Tahir Mamman goofed.
Until last week, very few knew who Tahir Mamman was. It was fitting therefore that he announced himself in a way symptomatic of this government. The minister announced during his interview with Seun Okinbaloye on Sunday Politics that students under the age of 18 will not be allowed to sit the West Africa Examinations Council (WAEC), National Examinations Council (NECO), and the Joint Admissions Matriculation Board (JAMB) exams. According to the Minister, This policy is not new. It is inbuilt in the 6 – 3 – 3 – 4 or the modified 9 – 3 – 4 system of education that started in 1983.Students not yet 18 will not be allowed to write the three major exams in tertiary education – WAEC, NECO, and JAMB.Third, that students will not be able to write these exams if they have not adhered to the 6 – 3 – 3 – 4 structure. The objective of the directive is simple. The minister, and by extension, the government, seeks to prevent immature students gaining admissions into Nigerian universities. However, by simply saying the implementation will commence next year does not solve the problem. Indeed, it is symptomatic of the way and manner serious policy issues have been handled under President Bola Ahmed Tinubu. There are many examples, including the fuel subsidy removal, the levy of US $10,000 on the companies with foreign directors, the change of the national anthem, the policy on 5 Percent digital levy, the ongoing 70% on banks windfall profit on exchange rate transactions, and the recent change in the CBN Act. Back to the minister’s announcement, it is possible for a student to have gone through the entire system and not be 18 years old. So, to fix the problem requires going back to the foundation. But that requires hard work and diligence that our policy makers are not known for.The policy affects everyone and applies to everyone from Primary 1 to Senior Secondary School (SSS) three if they are not at the required age to reach 18 when they write the exams. Since last week, I have checked the Ministry’s website, waited to see if a detailed policy document, or guidelines, will be released, and I have not seen one. I suppose the Minister thinks since he has announced it, that is the end. I am not the only one to think in this direction. Dr. Mike Ene, the Secretary General of the Nigerian Union of Teachers (NUT) thinks the same, as interviewed in the Tribune and Punch. If schools and parents only require a year to prepare for this directive, does the minister know how many students will be affected next year? Does the minister have a plan for those students that will be affected, or they don’t matter? Is the minister aware that significant number of students in private schools write other forms of exams and this further alienates them. Is the minister aware that we have near complete polarized education where majority of the private school students are trained with British and US curriculum and the students are prepared for universities abroad. In conclusion, some have argued that underage children in universities is one of the problems. I agree. But the manner you judge a serious policy maker is how he or she focuses on what everyone believes are the top three problems. In Nigeria today, poor quality education is number one problem. And by extension, poor skills. Second, there are over 20 million children our of school. Third, there are extensive poor teaching and learning resources across the country. While the Honorable minister was pursuing the small trophy of ensuring our universities only admit students above 18 years old, I do not know of any credible plan for the over 20 million that are out of school. In conclusion, I do not believe anyone less than 18 years should be in university, except in special circumstances, but this will not work. It will not work because it is rash, ill thought and ill prepared. Policies for and that affect over 200 million people should be thorough, rigorous, and comprehensive. If we are to solve problems, and not just symptoms, our policy makers should not be lazy, distracted, and pedestrian to think of and show how a policy works in practice.
Business confidence rises on expectations of monetary policy stability
The Central Bank of Nigeria (CBN) business survey for July 2024, released last week, has thrown up optimism for increased business confidence in the economy as the Naira is expected to stabilize over a six-month period. Outlook for August, October, and January 2025 shows indices of 7.6, 19.3, and 30.7, respectively, with businesses expecting greater levels of improvement in macroeconomic conditions later in the year. While the Naira is expected to continue to weaken in the coming months, the data shows an expectation that it will appreciate by the end of the year. The survey also shows positive employment outlook. The indices show different employment optimism levels, with agriculture the highest at 14.5, followed by construction at 13.9, and market services the lowest at 4.4. However, the immediate expectation is weak. The index shows a 0.1 for July 2024, down from 3.0 in June. The survey included 1600 businesses across services, industries, and agriculture. It covers expectations for August, October, and January 2025. According to the report, insecurity was the highest constraint to growth and business activity. Other factors are high interest rate, insufficient power supply, and high and multiple taxes. The overall confidence of 0.1 points to a decline of 2 points from June, showing the impact of raise in interest rates in May, given that the survey was taking days ahead of the July monetary policy committee meeting. Nigeria is going through one of the most difficult moments in history, with last year’s macroeconomic conditions and costs of living crisis the worst in a generation. The two-year inflation trajectory that started in April 2022 at 16.82% peaked at 34.19%, after July inflation recorded is 33.4%.
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LCFE at the forefront of FG’s 0% duty on staples, ameliorate food shortages
The Lagos Commodities and Future Exchange (LCFE) is set to lead the efforts of the federal government at addressing food shortages through the importation of staples foods such as rice, sorghum, wheat, millet, maize, and beans, ThinkBusiness Africa has gathered. The federal government, through the Nigeria Customs Service (NCS) released on Thursday the plans for 0% duty and value added tax (VAT) on key staples in the country for 150 days, to expire at the end of the year. Previously associated duties and VAT on the staples are suspended to support the federal government efforts at addressing rising food prices and shortages in the country. See Table 1. Food inflation reached 40% since April 2024. Table 1. Staple food Previous Duty New duty Husked Brown Rice 30% 0% Grain Sorghum 5% 0% Millet 5% 0% Maize 5% 0% Wheat 20% 0% Beans 20% 0% To avoid the ugly and incoherent situations of the past where the government could not track the purchase and distributions of such food items, the policy requires that at least 75% of the imported staples is sold through recognized commodity exchanges, such as LCFE. The press release says, “the policy requires that at least 75% of imported items be sold through recognized commodities exchanges, with all transactions and storage recorded.” With at least 75% of the commodities imported passing through exchanges, the government is assured of the transparency of the process, prices discovery, accurate data and records, and proper risk management frameworks. Indeed, it is for these reasons that the government is embarking on this only in the short term, so it does not jeopardies existing gains and growth in the trading of commodities through exchanges in the country. For instance, LCFE, operating since 2019, has over 40 companies trading commodities on its exchange. They trade commodities such as rice, soya beans, maize, cassava, gold, etc. Through the exchanges and the processes being developed, the government is increasingly becoming aware and able to track production, distribution, and consumption. Through established and continued improved exchange process that include the exchange, brokers, buyers, sellers, warehouse receipts, etc. Nigeria is increasingly modernizing how it trades its vast commodities. The Nigerian Customs Service (NCS), in its press release on Thursday 14th of August 2024, “guidelines for implementation of zero duty rate on some basic food items” says the government approved zero percent duty rate and VAT exemption on food items that include Husked Brown Rice, Grain Sorghum, Millet, Maize, Wheat, and Beans. The duty on rice was 30%, while that on Sorghum, Millet, and Maize was 5%, and Wheat and Beans carried 20% duty before the announcement that takes effect immediately. The plan is part of the government’s efforts at ameliorating the severe costs of living crisis, food shortages, and security in agriculture production zones. It follows the executive order signed by President Bola Ahmed Tinubu in June 2024, suspending import duty and tariffs on staple food items. The executive order is the accelerated stabilization and advancement plan (ASAP) of the government designed to address key challenges affecting the reform initiatives and stimulated development in various sectors of the economy. It follows dramatic increases in the prices of staple foods in the last one year. For instance, food inflation was 40.53% in May 2024, 40.9% in June 2024, and 39.53% in July 2024, compared to 24.61% in April 2023. In May this year, Nextier, an Abuja based think tank released a brief titled “averting Nigeria’s imminent food crisis.” The brief relied on the combined work of four major international institutions to arrive at its conclusions. UNICEF, Food and Agriculture Organisation of the United Nations in the report “The State of Food Security and Nutrition in the World 2023, and the United Nations World Food Programme 2023 all estimated that 25 million Nigerians were at high risk of food security last year. The International Rescue Committee also projected that that figure will reach 32 million this year. These estimates mean that in the space of two years, 15 million Nigerians have been added to the number of those at risk of acute food security and hunger.
My three takeaways from the recent protests
Ahead of the recently concluded protests, I found it surprising that the government was too jittery and felt that those who called for the protests would listen to the voices of elders and traditional rulers that they believe was responsible for their hunger and hopelessness. I believe it is this understanding that made Farooq Kper0gi, a professor of journalism, author, and researcher based in the US to highlight in his article, and I quote, “that the leadership of the protest, unlike the previous widespread protests in the country, was diffused.” End of quote. Ebenezer Obadare, the Douglas Dillon Seminar Fellow for Africa Studies at the US Council on foreign relations helped to qualify that and suggest that “rather than than the protests were leaderless, it was a different form of leadership that have emerged”. Notwithstanding that the protests are over, I thought to share my three takeaways, especially because they have implications for current and future social and political dynamics of the country. First, the reason for the continued division in the country 18 months after the 2023 elections that metamorphosed into the #endbadgovernance protests was the mistrust and distrust of the Independent National Electoral Commission (INEC) following bungled widely publicized electoral rules. For avoidance of doubt, while the opponents of the President may never accept him as the winner of the elections, his supporters also privately admit that INEC failed Nigeria, and it may take another generation for the public to trust the process again. So, the worst costs of living crisis in a generation merely accentuated and amplified their anger. Indeed, by mismanaging the process of the most important elections since the return to democracy in 1999, INEC has left many angry, disillusioned, and hopeless, much more than the result and the economic conditions since last year. To give hope, the President, though a beneficiary of a largely inadequate election, can build a stronger and more united Nigeria by addressing the short comings of the last elections. Second, and this is not the first time I am sharing this interpretation. Majority of Nigerians believe that the President, the Governors, and those in government do not share in the sacrifices of the worst costs of living crisis under their leadership. That is, it is generally seen that the government is exogenous to the economic reforms it espouses. Perhaps it is a communication problem, but they wonder if those that receive the financial support from the government are in the moon. The efforts of the government do not appear relatable since no one has come out that he or she received this support or the other. It is difficult for them to believe a government that says things will improve when most of the critical statements from the government are proven to be lies within 24 hours. Perhaps it is not relatable because simple government actions are embellished and amplified for no just reasons. It is not relatable when they see that government officials still live large and sometimes larger than the last administration. Finally, the protests highlighted the awful education and skills situation in the country. It is clear from the protests that Nigeria’s problem is not confined to the 130 million poor. It is now 130 million poor and uneducated. While it has always been there, social media has amplified its growth. Given what I have seen, Nigeria is dangerously threading towards successive generation with less education than their parents. It was not uncommon 30 years ago to see children in public schools able to read and write. That is rare today. So, increasingly, it is only the children of the shrinking middle class and the rich that can do so. It has become so bad that no one talks about how to get over 20 million children that are out of school the education they need. It has become so bad that the head of the Joint Admissions Matriculation board is lamenting the continuous decline in the cut off point for admissions into tertiary schools. It has become so bad that there are millions of unemployed people but are not fit for the thousands of jobs available. Oh yes, these problems did not start with the government of President Bola Ahmed Tinubu, but it is also the case that these problems are widening under him while the government seem helpless about tackling them. It is even more hopeless when the government continues to find the time to present and debate bills that seek to extend autocratic tendencies. For more of my thoughts, please visit tb.africa I thank you.
A Landmark Event for West Africa: The ESRI User Conference 2024
West Africa is on the cusp of a geospatial revolution, and the ESRI User Conference West Africa 2024 is set to be its epicentre. Scheduled for September 10-11 at the NAF Conference Centre in Abuja, Nigeria, this premier gathering will bring together a diverse community of GIS professionals, academics, and industry leaders to explore the transformative power of geographic information systems. The conference arrives at a pivotal moment. The region is experiencing a surge in data availability, driven by advancements in satellite imagery, GPS technology, and open-source platforms like QGIS. This wealth of information holds immense potential for addressing critical challenges in infrastructure development, environmental management, disaster response, and urban planning. The ESRI User Conference West Africa 2024 offers a unique platform to harness this potential. Attendees will delve into the latest ArcGIS software, gaining hands-on experience with tools that can revolutionize their work. Renowned experts, including GIS experts, representatives from GIZ, the Nigerian Communications Commission, the National Space Research and Development Agency, and leading figures from Sambus Geospatial, will share insights on cutting-edge applications, inspiring innovation and best practices. A highlight of the conference will be a keynote address by Akua Aboabea Aboah, Managing Director of Sambus Geospatial, who will discuss the company’s journey and vision for the future of GIS in West Africa. Additionally, the Surveyor General of the Federal Republic of Nigeria, Surv. Abudulganiyu Adebomehin, will share his perspectives on the role of GIS in national development. Beyond the technical expertise, the conference is a catalyst for collaboration and knowledge exchange. It’s a space where ideas are shared, challenges are discussed, and solutions are co-created. By bringing together diverse perspectives, the event fosters a vibrant ecosystem where innovation thrives. Sambus Geospatial, a leading provider of geospatial solutions in West Africa, is proud to host the conference. With a rich history spanning over three decades, Sambus has been at the forefront of introducing and implementing GIS technology in the region. The company’s journey, marked by resilience and innovation, mirrors the broader evolution of the geospatial industry. As a trusted partner and distributor of ESRI, ENVI, Trimble, and Wingtra, Sambus has played a pivotal role in empowering organizations across West Africa to harness the power of location intelligence. Through its expertise and commitment to customer success, Sambus has become synonymous with geospatial excellence. The ESRI User Conference West Africa 2024 is more than just an event; it’s a testament to the growing maturity of the geospatial sector in the region. It’s an opportunity to showcase the remarkable achievements made in recent years and to envision a future where GIS is seamlessly integrated into every aspect of society. The conference agenda is packed with thought-provoking sessions, including keynote addresses, panel discussions on emerging trends, and practical workshops. Participants will have the chance to learn about the latest advancements in GIS technology, explore real-world case studies, and discover innovative solutions to complex challenges. The event will also feature an exhibition area where attendees can explore the latest geospatial products, services, and technologies. This is an ideal opportunity for businesses to showcase their offerings and connect with potential clients. The ESRI User Conference West Africa 2024 is not just about technology; it’s about people. It’s about bringing together a community of passionate professionals who are dedicated to making a difference. By fostering collaboration, sharing knowledge, and inspiring innovation, the conference will play a crucial role in shaping the future of West Africa. As the region continues to develop and grow, the demand for accurate, up-to-date geospatial information will only increase. The ESRI User Conference West Africa 2024 is a platform for addressing this demand and ensuring that West Africa is at the forefront of the geospatial revolution. By attending this conference, participants will gain the knowledge, skills, and connections needed to drive positive change in their organizations and communities. They will leave inspired, equipped, and ready to tackle the challenges of the future with confidence and creativity. The ESRI User Conference West Africa 2024 is more than just an event; it’s a movement. It’s a call to action for GIS professionals to come together and shape the future of West Africa through the power of location intelligence. To register for the Esri User Conference West Africa 2024, please click the link: https://africabusinessconvention.com/event/esri-user-conference-west-africa-2024/ Join us in Abuja from September 10-11 as we map the future together.
Revenue Leak: N4.1tn Hole in Government’s Purse – FAAC
Nigeria is grappling with a massive revenue haemorrhage as government agencies fail to remit billions of naira to the Federation Account. The Federation Accounts Allocation Committee (FAAC) has revealed a staggering N4.1 trillion in unremitted funds as of June 2024, despite efforts to reconcile and recover outstanding debts. The Nigerian National Petroleum Company Limited (NNPC) remains the primary culprit, owing a colossal N940.62 billion. Other significant defaulters include the Nigerian Upstream Petroleum Regulatory Commission, Federal Inland Revenue Service (FIRS), and the Central Bank of Nigeria (CBN). The situation has worsened compared to May 2024, when the unremitted amount stood at N3 trillion. This alarming trend has severe implications for the nation’s economy. The missing funds represent a substantial portion of the government’s revenue, crucial for funding essential public services like education, healthcare, and infrastructure. The persistent failure to remit these funds undermines the government’s capacity to meet its obligations and hampers development efforts. Experts warn that if the situation is not urgently addressed, it could lead to a deeper fiscal crisis. There is a pressing need for stricter accountability measures and penalties for non-compliance. Additionally, strengthening the revenue collection system and improving transparency are essential to curb this alarming trend and ensure that public funds are utilized effectively for the benefit of the nation. The FAAC has initiated reconciliation efforts with the delinquent agencies, but progress has been slow. As the nation grapples with economic challenges, the recovery of these funds becomes increasingly crucial.
FCCPC Approach Suggests Targeted, Predatory Investigations against Foreign and Big Companies
Following the recent press releases by the Federal Competition and Consumer Protection Commission (FCCPC), especially the fines of US $200 million against WhatsApp and its parent company Meta, and the report on Coca-Cola and Nigerian Bottling Company regarding product labelling, this analysis provides context, background, and asks whether FCCPC is targeting big and foreign companies and acting in a manner that suggests its investigations are predatory. The Federal Competition and Consumer Protection Commission (FCCPC), Nigeria’s antitrust watchdog has made three major announcements/conclusions in the last year: Both BAT and WhatsApp were fined for antitrust practices using their market dominance and the same allegations are levelled against Coca-Cola. In addition to the fine against BAT for abuse of market dominance and infringement of public health regulations, the FCCPC said the maker of Lucky Strike and Dunhill cigarettes had also penalised retailers for providing equal platforms for its competitors’ products. The fine was the first levelled by FCCPC and the highest ever levied by Nigeria for antitrust violations. The same pattern has emerged in relation to WhatsApp and Coca-Cola, though based on different reasons. WhatsApp investigations were triggered on the back of its May 2021 updated privacy policy while Coca-Cola was based on a change in the formulation and resultant labelling of its Coke product. In the case of WhatsApp, the company has been given 60 days from the day of the release of the conclusion to pay US $220 million (though it appears the company is heading to the courts) while such a conclusion has not been reached in the case of Coca-Cola. BAT and Coca-Cola investigations started within a year of establishing the FCCPA, while WhatsApp investigations started in 2021. The Coca-Cola investigations started in June 2019, following the Act in February of this same year, while the investigations into BAT were opened in August 2020. Indeed, the FCCPC initiated an investigation into BAT and affiliated companies in August 2020 and obtained a federal court order in January 2021 to search multiple BAT sites and those of service providers for evidence used in forensic analysis. It added that additional investigation and analysis of evidence established multiple violations of competition laws. The FCCPC will monitor BAT for 24 months to ensure appropriate behaviour and business practices consistent with prevailing competition laws and tobacco control efforts, the watchdog said. In the case of Coca-Cola, it said it obtained vast materials from the company. In WhatsApp’s case, it followed the publication of its new privacy policy in May 2021. Public responses were largely positive following the BAT announcement in December 2023, while public responses appear muted in the case of WhatsApp and Coca-Cola in the midst of worsening economic conditions. Following the historical fine on British American Tobacco and its alliances by the Federal Competition and Consumer Protection Commission (FCCPC), the public response focused on the following: However, the responses to the fine on WhatsApp and the report on Coca-Cola has not attracted the same level of public attention. Also, unlike the BAT case, WhatsApp has appealed the decision. These conclusions have three major things in common. Given that the agency started operations in 2019, the conclusions provide an emerging pattern: This report looks at the gaps in the motivation and processes that led to these conclusions. This report shows that the agency appears to have targeted the companies, and by inference, wants to stamp its authority on the competition space in the country, with respect to the scale of the fines. However, this approach, while capable of flaunting short-term victories, has the potential for long-term injurious implications for investment, growth, and jobs in the country: This report thus looks at the regulatory and fiscal dimensions of the work of FCCPC as it relates to the fines on BAT and WhatsApp, and seeks to make three important points. First, it appears there is a misalignment between the regulatory and fiscal powers of FCCPC to the extent that there is a huge incentive for the agency to pursue big businesses because they can pay huge fines. Second, and following from the first is that the fiscal incentives in the regulatory powers of FCCPC will mean the pursuit of only big and perhaps foreign businesses, and not a systematic pursuit and correction of uncompetitive business environment in Nigeria. Third, it appears that the FCCPC action was predatory. The FCCPC was established in 2019, but the same year, it “became aware” of changes to Coca-Cola formulation, by August 2020, it commenced investigations against BAT. In the BAT case, there is evidence to suggest that the materials for the investigations were collated before the establishment of the FCCPC Competitiveness, Fiscal Policy, and Incentives The 2019 Act setting up FCCPC was a landmark establishment of an antitrust and competition agency in Nigeria. In 2019, President Muahammadu Buhari signed into law the Federal Competition and Consumer Protection Act, thereby creating the agency. The agency’s purpose is to develop and promote fair, efficient, and competitive markets in the Nigerian economy and to also facilitate access by all citizens to safe products and secure the protection of rights for all consumers in Nigeria. FCCPC was modelled after the South African Competition Act. It is widely accepted that the Act establishing the FCCPC on 30 January 2019 was a landmark, replacing the ineffective Consumer Protection Council (CPC). The Act was largely modelled after the South African Competition Act. It established two institutions for the purpose of enforcing its provisions. These are the FCCPC and the Consumer Protection Tribunal (CPT). The key function of these agencies is to eliminate monopolies and prevent or curtail the abuse of dominant market positions. In addition to repealing the CPC, the FCCPA also repealed the Investment and Securities Act (ISA) 2007, which empowered the Securities and Exchange Commission (SEC) to approve mergers and acquisitions. While the South African competition regime is regarded as a model of competition for developing countries, it is also seen as a vehicle for the attainment of national economic and social objectives. The overriding legislation of FCCPA. Sections of the Act establishing the FCCPC give it overriding powers over existing legislation in relation to competition and consumer protection. It thus means that the FCCPC has precedence over any other specific laws in those areas. Though sections 47 (2) and 105 (6) ( c ) acknowledge the leadership position of the FCCPC, there is a role for negotiable agreement with other relevant agencies. Antitrust agencies have become critical and powerful in moderating competition in
First Bank of Nigeria appointed Olusegun Alebiosu as its sixth managing director /CEO in this century.
Two months ago, Nigeria’s oldest lender, First Bank of Nigeria appointed Olusegun Alebiosu as its sixth managing director /CEO in this century. In this analysis, Proshare X-rays what the Risk background of the new CEO means for the Bank. The analysis projects the future and outlook for the bank by piecing together the thread of the bank’s leadership this century. In this review of First Bank’s (FBN) leadership Journey: A Shift that Shapes the Future, Building on Achievements and Lessons of the Last Decade; we addressed the following: 1. Preamble – Leadership Restructuring and Lessons of the Last Decade. • First Bank’s 130years of Stewardship Leadership • First Bank’s CEO Parade: Learning Along a Rising Curve. • In the lens of the industry: of Tier 1 Banks and the Future. • The Leadership Changes: The New Board and its Character. 2. Alebiosu – A Risk-General at the Helm. • Building the Future by Looking Back – Of Leadership and Succession. • First Bank’s Alebiosu: The Making of a Risk General. • Repairing Risk – The Art of the Deal. 3. When a Board Seeks Sustainability and Consistency. • When Succession Planning Matters: The First Bank Odyssey. • Keeping the Bank Agile: The Art of Sustainability. 4. Closing Thoughts. First Bank’s 130 years of Stewardship Leadership Corporate longevity signposts resilience: it does not presume a magical ability to avoid operational storms. However, it does highlight the ability to wade through occasional business turbulence and come out alive and well. Many great global companies over a hundred years old know the drill. They embrace easy and hard times with equal commitment to long-term sustainability. After 130 years in business, First Bank of Nigeria (FBN) has become a sort of national marquee symbolising the twists and turns of Nigeria’s economic fortunes. Running a financial institution over a century old is in itself a gold standard; so FirstBank stands in a class all by its own; and so must be those who have held the responsibility of running such an institution. In his book ‘The Living Company’, former Shell Royal Dutch Petroleum Company executive and 38-year Shell veteran Arie De Geus noted that ‘The natural average lifespan of a corporation should be as long as two or three centuries’. He argued that the dichotomy between profitability and longevity was a myth. As far as De Gues was concerned, profitable companies should be long lived. But he notes that there is a caveat. The endemic focus of managers on the bottom line to the detriment of the human community that makes up the organisation could be a self-inflicted bullet to the head. The research done by De Geus and his team at Shell/ Royal Dutch Petroleum Company explains why Niger ian companies like Fi rst Bank succeeded and struggled in seasons and under different managements. De Geus and colleagues identified four key characteristics of companies as old as the 130-year-old First Bank of Nigeria. The characteristics were: · Environmental Sensitivity and Cohesion; · Sense of Identity; · Tolerance; and · Conservativeness in Financing. In First Bank’s corporate sojourn, these characteristics have evolved in different shades under separate Chief Executive Officers (CEOs). We attempt a brief interrogation below. First Bank’s CEO Parade: Learning Along a Rising Performance Curve FBN’s leadership parade has seen some exceptional group of managers and directors with several inspirational products, and others that formed part of their learning and development as an institution. The 130-year-old bank has gone through cycles of resilience turned into islands of achievements and in some cases, oasis of reflections. More recently, the bank has seen a steady and firm resurgence of its operating strength with a lower Cost to Income ratio (CIR), shrinking Non-Performing Loan ratio (NPL), and smaller Cost of Risk (CoR). Admittedly, this has not been without ‘legacy’ corporate governance hiccups, but the uncharacteristic disruptions have been handled professionally and maturely, in the main. (see Illustration 1) Illustration 1: FBN, which represents 95% of FBNH’s asset size since it transitioned to a Holdco structure, has had five CEOs with different management styles over the last two decades, starting with Bernard Longe’s aspirational administration, Moyo Ajekigbe’s conservative and minimalist approach, Sanusi Lamido Sanusi’s risk focused approach, Bisi Onasanya’s proactive and aggressive administration, and finally, Adesola Adeduntan’s repair, rework and re-growth strategy. By the end of the Adeduntan’s era, the bank has shown a significant recovery from the previous high cost to-income ratio (CIR), low capital adequacy ratio (CAR), and bloated non-performing loans (NPLs), which enabled him to restore the Bank’s international credit rating to the same level as those of the other members of FUGAZ and Nigeria. Furthermore, the ROE and market capitalization of the Bank reached unprecedented levels that have never been achieved before. As of FY 2023, the Group’s CIR and NPL ratios declined significantly and compared favourably with regulatory expectations and industry benchmarks under the Adeduntan-led management. The Bank, during this period, pioneered agency banking and achieved strong growth with over 230,000 agents, making it the largest bank-led agency banking franchise in Nigeria and Sub-Sahara Africa (SSA), with significant growth in the contribution of the international subsidiaries to profit (~30%) that signposts the arrival of the Bank as a truly ‘multinational company’, exponential growth in market capitalization (>10X) and customer counts (4X), and a significant drop in NPL exposure with NPLs at 5% from a high of 30%. Furthermore, the Adeduntan era would be remembered for successfully pushing the bank’s digital agenda with the launching of the Digital Innovation Laboratory and Technology Academy (the first in the industry), execution of the various digital banking initiatives that resulted in over 23 million customers being onboarded on the Bank’s digital platforms that ensured that over 90% of the customers initiated transactions are now being conducted on those digital platforms which are fondly referred to internally within the bank as ‘Brick and Click’ banking. This period also saw the design and launching of ‘FirstDirect’, an integrated cash management and trade finance solution/platform that has digitized the banking interface between the Bank
President Tinubu is tying Cardoso’s hands over macroeconomic stability
On Wednesday 31st of July, as many Nigerians were making plans either to be part of the nationwide protests scheduled for the next day or watch proceedings online, the National Assembly hurriedly amended the Central Bank of Nigeria Act 2007. The lawmakers passed a bill to amend Section 38 of the CBN Act, raising the allowance for federal government borrowings from the Central Bank of Nigeria to 10%, from the previous threshold of 5%. Known as ways as means, the process is supposed to serve as an emergency form of funding for the government, limited to 5% of the previous year’s actual revenue, so as not to threaten the macroeconomic stability required for growth and jobs. However, since the bastardization of the process by President Muhammadu Buhari, the Tinubu government has now legislated what was an illegal practice under the former President. In the presentation of the bill, Senate Leader Opeyemi Bamidele touted three reasons for the increase. First, the bill will help finance budget deficits. Second, the loans will support essential government expenditures, stabilize the financial markets by preventing government default, and stimulate economic activity by creating jobs. Third, the increase will allow the government to support critical sectors such as agriculture and healthcare and provide infrastructure development while reducing borrowing costs by offering cheaper funds than traditional methods. There are many dimensions to this. I will focus on two. First, the process. While this measure had been mooted before, the timing and speed of passing the bill shows legislative recklessness. From widely available reports, the opposition to the bill was more than those in favour of it, but it still passed. For all intent and purposes, the current National Assembly is not pretending to surpass the pedestrian approach to legislative matters by the last session and continues to exhibit a joyous admission that it is prepared to pass any bill presented to it by the executive. It is no wonder that the National Assembly is not contended with the callousness of a voice vote in 2024 but also passed such a significant with such speed. To their credit, the National Assembly is attempting to legitimize the gross illegality under President Muhammadu Buhari. As data from Dataphyte shows, the ways and means under President Buhari were between 37.2% in 2017 and 138% in 2021. In addition, contrary to the stipulation of the Act, the ways and means were secretive, and the repayment was only securitized to be paid over 40 years at the administration’s twilight. That brings me to the second dimension of it. Contrary to what the legislators that supported this bill think, the rise in the borrowing allowance from the central bank will not only not solve the problem, but it is also tying the hand of the Central Bank governor in his efforts to stabilize the Naira and prices. I wonder who is going to tell our lawmakers that the reason we are in this mess is because the federal government is not disciplined about its finances. Who is going to tell President Tinubu that the raise is for deficit expenditure because the budget was optimistic and unrealistic in the first place? Who is going to tell President Tinubu that deficits can also be addressed by cutting costs and not raising revenues by printing money that generates greater levels of macroeconomic instability? Who is going to tell President Tinubu that Nigerians don’t believe his economic policies anymore because he is quick to expand government expenditures on the pleasures of government officials but very slow in implementing policies that cut government costs such as the Oronsanye report? In conclusion, the reason Ways and Means is called inflation tax is not just because it causes unsustainable levels of inflation as we have now, it’s also because it enriches the federal government at the expense of the State governments, the private sector, and the citizens. In addition, its effects on price instability are what destroy the economy’s ability to grow and create jobs. It is the effects of inflation that lead to capital flight and increases in interest rates for investors and manufacturers. It is the government borrowings’ effect on prices and instability that continues to drive the Naira’s instability. Who is going to tell President Tinubu that when you are in a crisis, you stop digging? And by extension, you don’t tie the hands of your central bank governor who is been held responsible for stabilizing the economy, but the root cause is unsustainable fiscal practices such as the federal government continuously spending monies it has not earned.
