As The Spirit Leads!

The phrase and context of this column’s title belongs to Remi Babalola, former Minister of State for Finance who was reported to have wondered in bewilderment, whether there was a holistic, coherent and well thought-out strategy behind Lamido Sanusi’s unfolding banking sector reforms or whether the “reforms” were proceeding “as the Spirit leads”!!! Several incidents appear to offer corroboration for the perception that the latter possibility is supportable-CBN introducing clearly unconstitutional Islamic banking guidelines in January, and then replacing with less blatantly unconstitutional ones in June 2011; and ordering banks to remove all Automated Teller Machines (ATMs) installed in public places; then months later introducing a “cashless” policy under which it encouraged banks to rapidly restore them, being prominent examples! And true, no one has seen any document articulating an integrated philosophy, plan and programme for the CBN’s overall financial sector agenda. The frequency of new policy announcements and amendments is so perplexing that one worries whether banks themselves are successfully keeping track!!! The recent CBN announcement that it would introduce a N5,000 note in 2013 unfortunately reinforces the impression that it acts tactically rather than based on a comprehensive strategy! I do not support the proposal which also includes converting currency N20 and below into coins; and re-designing all others for several reasons-it is unnecessary and diversionary, and does not amount to a substantial policy action; it will cost us significant resources (which in the light of its doubtful value or purpose means such expenditure is wasteful and profligate); it contradicts the “cashless” direction the CBN has embarked on at great cost to the industry and customers; it suggests an arbitrary and weak policy analysis process at the CBN; and it is unclear what motives, logic and economic imperatives have necessitated the policy. The best one can say on the matter is that it is inconsequential and of no effect on the economy or financial sector, and that is only if one ignores the costs and disruptions that would result there from. Please note that I do not subscribe to the popular, but misplaced argument that the policy would cause inflation! To the best of my knowledge, there is no scientific and/or economic evidence that mere introduction of higher currency denominations while retaining lower ones, without more will cause inflation. Inflation is a monetary (and not currency) phenomenon, usually caused by money supply dynamics and would not result simply because of introduction of a higher value currency note. Inflation may be caused by excess demand, high costs, or excessive increase in money supply. If the CBN combined this policy with too much money in circulation; Naira depreciation; or very low interest rates for instance, we may observe higher inflation, but that may be due more to those other variables, than the new note. That said, the basic underpinning of the “cashless” policy was to make financial and payments systems more efficient and less costly, the argument being that cash handling costs are excessive in our cash heavy economy and that migrating to cashless platforms would help reduce transaction costs and introduce better payments efficiency. Other benefits of the cashless system (which I personally supported in various media) included reducing corruption and money laundering, both of which are better facilitated through cash transactions! Significantly, the cashless policy is more relevant and impactful precisely in relation to higher value payments! To introduce N5,000 note just months into the cashless regime undercuts and contradicts the CBN’s logic! Admittedly processing N5,000 is cheaper for banks relative to lower denominations, but it still costs MUCH more than an electronic transfer, card or Point of Sale (PoS) payment! And will be big boon to corrupt officials and money launderers!!! In any event, the CBN had two policy alternatives in seeking to deal with cash processing costs-“cashless” banking or higher denominations! It couldn’t logically choose both!!! Beyond these, it is unclear what economic benefits are sought by the policy! Yes higher currency denominations don’t cause inflation; but they don’t reduce or mitigate inflation either! They do not retard economic growth; but they don’t spur it either!! They don’t necessarily increase money in circulation; but they don’t necessarily constrain it either!!! Instead they facilitate corruption and money laundering!!!!!!! The highest currency denomination in the British currency system is the fifty pound note! In the US, even though they have $1,000 notes, no one (except the mafia and other criminals!) sees it!!! The highest denomination regularly encountered in America is the $100 note!!! And this change costs money! Lots of money!!! Considering immediate past CBN Governor, Soludo implemented a comprehensive currency change which included converting some notes to polymer, introducing a N1,000 note etc between 2005 and 2007, it is difficult to justify a change at this time especially as the last one actually spurred controversy over its procurement and cost!!! The best that can be said for this change is that it is unnecessary and cosmetic. It adds no value and is not supported by any apparent economic rationale. The substantive economic policy imperatives facing Nigeria are clear-sustaining and increasing economic growth; diversifying the economy; improving infrastructure; improving fiscal and macroeconomic management; reducing inflation and interest rates; combating corruption; redressing poverty, unemployment and social exclusion; improving Human Development Indices; and improving investment climate and business competitiveness. Tinkering with currency does not help in advancing any of these and may actually hurt some!

The Ghanaian Transition

President John Atta-Mills of Ghana died on July 24, 2012 and was succeeded by his Vice-President John Dramani Mahama on the same day. Atta-Mills, who was aged 68, served as President of Ghana from 2009 when he took over from ex-President John Kufuor till his death. He had previously been Vice-President under Jerry Rawlings from 1997-2001 and unsuccessfully contested the presidency in 2000 and 2004 as candidate of the National Democratic Congress (NDC). He was the first Ghanaian president to die in office. Born on July 21, 1944, Atta-Mills was Fante from Ekumfi Otuan and attended Achimota School and University of Ghana, Legon where he obtained his law degree in 1967. He studied at London School of Economics and the School of Oriental and African Studies, University of London obtaining a PhD in law based on a doctoral thesis in taxation and economic development. He lectured at his alma mater in Legon for twenty-five years and served as Visiting Professor at Temple Law School, Philadelphia, USA. He was in charge of Ghana’s Internal Revenue Service from 1986 to 1996 and remarkably won the presidency in 2009 with only 50.23% of the vote against the equally formidable candidate of the New Patriotic Party (NPP), Nana Akufo-Addo. He was married with a son. (Source: Wikipedia) Upon Mills death, his erstwhile Vice-President, John Dramani Mahama was promptly sworn-in as mandated by the Constitution of Ghana. Born in November 29, 1958, Mahama is described by Wikipedia as a communications expert, historian and writer. He was a Member of Parliament from 1997 to 2009 and Minister for Communications from 1998 to 2001. Born in Damongo in Damongo-Daboya Constituency of Ghana, Mahama’s father was also a Member of Parliament. Like Atta-Mills, he attended Achimota and Legon, and obtained a degree in History and post-graduate qualification in communications. He also studied social sciences in the old Soviet Union and worked in Ghana’s diplomatic service and the development sector. He is now the presumptive nominee of the NDC in the next presidential elections and is expected to be confirmed as candidate in a party congress scheduled for September 1, 2012. Nigeria and Ghana share many historical similarities-British colonialism and its legacies of the English language, legal system and civil service amongst others; military interventions early in the country’s post-independence history; return to civil rule after multiple military rulers and coups; and transition from parliamentary to presidential system of governance. Remarkably both countries now share the experience of losing sitting, civilian leaders post-return to democracy-Yar’adua in Nigeria in 2010 and Atta-Mills in Ghana in 2012! But that is where the similarity ends! We can draw several distinctions between the processes of democratic deepening and national cohesion in the two countries as evidenced by the reaction to the demise of these two leaders. In Nigeria, as we all recall, Yar’adua’s illness and subsequent death almost led to the truncation of democracy in Nigeria. There was a long period of denial of his illness; there were several attempts by some to rule by proxy in his stead; there were numerous subterfuges around his illness, medical treatment in Saudi Arabia, re-entry into Nigeria and his eventual death. On the night he was brought back to the country, it was done in the dead of night and all lights were reportedly switched off at the airports during the “operation” conducted by senior military officers without the knowledge of the then Vice-President! Many attempts were made to intimidate then Vice-President Goodluck Jonathan from accepting the position of President and we needed an extraordinary action by the National Assembly to invest Jonathan as Acting President while Yar’adua lay gravely ill in Arabia!!! In the end, it is clear that only the fact that an attempt to prevent Jonathan from taking power as mandated by the Constitution would have resulted in serious danger to our national unity and cohesion prevented such desperation from some cliques! Indeed many would argue that we are still dealing with the consequences of Jonathan then seeking and accepting the nomination of the ruling PDP and winning the subsequent elections in 2011!!! The response in Ghana has been starkly different! Immediately Atta-Mills died, there was no question about what should and would follow-immediate swearing-in of his deputy Mahama in line with the Constitution. No one from Fante quarrelled that there was a presumption that the office was “zoned” to them for eight years! No one threatened fire and brimstone if Mahama goes ahead to contest the forthcoming election. There were no powerful politicians from Atta-Mills region promising to make the country ungovernable if another Fante man was not found to replace him! No one has had the effrontery to demand that the now sitting president, John Mahama must NOT contest the next polls; Atta-Mills wife and entourage did not attempt to hide his death from Ghanaians in a vain hope of grabbing power and national resources for themselves! Insecurity and indeed terrorism has not erupted in Mills’ Fante region to bring Mahama’s government to its knees for having the audacity to declare his intention of contesting!!! The evidence is clear that Ghana’s process of democratic deepening and nation-building is proceeding in a more qualitative manner than in her West African neighbour. Here rather than deepening democracy, we are endangering it and drawing our people further apart than we’ve ever been!!!

A Law and Order State!

I attended a “thank you” dinner hosted by Lagos State Governor, Babatunde Raji Fashola (SAN) for donors to the Lagos State Security Trust Fund on Saturday July 7, 2012 at a restaurant in Victoria-Island, Lagos. The dinner was underwritten by First Bank, one of the bigger donors (financially and by “donating” its CEO to serve as a fund trustee. The event was not designed to raise funds, but to thank organisations and individuals who had contributed to the cost of securing Lagos State. Those donors were being appreciated for their civic citizenship and for endorsing the new paradigm in which rather than wealthy individuals and businesses trying (in vain) to secure themselves only, they contribute towards a bigger fund which can leverage scale and synergy, and thus be more effective in securing society as a whole. I am a big admirer of the idea behind the establishment of the trust fund idea (cynics would say “why wouldn’t you since you were appointed a trustee in 2011! But I could disappoint them!!! The role is unpaid; attracts a sitting allowance of only N50,000; and imposes a heavy responsibility since one has in effect accepted the obligation to account, jointly with other trustees and fund management, to very enlightened business, professional and individual donors) since BRF introduced it in 2007. It’s a unique public-private partnership between the state, which has the responsibility for security, and its corporate and private citizens who recognise themselves as stakeholders in the enterprise of creating a conducive environment for business, living and leisure and who are ready for put their money where the mouths lie! It is not supposed to be the ideal-the state should ordinarily have the capacity-constitutionally, financially and operationally, to create its own police and to fund it through its revenues and citizens’ taxes, but Nigeria continues to insist on the dysfunctional irrationality of a federal monopoly on policing while law and order breaks down all over the country! But rather than helplessly wringing his arms, the Lagos State Government created this intervention to bridge the massive funding gap which had rendered the Nigerian police basically impotent in the face of a rising crime wave, now compounded by new phenomenon of fundamentalist terrorism, kidnapping and our old nemesis-corruption and financial crime. Until the fund was created, Lagos was taken over by daily armed robberies on the roads and in our homes (as I can personally testify) and daily fatalities, and even though crime has not been banished from our state, the contrast with the pre-2007 period and with other states, including neighbouring ones is stark! But back to the dinner! With the tension of being asked to make further contributions (in the very short term!!!) removed, it was a relaxed and amiable evening, with Gbenga Adeyinka 1st making the evening a very entertaining one as well-until BRF announced a major change in policy direction in Lagos State! The Governor declared a new emphasis on zero tolerance for unlawful behaviour in the state. There was pin-drop silence as the lawyer-governor cited examples-fraudulent and back-dated documents to support applications for land title perfection, non-tax compliance, gross traffic infractions, building and planning violations etc. Many may have perhaps shifted uncomfortably in their seats, and when Fashola asked the distinguished audience for a voice vote in support of the new direction, the response did not appear to be overwhelmingly enthusiastic! But I think we should support the Governor. If we want development, we must be willing to pay the price! Why should we be happy to visit and/or live in Europe, USA, Singapore, China and other nations and cities who have built successful societies on the back of strict rule of law and refuse to accept the imperative of doing so in our own country? Why should our compatriots be willing to pay taxes in the UK or USA while they join in not paying taxes back at home? Why should we flagrantly breach traffic and urban planning regulations in Nigeria, while admiring the progress other societies which act otherwise are making? I ask these questions not out of self-righteousness; but can’t we all accept the need to change? Of course these changes will also have implications for the ruling classes-if you insist on tax compliance for instance, you will have to be accountable to the tax payer on how the money is spent; if you insist on strict law enforcement, then the leaders will be carefully watched on how they (and their family and friends) relate to the law. But hasn’t BRF earned the right to make higher demands on the citizens? I think he has! And isn’t it in our enlightened self-interest? I think it is!!! That is why I support the new Lagos State Road Traffic Law 2012 recently enacted by the state legislature and signed into law by the Governor. Compliance will involve a culture change by all citizens, but change we must. The government has also enacted a Land Use Act Title Document Regulations 2012 which may also signify a new and stricter regime in respect of land titles. I suspect others may follow. I would personally like to see a law that mandates registration of all domestic staff-drivers, housemaids, cooks, security men, washermen and women; prohibits employment or demands notice of illegal immigrants in household employment and makes employers liable for non-compliance.

Ramadan Kareem

The concept of sacrifice, whether by giving, service, keeping vigil, self-denial or fasting, is well-established in most religions. The importance of fasting, prayer and meditation pervades Christianity, African traditional religions, Buddhism, Judaism and Islam. In Islam, fasting during the entire lunar month of Ramadan is one of the religion’s five pillars and Muslims all over the world have remained, by and large, faithful to that injunction. Ramadan is the ninth month of the Islamic calendar, and the month in which Muslims believe that the Koran was revealed and wherein they are required to fast during the daylight hours from dawn to sunset. Muslims are taught that the Koran was sent down during Ramadan, and thus prepared for gradual revelation by Jibraeel (Angel Gabriel) to Muhammad, Islam’s Prophet, on the occasion called Laylat al-Qadr or “The Night of Power”. Muhammad is believed to have taught his followers that the gates of heaven are open all through Ramadan and gates of hell concurrently closed! The first three days of the next month (Shawwal) is spent in celebration of Eid-il-Fitri or the “festival of breaking fast”. Shia Muslims are reported to also believe that the gospel (Injil) was bestowed on Isa (Jesus) and the Psalms (Zabur) to David during Ramadan. Fasting is very important in the Christian faith. Indeed, our Lord Jesus Christ instituted the practice of fasting when he fasted for forty days and forty nights right at the inception of his ministry. It is probably not co-incidental that Jesus (unlike Adam and Eve) rebuffed the temptations of the devil at the end of this period of fasting, a demonstration perhaps of the power and grace obtained through the disciplining of body, soul and spirit and the tighter connection and communication with the will and mind of God enabled by humans through fasting. Indeed, Jesus Christ suggests in Mathew 17:21 that certain hierarchies of spiritual problems may be addressed only by prayer and fasting. In the contemporary church, while fasting remains very important, there has been a certain “democratisation” of the practice such that it often happens outside and beyond the Lenten season. Individuals, families, church groups and Christian ministers regularly embrace fasting in multiple seasons throughout the year, though Catholics and “Orthodox” churches retain the traditional Lenten fast as well. In Yoruba society, Ramadan is a season of fellowship, goodwill, giving, sharing, bonding and compassion. I have previously written in these pages on the lessons other Nigerians, particularly in Northern Nigeria, and even religious faithful all over the world can learn from the Yoruba about religious tolerance and harmony. I have also shared my personal experience as a child, teenager and youth with Ramadan in a peaceful multi-religious society. Ramadan was my favourite period of the year to visit my maternal grandparents in Sagamu, especially my grandmother, an Alhaja. Even though it was her period of fasting, for me, it was the season of abundance when you could eat your normal three meals a day and yet break fast with her at dawn and sunset. And, of course, the meals, compensatory of the abstention from eating throughout the day, were of higher quality and quantity! Even though the household was Islamic and I had a Christian upbringing and faith, I never felt out of place in any way. This atmosphere of unity was not peculiar to my family. It was the spirit you encountered everywhere in Yorubaland – in Sagamu, Ijebu-Ode, Abeokuta, Ibadan, Ikorodu, Lagos or anywhere else you went during Ramadan or “Ileya” or indeed at Easter or Christmas. In this season when extremists are seeking to destroy the nation on the altar of extremist religious ideology and politicisation of religion, I once again commend the Yoruba example to our brothers and sisters in other parts of the country. Incidentally, that spirit of tolerance and harmony has had positive impact on Yoruba (and Nigerian) society if only you look deeper. For instance, “ajiwere” music, which Muslim youths initially used to entertain the community during Ramadan, evolved into Fuji which was pioneered by Alhaji “Agba” Sikiru Ayinde Agbajelola “Barrister”, Ayinla “Kollington”, and now led by “King” Wasiu Ayinde Marshall (KWAM 1). I believe “Waka” music of “Queen Salawa Abeni” had similar roots. Today, a fusion of Fuji, Yoruba gospel (epitomised in the African Churches such as Cherubim and Seraphim, Celestial, CAC and African Church, but also present in Orthodox and Pentecostal variants), Juju music of King Sunny Ade (KSA) and Chief Commander Ebenezer Obey, US Hip Hop and Rhythm and Blues has emerged, such that you can see traces of these genres in the “Naija” music of initially Shina Peters and currently Nice, Wizkid, late Dagrin, Wande Coal, and even non-Yoruba stars like Ice Prince who sang “Oleku”. In effect, tolerance and harmony in Yoruba society have permitted a synthesis of multiple streams of music and contributed towards creating something greater than the sum of its parts. I suspect such positive fusion may have occurred in other spheres. I gather the greeting “Ramadan Kareem” means “a generous Ramadan”. May the spirit of material and spiritual generosity (in effect love, peace and unity) be restored in Nigeria and may hateful ideologies and violence be banished from our land. Amen. I wish all our Muslim brothers and sisters a generous Ramadan!