect from the verifiable empirical data of registered doctors in Nigeria).

[11] 1.6 divided by 13 multiplied by 100 equals 11.4 per cent.

[12]  Education for All Global Monitoring Report, 2012.

[13] “WFP’s Ghana country programme evaluation, as well as studies on the Ghana School Feeding Programme (GSFP), suggests that school feeding is one of the most effective ways to increase enrolment in schools across the three northern regions and in areas of endemic food insecurity (WFP, 2010a; SNV, 2009; SEND, 2008).” (UNESCO 2012: 74).

[14] http://www.noi-polls.net/index.php?s_id=3&p_id=224&p_pt=1&parent=11#.UbjH5U_n-YN accessed on 12/6/13.

[15] Naidoo, A. and Davidson-Harden, A. (2007). The Geopolitics of the Water Justice Movement.

[16] Nilson, D. (2005). ‘Public Service for a Chosen Few? Water and Sanitation Service Provision in Kampala, Uganda, under Colonial Rule’. Paper Presented to the IWHA Conference, Paris. December.

[17] Ayo, E. J. (1988). Development Planning in Nigeria. Ibadan: University Press Limited.

[18] Government Spending Watch: www.governmentspendingwatch.org/research-analysis/water-and-sanitation

[19] Sindzingre, A. (2006) Financing the Developmental State: Tax and Revenue Issues, presentation at the Overseas Development Institute (ODI), London, 5th April.

[20] Tax Justice Network Africa & Christian Aid (2014) Africa Rising? Inequalities and the essential role of fair taxation <http://www.christianaid.org.uk/images/Africa-tax-and-inequality-report-Feb2014.pdf>

[21] The highest rate of corporation tax in Nigeria in 1961 was 40 per cent and 45 per cent from 1975 to 1986.

[22] SOMO (2008) Taxation and Financing for Development

http://somo.nl/publications-en/Publication_2955 (Capital flight involves the deliberate and illegal disguised expatriation of money by taxable companies and/or individuals.

[23] This Chapter is titled: Fundamental Objectives and Directive Principles of State Policy. It consists of 12 sections, from section 13 to section 24.

[24] http://www.vanguardngr.com/2015/05/what-buhari-promised-nigerians/ accessed on 22/8/15.fa

[25] See for example the following source: http://www.igbofocus.co.uk/My-Manifesto-and-Vision-for-Ni/my-manifesto-and-vision-for-nigeria-by-muhammadu-buhari.html accessed on 23/8/15.