Chief Mike Ahamba, a Senior Advocate of Nigeria (SAN) and a former member of the Imo State House of Assembly, speaks in this interview with ONYEKACHI EZE and EMMANUEL ONANI on burning national issues, including agitation by the Indigenous Peoples of Biafra (IPOB).
What is your take on the proscription of the Indigenous People of Biafra (IPOB) by the Federal Government?
You are asking me to sit on appeal over an order of court. Yes, it was done via ex parte. If somebody is affected by an ex parte application, he has seven days to apply to have it vacated.
It is there in the law. So, my opinion does not matter. Let the person affected by that order take the steps under the law, and let’s see whether the law will refuse him.
We should stop running Nigeria on personal opinions and sentiments. If the law has provided a way to get out of a situation, don’t leave it and shout to the public. So, IPOB has a right under existing laws to go and say why the proscription should be set aside.
Do you support the argument that IPOB is a terrorist organisation?
As a strict, legally-minded person, my answer is no. But, that is not the only wrong thing that has happened. We must learn how to solve our problems within the rule of law.
When an ex-parte order is made, and it is made one-sided, the law says anybody affected by the order has a right to apply. If you don’t do it within seven days, you can still ask for extension of time, within which to do it.
Many people have queried the manner the agitation in the South-East was quelled. For instance, troops were deployed without seeking the approval of the National Assembly. Isn’t that a breach of the constitution?
Absolutely, it is a breach of the constitution, but it didn’t start today. Our people say that when you allow abomination to go beyond one year, it becomes a tradition. When the army was deployed for election in 2003 and 2007, Nigerians didn’t see it as a wrong deployment, but it was.
They allegedly shot people during the elections and since then, they have been deploying them where they should not deploy them, and nobody is saying anything. Section 217 of the Constitution tells you how and when the army should be deployed.
So, they have taken it as a system. Now that we have started to complain, let us complain absolutely. Let us look at section 217 of the Constitution, and know how and why the army can be deployed.
There must be a situation that is beyond the police; total breakdown of law and order beyond the police before the army can be deployed. But, Nigerians have allowed the army to be misused so far.
Now that this one has happened, and everybody has woken up from sleep, those who deploy the army should go and look at that law very well, and to know exactly when they can be called out or not.
Does it amount to an impeachable offence?
Ask the National Assembly. If you look at Section 143 of the Constitution, breach of the constitution is impeachable. Things go wrong in this country because the institutions that are supposed to carry out the letters of the constitution have refused to do their work.
If the institutions were to do their work, many governors would have gone now, including the governor of Imo State. There is immunity to prevent frivolity, but that same law, constitution that gave immunity to chief executives, also gave the legislature the power to impeach, if there is gross misconduct.
And gross misconduct is defined to include breach of the constitution. So, it is not for you and I to do it. The National Assembly should tell us why they wouldn’t start an impeachment process. The Imo State House of Assembly should tell us why they wouldn’t start an impeachment process in a situation where Rochas Okorocha has brazenly breached Section 173 of the constitution.
Let our institutions do their work, and this country would work. It doesn’t require ‘our mumu don do’ group to get the National Assembly to do its work. Unfortunately for us, most of the people given authority to run the constitution have decided to run it based on obsolete and mundane sentiments instead of acting in terms of the responsibility they have sworn to follow.
All of them swore to respect the constitution, but they won’t. So, go back to the people, to take care of the kind of people they send to National and State Assemblies. If we don’t have a disciplined National or states Assembly, we won’t have a disciplined president or governor.
Everybody has a responsibility, but we don’t want to carry it out. Unfortunately, during elections, the common man, who suffers in the end, does not look at who will do the job;
he looks at who has paid best or other parochial considerations. Nobody talks about competence. For eight good years, all these points were fought by me up to the Supreme Court, but what did I get; silence.
Before the court pronouncement, South-East governors had proscribed the IPOB. Do you think they were right to have done that?
It’s just like a governor banning me from coming to Owerri. Of course, I will resist it. You see, there is what you call locus standi. Every Nigerian knows what locus standi is.
In this case, the only people who have locus standi to fight back is IPOB. But, they are not supposed to do it by bringing young people who don’t understand what they are even doing on the road to come and make a noise and block the road.
If the governors have proscribed within what they think is their power, it is the person affected, who will now say: ‘You can’t do it’ and the court will decide. I think they are making a mistake of trying to implement antiriot law.
The law comes when a group of people are being unruly in a public place. But, you will first of all go and announce that they should quit. If they don’t, then the police will disperse them; not to proscribe them.
So, in all cases, I blame the Attorneys-General in all those places; they should know the limits of these things. But right now, a court has made an interim order, and you know every interim order has a limit; I don’t think it will go beyond two weeks after which the proscription ends if there is no absolute order.
The way the media reported it didn’t give the impression that it was an interim order pending the time IPOB is heard, then a final order can be made for or against.
How best do you think the issue should have been handled?
The problem with IPOB is that they have a stubborn leader; a young man, who has been given the privilege of sitting in a confab with the best in Igbo land, pleading with him to do things under discipline, but he refused. I’m sorry, I may not say what many people would like to hear, but I will always say what I think it is right, without prejudice to who likes it or who does not like.
Look, that young man has done something great for this country. He has exposed that many people in the country are unhappy. I think he should have placed his hands and left it there.
He should have taken steps to exploit that point; not to say secession or not. I don’t approve his secession, and I won’t approve it. In any case, I don’t think he understands the difference between secession and restructuring, or marginalisation. I am not in any way saying there is no reason why we shouldn’t complain.
They are complaining late, because some of us have been complaining for a long time, but we did not form an organisation to disrupt the country.
What is your perspective on the restructuring debate?
Let me tell you, I read in the newspaper that President Muhammadu Buhari was not opposed to restructuring. I don’t belong to the All Progressives Congress (APC), but I don’t play my politics by telling lies.
I used to be his top lieutenant, and I am aware that in his manifesto, when he joined the presidential race, restructuring was in the agenda. That was one thing that attracted me to him.
I said that in the first manifesto that Buhari brought for his presidency in this country, restructuring was there. But, he was against a Sovereign National Conference, because sovereign national conference meant deciding whether Nigeria will be a country or not.
so, the issue at stake is that, we must talk about how we are to stay together in the country because any step to say it otherwise becomes unconstitutional as a result of Section 2 of the Constitution.
You ask the President to dissolve Nigeria; he has no power to do that. I agree that there should be restructuring, but the issue is this: Anybody talking about restructuring should say what should be restructured. What should be restructured is governance, not geographical locations.
How to restructure governance in allocation of funds, appointments and behaviour of persons put in power as against the people they are supposed to rule.
The Nigerian public must restructure its own thinking and start thinking about programmes and not about ethnic group and religious inclination. Nigerians must warn themselves that we are living in breach of our federating agreement before independence we had in 1960.
We agreed that Nigeria should be run on the basis of production, but we are running Nigeria on the basis of distribution.
Interest rates cut likely at MPC’s meeting in 2018 –Aigboje
Managing Director, Capital Bancorp Plc, Mr. Higo Aigboje in this interview with Chris Ugwu, speaks on the financial services sector and the economy and concludes that there is a possibility of rates cut in 2018. Excerpts:
What is your take on the financial market?
The Nigerian financial market performance in 2017 was more stable than the previous year using some economic and market indicators as yardsticks.
Unlike the previous year where only the money and bond markets were active as a result relatively high interest rates occasioned in part by the ever increasing inflation rate and federal government’s appetite for borrowing, the stock market had its fair share in the upbeat with the stock market index closed northward and ranked as the third best performing stock market of 2017 globally.
The Foreign Exchange market experienced some level of stability owning to CBN’s actions on introduction of Investors’ and Exporters’ Window and CBN’s direct intervention occasioned by the accretion to the foreign reserves from oil revenues.
The banking industry also saw some level of better performance as some of the banks were able to latch on the opportunities in Nigerian Treasury bills in the year. The banks also saw an improved provisioning as a result of the improved performance of some of their debtors in the year.
Do you expect the gradual recovery in the economy to gain momentum this year?
In what we describe as a fair outing for the Nigerian economy in 2017 having come from a difficult year in 2016, I think the country looks poised to record better performance in 2018. In the early part of the year, the International Monetary Fund (IMF) projected a growth rate of 0.8 per cent while the World Bank projected a growth rate of 1.00 per cent for 2017.
Recent forecast by both bodies have maintained their initial growth forecast for the country. However, we are more bullish as we maintain our growth estimate of 1.5 per cent for 2017. Growth in 2018 was projected to significantly improve on the back of firming oil prices, improved foreign exchange liquidity, rising government revenues and increase in the government spending.
Going from the third quarter 2017, GDP report released by the Nigerian Bureau of Statistics (NBS), the non-oil sector of the Nigerian economy needs to report signs of a recovery for growth to reach levels seen before the oil price decline as consistent negative growth in the non-oil sector will continue to remain a drag on the overall growth potential of the Nigerian economy.
I also hope that appropriate policies, both monetary and fiscal will be put in place in 2018 to drive economic growth. I think also that the Federal Government will rapidly pass the 2018 Budget into law and execute the projects in desirable time to boost economic activities. 1 am of opinion that if the government rides on the current events, which presently are in the favour of Nigeria, the country will grow by an average of 2.2 per cent in 2018, despite downside risk to this growth forecast.
So, what are the downside risks to Nigeria’s GDP growth?
The projected GDP growth rate for 2018 should become a reality if the government continues to boost its non-oil sector revenues and properly deal with issues relating to wasteful government spending and non-friendly business policies.
Some of the downward risks to GDP growth also include a sudden decline in oil prices due to increased production from exporting countries; a sudden rise in insecurity and insurgency, which may disrupt economic activities in Nigeria; improper management and use of its foreign reserves, which would lead to further depletion and cause FX volatility and lack of clear and proper fiscal policies to drive different sectors of the economy.
The trending patriotic policies by advanced countries may also hamper inflow of both Foreign Direct Investments (FDIs) and Foreign Portfolio Investments (FPIs) even as some advanced countries have reported a rise in interest rates.
Looking at how some banks fared in 2017, do you think they will continue to return profits in 2018?
The Nigerian banking sector has remained one of the most vibrant and delicate sectors in the Nigerian economy especially as it has the capacity to send shock waves round the economy if it fails.
The sector has since 2015 continued to suffer significant headwinds as the CBN monetary policies and economic realities have continued to hamper its ability to significantly grow profits. However, most of the Tier-1 banks have been able to surmount these headwinds and have continued to surpass expectations even in the face of the unfriendly business environment and hostile business policies.
2017 saw the banking sector continue to post bumper earnings especially for most of the Tier-1 banks and a few Tier-2 banks. The rest of the group have continued to battle with high level of loan impairment, which has eaten deep into their operating profit and dampened their ability to grow their bottom line.
Non-Performing loans as at June 2016 stood at 11.7 percent and rose to 12.8 as at December 2016 with a large portion of the rise attributed to the banks in the Tier-2 space. The CBN may need to increase its oversight of the credit and approval process of the tie-2 banks in a bid to limit the rising NPLs.
The banks in 2017 are also expected to report higher interest income on the back of the high interest rate environment observed during the period while we expect an increase in cost to income ratio for the period.
Going forward, the banking sector is expected to remain robust and continue to return profits into 2018 but with the implementation of IFRS 9, which require banks to recognise impairment sooner and estimate lifetime expected losses against a wider spectrum of assets, which is expected take effect from 2018, we expect a prompt increase in the banks impairment charge, which will reduce profitability going forward but make banks stronger and less exposed to risk of impairment shocks.
Also, despite the reduction in interest rates, which is expected to increase banks’ lending to the real sector of the economy, the implementation of IFRS 9 may hamper some of the banks as an aggressive rise in loan advances would give rise to increased provisioning, which may affect the bank’s capital buffers in the immediate. All in all, the banks are expected to have a decent outing during the year 2018 with less shocks expected in the sector.
Do you think there is need for rates cut following the decline in inflation?
Having maintained the Monetary Policy Rate (MPR) and Cash Reserve Requirement (CRR) at 14 per cent and 22.50 per cent respectively while also retaining the asymmetric corridor of +200 bps above and -500 bps around the MPR for over a year, we expect a rate cut at the first meeting of the Monetary Policy Committee of the CBN in 2018, and we are of the opinion that the committee will cut the benchmark interest rate by 0.5 per cent or 1.00 per cent thereby taking the Monetary Policy Rate (MPR) to 13.50 per cent or 13.00 per cent.
The projected cut in rate is imminent owing to CBN’s continuous slash in stop rates for treasury bills, which once stood at a high of about 18.815 per cent in May 2017 and closed the last auction date at 15.57 percent last November.
The continuous decline in inflation figures have also supported the banks target to reduce the interest burden on its debt obligation and also offer real return on its securities.
In a bid to reduce the country’s domestic debt obligation, CBN repaid all the maturing treasury bills that matured in December 2017 and have signalled that it would continue to drop its stop rate going forward into year 2018 even as the CBN targets inflation rate below 12 percent for 2018.
As CBN drops MPR rate, we expect the real sector of the economy to benefit as a few banks will be forced to lend to the real sector of the economy as government securities become less attractive given the low return being offered.
Businesses will also see their interest expense drop on the back of dropping interest rates and we anticipated the MPR to close the year at 12 per cent, 2 per cent down from 14 per cent benchmark rate as at December 2017.
What is your take on the stock market in 2017 and the prospects in the current year?
The Nigerian stock market had an impressive showing in 2017 having closed the year with return of 42.30 per cent making it the third best performing stock market behind Argentina, which returned 77 per cent and Turkey that returned 48 per cent, we have projected a 25 per cent return for the Nigeria Stock Market for 2018 though downside risk to achieving this target remain visible.
The market gains in 2017 were driven by impressive returns in the Banking sector, which returned 73.32 per cent, the consumer goods sector that returned 36.97 per cent and the industrial goods sector, which returned 23.84 per cent while other sectors of the market recorded gains except for the Alternative securities market (ASEM), which closed down by 8.60 per cent.
The trading aspect recorded significant recovery while the market witnessed increased issues compared to 2016 where there were no issues.
The year 2018 is expected to witness a similar trend observed in 2017 as economic indicators have improved and the world now projects increased investor confidence and GDP growth for Nigerian economy.
Going forward we expect to see more trading activities in the secondary market as listed companies will begin to trade at new highs never seen before even as their profitability soars on the back of a vibrant economy.
The primary market is also expected to be active in the year with expectation of new listings, mergers and acquisitions, Rights issue, listing by introduction etc. are all expected to drive overall market activity and deepen the market in the process.
What do you think will determine the success of the market this year?
The success of the Nigerian stock market will be hinged on many factors. Amongst them are the firming or stability of oil prices; constant monitoring and effective management of the foreign exchange market; improvement in corporate earnings for the period; significant focus on the non-oil sector to increase output; enhancing the country’s non-oil sector export proceeds to improve FX liquidity; a lower interest rate regime; effective implementation and communication of the government economic policies.
Others include government focus on the real sectors of the economy to stimulate the economy; improve market participation by local investors and Domestic institutional investors; continuous robust regulatory oversight of the listed companies by all the market regulators; passage of Petroleum Industry Bill, unbundling of Nigerian National Petroleum Corporation (NNPC) and listing of the resultant companies; listing of already privatised companies such as MTN, Gencos and Discos and effective use of monetary policies.
Having seen the nine months earnings result for most of the listed companies, investor will begin to take position in anticipation of the companies audited result, dividend declaration and Q1 2018 result, which we expect to boost stock prices in the immediate and also trigger further activities especially for companies, which report impressive performance for their Q1 2018 numbers.
Generally, despite the downside risk to the outlook of the equities market, we are optimistic about the performance of the equities market as we believe that most of the fundamentals are in favour of a further surge in the equities market.
In conclusion, despite the rally observed in the equity space in 2017, there remains a pool of untapped potential in the stock market as most of the listed companies still trade at prices below their book value while a few stocks still trade at prices below our recommended target price.
We believe the current prices still gives room for ample upside and significant return to investors despite the fact that the dividend yield of the company would have slightly inched lower on the back of rising prices but still remain attractive especially with the potential benefit of capital appreciation in the short to medium term. We however, advise that investment in the stock market be made mainly on fundamental analysis and not on the back of a band wagon effect, which could fizzle out at any moment and keep the investor trapped in a wrong stock.
Ogebe: FG must brand killer herdsmen as terrorist group
He plies his law trade in the United States of America (USA). Emmanuel Ogebe, managing partner of US-Nigeria Law Group, in this interview with TUNDE OYESINA, speaks on killer herdsmen, proposed cattle colonies, anti-grazing laws and sundry issues
There are a series of solutions being canvassed by major stakeholders to at least curb excesses of the Fulani herdsmen and its attendant implications on nation building. And one of them is Anti-Open Grazing Law passed in Benue and a few other states of the federation. To what extent would you say this would help to tame frequent clash between the Fulani herdsmen and the farmers?
Barely a month after our last fact finding meeting to Nigeria, the human rights situation has continued to deteriorate and on January 1st, 2018, there was a serious massacre in Benue State, where about 73 people were killed. We went on a fact finding mission to Benue and it what we found was deeply disturbing. The piece of evidence we got support the allegations we heard previously about the Adamawa attack that there was government action of bias in favour of the attackers.
In Adamawa, we heard that the Air Force officers were used against the indigenes who were trying to defend themselves from the attackers. In Benue, it was even more grievous in that the Minister of Defence announced while we were in Benue, essentially, that these attacks were justified because the governor passed a law that they didn’t like and we evaluate whether the Fulani herdsmen are actually terrorists as it’s being reported by the global terrorism unit, we begin to see that the case is being established.
If you have a group that says they are rejecting a duly passed law by a constituted authority and they demonstrated their protest against the law by taking up arms against the state, that is an insurgency. They are now confirming what they said about taking over Nigeria and for the officials of the federal government, including the minister of defence to actually go against a state government that passed a law which was popular in the state is very worrisome.
There were protests by Benue indigenes over the activities of herdsmen in the state and they were the ones who pressed on members of the State House of Assembly to pass the law. It is a very sad situation where the FG is undermining the state to regulate activities of herdsmen in the state.
They feel the movement of cattle is a threat to their safety, farmland and crops, hence, the need to pass the law.
For the FG to begin to undermine the state is something that is very bad and should be condemned
Do you think the Fulani herdsmen’s claim that they were not carried along before the law was passed is enough justification for the mayhem?
That allegation from my investigation is false because it was a bill. There were public hearings on these bills and they were invited to make their presentations. We were told that an additional hearing was done in different locations just to accord everybody the opportunity to air their views.
We talked to current actors in the state and past officials of this administration. One of the things that we were told was that the president said to them that for God sake go and accommodate your country men. People from the past administration said that they flew down the Sultan from Sokoto to come and speak to those people as part of the peace efforts. Not only that, the previous administration built a mosque for them.
Despite the fact that Benue state is a Christian state, they went out of their way to build a mosque for them. It is a fact that Benue state “over accommodated” these people as an average of six people were killed in a day, that is an epidemic between 2003 and 2016 as there were over 40 attacks in Benue.
Do you think the cattle colony as being suggested by the Agric Minister, rather than the Anti-grazing law in the state is the way out?
Of course, by now, this government is supposed to have realised that the use of the term colony is despicable and unacceptable to any right thinking Nigerian. What has happened is, in Benue state, I found out that the former Senate President, David Mark has a ranch and has herds of cattle and he is obeying the laws of his state. Then, other people from outside will come into the state and talk about rejecting the laws when indigenes are obeying the law? He was the Chief lawmaker of the Federation and he is respecting a state law. It is very bad that the Federal Government wants to propose cattle colony, a solution they do not have the legal capacity to implement.
Land is vested on only two people, the state and the local authorities, and that is why we have the C of O’s and the R of O. The Federal Government essentially do not have land. So, they are proposing something that they cannot even implement.
Another finding we made when we were in Benue state was that they had ranches that were actually developed under the civilian democratic dispensation that Buhari overthrew. We have cattle ranch in Igumale and Ikyogen. You can see that at least 30 years ago, cattle ranch was already in order in the state but now, what we are looking for as a potential solution is for the state to resuscitate those ranches. It is not even the best agricultural practise to be running cattle up and down.
The leadership of the Miyetti Allah Breeders Association visited the NBA president in his office here in Abuja and said that Governor Samuel Ortom was warned before passing the anti-grazing law. What do you have to say about this?
You see, it is worrisome when an NGO makes threat to a duly constituted government. There have been other laws that have been attempted to be passed. There was the proposed social media law, NGO regulation law and many others but what did the civil society do? They did advocacy against these laws and those laws were not passed.
That is what any right thinking civilised person should do. But when you start killing people, then you are legitimising barbarism. What we should have seen would have been advocacy when the bill was being debated upon. You can even go to the extent of filing legal actions instead of trying to justify the mayhem that is not justifiable.
It is only in Nigeria that you see cows in stadium, expressway, Airport runway and everywhere. Cows have turned to executive convoy. What these people should do is to either obey the law or leave the state. When they were introducing Sharia laws in their states, President Buhari went as far as saying that why are the Christians bothered about cutting of Muslims hands. He told them to keep quiet.
The same argument can be made in Benue. Benue people are saying that they don’t want cows to destroy their farmlands and they should respect the laws of Benue. If you cannot pass through Benue without destroying their farms, find another route and go to states that allow destruction of farms. This is an issue of survival of human beings because the food stuff is been threatened not only in Benue but the whole of Nigeria. You have a situation where in addition to the hardship that has been caused by government’s policies, you also have the hardship of the herdsmen atrocities.
We went to Benue and we saw farmers in IDP camps. If the farmers are not working, there is going to be a shortage of food supply and obviously when there is a shortage of food supply and high rate on demand, the prices go up. So, the government inaction is having an adverse economic effect in Benue.
The civil servants in Benue have not been paid and the only way they survived in Benue is through farming. You now have a double jeopardy where salaries are not been paid and the farmers cannot farm. There is food crisis in Benue as we speak and within a short while it will spread across the country. We have a serious food crisis situation in Nigerian when the Boko Haram started and now we have a new additional factor of the Fulani herdsmen.
These herdsmen have claimed more lives this year than the Boko Haram. They have the broader footprint of the attack in Nigeria than Boko Haram. This year alone, they’ve attacked Taraba, Benue, Adamawa, Plateau and Ondo.
Mass production of local products’ll curb smuggling’
Mr. Ralph Osayameh is the Chairman and Chief Executive Officer of GF Investment Group. In this interview with BAYO AKOMOLAFE, Osayameh insists that mass production of local products will reduce cases of smuggling in the country, stressing that economy diversification into agriculture and mineral resources hold the ace for economic recovery, among other sundry issues.
What is your take on the Federal Government’s Export Expansion Grant (EEG)’s modification?
It is a good step in the right direction. We need to stimulate export. From the way it is being executed now, both Nigerians and foreigners can benefit from it and don’t forget that the creation of the free zones are intended to leverage on the perception of government as well. I think it is a step in the right direction.
Nigeria is an import-driven country. We even import fuel when we have the crude to be refined. Government is making efforts to stop importation of rice and other products and it has not deemed it necessary to stop fuel importation by focusing on local refining. And we need to ask ourselves: why has it been impossible to refine fuel locally? It is one of the unfortunate developments in our political system. I read recently the amount of money being voted for the usual turnaround of the three refineries, which have refused to perform. Sell these so-called gigantic national assets and diversify. You can even do quite manageable refinery at less cost with less problem. But part of what government has done, which is quite possible, is what they have done to Dangote. The Dangote refinery will do quite a lot in this direction.
Has Nigeria come out of recession as claimed by the National Bureau of Statistics (NBS)?
Technically, yes. We have got out of the economic recession with a very small margin. But in practice and with regard to what we have and the potential of what we have to do for the future, we are really not far from where we were before. It is a very slim margin and many economists are worried that these indices that you are flagging do not support the fact that we can be out of the woods for a very long time. We are still on mono product economy, we have a much-bloated expenditure profile and the projection does not even support the indices.
If the current economic level cannot be sustained, what other ways would you suggest for us to overcome this fragile economy?
Let me state clearly that the projection for 2018 budget tends to stipulate that we are going to have oil output of 2.3 million barrels. That is not sustainable, given the kind of oil cut that is now predominant in oil market and other oil climes. But having said that, the agricultural sector that we have been drumming support for over the years, which can take us out of the doldrums, is not being vigorously pursued. I must commend the present minister of agriculture, who said we are going to be self-sufficient in area of rice production in the future. But we need to do a lot more in the area of mineral resources for which this country is so richly blessed and which can re-order our pattern in revenue profile. We have not done much in that direction. What are we doing with limestone? What are we doing with gold? What are we doing with many other mineral deposits we have in this country? The truth is that we haven’t done much at all and these are being left to ordinary artisans. I think we need to articulate this better and until we re-direct the economy from the current apathy towards major products, I don’t think it is not sustainable.
How do you think government can suppress smuggling of rice in order to attain self-sufficiency?
By the time we over-supply, based on the abundance of evidence that we have, we can then crash the prices and smuggling will become unattractive. By the time the strategy is formalised in the next two to three years, Nigeria will become net exporter of rice and even if we don’t become net exporter, we will satisfy our local demand and consumption. Then, tell me what will be the urge to bring some quantity of rice through smuggling. That is not to suggest that even if we produced adequately for our use, we should create a situation whereby we manage all these influx of things that are not desirable. Now that people are eating local rice – the Ofada rice – then, the foreign taste will go down. Some of us are now patronising local fabric. If we do that, the message will be clear that this is a new initiative. Patronise what is Nigeria and, at the same time, boycott foreign products. I am not concerned about smuggling. You cannot even eliminate smuggling totally. By the time you have increased internal production, you will totally wipe off external products.
How has the policy of Single Treasury Account (TSA) and foreign currency restriction on certain imported items helped to grow the Nigerian economy?
Well, if there is any sector that has done well, it is the banking sector, particularly the Central Bank of Nigeria (CBN). We are totally dependent on import and that is why the exchange rate went beyond the roof to almost N550 to the dollar. But because of so many cries and exercises, we have been able to get it back to normal.
The Treasury Single Account (TSA) has done very well also because a lot of leakages came up. One government agency will have as many as 200 bank accounts without any control. Now, they have been able to centralise these, to a large extent, not totally. So, wastages have been controlled. Also, you can have complete control of what is available by way of disposable revenue in a more transparent manner, unlike what it was before whereby accounts were kept all over the place and with the TSA, a lot of money had been earned.
Don’t forget the Bank Verification Number (BVN), whereby CBN limits cash flow by way of ‘corruption money’. If anybody has to open an account now in three to four different places, the BVN can now do a summary of all of them. So, it limits corruption and if it is sustained, it will be better for us. So, with the exchange rate management, foreign exchange will no longer be granted for certain import items. The effective implementation of BVN and TSA in the country will be better for us all.
So, why are people evading tax in Nigeria?
Well, my own submission on this is that there is nothing good in moving money from your own domain to a place where you can avoid tax. If you legitimately move money for investment purpose from one area to another, based on universality of money, there is nothing bad in it. But for you to move money from one area to another, just because you want to hide it or because you don’t want people to know about it because you want to avoid tax, I don’t think there is anything good about it. But, unfortunately, it has become a universal phenomenon. The rich will always be richer and they discuss among themselves to find out how to avoid tax. It is the ordinary man who cannot hide his income that bears the brunt. One thing is that whatever is not desirable is not desirable.
I am not against free flow of fund all over the world. It is universal; money can flow. After all, we were talking of direct foreign investment. If money can flow in to do business here, why not? Legitimately, they bring it in; it is recorded at CBN that foreign money had flown in. If they want to repatriate, they can, if they want to have dividend, they can repatriate it. That is good money. But it is bad if it is for the purpose of avoiding tax and laundering. This can be termed as corruption in another way.
The banks today are declaring jumbo profits even when they have mountain of bad debts, which should ordinarily eat up their profit going by the prevailing financial reporting standards. Despite their huge profit, their interest rate is high. Some experts have accused them of window dressing.
Do you think Nigeria has capacity to address economic challenges?
It is a question of perception. There is an economic team led by the vice president and they are doing a good job. It was very visible during the regime of Obasanjo because we had a dominant president and a dominant minister of finance who doubled as chairperson of the economic team, which was Okonjo Iweala. You know the vice president has brought intellectualism into governance. They are doing a lot of things quietly. Everything cannot be fixed in one day. The only thing I want them to do really is that they should be consistent and they should find solution to the problem of power supply.
Permanent solution to the problem of power supply is a major variant in any development programme for any country. If we cannot even have supply within the economic sector; particularly the manufacturing sector, that is not good for business. No foreign investor would want to start investing in generators to power his or her business. I remember that somebody said some time ago when he was making sarcastic comment that Nigeria is the best economy in Africa and one of the best in the world. For a generator-based economy to be one of the best, then something must be wrong. We must find a common solution to the power problem. There are so many opportunities these days. We can have a modern system that is solar-based; we can have organisations that are within some geographical location that can have something like that. I think it is one of the issues that government must look into. State governments don’t need to spend money to get power supply into the grid and if any state government can do it, let them do it and let them face competition for the survival of the fittest.
You said the vice-president and his economic team are doing fairly well when we have not witnessed inflow of foreign direct investment through the campaign for the ease of doing business in Nigeria. How will you justify your comment about the economic team?
You saw the classification of Nigeria some time ago. From about 120 rating, the country has moved 24 points within two years circle. If this is sustained, it means that even by projection, in another five years or 10, we are going to move by 50 points. This country is still a very fertile ground for investors to come in. In which country in the world do you think you can have a return on investment of about five to 10 per cent? In the developed economy, you will be lucky to have modicum of investment return. But here, you can have five to 10 per cent returns. Despite all the challenges such as lack of power supply, poor infrastructure, the investors are still willing to come because they know this is a fertile ground. But we must put our house in order. This is a regime that started well. If they can continue like this in another five years’ time, the story will be quite different. So, we are on the right track and I suggest that if it is maintained, we can get better.
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