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Labour, FG head for showdown over electricity tariff

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Organised Labour through the Nigeria Labour Congress (NLC ) has sounded a note of warning to the Federal Government that the agreement reached with Labour that the N15 per kilowatt-hour, KWH by December 2021, must be respected.

Recall that in February, the Federal Government and Organised Labour, among others, agreed that there would a reduction in electricity tariff in December 2021, as well as end sale of gas  to the Electricity Generating Companies, GENCOs, in foreign currency, (Dollar) instead of local currency.

However, barely four months to December, the body language of government does not seem to be ready to honour the agreement.    

NLC in a statement by its President, Ayuba Wabba, also demanded a 40 percent reduction of gas price to the GENCOs, contending that instead of the $2.50 per standard cubic feet, SCF, it should be $1.50.

While rejecting the reported Government approved reduction of domestic gas price for GENCOs from $2.50 to $2.18, SCF, Labour noted that it did not only fall short of expectation, it equally breached the agreement both parties reached earlier in February 2021 that gas must be sold to the GENCOs in local currency as against the Dollar.

“Congress demands of the Federal Government to reduce the pricing of domestic gas supply to GENCOs to less than $1.50 per SCF. We also demand that payment for gas by GENCOs should be denominated in Naira. Furthermore, the Gas Companies should be included in the Central Bank of Nigeria (CBN) and Nigerian Electricity Service Industry, NESI, payment waterfall to guarantee payments for gas and contract sanctity with GENCOs.

“Congress demands that the Federal Government should respect the agreement it reached with Labour on electricity tariff. Congress remains implacably committed to the ultimate reduction of electricity tariffs by N15 per kilowatt-hour by December 2021 as contained in the agreement. Congress hereby serves notice that the posture of the Federal Government to flout agreements is completely unacceptable and would be resisted.”

Explaining NLC’s position, the statement said among others noted,  “It is significant that the incessant increase of electricity tariff was one of the several issues discussed between the representatives of the Federal Government of Nigeria and Organised Labour, herein after referred to as the Principals, on 28th September 2020. Specifically, an agreement was reached at the meeting to set up a Federal Government of Nigeria, FGN-Organised Labour Technical Committee on Electricity Tariff.

The Technical Committee thus set up on 28th September 2020 had a clear mandate to review several critical issues in the power sector and to suggest reforms that will provide succour to Nigerians over the short and long term.

“The Technical Committee submitted its final report to the Principals at the close of January 2021. The meeting of Principals convened on 22nd February 2021 and discussed the report. The Principals accepted among other recommendations that “necessary actions should be taken to use efficiency to bring the gas price to below $1.50 per MMB.”

“Indeed, the public will recall that at the close of the meeting, Dr Chris Ngige, Minister of Labour and Employment, made a statement to the media that the electricity tariff will go down considerably. According to media report of February 23, 2021, the Minister of Labour and Employment stated that “Nigerians will witness a reduction in the cost of electricity tariff, Minister of Labour and Employment Chris Ngige said on Sunday night. The minister said the Federal Government and organised labour agreed on the reduction in the cost of gas sold to Generating Companies to $1.50 as against the $2.50 it is sold to GENCOs.”

“Congress also wishes the Nigerian public to know that about 80per cent of electric energy generated in Nigeria is from thermal stations, which are powered by natural gas. In fact, the GENCOs consume over 70per cent of domestic gas production. Whereas the GENCOs are required to pay as much as $2.50 per standard cubic feet (SCF), other gas users, however, get the same at lower rates, ranging from $1.50 to $1.70 per SCF. The worn explanation for the incongruous high differential was the lack of timely payment by the GENCOs for the gas supplied.

“In other words, the lack of payment discipline and certainty was implicated as a major contributing factor that despite GENCOs account for over 70 percent of the consumers of domestic gas, rates are higher for power generation.

To redress the invidious situation, the Principals resolved that Gas Companies should be integrated into the Central Bank of Nigeria (CBN) payment waterfall of the Nigerian Electricity Sector Industry (NESI) to guarantee payments for gas and contract sanctity of GENCOs.

“Congress has gone into this lengthy detail to underpin her position that the gas price reduction for GENCOs announced by the Minister of State for Petroleum is a flagrant repudiation of the kernel of the agreement between the Federal Government and Organised Labour, as it falls far short below expectation.

“Congress reiterates the abundant evidence presented to the Technical Committee and the meeting of the Principals that the pricing of domestic gas for GENCOs in US dollars represents the quintessence of underdevelopment of Nigeria’s energy sector. Therefore, the dollarisation of domestic gas supply to local power generating companies similarly feeds neatly into the debate of the commodification of the indigenous resources to forcibly incorporate the developing countries into spawned dependency. Hence, Congress rejected the denomination of domestic gas pricing to GENCOs in foreign currency. Rather, Congress insisted on a payment regime in Naira not only for domestic gas but also, all energy associated products, which should be denominated in local currency.”

“To be fair to Government representatives, the meeting of the Principals was convinced by the argument of Congress. Thus, the Principals unanimously accepted that the current practice of gas pricing in US dollars would be discontinued to enable gas supply to GENCOs to be made payable in Naira.

“From the foregoing, Congress is increasingly hard put to repose confidence on the discussions and agreement at the meetings. The resolutions of the Principals cannot certainly be the basis for the minuscule gas price reduction announced by Minister Timipre Sylva.”

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2023: Disquiet as 12 PDP govs back northern President

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Ahead of its October 30 and 31 national elective convention, the Peoples Democratic Party, PDP, appears to have chosen to pick its National Chairman and 2023 presidential candidate from the South and North respectively.

Although, the zoning committee chaired by Governor Ifeanyi Ugwuanyi of Enugu State failed to make a categorical statement on the distribution of offices in the National Working Committee when it met in Enugu last week, it is expected to do so when it converges on Wednesday this week.

12 out of the 13 governors elected on the platform of the party, it was learnt, have unanimously endorsed the retention of the National Chairman in the South. Thus, despite the exit of suspended Chairman, Prince Uche Secondus, the office will remain in the South, with the South-West tipped to produce the next Chairman.

Retaining the Chairman in the South automatically makes the North the preferred zone for the presidential ticket in 2023.

However, that Governor Nyesom Wike of Rivers State had done everything possible to prevail on the Ugwuanyi, committee to throw the race for the national chairmanship open to all zones.

His argument was premised on the notion that good, capable hands to steer the affairs of the party abound everywhere in the country. Wike had further argued that zoning any of the party offices may deny PDP the opportunity of having the best man for the job at the helm at Wadata.

Were this to have scaled through, the party would have been left with no option but to similarly throw open the presidential ticket to all party leaders regardless of their states of origin.

Plausible as the reasons he advanced were, the Rivers governor soon realized that he was a lone ranger as his colleagues faulted his stand and opted for a Chairman of southern extraction.

A national officer of the party, who joined hands with Wike in the clamour for Secondus’ removal, noted that the governors chose to back out of Wike’s ship because it is “more of personal interest than for the good of the party.”

Speaking on the condition of anonymity, the official said contrary to the argument of Wike, “his colleague governors are aware that he has his eyes fixed on the 2023 presidency. He knows that a southern chairman will make it difficult for the PDP to have a presidential candidate from the South. So, he wasn’t asking that the race be thrown open for no reason.

He wants to vie for the highest elective office in 2023 but I think it is clear to him now that the PDP cannot oblige his dream for now. The governors are of the opinion that if the ruling party is going South, it must head in the opposite direction to seize the moment,” he said.

A PDP governor from the North-East, this medium gathered, had argued convincingly in one of their meetings in Abuja recently on the danger of fielding a southern presidential candidate in 2023. He was said to have told his colleagues and other party faithful that a good number of northerners in the ruling party would vote the PDP if it fields a northern candidate as the APC is expected to field a southerner. The meeting attended by all the PDP governors lay to rest the possibility of zoning the presidency away from the North.

Although, the source noted that Wike has not completely ruled out his presidential ambition, he is now ready to team up with his colleagues to have the chairmanship retained in the South provided the South-South and South-East are excluded. This position was well received by the zoning committee’s meeting in Enugu last week.

“Wike, alongside the Oyo Governor Seyi Makinde wants to see Chief Olagunsoye Oyinlola as the next PDP Chairman. They are not alone in this. Ab initio, Wike knew that his pro-South presidency on the platform of the PDP is difficult to sell just as having a northerner as PDP Chairman is.”

The alternative choice is that yes, the South can have the chairmanship provided it is not going the way of the South-South. He won’t back the South-East for the position either because his long-time friend, Oyinlola, is interested in the office,” he added.

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SANs tackle Malami, insist VAT not on Exclusive List

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Senior lawyers yesterday faulted the claim by the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami (SAN), that the Value Added Tax (VAT) is on the Exclusive Legislative List.
In an interview in New York, Malami was quoted as saying that no state has the power to lay claim to the collection of the VAT across the federation.

“A lot has precluded the state from collecting value-added tax. One, generally speaking, as you rightly know, the issue of the Value-Added Tax is an issue on the Exclusive Legislative List,” Malami said.
“And the implication of being in Exclusive Legislative List matter is that only the National Assembly can legislate on it. The question that you may perhaps wish to address your mind on is whether there exists any national legislation that has conferred the power on the state to collect VAT. And my answer is ‘no’.

“In the absence of a law passed by the national assembly in that direction, no state can have a valid claim to a collection of Value-Added Tax.

“The responsibility, right and constitutional power to legislate on a collection of VAT is exclusively and constitutionally vested in the national assembly and not in the state,” Malami reportedly explained.

But in separate interviews, some senior lawyers challenged the minister to point out where VAT was mentioned in the Exclusive Legislative List of the 1999 Constitution of the Federal Republic of Nigeria (as amended).

Human rights lawyers, Mr. Femi Falana (SAN), Dr. Mike Ozekhome (SAN), and Mr. Ebun-Olu Adegboruwa (SAN), among others, faulted Malami in separate responses .

But another senior lawyer, Mr. Ahmed Raji (SAN) expressed the belief that Malami was misquoted, not heard properly, or misrepresented in his claim that VAT is on the Exclusive Legislative List.
On his part, Mr. John Baiyeshea (SAN) said whether it is the federal government or the state that is legally empowered to collect VAT, is a decision of the court and not the AGF or any lawyer.

The collection of VAT has been a subject of national debate since Justice Stephen D. Pam of the Federal High Court in Port Harcourt ruled that the Federal Inland Revenue Service (FIRS) lacked the power to collect taxes not listed under Items 58 and 59 of Part I of the Second Schedule to the 1999 Constitution.

The FIRS had challenged the decision of the Federal High Court at the Court of Appeal, Abuja Division.
The appellate court had ordered the Rivers and Lagos State governments to maintain the status quo, pending the resolution of the legal dispute on the matter.

Dissatisfied with the decision of the appellate court that directed all parties to maintain the status quo, the Rivers State Government approached the Supreme Court, asking it to set aside the decision of the appellate court.

Citing different judicial precedents and constitutional provisions to disprove Malami’s position, Falana said the constitutional powers and competence of the federal government “is limited to taxation of incomes, profits and capital gains which does not include VAT.”

Falana argued that in both E.C. Ukala versus FIRS and Attorney-General of Rivers State versus FIRS, the Federal High Court held that there “is no constitutional basis for the FIRS to demand and collect VAT, Withholding Tax, Education Tax and Technology Levy in Rivers State or any other state of the federation.”

Specifically, the human rights activist contended that the federal government “cannot collect VAT or any other species of sales, or levy other than those specifically mentioned in items 58 and 59 of the Exclusive Legislative List of the Constitution.”

He, therefore, argued that the two decisions “cannot be faulted on legal grounds. Until the Court of Appeal or the Supreme Court sets them aside, to that extent, the decisions of the Federal High Court remain the law and as they cannot be impugned by any ex-cathedral statement or political opinion of any public officer, no matter how highly placed.”

Falana said since it would be problematic to set aside the judgments of the Federal High Court, the federal government might wish to embark on a consultation to let all the stakeholders appreciate the need to have a central collection system through the FIRS.

Falana, a former President of the West African Bar Association (WABA), however, observed that the federal government should be prepared to review the unjust distribution formula if it wanted the FIRS to collect the VAT.

Falana said in 2020: “The total VAT collected was N1.53 trillion. Apart from the allocation of 15 per cent to the federal government, the FIRS deducted four per cent as a collection fee while the Nigeria Customs Service deducted seven per cent from import VAT. There are some criteria involved in the distribution of FIRS that ought to be reviewed.”

Falana argued that having acknowledged the lacuna in the Constitution, the FIRS had mobilised the National Assembly to amend the law, noting that the attempt to use the federal legislature “will not work, as it is a non-starter.

“In Attorney-General of Ogun State versus Aberuagba, the Supreme Court stated categorically that the Sales Tax Law of Ogun State was invalid as it encroached on the exclusive legislative powers of the federal government. That was the prevailing situation in the Second Republic. But the judgment is not applicable under the current political dispensation.

“In other words, the VAT cannot be located in either the Exclusive or Concurrent Legislative List. Hence, it is a residual matter within the legislative competence of the House of Assembly of each State of the Federation,” Falana noted.

He, however, explained that the federal government might wish “to propose an amendment to the Constitution by putting VAT in the Exclusive Legislative List since another constitutional review is in progress.

“It is pertinent to point out that VAT was increased by the National Assembly last year, albeit illegally. But the increase has not had any positive impact on the Nigerian people.
“The essence of paying VAT and other taxes has long been defeated as governments have abandoned the provision of social amenities for the people,” he said.

Faulting Malami’s position yesterday, Ozekhome observed that the VAT “is not anywhere reflected in the Exclusive Legislative List of the 1999 Constitution.”

The senior advocate noted the judgment of the Federal High Court, Port Harcourt Division held that the VAT was not a matter within the Exclusive Legislative List.

He, therefore, added that the VAT “is a matter, which the state governments can or should legislate upon. As a result, there is now a law in Rivers State, which makes VAT an exclusive matter within the jurisdiction of the state. That is the present position.

“So, the mere pronouncement of the attorney-general in the faraway US cannot change the law, neither can it change an extant subsisting judgment of a competent court of law, which has not been set aside by the Court of Appeal. And that remains the law.”

On his part, Adegboruwa reinforced Ozekhome’s viewpoint, challenging the AGF to explain why the FIRS wrote a letter to the National Assembly to list the VAT on the Exclusive Legislative List if it was already there.

He, therefore, contended that the VAT “is not on the Exclusive Legislative List at all. If indeed it were on it, why would FIRS write a letter to the National Assembly, seeking to put VAT on the Exclusive Legislative List?”

The senior advocate added that all states across the federation “are thus entitled to make laws on VAT, through their various Houses of Assembly.
“This is the best way to end the controversy on the VAT. The federal government has no power in law to dabble into any matter that is not within its competence,” the senior advocate explained in his three-paragraph.

Another senior lawyer, Mr. Ahmed Raji (SAN) observed that a court of competent jurisdiction “has made a pronouncement which has been appealed. The matter is subjudice. The golden rule in ethics is that the appeal court should be allowed to rule before any further comments for or against”.

Raji expressed the belief that the AGF was misquoted, not heard properly, or misrepresented.
He, however, advised that all parties should focus their attention on the contents of their brief of arguments to be filed before the appeal court or Supreme Court as the case may be.

Similarly, Baiyeshea (SAN) said whether it is the federal government or the state that is legally empowered to collect VAT, is a decision of the court and not the AGF or any lawyer.
The senior advocate noted that he would not want to make the same mistake by the AGF by commenting on a case that is already before the court,

Baiyeshea said: “I will not like to make the same mistake with Malami by commenting on a matter that is before the Court of Appeal presently.
“All lawyers and indeed senior lawyers should know that we are not permitted to comment on or express an opinion on subjudice matters.

“Be that as it may, whatever the AGF has said will not matter. What matters is the decision of the superior court (in this instance, the Court of Appeal), which we are all waiting for. The matter will not stop at the Court of Appeal.

“It will certainly get to the Supreme Court. Whatever pronouncement the Supreme Court makes (based on interpretation of the relevant provisions of the Constitution), will eventually be the law. Therefore, what the AGF or any other lawyer or persons have said or may say, will at best be speculative opinions.”

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IPOB ‘bans’ Nigerian flag in South- east

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The Indigenous People of Biafra (IPOB) has declared October 1 a sit-at-home day and banned the Nigerian flag in the South-East.

The media and publicity secretary of the group, Emma Powerful, in a statement made available to the media in Awka, Anambra State, said the ban began on Saturday.

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The statement reads, “The IPOB has declared October 1, 2021 a total shutdown in Biafra land as a sign of our rejection of the evil construct called Nigeria and there shall be no movement in Biafra land on this day.

“Also, the IPOB has declared that from today, September 25, 2021, all Nigerian flags mounted anywhere in Biafra land must be brought down. The IPOB leadership will communicate to banks directly and give them a reason they must peacefully bring down Nigerian flags in their banking premises before we do it ourselves in our own way.

“Everybody must strictly adhere to this directive. We want to let the world know that Biafra land is not Nigeria and shall not be. A word is enough for the wise.

“In line with the memorandum of understanding and alliance between Ambazonia and Biafra nations, members of the IPOB, under the command of our great leader, Mazi Nnamdi Kanu, wish to ask Biafrans to support and celebrate Ambazonia Independence anniversary on October 1, 2021.

The statement added, “We advise Biafrans to stand with Ambazonia people as they celebrate their God-given freedom and independence. We should bear in mind that our brothers and sisters in Ambazonia are passing through persecutions in the hands of murderous Cameroonian government, just like Biafrans are facing similar ordeals in the hands of the Federal Government of Nigeria, which sympathises with terrorists but kills peaceful agitators.

“We, therefore, urge world leaders to use the opportunity of the ongoing United Nations General Assembly meeting to discuss the sufferings of the two persecuted nations of Biafra and Ambazonia. Our people have suffered enough in the hands of our oppressors, who are in bed with terrorists but derive pleasure in crushing peaceful agitators instead of addressing our genuine concerns.”

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