There are two significant reforms going on in the country-Sanusi Lamido’s Tsunami in the banking sector and the federal civil service reforms. Both have attracted massive media and public attention, with the banking crisis clearly enjoying more “air and talk time”. I have already made my views about the banking reforms clear in this column-by and large, I believe Sanusi Lamido’s actions are required to stop the complete descent into an unprofessional, unethical and unsound banking sector and an inevitable massive industry collapse down the line, if nothing drastic is done now. I suspect there may be legal, procedural and constitutional questions about the process adopted by the CBN governor, (and that is why the Courts exist), but in any financial sector, anywhere in the world, the actions alleged against the banks and bankers are likely to attract similar, or worse sanctions from regulators.
But I have till date not commented on the federal public service reforms being pursued by the (relatively) new head of Service of the federation, Stephen Orosanye. In my view, Orosanye’s reforms are at least as important, as the one in the banking sector. The need to improve capacity in the civil services across the nation and in Abuja is imperative if Nigeria is to achieve its Vision 2020 objectives. In many countries of the world that have achieved rapid development-Japan, Singapore, China, India, Honk Kong etc, the quality of policy advice and implementation support offered by the civil service has been a critical success factor. Since NEEDS was launched under the Obasanjo regime, the imperative to reform the public service as a crucial element of economic reform and development was quickly reduced to only two issues (which not surprisingly were financially beneficial)-monetization and sale of government houses.
The fundamental problems of the public sector-weak capacity, an aging service, low morale, lack of IT skills, limited opportunities for career progression etc- were not addressed, until now. I can say right away that I strongly support the policies introduced by the federal public service commission and the Head of Service. Incidentally as the Presidential spokesman, Segun Adeniyi pointed out, while opponents of the banking reforms being implemented by Sanusi Lamido accuse him of a “Northern Agenda” of wanting to take over the ownership of Southern banks, opponents of the public service reforms accuse Steve Orosanye of a “Southern Agenda” of seeking to wipe out the Northern leadership of the civil service. I wonder what the poor, illiterate and unemployed youths in Kano, Bauchi, Kebbi and Maiduguri have benefitted from these civil servants who have suddenly realised that their job in the service is to protect Northern interests, the same way I wonder whether the Southern bankers shared any of their massive wealth with the poor people in their villages.
The new measures which require both permanent secretaries and directors in the federal service to spend a maximum of eight years in office, subject to satisfactory performance; that compels civil servants to resign before taking up tenured service; and that requires senior civil servants to be computer-literate are commendable initiatives. They will re-invigorate the service, revive morale in middle and upper-middle level career officers who should now see a future for themselves in the service and should help create a better-motivated leadership for the service. It also looks to me like the first tentative steps towards a more professional and efficient federal public service. For me, the real surprise is why anyone would oppose such a policy! How can a system in which assistant and deputy directors retire before their directors and permanent secretaries be sustainable? How can that motivate the service? What is the incentive for such officers knowing that irrespective of their competence or contributions they are unlikely to rise to the pinnacle of their career to give of their best, or to avoid corruption?
Meanwhile many of these “permanent” permanent secretaries and directors have short-circuited the system by coming in at the top either through their state civil services or some extra-ministerial agencies. And many sustain their unduly prolonged tenures through false age declarations and doctored service records. It is a sign of the impunity and audacity that has taken over in our nation that such people are ready to bring down the service rather than accept this sensible policy change. The argument that if an officer having served eight years as a director or permanent secretary is still below sixty years old, and has not served thirty-five years in service according to existing guidelines is neither hear nor there. That guideline provides a mandatory retirement date, a maximum rather than a minimum! If an officer has served as CEO (which in effect is what Permanent Secretaries are) or Executive Director (Directors) for eight years in the private sector (banks, multinationals etc), will it be anomalous to ask him to retire, even if he hasn’t reached the mandatory retirement age?
But these actions should only be the beginning of institution-building (actually re-building) in the federal service, and the states should also take a cue. We need better human capital management practices, process and systems re-engineering, enhanced public service remunerations, training, clear service standards and deliverables and other initiatives to enhance the quality and efficiency of our public services. We also need a system for weeding out unproductive civil servants and either encouraging them to take early retirement through incentives, or retraining them and creatively re-allocating them to other areas (such as agriculture, education or public works) where a massive national need exists.
I interpret the two bold reforms embarked upon by the federal government as tentative signs of revived political will. I hope the new mood can be carried to implementation of the electric power sector reform act, the mines and minerals act and into crafting a sound policy for managing the education sector.
Wednesday, September 16, 2009
Gani Fawehinmi (1938-2009)
This columnist has kept to a tradition of announcing a “Person of the Year” since 2003. In 2003 and 2004, I selected the then Economic Management Team led by Ngozi Okonjo-Iweala as “Team of the Year” and in 2005, Okonjo-Iweala in her personal capacity. In 2006 and 2007, I returned to institutions, first the Judiciary and then specifically the Supreme Court as having, in my view, made the most significant positive impact on the Nigerian nation. In 2008, I had the shortest “shortlist” since embarking on the exercise, with initially only four names-Adams Oshiomole, Nuhu Ribadu, Rotimi Amaechi and Babatunde Raji Fashola meeting my strict criteria. And then I remembered Chief Gani Fawehinmi!
It was public knowledge at that time that Gani was ill, striken by lung cancer. For some reason, I was clear in my mind that it would probably be my last chance to honour and acknowledge him while he was alive. I did not want to be one of the many that would inevitably describe him after his demise as the greatest Nigerian that ever lived (and that’s what they are all doing now!) and I had no difficulty selecting him as my person of the year 2008. That article was published on Wednesday January 7, 2009. As I feared, the tireless, courageous and indefatigable Gani Fawehinmi passed on Saturday September 5, 2009 at 71 years. In that article, I wrote my “citation” as follows, “My person of the year is Gani Fawehinmi. This selection honours Gani’s lifelong commitment to the Nigerian nation and particularly the under-privileged. For most of the year, Gani was on his sick bed inside or outside the country, but that did not stop him from continuing to raise his voice passionately against corruption and mis-governance in our dear country. He has used his legal training, media access and even founded a political party, National Conscience Party to realise his dreams for a better Nigeria. He has given of his best, and will go to his God with a clear conscience. He is my person of 2008”
Today those words while appropriate, seem inadequate to describe the commitment, courage, integrity, sacrifice and tenacity Gani Fawehinmi brought to public life, legal practice, law publishing, social commentary, pro-democracy struggles and citizen advocacy in his unending crusade to improve our nation, and to enthrone social justice and egalitarian principles in our national life. He rose instinctively, consistently and persistently in defence of the under-privileged, the weak, the poor and the oppressed. Gani hated injustice, like many Nigerians. He hated corruption, oppression, abuse of power, and man’s inhumanity to man. Unlike most Nigerians however, he just could not keep quiet in the face of these vices. He could not be scared off by personal danger or economic considerations. He was never intimidated by power or its ability to put him in prison, deny him honours or awards, or even the possibility that he could be assassinated by a state which he believed killed Dele Giwa, one of the many clients whose battles he assumed. He was not ignorant of the devices of the autocratic and retrogressive forces which he continually confronted, but he was not cowed by them.
Gani was arrested, clamped in detention and prosecuted several times in the course of his struggles; indeed his health suffered from the many trials and tribulations he was subjected to; he fought on behalf of students, workers, journalists-any time there was an underdog, trampled upon by our internal colonialists, he was sure to rise up in defence. He was relentless in his struggles, passionate in his interventions, sacrificial in his contributions and tenacious in the vigour and energy he devoted to making Nigeria a better place. It is difficult to identify any other Nigerian that demonstrated these virtues to the level of this great patriot and hero. He was not a perfect person as no man could be. At times, he chose the wrong allies (the Buhari/Idiagbon regime for instance), or supported the wrong causes (the impeachment of Joshua Dariye by only six legislators under the supervision of the EFCC), but even when you disagreed with Gani, it was clear he was motivated only by his passion to confront corruption and social injustice in Nigeria.
If Gani had a regret, it would probably be Nigerians’ docility in the face of evil and our willingness to accept bad leadership. I also often wonder why our people seem so complacent and resigned to poverty, corruption, rigged elections and national drift. Gani must have wondered just like Fela before him why our people so fear danger and death, that they are prepared to accept a diminished existence. As I wrote in another article, “What do we lack? Part 2”, (April 15, 2009) “What are we Nigerians doing to restrain, challenge or replace bad leadership? If our national government is too remote for us to put pressure on and demand better performance from, what about the state and local governments, and national legislators who live amongst us? What about the commissioners and house of assembly members who stay in our communities? Why are Nigerians so willing to bend over backwards perhaps until we break?”
Well Gani Fawehinmi did his very best, and can now leave the rest to another generation. In his frustration, he even founded a party-National Conscience Party-and offered himself to Nigerians as its presidential candidate! As I wrote in my testimony, he will go to his God with a clear conscience.
It was public knowledge at that time that Gani was ill, striken by lung cancer. For some reason, I was clear in my mind that it would probably be my last chance to honour and acknowledge him while he was alive. I did not want to be one of the many that would inevitably describe him after his demise as the greatest Nigerian that ever lived (and that’s what they are all doing now!) and I had no difficulty selecting him as my person of the year 2008. That article was published on Wednesday January 7, 2009. As I feared, the tireless, courageous and indefatigable Gani Fawehinmi passed on Saturday September 5, 2009 at 71 years. In that article, I wrote my “citation” as follows, “My person of the year is Gani Fawehinmi. This selection honours Gani’s lifelong commitment to the Nigerian nation and particularly the under-privileged. For most of the year, Gani was on his sick bed inside or outside the country, but that did not stop him from continuing to raise his voice passionately against corruption and mis-governance in our dear country. He has used his legal training, media access and even founded a political party, National Conscience Party to realise his dreams for a better Nigeria. He has given of his best, and will go to his God with a clear conscience. He is my person of 2008”
Today those words while appropriate, seem inadequate to describe the commitment, courage, integrity, sacrifice and tenacity Gani Fawehinmi brought to public life, legal practice, law publishing, social commentary, pro-democracy struggles and citizen advocacy in his unending crusade to improve our nation, and to enthrone social justice and egalitarian principles in our national life. He rose instinctively, consistently and persistently in defence of the under-privileged, the weak, the poor and the oppressed. Gani hated injustice, like many Nigerians. He hated corruption, oppression, abuse of power, and man’s inhumanity to man. Unlike most Nigerians however, he just could not keep quiet in the face of these vices. He could not be scared off by personal danger or economic considerations. He was never intimidated by power or its ability to put him in prison, deny him honours or awards, or even the possibility that he could be assassinated by a state which he believed killed Dele Giwa, one of the many clients whose battles he assumed. He was not ignorant of the devices of the autocratic and retrogressive forces which he continually confronted, but he was not cowed by them.
Gani was arrested, clamped in detention and prosecuted several times in the course of his struggles; indeed his health suffered from the many trials and tribulations he was subjected to; he fought on behalf of students, workers, journalists-any time there was an underdog, trampled upon by our internal colonialists, he was sure to rise up in defence. He was relentless in his struggles, passionate in his interventions, sacrificial in his contributions and tenacious in the vigour and energy he devoted to making Nigeria a better place. It is difficult to identify any other Nigerian that demonstrated these virtues to the level of this great patriot and hero. He was not a perfect person as no man could be. At times, he chose the wrong allies (the Buhari/Idiagbon regime for instance), or supported the wrong causes (the impeachment of Joshua Dariye by only six legislators under the supervision of the EFCC), but even when you disagreed with Gani, it was clear he was motivated only by his passion to confront corruption and social injustice in Nigeria.
If Gani had a regret, it would probably be Nigerians’ docility in the face of evil and our willingness to accept bad leadership. I also often wonder why our people seem so complacent and resigned to poverty, corruption, rigged elections and national drift. Gani must have wondered just like Fela before him why our people so fear danger and death, that they are prepared to accept a diminished existence. As I wrote in another article, “What do we lack? Part 2”, (April 15, 2009) “What are we Nigerians doing to restrain, challenge or replace bad leadership? If our national government is too remote for us to put pressure on and demand better performance from, what about the state and local governments, and national legislators who live amongst us? What about the commissioners and house of assembly members who stay in our communities? Why are Nigerians so willing to bend over backwards perhaps until we break?”
Well Gani Fawehinmi did his very best, and can now leave the rest to another generation. In his frustration, he even founded a party-National Conscience Party-and offered himself to Nigerians as its presidential candidate! As I wrote in my testimony, he will go to his God with a clear conscience.
Reflections on Nigerian Banking Part 5
Last week in this column, I offered essentially my personal reflections in the wake of the Lamido Sanusi bombshell which led to the CBN dismissal of the CEO and Executive Directors of three of our largest banks-Union Bank (Bartholomew Ebong), Intercontinental Bank (Erastus Akingbola), Oceanic Bank (Cecilia Ibru), and two others, Afribank-which used to be one of our “big 4” banks before it fell from grace (Sebastian Adigwe) and Fin Bank (Okey Nwosu). On Friday, August 14 2009 when the Tsunami hit, I was interviewed through telephone by three newspapers and one radio station, and later that night by Silverbird TV as the main item on its late night news. The next day, I was on Channels TV’s early morning discussion programme and a day later on TV Continental discussing the same issue, as well reflecting how the banking shocker took over the media and private discussions of most Nigerians.
In all those discussions, I chose to focus on the technical aspects of the matter rather than the unfolding allegations of a “Northern Agenda” which continue to trail Lamido Sanusi’s actions. Knowing Sanusi, I find it difficult to think that he would act essentially driven by parochial considerations, rather than the merits of a matter. I also do not think it is in our interests as “Southerners” to suggest that while we complain about public sector corruption, we are more tolerant or ambivalent about private sector corruption, or at least allegations thereof. I am certain there is no Southern agenda of fraud, ostentation, corporate abuses or financial misdemeanour. Nevertheless I am concerned about the trend towards a wholesale criminalisation of borrowing, entrepreneurship or venturing that may be an unfortunate side effect of the unfolding saga.
On the TVC phone-in segment for instance, viewers reacted negatively to my point that borrowing or owing is not in itself a criminal matter. It is only where some specifically criminal activity (such as fraud, false representation, diversion, money laundering, insider dealing etc) is implicit or explicit in the transaction that criminal liability may attach. Indeed even cases of inability to repay a debt, for instance because a business venture has failed, normally attracts civil liability enabling the creditor to sue, appoint a receiver, sell pledged assets, execute judgment against corporate or personal assets or other such remedies. Therefore I am concerned about resort to publication of debtors names in the newspapers or inviting the EFCC into purely banker-customer relationships except as I have already pointed out, where a crime is alleged.
In relation to the substance of the matter, several arguments have been made over the last three to four years in this column concerning the direction of our financial sector. In a two-part serial, “Banking Consolidation…and then what?” published on January 25 and February 1, 2006 right after the consolidation exercise, I argued that “simply consolidating the industry will not automatically put an end to all the problems therein. Like they say, it is not yet Uhuru! Many of the Banks suffered from poor corporate governance and weak institutional capacity, low skill levels, weak processes and standardization, weak management information systems, sub-optimal utilization of technology, amongst others-in addition to low capital which recapitalization and consolidation has addressed. Crucially the concept of who a good banker is has changed from a trained, thinking, careful person of very high integrity to what in effect has become some thing resembling a clever, aggressive, “sharp” and unscrupulous person. Consolidation will not change that!”
In “Nigerian Banking: Differentiating or Commoditising?” (August 1, 2007), I warned against the increasing homogenous industry behaviour I observed. Banks were abandoning unique strategies in favour of herd behaviour noting that “since July 2004, most Nigerian Banks have done largely the same things-raise capital, merge with or acquire other institutions, change names, logos or colours, build many branches, buy ATMs and build e-commerce capabilities, increase retail market penetration, establish subsidiaries, go back to raise more money and open branches in West Africa and beyond-such that unique competitive positions are more difficult to sustain”. Indeed in that same article, I recounted the usual sequence in commoditized industries which our banks were likely to fall into once they were undifferentiated-“The classic sequence then is for price competition to ensue, margins to drop, and in the specific context of banking, imprudent loans and transactions to be booked.” Unfortunately that prediction turns out to have been more than accurate!
These arguments were subsequently repeated over and over again in more than twelve articles. In “The Banking Industry in 2008” (February 20, 2008), I complained that the industry imperatives at the end of consolidation (“stronger corporate governance, professional ethics and transparency in financial reporting, stronger regulation, tighter credit standards …strengthening capacity-human, risk management, information technology and systems and processes…”) were ignored in favour of a second round of capital raising, which I considered an error. I very recently re-stated these points in my “Reflections on Nigerian Banking”, Parts 1-3 published in March. In “Memo to Lamido Sanusi” (June 10, 2009), I identified Sanusi’s short-term priorities as CBN governor as dealing with foreign currency and reserves management, restoring macroeconomic confidence and “resolving concerns around financial sector soundness and health, including asset quality, provisioning, risk management, transparency and professional ethics”
My only regret is that the banking industry failed to take these good faith warnings seriously to everyone’s unfolding anguish!
In all those discussions, I chose to focus on the technical aspects of the matter rather than the unfolding allegations of a “Northern Agenda” which continue to trail Lamido Sanusi’s actions. Knowing Sanusi, I find it difficult to think that he would act essentially driven by parochial considerations, rather than the merits of a matter. I also do not think it is in our interests as “Southerners” to suggest that while we complain about public sector corruption, we are more tolerant or ambivalent about private sector corruption, or at least allegations thereof. I am certain there is no Southern agenda of fraud, ostentation, corporate abuses or financial misdemeanour. Nevertheless I am concerned about the trend towards a wholesale criminalisation of borrowing, entrepreneurship or venturing that may be an unfortunate side effect of the unfolding saga.
On the TVC phone-in segment for instance, viewers reacted negatively to my point that borrowing or owing is not in itself a criminal matter. It is only where some specifically criminal activity (such as fraud, false representation, diversion, money laundering, insider dealing etc) is implicit or explicit in the transaction that criminal liability may attach. Indeed even cases of inability to repay a debt, for instance because a business venture has failed, normally attracts civil liability enabling the creditor to sue, appoint a receiver, sell pledged assets, execute judgment against corporate or personal assets or other such remedies. Therefore I am concerned about resort to publication of debtors names in the newspapers or inviting the EFCC into purely banker-customer relationships except as I have already pointed out, where a crime is alleged.
In relation to the substance of the matter, several arguments have been made over the last three to four years in this column concerning the direction of our financial sector. In a two-part serial, “Banking Consolidation…and then what?” published on January 25 and February 1, 2006 right after the consolidation exercise, I argued that “simply consolidating the industry will not automatically put an end to all the problems therein. Like they say, it is not yet Uhuru! Many of the Banks suffered from poor corporate governance and weak institutional capacity, low skill levels, weak processes and standardization, weak management information systems, sub-optimal utilization of technology, amongst others-in addition to low capital which recapitalization and consolidation has addressed. Crucially the concept of who a good banker is has changed from a trained, thinking, careful person of very high integrity to what in effect has become some thing resembling a clever, aggressive, “sharp” and unscrupulous person. Consolidation will not change that!”
In “Nigerian Banking: Differentiating or Commoditising?” (August 1, 2007), I warned against the increasing homogenous industry behaviour I observed. Banks were abandoning unique strategies in favour of herd behaviour noting that “since July 2004, most Nigerian Banks have done largely the same things-raise capital, merge with or acquire other institutions, change names, logos or colours, build many branches, buy ATMs and build e-commerce capabilities, increase retail market penetration, establish subsidiaries, go back to raise more money and open branches in West Africa and beyond-such that unique competitive positions are more difficult to sustain”. Indeed in that same article, I recounted the usual sequence in commoditized industries which our banks were likely to fall into once they were undifferentiated-“The classic sequence then is for price competition to ensue, margins to drop, and in the specific context of banking, imprudent loans and transactions to be booked.” Unfortunately that prediction turns out to have been more than accurate!
These arguments were subsequently repeated over and over again in more than twelve articles. In “The Banking Industry in 2008” (February 20, 2008), I complained that the industry imperatives at the end of consolidation (“stronger corporate governance, professional ethics and transparency in financial reporting, stronger regulation, tighter credit standards …strengthening capacity-human, risk management, information technology and systems and processes…”) were ignored in favour of a second round of capital raising, which I considered an error. I very recently re-stated these points in my “Reflections on Nigerian Banking”, Parts 1-3 published in March. In “Memo to Lamido Sanusi” (June 10, 2009), I identified Sanusi’s short-term priorities as CBN governor as dealing with foreign currency and reserves management, restoring macroeconomic confidence and “resolving concerns around financial sector soundness and health, including asset quality, provisioning, risk management, transparency and professional ethics”
My only regret is that the banking industry failed to take these good faith warnings seriously to everyone’s unfolding anguish!
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