Wanted: exemplary leaders

Africa's glaring and perplexing leadership challenge was again highlighted by the bleak announcement that there was no fit person for the Mo Ibrahim Prize for Achievement in African Leadership for 2013. It was a damning verdict with huge negative implications for progress on the continent, and an awful advertisement for Africa, which continues to contend with the stigma of “darkness”.

It is a cause for concern that for two consecutive years, and for the fourth time in the award’s seven-year history, the Mo Ibrahim Foundation found no African leader worthy of the yearly $5 million prize (about N800 million) to be paid over a period of 10 years. In addition, the winner is guaranteed $200,000 annually (about N32 million) for life. The qualification – being a democratically-elected leader who has stepped down from office in the past three years, after serving constitutionally-mandated terms marked by a demonstration of “excellence in office” – appears tragically beyond the reach of most of the continent’s political leaders.

Sadly, the epileptic nature of the record of winners lacks inspirational value, the very attribute that the prize is designed to promote. After the inaugural award to Joaquim Chissano of Mozambique in 2007, he was followed by Festus Mogae of Botswana in 2008; then there was a two-year hiatus occasioned by ineligibility before Pedro Verona Pires of Cape Verde took the prize in 2011.

There is no doubt about the good intentions of the promoter of the award, which is by far the biggest prize for good governance in Africa, Dr. Mohamed “Mo” Ibrahim, a 67-year-old Sudanese-British mobile communications entrepreneur and billionaire. The beauty of the award is perhaps the institutional objectivity that it represents. What is doubtful, however, as the laudable scheme approaches its first decade, is the capacity of the continent’s leaders to grasp the vision and rise to new heights of exemplary leadership. For it would amount to an undesirable capitulation to visionless mediocrity if the criteria for the award were scaled down in order to ensure that a winner emerged every year.

As absurd as it might sound, it may be that the Mo Ibrahim Prize does not offer sufficient incentive to Africa’s leaders to govern well. For, considering the monumental levels of official corruption on the continent, it might possibly not be in the best interest of Africa’s greed-driven leaders to sacrifice the immediate dividends of corruption for an uncertain award.

However, it should be stressed that what is at stake is certainly beyond the pockets of some self-focused leaders. It goes without saying that Africa desperately needs new paradigms of progressive leadership, particularly in today’s world with its galloping pace of development. It is a huge shame that the continent still grapples with inexcusable poverty, appalling infrastructure, backward education and primitive health care arrangements, among other inadequacies that make it the butt of jokes in enlightened circles.

With specific reference to Nigeria, whose leaders enjoy the self-flattery of the tag “giant of Africa”, without in any way thinking like giants, it is disgraceful that the country was ranked 41st on a 52-country list called the 2013 Ibrahim Index of African Governance (IIAG), also a project of the Mo Ibrahim Foundation. The country not only scored lower than the continental average (51.6), it also ridiculously scored lower than the regional average (52.5) for West Africa. Assessment was based on four key areas: Safety and Rule of Law, Participation and Human Rights, Sustainable Economic Opportunity and Human Development.

This context underlines the enduring appeal of the Mo Prize, which should inspire Africa’s leaders to dream and re-imagine not only their various countries, but also the entire continent. It would be interesting to see whether they would eventually respond to the award with the enthusiasm and commitment to good governance that it desires to stimulate.

- The Nation Editorial

Guess who is dollarizing the economy!

 Any patron of Bureau de Change may find that a difference of about N10 per dollar now exists between the official rate of N155 per dollar ex-Central Bank, and about N165/dollar in the open market!  This is in place of the permitted one per cent markup officially allowed to commercial banks on dollar purchases ex-CBN.

In conformity with the law of demand and supply, the increasing market price of the dollar must be attributable to hoarding or the reality of more naira chasing dollars.  Paradoxically, however, according to the CBN, the increased dollar demand is not matched by a symmetric rise in imported goods; in other words, increasing dollars are demanded for speculative purposes or simply for custody as a store of value, in place of the naira.

The commercial banks have apparently taken advantage of the wider gap in forex rates to roundtrip dollars earlier purchased from CBN's forex auctions with large-scale dollar importation, for onward sale to Bureaux De Change (BDCs) and customers!! 

Surprisingly, despite the serious economic implications of such odious practice, no bank has so far suffered any serious sanction! 

In an attempt to puncture the perceived bloated dollar demand, last week, CBN rolled out a series of measures, which included withdrawal of the operating licences of 20 BDCs for purchasing and selling huge sums of dollars without required documentation; furthermore, commercial banks will henceforth only be allowed to import foreign cash after prior consideration and approval by CBN.

Furthermore the apex bank also raised the existing limit of US$40,000 to US$150,000 per annum for holders of naira debit and credit cards!  Question is, how many Nigerians earn this kind of money, and how much tax do they pay?  Nonetheless, the latest CBN guideline that recipients of forex money transfers (i.e. ex-Western Union, etc) shall henceforth be paid in naira, may inadvertently, actually drive the bulk of such remittances back into the 'black market', which offers better exchange rates! 

Similarly, CBN's reduction of BDCs' maximum weekly dollar purchases from $1,000,000 to "mere" $250,000, in spite of rising demand, might actually further reduce dollar supply and instigate naira exchange rate well above N165=$1.  Curiously, in retrospect, in August 2011, CBN management removed the limit on $1m/week sales to BDCs as part of measures to "sustain and ensure exchange rate stability"!!  Ironically, conversely, the slap-on-the-wrist penalty for those apprehended for smuggling millions of dollars out of Nigeria remains the simple forfeiture of 10 per cent of the foreign exchange value to government!

In addition to the latest measures, CBN also abolished the Wholesale Dutch Auction System (WDAS), under which banks could speculate, buy and hoard foreign exchange purchased from CBN, for onward sales to customers and importers; consequently, the Retail Dutch Auction System (RDAS) has been reintroduced, so that banks would now only purchase forex as per the specific demand of their customers.  Incidentally, RDAS failed in the past, and was substituted with WDAS, which is now again being replaced by the earlier discarded RDAS.  See our article titled "WDAS: Why is CBN Fooling Nigerians?" published in 2006, at http://www.lesleba.com/wdas.doc.

 Instructively, the earlier adopted forex market systems, such as FEM, IFEM, AFEM, DAS, all failed, just like RDAS and WDAS, to forestall extensive dollar hoarding and round-tripping!  Consequently, this latest reintroduction of RDAS is retrogressive and akin to a dog returning to its vomit! 

In reality, these forex market structures failed because CBN consciously ignored the other side of the equation relating to the supply of naira, because, as earlier indicated, when increasing cash sums chase any commodity whose supply is sticky or hoarded, the price of that commodity will invariably rise.  In other words, whenever naira supply increases relative to available dollars, the dollars price will rise with increased patronage!! 

So, any realistic and sustainable solution to the consequences of a beleaguered naira must recognize the cause of unceasing excess naira or excess liquidity in the market!  Every month, against the grain of economic wisdom, CBN religiously, borrows about N300bn excess cash at oppressive interest rates in order to reduce perceived surplus naira from the commercial banks and forestall inflation!!

Sadly, despite Lamido Sanusi, the CBN Governor's, belated "confession" of "unknowingly" sustaining the practice of borrowing back government funds in such transactions with oppressive interest rates, our leaders do not seem to care that the cumulative humongous public debts are ultimately not applied to infrastructural enhancement or improvement in our social welfare!

Although CBN and its surrogate parastatals such as Asset Management Corporation and Debt Management Office would swear that the perceived excessive spending of government is responsible for the unending surplus cash in the system, the truth, of course, remains clear, that the unending scourge of systemic excess naira is clearly the result of the ability of commercial banks to leverage multiple folds on the fresh inflow of hundreds of billions of naira, which CBN substitutes for distributable federation dollar revenue in monthly allocations to the three tiers of government!!  Surely, the CBN cannot sincerely contest this reality!  Besides, government's annual budgets below N5tn constitute less than five per cent of total estimated liquidity base (surplus cash) of over N100tn!!

Conversely, if dollar revenue allocations are paid with dollar certificates, we will immediately find that the destabilising problem of increasingly useless and surplus naira in the system and the accumulation of avoidable public debts will become a thing of the past, while the curse of systemic naira flush existing simultaneously with acute shortage of low-cost funds to the real sector will be exorcised!  Furthermore, the erstwhile artificial lopsided equation between naira and dollar supply will increasingly begin to be redressed in favour of the local currency!  Ultimately, a stronger naira will shift market preference from the dollar and reduce the propensity for round tripping and stifling dollar importation!

In conclusion, it is paradoxical that naira rate of exchange invariably comes under pressure simultaneously with increasing CBN dollar reserves; in other words, while the CBN hypocritically decries the excessive demand for dollars, and the higher propensity for Nigerians to hoard dollars, the real villain in the price mechanism that debases naira acceptability is actually the CBN, as it jealously hoards and presides over $40bn, after it has mischievously suffocated the money market with unbridled fresh naira creations substituted as monthly allocations for distributable dollar revenue! 

So, in effect, it is CBN's obnoxious monetary policy framework that repels market affinity/loyalty to the naira, and instigates the dollarisation of the economy with large-scale forex round tripping and re-importation of part of the dollars earlier purchased from CBN and remitted abroad by banks under WDAS.

SAVE THE NAIRA, SAVE NIGERIANS!!

The misused N1.2 trillion

There is no end to the engulfing menace of corruption, perfidy and official mismanagement in Nigeria. From outright looting of pension funds, subsidy scam, unspent budget phenomenon to pen robbery across all the tiers and levels of government, stealing has become our national anthem. It is now a daily routine in the country. Given revelation after revelation of how those entrusted with the management of the national economy have abused and misused the people’s mandate, Nigerians are no longer shocked. But when will this brazen act of official looting of our national patrimony come to an end? A report of the Senate Committee on Public Accounts, presented to the Upper House of the National Assembly last week, has revealed that the Federal Government under three successive administrations between 2002 and 2012 grossly abused and mismanaged funds from Nigeria’s Special Funds Account to the tune of N1.2 trillion. The administration of Presidents Olusegun Obasanjo, Umaru Yar’Adua and Goodluck Jonathan stand indicted in that order.

We consider this a grievous betrayal of the nation by elected chief executives. For an executive arm of government entrusted with the management of the national treasury, weaknesses of the magnitude highlighted in the report cannot but impact devastatingly on the material well-being of the society and its developmental projections. It is a proof of a terrible flaw in the management of the national economy. It also shows that there is no credible accounting system in application at the federal level and a manifest lack of transparency in the system. What is more, if the National Revenue Account is in such a mess, we can imagine why Nigeria is consistently adjudged one of the five most corrupt countries in the world. Again, it has been established that in no few cases, the necessary feasibility and viability studies which government must require before financing any projects are perfunctorily undertaken and this implies that it has on its records some white elephant projects which continue to appear in the budget every year.

Added to this is the contention that the economy has for long been carrying the burden of a heavy and needless bureaucracy. A necessary corollary of this is that budgets are never executed to the letter as even government officials have had to express openly that budgets are hardly implemented. With this scenario, it is apparent that the anti-graft war of the Federal Government is nothing but a ruse. If the government itself is not transparent enough, how can it control other sectors? It has always been quite natural to match control with participation since no law and ethics exist to the contrary. While it is conceded, and conceded it must be, that the capitalist option to national development is an incentive to corruption, the view must be maintained that the incompetent and misguided attempt at importing economic policies that have proven to be failures elsewhere have been an additional impetus to the rogue instinct of Nigerian leaders.

We insist that all efforts to resolve the expanding problem of immorality in the land will come to naught if crass materialism continues to hold sway. That our country has consistently been adjudged among the most corrupt nations in the universe is not something to rejoice over. Instead, it should dawn on us that such phenomenon contributes to the moral and ethical devaluation of every Nigerian. Yet it is very sad to note that corruption in high places has never been as high as it has become of late. Government has consistently refused to release capital votes as at when due to create room for cutting of corners. It is regrettable that the anti-graft agencies, overtime, have lent themselves to pursuits that called their integrity into question, resulting in a devastating wind of public disapproval. With repeated acts and pronouncements that reinforced public suspicion of partisanship, the agencies gradually lost the moral force to prosecute the anti-corruption war to the satisfaction of Nigerians.

As a body of representatives of the Nigerian people, the Senate has a responsibility to salvage the anti-graft agencies, put in place to halt the menace of economic and related crimes that retard our development as a nation, but which have been subjected to perceived levels of abuse. The anti-graft bodies must be accorded an appropriate level of independence by insulating them from executive control. This will come by way of removing the task of the appointment of key heads of those agencies from the executive arm of government. Again, the National Assembly must be seen to be performing its oversight functions over the Executive branch of government. This would go a long way to add greater credibility to the process and enthrone checks and balances in the system. Above all, the Jonathan administration should commence the process of probing the Obasanjo administration to prove its credibility and innocence.

Nigeria, where is thy soul?

When the Union Jack (the British flag) was, at the glittering mews of the Tafawa Balewa Square, Lagos on October 1, 1960, lowered for a free Nigeria’s green-white-green flag, gloriously fluttered in the sky by the breezy flurry of pride and ecstasy, it was a great moment pregnant with hope and expectation.  The whole world had seen a newly independent Nigeria, a potential world power, only buried in the sands of time.  Endowed with immense wealth, a dynamic population and an enviable talent for political compromise, Nigeria stood out in the 1960s as the potential leader in Africa, a continent in dire need of guidance.  For, it was widely thought that the country was immune from the wasting diseases of tribalism, disunity and instability which remorselessly attacked so many other new African states. But when bursts of machine gun fire shattered the predawn calm of Lagos its erstwhile capital city in January 1966, it was now clear that Nigeria was no exception to Africa’s common post-independence experience.

During the following four years (1966-1970), the giant and ‘hope’ of Africa measured its full length in the dust. Two bloody military coups, a series of appalling massacres and a protracted and savage civil war which claimed over a million lives threatened to plunge the entire country into oblivion.  It also deprived Black Africa, already weakened and disillusioned, of a crucial element of strength and leadership in the growing confrontation with White Africa along the Zambezi.  As God would have it, at the end of the civil war in 1970 the nation experienced an oil boom and a staggering wealth never before recorded in the history of young nations.  This new status, coupled with the emergence of a dynamic leader in the person of the late General Murtala Mohammed, in the mid-1970s, launched Nigeria back to a position of relevance in Africa when it proffered a new meaning and identity for the continent. Today, instead of a consummation of that hope and expectation, what confronts Nigeria is the story of a nation that has turned full circle as a giant with feet of clay: a big national and international nuisance and embarrassment. We are experiencing an unnerving weight of fuel scarcity in the sixth largest exporter of crude oil in the world.

A sadistic cabal of recycling local imperialists in both khaki and agbada has since hemmed the supposedly “giant of Africa” in a colony where misrule, ineptitude, crass opportunism and corruption have been elevated to a national culture.  More than half a century into this circuitous game in which the nation’s till has been pillaged and her vast wealth frittered away abroad, the rot is peaking; and the hapless people are paying the imponderably colossal price.  At the moment, in spite of a record huge revenue from the sale of crude oil and other domestic sources, the social services sector, which more directly impugn on the people’s lives, is almost at the height of a complete system collapse.  The story of virtually every social responsibility of the state to the people; of every area where the state remain relevant to her subjects under the unwritten social contract code, has been rewritten on its head: hospitals have graduated from mere prescription clinics into mortuaries as even medical doctors and other health workers are constantly on strike.  The public school system is in a shambles; roads, including hitherto smooth expressways are now death traps; and almost a century after electricity supply debuted in Nigeria, her citizens still live more in darkness than light.

Here is a complete story of retrogression and decay.  Above all, there is an alarming rate of insecurity in the land. Nigeria is in a ferocious state of anomie.  This is made worse by a tired and disheartened bitterness among the citizenry.  If Hilaire Belloc is right in his opinion that ‘readable history is melodrama’, the true story of the first decade of the twenty-first century in Nigeria, which also doubles as the longest tragic period of civil misrule since the past 99 years of the forced union by Lugard, should be mind-boggling.  It has been a decade of turmoil, with the elemental passions predominant.  Never have Nigerian public officials in responsible positions, directing the destiny of the nation, been so brutal, hypocritical and corrupt, leaving the country to swim in infrastructural decay, unemployment, hunger and desperation as in the past fourteen years of quasi-democracy.  The outcome is the pervading poll of insecurity which is threatening to drive the country into yet another civil war.  Like a demented society, Nigeria is soaked with irrational impulses, stress and tension as the people can no longer elect their leaders.

Aside from armed robbery which has rendered the entire police force vulnerable, there is candidly speaking, an alarming rate of mockery killings in Nigeria.  There are indeed gruesome stories of rapes, perversities, and child murders. Hostage taking is now a booming business in the country.  An extremely partisan and sympathetic public is willing to read and believe anything as even the crime pages of our national dallies appear tinged with sadism. Yet, where is that Nigerian who does not know that the real criminals in our midst today are our rulers?  

Who does not know that much of the savagery connected with our current state of hopelessness and bloodletting could be explained in the character of the buccaneers who have misruled us for all these miserable years?  How did Ghana which was at the level we are today in early 1980’s make it to now become an enviable haven where our foreign and local investors now relocate to?  Why has Nigeria suddenly relapsed into a country where violence has become a national pastime?

It is interesting at this point to draw a historical parallel between Nigeria and India, a former victim of colonialism which has now turned itself to a world power due to political doggedness and economic independence.  For a country like Nigeria still paying lip-service to the ideals of a federated union, the Indian Federation is an enduring model.  There is a high level of competition with every state controlling its economy, separate army and police. Hence the drive for massive, unprecedented investment in education and manpower development as India exports more than 800 scientists annually to the Silicon Valley of the United States who manufacture made-in-America goods.  The difference in age between India and Nigeria is 13 as India gained political independence from Britain in 1947.  But the question is: can Nigeria attain the height India has reached in the next 13 years?  From a position of relative despair and frustration, India has bequeathed to her children hope and happiness while Nigeria is still dancing in circle.

Nigeria, where is thy soul?