Tag: Okonjo-Iweala

  • Okonjo-Iweala on the ASUU strike: please speak truth, not  technocratic sophistry to the nation!

    Okonjo-Iweala on the ASUU strike: please speak truth, not technocratic sophistry to the nation!

    Sophistry: 1. A subtle, tricky, superficially plausible but generally fallacious method of reasoning. 2. A false argument; sophism.
    Dictionary.com (Online)

    At present, ASUU wants the Federal Government to pay N92bn in extra allowances, when the resources are not there, and when we are working to integrate past increases in pensions. We need to make choices in this country as we are getting to the stage where recurrent expenditures take the bulk of our resources and people get paid, but can do no work.

    Dr. (Mrs.) Okonjo-Iweala, Address to the National Council on Finance and Economic Development, Minna.

    In March 2012 shortly after the nationwide strike against the oil subsidy removal by the Jonathan administration in which she is a key cabinet member, Dr. Ngozi Okonjo-Iweala made a revelation in an article that was published in the March 3, 2012 issue of that iconic newsmagazine of British and global finance capitalism, The Economist. The revelation considerably startled the writer of the article. It certainly startled me, so much so that I have never forgotten it. What was this revelation? It was a bluntly stated assertion that corruption and waste were so endemic to Nigerian politics and governance that she, Ngozi Okonjo-Iweala, would be satisfied if by the end of her current tenure in 2015 as the nation’s Finance Minister she would have cleaned up as much – or as little – as 4% of the waste, mismanagement and corruption in the affairs of the Nigerian government. 4%? Yes, 4%.

    When I came across this figure of the pace in which our Minister of Finance and the Coordinating Minster for the economy thought corruption and mismanagement could realistically be cleaned from Nigerian governance, I read and re-read the article, thinking that, surely, there was an irony, a hidden meaning or perhaps a playful signification on the usually inflated claims of the statistical sciences intended in that 4% target. But there was no irony, no sarcasm and no ludic intent of any kind in the bar Dr. Okonjo-Iweala had set herself. This is because, as totally absurd as it may seem to ordinary folks like you and me, in the reified calculus of the technocratic gurus that run the nations and business conglomerates of the world, 4% of trillions upon trillions of naira – especially in the context of the monumental swampland of Nigerian corruption – is very consequential. You and I might think that the 96% that remains after 4% might have been reduced means that so much has been taken out of our national coffers that could have considerably made life easier for millions of Nigerians now and in the years head. But the technocratic mind – or more precisely the kind of technocratic mind embodied by our Minister of Finance – does not see things the way we see it. You may call it a form of cynicism that expresses itself as a professional ethos, but to the kind of technocratic rationality we encounter here, 4% recovered in five years is good enough.

    This, I suggest, goes to the heart of Okonjo-Iweala’s presuppositions in her strident attack on the ASUU strike earlier this week. In the justifiable rush to condemn the Finance Minister for her intervention the ASUU-Government negotiations, I suggest that it is in our best interest to pay attention to where Dr. Okonjo-Iweala is coming from, specifically to the kind of technocratic sophistry that underpins her reasoning and conclusions. But before getting to this point, a full disclosure of the sources and nature my interest in the matter is necessary, for I am far from being an intellectually detached observer or a dispassionate commentator on the case.

    As perhaps some of the readers of this column know, I was the National President of ASUU some 30 years ago, precisely between 1980 and 1982. And when I was succeeded by the late Mahmud Modibbo Tukur, I served as ASUU’s Immediate Past President (IPP) between 1982 and 1986. Moreover, between 1984 and 1987, I served as ASUU’s representative on the Central Working Committee (CWC) of the Nigerian Labour Congress (NLC). I mention all of this background not only to show and declare my strong connections and solidarity with ASUU but also to indicate that in the course of my work in ASUU, I came across many bureaucrats and technocrats, in government, among employers of labour, in the universities and other tertiary institutions themselves – and even within the rank and file of ASUU membership!

    I mention this last point deliberately because I think it would be a mistake not to recognise that the likes of Dr. Okonjo-Iweala do not constitute an aberration but are, rather, a part of the corps of elite bureaucrats in charge of the management and administration of the affairs of this world. The word “technocrat” is indeed an appropriate indication of the elite status of this corps of bureaucrats. Dear reader, look at the suffix “crat” in the following terms: democrat; plutocrat; aristocrat. In all of these cases, that suffix lends a seal of respectable identity and pedigree to each term. In the particular case of technocrats, they are – and are regarded as – the cream of the bureaucrats that run the nations, business empires and international organisations of the planet. And we must recognise this: within this demographically tiny elite group in our world, Okonjo-Iweala is among the most celebrated, the most sought after, a fact that she never lets anyone, her fellow cabinet members included, forget. What Okonjo-Iweala does not recognise, what in fact we must not let her and technocrats like her ever forget, is the fact that technocrats and technocracy often get things horribly wrong in our world at the cost of a lot of needless hardship and suffering of hundreds of millions of ordinary folks.

    To speak to this last claim, think of the following fact that has almost entirely been missed in the justifiable outrage that the Finance Minister’s intervention in the ASUU strike has caused: the very day before Okonjo-Iweala made her statement about the federal government’s impossibility of meeting ASUU’s demands, she held a press briefing at Abuja in which she informed the world and the nation of the efforts – the technocratic efforts, I might add – that her Ministry had been making to reduce corruption, waste and mismanagement in those arms of government and parastatals known as the MDAs (Ministries, Departments and Agencies). In that press briefing, she was very sanguine about the successes that her Ministry was beginning to make, against all the odds. She mentioned that she had set up two bodies that henceforth would ensure the full rationalisation of the operations of all the MDAs, all the personnel of these government units, together with their activities. Here are the names of these two bodies, both reeking with a maximum of technocratic smarminess: IPPIS – which stands for Integrated Payroll and Personnel Information Systems; and GIFMIS – which in turn stands for Government Integrated Financial Management Information Systems. [Watch out all you government employees! IPPIS and GIFMIS are watching you!]

    In the press briefing, Okonjo-Iweala also said that the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) had hired 53 consultants that would verify the accuracy and probity of revenue generating MDAs like the Federal Inland Revenue Service (FIRS) and the Nigerian Customs Service (NCS) in their collection of revenues and remittances of parts thereof due to the government. To cap it all, Okonjo-Iweala at this press briefing last Monday announced that so far, 46000 ghost workers had been discovered and the sum of N53 billion naira had been saved through the work of all these technocratic instruments she had put in place. Hallelujah!

    Quite apart from the fact that at this press briefing Okonjo-Iweala did not mention the name of a single public official or MDA that had been responsible for misdeeds and/or incompetence, the figure of N53 billion naira “saved” is worse than a joke; it is the expression of a kind of intellectual fraud and professional complacency that technocrats routinely perpetrate around the world, especially in the poor countries of the global South. Last year alone, an Ad Hoc Committee of the Senate on the oil subsidy scandal of 2011 found that the colossal sum of N2.58 trillion had been siphoned from the national treasury. As I observed in this column a few weeks ago, that sum represented more than half of the national budget for the entire country that year. The oil marketers that were illegally paid this humungous sum are not “ghost workers”; they are known, their names were published, together with how much each real or fake marketer was paid. And yet to date, not a single kobo has been paid back by these looters and not one of them has been arrested, let alone sent to jail. As far as I am aware, Okonjo-Iweala has said and done nothing to recover any of that N2.58 trillion naira. Neither has she nor her Ministry gone after the huge pension funds scams that rocked the country last year and earlier this year. N53 billion saved; meanwhile the N2.58 trillions looted in the oil subsidy scam stand unrecovered and are perhaps are unrecoverable in the scheme of things.

    In her defence, it could of course be argued that Okonjo-Iweala had told us exactly what to expect from her. She had told us that by 2015 to expect no more than 4% reduction of the monumental waste and corruption plaguing the land. To argue the case for this “defence” it could be said that technocrats are not police detectives; they are not enforcers of the law; and they are not moral crusaders. Their work is to make the machinery of governance work smoothly and efficiently, every cog in the wheel of management and administration moving along its apportioned groove. Pressing the case for this “defence” further, we could accept the fact that in the modern world, we cannot do without technocrats; and Nigeria in particular needs able and conscientious technocrats to counter the deadweight of entrenched mediocrity and incompetence in the corridors of power and the halls of governance in our country. But the great flaw in the worldview of the Okonjo-Iwealas of this country and this earth is the idea, the belief that to be a good technocrat you must be “realistic”, you must content yourself with the 4% that you can reduce, leaving the moralisers, the idealists, the romantics and the would-be messiahs to worry about the 96% that remains. This in effect means keeping quiet about and acting as if unconcerned with that lion’s share of 96% that the looters get away with.

    In conclusion, we need to anchor these generalised reflections in the specific case of Okonjo-Iweala’s extremely unconscionable intervention in ASUU’s negotiations with the federal government over the ongoing strike. Here, once we see clearly that the Finance Minister is basing herself on the assumption that only 4% of what is looted, wasted and mismanaged is recoverable, then we can perceive the fact that her assertion that “the resources are not there” is completely bogus and untenable. For only by a very sophistical reasoning in which ASUU’s demands are reduced to the purely technocratic formulation of “recurrent expenditure” can Okonjo-Iweala assert that the resources are not there. In this case, the gap between sophistry and truth is bridged by the fact that her brand of technocracy is perfectly compatible with all the scams, all the looting going on in the administration of which is a major player in an alliance of technocrats with kleptocrats.

    This alliance of Harvard and MIT – or Cambridge and LSE – educated technocrats with thieving, mediocre and unpatriotic politicians is, by the way, not unusual in the developing countries of the world. Since 1999 when our current failing experiment in democratic governance began, it has indeed been part of the justificatory myth of the ruling party at the center that notwithstanding all the unending crises we have gone through and are still going through, the “experts” have been recruited and will guide us to our destiny as one of the biggest economies in the world by the year 2020. This is of course a fantasy. To make it a probability, we need to adequately fund our universities and their teaching and research staff. How ironic then that the one member of the present administration that embodies this justificatory myth more than any of her colleagues should be the one to whom the task is delegated to say, quite untruthfully, that the “resources are not there” to resuscitate our universities!

    Biodun Jeyifo

    bjeyifo@fas.harvard.edu

  • FG to ASUU: We can’t meet your demands

    FG to ASUU: We can’t meet your demands

    Hopes of quick resolution of the present face-off between the Federal Government and the Academic Staff Union of Universities were dashed on Tuesday as the Minister of Finance, Dr. Ngozi Okonjo-Iweala, said the government has no resources to meet the union demands.

     

    Foreclosing possible truce to the five-week old industrial action that has paralysed academic activities in the nation’s ivory towers, Okonjo-Iwela said the striking university lecturers were asking for #92 billion in extra allowances, maintaining that government lack means of picking the bill.

    Speaking in Minna at the annual National Council on Finance and Economic Development meeting, the minister said that ASUU demand was coming at a time government was making efforts at reducing the structure of public expenditures.

    The theme of the meeting is: “Restructuring Nigeria’s Finances.”

    She said, “At present ASUU wants the government to pay N92 billion in extra allowances when resources are not there and when we are working to integrate past increases in pensions. We need to make choices in this country as we are getting to the stage where recurrent expenditures take the bulk of our resources and people get paid but can do no work.”

    She declared that if the demands of the university lecturers are met and “we continue to pay them salaries and allowances we will not be able to provide infrastructure in the universities.”

    The minister argued that when she assumed office “the share of recurrent expenditure in our total budgets had increased astronomically. “

    “In fact recurrent expenditures accounted for about 77.2 per cent of the federal budget and we are now working to re-balance this ratio,” the minister added.

     

     

  • FG unveils pension funds managers

    FG unveils pension funds managers

    The Minister of Finance, Dr. Ngozi Okonjo-Iweala, said on Thursday that the Nigeria Sovereign Investment Authority (NSIA) would help to manage the pension funds, to enhance investment in infrastructure in the country.

    Okonjo-Iweala made the remark in Abuja, at the official announcement of the sovereign wealth fund for investment.

    “One of the benefits of having this sovereign wealth fund is not just for the organisations that want to co-invest, but they will also help us work along with our pension funds.

    “They are designing at the moment; a mechanism that would enable us to manage our pension funds, to invest in infrastructure development.

    According to her, it has to be done very carefully, to earn returns.

    “If this is achieved, the nation’s pension funds would be managed in a protected way,” the News Agency of Nigeria quoted the minister as saying at the forum.

    Okonjo-Iweala said the one billion dollars for the Nigeria Sovereign Wealth Fund had been allocated to three key areas of Future Generations, Nigerian Infrastructure and Stabilisation Funds.

    She said that 200 million dollars had been allocated to the stabilisation fund, while 325 million dollars were allocated to infrastructure development and future generations funds, respectively.

    The minister added that the balance of the funds would be decided according to the law.

     

  • Okonjo-Iweala and governance in Osun

    Dr. Ngozi Okonjo-Iweala, Nigeria’s Minister of Finance and Coordinating Minister for the Economy has a knack for cutting superfluous controversies. Though highly self-opinionated, her coruscating brilliance is not in doubt. She speaks candidly on any aspect of economics that catches her fancy. One may have deep reservations about her soaring prognosis on the Nigerian dodgy economy and even dislike the somersaulting policies of the government she is a part of; certainly one can’t deny that the former World Bank technocrat often ardently means whatever she gives voice to. It is in this context that I view her recent remarkable appraisal of governance in Osun State. This should remind us of the useful lesson evident in the idiomatic expression that it can be counterproductive to throw out the baby together with the bath water. The minister’s considered utterances sometimes embody unassailable facts.

    I commend Okonjo-Iweala for adding her notable voice to those of many others who have conscientiously spoken about the unprecedented improvement evident in the socio-economic condition of the State of Osun since the advent of Ogbeni Rauf Aregbesola’s administration. Media reports quoted the Finance Minister as saying that Aregbesola is a model for good governance, having demonstrated clearly that good governance in Nigeria is feasible. She made the remarks in the address she read at a two-day workshop organised by the World Bank in June at Iloko-Ijesa for volunteers in the Federal Government’s Youth Empowerment and Social Support Operation (YESSO). It must be remembered that the unimaginable success of the Osun Youth Empowerment Scheme (OYES) necessitated the existence of YESSO. About a year after the introduction of the scheme in Osun, the World Bank reportedly began to study the programme and later submitted that OYES provided a practical platform for mass employment. It recommended the idea to both the Federal Government and states in Nigeria.

    In the said address read by her representative, the National Coordinator of YESSO, Peter Papka, Okonjo-Iweala rightly observed that the initiatives of the ACN government in Osun gave comforting assurance that it is very possible to level the perilously imposing mountains of youth unemployment across the country.

    Hear her: “You [Aregbesola] have demonstrated that good governance is possible with your programmes. You have demonstrated that youth development is possible. Your programmes so far have demonstrated that you are a good example of government and governance”.

    These are no patronising sound bites, for when the minister says “programmes” she guilelessly speaks of the numerous sustainable O’initiatives of the state government, which continue to undeniably redefine the social and economic conditions of the people of Osun.

    That the State of Osun comes first as the state with the least unemployment woes in Nigeria is a reality that can no longer be ignored by those who incessantly carpet its government. Before Aregbesola became governor, those of us who live and make our living in Osun know that the state was a haven of youth unemployment, infrastructural decay and economic stasis. Poverty stalked and menaced the people. But that is no longer the case. The transition that has been witnessed in the state for the past two years now has soothing evidence of concrete transformation. Youths whose lives were steadily wasting away have been rescued, given training in useful skills and empowered to start small businesses. Farmers have their own happy stories to tell. Under the aegis of the Osun Rural Enterprise and Agricultural Programme, agro-allied businesses have received a massive boost. With the computer tablet, free school uniforms, free daily feeding for pupils in Elementary Class 1-4, building of ultra-modern schools across the state, and increase in funding, the education system of Osun as we used to know it has changed significantly. Infrastructural development enjoys adequate attention now. Old roads are being rehabilitated and newer ones are springing up. A few weeks ago I read in the papers that all the nine state hospitals are already being renovated. That is in addition to the marked changes in healthcare services. Indeed, great things are taking place in Osun. Those who can’t hear see them; those who can’t see hear them; and hardly is there a single household in the Land of the Virtuous that doesn’t benefit from the policies of the present government.

    One other way to test for the genuineness and effectiveness of the policies of the Aregbesola administration is to invoke the methodology prescribed by the seasoned British economist, Dudley Seers. According to him, to understand whether a state or country is developing or not, three main questions need to be asked: First, “what has been happening to poverty?” Second, “what has been happening to unemployment?” Third, “what has been happening to inequality?” He contends that if we notice tangible declines in all of these key areas, doubtlessly the entity – state or country – can be said to be in an era of development. However, he cautions that if one or two of those core issues have an organic tale of misfortune, or if the three are becoming more unbearable, it would amount to sheer lunacy to describe that misery of biblical proportion as development.

    Surely, Okonjo-Iweala had issues of unemployment, poverty, and inequality in mind when she lauded Governor Aregbesola as an exemplar of good governance. The capacity of the Osun people to live dignified and meaningful life has been (and is still being) made possible through a consistent and focused implementation of programmes that squarely address poverty, unemployment, and social injustice. This is a fact that a high-ranking PDP apologist has affirmed dispassionately. And I see this as another clinical deconstruction of the two-for-one-penny fable of secession and islamisation that some calcified minds who could not stand the vision of Aregbesola wickedly spawned against him but to no avail.

    •Awopegba writes from Iloko-Ijesa, Osun State.

  • Okonjo-Iweala urges patronage of local products

    Okonjo-Iweala urges patronage of local products

    Coordinating Minister of the Economy and Finance Minister, Dr Ngozi Okonjo-Iweala, has urged Nigerians to patronise the products of indigenous original equipment manufacturers (OEMs). She said it was by doing so that the technology could be transferred, jobs created and good life assured for the citizens.

    Mrs Okonjo-Iweala, who spoke when she toured the factory of Omatek Computers in Lagos, said instead of looking up to the Federal Government for patronage, Nigerians should embrace the patronage of goods made in the country by their fellow country men.

    “We will only succeed in this country if we patronise our own products. Let us look unto ourselves and leave government. If we patronise our own goods, we will grow the economy,” she said, adding that with a population of over 150 million people, the multiplier effect of patronising indigenous OEMs would only be imagined on the economy.

    She also enjoined the Group Managing Director of Omatek Computers, Mrs Florence Seriki, an engineers, to make her products competitive in terms of quality, stressing that it only through that way that her products could defeat the stiff competition posed by imported goods.

    She urged her to look to the private sector for patronage instead of looking up to the government.

  • Development Finance Institutions coming,  says Okonjo-Iweala

    Development Finance Institutions coming, says Okonjo-Iweala

    The Federal Government is set to float Development Finance Institution (DFI) within the next 18 months.

    The initiative stemmed from the dearth of institutions that could support the private sector to access long term loans to grow businesses.

    Speaking in Lagos at the weekend during the tour of the ultra-modern factory of Omatek Computers at Alausa, Ikeja, the Coordinating Minister of the Economy and Finance Minister, Dr Ngozi Okonjo-Iweala, said the government was working with the World Bank, International Finance Corporation (IFC), Development Bank of South Africa and other developed countries to give birth to DFI.

    The minister lamented that the greatest development problem of the country was the lack of institutions. She also lamented that for 50 years, Nigeria was run without key institutions, a development she argued, had hampered the development of the country.

    Mrs Okonjo-Iweala said the DFIs will help bridge the gap in long-term finance to businesses in the country, adding that mortgage institutions have been built. “We lack long institutions for long term finance. That is why we are developing a wholesale finance institution. We need a wholesale finance institution. This country must build key institutions. We must stop relying on intervention from the government,” she said, adding that DFI will make facilities available for private entrepreneurs to expand their business for a 15-year period.

    She noted that no nation grows without strong institutions, lamenting that the country was run for half a century without institutions.

    She said institutions, such as the Bureau of Public Procurement (BPP) and Debt Management Office (DMO) were recently created, wondering that for 50 years, Nigeria didn’t have a DMO. Mrs Okonjo-Iweala commended the persistence, integrity, honour and the spirit of perseverance displayed by the Group Managing Director of Omatek Computers, Mrs Florence Seriki, urging her to keep the firm flying in spite of the harsh operating environment.

    She pledged the Federal Government’s support, saying that Omatek Computers was not only helping technology transfer, it is also creating employment opportunities for the youths.

    According to her, the Nigeria market is particularly a challenging one, adding that in a nation where the culture of after sales service has not taken firm root, it was exciting to her seeing the professionals that were assembled by the firm to offer after-sales services to customers.

     

  • Okonjo-Iweala to FIRS: Consider birth certificate as tax registration

    Okonjo-Iweala to FIRS: Consider birth certificate as tax registration

    As the country’s fortunes dwindles from the sale of crude oil, the Coordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, has instructed the Federal Inland Revenue Service (FIRS) to employ “any efforts” to grow the nation’s revenue base.

    She urged the FIRS to consider birth certificate as registration for taxation purposes as obtained in South Africa and Namibia, where tax registration and TCC are being linked to birth certificate.

    Represented by the ministry’s Permanent Secretary, Mr. Danladi Kefas, she said FIRS’ efforts to grow the nation’s revenue base remain a step in the right direction, most especially, in the face of the dwindling oil income.

    The minister said,”any efforts by the FIRS to grow the revenue base of the country are welcome and everybody must contribute his or her share, especially, when somebody is earning taxable income.”

    A statement from the FIRS said Okonjo-Iweala gave the directive in Abuja on Thursday at a one-day sensitization workshop for Local Staff of Embassies on PAYE, Withholding Tax (WHT), Value Added Tax (VAT) on Contracts, and Taxpayer Identification Number (TIN).

    The statement signed by Emmanuel Obeta, Director, Communications and Liaison Department quoted Okonjo-Iweala as saying that “you cannot escape tax and claim to be a responsible citizen of that country. Once you pay tax, you can now have the benefits that come with payment of taxes. Tax payment is the backbone of any country.”

     

  • Economy not threatened, says Okonjo-Iweala

    The Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, yesterday said the nation’s economy was not under threat of collapse.

    She also said Nigeria had successfully accessed the international capital markets with a USD1 billion dual-tranche international Bond offering.

    The bond offers were USD 500 million (5-year Bond) and USD 500 million 10-year Bond at Coupons of 5.125 per cent and 6.375 per cent per.annum., respectively. She said proceeds from the bond will finance key power infrastructure in various parts of the country.

    Okonjo-Iweala, who made these disclosures at a briefing in Abuja, said she never said that the economy would collapse.

    One of the national dallies had quoted the minster as saying that the economy will collapse if the budget was not amended.

    But she insisted that the only issue she discussed was about payment of salaries.

    On the $1billion bond, the minister said it has testified to investors’ ongoing interest in the unlocked potentials in Nigeria.

  • Okonjo-Iweala  summoned

    Okonjo-Iweala summoned

    Comments on the National Assembly over the 2013 amended budget by the Minister of Finance and Coordinating Minister of the Economy Dr Ngozi Okonjo-Iweala has earned her a summon by the House of Representatives.

    Mrs. Okonjo-Iweala is to appear before the lawmakers over her assertion that the economy will collapse in September if the National Assembly refuses to approve the 2013 Budget amendment bill President Goodluck Jonathan sent to it.

    The decision of the House followed the adoption of the prayers of a motion by a member, Samson Osagie, under matters of national importance,

    The House of Representatives recently rejected a bill by President Goodluck Jonathan amending the 2013 budget of N4.987 trillion passed by the National Assembly on the premise that Jonathan was not specific on areas of amendment.

    But the President quickly sent another amendment highlighting areas of critical interest meant for amendment.

    A newspaper yesterday quoted Mrs. Okonjo-Iweala as saying on a radio programme that the Federal Government may be handicapped in paying workers’ salaries should the budget amendment bill not be passed expeditiously.

    She said: “We have been able to implement the budget to a state that we now discovered that there has to be some amendment. So, Mr President sent the amendments to the National Assembly. I think we can continue for a little while longer; we need the amendment to pass because come September or October we may not be able to pay salaries.

    “One important part of the amendment is the salary that was moved out of that category to other subheads, which has to be restored. We need to restore N36billion for salary that was carried out so that the country will not shut down.”

    Osagie said the minister was raising a false alarm to incite the public against the National Assembly.

    “Assertion is intended not only to blackmail the National Assembly in the performance of its constitutional mandate, but also to incite Nigerian workers against a legitimate and most important institution of government – the National Assembly.”

    He reminded the House that there is a subsisting and valid appropriation Act duly signed into law by the President, which is the operating budget for Nigeria for the financial year 2013.

    He expressed worry “that the Minister of Finance had consistently insulted the sensibilities of the institution of the National Assembly through her constant umbrage and blackmail of this institution”.

    Osagie said rather than diverting the attention of the public from its failings, the executive must implement the budget passed into law and not stop.

    Deputy Speaker Emeka Ihedioha, who presided at the session, mandated the committees on Finance , Appropriation and Legislative Compliance to invite the minister and investigate if she really made such comments.

    The joint committee is to report back to the House within a week.

  • Turbulent time for naira

    Turbulent time for naira

    The Naira

    Three factors put the naira at a cross-roads during the second quarter of the year: increased oil importation, reduced sales of crude oil at the international market and exit of foreign investors repatriating their profit in the capital market.

    These dynamics bolstered the demand for the dollar and weakened the naira. On June 17, the naira was at 18-month low, dropping 0.8 per cent to N162.60 a dollar, culminating in a weekly decline of 1.8 per cent. It was the worst performance since December 23, 2011.

    The naira’s decline steepened last month after the CBN broke its rule of only selling dollars at its bi-weekly auction within a three per cent band around N150 to the dollar, a system designed to stabilise forex trading.

    But analysts see the naira fluctuations as temporary, given the position of the reserves, which currently stands at $48.3 billion, which means the apex bank can defend the naira.That defence occurs regularly at critical points.

    Jide Solanke, an analyst at Lagos-based FSDH Merchant Bank Ltd told Bloomberg, that there’s was high demand for dollars as people are taking profits and their money out of the country. He noted that the reserve position is robust, which means the CBN can defend the naira.

    Currencies Analyst at Ecobank Nigeria, Olakunle Ezun, said though the naira has breached CBN’s three per cent above N155 to a dollar target, the banking watchdog is positioned to stabilise the local currency in the short term.

    During the last week of the quarter in a bid to tame the naira from further depreciation, the CBN increased the weekly offer at Wholesale Dutch Auction System (WDAS) market, offering $800 million from the usual $600 million, weekly. The marginal rate at both auctions remained N155.75 to a dollar. The Naira depreciated further last week losing 212 kobo week-on-week to close at N161.57 to a dollar from N159.45 the previous week.

     

    KYC

    The CBN also extended Know Your Customer (KYC) deadline for Designated Non-Financial Businesses and Professions (DNFBPs) from April 30 to December 31, this year.

    CBN Acting Director, Financial Policy and Regulation, A.O. Ikem advised DNFBPs that have not registered with Special Control Unit Against Money Laundering (SCUML) to do same before the deadline ends, failing which they would not be allowed to operate such accounts. The CBN said the extension was meant to address some of the challenges encountered by SCUML as a result of the number of persons seeking to enjoy late compliance.

    The CBN had earlier issued a circular, mandating DNFBPs on the need to provide additional KYC requirements to their banks and Other Financial Institutions (OFIs). It said compliance is in line with international best practice against adverse developments resulting from money laundering and financing of terrorism globally.

     

    World Bank hammer

    The World Bank Group announced the banning of the Nigerian firm, Scientific Energy and Environmental Management Systems Limited (SEEMS) for two years for fraudulent practices under the Second Lagos Urban Transport Project financed by the banks.

    It said the ban was part of a Negotiated Resolution Agreement, which includes satisfactory compliance with its Integrity standards, including corporate ethics training for all its employees within three months.

    SEEMS, however, agreed to fully cooperate with the World Bank’s Integrity Vice Presidency (INT), the unit mandated to investigate fraud and corruption in Bank-financed activities. The INT is responsible for preventing, deterring and investigating allegations of fraud, collusion and corruption in World Bank projects, capitalising on the experience of a multilingual and highly specialised team of investigators and forensic accountants.

     

    BoI’s credit

    To safeguard its loanable funds, the Bank of Industry (BoI) now demands 10 per cent equity contribution from prospective borrowers to enhance their commitment to the loans, the bank’s General Manager, Operations, Joseph Babatunde, has said.

    He spoke during the media workshop in Lekki, Lagos. He explained that the development finance institution is nearing conclusion in securing $500 million loan from the African Development Bank (AfDB), which would enable it expand its lending capacity to the economy.

    He disclosed that the AfDB will also be extending $200 million facility to the Nigeria-Export-import (NEXIM) Bank, adding that part of the delay in securing the loan was because the lender (AfDB) was awaiting Federal Government’s sovereign guarantee. “We have already secured the needed approvals for the loan aside getting a sovereign guarantee,” he said.

    He said rates for such loans are always at small margin above the Nigeria Interbank Offered Rate (NIBOR), adding that it will be a moving rate, rotating around NIBOR, and will be at single digit.

     

    Vision 20: 2020

    The Nigeria Inter-Bank Settlement System (NIBSS) also said the vision of Nigeria being among the top 20 economies in the world providing efficient e-payment services by 2020 will be achieved.

    NIBSS Executive Director, Business Development, Chritabel Onyejekwe disclosed this at during the 13th Card, ATM & Mobile Expo in Lagos. She said the cash-less banking initiative has recorded huge success and had drastically reduced banks’ operational costs.

    She said NIBSS in collaboration with the CBN, banks and other international partners are committed to the journey of transformation for the e-payment industry via cash-less economy. He said all the parties agree that a lot of work needs to be done at the grassroots.

     

    Private sector pension

    The private sector is well ahead of the public sector in pension fund contributions, FBN Capital, had shown. The report indicated that the private sector now contributes about 60 per cent of the N3.4 trillion pension assets under the management of Pension Fund Administrators (PFAs).

    The research firm said data released by the National Pension Commission (PenCom) showed that as at end of March 2013 (when pension assets were N3 trillion), the private sector contributed N1.8 trillion to the scheme. Also, the public sector’s contribution from ministries, departments and agencies (MDAs) of the federal and some state governments, was N1.2 trillion. This, it said, is a marked change from its composition in 2004 when the Act kicked off.

    FBN Capital said the increase to N3.4 trillion as at the end of May, this year was largely due to the filing in of 12 states into the contributory pension scheme, although only six states had collected and remitted contributions in compliance with the provisions of the Pension Reform Act (PRA) 2004.

     

    Religious bodies account

    The CBN refuted reports that it had ordered the freezing of the accounts of some religious organisations, citing alleged suspicion of links with terrorist groups. In a statement posted on its website, the banking watchdog said it had not ordered the closure or freezing of the bank account of any religious body or any institution.

    It explained that prior to 2006, Nigeria was on the list of the Non-Cooperating Countries and Territories (NCCTs) of the Financial Action Task Force (FATF), a global watchdog on financial crimes.

    The country was removed from the list on account of stringent actions taken by the Federal Government. However, by 2007, as a result of loopholes in Nigeria’s legal and regulatory system, the country was included in the ‘grey list’ of countries that had not made appreciable progress in their Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime by FATF.

    “It was, therefore, incumbent on Nigerian authorities to ensure that her financial processes and procedures as well as the provisions of the Money Laundering (Prohibition) Act (MLPA) of 2011 and the Prevention of Terrorism (PTA) Act of 2011, were in conformity with FATF recommendations and international best practice,” it explained.

     

    Mobile money transactions

    The cumulative transactions by the Mobile Payments Operators in the last one year were worth over N64 billion, more than 60 per cent of which were done in the last three months, CBN Deputy Governor, Operations, Tunde Lemo has said.

    Speaking at the conference on cash-less policy held in Lagos, with the theme: Transiting to a cash-less society – Charting the way forward, he said the CBN had licensed about 18 mobile payment operators to offer payment services via the mobile phone that over 100 million Nigerian are using. This, he said, will help promote financial inclusion and by extension, make the nation a cash-less one.

    Lemo said the CBN has released the guidelines on agent banking to guide banks and other financial service companies who may wish to offer financial products and services, on how to appoint and manage the agents.

    He said central banks all over the world are usually at the centre of the development of the banking and payments system. This, he said, was imperative, given that they perform the role of facilitating the exchange of goods and services among the economic agents.