Everyone is familiar with the Biblical story of Adam and Eve. Genesis 1: 27-28 says “So God created man in his own image, in the image of God created he him; male and female created he them. And God blessed them, and God said unto them, Be fruitful, and replenish the earth, and subdue it: and have dominion over the fish of the sea…” birds, and every living thing God in effect giving man a mission statement. We know specifically that God first created man, and then seeing that “…It is not good that the man should be alone…”, God proceeded to make a “help meet” for him (Genesis 2). Implicit in this we see that God created woman for COMPANIONSHIP AND HELP OR SUPPORT for man. In Genesis 2: 21-25, we know that God created Eve out of the rib he took from Adam after he had “caused a deep sleep to fall upon him” implying again that only in woman is man COMPLETE.
They were as Adam declared “bone of my bones, and flesh of my flesh…and they shall be one flesh…And they were both naked, the man and his wife, and were not ashamed” again suggesting the INTIMACY, SEXUAL AND EMOTIONAL UNION and SOLIDARITY that God intended between man and woman. These verses also suggest than man would be a COVERING for woman and vice versa and that in each other would their DESTINIES be fulfilled. I would not bother recounting the story of man’s fall recounted in Genesis 3, as that is not the focus of this write-up. Suffice to note that both man and woman failed this first and critical spiritual test. The story however reminds us that the enemy will always seek to penetrate the relationship between man and woman through the more vulnerable or naïve of the two.
After the fall Adam and Eve continued their (now) mortal existence outside the garden of Eden, and the indirect Biblical evidence is that Eve for the rest of her relationship with Adam succeeded in her multiple roles-conception, co-habitation, comfort, help, completeness, covering and consummation of destiny enabling Adam to live to a ripe old age of 930 years (Genesis 5:5). There are other Biblical stories that till this day provide insight into the possibilities of relationships between man and woman. Sarah and Abraham-proceeding from an initial error (giving Hagar, her servant to Abraham as wife, but eventually fulfilling the vision (Genesis 21:5). In the story of David and Bathsheba (and Uriah) (2 Samuel 11-12), we see how adultery, lying, oppression and eventually murder can result from complex relationships between men and women. From Uriah’s point of view, we also see how a man can lose his life because of a cheating lover.
The story of Samson and Delilah (Judges 16) also contains eternal wisdom. Samson’s only weakness was his love for women, and his enemies, the Philistines, having failed in every other stratagem, successfully penetrated Samson’s household by getting Delilah to seek out and reveal his secrets to his enemies. It is interesting that in spite of several previous attempts which revealed Delilah’s evil intent (verses 7-9; 10-12; and 13-14), Samson eventually (verse 17) revealed his strength to her, and through her to his enemies, reminding us that a woman would always have the ability to destroy her lover, and sometimes vice versa. What does all this have to do with Princess Diana or Hillary Clinton? Both were famous women, married to very important men, and known all over the world. But they were very different in important ways, and with severely divergent consequences.
Diana was the young, pretty and adorable bride of Prince Charles, at the time probably the most eligible bachelor in the world. She was not highly educated, but had an appearance of innocence that the world loved. She was however, as it later emerged not very wise, even though highly manipulative. When she experienced problems in her marriage, she appears to have turned to other men and eventually was divorced from her husband. Her lovers included Asian cricketers, doctors and eventually an Egyptian Moslem, Dodi El-Fayed with whom she died in a tragic car accident in Paris. Hillary Clinton on the other hand was married to Bill Clinton. Both Bill and Hillary were brilliant lawyers, and when Bill became Governor of Arkansas, she continued in private legal practice. Eventually with Hillary’s strong support and encouragement, Bill became President of America and Hillary the First Lady. The Monica Lewinsky scandal almost destroyed Clinton and Hillary held Bill Clinton’s destiny in her hand. If she turned against him, his Presidency was likely to be irredeemably damaged. Fortunately Hillary saw the bigger picture. She decided to fight the “vast right wing conspiracy” that sought to destroy her husband, and even though she was mad at Bill, she understood that their destinies, not just his, were at stake.
While Diana lies dead in her grave, her husband has married Camilla his long time lover, and may yet become King of England. Hillary on the other hand, became Senator from New York, almost became Democratic Presidential Candidate, losing very narrowly to Barack Obama, and is now US Secretary of State. While Hillary understood her God-given role, to help her husband fulfil his destiny and therein fulfil hers as well, Diana did not and trifled with it. She did not understand her great and historical role, as Princess, Queen, Queen Mother and in the Church of England.
Wednesday, December 30, 2009
Wednesday, December 23, 2009
The Priests of Jeroboam
Solomon’s Kingdom was “outwardly rich, prosperous, and thriving… ” (quoting from the Nelson’s New Illustrated Bible Dictionary, p.649), “But the great building projects he undertook were accomplished by forced labour, high taxes, and other oppressive measures. When the great king died, the kingdom was like a powder keg awaiting a spark”. Before Solomon’s death, the prophet, Ahijah had prophesied to Jeroboam who was Solomon’s servant (1 Kings 11: 28) that God was going to tear the kingdom out of the hand of Solomon into twelve pieces and would give Jeroboam ten of those pieces. Unfortunately Solomon’s successor, the unwise Rehoboam provided the final straw, listening to the advice of his inexperienced companions and declaring to the Isrealite delegation led by Jeroboam, “Whereas my father laid a heavy yoke on you, I will add to your yoke…” The consequence was the cry, “to your tents O Israel” and thus was Jeroboam, the servant made king over ten tribes of Israel.
But Jeroboam, like the servant that he truly was, feared for the safety and security of his new status as king. He feared that for as long as Israel went to worship at the Temple of Solomon in Jerusalem, they would experience nostalgia for the Kingdom of the House of David. So for reasons of strategy, and not faith he had to create a new religion for Israel! He turned to idolatry and made two calves of gold, putting one in Bethel and the other in Dan, for Israel to worship. This action was inspired by Jeroboam’s own desire for self-preservation and clearly contrary to the explicit commandments of God and his covenant with Israel. Jeroboam went beyond this initial error. He “made an house of high places, and made priests of the lowest of the people, which were not of the sons of Levi” (1 Kings 12: 31-33), again clearly for reasons of self and regime viability rather than service to God. In spite of several warnings, Jeroboam continued in his destructive path. He continued to make priests of the lowest of the people and consecrated any willing person as priests of the high places (1 Kings 13: 33) and according to the Bible, “this thing became sin unto the house of Jeroboam, even to cut it off, and to destroy it from off the face of the earth”.
Jeroboam was succeeded by his son Nadab, who continued in his father’s errors and not long thereafter, Baasha killed all the House of Jeroboam fulfilling the prophesy. Baasha was succeeded by his son Elah. Elah in turn was killed by his servant Zimri, but the people turned against Zimri and sided with Omri who prevailed against Zimri. Omri was succeeded by his son, Ahab, the husband of Jezebel, in the time of Elijah, the Tishbite. Ahab did worse than all those who reigned before him, (“And Ahab the son of Omri did evil in the sight of the Lord above all that were before him”-1 Kings 16: 30) and not only did he walk in the path trodden by Jeroboam, but he escalated the defiance of God by Israel’s Kings, and “Ahab did more to provoke the Lord God of Israel to anger than all the kings of Israel that were before him” and elevated the worship of Baal (a fertility and nature god of the Canaanites and Phoenicians) to a state religion in Israel.
Indeed by the time of Ahab, it was recorded that there was only one prophet of God left-Elijah while the prophets of Baal were abundant in their multitude. In the words of Elijah himself, “I even I only remain a prophet of the Lord; but Baal’s prophets are four hundred and fifty men” (1 Kings 18: 22). I have previously wondered about an incongruity here. We know what became of Jeroboam-after his death, his son and successor, Nadab along with his entire genealogy was wiped out as decreed by the Lord. But what happened to the priests whom Jeroboam ordained carelessly and recklessly all over Israel, thus provoking the Lord to anger? Fittingly the Bible does not speak explicitly about them after Jeroboam, but the revelation is there for the wise. In the time of Jeroboam and perhaps for some while thereafter, those false priests may have continued to pretend to be ministers of the Lord God of Israel, but by the time of Ahab, they had all shed all pretences and were now prophets of Baal! Thus Elijah was the only prophet of God left in Israel!!!
Now we know what became of the priests of Jeroboam-they became prophets of Baal. And we know what became of the prophets of Baal. Though their numbers were many, they were destroyed at the confrontation with Elijah. When all the people saw the fire of the Lord consume Elijah’s sacrifice, they fell on their faces and acknowledged “The Lord, he is the God; the Lord, he is the God” restoring the true worship of God in Israel and putting the plans of men to shame. And all the prophets of Baal were slain at the brook, Kishon. Have a good Christmas!
But Jeroboam, like the servant that he truly was, feared for the safety and security of his new status as king. He feared that for as long as Israel went to worship at the Temple of Solomon in Jerusalem, they would experience nostalgia for the Kingdom of the House of David. So for reasons of strategy, and not faith he had to create a new religion for Israel! He turned to idolatry and made two calves of gold, putting one in Bethel and the other in Dan, for Israel to worship. This action was inspired by Jeroboam’s own desire for self-preservation and clearly contrary to the explicit commandments of God and his covenant with Israel. Jeroboam went beyond this initial error. He “made an house of high places, and made priests of the lowest of the people, which were not of the sons of Levi” (1 Kings 12: 31-33), again clearly for reasons of self and regime viability rather than service to God. In spite of several warnings, Jeroboam continued in his destructive path. He continued to make priests of the lowest of the people and consecrated any willing person as priests of the high places (1 Kings 13: 33) and according to the Bible, “this thing became sin unto the house of Jeroboam, even to cut it off, and to destroy it from off the face of the earth”.
Jeroboam was succeeded by his son Nadab, who continued in his father’s errors and not long thereafter, Baasha killed all the House of Jeroboam fulfilling the prophesy. Baasha was succeeded by his son Elah. Elah in turn was killed by his servant Zimri, but the people turned against Zimri and sided with Omri who prevailed against Zimri. Omri was succeeded by his son, Ahab, the husband of Jezebel, in the time of Elijah, the Tishbite. Ahab did worse than all those who reigned before him, (“And Ahab the son of Omri did evil in the sight of the Lord above all that were before him”-1 Kings 16: 30) and not only did he walk in the path trodden by Jeroboam, but he escalated the defiance of God by Israel’s Kings, and “Ahab did more to provoke the Lord God of Israel to anger than all the kings of Israel that were before him” and elevated the worship of Baal (a fertility and nature god of the Canaanites and Phoenicians) to a state religion in Israel.
Indeed by the time of Ahab, it was recorded that there was only one prophet of God left-Elijah while the prophets of Baal were abundant in their multitude. In the words of Elijah himself, “I even I only remain a prophet of the Lord; but Baal’s prophets are four hundred and fifty men” (1 Kings 18: 22). I have previously wondered about an incongruity here. We know what became of Jeroboam-after his death, his son and successor, Nadab along with his entire genealogy was wiped out as decreed by the Lord. But what happened to the priests whom Jeroboam ordained carelessly and recklessly all over Israel, thus provoking the Lord to anger? Fittingly the Bible does not speak explicitly about them after Jeroboam, but the revelation is there for the wise. In the time of Jeroboam and perhaps for some while thereafter, those false priests may have continued to pretend to be ministers of the Lord God of Israel, but by the time of Ahab, they had all shed all pretences and were now prophets of Baal! Thus Elijah was the only prophet of God left in Israel!!!
Now we know what became of the priests of Jeroboam-they became prophets of Baal. And we know what became of the prophets of Baal. Though their numbers were many, they were destroyed at the confrontation with Elijah. When all the people saw the fire of the Lord consume Elijah’s sacrifice, they fell on their faces and acknowledged “The Lord, he is the God; the Lord, he is the God” restoring the true worship of God in Israel and putting the plans of men to shame. And all the prophets of Baal were slain at the brook, Kishon. Have a good Christmas!
Friday, December 11, 2009
Nigeria in 2010
The Great Recession of 2008-2009 is now, according to most data officially over. Taken as a unit, the global economy has stopped contracting even though some national economies, notably the British are still in recession. America has started growing again, though slowly, and the country’s finances and macroeconomic situation are still bad-growing deficits, huge debt, two wars and high unemployment. Asia is in better shape, driven by China and India, both of whom appear to have shaken off the recessionary flu. Emerging economies are generally doing better than developed ones, perhaps signifying an incipient shift in the global balance of power. The IMF subtly confirms the power shift-moving quotas from “over-represented” developed nations to “dynamic emerging economies”.
Nigeria, as corroborating data from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and Economist Intelligence Unit (EIU) all confirm never went into recession-all of them put 2008 GDP growth around a range of 5-7% driven by the non-oil sector even as oil production contracted again in 2008. Amazingly NBS data in fact puts GDP growth in Q4 2008 and Q2 2009 at over 7%. Oil prices have recovered from the below-$40 depths it sunk to in December 2008 to an average in the last month of over $70 per barrel well over our $45 budget price benchmark and production is also reportedly rising as a result of the fairly successful amnesty programme in the Niger-Delta which has significantly reduced disruptions to oil production activities. The prospects for global recovery were briefly shaken as a result of the Dubai collapse and debt debacle but markets appear to be shaking off the panic that initially developed.
With regard to the financial sector, which was the origin of recent economic turmoil, consensus is gradually developing around some principles for regulating financial institutions going forward-tighter capital standards; curbs on compensation and executive pay; stricter regulation of derivatives, securitisation, hedge funds and rating agencies; risk-adjusted capital and profits; consumer protection; and the need for increased global coordination in financial services regulation. As a general rule, it appears Central Banks will be increasingly involved in directly regulating “systemically important” (meaning large) banks. Indeed if the Conservatives take power in Britain, as appears likely, the FSA may be abolished as the industry regulator and may become a consumer protection institution within financial services while banking regulation returns to the Bank of England. Many of these trends may manifest locally. Additionally, there may be a greater role for the Financial Services Regulatory Coordinating Committee, further industry consolidation and stronger capital market regulation. The insurance sector may also have to clean up its books.
The outlook for 2010 for Nigeria appears mixed, with positives and negatives. The most significant negative, as I highlighted last week may be increased political risk, as attention shifts from policy and governance to politics and elections. The risks associated with presidential health and succession remains high as is now becoming obvious. Macroeconomic and fiscal management may strain under the weight of electoral calculations; spending (and “quantitative easing”) may increase; inflation is likely to increase as money supply expands and oil sector deregulation raises transport and food prices. The credit crunch that is developing as a result of the loan write-offs and shock of recent regulatory interventions in the sector may also constrain private sector activity, at least in Q4 2009 and Q1 2010. Higher unemployment is likely.
But there are positives as well-the prospect of higher government revenue as both oil prices and production rises; the likelihood of some re-accumulation of foreign reserves and relative exchange rate stability; the fact that financial sector “toxic” assets have now been recognised and dealt with therefore increasing industry transparency; stock market prices may now have fallen to bargain levels (except that lack of confidence and liquidity and perhaps political risk may yet constrain recovery); the improving security situation in Lagos and the Niger-Delta which are responsible for most economic activity etc. Unfortunately the government appears committed to a wrong power policy-instead of completing the unbundling and privatisation of PHCN and encouraging private investment, the regime has chosen incremental growth financed by government. And even then, the 6,000 MW by December 2009 target is almost certain to be missed. Already officials are re-interpreting the target in terms of generated rather than distributed power!
We expect continued GDP growth in 2010-indeed given the prospects of higher oil production, the growth rate may even be higher. Government has given up on single-digit inflation, at least in 2010 as its own budget proposals targets 11.2% inflation. We think further Naira devaluation is possible. The EIU projects a N/$ exchange rate of N165 for 2010, which we think is not unrealistic. Regulatory standards are likely to be tougher across sectors and tax enforcement is also getting stricter. The social conditions of course remain dire-poverty around 54%, high unemployment, decrepit schools, poor healthcare coverage, the absence of a social welfare net while our population goes above 160 million people!
Nigeria, as corroborating data from the Central Bank of Nigeria (CBN), National Bureau of Statistics (NBS) and Economist Intelligence Unit (EIU) all confirm never went into recession-all of them put 2008 GDP growth around a range of 5-7% driven by the non-oil sector even as oil production contracted again in 2008. Amazingly NBS data in fact puts GDP growth in Q4 2008 and Q2 2009 at over 7%. Oil prices have recovered from the below-$40 depths it sunk to in December 2008 to an average in the last month of over $70 per barrel well over our $45 budget price benchmark and production is also reportedly rising as a result of the fairly successful amnesty programme in the Niger-Delta which has significantly reduced disruptions to oil production activities. The prospects for global recovery were briefly shaken as a result of the Dubai collapse and debt debacle but markets appear to be shaking off the panic that initially developed.
With regard to the financial sector, which was the origin of recent economic turmoil, consensus is gradually developing around some principles for regulating financial institutions going forward-tighter capital standards; curbs on compensation and executive pay; stricter regulation of derivatives, securitisation, hedge funds and rating agencies; risk-adjusted capital and profits; consumer protection; and the need for increased global coordination in financial services regulation. As a general rule, it appears Central Banks will be increasingly involved in directly regulating “systemically important” (meaning large) banks. Indeed if the Conservatives take power in Britain, as appears likely, the FSA may be abolished as the industry regulator and may become a consumer protection institution within financial services while banking regulation returns to the Bank of England. Many of these trends may manifest locally. Additionally, there may be a greater role for the Financial Services Regulatory Coordinating Committee, further industry consolidation and stronger capital market regulation. The insurance sector may also have to clean up its books.
The outlook for 2010 for Nigeria appears mixed, with positives and negatives. The most significant negative, as I highlighted last week may be increased political risk, as attention shifts from policy and governance to politics and elections. The risks associated with presidential health and succession remains high as is now becoming obvious. Macroeconomic and fiscal management may strain under the weight of electoral calculations; spending (and “quantitative easing”) may increase; inflation is likely to increase as money supply expands and oil sector deregulation raises transport and food prices. The credit crunch that is developing as a result of the loan write-offs and shock of recent regulatory interventions in the sector may also constrain private sector activity, at least in Q4 2009 and Q1 2010. Higher unemployment is likely.
But there are positives as well-the prospect of higher government revenue as both oil prices and production rises; the likelihood of some re-accumulation of foreign reserves and relative exchange rate stability; the fact that financial sector “toxic” assets have now been recognised and dealt with therefore increasing industry transparency; stock market prices may now have fallen to bargain levels (except that lack of confidence and liquidity and perhaps political risk may yet constrain recovery); the improving security situation in Lagos and the Niger-Delta which are responsible for most economic activity etc. Unfortunately the government appears committed to a wrong power policy-instead of completing the unbundling and privatisation of PHCN and encouraging private investment, the regime has chosen incremental growth financed by government. And even then, the 6,000 MW by December 2009 target is almost certain to be missed. Already officials are re-interpreting the target in terms of generated rather than distributed power!
We expect continued GDP growth in 2010-indeed given the prospects of higher oil production, the growth rate may even be higher. Government has given up on single-digit inflation, at least in 2010 as its own budget proposals targets 11.2% inflation. We think further Naira devaluation is possible. The EIU projects a N/$ exchange rate of N165 for 2010, which we think is not unrealistic. Regulatory standards are likely to be tougher across sectors and tax enforcement is also getting stricter. The social conditions of course remain dire-poverty around 54%, high unemployment, decrepit schools, poor healthcare coverage, the absence of a social welfare net while our population goes above 160 million people!
Tuesday, December 1, 2009
Assessing Nigerian Political Risk
Political risk is usually elevated in Nigeria whenever we enter electoral cycles reflecting the fact that we are yet to become a stable, mature democracy. This season is no different. As we enter into 2010, politics, elections and succession will take the front burner and policy and governance will recede to the background. There are some economic implications usually associated with electoral cycles in Nigeria-fiscal expansion and a rash of contract awards as war chests are built, less value-for-money from government procurement etc. The macroeconomic implications may include higher inflation, foreign currency volatility and higher budget deficits. We have already seen some of these phenomena and the others may yet manifest.
The uncertainty introduced as regards the quality and legitimacy of the approaching party primaries and general elections, possible electoral violence, election-related disputes and litigation, policy continuity or instability etc, all help to undermine the investment climate and business and consumer confidence. In one of the most extreme examples, the 1993 elections indisputably won by Chief MKO Abiola was annulled plunging the country into the June 12 political crisis and the terrorist dictatorship of General Sanni Abacha. The 1983 elections were so massively rigged by the then National Party of Nigeria (NPN) that the ensuing government lasted only three months before it was toppled by the Generals. The earlier 1964-65 election cycle led directly to the 1966 military coup and the 1967-70 civil war. In Nigeria, politics and succession is a big deal and the appearance of political continuity and stability since the return to civil rule in 1999 should give no one an illusion that those dangerous electoral cycles are behind us.
Indeed the reality is that both the elections of 2003 and 2007 were of doubtful credibility and legitimacy and the polity may be unable to withstand a third straight flawed polls. As we move into 2010, the battlefield logistics therefore revolve around electoral reform (or lack of it); creation of an opposition alliance (in particular, will the opposition be able to successfully build a cohesive platform and agree on a common candidate for the presidency?); building of war chests (witness the spate of contract awards since the second half of 2009 and the budget proposals for 2010) and the role of the international community. Unfortunately the issue of presidential health introduces additional risks and uncertainties and further complicates the sensitive electoral cycle. If not carefully managed, some of the possible scenarios may be analogous to the June 12, 1993 crisis in their implications!
My working assumption is that given the concerns over President Umaru Yar’adua’s health, he will not be the PDP candidate in 2011. Of course his inner circle have an interest in projecting otherwise-to prevent him becoming a lame duck and to preserve their influence over succession-but it is unlikely that Yar’adua will endure the stress of another electioneering cycle. So who could be the candidates? I have a shortlist that includes the First Lady Turai Yar’adua; Governors Isa Yuguda and Saidu Dakingari; Chief Economic Adviser Tanimu Yakubu and Agriculture Minister, Sayyadi Abba Ruma; National Planning Minister, Dr Shamsudeen Usman; and Governors Bukola Saraki, Danjuma Goje, Namadi Sambo, Ibrahim Shema and Aliyu Babangida. In fact, technically all Hausa-Fulani Governors between 1999 to date may also be considered as possibilities.
Vice President Goodluck (!) Jonathan could also be the candidate, especially if he inherits the office before then. Of course, it cannot be presumed that if anything happens to Yar’adua, Jonathan will be “allowed” to succeed him as prescribed by the Constitution. His seemingly deliberate exclusion from international fora such as the United Nations and strenuous efforts to ensure that power is never formally handed over to him whenever the President is absent are indicators that some critical constituencies are averse to his possible succession. I can only hope that those tempted to consider preventing a constitutional succession recognise the clear implications-the notion of a Nigerian nation may be irredeemably damaged and any arguments for restraining the “militants” in the Niger-Delta and ethnic agitators from other parts of the country from seeking “self-determination” may lack credibility in such a scenario. Whatever happens, it is critical to Nigeria’s territorial integrity and national cohesion to preserve the integrity of the Constitution while negotiating future political arrangements.
Which factors or constituencies will exercise decisive influence over the choice of candidates? In the opposition, it is clear that Asiwaju Bola Tinubu, Atiku Abubakar, Muhammadu Buhari, Attahiru Bafarawa are the king pins. Nuhu Ribadu and Nasir El-Rufai have in effect become opposition-in-exile and may also be in play. In the PDP, there are evidently two critical power groups-the President and Katsina clique around him including the First Lady, Tanimu Yakubu, Dahiru Mangal, Abba Ruma, Ibrahim Shema etc, and the Governors. Already the Governors represent the political centre-of-gravity in the current political dispensation and if anything happens to Yar’adua, the Katsina clique immediately loses relevance and the Governors become the sole deciding group. I am watching this space!
The uncertainty introduced as regards the quality and legitimacy of the approaching party primaries and general elections, possible electoral violence, election-related disputes and litigation, policy continuity or instability etc, all help to undermine the investment climate and business and consumer confidence. In one of the most extreme examples, the 1993 elections indisputably won by Chief MKO Abiola was annulled plunging the country into the June 12 political crisis and the terrorist dictatorship of General Sanni Abacha. The 1983 elections were so massively rigged by the then National Party of Nigeria (NPN) that the ensuing government lasted only three months before it was toppled by the Generals. The earlier 1964-65 election cycle led directly to the 1966 military coup and the 1967-70 civil war. In Nigeria, politics and succession is a big deal and the appearance of political continuity and stability since the return to civil rule in 1999 should give no one an illusion that those dangerous electoral cycles are behind us.
Indeed the reality is that both the elections of 2003 and 2007 were of doubtful credibility and legitimacy and the polity may be unable to withstand a third straight flawed polls. As we move into 2010, the battlefield logistics therefore revolve around electoral reform (or lack of it); creation of an opposition alliance (in particular, will the opposition be able to successfully build a cohesive platform and agree on a common candidate for the presidency?); building of war chests (witness the spate of contract awards since the second half of 2009 and the budget proposals for 2010) and the role of the international community. Unfortunately the issue of presidential health introduces additional risks and uncertainties and further complicates the sensitive electoral cycle. If not carefully managed, some of the possible scenarios may be analogous to the June 12, 1993 crisis in their implications!
My working assumption is that given the concerns over President Umaru Yar’adua’s health, he will not be the PDP candidate in 2011. Of course his inner circle have an interest in projecting otherwise-to prevent him becoming a lame duck and to preserve their influence over succession-but it is unlikely that Yar’adua will endure the stress of another electioneering cycle. So who could be the candidates? I have a shortlist that includes the First Lady Turai Yar’adua; Governors Isa Yuguda and Saidu Dakingari; Chief Economic Adviser Tanimu Yakubu and Agriculture Minister, Sayyadi Abba Ruma; National Planning Minister, Dr Shamsudeen Usman; and Governors Bukola Saraki, Danjuma Goje, Namadi Sambo, Ibrahim Shema and Aliyu Babangida. In fact, technically all Hausa-Fulani Governors between 1999 to date may also be considered as possibilities.
Vice President Goodluck (!) Jonathan could also be the candidate, especially if he inherits the office before then. Of course, it cannot be presumed that if anything happens to Yar’adua, Jonathan will be “allowed” to succeed him as prescribed by the Constitution. His seemingly deliberate exclusion from international fora such as the United Nations and strenuous efforts to ensure that power is never formally handed over to him whenever the President is absent are indicators that some critical constituencies are averse to his possible succession. I can only hope that those tempted to consider preventing a constitutional succession recognise the clear implications-the notion of a Nigerian nation may be irredeemably damaged and any arguments for restraining the “militants” in the Niger-Delta and ethnic agitators from other parts of the country from seeking “self-determination” may lack credibility in such a scenario. Whatever happens, it is critical to Nigeria’s territorial integrity and national cohesion to preserve the integrity of the Constitution while negotiating future political arrangements.
Which factors or constituencies will exercise decisive influence over the choice of candidates? In the opposition, it is clear that Asiwaju Bola Tinubu, Atiku Abubakar, Muhammadu Buhari, Attahiru Bafarawa are the king pins. Nuhu Ribadu and Nasir El-Rufai have in effect become opposition-in-exile and may also be in play. In the PDP, there are evidently two critical power groups-the President and Katsina clique around him including the First Lady, Tanimu Yakubu, Dahiru Mangal, Abba Ruma, Ibrahim Shema etc, and the Governors. Already the Governors represent the political centre-of-gravity in the current political dispensation and if anything happens to Yar’adua, the Katsina clique immediately loses relevance and the Governors become the sole deciding group. I am watching this space!
The Credit Crunch is Here! Part 2
In the aftermath of our domestic stock market collapse and the global financial crisis last year, a friend and former student of mine sent me an e-mail. The story reproduced hereunder with my comments in bold teach all anyone needs to know about financial crisis.
“Tamedu is the proprietor of a Foo-Foo and Isi-Ewu Shop… in Lagos, Nigeria. Sales are low and, in order to increase them, he comes up with a plan to allow his customers to eat now and pay later. (In effect, Tamedu stops being a food seller and becomes a financial institution engaged in lending. Unfortunately he has not acquired any credit risk management skills) He keeps track of the meals consumed on a ledger. Word gets around and as a result increasing numbers of customers flock to Tamedu's shop. (If credit is freely available, borrowers will flock to any lender; the test is whether he can collect the debts on due date) His suppliers are delighted and are very willing to sell more and more raw materials for the meals he prepares. Tamedu shows them his ledger of receivables and they extend him credit (a financial system develops)
“A young and dynamic Customer Service Consultant at the local Nairaland bank recognizes these customer debts as valuable future assets and gives Tamedu a credit line and then increases Tamedu's borrowing limit (In AIG’s financial products division, they would have called it financial innovation). Taking advantage of his customers' freedom from immediate payment constraints, Tamedu jacks up the prices of his Foo-Foo and Isi-Ewu. Customers don't mind as they are not required to pay on the spot (A borrower who has no intention of repaying doesn’t care what the interest rate is!). Sales volume increases massively; Banks and suppliers lend more (the bubble begins); Tamedu opens more outlets in Abuja, Kaduna, Port Harcourt and Ibadan (In effect he becomes a mega-food seller!). He sees no reason for undue concern since he has the debts of the customers as collateral. At the bank's corporate headquarters, expert bankers recognize Tamedu's customer loans as assets and transform these customer assets into Bonds (that is called securitisation. Unfortunately a securitized instrument is only as good as the underlying asset, which in the US sub-prime market were bad mortgages based on over-valued houses; in the Nigerian margin loan transactions, the underlying stock prices were determined by Peter Ololo!) .
“These negotiable instruments are given exotic names such as FoofooBond, IsiBond, EwuBond AND EgusiBond (that’s what they call derivatives). These securities are then listed on the Stock Exchange and traded on markets worldwide (globalisation of financial markets, which guarantees that like global pandemics, modern financial crisis infect the whole world). No one really understands what the names mean and how the securities are guaranteed (In the US crisis, the CEO thought the COO knew, the COO thought the risk manager did, the risk manager thought the investment bankers did, they thought the product managers did, the investors assumed all these Harvard MBAs in the bank did, and the regulators assumed that the bankers knew-apparently no one knew anything) but, nevertheless, as their prices continuously climb (a bull market celebrated by the NSE DG) , the securities become top-selling items One day, although the prices are still climbing, a credit risk manager of the Nairaland bank decides that the time has come to demand payment of one of the debts incurred by Tamedu(He in effect puts a pin to the balloon).
“Tamedu in turn asks his clients to pay up. One by one they refuse; the clients cannot pay back the debts. Tamedu refuses to serve them anymore. The clients stop coming. Tamedu is really screwed now. (And the bubble bursts) He cannot fulfil his loan obligations and therefore claims bankruptcy. All bonds drop in price by between 80 to 95% (meltdown). The suppliers of Tamedu, having granted generous payment due dates and having invested in the securities (bad debts, toxic assets) are faced with similar problems. The goat-meat supplier defaults on payment to the Mallam who sells goats to him and to the cattle supplier and claims bankruptcy. The yam supplier is taken over by a competitor; Tamedu lays off the cook and staff. Bankruptcies soar, unemployment mushrooms (Recession, unemployment, corporate bankruptcies, credit crunch etc). The Nairaland bank that lent the money in the first place is set to collapse (Lehman Brothers, AIG, Freddie Mac, Fannie Mae, and the local examples) It is saved by the Government following dramatic round-the-clock consultations by leaders from the …(ruling) Party with Tamedu commuting back and forth in his Executive jet and Mercedes 500SEL, brokering the deal. The funds required to save the economic collapse are obtained by a tax levied on the citizens, most of whom do not eat Foo-Foo or Isi-Ewu. (Privatised profits and socialised losses-the people always end up paying!)
The meltdown was not caused by the credit risk manager who asked Tamedu to pay up his debts. He in fact probably prevented a bigger collapse in future if the bubble was allowed to get bigger…and bigger…blaming Lamido Sanusi for the current credit crunch amounts to blaming the surgeon, who undertook the corrective surgery, rather than the patient who made wrong lifestyle choices, and the doctor who delayed treatment. But then the surgeon must also be calm and careful to ensure the patient does not die after a “successful” surgery!
“Tamedu is the proprietor of a Foo-Foo and Isi-Ewu Shop… in Lagos, Nigeria. Sales are low and, in order to increase them, he comes up with a plan to allow his customers to eat now and pay later. (In effect, Tamedu stops being a food seller and becomes a financial institution engaged in lending. Unfortunately he has not acquired any credit risk management skills) He keeps track of the meals consumed on a ledger. Word gets around and as a result increasing numbers of customers flock to Tamedu's shop. (If credit is freely available, borrowers will flock to any lender; the test is whether he can collect the debts on due date) His suppliers are delighted and are very willing to sell more and more raw materials for the meals he prepares. Tamedu shows them his ledger of receivables and they extend him credit (a financial system develops)
“A young and dynamic Customer Service Consultant at the local Nairaland bank recognizes these customer debts as valuable future assets and gives Tamedu a credit line and then increases Tamedu's borrowing limit (In AIG’s financial products division, they would have called it financial innovation). Taking advantage of his customers' freedom from immediate payment constraints, Tamedu jacks up the prices of his Foo-Foo and Isi-Ewu. Customers don't mind as they are not required to pay on the spot (A borrower who has no intention of repaying doesn’t care what the interest rate is!). Sales volume increases massively; Banks and suppliers lend more (the bubble begins); Tamedu opens more outlets in Abuja, Kaduna, Port Harcourt and Ibadan (In effect he becomes a mega-food seller!). He sees no reason for undue concern since he has the debts of the customers as collateral. At the bank's corporate headquarters, expert bankers recognize Tamedu's customer loans as assets and transform these customer assets into Bonds (that is called securitisation. Unfortunately a securitized instrument is only as good as the underlying asset, which in the US sub-prime market were bad mortgages based on over-valued houses; in the Nigerian margin loan transactions, the underlying stock prices were determined by Peter Ololo!) .
“These negotiable instruments are given exotic names such as FoofooBond, IsiBond, EwuBond AND EgusiBond (that’s what they call derivatives). These securities are then listed on the Stock Exchange and traded on markets worldwide (globalisation of financial markets, which guarantees that like global pandemics, modern financial crisis infect the whole world). No one really understands what the names mean and how the securities are guaranteed (In the US crisis, the CEO thought the COO knew, the COO thought the risk manager did, the risk manager thought the investment bankers did, they thought the product managers did, the investors assumed all these Harvard MBAs in the bank did, and the regulators assumed that the bankers knew-apparently no one knew anything) but, nevertheless, as their prices continuously climb (a bull market celebrated by the NSE DG) , the securities become top-selling items One day, although the prices are still climbing, a credit risk manager of the Nairaland bank decides that the time has come to demand payment of one of the debts incurred by Tamedu(He in effect puts a pin to the balloon).
“Tamedu in turn asks his clients to pay up. One by one they refuse; the clients cannot pay back the debts. Tamedu refuses to serve them anymore. The clients stop coming. Tamedu is really screwed now. (And the bubble bursts) He cannot fulfil his loan obligations and therefore claims bankruptcy. All bonds drop in price by between 80 to 95% (meltdown). The suppliers of Tamedu, having granted generous payment due dates and having invested in the securities (bad debts, toxic assets) are faced with similar problems. The goat-meat supplier defaults on payment to the Mallam who sells goats to him and to the cattle supplier and claims bankruptcy. The yam supplier is taken over by a competitor; Tamedu lays off the cook and staff. Bankruptcies soar, unemployment mushrooms (Recession, unemployment, corporate bankruptcies, credit crunch etc). The Nairaland bank that lent the money in the first place is set to collapse (Lehman Brothers, AIG, Freddie Mac, Fannie Mae, and the local examples) It is saved by the Government following dramatic round-the-clock consultations by leaders from the …(ruling) Party with Tamedu commuting back and forth in his Executive jet and Mercedes 500SEL, brokering the deal. The funds required to save the economic collapse are obtained by a tax levied on the citizens, most of whom do not eat Foo-Foo or Isi-Ewu. (Privatised profits and socialised losses-the people always end up paying!)
The meltdown was not caused by the credit risk manager who asked Tamedu to pay up his debts. He in fact probably prevented a bigger collapse in future if the bubble was allowed to get bigger…and bigger…blaming Lamido Sanusi for the current credit crunch amounts to blaming the surgeon, who undertook the corrective surgery, rather than the patient who made wrong lifestyle choices, and the doctor who delayed treatment. But then the surgeon must also be calm and careful to ensure the patient does not die after a “successful” surgery!
Subscribe to:
Posts (Atom)