The Nation Newspaper

Category: Sanya Oni

  • PHCN: The day after

    Power-starved citizenry ought to be forgiven if they barely paid any heed to what was supposed to be a milestone in the quest for steady electricity supply. Blame it on reform-fatigue, the deadline for payment for the preferred bidders of the generating (GENCOs) and distribution companies (DISCOs) closed Wednesday last week without the typical bang that one would have expected. Save for the few sighs here and there, it may well have sneaked on us like the proverbial thief in the night.

    Not that it was entirely shorn of some drama though. Some 96 hours before the Wednesday deadline, there were in fact apprehensions about the preferred bidders being able to cough out the balance to make good their bid. There were equally reports about outstanding sticking points between the government and the powerful electricity workers union on the issue of severance packages; indeed, there were hints, at some point, that the preferred bidders had served notice on the federal government that the final payment will be kept in abeyance until all outstanding liabilities were cleared.

    And all of these were going on in the context of the latest rumble in the banking sector: the apex bank’s so-called sterilisation of 50 percent public sector deposits with immediate, direct impact in the tightening of liquidity in the economy.

    Of course, if it seems any attestation that Nigeria is a place where miracles happen, the historic process designed to usher in the regime of liberalisation of the power sector sailed almost flawlessly and without serious hiccups. It was too good to be true. By close of work on Wednesday, nine out of the 10 bidders for distribution companies (Discos) had paid in full; it also emerged that four preferred bidders for generating companies (Gencos) had also perfected payments to assume ownership of the entities. Only two fell by the wayside. CMEC/EUAFRIC Energy JV, the preferred bidder for Sapele Power Plc which reportedly made a “substantial” payment; Interstate Electric Limited, the preferred bidder for Enugu Distribution Company, failed to make any payment aside the initial 25 percent by due date.

    The exercise therefore can claim to be an unqualified success. However, the issue of whether the intractable power crisis is finally over just by mere coming to pass of the milestone event is one that Nigerians would have to wait to answer in the coming months. I do not think however that anyone should be in doubt as to the historic import of what happened. Aside heralding a new beginning for the sector, it also promises a new paradigm for doing business. Taken together with the foundation laid by the Power Sector Reform Act 2005 and the Power Sector Roadmap of August 2010, there is absolutely no longer any question about the stage being set for turning the power sector around. Perhaps, what is left is the debate on what the change of ownership portends in the short, near or even the long term; no longer at issue is the need to dismantle the inept, irredeemably corrupt and dysfunctional utility firm and its the antiquated business models and architecture.

    While we celebrate the overdue interment of the Power Holdings Company of Nigeria (PHCN) and its bundle of bad rubbish, I need to enter a caveat though that the development alone is neither the magic wand nor the cure-all pill that the sector requires to get out of the bind. What it does is offer a new basis, or, if you like, direction to salvage a sector that has been held down by the twin forces of monopoly and corruption.

    In any case, no one disagrees that a dime of public funds sunk into the old behemoth is anything but money down the drain. After nearly eight years of reform odyssey and a capital spend in excess of $16 billion from the public till, we may have, as ex-President Obasanjo once touted, earned ourselves a global record in power expenditure; we have also arrived at a point where it has since become an embarrassing understatement to state that the deliverables come far short on expectations.

    This is why the import of the tectonic shift in the power sector should not be understated. First, it means that those vanishing billions we hear at budget defence sessions can, at least theoretically, be put to other uses. It also means better prospects of investment and hence value delivery in the long run – something that most Nigerians would readily affirm as alien.

    Agreed, all of the above may not sufficiently address the question of what the future holds in store. First, I don’t that anyone should be mistaken about the changes as merely about substituting the tyranny and the crass inefficiency of the erstwhile government monopoly for the potentially exploitative antics of a compulsively-obsessive market operator. Both of course represent the different sides of the same coin of bad business practices that denies the consumer the value for his money’s worth.

    Going forward, the development must go with the understanding of what the requirements are under the transition period, and what is clearly a long journey to a liberalised power sector driven by the ethos of competition and fair market prices. The milestone at this stage needs to be understood for what it is: a transitional one. Parcelling the erstwhile behemoth among disparate players does not itself qualify for competition. Far from it; the suggestion that the development marks the dawn of competition smirks of a misuse of the word. The nation’s expectation of revamped, robust, efficient, cost-driven, and well-regulated electricity market is still a long way ahead.

    Finally, I must say that things can only get better; however, how well things turn out would largely depend on the role of the regulator – the Nigerian Electricity Regulatory Commission (NERC). For much of what is clearly an uncharted course, NERC has done admirably well at least in terms of setting out the ground rules for the players and also in generally keeping faith with the entire reform programme.

    But then, that is not nearly a fifth of the job NERC needs to undertake; or is it?

     

  • All roads lead to Abuja?

    The latest circus of muscle-flexing over local government autonomy hardly comes as a surprise. If it seems an indication of how muddled our federalism has come to be in the hand of our slow-learning operators, it partly reflects the desperation in some quarters to perpetrate their retrogressive reign and anti-development agenda on the polity.

    I don’t want to go into the matter of how our federal lawmakers came to read their manual on federalism upside down. That is not important; at least not now. Rather, of great interest to me is that the two chambers of the National Assembly have taken their positions on the raging debate of local government autonomy: one for, the other against.

    The House of Representatives, persuaded that autonomy is the way to go, voted –according to the reports – overwhelmingly to give “full financial, administrative, executive and legislative autonomy to local government councils in Nigeria”.

    In the Senate, a determined group of minority senators – 34 in number – used the filibuster to deny the pro- autonomy senators the needed 73 votes! And that on an issue that have the potentials of altering the terrain of our federal practice!

    Should anyone therefore feign surprise that the division came that close? I don’t think anyone should. At least, not while everyone remains hung on the Niger Delta freebies and the rentier economy it promotes, and not when power is seen as an end an itself rather as an opportunity for service.

    I think I understand the Lower House’ love for the fancy word “autonomy” a phrase increasingly used exclusively for the councils. It starts from their opinion of the 36 governors as the bad boys who need to be stopped forthwith from dipping itchy fingers into the councils’ tills. Where the idea came from, I do not know but suffice to say that the attitudes of some of the governors, who, often times carry on like the Lords of the Manor have simply not helped matters.

    What could be wrong with councils insisting on taking control of their funds? I think there is a world of difference between being allowed to take charge of their affairs and the clamour to have council officials sit at table with their federal and states counterparts to share revenue from a common pool. How about blending the confounding three-tier federal arithmetic with the monthly conclave of 774+ 36+1 officials to share oil money in the name of autonomy? How does that square to the imperative to devolve more powers to the states?

    And to what effect? More funds for council officials to buy those fancy toys that make them objects of adoration in those far flung communities after leaving just enough left to pay the bills of their bored staff?

    What are the problems with our councils? I can number them in dozens. In the first place, I believe that the capabilities of our local councils are overstated. Majority are simply nowhere there yet, at least not as far as being agents of change and development is concerned. Take a trip to any of the rural local governments and you will be amazed at the number of absentee officials – officials on AWOL – men and women who only show up either when their wage is due or when there is something to share!

    No doubt, there are few exceptions in notably, urban local government areas which for obvious reasons, have very little choice than to perform even if minimally. The truth is that the records of our local councils overall, have been dismal. That explains why nothing of development is going on, and why basic social services are not provided at that level. Fact is; majority are no more than mere outposts for sharing the federal freebie.

    So how does the quest for “autonomy” cure what is fundamentally a structural problem? How does a monthly excursion to Abuja promote development or even lift the status of the local council? Will the craving to share in the wealth they did not help to create encourage responsible fiscal practice? Would it not produce alternate governors – officials who will consider themselves answerable to no one in the long run?

    This is where I believe that those pushing the autonomy miss the argument. It starts with their inability or unwillingness to isolate the problem. Left to me, we should rather be discussing whether indeed the current local government structure has not outlived its usefulness. Imagine the chairman of a local government whose internally generated revenue would not even suffice to purchase the diesel needed to run its generators making a case for autonomy. What he means is that he needs a licence to live off the wealth created by others. True autonomy means living off your sweat. Has anyone ever queried any chairman for spending their internal revenues the way they deem fit?

    I need to make one important point. I do not wish to suggest that the governors are entirely blameless in the mismanagement of our councils. Indeed, one of the problems is the absence of democracy at that level. The obverse side is that claims of meddlesomeness by the governors are often times exaggerated. The problems of the local governments are largely endogenous, hence my position that the prescription of autonomy is a wrong therapy to consider.

    While fiscal federalism is yet a long way yet in practice, let the local governments make do with what they have. Yes, we need democracy at the grass roots; we also need development. Autonomy in the circumstance cannot be the end. The councils surely have a long way to prove that they are worthy of our trust. They are a long way from there.

     

  • Oil theft and a minister’s lament

    Oil theft and a minister’s lament

    Did anyone watch the Minister of Finance, Ngozi Okonjo-Iweala bemoan, on TV, the nation’s daily loss of 400,000 barrels of crude before the House of Representatives Joint Committee on Appropriation/Finance two weeks ago?

    It is not impossible that many Nigerians passed off that latest signature cluelessness of the Jonathan administration to the festering menace as one of one of those things – another instance of the systemic meltdown under the current managers – more out of indifference to its trademark incompetence than anything else.

    Unfortunately, we are talking of a development that is at the heart of the survival of the Nigerian nation, a malaise that the nation can pass off only at its peril.

    Picture a minister in charge of the exchequer passing off a loss nearly equal to 20 percent of its projected revenue for a given year? And this presented merely as footnote in the context of turf war between the executive and the legislature over the shape and size of budget – as against what should have been a red flag to summon citizens to war?

    Don’t ask me how bad things can further get. I doubt if it could be worse.

    Those who say Nigeria is a country of infinite possibilities are damn right. What are we talking about here? At a conservative estimate of $100 a barrel, we are talking of a daily loss of $40 million; that is a princely loss of N2.184tn per annum – a figure nearly 50 percent of the entire federal government budget for 2013 – and this lost to shadowy operators!

    The obverse side of the tragedy is that the Jonathan administration does not even know the fraction of the 400,000 barrels stolen!

    Ten percent, 20, or more? Even President Jonathan’s acclaimed coordinator of the economy wouldn’t attempt a guesstimate beyond that “it is not as if the entire 400,000 barrels is stolen, no”.

    Really? What more does she know? “That whenever the pipelines are attacked and oil is taken, there is a total shut down. All the quantity of oil produced for that day will be lost because it means government cannot sell it and it means a drop in revenue.” Good heavens! How about offering Nigerians that for consolation and that coming from our Ivy League minister!

    Let’s attempt a simple arithmetic, taking a conservative figure of 10 percent of the amount as representing the stolen crude. That is some $4 million dollars daily –lost to the illicit trade and in the Gulf of Guinea region that already enjoys the dubious reputation of being one of the most under-policed regions of the world?

    Well, I’m told that the sum is enough to finance Gulf War 11!

    Is anyone still in doubt that the nation is sitting on gunpowder?

    And what did our distinguished lawmakers do? Nothing. No summons to the Petroleum Minister. None to the Navy authorities or even the entire defence establishment. Does anyone see how easy it is for the abnormal to become norm in these parts? No wonder our bored but sometimes hyperactive lawmakers have since moved on to attend to other matters!

    In this however, the lawmakers would seem by far less culpable than the ‘dovish’ Commander-in-Chief under whose watch the nation is being violated and bled.

    In the first place, given what we know of the illicit trade, it is hardly done under the cover of darkness. It cannot be. Hard to imagine is how those super-tankers mooring to the shore to steal Nigeria’s crude escape being caught under the radar of the Amphibious Brigade of the Nigerian Army or the continent’s second largest Navy? And we are told that the business is a daily occurrence? Who’s kidding?

    Let me put things in proper perspective. Oil theft is certainly nothing new – at least not in these parts. At Obasanjo coming in 1999, the daily loss to the activities of criminals stood at some point at 100,000 barrels per day. To its credit, the administration, rather than whine about the menace, actually brought the illegal trade down to 30,000 barrels per day or even less by 2003. The reversal of the achievement, which began under the Yar’Adua administration, is what has now hit the record levels of 400,000 barrels per day under President Goodluck Jonathan.

    To have a clearer sense of the disaster that is daily visited on the nation is to imagine a corporation losing nearly 20 percent of its revenue, not to acts of nature but to activities that are within the purview of those charged with running it. Surely, that would be a good ground for an extraordinary meeting by shareholders to sack both the board and executive management; that is if they are lucky to get out apiece as against seeking a renewal of woeful tenure!

    The greater tragedy is that all this is happening at a time of great dynamism in the oil industry globally. One of the major developments is the revolution in shale oil sub sector primed to ensure that oil imports by leading consumers like the US is drastically curtailed. From barely 111,000 barrels per day production in 2004, the United States ramped up its shale oil output to 553,000 barrels per day in 2011 – an annualised growth rate of 26 percent during the period. As if the trend is not ominous enough for the oil-producer OPEC cartel, the country’s oil imports is said to be down to its lowest levels in two decades with shale oil projected to displace hydrocarbon imports by 35-40 percent in the long term.

    If you thought that an OPEC member country like Nigeria ought to have gone to the drawing board to assess the likely impacts of the shale oil revolution on its revenues, budgets and the economy as a whole, you are tragically mistaken. Indeed, OPEC’s sixth largest producer hasn’t even shown signs of joining the debate anytime soon, not to talk of seeking to evolve a strategy to mitigate the potential long term effects of the revolution on its revenues. Instead, what we have is a nation hung on the menace of oil theft, a legislature on spendthrift mode, and a President on global shuttle looking for foreign help to protect its exclusive economic zone when he should be at his War Room issuing orders to his men to end the menace!

    Let me reiterate what I said at the beginning; it couldn’t get worse. I mean it.

  • As Rivers’ anomie continues

    As Rivers’ anomie continues

    Did anyone ever suffer the illusion that the foiling of the attempted coup by the Gang of Five at the Rivers State House of Assembly on July 9 would bring some respite for the folks in the state?

    Two weeks after, the signs ought to be clear enough: the quintet and their pipers may have been worsted by the superior tactics of Governor Rotimi Amaechi and the 27 loyal lawmakers, there is no relenting on their part. That the Obuah-led faction of Rivers’ PDP wants the governor out by means foul than fair is hardly news; indeed, only those unfamiliar with the PDP’s bizarre inventiveness would consider the pre-emptive valedictory service staged for the governor and his troop at the weekend as anything strange.

    That is how it has always been for the party of the tattered umbrella.

    Now, thanks to the Sunday Sun of July 21, we now know that the event(s) of July 9 is merely a dress rehearsal for the main battle which according to the newspaper, “will be the final push to dislodge Amaechi from his stranglehold in the state and dissolve his post-2015 political ambitions permanently”. Apparently emboldened by the findings of their post-putsch review strategists which blamed their failure on “tardiness and the inability of critical people in the scheme to tighten all the loose ends well”, the anti-Amaechi forces are reportedly fine-tuning a new offensive. This time around, the creek warriors have since resolved that nothing would be considered off-the-table.

    You ask: who is giving the battle orders? After last week’s visit by 16 Bishops from the South-south zone to First Lady Dame Patience Goodluck Jonathan, I believe that the question has been sufficiently answered. Since the details are already in public domain, I do not wish to bore my readers with them here. Suffice to say here that our irrepressible Dame not only repudiated the previously held position of the hired hands that the Presidency had no hands in the crisis, she let out the hitherto suppressed truth about her direct, active involvement in the animus. In a fit of rage, she labelled the elected governor a wayward son who needed to be steered from the path of self-destruction; in another breadth, she would admonish him to stop being used by outsiders against his own blood! Such contradictions are perhaps expected in the atmosphere of contrived crisis.

    So where do we go from here? In the first place, those who see the Presidency as holding the ace miss the point. It does not. If it does, the Rivers story would have changed by now. The issues, as it is, is no longer one of whether or not the lawmakers loyal to Amaechi will hold out. At this point, it does not really matter how things turn out; what we have is a battered, bruised, diminished, demystified, but desperate Presidency.

    I do not think we have had it so bad.

    So, what to expect? More serial missteps; more attempts to subvert the constitution by those sworn to uphold and defend the sacred document. Should anyone be surprised if the Abuja lords finally succeed in crowning Evans Bapakaye Bipi Speaker of the Rivers legislature through the back door?

    Clearly, one lesson that the Rotimi Amaechi ordeal has taught is that the notion of the Nigerian Presidency as the most powerful one in the world has very little in terms of substance really; what has sustained the myth is the historical weak-kneed resistance by an indifferent citizenry. That is what has made it to become self-perpetuating. Our recent history has since taught that it is more of illusion than fact.

    You ask – what of the Ayodele Fayose example? I say, this is 2013; the circumstances are clearly different.

    Still want to ask how the Rivers scenario will play out?

    First, I do not think that anyone should loose sleep over the role of the partisan police. Let me make a quick comment on the ugly event of July 9. After watching the show of shame on Youtube, my conclusion was that there was no language too strong to condemn the brigandage in the hallowed legislative chambers. It is however a different call to be asked to choose between the show of shame on one hand, and the attempted institutional subversion, the brazen attempt by the five gangsters to foist their rule of impunity on the state, coupled with their open, contemptible disdain for the constitution of the federal republic. Simply put: those chaps ought to have been arraigned for an attempted coup!

    How about the drama of declaring one of the principal actors – Chidi Lloyd – wanted or even the extreme measure of hanging the charge of attempted murder for what appears to be at best a case of affray? That is Nigeria Police for you. The point is, the drama is unlikely to go farther than keeping the man out of circulation. After then what?

    Was the governor right to have ‘invaded’ the House with his personal security? How about asking the governor to wait to be kicked out of office by the garrulous five?

    By the way, how dare anyone ask whether it was right for a governor sworn to uphold the law and the constitution to sit in the comfort of his office while lawbreakers are allowed free reign in his domain? Do you ask a governor to play by the rules when the forces massed against him have long parted with the niceties of rules and due process?

    I need to make this final point. The greatest tragedy in the Rivers’ crisis is the diminishing moral authority of the Presidency. A Presidency that would stage a victory ball for the loosing party in a contest cannot but damage its esteem in the eyes of the people. The other day, we even heard the First Lady lecture on respect for constituted authority. Strange, isn’t it coming from an unelected individual that once gave an elected governor a dressing down over state policies?

    These are unusual times. We may as well start to prepare for the coming anarchy.

  • Bonds: Stiglitz vs Okonjo-Iweala

    Bonds: Stiglitz vs Okonjo-Iweala

    If you missed Wednesday’s announcement of the outcome of the country’s billion-dollar bond offer to international investors by Finance Minister Ngozi Okonjo-Iweala, you probably number among the uninitiated in the free-wheeling club of high finance.

    Just in case you missed it, let me attempt a simple summary of the outcome that has since kept Abuja on the orgy of wild celebration: Nigeria put one billion dollars bond on offer; the subscription, said to have drawn top investors from US, Europe and Asia, came in multiple of four! In layman’s language, it means Nigeria had sought to raise one billion dollars from the international capital market but got enough investors to stake $4 billion for a share in the Nigerian pie!

    That obviously meant a lot to Finance Minister Okonjo-Iweala; her excitement, so palpable, nearly went overboard. Hear her: “the fact that Nigeria could go to the bond market, after waiting a while and we got four times our subscription, shows confidence in the strength of the Nigerian economy… Over 200 investors could not get any share of the bonds because we were oversubscribed’’.

    She would also add: “The reason we are excited is because as you know, these are turbulent times, especially following expectations of tapering of Qualitative Easing by the U.S Federal Reserve Bank”. Lost perhaps was the irony that the feared quantitative easing actually drove interest rates down – not up; our officials are of course exultant about the prospects of borrowing at relatively high costs! That is what they call “confidence”!

    Let’s look at what the bond in two categories of $500 million each means for the ordinary Nigerian. Whereas the first tranche has five-year duration, it attracts a 5.125 per cent interest rate; the other, with 10-year duration at 6.375 per cent interest rate.

    What happened to the argument made only a short while ago that the loans being sought were cheap, concessionary loans of two percent with some 20-30 years repayment? Does that figure now in the current relapse into the old habits of debt peonage?

    Does anyone bother these days to raise questions about the bizarre financialism under which the nation would borrow at interest rates of six percent only to stash its Sovereign Wealth Fund in off-shore accounts to draw a measly below two percent interest?

    At this point, I should invite you, dear reader, to the seminal contribution Joseph Stiglitz and Hamid Rashid on the subject of Sub Saharan Africa’s increasingly insatiable appetite for sovereign bonds. A must read – if you ask me – for what I consider as its fresh perspective on the raging debate.

    Stiglitz and Rashid had posed the interesting question of why increasing numbers of developing countries have resorted to expensive sovereign-bond issues particularly when their existing foreign debt carried an average interest rate of 1.6% with average maturity of 28.7 years.

    The article, set in the background of the raging contagion of Eurobonds which first birthed in Ghana, but has since spread to Gabon, the Democratic Republic of the Congo, C’ote d’Ivoire, Senegal, Angola, Nigeria, Namibia, Zambia, and Tanzania, also contains dire warnings on the danger of the ultra-orthodox financialism which most sub Saharan governments have since fallen spell.

    In it, the duo did a good job of ripping through the official mantra of “surging confidence” bandied as feeding the obsession for the debts when they noted that: “the quantitative easing having driven interest rates to record lows, one explanation is that this is just another, more obscure manifestation of investors’ search for yield”.

    That shouldn’t be hard to understand; in Europe, United States and Asia, interest rate capped at two percent or below offers little or no attraction for “vulture” funds. So, where would the ‘gamblers’ have taken their money except to regions where they can enjoy six percent interest with sovereign guarantee to boot?

    Since when did “confidence” stop being denominated in hard cash – the cash haul described as return on investment? Shouldn’t that knowledge have tempered the claim of achievement? Picture the gambler and the profligate in a game of feints and deception; isn’t it supposed to be game in the muddled world of high finance?

    The article under reference also identified “the conditionality and close monitoring typically associated with the multilateral institutions make them less attractive sources of financing”.

    I love the way the duo framed the rhetorical question: “What politician wouldn’t prefer money that gives him more freedom to do what he likes? It will be years before any problems become manifest – and, then, some future politician will have to resolve them”!

    Now, that is an elegant way to frame a problem that we know only too well – corruption.

    We know the attraction for bonds; they are cheap. The ‘cheapness’ is however not always the whole story. The rents – arbitrage – to be earned by thieving officials have more often than not constituted the major attraction. Even at that, it seems the best way to kick the problems down the road for the coming generation to solve. That is the way things have been. Apparently, they will remain so for a long time to come.

    So, what would the Jonathan administration do next? Go for more bond issues as proof of “investor confidence”? Leave the nation’s financials in utter mystery while living in denial that the nation is fast sinking into debt peonage?

    Have we parted with the so-called “odious” debts in 2005/6 only to re-learn the habits that we once assumed had been shed? How does one explain the mystery behind the mounting debts during a period of sustained oil earnings?

    Permit me, dear reader, to suggest that the so-called “investor confidence” is completely misconceived. The world knows better than celebrate the “fundamentals” of an economy where no meaningful economic activities are going on. Didn’t our officials announce way back in 2008 that our capital market has arrived on the world stage with return on investments said to be highest on the universe?

    How come the market took the hit at the onset of the global credit crisis with the exit of the vultures – the foreign portfolio investors?

    What is the difference between the SAPped 80s and the present? In the 80s, the nation ran into balance of payment crisis because oil prices took a dive. Unable to meet its import bills, and with a huge portfolio of debts to service, it had to endure all manners of economic prescriptions to keep afloat. Three decades after, the only difference is that oil price has not only kept steady, but has managed to surpass expectations. With $50 billion dollars in the kitty, as foreign reserves, even a blind vulture can afford to gamble. You call that achievement; well, I call it common sense.

  • A visa bond of trouble

    From all indications, the British government may have, at least for the time being, backed off from its earlier proposal to impose a ‘punitive’ £3,000 (N730,000) visa bond on travellers from a group of six Afro-Asian countries deemed to pose “high risk” of immigration abuse. Last week, UK’s The Guardian quoted a member of the Liberal Democrats, the coalition partner of the ruling conservative government as saying that the policy has not been “signed off’. However, far from suggesting that the proposal was off the table, he gave hint that the government still agreed in principle with the policy although he noted that the “exact details of how it is to be piloted, including the size of the bond, is still being discussed in the government”.

    In other words, whether the six countries affected by the policy likes it or not, the visa bond policy which targets India, Pakistan, Bangladesh, Sri Lanka, Nigeria and Ghana — all non-white Commonwealth nations may have come to stay.

    The collective outrage by the nationals of the affected countries about a measure they considered as discriminatory, although understandable is somewhat misdirected. To start with, visas are by their nature inherently discriminatory; countries put visa regimes in place to restrict the influx of immigrants into their territory. It is elementary that not every one that applies for a visa ever gets one, including applicants ordinarily deemed as qualified!

    What are the arguments against the measure? That Her Majesty’s government, as leader and primus inter pares in the Commonwealth has no business imposing such patently unfair visa regimes on fellow commonwealth members? And that because of the rich historic ties between her and the group of six, the measures are simply unfair! In the first place, those who bandy the argument obviously forget or chose to forget, that the sun of the British Empire is said to have set in different parts several decades ago. It set in India and Pakistan in 1947; Sri Lanka 1948; Ghana in 1957; Nigeria 1960, Bangladesh 1971. Just as it seems fashionable for my generation to recall a time when they needed no visas to travel to Britain, part of the problem is the temptation to relapse into nostalgia; to reset the relations buttons to the 60s and the 70s!

    The issue here is that Her Majesty’s Government has already determined that the targeted countries posed high risk of immigration abuse! That is the judgment by a sovereign government to which they are entitled! Shouldn’t we have spared ourselves the emotionalism while making the case that our citizens seeking sojourn in UK are model citizens?

    Today, the global economy is in a flux; In UK for instance, youth unemployment is 7.8 percent, moderate by the standard of its peers in Western Europe. Before the global crisis, it was a little over five percent. The International Labour Organisation (ILO) for instance reports that the number of people looking for work for over a year has more than doubled since 2007, up from 391,000 to more than 902,000.

    Like America, the subject of immigration remains a hot button one. A Britisher put the issue in perspective when he observed rather wryly: “You don’t need a PhD to understand that when the number of unemployed people vastly outnumbers the number of job vacancies, and public housing stock is under huge strain, it’s a very bad idea not to radically restrict immigration. This isn’t rocket science”.

    So, is the £3,000 the answer to the immigration problem?

    I agree that the policy lacks rigour. What it does is adjudge the potential traveller as guilty until proven otherwise. Moreover, the act of singling out of six countries as “high risk” immigration violators is apparently in bad taste. And if you ask me, it is unlikely to deter the potential illegal immigrant; it simply jerks up the cost of procuring the exit card!

    However, I think the problem is that we pay too much attention to what the Brits are doing to fix their problem. My problem is that we are not even about to start dealing with ours which is to fundamentally address the question of why our youths have found the lure of foreign pastures irresistible despite the dangers and frustrations, or why many would readily pay the ultimate price than stay to work things out.

    Last week for instance, we heard Foreign Minister Gbenga Ashiru swear to “defend the interest of Nigerians by whatever means we can”. With what? A tit-for-tat wouldn’t be a bad proposition except that in our circumstance, it would be a most laughable one. What would that amount to given that the migration is almost wholly one-way?

    I say take it easy; we have seen similar posturing before. Didn’t one minister, Stella Oduah once threaten to ban British Airways from flying the Nigerian airspace over claims of unfair discriminatory practices? Has the world ended since the threat came to no effect?

    At the root of our problem is governance. We churn out graduates into a labour market already bursting in its seams. We cannot even guarantee admission for our children in higher institutions preferring instead to outsource admissions to Ghana, Ukraine and other foreign universities. In the last Unified Tertiary Matriculation Examination UTME held in April for instance, of the 1.7million that sat for the exam, only 520,000 spaces are said to be available – less than a third. For our army of youngsters, theirs is an annual sentencing into an uncertain, bleak future.

    If you ask me, I’ll insist that our enemy is within; at least the Brits are not nearly the enemy we think they are – not anywhere those foreign investors who pose as friends but act like fiends by bringing in labour for jobs that locals can conveniently do.

    As always, the point must be borne in mind that the right to travel is nowhere guaranteed; not even in No-Man’s-Land.

  • Good news from Cross River

    Those who have followed my thoughts on this page would understand my general skepticism about the unceasing but clearly outlandish claims of Foreign Direct Investment inflow by our federal government. It’s hard not to be, in a situation where the government at the centre does very little else than stage those never-ending high-octane affairs in five star hotels in Abuja; never mind that few of those shows ever get beyond the elaborate ceremonies staged to put pen to the MoUs complete with their photo-sessions; or, the fact that a good number of the proposals are no more than ‘legal’ Ponzi schemes to fleece the local economy. Or still, when claims about FDI are not always what they seem. One only needs to look back to 2008/9 to see how quickly how the gains of the celebrated $4 billion investment haul by foreign portfolio investors would later become pain for the local economy, when soldiers of fortune, disguised as “investors” exited with their capital and all – an experience the capital market has barely recovered from.

    Against this background, you can understand why the ground-breaking ceremony of General Electric’s $1 billion manufacturing and training facility at Calabar, the capital of Cross River State would evoke both curiosity and scepticism at the same time. First, GE is a world class player – the kind of company that any country would love to have around. The second is the scale of the investment: an initial $250 million capital expenditure and another $800 million incremental spending on local sourcing of goods and services. The third is the projected jobs estimated at 2,300. Part of the package, I later understand is to make Nigeria the regional hub for GE’s manufacturing service and renovation in Africa; and, if it seems a piece of icing on the cake, the proposed facility is said to be one of two of its kind in the world under the corporation’s Greenfield investment drive.

    Just as the achievements can hardly be understated, one lesson that should not be lost is how the state has managed to transform from being a wholesale civil service state to a global tourist haven. Only a few years ago, if the world took any notice of the state, it is probably when reference is made to the beautiful and serene Obudu as well as Tinapa; today, it seems to have marched on, determined as it were, to earn its place as an industrial hub. The arrival of GE and a few other Fortune 500 companies in the state may have changed all of that for good. And from all indications, there is no stopping the march. There are great lessons here.

    I need to make the preliminary point here. Surely, the government and the people of Cross River surely have reasons to be proud of the coming of General Electric. More than mere tonic to diversify its productive base, the training facility proposed for Calabar should in fact serve as springboard for the transfer of critical skills for its citizens; the other derivatives of employment and value addition are as good as given.

    The first lesson is that is that the GE investment is neither magic nor the choice of Calabar happenstance. It is a choice consciously made by the leadership. Indeed, I suspect that the one-time oil-producing state may have finally come to its own after the bitter experience of loosing its erstwhile pots of fortune to Akwa Ibom. Evidence is the record number of investors now seeking to make Calabar their home. Today, whereas the state may not have those whited sepulchres of its oil-drunk neighbours to boast of, it has a number of world-class investments going for it. Notable examples are Wilmar Limited’s on-going $400 million investment in agriculture and agro-processing; Brentex Petroleum $300 million pipe mills manufacturing and the $700 million Essar Power Limited 660MW Integrated Power Project; Southgate Cocoa, and the Artee Group’s investment in shopping malls.

    Driving round the city, it is hard not to see the evidence of a state roaring to go – a state with its eyes firmly set on the future and, which according to its Governor, Liyel Imoke is set to wean itself of dependence on oil and gas while actively striving to provide enabling environment for the private sector to thrive.

    Gerald Ada, Imoke’s special adviser on investment and promotions would, in the course of interaction with yours sincerely, supply the factors which make the state tick for investment. I have elsewhere identified the factor of leadership on which the entire quest is anchored. That is critical. The other factor is the enabling institution to deliver the quest. This is where the role of the Cross River State Investment Promotion Bureau – a surprisingly lean agency that is pivotal to the state’s investment drive comes to play.

    Ada describes the bureau, a creation of the State Investment Promotion Bureau Law No. 4 of 2008, as providing not only the legal instrument for investment promotion, but also serving both as one-stop shop as well as clearing house for investment matters. The issues could range from access to land; to taxes and applicable rates and even to relations between the would-be investor and the local governments; and where it becomes necessary, the bureau facilitates access to the governor. He would also explain why on the coming of the bureau, the erstwhile Ministry of Trade and Commerce had to be scrapped: to eliminate the typical tardiness associated with the non-responsive bureaucracy- a major headache for would-be investors.

    Now, I do not here suggest that Cross River State has found the magic formula to the exclusion of other states. Indeed, I am aware that some states have done quite well in the area of streamlining procedures for new businesses. What I have tried to do is to acknowledge the modest efforts by the government – particularly those that seems to me to be working. The point about venture capitalists is that they are able to spot investment opportunities even without the meaningless road shows that have become fashionable in these parts. What available evidence seems to suggest is that the Cross Rivers State may finally be getting it right. The good news is that this is already being acknowledged. Which means that the journey to economic renaissance has since begun.

  • FAAC ruckus

    If the newshounds barely paid attention to the boycott of the monthly Federal Accounts Allocation Committee meeting in Abuja Thursday last week by commissioners of finance in the 36 states of the federation, the aftermath of the drama has since become impossible to ignore.

    To be sure, this would not be the first time that the finance commissioners will openly voice their disagreement with the federal government on the computation of the distributable revenue. Whereas such disagreement has since become the norm – flowing as it were from the bizarre federal practice in which federating parts would routinely gather to share funds, the difference this time is the context and the setting of the disagreement.

    Clearly, short of an attempt to play the ostrich, nothing of the ruckus at the Abuja meeting can be said to be entirely unexpected. After the May 24, election of the Nigeria Governors Forum (NGF), the losing and the winning side have since thrown everything into the fray in what is supposed to be their mission to gain advantage. Of course, with the Presidency sworn to play the spoiler in the project to rip the forum apart, it was a matter of waiting for the next opportunity to launch into the next phase of battle.

    Well, that opportunity presented itself at the meeting convened to share the federally collectible revenue for the month of May. On the appointed day, the members gathered; however, the meeting was not to be as members walked out with a resolve to report back to their principals that things are not exactly what they seem.

    If the honourable commissioners had meant to stir the heart of the conscienceless federal behemoth to act justly, they were to be mistaken. Rather, they merely provided ammunition for the behemoth.

    I guess it was inevitable that FAAC will be sucked into the battle. By its composition, the body is made up of the commissioners of finance in the 36 states with the minister of state for finance representing the federal government. More out of reason of protocol than anything, the minister also doubles as chair of the body. Of course, with the principals of the two sides still locked in combat and even more so at a time the parties are still seething with rage over claims and counter-claims of ‘victory’, it seems understandable that the agents of the two parties would take their cue.

    It seems, unfortunately one instance when the politics of the forum will trump not only common sense, but also the cherished principles of our federalism. At the heart of the dispute is the interest of the states which is obviously diametrically in opposition to that of the federal government. The issues of course revolve around claims of observed discrepancies in the accounting of the distributable revenue, a claim, though hardly new, has remained a thorny issue in the relation between the federal government and the states. Unfortunately, the federal government prefers to see itself as principal while treating the states as its vassals. Now, to this claim was added an alleged non-implementation of decisions and resolutions of the forum. Specifically cited was the non-payment of arrears of February and that of the augmentation passed in May.

    The issues were such that the commissioners needed the input of their principals to resolve hence their boycott and subsequent resolve to take the message to them “so that they will put heads together to meet with the President and every other well-meaning entities of the federation so that these problems will be resolved once and for all”.

    As must be obvious now, that expectation is thoroughly misplaced. First, aside providing opportunity for the meddlesome federal government to further sow seeds of division into the governors’ body, it affords Governor David Jang and his losing party in the NGF an avenue to play for relevance.

    The issues are very clear. The call by the finance commissioners on a federal government alleged to be cheating to judge its own cause is clearly a ludicrous one. The federal government has no such records of fiscal sense or that of equity. In the last 14 years of civil democratic rule, the evidence on ground is one of a federal government most resistant to all entreaties by stakeholders to open the books of the national oil corporation turned collecting agency – the Nigerian National Petroleum Corporation – in line with the requirement for transparency.

    Surely, could the commissioners have chosen to be blind to the politics of revenue sharing? After all, the evidence is clear: 14 years after the revenue formula inherited from the military, the same federal government has practically frustrated every attempt to divest it of the ‘excess baggage’ revenue. Through its collecting agency, it solely determines what gets paid into the distributable pool. Again, much against reason and common sense, it has held on to a disproportionate 52 percent share from the pool- funds it has neither been able to use wisely nor indeed any productively for the benefit of the Nigerian people.

    Why are these issues relevant at this time? It is precisely because the issues underlie the many battles between the federal government and the states. They are at the heart of why the Jonathan administration seeks to decapitate the NGF. Whether it is the battle over the Sovereign Wealth Fund (SWF) which although the federal government jointly owns with the states and local government, the former insists on running almost exclusively or the management of the piggy bank called crude account, they are the reason the NGF, and by extension, its obdurate leader – Governor Rotimi Amaechi of Rivers State have become the enemy that must be crushed.

    Clearly, President Goodluck Jonathan’s desire to carve the NGF in his very image and likeness is perhaps only hidden to the extent that his desire to run in 2015 remains disguised to those in the villa. More than an ordinary tool, a FAAC in the hand of a desperate President is both a weapon of defence and offence – a veritable scourge to whip dissent into line. Forget the so-called commonality of interest among the governors: reining in the fiscally obdurate federal behemoth would come later. Jang and his co-traveller in infamy, Olusegun Mimiko will ensure just that. At this time, the name of the game is power – and as for President Jonathan, the March towards 2015 is unstoppable!

    Where do these lead? Your guess is as good as mine.

  • June 12: Old habits die hard

    June 12: Old habits die hard

    June 12, 1993, about 14 million Nigerians trooped out to cast their ballots in what became the watershed as the freest and fairest elections in the nation’s electoral history. The Social Democratic Party (SDP) candidate, the business mogul Moshood Kashimawo Olawale Abiola, received over 8 million votes, and won in 19 states and the Federal Capital Territory. His National Republican Convention (NRC) counterpart, Alhaji Bashir Tofa got over six million votes and won in only 10 states. The SDP candidate’s victory was resoundingly comprehensive as he clinched almost 60% of the total votes cast. Only in two states of Kebbi and Sokoto did Abiola fail to obtain at least one-third of the votes.

    That was the result before the June 16, 1993 order by the Abuja High Court suspending further announcement of the results. The order was of course as good as superfluous given that the result, under the existing rules, was already available to the world. We know what happened later: the election was annulled by the Ibrahim Babangida junta.

    The intendment of the annulment was in effect, to deny that the exercise, in which more than 14 million citizens freely exercised their franchise, never really took place! The description of the criminal annulment as a military wonder of procuring an abortion after the arrival of the baby could not be more apt!

    But then, no less revealing is the attitude of a section of the political class. Some actually insisted that the election, in which they freely took part, could not have been valid mainly on the strength of a spurious judgment procured at midnight! Losers on their part would not even find the grace to concede victory to the winner just as some would threaten to bring the roof down should the result of the non-controversial election be recognised. In the end, the pan Nigerian mandate was effectively scuttled. As they say, the rest is history.

    But then, we are talking of an event that took place two decades ago. How well has the nation fared 14 years into the so-called democratic journey? No doubt, its quest for democratic consolidation has been a mixed bag. Whereas the experience has ranged from the outright confounding to the ridiculous, the nation can at least point to one major blessing that the democratic order, with all its dysfunctions, is at least theoretically, still in place!

    Now, let’s go back. Twenty years ago, the nation had what one might call, a passable electoral process. Warts and all, the Modified Open Ballot system – better known as Option A4, at least guaranteed some degree of credibility to the process. The requirement was simple. Voter registration was elaborate. Accreditation of voters, although tedious and cumbersome was at least open and transparent. The collation process, although fraught with some challenges, was generally seen as credible and reliable.

    What do we have today? If in 1999, the process was passable, subsequent years have been an exercise in steady regression. If citizens thought that no election could be worse than that of 2003, they could not have imagined what became of the 2007 elections. In the South-west, it actually took the active intervention by the judiciary to return to the winners what the electoral robbers had stolen as we saw in Ekiti and Osun states! And the source of the trouble: the electoral machine that turned losers into winners and vice versa.

    That was the background which informed citizens’ faith in the Attahiru Jega-led INEC. And what did we get? At best a distinction without a difference. Today, Nigerians can’t even be sure that any system let alone a fool-proof one is in place. Despite the song made by the electoral umpire about deploying modern technology to its activities, the last exercise ended in utter disappointment, unfortunately, for an exercise that the nation had invested so much faith and resources. In the end, not only was the outcome suspect, all the promises of an error-free, biometric system simply disappeared with the wind.

    But then, the problem with the political system isn’t always that of the architecture of the elections. It seems to me that we have a greater challenge to deal with in the attitude of the players in our electoral politics. It starts with their basic understanding of political concepts and extends to their disdain for the rule of the game. In 1993, a section of political players would insist on not making the distinction between the military-ordered cancellation of party primaries and the annulment of a national election. It’s like not finding the difference between the candidate that was prevented from writing an exam and another that sat and passed for an exam but for which the examiner would nonetheless insist never held!

    Again, that was 1993. It is a measure of the regression of our national politics that the same old daemon of delinquency is back. Evidence: May 2013, a so-called “consensus arrangement” among players is deemed as superior to an election in which parties willingly took part, and of which the result would run contrary to their expectations of their ‘consensus’. And that is an election in which only 35 voted!

    One is talking here of the Nigerian Governors Forum election of May 24 which Rotimi Amaechi, the Rivers State governor won with 19 votes, but which the consensus group now claims that their man, Jonah Jang won with 16. I watched Olusegun Mimiko, the Ondo state governor struggle to make the case that the election held against the grain of expectation. Did he say that the election did not take place? No, he didn’t – only that the incumbent ought to have stepped down in deference to their rules. Did he vote? Was his vote among the 35 counted? At this time, it’s even pointless to talk about bad losers who instead of accepting defeat gracefully would rather invoke God as if He, and not them, scripted the confusion.

    Where is the nation headed? It’s not difficult to tell. Let me however make this point: the virus of political delinquency would kill this democracy faster than anyone might ever think. The point is – it’s easier to fix the bolts and the nuts of the electoral machine than one would deal with the delinquency virus. What delinquency does is gnaw slowly away at the soul of the democratic spirit. Now, tell me, whoever heard of a being without the spirit?

     

  • My Jonathan scorecard

    My Jonathan scorecard

    If anyone needed evidence of the administration’s determined flight to fantasy-land, last week’s exaggerated self-score by President Goodluck Jonathan of his administration’s mid-term performance should be it. Nearly a week after, the hordes of Nigerians that have volunteered opinions on the self-score are still struggling to make up their minds as to what galls them the more: between the heaps of sterile statistics thrown at the faces of the bewildered populace, and the reality etched on the furrows of the ordinary man on the street that the administration emphatically deny.

    Never has an assessment been so blatantly deficit in credibility as the exercise staged in Abuja Wednesday last week. Speaker after speaker spoke glowingly of the administration’s record achievement in two years just as statements were rendered et cathedra. Watching the whole charade on television, I struggled in vain to find the redeeming grave, at least a basic acknowledgment of the painful sacrifices made by Nigerians in the mission that has delivered more pains than gains. For the self-scorers, the Eldorado is here already!

    Some samples of their Eldorado: an economy roaring at an annual 6.7 percent growth; the foreign reserves at a soar-away $50 billion; the Sovereign Wealth Fund with $1 billion seed money despite initial objections by some governors. Inflation (which the spendthrift administration is culpable in fuelling at every turn) is touted as being progressively won with inflation now down to 9.1 percent from 12.4 percent in May 2011. How about the claim of record foreign direct investment inflow at a time local businesses remain in coma? Add to these; the administration’s programme on power is on course; ditto its programme to rehabilitate the railways and the transportation infrastructure.

    The administration is, without question, entitled to its claims of achievement – including those bordering on delusions. Nigerians of course have the duty to point at the hard facts either deliberately suppressed or glossed over in the larger conversation on the economy and by extension, the nation’s future. The issue certainly runs deeper than the administration’s book balances can ever reveal; which explains why the unceasing but cheap seduction by the Jonathan’s book-keepers to their narrow treatise with its distorted reality even when there are other authorities to turn for a more balanced picture has been particularly irksome.

    Let’s consider the report of the anguished operators on the Main Street; the whining manufacturers whose operations are constantly threatened or are in the throes of shutdown for the same old reasons of inclement environment. Do they agree that the Eldorado is here?

    Put in another way: Is the environment under the Jonathan administration, more clement than it was five, eight or even 10 years ago? Not even the Jonathan administration – in its widest delusions – would dare to suggest that the problems have disappeared. Just as the same old problems have endured, some have in fact metastasized; the only difference is the signature on the promissory notes.

    Two weeks ago, I stumbled on an observation by the Senior Representatives of the IMF in Nigeria, W. Scott Rogers which I consider particularly relevant in framing the current debate on the economy. Here is how the IMF chieftain captured what he called the Nigerian “conundrum”: “Income per capita has gone up, yet poverty isn’t improving and we are having a difficult time understanding why that is, or how that could be”.

    Now, the IMF couldn’t understand why poverty is on the rise at a time the nation’s per capita income is rising. Do our officials know? I bet – they don’t.

    Well, I have some ideas to explain the so-called mystery.

    The first is the bazaar of contractocracy at all levels of government. Today, the shortest route to unearned wealth is government business. Our government –at the federal level in particular – has become a huge procurement machine spinning contracts without delivering value. It can afford to spruce up far –flung airports even when there are no aircraft to fly; the same way it retains enough funds to erect monuments in service of the egos of those in power but never enough to fix the craters on the highways. Whoever thought that a government in this day and age could create a department to service the needs of certified deviants and their co-travellers in criminal delinquency? Of course, it can only happen in Nigeria. Under Jonathan presidency, the portfolio has not only enlarged, it has since assumed the status of an industry.

    The obverse side of the government profligacy is the continuing asphyxiation of the real sector through the prohibitive cost of lending. Let me offer a simple explanation on why the government is the sole culprit in this. Today, the Monetary Policy Committee (MPC) rate which sets the benchmark lending rate has been kept at 12% for the MPC’s 10 meeting running. This is of course justified by the need to curb government’s unbridled spending – the expansionary fiscal activities of government at all levels. That, in turn, hikes the cost of borrowing to everyone – including the small and medium scale business. In other words, it is a case of getting them to pay for the sins of the irresponsible government! It is a vicious cycle.

    Now, you know who to hold responsible whenever the real sector complains of prohibitive costs of funds. Does anyone yet see how costly the delinquency of the public sector can be? Is the Jonathan administration less culpable than those before it in this regard? As for those complaining about the current MPC rate, I say: wait till the third quarter of next year to see the rate head further north as politicians roll out their war chest as the race to 2015 hits the home stretch!

    Related to the above is the unemployment situation. The statistics is simply frightening. As for youth unemployment, don’t even dare to go there – It has reached the tipping point. We herd our children to school hoping that opportunities will somehow open up after graduation. Our government talks about the need to expand the opportunities for youths but does nothing to create them. As it is in the labour market, so it is in the educational system. With only 520,000 spaces available for the 1.7 million candidates who sat for this year’s Unified Tertiary Matriculation Examinations (UTME), are we not preparing the nursery ground for tomorrow militants and Boko Haram recruits? Does that feature on the Jonathan scorecard?

    I should not fail to mention another conundrum – our mounting debts at a time of unprecedented incomes. The Jonathan administration insists that the nation is presently under-borrowed. And what is their case for borrowing? That we should, just because we can? And at a time we are supposed to be growing the piggy bank called the Excess Crude Account?

    They say the funds are cheap – unlike the Paris and London club of debts? So what? Should anyone be pressing to borrow at 15 percent while stashing away our reserves at JP Morgan at nominal interest of barely 2%?

    So, where is the basis for the claim that the Jonathan administration is any different from those that have landed us in the present hell-hole? Only because more money is flowing in and hence it could afford to throw it around?

    Still want my score? It would be a D.