Category: Editorial

• NASS may have to rework the CBN Act to check observed recklessness

Troubling. That best sums up this newspaper’s reaction to some of the key highlights of the audited financial statements of the Central Bank of Nigeria (CBN) covering the period 2016-2022. If it is any travesty that the audited statements are coming several years behind what the law mandates, the multiple revelations contained in them must be deemed as alarming.

Indeed, if Nigerians were ever in doubt about the footloose, if not entirely reckless, monetary policy undertakings that the suspended CBN governor, Godwin Emefiele plunged the country into, these revelations have since settled them.

The financials covering those six years are as concerning as could be. From playing the Santa Claus to the Federal Government through its irresponsible ways and means advances, we have seen – at least that is what the financial statement suggests – the wheels turn full circle for the apex bank with record foreign borrowings that are not only opaque but unprecedented in the annals of the nation’s economic history.

Among the revelations in the financials is how the CBN took $7 billion and $500 million loans from two US banks – JP Morgan and Goldman Sachs, respectively. The report also refers to a so-called 30-day forward contracts totalling N3.15 trillion with undisclosed counterparties; there is, yet another $3.2 billion said to be owed an unnamed party as foreign currency forward contract payables—with no notes providing clarity on the transaction accompanying that item. Expectedly, the debts are said to have been collateralised with Nigeria’s foreign assets.

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That these matters are only now coming to light naturally provokes nagging questions not just about their propriety but also the authority behind them. The big question is – why were the reports for the preceding years from 2016 up until 2021 not released until now? The only conclusion we are left with is that the now suspended CBN governor deliberately hid them from public view.

In the circumstance, a thorough investigation has become apposite.

Was the immediate past administration, under which those loans were sourced, aware of them? More specifically, was President Muhammadu Buhari duly informed? Was his approval sought or given?

Are we dealing here with boundless institutional overreach in which a more attentive presidency could have detected and so set right? Compare this with when the CBN under Charles Soludo embarked on naira redenomination exercise only to be promptly overruled by the late President Umaru Yar’Adua based on the former’s failure to obtain prior written approval as spelt out in the CBN Act.      

What of the National Assembly, which, under the constitution is vested with the power of the purse? Was its consent sought not to talk of being granted? Again, were the joint National Assembly committees on Public Accounts in the know?

Could the so-called independence of the apex bank have vitiated the need for the Sovereign, represented by the government of the federation, to be duly informed considering that the assets pledged for them belong to the people of Nigeria?

Are the loans in question part of the foreign reserves?  If they are – as it is widely believed to be – would that not amount to overstating the reserves? Wouldn’t that have amounted to willfully misleading Nigerians and the international financial community on the true state of things – with frightful implications for the economy?

To put it simply: could the law have permitted such expansive powers which the CBN seized – without the strictures of oversight?

It helps that President Bola Tinubu has already appointed a special investigator to look into the books of the apex bank. The least Nigerians expect is for the body to help find the answers to these and many other questions bordering on the activities of the bank in the last six years. A major part of that quest must be the question of how to restore the apex bank to its core mandates – shorn of the rather mindless overreach under which the bank seems to have collapsed the dividing walls between the monetary and fiscal divides of governance. While we await the findings of the special investigator on these and many more – including whether or not laws were broken and by who, the National Assembly might want to take another look at the CBN Act itself in the light of the grave governance issues provoked by the findings, to see which areas need urgent amendment.

• This is necessary to know how best to deal with insurgency

The conflicting reports concerning the crash of the Nigerian Air Force (NAF) helicopter travelling from Zungeru in Niger State to Kaduna, Kaduna State, should be thoroughly investigated by relevant authorities. In a terse statement by the NAF spokesman, Air Commander Edward Gabkwet, “the aircraft had departed Zungeru Primary School en route to Kaduna but was later discovered to have crashed near Chukuba village in Shiroro Local Government Area of Niger State.” Conversely, villagers who witnessed the crash claimed the aircraft was shot down by bandits.

In a counter-narrative to the official statement by the NAF spokesman, some terrorists led by one Dogo Gide in a video claimed to be responsible for shooting down the aircraft. They claimed to have shot down the aircraft with an AK47 weapon. Sadly, Niger State has been a volatile region with the activities of various terrorist groups and illegal miners. Indeed, the Nigerian military in an ongoing counter-terrorism effort has reportedly killed 53 terrorists within the axis in recent past.

A day before the crash, military men were ambushed along the Zungeru-Tegina Road, and the defence spokesman later reported that in addition to the crash victims, 36 soldiers were killed last week by terrorists. In a condolence message, President Bola Tinubu lamented that: “the tragic loss of our gallant soldiers in a helicopter crash at Chukuba Village near Shiroro, Niger State, … brought immense sadness to me.” We join the president to condole with the families of the deceased, the military chiefs and the entire country, over the tragic losses.

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Tragically, illegal miners have become an albatross for our country, with citizens and the nation bleeding profusely because of their activities. Across Osun, Zamfara, Plateau, Niger and several other states, the backers of these illegal miners have constituted themselves into an army of occupation, decapitating lives, destroying ecology and raping the nation’s mineral resources with impunity. Sometimes with the connivance of locals, traditional and governmental authorities, security operatives, illegal miners trade on sophisticated arms. They engage in illegal mining and build a protective army as part of their team.

The claim by the bandits in Niger State that they are the ones who shot the NAF craft should be thoroughly investigated by the security agencies. It should not be dismissed as a propaganda, even though we know that they could make such a claim to gain attention and notoriety. For, if indeed the bandits have acquired capacity to shoot down an aircraft, then, the nation may be facing graver challenges than envisaged. And if it can happen to a military helicopter, it can also happen to any other air plane in that place or elsewhere.

If, as claimed by the bandits they have truly acquired the capability to shoot down an aircraft, then urgent steps must be taken to protect the nation’s air space. We therefore expect the nation’s security hierarchy to be interested in what happened to the NAF helicopter, and the contending claims. They should not wait for another tragedy before those who claimed to be involved in the dastardly act are routed out and made to face the law of the land. We have had enough of the reign of banditry in Niger State.

The nation’s political leaders should examine the root cause of the thriving banditry across the country, particularly in places where there are abundant mineral resources. The law makers should consider putting mineral resources in the concurrent legislative list, so that states can legitimately take charge of the minerals within their state for economic development. As seen in other African countries with abundant mineral resources, like DR Congo, criminal activities fester wherever the state is not effectively in control of the mineral resources within its domain.

• CBN should sanitise the banking space

Calls on the Central Bank of Nigeria (CBN) to take action against commercial banks flagrantly flouting the rules to the detriment of other customers and the banks have placed infractions in the sector in the public space once again. The coordinator of Progressive Shareholders Association, Boniface Okezie, and Independent Shareholders Association, Igbrude Moses, have frowned at the trend and called for tighter laws to prevent it from becoming a threat to the financial institutions, and possibly negatively impact the national economy.

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The Banks and Other Financial Institutions Act (BOFIA), as amended in 2020, forbids any director or significant shareholder from being granted more than five per cent of all loans  in a financial year, while total credits that could be granted directors in the period should not exceed 10 per cent.

The shareholders have pointed out that the monitoring officials of the CBN should more effectively check practices at the banks. Sometimes, credits are extended to companies linked to the directors in a bid to evade scrutiny.

For last year, STANBIC IBTC granted its directors N56.7b, and Union Bank extended N53b to those charged with the responsibility to ensure that the institutions adhere to the rules and keep the sector healthy. Sterling Bank lent N2.4b, and Access Bank N469m. 

Unless the apex bank checks the trend, other provisions of BOFIA and its guidelines may be flagrantly abused by the bank directors, and we may soon find the banks in the state that led to the failed banks episode of the 1990s, and the concomitant effects.

Other excesses and abuses that customers have complained about include willful deductions from their accounts and failure to adhere to rules regarding credits to agriculture and the real sector of the economy; rather preferring short term loans for trading.

As soon as the Federal Executive Council is inaugurated, the job of the new economic team and fiscal managers is well cut out for them. Together with the President who has overall oversight over the economy and the mandate to heal the land, the CBN has a duty to rein in the commercial banks’ chiefs. The fiscal and monetary authorities should learn to align their programmes in the country’s interest and all sectors must be made to realise that only a disciplined approach could help lead the economy out of the wood. 

Given the size of her Gross Domestic Product and quality of human resources, Nigeria has no reason to be so poor and pressed down. Banks are the pipelines through which lubricants are supplied to the national economic machine. As such, they ought to be disciplined in ensuring that all their publics, including the directors, managers, shareholders and customers keep to the rules. Indiscipline and betrayal of trust are parts of the problems of development in the country. These must be stopped by the Tinubu administration.

There are examples from other countries such as the Asian Tigers, China, United Arab Emirates, even Malasia and Indonesia for Nigeria and other African countries to learn from. At the centre of it all is the determination of all to play by the rules, identify either the national interest, ethos, mores and values and realise that all must contribute to baking the bread to be shared.

President Bola Tinubu has a duty to rev up the patriotic spirit in managers of all sectors of the economy, including the banks. If Nigeria must take the giant leap that would spur other countries in the continent to greatness, the banks must be sanitised. The starting point is to fish out those who are willfully breaking laws and bring them to book. This would whip other financial institutions to line.

Nigerian banks continue to return hundreds of billions of Naira as profit, and their balance sheets keep growing annually, sometimes at the expense of those at the bottom of the pyramid, with little impact on the economy. Customers can hardly access loans as the terms are too stringent for a poverty stricken population, majority of whom even the National Bureau of Statistics says are swimming in the pool of multidimensional poverty. Unless the people, represented in this case by individual customers and small businesses are supported by the banks under the close supervision of the apex bank, Nigeria will continue to grope in the dark. Only urgent action by all concerned can save the situation.

• Revelations at House hearing would seem to suggest that the FCC stinks

It is an agency set up to help uphold the principles of equity, justice and thus integrity in employment into Ministries, Departments and Agencies (MDAs) of government in a complex, plural society like Nigeria. Unfortunately, the Federal Character Commission (FCC), in stunning revelations at the ongoing investigations into alleged job racketeering and employment fraud in the agency by the House of Representatives, has proven to be utterly without character and a cesspit of corruption in the recruitment of staff. That is, of course, if the revelations at the hearing are true.

An ex-staff of the commission, who was the desk officer of the agency’s Integrated Payroll and Personnel Information System (IPPIS), Hassan Kolo, confessed before the House committee that he collected N1 million and N1.5 million each from at least 25 job seekers and secured them jobs in the commission.

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Kolo claimed that he collected the money from the job seekers on the directive of the commission’s chairperson, Maheeba Dankaka, and that the money, which was paid into his personal account, was withdrawn by him and handed over to Dankaka in cash, at her residence on different occasions.

Kolo alleged further that he was directed by Dankaka to liaise with one Yishau Gambo, a driver and Personal Assistant to the FCC from Taraba State to collect the money from the applicants. He stated that the appointment letters issued to the affected applicants were not fake but were allegedly signed and handed over to him by Dankaka herself.

Kolo said that Dankaka was one of those who recommended him for his present job at the Asset Management Commission of Nigeria (AMCON) as compensation for the errands he ran for her as regards the corrupt job placements. Although he was on a salary of N110,000 at the FCC, the sum of N38 million was reportedly found in his bank account, and another N75 million cumulatively in three other accounts linked to him.

However, the FCC chairperson told the committee that her attention was drawn to the job racketeering by the agency’s director of human resources and that she referred the matter to the committee on promotions, appointments and discipline, which investigated it and submitted a report. Thereafter, Dankaka claimed to have written the Department of State Services (DSS) and the Independent Corrupt Practices and other Related Offences Commission (ICPC) requesting further investigations. Swearing on the Holy Koran, she said “If I have ever collected money from this Kolo or asked him to collect money on my behalf, may God destroy all that I have worked for”.

Beyond emotionalism, however, the appropriate security agencies must thoroughly investigate all those named and indicted in this case to ascertain the truth and ensure those found culpable are brought to book.

This sordid revelation at the FCC only confirms the widespread belief that job racketeering is a pervasive practice that cuts across MDAs in the public service at both federal, state and local government levels. Most government agencies at all levels no longer publish advertisements for applications to fill vacancies. Rather, these vacancies are filled surreptitiously with the employment, either of those who are able to pay the alleged astronomical sums demanded, or come from privileged backgrounds with connections in high places. The implication is that in most cases, the best, brightest and most competent hands are not recruited into the public service and this is a significant factor in the poor quality of public service delivery in the country.

It is ironical that in the FCC case under focus, the desk officer in charge of the IPPIS at the commission was at the centre of the job racketeering scheme. For, the IPPIS had been introduced to eliminate ghost workers and sanitise the job recruitment and payment process. From all indications, it has, however, itself become a source of corrupt enrichment by unscrupulous public officers. The integrity and security of the IPPIS thus needs to be further strengthened across board, to make it difficult to compromise.

Furthermore, these job racketeering scandals in the public sector is partly a function of the severity of the unemployment crisis in the country, which is estimated to be one of the highest in the world. But the enduring solution to unemployment in Nigeria does not lie in employment in government ministries and agencies because there is a limit to which the public sector can create productive employment. Rather, efforts must be invigorated to boost the productivity and efficiency of the private sector through greater ease of doing business, elimination of duplicated taxes and provision of critical infrastructure such as power supply, as it is best placed to generate jobs on a massive scale.

What is sorely needed now is a conducive business environment

For at least two major reasons, GlaxoSmithKline’s (GSK) decision to cease operations in Nigeria is a great blow to the country’s manufacturing sector.  A great blow because it is coming at a time a new government that seems desirous of confronting the challenges faced by manufacturers as well as address other serious economic impediments, is just settling down to business. Second, the company is a major operator in the crucial health sector.

According to GSK Nigeria, it is working on modalities for the planned exit with advisers after which it would submit its proposal to pay off Nigerian investors to Nigeria’s Securities and Exchange Commission. Once this is approved, the Nigerian investors would be paid off, leaving only no its parent GSK.

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GSK’s  British parent company GSK (GSK.L), has been in Nigeria since 1971. No doubt its figures have not been particularly  impressive in the last few years. It has had to cope with increased competition from local companies  as well as imports from India and China, whose drugs are relatively cheaper, in some cases due to the underhand dealings between the manufacturers of those drugs and their unpatriotic Nigerian importers.  Of course we know the other challenges faced by manufacturing concerns in the country, including but not limited to irregular power supply, multiple taxation, etc. Poor power supply means that companies have to resort to power generators with the attendant high price of diesel. All of these  naturally push up the cost  of production, a development that the company, like other manufacturing concerns, has endured  over the years .

Apparently it has got to a stage that the company can no longer absorb the shock. So, its exit could therefore not have been due to subsidy removal or the reforms in the forex regime initiated by the Tinubu administration.

This is clear from the frightening financials that the company has made public. The figures indeed give a cause for concern. Its half year sales for 2023 dropped by about 50 per cent compared to the corresponding period last year. That means from about N14.8bn to about N7.75bn ($9.82m). Similarly,  the company’s shares which was worth about  N42.24 in 2014 is now worth a paltry N8.10. 

“For the above reasons, and having, together with GSK UK, evaluated various other options, the Board of GlaxoSmithKline Consumer Nigeria Plc has concluded that there is no alternative but to cease operations,” GSK Nigeria said in a statement.

As a matter of fact, the company’s British parent company (GSK L) had since 2018 hinted of plans to cut back operations in Africa and adopt, instead, a distributor-led model.

That the parent company is ready and willing to pay off Nigerian shareholders who form majority (with about 53.6 per cent shareholding) shows how dire the situation is.

The country is yet to recover from the negative impacts of the exit of companies like Dunlop Nigeria Ltd, Michelin, etc that left the country long ago; the present government must do everything humanly possible to halt such exits. We may say GSK has only a few people in its payroll, the fact of the matter is that the country cannot afford job losses any longer. At any rate, there are countless of others who live on ancillary services provided to the company as well as others that the company also services indirectly. All of these jobs would be wiped out when it leaves.

We therefore, urge the Tinubu administration to expedite action on its economic reform programmes to engender confidence in, not only investors who are already in the country, but also prospective ones. There is more to do to ensure steady public power supply so as to reduce the cost of operations of industrial concerns. The government must also more vigorously address the issue of insecurity. No reasonable investor would invest in an insecure environment no matter how tempting other indices are. There is also the need to streamline taxes to reduce the incidence of multiple taxation. Other challenges at the ports must also be dealt with if more manufacturers are not to leave the country, thus truncating its dream of an industrial revolution.

• Recents reports show the ugly side of exodus

Recently available information further highlighted the problem of escalating exodus of Nigerians from the country in quest of greener pastures. The Director-General of the National Agency for the Prohibition of Trafficking in Persons (NAPTIP), Dr Fatima Waziri-Azi, said: “Just this year alone, we have received a lot of complaints of Nigerians trapped in North Africa, especially in countries like Morocco and Tunisia, who are unable to come back home.”

According to Waziri-Azi, who spoke at an event in Abuja organised by the Office of the Head of Civil Service of the Federation as part of activities marking the 2023 Civil Service Week, most of the affected young Nigerians were victims of human traffickers who had deceived them with tales of sporting opportunities abroad. She said on arrival at their foreign destinations, the majority of them had been trapped in dehumanising prostitution, exploitative labour and organ harvesting schemes.

At another Abuja event, the 2023 Anti-Smuggling of Migrants Nationwide Sensitisation and Enlightenment Campaign, the acting Deputy Comptroller-General of the Nigeria Immigration Service (NIS), Kemi Nandap, said: “We have a big problem in this country and that is the issue of ‘Japa syndrome.’ We have so many of our youths who are dying in the Sahara, dying in the Mediterranean Sea.” Quoting the International Organisation for Migration (IOM), she said at least 1,200 Nigerians had died while trying to migrate through the Sahara Desert and Mediterranean Sea this year.

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The striking common thread in these narratives is that too many Nigerians are desperate to leave the country, whether through supposed sports routes or irregular ways.  The picture of desperation, and the tragic consequences, is alarming.  

People move for various reasons, including social, political and economic factors. But it is known that, largely in Africa, economic reasons trigger movement of people, especially young men and women. Such migrants are pushed to other countries where they expect to find greener pastures for employment or enterprise development.

It’s a cause for concern that many of the country’s youths tend to believe they can get a good life only if they move to more developed countries, particularly in the Western world. For instance, a 2022 report said nearly 800 Nigerians trying to reach Europe through Libya were repatriated from Libya within a year. 

Importantly, the NAPTIP boss explained how human trafficking can be foiled, saying the “Trafficking in Persons (Control of Activities and Centres) Regulations 2019” gives the agency the powers to control and issue clearance certificate to travel agents, tour operators, sporting agents and all Nigerians leaving the country for the purpose of labour recruitment or sporting activities or educational purposes.

Based on this, she advised that parents or guardians who are approached by sporting agents offering alleged opportunities for their children to either play football or participate in athletics abroad should ask whether they have a NAPTIP clearance certificate.

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This is useful advice. But it does not address the question of the lack of such opportunities in the country, which is why many young Nigerians unsuspectingly fall into the hands of human traffickers who pose as sporting agents in the first place.  NAPTIP should make serious efforts to rescue the Nigerians said to be “trapped” in North Africa.

Also, those who travel through irregular processes are usually desperate to escape from what they perceive as hellish conditions in the country. Their desperation is a thought-provoking statement on what they consider to be intolerable living conditions at home. 

In both cases, Nigeria is the ultimate loser. “Enlightenment and sensitisation” have been identified as helpful approaches to solving the problems. But beyond this, the authorities should wake up to the need for greater development, and do more to improve socio-economic conditions in the country.  That is the crux of the matter.