Wednesday, March 23, 2011

Of businessmen and politics

I FIND Dr. Reuben Abati’s commentary in The Guardian of March 20, 2011 very interesting and didactic. The article titled “Businessmen and the 2011 Elections” was his reaction to the editorial of Bussinessday of March 18, 2011 titled ‘Bankers’ Romance with Politicians’. The newspaper had in its editorial warned of the backlash of the unholy romance currently going on between the bankers and the politicians who are candidates in the forthcoming elections. Businessday cited the recent appointment of the movers and shakers of Nigeria’s economy particularly former and serving bankers as members of the People’s Democratic Party’s Finance and Fundraising Committee.

The newspaper alerted that this is against the directive from the Central Bank of Nigeria which in its regulation of the banking scope of Activities & Ancillary Matters, No 3, released last November said: "from the date hereof, no bank shall grant or permit to subsist, any loan, donation, gifts or any form of financial accommodation to any political funds, political party, or for political purposes whether directly or indirectly; incur any political expenditure".

The gist of Dr. Abati’s argument is that this is a needless controversy as according to him, “In Nigeria, businessmen cannot be blamed for seeking golden protection through involvement with politicians. That will be all too naïve! The Nigerian business environment is too volatile, and with government so powerful and omnipresent, it pays the investor community to establish access, influence and leverage with the government of the day. This however presents for each individual, a test of moral and corporate values to conduct himself or herself in ways that minimize or eliminate reputational challenges and this is best done through etiquette, compliance with electoral regulations and observance of industry/sector engagement rules.”

Dr. Abati went on to cite examples of how businessmen play leading role in United States of America, United Kingdom, Italy, Armenia and Ukraine. He says the involvement of businessmen is a non-issue at best and at worst, a moral burden on the businessmen. I disagree with these submissions. Undue involvement of businessmen in politics goes beyond moral burden; it is unconstitutional, illegal and unfair.
Yes, there is no law that says a banker or a businessman cannot belong to a political party, vote or be voted for at elections. This is a fundamental human right. However, the 1999 Constitution as amended, the Electoral Act 2010 as well as the Companies and Allied Matters Act (Laws of the Federal Republic of Nigeria 1990) all frown against undue involvement of businessmen in politics.

Starting with the 1999 Constitution as amended, section 221 says: “No association, other than a political party, shall canvass for votes for any candidate at any election or contribute to the funds of any political party, or to the election expenses of any candidate at an election.” This constitutional provision is much in sync with the provision of section 38 (2) of the Companies and Allied Matters Act (CAMA) which says: “A company shall not have or exercise power either directly or indirectly to make a donation or gift of any of its property or funds to a political party or political association, or for any political purpose; and if any company, in breach of this subsection makes any donations or gift of its property to a political party or association, or for any political purpose, the officers in default and any member who voted for the breach shall be jointly and severally liable to refund to the company the sum or value of the donation or gift and in addition, the company and every such officer or member shall be guilty of an offence and liable to a fine equal to the amount or value of the donation or gift.”

Even though the 1999 Constitution as amended and CAMA forbid companies or businesses from donating to campaign fund of a political party or candidate, it allows individuals within those companies to make a personal donation to the campaign fund. It is and should however not be a blank cheque. Electoral Act 2010 in Section 91 (9) says: “An individual or other entity shall not donate more than 1, 000,000 to any candidate”. Even if a candidate is very rich and could single-handedly funds his or her campaign, section 91 sub-section 2 – 7 of Electoral Act 2010 places a cap on the amount such candidates can spend on their campaigns.

The issue here is that it is both legally and morally reprehensible for businessmen or corporate organisation to use depositors or shareholders fund to finance political campaign. As Bussinessday editorial rightly observed, “political activities, by their nature, are purely speculative with no realistic measure of returns”. There is no gainsaying the fact that the crises that rock the Nigerian financial sector particularly the Nigerian Stock Exchange and the banking industry are largely precipitated by politically exposed persons both within and outside of the industry. When the private sector under the pseudonym of Corporate Nigeria used depositors and shareholders fund to bankroll the campaigns of presidents and some Governors in 1999, 2003 and 2007 in order to obtain what Dr. Abati referred to as golden protection, when the bubble burst in August 2009 and ‘Hurricane Sanusi’ blew away a total of eight bank Managing Directors and subsequently the Director General of Nigeria Stock Exchange was removed by Security and Exchange Commission did those presidents and governors offer them protection against prosecutions?

If operators of corporate organisations wanted to actively participate in politics, he or she should resign his or her appointment to do so. Otherwise, personal donation within approved legal limit to a political cause will be in order, however, to lend or give depositor or shareholder’s money to politicians to contest election is criminal, illegal and unconstitutional. Moreover, goading corporate sector players to be actively involved in politics as Dr. Abati encourages in his commentary creates uneven playing field for political contest. If it were to be the opposition party(ies) that announced those ‘business octopuses’ as members of their fundraising and finance committee, their business interest would have suffered cataclysmic consequences but because they were appointed by the government in power, they can expect huge returns on investment in the form of waivers, concessions, patronages and favourable business policies.

They get all of these at the expense of the suffering masses whose interest the business elite will never protect in their quest for super-profit. It is high time the Central Bank of Nigeria, Security and Exchange Commission and indeed the Independent National Electoral Commission took up the gauntlet and enforce the codes on party financing in Nigeria.