The Nation Newspaper

Category: Special Report

  • Why sustenance of Niger Delta peace is key to economic recovery, by stakeholders

    Why sustenance of Niger Delta peace is key to economic recovery, by stakeholders

    To some experts and analysts, there is nothing in the N7.44 trillion 2017 “Budget of Economic Recovery and Growth” to inspire hope of a quick economic recovery. Rather, they argue that what will pull the country out of recession are basically developments in the oil and gas industry. They suggest how to make the relative peace in the Niger Delta permanent, reports Assistant Editor CHIKODI OKEREOCHA. 

    The fear of resurgence of militancy in the Niger Delta is the beginning of wisdom for the Federal Government, oil companies and stakeholders in the oil and gas industry.

    The relative peace in the oil-producing region has contributed to the increase in oil production to 1.8 million barrels per day (bpd). Oil output had been cut to about half a million bpd by a fresh wave of militancy by restive youths before the attainment of a ceasefire.

    With oil price yet to rebound and Brent crude standing at $48.46 per barrel as at the weekend, experts and operators in the oil and gas industry believe Nigeria might be out of recession faster than envisaged if the current 1.8 million bpd production output is sustained and pushed up further.

    But they said the Federal Government must muster the political will to sustain the prevailing peace in the Niger Delta for this to happen.

    Some of them, who spoke with The Nation, warned of the consequences of a resurgence of militancy in the Niger Delta, saying such development will hurt oil and gas operations. According to them, sustaining the oil production level was critical to the implementation of the N7.44 trillion Appropriation Act.

    The Chairman, Petroleum and Natural Gas Senior Staff Association of Nigeria and National Union of Petroleum and Natural Gas Workers (PENGASSAN & NUPENG) National Petroleum Industry Bill (PIB) Committee,  Hyginus Onuegbu, argued that the 2017 budget remained an estimate and that its revenue targets were based on mere assumptions.

    Acting President Yemi Osinbajo had last month signed the N7.44 trillion 2017 budget tagged “Budget of Economic Recovery and Growth” into law. The lawmakers had raised the figure from the initial N7.28 trillion estimate presented by President Muhammadu Buhari in December last year.

    Osinbajo said that the N7.44 trillion budget had a revenue projection of N5.08 trillion and an aggregate expenditure of N7.44 trillion; the projected fiscal deficit of N2.36 trillion is to be financed largely through borrowing.

    It also set aside N1.84 trillion for debt servicing, N177.4 billion for sinking fund, N2.97 trillion for recurrent expenditure (non-debt) and N2.177 trillion for capital expenditure.

    The Acting President said the budget would deliver positive economic growth and prosperity, as it would be implemented in line with the Economic Recovery and Growth Plan (ERGP). He said the budget was designed to bring the economy out of recession onto a path of sustainable and inclusive growth.

    But Onuegbu disagreed. As far as he is concerned, “the 2017 Budget should not be celebrated.”

    The immediate past Chairman of the Rivers State chapter of Trade Union Congress (TUC) said Nigeria will come out of recession not because of any special aspect of the 2017 budget.

    Onuegbu said: “This is a budget that was signed in the middle of the year. he charged, asking, “How can you sign a budget in the middle of the year and come round to say it will bring the country out of recession? When will capital development begin to take place?”

    Onuegbu insisted that the only viable way out of recession is for the Acting President and the Federal Government to take the peace that currently exist in the Niger Delta seriously and ensure that the promises made to the Niger Delta people are kept.

    According to him, this was necessary to avoid any disruption in oil and gas operations.

    “If there is crisis in the Niger Delta, the nation’s oil production target will not be met, and of course, its revenue target will not be met”, he warned.

    Before the truce, oil output was cut by 50 per cent the disruption of oil installations and operations by militants. It was the lowest in almost 30 years. The effects of the sharp drop were devastating. The government lost an estimated 60 per cent of its revenue to the series of attacks by militants on oil gas facilities.

    Besides, 60 per cent of her gas supply was lost to pipeline vandalism, a development which left sour taste in the mouths of investors in the power sector and by extension, electricity consumers across the country.

    The belief in some quarters is that the devastation would not have been far-reaching if Nigeria had not depended on oil for 70 per cent of its revenue and 95 per cent of her foreign exchange earnings. The reliance on oil as the mainstay of Nigeria’s economy accounted for why the crisis in the region pushed the economy into its worst recession in decades.

    It took the intervention of the Acting President to reign in the region. His diplomacy shuttle to oil-producing communities in some states in the Niger Delta where he held series of dialogue with leaders and representatives of the militants yielded positive report.

    The militants agreed to sheath their sword after securing Osinbajo’s assurances of government’s commitment towards genuine peace and development of the region. Certain promises were also made. The result was spontaneous. Disruption of oil production and destruction of oil installations and pipelines stopped, thus pushing up oil production level to 1.8 million bpd.

    But the expert’s argument is that sustaining the peace in the region must be sustained to maintain the prevailing oil production level, which they say is critical to the delivery of this year’s budget.

    “The Federal Government should understand that critical to the achievement and delivery of the 2017 Budget is the maintenance and sustenance of the peace in the Niger Delta so as to engender increase in oil & gas production that we are witnessing now”, Onuegbu told The Nation.

    A Lagos-based lawyer and public affairs analyst, Mr. Obiora Akabogu, aligned with Onuegbu’s position. Noting that Niger Delta remains Nigeria’s wealth base and the goose that lays the golden egg, he hinged the growth of the economy on the level of peace in that region.

    He urged the government to muster the political will to make necessary adjustments and concessions to ensure a lasting that region.

    Akabogu said: “There are some adjustments the government can make with executive fiat; you don’t even need constitutional amendments just to make the people of that area more comfortable.

    “People of that region are not greedy; they are easy to placate because if it were some other hostile environments they would have held the government to ransom until you meet up to 70 per cent of their demands.”

    He insisted that the government must develop the political will and strategy to develop that region and also resist pressure to mount military operation in that region.

    Akabogu said: “It is not a win-win situation militarily because of the peculiar topography of that region. Rather, dialogue and political will can do a lot of good to the Federal Government.

    “The mere fact that the budget came mid-way into the year shows you that the survival of the economy is not necessarily based on the budget; that there are other indicators and calculations.”

    Akabogu recalled that previous budgets have not done any serious miracle to the economy, but one way or the other, Nigerians have found a way to survive outside the budgets.

    He said that the budget may be ambitious important because of capital projects, the fact that it came late into the year meant that Nigerians should not expect too much.

     

    Fears of poo, shoddy implementation

    The late passage and signing of the budget into law has raised fears over possible delay in the kick-off of its implementation, and consequently, its capacity to achieve the intended outcomes.

    The Registrar/Chief Executive of the Institute of Business Development (IBD), Mr. Paul Ikele, said that beyond basing it on realistic assumptions, the budget must be judicious implemented to take country out of recession.

    He told The Nation that it was necessary to avoid the same low and shoddy implementation of last year’s budget if this year’s must succeed.

     

    Push for uninterrupted oil production heighten

    Akabogu explained that the optimism that the economy will bounce back has nothing to do with the budget’s intended outcomes, but with other extraneous calculations such as the predictions by World Bank and the International Monetary Fund (IMF).

    The World Bank recently upgraded its forecast for Nigeria’s economic growth to 1.2 per cent for 2017, citing improved oil production due to decreased militant activities.

    The bank, in its June 2017 Global Economic Prospects report, said: “Nigeria is forecast to go from recession to a 1.2 per cent growth rate in 2017, gaining speed to 2.4 per cent in 2018.”

    It noted that: “In Nigeria, militants’ attacks on oil pipelines decreased…..Oil exports are rebounding in Nigeria on the back of an uptick in oil production from fields previously damaged by militants’ attacks…”

    The IMF also raised its projections for Nigeria’s economic growth this year to 0.8 per cent. It also revised its forecast for Nigeria in 2018 to 2.3 per cent, from its previous projection of 0.7 per cent. The forecasts were revised up mainly to reflect high oil production due to security improvements in the resource-rich Niger Delta.

     

    How to sustain peace in the Niger Delta

    Onuegbu spoke of the need for the Federal Government to abide with the agreement it reached the leadership of communities in the Niger Delta for continued peace in the region.

    For instance, he said that issues around modular refineries must be resolved.

    His words: “When the Acting President came to the Niger Delta, he made a promise about modular refinery. As a matter of fact, some youths started organising themselves. In fact, there was an association of modular refiners in Nigeria. That is an issue that needs to be resolved.”

    The government had announced plans to establish modular refineries to engage youths engaging in illegal oil refining. The planned upgrade of illegal refineries in the region to modular refineries has been welcomed by the people.

     

    Suspicion

    As youths and prospective investors in modular refinery business waited anxiously for the government to come out with modalities for the take-off of the project, there were reports that the government would not allow the proliferation of such refineries across the Niger Delta.

    The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, explained that having such refineries scattered across the Niger Delta would worsen environmental degradation and gas flaring, which will increase the problems of the region.

    According to him, the government would commission a broad study for the development of an intelligent plan for the construction of modular refineries in the region. ,

    The minister said: “It is important to clear a misconception, especially as it has to do with modular refineries.

    “Setting up smaller modular refineries in so many places in the Niger Delta would worsen gas flaring in the region and also bring about environmental challenges. It is critical to develop an integrated approach and plan to modular refineries construction in the Niger Delta, ensure that they are properly optimized and are not scattered everywhere.”

    But Onuegbu counselled the government against reneging on its promise about modular refineries. According to him, this was necessary in order to sustain the peace in the region and starve off disruption of oil and gas operations.

    Yet, the modular refinery, which has been put on hold, was one in the long list of issues agitating the minds of Niger Delta people that have not been resolved. There is also the issue of restructuring and funding of the Niger Delta Development Commission (NDDC).

    Onuegbu regretted that the government owed a lot of money to the NDDC, which it has yet to remit. He pointed out that these are funds necessary for the development of the Niger Delta.

    The Nation learnt that restructuring and funding of NDDC was part of the 16-point demand being adopted as working document to end the Niger Delta crisis when Osinbajo led a high-powered delegation to the region early this year, beginning with Delta State.

    The 16-point demand, prepared by the people of the Niger Delta under the aegis of Pan-Niger Delta Forum (PANDEF), under the leadership of Ijaw leader and elder statesman Edwin Kiagbodo Clark, was presented to Buhari when the President received them at the State House on November 1, last year.

    On PANDEF’s shopping list are: Presidential Amnesty Programme; Law and justice issues, Effect of increased military presence in the Niger Delta, Plight of Internally Displaced Persons (IDP), Relocation of administrative and operational headquarters of International Oil Companies (IOCs), Ogoni clean-up and environmental remediation, and the Maritime University.

    Other demands include: Strengthening the Niger Delta Ministry; the Bakassi question, Fiscal Federalism, Key regional critical infrastructure; Security surveillance and protection of oil and gas infrastructure; Power supply, economic development and empowerment; and Inclusive participation in oil industry and ownership of oil blocs.

    Sources close to the preparation of the 16-point demand hava admitted that the government has made some appreciable progress in meeting some of the demands. They note that the commencement of the clean-up of Ogoni land, the revisiting of the unpaid amnesty stipends and the National Maritime University, among others, are signs that the issues agitating the minds of the people are gradually being addressed.

    But, will the government pluck up the courage and political will to holistically address these demands rather than quick fixes? Will it strive to build trust, instill confidence and give the local communities in the Niger Delta some sense of belonging?

    As answers to these questions remain a matter of conjecture, the prevailing ceasefire militancy and may not be permanent for as long as the issues remain unresolved.

    Analysts say that no stone should be left unturned to guard against the resumption of hostilities in the oil-rich region and not hurt ongoing efforts at reflating the economy and take it out of recession.

  • Operators seek more support for SMEs

    Operators seek more support for SMEs

    The Central Bank of Nigeria (CBN) has consistently reiterated its commitment to Small and Medium Scale Enterprises (SMEs) funding. The apex bank recently launched a N220 billion Micro, Small and Medium Enterprises (MSMEs) development fund to support SMEs’ financing. But, many stakeholders accuse the CBN and commercial banks of not doing enough for the sub-sector, report OKWY IROEGBU-CHIKEZIE and COLLINS NWEZE.

    Despite being the building blocks for new businesses and wealth boosters for nations in the areas of economic turnaround, the operations of Micro, Small and Medium Enterprises (MSMEs) are hampered by poor access to credit facilities and infrastructure and capacity deficiencies.

    After identifying the challenges, the Senate mandated its Committee on Banking, Insurance & other Financial Institutions  to organise a roundtable session with the Central Bank of Nigeria (CBN), commercial banks, the Nigerian Deposit Insurance Corporation (NDIC), other relevant stakeholders and industry experts to finding immediate, sustainable and lasting solutions to  expand MSMEs’ access to loans.

    In fact, Deputy Senate Leader Ibn Na’Allah is at the forefront of a push for a conference to address rising interest rates.

    Other stakeholders have been pointing accusing at the CBN and commercial banks of sticking to high interest rates despite the prevailing economic situation.

    The stakeholders believe that development patterns across the globe have shown the role of SMEs in resource mobilisation, deployment of resources for growth and the emergence of industrial economy.

    The SMEs play significant roles in the growth, development and industrialisation of economies in Asia, Europe and North America.

    But, the banks, including the CBN, have admitted funding and poor infrastructure as the most serious challenges confronting the MSMEs and said they are taking major steps to address them

    The apex bank has therefore set up guidelines for the management of the N220 billion development support, voted for SMEs’ financing.

    According to it, the MSME sub-sector has many unserved and under-served clients, pointing out that an 80:20 ratio has been designed for on-lending to micro enterprises and SMEs to address funding requirements of this critical segment of the economy.

    It (CBN) has opened a special Forex window for SMEs to assist operators  import eligible finished and semi-finished items not exceeding $20,000 for an enterprise per quarter.

    CBN spokesman Isaac Okorafor, said the apex bank’s special intervention was necessitated by a discovery by the apex bank that a large number of SMEs were being crowded out of the forex space by large firms.

    Under the special arrangement, enterprises with employee strength of between 10 to 199 and asset base of between N5 million to less than N500 million will be offered the opportunity to import eligible items within the approved threshold.

    On the N220 billion intervention funds for the SMEs, the CBN said women’s access to financial services should increase by 15 per cent yearly to eliminate gender disparity.

    It said that 60 per cent (or N132 billion) of the fund has been earmarked for financial services to women.

    The regulator said that in operating the fund, special consideration will be given to institutions that will provide financial services to graduates of CBN’s Entrepreneurship Development Centres (EDCs).

    The banking watchdog said that a maximum of 10 per cent of the commercial component of the fund would be channelled to trading and commerce to ensure that the productive sectors of the economy continue to attract more financing necessary for employment creation and diversification of the economic base.

     

    Banks and SMEs

    Many commercial banks have been explaining their commitment to SMEs’. The Managing Director of Sterling Bank Plc, Yemi Adeola, described entrepreneurs as the backbone of the economy, adding that the programme is driven by the lender’s passion for helping budding entrepreneurs to attain great heights.

    According to him, his bank has introduced innovative competitions and ideas that would  encourage young entrepreneurs to think beyond the negative societial ills and build strong businesses.

    The bank, he said, instituted the “Meet the Executive”, a programme meant to select three young local entrepreneurs that will not only get project-based grants, but would be introduced to local and international investors.

    The FirstBank of Nigeria Limited also reiterated its commitment to providing cheap and long-term funding for the sub-sector. The bank said SMEs, with capacity to create millions of jobs for the population, remain the engine of growth for the economy.

    It, however, reiterated the need to create successful SMEs that would help the economy achieve its full potentials.

    The Skye Bank said it has not only provided an enabling environment for SMEs to thrive, but has been at the fore front of extending credit facilities to the operators as well as real sector businesses.

    The bank spoke of its involvement in optimising value and benefits from the agricultural value-chain with the extension of credit facilities to operators in the agro-allied industry, ranging from cocoa processing, flour production, and animal husbandry, among others.

    These projects are being implemented across the six geo-political zones of the country. Some of these companies produce for local consumption and export, thereby expanding the foreign exchange earnings base.

    The lender said: “The bank’s foot prints are also visible in the healthcare sector where several pharmaceutical companies have either been revamped through credit lines or assisted to expand their production capacity and improve their operational and logistic resources.

    “The bank has also assisted many pharmaceutical firms to achieve certification by the World Health Organisation (WHO), thereby placing some Nigerian drug makers among world-class drug companies that can bid for drug supplies globally.”

    According to Skye Bank, it has provided part-financing of one of the largest integrated plants in sub-Saharan Africa for the production of flour, pasta, noodles and feed meal.

    The bank claimed to be a major financier in the development of one of the biggest confectionery companies producing one of the best cream crackers in the country. The company, which the bank did not name, is said to be installing its fifth production line and that talks have started with equipment manufacturers for the sixth line. The new line has increased the customer’s capacity to produce 30,250 metric tonnes annually.

    The First City Monument Bank (FCMB) has also been deepening its support to SMEs through the disbursement of more than N3 billion to such businesses in two years.

    The development has led to an increase in the number of SME operators that have benefitted from the funding support of the bank across the country.

    FCMB is one of the top participating banks appointed by the CBN to drive the N220 billion development fund instituted by the apex regulatory body to provide loans to SMEs.

    Beyond funding, the FCMB has put in place, various initiatives and capacity building programmes that have fast-tracked SMEs’ growth, thereby up-scaling the lender’s contributions to the development of the country.

    Besides organising training sessions for owners of SMEs, the bank has brought its professional expertise closer to the people by having dedicated loan officers at some of its branches nationwide.

    These officers are trained and equipped to provide SMEs with the best and most effective advice and support.

     

    Stakeholders speak

    President, Manufacturers’ Association of Nigeria (MAN), Frank Udemba Jacobs, lauded the CBN for playing its developmental roles in the economy.

    According to him, the apex bank has a handful of development funds dedicated to SMEs.

    He named  some of the funds as  the N220 billion Micro, Small and Medium Enterprises Development (MSMED) Fund; the N300 billion Real Sector Support Facility (RSSF) and the Anchor-Borrowers Initiative for the Agricultural sector which the  Federal Government plans to extend to other  sectors, including manufacturing in the recent  Economic Recovery and Growth Plan (ERGP) document.

    Jacobs, who confirmed that that the funds are given at single digit lending rate, hailed the CBN for its support so far to the SMEs. On corresponding support by commercial banks, he said the banks also support but that the difference is that commercial banks guarantee these development funds and as such may put measure to minimise risk in terms of collateralisation to hedge against default of repayment.

    He said: “Unfortunately, most of the small businesses do not have the kind of collateral being demanded by the commercial bank as a result these funds remain significantly un-accessed. Worthy of note is also the recent approval of preferential allocation of FX for SMEs. This is novel even though grossly inadequate.

    “The Collateral Registry Act and the Credit Reporting Act, which were recently signed into law by Acting President Prof Yemi Osibanjo will help improve SMEs access to this development fund.

    “With the two Acts, small businesses can use their moveable assets such as cars, inventory, equipment etc as collaterals for loans especially from these development funds”.

    Identifying the Collateral Registry and the Credit Reporting initiatives as the brainchild of the CBN, the MAN chief said it would be wrong to brand the CBN as unfriendly to SMEs.

    On the claim that a cartel has hijacked commercial banks to stall the growth of the economy and small businesses, Jacobs said it would be impossible for a group of individuals to hijack all the commercial banks.

    He said: “It is also difficult that any group of Nigerians will want the economy to remain in recession as it has been since 2015. I feel Nigeria is bigger than any single group of individuals”.

    On his part, Muda Yusuf of the Lagos Chamber of Commerce & Industry (LCCI) confirmed the existence of CBN’s several intervention funds as part of its development finance functions.

    He listed some of the interventions funds as: MSMEs, manufacturing, power sector and Aviation. According to him, the government has further made available MSME intervention fund of N220 billion, part of which has been earmarked for the anchor-borrowers scheme to support agriculture.

    Though he lauded the initiatives, he, however, identified access to the funds by operators as a big challenge.

    Yusuf said: “The utilisation rate has not been impressive, which is why it important to identify the constraints to access. The first major factor is that under the present framework, the banks bear the credit risk of the interventions funds.

    “This has weakened the zeal of many banks to disburse the funds because of associated risks, especially for the real sector of the economy and the SMEs.

    “The conditions for lending are therefore typically very stringent, making access difficult.  This is an impediment that should be addressed if the financing opportunities in the intervention would be unlocked”.

    He canvassed a framework to de-risk the lending, possibly through credit guarantee schemes put in place possibly by the CBN.  Yusuf asked government to consider the option of lending to SMEs as an economic development initiative and not strictly a commercial undertaking.

    The LCCI Director-General urged lenders to come into the space with a developmental mindset rather than a commercial mindset. He said the CBN and the government have major roles to play in fostering this mindset.

    On other SMEs’ challenges to lending, the LCCI chief pointed out the limited knowledge of many sectors of the economy by the commercial banks.

    Yusuf said: “It is difficult for banks to lend to a sector that they do not have good knowledge of.  This is perhaps why it is difficult to source domestic capital for sectors like the solid minerals, hospitality, entertainment and ICT, etc.

    Yusuf further stated that productivity remain an issue for many SMEs in manufacturing and agriculture.

    According to him, poor productivity heightens the risk of failure and the risk of loan defaults which invariably affects the disposition of the banks in lending to real sector.

    According to him, infrastructure is a critical factor hampering SMEs,  thus limiting operator’s access to credit facilities.

    Another critical factor limiting operator’s access to credit is the crowding out effect of government borrowing in the financial markets.

    Yusuf wondered how private sector operators can compete when the government is borrowing at over 20 per cent.

    According to him the current yields on Treasury Bills and Federal Government Bonds have created a major disincentive to lending to private sector, especially the real sector and the SMEs that are typically perceived as very risky.

    He pointed out that the phenomenon has created a profound disconnect between the private investors and the banking system.  Arguing that the private sector percentage contribution to the Gross Domestic Product (GDP) in Nigeria (at 14.2 per cent according to a recent World Bank data) remains one of the lowest in the world, Yusuf said that the average for sub-Saharan Africa is 45.8 per cent, 96.5 per cent for the middle-income economies and 146.6 per cent for the high-income economies.

    He said: “Another challenge of access to credit is that many SMEs cannot prepare a business plan, yet this is often a requirement by the banks for lending.

    “But the reality is that the inability to prepare a good business plan does not diminish the entrepreneurial competencies of these SMEs.

    “Indeed, the most successful micro and small businesses cannot articulate a business plan in writing, although a few engage consultants to do this for them when the need arises’’.

  • Call for restructuring: Afe Babalola gives IBB kudos

    Call for restructuring: Afe Babalola gives IBB kudos

    •Legal giant says ex-military leader deserves award

    If elder statesman Chief Afe Babalola (SAN) had his way, erstwhile military President Ibrahim Babangida will be honoured with the 2017 Nigeria Peace Award for joining the calls for restructuring. The legal icon and founder of Afe Babalola University, Ado-Ekiti (ABUAD) believes the time to restructure the country is now. In this piece entitled: “IBB’s call for restructuring – he deserves 2017 Nigeria Peace Award”, the eminent lawyer recommends the immediate convocation of a Sovereign National Conference (SNC) to pave the way for a referendum for Nigeria to have a constitution that is truly the people’s.

    I join multitudes of friends and admirers of the former military president, Gen. Ibrahim Badamasi Babangida (IBB) to congratulate him on the celebration of his 75th birthday on planet earth. More importantly, I congratulate him profoundly for joining the call by many compatriots for the restructuring of the country.

    IBB’s position reminds me of what Sophocles, a Greek philosopher, said in his book titled: The Theban Plays

    “Do not let your first thought be your only thought. To think that your will is the only way betrays a shallow mind and an empty heart. It is for this reason that the meadows which move to and fro on a flood river remain unbroken while those that flow against the flood are broken asunder”.

    I salute his courage and brilliance and his ability to position his mind having regard to the situation on ground.

    This is a lesson for Nigerians who remain still and unbending on the issue of restructuring of Nigeria. I challenge them to rise up and embrace what the great Greek philosopher had espoused as far back as 441 B.C.

    To say that the retired general is a different person to different people is like stating the obvious. However, what cannot be denied is that he is a courageous, fearless, highly cerebral elder statesman who could equally be controversial and often misunderstood.

    I congratulate him particularly for embracing restructuring of our dear country thereby joining the ever-growing band of those of us from the North, West and East who have been clamouring for restructuring as the panacea for the myriad of problems afflicting the country today.

    I have been an unrepentant advocate of the need to restructure Nigeria, so much so that I have been speaking, writing papers, delivering lectures across the country on the issue of restructuring since 2002 as the best way to achieve our aim and objectives of building a united and prosperous Nigeria.

     

    1960 Constitution

    Before 1960, our founding fathers met for almost 10 years in Lancaster House, London and took into consideration the fact that Nigeria is a country of nations with about 250 ethnic groups. In their wisdom, they made a constitution which allowed each component part to remain and practice its own culture and grow at its own pace under one umbrella of a united Nigeria and a befitting Federal Constitution.

     

    The military

    Unfortunately, that constitution was set aside by the military who thought they knew better than our forefathers. Again, the same military bequeathed to us the 1999 Constitution under which the centre had become so strong and the component parts so weak that there is virtually no meaningful development in almost all the states prior to the taking over by the military in 1966, our constitution allowed each component part to develop at its own rate. Consequently, there was healthy rivalry between the regions. The West was the most advanced and others followed and the country was developing at fast rate.

    Although, we may not necessarily go back to the regions of 1960, we can substitute for the regions, something similar to it. Certainly, we need to restructure the country. We urgently need a forum where our problems would be discussed and arrive at a suitable federal constitution for the country. In order to solve the problem of unemployment, falling standard in education, recession, crimes including armed robbery and kidnapping, the country needs to be restructured.

     

    Persuading others

    I want to specially commend IBB for his new position and frank talk about the need for restructuring the country. I urge him to go a step further and persuade those still on the fringe particularly some former military rulers to join those of us in the forefront of the campaign of restructuring of the country for a true federalism.

     

    Sovereign National Conference & referendum

    I strongly advise the government to convey a sovereign national conference, the outcome of which will be ratified by referendum which will give birth to the people’s constitution.

    For avoidance of doubt, the outcome of the referendum shall not be subject to the confirmation or approval of the National Assembly which as we all know will not take kindly to such recommendations such as legislators earning only sitting allowances.

  • How ex-Naval chiefs transferred billions into private accounts, by EFCC witness

    How ex-Naval chiefs transferred billions into private accounts, by EFCC witness

    A Federal High Court sitting in Lagos heard yesterday how a former Chief of Air Staff (CAS), Air Marshal Adesola Amosu, allegedly set up a diagnostic centre with funds allegedly belonging to the Nigeria Air Force (NAF).

    It was at the resumed trial during which an Economic and Financial Crimes Commission (EFCC) investigator, Tosin Owobo, testified before Justice Mohammed Idris of the Federal High Court.

    He was testifying in the trial of Air Marshal Amosu and former NAF Chief of Accounts and Budgeting, Air Vice Marshal Jacob Adigun and a former Director of Finance and Budget, Air Commodore Olugbenga Gbadebo.

    The anti-graft agency accused them of converting N21 billion from NAF through various companies, namely Delfina Oil and Gas Ltd, Mcallan Oil And Gas Ltd, Hebron Housing and Properties Company Ltd, Trapezites BDC, Fonds and Pricey Ltd, Deegee Oil and Gas Ltd, Timsegg Investment Ltd and Solomon Health Care Ltd.

    Led in evidence by prosecution counsel Rotimi Oyedepo, Owobo said his team’s investigation discovered an account owned by Amosu and his wife in the United Bank for Africa (UBA) in the name of Solomon Health Care.

    He said: “We discovered that it is a hospital and diagnostic centre located in Ikeja owned and operated by Amosu and his wife. Our team also visited the premises at 24, Adeniyi Jones, Ikeja in Ikeja when they just started operations.

    “Some equipment were just being installed by General Electric such as MRI scanners, X-Ray Machines and other sophisticated medical equipment”, he said.

    Owobo, who had earlier testified that Amosu transferred N677 million from NAF to Delfina Oil and Gas and others between March 2014 and April 2015, said Solomon Health Care was funded with money transferred from Delfina Oil and Gas and others.

    He said that on January 16, 2015, N145 million was transferred from Delfina Oil and Gas to Solomon Health Care.

    On January 20, 2015, the sum of N45 million was transferred to Solomon Health Care, while over N93 million was transferred to the diagnostic company from Trapezites BDC (Bureau de Change) on January 30, 2015.

    The witness said that another N106 million was also transferred on to Solomon Health Care from Trapezites BDC on the same day.

    Other amounts transferred to Solomon Health Care, he said, were N55 million (April 17, 2015); N55 million (May 6 2015) from Mcallan Oil and Gas; N78 million (June 1, 2015) and N81 million (June 1, 2015) from the same company.

    He said the balance in Solomon Health Care’s account as at April 39, 2015 was N360, 640,636.25.

    Owobo said the EFCC also had cause to investigate Timsegg Investment, which he said had Gbadebo as director.

    The investigator said: “The accounts of Timsegg Investment received direct transfers from from NAF accounts. Timsegg had accounts with UBA and FCMB. We wrote the banks, and we analysed their responses and made further discoveries.”

    Owobo claimed that Gbadebo transferred N12 million from NAF Airmen Subsidy Account to Timsegg; N25 million from NAF Airport Operation Account and N20 million from NAF account on June 4, 2014.

    According to him, N10 million was transferred on July 4, 2014; N24 million (July 30, 2014); N10 million (August 29, 2014); N29 million (October 8, 2014) from NAF Jet Account and N24 million and N65million (October 8, 2014).

    Others are: N14 million from NAF Operations account on October 31, 2014; N15 million (December 2, 2014) from NAF Jet Account; N20 million (May 5, 2015) from NAF Operations Account; N19 million (May 27, 2015) from NAF account and N19 million (July 3, 2015) from NAF Operations Account.

    The funds, according to the witness, were all transferred to Timsegg’s account.

    “We discovered that most of the funds were being fixed on term basis. Upon expiration, cash withdrawals were made by Gbadebo. The funds were paid to him as his share from NAF and were for his personal use”, he said.

    Owobo said a property on 40A Bourdillion Road, Ikoyi, was discovered to belong to Adigun, the second defendant, which he said was acquired with money from Delfina Oil and Gas.

    Justice Idris will rule today on an application by Oyedepo to visit some of the property allegedly acquired by the defendants which cannot be brought to court as exhibit.

    “I humbly apply for my Lord to visit the locus for the purpose of admissibility of the properties mentioned in the charges, especially those within jurisdiction”, Oyedepo prayed.

    But, defence counsel Bolaji Ayorinde (SAN) opposed the application on the basis that there was no basis for it.

    Justice Idris adjourned until today for ruling.

  • Cement production: Nigerian firm leads in push for Africa’s self-sufficiency

    Cement production: Nigerian firm leads in push for Africa’s self-sufficiency

    Africa is inching closer to self-sufficiency in cement production. A multinational, Dangote Cement Plc, is at the forefront of the ambitious drive, with plans to start production at its $300 million cement grinding plant in Congo. Assistant Editor OKWY IROEGBU-CHIKEZIE, who was part of a guided tour of facilities at the Congolese plant, reports.  

    With gradual closure in the demand and supply gap of cement in Africa, the construction industry is witnessing a dramatic turnaround. It is in the area of product manufacturing, importation, packaging and distribution.

    The turnaround is expected to throw the continent into the realm of self-sufficiency in cement.

    Besides, meeting the prevailing demand in the construction market, the revolution is saving the continent huge foreign exchange on importation, as well as boosting employment opportunities.

    In Congo Brazzaville for instance, an indigenous multinational, Dangote Cement Plc and Africa’s driver of self-sufficiency target in cement, plans to create more than 1,600 direct and indirect jobs. The company’s $300 million plant will soon begin cement production.

    According to Plant Director for Congo Operations, Mr. Ganapathy Balasubramanian, the multi-million dollar investment will significantly boost the economy of the Francophone nation and its neighbours after completion.

    The 1.5 million metric ton-capacity plant, located in Bouansa, Congo Brazzaville, is billed for completed soon. Balasubramanian also spoke of plans to boost to raise the plant’s production capacity by 1.5 million metric tons, bringing it to three million metric tons.

    Speaking during a guided tour of the ultra-modern plant, Balasubramanian said the factory, built on an 80-hectare land, will not only meet the nation’s cement demand, but cater for the export market in countries in Central Africa.

    The plant director, who put the project cost at CFA 133 billion (about $300 million), told reporters that factory will get it’s 20 megawatts power needs from Congo’s national grid.

    He also informed that the factory has a potential utilisation profile of 99 per cent when upon completion. The Congolese are the latest in the list of Africans to be excited by prospects of massive job opportunities and significant boost in Gross Domestic Product (GDP) following investment by Dangote Cement Plc.

    The Central African nation is the latest to join the clubof beneficiaries of the cement giant’s strategic investments across 16 African countries where it targets to achieve a total cement production capacity of 75 Million Metric Tonnes Per Annum (MMTPA) by 2019.

    Some of the strategic investments targeted at changing the narrative of Africa’s cement market from dependency on importation to self-sufficiency include: 1.5 million MTpa in Senegal, Zambia’s 1.5 million MTpa (Green-field projects), Tanzania’s 1.5 million MTpa, South Africa’s 2.2 millon MTpa, Ethiopia’s 1.5 million MTpa and Cameroun’s 1.5 million MTpa cement grinding plant.

    The company also has cement terminal operations in Ghana (3.0 million MTpa); Sierra Leone (0.5 million MTpa); Ivory Coast (1.0 million MTpa) and Liberia (0.5 million MTpa).

    It was learnt that many of the countries limestone deposits, the essential component for cement production in commercial quantity.

    The nationals are thrilled by the deposits because of their spin-offs, especially in the area of job creation.

    It was the same sentiment in Ethiopia where the inauguration of a 2.5 million MTpa cement plant in the East African country in 2015 was expected to create over 7, 000 jobs. There were also plans to double the plant’s capacity before the end of that year.

    At take-off, about 2,000 people were directly employed in the main plant operation and 5,000 others indirectly engaged.

    Speaking at the inauguration, President of Dangote Industries Limited (DIL), Alhaji Aliko Dangote,   charged African leaders to create a conducive environment for real sector growth, noting that doing so remained the best to create jobs and to reduce poverty.

    Dangote also stressed the need for genuine collaboration between the private sector and governments at all levels for the much-needed real sector growth, noting that there must be deliberate efforts to encourage Africans, not just foreigners alone, to invest in Africa.

    He said: “Take for example, my company, the Dangote Cement, is currently investing in 16 African countries, with plans to invest in many more over the next few years. We need to encourage this trend to see more investments in Africa by Africans.

    “Above all, there is the need to encourage the private sector to collaborate with governments across Africa, to address the issue of infrastructure deficit, which has plagued the continent for decades.”

    According to him, “manufacturing, and not trading, is the best way to grow an economy.”

    “This event, which we are witnessing today, attests to the fact that we took the right decision when we decided to transit from trading in our home country, Nigeria, into manufacturing, in 1996”, he said.

    Dangote, who is Africa’s richest man, noted that his investments in new cement plants and terminals across 16 African countries were in line with his company’s long-term vision to become one of the world’s biggest cement producers.

    “We envisage that by the time we complete all our ongoing African projects, we will be on track to achieving our target”, he said.

     

    Nigeria’s cement market leads

    No doubt, the Nigerian cement market where the multi-billion dollar investor started his investment drive across the continent remains the biggest and most impactful. The total production capacity of the company’s three plants is 20.25 MMTPA.

    The plants are: Obajana in Kogi State (10.25 MMTPA), Ibese in Ogun State (6.0 MMTPA) and Gboko in Benue (4.0MMTPA).

    The Obajana Cement Plant (OCP) is believed to be one of the single largest cement plants in the world with a combined 10.25MMTPA capacity. It added a fourth line of 3.0 MMTPA to two years ago. Apart from a 135 mw capacity power plant, the cement plant has a gas pipeline of approximately 90-kilometre length for natural gas supply.

    The company also recently inaugurated its factories in Okpella, Edo State and Itori, Ogun State. According to Dangote Group Executive Director, Strategy, Projects and Portfolio Management, Devakumar Edwin, the Okpella plant will have two cement lines, which will with capacity for three mmtpa each.

    On the other hand, the Itori plant, he said, will deliver approximately three mmtpa from two production lines. Both plants are expected to come on stream next year.

    He said the proposed plants would add 12 mmtpa to the company’s current local output of 31.25mmtpa, raising its total output to 41.25mmtpa.

    Explained that the company’s expansion drive, Edwin said it was targeted at reducing transportation and production costs, adding that it would on the long run bring down price and more employment opportunities for youths in the host communities.

    Other outlets of Dangote Cement are: Lagos Cement Terminal, Port Harcourt Cement Terminal, Onne cement terminal, Aliko Inland Cement Terminal and Continental Cement Terminal. The terminals have combined capacity of nine mtpa.

    On account of its local investments in Nigeria, Dangote Cement is said to control about 65 per cent of the market and over 30 per cent of the Nigerian Stock Exchange (NSE).

    According to Dangote, the group’s cement production has surpassed Nigeria’s average total consumption of 20 million metric tonnes.

    The Nation learnt that Dangote’s strategy for Africa is to achieve a total capacity of 75 MMTPA by 2019. Officials of the company, who spoke in Congo, said that this will make the company a global force to reckon with in cement production.

    They hinged their optimism on the fact that the company has unique footprints in cement production across Africa.

    Experts have traced the rising demand for the commodity in Africa to massive infrastructural developments in many countries.

  • Financing infrastructure: Islamic Bond to the rescue

    Financing infrastructure: Islamic Bond to the rescue

    The Federal Government has an ambitious plan to fix the deficit in infrastructure, especially in roads, power and railways, with the N7.44 trillion 2017 Budget.  It hopes to finance the budget largely with borrowed funds. COLLINS NWEZE reports that the  government is eyeing a  N100 billion (about $300 million) Sukuk (Islamic Bond) to fix targeted developmental projects. 

    The stage is set for the Federal Government to sell a N100 billion (about $300 million) sovereign Sukuk (also known as Islamic Bond) this month. The target is the local market.

    The government, which is relying on loans to fund this year’s N7.44 trillion Appropriation, is taking advantage of the friendly terms to approach the Islamic finance market.

    The Islamic finance market is growing globally. This phenomenal growth is despite the poor recovery in other segments within the world’s financial markets.

    The International Monetary Fund (IMF) has linked the rapid growth of Islamic banking in developing countries to its relative resilience to financial crises, contrary to the developments in conventional banking. Thus in the next two to three years, Shariah-compliant assets are expected to sustain a double-digit growth.

    The government plans to inject the funds into road projects and to fund the Budget of Economic Recovery & Growth which was signed last week by Acting President, Yemi Osinbajo.

    According to the budget details, the Federal Government plans to borrow about $10 billion from the debt markets, with about 50 per cent of the fund coming from foreign sources. It is to fund a budget deficit worsened by lower oil prices at the international market, a development that has weakened the Naira and forced the government to readjust spending. The government’s plan is to fund more than half of its budget deficit of N2.36 trillion from local borrowing and to tap concessionary sources to fill its funding needs. It has opened talks with the World Bank since last year.

    The Sukuk is based on an Ijara structure. Ijara is a common leasing arrangement in Islamic finance, which bans payment of interest. Sukuk have become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf Region and Southeast Asia.

    The Islamic bond with a seven-year tenor will go on sale on June 28 for three days via book building. It will be tradable on the Nigerian Stock Exchange (NSE) and on FMDQ over-the-counter platform. The bond issuance will be guided by the Debt Management Office (DMO) under Abraham Nwankwo as Director-General.

    Nigeria is home to the largest Islamic population in sub-Saharan Africa, with a reasonable percent of its N180 million people as Muslims. It is also home to one of Africa’s fastest-growing consumer and corporate banking sectors.

    Islamic finance means a situation in which corporations, including banks and other lending institutions, raise capital in accordance with the Sharia, or Islamic law.

    The bond issuance remains part of government’s plan to fast-track the development of infrastructure and engage in project-tied capital raising, given that Nigeria has challenges with road, railway and power infrastructures.

    Nigeria is not new to Sukuk. In 2013, Osun State issued N10 billion worth of Sukuk, but no other Sukuk transaction followed.

    The latest issuance is part of plans to develop alternative funding sources for government and to establish a benchmark curve for the corporate world to follow. The target of the offer are retail and institutional investors, with First Bank and Islamic wealth manager Lotus Capital managing the sale.

    The Osun example

    In October 2013, the Osun State government issued a N10 billion Sukuk yielding 14.75 per cent, bankers said. The Osun State bond was the first Islamic bond from a major economy in sub-Saharan Africa.

    The cocoa-producing southwestern state of Osun got N11.4 billion in total subscriptions for its seven-year paper, from asset managers and Islamic funds, bankers said.

    Sukuk has become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf and southeast Asia. The Sukuk bond was issued in accordance with enactment of the Osun State Bonds, Notes and Other Securities Law 2012 and setting up the Osun Sukuk Company Plc. Though Islamic in nomenclature, Sukuk bond, is a conventional bond and coordinated by the regular investors in the nation’s capital and money market. The bond was issued in accordance with the Security and Exchange Commission’s (SEC’s) rules and regulations.

    The redemption of the bond being used to finance roads and school constructions across the state will be due in 2020.

    Authorising and approving the offer at a board meeting for the Sukuk Company, Osun State Governor, Ogbeni Rauf Aregbesola explained why his administration opted for Sukuk bond. He described it as an opportunity to develop the state. He appealed to the people to see the bond as an avenue to attract development to the state for the benefit of all and sundry.

    Other African countries including South Africa, Kenya and Senegal also plan to issue Sukuk. The Gambia has been selling small amounts of Islamic Bond for several years.

    Local credit rating agency Agusto & Co gave an ‘A’ rating to the Sukuk, suggesting it will attract ample investor demand. Bankers have also said that Osun hoped the issue, would be bought by both local pension funds and international investors.

    Speaking on the bond issuance, Currencies Analyst at Ecobank Nigeria, Olakunle Ezun said the Sukuk allows government to raise funds for specific targeted developmental projects that will add value to the lives of the people.

    He explained that Islamic bond has the potential of improving liquidity in the capital market and creating wealth for more investors even as the bond offers investors collectable returns in the form of profit from sale, rental or combination of both.

    The Sukuk, he added, also serves as tool for risk management as the bond has relatively low risk profile, as the investors are always confident of recouping their investments without fears of losing their funds.

    It has strong appeal to ethical investors, who are able to benefit from the investment opportunities that Sukuk offers to institutional investors. Besides, bond holders can trade their investment for cash anytime they so desire to bring more people into the financial system in line with the financial inclusion project approved by the Central Bank of Nigeria (CBN). He said the Sukuk appeals to Islamic faithful and other investors interested in reaping good returns from their investments.

    The Managing Director of Cowry Assets Management limited, Johnson Chukwu, said the Sukuk allows the people who do not want to invest in interest-bearing instruments to participate.

    Chukwu said: “The Sukuk bond will meet the investment need of large population of Nigerian that do not want to invest in interest-bearing instruments. It will attract funds from people that have refused to invest in other debt instruments because of their values. It will bring more people into the financial system.”

    According to him, Sukuk can play an important role in the development of an Islamic market and banking system.

    An Islamic scholar, Abiodun Rasaq, said prospects for Islamic finance are very bright, adding that the finance system has become necessary given a very significant proportion of Nigeria population strongly believe that based on the nature of the capital market and the dictates of their religion, they cannot invest in the market.

    He called for the development of products that is attractive to these set of investors to allow easy flow of their funds into the market.

    Chukwu said that just as some Christians also do not like certain things like alcohol, or invest their money in companies producing arms and ammunitions or gambling firms, some Muslims also prefer Islamic finance that is interest-free.

    He disclosed that Nigeria’s profile as Africa’s most liquid debt market after South Africa has been rising since JP Morgan and Barclays, included its bonds in their sovereign bond indices, encouraging greater foreign participation in its debt market.

    He said the use of Islamic finance in Africa could grow further as several north and sub-Saharan African countries including Morocco, Tunisia, South Africa and Kenya are laying the legal groundwork to be able to issue Sukuk.

    Other stakeholders believe that Sukuk provides an ideal way of financing large projects for the public good. “There are many economic activities or projects that are out of reach of individuals, companies, or, in the case of various developing Islamic economies, governments. In these cases, sukuk are perfect for financing these projects without falling into interest-based debt,” he said.

    Also, investors on the secondary market that are looking for investments that can be liquidated easily will find that Sukuk are ideal.

    How Islamic finance works

    Islamic finance is an interest-free banking plan. When Muslim cleric Abubakar Usman told his entrepreneur friend Ahmad Yusuf that sharia law forbids paying interest on borrowed funds, it surprised the later. Yusuf, an Osun State cocoa merchant quickly returned N1 million loan he got from a commercial bank to the lender and approached the fast-growing industry of Islamic banking.

    Islamic banking is a market that has doubled in size in the past five years. Its worth has been estimated above $2 trillion, with a demand forecast that it will soar to new heights in the coming months.

    After repaying the loan a week after securing it from a commercial bank, Yusuf said: “A cleric told me it is not permissible under Islam to take loans from a non-Islamic bank because they charge interest.”

    A few days later, he arranged for a loan from an Islamic bank after paying a $100 service charge. Islamic banking customers, aside being mainly Muslims, are attracted to Islamic finance by its flexibility, link to real economic activity and its ban on transactions involving speculation or uncertainty.

    Islamic finance is gaining ground in the country. Besides Nigeria, global acceptance for Islamic finance is increasing by the day despite initial hitches to its survival. According to Standard & Poor’s (S&P), Islamic finance remained a demand-driven market, with scarce supply, still hampered by a limited range of Islamic financial centers and their various regulatory frameworks.

    The rating agency said it believed that regulatory efforts to accommodate Islamic finance and the establishment of additional industry bodies at national levels will take center-stage beginning from 2014.

    The newcomers in the industry — such as Oman, Turkey, and Nigeria, for instance — have been tracing the footsteps of fast-growing pioneers, such as Malaysia.

    “Right behind the newcomers, a long line of countries is aspiring to enter the market, with the continent of Africa in the forefront,” it said.

     

    CBN’s regulation

    With local commercial banks facing cash crunch over dwindling oil revenue and increasing need to shore up their capital bases, the time to promote Islamic finance, analysts said, is now.

    Hence, many people saw it coming when the apex bank in 2015, issued guidelines for an advisory body that will oversee Islamic banking in the country.

    An essential governance structure and element of regulatory oversight for institutions offering non-interest (Islamic) financial services is the establishment of an advisory body at the level of the apex bank. The bank is to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest (Islamic) Financial Institutions (NIFIs) are in compliance with the rules and principles underpinning their operations.

    Also, section 9.1 of the CBN Guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria provides for the establishment of an advisory body at the CBN on Islamic banking and finance.

    The body shall be called the Financial Regulation Advisory Council of Experts (FRACE). The Council shall advise the CBN on matters relating to Islamic commercial jurisprudence for the effective e regulation and supervision of NIFIs in the country.

    With the policy guidelines, the CBN has become the latest regulator to opt for a centralised approach to the Islamic banking industry.

    Traditionally, Islamic banks have practiced self-regulation when ensuring that their products follow religious principles. But a centralised model of supervision is increasingly being favoured across the world.

    Financial institutions that offer Islamic banking products are required to have their own boards of Sharia finance experts, who are limited to serving in one institution at a time. The advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.

    Capital base

    The CBN guidelines on non-interest banking peg the minimum capital base at N10 billion for National Islamic Banks and N5 billion for regional Islamic banks. However, the regulator allows deposit money banks to offer non-interest banking products, using existing structure such as the branches, even manpower.

    The CBN has so far registered Jaiz Bank and it has given a licence to Stanbic IBTC Bank to operate Islamic banking window. Sterling Bank also has approval to operate an Islamic window. This is in addition to the work being done by National Insurance Commission to promote Takaful, an Islamic insurance product.

    Analysts believe that many Islamic financial markets had established their presence in all the major financial centres and were playing key roles in deepening the financial markets with products across the globe.

    They insist that in the face of the growing network  in  the global financial system and its integration, it is unrealistic for any existing or aspiring financial centre to be oblivious of this development.

  • Financing infrastructure: Islamic Bond to the rescue

    Financing infrastructure: Islamic Bond to the rescue

    The Federal Government has an ambitious plan to fix the deficit in infrastructure, especially in roads, power and railways, with the N7.44 trillion 2017 Budget.  It hopes to finance the budget largely with borrowed funds. COLLINS NWEZE reports that the  government is eyeing a  N100 billion (about $300 million) Sukuk (Islamic Bond) to fix targeted developmental projects. 

    The stage is set for the Federal Government to sell a N100 billion (about $300 million) sovereign Sukuk (also known as Islamic Bond) this month. The target is the local market.

    The government, which is relying on loans to fund this year’s N7.44 trillion Appropriation, is taking advantage of the friendly terms to approach the Islamic finance market.

    The Islamic finance market is growing globally. This phenomenal growth is despite the poor recovery in other segments within the world’s financial markets.

    The International Monetary Fund (IMF) has linked the rapid growth of Islamic banking in developing countries to its relative resilience to financial crises, contrary to the developments in conventional banking. Thus in the next two to three years, Shariah-compliant assets are expected to sustain a double-digit growth.

    The government plans to inject the funds into road projects and to fund the Budget of Economic Recovery & Growth which was signed last week by Acting President, Yemi Osinbajo.

    According to the budget details, the Federal Government plans to borrow about $10 billion from the debt markets, with about 50 per cent of the fund coming from foreign sources. It is to fund a budget deficit worsened by lower oil prices at the international market, a development that has weakened the Naira and forced the government to readjust spending. The government’s plan is to fund more than half of its budget deficit of N2.36 trillion from local borrowing and to tap concessionary sources to fill its funding needs. It has opened talks with the World Bank since last year.

    The Sukuk is based on an Ijara structure. Ijara is a common leasing arrangement in Islamic finance, which bans payment of interest. Sukuk have become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf Region and Southeast Asia.

    The Islamic bond with a seven-year tenor will go on sale on June 28 for three days via book building. It will be tradable on the Nigerian Stock Exchange (NSE) and on FMDQ over-the-counter platform. The bond issuance will be guided by the Debt Management Office (DMO) under Abraham Nwankwo as Director-General.

    Nigeria is home to the largest Islamic population in sub-Saharan Africa, with a reasonable percent of its N180 million people as Muslims. It is also home to one of Africa’s fastest-growing consumer and corporate banking sectors.

    Islamic finance means a situation in which corporations, including banks and other lending institutions, raise capital in accordance with the Sharia, or Islamic law.

    The bond issuance remains part of government’s plan to fast-track the development of infrastructure and engage in project-tied capital raising, given that Nigeria has challenges with road, railway and power infrastructures.

    Nigeria is not new to Sukuk. In 2013, Osun State issued N10 billion worth of Sukuk, but no other Sukuk transaction followed.

    The latest issuance is part of plans to develop alternative funding sources for government and to establish a benchmark curve for the corporate world to follow. The target of the offer are retail and institutional investors, with First Bank and Islamic wealth manager Lotus Capital managing the sale.

     

    The Osun example

    In October 2013, the Osun State government issued a N10 billion Sukuk yielding 14.75 per cent, bankers said. The Osun State bond was the first Islamic bond from a major economy in sub-Saharan Africa.

    The cocoa-producing southwestern state of Osun got N11.4 billion in total subscriptions for its seven-year paper, from asset managers and Islamic funds, bankers said.

    Sukuk has become an increasingly popular investment globally, particularly among cash-rich funds in the Gulf and southeast Asia. The Sukuk bond was issued in accordance with enactment of the Osun State Bonds, Notes and Other Securities Law 2012 and setting up the Osun Sukuk Company Plc. Though Islamic in nomenclature, Sukuk bond, is a conventional bond and coordinated by the regular investors in the nation’s capital and money market. The bond was issued in accordance with the Security and Exchange Commission’s (SEC’s) rules and regulations.

    The redemption of the bond being used to finance roads and school constructions across the state will be due in 2020.

    Authorising and approving the offer at a board meeting for the Sukuk Company, Osun State Governor, Ogbeni Rauf Aregbesola explained why his administration opted for Sukuk bond. He described it as an opportunity to develop the state. He appealed to the people to see the bond as an avenue to attract development to the state for the benefit of all and sundry.

    Other African countries including South Africa, Kenya and Senegal also plan to issue Sukuk. The Gambia has been selling small amounts of Islamic Bond for several years.

    Local credit rating agency Agusto & Co gave an ‘A’ rating to the Sukuk, suggesting it will attract ample investor demand. Bankers have also said that Osun hoped the issue, would be bought by both local pension funds and international investors.

    Speaking on the bond issuance, Currencies Analyst at Ecobank Nigeria, Olakunle Ezun said the Sukuk allows government to raise funds for specific targeted developmental projects that will add value to the lives of the people.

    He explained that Islamic bond has the potential of improving liquidity in the capital market and creating wealth for more investors even as the bond offers investors collectable returns in the form of profit from sale, rental or combination of both.

    The Sukuk, he added, also serves as tool for risk management as the bond has relatively low risk profile, as the investors are always confident of recouping their investments without fears of losing their funds.

    It has strong appeal to ethical investors, who are able to benefit from the investment opportunities that Sukuk offers to institutional investors. Besides, bond holders can trade their investment for cash anytime they so desire to bring more people into the financial system in line with the financial inclusion project approved by the Central Bank of Nigeria (CBN). He said the Sukuk appeals to Islamic faithful and other investors interested in reaping good returns from their investments.

    The Managing Director of Cowry Assets Management limited, Johnson Chukwu, said the Sukuk allows the people who do not want to invest in interest-bearing instruments to participate.

    Chukwu said: “The Sukuk bond will meet the investment need of large population of Nigerian that do not want to invest in interest-bearing instruments. It will attract funds from people that have refused to invest in other debt instruments because of their values. It will bring more people into the financial system.”

    According to him, Sukuk can play an important role in the development of an Islamic market and banking system.

    An Islamic scholar, Abiodun Rasaq, said prospects for Islamic finance are very bright, adding that the finance system has become necessary given a very significant proportion of Nigeria population strongly believe that based on the nature of the capital market and the dictates of their religion, they cannot invest in the market.

    He called for the development of products that is attractive to these set of investors to allow easy flow of their funds into the market.

    Chukwu said that just as some Christians also do not like certain things like alcohol, or invest their money in companies producing arms and ammunitions or gambling firms, some Muslims also prefer Islamic finance that is interest-free.

    He disclosed that Nigeria’s profile as Africa’s most liquid debt market after South Africa has been rising since JP Morgan and Barclays, included its bonds in their sovereign bond indices, encouraging greater foreign participation in its debt market.

    He said the use of Islamic finance in Africa could grow further as several north and sub-Saharan African countries including Morocco, Tunisia, South Africa and Kenya are laying the legal groundwork to be able to issue Sukuk.

    Other stakeholders believe that Sukuk provides an ideal way of financing large projects for the public good. “There are many economic activities or projects that are out of reach of individuals, companies, or, in the case of various developing Islamic economies, governments. In these cases, sukuk are perfect for financing these projects without falling into interest-based debt,” he said.

    Also, investors on the secondary market that are looking for investments that can be liquidated easily will find that Sukuk are ideal.

     

    How Islamic finance works

    Islamic finance is an interest-free banking plan. When Muslim cleric Abubakar Usman told his entrepreneur friend Ahmad Yusuf that sharia law forbids paying interest on borrowed funds, it surprised the later. Yusuf, an Osun State cocoa merchant quickly returned N1 million loan he got from a commercial bank to the lender and approached the fast-growing industry of Islamic banking.

    Islamic banking is a market that has doubled in size in the past five years. Its worth has been estimated above $2 trillion, with a demand forecast that it will soar to new heights in the coming months.

    After repaying the loan a week after securing it from a commercial bank, Yusuf said: “A cleric told me it is not permissible under Islam to take loans from a non-Islamic bank because they charge interest.”

    A few days later, he arranged for a loan from an Islamic bank after paying a $100 service charge. Islamic banking customers, aside being mainly Muslims, are attracted to Islamic finance by its flexibility, link to real economic activity and its ban on transactions involving speculation or uncertainty.

    Islamic finance is gaining ground in the country. Besides Nigeria, global acceptance for Islamic finance is increasing by the day despite initial hitches to its survival. According to Standard & Poor’s (S&P), Islamic finance remained a demand-driven market, with scarce supply, still hampered by a limited range of Islamic financial centers and their various regulatory frameworks.

    The rating agency said it believed that regulatory efforts to accommodate Islamic finance and the establishment of additional industry bodies at national levels will take center-stage beginning from 2014.

    The newcomers in the industry — such as Oman, Turkey, and Nigeria, for instance — have been tracing the footsteps of fast-growing pioneers, such as Malaysia.

    “Right behind the newcomers, a long line of countries is aspiring to enter the market, with the continent of Africa in the forefront,” it said.

     

    CBN’s regulation

    With local commercial banks facing cash crunch over dwindling oil revenue and increasing need to shore up their capital bases, the time to promote Islamic finance, analysts said, is now.

    Hence, many people saw it coming when the apex bank in 2015, issued guidelines for an advisory body that will oversee Islamic banking in the country.

    An essential governance structure and element of regulatory oversight for institutions offering non-interest (Islamic) financial services is the establishment of an advisory body at the level of the apex bank. The bank is to provide assurance that the strategic direction and conduct of financial transactions of Non-Interest (Islamic) Financial Institutions (NIFIs) are in compliance with the rules and principles underpinning their operations.

    Also, section 9.1 of the CBN Guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria provides for the establishment of an advisory body at the CBN on Islamic banking and finance.

    The body shall be called the Financial Regulation Advisory Council of Experts (FRACE). The Council shall advise the CBN on matters relating to Islamic commercial jurisprudence for the effective e regulation and supervision of NIFIs in the country.

    With the policy guidelines, the CBN has become the latest regulator to opt for a centralised approach to the Islamic banking industry.

    Traditionally, Islamic banks have practiced self-regulation when ensuring that their products follow religious principles. But a centralised model of supervision is increasingly being favoured across the world.

    Financial institutions that offer Islamic banking products are required to have their own boards of Sharia finance experts, who are limited to serving in one institution at a time. The advisory body will be guided by the principles of sharia governance issued by the Malaysia-based Islamic Financial Services Board.

    Capital base

    The CBN guidelines on non-interest banking peg the minimum capital base at N10 billion for National Islamic Banks and N5 billion for regional Islamic banks. However, the regulator allows deposit money banks to offer non-interest banking products, using existing structure such as the branches, even manpower.

    The CBN has so far registered Jaiz Bank and it has given a licence to Stanbic IBTC Bank to operate Islamic banking window. Sterling Bank also has approval to operate an Islamic window. This is in addition to the work being done by National Insurance Commission to promote Takaful, an Islamic insurance product.

    Analysts believe that many Islamic financial markets had established their presence in all the major financial centres and were playing key roles in deepening the financial markets with products across the globe.

    They insist that in the face of the growing network  in  the global financial system and its integration, it is unrealistic for any existing or aspiring financial centre to be oblivious of this development.

  • June 12 is ‘Mother of May 29’

    June 12 is ‘Mother of May 29’

    To All Progressives Congress (APC) stalwart Asiwaju Bola Ahmed Tinubu, the agitation triggered by the annulment of the June 12, 1993 presidential election results is the precursor of the democracy being enjoyed today. The former Lagos governor believes the Fourth Republic would have been a mirage if pro-democracy forces had not resisted military rule. In a retrospective appraisal of the annulment 24 years ago, Asiwaju Tinubu describes June 12 as the mother of May 29.

    The blood of those who gave their yesterday and sacrificed even their lives for the democracy and freedom we enjoy today was not shed in vain. The truth is June 12 is the mother of May 29th. Without the uncompromising resistance to military rule engendered by the annulment of the June 12 election, there would most probably be no Fourth Republic today and we would still be groaning under the jackboots of military dictatorship.

    “The annulment was a bitter pill to swallow, especially for the millions of people who expended so much time, energy and material resources to help ensure victory for Chief MKO Abiola.

    “The late MKO selflessly committed so much of his substantial fortune towards ensuring his victory at the polls. In doing this, he was not motivated by personal, selfish or pecuniary considerations.

    “Abiola could have chosen to abandon the mandate in order to rebuild and resuscitate his disrupted business. But he opted for the path of the true ‘Omoluabi’.

    “He refused to sacrifice honour for an ephemeral mess of pottage. He was an embodiment of the eternal Yoruba adage, which says that death is better with honour than life without dignity.

    “Looking back, we can say, thank you Chief MKO Abiola for giving your all that we may bask in the glow of democracy today. The annulment was meant to halt the unstoppable and irresistible march to deeper democratic practice in Nigeria. That objective failed woefully.

    “The annulment was a challenge that precipitated a concerted response, which helped to promote the cause of democracy in Nigeria, contrary to the will of its anti-democratic perpetrators.

    That annulled free and fair election taught us, once again, to organise; it tutored us new tactics and strategies of confronting, undermining and ultimately overcoming seemingly impregnable forces and fortresses of dictatorship and oppression.

    “It revealed to us the imperative of forging relationships and diverse networks across ethnic, religious, regional and partisan divides if we were to move forward.

    “It is this invaluable experience we gathered in the struggle to enthrone democracy and retrieve our country from the iron grip of dictatorship that emboldens us today to warn those directly or indirectly threatening our democracy through another military intervention to perish the idea.

    “Just as happened in the past, those who stand on the path of truth and higher moral values will always triumph over those whose strength derives from the barrels of the gun.

    “Twenty-four years after its annulment, the spirit of June 12 lives on in the hearts and minds of millions of Nigerians. The lessons of that election still speak eloquently to us today despite the utter lack of vision and imagination in governance between 1999 and 2015 that has fuelled the revival of separatist agitations and deepened distrust among the component parts of Nigeria.

    “One enduring truth that June 12 demonstrated is that given inspirational, visionary and sincere leadership, Nigerians can rise above divisive primordial sentiments to demonstrate high patriotism and a belief in merit in their voting patterns.

    “Thus, Chief MKO Abiola won a pan-Nigerian mandate in that poll, garnering considerable votes across the various zones of the country and even beating his opponent in the latter’s Kano State home base.

    “Again, despite having a fellow Muslim, Alhaji Babagana Kingibe, as his running mate, the duo won handsomely even in wholly-Christian dominated parts of the country. All these show that it is really the elite most times that deliberately instigate the politics of distrust, fear, suspicion and divisiveness; they are the ones that all too often exploit our differences to destabilise the polity for their own selfish interests.

    “This year’s commemoration of the anniversary of June 12 coincides roughly with two years in office of the All Progressives Congress (APC) at the federal level. Some critics, particularly of the opposition, are already writing off the government as a failure.

    “Well, that is their prerogative and in accordance with their rights in a democratic polity. But the vast majority of Nigerians are neither stupid nor lacking in political sophistication. They are aware of the immense mess inherited by the President Muhammadu Buhari administration.

    “Of course, the APC administration has not simply sat back, lamenting the crippled economy it inherited from the previous government of Dr. Goodluck Jonathan, which earned unprecedentedly high oil revenues for the most part of its tenure with little or nothing to show for it.

    Two years into its term, any objective analyst will agree that the APC has already taken impressive strides to clear the Augean stables it inherited from the past administration. Concrete gains are being made in curtailing corruption, reviving and diversifying the economy and strengthening national security even though much harder work still lies ahead admittedly.

    “There is no doubt that once the APC-led Federal Government successfully contains these challenges, and we are gradually turning the corner with light discernible at the end of the tunnel, it can more urgently and firmly begin to address other planks of its manifesto especially the imperative of strengthening the country’s federal practice.

    “But even in our darkest moments, let the torch of democracy be our guide to the higher and nobler plains of good governance, strong institutions, reverence for the rule of law and a continually-improving and growing economy.

    “It is only through strengthening the institutions, practices and procedures of democracy that we, like the Americans, foremost exemplars of the democratic ideal, can ceaselessly strive moment by moment, day by day and year by year to continually aspire towards the more perfect union of our dreams.”

  • What has changed since June 12?

    What has changed since June 12?

    The June 12, 1993 presidential election was a watershed. It has remained a reference point in national history. Domestic monitors and foreign observers were unanimous that it was the freest and fairest in the country. Group Political Editor EMMANUEL OLADESU reminiscences on the annulment and its damage to national unity.

    TWENTY-FOUR years after, the nation is yet to recover from the damage. There was a pan-Nigeria movement. Its sole aim was to end military rule and elect a leader with a national outlook. The military laid thorns on the way. The people endured the tribulation. Nigerians, irrespective of their tribe and religion, thronged the polling booths to elect Chief Moshood Kashimawo Abiola as president. Up to now, they are still awaiting the results. The effort was in vain.

    The June 12 presidential election was the unifying factor for the heterogeneous country. The exercise ended the partisan divisions cruelly exploited by self-serving leaders.  However, to the consternation of voters, the most credible poll was annulled by former President Ibrahim Babangida, the self-styled ‘Evil Genius.’

    Human rights activists and pro-democracy crusaders have described the cancellation as the greatest act of betrayal by the military. Never has a country been ambushed by a soldier of fortune. The criminality led to wild protests, which nevertheless, failed to force the military to retrace their steps. The victor, Abiola of the defunct Social Democratic Party (SDP), became a prisoner for four years. He never returned from detention.

    The scenario underscored the illusion of hope. The late sage, Chief Obafemi Awolowo, saw the future. Having worked with the military, he could understand their mindset. The former Premier of defunct Western Region knew that it was relatively easier for the camel to pass through the eye of a needle than for a military leader to voluntarily hand over power to civilians. Even, Gen. ‘Jack’ Yakubu Gowon, a seemingly benevolent leader, under whom he served as Vice Chairman of the Federal Executive Council (FEC) and Federal Commissioner for Finance, was reluctant to leave office, until he was shoved aside in a coup organised by his cousin, the late Col. (later Maj.-Gen), Joe Garba. Awolowo knew that Babangida, the ‘clever boy’ from Minna, was full of prevarication.

    When the eminent politician was invited to participate in the discussion on the political future of the country by the Political Bureau headed by Dr. Cookey, he shunned the invitation. Awolowo declared that Nigeria had embarked on a fruitless search for democracy, adding that, when they imagined that the new order had arrived, they would be terribly disappointed.

    The former Unity Party of Nigeria (UPN) leader had psychologically studied IBB’s maneuverings. He doubted his commitment to democracy and ability to successfully moderate a transition process. After returning to his Ikenne, Ogun State home from a visit to the former military president at Doddan Barracks, Lagos, the seat of government, Awo summoned the meeting of his supporters. There, he reviewed the political situation in the country, contending that the military regime was not keen about the transfer of power to civilians. He urged them to exercise caution and learn to deal with the military president with a long spoon. Few months later, the indomitable Awolowo passed on.

    Between and 1986 and 1993, Nigeria became another IBB laboratory, where various kinds of experiments were carried out. The Babalakin Panel, which the military set up, turned in a beautiful report. It was buried by coup plotters, led by IBB. It was not exhumed. Cookey’s Bureau became a serious talk show. On three occasions, the transition programme was postponed by IBB without any convincing explanation.

    Babangida came up with more tricks to dazzle the political class. He cajoled unsuspecting politicians into forming political parties, which, according to the guidelines, should have national spread.

    When the National Electoral Commission (NEC) chaired by Prof. Humphrey Nwosu came up with their result sheets, they, in IBB’s reckoning, failed to measure up. The hammer fell on the 23 political associations. They were consigned to the dustbin of history.

    Up came two political parties; the Social Democratic Party (SDP); a little to the left, and the National Republican Convention (NRC); a little to the right. Politicians struggled to join either of them.

    The attention of Nigerians was on the programme. As the implementation of the electoral time-table proceeded, there were distractions. New elements were included on regular basis. Politicians were banned and unbanned. In fact, some of the politicians were broke at that stage. Some of them were detained, released and re-arrested.

    In 1990, the human rights’ community was fed up. Fiery Lagos lawyer, the late Chief Gani Fawehinmi, who was hounded into detention by the administration, cried out that the entire transition programme was a fraud. He urged more commitment on the part of the military. He also enjoined Nigerians never to sleep on guard. His compatriot, Dr. Beko Ransome Kuti (now late), advised Babangida to be more serious and committed to the democratic enterprise.

    Nigerians were determined. They succeeded in electing governors and state and federal legislators. But, it remained one more hurdle to cross. The presidential election was the ultimate. Big wigs were in the race in both parties. However, after successful primaries, the exercise was cancelled and participants were banned. Suddenly, the parties were in want of candidates. It was at that stage that Abiola appeared on the scene.

    Abiola was a veteran presidential aspirant, even at that stage. Ten years earlier, he had vied under the banned National Party of Nigeria (NPN). On the order of the then Transport Minister, Dr. Umaru Dikko, he was denied nomination form. The party office was shut at him. It was not his first baptism of fire. Earlier, he had contested for the NPN national chairmanship at a time President Shehu Shagari and prominent members of the party caucus were rooting for the late Chief Adisa Akinloye. Abiola lost his deposit at the primary.

    When he emerged as the SDP candidate, Abiola was perceived as a stranger. Alhaji Baba Gana Kingibe, who later became his running mate, following pressures by the 14 SDP state chairmen, described him as someone who was on the sideline only to come and reap where he did not sow. Abiola was said to have consulted with his longtime friend, Gen, Babangida, who gave his blessing. Doubts were expressed because of his conservative antecedents. Many did not give him a chance. Within months, the gaps were closed. He apologised to the Awoists over his alleged sins against the Awolowo political family. The group, led by Chief Adekunle Ajasin, resolved to support him. Many people had a change of heart. They recalled his philanthropic activities. His message of hope, particularly the abolition of poverty, was captivating. His rival, NRC’s Othman Bashir, his former colleague in the NPN, was no match. Ahead of the poll, their fate was decided at the presidential debate. During the debate, the SDP flag bearer demonstrated the grasps of the situation; the economy, politics, security and other challenges. Across the country, Abiola was the choice.

    On poll day, nature was kind to Nigeria. The weather was benevolent nationwide. Nigerians were united by the festival of political change. On long queues, they were orderly as they cast their votes for their preferred candidates. There were no reports of violence, snatching of ballot box and brutality by security agents.

    The electoral umpire was impartial. In fact, results could also be collated by party agents in that atmosphere of transparency and openness. News filtered that MKO had won. The prices of goods and services crashed. Joy was bold on the faces of Nigerians. People started celebrating the new dawn. A quit notice has been issued to the military rulers.

    However, as the election results trickled in, further announcement was abruptly suspended, following an order from above. There was suspense. There was tension. It persisted. Anxiety enveloped the country. Voters were bewildered. Democracy was truncated. Abiola polled 8,341,399, which represented 58.36 per cent, defeating his rival, Tofa. Even, in Kano, where Tofa hails from, the SDP won. Fawehinmi also said that Abiola won in the Army barracks.

    The annulment underscored the illusion of hope and the capacity of few soldiers to trample on popular will. More than two decades after, the fond memories of the horror has not faded away. It was a dark moment, which heralded a chain of events, including prolonged crises, the setting up of the interim contraception, the enthronement of Abacha regime and the renewed clamour for popular rule by pro-democracy forces.

    Abiola was a man of valour. He was brave and bold. The Aare Ona Kanknfo of Yorubaland could not run away from battle. He did not go to sleep after the injustice. He fought the military without the gun. He resisted frantic attempts to compromise him. At Epetedo, Lagos, he declared himself President, based on the unofficial results. He took a great risk and its consequence.

    On the podium, he declared: “On that day (August 27, 1993), the people of Nigeria, through their democratic expressions of June 12, 1993, expected me to assume the reins of government. I fully intend to keep that date with history.”

    However, on that day, what was in place was not the Abiola Presidency, but Ernest Shonekan’s Interim National Government (ING) contraption, which Gen. Olusegun Obasanjo (rtd) described as lamentable, but understandable. Gen. Babangida had bowed out in shame a day before, having failed to elongate his stay in power.

    After the Epetedo Declaration, Abiola incurred the wrath of the military. Soldiers and other security agents were after him. He jetted out of the country. At that time, the frontline propagandist, Uche Chukwumerije, who was Secretary for Information, derided him as the first Aare Ona Kankanfo to have deserted the battle. Abiola came back, struck the wrong deal with Gen. Sani Abacha, who promised to handover to him, but reneged on his hypocritical promise.

    As the June 12 battle dragged on, crusaders were weary. Religion and ethnicity were invoked. The struggle adorned an ethnic colouration. Gradually, the rank of June 12 travellers was divided. Some crusaders, including Alhaji Lateef Jakande, Abubakar Rimi, Alao Aka-Bashorun and Ebenezer Babtope, were trapped in the Abacha Government. It was suicidal to resign.

    Abiola was sent into ‘prison’ without trial. He never returned alive. His wife, Kudirat, was murdered on the streets of Lagos. His business empire were crippled. His supporters, including prominent SDP leaders, activists, youths, and students, were dispersed. The National Democtatic Coalition (NADECO), Afenifere, Eastern Mandate Union and other cried foul. They could not force back the hand of the military. Political jobbers put the June 12 poll behind them as they jostled for seats in the 1994 National Conference set up by Abacha.

    “After using some SDP and NRC ministers in his cabinet to stabilise his regime, he later discarded them. Political jesters, including Lamidi Adedibu, came up with a curious message and an assurance of inexplicable bail conditions for the custodian of the popular mandate. Abiola turned it down, vowing not to let Nigerians down. He died in controversial circumstances without realising his dream for Nigeria.

    June 12 continued to torment the military after Abiola’s death. Although Abacha passed on before Abiola, the symbol of the struggle was not released by Abacha’s successor, Gen. Abdulsalami Abubakar. The circumstances surrounding his death has remained in the realm of conjecture. Up to now, Abiola has not been adequately immortalised by the Federal Government.

    The June 12 struggle may be described as a lost battle. It gave birth to the clamour for restructuring by Afenifere. It also led to power shift to the Southwest. However, the beneficiaries of the struggles in 1999 were the same class of politicians, military confederates and cronies, who truncated it.

    Since June 12, the nation’s quest for credible election has been a mirage. The sanctity of the ballot box is still a struggle. In 1999, 2003, 2011, and 2015, there were floodgates of litigations, following presidential elections. In 2007, the late President Umaru Yar’Adua acknowledged that he rode to power on the back of a flawed election.

    In 2011, there was a violent eruption in the North, following the presidential poll in which Dr. Goodluck Jonathans challenger, Gen. Buhari, headed for the court after rejecting the results.

    Governorship and parliamentary elections have not fared better. In 2007, governorship polls were disputed in almost all the states of the federation. The post-election litigations dragged on till the next election.

    In 2015, the nature of pan-Nigerian movement for power shift made rigging impossible. Former military haed of state, Ge. Buhari of the All Progressives Congress (APC) defeated Dr. Jonathan of the PDP. But, has the new dawn wiped away the tears of Nigeria? Has it led to the abolition of poverty? Where is the new hope?

  • Genesis of separatist agitations in Southeast

    Genesis of separatist agitations in Southeast

    Seventeen years after the relaunch of the secessionist agenda by eastern agitators, the struggle for an independent state of Biafra has sparked ethnic tension. Group Political Editor EMMANUEL OLADESU traces the genesis of the Movement for the Actualisation of the Sovereign State of Biafra (MASSOB) and the Indigenous People of Biafra (IPOB) – the arrowheads of the struggle.  

    It was in 1999. A young Igbo chief, Ralph Nwazuruike, suddenly appeared on the scene. He is not a politician. Neither is he a businessman. He is not a retired soldier. His antecedent was unknown. He is not a national figure. But, the strange crusade by the Indian-trained lawyer generated fear, which reverberated across the land.

    Twenty-nine years after, the ghost of Biafra was exhumed. Nwazuruike said he was ready to raise an army for the realisation of a separatist agenda, which the late warlord Emeka Odumegwu-Ojukwu failed to achieve at the height of his illustrious military career.

    Anxiety was about to envelop the polity. The new champion of a dead agenda is a man of speed. To the consternation of a shocked country, he hoisted the Biafran flags in different locations in the region. To demonstrate his seriousness, he also launched a nationalist organisation, the Movement for the Actualisation of Biafra (MASSOB). As other Nigerians dismissed the new movement as a huge joke, many of Igbo kinsmen saluted his patriotic sagacity. Soon, MASSOB held series of rallies to draw home its point. It launched what it described as the Biafran International Passport. Later, they attempted to launch a separate currency.

    The group also unfolded plans to form the Biafra Government in Exile and the Biafran Shadow Government.

    Nwazuruike believed he could achieve where Ikemba Odimegwu-Ojukwu failed in 1970. Following the 1966 coup and counter-coup, which led to the massacre of Igbos in the North, the military governor of the defunct Eastern State declared a state of Biafra. Thus, the East, under his leadership, embarked on a disastrous secessionist war. Amid the war, the embattled Commander-in-Chief abandoned the troops on the war front and left the ill-fated country of his dream.

    Many Igbo have continued to nurse the pains of the war. Although the former Head of State, Gen. Yakubu Gowon, embarked on a programme of reconstruction, rehabilitation and political reconciliation, it did not lead to the psychological reintegration of the ethnic group into Nigeria.

    Before and after independence, Igbo dominated many sectors of the country. But, they believe that, since the war, they have been marginalised by successive administrations. Ironically, key Igbo leaders were allies of the successive governments.

    In the current dispensation, Igbo has alleged neglect. This has underscored the resurgence of the clamour for a sovereign state, unlike Yoruba, who following their tribulations after the annulment of the ‘June 12’ election, intensified their clamour for a sovereign national conference. Issues that have provoked disaffection in the East are not entirely absent in the North, West and Southsouth.

    These include: poor state of infrastructural facilities, especially roads and lopsided distribution of federal appointments to the disadvantage of the East. There is always competition for ‘federal resources.’

    At stake in Nigeria is the core national question; the crisis of distribution; which successive regimes have failed to resolve.

    Besides, Igbo is bitter that it has not produced a president for Nigeria. It has expressed disgust at its marginalisation during state creation. While the Northwest has seven states and other zones have six each, the East has five.

    In the views of its leaders, only a return to true federalism through restructuring could keep the East under the banner of Nigeria.

    However, the strategies employed by MASSOB infuriated the government. Despite the fact that MASSOB leaders described the group as a peaceful organisation on a legitimate mission, government has branded it as a violent group on a mission to undermine the country. During the group’s peaceful protests, the East stood still. Commercial activities were disrupted. Also, motorists suffered on the roads.

    To the government, national sovereignty was being subverted. In the course of MASSOB/police confrontation, scores of lives have been lost. MASSOB alleged that no fewer than 1,000 agitators have been killed by the police. Many members of the group also languish in detention. The group’s leaders have been arraigned in courts for charges ranging from subversion and treason.

    The struggle is an expensive venture. The agitators required money to pursue the decorative regional goal. Although MASSOB was previously at the fore front of the struggle, other groups also sprang up to agitate for the same cause. They include the Biafra Zionist Movement, led by Benjamin Igwe, a lawyer. Along the line, there were allegations that the agitation has been converted to a business venture.

    Curiously, there was a split in the group, when a crisis of confidence broke out in its leadership ranks. Nwazuruike started to take a back seat. MASSOB was factionalised and up came the Director of the MASSOB Radio, Nnamdi Kanu, who instantly filled the void. His group, the Indigenous People of Biafra (IPOB), became a pain in the neck for the Federal Government.  He was charged and remanded in prison. Recently, he was granted bail on terms and conditions, his kinsmen described as stringent. One of such conditions is that he must not be seen in a crowd of more than 10 people. Last week, there were speculations that the Federal Government may appeal for the review of his bail conditions.

    But, will he succeed in his struggle? Time will tell.