Category: Editorial

  • Sad story

    Sad story

    •Again, NACCIMA draws attention to the plight of the many firms closed down in Nigeria

    The dire economic strait in which Nigeria is enmeshed was, once again, forcefully brought home at a zonal workshop organised in Asaba, Delta State, by the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC). Presenting a paper on the occasion, the President of the National Association of Chambers of Commerce, Industries, Mines and Agriculture (NACCIMA), Dr. Herbert Ajayi, revealed that no fewer than 800 companies had closed down in Nigeria between 2009 and 2011 due to the harsh economic climate in the country. Although the Manufacturers Association of Nigeria (MAN) does not believe this figure, the fact is that many firms had closed down in the country due to the reasons adduced by NACCIMA. The issue may be with the number.

    To worsen matters, Ajayi further disclosed that more than half of the surviving firms are classified as ailing, which portends grave danger for the continued existence of the manufacturing sector. Of course, these statistics are not new to Nigerians, particularly the youth who have over the years borne the brunt of the massive unemployment that inevitably accompanies the collapse of companies on such a colossal scale. What is sad is that, even though the problems have been severally diagnosed and solutions proffered over the years, the situation is only worsening. This newspaper, for instance, has had cause to decry the alarming rate of de-industrialisation in the country, as major firms have closed their operations, abandoned multi-billion Naira complexes and re-located to neighbouring countries.

    Some of the reasons identified by the NACCIMA President for the unwholesome situation include poor infrastructure, inefficient transportation, pervasive insecurity, incessant increases in the prices of petroleum products used by industries, multiple taxation, unabated smuggling and the inability of government agencies at the ports to meet the 24-hour target for cargo clearance, which in turn has negative cost implications for the manufacturing sector. But by far the most serious problem is epileptic power supply. The attainment of over 4,000 MW, which has been celebrated in recent months, does not even begin to address the huge demand for power, domestic and industrial, in a country of over 150 million people. The implication, as Dr. Ajayi points out, is that the manufacturing sector relies on generators for over 70 percent of its energy uses, a situation that further hampers efficiency and profitability.

    Another huge obstacle on the path of a viable manufacturing sector is inadequate access to local and foreign loans to fund business operations. The huge interest rates charged by banks in Nigeria, which hardly ever drop below 20 per cent, make it virtually impossible for any serious business to rely on the banks for funds and yet break even. It remains a mystery why after several much hyped banking reforms over the last few years, our banks are still unable to discharge the elementary responsibility of providing affordable funds for the real sector to operate optimally, generate jobs and create wealth.

    Yet, these same banks not only declare huge annual profits, their chief executives continue to maintain extravagant lifestyles completely at odds with the country’s economic realities. And those companies that try to access cheaper funds from abroad more often than not find themselves in unpleasant and untenable positions. Bureaucratic delays and unpredictable fluctuations in the value of the Naira invariably make it difficult for them to meet the conditions of their loan obligations, with harmful consequences for their businesses.

    The Central Bank of Nigeria (CBN) surely has its work cut out for it. The apex bank must face the challenge of devising measures that will enable banks more effectively fulfil their functions of funding the real sector for accelerated economic growth and development. In addition, the relevant authorities must also work towards reviving the country’s moribund industrial estates to enable firms enjoy economies of scale that enhance profitability.

  • An unfinished campaign against Polio

    An unfinished campaign against Polio

    Leaders of the global fight to eradicate polio vowed at the United Nations on Thursday to step up their efforts to eliminate the virus from the three countries where the disease still has a foothold — Afghanistan, Pakistan and Nigeria. The challenge is that those countries are troubled by political unrest, violence and social customs that can interfere with the delivery of vaccines to the children and adults who need protection.

    Polio erupted in frightening epidemics around the world during the 20th century and crippled or killed hundreds of thousands of victims a year. There is no cure, but vaccines eliminated the virus from advanced countries and relegated it to poorer regions of the world.

    In 1988, a global campaign was organized by public and private organizations to eradicate the disease. It has been an enormous success. At its start, more than 350,000 children were paralyzed each year in more than 125 countries. This year, only 145 cases have been reported, and the disease remains endemic in only three countries.

    Afghanistan pushed down the number of cases to 17 so far this year from 80 last year. Pakistan drove its polio burden down to 30 cases as of mid-August, but has run into difficulties because of opposition from the Taliban and Muslim religious leaders who depict vaccination campaigns as a cover for espionage. Nigeria experienced a drop in cases in 2010 followed by an upsurge to 84 cases this year, mostly in areas where militant groups are fighting and people distrust Western vaccines.

    Ban Ki-moon, the secretary-general of the United Nations, said he would enlist agencies of the United Nations to make eradication a top priority this year. Ridding the world of polio should be a crucial part of a broad campaign to immunize all children against infectious diseases.

     

    – New York Times

  • Lateef Adegbite (1933-2012)

    Lateef Adegbite (1933-2012)

    •In his exit, Nigeria has lost a bridge builder

    Act well your part, there all honour lies.’ This quote by that great philosopher and poet, Alexander Pope aptly depicts the life and times of Dr. Abdul-Lateef Oladimeji Adegbite who passed away on September 28. That Adegbite gained significant mileage as a devout Muslim who spent the better part of his life championing the cause of Islam is well established. Nevertheless, we do not think also that anyone would doubt his sharp intellect and admirable academic attainment that saw him earn a Ph. D in Law in the 1960s, when being a school certificate holder was a sure guarantee of a secured future.

    Whether as an Islamic scholar or academician, Adegbite’s footprints cannot be erased. More importantly, he would be remembered as one Secretary-General of the Nigeria Supreme Council for Islamic Affairs (NSCIA) that positively uplifted the public perception of Islam in conduct and through guarded utterances. He was an exemplar of what a good Muslim should be, without being violent or getting involved in acts that could generate hatred for himself and his most cherished Islamic religion.

    In 1959, the Western Region Premier, Chief Obafemi Awolowo awarded him a scholarship that afforded him an opportunity to study Law at the University of Southampton, England, graduating with a B.A. in July 1962. He proceeded to the College of Law for Solicitors, Lancaster Gate in London, and then to Gray’s Inn from 1963 to 1965. Later he won a Commonwealth Scholarship for his post-graduate studies in England.

    He was active in the service of the nation throughout his lifetime. He was, till death, Chairman of the Presidential Committee on Public Awareness on Security and Civic Responsibilities. Before this, he held several important positions. In-between his career as a Law teacher, Adegbite in 1971 was appointed as Commissioner for Local Government and Chieftaincy Matters in the old Western State by its governor, Brigadier Christopher Oluwole Rotimi. He was later appointed Commissioner for Justice and Attorney-General in the same state in 1973. He was President of the Nigeria Olympic Committee from 1972 to 1985.

    Dr Adegbite was Pro-Chancellor and Chairman of the Governing Council of the University of Maiduguri from 1984 to 1990. He was also a member of the Executive Committee of the Lagos State Chamber of Commerce and Industry. Adegbite was at the Constituent Assembly in 1976. He was chairman of the Ogun State Pilgrims Board and a member of the National Pilgrims Board.

    Born on March 20, 1933 into a strictly Moslem Egba family in Abeokuta, Ogun State, his first point of learning was an Arabic school before he was later enrolled at St. Paul’s Primary School, Igbore, Abeokuta in 1942, at age nine. He attended King’s College, Lagos, on scholarship, where he graduated in 1956. There he co-founded and then emerged as the first National President of the Muslim Students’ Society of Nigeria.

    He taught law at the University of Lagos before going into private practice in 1976 when he founded the legal firm of Lateef Adegbite & Co, with himself being as the principal partner. His main office was in Lagos with a branch office in Ago-Oba, Abeokuta. He was one of the founders of the Abeokuta Social Club (now Abeokuta Club), in 1972.

    Dr Adegbite, a recipient of the national honour of Commander of the Order of the Niger (CON) and a true statesman was the holder of the revered traditional titles of Seriki of Egbaland and Baba Adinni of Egba Muslims. He lived an exemplary life of dedicated service to the nation. In him, Nigeria has lost an agent of peaceful coexistence and a bridge builder.

     

  • CBN debtors’ list

    CBN debtors’ list

    •People who take loans must be ready to pay or face the consequence

    LAST week, the Central Bank of Nigeria (CBN) returned to the name-and-shame tactics of publishing the names of the financial sector’s biggest debtors. Prominent among the 113 companies and 419 directors/shareholders in the list are Femi Otedola, Alhaji Sayyu Dantata, Sir Johnson Arumemi-Ikhide, Prof Barth Nnaji (former Minister of Power), Mrs. Elizabeth Ebi and Dr. Wale Babalakin.

    Unlike in the past when it stopped at the point of making the names public, this time, the apex bank announced the extraordinary measure of shutting them out of further credit. It also threatened to hand them over to law enforcement agents in the event of their continuing neglect to fulfill their repayment obligations to the lenders. Banks which flout the directive would be made to make an immediate provision of 100 percent of total principal and interest outstanding in the account of the customer and related parties – without prejudice to regulatory action that the CBN may further take.

    As a newspaper, we are torn between the tendency to criminalise debts that is increasingly commonplace, which we deplore, and the offensive criminal impunity underlying the transactions that have now constituted an albatross to the financial system. Much as we are willing to concede to a world of difference between the class of genuine borrowers who became unwilling victims more by factors beyond their control than anything else – and the class that now constitutes the delinquent class renowned for preying on the financial system, the trouble has been in spotting the difference.

    Unfortunately, in the circumstance in which the banking sector found itself saddled with a staggering toxic loan portfolio of N3.4 trillion, the CBN seems to have reasoned that the situation dictated drastic measures. At this point, it is increasingly hard to fault the apex bank. True, the Asset Management Corporation of Nigeria (AMCON) has taken over most of the toxic loans in the bid to give some breather to the financial system; this itself has come at huge costs to the treasury. Meanwhile, a good number of the debtors have neither shown enough efforts to engage their creditors let alone the willingness to pay what they owe.

    The measure by the apex bank, in our view, speaks to the exigency of the situation. The initiative, and, if we dare say, courage, by the CBN in making public the names of the individuals, is deserving of commendation. Far from being drastic, it comes with the territory that those who borrow from the financial system must see themselves as having the obligation to pay. Failure should therefore come with expectations of penalties, if only to discourage irresponsible debtors from bringing the roof down the heads of everyone.

    In the specific case, it seems to us a necessary step to complement the on-going efforts to sanitise the financial sector. It is important to send the signal to those whose activities contributed in no small measure to the unravelling of the sector that the impunity of that era would not be overlooked. We cannot imagine a closure to the unfortunate event that culminated in the failure of some of the nation’s big lenders, and the collateral cost of the loss of investment by nearly two million shareholders, outside of the drastic prescription. Those not averse to hiding behind legalism to frustrate legitimate debt recovery need to be taught the lesson that the alternative to being credit-worthy is being shut out of formal credit. If we must make the laws stricter to make it mandatory for people to know that loans are no free funds, we should not hesitate to do so.

    All said, we must note that the financial system would not have found itself in this mess if credit bureaus were in operation. Clearly, the coming of the bureaus as a guide to the making of credit decisions has become imperative. Everything that needs to be done to get the bureaus on board must be done – immediately.

  • Unmasked

    Unmasked

    •Blowing the cover off the operatives of the SSS is a new low in the war against the state

    It seems quite an innocuous act but it may well be one of the deadliest blows the Boko Haram Islamist terror group has dealt the Nigerian authorities. There are no suicide bombs deployed or heavy gun battles as had been the case in the past.

    No. This time, the terrorists cut deep into the heart of Nigeria’s elite security outfit, they blew their cover. To unmask a spook is akin to rendering a damsel naked in public; it was a premeditated decapitation of Nigeria’s number one secret service.

    A few weeks back, the social media were awash with a deluge of information about officials of the State Security Service (SSS). Sensitive data and detailed information about the outfit were uploaded into the global information highway.

    According to report, the data of over 60 personnel, including the director-general of the agency Mr. Ita Ekpeyong were posted on the internet by suspected sympathisers of the Boko Haram sect. The information released included full names of operatives, their mobile numbers, names of next of kin, bank account details and other sensitive private information.

    This indeed is a punch below the belt as the expose is capable of not only jeopardising the lives of the men but also their career and operations. The intention of course is to ridicule and embarrass the service by the very exposure.

    The power and mystique of the secret service is in the secrecy of its operations and the ability to surprise through covert and undercover activities.

    For the Boko Haram Islamists, considered to be rag-tag, untrained and unprofessional to break the code of the SSS, is the very limit of humiliation.

    It is salutary to note that the service has redeemed a bit of its image by tracking the culprits, especially the moles in the house who breached its security. As it turned out, the agency was infiltrated by the sect who violated their system.

    The agency has vowed to clear the mess by flushing out the bad eggs and restructuring the service drastically. While we are at it, we want to differ that what has happened was a human error and not necessarily a structural one.

    Need we restate that the breaking of the cover of Nigeria’s elite secret service by the Islamists sect is a slap on all Nigerians. One would have expected that the SSS would have upgraded its activities in the light of the recent upheavals. It is worrisome that lapses of this nature still exist in the system. If the sect could break into the very heart of the SSS, there is no telling where else it has penetrated or is trying to.

    We call on the service to brace up. If there is nothing else Nigeria learned from the incipient terrorist activities, it must be the rudiment of security operations.

    We expect that by the time Nigeria is done with Boko Haram and its attendant security challenges, she ought to have one of the best security apparatus to be found anywhere. After all, it is said that every adversity has its bright side.

     

  • Gas flare

    Gas flare

    NIGERIA’s status as a global leader in flaring of associated petroleum gas is probably as well known as its dithering, half-hearted attempts at ending the scourge generally known to be a source of global warming is legendary.

    The picture of the humongous quantum of gas being flared was recently presented by The Guardian of the United Kingdom in its edition of May 31. According to the newspaper, the petroleum industry currently spews toxic orange flares – the equivalent of the UK’s annual gas use in every three months from its two million barrels daily oil output. Quoting the Nigerian National Petroleum Corporation (NNPC), the newspaper also reported that the Oil Majors – ExxonMobil, Shell and ChevronTexaco between them flared 23.5 billion cubic feet of gas in January alone.

    Noteworthy also is the report by this newspaper on September 24, quoting former Head of State, retired General Yakubu Gowon as revealing that over 460 billion standard cubic feet of gas – which if processed and exported, could have fetched $2 billion – are also flared annually.

    The persistence of the practice deemed “illegal” by the Federal Government since 1984, despite the stiff penalties can be explained by three factors. The first is inadequate penalty which explains the readiness of the oil companies to pay fines.

    The second is the continuing neglect by the Federal Government to put in place policies to promote investment as well as encourage utilisation of the abundant gas – factors which explain the constant shifting of the deadlines for ending the flares.

    The third factor is the absence of discipline and the inability of the Federal Government to muster the political will to push for an end to the practice 28 years after it first resolved to end it.

    The issue certainly goes beyond Nigeria’s claims to having the seventh largest gas reserves in the world. As it is, the government continues to delight in showcasing the proven reserves of 187 trillion cubic metres, or even the so-called unproven reserve also estimated at 600 trillion cubic metres, and the illusion that it confers. While the government is at it, it pretends about the more pertinent challenge – the issue of converting the abundant endowment into wealth for the nation’s development.

    Now, the imperative to end the flaring of associated gas is one that can no longer wait. It remains unthinkable that a nation said to be in dire need of gas to fire its power plants, and for which domestic utilisation tends to zero, would settle for the wasteful path. Equally horrendous is that the practice, with its deleterious impacts on the environment, particularly on the flora and fauna, has been allowed to endure for so long.

    The issue goes beyond drawing more revenue into the government coffers; the imperative to save the environment for the incoming generations dictates that the nation does something about the practice – fast. It seems about time the nation shed one out of its many notorious reputations – the one relating to the emission of toxic greenhouse gases.

    As for claims that the in-coming Petroleum Industry Bill (PIB) would address the practice, such optimism is neither reassuring nor borne by the facts of our recent experience. While the passage of the bill may well be the beginning of the long, difficult road to change the face of the industry in terms of the attitude to gas investments, it would be simplistic to suggest that the desired changes are certain just on account of the PIB becoming law.

    What we expect from government is to blaze the trail in gas development. We expect to see more action in the area of greater partnership with investors in the provision of vital infrastructure to boost both domestic and industrial gas utilisation. We need upstream gas investments alright, particularly in the Liquefied Natural Gas sector; however, the nation’s long-term interest would be better served when investments are anchored on domestic self-sufficiency.

     

  • How private are your phone calls?

    How private are your phone calls?

    Americans need safeguards against snooping by intelligence agencies that are tracking terrorists.

    In the aftermath of the 9/11 attacks, the Bush administration monitored the international phone calls and emails of hundreds, perhaps thousands, of people within the U.S. without a court order. Seven years after the New York Times broke that story, it is apparent that privacy safeguards legislated in response are inadequate — a deficiency Congress needs to rectify.

    The House recently voted to extend for another five years amendments to the Foreign Intelligence Surveillance Act adopted in 2008. The amendments allow U.S. intelligence agencies, with minimal court supervision, to collect vast amounts of electronic communications from sources reasonably believed to be abroad, even if a U.S. resident is at the other end of the conversation. Sen. Ron Wyden (D-Ore.) has placed a hold on similar action in the Senate in the hopes of amending the legislation.

    Meanwhile, a group of lawyers, journalists, activists and academics who communicate confidentially with foreigners living abroad has filed suit claiming that the 2008 FISA amendments have made it difficult for them to exercise their constitutional rights and execute their professional obligations. On Monday, the Supreme Court will hear arguments on whether the plaintiffs, represented by the ACLU, have legal standing to bring suit. Given the importance of the constitutional questions involved, the justices should affirm that they do.

    But the important actor in protecting the privacy of Americans is Congress. The 2008 amendments do contain some protections for Americans’ privacy. For example, the government may not use its authority to gather information abroad to “target” someone known to be in the United States. The law also contains “minimization” procedures placing restrictions on the retention and dissemination of information about U.S. citizens and residents.

    But critics say that the prohibition on the targeting of Americans is no guarantee that the government isn’t engaging in what the ACLU calls “dragnet surveillance” of Americans’ international emails and phone calls. Given that intelligence agencies are trawling for broad categories of information — perhaps as broad as “communications originating in or terminating in Yemen” — it’s inevitable that some of those communications will involve people in the U.S.

    How many? The office of the director of national intelligence said last year that it is not “reasonably possible” to determine the number of people in the U.S. whose communications may have been “reviewed.”

    It’s generally assumed that most of the collection involves not real-time eavesdropping on phone conversations or instant messages but the downloading of large amounts of information, which is later analyzed. In one scenario, communications from a person in the U.S. would be accessed as part of the scrutiny of a variety of messages sent or received by a foreign target. But some worry that analysts also may use the names of U.S. citizens and residents in their searches of acquired communications. The office of the director of national intelligence insists that the government does not engage in “back door” searches of Americans, but also acknowledges that government operatives have “sometimes circumvented the spirit of the law.”

    In voting to reauthorize the FISA amendments, the Senate Intelligence Committee concluded that the law “has been implemented with attention to protecting the privacy and civil liberties of U.S. persons.” Americans would be more receptive to such assurances if Congress were to adopt two amendments proposed by Wyden and Sen. Mark Udall (D-Colo.).

    One would prohibit, in the absence of a court order, “the intentional acquisition of the contents of communications of a particular United States person or the searching of the contents of communications … in an effort to find communications of a particular United States person.” (There are exceptions for emergencies in which such information might be necessary to save lives.) The other would require the Justice Department and intelligence agencies to inform Congress of how many people in the U.S. have had their communications either “acquired” or “reviewed.”

    Congress must strike a new and better balance between national security and the privacy rights of Americans.

    – Los Angeles Times

  • John Cardinal Onaiyekan

    John Cardinal Onaiyekan

    The priest as model of moderation in a nation embroiled in needless crisis

    The papal elevation of Dr. John Olorunfemi Onaiyekan, Archbishop of the Catholic Diocese of Abuja, into the conclave of cardinals, may well be recognition of Dr. Onaiyekan’s excellence in priestly, public and private lives.

    But coming at this time when Nigeria is captive to insane fundamentalist shedding of innocent blood, which feigns religiosity but has nothing to do with any faith, it is papal medallion for the imperative of the priest as a moderating influence, even when everyone else is losing his head. Pope Benedict XVI’s creation of Dr. Onaiyekan as cardinal, taking effect from November 24, could not therefore have come at a better time.

    All through his priestly career, Dr. Onaiyekan has been brilliant at his theological studies and outstanding as a practising priest. Those who know him personally have testified to his sense of pious rectitude, his devotion to the highest good in secular society and his ability to to draw a line between sectarian fidelity and the need to work together with other faiths for the collective sanity of the country. He loved his faith without zealotry.

    But all these previous traits have only come to reinforce Dr. Onaiyekan’s excellent ecumenical credentials, at a time his country, goaded down the road of religious infamy by a few murderous malcontents and anarchists, needs such traits most.

    That also must have driven his joint nomination, with the Sultan of Sokoto, Alhaji Sa’ad Abubakar III, for the 2012 Nobel Peace Prize, for somewhat trying to maintain some Christian-Muslim detente, in the face of terrible odds and unprovoked intra, and inter-religious killings by Boko Haram. The Nobel nomination and now this cardinal elevation just show, through the noble deeds of likes of Dr. Onaiyekan, both the secular and spiritual globe are not ready to give up on Nigeria just yet. That is salutary.

    But even before this dire religious crossroads, the cardinal-designate has earned a reputation of speaking truth to power, in his own inimitable non-shrill but nevertheless clear manner, a trait Dr. Onaiyekan shares with his illustrious predecessor in the College of Cardinals, Anthony Cardinal Olubunmi Okogie, retired Archbishop of Lagos Catholic Metropolitan See, even if Cardinal Okogie was a shade more combatant.

    When at the brazen steal that was the 2007 general elections when much of Nigerian Christendom was given to cant, perhaps on account of the religious bent of Chief Olusegun Obasanjo, then outgoing president, Dr. Onaiyekan cut through the double talk and told the world how brazen that electoral heist was.

    That not only consolidated the Nigerian Catholic Church’s record of robust engagement of secular authorities on issues of public importance, as already laid down by the likes of Cardinal Okogie, it also reverberated well with the Christian Association of Nigeria (CAN) rank-and-file.

    An indignant CAN therefore voted out its sitting president, then Church of Nigeria (Anglican Communion) Primate, Peter Gasper Akinola, who had prevaricated over the electoral mess and voted in Dr. Onaiyekan. That was in the best tradition of the Church as societal conscience in troubled times.

    In the new Cardinal Onaiyekan, Nigerians should realise anew the immense talent this country harbours and how we can leverage these talents to lift our country. John Cardinal Onaiyekan, after his consecration on November 24, would be Nigeria’s fourth cardinal: after Cardinals Dominic Ekanem, Francis Arinze and Okogie. With all the chaos and crisis of 52 years of independence, Nigeria has produced a Nobel Laureate in Prof. Wole Soyinka and Africa’s most popular novelist in Prof. Chinua Achebe, among other illustrious sons and daughters that are the envy of the world.

    With right leadership and motivation, Nigeria can hold its own among other nations. Let this common national pride in Dr. Onaiyekan’s elevation then trigger a common purpose in making our country great.

  • Unbundling PHCN

    Unbundling PHCN

    IF the deal is successfully consummated, the public till would bulge with N107 billion. That is the cumulative price the five preferred bidders are paying for five (out of 18) electricity generation plants hitherto owned by the Power Holding Company of Nigeria (PHCN), now being unbundled, under the power reforms process.

    The five winning bids and their asking prices are: Transnational Corporation of Nigeria Plc, (Transcorp): Ughelli Thermal Power Plant ($ 300million), Amperion Consortium: Geregu Power Plant ($ 132 million), CMEC/Eurafric: Sapele Thermal Plant ($ 201 million), Mainstream Energy Solutions Limited: Kainji Hydro Plant ($ 50.76 million, which met the reserved yearly rental fee, since the plant would not be sold outright) and North-South Power Company Limited: Shiroro Hydro-power Plant ($23.6 million, annual fee for a 15-year concession).

    So, whereas the thermal plants would be sold outright, provided the preferred bidders came up with the bid price within the stipulated period, winners of the hydro plants bid would be concessioners over a 15-year period. A sixth plant, the Afam Thermal Plant would require fresh bids, as none of the three bidders, said Atedo Peterside, chairman of the National Council on Privatisation (NCP) technical committee who supervised the bid process, could not meet the terms.

    On the face of it, these putative sales are a welcome breakthrough, given the difficulties the power reforms process has passed through, particularly from the labour unions and staff of the PHCN pushing for what they call just disengagement benefits.

    Another thing to cheer is the claim by Mr. Peterside that officials of both the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices Commission (ICPC) observed the bids and could, according to him, testify to the integrity of the process, since they saw that whoever did not meet the requirements or even made late bids was turned down.

    It is good Mr. Peterside is concerned about the integrity of the process. That is how it should be, for integrity is not only crucial for the successful sale of these plants, it would be key in the sale of the remaining 13 plants; as well as the eventual success of the power privatisation exercise. Perceived high integrity would drive inflow of foreign investment and give the power sector the jab in the arm it needs to power Nigeria into the era of uninterrupted power supply; and the resultant re-industrialisation that would give the Nigerian real sector a rebirth.

    Still, doubts remain. Many a public utility had before been sold with fanfare, only for the preferred bidders to fail to come up with the cash to consummate the deal. A few too have been bought, only for the buyers to strip them of assets and move on. Though for every preferred bidder there is reserved one, what are guarantees that this latest process is free from these previous mishaps?

    This question is pertinent because global players in the power turf, like the US General Electric and others were absent at the bidding, despite its much-vaunted openness and transparency. Which leads to the next bother: the companies that won the bids are linked to the political and economic elite, who have always swirled around the corridors of power, if not as outright politicians but as patrons of the ruling party and friends of the government in power. Are the sales then no more than a transfer of non-performing public utilities to cronies?

    These are disturbing questions. But they can be loudly answered in the negative if the preferred bidders realise that the need for privatisation is the delivery of better services; and go ahead to provide just that. That is the sole way the exercise would turn a success.

  • South Africa drifts under Jacob Zuma

    South Africa drifts under Jacob Zuma

    In the 18 years since the end of white minority rule, South Africa has rarely looked so shaky. Mining, the bedrock of the old economy, is in crisis as costs rise and commodity prices fall. Wildcat strikes are spreading across the industry and into other sectors. Companies are losing production, and the recognised unions, with which business was able to barter in the past, have lost influence over the labour force. Equally worrying, the political atmosphere is not only charged but increasingly poisonous. Opportunists such as Julius Malema, the disgraced former youth leader of the African National Congress, are exploiting a leadership vacuum to publicise the broader failures of the post-apartheid state and whip up support from the disenfranchised.

    There is much that is great about South Africa, not least the peaceful transition from apartheid and the spirit of tolerance that has existed since. But Jacob Zuma, the president, has failed to grasp how this legacy is now under threat nor has he understood that the current crisis is a symptom of much deeper malaise. On Wednesday he addressed the UN General Assembly, and avoided the subject altogether. Back home he has failed to take charge and barely visited the mines. Instead he has put off dealing with the thornier issues until the ruling ANC policy conference in December. He assumes that the strikes will end with negotiation and compromise.

    The immediate conundrum is not an easy one. After the massacre by police at Marikana of 34 striking mineworkers last month, Lonmin eventually bowed to public pressure and raised wages. It has succeeded in getting its platinum mines back in operation but at the cost of its profitability. Moreover, that concession has encouraged other miners to strike. There is no happy solution for an industry which is already operating on thin margins. If the mining houses cave in to workers’ wage demands, it will be at the cost of jobs. They will be forced to shut marginal mines. Yet if they tough it out, the strikes are liable to escalate and more production and possibly even lives will be lost.

    The only other option is for the government to suppress the strikes by force. This is not a decision the ANC can take. So, a wage increase may be the only way. The problem is that the industry will be smaller and less competitive as a result.

    Miners are already South Africa’s best-paid workers. But by comparison with the ruling black elite they are paupers. It may be possible for the government and industry to win some breathing space by buying them and other workers off. But this will solve only a small part of the problem.

    Restructuring the whole economy is the bigger and more important challenge. A small elite within the ANC has in effect bought into the apartheid economy it found in 1994. Remarkably, South Africa in terms of income distribution has become even more unequal since. What is needed to address that is much more than a debate about wages. Radical reforms to education, the labour market, business regulation and land ownership are needed to spur labour-intensive sectors such as manufacturing and agriculture. South Africa’s economy has grown on average by 3.6 per cent over the past decade. Even that pace of growth, far short of what is needed to absorb the legions of unemployed, is now faltering.

    The necessary reforms will be painful. But deferring them, as the ANC is wont to do, is not an option if further unrest is to be avoided. When the party meets for its five-yearly congress, it will decide whether Mr Zuma is the man to chart the course. South Africa should be at the forefront of continental growth. But for too long the ANC has deferred the tough decisions. That is why South Africa is now at a dangerous impasse.

    – Financial Times