When you want to hang a dog, first give it a bad name! Evidently some powerful constituencies in Nigeria viscerally dislike privatisation and the notion of private-sector led development. They prefer the prebendal, statist, semi-feudal development (actually underdevelopment!) model in which banks, refineries, telecommunications companies, electricity generation and distribution utilities, hotels, airlines, newspapers, television and radio stations etc are controlled by Abuja and bureaucrats, politicians, traditional rulers, government contractors and sundry patrons and wards of the state control all economic resources and determine who gets rich or stays poor! This coalition and their agents hate privatisation as it takes away their control over the destinies of our nation and its peoples.
But they can’t say this, can they? So instead they focus on persuading us it has failed! That privatisation is over-rated and state-owned enterprises are better after all. It doesn’t bother them that massive corruption is endemic in state-owned enterprises, but they carefully scrutinize privatisations for opportunities to call the kettle black! And they succeed in persuading some naïve or hypocritical “comrades” (who own private professional practices; carry three mobile phones; work for private banks and telecommunication companies; and appear regularly on private broadcast stations!!!) to their cause!!! The current leader of this “Anti-Privatisation Coalition” is Vice-President Namadi Sambo, who ironically as Chair of the National Council on Privatisation (NCP) presides over privatisation. In Sambo’s view, “80percent of privatised firms moribund” (Thisday May 13, 2011) and “the process of privatisation has been going on for about ten years but has not been successful due to obvious non-performance” (Peoples Daily May 12, 2011). Meeting with the Russian Ambassador, Sambo re-stated that “many of the privatised companies have not met been able to meet the aspirations of government” (Punch June 28, 2011).
Unfortunately Sambo may have persuaded President Jonathan! The Nation newspaper’s screaming headline proclaimed “Privatisation has failed, says Jonathan”!! This at the inauguration of NCP!!! Jonathan’s late boss, Umaru Yar’adua reversed the privatisation of Refineries which were concluded just before ex-President Obasanjo handed over to him. Yar’adua also refused to proceed with the expected privatisation of unbundled Power Holding Company of Nigeria (PHCN) entities; and later formally outlined a policy championed by Rilwanu Lukman which rested the private sector electricity model in favour of state control. Should we then expect that Jonathan will abandon the Power Sector Roadmap and Electric Power Sector Reform Act 2005 both of which are based on privatisation of electricity generation and distribution, while transmission is billed to be concessioned to the private sector? Is the power road map dead on arrival, since we can logically expect Namadi Sambo to frustrate expected privatisations?
Interestingly a replay of Yar’adua’s strategy of stalling Obasanjo’s power reforms, (as Engineer Foluseke Somolu recently pointed out), through public disinformation that $16billion had been wasted on power; and Ndudi Elumelu’s House of Representatives Power Committee probe appears ongoing! The Senate has commenced its legislative agenda with an adhoc committee investigating privatisation!!! Senate President David Mark while inaugurating the panel declared that privatisation has not achieved the desired objectives and actually blamed privatisation for loss of jobs, financial deprivation and loss of revenue to the federal government!!! If the Senate had already reached these conclusions, why did it bother setting up an investigation? I urge Nigerians to be calm and circumspect in responding to the “alarming revelations” emerging from the Senate probe!!!
By all means, any clear infractions must be dealt with based on law and due process. Indeed this columnist has long identified conditions which make for successful privatisations-an independent technical agency overseeing the process; proper valuations of assets being disposed of; open, competitive and transparent bidding by all participants; a process that first establishes technical qualification of bidding firms before proceeding to competitive financial bidding; and the absence of corruption and political interference, except in cases of national security and overriding national interest. The industry structure must ensure existence of a competent regulator; and privatisation must not result in private monopolies. Where specific transactions breached these principles, that is not a failure of privatisation but the corruption and political irresponsibility that afflicts our nation!
But the bigger picture is that the private sector has been vastly more successful than government in Nigeria. Can anyone compare Oando and Conoil to Unipetrol and Nolchem? Would First Bank and UBA have survived (remember Continental Merchant, Allied Bank, IMB, NMB etc) government ownership? Can you compare Federal Palace Hotel, Golden Tulip Festac, Ikoyi Southern Sun, Notore and Eleme Petrochemicals to their rotten pre-privatisation predecessors? Does anyone miss the scandal-plagued, massively corrupt, pre-privatisation African Petroleum or NAFCON? Aren’t Nigerians aware that military rulers and bureaucrats used Aluminium Smelter Company and Ajaokuta Steel to enrich themselves? Can’t we see what difference private capital and management has made in telecommunications, financial services, aviation, newspapers, radio and television broadcasting, private universities, hotels etc? Do we miss the days when Nigerian Airways, Daily Times, New Nigerian, NTA, Radio Nigeria and inefficient and politicised government-owned banks were our only alternatives?
Does anyone want a return to the days when state-owned parastatals consumed billions of Naira every year without returning a kobo to the treasury? I don’t!!!
Wednesday, August 17, 2011
Wednesday, August 10, 2011
The Extended Tenure Distraction
President Goodluck Jonathan was reported to have stated at the Presidential Inauguration Lecture delivered by Professor Ladipo Adamolekun just before his inauguration on May 29 that in his view, four years was too short to achieve transformation. The statement was unexpected from a president just elected overwhelmingly on a mandate of “transformation” and upon whom Nigerians had invested hopes for national renewal. Jonathan has now in effect launched a campaign to persuade the National Assembly, the political elite, State Governors and legislatures on the desirability of a constitutional amendment to extend the tenure of the President and Governors from the current four to between five and seven years with no prospect of second terms.
I have since been bewildered as I pondered how the president and his advisers considered this issue his most important policy and legislative priority? Even though I would prefer to believe the president’s assertion that he doesn’t intend benefitting from the proposed change, the question remains why this matter occupies such elevated position on the president’s agenda? And the wisdom, from the point of view of strategy, of the president personally making the case; the consequence been that Jonathan has squandered political capital so early in his term on a debate of at best doubtful value! This column, as well as many other commentators and stakeholders have spent time articulating an agenda for the Jonathan administration covering power, transportation, infrastructure, economic diversification, unemployment and poverty, education and health, housing mortgage and land reform etc-did anyone identify extended presidential and gubernatorial single tenures as an important national imperative?
Beyond misplaced priorities, the case being made for longer tenures appears shallow and simplistic!!! The logic advanced is that extending presidential and governorship tenures would reduce cost and ferocious competition associated with four-year electoral cycles and allow office holders focus on performance without re-election worries. These arguments do not stand much scrutiny! The 2007 elections, probably the worst in Nigeria’s chequered democratic history was conducted by ex-President Obasanjo who wasn’t a candidate. Yet it was a “do-or-die” matter because like all incumbents, Obasanjo was interested in his succession! So were ex-Governors Gbenga Daniel, Bukola Saraki and Ali Modu Sherriff of Ogun, Kwara and Borno states respectively in the last governorship elections even though they weren’t contestants, having served mandatory two terms. The point is, in corrupt political systems (particularly), departing incumbents and parties remain interested in succession irrespective of whether specific individuals are running!
The prospect of exclusion from political power for five to seven years may in fact have the unintended consequence of making intra and inter-party competition for political power a more deadly fight-to-finish! The knowledge that another opportunity is only four years away moderates desperation to win elections at all cost. I worry also about the consequences of electing a wrong governor or president! The electorate is condemned to five, six or seven years of drift and stagnation once it makes the error of electing a wrong leader. Given that most Nigerians regard most of those they have elected as failures in office, I wonder whether they have any reason to project that giving longer non-renewable terms will make a positive difference. The more likely consequence is that a corrupt, incompetent or irresponsible leader with has no prospect of re-election will become totally irredeemable, lacking no incentive to attempt better performance. In my view, six or seven years of mis-governance may amount to a generational calamity!!!
In a yet-developing democracy, rife with corruption, self-aggrandisement and unaccountable leadership, this proposal is likely to weaken, rather than strengthen our democracy! Leaders will get more insulated from the voters; the electorate will further lose “power” over their rulers; and elected officers will become near monarchs! The proposal assumes that the over-riding motivation for seeking political office in Nigeria is the quest for service, with the political system and elections being a distraction rather than the other way round! Most Nigerians will for good reason, contest such an assumption. The truth appears to be that many seek office for pecuniary gain, and may simply appropriate the gains of longer tenures in cash, rather than focused service. A truly committed leader would excel in four years, and the voters will reward him with a second term as they did for Fashola in Lagos.
I concede however that there may be need to debate the more comprehensive proposals contained in the draft 1995 Constitution (which never became law) which recognised six geo-political zones; created the offices of President, Vice-President, Prime-Minister, and Deputy Prime Minister; created five-year single terms for president and governors; recognised the principles of zoning and rotation of political offices among geo-political zones and senatorial districts; created a 30-year transition period for such zoning and rotation to operate; created a process to ensure succession from the same zone in the event of succession or death of an incumbent; and recommended proportional “all-party” governments to eliminate the “winner-takes-all” system which is the real cause of deadly political competition. Even though these proposals emerge from the “national cake sharing” paradigm of the Nigerian nation, they are worth re-examining to see if they offer any value.
I have since been bewildered as I pondered how the president and his advisers considered this issue his most important policy and legislative priority? Even though I would prefer to believe the president’s assertion that he doesn’t intend benefitting from the proposed change, the question remains why this matter occupies such elevated position on the president’s agenda? And the wisdom, from the point of view of strategy, of the president personally making the case; the consequence been that Jonathan has squandered political capital so early in his term on a debate of at best doubtful value! This column, as well as many other commentators and stakeholders have spent time articulating an agenda for the Jonathan administration covering power, transportation, infrastructure, economic diversification, unemployment and poverty, education and health, housing mortgage and land reform etc-did anyone identify extended presidential and gubernatorial single tenures as an important national imperative?
Beyond misplaced priorities, the case being made for longer tenures appears shallow and simplistic!!! The logic advanced is that extending presidential and governorship tenures would reduce cost and ferocious competition associated with four-year electoral cycles and allow office holders focus on performance without re-election worries. These arguments do not stand much scrutiny! The 2007 elections, probably the worst in Nigeria’s chequered democratic history was conducted by ex-President Obasanjo who wasn’t a candidate. Yet it was a “do-or-die” matter because like all incumbents, Obasanjo was interested in his succession! So were ex-Governors Gbenga Daniel, Bukola Saraki and Ali Modu Sherriff of Ogun, Kwara and Borno states respectively in the last governorship elections even though they weren’t contestants, having served mandatory two terms. The point is, in corrupt political systems (particularly), departing incumbents and parties remain interested in succession irrespective of whether specific individuals are running!
The prospect of exclusion from political power for five to seven years may in fact have the unintended consequence of making intra and inter-party competition for political power a more deadly fight-to-finish! The knowledge that another opportunity is only four years away moderates desperation to win elections at all cost. I worry also about the consequences of electing a wrong governor or president! The electorate is condemned to five, six or seven years of drift and stagnation once it makes the error of electing a wrong leader. Given that most Nigerians regard most of those they have elected as failures in office, I wonder whether they have any reason to project that giving longer non-renewable terms will make a positive difference. The more likely consequence is that a corrupt, incompetent or irresponsible leader with has no prospect of re-election will become totally irredeemable, lacking no incentive to attempt better performance. In my view, six or seven years of mis-governance may amount to a generational calamity!!!
In a yet-developing democracy, rife with corruption, self-aggrandisement and unaccountable leadership, this proposal is likely to weaken, rather than strengthen our democracy! Leaders will get more insulated from the voters; the electorate will further lose “power” over their rulers; and elected officers will become near monarchs! The proposal assumes that the over-riding motivation for seeking political office in Nigeria is the quest for service, with the political system and elections being a distraction rather than the other way round! Most Nigerians will for good reason, contest such an assumption. The truth appears to be that many seek office for pecuniary gain, and may simply appropriate the gains of longer tenures in cash, rather than focused service. A truly committed leader would excel in four years, and the voters will reward him with a second term as they did for Fashola in Lagos.
I concede however that there may be need to debate the more comprehensive proposals contained in the draft 1995 Constitution (which never became law) which recognised six geo-political zones; created the offices of President, Vice-President, Prime-Minister, and Deputy Prime Minister; created five-year single terms for president and governors; recognised the principles of zoning and rotation of political offices among geo-political zones and senatorial districts; created a 30-year transition period for such zoning and rotation to operate; created a process to ensure succession from the same zone in the event of succession or death of an incumbent; and recommended proportional “all-party” governments to eliminate the “winner-takes-all” system which is the real cause of deadly political competition. Even though these proposals emerge from the “national cake sharing” paradigm of the Nigerian nation, they are worth re-examining to see if they offer any value.
The Extended Tenure Distraction
President Goodluck Jonathan was reported to have stated at the Presidential Inauguration Lecture delivered by Professor Ladipo Adamolekun just before his inauguration on May 29 that in his view, four years was too short to achieve transformation. The statement was unexpected from a president just elected overwhelmingly on a mandate of “transformation” and upon whom Nigerians had invested hopes for national renewal. Jonathan has now in effect launched a campaign to persuade the National Assembly, the political elite, State Governors and legislatures on the desirability of a constitutional amendment to extend the tenure of the President and Governors from the current four to between five and seven years with no prospect of second terms.
I have since been bewildered as I pondered how the president and his advisers considered this issue his most important policy and legislative priority? Even though I would prefer to believe the president’s assertion that he doesn’t intend benefitting from the proposed change, the question remains why this matter occupies such elevated position on the president’s agenda? And the wisdom, from the point of view of strategy, of the president personally making the case; the consequence been that Jonathan has squandered political capital so early in his term on a debate of at best doubtful value! This column, as well as many other commentators and stakeholders have spent time articulating an agenda for the Jonathan administration covering power, transportation, infrastructure, economic diversification, unemployment and poverty, education and health, housing mortgage and land reform etc-did anyone identify extended presidential and gubernatorial single tenures as an important national imperative?
Beyond misplaced priorities, the case being made for longer tenures appears shallow and simplistic!!! The logic advanced is that extending presidential and governorship tenures would reduce cost and ferocious competition associated with four-year electoral cycles and allow office holders focus on performance without re-election worries. These arguments do not stand much scrutiny! The 2007 elections, probably the worst in Nigeria’s chequered democratic history was conducted by ex-President Obasanjo who wasn’t a candidate. Yet it was a “do-or-die” matter because like all incumbents, Obasanjo was interested in his succession! So were ex-Governors Gbenga Daniel, Bukola Saraki and Ali Modu Sherriff of Ogun, Kwara and Borno states respectively in the last governorship elections even though they weren’t contestants, having served mandatory two terms. The point is, in corrupt political systems (particularly), departing incumbents and parties remain interested in succession irrespective of whether specific individuals are running!
The prospect of exclusion from political power for five to seven years may in fact have the unintended consequence of making intra and inter-party competition for political power a more deadly fight-to-finish! The knowledge that another opportunity is only four years away moderates desperation to win elections at all cost. I worry also about the consequences of electing a wrong governor or president! The electorate is condemned to five, six or seven years of drift and stagnation once it makes the error of electing a wrong leader. Given that most Nigerians regard most of those they have elected as failures in office, I wonder whether they have any reason to project that giving longer non-renewable terms will make a positive difference. The more likely consequence is that a corrupt, incompetent or irresponsible leader with has no prospect of re-election will become totally irredeemable, lacking no incentive to attempt better performance. In my view, six or seven years of mis-governance may amount to a generational calamity!!!
In a yet-developing democracy, rife with corruption, self-aggrandisement and unaccountable leadership, this proposal is likely to weaken, rather than strengthen our democracy! Leaders will get more insulated from the voters; the electorate will further lose “power” over their rulers; and elected officers will become near monarchs! The proposal assumes that the over-riding motivation for seeking political office in Nigeria is the quest for service, with the political system and elections being a distraction rather than the other way round! Most Nigerians will for good reason, contest such an assumption. The truth appears to be that many seek office for pecuniary gain, and may simply appropriate the gains of longer tenures in cash, rather than focused service. A truly committed leader would excel in four years, and the voters will reward him with a second term as they did for Fashola in Lagos.
I concede however that there may be need to debate the more comprehensive proposals contained in the draft 1995 Constitution (which never became law) which recognised six geo-political zones; created the offices of President, Vice-President, Prime-Minister, and Deputy Prime Minister; created five-year single terms for president and governors; recognised the principles of zoning and rotation of political offices among geo-political zones and senatorial districts; created a 30-year transition period for such zoning and rotation to operate; created a process to ensure succession from the same zone in the event of succession or death of an incumbent; and recommended proportional “all-party” governments to eliminate the “winner-takes-all” system which is the real cause of deadly political competition. Even though these proposals emerge from the “national cake sharing” paradigm of the Nigerian nation, they are worth re-examining to see if they offer any value.
I have since been bewildered as I pondered how the president and his advisers considered this issue his most important policy and legislative priority? Even though I would prefer to believe the president’s assertion that he doesn’t intend benefitting from the proposed change, the question remains why this matter occupies such elevated position on the president’s agenda? And the wisdom, from the point of view of strategy, of the president personally making the case; the consequence been that Jonathan has squandered political capital so early in his term on a debate of at best doubtful value! This column, as well as many other commentators and stakeholders have spent time articulating an agenda for the Jonathan administration covering power, transportation, infrastructure, economic diversification, unemployment and poverty, education and health, housing mortgage and land reform etc-did anyone identify extended presidential and gubernatorial single tenures as an important national imperative?
Beyond misplaced priorities, the case being made for longer tenures appears shallow and simplistic!!! The logic advanced is that extending presidential and governorship tenures would reduce cost and ferocious competition associated with four-year electoral cycles and allow office holders focus on performance without re-election worries. These arguments do not stand much scrutiny! The 2007 elections, probably the worst in Nigeria’s chequered democratic history was conducted by ex-President Obasanjo who wasn’t a candidate. Yet it was a “do-or-die” matter because like all incumbents, Obasanjo was interested in his succession! So were ex-Governors Gbenga Daniel, Bukola Saraki and Ali Modu Sherriff of Ogun, Kwara and Borno states respectively in the last governorship elections even though they weren’t contestants, having served mandatory two terms. The point is, in corrupt political systems (particularly), departing incumbents and parties remain interested in succession irrespective of whether specific individuals are running!
The prospect of exclusion from political power for five to seven years may in fact have the unintended consequence of making intra and inter-party competition for political power a more deadly fight-to-finish! The knowledge that another opportunity is only four years away moderates desperation to win elections at all cost. I worry also about the consequences of electing a wrong governor or president! The electorate is condemned to five, six or seven years of drift and stagnation once it makes the error of electing a wrong leader. Given that most Nigerians regard most of those they have elected as failures in office, I wonder whether they have any reason to project that giving longer non-renewable terms will make a positive difference. The more likely consequence is that a corrupt, incompetent or irresponsible leader with has no prospect of re-election will become totally irredeemable, lacking no incentive to attempt better performance. In my view, six or seven years of mis-governance may amount to a generational calamity!!!
In a yet-developing democracy, rife with corruption, self-aggrandisement and unaccountable leadership, this proposal is likely to weaken, rather than strengthen our democracy! Leaders will get more insulated from the voters; the electorate will further lose “power” over their rulers; and elected officers will become near monarchs! The proposal assumes that the over-riding motivation for seeking political office in Nigeria is the quest for service, with the political system and elections being a distraction rather than the other way round! Most Nigerians will for good reason, contest such an assumption. The truth appears to be that many seek office for pecuniary gain, and may simply appropriate the gains of longer tenures in cash, rather than focused service. A truly committed leader would excel in four years, and the voters will reward him with a second term as they did for Fashola in Lagos.
I concede however that there may be need to debate the more comprehensive proposals contained in the draft 1995 Constitution (which never became law) which recognised six geo-political zones; created the offices of President, Vice-President, Prime-Minister, and Deputy Prime Minister; created five-year single terms for president and governors; recognised the principles of zoning and rotation of political offices among geo-political zones and senatorial districts; created a 30-year transition period for such zoning and rotation to operate; created a process to ensure succession from the same zone in the event of succession or death of an incumbent; and recommended proportional “all-party” governments to eliminate the “winner-takes-all” system which is the real cause of deadly political competition. Even though these proposals emerge from the “national cake sharing” paradigm of the Nigerian nation, they are worth re-examining to see if they offer any value.
Wednesday, August 3, 2011
Sanusi's Many Controversies (2)
I support the case, for reasons of financial inclusion, for providing non-interest banking for those who for reasons of faith, find conventional interest-based banking objectionable. However this must be done in line with BOFIA and our Constitution, rather than by creating a precedent that could lead towards Nigeria’s “Sudanisation”. The problem as I see it is that Sanusi seeks to take his regulatory framework from Malaysia, Bahrain and other officially Islamic nations, rather than countries that insulate their laws and Constitution from religion! The Central Banks in UK, USA, South Africa, Singapore, Hong Kong and those other places the CBN touts as having Islamic banking products, certainly would not accept banking guidelines which blatantly infringe on the separation of state and Church or Mosque!
The Banking and Other Financial Institutions Act (BOFIA) enacted by two Muslims, Ibrahim Babangida and Abdulkadir Ahmed as President and CBN Governor respectively, made provision since 1991 for non-interest banking as a constitutional and non-divisive means of allowing those Nigerians who abhorred interest to create and/or patronise non-interest financial institutions(NIFI). Section 61 of BOFIA defines NIFI as “a profit and loss sharing bank” which is “a bank which transacts investment or commercial banking business and maintains profit and loss sharing accounts”. Jaiz International Bank received an approval-in-principle to conduct non-interest banking several years ago, until Soludo’s N25billion minimum capital proved an obstacle. There was no objection then to Jaiz’s imminent license, until CBN’s January guidelines which introduced religion into banking regulation. Sanusi, it must be noted, has since re-introduced Arabic lettering on the Naira and now seeks to float sovereign Islamic bonds (“Sukuk”) so his critics can legitimately point to a trend!
As I pointed out last week, Sanusi’s January 2011 guidelines contained several inappropriate provisions- it defined a NIFI as one who conducts business “in accordance with Shariah principles and rules of Islamic commercial jurisprudence”; defined Shariah principles as “the divine guidance as given by the Holy Qu’ran and the Sunnah of the Holy Prophet and embodies all aspects of the Islamic faith, including beliefs and practices”; contained terms such as “Shariah-compliant products and services”, Arabic terms such as “Istitna”, “Ijarah”, Ijarah wa iqtina”, “Mudharabah”, “Salam”, “Sukuk” and many others; required all licensed NIFIs to establish “an internal Shariah compliance review mechanism and a Shariah Advisory Committee”; and required the CBN to establish a “CBN Shariah Council” to “advise the CBN on Shariah matters”!!! With those guidelines, Sanusi put to question his credentials as a technical financial sector regulator and public servant in a multi-religious entity like Nigeria.
The June amendment according to one commentator was “clever(er) by half”. Instead of a “CBN Shariah Council”, you now have a “CBN Advisory Council of Experts”; Arabic words are omitted; and instead of a mono-definition of NIFI based on “Shariah principles and rules of Islamic commercial jurisprudence”, it created two categories-those based on “Islamic commercial jurisprudence” and “any other established rules and principles”. The document prescribed modalities for the “Islamic” ones while the CBN promised to “subsequently issue guidelines governing the provision of non-interest financial services based on established principles other than Islamic finance”. These guidelines remain problematic as they purport to redefine NIFI other than as specified in BOFIA and establish “Islamic Financial Institutions” contrary to the letter and spirit of BOFIA and our Constitution. They may also be discriminatory, prescribing capital requirements for Islamic banking lower than for conventional ones for equivalent coverage. As pointed out by others, the CBN should have simply issued operating guidelines which are faith-neutral (like those for private universities or broadcast stations by NUC and NBC) and allow individual institutions set up internal mechanisms (in this case such as product papers; credit and risk management policies; ethical guidelines; corporate governance and corporate social responsibility principles; memorandum and articles of association; and other institution-specific governance mechanisms) to fulfil their mission.
Beyond the Islamic banking controversy, it is necessary to caution the current Central Bank against getting involved in political, religious or socio-economic disputations. Unlike most global central bankers, Sanusi has tended to court controversy-at his Senate confirmation hearings, he criticised the governance agenda of the government that appointed him; he took on errant bank owners at a point calling for their public execution; he once declared that Nigeria’s stock exchange operated like a casino; disagreed openly with the International Monetary Fund (IMF); launched a blistering attack on the national legislature; and urged the public not to believe bank rating agencies, which are licensed by the CBN! Some months back, he publicly threatened to liquidate the 8 “intervened” banks if they didn’t recapitalise by September 30, 2011, recently altering the threat to nationalisation. It would be inconceivable that any of these statements could be made by US Federal Reserve Chair, Ben Bernanke or Bank of England Head, Mervyn King!!!
The CBN has fundamental challenges to deal with-indices on access to credit; unemployment; financial deepening; financial sector stability; and exchange rate management are all going negative. All these economic limitations can be remedied. It would be sad however if the manner of introduction of non-interest banking leads Nigeria further in the direction of Sudan, Yugoslavia or Indo-Pakistan!
The Banking and Other Financial Institutions Act (BOFIA) enacted by two Muslims, Ibrahim Babangida and Abdulkadir Ahmed as President and CBN Governor respectively, made provision since 1991 for non-interest banking as a constitutional and non-divisive means of allowing those Nigerians who abhorred interest to create and/or patronise non-interest financial institutions(NIFI). Section 61 of BOFIA defines NIFI as “a profit and loss sharing bank” which is “a bank which transacts investment or commercial banking business and maintains profit and loss sharing accounts”. Jaiz International Bank received an approval-in-principle to conduct non-interest banking several years ago, until Soludo’s N25billion minimum capital proved an obstacle. There was no objection then to Jaiz’s imminent license, until CBN’s January guidelines which introduced religion into banking regulation. Sanusi, it must be noted, has since re-introduced Arabic lettering on the Naira and now seeks to float sovereign Islamic bonds (“Sukuk”) so his critics can legitimately point to a trend!
As I pointed out last week, Sanusi’s January 2011 guidelines contained several inappropriate provisions- it defined a NIFI as one who conducts business “in accordance with Shariah principles and rules of Islamic commercial jurisprudence”; defined Shariah principles as “the divine guidance as given by the Holy Qu’ran and the Sunnah of the Holy Prophet and embodies all aspects of the Islamic faith, including beliefs and practices”; contained terms such as “Shariah-compliant products and services”, Arabic terms such as “Istitna”, “Ijarah”, Ijarah wa iqtina”, “Mudharabah”, “Salam”, “Sukuk” and many others; required all licensed NIFIs to establish “an internal Shariah compliance review mechanism and a Shariah Advisory Committee”; and required the CBN to establish a “CBN Shariah Council” to “advise the CBN on Shariah matters”!!! With those guidelines, Sanusi put to question his credentials as a technical financial sector regulator and public servant in a multi-religious entity like Nigeria.
The June amendment according to one commentator was “clever(er) by half”. Instead of a “CBN Shariah Council”, you now have a “CBN Advisory Council of Experts”; Arabic words are omitted; and instead of a mono-definition of NIFI based on “Shariah principles and rules of Islamic commercial jurisprudence”, it created two categories-those based on “Islamic commercial jurisprudence” and “any other established rules and principles”. The document prescribed modalities for the “Islamic” ones while the CBN promised to “subsequently issue guidelines governing the provision of non-interest financial services based on established principles other than Islamic finance”. These guidelines remain problematic as they purport to redefine NIFI other than as specified in BOFIA and establish “Islamic Financial Institutions” contrary to the letter and spirit of BOFIA and our Constitution. They may also be discriminatory, prescribing capital requirements for Islamic banking lower than for conventional ones for equivalent coverage. As pointed out by others, the CBN should have simply issued operating guidelines which are faith-neutral (like those for private universities or broadcast stations by NUC and NBC) and allow individual institutions set up internal mechanisms (in this case such as product papers; credit and risk management policies; ethical guidelines; corporate governance and corporate social responsibility principles; memorandum and articles of association; and other institution-specific governance mechanisms) to fulfil their mission.
Beyond the Islamic banking controversy, it is necessary to caution the current Central Bank against getting involved in political, religious or socio-economic disputations. Unlike most global central bankers, Sanusi has tended to court controversy-at his Senate confirmation hearings, he criticised the governance agenda of the government that appointed him; he took on errant bank owners at a point calling for their public execution; he once declared that Nigeria’s stock exchange operated like a casino; disagreed openly with the International Monetary Fund (IMF); launched a blistering attack on the national legislature; and urged the public not to believe bank rating agencies, which are licensed by the CBN! Some months back, he publicly threatened to liquidate the 8 “intervened” banks if they didn’t recapitalise by September 30, 2011, recently altering the threat to nationalisation. It would be inconceivable that any of these statements could be made by US Federal Reserve Chair, Ben Bernanke or Bank of England Head, Mervyn King!!!
The CBN has fundamental challenges to deal with-indices on access to credit; unemployment; financial deepening; financial sector stability; and exchange rate management are all going negative. All these economic limitations can be remedied. It would be sad however if the manner of introduction of non-interest banking leads Nigeria further in the direction of Sudan, Yugoslavia or Indo-Pakistan!
Wednesday, July 27, 2011
Sanusi's Many Controversies
I supported Lamido Sanusi’s initial actions, though with some reservations. I shared his concern for better governance, transparency and risk management and believed regulators and economy managers needed action to prevent future systemic crisis. Against charges of “Northern agenda”, I wrote that “knowing Sanusi, I find it difficult to think that he would act essentially driven by parochial considerations” and cautioned commentators against the impression that “while we complain about public sector corruption, we are more tolerant or ambivalent about private sector corruption” concluding that “…there is no Southern agenda of fraud, ostentation, corporate abuses or financial misdemeanour”. I complained however about “…wholesale criminalisation of borrowing, entrepreneurship or venturing”-it was unnecessary to advertise the names of persons in newspapers simply because they borrowed money from a bank!
I identified the challenge of “what to do with the eight banks now under government control” and warned against “nationalisation” arguing that “Given our history with nationalised banks in the 1970s and 1980s, this would be a severe error”. I urged the CBN to “move towards recapitalisation of these banks by their owners, a quick off load to other acceptable international private core investors or a merger or acquisition of these institutions” and urged the CBN “to accept a negotiated solution with the bank owners that preserves the regulators original goals”. I also suggested that “CBN over-dramatised its actions in relation to the sector and could have minimised disruptive emotions” (erring bank CEOs have been removed without undue publicity on at least four earlier occasions) and argued that “the systemic implications could have been better anticipated and counter-cyclical measures adopted in advance rather than as a reaction?” I feared that the CBN overreached itself in taking over management of the banks rather than simply removing erring CEOs; exercising its power to accept or reject replacements; mandating required loan write-offs; and requiring re-capitalisation within a given period.
In assessing probable consequences of Sanusi’s intervention, I stressed that “whatever it takes, we must get the banking sector to resume lending…” or a credit crunch was imminent. Indeed Sanusi publicly dismissed that possibility, arguing that the bank owners looted their institutions’ funds anyway, so their lending would not be missed in the economy! Since then, all data from CBN itself has confirmed significant contraction in private sector credit in 2010 and two months of 2011!!! Sanusi has subsequently gone from one (unnecessary) controversy to another-dismissing the need for rating agencies!; accusing the National Assembly (wrongly) of spending 25% of Nigeria’s “overheads”, recurrent expenditure or total annual budget. I avoided that controversy because I shared public revulsion at the legislators’ unsavoury self-awarded income, but the facts were simply that in 2010, the National Assembly’s budgets were 1% of capital; 5% of recurrent and 3% of the nation’s budgets.
I however support Lamido’s cash policy which commences in June 2012 allowing for a period of planning and preparation; at inception, it covers selected locations-Lagos State; Aba; Port Harcourt; Abuja and Kano where infrastructure is better; after the policy becomes operational, it does not totally prohibit cash transactions above the specified thresholds of N150,000 and N1,000,000 but imposes a penalty, which by-and-large ensures the person who transact high volume cash bears the cost rather than pass it to the rest of us. Beyond these, I believe the policy could help in curbing corruption and money laundering, which are facilitated through cash transactions and reducing interest rates and other financial charges.
Sanusi’s biggest controversy is over Islamic banking! No one who read the guidelines on Non-Interest Financial Institutions (NIFI) issued by Sanusi in January 2011 would accept Sanusi’s subsequent posturing that this is about finance and economics! The framework defined a NIFI as one who conducts business “in accordance with Shariah principles and rules of Islamic commercial jurisprudence” and defined Shariah principles as “the divine guidance as given by the Holy Qu’ran and the Sunnah of the Holy Prophet and embodies all aspects of the Islamic faith, including beliefs and practices”. Those guidelines were irresponsible and insensitive apart from being blatantly unconstitutional! It also contained terms such as “Shariah-compliant products and services”, Arabic terms such as “Istitna”, “Ijarah”, Ijarah wa iqtina”, “Mudharabah”, “Salam”, “Sukuk” and many others; requires all licensed NIFIs to establish “an internal Shariah compliance review mechanism and a Shariah Advisory Committee” and shockingly required the CBN to establish a “CBN Shariah Council” to “advise the CBN on Shariah matters”!!!
These guidelines were withdrawn in June in the face of imminent legal challenge, but it is impossible after reading them to regard Sanusi as merely a technical financial sector regulator interested only in economics and finance. The revised guidelines merely attempted to escape blatant illegality, re-naming the “CBN Shariah Council” as “CBN Advisory Council of Experts” and providing for two types of NIFIs-those “based on principles of Islamic commercial jurisprudence” and “any others”! The document then proceeded to discuss only the ones based on Islamic commercial jurisprudence!!! Section 61 of the Banking and Other Financial Institutions Act (BOFIA) defines NIFI as “a profit and loss sharing bank” which is “a bank which transacts investment or commercial banking business and maintains profit and loss sharing accounts”. Sanusi’s guidelines purport to re-define what the law has already defined.
I identified the challenge of “what to do with the eight banks now under government control” and warned against “nationalisation” arguing that “Given our history with nationalised banks in the 1970s and 1980s, this would be a severe error”. I urged the CBN to “move towards recapitalisation of these banks by their owners, a quick off load to other acceptable international private core investors or a merger or acquisition of these institutions” and urged the CBN “to accept a negotiated solution with the bank owners that preserves the regulators original goals”. I also suggested that “CBN over-dramatised its actions in relation to the sector and could have minimised disruptive emotions” (erring bank CEOs have been removed without undue publicity on at least four earlier occasions) and argued that “the systemic implications could have been better anticipated and counter-cyclical measures adopted in advance rather than as a reaction?” I feared that the CBN overreached itself in taking over management of the banks rather than simply removing erring CEOs; exercising its power to accept or reject replacements; mandating required loan write-offs; and requiring re-capitalisation within a given period.
In assessing probable consequences of Sanusi’s intervention, I stressed that “whatever it takes, we must get the banking sector to resume lending…” or a credit crunch was imminent. Indeed Sanusi publicly dismissed that possibility, arguing that the bank owners looted their institutions’ funds anyway, so their lending would not be missed in the economy! Since then, all data from CBN itself has confirmed significant contraction in private sector credit in 2010 and two months of 2011!!! Sanusi has subsequently gone from one (unnecessary) controversy to another-dismissing the need for rating agencies!; accusing the National Assembly (wrongly) of spending 25% of Nigeria’s “overheads”, recurrent expenditure or total annual budget. I avoided that controversy because I shared public revulsion at the legislators’ unsavoury self-awarded income, but the facts were simply that in 2010, the National Assembly’s budgets were 1% of capital; 5% of recurrent and 3% of the nation’s budgets.
I however support Lamido’s cash policy which commences in June 2012 allowing for a period of planning and preparation; at inception, it covers selected locations-Lagos State; Aba; Port Harcourt; Abuja and Kano where infrastructure is better; after the policy becomes operational, it does not totally prohibit cash transactions above the specified thresholds of N150,000 and N1,000,000 but imposes a penalty, which by-and-large ensures the person who transact high volume cash bears the cost rather than pass it to the rest of us. Beyond these, I believe the policy could help in curbing corruption and money laundering, which are facilitated through cash transactions and reducing interest rates and other financial charges.
Sanusi’s biggest controversy is over Islamic banking! No one who read the guidelines on Non-Interest Financial Institutions (NIFI) issued by Sanusi in January 2011 would accept Sanusi’s subsequent posturing that this is about finance and economics! The framework defined a NIFI as one who conducts business “in accordance with Shariah principles and rules of Islamic commercial jurisprudence” and defined Shariah principles as “the divine guidance as given by the Holy Qu’ran and the Sunnah of the Holy Prophet and embodies all aspects of the Islamic faith, including beliefs and practices”. Those guidelines were irresponsible and insensitive apart from being blatantly unconstitutional! It also contained terms such as “Shariah-compliant products and services”, Arabic terms such as “Istitna”, “Ijarah”, Ijarah wa iqtina”, “Mudharabah”, “Salam”, “Sukuk” and many others; requires all licensed NIFIs to establish “an internal Shariah compliance review mechanism and a Shariah Advisory Committee” and shockingly required the CBN to establish a “CBN Shariah Council” to “advise the CBN on Shariah matters”!!!
These guidelines were withdrawn in June in the face of imminent legal challenge, but it is impossible after reading them to regard Sanusi as merely a technical financial sector regulator interested only in economics and finance. The revised guidelines merely attempted to escape blatant illegality, re-naming the “CBN Shariah Council” as “CBN Advisory Council of Experts” and providing for two types of NIFIs-those “based on principles of Islamic commercial jurisprudence” and “any others”! The document then proceeded to discuss only the ones based on Islamic commercial jurisprudence!!! Section 61 of the Banking and Other Financial Institutions Act (BOFIA) defines NIFI as “a profit and loss sharing bank” which is “a bank which transacts investment or commercial banking business and maintains profit and loss sharing accounts”. Sanusi’s guidelines purport to re-define what the law has already defined.
Wednesday, July 20, 2011
Agenda for Jonathan's Ministers
I wrote “Agenda for Jonathan” four days before President Jonathan’s inauguration. With his cabinet in place (including Dr Akinwunmi Adesina whose selection appeared to have fallen through), I now adapt and drill it down to ministers who define policies and lead execution of the administration’s agenda. I retain the view that the President’s core objectives should centre on power and infrastructure; human capital and social sector investments; deepening economic reforms and improved fiscal and macroeconomic management; security and national reconciliation; legal and constitutional reforms; and corruption, ethics and national values. I also include land, housing and mortgage reforms.
The president’s power sector road map is a good plan and focus must be removal of obstacles to its swift execution, especially labour and geo-regional reservations, and ensuring that Nigeria has a private-sector controlled electricity industry. Unfortunately the Bureau of Public Enterprises (BPE) and government started by shifting the deadline for privatizing the power entities to February 2012!!! The minister must ensure no further missed targets and milestones! Beyond privatizing PHCN entities, a strategy for turning over the ongoing National Integrated Power Projects (NIPP) to the private sector must be designed. I advocate movement towards decentralizing transmission and distribution, and reducing reliance on the inefficient national grid. The Yar’adua/Jonathan era witnessed large budgetary allocations to road infrastructure, but execution (and value-for-money) has lagged. President Jonathan must now ensure we see tangible improvements in our national road network. Nigeria should aim to be the air, sea, road and rail transportation hub in West Africa and Africa.
Government must focus ALL attention on social sector reforms-education; health; poverty alleviation and tackling unemployment. In line with the 2011 appropriation, we must increase investments in education and science and technology to redress the education sector disaster the nation is marching inexorably towards. We need better educational infrastructure; more emphasis on quality; better trained and motivated teachers; leveraging science and technology; and improved ethics and standards in our educational sector. While government must seek consensus around reform of the Almajirai educational system in the North, the minister’s proposal to build 400 Almajirai primary schools is problematic! Will the expenditure come from the federal budget? Will these schools belong to the federal government? Who will manage and bear the future recurrent expenditure of those schools? Does building religious schools not conflict with the Nigerian Constitution?
The key health sector challenges are sector reform to ensure we have the right management structures and institutional mechanisms and sustainable financing. The president needs a strong team of financial, insurance and health sector experts to review the current sub-optimal health insurance scheme and devise comprehensive reforms to ensure universal health coverage in a sustainable framework. We have a national emergency regarding poverty and unemployment. The report of the Dangote Committee on Job Creation already provides a “roadmap” for dealing with the jobs issue, but we need a similar “Marshall Plan” for poverty alleviation, social welfare, rural development and successful attainment of the Millennium Development Goals. Land reforms are central to two national priorities-development of a viable and sustainable mortgage market and increasing investments in agriculture as an option for generating youth and graduate employment. I believe that reforms should include removal of the consent requirements in the Land Use Act.
The thrust of economic policy and management should focus on diversification from crude oil exports, focusing on refining, petrochemicals, aluminum and other downstream activities; agriculture (investments in new farms and fisheries, food storage, transportation and processing); solid minerals development; manufacturing, transportation and tourism. Critical in achieving economic diversification are power, security, and appropriate sectoral policy reforms. The problems of Niger-Delta militancy, Boko Haram insurrection and general state of crime and insecurity MUST be laid to rest leveraging better intelligence, strong enforcement and dealing with underlying social issues. We also need a competition and anti-trust law to ensure what we get is a free market, not a free jungle; and continued regulatory and investment climate reforms to improve foreign (and domestic) investment. On the fiscal side, passage of the Nigerian Sovereign Investment Authority Act is a big step towards institutionalizing better fiscal management. The establishment and management of NSIA must now be executed devoid of politics, cronyism and the “Nigerian factor”. I will also advocate an amendment to the Fiscal Responsibility Act to compel federal (and states/LGs) government to devote at least seventy percent of budget to capital expenditure by 2015, with the law mandating progression to that minimum on a year-to-year basis. Reform of the public services, compliance with procurement regulations; and a true anti-corruption war are also mandatory.
I also hope the administration will have time for legal and constitutional reforms to enthrone a true federal system, including devolution of powers to states and local governments; fiscal federalism; independent candidacy and Diaspora voting; a fair and accurate census and voters register; reform of the Land Use Act, and introduction of commercial courts. Finally I believe the president must focus on national values and ethical re-orientation. At the root of Nigeria’s development crisis and stunted growth is an underlying erosion of values and ethics; and unprincipled worship of money, position and power, irrespective of how they are attained.
The president’s power sector road map is a good plan and focus must be removal of obstacles to its swift execution, especially labour and geo-regional reservations, and ensuring that Nigeria has a private-sector controlled electricity industry. Unfortunately the Bureau of Public Enterprises (BPE) and government started by shifting the deadline for privatizing the power entities to February 2012!!! The minister must ensure no further missed targets and milestones! Beyond privatizing PHCN entities, a strategy for turning over the ongoing National Integrated Power Projects (NIPP) to the private sector must be designed. I advocate movement towards decentralizing transmission and distribution, and reducing reliance on the inefficient national grid. The Yar’adua/Jonathan era witnessed large budgetary allocations to road infrastructure, but execution (and value-for-money) has lagged. President Jonathan must now ensure we see tangible improvements in our national road network. Nigeria should aim to be the air, sea, road and rail transportation hub in West Africa and Africa.
Government must focus ALL attention on social sector reforms-education; health; poverty alleviation and tackling unemployment. In line with the 2011 appropriation, we must increase investments in education and science and technology to redress the education sector disaster the nation is marching inexorably towards. We need better educational infrastructure; more emphasis on quality; better trained and motivated teachers; leveraging science and technology; and improved ethics and standards in our educational sector. While government must seek consensus around reform of the Almajirai educational system in the North, the minister’s proposal to build 400 Almajirai primary schools is problematic! Will the expenditure come from the federal budget? Will these schools belong to the federal government? Who will manage and bear the future recurrent expenditure of those schools? Does building religious schools not conflict with the Nigerian Constitution?
The key health sector challenges are sector reform to ensure we have the right management structures and institutional mechanisms and sustainable financing. The president needs a strong team of financial, insurance and health sector experts to review the current sub-optimal health insurance scheme and devise comprehensive reforms to ensure universal health coverage in a sustainable framework. We have a national emergency regarding poverty and unemployment. The report of the Dangote Committee on Job Creation already provides a “roadmap” for dealing with the jobs issue, but we need a similar “Marshall Plan” for poverty alleviation, social welfare, rural development and successful attainment of the Millennium Development Goals. Land reforms are central to two national priorities-development of a viable and sustainable mortgage market and increasing investments in agriculture as an option for generating youth and graduate employment. I believe that reforms should include removal of the consent requirements in the Land Use Act.
The thrust of economic policy and management should focus on diversification from crude oil exports, focusing on refining, petrochemicals, aluminum and other downstream activities; agriculture (investments in new farms and fisheries, food storage, transportation and processing); solid minerals development; manufacturing, transportation and tourism. Critical in achieving economic diversification are power, security, and appropriate sectoral policy reforms. The problems of Niger-Delta militancy, Boko Haram insurrection and general state of crime and insecurity MUST be laid to rest leveraging better intelligence, strong enforcement and dealing with underlying social issues. We also need a competition and anti-trust law to ensure what we get is a free market, not a free jungle; and continued regulatory and investment climate reforms to improve foreign (and domestic) investment. On the fiscal side, passage of the Nigerian Sovereign Investment Authority Act is a big step towards institutionalizing better fiscal management. The establishment and management of NSIA must now be executed devoid of politics, cronyism and the “Nigerian factor”. I will also advocate an amendment to the Fiscal Responsibility Act to compel federal (and states/LGs) government to devote at least seventy percent of budget to capital expenditure by 2015, with the law mandating progression to that minimum on a year-to-year basis. Reform of the public services, compliance with procurement regulations; and a true anti-corruption war are also mandatory.
I also hope the administration will have time for legal and constitutional reforms to enthrone a true federal system, including devolution of powers to states and local governments; fiscal federalism; independent candidacy and Diaspora voting; a fair and accurate census and voters register; reform of the Land Use Act, and introduction of commercial courts. Finally I believe the president must focus on national values and ethical re-orientation. At the root of Nigeria’s development crisis and stunted growth is an underlying erosion of values and ethics; and unprincipled worship of money, position and power, irrespective of how they are attained.
Wednesday, July 13, 2011
The Jonathan Cabinet
The outline of the Jonathan Cabinet is almost complete and we can now take a comprehensive look at the implications of President Jonathan’s selections. The cabinet has a small, but strong policy core in Dr Ngozi Okonjo-Iweala, Mr Olusegun Agangan, Professor Barth Nnaji and Dr Shamsudeen Usman. It seems clear that Okonjo-Iweala, World Bank managing director, and Harvard/MIT graduate, will take the finance ministry and head the government’s economic management team, a role which she is excellently prepared for and which she carried out most successfully under ex-President Obasanjo between 2003 and 2006. Her qualifications and commitment are impeccable and she brings a much-needed extra in terms of values. It is an appointment I support without reservation.
I had wondered about the allocation of responsibilities between Okonjo-Iweala and Aganga were both to be in the cabinet. It now seems clear that Aganga has in effect accepted a “demotion” from finance to a so-called “Commerce and Investment” ministry. Contrary to some opinions, I think Aganga did well in the last one year and the delivery of the Nigerian Sovereign Investment Authority Act would be his defining contribution to Nigerian fiscal and macroeconomic management, a development of major policy and historical significance. His undoing has been inability to sell his policies and actions to the Nigerian people and perhaps an insular communication approach. Professor Barth Nnaji is the third element of the policy tripod, and his appointment is also an excellent one. I believe the power road map, if faithfully executed will create a private sector controlled electricity sector, and generate the industry structure and investments required to bridge our massive electricity deficit.
Dr Shamsudeen Usman will provide some continuity having occupied both the finance and national planning portfolios in the last four years. It is unfortunate that a gentleman that could have provided new thinking in the agriculture sector, one Dr Akinwumni Ayo Adesina, a globally-reputed agriculture expert currently at the Rockefeller Foundation may have been frustrated away as the position appeared to have been “zoned” somewhere else! There are a few interesting profiles coming into the team-Ambassador Gbenga Ashiru who should take the external affairs ministry; Ms Jumoke Akinjide who has decent qualifications and experience; Bolaji Abdullahi who reportedly excelled as Kwara State Education Commissioner; ex-Accenture Country Manager Mrs Omobola Johnson; and Dr Muhammed Pate. We wait to see what ministries they will occupy and what tangible achievements they will record in government.
Beyond these, there is little that is exciting about the emerging Cabinet!!! Some of Jonathan’s choices are controversial-Dieziani Allison-Maduekwe due to the barrage of allegations against her and reservations of industry incumbents-as I wrote last week however, it remains to be seen whether the allegations are truth or blackmail; PDP Acting National Chairman, Dr Bello Haliru Muhammed, who was named in the Siemens bribery scandal; and transport minister, Mallam Yusuf Suleiman who faced a corruption prosecution during his earlier tenure. Some of the returnees are acceptable and will now have to prove over a longer period their relevance as members of a cabinet purporting to achieve “transformation”-Professor Onyebuchi Chukwu in health; Professor Ruquayattu Rufai in education; Labaran Maku in information and communication; Emeka Wogu in Labour; and Mohammed Bello Adoke who returned as Attorney-General and Justice Minister. Many of the new appointees will also be expected to justify their inclusion in Jonathan’s team-Mr Edem Duke; Professor Ita Okon Bassey Ewa; Alhaji Bukar Tijani (who is expected to get the agriculture portfolio); Professor Viola Onwuliri; Erelu Olusola Obada; Ms Ama Pepple; Dr Yerima Ngama; and Ambassador Bashir Yuguda.
The rest of the nominees fall into two categories-those who appointments represent political (or friendly) pay-offs or those who are yet unknown quantities and difficult to characterize. In the political category, you can list Senator Bala Mohammed (FCT); Navy Captain Caleb Olubolade (FCT, State); Architect Mike Onelemen; Mr Nyeson Wike; Comrade Abba Moro; Alhaji Musa Sada (mines and steel); Dr Samuel Ortom; Senator Idris Umar; Princess Stella Oduah (aviation); Elder Godsday Orubebe (Niger-Delta); and Hajia Zainab Maina (women affairs). There are four nominees whose names do not ring any bells-Sarah Reng Ochekpe; Hadiza Ibrahim Mai-lafiya; Nurudeen Muhammed and Hajia Zainab Ibrahim Kuchi!!! The president also named several special advisers and personal aides, of whom Dr Reuben Abati (media and publicity); Dr Tunji Olagunju (NEPAD); Senator Joy Emordi (National Assembly); Professor Dan Adebiyi (Special Duties?) and Dr Pius Osanyikanmi (foreign affairs) may be expected to make some difference.
Overall the cabinet composition is underwhelming and is a mixed bag of average performers; political chieftains and/or their nominees; gender balancing; and a few strong people chosen on the basis of their performance and pedigree. Beyond the policy core, there is very little to be excited about, and one can only hope that policy team would be backed with the necessary political will to thrive in what is likely to be hostile territory!!! Well let’s hope the government can now settle down to “transformation”!!! Nigerians are waiting.
I had wondered about the allocation of responsibilities between Okonjo-Iweala and Aganga were both to be in the cabinet. It now seems clear that Aganga has in effect accepted a “demotion” from finance to a so-called “Commerce and Investment” ministry. Contrary to some opinions, I think Aganga did well in the last one year and the delivery of the Nigerian Sovereign Investment Authority Act would be his defining contribution to Nigerian fiscal and macroeconomic management, a development of major policy and historical significance. His undoing has been inability to sell his policies and actions to the Nigerian people and perhaps an insular communication approach. Professor Barth Nnaji is the third element of the policy tripod, and his appointment is also an excellent one. I believe the power road map, if faithfully executed will create a private sector controlled electricity sector, and generate the industry structure and investments required to bridge our massive electricity deficit.
Dr Shamsudeen Usman will provide some continuity having occupied both the finance and national planning portfolios in the last four years. It is unfortunate that a gentleman that could have provided new thinking in the agriculture sector, one Dr Akinwumni Ayo Adesina, a globally-reputed agriculture expert currently at the Rockefeller Foundation may have been frustrated away as the position appeared to have been “zoned” somewhere else! There are a few interesting profiles coming into the team-Ambassador Gbenga Ashiru who should take the external affairs ministry; Ms Jumoke Akinjide who has decent qualifications and experience; Bolaji Abdullahi who reportedly excelled as Kwara State Education Commissioner; ex-Accenture Country Manager Mrs Omobola Johnson; and Dr Muhammed Pate. We wait to see what ministries they will occupy and what tangible achievements they will record in government.
Beyond these, there is little that is exciting about the emerging Cabinet!!! Some of Jonathan’s choices are controversial-Dieziani Allison-Maduekwe due to the barrage of allegations against her and reservations of industry incumbents-as I wrote last week however, it remains to be seen whether the allegations are truth or blackmail; PDP Acting National Chairman, Dr Bello Haliru Muhammed, who was named in the Siemens bribery scandal; and transport minister, Mallam Yusuf Suleiman who faced a corruption prosecution during his earlier tenure. Some of the returnees are acceptable and will now have to prove over a longer period their relevance as members of a cabinet purporting to achieve “transformation”-Professor Onyebuchi Chukwu in health; Professor Ruquayattu Rufai in education; Labaran Maku in information and communication; Emeka Wogu in Labour; and Mohammed Bello Adoke who returned as Attorney-General and Justice Minister. Many of the new appointees will also be expected to justify their inclusion in Jonathan’s team-Mr Edem Duke; Professor Ita Okon Bassey Ewa; Alhaji Bukar Tijani (who is expected to get the agriculture portfolio); Professor Viola Onwuliri; Erelu Olusola Obada; Ms Ama Pepple; Dr Yerima Ngama; and Ambassador Bashir Yuguda.
The rest of the nominees fall into two categories-those who appointments represent political (or friendly) pay-offs or those who are yet unknown quantities and difficult to characterize. In the political category, you can list Senator Bala Mohammed (FCT); Navy Captain Caleb Olubolade (FCT, State); Architect Mike Onelemen; Mr Nyeson Wike; Comrade Abba Moro; Alhaji Musa Sada (mines and steel); Dr Samuel Ortom; Senator Idris Umar; Princess Stella Oduah (aviation); Elder Godsday Orubebe (Niger-Delta); and Hajia Zainab Maina (women affairs). There are four nominees whose names do not ring any bells-Sarah Reng Ochekpe; Hadiza Ibrahim Mai-lafiya; Nurudeen Muhammed and Hajia Zainab Ibrahim Kuchi!!! The president also named several special advisers and personal aides, of whom Dr Reuben Abati (media and publicity); Dr Tunji Olagunju (NEPAD); Senator Joy Emordi (National Assembly); Professor Dan Adebiyi (Special Duties?) and Dr Pius Osanyikanmi (foreign affairs) may be expected to make some difference.
Overall the cabinet composition is underwhelming and is a mixed bag of average performers; political chieftains and/or their nominees; gender balancing; and a few strong people chosen on the basis of their performance and pedigree. Beyond the policy core, there is very little to be excited about, and one can only hope that policy team would be backed with the necessary political will to thrive in what is likely to be hostile territory!!! Well let’s hope the government can now settle down to “transformation”!!! Nigerians are waiting.
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