The Nation Newspaper

Tag: conundrum

  • Conundrum of banks as FIRS’ collecting agents

    Olisa Agbakoba Legal (OAL) Senior Associate/Practice Manager Ifeatu Medidem examines the legality of banks mandatory obligation as collecting agents for FIRS.

    The Federal Inland Revenue Service (FIRS) has intensified its drive to recover out-standing tax liabilities from tax payers in default of tax obligations.

    To this end, FIRS has been writing to tax payers’ bankers, appointing the banks agent of the banks’ customer, to collect outstanding tax liabilities from the tax payers’ bank account balance. This is referred to as tax substitution.

    FIRS bases its appointment of the banks as collecting agents on the provisions of Section 49 of the Companies Income Tax Act 2004, and Section 31 of the Federal Inland Revenue Service (Establishment) Act 2007.

    Section 31 of the Federal Inland Revenue Service (Establishment) Act 2007 provides:

    “The Service may by notice in writing appoint any person to be the agent of a taxable person if the circumstances provided in sub-section (2) of this section makes it expedient to do so.

     The agent appointed under sub-section (1) of this section may be required to pay any tax payable by the taxable person from any money which may be held by the agent of the taxable person

    Where the agent referred to in subsection (2) of this sectiondefaults, the tax shall be recoverable from him.

    For the purposes of this section, the Service may require any person to give information as to any money, fund or other assets which may be held by him for, or of any money due from him to, any person.

    The provisions of this Act with respect to objections and appeals shall apply to any notice given under this section as if such notice werean assessment.”

    Section 49 of the Companies and Income Tax Act, 2007 also empowers the FIRS to collect tax due from companies and appoint agents to collect tax due from companies, thus:

    “The Board may by notice in writing appoint any person to be the agent of any company and the person so declared the agent shall be the agent of such company for the purposes of this Act, and may be required to pay any tax which is or will be payable by the company from any monies which may be held by him for or due by or to become due by him to the company whose agent he has been declared to be, and in default of such payment, the tax shall be recovered from him”.

    Typically, FIRS instructs the bank to set aside an amount equivalent to the tax payer’s outstanding tax liability, and remit same to FIRS.

    FIRS also directs that the bank place a restriction on the tax payer’s accounts and inform FIRS of any transaction on the tax payer’s account prior to execution on the accounts. The bank is also expected to release the tax payer’s bank statements and other financial records to FIRS.

    The banks, probably concerned about compliance and cooperation with government agencies are quite swift to comply with the directives. Some valued customers are lucky to receivesome notification, prior to the bank’s execution of FIRS’ directives; others, not so much.

    Understandably, given how difficult it often is to recover outstanding debts from recalcitrant debtors, it may not be so surprising that FIRS devised this strategy.

    But the appointment of banks as collecting agents has stoked several fundamental issues in relation to the propriety or otherwise of the action. Chief of which, is the constitutionality of FIRS’ appointment of banks as collecting agents to collect and remit outstanding tax liabilities of tax payers, without court orders.

    This is besides the conversation around the hardship that may be occasioned the tax payer who has had its bank account restricted, particularly where it turns out that the restriction is unjustifiable.

    However, a salient issue that seems to have eluded discussion is the query, “Is a bank legally enabled to act as collecting agent to collect outstanding tax liabilities from its customers’ bank account(s) on behalf of the FIRS?”

     

    Appointment of a bank as a collecting agent imposes mandatory responsibility

     

    On a cursory reading of the provisions of Section 31(3) FIRS Establishment Act and Section 49 of theCompanies Income Tax Act, it may appear that the provisions create an ordinary principal/agent relationship between FIRS and the appointed collecting agent. By principles of law an agency relationship presumes a payment obligation between the principal and the agent. This is not the case with tax substitution, because the appointed/declared agent is the agent of the tax payer, and not FIRS.

    The provisions of Section 31(3) of the Federal Inland Revenue Service (Establishment) Act 2007 and Section 49 of the Companies and Income Tax Act, 2007 impose a mandatory responsibility on the Bank appointed as collecting agent, rather than a commission earning activity.

    By these provisions, where the FIRS appointed Bank fails to remit the outstanding tax liability from the tax payers’ funds in its custody, such bank would be personally liable to FIRS for the tax payer’s outstanding liability. This certainly places the banks between the devil and the deep blue sea.

     

    Banks owe a duty of confidentiality/secrecy to their customers with some exceptions

     

    A pressing issue for concern, as to the propriety of the banks’ appointment as collecting agents for FIRS, is the unavoidable breach of a bank’s fiduciary duty to its customer. This issue has raised a lot of hue and cry, over FIRS’ appointment of banks as collecting agents over their customers’ outstanding tax liabilities.

    A bank and its staff are obliged to keep secret, information regarding the business and account(s) of its customers.

    In Tournier v National Provincial and Union Bank of England, (1924) 1KB 461, BankesLJ of the Court of Appeal of England held that confidentiality was an implied term in the customer’s contract and that any breach could give rise to liability in damages if loss results.

    As with every general rule, there are exceptions to the duty of the bank to keep secret, every information regarding the customer’s account(s). These exceptions are:  (a) Where the bank has duty to the public to do so. (b) Where the bank’s own interest requires disclosure: – This occurs for example, where legal proceedings are required to enforce the repayment of an overdraft or where a surety has to be told the extent to which his guarantee is being relied upon. (c)  Where the bank has the express or implied consent of its customer to do so: – where he supplies a reference to its customer or where it replies to a status inquiry from another bank. (d) Where disclosure is required by law.

    FIRS’ appointment of banks as collecting agents in respect of the bank’s customer’s outstanding tax liability, ostensibly falls under the exception (d) above; given the provisions of Section 31(3) FIRS Establishment Act and Section 49 of theCompanies Income Tax Act.

    Yet, the manner in which the banks typically respond, with swift compliance, undeniably raises issues of conflict of interest and breach of the bank’s fiduciary duty to its customer. The banks’ compliance with the directives imposed by the FIRS,against ‘tax defaulters’(customers of the banks) involve a glaring breach of the duty.

    A bank cannot perform the obligations of tax substitution, without impairing the confidential obligation it owes its customers. This confidentiality obligationis the pillar of banking.

    Clearly, the banks, as collecting agents for FIRS, are conflicted, in that they are torn between complying with directives of FIRS, a government agency; and fulfilling their obligations to their customers.

    There is however no positive law to safeguard the relationship between a bank and its customers. It is advisable that banks tread with caution, and take steps to secure their position.

     

    Banks as collecting agents for FIRS – possible safeguards

     

    In light of the foregoing, where a bank is faced with tax substitution directives from FIRS, the bank may rely on Section 31(5) FIRS Establishment Act to protect itself. The bank ought to take into consideration that as with all tax assessments and notices, a tax payer has the right to object or appeal.

    Banks rather than rushing to comply with FIRS’ directives, should ensure that adequate inquiries are made, to confirm that the notice in respect of a tax payer relates to a tax liability that is final, due and outstanding.

    A tax payer’s liability is payable when a tax payer defaults in paying its tax liability on a tax assessment that is undisputed, either on the basis of a self-assessment, or upon the tax payer’s specific agreement to FIRS’ assessment. Where an assessment is disputed, the tax liability is payable when the assessment has become final and conclusive.

    This may either be uponexpiration of statutory time for objection or payment, and the tax payer fails to object to the assessment, or upon determination by the Tax Appeal Tribunalor the Courts, in the absence of an appeal of decision of the Tribunal or Court.

     

    Final word

     

    Pending the interpretation of the Courts on the constitutionality of FIRS’ powers to appoint a tax payer’s banker as its agent to collect outstanding tax liabilities from the tax payer’s bank account, tax payers are best advised to take steps to comply with statutory requirements to compute and remit their outstanding tax obligations.

    Where, however, the tax payer has already had its bank accounts restricted under FIRS’ directives, it would be prudent to seek professional counsel to explore resolution mechanisms best suited to the peculiar circumstances.

    FIRS’appointment of banks as collecting agents in respect of the banks’ customers’ outstanding tax liability, places the banks in the precarious position of potentially impairing the confidentiality obligation owed to customers. Banks are also exposed to legal action, particularly where the tax liability is disputed.

    It is the writer’s view that a bank should consider all possible options to secure its position, in addressing the mandatory obligation imposed by FIRS’ appointment to act as collecting agents from its customer’s bank accounts.

    The banks are also at liberty to test their appointment by FIRS, as collecting agents, pursuant to the provisions of the Federal Inland Revenue Service (Establishment) Act 2007 and Section 49 of the Companies and Income Tax Act, 2007.

    A determination by the Courts would certainly bring welcome development to our jurisprudence.

    Besides, there is the danger of taking the now largely banked economy a few steps back. Individuals and business organizations may refuse to bank, for fear of having their funds subjected to seizure without recourse to them, or to avoid having their financial activities monitored, or to maintain their financial privacy.

    Tax evasion is a criminal offence under the law. FIRS may choose to lay more emphasis on prosecuting offenders as a deterrent to intending tax evaders.

    It is quite commendable that FIRS is actively widening the tax net, particularly with the proposed imposition of five per cent value added tax on lottery and gambling activities.

  • Daura: Conundrum of authority

    It is no longer news that the chickens finally came home to roost for Lawal Daura last week when Vice President Yemi Osinbajo terminated his appointment as head of the Department for State Security, DSS. The move was a shock, just like many of Daura’s own stunts in his time as the head of the country’s secret service. Daura was said to have been sacked, then whisked away through a back exit, while his security detail waited in vain at the administration gate of the Villa.

    It was a fitting departure for the controversial spy chief as he finally met his waterloo after yet another controversy regarding a blockade of the National Assembly complex by his men. Daura’s record as the head of the secret service was marred by lawlessness and disregard for authority, including that of his principal, President Muhammadu Buhari. In an administration that has been markedly liberal in its attitude towards exercise of power by its appointees, Daura reached new heights in excessive use of authority and cast unwarranted publicity on his agency’s activities, often in contravention of extant laws and superior directive.

    Unfortunately, Daura’s official impudence is not an isolated case. Most appointees in the Buhari administration seem to be working on their own clock, carrying on as if their connection to the centre has been severed by their self-importance. The most visible example of this has been in the case of security chiefs who seem to be going beyond the line of their duty in the pursuit of unclear agendas. Daura, for instance, went toe to toe with the presidency on the issue of the appointment of Ibrahim Magu as head of the Economic and Financial Crimes Commission, EFCC. While the independence of certain institutions is necessary to properly run a democracy, one expects that there should be a meeting of minds on many matters, especially when the acts of government agencies always reflect on the president.

    The ultra-liberal approach to the delegation of authority by the Buhari administration has been more disruptive than it has been productive. It is in the nature of appointees overseeing government agencies to follow directives, and where no direction is forthcoming from the appropriate quarters, there is a danger of control of the agency being hijacked by others, who may not have the best interests of the administration at heart. Time after time, we have seen the presidency dissociate itself from the acts of its appointees in one agency or another. The public has to contemplate whether the presidency has been feigning ignorance of its own orders or is really out of touch with its appointees.

    It could be this disconnect in the line of communication between the centre and its agents that led to the recent commotion at the gates of the National Assembly. The errant head of the secret service enjoyed the advantage of a very long leash from the presidency which may have opened up the DSS to influence from forces that were opposed to the smooth running of government in this administration.

    Bukola Saraki, the senate president, has been fingered as a possible mastermind behind the reckless show by the DSS last Tuesday. If there is any truth to this, it casts more aspersions on the ability of the president to manage his appointees and run a tight ship than it does on the senate president for being a cheap opportunist. Either way, the outrage expressed by the presidency, and by the vice president in particular, shows that Daura may have become uncontrollable and had to be served his walking papers. The question then remains, that how many more of Buhari’s appointees need the same treatment?

    Daura’s sin of storming the National Assembly without proper authorization is equal to the excesses of others like Ibrahim Idris, the Inspector General of Police, who has himself laid siege on the Benue State House of Assembly in a shambolic impeachment proceeding, or Ibrahim Magu who has been accused of freezing state accounts or carrying out selective prosecutions against interests not aligned with that of his principal. The outrage at Daura’s act of ‘betrayal’ is somewhat an endorsement of the excesses of these other officials and many more like them who have remained untouched despite compromising the ethos of their office.

    There is so much activity in the political and public space and one cannot distinguish between issues propelled by self-interest and those driven by public good. Many government agents find themselves serving multiple masters in the conundrum that government authority has become. This is aided by the supremacy battle between the legislature and executive which has produced a senate president who is ready to dismiss all practical legislative conventions in order to win one over the ruling party and the president.

    Whether the senate president was behind the DSS siege on the National Assembly or not, he has proven to be a chronic opportunist and master of deflection. A senate president who thinks it is good and practical politics not to resign after defecting to the opposition, despite leaving the ruling party, must be deeply immoral. Politics, like the one he practices, is what has led us into the recent political commotion we are experiencing, and the commotion in-turn fuels confusion and abuse of authority by agents of the government.

    Now that the country has seen what a lack of cohesion in government can do, it is time the presidency starts setting the tone for its administration by strengthening its chain of command and outlining the bounds of the exercise of power by its appointees in the different agencies of government. It is not enough to appoint a person into authority; there needs to be a synergizing of objectives and the activities of the government as a whole. If this is achieved, the united front on the executive side may inspire cooperation from the legislature, within its ranks and in collaboration with the executive arm to carry on the business of governance.

    Also, the timing of executive actions like that which the vice president performed last week ought to be right. Already, there has been foot-dragging about insubordination within the government fold in the past three years. The deterrent value of the sack of Daura may not be immediately seen, but it has sent a clear message to others to sit up and establish a clear line of authority before taking sensitive actions. This is one reason why the presidency ought to take decisive and timely action where it has been exposed.

    The feud between Daura and Magu is public knowledge. Already, Daura has reportedly had his passport seized, while the EFCC has been called in to investigate his involvement in the controversy surrounding about N80 billion linked to the DSS. The presidency should monitor the investigation to ensure that it does not become a mission of vendetta by Magu who may have a personal axe to grind with Daura. The country needs true resolution of issues at this point and not scapegoats for a collective problem.

    If indeed, there was an unauthorized request for the DSS to act in the manner it did at the National Assembly, the truth must be unearthed and appropriate action taken swiftly against anyone who is found complicit. It should also be noted that this is not the first time the government has distanced itself from the acts of its agents. Other cases should be investigated too and those found complicit should be punished.

    In the boiling political landscape right now, there is likelihood that the DSS siege and Daura’s dismissal could be shaded in certain ways to suit the aims of people in or out of government. It is imperative that this episode does not become a case of sacrifice of the scapegoat. Instead, it is an opportunity to tighten ship and do things through normal channels, for the benefit of Nigerians.

  • Skewed Zimbabwe presents global stock investors with a conundrum

    Investors’ interest in Zimbabwe may have risen since soldiers forced long-standing President Robert Mugabe to quit in November, but figuring out when to re-enter the southern African economy is causing a dilemma.

    While Zimbabwe, whose economy almost collapsed under Mugabe, has no traded bonds, its stock market, with a capitalisation of almost $12 billion, is bigger than those of Botswana, Ghana and Zambia combined.

    Most money managers will probably wait until after elections scheduled for July 30, which will pit President Emmerson Mnangagwa, a former spy chief, who was close to Mugabe, against Nelson Chamisa, leader of the main opposition party.

    But even if the vote goes smoothly, there will be the issue of the premium attached to Zimbabwean stocks: the nation, which doesn’t have its own currency, is short of cash dollars, which has caused locals to pile into equities.

    Some investors measure the premium by taking the difference between the price of Old Mutual Plc’s stock in London and in Harare, Zimbabwe’s capital. While the gap has shrunk since Mugabe’s ouster, the Harare shares still cost twice as much as the London ones, when converted to dollars.

    In essence, investors need Zimbabwean stocks to fall, and thus that premium to shrink, before they’re confident enough the cash crisis is ebbing.

    Yet, as Exotix Capital points out, any alleviation of the cash shortage would also increase the underlying value of stocks, since it would boost the broader economy and consumer demand.

    “A judgment on whether current valuation multiples are attractive requires disaggregating the ‘cash-substitute’ premium (and one’s view of whether that increases or reduces over time) and the valuation of the underlying business (and one’s view of whether that is fair or not),” Exotix analysts Christopher Dielmann and Hasnain Malik said in a note Wednesday.

    For now, investors trapped in Zimbabwean equities, including Franklin Templeton Investments and Cape Town-based Allan Gray, will have “little option but to reinvest dividends or rotate within local equities’’.

    “For those considering new investments, these face-value multiples are likely still too high, regardless of whether the prospects for re-capitalisation of the economy are likely to improve,” he said.

    South African labour unions picket Eskom office in wage dispute

    Hundreds of union members picketed outside the headquarters of Eskom because of a wage dispute, which has hurt the cash-strapped South African power utility’s ability to deliver electricity to Africa’s most industrialised economy.

    Labour unions, angered by Eskom’s failure to raise salaries as it embarks on a cost-cutting drive, have threatened a “total shutdown” of Eskom’s operations if the utility does not cede to their demands to raise salaries by 15 percent.

    The pickets come a day after protests at around 10 Eskom power plants forced the state-owned firm to switch off some generating units because trucks carrying coal and busses ferrying staff were blocked by picketing workers from entering the plants.

    Eskom’s spokesman Khulu Phasiwe said some units at power stations were still switched off but that the firm had activated contingency plans to ensure that a sufficient amount of power was being generated.

    Police were on hand at power stations and the firm’s Megawatt Park headquarters to protect workers and Eskom equipment, he added.

    The National Union of Mineworkers (NUM) and National Union of Metalworkers of South Africa (NUMSA), who say they represent more than 20,000 out of a total of 47,000 Eskom employees, say thousands of their members will march to Megawatt Park later on Thursday to keep up the pressure in the wage negotiations.

    Stabilising the finances of Eskom, which produces more than 90 percent of South Africa’s power, is a priority for President Cyril Ramaphosa as he looks to rekindle growth after nine years of stagnation under his predecessor, Jacob Zuma.

    Ramaphosa oversaw the appointment of a new board and chief executive at Eskom in a bid to clean up governance and set the firm on a firmer financial footing.

    South Africa’s energy regulator Nersa will announce its decision on whether Eskom should be allowed to recover more than 60 billion rand ($4.55 billion) of costs via higher electricity tariffs.

  • The meter conundrum

    A new regulation by the Nigerian Electricity Regulatory Commission (NERC) tagged “Meter Asset Provider Regulation, 2018” which takes the sole responsibility of providing prepaid meters away from the electricity distribution companies (DISCOs) is one of the pragmatic decisions by the regulatory agency to deal with a fundamental problem in the power sector. The sector is plagued by quite a number of problems, though, but that of appropriate billing has remained as contentious as ever.

    In the absence of prepaid meters, and with many of the former meters that the DISCOs inherited from their predecessor agencies – the defunct National Electricity Power Authority (NEPA) and the Power Holding Company of Nigeria (PHCN) – not working well, the DISCOS have continued, by and large, to bill consumers on estimates.

    Naturally, this has led to frequent complaints by power consumers, of inequitable billing, as the bills they are given monthly are derived arbitrarily. Although this practice had been there ever before the DISCOs took over in 2013 when the power entities were privatised, resentment against the estimated bills, otherwise called ‘crazy bills,’ has continued to grow, particularly with the privatisation of the sector. Both the government and the DISCOs have been going back and forth on the issue of prepaid meters for long. At a point, government told power consumers not to pay until they were provided with prepaid meters, warning that DISCOs should not disconnect any consumer who refused to pay due to unavailability of the meters.

    Thus, both the power consumers and the government have been presented with a fait accompli; as many people still continue to pay what seems to them reasonable bills in the circumstance, irrespective of what the DISCOs billed them. Unfortunately, the DISCOs have continued to carry forward the debit balances in the bills, some of which cannot be justified, perhaps in the hope that someday, something would happen and those concerned would be forced to pay those questionable bills.

    It is against this background that we welcome the NERC’s decision to take away the sole responsibility of providing meters from the DISCOs. It is obvious, more than four years down the line, that they cannot (or are not willing to) provide the meters and would rather continue to bill consumers on estimates because that enables them to make cheap money off their customers.

    What the new regulation has done is to introduce another class of operators in the power sector called Meter Asset Providers (MAPs). Their job was spelt out by NERC’s Commissioner, Legal, Licensing and Compliance, Dafe Akpeneye, at the 25th Monthly Power Sector Meeting. According to Akpenaye, after reviewing the situation, the commission met with all the relevant stakeholders – consumers, DISCOs, financiers and others across the industry in order to chart the way forward.

    Akpenaye said: “We all arrived at the same answer that we have to do something different. We can no longer leave this very important obligation to the distribution companies alone; other players have to come into this space. So, we went about creating the NERC Meter Asset Provider (MAP) Regulation, 2018.” What does this seek to do differently? The MAPs are independent people that will be approved by NERC but contracted by the DISCOs to bridge the metering gap. In effect, there will be many options available to customers. According to Akpenaye: “Electricity consumers will now have the option of self-financing. Those who don’t want this will be able to obtain meters from MAPs and there will be a metering service charge spread over a period of 10 years.”

    Giving the place of accurate billing in the power mix, this decision could not have come at a better time. Apart from helping to ameliorate the problem of billing in the sector, it also has the potential of attracting about N200m investment in the industry in the next three years, as well as create jobs.

    That the government had to settle a meter contract problem that lasted for 14 years out of court before it could actualise the Meter Asset Provider Regulation, 2018 demonstrates its resolve to put behind it an age-long problem in the power sector. We urge all the stakeholders to cooperate to make the initiative work. On its part, the government should enlighten the citizens on this new choice and how to access it, including the terms of the deal.

    It is after solving the billing conundrum  that we can now begin discussions on appropriate tariff.

  • A conundrum

    On the federalist plane, the Economic and Financial Crimes Commission (EFCC) Act has always stood on tenuous grounds. A central omnibus, galloping into town like some triumphant sheriff and sending state institutions diving for cover, can’t be in harmony with a federal constitution, pushing presidential democracy.

    While the federal constitution rigidly separates functions between the central power and component state authorities, presidential democracy is even more clear-cut in separating powers among the three arms of government — legislature, executive and the judiciary.

    The Ado-Ekiti Federal High Court, which on January 30 ruled that the EFCC could not launch probes into states’ finances without the nod of the state House of Assembly, did no more than reestablish these constitutional rubrics. It is hard if anyone can fault it on that score.

    Yet, that judgment could be faulted on the altars of legalism, as fancy escapism from a central problem ruining Nigeria: sleaze. Although the court left open the window that the EFCC can indeed investigate and dock individuals accused of sleaze (as opposed to states as corporate bodies), it seemed to have wished away the all too glaring proof of institutional rot and willful subversion of state legislatures by the oppressive and insufferable executives.

    Take the case of Ekiti, which Attorney-General dragged the EFCC and the Federal Government to court. In this same Ekiti, Governor Ayo Fayose had strutted into the House of Assembly, read a travesty that he called a year’s budget estimates and crashed down the gavel that he had passed the Appropriation Bill. The sheepish assembly and the fanatical crowd in the public gallery only roared in approval!

    How could such a scenario approximate the court’s presumption that there is indeed a “State House of Assembly,” with such cynical and brazen rape from the executive? If that were so, how can such a legislature perform its over-sight function, on the executive, as the Constitution requires?

    If that is well-nigh impossible, how does it checkmate brazen financial crimes by the executive, even with the thoroughly crippled, subverted and compromised legislature taking its chances, in the free gravy of graft?

    And if that could be an ugly reality, how do you ensure public funds are spent for the greatest good of the greatest number (to paraphrase the philosopher, Jeremy Bentham) and that it does not sink into a few private pockets, sowing poverty and penury in the land, signifying some fearsome future clash between the haves and have-nots?

    So, inasmuch as the Ado-Ekiti court’s verdict struck a big blow for federalism, it also strikes a near-fatal blow for probity and integrity in state finances. Yes, the court left open the window to prosecute individuals alleged to have stolen public funds. But with the legal cover now given a colluding and thoroughly subverted state legislature like Ekiti’s (and most of the other states’), how do you even do routine investigation without suffering institutionalised stone-walling?

    Still, good or bad, this verdict, if not appealed and reversed, has stated the law as it is. Unfortunately, due to the cynical mind of extant players, and their unfazed penchant for bad faith and reckless manipulation, it is clear the law, as it is, appears not good enough to curb sleaze, the contemporary Nigerian pandemic; and the number one trigger of mass poverty and denied opportunities.

    Indeed, the powerlessness of extant laws, in the face of cynical manipulation by state executives, accounted for much of the Olusegun Obasanjo-era grave constitutional infractions, where the EFCC, under Nuhu Ribadu, embarked on the tragic novelty of “simple minorities,” to induce federally subdued state legislatures to hastily impeach sitting governors, so that EFCC could dock them.

    The cases of Plateau, Anambra and Oyo still scream out of the Obasanjo-era book of constitutional rapes, based on suspect patriotic motives — though the Oyo case resulted from a blow-out between then Governor Rashidi Ladoja and the late Lamidi Adedibu, that era’s Oyo political ‘garrison commander’.

    If that was absolutely unacceptable — and the public outcry against it back then made that very clear — this seeming court-aided institutional cover for possible graft, even if it is legalistically sound cannot be good for the society. That is the big problem with the verdict.

    If the verdict is not appealed and reversed, an option is to look at the laws again and somewhat forge how EFCC operations could be harmonised with the federal doctrine, given the clear and present danger sleaze constitutes to everyone. But again, that would achieve little, if the subversive mindset of the players is alive and well. That way, it might just be a matter of time before crooks in the public space fashion out a way to subvert the newly wrought set of laws.

    But a more sustainable option would be for state legislature to sit up to the oversight functions, over their executives. With the current level of recruitment into these chambers, when whoever would be governor almost always has the lawmakers in his pocket, sponsoring the election of most of them, that would take some doing.

    Still eventually, these state Houses of Assembly have to wake up to their constitutional duties and responsibilities. That is the only way they can keep watch over states’ finances, without some central super man riding into town and conking everyone in the head.

  • The Maina conundrum

    The President did well by ordering that he be sacked, but those responsible should be punished

    It staggers the imagination and reads like a scene right out of a fictional crime thriller. The former head of the Presidential Task Force on Pension Reforms (PTFPR), Mr. Abdulrasheed Maina, accused of involvement in the embezzlement of pension funds amounting to over N2 billion suddenly resurfaced in the country after about four years on the run. He did not return furtively as a fugitive from the law but as a VIP of sorts. Here is a man who was dismissed as an Assistant Director on Grade Level 14 from the Federal Civil Service since 2013, for absconding from duty, declared wanted by the Economic and Financial Crimes Commission (EFCC) and the International Police Organization (INTERPOL) in 2015, and is currently facing trial in absentia before the Federal High Court in Abuja, along with two others for the alleged crime.

    Maina was brought back into Nigeria in murky circumstances, reinstated into the public service and on double promotion too as an Acting Director on Grade Level 16, also in the Ministry of Interior. Apparently outraged at the absolutely inexcusable behaviour of those responsible for this fiasco, President Muhammadu Buhari promptly directed the immediate disengagement of Maina from the public service. He also ordered that the entire unsavoury affair be investigated and a report forwarded to him with dispatch. This is in line with Buhari’s reputation for personal integrity and an aversion to corruption. Unfortunately, some of those who the President will most likely rely on to probe and advice him on the issue are themselves apparently culpable in the matter.

    One of such persons whose office is so critical to the success of any onslaught against corruption is the Attorney-General of the Federation (AGF), Mr. Abubakar Malami (SAN). The AGF’s conduct in the whole affair leaves much to be desired. The foundation of Maina’s fraudulent reinstatement in an elevated position rests on Malami’s completely misguided interpretation of a judgment delivered by Justice A. Bello of the Federal High Court, Abuja Division, on March 27, 2013, which quashed the warrant of arrest issued against the ex-PTFPR boss by the Nigeria Police because it did not adhere to due process.

    By no stretch of imagination could the AGF have credibly read into the judgment the meaning that it voided the validity of Maina’s excision from the service. True, the court set aside the warrant of arrest issued against Maina by the police and issued a perpetual injunction restraining the plaintiff’s arrest on the basis of the warrant. However, the judge clearly stressed in his verdict that “beyond these two reliefs, given all the facts available to the court, the applicant is not entitled to any other relief”. Justice Bello indeed advised Maina in concluding his judgment to “submit himself voluntarily to the investigation by the Senate in order to show that he respects constituted authority”.

    Could the AGF pretend not to know that at the time he unilaterally, unwarrantedly and illegally granted Maina what amounts to a clean bill of health, the EFCC’s case against the ex–pension fund boss and three others filed on July 10, 2015, was ongoing? What explains the AGF’s communication with the Federal Civil Service Commission (FCSC) on the Maina matter without reference to the Office of the Head of the Civil Service of the Federation (OHCSF)? To compound the suspicious procedural irregularity, the FCSC in turn directly advised the Ministry of Interior to act on Maina’s reinstatement, again bypassing the OHCSF.

    Although the HCSF, Mrs. Winifred Oyo-Ita, apparently tactically distanced her office from active involvement in the illegal process, we are of the view that she should have strongly voiced her reservations in the interest of justice, staff morale and integrity of the service. No less condemnable is the role of Minister of Interior, Lt-General Abdulraham Dambazau (Retd), who has unconvincingly tried to pass the buck, claiming that his office is not responsible for matters of recruitment, promotion and discipline in the public service.

    The seeming somnolence of the Directorate of State Services (DSS) on the Maina saga is inexplicable. How could a man on the wanted list of a key sister security agency and a fugitive from the law in Nigeria have entered the country undetected and now again vanished mysteriously into thin air right under the supposed eagle eyes of the ubiquitous DSS operatives? Something serious is definitely amiss.

    We commend President Buhari’s strong response to this sad incident. This revelation should spur him to critically reassess his war against corruption and the suitability for office of some of his close aides, with a view to re-positioning and rejuvenating his administration for the second stretch of its first term.

    While urging the President to act decisively in dealing with all those implicated in this scandal, he should also seize the opportunity to address the stalled investigations into allegations of corruption against the suspended Secretary to the Government of the Federation (SGF) and Director-General of the National Intelligence Agency, Mr. David Babachir Lawal and Ambassador Wole Oke, respectively. At stake as long as these sorts of issues linger unnecessarily are his personal reputation, the integrity of his anti-corruption war and the credibility of his administration.

  • A conundrum unfolds in Kenya

    A conundrum unfolds in Kenya

    N his reaction to the annulment of the August 8, 2017 Kenyan presidential election, President Uhuru Kenyatta exhibited his real African self: a split, dual personality. The poll had been annulled by the Supreme Court, which ruled that the transmission of the poll results was not in accordance with the provisions of the constitution. The court, by a 4-2 split decision, had ruled that:

    1. As to whether the 2017 Presidential Election was conducted in accordance with the principles laid down in the Constitution and the law relating to elections, upon considering inter alia Articles 10, 38, 81 and 86 of the Constitution as well as, Sections 39(1C), 44, 44A and 83 of the Elections Act, the decision of the court is that the 1st Respondent failed, neglected or refused to conduct the Presidential Election in a manner consistent with the dictates of the Constitution and inter alia the Elections Act, Chapter 7 of the Laws of Kenya.
    2. As to whether there were irregularities and illegalities committed in the conduct of the 2017 Presidential Election, the court was satisfied that the 1st Respondent committed irregularities and illegalities inter alia, in the transmission of results, particulars and the substance of which will be given in the detailed and reasoned Judgment of the court. The court however found no evidence of misconduct on the part of the 3rd Respondent.
    3. As to whether the irregularities and illegalities affected the integrity of the election, the court was satisfied that they did and thereby impugning the integrity of the entire Presidential Election.

    After the annulment, which followed the case brought by Raila Odinga’s National Super Alliance (Nasa), President Kenyatta’s first instinct was to submit to the rule of law. “It was important to respect the rule of law even if you disagree with the Supreme Court ruling,” he said gravely. “Your neighbour will still be your neighbour, regardless of what has happened. My primary message today to every single Kenyan is peace. Let us be people of peace.” But after catching his breath a little later, he fired a vicious broadside on the judges when he addressed a rally in Nairobi, the country’s capital. Describing the judges as crooks, he accused them of malevolently deciding to cancel the election. He then went on to issue a dire warning to the chief justice, David Maraga, that the annulment he authored had transformed him (the president) once again from president-elect to president, implying that he had full powers to possibly deal harshly with the judges. “Do you understand me? Maraga should know that he is now dealing with the serving president,” the 55-year-old president said ominously. “We are keeping a close eye on them. But let us deal with the election first. We are not afraid.”

    Most Nigerian analysts have focused almost exclusively on the lessons contained in the Kenyan annulment for the Nigerian judiciary. The analysts rightly draw attention to the abject reluctance of the Nigerian Supreme Court to upturn presidential elections in the past even when it became glaring that the rules of the game were not respected, and plaintiffs had competently underpinned their arguments with condign proofs. The apex court in Nigeria, they snorted, had found the inventiveness to create a whole new range of lexicon to excuse their cowardice, including talking of ‘substantial compliance’ and other jurisprudential contrivances such as legal and procedural technicalities to validate clear and dangerous political anomalies.

    Other commentators speak of their sadness about how irresponsibly Nigerian judges, particularly on the apex court, forfeited their chances at setting a legal precedence for Africa, one which in annulling an election would help enthrone and strengthen democratic practices. The Nigerian apex court, they argued, had that chance in 1979, but it wilfully threw it away when it admitted the fallacious political arithmetic argument of twelve two-thirds of a state. Since then, they said, the apex court in these parts had sustained a despicable tradition of never annulling an election on the unstated excuse that it was inherently destabilising. By a combination of fear and perhaps lack of surefootedness, the Nigerian apex court thereby surrendered the continental leadership mantle to other more ambitious jurisdictions, this time, kenya, in the same way they had become accustomed to surrendering to Ghana and other polities leadership in the practice of democracy.

    But what really counts in the Kenyan example is not so much the courage of their Supreme Court, as enviable as that was to other African countries, nor of the accuracy of their judgement, as indisputably as it seems; what appears to matter much to the continent is the idiosyncratic reaction of the Kenyan president to a matter which, if he had sensibly exploited it well, would have brought him honour and much acclaim. The reaction showed up his dual personality, a dualism certainly not alien to other African leaders. Indeed, it can be argued that as far as humans are concerned — and African leaders are no exception here — the instinct to distinguish right from wrong and the temptation to embrace either of the two depending on the subjective mood of the moment is deeply embedded in everyone. That African leaders often invariably choose wrong rather than right is perhaps the major controversial issue bothering the continent.

    It is striking that President kenyatta at first acknowledged the salience of the Supreme Court judgement, even admonishing his countrymen to submit to the dictates of the rule of law as well as to keep the peace, before doing a volte face and submitting to his primordial and atavistic instincts. So, the problem is not that President Kenyatta does not know the right thing; the problem is that he lacks the discipline to do the right thing, and the patience to carefully work towards leaving a great legacy of nurturing democratic institutions even when they cost him a lot. It is important to praise the Kenyan Supreme Court for finding the boldness and courage to annul the election. That uniquely iconoclastic move must never be understated. But it is far more important to finally understand that the war between good and evil that raged in the mind of the Kenyan president emblematises the malaise afflicting the continent’s political leaders.

    After forswearing his own private counsel to respect the rule of law and keep the peace, President Kenyatta sadly embraced a contrary point of view by insulting the apex court justices and threatening to unhorse them. As if he needed to remind Kenyans, he told the market rally in Nairobi that he was still the president and had the power to do something about the obstreperousness of the four justices. It did not occur to him that by swearing at the justices who voted to annul his victory he had drawn a dividing line between the six justices, and indicated that the four were evil and the two who upheld the election were good. Yet, he did nothing to controvert the basis of the judgement nor to establish that the justices were induced: all he did was indicate that because the judgement went against him, then it had to be wrong and evil, and the justices who threw his election out must have done it on purpose.

    President Kenyatta is an example of the problem with Africa, of leaders so arrogant that they must always have their way, of leaders who foolishly weave their destinies inextricably with those of their countries, of leaders so intellectually and emotionally diminished that they fail to see the significance of even allowing themselves to be wrong and wronged in order to strengthen their countries. From Cape to Cairo, as many African leaders had illustrated in times past, and are still doing today unremittingly, there appears to be little hope of finding among them great men with purpose and farsightedness who sensibly appreciate their own limits and estimate the infiniteness and eternality of their countries. In the many controversial legal cases the Nigerian Supreme Court grappled with, it had no sense of that history as critically as the Kenyan apex court has demonstrated.

    It is a shame that President Kenyatta has spurned an opportunity to associate with the regnant philosophy of his country’s apex court, especially in view of an election next month many pundits gave him the chance of winning fairly easily. Now that Kenyans know him for who he really is, a man made of straw and with no restraint and vision, it is left to them to determine whether they would still give him their votes on the scale he seemed ready to attract when he first lauded the courts for their sound and iconoclastic judgement.

  • Cut-off conundrum

    Cut-off conundrum

    •Stakeholders in universities’ admission must be more honest

    The storm of controversy that erupted across Nigeria after the announcement of 120 as the cut-off mark for admission into universities by the Joint Admissions and Matriculation Board (JAMB) is symbolic of the problems that have come to dominate the vexed question of tertiary admission procedures in the country.

    At its policy committee meeting of August 21 and 22, 2017, the board announced cut-off marks of 120 for universities, 100 for polytechnics and monotechnics, and 110 for innovation enterprise institutes.

    According to the Executive Secretary of JAMB, Professor Is-haq Oloyede, the decision was arrived at with the consent of the heads of tertiary institutions who were present at the meeting and represented an attempt to halt “under-the-table” admissions, whereby candidates who scored below recommended cut-off marks were admitted into tertiary institutions. He also explained that admitting institutions were free to set their own cut-off marks above what had been recommended.

    The widespread criticism which greeted the announcement was a logical reaction to the obvious lowering of standards implied in the current cut-off marks. In the 2015-2016 and the 2016-2017 academic sessions, cut-off marks were set at 180 for universities and 150 for polytechnics and monotechnics. The reduction to 120 for universities and 100 for polytechnics and monotechnics represents 30 per cent and 25 per cent of all available marks respectively – a clear failure by most educational assessment standards.

    JAMB’s argument is that the new cut-off marks would eliminate illegal admissions. Yet, some 17,160 candidates who scored below the cut-off mark were allegedly admitted into universities during the 2016-2017 academic session. Universities implicated in this practice are said to appeal to JAMB to regularise such illegal admissions years after they were carried out. Why would the board collude with institutions to undermine procedures that all had previously agreed to? And why is lowering standards across the board the best way to prevent such unethical practices in future?

    Nigeria’s tertiary institutions are as guilty of bad faith as JAMB. The policy committee meeting was attended by the executive heads of all universities, polytechnics and monotechnics. What were they doing when the new cut-off marks were agreed upon, only to voice loud disagreement after they were announced? It is instructive that, noisy as they were in expressing their opposition, not one tertiary institution has come out to challenge JAMB’s accusation of their perpetration of under-the-table admissions.

    Apparently, JAMB’s decision to computerise the cut-off process as well as its warning that it would not regularise any admission that did not follow due process again, made most of the representatives of higher institutions at the meeting to change their mind and reduce the cut-off mark to 120. If JAMB is able to stick to its new decision and a high cut-off mark is adopted, the computer would not accept anything below that.

    In essence, Nigeria is presented with an anomaly of complex proportions: the promotion of cut-off marks which promote mediocrity instead of excellence; tertiary institutions claiming to reject such cut-off marks while surreptitiously admitting candidates who score below them without sanction by JAMB.

    The posturing and hypocrisy on all sides is particularly distasteful when it is remembered that the cut-off marks are only specified minimum scores, with admitting institutions being free to determine higher cut-offs for themselves. This has indeed, been the case for universities like the Universities of Ibadan and Lagos, and Obafemi Awolowo University, which have traditionally set 200 marks for their respective cut-offs, even when the JAMB cut-off was 180.

    This unedifying and unnecessary drama once again demonstrates why some people have questioned the continued relevance of JAMB. In spite of the board, tertiary institutions still set their own cut-off marks and conduct post-UTME tests for candidates seeking admission.

    JAMB must reassert itself to continue to be relevant. A situation where tertiary institutions are able to repeatedly admit candidates whose scores fall below its cut-offs and get JAMB to ultimately approve such illegal admissions, makes the board more or less a toothless bulldog.

    An efficient and equitable tertiary admissions process is vital to the development and growth of Nigeria. As the principal conductor in this regard, JAMB’s role must ensure that it facilitates admissions procedures to the benefit of all.

  • The Nnamdi Kanu conundrum

    SIR: Speak in his favour and you are labelled an agitator and dammed by the campaigners of one Nigeria.  Speak against him and his followers, IPOB will bring down the roof on your head with a barrage and coteries of blackmail and insults. Then, try playing smart by sitting at the edge or in the middle of the raging arguments and you are called names unprintable.

    So which way or path do we follow on the Nnamdi Kanu conundrum, the Biafran question? Do we continue maintaining the status quo and tensions keep mountain over the fate of Nigeria, in the face of the pervading quest for its balkanisation by the forces pulling its strings apart which IPOB epitomizes or do we tread the difficult path of re-arresting him or a total clampdown on the IPOB for calmness in the nation?

    You may take everything away from Nnamdi Kanu but not the unification his arrest, detention and release has brought to Igboland.  Of a fact and reality,  Igbos now speak closely in one voice as they have collectively agreed on the  marginalization of their zone by the present administration of President Buhari. Since the emergence of APC as ruling party, the region has never had anything close to what we now have in terms of oneness of mind and unity. Leading to reasons why we are all shouting restructuring at the same time with little or no dissenting news whatsoever.

    The federal government must consider listening to voices of its citizens more than carrying a live-rifle against them.  They should engage protesters in conformity with the standards and rules of engagement acceptable internationally, just as they ought to ensure they hear every dissenter out and find a way of reaching out to his or her problems.

    Kanu’s re-arrest should not be the most important decision to undertake now that the country is bleeding from all sides.  Instead, government should spare its muscles it is about flexing with IPOB for Boko haram, herdsmen and other vices plaguing the nation. We must learn to move from trouble while focusing our strength on things that will reposition the country and relaunch us as a force on the planet.

    Nnamdi Kanu and IPOB must on the other hand,  hear the voice of reason and follow their agitation for Biafra in a manner that does not present them as breaching public peace. Anambra’s elections must not be stopped or boycotted for any reason as that exercise is as important to Ndigbo as the air they breathe. Coming from a region with only five states among other regions in Nigeria with six states each, Ndigbo must not be short-changed again in Anambra come November as “exclusion from power is an exclusion from the benefits of power.”

    A word, they say, is enough for the wise.

     

    • Gwiyi Solomon,

     Enugu.

  • Wike and the Rivers conundrum

    The situation in Rivers State in the last few years doesn’t lend itself to rationality or even commonsense. The bitter rivalry between leading personalities in the state has blossomed into political, ethnic and even communal feuds the wounds of which would take some time to heal.

    It may be inelegant to state that Rivers over these years, is akin to a gang land enclave but the state is like no other in the land and it has been so for quite some time. It is as volatile as a tinder go. Elections are zero-sum, winner-takes all game. It has been so for some time.

    It is perhaps the most buoyant corner of Nigeria with over five decades of rich crude oil mining. It boasts of a mixed race of Igbo, Kalabari and Ogoni stocks with historical enclaves known as War Houses. But the stupendous wealth occasioned by vast crude oil dollars has seen warlords replace the hitherto well-structured community War Houses.

    In the last two decades, armed gangs, abductors and militants spawned in the paved streets of Port Harcourt have coalesced in the creeks and waters of the oil-rich Niger-Delta from whence they create republics of their own – abducting expatriates, disrupting flow-stations and bursting oil and gas pipes.

    Mercantilist international oil companies in cahoots with weak and narrow-minded leaders have ensured that Rivers State (as epicentre) and the entire delta zone of Nigeria remains a living Golgotha. It is in the light of this grim background that one attempts a review of the state of Rivers State today.

    Exactly six months ago, one had been part of the Nigerian Guild of Editors conference held in Port Harcourt. No few than 200 editors gathered in the heart of the city for about a week brainstorming over the affairs of the nation and the Guild and eventually doing a guided tour of key projects of Governor Nyesom Wike’s administration.

    We were shown huge impressive projects at various levels of formation. Personally, leading editors to some of these sites across the state, the governor was quite boisterous and elated showcasing his busy sites.

    And they were indeed busy and more remarkably, large work sites. He came across to me then as a man who likes his things large and even gross. Bridges cutting through creeks (I still retain images of piles and piles of pipes and iron rods littering various such site); dual-carriage roads cutting through virgin hinterland areas; an expanded and modernised multipurpose sports centre and a vast recreation park.

    These are a few of the images one still remembers after a long day of touring projects. Gov. Wike and his cabinet members were happy with themselves of course; members of the Guild were impressed by what may be descried as an impressive array of work-in-progress. But I was not impressed. I had been inured by numerous such great sights and sites that ended up a farce. Of course I couldn’t bring myself to write on such exploits then. Let’s wait and see, was the self-counsel.

    There was also a much strenuous effort to show that Port Harcourt was secured and safe in negation of rampant reports of violent crimes and kidnapping. We were literaly made to walk about the city-centre unchaperoned- some of us with our hearts in our mouth. But nary one of us hit his foot against a rock.

    It was a tale of glory and triumph as we departed to our various destinations. Governor Rauf Aregbesola was there also and he sang the same pleasant tune about peacefulness in a land marked to be far-removed from paradise. Aregbe’s trepidations must have found succor in the silky embrace of Port Harcourt welcome and hospitality. By his admission he didn’t feel less at home and he was indeed, minded to stay overnight.

    All these happened about six months ago. Who can fathom how much difference a few months can make in the life of an enclave? A most turbulent one at that. Apart from the 2015 general election which can be denoted as a blistering battle of giants, the National Assembly rerun elections last December is no doubt something of a final epiphany which nonetheless is still simmering. Accusations have welled up to counter even more accusations. There was fire and firings; there was blood and blood letting in an epic turf battle that defied method or logic. Rivers is a seething conundrum or cauldron if you like.

    But sandwiched between the gladiators are Rivers people – beleaguered and hapless. Now cannon fodder, now fodder cannon. Strangers in paradise; parched in a land suffused with milk and honey. Who is minding the gap? How adequately?

    The last time one checked with folks in Port Harcourt, the people seem to be happy with their ebullient, rambunctious governor. This is of course a tough call, but residents and those who know Port Harcourt attest to a visible transformation happening at a speed some of them did not expect or imagine – not from a man under a whirl storm.

    It sure would be difficult for people outside Rivers State to accept that anything good would come out of Rivers State now, but the reality, one can confirm, is a pleasant surprise. Zamfara State Governor, Abdullaziz Yari, who is of a different party was awe-stricken upon a recent visit to Port Harcourt the point that he became effusive in his laudation of Wike.

    There is a litany of completed projects – roads especially. Innovations have been imbued the revenue collection system and IGR has reported doubled to about N10 billion, added to Federal allocation, this is enormous cash by any measure – far more than many State earn per annum.

    It is said that adversity brings out the best in us. But whether Wike is driven to work like ‘crazy’ by a chequered environment or he is in his true element, time shall tell. However, of importance is that Rivers people get their ‘deliverables’ delivered.

    More important however, the man in the arena, Governor Wike, has ample opportunity to repair the State and heal her wounds. What’s to be done? Since poverty and privation remain at the root of so much strive and internecine feuds. The governor must do more by being more accountable and transparent. He must adopt an inclusive and integrated approach to the development of the State. What this means is that he must put the local councils at work and make them work furiously and accountably as possibly. The result of this will not only be most salutary to the State but to his career and legacy. Quality governance is the antidote to most of Nigeria’s problems.

    Rivers State needs not be a conundrum; a perpetually boiling cauldron. Can Wike break the duck?

     

    Fashola: The trial of ‘Power Mike’

    This tag is my wife’s special badge for Babatunde Raji Fashola since he was handed three large epaulets in this administration. The immediate past (exemplary) Governor of Lagos State now heads three merged Ministries of Power, Works and Housing.

    Each time power snaps when you are needing it the most, she would exclaim: Power Mike, how far?

    Power supply has been at its nadir in the new year and one has never seen BRF so harried. The more he explains, the more people yell and whimper at the same time. Listening carefully to him though, it is apparent that he is on top of the situation. From BRF’s antecedent, he is not one to sleep and snore when there is a pressing issue at hand. He says many transmission projects are completed or nearing completion; he says government is working on the debt overhang bedevilling the power sector especially in the gas end of the value chain. Suffice to say that if anyone can fix Nigeria’s power sector, it’s BRF.

    Those who are observant can see work going on frantically in the Works sector: not in a long time have we witnessed many highways under construction in Nigeria.