The Nation Newspaper

Category: Baba Yusuf

  • Implications of cbn’s bank recapitalisation policy(2)

    Implications of cbn’s bank recapitalisation policy(2)

    About 1month ago (12th April 2024), I wrote part 1 of the above topic, adding my voice to the decision of the Central Bank of Nigeria (CBN) to recapitalize Nigerian Banks in order to strengthen the Banks, consolidate the sector and rein fence it from present and potential risks and threats

     In today’s episode, I will continue my contributions on the implications of the Banks’ recapitalization policy and potential impacts on Nigeria’s economy, in the short, mid to long terms.

    Support for the achievement of the $1trillion economy

    As a “giant of Africa” and one of the biggest economies on the continent, Nigeria’s balance sheet is not up to $1Trillion. This should not be accepted and therefore I totally agree that we should be audacious in setting our target national economic value, going forward. Therefore, I like the audaciousness and gusto of President Bola Tinubu in this regard, because visions must be audacious for you to make progress. But audacious visions should be driven by the right strategy and the correct sequence of actions to achieve success. So the recapitalization should be part of the strategy, but the Bank recapitalization will be one amongst other pillars of the pillars for success, and without other critical pillars. If we want to deliver a $1 Trillion economy by 2025 we MUST re-activate our production sector, i.e. we need to get power fully onstream – generation, transmission, and distribution, and we need to re-ignite the argic value chain (which is a quick win). Tackling insecurity is also one of the critical pillars that MUST be addressed as a matter of national priority. A banking sector recapitalisation is neither here nor there if we continue to have serious insecurity issues. Therefore, there should be an over-arching strategy and the right sequence of events. Because from a project management perspective, when the mile stoning of the action points is sequenced properly, i.e. when you deal with insecurity, then you will be sure-footed, going forward. If you don’t deal with insecurity, then the drawback is that you may install a power plant asset somewhere in this country and you are at 70% completion, then insecurity will collapse/ destroy it which will lead to what we call “major slippages” in project management, i.e may be one step forward, 5 steps backward. Based on the foregoing, the strategy must be robust and the action planning should be proper with the right sequence of events. Importantly in recruitment and appointments of people that will man key positions, there are “round pegs in round holes”. I advise that Mr. President should consistently appoint people with domestic situational awareness with regards to the political, and socio-political issues of Nigeria. They should also have demonstrable sectoral understanding to domesticate strategies and policies for success – so that we are on point, on time, and impactful.  

    Read Also: Northern Elders reject CBN’s cybersecurity levy, says, it’s illegal, insensitive

     Enablement of an effective credit system

    President Tinubu has stated during his campaigns for Presidency that he will establish a credit-driven economic system for Nigeria. He delivered this promise with the passing into law and the establishment of the Credit Policy and system in Nigeria. So that affordability for essential assets and commodities like education, housing, transportation, etc. can be enabled for citizens. The objective is to in the long term stop the culture of “upfront cash” payment of all essentials of life which is one of the key enablers of corruption in Nigeria.

     I am of the opinion that the Banking reform and recapitalization policy by the CBN will support the achievement of President Tinubu’s vision and mission-critical objective of establishing a credit-driven economy.

     You cannot have an effective credit-driven economy when Nigerian Banks are running double-digit interest credit schemes. Therefore, I expect that in the next set of reforms that will follow the re-capitalization policy, the government (legislative and executive) will take into consideration prudential guidelines and regulations to ensure that interest rates are capped within what I call a reasonable win-win threshold. A situation whereby Nigerian Banks operate like shylocks will never augur well for the economy, because the banks will continue declaring profits in a declining economy whereby the number of multi-dimensionally poor Nigerians will be increasing – that is a misnomer. The growth of our banking industry should be directly proportional to the collective prosperity of Nigerians. Otherwise, the noble intention of the administration of President Bola Tinubu’s intention to run a credit-driven economy will not work with the way the Banks are currently operating – highly transactional and non-strategic

    Enable nigerian banks to undertake big-ticket capital projects

    The bank recapitalization will also boost the liquidity and capacity of Nigerian Banks to be more involved and productive in undertaking what I call the “big ticket” capital projects, especially in supporting the private sector and the Public-Private Sector (PPP) projects for example the AKK Gas pipeline projects, etc., over and beyond their current capacity which is obviously dwindling.

     This is not losing sight of the very important critical informal sector which actually drives 80% of Nigeria’s economy. Therefore, the boost in capacity should also reflect and be evident in the Banks’ support for Nano, Micro, Small, and Medium Scale Enterprises (MSMEs). Even though I have stated this is Part 1 of this Column, the importance of supporting the MSMEs and the informal sector of the economy by Nigerian banks cannot be over-emphasized.

     The Nigerian banks are highly operational and transactional, they are numbers-driven in an arithmetic progression for the short term and no long term, i.e. they are not strategic for the mid to long term and because of that there is no value creation, and value innovation in the Banking sector from a socio-economic perspective. That is also why when the “big ticket-US Dollar” capital projects come up, we see the Banks struggling to come up with the interventions even as a syndicate. That is why I am happy that the current CBN leadership decided to consolidate the industry and prepare it for better performance to fully participate and better drive the Nigerian economy. I am very well aware that due to the nature and scope of some of the big-ticket capital projects, they are better supported by International Finance Institutions/ Multilateral organizations, but I would like to see the upscaling of the capacity of our local banks, especially given the fact that even though we have been sliding backward in the last years, we still remain one of the biggest and potentially viable economies in Africa. Therefore, our local Banks that are bragging to have footprints and established presence in the subcontinents or regions across the world should be able to add considerable value to the recovery and growth of Nigeria’s economy – not marginally, but in a geometric progression, such that one of two banks could deliver is not whole at least partly such big-ticket US Dollar projects in areas like Power sectoral reform, Agriculture, Solid Minerals (exploration and processing), etc. We do not want Nigerian Banks to take the back seat when such critical projects are coming onboard and middle-tier portfolio investors will come in and take a large chunk of the pie of the opportunities in our Country will little plow back to our people and their communities., only for them to the announcing high numbers of profitability with little support for the economy at the expense of the citizens of this Country. That trend needs to change.

    Better operational efficiencies and better value for stakeholders

    One of the expectations is that the Banks will be healthier and stronger. The Banks are expected to also deliver better operational efficiencies, values, and dividends for stakeholders.  I would like to hear from the Banks, possibly through the CBN, how they will support the recovery of Nigeria’s economy, not just in words but also in actions.  With break-neck interest rates, the Banks are smiling to the Banks while almost 65% of Nigerians are cringing under socio-economic vagaries and the Banks should not be allowed to play the Ostrich in this situation. Banks are expanding, diversifying, and growing into other Countries Year-on-Year, regardless of how the economy is faring.  This situation is not in tandem with realities.

    How will banks support the Federal Government, going forward, especially with regard to the informal sector sustainability is very important. How are the Banks really giving Bank to Nigeria – which made them, the economy of Nigeria that built them to the extent that they have Branches in the UK, USA, etc? Citizens cannot walk into Banks and get reasonable credit lines for their MSMEs. I hope that the CBN will catalyze support for the informal sector beyond the current marginal and arm’s length support the banks are providing.

     In conclusion, I hope that the Bank’s recapitalisation policy will achieve the desired socio-political objectives for Nigerians.

  • Judicial reform is a critical success factor (2)

    Judicial reform is a critical success factor (2)

    “With bad laws and good civil servants, it’s still possible to govern. But with bad civil servants even the best laws can’t help.” …Otto von Bismarck – First Chancellor of the German Empire in 1871

    Last week I wrote part 1 of the above topic, adding my voice to the rising calls for reforms in the Nigerian judiciary. Some days ago, the conference on Judicial reforms which began last week was concluded where important resolutions and recommendations were made. I hope that the resolutions reached and recommendations made at the conference will be executed, otherwise the August gathering will end up as just a talk shop, and a sad waste of time.

     In today’s episode, I will continue my contributions on the way forward to reform our judiciary.

     Misconduct and corruption in the judiciary and legal profession

    The rising cases of Judges facing prosecution in recent years which further brought the Judiciary to the limelight for the wrong reasons require introspection of the judiciary and all critical stakeholders. This is in addition to allegations and counter-allegations of procurement of judgments by litigants, especially in political and election cases. These sad developments will further erode the confidence of stakeholders and citizens in the judiciary. A waning respect and confidence in the judiciary spells doom for any nation.

    Based on the aforementioned, there is no provision to excuse/ settle or condone criminality under other laws and regulations of the Federal Republic of Nigeria. Therefore, I ask that as part of the Judicial Reforms, judges that engage in such sharp practices to the chagrin of the Judiciary and the legal profession should be punished and stopped from doing so forthwith.

    Another key factor that has engendered corruption is the waning meritocracy in the judiciary just as is our civil/public service. This pervasive culture has propelled undeserving people to become judges and even grow in their careers to the detriment of such a noble profession whereby some people who should not be judges become justices. The embarrassing culture of issuance of all manner of expertes and judgments that even defy precedence reflects the concern of stakeholders that indeed the Bench should be rid of corruption if our polity could ever be salvaged.

    It would not be fair and sincere to talk about corruption in the judiciary without addressing the same issue that I dare say is also bedeviling the legal practice whereby some few lawyers are bringing the respectable profession to disrepute. As the saying goes, “One bad apple spoils the whole lot”. Therefore, while I commend the Nigerian Bar Association (NBA) for taking some steps to discipline lawyers who engage in professional misconduct and other forms of corruption, I urge the NBA to be more practical and pragmatic in cleansing the legal profession and protecting its reputation and respectability. It is very important that the credibility of the law profession is not tarnished in order for the practice to be respected and appreciated.

    It follows, therefore, that malaise in the legal practice is affecting the Judiciary. If nothing serious is done, we will soon not have the proper people become judges in Nigeria.

    Growing apathy for a career in the judiciary.

    In my humble opinion, the remuneration and career track in the judiciary is poor and not befitting of officers in the temple of justice, who are expected to live above board, be incorruptible, and adjudicate without fear or favor. Worst is the way retired justices are treated with disdain and disrespect just like how we treat most of our senior citizens who have served the Country with distinction and honor. I still remember an example in the case of the late Justice  .. who was treated in the most unfair and unjust manner, and it is unfortunate. Such actions discourage good judicial practitioners (judges and judicial officers who are in Nigeria’s judiciary is becoming so unattractive that it is gradually and inadvertently becoming a dumping ground for people who have no other career options to become judges or judicial officers and that is dangerous. When depressed, frustrated, and/ or unsuitable people increasingly become judges in Nigeria, then the Country is doomed.

     A career in the judiciary should be when officials in the temple of justice are no longer role models in Nigeria. Gone are the days when Judges, Court registrars, etc. were revered and held in high regard in our society. Even the lawyers mostly are not keen on becoming judges due to poor remuneration, infrastructure, lack of working tools, etc. This ugly trend should change if we are sincere about reforming the judiciary. The working conditions, remuneration, and compensation package for Judges and judicial officers should be attractive enough to attract the best of our citizens in terms of knowledge of the law, intelligence, and integrity.

    The njc and the paradox of self-evaluation

    I align with the call for the removal of the CJN as the chairman of the National Judicial Council (NJC) by stakeholders including the Nigerian Bar Association (NBA).

    I also agree that the composition of the NJC, which is the body responsible for disciplining erring judicial officers in the country, is currently defective from a regulatory perspective. The judiciary should know better than anyone, that it should not “self-regulate” itself. Therefore, I commend the recommendation of the NBA that, “members of the NJC should be appointed as follows: six judicial officers appointed by CJN; six lawyers nominated by the National Executive Council of the NBA including the NBA President and six non-lawyers appointed by the President, Federal Republic of Nigeria, subject to the approval of the Senate. And also, that, “The Chairmanship of these bodies should be rotated between the heads of the three constituent groups.”.

    I believe the recommendation on the structure of the NJC will ensure more effective regulation, and consequence management which will ensure discipline, Moving forward.

     Dearth of knowledge and lack of operational inefficiency

    The judiciary is operationally stuck in the past – still using 20th-century manual and archaic operations systems.

    Read Also: Olubadan: Olakulehin’s enthronement takes another twist as Ladoja, kingmakers differ on terms of settlement

     Knowledge gaps in judges’ capacity to update skill sets and competencies – The need for more training and capacity building especially in the use of modern tools and techniques like the use of information technology to fully automate court processes, proceedings, and management including the record of proceedings by judges. A situation where judges are largely manually recording case proceedings using “long hands” is neither efficient nor sustainable in the 21st century. Using archaic methods seriously undermines the effective administration of justice and is a major failure factor for the judiciary. This issue should be treated as a matter of priority.

     Increase of unskilled human resources as support staff in the judiciary

    Manpower in the judiciary is not measuring up to the rising population. It is important to note that just like in the case of insecurity whereby the armed forces are seriously under-manned to keep up with the rising population in Nigeria and the corresponding rise in criminality and insecurity and the resources needed to adequately combat crimes, and terrorism; the judiciary is also seriously under-manned to keep up with the rising population and the corresponding rise in the demand for adjudication to address constitutional, civil, and criminal cases. The current number of Courts across Nigeria, the number of judges at high lowers, and worst still the number of judges at the Appellate Courts and the Supreme Courts leaves much to be desired. Indeed, the workload on the judges is too much, unhealthy, unproductive, and completely unacceptable. This accounts for the snail-speed of our court processes, procedures, systems, and performance which in the end in most cases end up as justices denied; in line with the legal mantra – “justice delayed is justice denied”.

     Undue interference by the executive and financial autonomy for judiciary

    One of the critical failure factors of an effective judiciary in Nigeria is undue interference by the executive in the workings of the Judiciary especially given the methodology of the appointment of Judges in Nigeria whereby is based on opaque criteria and mostly hinged on privileges rather than merit, competence and integrity then we are doomed

     Another critical failure factor for the judiciary is the situation whereby the judiciary has to continuously go cap-in-hand to the Executive arm of Government at federal and Subnational levels for financing. I join in the advocacy that in order for the judiciary to be fully reformed and satisfactorily effective, the judiciary must be financially independent.

     In closing, I am of the strong opinion, that It is only a reformed, modern, well-resourced (man and material), well-equipped, empowered, and autonomous Judiciary that will significantly add value to transparency and accountability; foster and entrench fairness, equity and justice (or a sense of it) in Nigeria.

  • Judicial reform is a crititcal success factor

    Judicial reform is a crititcal success factor

    Background

    The 2-day National Summit on Justice 2024, organized by the Federal Ministry of Justice in collaboration with the European Union, the International Institute for Democracy and Electoral Assistance, the United Nations Children’s Fund, and the United Nations Office on Drugs and Crime; commenced two days ago (24/04/2024), is a welcome development. I commend the Minister of Justice and Attorney of the Federation, Mr. Lateef Fagbemi SAN for organising this important Summit. I also note that some days ago the President of the Nigerian Bar Association, NBA, Mr. Yakubu Maikyau SAN, stated that there will be focused discussions on judicial reforms during the upcoming 2024 NBA Conference. I hope that there will be sincere, honest, and forward-thinking deliberations during all the events, and more importantly, I hope that a strategy will be crafted for the betterment of the Judiciary in particular, particularly the legal profession and the generality of Nigeria in general. I believe that it is only when we fix our judiciary, that we can be able to truly fix our polity.

     I am happy that there is a growing consensus amongst critical stakeholders with regard to the issues in the judiciary and the need for critical reforms. Indeed the positions taken by  President Bola Tinubu (represented by Vice President Kashim Shettima), Senate President Godswill Akpabio, the Chief Justice of the Federation, Justice Olukayode Ariwoola, and the Minister of Justice and Attorney of the Federation re-echo the consensus about the malaise in the Judiciary. The consensus of the need for a reform of our judiciary is interestingly reflective of a position taken about 77 years ago by the late Chief Obafemi Awolowo, the former Premier of the Western region of Nigeria. In 1947, the late Chief Awolowo wrote that “Corruption is the greatest defect of the Native Court system.” He complained that not only did judges take bribes, people used their connections to enrich themselves and avoid punishment for their crimes. Does that sound familiar?

     Accordingly, I am making this contribution as a patriotic Nigerian, a friend of the legal profession from which the judiciary sprouts and grows. I am also speaking on this topic as a critical stakeholder – being a litigant in ongoing or decided matters, as a Plaintiff or Defendant; where I have experienced first-hand, the impact of good and bad judicial practice, especially as a victim of miscarriage of justice.

    Indeed, due to a lack of consistent, honest, and sustained evaluation, citizens’ engagements, and reforms; the judiciary has inadvertently and in some cases I dare say, deliberately become part of the problem rather than a solution provider for a better Nigeria in terms of the improvement of our democracy, fight against corruption, other forms of criminality,  and the entrenchment of fairness, equity, and justice in our societies. The judiciary has sadly become an enabler/ promoter/ partaker of corruption,  erosion of our value system, and degradation of our society, and part of the reason why the executive and legislative arms of government in Nigeria have been underperforming with no consequences.

     Therefore, based on the aforementioned facts, I dare say that the inability of the executive and legislative arms to deliver the dividends of democracy in Nigeria is partly due to some of the shortcomings of the judiciary. 

     The judiciary should be able to play its role without fear or favor and not allow itself to be used to undermine the process of reforming our Country while ensuring that justice is served to all. While undertaking reforms, it is also important not to forget that the judiciary is also part of the Civil Service.

     Challenges and ways forward

    The best way to chart the way forward for the judiciary, is to dimension some of the key challenges bedeviling the Judiciary, because only then could we be able to develop a strategy and blueprint for Judicial reform in Nigeria. I humbly illustrate below and in subsequent episodes, what I consider as key challenges and “ways forward”, that must be addressed in order to reform the judiciary as a matter of national priority.

    •  Plethora of Exparte Orders and conflicting judgments are becoming anathemas to our polity

    One of the classing examples of how the judiciary enables wanton corruption in Nigeria is the ugly trend how persons and organizations lean/ hide under section 46 of the 1999 Constitution as amended, to secure injunctions/ judgments to stop investigations, especially on matters of corruption, other forms of criminality, and even terrorism; to the extent that judges grant orders to stop statutory bodies from performing their constitutional responsibilities, which leave much to be desired. This is a serious issue that is becoming an anathema to the progress of Nigeria. In most of the cases where such injunctions or judgments are given, it is very clear that the prayers of the applicants are out of place at no moment. Additionally, some of the injunctions are granted in clear violation of the constitutional provisions given those Arms or agencies of Government, for example; the National Assembly in line with Sections 88 and 89 of the 1999 Constitution, or the provisions of the Acts of the EFCC, ICPC, Nigeria Police, DSS, etc. In any case, it is elementary to note that anyone trying to stop an investigation into criminal allegations is actually indicating that he/ she is trying to avoid investigation and possible prosecution, and therefore, such applications should not be granted by the honorable justices. This is because innocent parties will set the records straight and clear their names when they face an investigation. Unfortunately, we are all witnesses to this ugly trend which if not stopped, will certainly legitimize corrupt practices, and all forms of criminality including terrorism and acts that could threaten our territorial integrity. These are serious issues with potentially serious consequences on our polity, and should not be entertained by any well-meaning judges or citizens of Nigeria.

     In addition, the ongoing practice by judges of cognate jurisdictions granting conflicting/ countermanding injunctions/judgments, especially in political and criminal matters.; in my opinion amounts to misconduct by justices and judicial officers. This is especially so when senior members of the bench (serving and retired Judges) have also re-echoed these concerns, so far, to no avail. I urge that these practices that bring disrepute to the judiciary should be estopped forthwith so as to reclaim the reputation and sanctity of the temples of justice (i.e. the Courts) in Nigeria and consequently give more respect and gravitas to the judicial pronouncements of our judges.

    Read Also: Tinubu to declare open 2024 national judicial summit

    Moreover, to put things in context, there are no lacunas in our laws regarding the principles of separation of powers, purviews, and causes of action, for statutory bodies e.g. arms of government like the National Assembly, law enforcement, regulatory and prosecutorial institutions. There are clear provisions of the Constitution of the Federal Republic of Nigeria, whereby the party or persons that are/are not satisfied with the decision/ action of the statutory bodies undertaking the investigation, could go to Court and seek protection and/ or redress. However, going to Court should be done only if the investigation is undertaken wrongly or concluded wrongly. But to pre-empt a criminal investigation with a court order to stop the investigation ab initio presupposes guilt and/or attempt to obstruct justice which in itself is an offense under our laws. Therefore, for honorable justices to stop or frustrate an investigation that may unravel corruption, criminality, terrorism or threat to national security is tantamount to promoting corrupt practices and other forms of criminality. Such injunctions/Orders have been frustrating the duties of the National Assembly, the Nigeria Police Force, EFCC, ICPC, DSS, the Military, regulatory bodies, etc.

    Accordingly, on the basis of legal reasoning, the judiciary should allow and support statutory institutions to perform their duties, rather than prevent valid investigation or obstruct the principles of separation of powers that they- the judiciary should protect! Legislative, regulatory investigative, and prosecutorial institutions should be allowed to undertake their mandates as enshrined in the Constitution. If some judges continue the habit of forestalling investigations under the guise of fundamental human rights, as long as the investigation (civil or criminal) does not violate any constitutional provision; then that Judge, in my opinion, is supporting the obstruction of justice. 

    Based on the aforementioned, there is no provision to excuse/ settle or condone criminality under other laws and regulations of this Country. Consequently, I ask that as part of the Judicial Reforms, judges that engage in such sharp practices to the chagrin of the Judiciary and the legal profession should be stopped from doing so forthwith.

    I will continue elucidating more of my insights and perspectives on this very important topic of judicial reforms in subsequent episodes.

  • The single window platform

    The single window platform

    “A hero is judged by his or her performance and by the positive impacts achieved” … Professor Ali Mazrui.

    The inauguration of a steering committee for the Single Window (SW) Project by President Bola Tinubu is an excellent step in the right direction.

    Through this move, Mr. President Tinubu has triggered a process that will significantly enable process and business improvements for better economic performance, moving forward. The Single-Window platform is a one-stop-shop operational model that is critical to removing the multiple pain points that elongate processes with adverse impacts of businesses, international trade, and the overall economy of Nigeria. This SW platform has been recognized by organizations like the United Nations Economic Commission for Europe (UNECE) and its Centre for Trade Facilitation and Electronic Business UN/CEFACT, the World Customs Organization (WCO), World Trade Organization (WTO), etc., and has been adopted by many Countries around the world including USA, UK, UAE, Singapore, China etc.

     One of the critical success factors for economic sustainability and growth is for the government to create platforms and systems that can promote diversification of the economy, trigger additional or improved economic activities, and at the same time facilitate the enablement of these businesses in ways and manners that they will be successful and impact on the economy, short to long term. The Single Window platform will surely enable the aforementioned objectives.

     It is worthy of note that previous administrations have attempted to implement the Single-window platform under many policies, including the Executive Order on the Ease of Doing Business during the administration of President Muhammadu Buhari. Lack of political will to fully implement the presidential Executive Order of Ease of doing business at the Cargo terminals or our Ports was the critical failure factor. I am confident that President Tinubu has the political will to ensure the success of the implementation of the Single window policy during this administration.

    Read Also; Tinubu’s economic reforms yielding results, says Alake

     Accordingly, I agree with Mr. President that we cannot sit and allow over $ 4 billion of Nigeria’s national income to continue to leak away annually due to red-tapism, inefficiencies, and corruption. This initiative by Mr. President is timely, and I am very excited about this development as I look forward to full implementation with full interagency collaboration and synergies with other stakeholders to ensure success

     Essentially, the false starts and failure to implement the single window platform over the years were due to corruption. The refusal of the agencies that have no business in the Ports (Sea, land, and Air) to leave the Ports, and the collusion between some unscrupulous government officials and bad business operators are some of the issues that frustrated the success of this laudable project for many years. Indeed, this step taken by President Tinubu, to my mind, will lead to the successful implantation of a platform that has been successfully implemented in many Countries around the world including some Countries in Africa like Ethiopia, South Africa, etc., and yet Nigeria is still lagging behind.

     One of the negative impacts of not having the single window platform includes taxation issues, inefficient operations at our ports (Sea, Land, and Air), increased cost of doing business, leakages, and a disjointed and inefficient logistics supply chain management.

     Some of the key achievements will include:

    •The timeline of processing cargo will be shortened drastically thereby significantly improving supply chain management and delivery;

    •Cost of doing business will be reduced thereby improving the ease of doing business; The platform will also reduce the cost of operations for the government which will impact on the reduction of cost of governance. This is Because layers of bureaucracy and their tangible and intangible costs will be eliminated.

    •Efficiencies and effectiveness of service deliveries will be achieved with a positive ripple effect on the economy.

    •Leakages will be blocked. Consequently, revenues for federal government will increase

    •Operational efficiencies, revenue and profitability for business will improve and will impact the overall national economy.

    •The single window will essentially be a win-win for all, i.e. importers, exporters, consignees, government, etc.

    •Nigeria’s rating in international business will improve due to compliance with best practices.

    •Nigeria will be better prepared and more competitive on the Africa Continental Free Trade Area (AfCFTA), ECOWAS, and other continental and international platforms

     Some critical success factors I submit some food for thought for consideration while undertaking this important national assignment.

     Political Will

    Politics will be a critical success factor because the entrenched vested interests that have frustrated the previous attempts and efforts will yet again attempt to ensure that the single window does not succeed so that their activities of economic sabotage will continue.

     Due to entrenched vested interests that will be more interested in maintaining the status quo, sabotage Is a high-risk element that Mr. President should not condone. Therefore, I urge Mr. President to deal decisively with anybody/ people who attempt to frustrate/sabotage this project should be dealt with decisively so as to send a clear message that this time around the Single Window platform must work.

     Governance and Operational Model for The Single Window Platform

    Effective coordination is another critical success factor. I hope that Mr. President will give a clear directive as to who will drive the single window platform. For instance, I am of the opinion that the platform should be driven as a special project by a special project management office, with a direct line of report to Mr. President or the Chief of Staff to the President. My proposal is due to the dependencies and interdependencies across the current complex nature of operations whereby government agencies with varying mandates, priorities, targets, and objectives; for example, the Nigeria Customs Service, FIRS, FAAN, NPA, NAFDAC, NDLEA, etc., mostly operate in silos. The Interim Special Project Office will ensure the objective setup of the platform, efficient and effective delivery of the shared services that will certainly evolve, and effective management of critical stakeholder engagements, communication management, and the overall performance management of the project. The Special Project Office should have a tenure to be determined by Mr. President after which a governance framework would have been set up to drive the single-window platform from then on.

     This governance framework will better manage interagency rivalry and competition, improve synergies, and eliminate sabotage. The Project Team should be led by a subject matter expert with a track record of capacity, integrity, and track record of performance, and multi-sectoral experience especially but not limited to Strategy, operations management, logistics and supply chain, Information Technology, and Project Management. The person’s key mandate will be to act as a neutral party and coordinate the successful implementation of the single-window project.

     It should also be instructive that the people who will drive the processes within the single window platform should have not just the capacity but also the integrity to do the job. There should also be a layer of effective and efficient monitoring and evaluation of the success of this project year-on-year for the next few days of this administration. From a governance perspective, Compliance with extant laws and regulations is also a key pillar for success.

     Round pegs in round holes

    Another key challenge that will hamper the success of this initiative is the lack of existing capacity within the current public sector entities to effectively drive this very robust and technology-driven platform. I advise that those capacity issues should be addressed dispassionately, and objectively to ensure that we have round pegs in round holes.

     Quality assurance and business continuity

    Because it will be technology-driven, I hope the Disaster recovery and System continuity plan will be robust, practical, and effectively tested with fail-over to manual if and when necessary to avert a national disaster where we have failures due to power outages, systems failure, or force majeure. WE CANNOT AFFORD TO HAVE A FAILURE WITHOUT A FAIL-OVER. There must be a backup to ensure continuity in the event of a crisis or disaster.

     The single window will also ensure and consolidate data integrity with regard to the volumes of our import and export cargoes, the receipts thereon in terms of revenues and other variables. This platform will also ensure the integrity of the process such that no agency or stakeholder inadvertently or deliberately circumvents the system.

     Critical Stakeholders Engagement

    We need the buy-in of critical stakeholders to ensure the success of this with a positive impact on the economy. I believe that more needs to be done to that effect in terms of execution. We believe that it is not the sole responsibility of government but rather a collaboration between the private and public sectors in trying to see how we can improve our trade processes for better economic growth and development

  • Implications of CBN’s bank recapitalisation policy

    Implications of CBN’s bank recapitalisation policy

    As part of the strategy to achieve President Tinubu’s vision of making Nigeria a $1Trillion by 2025, the Central Bank of Nigeria under the leadership of Mr. Olayemi Cardoso, has rolled out a policy to recapitalize the Nigerian Banks in the next 2 years, by introducing new minimum capital requirements for banks of all categories. This policy will further strengthen Nigeria’s financial system by pegging the minimum capital base for commercial banks with international authorization at N500 Billion. In addition, the new minimum capital base for commercial banks with national authorization is N200 Billion, while the new requirement for those with regional authorization is N50 Billion.

     Accordingly, after the recapitalization, the top 5 Nigerian banks could have a combined paid-up capital/ share capital of N2.5 trillion at N500b each. It is worthy of note that based on the latest financial results of the top 5 Nigerian Banks, the current combined capital of the 5 top banks is about N1.3 trillion, i.e. slightly above 50% of the targeted capacity. The recapitalization will essentially improve the resilience of the Nigerian Financial sector which is key to economic development.

     The recapitalisation policy by Mr. Cardoso led CBN as he tries to tidy up our monetary policy in the bid to turn around Nigeria’s economy, is commendable. This is in addition to the stabilization of the Naira achieved so far from N1,950.00 to about N1,100.00 in the past 2 months.

     Therefore, the timing for re-capitalization is right, given that the last recapitalization was done about 19 years ago in 2005, during the tenure of Professor Charles Soludo as the CBN Governor. The Banks have so far weathered the storm, but in recent years, we have witnessed some stress and fault lines emerging in the Banking sector, based on which some interventions are undertaken by the government to save some corporate governance issues for example at First Bank, about 2 years ago when an interventionist Board of Directors were appointed for the First bank group by the CBN, and also about 1 month ago, the CBN had to intervene to stabilize some Banks by dissolving the board of directors and appointed new executive directors to “oversee the affairs of the deposit money Banks” at Keystone Bank, Polaris Bank,  and Union Bank, which is an indication of some fault lines in the Banking sector.

     Recapitalisation will certainly reinforce the Banking sector and prepare it as a strategic pillar for effective socio-economic recovery and, as a critical support achievement of the $ 1 trillion by 2025. Interestingly, despite the brutal socio-economic headwinds that we face in Nigeria, the Banks are smiling as they declare huge profits year-on-year, therefore the CBN is correct to say that the Banks should recapitalize at this point in time. Let us consolidate the Banks and further institutionalize corporate governance and resilience for the Banks.

     Options available for banks

    Given that none of the top five Banks in Nigeria that even have an international presence, currently has more than N200bn capital base, which is far less than the N500b minimum required per bank, there is a shortfall of about N1.4billion to meet the N2.5tn. The CBN has rightly advised the banks to raise funds through the 3-key means, i.e.; through private placements; mergers, and acquisitions whereby the Banks can explore partnerships through mergers and acquisitions to consolidate and become stronger Banks as we have seen in the past which was how the likes of the current Access Bank, UBA, Fidelity, etc. emerged. Another option available for the Banks is to re-consider their status as Commercial and re-strategize and consider other segments of the sector. So from a strategic perspective, why not strategise and invest in the regional and/ or sectoral market for better strategic positioning to play and play big, i.e. to become regional Banks or Merchant Banks, or other segments of the Banking ecosystem to play in? In the end, the new policy will tidy up the Banking sector, consolidate the Banks, and make them more competitive, productive, and value-adding to Nigeria’s economy.

      FDI opportunities for the banks

    The recapitalization policy is an opportunity for Foreign Direct Investments (FDIs) to come into our economy. Given that the top 6 banks are churning out huge profits year on year with increased capital and asset bases, suffice it to say that the Banks have healthy balance sheets and good financial and economic outlooks and therefore they will be very attractive to foreign investors. FDIs have a good investment appetite when they see a business with healthy balance sheets, and the prospects are showing a mid-long-term Return on Investment (ROI) outlook. Even though I dare say here that some of us want to know the magic the banks are doing in boasting of healthy balance sheets and profits while the Nano, Micro, Small, and medium scale enterprises (SMEs) and the informal sector are struggling under the vagaries of socio-economic hardships. But that will be a conversation we should have another day because thriving SMEs and the entire informal sectors are critical success factors to economic recovery and the attainment of the N1 trillion economy by 2025, otherwise, the vision will be a mirage.

     Banks should focus on value innovation for sustainability

    I reckon that this round of recapitalization will force the banks to imbibe value innovation and move beyond operational transactional banking to banking that is value-creating and value-adding to the critical and informal sectors of the economy, consequently supporting economic diversification and growth of Nigeria.

    Read Also: CBN steps up measures to strengthen naira against dollar

     For instance, the banking sector has been contributing marginally to the Agri sector which is a critical sector to diversifying Nigeria’s economy and a low-hanging fruit for economic recovery while conversely, investing in the Agri will reposition the Banking industry’s strategic growth potential and realization of mid to long term growth and sustainability. All the Banks do not have to be Commercial. There is vision, sense, strategy, and value in focusing on sectoral, regional, and/or market-specific models of banking in an economy like. Nigeria with such huge diverse and viable resources like Solid Minerals, the informal sector, etc. This is why I believe that the Banking industry could grow with the economy organically in Geometric progression because sustainability is key.

     Apart from a few, most of the Agric desks in the Banks have been underperforming because of a lack of broad Agric business strategy and investment-friendly policies. The Banks need to be creative from business continuity and growth perspective because Banks are not insulated from the global and national socio-economic challenges we are facing in Nigeria. So, if they craft their strategy for the Agric sector from a value innovation to support perspective; they will support our teeming youths who have very innovative mindsets, capacities, and potentials. They could support them with the right investment offerings in the entire Agric value-chain; production, quality control,  storage, value-addition, packaging, logistics and supply-chain, inland trading and export, i.e. mid and downstream subsets of the sector; the Agric sector has the potential capacity to provide more opportunities for the youth than even the digital technologies sector in terms of deep and wide multidimensional socioeconomic impacts in Nigeria down to our hinterlands; based on which he Banks can make more income and profits.

    Robust stakeholder engagement to get buy-in

    I wish to draw the attention of the CBN to the criticality of robust stakeholder engagements so as to get the buy-in of critical stakeholders and achieve success. There is a need to manage sentiments and optics from the get-go. For example, in my opinion, the recent movement of some departments of the CBN drew unnecessary criticisms that could have been better managed. The CBN has a lot of work to do in engaging industry stakeholders, citizens, Country Residents/ expats, etc. who are all actually the Bank depositors so that they rest assured that the policies are in their best interests. The stakeholder engagements will also de-emphasize sentiments of regionalism, ethnicity, etc., and direct attention to the laudable, noble, and necessary intention of the Bank recapitalization or any policy of such crucial nature. By doing so, the CBN’s job will be much easier.

     Other expectations of the impacts of the banks recapitalisation

    Some of the expected impacts of the recapitalization, in my opinion, should include better efficiency, customer service, and better competition regionally, and internationally. I also expect that there will be available funds to support the domestic economy by way of loans with lean and reasonable interest rates over more practical timelines to support sectors and markets.

     While I commend the CBN Governor on the positive trajectory they have achieved so far, I encourage Mr. Cardo and his team that sustainability is key. I will put a pause here on this very important topic of our banking reforms in Nigeria, as I intend to make more contributions on the topic in due course. Thank you for reading.

  • BRICS as a platform for economic sustainability

    BRICS as a platform for economic sustainability

    “With each new day in Africa, a gazelle wakes up knowing he must outrun the fastest lion or perish. At the same time, a lion stirs and stretches, knowing he must outrun the fastest gazelle or starve. It is no different for the human race. Whether you consider yourself a gazelle or a lion, you simply have to run faster than others to survive.” ― Mohammed bin Rashid Al Maktoum, Monarch of Dubai and Prime Minister of United Arab Emirate (UAE)…

    BRICS is an intergovernmental organisation comprising Brazil, Russia, India, China, and South Africa. The aforementioned Countries are the fastest-growing world economies, It is worthy of note that China is the second largest economy in the world. The objective of this organization is for strategic partnership and cooperation on investment opportunities, coordinating multilateral policies guided by the principles of non-interference, equality, and mutual benefit. BRICS was founded in 2009 and has since expanded in membership, regional, international, and intercontinental spread, and influence. Egypt, Ethiopia, Iran, Saudi Arabia (though arguably so), and the United Arab Emirates officially joined BRICs on the 1st of January, 2024. BRICS currently has 10-member nations, and according to Bloomberg, about 34 new Countries have expressed interest in joining BRICS. One of the key objectives of the BRICS group is to dominate the world economy by 2050.

     Therefore, it is cheery news to me and a lot of other Nigerians when Nigeria’s Honorable Minister of Foreign Affairs, Ambassador Yusuf Tuggar stated that Nigeria is currently considering the possibility of joining BRICS and that Nigeria has not given up the ambition of becoming a permanent member of the Security Council of the United Nations. The Minister made the assertions during his official visit to Russia around the 6th of March, 2024.

     The BRICS strategy is certainly working as the BRICS countries include major world powers, such as China and Russia, and countries that are major powers on their continent, such as South Africa and Brazil. The group currently has a combined population of 3.5 billion i.e. 45% of the world’s population. It has a combined economy of over $ 28 trillion which is about 28% of the global economy. BRICS countries will also be producing about 44% of the world’s crude oil.

     The Russia-Ukraine war has further divided the world economically with consolation of the BRICS nations as a counter-measure to the globally dollarized economy which is slowly but steadily posing a threat to the US Dollar and certainly the US economy in the mid to long term – it is just a matter of time.

     To de-risk and diversify nigeria’s economy

    Our current economic situation requires that we diversify our options and de-risk our economy from the “choking effect” of the US Dollar. While it is true that the US Dollar will remain a globally dominant currency of trade, the current global socio-economic and political realities clearly call for forward-thinking countries to diversify their options of investment and trade; the growing membership of BRICS is the platform of that diversification.  The earlier Nigeria key into it the better for our battered economy. Let the process begin so that Nigeria will not be left behind as a sovereign nation.

    Read Also: FULL LIST: Jail term, fine, other consequences for mutilation, abuse of naira notes

    In my opinion, BIRCS should be one of the pillars of our international relations and economic diversification strategy. It will not just give Nigeria the freedom of choice and options but it will also give Nigeria leverage in our international relations and economic expansion and diversification initiatives.

     I commend the administration of President Tinubu for clearing the accumulated backlog of $7Billion FOREX of over $ billion that accumulated during the Buhari administration which was part of our economic woes by escalating inflation, even resulting in some diplomatic rows with the likes of the United Arab Emirates, etc. It took the current administration through the Central Bank of Nigeria, nine (9) months to ingeniously clear the backlog.

     Consequently, I am of the strong opinion that going forward, BRICS is an opportunity for Nigeria to be emancipated from the shackles of US Dollars, and will certainly free and hedge Nigeria’s economy from the straight jacket situation with the US Dollars in terms of trade, investment, and international relations.

     As the giant of Africa, Nigeria’s membership in the BRICS is long overdue. Let us not delay too much as we did with the AfCFTA membership, especially given the fact that we have to lay the foundation, the pillars and building blocks, and frameworks, the time is now before we start running against time. Given our currently dire economic situation, we should explore all available viable options to receive our economy and position it in a growth and development trajectory.

     Points for Nigeria to note

    •Top global oil producers like Saudi Arabia, Russia, Iran, and United Arab Emirates are already members of BRICS with Saudi Arabia as the 2nd largest world oil producer behind the United States of America, Russia ranked 3rd, China is 6th, Brazil is 7th, the UAE is ranked 8th and Iran is 9th, i.e. 6 of the 10 top global oil producers are in BRICS. This implies that BRICS member countries currently control almost 50% of the world’s oil production. With Oil and Gas still remaining the critical economic driver, and it will remain so for a long time, it is essential that Nigeria seize the moment to be part of this increasingly important group.

    •New data from the National Bureau of Statistics (NBS) showed that FDI in the country fell by 33 percent in 2022. This is more worrisome due to the fact that the trajectory has been dwindling since 2015, as foreign direct investment (FDI) to Nigeria has plunged to $468.91 million, the lowest in at least nine years, according to official data. This has been having dire consequences on socio-economic growth. BRICS is a veritable platform for attracting significant FDIs.

    •The way forward for Nigeria, is to as a matter of priority improve and upscale our competitiveness in terms of our critical infrastructure i.e., intermodal transportation network; power; logistics and supply chain platforms i.e. the airports and the entire aviation value chain; seaports and the entire maritime value chain, land borders; products value addition and processing.  We also need to improve the state of our not-so-competitive manufacturing and industrial sectors that are struggling under multiple global socio-economic variables, it is a major red flag. Joining BRICS will surely support Nigeria in this regard

    Foreign policy and geopolitics

    Global and sub-regional peace and economics will continue to be impacted by geo-politics. Geo-politics is significantly influenced by the foreign policy direction of the United States of America and its allies and the reactionary foreign policies or initiatives by China, Russia, and other Countries.

    Certainly, the Russia- Ukraine Imbroglio has ravaged the global economy almost resulting in a global recession with devastating impacts on food security, supply chain disruptions, oil supply and pricing, energy supply to Europe, and the resultant effect of the cost of living crisis, etc.

    In the case of Russia, President Vladimir Putin is not likely to shift ground but rather refine his mid to long-term strategy because so far, his strategy has been working more for him than the US and EU strategy for Ukraine. If the Russia-Ukraine imbroglio continues unabated without a change in the political strategy disposition, it will continue to impact negatively on global and national economies.

    Based on the aforementioned, Nigeria’s over-arching national strategy has to change especially with regard to the economy, foreign policy, Trade, and Investment with foreign policy as a nexus for international Trade

     Global economic gloom

    • According to the World Bank; the current global economic trajectory is not looking good based on geopolitics, and climate change which has impacted food security, infrastructure, human capital, etc.

    • The second half of 2024 will be the slowest half-decade of GDP growth in 30 years!

    • Escalating geopolitical tensions could create fresh risks for the world economy. “Meanwhile, the medium-term outlook has darkened for many developing economies amid slowing growth in most major economies, sluggish global trade, and the tightest financial conditions in decades.”

    • Cost of borrowing for developing economies—especially those with poor credit ratings—are likely to remain high with global interest rates stuck at four-decade highs in inflation-adjusted terms.

    • Global growth is projected to slow for the third year in a row—from 2.6% last year to 2.4% in 2024, almost three-quarters of a percentage point below the average of the 2010s. Developing economies are projected to grow just 3.9%, more than one percentage point below the average of the previous decade.

     Conclusion

    What should remain etched in our minds as Nigerians, especially the current administration under the leadership of President Tinubu is the fact that based on the aforementioned realities and projections; it will be a good de-risking economic strategy for Nigeria to be part of BRICS as a “shock absorber” for sustainable economic growth in an increasingly polarised world.

  • Agriculture key to economic recovery in states

    Agriculture key to economic recovery in states

    State Governors need to as a matter of urgency, prioritize agriculture for economic recovery and diversification. I remember that as far back as 30 years ago, while I was working, I was also trading in agricultural commodities. At times, across Nigeria, we were not talking about food scarcity. Ironically 30 years ago, we were rather talking about wastages of agricultural products and how to store them and cut down the wastages. From Kano and other parts of northern Nigeria to all other parts of southern Nigeria; fruits, vegetables, grains, yam tubers, cassava, potatoes, etc. were wasting away. I recall with nostalgia the huge yam barns in Niger, Benue, the southeast of Nigeria.

     Fast forward to today, we are struggling with food insecurity. It is sad how bad things have become. Farmers are not able to go to their farms due to insecurity, nor do they have enough tools and feeds like fertilizers, etc. The purchasing powers of the farmers are so low that they are majorly reduced to the lowest form of subsistence farming. Food insecurity is also due to the rising population, which has grown in geometric progression from the first republic to date. Therefore, the need to upscale our production capacity is long overdue.

     Some agricultural initiatives by Federal and some State Governments are laudable. For example, the agriculture project initiated by the Executive Governor of Niger State, His Excellency Mohammed Umar Bago which was commissioned by President Tinubu some days ago is commendable. However, I advise that State Governors should have more robust and strategic plans that will be all-encompassing across the Agri value chain to include grading, cleaning, packaging, storage, value-addition, etc.

     Depleted strategic grain reserves

    It is worthy of note that, currently Nigeria has basically depleted its strategic grain reserves. I hope that there is a plan on how to replenish The reserves as a matter of priority. Because it will be a disaster if we do replenish our strategic grain reserves this year. This is especially so because of the valid projections that there will be food scarcity this year due to climate change, and insecurity. So, Governors should wear their thinking caps and come up with robust strategies going forward.

     In the case of the request by President Tinubu to the Governors to provide land so that Mr. President will ensure that he enables the provision of a dichotomy that will stop the clashes and unwarranted deaths between farmers/ herders which are seriously impacting socio-economic situations at States. But as the Chief Security Officers of their States, the State Governors need to deal with these issues in their States head-on. I believe that if Governors borrow and improve the templates of the Premiers of the regions of Nigeria during the first republic and State Governors  States of Nigeria of the 1960s to 1980s, they will achieve some quick wins and also achieve major milestones in food security, job creation, and other socio-economic growth, especially increase in revenues. Almighty God Created Nigeria in such a way that every State has a special, and viable agri value chain that will add value to the people of the State and the nation in general. Around 1995, I was legally exporting grains to Niger, and Burkina Faso, because we had enough, indeed Nigeria still feeds the West African sub-region. Those glorious days could return.

     Dams agriculture clusters and farm centers

    The State Government can fully revitalize and fully utilize the State-owned Dams and river basins for the production of agricultural products for all-year-round farming using irrigation, etc. These are quick-win platforms to arrest the looming food insecurity. Most of the Agriculture clusters and farm centers in Kano and some States in northern Nigeria which were established in the 1970s and 1908s have been cannibalized and are long dead. I strongly advise that State Governments should re-introduce the farm clusters and farm center projects for the production of grains, perishables, livestock, fisheries, etc. This is a critical success factor for the diversification of economies. From the 1950s to the 1980s, States were basically self-sufficient due to the utilization of such key water bodies and irrigation farming. Dairy products and food items were supplied all over the nation from Kano, Kaduna, Katsina, Plateau, Benue, Niger, etc.  all year round with millions jobs job created.

    Read Also: 42,000mt of grains being shared to states, says Agriculture minister

     The Knarda and Kasco of 1970s and 1980s in Kano as case studies

    The Governors should set up, re-recreate, or re-vitalize the likes of the Kano State Agricultural and Rural Development Authority (KNARDA) and the Kano State Agricultural Supply Company. These are critical enablers of a successful and sustainable Agriculture value chain. KNARDA, KASCO along with critical platforms like the Dams have demonstrably added value to the development of Agriculture in Kano from the 1970s to the 1990s.

     KNARDA was established in 1999 along with KASCO as its commercial subsidiary to improve the supply of agricultural inputs for technology adoption in Kano. They were established following the success of World Bank Assisted Agricultural Development Projects (ADPs) at Gombe (at that time in Bauchi State), Funtua (at that time part of Kaduna State), and Gusau (at that time part of Sokoto State) in 1975. Other States in the Federation also had similar strategies and models that worked successfully.

     Lessons from failed agric interventions

    I hope and pray that President Tinubu will never allow the scenario of the Anchor Borrowers scheme which was a huge scam and failure to happen again. Absolute power corrupts absolutely, and the anchor borrower scheme that was anchored by the former CBN Governor, Mr. Godwin Emefiele is a classic example of how not to run such Agriculture – that is the first lesson n which should also be imbibed at the state level.  We should situate project functions and functionalities where they should be. We should therefore not give absolute power in any kind of situation. There should be accountability, a proper management framework, and a system especially considering the huge amount of money and other resources that are invested in such intervention, especially given the fact that we don’t have any excess Naira or Kobo to waste this time around.

     Please let us note that the anchor borrowers’ scheme is not the problem, it was the institution that drove the scheme, the project framework, and how it was abused that led to the monumental corruption and waste, which was avoidable and unfortunate.  Accordingly, I advocate that moving forward we should have a strategy whereby all agriculture interventions should go directly to the farmers and not through middlemen and “special purpose vehicles” models that are reeking of corruption, because in the end the farmers either do not get the interventions, or they get useless interventions at very high costs to not effect The real farmers and all operator across the agriculture value chain should directly access intervention and there should be a clear dashboard to ensure accountability and measure success.

     Dealing with insecurity

    Dealing with insecurity remains a critical success factor, otherwise no amount of intervention will be successful and sustainable. Therefore, the solution approach should be wholesome in terms of security, and provide all operational requirements to support farmers and also upscale their capacities to produce across the entire value chain, not just production, but include, quality control, storage, value addition, packaging, logistics, enablement for marketing and sales, exports, etc.

     In addition, I also advise that the State Government should try as much as possible to remove their hands from taking over lands to produce but rather focus on ensuring the delivery of the Agricultural revolution strategy, ensuring compliance with regulations on production, quality control, research and development, strategy reserve, planning, cost of doing business, ease of doing business, measuring performance and effectiveness of the initiatives and the strategy. I commend the efforts of all the governors who are making efforts to restore security in all the States in Nigeria.

     Expectations

    •Cutting/ containing the cost of governance

    •Prudence in government spending at the top, across, and to be cascaded down the structure and system of governance

    •Blockage of leakages in the entire government (Federal and State levels). Because the more you get money and throw it into a bottomless purse, you cannot retain anything. Therefore, if we do not take seriously the issues of leakages/ wastages and prudence and Government behavior with regard to governance.

     Dividends of Democracy: People need to see that the Government is actually using the taxes collected and other revenue generated at national and state incomes to add value to the quality of life and properties of citizens, add value to governance, and to and for the progress of and for the growth and development of Nigeria.

  • Policy impact assessment  of expatriate Employment Levy    

    Policy impact assessment  of expatriate Employment Levy    

    About 3 weeks ago Nigeria was inundated by the introduction of the Expatriate Employment Levy by the Ministry of Interior asking business organizations to pay annual levies of $15,000 and $20,000 for every expatriate employee or Director respectively.

     The new levies were vehemently opposed by the business community across all sectors of the economy, with the Manufacturer Association of Nigeria (MAN), and various chambers of commerce across the country, raising serious concerns on the multiple, negative concomitant implications on not just the businesses and investments but especially on the economy of Nigeria, short, mid, to long terms. I had also stated in various media engagements that the EEL is ill-timed and will be counterproductive to the overarching objective of President Tinubu’s administration. The Letter written by MAN to President Tinubu seeking his intervention on this very important issue was germane and timely.

     I commend Mr. President for suspending EEL implementation pending more stakeholders’ engagements. However, I also advise that there should be proper policy interagency collaboration and coordination to ensure that policies are not inadvertently frustrating the efforts of the government.

     It is based on the foregoing that I share with us an impact assessment of this policy and other policies vis-à-vis the importance of policy coordination and coherence for efficient, effective, and result-oriented policy strategy.

     Investment Acquisition Versus Investment Retention

    According to the World Bank, the Foreign Direct Investment (FDI) profile of Nigeria plunged to almost 60% within 11 years between 2010 to 2021 from about $5.8Billion to about N2.8 Billion, and to make matters worse, Nigeria’s FDI inflows plunged further down to about $840million last year (according to the Nigeria Bureau of Statistics). The woeful FDI track record of the last 12 years is a clear indication of our dire need to reverse the trend in order to turn around the economic situation of Nigeria and subsequently put it on a progressive trajectory.

     President Bola Tinubu says his 9months old administration has so far attracted $30 billion in Direct Foreign Investment commitments into the real sectors of the economy, including manufacturing, telecoms, healthcare, oil and gas, and others.

    However, it is worthy of note that, according to the Central Bank of Nigeria (CBN) 3rd quarter report of 2023, by Q4 of last year, foreign investors divested over $200million with the departure of major investors who have been divesting from Nigeria in the past 4 years including Shoprite, one of the major Oil and Gas companies Exxon Mobil is moving to Egypt, and recently GlaxoSmithKline (GSK), etc.

     There are 3 things that ensure the sustainability of investment and trade climates anywhere in the world and they are investor acquisition, secondly, the enabling environment for the investments to thrive and the economic objective to be achieved, and thirdly and most importantly investor retention. If investors are not retained because most infrastructure and manufacturing investments are long-term; incoherent or inconsistent policies will kill the investments and economic activities around the value chain ultimately defeating the main objectives of acquiring and making the investments.

     Therefore, it is my view that policy coordination and coherence are critical success factors to ensuring that the investment commitments become realities and more importantly the existing investments are fully supported to be sustainable. This is because there is the need for an immediate inflow of capital to build critical infrastructure and catalyze production, in the domestic and export markets.

    Policy Coordination And Coherence

     Some of the major banes of our progress as a nation are policy incoherence and the lack of policy coordination by MDAs, albeit the intention may be good when government agencies work at cross-purposes to the detriment of the Country. From a policy coherence perspective, some germane questions arise, i.e. The questions that arise are as follows: What sort of work were put in place by MDAs when conceptualizing such policies? What level of inter-agency collaborations takes place while formulating policies to ensure that agencies do not bring policies that will be at cross purpose with the overarching objective of government or with other subsisting policies, either within the realm of their own entities or in other entities? What level of critical stakeholders’ engagement in the noble intentions behind conceptualizing the policies will not end up being counterproductive or unsuccessful in execution? Those questions are key to the formulation of far-reaching and impactful policies that will add value to the overall strategy of the government.

    I am bringing this topic to the fore because President Bola Tinubu has one big selling point and achievement since the beginning of his administration 9months ago and it is that he has invested a lot of time and money around the world to bring Foreign Direct Investment (FDIs), and we end up with some policies that could inadvertently negate all those efforts. From a strategy, risk assessment, and investment perspective, investors undertake due diligence before they commit to investment commitments notwithstanding the assurances that will be given to the President of a Country, and one of the key instruments of delivering due diligence if the SWOT Analysis, which is an acronym Strengths Weakness, Opportunities and Threats) During SWOT Analysis, it has been confirmed that “inconsistent government policies” are one of the “Threats” to any investment, local and international. Therefore, the preponderance of inconsistent government policies, and incoherent policies are red flags that stop investors from making investments especially the mid to long-term investments that are huge running into millions or billions of US Dollars over a long period of time.

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    Another key point to always note is that such policies are not only impacting foreigners but also our local investors, for example, the Manufacturers Association of Nigeria (MAN) local businesses have strategic and technical partnerships with foreign organizations and like also mentioned increasing the levy from $2,000 to $15,000 or $20,000 is based on what yardstick given the current global and domestic socio-economic realities in Nigeria. How will such a policy trigger a counter to rising inflation for example? So, in essence, a policy could be ill-timed and will certainly exacerbate the condition of our operating environment.

    Potential Violation of Bilateral or Multilateral Agreements or Laws

    Nigeria is a signatory to various international agreements and treaties for example the Africa Continental Free Trade Agreement (AfCFTA) and ECOWAS. Therefore, there is no gainsaying that it is important to undertake research and coordination with relevant MDAs to ensure that the policies under consideration will not breach any subsisting agreements of treaties and in cases where such agreements and treaties must be breached we should have answers to those breaches otherwise there will be negative consequences on Nigeria and Nigerians, either on the short and mid-terms or on the long terms. For example, the provisions of the AfCFTA and ECOWAS are very clear regarding breaking down trade barriers amongst African Countries (of West Africa in the case of ECOWAS) to ensure the free flow of persons, goods, and services for the ease of trade and business across borders without encumbrances. The EEL policy could have some negative diplomatic consequences on Nigeria due to reciprocal diplomacy whereby other Countries may swiftly apply such a levy. The same levies on Nigerians providing goods and services in other African Countries or even other Countries around the world. With over 17 million Nigerians in the diaspora, the potential ripple and concomitant effect on our polity will be a strategic mistake that could have a negative impact on a struggling economy that Mr. President is trying to salvage it.

    From an economic perspective, there is a need to have a robust assessment of our policy coordination and policy coherence initiatives. For example, a situation whereby Mr. President is trying so hard to catalyze economic growth, investment, and trade and we have within the same administration policies that are counterproductive to the overarching objective of the administration. Another instance is that within two months this year (from January 1st to February 14 this year), the CBN adjusted the import duty rating 5 times, this is important because import duties are benchmarked against the US Dollar the implication will be the impact of the cost of doing business, ease of doing business, a galloping inflation rate which will ultimately directly or indirectly increase the cost of living crisis. Introducing the EEL having adjusted import duty ratings 5 times within 2 months will certainly negatively affect the efforts of Mr. President to not just bring FDIs who will be discouraged to come in but to also further compound situations for the productive sectors of the economy struggling to survive under the brutal impact of economic challenges.

    In closing, I hope that the EEL episode will be a learning point for key drivers of MDA to take note of policy coordination and coherence while formulating policies for our common good.

  • States, rise up to cost of living crisis

    States, rise up to cost of living crisis

    THE NEED FOR URGENT ACTION

    The cost of living crisis in Nigeria is getting worse with brutal consequences for citizens, and this requires urgent action by the State Governments. Three weeks ago (on February 16), I wrote on the same topic with a focus on the Federal Government. In today’s edition, I have some notes for the State Governors where they are dealing firsthand with citizens’ reactions to this terrible situation.

     Nigerians are expecting accelerated interventions at the subnational level. I commend the efforts of some Governors who have already taken proactive steps to mitigate the impact of the removal of fuel subsidies on their populace. The notion that the President is the only one responsible for the welfare and well-being of the citizens of Nigeria is not correct. The Governors are also key to the delivery of good governance as is evident in your various activities and interventions. But there is a need for more action and performance, with consequent positive impacts and more visibility. It is also worth noting that the political consciousness of Nigerians has been at its highest since independence, and therefore the citizens are watching and will be sensitive to developments (positive or negative)

     The Federal Government cannot do it alone, state governors must think out of the box, because all the states in Nigeria are so blessed with man and material resources such that no state has any business being poor. Socio-economic recovery and sustainability can only be achieved with value creation and value innovation.

    FOOD SECURITY

    One of the key interventions that Mr. President provided was the release of over 24,000 tonnes of grains. But it is important for us to note the rule of subtraction without addition – it means we are depleting or we have already depleted our strategic reserves. The global warming indicators have shown that food production this year will be less and then there is the big elephant in the room, i.e. insecurity that has kept farmers away from the farms for a long time. Therefore, there is anticipated global food insecurity. So, I expect that within the whole intervention framework, we will have plans to replenish the strategic grain reserves as quickly as possible, because the strategic grain reserves are the last lines of defense and must be available at all times. Otherwise in the next 5 to 6 months during the rainy seasons, naturally there are food shortages during the rainy seasons even without the issues of insecurity, global warming, and the depleted strategic grain reserves. It means that there is a potential disaster by quarter 4 of this year if a concerted well-thought-out strategy is in place immediately to proactively manage the impending danger.

     There is a connection between food insecurity and health, education, and poverty. Because the agriculture value chain produces not just food, but raw materials for industries, raw materials for medicine, and healthcare. Food insecurity will also increase the rate of malnutrition in some parts of Nigeria, especially the northern region where we have the highest number of multi-dimensionally poor Nigerians constituting about 70%. In addition, because of malnutrition and increased infant mortality, there is already a prevalence of hunger and poverty. People are dying due to hunger, and people have started resorting to desperate measures resulting in social unrest and an increase in crime.

      The critical success factor to turn around the socio-economic malaise in Nigeria is first and foremost tackling insecurity. Otherwise, any other initiative will be a “flash in the pan”. This is because the recent escalation of insecurity around the northwest, north-central, and even southeast is hampering food production, otherwise, we are taking two steps forward and three steps backward. This has significantly impacted food security. The northern part of Nigeria is the food basket of the nation and is arguably some part of the West African sub-region. Farmers have gone to the farm late this year. Climate change is impacting, and the danger of food insecurity is looming. There is a need for quick actions

     CRITICAL SUCCESS FACTORS

    •       We should not lose sight of the significance of national security as a critical success factor in achieving food security. For instance, the fertilizers that will be shared will be worthy of note that the fertilizers will be useless if the farmers cannot go to the farms to produce due to insecurity. Farmers need to return to their farms as soon as possible to produce more food and raw materials for the economy to mitigate the looming food shortage with dire consequences.

    •      Value innovation through Public-Private Sector (PPP) initiatives. In this case, I dare say the “real, people-oriented and impactful PPP” models (and not white elephant projects) if used viably and efficiently as strategic tools, will change the dwindling fortunes of the States, especially in terms if critical infrastructure like roads, bridges, agriculture, solid minerals exploration and management, health care systems, etc.

    •      Another critical success factor is in the area of Youth Empowerment. I urge you to continuously harness the skills of Youths and channel them to productivity and development, from technical skills acquisition, talent hunting, value, and job creation, entrepreneurship, and importantly education in all its ramifications, value re-orientation, and leadership by example. To enable them to earn sustainable good lives and livelihoods.

    •In addition, at the National Executive Council level, to see some new strategic synergies of creativity to engender productive states and national economies in the short to long term.

    •Inter-state collaboration and partnerships regardless of party affiliations are very important going forward. I expect to see more of such collaborations by individual states and also by leveraging platforms like the Nigerian Governors Forum, for governors to look beyond party lines and to look at the constitutional mandate of governorship and align the provisions with the visions and aspirations of Governors. Such partnerships could result in an increase in the income of your respective states, create more jobs, and better the welfare and well-being of your people.

    •Entrenchment of the culture of excellence and prudence in the public sector by providing quintessential leadership, i.e. starting the reforms from the top and setting examples with zero tolerance for indolence, mediocrity, nepotism, and sycophancy.

    •Transparency and Accountability in public service, resource allocation, and utilization

    •Anticorruption Strategy and Value-Reorientation: Beyond the mantra to action through realistic, practical, and pragmatic plans and actions with the requisite strategy, management, and execution.

    •Local Government Autonomy: While this topic remains a thorny issue in line with the principle of devolution of powers, I will still urge your excellencies to ensure the entrenchment of the autonomy of the Local Government Administrations as a critical success factor for governance at the State level. This will remove a pile of blame from Governors for the non-performance of some Local Government Chairmen and their Councilors.

    Read Also:High cost of living: Be patient with Tinubu, Oyetola tells Nigerians

     YOUTH EMPOWERMENT IN AGRICULTURE

    The youths of any society or nation are key to the development and substance of that nation.  A very worrisome situation in Nigeria is the lack of deepening commitments and impacts with regard to the support for Nigerian youths to seriously take Agriculture as a profession or business. Part of the issue is that Agriculture has been nationally unattractive and more of a campaign tool than a national and state economic development tool. Over time, successive administrations have not sustained agriculture initiatives and interventions that would have made agriculture the “go-to” industry, for people to be encouraged to join farming.

     ROLE OF STATES AND LOCAL GOVERNMENTS

    The importance of the roles of the States and Local Governments to improve our Agricultural value chain and its socio-economic contributions cannot be over-emphasized. Apart from the national agriculture sectoral reform strategy, which I suggested in last week’s episode of this Column, that we should have at the Federal level, the State Governors, the National Assembly, and state assemblies need to do more in crafting their various Agriculture reform strategies that will key into the overarching national development plan while taking into cognizance their peculiarities with a view to harnessing all their agricultural resources in the states for better socio-economic impacts -short to long term.

     In conclusion, your excellencies, I know that governance at this critical time in the history of Nigeria is not easy, and I commend you for taking the bold and tough decision to serve as governor in the Federal Republic of Nigeria. I am also sure that you prepared for this moment knowing the challenges that you will face, and more importantly, your people elected you with a lot of expectations. Therefore, to whom much is given, much is expected.  I leave you with this quote. I wish you all, Mr. Present and all Nigerians, God’s Guidance and Grace. May Almighty God Continue to Bless the Federal Republic of Nigeria.

  • Ammendment of the 1999 Constitution: A call on the Elites

    Ammendment of the 1999 Constitution: A call on the Elites

    “We cannot be mere consumers of good governance, we must be participants; we must be co-creators. As citizens, we have to co-create good governance, we cannot outsource it and hope to be passively happy consumers. Like everything worth its while, good governance must be earned.” … Rohini Nilekani – Indian writer, author and philanthropist

    About 10 days ago President Bola Tinubu met with the 36 state governors to discuss the rising food insecurity, inflation, cost of living crisis, and insecurity. The outcome of the meeting chaired by Mr. President was the decision to establish State Police at the subnationals as one of the critical success factors to stop the rising insecurity in Nigeria. Consequently, legislative processes have been initiated at the national assembly to kick-start the process of amendment of the 1999 Constitution which is a Sine qua non for the establishment of the State and Community Policing, restructuring/ devolution of powers, local government autonomy, etc.

     Accordingly, the 10th National Assembly has commenced the process of amendment of the 1999 Constitution. Three days ago, at the Transcorp Hilton Hotel, Abuja, the House of Representatives inaugurated a Special Committee to review the Constitution, which is to be Chaired by the Deputy Speaker of the House of Representatives, Rt. Hon Benjamin Kalu.  Some State Governors have also kick-started the process that will initiate legislation for the establishment of State Police. The Special Committee will deliberate on about 44 Bills which include; devolution of powers, state police, local government autonomy, gender mainstreaming , change of our legislative system to a unicameral parliamentary system, etc  Interestingly, at the event, the Conference of Speakers of the Nigeria States of Assembly represented by their Chairman, Honourable Adebo Odundoyin have expressed their full support for the Constitution Amendment Process and state the readiness of the State Assemblies to undertake legislative reviews at subnational levels to ensure development in their respective States in particular and the Country in General.

     It is against the background of the aforementioned developments that I find it necessary to speak to all well-meaning Nigerians, particularly the elites, through this medium , on the importance of citizens participation in the legislative process as a crucial value-addition to the enactment of sound, far-reaching, , practical, relevant and impactful amendment of the Nigerian constitution and also laws that will further unify Nigeria and ensure delivery of good governance. By “elites”, I mean the middle-class citizens, who are mostly educated, gainfully employed, and part of the governance and leadership structure of Nigeria in the Civil Service, Public Service, and Private sector. We are mostly employees or employers of labour as professionals, business men/women, entrepreneurs, academics, craftsmen, etc within the organized and informal sectors.

     MY CALL TO THE ELITES OF NIGERIA

    The political landscape is broadening and the political consciousness of Nigerians has heightened over time, with citizens demanding for good governance and increasingly knowing the power of their votes. 

     However, in my opinion, good governance is not just about waiting for politician to do as they wish while we lament about how things have been going worse in the past 24 years since the return of Nigeria to  democracy, but good governance is a process which includes citizens making demand and actually setting the parameters, standards of the kind of leadership their want and the accountability and performance framework based on which they will measure their leaders at all levels and hold them accountable.

    I dare say that except for the 2015 and then 2023 general elections, the elites of this country have been serially and unfairly undeserving of the political evolution of Nigeria by not being actively part of the political process. We mainly engage in “arm chair “criticisms and cynicisms. the question is what are the contributions and sacrifices we are making to better the political process? It is not good enough to just lament and pontificate. What solutions are we offering and how are we part of the solutions? As the saying goes, talk is cheap! It is time for action. Take note that not participating in the political process is also a vote of confidence on the status quo. And if we don’t participate, then we lose the moral ground to challenge and hold our leaders accountable because we would have a really failed ab initio in our roles as citizens.

     We, the elites have been failing the masses of this Country by not really taking tangible actions that add value to our political process. Only when things affect our relatively comfortable lives do we try to gaslight the situation and make it look as if we are all in it together! That is what I call the “hypocrisy of our expectations “. It’s not good enough to carry placards, because the elites don’t even carry the placards anyway. I urge us to actively and consistently engage the leadership of this country at national and sun national levels so that we can all “own” the outcomes or collectively “disown” the outcomes of our political processes in the overall interest of Nigeria.

     So, to the elites and the “sabi sabi”, “egg-heads” and “arm chair leaders” amongst the elites (and they are in the majority) – it’s time to get down from our high horses and be part of the process. We should articulate our respective WhatsApp group banters, lamentations, arguments, and pontifications to real actions and contributions by articulating position papers and term papers and by attending public hearings. These are some of the most crucial and value adding actions the elites should take! Enough with idealism, judging, criticisms, and “talk shops” – LET US BE PART OF THE PROCESS.

     Meanwhile, I recognize the efforts of a few elites who have ventured to speak truth to power in trying to put the Government on its toes, those efforts are impressive and highly commendable. But to demonstrate sincerity of purpose, we should remain consistent. We have a lot of work to do in order to make Nigeria great.  Insults and toxic cultures will only plunge us further into the abyss of backwardness as a nation and as a people.

     SOME POINTS TO NOTE

    I humbly submit an action plan to guide our thoughts and conversations:

     •Going forward, we should Mainstream group discussions by articulation, lobby, advocacy, and participating in public hearings, and submitting papers to relevant arms, and institutions of government at state and sub national levels

    •Leveraging Technology and Social Media to raise awareness and galvanise support for very crucial provisions to be made or included in the constitution amendment. All these can be done in an organized manner. WhatsApp groups and other conventional community and interest groups and societies could articulate and refine their thoughts and positions on  the various topics of review and submit them as proposals to the respective Constitution amendment Committees and also fully participate in the legislation process through follow-ups and performance reviews. 

    Read Also: Cement price hike: NIQS throws support for importation

    •These engagements should not stop only with the Constitution Amendment but to also include other subsequent legislations  to introduce new Acts/ laws or for the review of existing laws.

    •Confining our conversations only to Whatsapp groups, dinner table conversations of side talks means that we have abdicated our responsibilities as citizens and that is why we end up hamstrung with ambiguous laws or incoherent policies that in most cases destroy our economy and social structure and system while we complain on the side lines to no effect.

    •We must not leave the entire thought processes and actions of legislation to politicians who in most cases do not even consult their constituents but rather push some other agendas to the detriment of the people. If these continue to happen, we should all have ourselves to blame and importantly we will actually continue to live the brutal consequences of not paying attention and participating in our political process, or die as a result.

    •We should please note that the process is the most important part of our political evolution. Because the process will determine the quality of the outcome and impacts.

    •As citizens, we should also be very aware and fully engage in sectoral reform legislation to ensure that our individual and collective skills, competencies, and capacities add value to the process so that our various areas of profession or interest are supported for our collective good as a people and as a Country. I believe that active and more robust stakeholders engagements and citizens participation will not only strengthen our democracy but more importantly will ensure good governance and consistent delivery of the dividends of democracy at all sectors and strata of our Country.

     I will leave us with a food for thought to reflect on: The achievement of the national growth and development that we dream of will continue to be a mirage, until we actively participate in the political process of the evolution of Nigeria.