2015 Elections: Northern elders as scare mongers

In African culture, elders are the custodians of truth.  They are the moral guide to the society and they do all in their wisdom to engender peace and preserve the interests of the larger society.  Unfortunately, the various elders’ groups in Nigeria–in the East, West, South-South, Middle Belt or North -are different; they observe this rule in the breach. The most typical of them is the Northern Elders’ Forum (NEF) which has been in the news in recent times, for its strident pursuit of sectional and parochial interests to the detriment of the well-being of the larger Nigerian nation.

The elders, at the end of its meeting in Kaduna last month, alleged that the immediate past Chief of Army Staff, Lt. General Azubuike Ihejirika and some other top military officers were involved in extra-judicial killings and strangulation of civilians by soldiers in Bama and Giwa Barracks in Borno State, using an underground detention centre.  The Forum’s threat to drag the former Army chief to the International Criminal Court (ICC) in The Hague, is not only seen as a campaign to fan the embers of ethnic discord –with its potentialities in Nigeria-it is also a campaign to diminish Nigeria before the international community. More grievous is that it is a malicious attempt to portray President Goodluck Jonathan as a violator of human rights.

At a different forum, the group and the Northern Traditional Rulers Council (NTRC) accused the President of masterminding the mass redeployment of heavy military weapons from the North to the South. As if the issue is not worrisome enough, their meeting chaired by no less a personality than the Sultan of Sokoto, Alhaji Sa'ad Abubakar III, in Kaduna, alleged that the reason for the arms relocation was to aid the plan to rig the 2015 elections. Weighty accusations, I dare say. However, they are allegations that are as curious as they are baseless.

While the spokesman for the first group, Professor Ango Abdullahi, did not mention the six other persons he alleged were involved in the Borno human rights violations, the Sultan’s group did not in any way substantiate its allegation on arms relocation.  The questions that arise are many, but only two will suffice here: Why did they hide the allegations in their large babanrigas, until shortly after Ihejirika was removed as Army Chief?  And where were they when Odi, Katsina-Ala and Zaki Biam faced worse action, or are Katsina-Ala  and Zaki Biam no longer part of their North?

While several groups have denounced the Northern Elders Forum (NEF), for openly discouraging the military’s efforts in containing terror -- for that’s what its posture amounts to-prominent Igbo leaders say it is an attempt to tarnish the image and sterling performance of General Ihejirika as the nation’s army chief.  My worry is that the attack on the former army chief is ill-conceived, coming at a time that the military, and indeed the nation, was counting the losses in human and material terms of the war on Boko Haram.

According to Ihejirika himself, in the entire command chain of the Army, directives are issued from higher commands down to the issuance of operational orders, but at every level of adherence, the rule of engagement is emphasized with special emphasis on the preservation of human rights. Therefore, to accuse the army, such a highly organised institution that does not condone indiscipline, of human rights abuses within the Nigerian territory, is to be uncharitable, considering the challenges they have had to face and the risks they have borne in the Boko Haram ‘war’. Besides, to single out Ihejirika for accusation, smacks of hidden agenda, and fuels the belief by Ohaneze Youths, that it was an attempt to blemish the records of their kinsman who broke all records to rise to the top position of the Nigerian Army.

We have always known the Northern Elders Forum (NEF) as the modern version of the old Kaduna Mafia, but when did they transform to military tacticians?  Their tale on relocation of military hardware must therefore be seen as unnecessary scare-mongering.  To allege too that it was part of a grand design to rig the 2015 elections is utter claptrap coming from hawkish politicians out to score some cheap points.  NEF must appreciate the impact of the ongoing reforms in our electoral system, for which President Jonathan has received acclaim and commendation from local and international organizations. Such glib allegations are senseless in a country that has increasingly widened the democratic space and moved away from shambolic elections.

We must get something clear here.  The NEF stand on Ihejirika, has revealed the other side of the Northern Elders who have all paid lip service to the war on terror which Boko Haram presently symbolizes. Here we have politicians who mask under some amorphous groupings to further their regional agenda, regardless of the cost to our nation’s development.  While it is still within their democratic rights to oppose President Jonathan and oppose his administration’s policies, we must insist that they pursue their regional political agenda within the limits of decency.  What everybody must frown at is their insistence over time, in stoking the fire of sectional interests, and denigrating of the institution of the presidency.  The question must indeed be asked: where truly lies their sympathy?

Like Senator Uche Chukwumerije said while adding his voice in condemnation of the elders’ indiscretion, their statement has revealed the depth of resentment of the campaign against Boko Haram. Chukwumerije, who said the threat was capable of unleashing ill-will on the federation, further described it as highly provocative to the sensibilities of all, who desire the unity and stability of Nigeria.  While he described the NEF as biased, he believes they had opened doors into the world court for not only the Ndigbo, but also the people of Odi, Zaki-Biam and Katsina Ala, saying they would all dust their files and head for The Hague.  I cannot agree any less.

Constance Okechukwu sent in this piece

Sanusi’s Dangerous Gaffe

Barely a week after a letter sent to the President by the governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi over an alleged non-remittance of huge oil funds caused tremendous stirs; the CBN governor beats a retreat, bites the humble pie and admitted his allegation was wrong

Sanusi Lamido Sanusi, the governor of the Central Bank of Nigeria, CBN ate the humble pie last week when he retracted his earlier allegations that the Nigerian National Petroleum Corporation, NNPC failed to remit $49.8bn (about N8tn) oil proceeds to the Federation Account between January 2012 and July this year.

The CBN governor, who appeared before the Senate Committee on Finance, alongside Minister of Finance, Dr. Ngozi Okonjo-Iweala, Minister of Petroleum Resources, Diezani Alison-Madueke, Director-General, Budget Offi ce of the Federation, Dr. Bright Okogu; and the Group Managing Director, NNPC, Andrew Yakubu, denied saying that $49.8 billon was missing from the Federation Account, stating that he only said that there may be unremitted amount of monies into the federation account.

Though the CBN governor admitted that he indeed, wrote the letter to the president, he said that “in truth, there is no missing money. Chairman, we did not see the letter as a conclusion of our investigation, but an invitation to investigate. “So, the conclusion that $49.8 billion was missing was wrong, even though, we had the allegation that it was un-remitted,’’ Sanusi said.

He expressed regrets that the letter found its way into the press, adding that it was born out of concern over low rate of accruals. “I found it very unfortunate, it was leaked to the press and the answer is ‘Yes’, the CBN governor did send that letter with those contents. By way of those contents, the Central Bank and Finance Ministry and the government were very much concerned over the years at the very low rate of accretion to the reserves.”

The CBN governor, however, said that a lot had happened since the letter became public and that all stakeholders involved were working together to rectify the situation. “We (the Minister of Finance, Minister of Petroleum Resources, Central Bank, FIRS, and DPR) have set up technical team which has started a process of reconciliation and there has been a lot of progress made.”

He said the committee had made a lot of progress, especially with the NNPC explanation that $24bn of the amount in question, which was put at $67bn, was actually not its crude but that which was shipped on behalf of third parties.

He said the third parties included oil companies that paid taxes in crude and the Nigerian Petroleum Development Company for third party financing, adding that “that already addresses half of the fi gure ($49.8bn).

Sanusi added that the second part of the alleged missing funds was about domestic crude lifting, which was put at $28bn, and “from which we feel there is a shortfall and we had a press conference and talked about that shortfall.”

“Now, we are still in the process of reconciling that figure and we have not yet started talking about the export sales tax, which is $20bn, which we will reconcile.

“The finance ministry has told us that even before this letter, there had been ongoing negotiations and discussions with the NNPC and the FAAC, and these numbers have always been discussed at the level of convenience of the fi nance (ministry).

“So, since the objective of this committee and for all of us on this side is actually to get to the bottom of it and fi nd out exactly the amounts that need to be remitted and what needs to be done and recommend action, what I will like to do is that given the progress, we have made a request to be given more time to continue with this process and come back with a fi nal position among us.”

However, Sanusi’s effort to rationalise his position fueled further controversy when Okonjo-Iweala interjected his comments that there was a general consensus among all the agencies involved during their reconciliation meetings that there was indeed, a $12bn shortfall.

Contrary to the CBN governor’s assertion, Okonjo- Iweala said that what was found out during reconciliation was $10.8bn and not $12bn, adding that although the shortfall had been acknowledged by the NNPC, its magnitude was still being disputed by the corporation.

Okonjo-Iweala said, “We have been able to get to the bottom of the $49.8bn that was indicated in the CBN memo. But also due to the way that the accounting for the crude was read, some of it that was being lifted for other parties to the tune of $24bn was said to be missing, but it has been accounted for.

“So, the bulk of the sum of $49bn has been accounted for and that is what the reconciliation exercise is about. So, it is very clear that this is not missing.

“However, both fi nance (ministry) and NNPC have been in discussion to reconcile. We do so every month after the Federation Accounts Allocation Committee meeting. We reconcile our fi gures. It is not an easy thing.

“In the course of the reconciliation, from January 2012 to July 2013, we have looked at a shortfall of about N1.7tn, the equivalent of $10.8bn. That is the amount that we have been discussing; and of course, the NNPC has been disputing some of it, but it is an ongoing reconciliation. We will still continue; we do it every month.

“We will continue our work after now until we can come to terms with what is actually the shortfall and what is due to come to the Federation Account,” the minister said.

While explaining the reason for the shortfall, the NNPC, in a joint statement with the CBN and the Ministry of Finance, blamed it on subsidy claims, undiscovered crude, product losses and cost of strategic petroleum product storage not currently captured in the Petroleum Products Pricing and Regulatory Agency’s template for refunds.

The corporation said the fi gures were well known to all stakeholders at the Federation Accounts Allocation Committee, adding that the shortfall was always updated on monthly basis.

It, however, said all parties concerned were working through the ongoing reconciliation efforts to resolve the shortfall.

Admitting that there was some level of shortfall in the amount remitted to the Federation Account, Alison-Madueke argued that the defi cit had been known for a long time., “We have come to a very clear understanding that there is a listed amount of which most part has been accounted for. There is a shortfall, which has already been mentioned but that shortfall has been known for quite some time.

“It has been acknowledged by the NNPC, but the extent of the shortfall has also been disputed by the NNPC for quite some time now. The NNPC has always participated in the reconciliation meetings with the CBN, FIRS and DPR, and that will continue,” Alison-Madueke said.

She said that the reconciliation efforts are in order to come to an agreed fi gure. She stressed that crude oil production in Nigeria had been under a lot of scourge due to the high level of theft.

“We have been very aggressive to increase our production and reduce the level of theft. In terms of our efforts, we have over the last two weeks seen an increase from a drop of 2.2 million barrels per day to what it is today, which is 2.38mbpd,” the minister said.

It would be recalled that the CBN governor had caused a stir two weeks ago, when a letter he wrote to President Goodluck Jonathan dated September 25, 2013 in which he leveled several allegations against the management of the NNPC, found its way to the media.

The CBN governor had in the letter said that the apex bank’s “analysis of the value of crude oil export proceeds based on the documentation received from pre-shipment inspectors shows that between January 2012 and July 2013, NNPC lifted 594,024,107 barrels of crude valued at $65,332,350,514.57.

“Out of this amount, NNPC repatriated only $15,528,410,098.77 representing 24 per cent of the value. This means the NNPC is yet to account for, and repatriate to the Federation Account, an amount in excess of $49.804 billion or 76 per cent of the value of oil lifted in the same period.

The CBN governor had also in the controversial letter, advocated that the president should authorise “A thorough audit of activity on any domiciliary accounts held by NNPC outside of the CBN. This, he said is because the CBN has no record of either the dollar proceeds of these diverted sales or the naira equivalent being transferred to the Federation Account.

“An examination of banking records of companies involved in oil lifting and swaps deals, including audit trails of regular payments to third-parties; an independent review of the terms and condition of oil lifting and swap contracts for fairness and equity and transparency,” Sanusi Lamido had stated.

The CBN governor had also alleged that the NNPC has failed to keep up with payments of its levies under Nigerian Export Supervision Scheme (NESS) in line with this law, and currently owes the Federal Government N22 billion.

“As banker to the Federal Government and Economic adviser to the President, I am obliged to draw the President’s attention to these serious issues of which you have most probably never been aware in this detail,” Sanusi Lamido had said.

In his recommendation, the CBN governor said that the NNPC should provide evidence for disposal of all proceeds of crude sales diverted from the CBN and the Federation Account; investigate crude oil lifting and swap contracts, as well as the financial transactions of counter-parties for equity, fairness and transparency among others.

The publication, expectedly, had triggered a rash of counter- accusation, with the NNPC accusing the CBN governor of lacking the requisite knowledge of the workings of the oil and gas industry and the modality for remitting crude oil sales revenue into the Federation Account. 

Besides, the corporation said the letter was leaked to embarrass it and the government as part of the campaign for the 2015 general elections.

The Group Managing Director of NNPC, Engr. Andrew Yakubu insisted that the NNPC is not in the business of withholding proceeds of crude oil sales due to the federation account or any other statutory remittances.

Yakubu said that it is not in the corporation’s character to join issues or trade blames with other agencies of government but said that considering the high level of publicity that the recent letter from the Governor of the Central Bank of Nigeria (CBN) to the President has generated, and the erroneous impression it has created among Nigerians, it has become necessary to set the records straight.

The NNPC GMD said that all NNPC crude oil lifting is made up of equity rude, royalty oil, tax oil, volume for third party fi nancing, and NPDC equity volume, stressing that remittances of proceeds from the above lifting are made according to statutory and production arrangements.

Accordingly, he said that proceeds from equity crude is paid by NNPC into the Federation Account which is held by the Central Bank of Nigeria, while the proceeds from Royalty oil is paid to Department of Petroleum Resources, DPR, whose designated account is managed by the same CBN.

Similarly, Yakubu said that the proceeds from Tax Oil or Petroleum Profi t Tax lifted by NNPC is paid directly into the Federal Inland Revenue Service, (FIRS) account also managed by the CBN, while the Third Party Finance and Trial Marketing volume are paid into designated Escrow accounts, while NPDC equity proceeds are remitted to NPDC account.

The NNPC boss said that contrary to the CBN letter which claims that for the period 1st Jan 2012 to 31st July 2013, total National crude oil liftings was 1.287 billion barrels, the corporation’s records show that the total national crude lifting for the same period was actually higher at 1.330 billion barrels.

On the alleged N22bn unpaid levies to the National Export Supervisory Scheme, the corporation said that the levies are paid to third party inspectors based on services rendered to the Federal Government. “Payment to the NESS is update as per value of work done,” it said.

The current position, according to Yakubu is that, NNPC has paid a total of $114.78 million from inception of NESS in 2009 up to October 2013 as against the total budget of $117.08 million for the same period. “These payments have been reconciled with the CBN, who are again the custodians of the NESS account that is operated on a draw-down basis by the CBN.”

The NNPC boss said that the allegation is “unfounded, baseless and a political instrument” for the 2015 general elections and an attempt to ridicule the corporation and its management.

Curiously, however, while the NNPC management took time out to deny the CBN governor’s allegations, the CBN governor merely said that it considers any further discussion on the issue as inappropriate.

In a statement by Ugochukwu Okoroafor, director, corporate communications, CBN, the apex bank said it would neither confirm nor deny the existence of such a letter but said the bank was aware of a proposal to set up a technical team made up of representatives from the Federal Ministry of Finance, the NNPC and the CBN to examine the sources of any revenue leakages and propose appropriate fiscal controls.

“The CBN welcomes these initiatives and believes that they represent a positive contribution to the process of improving the management of the economy, especially if they lead to greater oversight of the fi nance ministry over oil revenue and improvements on disclosure and transparency in the oil industry,” the statement said.

It noted that the capacity of the CBN to perform its role effectively is strengthened or undermined by the extent to which the nation is able to increase foreign exchange earnings and savings from these earnings, thus boosting the Excess Crude Savings Account, raising revenue levels, providing currency stability and moderating interest rates with limited risks to infl ation and fi nancial stability.

“In the performance of this role, it is natural for the CBN to be concerned at the low level of accretion to reserves of the Excess Crude Account, in spite of strong international oil prices, especially, as Nigeria’s performance is compared with other oil producing economies.”

 Written by Salami Semiu 

53 years after 120m Nigerians have no access to electricity – Egharhevwa

Aruviere Martin Egharhevwa is a young qualified Nigerian lawyer living in London, United Kingdom. In this interview with Saturday Vanguard Business, Urhobo born citizen of Delta State, laments the rate of unemployment among Nigerian youths, epileptic power supply that has crippled business operation in the country, insecurity and poor level of economic development in the country. Excerpts:

Since the ban of Okada in some states in Nigeria without a better replacement, insecurity is on the increase, what do you think is the solution?

The law enforcement agencies are seen by the perpetrators of crimes as impotent; and the courts, where they are meant to be prosecuted, as prostrate.Today, Nigeria is increasingly being seen and projected as a lawless state. The impression is that you can commit any type of crime and nothing would happen to you.

Thus anything can go and the system is helpless about it. It is for this and all such failures by the state that many see Nigeria either as a failed or failing state, depending on persuasion.

There is upsurge in crimes in Nigeria because it is not only lucrative; criminals hardly pay the price for their activities.

The nation’s dysfunctional judiciary has emboldened them the more. Suspects are arrested, but before you could think of what becomes of them they are released either on bail or surreptitiously. The same set of people goes back to their pastime.

Renowned American jurist, Justice Oliver Wendell Holmes, Jr., once said that crime in the eye of a bad guy is the consequences that go with its commission. The only solution to crime is justice; somebody must and should be held responsible for a crime. Thereafter, prosecution and subsequent sentencing.

Do you think the oil companies in the Niger Delta have done enough empowerment for their youths?

No! They have failed the people abysmally. Empowerment, even development and employment is comatose. Take my immediate community for example, Kokori Inland. We produce one of the best crude oil in the world but today the community is worse for it. No jobs for my people! Graduates, skilled workers and the rest of them are roaming our streets dejected and rejected by the multi nationals operating in the Niger Delta region.

Could you please suggest how Nigerian youths can be empowered?

Criminologists have known for ages that economic disaffiliation is one of the most potent triggers of counter-cultural and violent tendencies. They have known, too, that the disempowering tyranny of poverty and the all-too-familiar indiscretions that the exuberance of youth instigate are a combustible mix that all too often ignite extreme social conflagrations.

Nigerians don’t need any high-minded social science theorist to tell them this. They know, from their recent live experience, that poverty and youth don’t mix well. The Boko Haram violence, although now definitely fizzling out, is eloquent testimonial endorsement of this fact.

It isn’t accidental that Yobe and Borno states, which have the dubious honour of being among Nigeria’s states that are poor, bear the worst burden of the Boko Haram insurgency. Although the ideological masterminds of Boko Haram’s terror aren’t poor, its foot soldiers are recruited from the flotsam and jetsam of the populace, from the economically disaffiliated in the society, from young people who apparently have nothing to live for and can therefore be easily manipulated into unthinking, unreflecting extremism.

If British politician Benjamin Disraeli is right that “the youth of a nation are the trustees of posterity,” then the imperative of governance should be to give the youth of any society something to live for. In other words, the fulcrum of governance should revolve around securing the future of the youth, rejuvenating their hopes, and empowering their present.

Nigerians pay high tariff on power supply, yet they don’t have it. Recently, it has been increased, is it how it is being done abroad?

Not at all, you enjoy whatever you pay for. I must quickly state it that, I consider it unfair, unjust and unacceptable for government to place the big burden of electricity tariff on customers despite the increasingly deteriorating services of PHCN. There is no justification for it especially when the generality of electricity consumers across the country are yet to derive sustainable satisfaction from the services provided by the PHCN.

In spite of the high tariff, electricity supply across the country remains erratic. Domestic and industrial electricity consumers are not getting value for the outrageous monthly electricity bills they are forced to pay for poor services rendered by PHCN.

Across the country, businesses of artisans, small-scale entrepreneurs and other investors are being crippled by erratic electricity supply.

This has led to more blue-chip companies relocating from Nigeria to neighboring countries, where conducive operating environment is guaranteed. Whereas in Nigeria that aspires to be among the first 20 frontline economies in the world by 2020, 120 million of the 160 million people after 53 years of independence, have no access to electricity supply.

Also, as at 2006, more than 60 million generators were imported into the country yearly while a whopping sum of N1.6 trillion was expended on fueling generators.

It is scandalous that even The Presidency and the various tiers of government across the country are contributors to this avoidable waste and drain on the financial resources of the country. Importation of generators has become a big and highly lucrative business handled by a powerful and influential cabal. This seems why over the years, nothing is working in the power sector.

As long as the generator business is booming, the problem of epileptic power supply will persist since there is criminal collaboration between importers of generators and some unpatriotic and corrupt persons in high places.

By Moses Anosike
http://www.vanguardngr.com/2013/08/53-years-after-120m-nigerians-have-no-access-to-electricity-egharhevwa/

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?