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Category: Sanya Oni

Whither Buhari Bounce?

Nine months after, Nigerians may have found that they rejoiced too soon about the so-called Buhari Effect and its presumed impact on our public institutions. For die-hards of the Buhari administration who only a while ago thought little of appropriating the modest appearances of “progress” observed few days after the coming of the new Sheriff, going as far as investing it with a garb of extraordinariness, it must be a new lesson in the day that the magic has turned to a mere fleeting shadow given the nation’s steady regression of the last three weeks.

For the throng, it must be a terrible time indeed.

Across the board, the indices are anything but “progress”. If anything, it’s more of the same – worse in some respects. The nation’s currency – the naira – is in terrible shape. By weekend, it traded N320 to the United States dollars. Our foreign reserves – no thanks to the plunge in oil prices – are in full negative flight. From $28.2 billion in January, it shrunk further to $27.8 as at the end of February – barely enough to cover four months of imports. For an import dependent nation – with practically nothing, save oil to export, that can only spell trouble.

The security situation remains as troubling as ever. Presently, our gallant troops may well be on the final stages of routing the band of insurgents – the Boko Haram – in the North-east, the Fulani herdsmen – our new nightmares – are off the leash with their orgy of rape, killing and maiming not-so-fellow Nigerians. The same with the menace of kidnapping that have assumed epidemic proportion.

As if the situation is not grim enough, our old nightmares have returned in full force. The fuel shortages have returned full blast – never mind that it never really went anywhere. Yet again, it is a season of finger-pointing: the government blames the two foremost unions in the industry; the unions on their part – ever so eager to dredge up all manners of ‘agreements’ with the employers and government to justify their penchant for strikes – in turn accuse the government of reneging on them. The third leg in the triumvirate, the marketers blame the government for falling behind in its obligations to them; the government in turn accuse them of lacking in patriotism or of outright sabotage. Ever heard of deregulated chaos?

The same is true of the power sector. A decade plus after the coming of the Power Sector Reform Act, what we have done is replace government monopoly with the reign of a cartel of disparate players answerable to no one in particular! And now we are learning that beneath the façade of changes are the same old, crippling structures of inefficiency, corruption, red tape and tyranny of a hubristic kind! Imagine when we thought things had changed for the better; and at a time we are supposed to be ramping up power generation, all it took was a bunch of brigands and outlaws to throw the system into crisis to let us know that things are not as they seem. And now for that, we have a paralysis that has endured for three weeks running!

If the lessons of the current paralysis said to have been caused by vandalism and the sabotage of power infrastructure are any instructive, it is how very little things have refused to change; it is a classic throwback to the ancien regime.

And now, in what must be a cruel irony, the throng once described by Presidential handlers as wailing wailers are not only having fun, they have drawn a new battle in our minds on the state of the nation with their brand new hash-tag – #Bring back corruption (read Goodluck Jonathan)!

Stumbling on their verse in the cyber-sphere recently, I couldn’t but chuckle:

With Corruption a bag of pure water was N80 / Without Corruption a bag of pure water is N150

With Corruption dollar was N180 / Without Corruption dollar is N400

With Corruption I have 20hrs electricity at low tariff / Without Corruption I have 7hrs electricity with 45% increase in tariff

With Corruption Keke to my house takes N50 / Without Corruption Keke to my house takes N100

With Corruption smallest Indomie was N40 / Without Corruption smallest Indomie is N60

With corruption a bag of rice costs N8,500 / Without corruption it is N14,000.

# I stand with Corruption

# Bring back our corruption

Do I smell Stockholm syndrome here – a psychological phenomenon in which the victim express empathy, sympathy and positive feelings toward the victimiser – a longing for a return to bondage, the proverbial Egypt?

As for the wailers, if we excuse their artful preying on the nation’s tragedy as indeed mischief laden in their verse, not so their cruel, opportunistic displacement of effect for cause in their explanation of the current morass for which they are most culpable. Much as they are entitled to their nostalgia about the laissez-faire regime and its ethos of plunder –which they are not even ashamed to admit to – their attempt to place things on the same pedestal with the salvaging administration only because of the palpable frustration with the latter’s slow pace, or if you like, its rather pathetic response to the broad range of challenges hobbling the economy, must pass as the greatest affront to the sensibility of every self-respecting Nigerian.

This however is hardly a denial that the growing impatience with the Buhari administration is anything but real. For instance, Governance Advancement Initiative for Nigeria (GAIN) in their February survey reportedly found that more Nigerians for the first time since December 2015 scored Buhari low on jobs, economy, and power. Not all, it reported the President’s approval rating as dropping from 63.4 per cent in January to 32.8 per cent. When compared with an earlier poll which found that majority of respondents actually blamed former President Goodluck Jonathan for our current economic woes, the waning magic of Buhari Effect is perhaps better appreciated.

What to do? Simple: the administration needs to sit up. By sitting up I mean embarking on hands-on, effective governance. Time for the Buhari administration to offer the nation a clear, discernable roadmap on the whole range of problems holding the country down; to inject a sense of urgency and purpose into the business. Suffice to say that these elements are currently lacking.

Last week for instance, I listened to the Attorney General of the Federation (AGF), Abubakar Malami (SAN), threaten to bring the roof down on any person suspected to have engaged in foreign exchange round-tripping. Said he: “It has become obvious that having failed in the attempt to force devaluation, certain forces have now aligned to create an artificial situation whose primary purpose is to undermine the economic programmme of the Buhari administration”.

My response: That’s drama – more of the same – not governance. If as the minister claims, he has “proofs”, shouldn’t the minister have simply gone after the saboteurs rather than treat Nigerians to what is becoming a wearisome melodrama? Didn’t the sportswear giant Nike say – Just Do It?

March 15, 2016
From Stiglitz to Ezekwesili

Never mind that the naira has been “technically” devalued, the debate on whether or not to throw the currency to the market hounds is getting more interesting by the day. I just finished reading an interesting piece titled Closing Developing Countries’ Capital Drain written by the duo of Joseph E. Stiglitz and Hamid Rashid. I must confess that the piece blew my mind. I therefore recommend it for reader’s enjoyment.

As if he needs any introduction, Stiglitz is Nobel laureate in economic sciences and professor at the Columbia University, United States while Rashid is a former director-general for multilateral economic affairs at the Ministry of Foreign Affairs in Bangladesh, senior adviser at the UNDP’s Bureau for Development Policy, and Chief of Global Economic Monitoring at the United Nations Department of Economic and Social Affairs. Both therefore should know.

Why do I find the piece by the duo irresistible? It is the way they attempted to frame dilemma facing developing countries at this time – a refreshing call away from the puerile market orthodoxies in an unequal world!

I also love their contextualisation of the current challenges facing us as “not just falling commodity prices, but also massive capital outflows”.

The facts, as they say, speak for themselves. The duo, for instance, would have us know that from a net capital inflow of $2.2 trillion in the five years of 2009-2014, net outflows from developing countries in 2015 alone, exceeded $600 billion –more than one-quarter of the inflows they received during the previous six years.

They also note that “the largest outflows have been through banking channels, with international banks reducing their gross credit exposures to developing countries by more than $800 billion in 2015”.

You ask why? It’s no other than the slowdown in China and the collapse of oil prices by more than 60% since July 2014!

For the developing economies, the impact of the trend cannot be anything but devastating: “drying up liquidity, increasing the costs of borrowing and debt service, weakening currencies, depleting reserves, and leading to decreases in equity and other asset prices… large knock-on effects on the real economy, including severe damage to developing countries’ growth prospects.

Familiar? It seems to me that some foreigners know where the rains started to beat us far more than our own people!

Among many prescriptions, they wrote: “In some cases, it may be necessary to introduce selective, targeted, and time-bound capital controls to stem outflows, especially outflows through banking channels. This would entail, for example, restricting capital transfers between parent banks in developed countries and their subsidiaries or branches in developing countries. Following the successful Malaysian example in 1997, developing countries could also temporarily suspend all capital withdrawals to stabilize capital flows and exchange rates. This is perhaps the only recourse for many developing countries to avoid a catastrophic financial crisis. It is important that they act soon”.

The above piece was written last week! Nowhere did I find the duo luxuriate in the illusion that the market would somehow self-regulate! And this is at a time our home grown economists would rather have us throw our forex vaults so the vultures can come and do as they please!

This is why I found the offering by our very own Oby Ezekwesili, former minister and World Bank Vice president in the Vanguard of Sunday February 28 titled Ideologies don’t deliver results for the poor on the subject totally strange if not incomprehensible. Her piece supposedly to a critique of the Buhari administration’s economic policies turned out to be more than a validation of my piece of last week titled What the hell is wrong with us. Not only is her position a repudiation of the position of Stiglitz and co. in its obsesion with the market, it sadly takes strategic national intetrest out of the national economic equation!

Samples: The president’s now well publicized and known stance on the acute foreign exchange crisis has magnified nervousness about his economic management history and ideology-centred policy direction…So strong is the president’s view on the value of the Naira that he uses words like “murder the Naira” to foreclose any consideration of alternative perspectives. It is precisely because of this manner of framing tough economic policy choices that the country is at this time engaged in an unhealthy debate that lacks empirical foundations and nuance”. So the problem is with the word “murder”? How about the activities of speculators that do more than murder the currency?

And this: “Nigeria has oscillated from a command and control regime with government as driver in resource allocation to a more market oriented system since the past 30 years. We however can be said to now have a broad coalition and even near consensus that the market economy framework has served us better”.

Only because the piggy back had hitherto been overflowing?

And yet another: “…The effort at controlling and commanding the demand for foreign exchange can only worsen already bad economic distortions. It is these distortions, more than dollar demand side issues that form the crux of our current account and fiscal crises”.

Because Bloomberg and The Economist said so?

Left to the Ezekwesilis of this world, Nigeria’s problems begins and ends with the so-called market forces – nothing in between. To be sure, most Nigerians would probably agree that the current administration lacks a coherent economic direction just as many would readily concede that the administration that promised change could do far better than it is presently doing both in terms of rigour and pace. Like many, I have had to express my frustrations with a president who appears hung on old paradigms like for instance in choosing to retain the refineries and its forays into aviation.

It is however a different call with the administration’s forex management policy particularly its insistence on not devaluing the currency. It is pragmatic and sound – far better than Ezekwesili’s overly romantic view of the market as the most effective allocator of a dwindling national resource like forex at a time of negative accretion! And we are here talking of a market controlled by speculators and street dealers! In other words, have the invisible forces call the shot while making the case for the sovereign to be in retreat?

Let me raise a question that I didn’t find the space to ask last week: which true businessman would buy dollars at the rate of N400? To keep the factories going in spite of consumer purchasing power or what? Why can’t we push for our country to do what other civilised countries do – by rendering the hawking of currencies on the highways irrelevant? Why should anyone seek to canonise the s so-called black market?

March 1, 2016
What the hell is wrong with us?

Last week, the South African clothing company, Truworths, finally took its exit from our shores citing stringent regulation of stock imports, foreign exchange controls and rising costs as its reasons. It’s Chief Executive Officer Michael Mark would tell Bloomberg in a phone interview that “The regulations were making it extraordinarily difficult to get stock into the stores, we couldn’t get money out, so there was no point any longer…Obviously everyone gets exited about Nigeria because of its size, but I think they’ve taken an incredible strain with internal problems in the country politically and then there are the issues with their oil.”

Earlier on in 2013, its compatriot, Woolworths similarly exited with the closure of its three stores in the country citing the same factors of high rental costs, duties and difficulties getting stock into stores. “It’s a tough market, with high rental expenses and I felt you needed to get big or get out,” Ian Moir, its chief executive officer had recalled in a chat with reporters in Johannesburg, last Tuesday. “We made the right call; we didn’t see things really changing there for the next 10 years.”

At a time of record level unemployment, the news of yet another business drawing shutters on its operations in the country would ordinarily be a big deal. For the tribe who can’t seem to see anything good in the restrictive policies of the Central Bank as affecting the utilisation of forex, it is supposed to be another evidence of the unworkability of the foreign exchange regime that has plumbed the naira to its lowest depths ever in the so-called parallel market with the currency exchanging for N400 to the United States dollar last week.

The truth however is that the story of the two South African retailers is somewhat illustrative of all that is wrong with us as a nation –the fetish that we have made of foreign direct investment as well as astounding inability to articulate our interests in the complex and confounding global marketplace where national interest rules. Today, the South African cloth makers have since moved on in their global outreaches while the so-called biggest economy is stuck with debating whether or not to throw its embattled currency into the hounds.

President Muhammadu certainly spoke my mind on the raging issue of devaluation when, in faraway Sharm El-Sheik, Egypt last week, he ruled out any official devaluation of the naira. At the Presidential Panel Roundtable on Investment and Growth Opportunities in the North African country, the President again restated his resolve: the naira won’t be devalued. He told those “who have developed taste for foreign luxury goods” to continue to pay for them rather pressure government to devalue the naira.

He asked: “Developed countries are competing among themselves and when they devalue they compete better and manufacture and export more. But we are not competing and exporting but importing everything including toothpicks. So, why should we devalue our currency?” According to him, “We want to be more productive and self-sufficient in food and other basic things such as clothing. For our government, we like to encourage local production and efficiency…The land is there and we need machinery inputs, fertilizer and insecticides”.

It seems to me that the President has been far more persuasive that the throng that have made a song of devaluation as a pill that we must swallow even when the so-called benefits are only known to them.

The issues are certainly not rocket science. With foreign reserves barely sufficient to cover few months of imports, and with the price of our principal export permanently headed south, the choice before us is simply limited. Even our wards studying in foreign shores have since imbibed the wisdom of adjusting to the new reality. I recall that a month ago, my ward studying at a Canadian university actually bought the nation’s dollars at N200 with her ATM at a time the official rate was some N145. And that was long before the Bankers Committee determined that they – and our hordes of medical tourists – would no long be eligible for forex through the official channel. Today, our hordes of virtual shoppers at home and abroad have similar stories to tell of a forex market that has somehow liberalised itself! The point that must not be lost is that we do not have enough to go round. And simply because we do not have enough, the path of wisdom is to ensure that what is available is allocated in a way to deliver maximum benefits.

At this time, we can choose to play the prodigal by throwing our forex vaults open – hoping perhaps – that the currency will sooner find its level. It never will. That is why I cannot agree more with the reasoning by government that the luxury of waiting for the market to determine the allocation of a finite commodity like a forex in an unequal world is an unwise one! That’s why I am amazed that bodies like the Lagos Chambers of Commerce and Industries and the manufacturers’ umbrella body – the Manufacturers Association of Nigeria (MAN) would dare to suggest that the naira be left to float with the tide! I ask – to whose benefits? Their foreign portfolio-investor friends ever so ready to hit the airports at the first signs of trouble?

Let’s go back to the story of Truworths. Would the company have exited were the forex restrictions not to be in place? May be; maybe not. I understand the issue of rising costs is obviously a major factor in the decisions; it seems however unlikely that the company would have left so long as it has the window to flood the Nigerian market with South African fabrics.

My big question remains: Why would a foreign company exist solely to sell its foreign goods in the country? Why should it seek to be entitled to unrestricted access to our forex at a time like this?

Now, compare with our Aba cloth maker who despite the harsh environment still manages to keep by. He knows he has nowhere to go; for good or bad, he has learnt to take things in their stride. He needs forex to bring in equipment, to modernise his offering in a competitively globalising world. Above all, he knows what it means to create wealth with nothing. So, why would his government not protect him against the hordes of foreign invaders who so much love to reap where they have not sown?

February 23, 2016
Ding-dong over electricity tariff

Last week’s standoff between the electricity distribution companies and the Organised Labour over tariff hike has, in a manner of speaking, exhumed a corpse which both parties have suffered the illusion of laying to rest but which in fact remains ‘live’. One here talks of the farce that the post-Power Sector Reform Act 2005 has ushered in – a sector that is liberalised only in name. We may have come a long way from when the debate on the provision of the public was split along ideological lines; what we could not have bargained for is the motley assembly of anaemic rent collectors described as Discos under a so-called market environment.

Eleven years after the institutional framework designed to usher in the regime of liberalisation is said to have kicked in, our old nightmare may have changed hands, the problems that dogged the ancien regime have magnified in geometric proportions – far beyond our wildest imagination. Some two and half years after the handover of the assets to the 14 privately-owned successor-companies of the Power Holdings Company of Nigeria (PHCN), it is increasingly clear that the sector, in the hands of the new owners, is headed nowhere.

I have taken time to peruse the issues at the heart of the current dispute. I must confess that it was, initially, somewhat tempting to dismiss this latest agitation by labour as just of those things. To start with, I understand that labour, like any body of consumers would loathe any idea of a tariff hike no matter how justifiable. But even much more than that is my growing frustration with the group over what I consider as its fixations with old ways and means in a vastly changing world! I cite a ready example in the oil subsidy debate over which labour was needlessly obdurate even when it was so apparent that the subsidy burden had become an albatross too heavy a burden for the treasury to continue to bear. I have never seen a more destructive fixation than that! One can therefore understand the basis of my initial irritation.

This time around however, things are different. Labour is right. It’s time for the Discos – or whatever they are called – to sweat for their money. At this time, no one denies that the issue of tariff review has been on the table for so long; indeed, it is one of the key pillars of the power sector reform. Moreover, that is not what labour’s agitation is about.

I must concede that the NLC President, Comrade Ayuba Wabba did a fantastic job of distilling the issues in his joint statement with his Trade Union Congress counterpart on their plan to picket the Discos last week. Among the many factors cited were: an alleged non-compliance with section 76 of the Power Sector Reform Act 2005 in effecting the increase; the lack of appreciable improvement in service delivery compounded by the non-compliance with the signed privatization Memorandum of Understanding (MOU) of November 1, 2013, which stipulates that within 18 months gestation period, all consumers are to be metered. There was also reference to an alleged disobedience of a subsisting Court Order by Justice Mohammed Idris of the Federal High Court, Ikoyi, Lagos, dated May 28, 2015, prohibiting further increment until the determination of the substantive suit; and finally, that the timing of the increase aside negating the current economic realities would further impoverish Nigerians.

Without question, the issues, as outlined by the labour leaders, aptly capture what has now become the unending regime of frustrations of the electricity consumer in the hands of the operators. Today, steady electricity remains a rarity. While it is bad enough that the massive investments promised by the new entities have failed materialise, or worse still, unimaginable that the sector is still looking up to the federal government to bail it out, it is outrageous to imagine a technology-driven sector like power insisting on doing things by the rule of the thumb in 2016! That, to me is the crux of the matter.

Again, labour is a pain in the ass. Now, I am not even certain that I would endorse its methods 100 percent! But that is not the issue. What is at issue is a service provider insisting on reaping before turning the soil around! And now labour says NO! As far as winning the argument goes, I’ll give the moral advantage to our men on the agitation front as theirs has become a public duty imposed by the exigencies of the time in the event of the failure of the regulatory agencies to act in their defence.

Where do we go from here? Honestly, it is difficult to answer. As flawed as the process of privatisation has turned out to be, going back on the process will certainly prove difficult if not impossible. Truth is – the feud over tariff obviously masks a more fundamental problem; it is in fact symptomatic of a deeper problem – which is the absence of capacity, both technical and managerial, by the current crop of players. As it appears, we are stuck in the middle of a deep sea with no rescue in sight!

I guess the least we can do at this time is getting the different companies to live up to the obligations spelt out in their MOUs with the understanding that failure comes with hefty sanctions. Such options as possible force sale should not be ruled out. That should not prove difficult for the government.

Finally, the federal government may want to sit back and ask itself if the business of liberalisation stops at parcelling out the power firms as against attracting the huge funds it claimed it could not afford into the sector. How about committing the investors into a clear roadmap with timelines? Why would the power companies insist on sucking the juice and asking the consumer to feed on the roughage? Is that what their liberalisation teach?

February 16, 2016
The budget circus

So soon after we are supposed to have been done with the riddle of how a budget presented in the full view of a global audience of allegedly took a walk from the chambers of the National Assembly undetected, a new chapter to the controversy appears to have been opened at the weekend. This time, it is not the usual culprit, the National Assembly but a group described by the Presidency as the budget mafia that is being charged with mangling the 2016 budget.

The specific charges range from an alleged inflation of expenditure items by some N1.7 trillion, the smuggling of some 6,000-odd items into the budget and criminal sabotage.

Here is how an unnamed source captured the saga as quoted by this newspaper: “Bureaucratic resistance and entrenched systemic corrupt practices dogged every move of the presidency to produce proposals reflecting financial prudence and frugality, during the preparation of the 2016 Budget now before the National Assembly. For instance, after learning that the presidency was considering a large budget of possibly N8 trillion in order to significantly increase capital expenditure, bureaucrats brought a proposal of N9.7 trillion for overhead and capital spending even without personnel spending. Of the proposed N9.7 trillion, the bureaucrats planned to spend an alarming N3 trillion on overhead alone but the presidency eventually slashed this to N163b lower by 8% than 2015 budget which was N177billion, indicating massive cut of some of the main provisions by the Buhari presidency”.

“These bureaucrats also proposed to spend N2.1 trillion on personnel for the 2016 estimates compared to about N1.8 trillion in the 2015 budget. But the presidency also cut this down to N1.7 trillion in the final estimates sent to the legislature…”

“We were virtually doing vigil to beat the time since the budget had to be presented before the end of the year to the National Assembly and while some of the civil servants eventually cooperated, those who were resistant caused the insertions of many of the provisions that are now embarrassing the government…”

“The situation and its fallout were so bad that it provoked the annoyance of the President who nonetheless kept his cool buying time so as to meet the target date for the presentation of the budget in line with extant laws and regulations governing the budget process…”

Knowing the mind of the administration, the nightmare of the civil servants may have just begun. Already, we are told that a number of top civil servants have been pencilled to go. Hopefully, there will be enough provisions in the Civil Service General Orders to hang the recalcitrant officials in the sun.

Given that the Presidency has since moved to correct the identified distortions, why has it suddenly become an issue? By the way, where were its own officials when these so-called manipulations were taking place? Why seek to score cheap, needless points since the administration has had its way?

These are certainly unusual times.

To begin with, there is something painfully unnerving about the penchant by the Buhari administration to play games at a time like this. Earlier on, we saw its ignoble attempt to hold the National Assembly responsible for a problem it created. For the throng – of which yours truly is one – ever so ready to give the Presidency the benefit of the doubt, the latest development must come as a teachable moment. Truth is – if ever a budget could be described as sloppy, the 2016 budget would stand apart.

As they say – the devil is in the details. Check out the billions proposed for exotic cars – by an administration that promises to do things differently; the proposed residences of the trio of Vice President, Senate President and Speaker, House of Representatives at a princely cost of N5 billion and several other expenditure heads clearly out of tune with current moods. How does one explain the fact that the capital estimates for the State House Clinics dwarfs those proposed for our teaching hospitals altogether? Those are the issues Nigerians are interested in finding answers to. That demand is a far cry from current attempts to frontload alibis for failure!

So the Presidency is “embarrassed”? Nigerians are put it mildly, scandalised.

It isn’t as if Nigerians are ignorant of the near-infinite capacity of the civil servants to do mischief though. Indeed, I don’t know of many Nigerians who would shed tears for the civil servants wherever and whenever the Buhari anti-corruption onslaught hits their quarters. The administration only needs to look at the sprawling real estate dotting Abuja skyline some 80 percent of which are said to belong to federal civil servants to appreciate how much our civil servants have helped themselves at our expense!

The attempt to use our budget as alibi to excuse its tardiness is what I consider as unacceptable. Nearly eight months on, it must be exasperating for Nigerians to watch an administration they reposed so much faith falter on every count. It is worse than tragic. We are certainly far too much into motions without locomotion. It’s time to get moving.

Supreme Court and the rest of us

The news came at the weekend that the Supreme Court has finally upended all the gains brought on by the adoption of the card reader in the electoral process. That is most unfortunate. An online medium while adducing reasons why the election of Governor Dave Umahi of Ebonyi State was upheld quoted the apex court to have said “that while provision was made for the use of the Electronic Card Reader Machine for accreditation of voters in the Approved Guidelines and Regulations for the conduct of the 2015 general elections, the device was never “intended to supplant, displace or supersede” the Voters’ Register”.

By that ruling, the apex court appears to have thrown that singular innovation applauded globally into the bin. It is worse than tragedy.

February 9, 2016
The matter of tax

With nary a prospect of rebound in the price of the liquid gold in the near term, the debate on alternative revenue sources has suddenly acquired a strident and interesting tone. Only last week, my colleague, Tunji Adegboyega in his Sunday column practically took the National Assembly to the cleaners over their suggestion that the federal government should rather grow the tax revenue than finance the budget from borrowing.

Poor senators! They had in the course of their debate on the general principles of the 2016 budget drawn attention to the debt component said to average N500 billion daily which they considered outrageous. Senate Chief Whip, Olusola Adeyeye (APC Osun Central) who led the debate thought that what the nation needed at this time was to go back to the model of governance used during the First Republic where every adult was made to pay tax.

As he recalled: “Nobody in my village will go to his farm until he can produce his tax receipt; we need ingenuity to bring this to pass. We must begin to tax things like cigarettes, alcohol; you beat your wife, you pay heavily…Text messages cost N3.81 a page: if we add just N1 to a page of text message and we say that money belongs to government, we will make billions.

He did end there: “We must install toll on roads, but that is not enough: across the world, when you park at any airport, you pay per hour; we must do what the rest of the world does…We must begin to tax allowances; Nigeria is the only country that shelters the bulk of the earnings of its workers and call them allowances. You don’t want your allowances taxed? They will be taxed because they must be taxed.”

Those were what my colleague would have none of. He thinks Nigerians are already overburdened as it is. And just because the current public finance system ill-serves the ordinary citizen, he thinks there is no basis to demand more sacrifice while our profligate parliamentarians live their lives to the hilt. And so for starters he counsels that the lawmakers think outside the box!

There are two isues here. The first is whether the call by the senators have any merit. The second is whether our-pampered, overpaid and under-performing lawmakers should be the ones pushing for more taxation at this time.

Let’s be very clear about what the issues really are.

The first is that the nation is practically broke. If we weren’t, we wouldn’t be talking about a budget of N6.08 trillion with an assumption of a whopping N2.2 trillion deficit. Unfortunately, we are also talking of a budget which assumes a sales price of $38 for its barrel of crude at a time crude goes for sub-$30. If the present situation, fostered by the obduracy of major oil producers in their opposition to any idea of production cut is grim, the re-entry of the Iran crude into the market simply forecloses the possibility of imminnent oil price rebound. Like I said not too long ago, we are on to a long, dark night.

The second is that the options open to us as a nation is increasingly limited. While we are nowhere yet near the balance of payment crisis of the late 1980s, the full-blown symptoms of a maldajusted economy are firmly set upon us. I see most of the contribution to the current debate on the economy not taking sufficient time to chew upon the implications of the global oil movements against the demands of the local economy; had they done so, they would have appreciated not just the nature but the depth of the current emergency. Today, we know that some 24 out 36 states have their receivables falling far behind recurrent expenditures. Indeed, with understandably the exception of the federal government and one or two states, the rest being unable to discharge their responsibilities to their workers ought to be in receivership by now!

But even more fundamental is the yawning infrastructure gap. Whether it is roads, power, railways, or the hydrocarbons sector, at least we all agree that the supporting infrastructures for a modern economy are virtually non-existent. Few months into the lean season, we are yet again pretending to be wise to the need to diversify the economy, improve its competititivenes and generally get Nigerians working. Except that we forget that none of these can be delivered without massive public expenditure; and not while we remain oblivious to the need for current sacrifices to ensure the future good.

Nigerians are certainly not alone when it comes to loathing the tax idea. Even in the so-called advanced economies, discussions on the subject are oftentimes impassioned. Yet, it is at the core of the social contract between the governed and the governing authorities. Aside being one of the oldest ways to redistribute wealth, it is the most sustainable way to finance public expenditure.

Let’s come to the question: are Nigerians overburdened with tax? The figures obviously suggest otherwise. In the course of a simple check on the tax-to-GDP ratio for different countries for year 2015, my findings are most instructive. Whereas the tax-to-GDP ratio for Nigeria ranks bottom at 6.1 percent, that of Egypt is 15.8 percent; Gambia 18.9 percent; Ghana 20.8 percent; Kenya 18.4 percent. In this, Nigeria compares well with the Saudis at 5.3 percent.

The point is – we can do far more than we are currently doing on taxation. For instance, at the current five percent rate, Nigeria probably pays the least Value Added Tax (VAT) on the continent. Under the ECOWAS common tarrif, Nigeria is supposed to be paying 14 percent. Aside paying the lowest rate, a good number of items that could have been brought under VAT are currently excluded. In the current circumstances, the debate on VAT has become legitimate.

Le me say this: whenever the subject of tax comes us, the images that readily pops up is the tax man chasing obdurate folks in strret corners for the tax certificate. Apart from being the image many of us grew up with, it’s one of the enduring myths of taxation being an oppressive machine. The world has changed and with it new methods for tax collection. Changing with the times means finding more creative ways to collect tax.

For now, we can debate all the methods in the world, the peccadilloes of our governing elite and their tax and spend tendencies. These are certainly legitimate. But let’s not imagine that there can be an alternative to tax.

February 2, 2016
Kogi: Because I am involved

In a matter of hours, Yahya Bello will be sworn in as Governor of the Confluence State. Thanks to the triumvirate of the Independent National Electoral Commission, (INEC), the Attorney General of the Federation, Abubakar Malami, SAN, and the leadership of the All Progressives Congress, the good people of Kogi, will be having someone they did not elect to preside over their affairs at least until such a time the judiciary finally decides one way or the other.

I have said it before, what is playing out in Kogi is worse than travesty; what makes it hard to swallow that this is happening in a supposedly constitutional environment. For no matter what anyone may say, and no matter the attempt by our ever opportunistic politicians to muddle things up, there are too many issues too sticky to live down.

One of them is the strenuous attempt to override the will of the voters who trooped out to vote on November 21, 2015 to elect a new governor. No matter what holy book the supplanter chooses to swear with, it does not change the fact that the people did not have Bello on the ballot at the point they exercised their franchise last November. Yes, the people voted for APC, but they also trusted the duo of Audu and Faleke to give them their mandates! And that mandate precludes their Bello! This is what APC conveniently forgets. Yes, the party sponsors the candidates, without the candidate, there is no contest!

And while it is tragic that the APC would seek to elevate its internal party primary over and above an election that was adjudged transparent and fair; surely, INEC, not least the APC supplanter, Bello must know that the so-called December 5, 2015 supplementary poll, which delivered a mere 13,000 votes for a candidate that was not on the original ballot, is at best a case of holding on to thin straw! Tomorrow’s party of inauguration therefore changes nothing!

And if I may add – APC ought to have realised by now, the futility of its attempt to deny Abiodun Faleke, Prince Abubakar’s running mate, the fruits of their joint victory. For sure, it’s surely going to be a long, dark night for the APC and their anointed one.

I have heard some so-called stakeholders suggest that the people of Kogi should let things be if only in the spirit of the new-found rapprochement between the West and Central Senatorial Districts both of which have jointly clamoured for power to rotate to them. On the surface, they have a point.

For those who don’t know, a little background would suffice. The state like many of its counterparts in the federation, sits on a tripod: Kogi West, Kogi Central and Kogi East. Since its creation, the state has been ruled exclusively by the dominant Igala from the East. From 1999- 2003, it was Abubakar Audu followed by Ibrahim Idris 2003-2011, and then Idris Wada 2011-to date. Before the primaries, I understand a lot of work was done by the West and Central to get power to shift in the spirit of equity. Unfortunately, like in previous attempts, those efforts, as valiant as it was, could not break the Igala hegemony. In the end, Audu and Wada both Igalas emerged on the tickets of the APC and PDP.

And so we had an election in November. And then, Audu the APC candidate who was set to win the election died. At the time of his death, the election was practically concluded save for 91 polling units scattered across the state. Soon after, INEC pronounced the election inconclusive. Not done, a supposedly independent electoral body, with battery of lawyers at their beck, opted to turn to the government’s chief law officer for direction! Nigerians know how the story went: a stranger to the APC ticket was drafted from nowhere to complete an exercise that was as good as delivered! As a result, history was made: a governor elected with 13,000 electors!

To many, it probably matters not that an election took place on November 21, 2015. It is supposed to matter less still that the election produced a clear outcome – 240,867 votes for the APC ticket of Abubakar Audu and James Abiodun Faleke, and 199,415 for the outgoing team of Idris Wada and Yomi Awoniyi of the Peoples Democratic Party. Aside not being on the ticket, we are supposed to forget that the claim by Yahya to the gubernatorial office was that he took part in a primary which he lost! For now, law, justice and public policy are meant to count for nothing since the end – power shift – has more than justified the patent INEC-aided impunity!

That is the tragedy in the Confluence State.

What the future portends for the state is hard to tell at this stage. It seems to me that the story has only just begun. The state is certainly in for a long night. For a state that has been in perpetual stasis, development will, for sure, be on hold. Trust the resurgence of old animosities and cleavages in a state that has had its own fair share of security troubles.

A state where primary school teachers were on forced holidays for more than a year because they could not be paid; a state where workers salaries are a privilege rather than a right. I have written on this page of the experience of hell on the highways; henceforth, citizens can brace up for the worst. All of this because INEC not only chose to surrender its independence, but sacrificed principles for expediency.

For the good people of Kogi, it seems a case of the father eating the sour grapes, with the children’s teeth set on the edge. It is an unenviable position to be in.

January 26, 2016
Nigerian economy and its undertakers

Merely by the strength of the forces arrayed against the naira at the moment, it seems a matter of time before the currency is taken to the Golgotha. It’s the morbid season hence the swooning of the vultures for the proverbial carcass. As it seems, not even the valiant efforts of Godwin Emefiele and his men at the apex bank would suffice to stave off the cataclysm in the face of the reprobate forces massed against the Nigerian economy.

Ask anyone about the factors responsible for the current travails of the naira. You’d be surprised at the range of answers you get. Oil would of course remain the chief culprit. With a barrel of crude at sub $30, the economic Armageddon, surely is set upon us. With barely enough left after paying wages, the exotic tastes of our over-pampered elites would seem for now out of the consumptive equation.

For many however, the problem simply begins and ends with Emefiele and his colleagues at the apex bank. This position appears to have gained some traction in the weeks following the restrictions placed on the forex market. I perfectly understand the angst of traders in the 41-odd items precluded from Emefiele’s naira auction. I guess it would also apply to manufacturers and operators in the real sector who can’t seem to find forex in the official window despite Emefiele’s grand promise to meet all of their legitimate demands. Add to the group, the operators of bureau de change who were only last week ousted from accessing Emefiele’s greenback trove – never mind their protestation that their segment is a mere five percent of the market; all of them have just about something to say about the Emefiele wahala!

Unfortunately, if we aren’t so eager to embrace simplistic solutions even at the risk of fatal misdiagnosis; or put in another way – if we are not so enamoured about placebos to the point of misplacing them for the curative drug, it seems to me the best time – if ever there was – to take a hard look at what fundamentally ails the Nigerian economy and by extension the naira.

I have followed with amusement the argument of those who insist that the currency be left to float as indeed some of the other related jargons about letting the naira find its true value. Well, yours truly is still waiting to be ‘educated’ on the ‘true value’ of a product known to be finite in supply and indeterminate in demand – short of making the argument for the speculators to overrun the market since their price, arguably approximates the so-called real value of the naira!

That is however a different matter. Today, I talk of a more insidious threat to the national economy. I speak of the enemies adorned in the garb of friends. I speak of the tragedy of a nation hung on so-called foreign investment while local initiatives are left to flounder. Today, if we have learnt our lessons from the exit of foreign portfolio investors at the first signs of the global credit crisis in 2008/9, it is how barely we have taken in the hard lessons. Remember that the singular exit cost the Nigerian bourse $5 billion from which the market is yet to recover. Five years on, it took the long-predicted rumble in global oil prices for the shacks to cart away $4 billion overnight; our bourse has been reeling in the aftershock ever since.

Of course we are back to the same ruinous path. Today, only few Nigerians know about the multiple billions of dollars carted away in remittances, charges, patent and royalties and other sundry charges by our do-gooder foreign investors. By the way, that is hardly a crime particularly when values are delivered to the economy. The problem is when the so-called foreign investors increasingly become mere conduits for repatriating billions of our limited foreign cash through their dubious mechanisms of over-invoicing. Guess you know by now who gets to benefit the most when the patron saints of the IMF come calling with their demands for greater liberalisation of the forex market! Never mind that it is the surest path to their usual policy support instruments (PSI), a euphemism for the bitter pills of adjustment that our citizens have come to loathe when things go critical wrong!

The point I seek to make is that economic nationalism has gone beyond the textbook stuff. Whatever may be said of the cement manufacturing sector at the moment, it is adjudged a success story by any standards. With combined capacity of the nation’s cement plants in excess of local requirements, it is little wonder that Emefiele and co can dare to call the bluff of cement importers!

Contrast with the cartel of fuel importers that continues to insist on holding the nation by the jugular. The story of the billions spent on the racket of fuel imports and its multiple industries of rent along the value chain are by now familiar. What is little known is that Oil Cartel Inc. actually consumes 34 percent of the entire demand for foreign exchange.

Still want to know why the naira will not recover in near term?

Now, if that seems a stiff price to pay to get Africa’s largest economy moving, there is at least some good news that our ordeal will soon be over. I speak of the day when the 650,000 barrels per day Dangote Refineries and Petrochemical Complex would finally come on stream – in 2018. Should things go as planned, the country would from that date save a third of its current forex requirements used for fuel imports!

As it appears, there is no end to the milking of the Nigerian cow. Late last year, many newspapers gleefully reported on the threat by foreign airlines to reduce their flights to Nigeria. The reason – as you might guess – is said to be the difficulties being encountered in remitting their sales abroad.

Of course, save for the tinge of blackmail, the issue of what they choose to do or not to do is entirely their prerogative. And while we are at it, one of the more notorious of the airlines has since laid off its half-dozen Nigerian crew. And if it seems sufficiently galling that Nigerian passengers pay about 76 percent more in the premium class of European carriers on their West African route, what about their sworn opposition that have rendered the principle of reciprocity embedded in the various Bilateral Air Services Agreement (BASA) nugatory?

It couldn’t get more bizarre that the biggest economy on the continent is expected to catch cold because a cartel of foreign airlines dared to sneeze over difficulties being experienced in their attempts to cart home $470 million –the value of third quarter 2015 ticket sales.

Still wondering about the beneficiaries of the tutorials on forex liberalisation?

I close. The old saying that soldier go, soldier comes but barrack remain holds true. The nation’s economy to which its fate is inextricably tied, is for us to make or mar. While our home-grown experts junket foreign capitals in search of foreign investment of dubious values, yours truly merely ask that they spare a thought to local entrepreneurial efforts. With a fraction of the support given their foreign counterparts, and with massive investment in infrastructure, I wager that the local business will soar like the eagle.

Trust me.

January 19, 2016
Rule or ruse of law?

With the nation’s mighty and powerful being hauled one after the other before the courts to account their share of the bazaar called armsgate, one of the more positive dimensions to the onslaught on vice in high places must be the current move from the asinine debate about the absolute right of an alleged felon to hop on the plane for a medical appointment in some foreign capitals to the centrality of law in the entire process.

Now, thanks to President Muhammadu Buhari’s spectacular gaffe in his maiden media chat, the fangled phrase, rule of law has suddenly gained elevation – I daresay, not so much because some Nigerians – in their love for cant – are necessarily firm believers in the concept, but because some have found in it an opportunity to do what they do best – talk!

Obviously, you won’t be a Nigerian if you don’t have one or two things to say on the current developments. As a matter of fact, I wager to say that Nigerians would have found something else to talk about had the President not flown off the handle at the media chat. If it seems a measure of their so-called indignation that they have been talking since, it is also moot point that Nigerians aren’t so much agreed on the definition let alone the strategy to fight the monster called corruption!

No question about it – President Buhari goofed – big time. It is after all elementary that the law presumes an offender innocent until the state successfully proves its case in the court of law. His reference to the “atrocities people like Dasuki committed” on the basis of which he believes he should not be entitled to bail is as absurd as it is untenable. The same also applies to the case of Nnamdi Kanu – the leader of the Indigenous People of Biafra (IPOB) – standing trial for treasonable offences. Surely, the President has no business speaking condescendingly on any citizen let alone determining their guilt before the full course of trial. For many, the two cases – you can add the Shiites crisis in Kaduna as the third – are sufficient to detract from the administrations rule of law armour.

I beg to disagree. To reduce the war to the President’s sin of indiscretion is certainly taking things a bit too far. Once again, I am forced to draw upon the example of an accident scene. In the typical bedlam, whereas the milder cases are often the loudest in their shrill cries to draw attention to themselves, the trained medic is careful to isolate those lying still –ostensibly because they have little or no energy to draw upon – for urgent attention.

It is no accident that the rule of law has suddenly become handy in the current circumstances. If it seems by far more tolerable to present as alibi than the unending dog-fights over the seizure of international passports which comes to the right to travel abroad to receive some specialised medical treatments, its seduction, to be sure, would lie its universal appeal and its inviolability – something resonates more with the lawyers, the populace and the international community.

But then, this is precisely the part that I am worried about. Of course, we know the pathology of the powerful. They are not just contented with breaking the law, neither are they averse to twisting the law in such ways and manner as to defeat the course of justice. What about their penchant to undermine the judicial system? Have we not seen a counsel lampoon a judge in an open court only for the same counsel to turn round to ask the luckless judge to recuse himself from the case since he could no longer be trusted to be unbiased after insulting his lordship? That is the level of delinquency to which the judiciary has sunk. Today, we know that a clever attorney and a letter from a foreign infirmary are significant steps to freedom from the rigours of trial and defeat for the justice system. Ours is a clime where those with the means can literally procure the licence to kill. In any case, such are not supposed to be a problem – or are they?

Suddenly, with a fresh breeze of change, we are told that the powerful cannot bear to suffer the allergy of minor irritations that attenuate the justice delivery system! That is bunkum. The same men who allegedly despatched others to their untimely deaths; the individuals who acts of omission and commission are alleged to have rendered millions homeless cannot bear to spend the harsh harmattan weather away from their loved ones! What about those who converted the parastatals in their charge to piggy banks to dispense all manners of favours? And now to imagine that the rest of us, no less victims of their avarice and greed –being enlisted in their orchestra of shame!

I am of course for the rule of law. It is important to regulate the behaviour of different actors in the polity. The chant at the moment is unfortunately, an elite pastime aimed at promoting the false choice between the rule and the ends of justice. The point remains that while the rule must avail for the accused to make his demands within the ambits of the law; it should be no less for the investigators to do their jobs– also within the ambits of the same law – unfettered. That this can come with some minor irritations should not suffice for the clamour to bring the roof down on everyone heads!

Again, the point is – while the brazen violations of the rule of law are intolerable any day, those who seek to erect their fangled concept on the foundations of anomie are welcome to their illusion that the path leads anywhere else than one of societal disintegration. Surely, that is not what we want – or is it?

January 12, 2016
Trouble with Buhari budget

Trust Nigerians, they have since been voicing out their concerns not just on the size of President Muhammadu Buhari Budget 2016 but also the contents of the fiscal instrument expected to signpost change. Yes, not a few, have been mystified by its expansionary outlay in a period of vastly declining national revenues. With oil prices showing no signs of imminent rebound, and in the unlikelihood of revenues from non-oil sources making up for the gap in the near time, and now with debt –re-emerging as a principal factor in our public finance matrix –naturally, there ought to be a lot to talk. After all, it is barely a decade after our celebrated exit from the debtor cartel of London and Paris Clubs –subsequent to which we are supposed to suffer the debt allergy.

To suggest that the issues are being properly framed is however a different matter. I do not want to delve into PDP’s characterisation of the N6.8 trillion budget as “a big fraud and executive conspiracy tailored towards mortgaging the future of the nation”. If Nigerians are any bemused by the PDP’s rant especially its verbose dismissal of the budget as “completely unrealistic and duplicitously embellished with impractical predication”, I’ll say that they ought to have better things to do than listen to the tutorials from a party that was midwife to the most profligate administration ever to known to man! Recall that under PDP’s disastrous rule, total earnings not only exceeded those of previous administration combined, yet the party left the country faring worse under all known indices of human development!

And so I speak of well-founded concerns that have been expressed in some quarters about the budget. I start with the rather ambitious revenue projection of N3.86 trillion in a year the federal government plans to spend N6.08 trillion – hence a N2.2 trillion deficit. Much as the idea of a deficit is not necessarily a bad one– no matter that it is a mere 2.16 percent of the debt-GDP ratio – the option of borrowing to fix the gap says pretty little about our experience of fiscal rectitude –or lack thereof. Are we not living witnesses to huge loans contracted on humongous terms which in the end delivered pretty little by way of value? As if the assumption that the managers of the economy have learnt their lessons from past experience of debt management is not dangerous enough, the administration appears to have glossed over capacity issues that have dogged every cycle of budget implementation.

In any case, the key assumptions of the budget must be seen as troubling enough. At a time a record number of our crude vessels are said to be stranded at sea looking for buyers, the Buhari administration obviously did not think it a bad idea to count the chicks before they are hatched. If you ask me – again I’ll say that the administration’s bet on pumping 2.2 million barrels of crude daily is hardly the way to wean the country off its addiction to oil! As for the $38 a barrel benchmark – another key assumption – is it a case of the administration’s hierarchs knowing something about the dynamics of oil price that Nigerians, nay the rest of the world do not know at this time?

Agreed, the options for getting the country out of the cul-de-sac are somewhat very limited at this time. Were the nation’s infrastructural gaps not as wide as we currently have; or the institutions not so broken to such an extent that any talk of putting a foundation for economic recovery on it seems domed ab initio; and the unemployment situation so grave as to constitute a national security issue, we’d probably have enough time to debate on the niceties of massive public expenditure cuts or some modest efforts to align expenditure with revenue – which for all practical purposes seems at the moment the surest route to nowhere. It’s probably one luxury we cannot afford given the dire emergency.

So, I do not think the option is for the country to do nothing as the wailers appear to suggest. In fact, I am willing to endorse the general principles behind the budget in so far as it recognises that some bold, expansionary measures (which the government seems best placed to put in place particularly at this time) are needed to give fillip to the economy. The implementation of the conditional cash transfer of N5,000 to the under-class – a novelty – promises to be interesting just as the school feeding programme is potentially revolutionary. I will aver in the same breathe that the 30 percent planned spend on capital projects, though rather modest, is a positive move given that the need for the realignment of the capital-recurrent component goes to the heart of our budget problem. Although it is still early in the day to make definitive affirmations on outcomes, the mere fact that successive PDP administrations found it impossible to move in any concrete way in that direction for the whole of 16 years obviously makes it a plus for the Buhari administration.

Still, there are many things wrong with the so-called ‘budget of change’. It is broadly, as far as I can see, more of the same. The quest to prune the cost of running the bureaucracy remains largely, unconquerable. Our bureaucratic cart continues to drive (or if you like – drag), the development horse. President Buhari’s wish is therefore one thing; our smart Alec bureaucrats and their allies in the political establishment will almost inevitably have their ways. Talk of assortment of projects with dubious economic utility; a budget stuffed with pork and earmarks – there you have them in plenitude in the budget of change.

Samples. I look at the huge votes for choice toys for officials – the billions to be spent on exotic cars – by both the executive and the legislature; I cannot but wonder if these are meant for tourists or wayfarers as opposed to public servants. I understand why shelling out huge sums in foreign exchange to procure the fancy toys would keep our big men happy; however, for an administration that promises to do things differently, we expected things to at least reflect current moods. It’s hard to imagine that this is happening at a time Godwin Emefiele and company at the apex bank have taken on the drastic measure of clamping down on petty users of foreign exchange like our students abroad; a time when traders in the 41-odd items precluded from access to foreign exchange have become overnight economic refugees. I thought that our lordships would, if only for the sake of symbolism, reflect upon their lust for the exotica and show solidarity with the rest of us for once! The same goes for the residences proposed for the trio of Vice President, Senate President and Speaker, House of Representatives at a princely cost of N5 billion. At this time – and from funds known to be largely borrowed? To the extent that no one has yet told us that these gentlemen sleep in the streets of Abuja, some of those capital projections surely, can wait!

Happy New Year to you all!

January 5, 2016