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ADVERTORIAL: GOVERNMENT INSTITUTIONS’ UNHEALTHY FIXATION WITH PRICE FIXING

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The Centre for Social and Economic Rights (CSER), a civil society organisation, is becoming increasingly worried about attempts by institutions of state in Nigeria to fix prices of goods and services in a free enterprise system. These have come in the shape of government organs/agencies issuing directives to private businesses on what prices they should charge for their goods/services.

Ordinarily, these would have been dismissed, but for the fact that they are being championed by the Federal House of Representatives and very shockingly, the National Broadcasting Commission (NBC).

On 1 September 2020, Daily Independent quoted acting NBC Director-General (D-G), Professor Armstrong Idachaba, as ordering the Management of MultiChoice Nigeria to revert to old prices and stating that the company cannot downsize despite the severity of the economic climate. Idachaba spoke to the newspaper after a meeting with the MultiChoice Management to discuss the recent price adjustments announced by the pay television company. MultiChoice had explained that it adjusted prices on some of its DStv and GOtv packages after considering the impact on the consumer, rate of inflation at 12.82%, the highest in 27 months, content costs and efficiencies within the company.

“They said they are committed to keeping their business in Nigeria but are affected by currency devaluation and inflation rate. They said their fears are that they may lay off Nigerians in their employment if they have to remain in business bearing in mind the present unfavorable circumstances of doing business. They gave examples of other companies that are closing shop because of economic challenges,” he told Daily Independent.

A similar directive was issued a few weeks earlier, when he directed the company to suspend the said tariff adjustment and asked to know why MultiChoice did not inform the NBC before announcing the price adjustments. He also promised to invite StarTimes, MultiChoice’s rivals, to give reasons for the 30% price adjustments made on its packages.

Interestingly, Idachaba admitted that the NBC lack the power to fix prices, saying: “With regards to broadcasting, there is nowhere in the Act of the commission, which gives us the power to fix prices.”

CSER applauds Idachaba’s honesty, but is concerned by NBC’s latent desire to legislate on prices and private businesses’ response to harsh economic/operational conditions.

“I am told, but I have not confirmed that the Telecommunications Act gives the NCC the power to determine prices… We have no provision to regulate the prices that those who offer broadcast services fix, but if, in the course of fixing prices, we find out that it is very exploitative and injurious to the consumers, we have the power to call them to order, which we have done severally,” Idachaba said.

On 18 August 2020, the House of Representatives directed StarTimes, to revert to its old tariffs. Hon. Uyime Idem, Chairman of the House Ad-hoc Committee investigating the non-adoption of Pay-As-You-Go billing system by Pay TV firms, said the increment is ill-timed in view of the harsh economic realities occasioned by COVID-19.

“We are in a limbo at the matrix used to arrive at the current price regime. The timing for the increment was wrong, unfortunate and insensitive considering the harsh economic realities occasioned by the COVID-19 pandemic. We will like StarTimes to as a matter of urgency revert to the old subscription tariff in the interest of Nigerians,” Idem said.

Star Times, according to reports, attributed the adjustments to the new VAT regime, exchange rate volatility and high cost of providing alternative source of power.

We recall that the 8th session of the House and Senate illegally attempted to foist a billing model on MultiChoice Nigeria, an indication that this interference is not new.

CSER is disappointed that the House is playing to the gallery just to be seen as concerned about the people when facts decline to support such. We are equally worried that the NBC, a practice regulator, is trying to assume price-regulatory powers. Idachaba admitted that the Commission had previously directed pay TV operators to suspend price increase.

We wonder where the Commission derived the powers to order private businesses on how to respond to threatening economic situations. We know how life-disrupting job losses are, but they are unavoidable in the basket case Nigeria has become.

These institutions appear to ignore the fact that Nigeria operates a liberal economic system, which thrives on the balance of the interests of businesses and the consumers. It is not out of place for government to intercede-not interfere-but such intercession should not hurt private businesses and, importantly, the consumer it seeks to protect.

Issuing stop orders to private enterprises through the media could serve to incite consumers against businesses. It is self-serving and injurious to national economy.

NBC and the House of Representatives need to realise that they are in grave error on this score. First, NBC has no power over prices. Same for the House, which needs to understand that its resolution is no law. Nigeria operates a free enterprise system, not the discredited command economy.

The interference of the House and NBC in a matter between a private business organisation and its clients is needless. We can understand intercession when such involves abridgement of rights, but that is not the case in this instance.

The House cannot act Moses the Lawgiver in pricing, which is the result of interplay between supply and demand and not drunken populist posturing.

NBC and the House are not unaware that prices of goods and services have been affected by the increase in the rate of VAT, which is collected on behalf of government and remitted to same.

Since the outbreak of the COVID-19 pandemic, from which the House and NBC are keen to reap emotional dividends, providers of other goods and services, including government agencies and departments, have raised prices to reflect the current economic situation.

The National Electricity Regulatory Commission has approved increase in energy tariffs, effective 1 September, 2020. Petrol pump price has been raised to N151.56.

The Federal Airports Authority of Nigeria (FAAN) hiked the pre-paid toll payable at Lagos’ Murtala Muhammed International Airport (MMIA) toll gate users from N10,000 to N40,000. FAAN, within the same period, raised its Passenger Service Charge (PSC) from N1,000 to N2, 000. The Nigerian Railway Corporation (NRC) has adjusted train fares on the Abuja-Kaduna route by 100%. The new fares are N6,000 for First Class, N5,000 for Business Class and N3,000 for Economy. VAT rate has risen from 5% to 7.5%.

A major contributor to the soaring costs is the volatility of the Naira, which trades officially at N387 to $1 and N480 to $1 on the parallel market.

With the highest rate of inflation in 27 months, prices of goods and services have risen steeply. Without commensurate price adjustments, providers of goods and services, including government agencies, will not offer the same quality or go out of business.

Price regulation, understandably, is hugely appealing. Its appeal has been strong from the earliest times because it promises protection to groups that are most hard-pressed to meet price increases. The Old Testament prohibited interest on loans to fellow Israelites, while medieval governments fixed the maximum price of bread.

But Nigeria, it has to be stated again, operates a free enterprise system that ensures that resources are allocated based on supply and demand. It promotes consumer liberty to choose, encourages market competitiveness, ensures consumer voices are heard and determines what products or services are in demand.

Supply and demand create competition, which helps ensure that the best goods or services are provided and makes the market attractive to investors. Nigeria needs investors, especially from abroad. But NBC and the House fail to realise that behaving like Soviet-era price control agency discourages investments.

Without investments, jobs are harder to find, tax revenue shrinks, consumer choices in goods/services are fewer and the society is worse.

The “sympathetic” House members should be capable of better conduct than cheap showboating. In other climes, the government is focused on initiatives designed to help citizens afford essential commodities, not luxury goods/services. NBC, we believe, urgently needs to focus on its regulatory duties, which do not include price regulation and impotent directives.

Nelson Ekujumi
Executive Director


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Unity Bank Upgrades Corpreneurship Prize Money to N16M Per Stream as 30 New Winners Emerge

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In a bid to boost start-up capital and place more resources at the disposal of aspiring young entrepreneurs in Nigeria, retail lender, Unity Bank Plc has increased the prize money for winners of its flagship Entrepreneurship Development Initiative, known as Corpreneurship Challenge to 16 million Naira per stream.

Head, SME Banking, Dr. Opeyemi Ojesina addresses the participants at Delta NYSC Orientation camp before the commencement of the pitch presentation

Consequently, participants who emerge winners in the business pitch will henceforth win N800,000, N500,000, and N300,000 Business grants for the 1st, 2nd, and 3rd positions respectively as against the previous editions in which the sum of N500,000; N300,000 and N200,000 were handed out to respective winners in the Corpreneurship Challenge.

Launched in 2019 with pilots in 4 states – Lagos, Edo, Ogun, and Abuja and scaled to 10 States in 2020, the Corpreneurship Challenge initiative is promoted in partnership with the NYSC Skills Acquisition and Entrepreneurship Development, SAED. The initiative features a business pitch presentation where participants have the opportunity to present their business plans and stand a chance to win business grants.

At the recently concluded edition of the Corpreneurship Challenge for 2024 NYSC Batch A, Stream 1 NYSC service, 30 winners emerged including upcoming entrepreneurs developing innovative solutions in several business value chains such as Poultry farming, Fashion, and Pastries, among others, after participating in the business pitch that took place across the 10 NYSC Orientation Camps in Rivers, Delta, Anambra, Abia, Oyo, Ogun, Kebbi, Niger Sokoto and Zamfara States.

At the Delta State NYSC Orientation Camp in Issele-Uku, Folorunsho Kolade who pitched a Poultry farming business plan emerged as the overall winner to claim the N800,000 grand prize; Samuel Ayodotun. J. whose innovative footwear venture idea, Basky Footprint took the second spot to win the N500,000 cash prize; while another corps member, Udoji Chibuike Peter, whose venture plan on the footwear fashion value chain also emerged as the second runner-up to claim the N300,000 grant.

Also, at the NYSC Orientation Camp at Nonwa Gbam Tai, Rivers State, Dan Betobong Samuel’s business plan on food production claimed the top spot to clinch the N800,000 grand prize; while Linda Christopher’s Lily Pastries’ business plan emerged as the first runner-up to claim the N500,000 grant. Esther Jacob’s business pitch on the poultry value chain emerged as the second runner-up to win the N300,000 cash grant.

Speaking at the NYSC Orientation Camp in Rivers State, the Divisional Head, Retail and SME Banking, Mrs. Adenike Ambimbola commended the participating Corps Members for the quality of their business plans and pledged the Bank’s commitment to sustaining the Entrepreneurship Development Scheme.

While congratulating the winners, Mrs. Ambimbola said, “Unity Bank is proud to associate with the Skill Acquisition and Entrepreneurship Development (SAED) scheme of NYSC in providing interventions and support to budding entrepreneurs with promising ventures through the business grants to help turn these ideas into reality. We recognize the importance of investing in our youths and empowering them to drive positive change within our economy.”

Also speaking at the grand finale held in Delta State NYSC Orientation Camp, Dr. Opeyemi Ojesina, Head of SME Banking, Unity Bank expressed delight at the Unity Bank Corpreneurship Challenge’s growing profile as a leading business incubation platform and catalyst for entrepreneurship development in Nigeria.

He said, “Over the past five years, Unity Bank has steadfastly supported the Corpreneurship Challenge, witnessing its profound impact on youth empowerment and job creation nationwide.

“The programme has earned a reputation for its innovative approach, seamlessly integrating financial backing, mentorship, and skill development to nurture aspiring entrepreneurs.”

Ojesina further underscored the invaluable mentorship offered to participants, connecting them with seasoned professionals who provide crucial insights, guidance, and a roadmap for success.

He emphasized Unity Bank’s belief that true empowerment extends beyond financial aid to the cultivation of entrepreneurial acumen.

So far, Unity Bank has invested over N120 million in the initiative, which has now produced 369 winners since it was launched in 2019.

In 2021, the leadership of the NYSC bestowed on Unity Bank the “Icon of Youth Empowerment” award in recognition of the impact of the initiative.

The Corpreneurship Challenge continues to elicit growing interest among the corps members, attracting over 4,000 applicants and participation in every edition.


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Cloud Energy Launches Solar Energy As A Serrvice for Stable Electricity

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Cloud Energy Solar, recognized as Nigeria’s premier solar energy provider, has initiated the Solar Energy as a Service programme, which aims to empower “Solar entrepreneurs” to offer electricity solutions for Micro, Small, and Medium Enterprises (MSMEs) by using Cloud Energy’s Solar Energy Storage System (ESS).

Cloud Energy Launches Solar Energy As A Serrvice for Stable Electricity

This is coming against the backdrop of societal challenges including inflation and high cost of living in the country.

Speaking to a group of Resellers during a virtual Zoom conference, Mr. Theophilus Nweke, managing director of Cloud Energy, emphasized that the launch of the Energy as a Service Programme underscores Cloud Energy’s unwavering dedication to expanding access to electricity across Nigeria…

Under the programme, the MD explained, that Cloud Energy would boost the entrepreneurial capacities of the Reseller by providing the equipment to produce power for embedded power clusters in markets, in high streets, and other commercial areas. Cloud Energy would also provide logistics, training, and technical support to ensure the sustainability of the Energy as a Service Programme.

The Reseller would find the clusters, mobilize them, distribute the power, and collect the tariff.  The original equipment is supplied on lease to the reseller who enjoys three days grace period

One significant concern among citizens today pertains to the necessity for critical Micro, Small, and Medium Enterprises (MSMEs) to remain inactive while awaiting electricity supply from the Distribution Companies (DISCOs), particularly following the removal of fuel subsidies. Furthermore, the escalating cost of diesel has led to many standby generators remaining inactive permanently.

The managing director of Cloud Energy elaborated that Solar Energy as a Service represents a patriotic innovation, ensuring electricity access on a Pay as You Use basis. This program revitalizes idle MSMEs, enhances national productivity, and fosters widespread employment opportunities for Nigerians

Solar Energy as a Service, which will create new opportunities for prudence and accountability within the Energy sector is not limited to Cloud Energy Resellers.

All stakeholders who share the commitment to expanding the boundaries of access to power in Nigeria are free to partner with Cloud Energy to attain the national power aspirations.

During the question-and-answer session, the managing girector assured the Resellers of the immediate take-off of the program while urging them to seize the opportunity to increase their streams of income for the good of the sector.

Cloud Energy was, established in 2015 with the rare attributes of knowledge, youth, and integrity.

The company has developed sustainable solutions in large-scale energy storage, mini-grids and captive power, and solar rooftops for homes.

Backed by credible after-sales support, Cloud Energy has branded the Sunbox series, electrical appliances, fans, television sets, freezers, and fridges that have brought fulfillment to many homes, offices, and MSMEs.

Cloud Energy is a major partner of the Federal Government’s Rural Electrification Agency to learn more about Cloud Energy, visit its website at www.cloudenergy.com.ng


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Reps Mull Tax Crimes Commission to Curb Revenue Leakages

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The House of Representatives on Wednesday passed for second reading a bill seeking to establish a National Tax Crimes and Oversight Commission to tackle revenue leakages in the country.

Reps Mull Tax Crimes Commission to Curb Revenue Leakages

Titled “A Bill for an Act to Establish the National Tax Crimes and Oversight Commission to Address Revenue Leakages Emanating from Non-payment and Under Payment of Taxes, Irregularities in the Assessment, Reporting and Remittances of Taxes to Prevent and Combat Tax Related Crimes, to Ensure the Protection of Taxpayers Rights and for Related Matters,” the proposed legislation is sponsored by Benjamin Okezie Kalu, deputy speaker of the House,  and eight others.

Leading the debate on its general principles, Felix Uche Nweke, one of the co-sponsors, said the Commission, when established, will check irregularities in the assessment, reporting, and remittances of taxes, prevent and combat tax-related crimes, and plug all leakages in the tax administration system in the country.

The lawmaker noted that leakages occur where unscrupulous staff and agents of tax authorities collude with citizens to under-assess the tax-payer thereby resulting in underpayment.

He said leakages also occur in the form of tax evasion, especially such that is encouraged and condoned by the tax collector and more especially among multinational corporations operating within the country.

Nweke further said leakages also occur where there are non-remittances of collected taxes, that is to say where government does not get the total amount of taxes collected as a result of revenue diversion by fraudulent staff of tax authorities.

He said there is a need to establish an Independent Tax Crimes and Oversight Commission, which will have the capacity to investigate, audit, prevent and combat tax related crimes.

This, the lawmaker said, will effectively prevent international tax evasion and other transnational organised crimes and abuses of the nation’s public finance system.

He stressed that the bill seeks to  promote economic efficiency and effective tax administration system, detect and deter evasion, fraud and abuse in Nigeria’s tax administration system and to protect taxpayer’s rights.

 

Nweke said: “The amount of revenue available to any government determines the extent to which such a government may be able to provide public goods and services. It is a pointer to how far a nation can ensure her growth and development.

“While taxation is considered the most important means of generating public revenue, it is worthy of note that nations that strive to develop aim at putting in place a fair, just, efficient and simplified tax administration system which builds confidence amongst the citizens and as well motivates and encourages citizens to pay their taxes.

“While it is one thing to fix the amount of taxes to be paid, it is another for tax collection authorities and assessors to determine the right amount of taxes to be paid in accordance with the provisions of extant tax laws. This will definitely contribute to our national security through prevention of tax related crimes, prevention of illicit financial flow derived from tax evasion, international tax schemes, cybercrime, etc.

“The Tax Crimes and Oversight Commission will not function as a law court, it will not duplicate the functions of the Tax Appeal Tribunals established in accordance with section 59(1) of the Federal Inland Revenue Service (Establishment) Act, 2007 and ti will not be saddled with any form of quasi-judicial functions.”


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