The Nation Newspaper

Category: Sanya Oni

  • Legitimate padding?

    Legitimate padding?

    By the time we are finally done with theYakubu Dogara/Abdulmumuni Jibrinroforofo, we ought to be well on the way to removing the last veil on ourso-called Appropriation Act as anything but a hybrid of farce and fraud.Aside the ostentatious play on semantics and legalese that has charmed many as much as it has left a good number equally bewildered in the wake of the animosities, one of the more  interesting asides is the current pretense about the annual exercise of rolling out appropriation figures as anything but an elaborateruse. So, whileNigerians may not have been better educated on the concept as has been bandied in the wake of the storm in Dogara’s House, the same cannot be said of their awareness of the element offiscal accommodation described as padding which continues to make nonsense of the country’s projects and plans – the same way that Nigerians are only too aware of the shoddiness that has become the defining character appropriation process since the fourth republic berthed.

    So much for its “sail into definitional labyrinth”(to borrow the words of The Nation’s ever perspicuous columnist, Idowu Akinlotan), Nigerians know better than to expect anything more than a perfect storm in a teacup at the end of the current animus – beyond of course its entertainment value – thanks to the ruling All Progressives Congress.

    Such as been the massive play on words – a swing from the semantics to legalese – in what has become a futile effort to explain a practice rooted in avarice.  Imagine being seduced into thinking that the whole business was about some finer points of constitutionalism, the most cherished principles of separation of powers between the executive and the legislature, or some pretense to fiscal rectitude? Those are obviously far from the contemplation of Dogara’s House. Rather, we are talking essentially of pork –projects packaged and delivered as constituency items in the budget; projects of extremely dubious utilities whose chance of execution often tended to zero.

    Dogara is right though. There can be no argument about the constitutional provision that “to money shall be withdrawn from the Consolidated Revenue Fund or any other fund of the federation except in the manner prescribed by the National Assembly…. And that the budget is a law and nobody can object to the fact that only the legislature can make law, so it is only the parliament that can conclude it”. But then, he is damned wrong to imagine that he and his coterie of principal officers can do as they please with our commonwealth. Moreover,  the allegations by Jibrin, to the extent that they strike at the heart of the integrity of the appropriation process as indeed the integrity of the House over which he presides would seem to be deserving of full attention of the full plenary than the principal officers of the House are willing to undertake. That is why Nigerians are involved.

    Let’s us be clear in this. No one is as yet pronounced guilty. Indeed, as far as I can see, the whole notion about padding being either a crime or whether it is a justiciable matter is particularly contestable.

    As for definition, I have checked not a few dictionaries. One of them, Dictionary.com defines padding as “to expand or add to unnecessarily or dishonestly”. Although the definition, as pejorative as can be, would suit Jubrin and Company poised to do Dogara in, it seems doubtful that it would help their cause in any significant way beyond of course the moral issues already in the public domain.

    Nigerians however need to know whether indeed the principal officers acted in good faith; whether the clean copy of the document presented to President Muhammadu Buhari was the one the House actually endorsed, or as is being alleged, the principal officers introduced some new elements before its transmission to the president.

    Is‘padding’necessarily unlawful? Maybe not; it is however not necessarily right. Depending on how it is carried out, it could in fact be wrong. I guess that was the point that Lagos Lawyer, Wahab Shittu sought to make last week. Writing on the subject in The Nation August 9, he agreed that “the National Assembly is entitled to reduce or increase expenditure for projects earmarked for execution by the president in the budget preparation”, the caveat being that the National Assembly is NOT entitled to add its own projects to the budgetary estimate presented by the President. In his opinion, “if the National Assembly is interested in any project, it may consult with the executive who may then add such projects to the budgetary estimate prepared by the president as part of the president’s developmental agenda for the country”.

    Hopefully, Nigerians would yet see a more definitive pronouncement on the matter by the courts in the nearest future. The debate continues.

    For now, the point which no one should be in denial is that padding – legal or not –has become a cancer that must be rooted out of the budgetary process. To the extent that it has constituted the perfect– albeit illegitimate – mechanism through which privileged officials –elected or appointed – secure unearned privileges at the expense of the rest of us, it simply has no place under a regime sworn to transparency.

    Restoring integrity to the budgetary process is therefore way to go. It is a tough job no doubt. Of course, the National Assembly is not the only sinning party. How do you deal with the hordes of bureaucrats, those anonymous  fellows sworn to juggling up the figures from year to year? What about the administration’s appointees, the men who, although have their fingers in the pie, and yet can’t be seen to do any wrong?

    Where do we begin? Any ideas?

  • For states, not yet a respite

    For states, not yet a respite

    With no end in sight to the crushing burden of workers/pensioners emoluments that has left the economies of most states in the federation prostrate, one of the more heart-warming developments must be the announcement by Finance Minister Kemi Adeosun on July 21 of a record haul of N559.03 billion into the federation account. Rising from the July meeting of the Federal Accounts Allocation Committee (FAAC), the minister had announced that the amount, the highest so far this year, comes with a dramatic upshot in the gross revenue accruing to the federation by N301.32bn, also the highest in a long time.More significantly, she attributed the increase in revenue to efficiency in collection by the revenue generating agencies:  “The big cause of the increase is the improvement of non-oil revenue from FIRS. The FIRS improved its performance between last month and this month by N165 billion…there was also an improvement of N12.6 billion by Nigeria Customs Service…”

    Withthe cash haul probably no more than the proverbial tiny droplet in a swathe of parched land, it was no surprise that nearly all of the finance commissioners present opted to keep mum on the development perhaps for fear of raising expectations at their states.Yet, at a time many of our governors have thrown up their hands in surrender to the threatening insolvency, the achievement needsonly to be seen in the broadercontext of the current economic meltdown to be appreciated. Indeed, that appears to be the high point of the 135th Meeting of the Joint Tax Board held in Abeokuta – a week after the minister’s announcement. Speaking at the occasion, the executive chairman, Federal Inland Revenue Service, FIRS, Tunde Fowler, let it be known that70 percent of the amount came from non-oil while only 30 percent came from oil sources (Never mind that, N79.27 billion represented gains made from exchange rate differential).

    If you thought that was remarkable, he would attribute the sterling performance to “massive new taxpayer registration drive, tax education and engagement through the establishment of the Federal Engagement and Enlightenment Tax Teams, FEETT, audit of five key sectors: banks and the financial sector, aviation, power, telecoms and oil and gas is beginning to yield result” just as healso disclosed at the forum that FIRS has added over 700,000 new corporate accounts in since he assumed office with a target to register at least 10 million additional taxpayers by December 31 – and this in addition to the cumulative figures of 10 million registered taxpayers from states Boards of Internal Revenue and the FIRS combined.

    Indeed, an elated Ogun State Governor, Ibikunle Amosun, would effusively tell the representatives of FIRS and other revenue generating agencies present: “Whatever you, Customs and others did last month that ensured that we ( federal, states, shared over N500 billion at FAAC, please continue to do it. It is good for the Federal Government. It is good for states. It is good for Local Governments. It is good for the nation’’.

    That admonition by the accountant governor, in my view, ought to have been directed to his governor colleagues most of whom have done little else than moan since the price of crude oil took a plunge. For many, governance has taken flight leaving an industry of excuses. If you ask me, the message to them at this time ought to be that they should put on their thinking caps to address the problems they were elected to solve. Topmost of the problem is the issue of unpaid wages and pensions.

    The import of the development is to see it as signposting the latent possibilities in taxation as a key driver of government, the promise of a new dawn in the nation’s quest to carve out a future less tied to the vagaries of oil. That FIRS is able to rake in that much at a time when economic activities are at their lowest ebb makes it even more remarkable.  While it might seem early to clink glasses in celebration given the vast grounds to be covered, there is certainlya lot to be said of the steady and remarkable transformation of what was once a laid-back revenue collecting agency of the federal government on the one hand, and the equally steady regression of the states’ Boards of Internal Revenue (minus Lagos) to such an extent that some of our governors have been reduced to whining administratorstoday.

    There would of course a few exceptions among the governors;  the overall picture however is a class that have since lost it: a class that has become an appalling spectacle in lack of preparedness and imagination; a revelation in the profound lack of understanding of the challenges of governance, and above all, a class lacking the will to tackle headlong the problems as they come.

    Evidence? Where else to look but the ritual of endless cleanup of payrolls in search of ghost workers –exercises that  are increasingly looking more like motions to buy time than anything else; the emergency embrace of placebos – which comes by the usual refrains about getting back to agriculture even when the policies that make such prospects promising have barely incubated in the minds of their promoters; variety of ill-thought measures that present appearances of something being done to the outright hare-brained ones such as the one proposed by Governor Rochas Okorocha of Imo State to reduce the five working days to three.

    To these we may add the endless supplications in government houses for a rebound in crude prices.

    It is perhaps trite here to counsel that the current problems will not disappear by mere wishes. The truth is that there is nothing in the problems in the states that cannot be solved by hard thinking and work. Time our governors sat down to work.

  • The economy in recession

    The economy in recession

    If anyone was ever in doubt about the depth of the crisis rocking Africa’s so-called largest economy, Finance Minister Kemi Adeosun’s parley with the senators on the state of the economy on July 21finally settled that. Now, it is official: The Nigerian economy is tending precipitously to the abyss. According to Adeosun, “… if you have two periods of negative growth, you are technically in a recession… we are in a tough place, whether you call it recession or not, we are in a tough place, but the most important thing is that we are going to get out of it…I don’t think we should dwell on definitions, I think we should really dwell on where we are going.”

    Talk about finally terminating the pretence of being sub Saharan Africa’s fastest growing economy;the exaggerated claims of macro-economic stability – touted asderivative of PDP’s interminable reforms and,of course,the dubious claims of superlative growth in non-oil export earnings etc. That these “achievements” are coming undone within a year of the latest cycle of oil price shocks obviously says a lot about the 16-years legacy of the PDP.

    My sympathies goes to the Buhari administration’s Economic Management Team on whose lot it falls not just to explain the cause of the current crisis but totackle them headlong. While I have struggled to understand what the minister meant by “technical recession”, it seems to me that the luxury of some semantic indulgences is one the administration can ill-afford at a time when fire is literally on the mountain. In this, the minister ought to have known better than stoke controversies on the distinction that comes to nothing really.

    I assume that Nigerians already know the meaning of recession. One online dictionary defines it as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales…” The implication is that recession does not last for long.

    Most Nigerians would probably contest the latter considering that the phenomenon has come to define the way they live and have their being. Indeed, most would consider it the ‘standard normal’ given the many cycles of booms and busts they have had to endure. Whether in the context of families’ ever-shrinking disposable incomes in the midst of hyperinflation at the best of times; or at the worst of times as in thecurrent acute scarcity of forex that has meant nothing but trouble for the manufacturer who need to import raw materials and spares to keep his factories working, Nigerians are only too aware of the frightening statistics of economic underperformance that have come to define their existence.

    By the way, did anyone ever come to the point of doubting the destination of a country whose manufacturers and other key real sector playershave been on a death row for as long as anyone can remember; an economy where power supply is a rarity and other infrastructuresare at best at pre-industrial levels; where the small and medium scale enterprise dieby the scores – daily;where banks have long shifted from their traditional function of financial intermediation to focus instead on servicingthe crazyindulgences of irresponsible bankers and their promoters; a country where consumption trumps production andspeculation trumps wealth creation? That is the Nigerian economy for you.

    Minister Adeosun therefore discloses nothing new when she says that the country is under technical recession. What would have been refreshing is if the minister availed Nigerians of a concrete pathway out of the problem and in such a way and manner to suggest an appreciation of the dire emergency.What we had instead is anapparent gross understatement of the problem on one hand, and an exaggerated optimism about the prospects of recovery on the other. I found that troubling.

    I do not think that anyone should be mistaken about what is at the heart of the current crisis: virtually every sector is in a state of meltdown. From factories that are drawing shutters on their operations to the anaemic financial institutions plagued by internal operational inadequacies, the story of scale-back is the same. The collapse in global oil prices has merely exacerbated the problem of an underperforming economy. The consequence is the current situation in whichfar more Nigerians are out of work than those in productive pursuits.

    And what has been the federal government’s response? Considering what is clearly an emergency, I would say too little.Imagine an apex bank supposedly sworn to attract funding to critical sector raising interest rates from 12 to 14 percent all because, it claims it wants to attract savings in an economy where disposable incomes are at the lowest levels ever! Does anyone see the contradiction? So, how will a manufacturer, forced to borrow at 21 percent, compete with peers outside that can easily access credit at four percent?

    Let’s be clear: the situation, far from being insoluble, calls for imagination and clear sighted leadership of the federal government. It’s certainly not true to say that bold and revolutionary measures have not been undertaken before in similar circumstances. While there are copious examples from other jurisdictions, one ready example is when, at the height of the subprime mortgage crisis, the Americans came up with the Troubled Asset Relief Program (TARP) under which the country’s financial institutions’ toxic assets were purchased to strengthen the sector. That legislation,signed into law by U.S. President George W. Bush on October 3, 2008 was initially projected to cost the American treasury $700 billion, but total disbursements would later be reduced $431 billion.

    Back home in Nigeria, we had the local version of TARP in 2009 when the then CBN Governor Sanusi Lamido Sanusi bailed out the nation’s financial sector with an unprecedented N620 billion after their managements took them under.

    At a time millions of our youths pound the streets looking for what to do, has anyone thought of the paradox of keeping these bodied Nigerians idle at a time our roadsare begging to be fixed? Has anyone figured out the multiple benefits from setting aside a tiny fraction of the N268bncommitted in the 2016 budget to getting out-of-job contractors back on site to organise hundreds of thousands of youths across the country into work gangs,even if on temporary basis, to fix our crater-ridden highways? What would it cost to train young Nigerians in the emerging solar technology considering that that is the way of the future? How much? Does anyone even know?

    Time we began to think outside the box.

  • Anomie all the way

    Anomie all the way

    Suddenly, the ‘prophets’ are quiet. I mean the experts, the economists and our latter day‘manufacturers’ who yesterday predicated a stable reign of the national currency after its floatation. Well, the naira may havedone well – far beyond their expectations. By Monday, it exchanged for N292 to the United States dollar officially. And if you are unlucky to do any purchase abroad with your ATM, you’ll need fork out N366 to purchase a one dollar bill. My charge studying in Canada actually confirmed purchasing the Canadian dollar last week at the rate of N258.1 via ATM. By the way, the CAD officially sold at N218. On enquiry from the bank, she was told that foreign ATM transactions were precluded from official forex transactions. In other words, the black market rules on all ATM transactions outside our shores!

    Sure, we know that the black market rules in more areas that the regulators will care to admit – no thanks to the nation’s irresponsible elite and the financial system operators. The former, lacking any scruples, would readily sell the nation for a morsel of bread; and the latter, with neither the sense to understand the niceties of rules nor the ethical foundation to mind them would do anything for money. In the interplay between the two is a vast jungle defining our marketplace.

    Of course, if we go by the prediction of experts as reported by Punch newspapers, your naira, the symbol of the nation’s strength in the market place is in for a terrible time ahead with some predicting that it might even hit N350 to the dollar at the interbank window. That should not be hard to understand (never mind Godwin Emefiele, the nation’s number one banker’s projection ofN250).While very negligible production is going on, far much less is going on in terms of local value addition to primary products.The result? We earn less and less of forex to spend more and more on imported manufacture!

    Still want to know where the naira is headed? Short answer is – nowhere! Check it out; rather than the being forced out of existence, the black market – the so-called parallel market is on the ascent and so is the incentive for arbitrage. At the subsisting differentials of N65 to N70 between the interbank and parallel market rates, it would take more than a vow of poverty to resist the temptation to round-trip.

    Truth is – had the economy’s minders spent as much time on how to get the economy on its feet as they have done on figuring out the arithmetic of sharing the shrinking piggy bank, we would probably be well on the way to developing the concrete policies to get some our critical industries revving back to life and to boost our forex stock.

    Not that anyone is complaining at the moment though. Not our dot.com analysts – the friends of the foreign merchants for whom tight forex regulations had come to spell trouble. Not our manufacturers, who, hung on forex, need the cover of machineries and raw materials to ship our increasingly scarce capital abroad. Now, everyone can have their heart’s content of the forex they are not earning under the liberalized forex regime. For now, matters of affordability or even the crushing illiquidity will have to tarry a while. The same for the foreign carriers; time to cart their $500 million ticket remittances – and more –home.

    You ask where this leads? Where else but the warm embrace of the very Breton Woods institutions and their toxic brew of policy support instruments – the potion that Nigerians have come to loathe? Does anyone see how nearer we are to the 1980s than anyone would care to imagine?

     

    Court vs. NERC: Play of the giants?

     

    Last week, a Federal High Court in Lagos ruled against the bid by the National Electricity Regulation Commission (NERC) and electricity distribution companies to increase electricity tariff. A Lagos-based lawyer, Toluwani Adebiyi, had following announcement of a new tariff regime, approached the court to stop the hike until there had been a meaningful and significant improvement in power supply to at least 18 hours in a day in most Nigerian communities.

    Of interest is the finding of the court.

    In the opinion ofJustice Mohammed Idris,”The upward increment in tariff was hasty and procedurally ultra vires. The review was done in a breach of existing order. This again was hasty, reckless and irresponsible”.

    The erudite justice went on: “The court has the inherent jurisdiction to undo what has been done by a party in self-help.The increment in tariff by the 1st defendant, while parties were before the court and there was a subsisting order for status quo, is hereby declared illegal. The 1st defendant is hereby directed to reverse to status quo. The 1st defendant is further restrained from increasing the electricity tariff except in strict compliance of the provisions EPSRA and the procedures stipulated in section 76 of the EPSRA”.

    By the ruling, the judge may have preserved the sanctity of his orders; the issue is whether public policy will be served either now or in the long term.

    Agreed, issues of tariff determination have never been anything but a dangerous territory. Understandably, it is one area where Nigerians would rather have their passions, rather than cold economics, rule. This is even more so in a sector whose key players have neither lived up to their billings as responsible service providers nor appear persuaded of the need to play fair. We are talking of an environment where the regulator not only prefers to play the ostrich but would readily pander to the dictates of the players.For the Nigerian consumer, it is a Catch-22 situation.

    Yet, the ruling, no doubt populist, has merely complicated if not compounded, what is already a bad situation. Such weighty pronouncement on the basis of nebulous procedural technicalities without minding the grave risk the order could cause the sector? Will the court also direct that other elements in the cost chain be kept on hold until the final determination of the court?

    These are interesting times.

  • Peter Obi @55

    Peter Obi @55

    Whereas his admirers call him Okwute (The Rock), mostNigerians remember him as the soft-spoken but doughty fighter who took on the principalities and powers in his state and prevailed. The man, Peter Obi, former governor of Anambra State clocks 55 today.

    A proverbial cat with nine lives, he took office on 17 March 2006 after nearly three years of litigation only to be impeached by the state House of Assembly after seven months in office. He later successfully challenged his impeachment and was re-instated as governor on February 9, 2007 by the Court of Appeal, Enugu. He left office on May 29, 2007 following the general elections, purportedly won by Andy Uba won. He returned to the courts, this time contending that the four-year tenure won in the 2003 elections started to run when he took office in March 2006. On June 14, 2007 the Supreme Court of Nigeria upheld his position and returned him to office.

    Such was his doggedness – his unflagging spirit. There is however another  reason the country will not forget Peter Obi in a hurry: frugality. He was frugal to a fault. He not only ensured that every kobo of public money in his charge counted, he ensured that they delivered real value to the people.

    At a time when fiscal insolvency has become the staple across the states, our whining governors may yet have one or two lessons to learn from the books of the man they call The Rock. Happy Birthday, sir!

  • A president’s dilemma

    A president’s dilemma

    With Niger Delta’s avenging groups now nearing a dozen, it ought to be obvious to everyone that the nightmare of a nation hung on hydrocarbons is not about to end anytime soon.At least not with the number of groups sworn to bring the  oil industry and by extension, the nation to its knees growing day by day; and certainly not with each new group claiming to hold the franchise to the latest enterprise in town – the quest for wealth without work.Nigerians are obviously in for a long dark night.

    Today, the signs are unmistakable. Our gas turbines cannot run because there is no gas to power no thanks to the ability of the avengers to put thevital artery carrying gas outof business. The result: a nation that peaked at 5,000 MW in distributed power barely a year ago currently struggles to share 2,000MW or less. Our crude exports, the main source of foreign exchange,fare no better. With 2.2 million barrels crude production projected for the 2016 budget, the nation currently struggles to get 1.6 million barrels into what is itself a depressed global oil market. And this at a time some 27 states depend on handouts from the federal government.

    You canunderstand the basis of the metamorphosis of a President who only a while agoin a fit of righteous angerpromised to give those behind the mindless savaging of the nation’s vital infrastructures the Boko haram treatment.The President has merely opted to count the opportunity costs of extracting the crude to the market!

    To be sure, the success or otherwise of a military expedition could mean just about everything. We know that means; it could be the surest route to Gbaramatu 11 and perhaps Amnesty 11. That routeobviously discounts the possibility of failure against the disparate groups whose mastery of the creeksappears unrivalled at least compared with our fighting men;a group whose capacity for mindless destruction seems beyond comprehension.

    Does anyone still wonderwhy thePresident now seeks rather desperately to engage the amorphous groups going as far asinvoking God to touch the heart of those‘wayward children’?And the militants that continue to raise the stakes which each passing day?

    It is all about economics – the economy of a federal government threatened by bankruptcy and that of the free-wheeling militants currently under the threat of obliteration by the federal government. Both are desperately seeking accommodation and possibly a bailout!

    That is why I am amused by the current talks about war. War for what – when there is so much to lose and very little to gain? Forget all the show of force and the sabre rattling on either side; both parties certainly recognise that the war is unwinnable.

    Not for a federal government hung on Niger Delta’s oil; war at this time, apart from unsettling everything that the Buhariadministration has put in place will most certainly prolong the agonies of Nigerians yearning for improvements in their socio-economic conditions. With the economy in tatters and the infrastructures in dire straits, the pressure on the federal government to perform obviously leaves little room for the costlydistractionof a long drawn war.

    In any case, why would anyone declare a war whose outcome is as uncertain as it is unpredictable? Why not put some settlement ideas on the table to buy the peace even if tends to proverbially kicking the problem down the road?

    The militants are a different kettle altogether. Never mind their opportunistic posturing; they have even more reasons to loathe any war.True, they have tasted blood and have in some way acquired an awesome sense of power. Yes, they know the Niger Delta terrain so well and so can teach the biggest military on the continent a lesson or two about creek combat. But then, to what purpose? By the way, since when did those pricey SUVs, which they love to show off to lesser mortals in the region begin to run the dangerous creeks?

    A Niger Delta republic – minus the Itshekiri, Urhobo, Ikwere, Anang, Ibibio and the Efik?

    Trust me; the avengers know better than risk lives and limbs for such high ideals; not even such ideals as justice or equity – social or environmental. Guess if they knew, they would think twice about sacrificing their home and hearth through mindless destruction of pipelines for the joy of some assumed short term gratification. As for examples, they have Government Tompolos, the Asari Dokubos and their erstwhile comrades in arms to point at; dealers or traders who have made good on the militancy while their region suffered further pillaging and retrogression.

    Where do go from here? President Muhammadu Buhari obviously means well. No doubt, he wants to do good by the people of the Niger Delta. In the 2016 budget for instance, he wants a brand new Lagos to Calabar railways, a project, which if implemented, will open the vast region to accelerated development. Hopefully too, the East-West road will also come into fruition. Whereas the path to development can be sometimes tortuous and slow, he pleads again and again that the people should give him time. I understand that the people of Niger Delta, like their counterparts in other parts of the country, not only desire the good life but want it so fast.While that is bothreasonable and legitimate, the problem has always been the kind of good life as understood by the militants – a life defined by hedonism.

    That is where the president and by extension, the nation’s dilemma derive.

    Can the President afford not to given in to demands of the militants and by so doing risk further pains for the already impoverished but increasingly impatient Nigerians? Will giving in to the demands of the militants not occasion the emergence of more splinter groups? What about the ordinary Niger Delta folk, far removed from the animosities, who want to live his life in peace and desire a better future for his children and future generations?

    And what about Nigeria – a nation forced to endure the pain of humiliation and blackmail in the hands of these outlaws?And when will this end?

    It is a tough choice for the President.

  • Moment of truth

    Moment of truth

    For now, Nigerians can at least heave a sigh of relief that the long-running but rather unproductive debate about the value of the naira has finally come to an end. Just imagine; while the debate lasted, everything –from ordinary household decisions to weightier matters of the macro-economy- was kept on hold. It was like the budget circus all over again. Overnight, everything and everyone became endangered: the hordes of student-migrants in Europe and Americas who suddenly discovered that they could no longer process the so-called ‘Form A’ for their tuitions; the manufacturer who, after completing the rites of filling the ‘Form M’ and shelling out millions of naira to the bargain found that they had no forex  to buy; not least the trader caught in the trap of the 41 items declared ‘no go’ by Emefiele’s CBN; the latter stood no chance in the world of getting the scarce commodity from authorized sources.

    Yes, while it lasted, there were enough alibis for different actors to manufacture. Nigeria’s world, we are told, was falling apart. As one might imagine, there was enough blame to go round: the CBN for not making forex available; the government for being clueless in the face of unprecedented meltdown; manufacturers for being hung on forex while doing pretty little about backward integration. Lest I forget – our students, forced to travel abroad for obvious reasons of limited opportunities and poor standards – were told to return home. Never mind that an estimated two million sat for barely six hundred thousand spaces in our entire tertiary institutions. Yes, they can come back home to farm!

    Mercifully, all of that is now over. Thanks to Emefiele’s Pauline conversion, the naira is on the float. With an average of N285, you can you have the United States dollars to your heart’s content. For the time being, we can conveniently dispense with the mathematics of forex’s slowing accretion. With$26 billion in the reserves, an amount sufficient to cover five months of imports gravy, CBN Governor Emefiele reckons that the country will do just fine – considering that the global threshold is three months. That is supposed to be some consolation. Nigerians can enjoy the respite while it lasts!

    As we would soon be finding out, there is more than enough to worry about. Indeed, the mathematics of forex accretion, as many will soon find out, is everything. To the extent that the current course depends on the ebb of the petro-dollar, we have merely postponed the evil day. Today, we know how much of petro-dollars we can count upon. Pray as we might for quick recovery of oil prices, it seems unlikely that the supplication will be answered anytime in the near term. But that is not even near the potion of affliction waiting to be served by Niger Delta’s rampaging youths sworn to teach Nigeria the final lesson.

    The other worry is of course the so-called real sector. Like I noted last week, it is probably chic to pretend that the problem of the sector started yesterday – that it began and ended forex. How convenient!

    Sometimes, I am tempted to ask if we have anything that could be described as the real sector. Yes, we have dozens of so-called manufacturers, supposedly big time players. Unfortunately, only in moments like this are they revealed for who they are: packaging outfits or assembly lines! Yes, they need forex for machineries and spares. But that’s not the only reason they need forex: to transfer capital!Yes, they are a group – weaned on government largesse hence not known to be creative or think outside the box!

    Pity the small and medium scale industries; in an environment marked by infrastructural inadequacy and institutional indifference, they stand no chance.  Sorry.

    None unfortunately, compares with the pathetic federal government. Yes, the federal government is the chief culprit. It has not only betrayed a terrible understanding of the challenge but has proven increasingly at sea on how to go about the job of fixing the economy. Describing the current charadeas a rod ofaffliction, in the circumstance,is an understatement.

    Of course, we are in a dire emergency. Only the Buhari administration, with its snail-pace governance style, pretends otherwise. Today, we know for a fact that four out every youth is either unemployed or under-unemployed. Electricity supply is today a rarity; our roads belong in the 19th century or worse; it is certainly no exaggeration to say that the country has since abandoned any pretensions to aspiring to modernity.

    Moments like this make comparison compelling. One recalls that the mediocre Shagari administration in the 1980’s had the good sense to come up with an Economic Stabilisation Act when trouble loomed.At least that was some psychological motion! The late President Umaru Yar’Adua even threatened to declare an emergency on the power sector. That at least was borne of the understanding of the moment.

    What do we have today? Plenty of motions without any real movement. As it appears, none of the economic indices seems sufficient to stoke the panic button. It is, as they say in popular lingo: It’s all correct!Not the economy that contracted by four percent in the first quarter; not the spate of factory closures; the soar-away inflation that have bowled households over; not the hybrid of youth restiveness  described as militancy; not even the curtain of darkness thrown on the nation by the inept power utility firms seems sufficient enough to jolt the administration to action.

    It’s like things can go on like this forever.

    In case this federal government forgot: Nigerians didn’t elect them to find excuses; they were elected to fix the problems. Today, if the administration has any grand ideas about solving the nation’s multifarious problems, it is yet to avail Nigerians of them. As Nigerians are wont ask: if it takes a thousand years to prepare for an inevitable madness, how many years will the lunacy last?

    From the budget circus and now to the farcical forex play; where do we go next? Where?

  • Finally, the naira floats

    Finally, the naira floats

    Poor Godwin Emefiele. Last Wednesday, he finally caved in to the strident demands to let go of the apex bank’s hold on the foreign exchange market. The CBN document, ‘’Framework for Re-introduction of Managed Float Exchange Rate System” finally puts closure on the long-drawn debate on what the value of the naira should be and what role the apex bank should play in determining its value vis-à-vis major international currencies.  By that, the 16-month-long “managed” exchange rate under which our currency, the naira traded at N197 to the US dollar came to what is perhaps a long-expected end.

    Given the forces arrayed against Emefiele’s Central Bank of Nigeria, the odds that the bank could have held out came to one in a million. If the apex bank had thought that the threat of imminent depletion of the nation’s store-house of foreign currency called for understanding, or some drastic measures of sorts given thedire economic circumstances, that view was obviously not shared.

    The story, as sold, is familiar: the market worked best when allowed to allocate the resources. Never mind that the resource is forex whose inflow had come under intense strain as a result of falling oil prices and a vastly reduced output. Never mind that the Nigerians’ appetite for forex as indeed for all manners of imports havegone on the hyper mode – and this inexplicably. For our hordes of portfolio investors, the club of flight by night investors, the throng of airline operators who insist on being on first line charge on the increasingly limited reserves, the gospel must be – relax all controls on forex market to enable operators repatriate their remittance or their capital as the case might be!

    Trust our arm chair analysts noted for their preference to turn logic on its head, the argument went on and on that the restrictive monetary policies of the apex bank were behind the economy’s slowdown; that because the apex bank refused to throw the naira to the hounds was why nothing worked – or is working. For the manufacturers who had all these years to integrate their operations backward to gain long term strategic advantage but chose to be hung on imported raw materials, the problem was Emefiele. The sundry importers who traded in the 41-odd items declared ineligible by Emefiele’s CBN, surely, the man was insufferable!

    In the end, it was sufficient to pretend that the problem started yesterday; or that business could go on as usual;that the stock of the reserves which tumbled from $60 billion eight years ago to $48.174 billion five years after and which is currently down to barely $27 billion would somehow self-adjust.

    In the circumstance, the otherplausible argument that the current forex restriction was borne of an exigency – didn’t matter.From the delinquent Broad Street actors to dwellers of the nation’s decapitated industrial alleys, not forgetting the agents of foreign capital for whom the extant forex regime was sweet poison – all egged on by the meddlesome undertaker, the International Monetary Fund; the chorus was the same: the extant forex regime had to go after which all things are supposed to return tonormalcy!  The marketers, as they say in parliamentary lingo, have it!

    My bet: we have the coming weeks to find out who is right or damn right myopic!

    Now, let’s be clear – there is nothing mystical, or if you like, esoteric in the value of a nation’s currency.The conventional position is that it reflects acountry’s economic base particularly its ability to export and hence earn foreign exchange.But then, such position also flies in the face of other strategic considerations known to influence the direction of currency movements.

    On the first, it is not hard to explain that Nigeria did well in the past only because the good fortune of oil smiled on her: at a roaring oil price of $100-plus per barrel for years during which the nation’s foreign reserves threatened to burst it seam, the naira could hold steady whether or not the so-called non-oil sector performed.  As for the second, ask the Chinese;the Americans and the Asiatic; these countries know better than waste productive time debating whethermarket or policy underlies their interminable currency wars! They have been taught to not just to recognise the forces of national interests at work or playbut to be ahead of competition no matter what!

    What’s wrong with the extant restrictive regime? Nothing – if you ask me – except that the Buhari administration treated it as an end in itself. In other words, those who accuse the administration and by extension, the CBN of being needlessly obdurate in resisting the earlier call to let the naira float are right only to the extent that it became a stand-alone policy.  Don’t forget the problem: forex was scarce and supplyincreasingly finite; and what was available was under the threat of depletion.

    That takes us to the latest measures by the CBN. To begin with, I find the whole exertions on the value of the naira highlydiversionary. Again, if you ask me, I’ll say that the debate stems from a fundamental misdiagnosis of the problem. Far from what appears to be the current obsession with forex management, the problem, more fundamental touches on the ability of the economy to renew itself. As this column is wont to say, the problem comes down to the tragedy of a nation that relies on a single commodity for all its forex; one that spends a disproportionate chunk of its forex on imports.

    As far as I know, there are two legs to solving the current problem. The first part which is the easier part isto curb the imports. That, apparently was what the CBN attempted to do when it precluded 41 items from accessing forex through the official window. Unfortunately, in the absence of a coherent programme of import substitution either in the short, medium or long term, the nation’s expectation of self-reliance soon turned to waiting for Godot!

    The lesson: Import restriction does not automatically translate to a nation’s capacity to produce the goods!

    The other leg – which is the harder part – is to produce for export. That obviously requires a broad strategy – something far beyond the pale of the current regime of naira’s floatation.

    As for the winners of the latest CBN measures, there is no prize for guesing: the club of importers, currency speculators, portfolio investors – of course, the airlines whose equivalent of $500 million dollars cannot be transferred under the extant regime; they will surely be be happy. Dont’s ask me where it will lead!

    By the way, where in the world did the idea come that a relaxation of forex rules will bring the nation’s moribund factories to life?

  • Bogey of restructuring

    Bogey of restructuring

    With the nation’s back practically to the wall, we are once again, forced to debate the future of the ‘mechanical contraption’ called Nigeria. Like everything Nigeria, it has retained the essential all-comers flavour. In other words, just about everybody claims to know enough of the subject to qualify as an expert. As it is in the social media, so it is, unfortunately, in the mainstream media. Welcome to the talk-fest!

    The subject – you guessed right – is restructuring. A Nigerian Political Science undergraduate would be forgiven for imagining that Nigeria actually holds some proprietary rights to the fangled wordtouted – again and again – as the magical cure to the nation’s ills. Of course, with frustrations ranging from Boko Haram, cattle rustling, kidnapping, militancy and insurgency – all abounding; and with no end in sight to the multifarious challenges that have hobbled the nation’s march to greatness, the concept – like a treasured coin – and with it the myth that it has spawned, has simply endured. The credit for stoking the current fire however belongs to the Turaki Adamawa Atiku Abubakar. Sure, the man knows how to strike the right chords.

    The word restructuring of course means different things to different folks. I sort of like one online dictionary definition: ‘Bringing about a drastic or fundamental internal change that alters the relationships between different components or elements of an organization or system’. Based on the above, few will argue that Nigeria is not overdue for some overhaul of sorts. While for organisations, corporate restructuring is what they do from time to time depending on the exigencies to bring efficiency to their operations, in the hands of our emergency activists and politicians, it can mean just about anything from an alibi to nothing!  Could it also be a substitute for demands  accountable governance?

    Talk of moments when words are lost in frequent usage. I have heard it said that true federalism will do. Sure that’s also restructuring. Or, a break up the country into more manageable administrative units. That too is a variant of restructuring. Today, some folks in the Niger Delta region see restructuring as the key to the Eldorado, that place of eternal bliss where wealth without sweat is guaranteed –even if it turns out an eternal fiefdom of militias and warlords. The same way some in the South-east demand it to redress perceived age-long injustices and with it the unbearable yoke of devalued citizenship that they have been subjected in the Nigerian federation; how about compatriots in the South-west for whom the clamour comes close to a perpetual craving for relevance?

    Lest I forget, some in the Middle Belt – minus the North of course, wants it to stave off perceived northern domination. It seems given that the “North” which sees nothing wrong with the current structure.

    I agree that Nigeria’s problems have deep roots in its current structure. That is a fundamental fact. I could not agree more with the former Vice President on the need “for a restructuring and renewal of our federation to make it less centralised, less suffocating and less dictatorial in the affairs of our country’s constituent units and localities”. To be sure, he says nothing new when he says that the current structure “has not served Nigeria well, and at the risk of reproach, it has not served my part of the country, the North, well”.

    Again, that is beyond dispute. With perhaps the exception of Lagos, the rest of the nation’s administrative units – more appropriately centres of indolence – depend on Abuja for survival. So bad have things become that even the traditionally agrarian ones now wait on Lagos for Thailand Rice!

    More than half a century of independence, we neither have the capacity to generate and distribute sufficient electricity for domestic uses let alone our few surviving industries. As for high-tech industries, whereas countries like Brazil and India that were with us on the same level some 50 years have gone into aircraft manufacturing, the so-called African giant currently aspires to the level of cobbling foreign auto-parts in the name of auto-manufacture!

    The same is true of the infrastructure left by departing colonial authorities; whether it is the railways, the postal services or even the bureaucracy; we have simply run them aground!Today, more Nigerians are out of work than the number with gainful employment. With 10 million out of school kids, a population equal to half that of our next door neighbour, Ghana. With perhaps the exception of few domestic items, the country with the largest concentration of the Black race practically survives on imports from food to basic industrial parts. Our universities, supposedly centres of knowledge production are none of that; instead, they have increasingly become purveyors of ignorance and superstition. I have not yet talked about the paradox of a country which holds the dubious recordsof highest number of millionaires and the poor on the continent.These are no doubt derivatives of the current choking, retrogressive centralisation of political power. This, unfortunately, has spawned the craving for wealth without work, industry or enterprise and its countless variants of rent.

    There is however a more fundamental factor. It is a familiar story of the chick and egg – the question of which one came first. Did the collapse of the moral order – the fine but delicate fabric that holds the society together as an organic and productive entity – create the current monstrosity; or is it a case of the structure producing the monstrosity? Guess this is open to debate.

    One thing seems clear though: No matter how fanciful the proposedadministrative design is, I do not see it curing the current maladies.If it seems hard to imagine capitalism without its undergirding protestant ethos of hard work and frugal living, it is even harder to imagine a functional restructured Nigeria without value and attitudinal reorientation of the individual. Bring all the artefacts of modernity that money can buy;put on top a system of government that is out of this world, without a substructure of good citizenship,  the efforts at nation-building will come to naught.

    Of course, I worry about the collapse of the family and the erosion of the mores – the building blocks of society. Thanks to the new gospel that focuses on prosperity, we now have a generation for whom the sweat of the days’ honest labour is but a curse! And if you think this is limited to the level of the individual, imagine what goes on at the macro level – at the level of institutions charged with delivering services!

    Still want to know why your local electricity wants you to pay for services not rendered? Or the local hire that would loaf around all day and yet expects to be paid to be paid the full day’s wage? The artisan cutting corners? What about the ogas at the topthat spends official hours chatting away? And now, the avengers who care little about destroying their home and hearth for the pleasure of their dreamed Eldorado?

    Talk about thelonging for the‘restructured’entitlement.

  • One year of Ambode’s Lagos

    One year of Ambode’s Lagos

    Some 48 hours to the first anniversary of the Akinwunmi Ambode administration in Lagos, I chanced upon an online publication proudly announcing the latest ambition of the Centre of Excellence under its high-achieving helmsman: the induction of the state into the membership of the Rockefeller Foundation-pioneered 100 Resilient Cities. Membership of the network, described as “an elite international group proactively preparing to face any challenge that may lie ahead as the world faces huge deficits in preparedness for rapid growth and natural and man-made disasters”, according to the report, will enable her gain access to tools, funding, technical expertise, and other resources to build resilience the challenges of the 21st century.

    The choice of Lagos, according to the Foundation, – out of more than 325 said to have applied –is based on its willingness, ability, and need to become resilient in the face of familiar challenges of urban planning, transport gridlock, environment, public health and modern infrastructure that have dogged the 21st city.

    At a time when fiscal insolvency of states was the hot button topic in the mainstream media, and with more than two-thirds of the constituent states of the Nigerian federation locked in the battle for survival, it didn’t come as a surprise that the issue barely qualified for mention just as the idea of a state positioning itself for the future at this time would seem to many as an extravagant pastime.

    No matter. An elated Governor Ambode would go on to describe the development as “a significant honour”. The new status, according to him, “will give Lagos the tools to support a better Lagos today, tomorrow, and for future generations to come…”

    Said he: “As a new member of 100 Resilient Cities, we can work with the best in the private, government, and non-profit sectors in developing and sharing tools to plan for and respond to the resilience challenges ahead.”

    However, if the Rockefeller event passed without fanfare, not so the commissioning of the the coordinating agency for emergency responders – the Lagos State Emergency Management Agency (LASEMA) rescue unit at Oshodi by Vice President Yemi Osinbajo on May 23; and not least the highly publicised event of the commissioning of 140 Patrol Vans, 335 Power Bikes and other security kits procured for the Police and other Security Agencies by the Lagos State government at the Tafawa Balewa Square also on the same day.

    Yet, the two separate but nonetheless related developments, in my view, are significant; apart from setting the context for evaluating what the Ambode administration has done in the last one year, it is certainly a telling statement of where the administration seeks to take the state in the coming years. Indeed, only in that context can one truly appreciate the various initiatives seen in the last one year.

    Thanks to the impressive political economy laid by Asiwaju Bola Tinubu (1999-2007), a foundation which was built upon by Babatunde Raji Fashola (2007-2011), a burst of narrative of a city that has come to its own has long emerged. In my undergraduate Urban Sociology class in the early 80s, I recall the Lagos ‘development problem’ being framed in the narrow context of its sprawling slums – the rure-in-the-urbs; its many variants of inner city squalor world of shanties and decrepit structures and the challenge adaptive upgrading, alignment of its rapid growth with the resources required to keep it apace with the needs of the then emerging 21 century city.

    Not anymore. Lagos, the city of the future is on the rise. While it may not be there yet, there can be no denying its readiness to embrace the future as an organic, self-sustaining city.  Like the stone that the builders nearly cast away, Ambode the ‘go-slow man’ is not only working at a breathtaking pace, his dreams for the state are as outsized as they are bold. One year on, his dream of a city that never sleeps under the Light Up Lagos has begun to take shape; the monorail linking Marina to Oniru in Victoria Island and Ikoyi with a connection to the Lekki Rail Line is in the womb; a world class transport interchange – complete with containerized shopping mall, recreation and entertainment facilities at Oshodi to be delivered in the next 13 to 16 months; a N49billion medical park at the former site of the School of Nursing also to be delivered in 20 months. So is the avant garde Fourth Mainland Bridge expected to gulp N844billion to be executed under a Public Private Partnership (PPP) initiative. Need one talk about on-going road projects across the state; the upgrade of slums in Amukoko in Ajeromi/Ifelodun Local Government and Ilaje-Bariga as well as the provision of modern waste disposal facility in Epe? What about the world-class security architecture which offer Lagosians relative peace of the mind?  Twelve months on, there is certainly a lot to be said of the past year under Ambode as the steady coming of Lagos into its own as a dream city, a 24/7mega-city of endless possibilities in which the forces of development are set by the limits of the human imagination.

    Lagos is no doubt rich; by the sheer size of its GDP, it stands out as a clear leader. Home to some 21 million inhabitants, it impressive Gross Domestic Product of $131 billion ranks it ahead of 42 African countries. But that is only a part of the Lagos story; the other part is that it is the seventh fastest growing city in the world, a factor that takes its toll on the available resources; secondly, Lagos, for all its contribution to the federal pie, gets far less than it truly deserves for a state that boasts of being the nation’s commercial capital. That explains why the airport road is in a sorry state; it is the reason the Apapa-Oshodi expressway – which link the seaport to the rest of the country is in a mess.

    Lagos is of course lucky.  It is at least blessed with helmsmen – leaders imbued with the wherewithal to dream and imagine a 21 century city. That is what has made the difference. Asiwaju Tinubu. Fashola. And now Ambode. Sure, the next three years will bear me out!