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Role of Windfall Tax in Encouraging Ethical Banking Practices in Nigeria

By Donatus Eleko

In a rapidly evolving financial landscape, where the pressures of market volatility often dictate the profitability of banking institutions, there is a growing concern over the ethical practices within the banking sector. This issue is particularly pertinent in Nigeria, where the banking sector has witnessed significant gains and losses tied closely to the whims of market forces. As such, there is a pressing need to foster a culture of accountability and responsibility within the sector to ensure that profits are not merely the byproduct of market fluctuations but are also reflective of genuine value creation for customers and the economy at large. One potent tool that has the potential to encourage such practices is the windfall tax.

Understanding the Windfall Tax

The concept of a windfall tax is not novel; it is a targeted tax levied on companies that have reaped extraordinary profits, often as a result of unforeseen circumstances or market conditions rather than their operational efficiencies. In the context of the banking sector, a windfall tax would be applied to the excess profits banks generate due to favorable but volatile market conditions, such as sudden changes in interest rates, exchange rate fluctuations, or other macroeconomic factors.

In Nigeria, the application of a windfall tax on banks could serve as a critical measure to disincentivize profit-making strategies that rely heavily on market volatility. Instead, it would push banks towards more sustainable and ethical business practices, where profit generation is aligned with long-term value creation, customer satisfaction, and economic development.

The Nigerian Banking Sector: A Landscape Ripe for Reform

The Nigerian banking sector has undergone significant transformations over the past few decades. From the consolidation era in the early 2000s to the recent drive towards digital banking, Nigerian banks have navigated various challenges and opportunities. However, the sector remains heavily influenced by external economic conditions, such as fluctuations in oil prices, foreign exchange rates, and global economic trend.

These factors have often led to situations where banks record significant profits, not necessarily because of innovations or value-added services, but due to market conditions that temporarily favor certain financial instruments or activities. For instance, during periods of high interest rates or foreign exchange volatility, banks may see their profit margins swell due to increased margins on lending or foreign exchange dealings, rather than through sustainable business growth or improved customer service.

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While profitability in itself is not problematic, the concern arises when such profits are not reinvested into the economy or used to improve the banking services that customers rely on. Instead, they may be channeled into executive bonuses or dividends, creating a disconnect between the banks’ performance and their contribution to the broader economy. This is where the introduction of a windfall tax could play a pivotal role.

Incentivizing Ethical Banking Practices Through Windfall Taxation

The primary objective of a windfall tax in the banking sector is to encourage banks to adopt more responsible and transparent financial practices. By taxing excessive profits that arise from market volatility, the government can create a system where banks are incentivized to focus on sustainable growth and long-term value creation.

1. Promoting Transparency and Accountability

One of the immediate impacts of a windfall tax would be the push towards greater transparency in banking operations. Banks would need to clearly differentiate between profits derived from market conditions and those generated from genuine business activities. This level of transparency is crucial for building trust with customers, investors, and regulators.

To avoid the tax, banks would be encouraged to adopt more robust reporting practices, ensuring that their financial statements accurately reflect the sources of their profits. This could lead to the adoption of more conservative accounting practices, where profits are not overstated, and potential risks are fully disclosed. In turn, this would enhance the overall stability of the banking sector, as stakeholders would have a clearer understanding of the banks’ financial health.

2. Encouraging Long-Term Value Creation

The implementation of a windfall tax would also incentivize banks to focus on long-term value creation rather than short-term gains. Banks would need to rethink their business models to prioritize activities that generate sustainable profits, such as expanding their loan portfolios to include more SMEs, investing in financial technology, or improving customer service.

By discouraging reliance on volatile income streams, such as trading profits or foreign exchange gains, the windfall tax would push banks to develop more innovative financial products and services that meet the needs of their customers. This could include offering more affordable loans, improving access to banking services in underserved areas, or developing new financial instruments that support economic development.

In this way, the windfall tax could act as a catalyst for banks to align their profit motives with the broader goals of economic growth and social responsibility. As banks shift their focus towards activities that contribute to the real economy, they would not only enhance their reputation but also create a more resilient and inclusive financial system.

3. Reinvesting in the Economy

A well-structured windfall tax regime could also encourage banks to reinvest their profits back into the economy. Instead of distributing excessive profits as dividends or executive bonuses, banks could be incentivized to allocate a portion of their windfall gains towards initiatives that benefit the wider society.

This could include investments in infrastructure projects, financial inclusion programmes, or partnerships with the government to fund social development initiatives. By channeling a portion of their profits towards these areas, banks would not only reduce their tax liability but also contribute to the economic development of Nigeria.

Moreover, the revenue generated from the windfall tax could be used by the government to fund public goods and services, such as education, healthcare, and infrastructure. This would create a virtuous cycle where the success of the banking sector directly contributes to the improvement of the overall economy and the well-being of the population.

Addressing Potential Challenges

While the introduction of a windfall tax in the Nigerian banking sector presents numerous benefits, it is not without its challenges. One of the key concerns is the potential for the tax to be perceived as punitive, which could discourage investment in the sector or lead to capital flight. To mitigate this risk, it is essential that the windfall tax is designed in a way that is fair, transparent, and predictable.

1. Ensuring Fair Implementation

The success of the windfall tax will depend on its fair and consistent implementation. The tax should be levied based on clear criteria that take into account the unique circumstances of each bank, such as its size, business model, and market conditions. This will help to ensure that the tax is applied in a way that is equitable and does not unfairly penalize certain institutions.

Furthermore, the government should engage with key stakeholders in the banking sector to ensure that the tax is understood and accepted. This could involve consultations with industry representatives, regulators, and financial experts to design a tax regime that balances the need for accountability with the importance of maintaining a competitive banking sector.

2. Balancing Taxation and Innovation

Another challenge is finding the right balance between taxation and innovation. While the windfall tax is designed to discourage excessive risk-taking, it should not stifle innovation within the banking sector. Banks need to be encouraged to take calculated risks that drive economic growth and create value for their customers.

To achieve this balance, the windfall tax could be structured to provide incentives for banks that invest in innovative projects or demonstrate a commitment to ethical business practices. For example, banks that allocate a portion of their profits towards financial inclusion initiatives or environmental sustainability projects could be eligible for tax credits or exemptions.

This approach would ensure that the windfall tax encourages responsible behavior while also supporting the continued growth and development of the banking sector.

Conclusion: A Path Towards Responsible Banking

The introduction of a windfall tax in Nigeria’s banking sector represents a significant opportunity to foster greater accountability and responsibility within the industry. By taxing excessive profits that arise from market volatility, the government can incentivize banks to adopt more sustainable and ethical business practices, focusing on long-term value creation rather than short-term gains.

However, for the windfall tax to be effective, it must be implemented in a way that is fair, transparent, and supportive of innovation. By engaging with stakeholders and carefully designing the tax regime, the government can ensure that the windfall tax serves as a catalyst for positive change in the banking sector, contributing to the broader goals of economic development and social responsibility.

As Nigeria continues to navigate its economic challenges, the adoption of a windfall tax in the banking sector could play a crucial role in building a more resilient, inclusive, and ethical financial system. In doing so, it would help to ensure that the success of the banking sector is not only measured by its profitability but also by its contribution to the well-being of the Nigerian people and the economy at large.

September 1, 2024
NIA, DSS Change of Guards: Tinubu’s Intelligence Turn around Maintenance

The week rolled by rather fleetingly, like it ran faster than usual. Though not much activities were seen from President Bola Ahmed Tinubu’s office, which did not mean that things did not happen any ways. Right from Sunday till yesterday, the events seemed to maintain fast paces that you hardly noticed they were happening, all of a sudden it was another weekend.

You will recall the President cut his brief work stay in France short to come home to attend to some state matters, especially the swearing in of the new Chief Justice of Nigeria (CJN), Justice Kudirat Kekere-Ekun. The event, which held two Fridays ago, seemed to make him briefly put his initial programme on hold, however, after the ceremony, he kind of went back to continuing his routine here at home.

Most part of the week he was mostly heard and read through the activities of his many lieutenants and statements of his media managers. His schedule for the week was mostly blank, until Thursday when he received Letters of Credence from new envoys, including the new Ghanaian High Commissioner to Nigeria, Vice-Admiral Seth Amoama (Rtd), and the Brazilian Ambassador to Nigeria, Carlos Jose Areias. Shortly after that event, he had to embark on another economic and diplomatic trip to the People’s Republic of China where a string of activities have been lined out for him to participate in.

As very scanty as the events of last week were, at least in the public’s eye, there was a particular step that has been viewed as very critical to the nation’s stability and the eventual achievement of his administration’s programme. You will recall that there was a bit of shake up in the security system, the intelligence arm of the architecture. On Saturday evening the Director General of the National Intelligence Agency (NIA), the nation’s equivalent of the Central Intelligence Agency (CIA) of the United States (US), Ahmed Rufai Abubakar, tendered his resignation to President Tinubu, citing personal reasons and assuring that his friendship with the administration is still very much intact.

His colleague at the head of the Department of State Service (DSS), Yusuf Magaji Bichi, was also announced to have tendered his resignation in the same manner, although since his was done away from media attention, we cannot say we know why he threw the towel in, but some who know have suggested that his reason and the circumstance might not be that different from that of Abubakar.

All these happened between Saturday and Sunday and by Monday, almost like the situation seen with the change of baton at the Supreme Court, where no vacuum was allowed to linger. By Monday evening, President Tinubu had announced new heads for the two very critical national security agencies. In a statement made available to journalists by the President’s Special Adviser on Media and Publicity, Ajuri Ngelale, names of new heads were announced for both agencies.

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“President Bola Tinubu has approved the appointment of new Directors-General of the National Intelligence Agency (NIA) and the Department of State Services (DSS). Ambassador Mohammed Mohammed is the new Director-General of the NIA. Mr. Adeola Oluwatosin Ajayi is the new Director-General of the DSS.

“Ambassador Mohammed has had an illustrious career in the foreign service since joining the NIA in 1995. He had served in various roles, culminating in his promotion to the rank of Director and his subsequent appointment as the head of the Nigerian mission to Libya. The 1990 graduate of Bayero University, Kano, had served in North Korea, Pakistan, Sudan, and at the State House, Abuja.

“The new DSS Director-General, Mr. Adeola Ajayi, rose through the ranks to attain his current post of Assistant Director-General of the Service. He had, at various times, served as State Director in Bauchi, Enugu, Bayelsa, Rivers, and Kogi. The new appointments follow the resignation of the previous NIA and DSS chiefs.

“President Tinubu expects that the new security chiefs will work assiduously to reposition the two intelligence agencies for better results and charges them to bring their experience to bear in tackling the security challenges bedevilling the country through enhanced collaboration with sister agencies and in surgical alignment with the Office of the National Security Adviser (ONSA)”, the statement said.

Almost immediately the President announced his new spy masters, comments and opinions started flowing in, mostly commending him for seeking out those they considered the most appropriate replacements. From regional groups to major opinion moulders, the President’s action continued to receive accolades. One of such reviews, one by a northern group, Northern Alternative Forum (NAF), praised his “capacity to search far and wide in recruiting capable hands to man these sensitive institutions of government”.

Speaking about the appointments, National Chairman of NAF, Mallam Gidado Ibrahim, said “these appointments are the best picks by the President. With these appointments coming simultaneously, a new life will be breathed into our nation’s intelligence community and the fight against insecurity, especially terrorism. The secret police has indeed entered a new era. With these men in the saddle, the Intelligence gathering capacity of our secret police will be enhanced. We have no doubt that they will bring their wealth of experience to bear in tackling the security challenges facing our nation”.

Considering the state of security in the country, from the north to the south, there has for a long time been a consensus that there is a need for a re-jig to occur in the nation’s security structure. Though he started that process last year when he replaced the service chiefs, the Inspector-General of Police and the National Security Adviser. He allowed the intelligence chiefs in both organizations to last another fifteen months with is administration, but now he completed the process with the most recent change of guards in the intelligence community. The coming weeks are for showing workings for the new chiefs.

Besides the significant appointments in the early part of the week, the President did other things of national importance, one of which was the reception of Letters of Credence on Thursday, during which he made new moves for economic and diplomatic adventures with the countries sending new envoys. For instance, in his discussions with the Brazilian Ambassador, Areias, President Tinubu recalled discussions with is Brazilian counterpart, Luiz Inacio Lula da Silva, in February.

“We have a long history of bilateral and cultural relations with Brazil. You must see Nigeria as your second home and explore the abundant economic opportunities in the country. I have been talking to some of my Brazilian friends concerning the prospects of investing in dairy farming in Nigeria. We are eager to push these investments forward. In my recent discussions with President Lula, we agreed to energize the economic development of our two countries, and I look forward to continuing that collaboration”, the President told the envoy.

On Monday the President responded to the new figures from the National Bureau of Statistics (NBS) on the nation’s Gross Domestic Product (GDP). According to NBS, the real GDP grew by 3.2% year on year in Q2, higher than the 2.51% recorded in the same period of 2023. The primary objective of the administration is pulling the economy out of the doldrums as soon as possible. From expert analysis since the administration assumed office, the economy took too much hit from activities of the economic saboteurs and those who deliberately misdirected the system for selfish gains.

So when the NBS came up with the cheering news, after weeks and months of gloomy economic analyses and forecasts, it was another opportunity for the President to breathe and reassure Nigerians that his administration’s reforms are bound to yield positive rewards for the nation and every working and sacrificing Nigerian. “We are confident that with the policies we have put in place, we expected production to rise to about two million barrels very soon”, Tinubu said.

Then on Thursday he departed for China for a three-level official visit. Earlier in the week his spokesman, Ngelale, had informed of plans for the trip, laying out an elaborate programme of events.

According to Ngelale, the President’s visit to China is with a focus on strengthening economic ties and securing investments in key sectors. The trip is expected to yield significant benefits for Nigeria, with a focus on deliverables and tangible results. During his visit, President Tinubu will engage in three levels of interactions: corporate, CEO-level, and head-of-state meetings. Firstly, he will conduct site visits to major Chinese corporations, including Huawei Technologies and the China Rail and Construction Corporation (CRCC), to advance the completion of the Lagos to Kano high-speed rail line.

Next, he will meet with 10 CEOs of prominent Chinese companies, representing sectors such as ICT, oil and gas, and financial services, to explore investment opportunities and partnerships. These companies have assets under management totaling over $3 trillion. At the highest level, President Tinubu will meet with Chinese President Xi Jinping to sign several Memoranda of Understanding (MOUs) on cooperation in areas like green economy, agriculture, satellite technology, and media enterprise development. The two leaders will also discuss matters of mutual interest, including national, regional, and international security.

Furthermore, President Tinubu will participate in the Forum on China-Africa Cooperation

( FOCAC) Summit, where he will deliver remarks on behalf of the ECOWAS and engage with Chinese leaders on key issues. As Chairman of the ECOWAS Authority of Heads of State and Government, he will also address the high-level peace and security plenary. This comprehensive engagement is expected to yield immediate and future benefits for Nigeria’s economy and people, justifying the expenditure and ensuring a focus on deliverables.

This week is expected to be dominated with sound bites and statements from the Far East, spilling news diplomatic and economic achievements for Nigeria. We just need to wait for things to start happening.

September 1, 2024
Elite cynicism and 2027

The Nigerian political elite play cynical games. In January 2023, just as the presidential election scheduled for 25 February was approaching, major partisan stakeholders were upbeat about and had a lot to say in favour of democracy. Then the picture of the results of the election began to emerge, and lack of democratic temperament by some political players started to manifest. First, there was a call to the Independent National Electoral Commission (INEC) to terminate the collation of the results, reminiscent of the 1993 presidential election results annulment saga. Second, there was a march to the Army Headquarters in Abuja with an open call by some political partisans that the Army takeover the government to prevent the officially-declared winner from being sworn in.

Did that incitement of the army not amount to having learnt nothing and forgotten nothing regarding the 1966 misadventure? The ill-advised decision to settle the nation’s ethno-political challenges through a coup-d’état has had unimaginable ripples which continue till today. The architects of that coup lost sight of the Yoruba counsel that there’s more after six than seven. (‘Oun tó wà léyìn òfà, ó ju òje lo.’) And it’s not certain whether the coupists have come out of that perversity fulfilled enough for a similar course of action to be contemplated today. Strangely, there seems to be a pervading oblivion which has made some sections of the country to appear enamoured of the counterproductive coup option. And the rhetoric has been familiar.

As the desire to undermine the victory of the winner of the 2023 election, President Bola Ahmed Tinubu, continued, the political, intellectual, legal, religious and media elite were in an unedifying concert. The basest of such was the warning by Datti Baba Ahmed, the Labour Party’s Vice-Presidential candidate in the election, to the Chief Justice of the Federation to keep away from the 29 May, 2023 swearing-in of the President-Elect. It also appeared queer for a Senior Advocate of Nigeria to say he had asked the INEC Chairman for the interpretation of the constitutional provision on scoring 25% of the Federal Capital Territory (FCT), Abuja, votes. It wasn’t expected that a lawyer of his standing would not know that the proper institution that interprets provisions of the constitution is the Supreme Court. There was also the denigration of the judiciary by lawyers, and others, who insisted that only their own partisan interpretations of the 25% requirement, among others, were correct.

In his 30 January, 2024 remarks at the resumption of plenary after Christmas and New Year holidays, the Speaker of the House of Representatives, Abbas Tajudeen, noted as follows: “Of immediate concern to us are electoral reforms to address grey areas in the 2022 Electoral Act. The purpose is to ensure that future elections are free, fair, and credible elections that truly reflect the people’s will. Recent data shows that 75% of gubernatorial elections conducted by INEC in 2023 ended up in the Supreme Court. A significantly higher percentage of gubernatorial, State, and National Assembly elections was litigated to the appellate level.” It is uncertain which kind of electoral reforms could stop the proliferation of electoral petitions in 2027, given the cynical use of electoral litigation by Nigerian politicians, even those who lose hopelessly. Electoral litigations invest the electoral flock of losers with the hope of the legal reversal of fortune, in order to stop these supporters from crossing over to the party that won.

Another strange idea which resonated with some political partisans was that the courts rather than the voters were the ones deciding the victory of many candidates. This cynical view was usually activated only when some politicians’ candidates lost their presumed victory upon successful legal challenge by their opponents. If a candidate is declared winner, and the victory is challenged in court, and it is found by the judges that when fraudulent votes have been expunged, the person who was earlier declared winner was erroneously so-declared, declaring the true scorer of the majority votes winner, by the court, would essentially amount to affirming the earlier decision the voters. To suggest that, in such cases, the judges should not pronounce a winner on the basis of the clear evidence placed before them, but rather order a rerun would amount to double jeopardy to the original true winner. As for the person who manipulated the system or process in order to be declared winner at first, the rerun could just be giving them a second chance to hone their skills and manipulate the system or the process more debilitatingly.

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Some religious personages were also partisanly vociferous in their opposition to the swearing in of the President-elect, on 29 May, 2023, before the cases in court were fully decided, irrespective of extant constitutional provisions and prior practice, in the hope that the Courts would nullify his election. Even some intellectuals, experts in political science, claimed that INEC was incompetent because of the result declared. In other words, INEC could only have been competent if it had declared those experts’ preferred candidate winner. In addition, some media outfits were unabashedly distorting facts related to the election. Recalling all of the foregoing is important to have a better understanding of the current concerted efforts to distract the incumbent government in furtherance of the country’s elite cynicism. It is interesting to note here the composition of the delegation of The Patriots who paid President Tinubu a visit on 9 August, 2024 and requested him to start the process of writing a new constitution for the country. In fact, in a television interview earlier in the year, a member of that delegation pooh-poohed the “renewed hope” agenda of the President as “renewed poverty”.

The condemnatory reactions to the Supreme Court judgement granting autonomy to the local governments could also be seen as ploys to distract the government. Consider, for example, the following views of Olu Fasan in his 18 July, 2024 article, titled “Local government autonomy: Supreme Court’s perverse ruling won’t work”, in Vanguard: “Without a doubt, I absolutely abhor the crippling of local governments by state governors. However, I viscerally reject the way the Supreme Court addressed the issue by turning the Constitution on its head and ripping up the veneer of federalism in Nigeria. … Forgive my cynicism, but I suspect that just as Bola Tinubu, Nigeria’s power-grabbing president, corralled the National Assembly to change the national anthem, he got the Supreme Court to reach this perverse decision.” The Punch in its editorial of 20 August, 2024 titled “Restructuring: Tinubu getting his priority wrong” also stated: “Tinubu’s government went a step further by instigating the Supreme Court to grant financial autonomy to local governments, turning the principle of the centre and the federating units on its head. … Therefore, Tinubu should summon the political guile to initiate Nigeria’s restructuring rather than play games with spurious financial autonomy for LGs.”

Doyin Okupe, a former Director-General of the Labour Party Presidential Campaign Organisation, was also reported to have declared, in a 30 June, 2024 article, in The Cable, titled “’An aberration’ – Okupe faults FG over autonomy suit against states,”: “[the idea of LGs as a third tier] should be expunged from the constitution.” Moreover, trying to insinuate inconsistency or double standards on the part of the Supreme Court, Olu Fasan noted: “[I]n 2022, the Supreme Court quashed President Buhari’s Executive Order 10 that empowered the Accountant General of the Federation to bypass state governments and disburse federal allocations directly to local governments on the basis that it violated the principle of federalism. So, how come the same Supreme Court now empowers the Accountant General to do the same thing, thus eviscerating the little semblance of federalism existing in Nigeria?”

Lawyers note that no two cases are exactly the same. The Executive Order 10 was a unilateral action by one tier of the Nigerian federalism to impose its desire, however well-intentioned, on the other tiers, without prior negotiation and agreement with these other tiers, as federalism typically requires. The Supreme Court judgment against President Buhari was therefore a move to moderate the relative power of the federal tier and strengthen federalism. Regarding the 11 July, 2024 judgment on local government autonomy, the Supreme Court was approached to interpret seemingly ambivalent provisions of the Constitution. Such interpretation is a duty that the principle of federalism typically imposes on the Court. Both the Federal Government and the State Governments had fair opportunities to argue their respective positions before the Justices of the Supreme Court. All that the Court did was to deliver its judgment on the basis of the relative merits of those arguments, and the Court has thereby strengthened Nigerian federalism by liberating a tier of the Nigerian federal system.

Instructively, Femi Mimiko in his 26 July, 2024 article titled “Local government autonomy, governance and outcomes in Nigeria” observed: “[W]hen subjected to thorough interrogation, no standard federal system exists; not even the US – the first in the category – qualifies to be so called, as every federal system evolves within specific contexts shaped by history, environmental realities, and behavioural orientation of the citizenry. All of these make the concept of ‘true federalism,’ so popularly invoked in Nigeria, a conceptual misnomer. Every federal system comes with its own unique feature, making the focus of analysis to be on functionality; to wit, how functional is a federal system, and what does a people need to emplace to make same more functional?” What some sections of the Nigerian elite seem to find nightmarish is the possibility that the local government autonomy judgement would earn President Tinubu electoral credit come 2027. Why should that concern them more than the fact that the enhanced autonomy would ease the pains of the citizens? This is unpatriotic elite cynicism where what is required is elite contrition.

Those who have an axe to grind with President Tinubu are not in short supply; but the people are his armour, and prioritising their welfare is his self-defence. This is, as such, no season for fair-weather economists. The primary duty of our economic juggernauts at this point is not fault-finding, but doing the deep thinking required for finding the innovative ways of ameliorating the difficult economic situation of the country. As an English proverb says, “You can’t call yourself a Colonel until you have killed a cobra.” A Yoruba variant of this is that “It’s the day a dog kills a porcupine that we’ll acknowledge it as a hunter.” (‘Ó di ojó tí ajá bá pá lílí ká tó mòó l’óde.’) So, it’s when the President’s economic teams have significantly solved the nation’s debilitating economic problems that they’ll be acknowledged as truly experts. What President Tinubu needs to sustain his reputation as an astute politician is expeditious, discernible improvement in the living condition of the people.

September 1, 2024
Fake certificates

This is a thing government must fight even as it must expand space in our tertiary institutions

A stunning investigative expose by a Nigerian newspaper in March this year, shed light, once again, on widespread patronage by Nigerians of universities in neighboring countries where they are issued fake certificates without meeting the conditions that should qualify them as university graduates. In this particular instance, a reporter with the Daily Nigerian, Umar Audu, sought admission into a university based in Cotonou, the Benin Republic Capital, was admitted and within six weeks, he had been issued a certificate indicating that he had met all the requirements to be issued the document. Beyond this, the reporter was enlisted to participate in Nigeria’s National Youth Service Corp (NYSC); a compulsory one year programme for all tertiary institutions’ who seek to work in the country.

This investigative report brought to the fore, once again, the phenomenon of fake certificates in the country, which reportedly has assumed endemic proportions and is now taking a disturbing international dimension. Following the publication of this report, the Nigerian authorities immediately placed a ban on the accreditation and evaluation of certificates from universities in some neighboring countries such as Benin Republic and Togo, while investigations are being conducted on the scale and dimensions of the fraudulent practice. There is every reason to believe that the culture of striving to obtain certificates without undergoing the necessary rigour to earn them by merit, including examination malpractices, is deeply embedded and more prevalent in our society than is assumed.

In the aftermath of the Benin Republic fake university certificate scandal, Nigeria’s Federal Ministry of Education set up an inter-ministerial committee to investigate the problem and come up with recommendations to prevent future occurrences. The committee has submitted that admissions into the country’s universities must be processed through the Central

Admissions Processing System (CAPS) of the Joint Admissions and Matriculation Board (JAMB). Furthermore, henceforth, universities are to submit to the ministry their matriculation lists not later than three months after the completion of each admissions exercise, through channels authorised by JAMB. These measures will ensure that there is a central portal of JAMB through which the authenticity of admissions and processes can be ascertained by interested persons within and outside the country.

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However, there are cases of some universities in these neighbouring countries which were deliberately set up to lure Nigerian students with certificate offers to be issued speedily even when the beneficiaries have not gone through the mandatory period required to be awarded the certificates meritoriously. In such instances, the Nigerian government has to work in conjunction with governments of affected countries as well as the International Police (Interpol) to bring such unscrupulous elements before the law. How about those Nigerian students who were not victims of fraud but deliberately sought out equally fraudulent universities which would auction unearned certificates to them? They should also be made to face the stringent sanctions of the law to serve as a deterrence to others.

JAMB, in recent years, has received widespread commendation for considerably enhancing the transparency of its processes and the integrity of its examinations. This is probably one reason why students have resorted to seeking fake certificates in low grade universities in neighbouring countries. JAMB should be in touch with such universities in order to advise them appropriately on how to obtain genuine results of prospective students in Nigeria. No less critical is the urgent need to address the factors which make young Nigerians desperate enough to seek the acquisition of fake degrees in foreign universities. One critical factor in this respect is that the number of applicants who seek admissions into our tertiary institutions annually far exceeds the available spaces. Or, many candidates fail to meet the minimum requirements for their course of choice and are even not ready to accept offers for which they are qualified.

Again, public universities at all levels are plagued by diverse challenges, including incessant strikes by unions which make it difficult for students admitted to various courses to have a clear idea of exactly when they would graduate. While most private universities have more predictable graduation timelines and better learning and accommodation facilities, their astronomical fees are beyond the affordability of millions of Nigerian youths eager for higher education. The challenge for government is thus to make qualitative public university education available for higher number of students at affordable costs. It certainly doesn’t require rocket science to achieve this. Where there is the will, the way will be found.

September 1, 2024
Nigeria’s naira crude revolution

Assuming no unforeseen circumstances, Dangote Refinery is expected to make its first delivery of refined premium motor spirit, pms, to the Nigerian market by September 2024. The Federal Government has also announced that sales of crude oil to Dangote and other local refineries will begin on October 1, 2024. To address concerns about pump prices and dollar-naira exchange rates, the Federal Executive Council approved a plan. The plan offers 450,000 barrels for domestic consumption in naira to Nigerian refineries, with Dangote Refinery as the pilot.

To begin with, this directive to the Nigerian National Petroleum Company Limited (NNPCL) marks a pivotal moment in Nigeria’s efforts to redefine crude oil sales and bolster the local economy through domestic transactions. The move is expected to have a positive impact on various sectors, including manufacturing and agriculture. Selling crude oil in naira will reduce reliance on foreign exchange, thereby stabilizing the currency. For instance, if Nigeria sells 450,000 barrels of crude oil per day to local refineries in naira, it could reduce the country’s foreign exchange expenditure by approximately $1.5 billion annually, assuming a crude oil price of $60 per barrel. This could be a significant step towards economic diversification and growth, if implemented effectively.

The success of this initiative depends on effective implementation; and the Zacch Adedeji-led Technical Sub-committee has a crucial role to play in this critical, perhaps, even national groundbreaking endeavour which could propel the country into meeting the needs of the present without compromising the ability of the future. Adedeji’s expertise and reputation for delivering results make him an excellent choice. With a strong background in public service, including his tenure as Oyo State Commissioner for Finance, Executive Secretary of the National Sugar Development Council (NSDC), and Executive Chairman of the Federal Inland Revenue Service (FIRS), he possesses the necessary skills to drive transparency and achieve the programme’s objectives.

In the public service environment, bureaucracy dictates that success is shared, not individually claimed. For instance, FIRS operates under the Ministry of Finance, which will likely credit President Bola Tinubu for the programme’s achievements. Ultimately, the president, who also serves as Minister of Petroleum, bears the responsibility. Therefore, this Sub-committee’s work will significantly impact how history judges Tinubu’s government, making it a legacy project.

On paper, the tasks seem straightforward, but two critical issues must be resolved first, otherwise, there will be fundamental defects. Firstly, the Sub-committee must ascertain the accurate crude oil production levels, factoring in theft and forecasting production for the next two years. Secondly, it must confirm the number of forward sales agreements. This is critical as Nigerians are not even sure that forward sales are still not being made. Only after addressing these issues can a realistic figure be set to support local refineries.

If the Federal Government had not issued this directive, Nigeria’s dependence on oil exports and foreign currency would continue to stifle economic growth and diversification. Local refineries would struggle to access affordable crude oil, and the status quo would persist. This would mean missing out on opportunities for economic diversification, growth and development. To ensure cost-effectiveness therefore, the Sub-committee must assess whether the allocated amount will achieve necessary economies of scale, and also consider the opportunity cost of selling in naira, which means forgoing anticipated foreign exchange earnings. Nevertheless, the ultimate goal is to utilize full production capacity domestically and export refined products, in sync with the national interest.

Nigeria currently faces a balance of payment crisis and a dysfunctional economy. The country is not attracting worthwhile investments, apart from ‘hot’ portfolio investors. What we need are patient investors who will eventually translate into socially responsible growth. Therefore, the Sub-committee’s work is crucial in addressing structural debilitation stunting sustainable development. Establishing sustainable refining capacity at home can help address the balance of payment crisis and current account deficit. As a result, this will yield immense foreign exchange savings, benefiting sectors like Aviation, manufacturing, and agriculture. Added to these is that local refining capacity will support the transition to commercial, science-led farming, modernizing agriculture.

The Sub-committee must accurately determine crude oil production levels and verify forward sales contracts. This ensures FIRS receives the correct revenue allocation for the Federation Account. As the sole collection agent for the Federal Government, the Service relies on precise data to manage and distribute resources effectively. In a world that seems to have forgotten its meaning, this underscores the significance of its role in maintaining the country’s economic stability, making it essential to ensure the Sub-committee’s assignment is completed with utmost accuracy and transparency.

The pending sale of national assets in the oil sector is prompted by the departure of major players like AGIP and TOTAL from Down- and Upstream sectors. This development presents a critical concern that requires urgent attention. Indeed, this issue has already sparked intense discussion, as evident in the recent exchange between Oando/OVH/NNPCL and former Vice President Atiku Abubakar.

To fully leverage the naira crude revolution’s potential, NNPCL must address its internal challenges, which hinder its ability to compete with international peers like Aramco, Petrobras and PETRONAS. Unlike these industry leaders, NNPCL faces substantial challenges, including corruption, mismanagement, and security issues, which limit its ability to optimize production, invest in research and development, and diversify its portfolio. For instance, while Petrobras excels in deep-water exploration, NNPCL’s security concerns restrict its ability to explore and extract oil in certain regions. Similarly, while PETRONAS boasts a diversified portfolio, NNPCL’s mismanagement and corruption issues hinder its capacity to invest in new ventures.

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Overall, while NNPCL has opportunities for growth, it trails behind peers in terms of technological advancement, financial performance and operational efficiency. As the global energy landscape shifts, Nigeria must adapt or risk being left behind. By adopting best practices and addressing its internal challenges, NNPCL can unlock its full potential and support Nigeria’s economic development. The conventional wisdom, headed by Adedeji, has the technical capacity to get to the bottom of the dysfunction and in the process make path-breaking contributions to national development.

With the September rollout looming, Nigeria’s economic fate is uncertain. Take it or leave it, the Sub-committee can be given a success possibility only if the Tinubu-led administration is prepared to sincerely confront the powerful cabals whose desperation is no more a hidden secret. In a land that’s full of possibilities and questions, it’s like trying to please a room full of hungry lions with a single piece of meat. Indeed, this makes Adedeji and his fellow risk-takers’ job appear even more perilous than leading a conventional war.

The naira crude revolution has the potential to positively impact Nigeria’s economy by reducing reliance on foreign exchange, but its success depends, primarily, on addressing existing challenges. And as Nigeria embarks on this bold initiative, will it be the catalyst for a brighter economic future, or will it succumb to the same pitfalls that have hindered progress in the past? Again, what if the proposed hymn of humanity refuses to be a paean to our collective compassion but a dirge for our societal failures?

At a time like this, one can only wish Zacch Adedeji and his team every success in this complex endeavour!

May the Lamb of God, who takes away the sin of the world, grant us peace in Nigeria!

August 31, 2024
Makoko tour that turns our poverty into profit

By Emmanuel Abiodun Oke

I recently stumbled across a disturbing reality while doing a simple Google search after someone shared a screenshot with me to confirm the authenticity of the content. When I typed “Makoko Community Tour on Trip Advisor,” what I found next left me speechless. A company is charging tourists $198—an equivalent of NGN316,800 at today’s exchange rate—to take a tour through the heart of Makoko, one of Nigeria’s most impoverished communities. This isn’t just tourism; this is exploitation, plain and simple. But the question remains: Is this tour even right in the first place? Should the pain and poverty of a community be turned into an attraction for outsiders?

For those unfamiliar, Makoko floating community is often referred to as the “Venice of Africa,” but that moniker barely scratches the surface of the realities on the ground. Located on the edge of Lagos, Makoko is a floating underserved community where makeshift houses sit on stilts above polluted waters. It is home to thousands of people, mostly fishermen, most of who live without access to clean water, electricity, or basic healthcare. For decades, the government has turned a blind eye to the needs of this community, with minimal investment in infrastructure or social services.

The people of Makoko, welcoming and unsuspecting as they are, have no idea that this hefty fee is being collected at their expense. Worse still, the proceeds are lining the pockets of tour companies in cahoots with some youths who allow the visitors to come and gawk at the living conditions of our people. It’s a system I would label as “poverty voyeurism,” a term that seeks to describe the phenomenon where tourists, driven by a desire to witness extreme poverty first-hand, come to communities like ours only to leave feeling enlightened, without understanding the deeper ramifications of their visits.

This isn’t merely a social media trend or an opportunity for a quick snap with locals to post on Instagram. It’s a gross commodification of our struggles, turning the lived experiences of people in Makoko into a spectacle for profit. The visitors get a tour, complete with boat rides through our floating community; meet with unsuspecting residents, for the price of a luxury dinner. Meanwhile, the people of Makoko receive nothing. It’s an unforgivable exploitation of the very real hardships we face daily. And to make matters worse, there are no real efforts from these companies to reinvest even a portion of the money back into the community for healthcare, education, or infrastructure.

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As an individual who was born and raised in the community and has dedicated my life to its betterment, this breaks my heart. The government’s neglect has only exacerbated the situation, with its interventions focused on recognizing and increasing chieftaincy titles of community leaders instead of tackling the systemic problems that have kept Makoko in the shadows for decades. Along with the government’s prioritization of high-end development projects like Eko Atlantic City, slum dwellers have been left marginalized. Many communities, such as Makoko, remain without essential public infrastructure like clean water, sanitation, or proper housing.

But it doesn’t have to be this way. True empowerment is not found in putting people’s poverty on display. It is found in giving them the tools and opportunities to rise above it. I am a testament to that fact. Alongside my brother, Noah Olorunwa Shemede, who founded the Whanyinna School in 2009—the first tuition-free school in Makoko—I have been part of the effort to confront the number of out-of-school children in our floating community. Noah has continued to contribute his personal resources, leveraging his network and the goodwill of people who reach out, all to bridge the education gap and empower families in our community even in the face of limited resources. We do this, driven solely by our commitment to building a better future for the children of Makoko, because we believe in the transformative power of education to break the cycle of poverty and empower individuals to create lasting change in their lives and communities.

This is the kind of change Makoko needs—education, empowerment, and opportunity, not pity tours that glorify our misery for outsiders. Visitors who genuinely care should be coming to offer support, not to feed their curiosity about poverty. Let them come to see the resilience of our people, our efforts to rise despite the odds, and our capacity to create change when given the opportunity. As a matter of solution, ethical tourism is a solution that comes to mind. These companies should partner with the community youths, leaders and NGOs, creating ways for visitors to give back directly by investing in schools, healthcare centres, or sustainable development projects that truly empowers the residents.

This is a call for action! Let us advocate for improved living conditions and real support for the people of Makoko. Let’s reject this degrading “poverty voyeurism” and work toward true empowerment and transformation. Makoko should not be defined by its slum; it is a testament to the resilience, strength, and potential of its people.

•Oke is of University of Georgia School of Social Work, Georgia, United States.

August 30, 2024
As Oyetola removes Bakassi Deep Seaport roadblocks

By Linus Obogo

The prospect for the realization of the Bakassi Deep Seaport could not have received an added boost than the reassuring words of the Minister of Marine and Blue Economy, Adegboyega Oyetola, affirming the federal government’s commitment to the ambitious project. The minister, who echoed the commitment of the federal government when Governor Bassey Otu paid a courtesy call on him, assured that no bureaucracy will hinder the actualization of the project.

In a clime plagued by red tape, bigotry and sectionalism, Oyetola’s declaration of federal government’s pledge could not be more reassuring and soothing. Indeed, it is a commitment to progress.

Envisioned in 2015 by the immediate past administration of Senator Ben Ayade, the Bakassi Deep Seaport in Oyetola’s unequivocal declaration signals an unwavering determination to expedite the development of the seaport, which is expected to bolster Nigeria’s position as a key player in African maritime trade. Oyetola’s assurance comes as a bite at the cherry, a seal of approval, uberrimae fidei, an utmost good faith the state had long longed for from the centre.

The Bakassi Deep Seaport, with its natural depth ranging from 21 metres, offers a unique advantage. Unlike many of Nigeria’s existing ports, which struggle with shallow draughts, Bakassi’s depth minimizes the need for extensive capital dredging—a costly and time-consuming process. This inherent advantage could significantly reduce the project’s initial financial outlay and expedite construction timelines, enabling Nigeria to quickly adapt to the demands of modern shipping.

An economic game-changer for both Cross River and Nigeria, the implications of the Bakassi Deep Seaport extend far beyond its physical infrastructure. For Oyetola, the project is expected to catalyse Nigeria’s emergence as the central hub for trans-shipment in the African region.

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Currently, due to the challenges bedevilling existing ports, many large containers destined for Nigeria are diverted to neighbouring countries. This diversion not only hampers Nigeria’s economic potential but also strains logistics and increases costs for businesses operating within its borders.

When eventually completed as a state-of-the-art deep seaport, Nigeria can only hope to reclaim its status as a primary destination for maritime trade in West Africa. Significantly, the optimized import and export processes to be facilitated by the Bakassi Deep Seaport could seriously drive down shipping costs, enhance trade efficiency, and stimulate economic growth.

Instructively, Governor Otu’s recognition and commitment to the project as a key component of Cross River’s strategic integrated infrastructure plan underscores its significance for regional economic development.

Conceived as Public-Private Partnerships, one of the most encouraging aspects of the Bakassi Deep Seaport project is its proposed structure under a public-private partnership (PPP) model. Governor Otu’s advocacy for this approach yielded dividends when in June he secured $3.5 billion in funding from Afreximbank in Cairo for the Deep Seaport Project.

The collaboration between the state government and Afreximbank is aimed at fostering economic growth and development in the state. Governor Otu’s approach reflects a growing global trend where collaboration between the public sector and private enterprises is seen as a pathway to efficient project execution and sustainable economic growth. And given Oyetola’s background in the private sector, there can only be a heightened optimism that the Bakassi Deep Seaport will benefit from strategic partnerships that can provide the necessary financial and technical resources for successful completion.

By seeking to engage with the federal government, Governor Otu is deliberately laying the foundation of success for the deep seaport.

Accordingly, the collaborative spirit between the federal government and Cross River State exemplified during the governor’s visit to the Ministry of Marine and Blue Economy is a promising indicator of future success.

Essentially, therefore, Oyetola’s acknowledgment of the need for synergy between Cross River and the federal initiatives is necessary in overcoming the drawbacks that often occasion large infrastructure projects.

The visit by Governor Otu to the minister indicated a unified front and a concerted effort in pursuing the Bakassi Deep Seaport to its full realization. Such unity as demonstrated by both the governor and the minister is imperative in navigating the complexities of project implementation, regulatory frameworks, and stakeholder engagement.

While the project was long pooh-poohed as a pipe dream early in its infancy, Governor Otu’s perspective on the scheme differs greatly. In line with his avowed commitment to seeing through his predecessor’s uncompleted projects, he is leaving no one in doubt about matching his words with action. For him, the deep seaport is not merely an infrastructure development, it represents a broader impact on Nigeria’s economy: it is a strategic investment in Nigeria’s future.

Additionally, the potential for job creation, enhanced trade opportunities, and increased foreign direct investment cannot be wished away derisively. And by the time the seaport eventually becomes operational, it will no doubt attract businesses seeking to leverage its strategic location for logistics and distribution across West Africa.

Knowing full well how the deep seaport project aligns with Nigeria’s broader economic diversification efforts, the governor is leaving no stone unturned to ensure the state’s economic trajectory is altered for the better.

Conscious of the myriads of roadblocks in its way to actualization, even as the prospects of the Deep Seaport appear tantalizingly enticing- bureaucratic inefficiencies, financial constraints, and potential resistance from regional stakeholders, are all too obvious to imagine, as they could impede progress. However, Oyetola’s commitment to minimizing the hurdles is a critical first step in addressing these challenges.

The Bakassi Deep Seaport project sure represents a beacon of hope for Nigeria’s maritime ambitions. And as Minister Oyetola and Governor Otu synergize to navigate the complexities of this behemoth undertaking, the promise of a vibrant, efficient, and economically prosperous maritime sector looms on the horizon.

While the project mirrors the sheer scale of Cross River’s vision and ambition, the potential benefits of the Bakassi Deep Seaport extend beyond to impact the entire nation and the African continent. And by committing to swift action, collaboration, and the innovative use of public-private partnerships, Nigeria can set the bar for infrastructure development that is both ambitious and sustainable.

The country can only watch with bated breath as Cross River charts its course toward becoming a maritime powerhouse in Nigeria, and Governor Bassey Edet Otu stands at the helm of this transformative journey.

•Obogo is Special Adviser on Media and Publicity to Governor Otu of Cross River State.

August 30, 2024
Five years of giving voices to voiceless women

By Christian Ita

Funded by Global Affairs, Canada and armed with the goal of powering women and girls by advancing their rights and supporting women-led organisations, networks and movements through capacity building and mentorship, influencing gender related laws, preventing and fighting Gender Based Violence (GBV) among others, in 2019, the Women’s Voice and Leadership-Nigeria, WVLN, through the instrumentality of ActionAid, has impacted the lives of many Nigerian women.

Five years down the line, via ActionAid’s implementations, the WVLN initiative has resolutely pursued a new lease of life for women and girls in Nigeria, including aggressive advocacy for gender equality, inclusiveness and empowerment of women.

Through innovative strategies- campaign, advocacy, networking and building alliances, community and high-level engagements, partnerships and funding and research and documentation- the ActionAid-WVLN project has not only rewritten the narratives of vulnerable women in Nigeria but has given women and girls the voice to be heard and the wings to fly through relentless advocacy and empowerment programmes; as well as the pursuit of justice and rehabilitation for abused and traumatised vulnerable women who lack access to justice, education and economic empowerment.

In the course of its five year project, the ActionAid/WVLN initiative made an appraisal of women participation in politics and decision making positions and the outcome was that Nigerian women are utterly marginalized and underrepresented in the political turf and other decision making avenues.

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Given the foregoing, WVNL in the last five years embarked on a sustained advocacy, support and contributions towards increased women participation in politics and leadership positions and it has been paying off. For example, more than ever before, in the last five years, more female undergraduates in Nigeria have won elections into their various institutions’ Student Union Governments.

For instance, at the Department of Computer Science, Institute of Management and Technology, IMT, Enugu, a female student recently emerged, for the first time, the departmental president. Similarly, a female student was elected as president of the National Association of Akwa Ibom State Students in the College of Health Technology, Calabar.

At the University of Cross River, UniCross,a female student was elected the first ever female vice president of the university’s SUG.

In the largely conservative Northern Nigeria, many female undergraduates also got elected into SUG positions. For example, 64 young female students won several seats in the SUG of various high institutions in Kebbi State, including the first female vice president of Kebbi State College of Nursing and Health Sciences. A female student was equally elected as vice president of the National Association of Kebbi State Students, NAKSS.

The WVLN project also supported the development of gender-policies in five Nigerian universities leading to three young female undergraduates emerging first ever SUG presidents in their various schools- Enugu State College of Education (Technical), Peaceland College Enugu and the University of Calabar, Unical.

In an unprecedented milestone, WVLN’s advocacy for increased women participation in decision making process saw 190 women making history as members of traditional leadership council in Bauchi, Enugu, Cross River, Kebbi and Kwara states.

On the whole, within five years, the WVLN’s advocacy for women participation in politics successfully mobilized 2566 women to register as first time voters while 131 women, enabled with direct link to project interventions vied for political offices.

Similarly, between 2019 and 2024, WVLN supported 7,857 women to collect their Permanent Voters Cards, PVCs while 40 women won various elections with verifiable attributes to the WVLN project.

In the last five years, the ActionAid inspired VWLN project maintained an unwavering commitment to building the capacity of women and girls and eradicating poverty, removing the various restraints and barriers including early marriage, lack of access to formal education, financial incapacities etc. militating against women’s participation in Nigeria’s economy. This can be gleaned from WVLN’S various funding streams- including multiyear grants, the Opportunity Fund, the Strategic Innovative Fund and COVID-19 Top-Up Fund- which along with a flexible and participatory approach enabled 182 women-based organisations to directly impact the lives of 4,082,535 individuals and indirectly reach over 3,067618 people.

In terms of direct, physical economic empowerment, ActionAid’s five years of pursuit of good tidings for women and girls through the VWLN project, culminated in the economic empowerment of 22, 445 women and girls across the six project states of Enugu, Cross River, Bauchi, Kebbi, Kwara, Lagos and the FCT.

The breakdown of this figure shows that 6,500 rural women were able to establish their small scale businesses armed with start-up grants or equipment.

Notably, the exceptional scheme for economic growth, Village Savings and Loans Association, VSLA played a pivotal role in WVLN’s financial and economic empowerment of women. The scheme was adopted and implemented by the project states plus the FCT with 532 groups including 13, 911 women. Between 2019 when the WVLN project kicked off and VSLA incorporated into it, a total of 233 local government areas in the six states plus the FCT were covered. One of the benefiting women was ecstatic when economic and financial benefits of the exercise dawned on her.

Essentially, over the last five years, benefiting women collectively saved N417.5million, reflecting their commitment to financial security and growth. The cash share- out amounted to N417.5million, which imply that the savings are not only substantial but fairly distributed to enhance the financial and economic capacities of the women involved.

In the course of its intervention in the lives of women and girls, especially the vulnerable segment, ActionAid, implementing initiative, WVLN received tremendous collaboration from the various Local Women Rights Organisations, LWROs, in the project states which enable holistic implementation of the project. For instance in Bauchi, many of such LWROs, including Fahimta Women and Youth Development Initiative, were partners and they also benefited from such partnership in the form of grants and economic empowerments.

The summation of WVNL’s financial involvement with women in the six project states with the FCT indicates that in the last five years, a total of N2, 283, 989, 106.74 has been expended.

The LWROs equally played salutary roles in chronicling incidence of sexual abuse of women and girls as well as GBV which enable WVNL to aggressively intervene, thus between 2019 and 2024, the project was able to influence 47 gender related laws, policies, strategies and frameworks at the state, national, institutional and community levels culminating into the passage of Violence Against Person Prohibition Law passed in six states.

WVNL’s successes in the last five years cannot be divorced from its innovative approach to issues bordering on the wellbeing and rights of women. Notably, such innovative approaches as I SupportHer Club, made up of 40 young men formed to motivate positive changes in attitude among men and boys towards women and girls greatly helped, it impacted positively.

Similarly, the use of Women Radio (WFM 91.7) to disseminate information, educate and champion the cause of women’s advancement and equality in Nigeria was another great approach, so also was the introduction of Financial Technology, FinTech into the formal community led savings and loans schemes.

August 30, 2024
We need more people of vision for food systems transformation

By Debisi Araba

“To make a prairie it takes a clover and one bee,

One clover, and a bee.

And revery.

The revery alone will do,

If bees are few.”

Emily Dickinson – 1779

Leadership is critical to enable the successful transformation of agriculture and food systems. On the recommendation of a dear friend and mentor, I recently purchased and read Campaigns Against Hunger, by E.C. Stakman. The book describes the underpinnings of the motivation for agriculture transformation in Mexico in the 1940s, ultimately leading to the creation of the CGIAR, the world’s largest agricultural innovation network. This recommendation, from a kindred spirit with whom I share a mutual vision to see the agriculture and food sectors in Africa thrive and transform for shared prosperity in our lifetime, could not be more appreciated.

The book takes readers on a time-traveling journey back to the halcyon origins of global agriculture development and the role governments, philanthropy, academia, and private enterprise have played in aligning capabilities and opportunities for maximising potential in food production. In my opinion, this book is a spiritual companion to The Man Who Fed The World, by Leon Hesser. In Hesser’s book, the focus is on Dr. Norman Borlaug, one of the scientists funded by the Rockefeller Foundation to support the transformational work on improving staple crop yields in Mexico. From the perspective of reading both books, one appreciates better the amount of faith, risk, investment, and coordination that went into making this big bet. It is also heartwarming to see that Dr. Rajiv Shah, the current President of the Rockefeller Foundation, is an apostle of this course of action, with the publication of his new book, Big Bets: How Large-Scale Change Really Happens.

Speaking of Presidents of the Rockefeller Foundation, in Campaigns Against Hunger, Stakman makes a profound and perspective-shifting statement in describing Dr. Raymond B. Fosdick, President of the Rockefeller Foundation from 1936 to 1948 and under whom the work in Mexico in the 1940s took off. Stakman describes Dr. Fosdick as “…a man who was not a visionary, but a man of vision…” On first glance, one might even overlook the words without the profound depth of their implication hitting you. Dr. Fosdick comes across to me as a man who knew the limits of his capabilities, but was also skilful at identifying those brimming with talent and affording them the latitude and wherewithal to get things done. He was a man of vision. He knew the ‘direction’ transformation needed to take and he supported those with the knowhow to follow the path and get to the destination. He did not place himself at the center of the process. Of course I wasn’t there, and I can only lean on the sanitised content of literature and personal accounts of those who worked on the program. I am willing to deduce that it is because of men of vision like Dr. Fosdick that a visionary like Dr. Norman Borlaug, one of the scientists deployed to Mexico, and who led the transformation of the wheat crop there, was able to thrive and ultimately be awarded the Nobel Peace Prize in 1970 for his transformative work on increasing crop productivity.

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Three key lessons from what it took to engender an agriculture revolution in Mexico are that culture matters in incubating the enabling environment for visionaries and people of vision to thrive and leadership can help to shape this. Also, you need people of vision in decision-making positions, to ensure that a course of action is defined and progress is made. Finally, success is hard fought for and not guaranteed.

In my career, I have worked with people – women and men – of vision, and I have also had the rare privilege to have worked with visionaries, one of whom incidentally was a protégé of Dr. Borlaug. I have also observed organisations where people of vision were in positions of authority and where those occupying positions of authority were not people of vision. In my experience, organisations where those without vision occupy authority positions have a higher risk of falling into the quagmire of mission creep, intellectual stasis, innovative atrophy, and ultimately, irrelevance. To counteract this, it is important for organisations to be clear-minded about the role institutional culture plays in curating the enabling environment for people of vision and visionaries to thrive. This is the core challenge of exercising leadership in food systems transformation; the ability to articulate the difficult realities we face, and then to inspire and have the humility and nous to afford the people of vision and the visionaries the environment to maximise their potential, while ensuring that everyone is carried along.

As the world grapples with the evolving challenges of delivering agriculture and food systems that are healthy, safe, nutritious, affordable, accessible, equitable, and not detrimental to the environment, I find myself thinking more about Stackman’s descriptor and wondering if those shaping institutional culture and at the helm of decision-making are conscious of their role in the narrative.

Visionaries are generational rarities, and rightfully so. These people come along and instigate monumental paradigm shifts in our thought and practice. People of vision are the torch bearers. They ensure that we can all stay the course, and regardless of the pace, we make progress. At the very least, we all should strive to be people of vision, or ensure that decision-making roles go to people of vision. This is important because it is the people of vision who have the humility and grace to identify the visionaries and to provide them the support to take us all on the next leap forward. This is the gift of leadership, and why I believe that the 1970 Nobel Peace Prize was as much a recognition of the work of Dr. Borlaug as it was that of Dr. Fosdick.

Dr. Debisi Araba is an Advisory Board Member of the African Food Fellowship

August 29, 2024
Understanding the environment for real estate investment

By Charity Ikpoba

Though it has contributed substantially to Nigeria’s financial economy, real estate sector in the country is going through a significant transformation, driven and powered by increased investor interest, rapid urbanization and population growth. And looking at the emerging trends, untapped opportunities and potential for sustained growth, one can conveniently conclude that the sector is poised for remarkable expansion.

That makes real estate investment an investment one could venture into and sleep with his two eyes closed. For the purpose of clarity, real estate investment has to do with the purchase of real estate properties as a means to generate additional income instead of using them as a primary residence. It also involves the management and sale or rental of real estate for profit.

There are myriads of benefits in real estate investment, aside the mere need for shelter. These benefits include predictable cash flow, hedge against inflation, tax advantages, portfolio diversification, in that one can conveniently leverage real estate to build wealth, land banking. Aside the aforementioned, another reason for undertaking real estate investment could be for social purposes – it could be seen as self-actualization (one’s life achievement drive) or just to make a social statement (boost status).

The global real estate industry is one of the largest and important sectors in the world. It includes everything from residential and commercial properties and agricultural land. And because the industry is constantly evolving and expanding the frontiers for opportunities, it requires knowledge, talent, organization and perseverance to venture into real estate. As a matter of fact, having knowledge and being educated about the real estate market is essential to a successful real estate investment and growth. Real estate investment requires a comprehensive business plan to optimize decision-making and utilize resources.

Location is of utmost importance and would continue to be the most valuable factor for profitability in real estate investment. Location and price go hand in hand. If a property is situated in a prime locality, it will command a better selling price. The same property in an area that is not so prime will command less price. Investors should be guided by this. Proximity to amenities, green space, scenic views, and the neighbourhood’s status factor prominently in residential property valuations, while closeness to markets, warehouses, transport hubs, freeways, and tax-exempt areas play important roles in commercial property.

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Investors should also put into consideration ‘build vs. buy’. New construction, with the option to customize, and modern amenities usually offers attractive pricing, though it comes with risks of delays, increased costs, and the unknowns of a newly-developed neighbourhood. On the other hand, existing properties offer convenience, faster access, established improvements (utilities, landscaping, etc.), and in many cases, lower costs.

Valuation is crucial to making accurate and informed decisions in real estate investment. When it comes to determining asset pricing, actual worth and risk assessment, valuation plays a vital role. In other words, valuation provides prospective buyers with ideas of how much they should pay for an asset and sellers how much they should sell for.

In an economy where real estate transactions are critical drivers, it is essential to have a reliable and objective system for evaluating property values because lack of clarity on purpose may lead to unexpected results, including financial distress—especially if the investment is mortgaged.

Within the Nigeria business environment specifically, issues of long and bureaucratic process of land registration, planning law, that is, law regulating or otherwise relating to the uses of land or the construction of things on land, high cost of construction as relates to high costs of building materials, high skilled labour costs, and costs associated with poor roads and sewerage systems, building collapse, limited source of funding, multiple taxations and levies such as development levy, income tax, building plan approval levy, property tax, land use tax paid by investors, devaluation of the Naira and its effects on the Nigerian construction industry which largely depends on foreign importation of raw materials and equipment for construction, land-grabbers (Omo-Onile), and difficulty in converting investments to cash whenever the need arises are besetting factors to real estate investment.

In addition, Nigeria just like every other jurisdiction has its set of laws and regulations which affects and influences real estate investments, and which investors must be familiar with.

The most critical one is the Land Use Act of 1978. The Act is the principal law enacted to regulate ownership of the real estate in Nigeria. By the provisions of the Act, the power to control and administer all land situated within a geographical area of a state is vested in the state governor for the benefit of the citizens. The governor is responsible for granting a right of ownership for individuals and corporate bodies to hold and use the land for a limited-term, and such grant is evidenced by the issuance of a Certificate of Occupancy or Governor’s Consent. By the provision of the Land Use Act, it becomes unlawful to transfer any interest in land without first obtaining the consent of the governor of the state where the land is located, as provided under Section 22 of the Land Use Act. Other key legislation affecting real estate investment which investors must critically note includes laws governing land registration, tenancy, and environmental protection.

Real estate sector in Nigeria might still be witnessing a number of challenges, which includes fraudulent practices by land grabbers, breach of contract by real estate sellers, sale of government acquired lands, among others, but the sector presents lucrative opportunities for investors seeking to capitalize on the country’s growing economy and burgeoning property market. Investors are however advised to always engage the services of professional estate surveyors and valuers for consultations, for real estate investments and transactions.

•ESV Ikpoba works with a Lagos-based firm of estate surveyors and valuers.

August 29, 2024