Wednesday, August 31, 2011

2012 Budget : Is govt racing against time?

2012 Budget : Is govt racing against time?

Monday, August 29, 2011

Checkmating Drug Trafficking and Abuse in Nigeria

In 2010, the United States of America delisted Nigeria from her drug Major List. That is heart-warming but is it an indication that incidences of drug trafficking and abuse is abating in the country? According to a report by the United Nations Office on Drugs and Crime (UNODC) Nigeria has a rising profile as an international route for drug trafficking. UNODC also said there has been a rise in the consumption of hard drugs in the country and that Nigeria is an active player in the $6.8 billion West Africa cocaine market, serving as a major route and market for cocaine from Columbia, to other centres of distribution and consumption around the world. Nigeria, according to the report, also serves as transit for drugs coming from the Indian sub-continent to Europe. About 2,000 Nigerians are allegedly arrested for drugs offences in the United Kingdom every year.

According to the National Drug Law Enforcement Agency (NDLEA), between 2006 and 2009, a total of 27,628 people suspected to be dealing in narcotics were arrested. This comprise of 26,054 males and 1,574 females. The agency also seized 871, 181.92 kilogrammes of narcotic drugs from illicit circulation with cannabis having the highest quantity with 849,867.27 kilogrammes. Furthermore, at a news conference addressed by NDLEA chairman, Ahmadu Giade on Monday, January 31, 2011, the agency claimed to have arrested 6,788 suspected drug traffickers in 2010. Giade told reporters that 793 cases were pending in court as at December 2010, while 1,509 cases were won and 26 were lost. The total quantity of drugs seized stood at 178,120.725 kilogrammes, and the largest single seizure of cocaine in the year was 450.400 kg.

A breakdown of the drugs is as follows: cannabis 174,661.59kg, cocaine 706.433kg, heroin 202.08kg and psychotropic substances 2,550.622kg. The NDLEA chairman said more women were found to be involved in drug trafficking during the year under review. "A total of 492 female drug traffickers were arrested while 6,296 male ones were nabbed." Giade also revealed that Kano state topped the arrest chart with 618 suspects, followed by Katsina and River states with 399 and 299 suspects respectively. "In terms of drug seizure, Ondo had the largest with 67,979.795 kg, Edo with 39,501.006 kg, while Delta accounted for 10,096.544 kg. These seizures were largely cannabis (Indian hemp)."

NDLEA also reported that 68 drug suspects were apprehended at the Lagos airport between January and July 2011. Recently, a 25-year old Nigerian drug courier Chilaka Ogbonna Emmanuel died onboard an aircraft on his way to Malaysia en-route Doha, forcing the pilot to divert the plane to India. Chilaka allegedly took off from the Lagos airport on Tuesday, August 2, 2011. A post mortem revealed that he had ingested narcotics. This unfortunate happenstance occurred barely few months after Nigeria lost a suspected drug trafficker, Offiah Gozie Vincent, who was arrested at the Murtala Mohammed International Airport Lagos, but died few days later in a Lagos hospital.

In July 2011, NDLEA claimed to have discovered in Lagos a factory that has the capacity to produce between 20 and 50 kilogrammes of methamphetamine per day, making it a large production centre similar to the ones in Mexico. According to NDLEA Chairman “This discovery is the first of its type in West Africa and the country.” It was reported that the street value of a kilogramme of methamphetamine is N2.5m. But the same kilogramme costs between N15m and N16m in Europe.

While drug trafficking shows no sign of abating, drug abuse has also become prevalent in Nigeria. A statement credited to NDLEA revealed that “Cannabis is the most abused drug in Nigeria. And the drug abuse cuts across age, sex and socio-economic status. A research conducted by the NDLEA has shown that drug abuse in the country is mainly a youth problem. Most hard drug users were exposed to the drugs between the ages of 13 and 19 when they are still in secondary school.” In Nigeria, there have been reports of abuse of non-conventional substances (hydrocarbons) like nail polish cleaner, gasoline, lizard excreta, zakami and rubber solution. Others are cough syrups with codeine content and pit toilets. The abuses of unconventional substances have been found to be wide spread in the North-west, North-east and North-central regions of the country.

A report by The Nation of August 10, 2011 titled “Drug: Nigeria moves from transit to consumer nation” indicated that “On the streets of major cities in Nigeria, drugs are hawked like every other item.....a drug like heroin, with street names, such as smack, skag and junk, usually sells for N1, 600 and N3, 200 per shot. Cocaine, often referred to as snow, flake, coke and blow sells a little higher at about N4, 800 to N5, 000 per grand powder. There are also Barbiturates, a.k.a. yellow jackets, reds, blues, Amy’s and rainbows but not very common and less costly. Others are street methadone, alcohol and ketamine. They are a powerful hallucinogen often referred to as Special K. Benzodiazepines is considered a family of sedative drugs. Amphetamines, known as billy or speed. Tobacco, which is at a lower rung on the list, is common in shops. Marijuana however, is another destructive herb when taken in excess. All these drugs are available in the nooks and crannies of Nigeria once you have the cash.”

Experts have identified major causes of drug abuse as peer pressure, weak parental control, child abuse, imitation, emotional stress, the availability of the drugs and the ineffectiveness of the laws on drug trafficking. On imitation, it is a sad pity that Nollywood artistes have not set good example to Nigerian youths given the way and manner some of our actors and musicians unnecessarily abuse drugs in their films and in reality. I think they should play down the use of alcohol and cigarettes in their productions. The consequences of drug abuse are very unpleasant. NDLEA says “drug abuse may lead to huge health and social problems such as morbidity, injuries, unprotected sex, violence, deaths, automobile accidents, homicides, suicides and physical or psychological trauma, dependence, and many more.” In 2010, the Agency counselled and rehabilitated 3,589 drug dependent persons while 16 persons were referred.

If the war on drug abuse and trafficking will be won, NDLEA must be well funded and detached from all forms of political interference. There is need for better awareness creation on the evils of illicit drug use and merchandising. Moreover, the legal framework requires strengthening to ensure that those involved in illicit drug trade are adequately punished to serve as deterrent to others.

Rethinking Nigeria’s Privatisation Programme

On July 5, 2011, I was a discussant at a policy dialogue organised by the African Centre for Leadership, Strategy & Development (Centre LSD) in Abuja. The dialogue was on the management of public enterprises in Nigeria. In attendance were government officials including an official of Bureau of Public Enterprises, development partners, academics, civil society organizations and the private sector. The interaction showed that government privatisation programme has not been as successful as its proponents will make us believe. It is not pro-poor and has no social safety nets. There are also viable alternatives to privatisation which ought to be considered by government. Many other notable people have commented on the privatisation scheme while practical steps have been taken to further assess the programme.

On August 4, 2011 while inaugurating a new board of the National Council on Privatisation (NCP), President Goodluck Jonathan observed thus: “We believe the private sector will handle things better that than the public sector. But the whole story about privatisation has not been as successful as Nigerians expected it to be.” In the view of Vice President Namadi Sambo “the process of privatisation has been going on for about ten years but has not been successful due to obvious non-performance. 80 per cent of such companies are actually not working.” However, the Director General of BPE thinks otherwise, according to Ms. Bolanle Onagoruwa, “On the contrary, if we consider all the privatized enterprises from inception of the programme in 1999 to date, the evidence indicate that more than 70 per cent of privatized enterprises are performing relatively well and less than 30 per cent are non-performing.”

On July 19, 2011 Senator Ahmad Lawan (ANPP, Yobe North) sponsored a motion with 25 other distinguished Senators calling for the probe of the government’s privatisation programme. Presenting the motion, he noted that the Federal Government embarked on the privatisation and commercialisation of federal public enterprises through the enactment of the Privatisation and Commercialisation Act No 25 of 1988, Bureau of Public Enterprises Act No 78 of 1993 and Public Enterprises Act of 1999. He said the primary and fundamental purpose of privatisation by the Federal Government was to divest and free the subsidies that were paid into the operations of the enterprises, so as to fund better the provision of critical and crucial infrastructure. The Senate adopted the motion, passed resolution No. S/Res/004/01/11 and set up an ad-hoc committee to look into the privatisation project. Senator Lawan was appointed the chair while other members of the committee are Senators Babafemi Ojudu (ACN, Ekiti), Alli Ndume (PDP, Borno), Philip Aduda (PDP, FCT), Ifeanyi Okowa (PDP, Delta), Hope Nzodima (PDP, Imo) and Mohammed Magoro (PDP, Kebbi). The committee was given four weeks to submit its report.

The committee’s terms of reference was to investigate the process through which the BPE privatised the companies and establish the agreements and conditions upon which the privatisation was consummated; determine how much was realised from the sale of the companies and where the proceeds were paid into while also determining how many jobs were lost and gained after the privatisation of companies. Others include, identify the factors militating against the expected improved and good performance of the privatised companies; determining the best way forward for the privatisation exercise and the desirable development and growth of the sold companies.

At the weeklong Senate ad-hoc committee on privatisation public hearing held from August 8 – 13, 2011, it was revelation galore. Indeed, the suspicions of the general public and the Senators were largely confirmed. All the directors-general (DGs) of the BPE since its inception, including its pioneer DG, Mallam Nasir el-Rufai, Dr Julius Bala, Mrs. Irene Chigbue, Dr Chris Anyawu and Ms. Bola Onagoruwa, were on hand to shed light on the transactions held under their watch. It was established that 122 federal government enterprises, spanning hotel and tourism, mining and manufacturing, banks and insurance, publishing and telecommunication sectors, etcetera, have either been sold or concessioned by the BPE from 1999 to date. It also emerged that while trillions of Naira was expended in establishing these enterprises, only total revenue of N146.2 billion (net proceeds and dividends) was realised during the period.

It also surfaced that due process and rule of law was side-stepped in the sales of some of the privatised corporations. A classical case in point was that of BUA Group versus Global Infrastructure Holden Limited over the sale of Delta Steel Company, Aladja. While BUA was selected by BPE as the preferred bidder, the presidency picked GIHL which did not submit any technical bid as the winner. BPE was also sidelined in the concession of the Ajaokuta Steel Company, as it was done by the Ministry of Power and Steel in 2006 by presidential fiat. GIHL was later to embark on asset stripping. There was also a proven case of corruption as Mr. Charles Osuji, a former Deputy Director of BPE openly admitted receiving bribe from Chief Mike Adenuga over the sale of National Oil to the business mogul. Funny enough, Mr. Osuji had the audacity to request the Senate committee for reinstatement to BPE in spite of his admittance of malfeasance.

It also emerged that some of the companies privatised may actually have had the contracts for their construction padded. Such was the case with the Aluminium Smelter Company of Nigeria (ALSCON) which was contracted with the sum of $3.2 billion, operated for 18 months and sold to Russel, a Russian company with Nigerian Board members for a paltry $130 million. According to the current director general of the BPE, an evaluation of the company indicated that the cost of the project was over-inflated as “a similar company in Mozambique, built within the same period, was constructed with $800 million.”

The Senate public hearing also revealed that the Bureau of Public Enterprises (BPE) illegally sold Federal Government’s 5 percent equity shares in Eleme Petro-Chemical Company Limited (EPCL) Port Harcourt to the Indian conglomerate, Indorama for N4.375 billion naira. This is contrary to the Privatisation Act of 1999 which states that not more than 75 per cent equity shares of the company shall be privatised while 2.5 per cent should be kept for staff, 7.5 per cent for host community and 5 per cent for the Federal government and the remaining 10 per cent for the general public. Curiously, Ndorama was one of the success stories of privatisation as the company is said to be operating at 100 per cent capacity utilization in less than two years of its acquisition and had paid out N12.9 billion as dividends to the Federal Government and the host community. It was commendable of the Senate committee to order BPE to return the money for the 5 per cent FG equity to Indorama.

The one week slated for the public hearing was grossly inadequate as the probe panel only heard issues relating to fewer than twenty of the privatised companies. It is unfathomable that none of the former members of the National Council on Privatisation was summoned to come and shed light on the torrents of allegations made on the privatisation exercise, yet NCP is the political and policy arm of the privatisation exercise whose approval must be sought by BPE before the sale of any public enterprise can be concluded. I do hope Senate committee will be able to pay visit to many of the privatised company for on-the-spot assessment. There is no gainsaying the imperative of reform of Nigeria’s privatisation process. The same factors that collapsed the public enterprises before their sale are also afflicting the privatisation exercise. These include: political interference, lack of good corporate governance, corruption, nepotism, and incompetent manpower. Under the Nigerian privatisation programme, the nation has lost assets, revenue, jobs and values.

One of the recommendations of the Centre LSD policy dialogue on privatisation is that the Nigerian government should start a programme of reconstruction and development of public enterprises in Nigeria with focus on redesign, restructuring, turnaround strategies, setting up of mechanism for improving efficiency and effectiveness and corporate governance. Need I say more?

Tuesday, August 23, 2011

Clarion call on Federal Government Press

The Nigerian Senate earned my commendation over its resolution compelling the Federal Government Press to print authentic versions of the National Assembly legislations.

On Thursday, July 28, 2011, Senator Paulinus Igwe (Ebonyi Central) had moved a motion calling the attention of the Senate to the illegal publication, distribution and sales of laws passed by the National Assembly. He observed that such act is in clear violation of the Authentication Act 2004. According to Senator Igwe, “the Act stipulates that the printing of any Act of the National Assembly is vested in the Government Printer who shall endorse on the back of the publication that it is published by authority.”

For sometimes now, multiple versions of the amended 1999 constitution, Electoral Act 2010 (as amended) as well as other Acts of parliament are being illegally printed by some shrewd businessmen and hawked on major streets of some states. In Abuja, the Three Arms Zone is the most notorious sales point. I recall the frustration I went through before the 2011 elections trying to access the genuine editions of the newly passed electoral laws meant to regulate the conduct of the polls and resolve post election disputes. Though belatedly, it is heart-warming that the Senate, after thorough deliberation, had deemed it fit to pass the vital resolution aimed at awakening the Federal Government Press to its lawful duty.

It is, however, important to stress that though those who illegally print and circulate bogus versions of our legislations are blameworthy; the government too must share in the censure. The legal department of the National Assembly, Nigerian Copyright Commission, the Presidency, Federal Ministry of Justice and Federal Ministry of Information under whom, I assume, the Federal Government Press is, must all share in the fault. If these ministries, agencies and departments had networked and coordinated to ensure prompt publication and circulation of these legislations as soon as they were signed by the president, the vacuum the illegal printers are trying to fill would not have been there.

I am proposing an amendment of the 2004 Authentication Act to mandate the printing of all National Assembly legislations by FGP within a period of 60 to 90 days of the signing of such legislations into law by the president. That is, however, in case such proviso is not currently in the Act. Also, Federal Government Press must be properly funded and equipped with competent personnel and modern machineries to perform its assigned legal responsibilities. Additionally, there must be well advertised sales points nationwide. Furthermore, all the 36 States should find a way of ensuring that the authentic copies of legislations passed by the state assemblies and signed by the governors are circulated nationwide through well publicized sales points. Finally, it will be helpful if our parliament and ministries of information could make available new Acts on their websites for easy access.

Monday, August 22, 2011

Rethinking Public Funding of Parties in Nigeria

At a lecture titled ‘Nigeria’s 2011 General Elections: The international dimensions and challenges’, organised by the Nigerian Institute of International Affairs in Lagos on August 8, 2011, INEC chairman, Prof. Attahiru Jega inter alia said: “INEC is also having challenges from the 63 political parties. They wanted funding from INEC, there was a legal frame work for it in the past; they have been receiving funding in the past and now the legal frame work has been removed. We have refused to fund them and this is creating problems for us.” Former Chief Justice of Nigeria, Hon. Justice Mohammed Uwais recently canvassed for the payment of public grant to political parties by the Federal Government. This, he said, will assist the parties in offsetting their electoral and other bills. Uwais told the News Agency of Nigeria (NAN) in Abuja that subscriptions from members were inadequate to fund the operations of political parties. “Ideally, parties should finance their campaigns. But even in advanced countries like Germany and France, grants are given to parties to assist them in contesting elections.’’

Justice Uwais chaired the 22 member Electoral Reform Committee that sat between August 2007 to December 2008. ERC had recommended in its final report that: “Government should continue to fund political parties either directly or through the INEC. The political parties should be encouraged to raise funds of their own through the sale of forms to candidates, fund-raising exercises, individual or corporate donations as well as undertaking commercial activities.” The Committee further proposed that “The funding of political parties should be based on their performance in general elections. After the 2011 election only parties that score a minimum of 2.5 per cent of the votes should be eligible to receive grants from public funds.” (See pages 39 -40 of the ERC Main Report).

The major lacuna with the precondition set by ERC for funding of political parties is its failure to prescribe how the minimum of 2.5 percent of the votes will be computed given the fact that some political parties may not contest for all elective positions during the general election. It would be recalled that only 20 out of the 63 political parties contested the 2011 presidential elections while there were also no gubernatorial elections in about 11 out of 36 states in Nigeria during the polls.

Prior to ERC recommendations, the 1999 Constitution of Nigeria had prescribed in section 228 ( c ) that the National Assembly may by law provide “for an annual grant to the Independent National Electoral Commission for disbursement to political parties on a fair and equitable basis to assist them in the discharge of their functions.” Concomitantly, 2006 Electoral Act in section 91 (1) says “.....the National Assembly may make an annual grant to the Commission for distribution to the registered political parties to assist them in their operation. (2) The Commission shall distribute such grant as follows: (a) 10% of the grant shall be shared equally among all the registered political parties; (b) the remaining 90% of the grant shall be shared among the registered political parties in proportion to the number of seats won by each party in the National Assembly.” It is noteworthy that this sharing formula was contested by Conference of Nigerian Political Parties and the court gave them a favourable judgement asking INEC to share the grant in a fair and equitable manner.

As Nigeria approaches another round of alterations of her electoral laws, it is important for the National Assembly to revisit the issue of public funding for political parties. In line with popular trend around the world, I think public funding of political parties is desirable given the fact that much resources are not coming into the parties from membership dues, fund-raisers and other legitimate sources. Moreover, the Constitution had barred these parties from accepting donation from abroad or from unwholesome sources. The current legal regime, if allowed to stay, will only be beneficial to big parties who have been able to win seats to form government.

N.B: This article was written before INEC's de-registration of seven political parties on 18 August 2011

Thursday, August 11, 2011

Winning the unemployment war in Nigeria

The singsong in Nigeria now is the alarming rate of unemployment. The Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi on July 16, 2011 said youth unemployment rate in Nigeria has hit 41.6 per cent. According to him, in gender-specific terms; the rate is 23.3 per cent for males and 17 per cent for females within the age of 15 and 24 years. The CBN Governor made the assertion in a paper, titled, “Youth empowerment as a tool for sustainable development -The Central Bank of Nigeria interventions,’ which he delivered at the National Youth Service Corps orientation Camp in Kwara State.

While speaking at 100th International Labour Conference (ILC) in Geneva, Switzerland in June 2011, former President Olusegun Obasanjo said “I want to underline the situation that will signal red alert for us in Africa. I am worried, I am apprehensive about unemployment in our continent that it has not been taken as seriously as it should be. I give example of my own country, Nigeria where we have about 120 tertiary institutions. When I was growing up, there was only one university in Nigeria. Today, when you include the polytechnics to the tertiary institutions, we have over 200 institutions of learning. Each institution graduates about 3,000 students every year. You have well over 600,000 graduates every year but we are not creating 100,000 jobs every year. That is the issue that worries me....”

According to the Punch editorial of July 26, 2011: “Some of the factors militating against effective reduction in unemployment include what the World Bank’s World Development Report for 2007 identified as slow economic growth and rigid labour markets; lack of skills and experience as well as limited access to information. Other factors include the collapse of the nation’s industrial sector due to harsh operating environment. For instance, the Manufacturers Association of Nigeria disclosed that in 2009, 834 member companies closed. The association’s membership audit revealed that no part of the country escaped company closures while up to half of those companies still in operation are “ailing.” The latest closures, according to the body, resulted in the loss of 83,000 jobs. Textile firms, which in the mid-1980s employed about 350,000 persons directly in over 200 mills, now employ less than 20,000 persons, following the collapse of most of the firms. Epileptic power supply has also spawned other economic distortions, including excessively high domestic production costs and low industrial capacity utilisation.” Aside the aforementioned reasons, a former Minister of Education in 2009 said eighty per cent of Nigerian graduates are unemployable. His reasons were because these graduates are poorly taught due to inadequate infrastructure and poor library facilities. How about that?

Quite alright, over the years, government has taken steps to address and redress the soaring rate of unemployment in Nigeria; however, such remedial measures have not yielded appreciable success. Among earlier initiatives are the establishment of National Directorate of Employment and National Poverty Eradication Program. In the 2011 budget, the Federal Government earmarked N50 billion for creation of jobs for the country’s teeming unemployed youths through the establishment of the National Job Creation Scheme (NJCS). While presenting the budget to the National Assembly on December 15, 2010, President Goodluck Jonathan said “to immediately impact unemployment, a Public Works Programme will commence across the 36 states and the Federal Capital Territory. This programme will involve the engagement of private sector contractors to implement simple, labour intensive public works...” The budget has been passed and signed since May 27, 2011, the cabinet has been reconstituted after the elections and hitherto, less than five months to the end of the year, nothing has been heard about when, how and if this N50 billion will or has been put to use.

In order to effectively overcome the grave challenge posed by unemployment in Nigeria, sober attention must be paid to sectors of the economy that are known to create value. As the process of preparing 2012 budget commences, it is important for government at all levels to do everything humanly possible to widen the productive base of the economy. These are the agricultural sector, mining and manufacturing sector, as well as the Information, Communication Technology sector. Nigeria’s over-dependence on oil and gas has been counter-productive. It is reported that the nation’s oil and gas sector, which today contributes over 90 per cent of export earnings and provides about 85 per cent government revenues, only contributes about four per cent to the nation’s employment.

It is heart-warming to note that the Federal Government has promised to release N75 billion to Small and Medium Enterprises (SMEs) under a low-interest credit scheme to, among other things, strengthen their capacity for job creation. The recently launched Nigeria’s Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) packaged by the Central Bank of Nigeria is also laudable. NIRSAL, which has been estimated to gulp about N77.5 billion for its implementation, is an innovative mechanism aimed at de-risking agriculture in order to motivate banks to unlock the enormous financial resources for the sector through increased lending. Hitherto, despite the 45 per cent contribution of the agricultural sector to the Gross Domestic Product, it was getting a meagre four per cent of the Federal Government’s total annual budgets since 2006.

In summary, as the various governments settle down to govern after the elections and inaugurations, it is of utmost importance for them to treat the issue of unemployment with the urgent attention it deserves. Rhetoric, lip-service and deception would cause collateral damage sooner than later. It is therefore imperative for the different tiers of government to provide the enabling environment that will encourage private sector to invest in the productive sectors such as agriculture, ICT and industrial concerns. The favourable environment being craved for comprises provision of basic infrastructures such as good roads, railway, electricity, pipe borne water, hospitals, schools, etcetera. One way of achieving that is by reducing the recurrent expenditure with a view to increasing the capital vote. Other needful interventions include provision of adequate security for lives and property, observance of rule of law, policy consistency, tax friendly regimes and efficient anti-corruption measures. We also need to take a cue from many Asian nations that give primacy to training and skills development, thus creating a pool of dexterous and technology-compliant youths with globally marketable skills.

Wednesday, August 10, 2011

Issues in the Nationalisation of Three Nigerian Banks

The withdrawal of licences of Afribank, Springbank and Bank PHB, three of the 2009 eight rescued banks by Nigeria Deposit Insurance Company on Friday, August 5, 2011 is another sad chapter on the lingering distress in Nigeria’s banking nay financial sector. It is unfortunate and pre-emptive of NDIC and Central Bank of Nigeria. I should think these regulators ought to have waited till September 30 which was the end date given for recapitalisation after which the hammer can now fall on defaulters. Indeed, I prefer the regulators (NDIC and CBN) should have given a grace period of additional one month after the initial deadline to enable defaulting banks recapitalise after which such harsh measure can then be meted to them. The step has the potential to scare away foreign investors into Nigeria’s economy as it is an indication of mismanagement and ineptitude. As things stand, there will be further job loss in spite of the already saturated unemployment market while the shareholders will also face further devaluation of their shares which is another economic loss. In fact as much as N32 billion was alleged to have been lost to the nationalised banks by their shareholders.

News report has it that depositors are already making panic withdrawals in spite of the reassurance by CBN and NDIC that no depositor will lose his or her money. It is also very heart-rending that those who initially run these banks aground in the first place, though have been charged to courts since 2009 or thereabout, almost two years after, the courts are yet to make firm pronouncements on their cases. Indeed, of the eight arraigned former bank managing directors, it is only the ex-MD of Oceanic Bank who went into plea bargaining that had been convicted. Others have been using all tactics in the statute books to frustrate their prosecution. There have also been several litigations by former MDs on what they termed their ‘illegal removal from office’ as well as litigations from shareholder associations of the rescued banks. This disquiet is expected to continue with the latest development. All these are bad for business.

However, the creation of bridge banks to take over from the nationalised banks is novel and commendable. It would be recalled that under the new arrangement, MainStreet Bank Limited takes over the assets and liabilities of Afribank; Keystone Bank Limited acquires the assets and liabilities of Bank PHB, while Enterprise Bank Limited takes over that of Spring Bank. The swift appointments of new managements and boards for the nationalised banks are also laudable. In fact, it is praiseworthy that the distressed banks are not liquidated but nationalised. If there had been liquidation, the negative impact would have been worse. Also creditable is the injection of a total of N679billion into the three banks by the Asset Management Corporation of Nigeria (AMCON) to bring the banks to capital adequacy.

I recommend that the entitlements of staffs of these nationalised banks who might lose their jobs should be paid on retrenchment. They should also receive pre-disengagement training in small and medium scales enterprises and be given soft loans as start up capital for their potential new businesses after their disengagement from the affected banks. These palliatives are necessary to cushion the negative impact of their job loss and to make their post service years tolerable and pleasant. Also, all lawful and legal means must be used to ensure that the nationalised banks debtors are made to pay back their debts. The fact that the banks have been taken over by the regulators must not make the debts of those banks to become bad debts. Moreover, Economic and Financial Crimes Commission, EFCC and judges handling the cases of those arraigned former bank directors must see to effective and timely prosecution of the alleged culprits who have brought tears, sorrow and untimely deaths to their banks shareholders and staffs. This is to serve as deterrent to those who may wish to mismanage our financial institutions in future. Lastly, the regulators must continue to be alive to their responsibilities by ensuring that periodic forensic audits of accounts of banks and microfinance institutions are held and preventive measures are taken to halt this ugly trend which has constitently brought untold hardship on shareholders and staffs of financial institutions.

Monday, August 8, 2011

Civil Society and Democratic Consolidation in Nigeria

Nigerian civil society organisations have come a long way in the democratisation project of the country. If we take civil society as the Third Sector defined as constituted by all those organisations that are not-for-profit and non-government, together with the activities of volunteering and giving which sustain them, then community based organisations such as town unions, faith based organisations, Non-Governmental Organisations like the Campaign for Democracy (CD), Civil Liberties Organisations, (CLO), Committee for the Defence of Human Rights (CDHR), Transition Monitoring Group (TMG), Alliance for Credible Elections (ACE), Centre for Democracy and Development (CDD) as well as professional associations such as Nigeria Bar Association (NBA), Nigeria Medical Association (NMA) and Nigeria Union of Journalists (NUJ) will all qualify to be member of the civil society constituency.

Civil society organisations have played vital roles in the consolidation of democracy in Nigeria. Some of the ways they have done that include: Fight for return to democracy - Many of these groups like CD, CDD, CDHR and CLO were instrumental in the restoration of civil rule. It would be recalled that between 1993 and 1999, in collaboration with the Nigeria Labour Congress which is another civil society organisation, these groups fought the Nigerian military to a standstill. They mobilised students and workers for civil disobedience, strikes and protest marches across the country. Many in their ranks were killed and maimed while some lucky few were able to make good their escape into exile.

CSOs working in the area of democracy and governance (D&G) have also been able to access funds from many donor agencies to execute diverse programmes such as voter education, election observation, campaign finance monitoring, election tribunal monitoring, electoral reform advocacy, conflict mitigation, access to justice, public interest litigation, budget tracking, constituency outreaches as well as research and documentation in thematic areas of democracy and governance. These initiatives have made a lot of impact in the consolidation of democracy as reports of activities carried out by CSOs have become the barometer through which international organisations and governments assess the democratic temperature of the country. Since these CSOs are presumed non-partisan and non-governmental, their opinions are regarded as objective and fair. This, in reality, is not necessary so.

CSOs also serve as vanguards against democratic threats and whistleblowers. For instance, when ex-President Olusegun Obasanjo’s administration attempted to tinker with the Nigerian constitution (2005-2006) to insert a tenure elongation clause, that evil plot was primarily shot down by the parliamentarians with pressure from the civil rights groups. CSOs also rose to the occasion to demand for the recognition of the then Vice President Goodluck Jonathan as the Acting President when late President Umaru Musa Yar’Adua was indisposed and was away to Saudi Arabia on medical tourism between November 2009 and March 2010. Civil rights organisations such as the Save Nigeria Group and Enough is Enough Group actually seized the initiative, mobilised and marched on the National Assembly to demand for a resolution that will give due recognition to vice president as acting president. This led to the adoption of the now popular ‘Doctrine of Necessity’ by the National Assembly in March 2010 or thereabout. The recently passed Freedom of Information Act would have been a mirage but for an NGO called Media Rights Agenda which alongside other partner organisations sponsored a private member bill on the issue at the National Assembly.

Some of the unforgettable efforts of the CSOs in the consolidation of Nigeria’s democracy were the unflinching support they gave to the Justice Uwais Electoral Reform Committee (ERC) inaugurated on August 28, 2007 by late President Yar’Adua. CSOs submitted tonnes of memoranda to the ERC offering suggestions on how Nigeria can break the chain of her electoral debacle. Indeed, significant number of the 22 member ERC was drawn from the civil society. They helped in analysing the challenges of Nigeria’s previous elections as well as charted the way forward. During the constitutional and electoral reform public hearings, CSOs were there in good numbers to present memoranda. This led to a better legal framework for elections that Nigeria currently has.

Again, during the preparations for the widely acclaimed 2011 elections, CSOs played a prominent role in ensuring that the elections were credible. First, they embarked on vigorous voter education using both the traditional and social media for their campaigns. Some other CSOs deployed thousands of observers to follow through and report on the electoral process. Some members of the civil society have also shed the toga of being armchair critics by joining the political fray to contest elections. Among them were Hon. Abdul Oroh, Hon. Uche Onyeogocha (both MHR 2003 - 2007), Hon. (Ambassador) Nkoyo Toyo (MHR 2011 – 2015). Others include former labour leader now Governor of Edo State, Comrade Adams Oshiomole and incumbent Governor of Ekiti State Dr Kayode Fayemi who was pioneer Country Director of CDD. Many other members of the civil rights groups have also been appointed into board positions or as ministers and commissioners. In their own little way they have, as individual, been able to assist with the consolidation of democracy in Nigeria.

In spite of the giant strides of CSOs in the democratisation of Nigeria, the third sector has its own share of troubles. These ranged from accusation of corruption by some of the donor agencies as well as inadequate capacity or technical expertise. There is also the challenge of dwindling donor fund especially in the area of democracy and governance. These have led to high mortality of the NGOs as well as incredibly high turn-over of staffs. Whichever way one looks at it, CSOs have played critical role in the restoration and defence of democracy in Nigeria. These they have done at a great cost to selves and organisations.

Friday, August 5, 2011

Conditional support for single term for executives

I really find it difficult to fathom the urgency that made the Presidency to fly the kite on the issue of single term for the president and governors which opposition parties have mischievously christened tenure elongation. Could it be to distract us from the menace of Boko Haram, or the hullabaloo occasioned by the licensing of Jaiz Bank which has pitted Christians and Muslims against one another over the Islamic banking proposal? Or perhaps, it was meant to take our attention away from demanding the implementation of the minimum wage of N18,000 for workers and the call for improvement in the standard of living of Nigerians. Whatever it was, I think what President Goodluck Jonathan did amounted to doing the right thing at the wrong time. Jonathan is barely two months into his four year tenure, and the National Assembly is yet to constitute the joint committee on constitutional reform, with no request yet for memoranda by the parliament; so why the haste?

If only for the sake of an academic exercise, I will comment on this issue that has heated the polity since it was officially broached by the Special Adviser to the President on Media and Publicity, Reuben Abati, on Tuesday, July 26, 2011. According to Abati, “President Jonathan is concerned about the acrimony which the issue of re-election, every four years, generates both at the federal and state levels. The nation is still smarting from the unrest, the desperation for power and the overheating of the polity that has attended each general election, the fall-out of all this is the unending inter and intra-party squabbles which have affected the growth of party democracy in the country, and have further undermined the country’s developmental aspirations. In addition, the costs of conducting party primaries and the general elections have become too high for the economy to accommodate every four years. The proposed amendment bill is necessary to consolidate our democracy and allow elected executives to concentrate on governance and service delivery for their full term, instead of running governments with re-election as their primary focus.”

In order to disabuse the minds of Nigerians who may think the proposed bill is for personal aggrandisement of the initiator, the statement went further to say that, “The envisaged bill is part of the Jonathan administration’s transformational agenda aimed at sanitising the nation’s politics. The President believes that this single move, when actualised, will change the face of our politics and accelerate the overall development of our nation. If the proposed amendment is accepted by the National Assembly, the President assures that he will not in any way be a beneficiary.”

In spite of the strident clarifications, groups such as the Action Congress of Nigeria, Congress for Progressive Change, Conference of Nigerian Political Parties, Nigeria Labour Congress, and the Nigerian Bar Association, have issued statements criticising the proposal and expressing their deep resentment to it. Not even the claim by the President on Thursday, July 28, at the Peoples Democratic Party’s National Executive Council meeting that the single term idea was not originally his, but that of the 29-member inter-party advisory committee set up by the late President Umaru Yar’Adua in 2008, was able to placate the antagonists of the proposition.

Having followed the argument of the proponents and opponents to the idea for a while, against the welt of opposing views, I am in support of a single term for the executives i.e. president and the governors. My support is however conditional. The pre-conditions are as follows: The proposed constitutional amendment must include the removal of Section 308 of the 1999 Constitution (as amended). Yes, the controversial Immunity Clause which the constitution refers to as ‘Restriction on legal proceedings’, must be excised from our grund norm (Constitution). The rationale behind this is that if an executive knows that he is liable to criminal and civil prosecution even while in office, irrespective of his or her tenure in office, there is the likelihood of such person(s) refraining from abusing his or her office.

My other condition is that the impeachment clauses as contained in Section 143 for the President and 188 for the Governor and Deputy Governor must be made less cumbersome. I humbly request constitutional amendment to sections 143 (11) and 188 (11). These sections define gross misconduct as “a grave violation or breach of the provisions of this constitution or a misconduct of such nature as amounts in the opinion of the National Assembly (or House of Assembly) to gross misconduct.” If we leave these sections as they are, the executives will be susceptible to parliamentary blackmail since the law says whatever amounts to misconduct in the opinion of the parliament is tantamount to an impeachable offence. I submit that impeachable offences must be listed in the constitution so that any president or governor who infracted on them will know he has deliberately done himself in. I assume that genuine fear of possible impeachment will make our chief executive officers not to misbehave.

My last pre-condition to supporting a single term for the executives is the imperative of strengthening of Nigeria’s anti-corruption agencies from the Economic and Financial Crimes Commission, to the Independent Corrupt Practices and other related offences Commission, and the Code of Conduct Bureau and Tribunal. Once the anti-corruption agencies are alive to their responsibilities, the immunity clause is off and there is a likelihood of impeachment in the event of known gross abuse of office, I believe the chances of a bad president or governor staying the length of his or her tenure in office before the next elections will be slim. Then the single term in office will make better sense, at least to me.

Monday, August 1, 2011

Appraisal of a Decade of GSM Revolution in Nigeria

It is ten years since Nigerian Telecommunication Commission (NCC) introduced Global System for Mobile Communications (GSM) in Nigeria. The licence auction had taken place from January 17 – 19, 2011 while Econet Wireless Nigeria (now Airtel) was the first to roll out on August 7, 2001. Before the licensing of GSM, in November 1997 Code Division Multiple Access (CDMA) telephone device had become operational in Nigeria. According to industry source, while CDMA operators focus on fixed wired access (landlines) and the fixed wireless access (mobile) that gives them limited mobility access, the GSM operators focus purely on mobile communication, which gives them unlimited mobile access.

Before the advent of these two dominant telephone operators, Nigerian Telecommunications, NITEL had been the monopoly providing telephone service in Nigeria. Many would remember how NITEL poles and cables were rivalling those of National Electric Power Authority (now PHCN) on our major streets. During the long reign of NITEL, telephone was a status symbol, exclusive reserve of the rich and mighty. Later, public phone booths were erected across major cities, particularly on the premises of Post offices, school campuses and other public buildings to serve the interest of the masses who could not afford NITEL’s fixed lines in their homes. Then, when Nigerians still use coins, the technology is that a caller will slot coin(s) into the phone box and dial to communicate. There was also the era of Thuraya and 090 Cellular. All of that has become history.

With the benefit of hindsight, I wonder how we managed to live without phones in those years before the advent of GSM and internet. Those years when communication is mostly restricted to letter writing through the largely inefficient and ineffective Nigerian Postal Services (NIPOST). Decades of making needless and sometimes fruitless journeys when one could have simply communicated the essence of the trip on phone and save time, energy, money and lives lost to accidents on such avoidable journeys.

The coming into operations of Global System for Mobile Communications has made life and living beautiful, easy, colourful, exciting and tenderly. Now you can rule your world with the deployment of latest technology in the field of information, communication technology. There is no need for frequent visit to family and friends as you can daily converse with them everywhere they are on planet earth. Apart from telephone calls, short-messaging system (SMS otherwise known as text messaging) and multimedia services (MMS) which are provided by GSM operators; many of the players in the telecom sector also provide internet services through modems and subscription platforms. This has significantly reduced the need to go to cybercafé to enjoy internet services, thus enhancing customer privacy.

GSM revolution goes beyond the aforementioned services. What about the value chain? Today, there are hundreds of thousands of Nigerians nationwide selling mobile handsets and accessories such as batteries, chargers, earpieces, memory cards, etc. Some are into sales and repair of handsets, music downloads to mobile phones, unlocking of handsets et cetera. Many others simply set up call centres where they also vend recharge cards. There are likewise companies manufacturing handsets and other accessories as well as those who are into production of recharge cards and telecom masts all being part of the value chain.

Mention must also be made of those companies who are supplying generators to power the telecommunication masts, those supplying the diesels to the power generating sets, those providing security at the offices and base stations of the telecom companies as well as the regulatory agency, NCC. What about the $285million and $400million that each of the telecom companies paid as licensing fees in 2001 and 2007 as well as the tax they pay annually to the coffers of both the federal and state governments? There are also sponsorship deals some of them have with different sporting federations and Nigerian artistes. A couple of them have correspondingly set up foundations through which they support education and do other charities as part of their corporate social responsibilities. All these and more are many of the benefits of the GSM revolution in Nigeria.

According to The News magazine of March 7, 2011 “The huge volume of business that the telecoms sector is driving in the Nigerian economy has become more manifest in recent years. This year, the sector’s contribution to the country’s gross domestic product, GDP, is expected to exceed the combined inputs of the manufacturing, banking, insurance and solid minerals sectors, according to estimates by the Federal Ministry of Finance. The telecom sector’s contribution this year, computed with Nigeria’s gross domestic product figures put at $206.66bn by the International Monetary Fund, IMF, is estimated at $15.7bn, amounting to 7.6 percent of the GDP. Finance and Insurance, manufacturing and solid minerals are put at 2.5, 4.5 and 0.4 percent in that order, totalling 7.4 per cent, which is 0.2 per cent less than the 7.6 percent estimates for the telecoms sector. Since 2005 (four years after it was liberalised), the telecoms sector remains the third largest contributor to the country’s GDP in the non-oil sector, after agriculture and trade.” “According to the Nigerian Communications Commission, NCC, estimates, active telephone subscribers in the country are now nearing the 90 million mark, while a teledensity of 63 percent currently obtains. GSM subscribers are estimated to have the lion’s share of 81,195,684, while subscribers to CDMA and Fixed Wireless services had 6,102,105 and 1,050,237 respectively.”

Among the many drawbacks of the GSM revolution in Nigeria is the poor services of the operators and the weakness of the regulators to enforce quality compliance. When GSM services started in 2001, the cost of handset and call rate was very prohibitive. Competition has however forced down the price. Despite the claims of cutting edge technology, there is still high level of drop calls and network failures. None of the operators can lay claim to have effectively covered the country. There are still several places even in major towns and cities where network signals of some of the operators are very weak or non-existent and as such customers have to subscribe to more than one network when they could have made do with one. Many thus have to carry multiple mobile-phones. Although, this problem has been lessened by the emergence of dual-SIM handsets.

There is a raging debate on health hazards associated with mobile phones. While some said GSM handsets can cause brain tumour or cancer, others are disproving it. The use of mobile phones in aeroplanes, hospital theatres, and fuel stations is prohibited as it could cause damage to sensitive equipment or engender fire outbreak. Kidnappers and armed robbers have also found it very useful for their nefarious acts hence the NCC policy of compulsory registration of SIMs and biometric data of all GSM subscribers in Nigeria. There are also allegations of fraudulent promos and bonanzas against some of the operators while making or receiving calls whilst driving had caused many preventable accidents. There is also the serious ethical issue of phone hacking or bugging by unauthorised people as exemplified by the current controversy stirred in the UK by News of the World newspaper as well as the accessing and publication of call logs by some politicians in order to prove allegation of compromise against some election tribunal judges. In spite of the little heartache the arrival of GSM revolution has brought on Nigerians, it is still one of the most visible dividends of democracy the country is enjoying.