Sunday, September 27, 2009

Open Letter to Prof. Dora Akunyili

Firstly, let me seize this opportunity to congratulate you on the recent wedding of your daughter Ndijeka Akunyili Crosby. Madam, as the "champion" of the nation’s re-branding programme, there is no better way to kick off the campaign than to subject 140 million television viewers to your grand display of opulence and lavishness. As they say, "charity begins at home".

Hon Minister, I used to be a critic of your current re-branding project. However, after deep thought I have to come to realise that Nigeria is a “Great Nation” with “Good People” after all. And instead of sitting back and criticising our leaders, we need to start celebrating our greatness.

So, why the sudden change of mind you may ask. For me, one of the things that makes us a great nation is the ability of the government to carry on with its business as usual, while the nation's universities remain shut due to lecturers strike. I can’t seem to think of any other nation that can afford to keep its institution of higher learning shut for over three months, without a massive public backlash. Our docility and reluctance to challenge the ruling elite is perhaps what you will consider makes us a nation of “good people”. As you will agree, respect for elders and people in authority are deeply entrenched in our culture and tradition. University students are so “respectful” that they are happy to sit at home for three months, watching Nollywood movies, without rising up in protest.

I also couldn’t agree less with the recent comments credited to the Education Minister Sam Egwu that “all the university lecturers in Ghana will not be adequate for a single university in Nigeria”. Even though our lecturers might have cultivated the habit of embarking on industrial action, we need to be thankful that we have one of the highest number of universities in the world. It is also worth noting that university education is free. Even western nations like the United Kingdom and the United States cannot afford to provide free education at University level, so what else do we want as a nation?

Madam, power generation has been one of the Achilles heel of our great nation. However, in the midst of this challenge, there is a lot to celebrate. We can boast of having the highest number of portable generators in the world per capita. We are so rich that most people can even afford own more than one “I big pass my neighbour” generators. I have suggested in the past that we should seriously consider encouraging the Chinese to start manufacturing “disposable” generators, as this could help to drive down the cost of generators. The initiative could also be the key to the President Umar Yar’Adua seven-point agenda and his "Illusion 2020". With disposable generators, the government need not to worry about meeting its power generation targets.

Hon Minister, I also read your recent letter to Sony Inc demanding an apology for portraying Nigeria as nation of scam artists in a TV commercial. You also banned local cinemas from showing the District 9 movie. Although the movie and TV commercial might have denigrated the people of this great nation, there are still some positives we can take out of it. As they say “any publicity is good publicity”. How many countries have been fortunate to be subject of a Hollywood movie? How many countries have been fortunate to be mentioned in a TV commercial sponsored a multi-national company like Sony?

The western world also sees us as a chronically corrupt nation. Even the latest index rating by Transparency International indicates that Nigeria is one of the most “politically corrupt” nation in the world. But Madam, what these anti-corruption activists fail to realise is that corruption is not just synonymous with Nigeria. We heard recently how British MPs have been manipulating their expenses claims, in a country that prides itself on probity and accountability. This shows that we are no that bad after all. The survival of our economy in the face of uninterrupted looting of the nation’s treasury has been a true test of our greatness. Although research shows that N850bn has been lost to corruption since independence, I’m yet to find a nation whose economy can survive losing such colossal amount of money. To put it in context, the bailout announced by the US government to save its economy from total collapse, as a result of the sub-prime mortgage lending, was only $750bn.

Hon. Minister, I have therefore decided to become one of the mouth-piece for your re-branding campaign here in my base in Australia. God willing, my intention is to compliment your efforts in the Asia-Pacific region in moving our nation forward.

I look forward to working with you on this noble initiative.

Yours sincerely

Patriotic Citizen

Friday, September 25, 2009

How Aondoakaa sold MMA to Wale Babalakin's Bi-Courtney

In another of the mind-boggling manipulation and corruption stories involving the Attorney General, Saharareporters has found his hand in the controversial handover of the General Aviation Terminal (GAT) of the Murtala Mohammed Airport in Lagos.

Mr. Aondoakaa, our impeccable source revealed, took huge bribe money from Mr. Wale Babalakin, the chairman of Bi -Courtney, the company now reputed for building sub-standard structures. Aondoakaa had worked with Bi-Courtney Aviation Services Limited to grant the company a 36-year concession to run the domestic wing of the Murtala Mohammed Airport".

During the Obasanjo's administration, Babalakin got Femi Fani Kayode to recommend that his lease on the airport be extended from 12 years to 36 years, but that proposal was rejected.

In came Aondoakaa, who, after receiving N400 million from Babalakin, got Bi-Courtney to sue his office for breach of contract after claiming that it had the right to manage both the MMA2 and the GAT for 36 years starting from April 2004. Curiously, Bi-Courtney did not include the Federal Aviation Authority of Nigeria (FAAN) in the lawsuit. That strategy was deliberate. FAAN would have contested the lawsuit, but Aondoakaa's refused to diligently defend his office when put on notice about the suit.

Bi-Courtney then obtained a court judgement allowing it to forcefully take over GAT in a secret ceremony that had the airport workers protesting. The worker’s protests have so far yielded some positive results, as the office of the National Security Adviser has intervened and suspended the Bi-Courtney agreement until Yar'adua returns from his sick bed in Saudi Arabia.

Only last week, the Coalition Against Corrupt Leaders (CACOL), an umbrella body made up of 35 organizations fighting corruption in the country, joined the growing nationwide clamour for Aondoakaa to be relieved of his position. In a letter to Yar’Adua, it said CACOL had found the Attorney General “to be roguish, corruptible, insensitive and incompetent either as a Minister in any Ministry or (as) the Attorney-General.”

The letter was copied to the President of the Senate; the Speaker of the House of Representatives; the Minister of Justice and Attorney-General of the Federation (the position Aondoakaa officially occupies); the Chairman of the National Judicial Commission; and the President of the Nigerian Bar Association.

Culled from Saharareporters

Tuesday, September 22, 2009

FG, Bi-Courtney and the General Aviation Terminal

As we know, in 2003 the Obasanjo regime signed a Build, Operate and Transfer (BOT) Public-Private Partnership (PPP) contract with Bi-Courtney Aviation Services Limited (BASL) for the construction of the second terminal at Murtala Mohammed Airport (MM2). The new airport terminal was opened in 2007. However following the approval of the PPP agreement, the status of the General Aviation Terminal (GAT) – whether or not it’s part of the agreement - has been subject of controversy. But after years of argy bargy and legal fireworks, the FG finally handed over the General Aviation Terminal of the Murtala Mohammed International Airport to BASL.

Stakeholders in the Aviation industry have expressed their concern on the government decision. According to the National Union of Air Transport and Engineers (NUATE), the handover of the terminal by the FG to BASL was undertaken without regard for “rule of law” and “due process”. In protest, the Union threatened to shut down the terminal, noting that the handover will inevitably result in job losses. In the same vein, Arik Air through its Counsel Chief Assam E. Assam, told newsmen that the airline – who operates 50% of domestic flights in Nigeria - might stop operation because it could not operate in any facility that is “under the control and monopolistic management of Bi-Courtney Aviation Services”. FAAN on its part is had held the position that GAT was not part of the property given to Bi-Courtney in the PPP agreement it has with the organization and had sided Arik Air in the struggle to retain GAT as FAAN entity as it has been the major source of revenue to the agency. According to FAAN, the handover of the GAT would result in about 40% shortfall in revenue for FAAN.

Based on the foregoing, it is evident that all is not well with the MMA2 PPP Agreement. I have always expressed my concerns about how PPP contracts are negotiated in Nigeria. I have specifically queried the purpose of the exclusivity clause in the MMA2 PPP Agreement –which is also been contested by FAAN, - that prohibits development of an airport in Lagos for 36 years. Many have disagreed with my viewpoint on this issue. Some have argued that it is in the “commercial interest” of BASL to have such a clause (i.e protect its investment). Some even insinuated that I have a personal grouse with BASL. Firstly, l will state categorically that I do not have any personal issue with BASL. I respect and appreciate BASL position as a commercial entity that is looking to maximise its opportunities and protect its financial investment. And if I were in their shoes, I would probably be seeking the inclusion of such a clause, if not more. However, my criticism is directed to the government for their ignorance and short-sightedness in agreeing to such a clause. The inclusion of such a clause in contractual agreement does not encourage competition. It only creates a private monopoly, and does not offer consumers “value for money”. The role of the government is to make sure that public interest in protected in signing such contracts. The clause also does not offer any incentive for BASL to be innovative. With guaranteed income for 36 years and no other competing airport, passengers and airline operators can be expected to be at the mercy of BASL.

Also, such a clause makes mockery of the government so-called Vision 2020. How can nation that intends to be one of the world’s top 20 economies prohibit airport development for 36 years? How can an aspiring G20 nation prohibit airport development in a city predicted to emerge as the third largest city in the world with a population over 20 million people by 2015? Whatever anyone thinks, I’m of the view that this sort of arrangement cannot be right.

In terms of the GAT handover and threats from Arik Air and NUATE, there are few questions which need to be answered by the FG. FAAN denied that GAT was part of the PPP contract, and its handover means loss of revenue. My question is, as a major stakeholder, what was the role of FAAN in the contract negotiation? Was the decision to concession GAT as part of the MMA2 contract taken unilaterally by the FG without following due process? Who were the government advisers on the contract? Arik Air also threatened to halt its operations. But since the PPP agreement predates the commencement of Air Arik operations, was Arik Air not advised of the PPP agreement and imminent transfer to BASL? As for NUATE, did the FG consult with the Union during the contract negotiation?

Whatever be the case, there are important lessons to be learnt from the MMA2 Agreement. One of the keys to success of any PPP is “communication”. It is inevitable that more people will be affected by a partnership than just the public officials and the private-sector partner. Affected employees, the portions of the public receiving the service, the press, appropriate labour unions and relevant interest groups will all have opinions, and frequently significant misconceptions about a partnership and its value to all the public. It is therefore important to communicate openly and candidly with these stakeholders to minimize potential resistance to establishing a partnership. If the FG has taken its time to educate all stakeholders, then the reported protest by Union wouldn’t arise. Also, there would not be the need for the threats from Arik Air.

The government should also implement mechanisms that will guarantee transparency at all stages in the tendering process. These mechanisms must include setting procurement specifications, open public hearings for major government contracts, and the final selection of contractors; and Involvement independent agencies to oversee the bidding process. Unfortunately most of the PPP contracts in Nigeria are announced on the front pages of newspapers. The process of awarding these contracts is shrouded in secrecy. A classic example is the Lagos-Ibadan Expressway N89billion concession contract. Up till now, the public is yet to be advised of the process that led to the selection of Bi-Courtney Ltd. Where was the tender for the procurement advertised? How many companies bidded for the contract?

Interestingly, the notion of public-private partnership has been touted in some government circles as a magic formula that will fix the country’s infrastructure blockages. The complexity of PPP contracts and the high costs involved means care should be taken in the way it is approached. PPPs are not a panacea for development. The principles that underlie successful PPPs are affordability, cost effectiveness, value for money, transparency and risk management.

Saturday, September 19, 2009

UK Govt!....Please Extradite James Ibori & David Edevbhie!

Nigerians at home and in diaspora,

Take a stand NOW against corruption in Nigeria...send an email expressing your distaste for Aondoakaa's meeting with the British authorities now or in the future to protect Ibori, Edevbhie and Gohill (about to be prosecuted by the British govt) and asking for the extradition of James Ibori and David Edevbhie to stand trial for their crimes against Nigerians! The time is tolerance for corruption and AONDOAKAA MUST GO!..when?...NOW!!!

You can email the British Attorney General at  or

Fax: 020 7271 2434

or call:

Ph: 020 7271 2492

UK Govt!....Please Extradite James Ibori & David Edevbhie!

Please note that the more complaints they receive the more encouraged they will be to protect our interests by bringing these criminals to justice!.....send your protest now!

Wednesday, September 16, 2009

Rebranding Lagos......

The decision of the Lagos state government to force owners of properties on major highways to “re-paint” their properties definitely needs a “rethink”. According to media reports, owners of properties along major highways were given 90-day ultimatum to undertake aesthetic improvements to their properties. This initiative, according to the Commissioner of Environment, Muiz Banire is in line with the Lagos Mega City Project. However following non-compliance, the Commissioner warned that “the state government would invoke its powers under Section 28 of the Land Use Act to seize properties of defaulters”.

In an effort to “rebrand” Lagos state, Gov. Fashola embarked on the Lagos Beautification Project -  also known as “Operation Green Lagos”. The beautification project which is part of the Lagos Mega City Project, has so far resulted in provision of luxuriant vegetation, aesthetically appealing sites, and more importantly the reclamation of public parks and open spaces. Whilst there is no doubt that these cosmetic environmental upgrade have been beneficial, Gov. Fashola and his advisers must ensure that the government does not impinge on citizens’ rights. Also, the government should be mindful of the unintended consequences of its policies and actions.

In my opinion, I do not think it is right for any government be it local, state or federal to compel a landlord to re-paint his/her property. One may argue that if a property yields a monthly-rent, then is only right that the property owner keeps it maintained. And I will agree with such argument because if I’m a tenant, I will expect that my landlord to keep my rental accommodation aesthetically pleasing. Especially in a place like Lagos, where some landlords demand two years advance rent payment. However, what about owner-occupiers? Has the government considered the impact of such directive on owner occupiers who cannot afford to re-paint their houses? It is not unreasonable to assume that deplorable state of the nation’s economy would have played its part in the neglect of certain properties. Has anyone seen a property owner, who will deliberately allow his property to go derelict? Who does not want his house to look nice?

So what I’m saying? The government needs to reconsider its position on this matter. A blanket rule compelling all property owners to re-paint their houses is surely not the right thing to do. Individual property owner’s circumstances are different, and therefore the government should deal with the issue on “case by case” basis. In a civilised society, Government provides grants/loans for such purposes. And such loans/grants are “means-tested”, i.e. only made available to those who cannot afford the cost of the refurbishment. Why can’t the Lagos State Government do the same? In fact, the Lagos Mega City Project provides a justification for such a scheme.

Also, I find the threat to “seize” properties of defaulters laughable. Mr Muiz Banire, was quick to quote Land Use Act, saying that the government will invoke Section 28 of Land Use Act to deal with erring landlords. But having read the Land Use Act, I’m yet to find where it is written that a Governor may revoke a right of occupancy because a property owner refused to maintain the aesthetics of his/her property to a certain standard. This could only happen if maintenance of aesthetic standard is included is imposed on the land through a “covenant”. And thus, failure to re-paint would be regarded as a “breach” of covenant. Even in cases where such covenants are imposed, how do you define aesthetic standard? Interpretation of what acceptable standards will be very subjective. And as they say, “beauty is in eye of the beholder”. What I consider as pleasant may be an eyesore to someone else.

Whilst I appreciate Gov. Fashola’s enthusiasm to bring sanity back to Lagos, some of his recent actions have been questionable. Government actions should not place unnecessary hardship on the citizenry. The fact is, we operate an unregulated property industry, which means the additional cost of any forced refurbishment will only be passed on tenants.

Sunday, September 13, 2009

"Attorney-General of the Federation, Michael Aondoakaa and the Three Thieves"

The recent events of the last few days left me wondering about the actual role of Michael Aondoakaa, the nation’s Attorney-General. For me, it is either someone failed to provide him with his job description when he was appointed as the A-G or he just loves been an usurper. It is no more news that the Federal Government has rejected a request by Britain for release of evidence needed for further investigation and prosecution of three Nigerian ex-governors in a London court for money-laundering. These formers Governors were alleged to have laundered proceeds from the sale of V-mobile shares - bought with government funds -  through private accounts in the United Kingdom. What is news however is the audacious move by the A-G to announce that none of the former Governors is currently investigation. According to the A-G, the Governors were investigated by the Economic and Financial Crimes Commission (EFCC) but were exonerated of committing any crime in January 2009. But in a swift response, the EFCC, through its Media Adviser refuted the claims that the former Governors have been cleared of financial wrongdoings. According to the EFCC “The letter being referred to in these reports have no specific impact or reference to the cases of the three former governors as it was only an advice to a bank on the operation of a company’s account and as such cannot speak for substantive cases being investigated.

The situation now seems to have hit a stalemate. We have the A-G on one hand saying that former Governors have no case to answer. But on the other hand, we have the bullish EFCC denying that’s the case. So who do we believe?

Many will agree that Nigeria has now turned into a theatre of comedy, and the current movie on the red-carpet is “anti-corruption”. Two weeks ago, it was “Sanusi and the Banking five”. Now it is “Michael Aondoakaa, and the three thieves”. These comedians have become a very useful tool in providing the much desired distraction that Abuja politicians need. While tickets to these blockbuster comedies are sold in front pages of the newspaper, President Umaru Yar’Adua continues to have field day in Aso Rock doing nothing.

The biggest clown on the centre stage for now is no one else but the nation’s Attorney-General Michael Aondoakaa. The A-G reminds of our good old friend, the Late Alhaji Wada Nas, the Minister for Special Duties (whatever that means!) during the Abacha regime. Alhaji Wada Nas, was the “Chief Propagandist” for the Military Junta. He became a regular feature of Nigerian media headlines; the political pot of Nigeria at that time was so hot and smoking with such issues as the June 12 elections, Human rights abuses, Abacha’s self succession bid among other issues. He was always ready to take on debate to defend the government’s policies and approach to challenging situations facing Abacha’s regime, even these policies clearly devoid of common sense. But anyway, it wasn’t too long before Wada Nas became Wada “Nonsense”.

The A-G so far has been displaying the same character as that of the Late Alhaji Was Nas, He has been spewing out as much nonsense as Nas did, if not more. However the difference is that, while A-G has been using the ‘ruse of law” to rationalise his actions, Wada Nas wasn’t that clever. But really, for any military regime to acknowledge the “rule of law” is like shooting itself in the foot. Michael Aondoakaa is perhaps, the most pathetic and inept Attorney-General my generation as witnessed. I can’t help but question every time why and how he was awarded a Senior Advocate of Nigeria status. Aonodakaa is a disgrace to the National Judicial Council. If this is the type of people been awarded SAN, then I’m sorry to say that a great disservice has been done to the likes of Late Rotimi Williams, Graham- Douglas and Gani Fawehinmi. If Aondoakaa is what a SAN is all about, then I think every law graduate should be awarded one.

We need to ask the A-G when he became an investigator, prosecutor and adjudicator. We also need to know if, he is the “Attorney-General of the Federation” or Attorney-General of corrupt former Governors. Why can’t he just allow the law to take its cause? If he feels he has nothing to hide on behalf of the accused Governors, then let him provide the evidence requested by the British authorities. The fact is, the British authorities have no pronounced these Governors guilty. They have only been charged to court. So why not let them defend themselves, instead of acting as their solicitor and advocate.

And what does he mean by saying “that the proper place to prosecute the alleged offence is Nigeria because the ingredients of all the offence investigated were committed in Nigeria and that all the accused persons reside in Nigeria”. Yes the crime was committed in Nigeria, but if money from the sales of V-Mobile shares were actually transferred to a UK account, then a crime has been committed in the UK. Does the A-G know about the United Kingdom Proceeds of Crime Act 2002 at all? It doesn’t matter if the Nigeria authorities are not interested in pursuing the case. The UK law is no respecter of any individual or group of people The A-G should allow these individuals defend the allegations levelled against them.

It is also disgraceful and absurd that the A-G can descend so low to accuse the former EFCC boss Mallam Nuhu Ribadu of been the mastermind behind the British prosecution. What does he think the Metropolitan Police is? An appendage of Downing Street, or a section within the Justice Department, that can just be manipulated willy-nilly like he does with the EFCC and Nigeria Police Force. I’m happy that Mallam Ribadu has come out openly to deny these claims. Let’s even assume Ribadu is conspiring with British authorities. But how does that represent a treasonable offence? How can a man who has taken it upon himself to carry on with the anti-corruption crusade regardless of his official status be charged with treason? When did anti-corruption crusade become a treasonable offence? If Ribadu is charged with treason, the A-G deserves to face a firing squad for his recent actions. Also, what does the A-G consider as the nation’s interest? Is he saying that writing letter of support for corrupt former governors to shield them from prosecution is in national interest? Or is the use of the Mutual Legal Assistance Treaty to thwart corruption cases is in national interest.

If the A-G is really interested in fighting the nation’s interest then there are few tasks he could spend his time on. He could use his office to expedite the proposed electoral reform. Also, there are hundreds of Nigerians on death row in Libya who will love to be defended by the “Chief Law Officer”.

Wednesday, September 9, 2009

Understanding Nigeria’s Banking Sector-PART 1

Written by Dayo Coker

 The Soludo Era:

After the banking consolidation exercise reduced the number of Nigerian banks to 25, Professor Charles Soludo became a national hero. He was hailed as a practical genius who translated abstruse economic phenomena into reality, a man who easily vanquished the stodgy and connected grey eminences that had tried to resist his reformist agenda.

As the masses sang his praises, the canny bank chiefs who had succeeded in saving their institutions knew that they had to embrace him in order to protect their empires. To seduce him, they levied themselves 2 million naira each and hosted him a superlative 50 million naira "dinner". He was initiated into the luxury life.

Soludo, the hyper-intelligent economist soon morphed into a dapper dresser who wore Savile Row suits and expensive Rolex watches. He became very close to a privileged group of bankers who became the de facto rulers of Nigeria’s financial sector. The tough talking regulator lost his sense of impartiality.

The Stock Market Boom.

General Olusegun Obasanjo's decision to work with Bretton Woods economists combined with soaring oil prices to draw foreign investors to the Nigerian financial sector. In addition to hedge fund managers who invested a small fraction of their portfolios in the growing market, ordinary Nigerians joined the fray when they realized that banking sector reforms had transformed the stock market into a veritable cash machine.
Growing investor confidence quickly led to a sharp rise in stocks and attracted the hoi polloi. Small investors rushed to the stock market in droves and sank their money in "high growth stocks". The snake oil bankers quickly read the situation and drew up plans to further increase their capital base.

In order to achieve abnormal returns, they enlisted the support of stockbrokers who brazenly manipulated stock prices with the tacit support of the leadership of the Securities and Exchange Commission and the Nigerian Stock Exchange. A rash of public offers soon followed, leading to an exponential increase in stock market indices. Some states even compelled civil servants to buy shares, forcibly deducting the value from their salaries.
Clergymen told their congregations about the "miraculous wonders" of the stock market. As the unsophisticated “sheep” emptied their nest eggs into the Nigerian Stock Exchange, the bankers and their sidekicks got richer. Mid-level managers earned millions in bonuses as reward for bringing in ensnaring ignorant investors. The stock market became part of the national conversation. And there was no stopping the bubble as the new financial elite was born.

Greed and Recklessness.

As the money rolled in, the banks immediately went on a spending spree. South African brand consultants were paid huge sums to design new logos, Indians got millions for software and overpaid managers were poached from rival banks. In little time, the banking tsars became delusional and started a turf war. They commissioned ostentatious offices and hired buxom bimbos to reinforce their marketing departments. These “happiness” officers were given huge allowances for miniskirts, contraceptives and expensive baubles.
The battle assumed a personal dimension as nouveau riche bankers fought for prime real estate in Ikoyi and Victoria Garden City. Others rented Banana Island flats and joined expensive boat clubs where they flaunted their expensive curios. The gnomish Jim Ovia took over an entire street in highbrow Victoria Island where he built an imposing edifice and commissioned a flashy ATM galleria. His amazing architects delivered The Civic Centre, a ship-inspired building that came to define his expensive taste. He became a trusted confidante to Aliko Dangote and Femi Otedola, Nigeria’s richest men. Aig Imoukhuede, one half of the now infamous United Alliance, built a fortress complete with angry mobile policemen. Jeremiah Omoyeni, the banker cum politician, got a 450 million naira housing allowance for his short stay at the helm of the crisis-ridden Wema Bank.

Anthony Elumelu, Cecilia Ibru, Jim Ovia and Tayo Aderinokun commissioned private jets to take them around the world while Akingbola curiously started an FM radio station and announced that he would treat himself to a Rolls Royce on his 60th birthday. Prince Nduka Obaigbena, This Day’s flamboyant chairman became the cheerleader-in-chief as banks picked up the tabs for visiting global dignitaries at the newspaper’s exquisite “town hall meetings.” Vanguard raked in billions from its annual Bankers’ Awards.

Foreign praise singers also realized that there was money to be made and set off a craze for dubious awards. African Business, Business Initiative Directions, The Banker and EMEA Finance came calling, dishing out awards in exchange for cash. Renaissance Capital, led by the mercurial Stephen Jennings staked its claim and exchanged ratings for securities contracts.

As oil prices continued to spike, savvy local entrepreneurs became potential oil and gas traders. They drew up grandiose business plans and convinced bank chiefs to advance huge loans for the purchase of tank farms and refined crude. The bankers obliged and shared the "upfront" interest. “Oil and Gas” became the most important phrase in the lexicon of the Nigerian banker.

Some of the oil traders were not satisfied with their bulging bank accounts. Since real estate is the Nigerian's true barometer of wealth, they went back to the bankers and drew up plans for an African Dubai. The bankers obliged and doled out more cash. Deals were sealed in posh country clubs as huge loans were given with utter disregard of risk management processes.

Foreign credit lines and unnecessary forays into the capital market meant there was just too much money to spend. Banks soon decided to have a taste of the apple and incorporated subsidiaries to market “luxury estates”. Lekki, Ikoyi and Abuja became the new Hamptons. Even foreigners began to complain about the skyrocketing prices of Nigerian real estate. "Expatriate Only" signs soon became de rigueur.

The Early Signs.

When the subprime mortgage crisis ballooned into a full scale economic meltdown, the foreign bankers knew they had to run. After all, the global banking system was on the brink of collapse. Indy Mac had disappeared and fabled Wall Street institutions such as Bear Stearns and Lehman Brothers had imploded.

The Nigerian banks had no chief economists and were blissfully ignorant of the implications of the crisis. Akingbola, Okereke-Onyiuke and Soludo all publicly declared that the country’s financial system was isolated from the rest of the world. Most Nigerians continued to buy stocks not knowing that Peter Ololo and his fellow stockbrokers were using cheap money to prop up the stock market. This made it easier for foreign operators to exit the market at a premium. Firms such as Actis, the private equity fund, dumped its shares in UAC for 50 naira. By the time, the stock market went into a tailspin, it was too late

Deconstructing the Fallen Five.

Erastus Akingbola-Some staffers of Intercontinental Bank have accused me of bias, claiming that I have personal scores to settle with Dr Erastus Akingbola. This is untrue. I have always believed that Erastus Akingbola was a crook and I owed the Nigerian public a duty to expose him. It is now clear that he was an exceptionally talented huckster who used his avuncular mien to shamelessly manipulate the public.

He frittered away the bank’s money on questionable “CSR” schemes designed to influence politicians and lay the groundwork for a future political career. In the week before the August 14 temblor, he instituted a 50 million naira scholarship scheme for Katsina natives in a clear attempt to lobby the president through Ibrahim Shema, the governor of the president’s home state. Akingbola also instituted a similar scheme in his home state, Ondo, where he was rewarded with the chancellorship of the state-owned university in a clear case of quid pro quo. As part of his national “save me from Sanusi” tour, Dr Akingbola finally ended up in Sokoto where his attempts to lobby an unsmiling Sultan fell flat.

He didn't show up for the historic August 14 meeting. Three days later, he had vanished into thin air. Nobody can underestimate the danger still posed by the highly influential Akingbola, who has been in the industry for thirty years. His case is not just an error in judgement. In any serious country, he would be the subject of an international manhunt.

Cecilia Ibru-Long before the stock market correction and the rapid fall in global oil prices, Cecilia Ibru had inexplicably shackled Oceanic Bank to a bilateral 175 million dollar five year loan from Merrill Lynch. This transaction was packaged by Osaze Osifo, a financial consultant and business partner of Andrew Alli, a CBN debtor who is currently at the helm of the controversial African Financial Corporation. A former chief executive of Oando, Osifo had made a killing in Nigeria's GSM licence auction before joining the Oando triumvirate of Jite Okoloko, Wale Tinubu and Mofe Boyo.

The Slick Osifo had cultivated a friendship with Oboden Ibru, Mrs Ibru's son and heir apparent, who doubled as the bank’s executive director and chief executive of Oceanic Capital. Osifo, Alli and four other principals needed additional capital for their investment boutique and through Oboden, Osifo’s company Travant Capital Partners was selected as the financial consultants for the transaction.

Oceanic Bank mismanaged this loan. In addition to heavily betting on real estate and petroleum marketing, the bank lent vast sums to the Delta State Government and other firms with ties to the powerful James Ibori. The bank also perfected numerous ways of diverting money through imaginary companies. One of such transactions involved lending millions of dollars to Meggitto Clothing for the purpose of exporting fabrics. This money vanished into thin air. We now know that there were other shady transactions such as the incomprehensible 19 billion naira loan extended to Nigeria's most famous nanny.

Insiders say that the dim witted Cecilia Ibru was hopelessly out of her depth at the helm of the bank. Surrounded by lackeys and relatives, she signed documents without reading them and gave loans based on her personal judgement. She relished being a mother figure and even though her staffers have kind words to say about her, they acknowledge that there was too much laxity with respect to management issues.

When it became apparent that Oceanic Bank was tottering, Mrs Ibru embarked on a number of questionable projects to raise money for her bank. These included an unethical 400 million dollar football reality program and a shady raffle in partnership with the Suru Group. It is a pity that the United Nations Global Compact did not do a thorough investigation before they named her to its committee on corporate governance.

Barth Ebong-Only a powerful witchdoctor could have known that Union Bank was in trouble. Long criticised for its horrendous customer service and aversion to technology, its chief executive was neither ostentatious nor publicity-hungry. As the oldest bank chief, he had a measure of gravitas which turned out to be a mask for incompetence.

With the benefit of hindsight, one should have guessed something was wrong with the big, strong and reliable bank when last year, in response to a campaign to force its chief executive to resign, the board moved its AGM to Maidugri, effectively disenfranchising the bulk of the bank's shareholders.

Union Bank also stunned analysts when it agreed to underwrite half of Afribank's overpriced public offer. Now it turns out that the dour Ebong also gambled heavily on high risk sectors. It is now clear that years of mismanagement had turned the bank into a corporate cadaver. So far, Union bank’s loan recovery efforts have yielded little fruit when compared to Intercontinental, Oceanic and Afribank. The authorities must also investigate how the trio of Nike Akande, Jite Okoloko and Festus Odumegwu ended up on the bank’s board of directors.
Sebastian Adigwe-Many analysts believe that Afribank's current problems stem from its relationship with African Petroleum. The bank was heavily involved in financing Femi Otedola's takeover of the petroleum marketing company and the huge debt added to its woes. The two firms forged a strong relationship that resulted in Adigwe joining AP's management board while Osa Osunde, an alleged front for Lucky Igbinedion, doubled as Vice-Chairman of AP and Chairman of Afribank. Apparently, the effete Adigwe was a figurehead who pandered to the whims and caprices of the bank's powerful backers. A few weeks to the CBN action, Afribank took out paid advertisements congratulating Ogbueshi Uche Luke Okpuno, one of its prized clients who later showed up on the CBN’s debtors list. How interesting.
Okey Nwosu-FinBank raised more than 100 billion from its public offer and invested heavily in the oil and gas sector. The bank clearly had no long term strategy and one wonders if Mr Nwosu believed that oil prices would hit 400 dollars. A week before he was sacked, the suave Okey Nwosu approved a loan to Jevcon Oil and Gas. It was widely celebrated as a testimony of the bank's devotion to indigenous operators in the maritime business. Amazingly, Jevcon shows up in the CBN list of debtors. Dr Onyung, Jevcon's chief executive, has not issued any public statement to counter the CBN’s claims. What was Mr Nwosu smoking?

Ndi Okereke Onyiuke and Musa Al-Faiki-Ndi Okereke- Onyiuke is an amazing creature, a corpulent buffoon who somehow clawed her way to the zenith of Broad Street while earning a dubious professorship. It is hard to understand how she kept her job after she publicly claimed that CNN and the Internet caused the stock market crash. While the NSE is a privately-owned organization, it is now clear that Okereke-Onyiuke has no business at the helm. For years, she has allowed the Exchange to be controlled by compromised acolytes and highly-placed insiders.

The case of Mallam Musa Al-Faiki is a cautionary tale. The former SEC DG was hopelessly out of depth during his five year tenure and did little to stop the widespread abuse in the market. Part of Mallam Al-Faiki’s problems was that he owed his position to Madam Onyiuke’s friendship with President Obasanjo. The vacillating SEC DG clearly did not want to offend his benefactor and when SEC staffers like Charles Udora, leaked their critical views to the press, he was always quick to issue a quick retraction.

The 'Talented' Peter Ololo-Two years ago, one of Okereke’s aides told me about Peter Ololo, whom he simply called “Falcon”. The aide was starry-eyed as he described the powers of this mythical "Falcon", who could effortlessly double the price of First Bank stock within a month. Today, Peter Ololo is in EFCC custody. He owes 88 billion.

Like every smart businessman, he filled his firm's board with power brokers such as Senator Tunde Ogbeha and Senator S.A Otegbola. Unfortunately, the indolent Nigerian press has not really scratched the tip of Ololo’s schemes. In addition to Falcon Securities, the disgraced accountant also controlled two active publicly listed companies, DEAP Capital Management and Trust and DVCF Oil and Gas Fund.

These companies were empty shells whose complex schemes were powered by insider trading and exploitative business models. If Mrs Waziri’s EFCC is serious about sanitizing the sector, it wouldn’t be a bad idea to question the chief executives of these two “fund management” firms.

Fit and Proper Person Test

Nigerian regulators must adopt a system of screening bank executive directors to ascertain that they are of sound mind and body. Private investigators should be hired to pry into their backgrounds and their educational and analytical skills must be evaluated by an impartial panel. People should not be appointed to highly sensitive positions because of ethnic politics and tenure. I believe that such as test would have shown that Mrs Ibru, Mr Akingbola and Mr Ebong were not suited to the task of managing their respective financial institutions.

Financial Services Authority

Perhaps the CBN, NDIC, SEC and other agencies should seriously consider the idea of establishing a Financial Services Authority to supervise the financial sector. The head of this agency must be chosen through a transparent recruitment process that has nothing to do with ethnicity, religion and other petty considerations. If the head hunters conclude that no Nigerian is suitably qualified, the government should consider foreigners for the post.

During the stock market bubble, a shocking thing happened. Pyramid schemes, commonly known as "wonder banks" sprouted in droves and earned the patronage of even highly educated bank managers who allowed greed to cloud their judgement. While they were eventually closed down, the SEC and the CBN has still not resolved the matter. An effective FSA could have nipped this development in the bud.

Vanguard newspaper and the Northern Agenda.

Unbelievable!!! In what must be a contender for this year's most stupid argument,Vanguard has backed its campaign against Sanusi with an article it published in March detailing a supposed plan by “anti-consolidation” forces to take over five Nigerian banks. I don’t understand why the Nigerian public is taking this rag sheet seriously when Sam Amuka-Pemu’s “tissue paper” newspaper does not even qualify to be called a tabloid.

Let’s look at the timeline. Vanguard published the article on March 23, 2009. At the time the article was published, those five banks were already heavily indebted to their peers at the inter-bank market and there were already concerns over their financial health. In fact, Dayo Coker was already on the trail of Erastus Akingbola and had released his findings to the press.

Their chief executives must have suspected that Sanusi would be a tough cookie and quickly dispatched their PR strategists under the aegis of ACAMB to plant the story. Of course, Vanguard’s moronic journalists played along and concocted this baseless story to distract the new governor. The article was meant to preempt Sanusi and force him into making a compromise but he refused to buckle under pressure. The Nigerian public does not understand that Vanguard newspaper is one of the biggest beneficiaries of the corporate malfeasance that pervaded the Nigerian banking sector. For years, the “newspaper” made a killing from the Vanguard Bankers Awards where a table for eight went for a whopping five million naira.

From a logical standpoint, this “northern agenda” argument holds no water. As the CBN Governor has pointed out in newspaper interviews, some Nigerian banks are controlled by nominees who are hidden behind legal documents. One does not have to be a chief executive to actually control a bank. It is possible that there could be individuals from the North that have designs on the banking sector but it makes no sense to speculate that a Northern "movement" is keen on hijacking the banking sector. And if Sanusi is a Fulani supremacist as his detractors have argued, then it means that other non-Fulani Northerners are unlikely to support this purported plan.

Opinion and Analysis

I doubt that Sanusi Lamido will be successful in ridding the financial sector of the crooks that call the shots. My pessimism stems from the experiences of other reformist crusaders that have tried and ultimately failed to change the status quo in this dystopian conundrum called Nigeria. His job will be made harder by his colleagues at the central bank. They understand how the system works and may not be committed to his disruptive agenda.

Sanusi’s dalliance with the EFCC might reap short term dividends but anybody who understands the workings of Mrs Waziri’s EFCC knows that the agency is simply using this God sent opportunity to con Nigerians into believing that it is serious about the anti-corruption war. We must also consider the legal angle. Senior lawyers have told me that it is difficult to prosecute debtors when there is no evidence of fraud in the loan disbursement process. This explains why hardcore debtors such as Ike Okolo’s Aquitane Oil and Gas have ignored the EFCC and opted to hire legal heavyweights to defend them. In spite of the EFCC’s public relations blitz, other notable debtors such as the imperious Peter Odili have also headed to court.

The CBN has done the right thing by releasing the list of debtors whose loans are not performing. The composition of the list shows that there is a problem with our banking sector. Some of our most respected corporate titans showed up on this list. I'm surprised that Alhaji Aliko Dangote and other respected Nigerian businessmen could brazenly decide to connive with these banks to shortchange small investors and depositors. What if the banks had collapsed? The banks didn't help matters with their dubious interest charges. They basically gave debtors an excuse to stall.

Culled from Saharareporters

Tuesday, September 8, 2009

CBN and Islamic Banking

The CBN Governor was quoted has saying that the prevailing economic meltdown has increased the demand for Islamic financial products and services across the world. And according to him, in spite of the crunch, Islamic institutions have displayed "strong resilience reflecting their conservative approach to business, balanced and ordered appetite for growth and focus on the basis of financial intermediation as opposed to innovation." And as result, the CBN will soon introduce Islamic banking in Nigeria to help stabilise the sector as fallout from the problems it is experiencing.

The CBN Governor’s statement has however generated some much controversy. Some have argued that being a secular state, Islamic banking cannot be practised in Nigeria. There is also a growing section of the Nigerian society who feel that Mallam Sanusi’s statement gives credence to the conspiracy theory that he is only acting the script of the northern cabals, who are alleged to be bent on taking control of banking sector. But I’m still at a loss regarding the relationship between the so-called Northern Agenda and Sharia banking. How can anyone be sure that principles of Sharia banking favours everyone in the north. To describe the proposed introduction of Sharia banking has a “Northern agenda” smacks of ignorance. What is the definition of Northern Nigeria? Is it everyone in Northern Nigeria that actually supports the Sharia system? Anyway, that is an aside issue.

Islamic banking is not a new phenomenon, even in other secular nations. For the example, the first Sharia bank in Western Europe was established in the United Kingdom in 2004. Major high street banks such as Lloyd Banking Group and HSBC also offer Islamic banking products to interested customers. It refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics. The overarching principle of Islamic finance and banking products is that all forms of interest are forbidden. The Islamic financial model works on the basis of risk sharing.

However, in spite of the acceptance of Islamic banking into mainstream banking in Western secular nations, it does not fit into the current Nigeria banking system. This is primarily because there are no laws permitting Islamic banking in Nigeria. The nation’s financial regulatory framework does not permit any form of religious banking. This however does not mean it cannot be introduced. It only means that changes will have to made to the nation’s banking laws.

So does introduction of Islamic banking means Islamisation of the nation? My answer to that is No! As noted previously, the introduction of Islamic banking will require massive changes to banking laws. Personally, I have no issue with the introduction of Islamic banking as long as it is not been forced on everyone. The principle of secularism demands, the state should not be promoting any religion directly or indirectly. All citizens should be treated equally regardless of religion, and preferential treatment should not be given to any person from a particular religion over other religions. Therefore, the CBN policy towards Islamic banks, will need to be “no obstacles, no special favours”. The CBN will have to promote a level playing field between conventional and Islamic banking providers. It is the role of the regulator to ensure that the ethics of such banking practices does not undermine the integrity of the national economy.

For me, if the introduction of Islamic banking will bring in the much needed foreign investment into the country, then why not? We need not to be hypocritical about some of these things. The religious jingoist do not want Islamic investments in our banks but are happy to have Arab companies such as Etisalat, Zain operating in our mobile phone industry. We may need to remind such people that these companies originate from Islamic nations.

Also, what stops other religious organisation from raising enough capital and applying for a bank licence. We already have religious organisation investing heavily in the education sector. If religious organisations can be granted licence to establish faith-based schools, then why not banks?

We are a nation of diverse religious beliefs, and if anyone believes religious banking practices is in line with his belief, then let him or her do so. As long as it is not to the detriment of the national economy.

Saturday, September 5, 2009

Gani Fawehinmi - Rest In Peace

Abdul-Ganiyu "Gani" Oyesola Fawehinmi (22 April 1938 - 05 September 2009) was a Nigerian author, publisher, philanthropist, social critic, human and civil rights lawyer and Politician. Gani, as he is fondly called, died in the early hours of 05 September 2009 after a prolonged battle with Cancer. He was 71 years old.

Gani, was born on 22 April 1938, into the Fawehinmi family of Ondo, in Ondo State.

His father, Chief Saheed Tugbobo Fawehinmi, the Seriki Musulumi of Ondo was a successful timber magnate, a great philanthropist, an opponent of excessive taxation of the poor and a deeply religious muslim leader. He was reported to have brought Islam to Ondo Town. Chief Saheed Tugbobo Fawehinmi died on 5 February 1963 at the age of 89 years.
Gani's grand father was the Late Chief Lisa Alujanu Fawehinmi of Ondo, who engaged in several successful battles for and on behalf of the Ondo people in the nineteenth century. Hence, the appellation the 'Alujanun', which means spirit. He died at the age of 92.

Gani had his early education at Ansar-Ud-Deen Primary School, Iyemaja - Ondo from 1947 to 1953 and his secondary school education at Victory College Ikare, a Christian School from 1954 to 1958, under the leadership of the Late Rev. Akinrele where he sat for and passed his West African School Certificate Examination in 1958.

Gani enrolled at the Holborn College of Law- University of London to read law in 1961. While at University, his father died. He completed his degree in London with a measure of difficulty due to lack of funds(From his father). This involves doing various menial jobs in London.

While in college, he was popularly known as "Nation" because of his passionate interest in national, legal and political affairs. He was an avid reader of Daily Times and West African Pilot, the most popular newspapers at that time.

In 1993 Fawehinmi was awarded the biennial Bruno Kreisky Prize. This prize, named in honour of Bruno Kreisky, is awarded to international figures who advance human rights causes. In 1998, he received the International Bar Association's Bernard Simmons Award in recognition of his human-rights and pro-democracy work. In 1994 he and some other notable Nigerians formed the National Conscience Party of Nigeria which exists till today and he stood for a presidential election in 2003 under the umbrella of the National Conscience Party.

Gani Fawehinmi became a holder of the Senior Advocate of Nigeria (SAN) the highest legal title in Nigeria in September, 2001

With his boundless energy he tenaciously and uncompromisingly pursues and crusades his beliefs, principles and ideals for the untrammelled rule of law, undiluted democracy, all embracing and expansive social justice, protection of fundamental human rights and respect for the hopes and aspirations of the masses who are victims of misgovernance of the affairs of the Nation.

In 1986, while Chief Gani Fawehinmi was Dele Giwa's Lawyer, the later was killed in a bomb blast under suspicious circumstances .
As a result of his activities chief Gani Fawehinmi, was arrested, detained, charged to court several times. His passport was also seized on many occasions. His residence and Chambers were searched several times. He was beaten up many times and was deported from one part of the country to another to prevent him from being listened to by the masses. His books were confiscated by the Federal Military Government and And his library at Surulere , a suburb of Lagos were set ablaze. Even his Chambers at Anthony Village, Lagos State, was attacked and invaded by persons suspected to be agents of the government 26 August 1994 and they shooting his Chambers guards,in the process, seriously wounding two of them.
In the process of his crusades for the rule of law, the hopes and aspirations of the poor and the oppressed, he fought many battles against the military dictatorship as a result of which he had been arrested several times by the military governments and its numerous security agents. He had been dumped in many police cells and detained in several prisons between 1969 and 1996.

His supporters have call him "the scourge of irresponsible governments, a thermometer with which the blood pressure of dictators is gauged, the veritable conscience of the nation and the champion of the interests and causes of the masses".
His promotion to becoming the Senior Advocate of the country was delayed as a way to victimise him. Eventually, he got the award in 2003 i.e. the Senior Advocate of Nigeria.

In 2008 Mr Gani Fawehinmi rejected the highest order that can be bestowed on a citizen by the Nigeria government—Order of the Federal Republic(OFR)—in protest of year of misrule since independence.

Many of Nigerians call him the people's president

Source: Wikipedia