Eight months into Godwin Emefiele’s ‘’Managed Float Exchange Rate System” – the verdict, at least so it appears, is that all is far from being well. If anything, things have gone much worse, not better, with the forex policy introduced in June last year. As predicted (or prophesied?), the naira has finally crossed the N500 line to the United States dollar; indeed, in the last two weeks, it has oscillated between N506 to N516. And so, the debate on whether the system can claim to have served the country well in the last eight months has ceased to be academic: it is the reality we now live with.
Little wonder, the governors at the National Economic Council, (NEC) on Thursday last week demanded an immediate review of the policy by the Central Bank of Nigeria (CBN). What they had in mind, they wouldn’t say. Be that as it may, the surprise is that it took them eight months to come to that conclusion.
Talk about the CBN being on the spot, weeks before, the cyber-sphere had been awash with all manners of theories – ranging from the outlandish to the harebrained –alleging serious economic crimes against the monetary authorities. Part of the frenzy of finding who to blame for the naira’s one-way trip to the Golgotha was to cast the Central Bank of Nigeria governor, Godwin Emefiele, in the lead of Project Kill the Naira! And as if determined to pour fuel into the raging inferno, Attorney General of the Federation and Minister of Justice, Abubakar Malami (SAN), reportedly issued the apex bank governor a query ostensibly to explain the charges – which I consider too base to list here – charges that may well have been dredged up from the vacuous rumour mill!
Of course, these are interesting times. Soon enough, there would be enough blames to go round for everyone.
For now, where do we go from here? From managed to the floating exchange rate regime, what next? We have turned full cycle. The former, despised for its rigidity – never mind that we had some semblance of stability – was blamed for sundry ills plaguing the economy. The latter, for all its pretences to the allocative power of the market has been a disaster (if it worked, we probably would not be talking of landing in the cesspit of recession).
Trust the manufacturer who could not access forex; the parent who could not remit wards’ fees to the college in a foreign university, the sundry importer whose 41-odd items were declared ineligible for official forex by Emefiele’s CBN, there is no telling the difference between the old and the new. Not even a good word from our hordes of analysts for whom the thriving black market is sufficient proof of the blind alley that the two policies have left us! Eight months on, we may have just realised how badly the Nigerian ailment has been misdiagnosed.
Here is what I wrote eight months ago when I first observed our obsession with forex management. The quest, I had reasoned, “stems from a fundamental misdiagnosis of the problem”. The problem, I had argued, being “more fundamental, touches on the ability of the economy to renew itself… the problem comes down to the tragedy of a nation that relies on a single commodity for all its forex; one that spends a disproportionate chunk of its forex on imports”.
Needless to state that I have been proven right. Few weeks later I had also warned on this page: “Had the economy’s minders spent as much time on how to get the economy on its feet as they have done on figuring out the arithmetic of sharing the shrinking piggy bank, we would probably be well on the way to developing the concrete policies to get some our critical industries revving back to life and to boost our forex stock”.
Today, we seem set for the same old prescriptions that brought us here in the first place. Never mind that the CBN has shouted itself hoarse; it appears that nobody is listening. The problem, says the apex bank, is that it does not have enough forex to go round! Unfortunately, unlike the naira which it has the liberty to print, the dollar is a no-go area.
Yet, we expect the naira to rebound by throwing it to the market hounds. And while we can do nothing about increasing the stock of forex in the piggy bank, we are also not prepared to give up our love for those exotic items that consume a huge chunk of our forex! And while Emefiele fails to play the magician, we demand that his head be served on the platter!
Just imagine the club of whiners. As it was in the very beginning, so it is even now: manufacturers, traders, contractors, portfolio investors to shady operators; name them; all them permanently on queue for forex. The range of demands is such that makes it tempting to assume that dollar has suddenly become the local medium of exchange. How could anyone not have foreseen the current unidirectional move of the naira more so at a time the supply of forex had severely contracted?
Merely by the amount of pressure brought to bear on Emefiele’s CBN in the last few days, expect to see some hastily packaged policies to ameliorate what is essentially a structural problem – something that requires deep thought as against superficial obsession with forex management. But then, that is the way of a people that would rather treat symptoms than tackle the disease.
Finally, I need to highlight another fundamental problem that the minders of the economy continue to ignore. Today, Nigerians worry that segment of that so-called parallel market has grown wings to the extent that it now plays the reference rate while the official inter-bank rate acts the adjunct. The question is: what are the monetary authorities doing about it? We are talking here of the club of unscrupulous actors known not only to prey on the system but have since become an atavistic force. What would it require to take them on? Why does the federal government prefer to feign helplessness in the face of their brutal assault on the nation’s currency? And where in the world, save Nigeria, are foreign currencies hawked on the highways as you would ‘pure water’?
What is the role of the Bureau de Change in the equation? By rule, they are supposed to serve the lower end of the market. Do they? Given that the latter operate strictly by its own opaque codes, what is the chance in a million that the CBN will ever be able to bring this segment within the loop of its forex management?
Is anyone still talking about respite for the naira?
SPONSORED BY 234NAIRA.COM:
SPONSORED BY 234NAIRA.COM: Former governor of Delta state, Chief James Ibori, has said he had been wrongly accused and maligned by those who said he stole, saying “I am not a thief, I cannot be a thief”.
Chief Ibori also said the biggest pain he felt over his travails was the suffering his people had to go through on account of his absence.
Speaking at a special thanksgiving service organised in his honour by his immediate community; the Oghara Kingdom, and held at the First Baptist
Church, Oghara, Chief Ibori also said his only testimony and joy now is the fact that he is alive and back to be with his people.
According to the former governor, who exhibited his overwhelming joy by dazzling the huge crowd of politicians, clergy, traditional rulers and
other enthusiasts who had graced the event, with dances, he had deduced that the intents of those who were behind his travails was to
separate him from his people.
He, however said he had no doubt that he would return home as he had put everything on God and believed that the God he trusted would stand by him.
that know me, you know that my entire life is a testimony itself and I have said it over and over again that my life is fashioned by God, directed by
God, sealed, acknowledged, blessed by God and I believe that since the day I was born.
“Like the Arch Bishop said, when this whole commotion started, what was most painful to me was the pain and suffering that my people were going
“It has nothing to do with me as a person because for some reasons like I said to you, I drew my strength from God and somehow, I knew that God would
stand by me, I knew that one day, and this day would come. I am indeed very please that I can now stand before you and look at your faces, faces that I
have missed and those of you that have indeed suffered the pains of my absence. It has nothing to do with me.
“So, when I reflect, it gives me joy that all your prayers, God has answered, all your supports and solidarity with me all through this period,
it is indeed not what I can begin to say. Like what our former chief of staff, Francis Agboroh said it is “ungbikuable”. If I am to give testimony
of my journey you will not leave here. The only testimony that I have is the fact that I am back and alive in your midst. And again I say that I
never had any doubt in my mind that I would get back home.
“When I looked at how things were going, I discovered that they want to separate me from you people. They want me to go to the corner where I won’t
be seen. That’s how I see it. At a point I called my elder brother (Former Governor Uduaghan) it is how I can get home is what I am about to do now.
It was a pragmatic decision.
“I am happy to be home with my people. There is nobody that can battle with the Lord. Urhobo adage says there is time for everything (okemutie). A day
will come when I will tell my story and every one of you will hear me. Today is to thank God”, Ibori said.
SPONSORED BY X365TV.COM: A Nigerian, Babs Rasaki, based in Brazil, has appeared before Magistrate Judy Latchman in Guyana to answer to fraud related charges. The man was remanded to prison.
Rasaki denied the charge which alleged that on January 9 and 13, at Georgetown and with intent to defraud, he obtained from the Lucky Dollar store one washing machine, a television set and other articles valued at Guyanese $582,495( $2794 US), by virtue of an American Express credit card, in the name of Ann Clara Angelino, knowing same to be forged. ADVERTISING Babs Rasaki: remanded in prison for fraud.
The second charge read that the accused, on January 10 at Wellington Street, Georgetown, and with intent to defraud, obtained from Gizmos and Gadgets two iPhones, valued $550,000, ($2638 US)by virtue of an American Express credit card in the name of Ann Clara Angelino, knowing same to be forged. Rasaki, who was unrepresented, told the court that on the days in question, he had accompanied Angelino, who is of Brazilian descent and does not speak English, to the business enterprises and made the purchases on her behalf.
Bail was refused on the grounds that he does not have family in Guyana or a local address in the jurisdiction. Police are also currently conducting an investigation with regards to the other documents found in his possession. The man will face Chief Magistrate Ann McLennan on February 16.
The story of Onyebuchi Emecheta whom the world knew as Buchi, is at the same time that of a personal and communal triumph; the triumph of the personal will and communal efforts over the vicissitudes of life. Much has been said about her deprivations at childhood. Without meaning to water that down in any way, I would wish to place it in its truest perspective.
She grew up in the 1940s; a time of widespread social change in Nigeria. Primary school education was still sipping into many parts of the Nigerian hinterland, starting from the litoral areas such as Lagos and Calabar where the first white Christian evangelists first established their schools. By the 1940s, poverty was still widespread in Nigeria and the urban centres were still few and far between. While primary school education was within the reach of any child whose parents were forward looking, or who had embraced Christianity, the Christian missionary schools that were coming up even in the villages, secondary school education were open only for the most fortunate few. Buchi Emecheta, who by this time was already living in Nigeria’s greatest metropolis, Lagos, was among the fortunate few. Her father, a veteran who had fought in Burma during the Second World War on the side of Britain, had an uncommon exposure that opened up several doors. No wonder, he was working in the then elite work force of Nigeria; the railways.
So, Buchi had a life of promise before her. Then tragedy struck! Her father died. She was barely eight years old by then. Despite all the promise of the life of the intellect ahead of her, despite her visible intelligence due to the top-flight results she must have earned in the primary school classes she may have attended. That her father died would have spelt the end of the road for Buchi Emechete but for something that has remained a major plank of the progress, the remarkable progress, the unstoppable progress, the celebratory progress that has set Ibusa apart as a domain of progress and development. That thing is communal effort.
In Ibusa town, the saying that “it takes a village to train a child”, is still coming true today as it did when Buchi Emechieta was a girl child in need of financial help in the 1940s. When words reached Mr. Hallim, a then senior civil service staff of the old Western Region Civil Service at Ibadan, that there was a prodigiously gifted girl who has exhibited a splash of brilliance in her short stint at school, like a meteor streaking through the night sky, he reacted like the average Ibusa man or woman; that the young Buchi must return to school. We may never know how Mr. Halim came about that fateful knowledge; was it discussed at a meeting attended by Ibusa people? Or was the issue raised by friends of Buchi’s late father? Well, what is important is the result; Buchi returned to school because an Ibusa man who was not her real father treated her as though she were his own real daughter. From there, Onyebuchi opened up her wings and soared like the eagle. From there, she studied voraciously. From there she became the Buchi that was known and celebrated across the globe. From there, she became the Buchi that the world has joined Ibusa town to mourn today.
There is the other Buchi, the product of hard work; the single mother who raised five children and still found the time to author 21 books. The challenges she faced and overcame were fully reflected in Buchi’s often-autobiographical literary harvest. Somebody wrote about her that: “The main source of inspiration for her writing, however, was Africa, and in particular the villages of Ibusa in (Delta State) Nigeria where her family came from. Even though she had spent a relatively brief period of her childhood there, the villages and the stories she heard on her visits with her mother left an indelible mark on the impressionable young girl and became the lodestone for all she wrote. In The Slave Girl (1977, for which she won the New Statesman’s jock Campbell award), The Bride Price (1976), and the ironically titled The Joys of Motherhood (1979), she poignantly captured, in a manner reminiscent of her male contemporary Chinua Achebe, a vanishing Igbo culture in the process of transition to modernity”.
Mr. Sylvester Onwordi, the man who wrote those words should know Buchi intimately because he is her very own son. And not surprisingly, he is a writer too! So, even though Buchi Emecheta left Ibusa very early in life, Ibusa never left her for a minute. She remained a true Ibusa daughter, giving her literary creativity sustenance from Ibusa.
She not only identified with the Ibusa, she flew the Ibusa flag to the farthest corners of Planet Earth for wherever her books were ever read, the blog on the book covers always announced the name of her home town as though she always felt the duty to pay homage to the place of her birth. Her son wrote: “A constant refrain throughout my childhood was that she would one day return to Ibusa – a place that took on an almost mythical significance for us within the family. She made many plans to return over many years, even building a house in the village while working as professor at the University of Calabar – an experience that formed the basis for her novel Double Yoke (1983). But having lived in the UK for so many years, she found it increasingly difficult to adapt to life in modern Nigeria. And Ibusa, in her long absence, was transforming itself into a town and a conurbation that she barely recognized any more”.
Just like Buchi the girl that left Ibusa in her childhood changed, so too did her dear town also change for change is the only constant in life. None can begrudge her not returning to live fully in Ibusa, no that would be asking for too much. That she knew and cherished where she came from, is enough for us. What has never been in doubt is her love for Ibusa. Although the first reaction, upon hearing of her death, is to mourn, this is not dirge. Instead, I hereby raise a hymn of celebration to thank God for sending to Ibusa such a wonderfully gifted writer. Instead of mourning, I hereby celebrate her focus in life and the hard work behind all she achieved.
Yes, I celebrate Onyebuchi Emecheta, the Ibusa girl who conquered the world. She lived a life of great productivity that she lifted herself to the pantheon of the immortals with the Chinua Achebes; for as long as her books continue to be read, for that long is she alive. Buchi Emecheta, we can never forget you for you have given us so much to remember you by. Rest in perfect peace our daughter, our mother, our aunt. Rest in perfect peace dear true success story that will continue to serve as a role model to every girl child all over the world. Rest in perfect peace dear daughter of Ibusa, “Ezigbo ada Igbuzo nodu nma”
Dr. Austin Izagbo President – General Ibusa Community Development Union (ICDU) Worldwide
SPONSORED BY KODUGA.COM...THE CLASSIFIEDS ADS WEBSITE: Tosin Owobo, a witness of the Economic and Financial Crimes Commission (EFCC), testifying in the trial of Air Marshall Adesola Amosu Nanayon (retired), a former Nigeria’s Chief of Air Staff (COAS), on Wednesday, narrated before a Federal High Court sitting in Lagos how Amosu diverted the sum of N3 billion meant for NIMASA to his personal oil and gas companies.
Owobo, an Assistant Detective Superintendent with the EFCC, gave detailed summary of
how the former Air force Chief, received the money from Nigeria Maritime Administration and Safety Agency (NIMASA) under the leadership of Patrick Akpolobokemi.
Amosu is standing trial alongside Air vice Marshal Jacob Bola Adigun, Air Commodore Gbadebo Owodunni Olugbenga and eight companies over the alleged N22.8 billion fraud.
The companies are: Delfina Oil and Gas Ltd, Mcallan Oil And Gas Limited, Hebron Housing and Properties Company Limited, Trapezites BDC, Fonds and Pricey Ltd, Deegee Oil and Gas Limited, Timsegg Investment Limited and Solomon Health Care.
At the resumed hearing of the case on Wednesday, Owobo informed the court that the anti-graft agency during investigation discovered that there was a Memorandum of Understanding (MOU) between Nigerian Air force (NAF) and NIMASA while Air Marshall Alex Badeh was the nation’s Chief of Air Staff, and that a sum of N1. 480 billion was paid to NAF in 2014, from Nigerian Maritime Administration and Safety Agency (NIMASA), for securing the nation’s Maritime.
He said the money was paid in two tranches of N1.480 million, into an account with Skye Bank.
Awobo also informed the court that on resumption in by Air Marshall Amosu as the nation’s COAS, he made a proposal of N4 billion to NIMASA which he claimed was needed to manage the Maritime security, but stated that the former Director-General of NIMASA, Akpolobokemi only released the sum of N3 billion, which was paid in three tranches of N1 billion each into Special Emergency Operation of NAF.
Furthermore, the witness who is the third witness in the criminal trial stated that upon investigation on how the money was spent, it was discovered that the monies were diverted into the Amosu’s Oil and Gas firms.
The oil and gas firms which the monies were diverted are: Right Option Oil and Gas Limited, Delfina Oil and Gas Limited, Mcallan Oil and Gas Limited, and Deegee Oil and Gas Limited.
However, an attempt by the witness to give details on the documents was opposed by the lawyers representing the accused persons.
The accused persons’ lawyers led by Chief Bolaji Ayorinde, Kemi Balogun, Norrison Quakers, all Senior Advocates of Nigeria (SANs), argued that the witness is not the maker of the exhibits tendered, neither did he confirm the authentication of the documents from the maker, therefore, he cannot give evidence on the exhibits.
However, the EFCC prosecutor, Rotimi Oyedepo, while urging the court to discountenance the objection raised by the defence, told the court that the witness is an Investigating Officer, who investigated the alleged crime, so he can give evidence on the exhibits (documents) tendered.
The matter has been adjourned till Thursday for ruling on whether the witness can give evidence on the documents tendered or not, and for continuation of trial of accused persons.
It would be recalled that the accused persons were first arraigned before the court on June 29, on 23 counts charge bordering on Fraud, money laundering, and stealing.
SPONSORED BY 234NAIRA.COM: ABUJA – The Federal Government through the Office of the Inspector General of Police, has entered two separate criminal charges against the former Governor of Benue State, Mr. Gabriel Suswam. Suswam who piloted affairs of Benue State from 2007 to 2015, was accused of fraudulently diverting over N3.1billion from coffers of the state.
Suswam In the two sets of charges marked FHC/ABJ/CR/255/ 2016 and FHC/ABJ/CR/256/2016, containing six and two counts respectively, FG also cited former Commissioner of Finance in Benue state, Mr. Omodachi Okolobia and one Janet Aluga as co-defendants in the matter. Meantime, the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami, SAN, has directed Police to transfer the case-files to his office.
Police prosecutor, Mr. David Igbodo made the revelation when the cases were called-up for mention before trial Justice Gabriel Kolawole on Wednesday. Igbodo said the cases were sent to the AGF owing to “the quantum of evidence” uncovered by the Police. Sequel to his application, Justice Kolawole adjourned the matter sine-die (indefinitely). Suswam and Okolobia were previously docked before Justice Ahmed Mohammed of the same high court on a nine-count money laundering charge.
The defendants who were arraigned on November 10, 2015, were accused of diverting proceeds of shares owned by the Benue State government and Benue Investment & Property Company Ltd. Though they pleaded not guilty to the charge, the EFCC however maintained that it has sufficient evidence to prove that they committed an offence punishable under section 15(3) of the Money Laundering (Prohibition) Act 2011 as amended in 2012.
SPONSORED BY CHIQUEMAGAZINE.COM: THE Economic and Financial Crimes Commission (EFCC) on Wednesday re-arraigned the former Chief of Air Staff, Air Marshal Mohammed Dikko Umar before Justice Nnamdi Dimgba of a Federal High Court in Abuja over alleged N4.8billion.
The anti-graft agency has accused Umar of using the funds he siphoned from accounts of the Nigerian Air Force (NAF), between September 2010 and December 2012, and purchased six choice properties in Abuja, Kano and Kaduna State.
In the charge marked FHC/ABJ/CR/92/ 2016, EFCC alleged that the former Air Force boss transferred N66million into the Stanbic IBTC account No. 9202077424 belonging to Capital Law office, from NAF operations account domiciled at UBA Plc, for the renovation/improvement of a house at No 1853 Deng Xiao Ping Street, Off Mahathir Mohammed Street, Asokoro Extension Abuja.
It told the court that Umar had between September and December 2012 in Abuja, used the Dollar equivalent of N500million removed from NAF account to purchase a four Bedroom Duplex with Boys Quarters at Road 3B Street 2, Mabushi Ministers Hill, Abuja.
That the defendant also used the US Dollar equivalent of N250million to purchase a property situated at No 14, Audu Bako Way, G.R.A. Kano State, in 2011.
Meanwhile, the defendant who was earlier docked before the high court on May 11, 2016, pleaded not guilty to the charge before Justice Nnamdi Dimgba, even as his lawyer, Mr. Hassan Liman (SAN), applied for his release on bail.
Liman prayed the court to allow his client to go home on self-recognition as he was previously allowed to do by Justice Binta Nyako who was hitherto in charge of the case.
Though EFCC lawyer, Mr. Tahir Sylvanus did not oppose Umar’s bail request, he however urged the court to impose some conditions.
In a bench ruling, Justice Dimgba directed the defendant to surrender his international passports to the deputy registrar of the court, as well as to produce two sureties who must not only own landed properties in Abuja, but must also depose to an affidavit of means before the court.
The court fixed February 13 and 16, 2017 for the commencement of hearing.
One of the charges against Umar read: “That you, Air Marshal Mohammed Dikko Umar, whilst being the Chief of Air Staff, Nigerian Air Force between September 2010 to September 2012 in Abuja, within the jurisdiction of the court directly converted the United States Dollars equivalent of the aggregate sum of N4846000 only removed from the accounts of the Nigerian Air Force, when you reasonably ought to have known that the said funds formed part of the proceeds of your unlawful activity, to wit, criminal breach of trust and corruption, and you thereby committed an offence contrary section 15(2)(b) of the Money Laundering Prohibition Act 2011 as amended and punishable under Section 15(3) of the same Act”.
Rather than exerting energy on what brought about the parlous state of the Nigerian economy and how the country fell into recession, the Federal Government should initiate reforms to revamp the economy. Stanbic IBTC Holdings Plc Chairman ATEDO PETERSIDE, in this article entitled: “Eleven actions required for speedy economic turnaround”, gives 11 nuggets that can lift the economy.
The Federal Government is doing some things right, such as the effort to curb overhead expenditures and to be more frugal than past administrations, but then, they are also doing many things wrong. There is a reluctance to completely break from the past and embrace significant economic reforms, even when our present predicament clearly warrants same.
We are now facing an economic crisis. A crisis is an inflection point. It is that point when multiple outcomes become possible. 2017 represents the last full calendar year that this administration has within which it must embrace major economic reforms, if it expects to still attain many of the more palatable economic outcomes. It is no use arguing over who, or what caused the economic recession (-2 per cent growth) and high inflation rate (over 18.5 per cent p.a.) that we are currently facing; far better to focus on what we need to do to get us out of this sorry state.
There are several units within the Federal Government that appear to be working hard. Sadly, most of them are working in “silos” and solving fringe problems. What appears to be still missing is a bold, holistic and audacious effort to harmonize fiscal, monetary, exchange rate, trade and macro-prudential policies in a concerted manner. Very few people want to take on the “big gorilla” in the room. That is why the impact of the Federal Government’s Economic Management Team (EMT) is not being felt.
Because many fear for their jobs, they are not interested in tackling their colleagues whose actions are negating and/or eliminating the most positive outcomes that the government owes the electorate.
I know that there are those who will criticize me for saying that the Federal Government’s economic policy direction remains unclear. My response to them is that the most significant economic reforms embraced so far by Federal Government came about rather reluctantly, for instance by Federal Government hanging on to an untenable position until it eventually disentangled itself or got overpowered by its own internal contradictions.
We saw this with petrol prices and also the devaluation of the naira. When these “reforms” came, they arrived in the form of half-measures. Thus, we stopped short of full petrol price deregulation and introduced an unsustainable price fix instead. We equally stopped short of adopting truly market-determined exchange rates and instead embraced a “fudge” that spewed widely divergent multiple exchange rates. Half measures typically bring some pain, but often fail (as in this case) to yield any lasting gain.
The rest of this article will discuss 11 major policy actions which the Federal Government should consider. We must shake off the indolent mindset that leads us to believe that all constitutional changes are taboo. Accordingly, I seek to draw attention to the following 11 important items on which major action is still required.
• The Central Bank of Nigeria (CBN) should accept that its foreign exchange and demand management policies have failed. The more restrictions they have placed on forex repatriation, the less likely it has become that badly needed forex inflows from portfolio investors, foreign direct investors and Nigerians will pick up. Privileged access to CBN’s forex allocations has become the best investment game in town for the politically well-connected. Furthermore, the directive to banks to allocate 60 per cent of forex to manufacturers, who account for only 10 per cent of the Gross Domestic Product (GDP) (including owners of zombie industries which are horribly import-dependent), has exacerbated an already bad supply situation. Forty per cent is much too small to accommodate the rest of the economy and so all other sectors (90 per cent of GDP) have been crippled.
This has unleashed panic, thereby sending the parallel market to the high heavens. Forex inflows disappeared partly because of the uncertainty surrounding the ability to repatriate interest/dividends through an overly restrictive 40 per cent window. There is no scientific basis for this 60 per cent /40 per cent rule. Meanwhile it has huge adverse distortionary implications on the supply side. The end-result has been our mind-boggling and widely divergent multiple exchange rates which have spooked investors who have taken fright and also taken flight. Sadly, we have effectively “shot ourselves in the foot” by taking ill-advised actions that crippled both forex inflows and the Service sector in particular (over 50 per cent of GDP).
· Three preceding administrations ended up brokering peace deals with Niger Delta militants. The Federal Government should urgently pursue high-powered negotiations which should be brokered by persons with a healthy track record in this activity and the ancillary pipeline protection business – it can net Federal Government $6 billion a year. In the longer term, I favour a constitutional amendment that reserves a one per cent royalty payment to immediate host communities on all mining and mineral producing activity (including limestone, oil and precious stones among others).
Communities will then be well-incentivised to keep production activity going. This is preferable to a long-term reliance on amnesty payments which constitute a moral hazard. A 13 per cent derivation payment to a possibly “unaccountable and distant” state governor does not filter down to host communities.
• We should simultaneously embark upon some asset sales which improve long-term efficiency and will yield foreign currency. I argued in my ‘LETTER TO MY COUNTRYMEN’ published on October 1, 2016, that the Federal Government share of the major Oil Joint Ventures of International Oil Companies (IOCs) should be sold down to 40 per cent or no more than 49 per cent. This would represent a replica of the highly successful Nigeria Liquefied Natural Gas (NLNG) model that provides a healthy dividend stream for the government. If it is good for NLNG, then it should be good for the IOCs too. Asset sales can yield $15-$20 billion over the course of the next two years if planned carefully.
•We urgently need to deregulate the entire downstream petroleum sector and also privatise Nigerian National Petroleum Company’s (NNPC’s) three refineries, depots and pipelines and domestic gas.
• Our civil/public service is still bloated, corrupt and inefficient and has become the excuse for a privileged two per cent of the population to consume close to 60-70 per cent of the annual budget via the recurrent expenditure vote. Methinks mass redundancies are now inevitable because the nation is stuck with a public service and legislators that we could only afford at $100 per barrel oil prices.
• Less than 25 per cent of our 36 states are economically viable. The obvious answer is political restructuring, as unpalatable as it may sound to some. In terms of overhead spending, we have to rejig our political structure so that significant overheads are transferred from 36 states to 6 zonal centres. We should keep an open mind towards this political restructuring argument because it is not even true that homogeneity within a state or zone necessarily guarantees peace. Somalia is homogenous and yet, it is probably the closest thing there is today globally to a failed state. Conversely, there are communities, states and nations around the world which are heterogeneous, but which are living peacefully together.
• To help overcome, the social and physical infrastructure deficit, we must embrace the private sector as the engine of growth and a capable partner/financier of infrastructural development. The power and transportation sectors are crying for more and not less privatisation. The logic of the power sector reforms was built around the adoption of cost-reflective tariffs, which we have since thrown out of the window. The transmission sector and gas supply difficulties are some of the other weak links in the power value chain.
• A dysfunctional legal system is an impediment to the rapid growth of a modern economy. The Chief Justice of the Federation must “buy into” and spearhead radical reform of our legal system.
· The anti-corruption crusade will only complement the positive changes envisaged above if the government itself respects the rule of law and obeys the courts. We should err on the side of extending the “benefit of the doubt” to accused persons whenever allegations cannot be proven beyond reasonable doubt. It is better to let four people who might be guilty go free than to convict one innocent man. The latter drains all the energy out of the anticorruption crusade and also destroys business confidence.
· Restoring business confidence should be the primary preoccupation guiding virtually every statement by public officers. This calls for a paradigm shift because the current preoccupation is for every Minister, Governor, Regulator or overzealous official to threaten investors with closure, bankruptcy, fines or seizure of their goods. Frightened businessmen (local or foreign) will not invest. We should be wooing investors instead of threatening them.
· The Federal Government should immediately appoint directors to the boards of every regulatory agency. The important lesson from the recent Financial Reporting Council (FRC) of Nigeria imbroglio is that a single rogue regulator can hold the entire system to ransom, help destroy business confidence and hamper economic growth. This only becomes possible when the checks and balances which our laws envisaged, through the appointment of boards, council members or commissioners, are not in place.
Our economy is underperforming because, amongst other things, it is caught up in a low foreign exchange trap. Borrowing forex without instituting necessary and badly-needed economic and structural reforms is akin to suicide. Those who are canvassing for more foreign debt simply because our debt/GDP ratio is low are overlooking the fact that our debt service ratios are already high. Our debt service ratios are high because our Tax/GDP ratio at six per cent is exceedingly poor and so, it will require a few years of concerted action to raise it significantly. Relying on debt alone to ease the forex trap is therefore a high risk strategy. That is why I also emphasise two) and three) above.
Nigerians take pride in arguing that the Lord loves us and so, he always intervenes by bringing us back from the precipice in the nick of time. I do not doubt that. What I truly believe is that the Lord intervenes through people. After the unbridled insults that were heaped on the Emir of Kano (Alhaji Muhammad Sanusi II) and a few others who dared to tell the government the truth about the parlous state of our economy, the easiest path for me would have been to keep quiet or to simply blame speculators, detractors or past regimes. If I did that then the attack dogs would have won. No, I am not about to abandon my right to free speech on account of some insincere sycophants.
I speak because I want my country to improve.
THOSE who were in Lagos around 1991-2 would remember Forum Finance located on Allen Avenue in Ikeja,a company that employed a number of young men and women in flashy cars going about town duping the gullible of their hard earned money. Its famous advert was “Forum go double your money!”. It paid outrageous returns to its earlier investors and this made many fools to part with their money . By the time the bubble burst,it was sorrow and tears for thousands of unwary who lost their fortunes to the Ponzi scheme . Ponzi schemes are named after Charles Ponzi, an Italian immigrant who perpetrated a legendary scam. Actually, he wasn’t the inventor of this type of scams – it was called “Robbing Peter to pay Paul” schemes – but his was so large that his name became synonymous with it. Ponzi started a business buying and selling a type of postal coupon and promised investors a 50% return on their money within 45 days (compare this to an annual 5% interest for bank savings account at the time).
Money from investors
Ponzi’s early investors did get their money doubled and even tripled in a short amount of time. This, and glowing newspaper reports at the time about his company, the Securities Exchange Company got him a lot of money from investors. At one point, Ponzi took in $1 million in a three-hour period from investors. All in all, about 40,000 investors invested about $15 million in Ponzi’s scheme in nine months between 1919 and 1920 (about $184 million in 2017 value).
When it was discovered that Ponzi was paying old investors with money from new ones, his scheme collapsed and he was sent to jail … for five years! After serving his federal sentence, Ponzi was sentenced by the State of Massachusetts for an additional nine years, but he skipped town. Ponzi ended up in Brazil, where he spent his last years in poverty and sickness. Before he died, Ponzi gave one last interview where he confessed to his crime. “My business is simple. It was the old game of robbing Peter to pay Paul. You would give me one hundred dollars and I would give you a note to pay you one-hundred-and-fifty dollars in three months. Usually I would redeem my note in 45 days. My notes became more valuable than American money … Then came trouble. The whole thing was broken.” (Zuckoff, Mitchell, Ponzi’s Scheme: The True Story of a Financial Legend, p. 313)
Early Ponzi schemes:
In the 1980s in San Diego, California, J. David & Company, a purported currency and commodity trading and investing operation named after its founder, J. David Dominelli, a withdrawn and shy currency and commodity trader, was revealed to be a Ponzi scheme which took in $200 million and returned $120 million to investors, leaving a net loss of $80 million. The scheme touched all levels of upper class business and professional life in San Diego and environs. One of those most closely involved was Nancy Hoover, the mayor of Del Mar, California, a cozy upscale beach town just north of La Jolla. Hoover was J. David’s assistant and live-in companion at the time. Also involved was the prominent New York law firm Rogers & Wells (now Clifford Chance), which had advised J. David (through a rogue partner) and others. When the fall came, J. David briefly escaped to Montserrat in the Caribbean, but was returned ultimately to plead guilty to federal charges and was sentenced to 20 years imprisonment,serving 10 before being paroled. You should not have forgotten now that financier Bernard “Bernie” Madoff was arrested for running a Ponzi scheme. There are four notable facts about his operation: It was the largest (dollar-wise) It was the longest-running (known) Ponzi scheme in history. Investigators sifting through the record found evidence of hanky panky since the 1970s. It was perpetrated by one of the pillars of Wall Street – Madoff was a former chairman of NASDAQ His victims are some of the most financially savvy and rich people in the world (you need at least $20 million to “invest” with him). His website used to say before it was taken over by authorities: In an era of faceless organizations owned by other equally faceless organizations, Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner’s name is on the door. Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm’s hallmark. There was also Biletov or fractions of shares of the MMM Corp, bearing the likeness of Sergey Mavrodi. Just one million people? Meh, said Sergey Mavrodi. His scheme duped two million people!
The Mavrodi scheme:
Mavrodi was a Russian scammer who along with his brother Vyacheslav Mavrodi and Vyacheslav’s future wife Marina Murayveya, founded the MMM company in (the triple Ms came from the surnames of these three people). In the early 1990s, MMM promised dividends of 1,000%, promoted itself heavily in TV ads, and delivered on its promise. At its peak, Mavrodi’s company was taking in more than $11 million a day from the public! Within five years, Mavrodi took in $1.5 billion from at least two million people. When the whole thing unraveled and the police raided MMM offices for tax evasion, Mavrodi pulled another fast one: he convinced his “investors” that it was the government’s fault that they lost their investment. He even ran for the Russian State Duma (the lower house of parliament) to get the government to initiate a “payback” programme … and he was elected! That was a good thing because he got himself a parliamentary immunity. When his immunity was later revoked, Mavrodi went on the lam. In 2003, he was arrested , fined $390, and sent to a penal colony for four-and-a-half years. That translates to about $38,052 swindled per hour in the slammer. MMM surfaced in Nigeria in 2016 with a promise on 30 per cent return on any money into the scheme in 30days!
House of Reps intervention
The House of Representatives did one good in its life by warning people against this scam. It asked the Economic and Financial Crimes Commission, EFCC, and the Central Bank, CBN, of Nigeria to immediately go after the promoters Mavrodi Mondial Moneybox, otherwise known as ‘MMM’ in Nigeria. Lawmakers strongly opposed the investment scheme, which lately gained popularity among Nigerians in the wake of the current economic recession in the country. The Chairman, House Committee on Telecommunications, Mr. Saheed Fijabi, had in a motion, drawn the attention of the House to the growing popularity of the scheme among Nigerians. “The scheme entered the Nigerian circle in 2016, capitalising on the high level of unemployment and poverty to deceive unwary Nigerians into falling prey to their antics”, Fijabi stated. He added that the fact that MMM was not regulated by law or approved by the CBN as a secure business venture, made Nigerians more vulnerable. Nobody did anything. By December 2016 when the company froze the accounts of its 3m “muguns’ it had raked billions of Naira unhindered.
The level of our ethical collapse was seen with images of worship places that should teach the right values about wealth creation organizing Ponzi seminars for MMM in their auditoria.How low can it get for a country . Our security agents who were raiding Bureau De Change operators months ago are not yet on record to have gone after the MMM operators who are not known to gave been licensed by the CBN to carry out any financial operations in Nigeria. Is there a government here? My heart sank when I saw Nigerians in their hundreds dancing and holding a vigil on the eve of the January 14 promise by the Ponzi schemers to start another round of duping session. My conclusion was that these people are irretrievably damaged psychologically and it would take a major shock in the system to get them to reason like normal cognitive human beings on this side of eternity. Is their fault totally ? No,I think the wayward Nigerian system which places emphasis on “sharing” has turned them into playthings in the hands of scammer because of expectations of free money in the order of our allocation mentality.
Goodnight, Alfred Ilenre!
THE cold hands of death came calling last week plucking one of the most consistent and clear headed activists in the crusade for the restructuring of Nigeria, Mr. Alfred Ilenre at the age of 76. Mr. Ilenre was a journalist with the Nigerian Tribune. Midwest Champion,Nigeria Observer and Nigerian Herald among others. He was until his Death the General Secretary of Ethnic Minorities Rights Organisation of Africa, EMIROAF, and an effective participant in many platforms that are concerned with getting the proper structures for Nigeria, I met him for the first time in 1990 when I went to the Tejuosho office of the late Ken Saro-Wiwa to interview him for The Punch newspapers.He was to make use of the office with Ken’s PA,Wayi, for many years after he was hung to sustain the struggle he died for.
We worked closely ever since then. I would call him to make appearances on TV every now and again because of his clarity and then on issues of common concern and he would always oblige except he was not in town. My last contact with him was in the home of the renowned poet,Odia Ofeimun during which we shared some thoughts as we used to do. I was to see him again after that with my wife as he was driving on some Lagos street but he did not hear our calling. The struggle for federalism in Nigeria has once again lost one of its most erudite disciples but it definitely continues .
It is heart-warming for me to see you, Senators, back in good health, refreshed and energised for the work ahead. Let me on behalf of the entire leadership wish you and all Nigerians a very happy new year. 2016, was a very challenging year for all of us. I assure you that the work we have done so far is gradually setting the stage for a greater and better 2017. Let me, therefore, begin this address by thanking every one of you for the hard work and dedication exhibited in the last quarter of last year to keep the promise we made to all Nigerians that we would pass laws that would make the difference in their lives.
It is already historic that within the last quarter, which incidentally is the second quarter of this session, we all rolled up our sleeves, with sweat on our brows and successfully passed 49 bills through 3rd reading and 68 bills through second reading. This is a record-setting feat, which has never been matched in the history of the National Assembly. That within a period of four months in the middle of the term of any past National Assembly, 49 bills are passed in a single quarter. I want to especially thank all the committees who worked tireless to help us achieve this milestone. Let me also thank President Muhammadu Buhari for showing faith with the work we are doing here at the National Assembly as he has by today signed into law 16 of the bills we have passed.
As long as our economy is still in recession, our work is not done. Because our people are still being laid off; so long as factories are closing shop, for as long as the hardship in the land continues to bite harder, investment continues to dwindle and the foreign exchange market remains fragmented, I will be demanding even much more from us to get all our economic reform bills passed. Ideally, we would like to see them pass together with the 2017 budget. Let me therefore urge all our committees involved with our priority bills to double efforts to ensure that by the end of the first quarter of this year we will have these bills ready.
We promise to pass our priority economic reform bills to help aid our economic recovery. This is a promise we must keep. There are already, new NASSBER research findings projecting that our priority bills, will have an output impact equivalent to an average of 6.87 percent of GDP over a 5-year period on the economy. The average annual growth in jobs is estimated at approximately 7.55 million additional employment as well as an average of 16.42 percent reduction in Nigeria’s poverty rate. Over the projected 5-year period, it is suggested that the reforms, which these bills would engender, may add an average of N3.76 Trillion to National income (National Disposable Income was N85.62 trillion in 2014), equivalent to 4.39 percent of 2014 figures.
These statistics make the delivery of these bills imperative and confirm evidently that we have got our priorities right so far. It is hoped that as we begin to turn our focus now towards the passage of the 2017 budget, these bills will be implemented simultaneously with the budget to enable us exit the recession quickly.
It is therefore imperative that we immediately begin work earnestly on the MTEF to ensure passage by the end of the week. In this way, consideration and debate on the 2017 budget will immediately follow in the three “sitting days” of the next week. It is our hope that we will with this budget begin the implementation of the report of the Committee on Budget Reforms, which has since submitted its report. This will enable more Nigerians participate in the budget consideration process, deepen the review and create the necessary efficiencies we expect from our budget implementation.
There is hardly a point reiterating the importance of making the 2017 budget the most successful budget we have ever passed, neither is it important to emphasise the need to have this budget back on the desk of the executive on time for implementation. As you may be aware, based on the recommendations of the Budget Reform Committee, we are working towards ensuring that budgets are prepared and submitted timely, so that implementation will follow a regular fiscal circle. In this regard, the National Assembly will not tolerate agencies of government not submitting their budgets within the budget period. This is why I urge all agencies yet to submit their budgets to do so quickly as budgets not received within time may have to wait for the next budget circle.
The budget is the most critical instrument within our public context for economic reordering. It is an effective tool to stimulate the economy, ensure an even distribution of development across the country; and give the “Made In Nigeria” initiative the impetus to survive and in the long term, sustain itself. In this particular regard, the Senate has played its part by passing the amendment to the Procurement Act for which we are awaiting concurrence by the House and for the immediate assent of the President. Once this happens, we will not rest at simply assigning it back to the relevant committee but rather, we all will play our part to ensure that all government agencies comply with the law. I for one, intend to put the full weight of my Office behind this initiative to build the trust and ensuing patronage of Nigerians in goods and products made by our own people. I truly believe that this is the singular policy that can play a key role in getting out of this recession, provide the needed jobs; and keep the economy going.
The issue of policy inconsistencies remains an issue that continues to challenge our business environment. I have in the past argued and still hold the view that for a private sector-led economy to thrive, we need to reform our policy environment to give investors and our businessmen and women ample adjustment time to make informed investment decisions rather than have uncertainties. This is especially important in the agriculture and solid mineral sectors where we have significant economies of scale and opportunities for diversification of our economy. In view of this, we shall, in consultation with stakeholders across board, be looking at legislative measures that could increase the potential for a more stable policy environment starting with the agricultural businesses and solid mineral resources sectors of our economy.
Before we left for the break, I and a few others met with stakeholders in the power sector to get an understanding of why no progress has been made thus far despite the best intention; and the revelations were mind-boggling. There had been errors in the privatisation process and the model by which the power sector is being operated—whether at generation or distribution—will never take us where we need to be. It has failed and nobody appears willing to tackle the issue head-on towards a permanent resolution. I have mandated the Senate Committee on Power to continue the consultation with the relevant parties to forge a path to solving our crippling power deficit. After all, if we are going to drive Nigerian industry, we need to resolve this and fast.
While we have our attention on the economy and are working with sweat on our brows to improve it for the betterment of our people, we cannot lose sight of the callous and growing circle of violence across the country, especially now in southern Kaduna. We condemn in totality to depravity being exhibited on the streets of Kafanchan. This Senate will not pay lip service to it neither will it sit idly by and watch innocent Nigerians being slaughtered on the basis of their religion, ethnic group or political persuasion. No, we will not stand aloof. Let me therefore; use this opportunity to call on the leadership in the state to use its authority and constitutional mandate to bring to immediate halt the growing orgy of violence that has enveloped Southern Kaduna.
This new theatre of conflict is one too many and must be nipped in the bud. Thankfully, a motion to this effect is already before us. We will ensure a thorough investigation is carried out to unravel the issues and advise government appropriately on the matter in order to ensure that all those found culpable are severely dealt with irrespective of who may be behind them. This will ensure there is no repeat of this madness and assure the people of Kaduna that injustice and impunity will not be allowed to triumph over our collective will to maintain our national unity and coherence.
The Petroleum Industry continues to be critical to the health of our economy. This is why, the Senate is urging the Executive to take positive steps to begin open and meaningful dialogue with those aggrieved in the Niger Delta to proffer lasting solutions that will help us take advantage of the emerging international oil market outlook to revamp our economic fortunes. The proposed engagement we suggest must be sincere, constructive, open, and aimed at confidence building. This Senate is willing to assist and play whatever role necessary to facilitate a successful agreement that would help us see to the end of the lingering conflict.
I would want us during this session to also pay attention to the protection and preservation of consumer rights. The current situation where consumers’ rights are violated and treated with indignity must stop. We are prepared to defend the right of the Nigerian to receive a superior quality of product or service purchased with their hard-earned resources. We will not stand for the exploitation of consumers and we have already shown that we are unafraid to tackle such issues whether perpetrated by public or private sector service-providers; as was the case of the intended data tariff hike proposed by the Nigerian Communications Commission (NCC) which we moved swiftly to prevent. We want people to know that they can run to us and we will in turn rise in defence of the Nigerian consumer who should be respected as a driving force in the economy.
I cannot end this brief remark of mine without emphasising on the need for us to pursue and conclude the ongoing constitutional review process which we will conclude by the end of this session in March. We must do this to ensure that our people begin to enjoy the benefits of the intended reforms which will help strengthen our unity, increase our prosperity and opportunity as well as expand our liberty and happiness across the country.
Finally, let me thank you all for your unflinching focus and perseverance in the way you have conducted yourself as we march towards the attainment of most of our laid priorities. Though there have been many distractions on the way and unmerited traducers unleashed at you to weaken your resolve, you have remained resolute and un-detachable to our collective goal. This is a reflection of what can be achieved if we keep the focus before the end of our tenure. Like I said when we started this journey, history beckons and we cannot afford to lose sight of the goal.
Saraki, President of the Senate, delivered the welcome address to Senators On their resumption from their 2016 end of the year recess on Tuesday, 10 January, 2017.