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Tag: Dakuku Peterside

  • Herbert Wigwe: The things yet unsaid – By Dakuku Peterside

    Herbert Wigwe: The things yet unsaid – By Dakuku Peterside

    Clean-shaven, suave, upwardly mobile, and incurably optimistic ,Herbert Onyewumbu Wigwe (HOW) was one of the most recognisable figures in the banking space and corporate Nigeria. His official biography could only be written by him. But I hope his example can inspire and influence us. Accurately describing Herbert in one word can be compared to explaining the mystery of centuries in a few words or a wild goose chase. It is a nuanced and complex process.

    He was an extraordinary businessman who died alongside his wife and son in the United States of America under exceptional circumstances. His tragic and sudden departure reverberated beyond our shores. But who was Herbert Wigwe? I can only answer this question from the narrow prism of my friendship and many encounters with him.

    Herbert and I were members of the same local church assembly, and I witnessed his dedication to spirituality, good works, and commitment to church growth. It is easy to explain because of his solid Christian foundation. Herbert’s father, Elder Shyngle Wigwe, is a pastor in the Redeemed Christian Church of God. Herbert was a man of prayer, which he complemented with a ruthless work ethic. He attributed all his successes to God’s blessings.

    Both of us are from Rivers State, and we had many sessions on how best to fix the politics of Rivers and, by extension, improve the State’s development trajectory. Herbert was utterly detached from politics but had deep insight into political manoeuvrings. We debated the affairs of Rivers State and the country, and he baffled me with the precision with which he predicted the outcome of political contests. He would quickly tell you that his political party is Nigeria and no other.

    His passion for Nigeria was simply unwavering. Only a few persons can match his faith in Nigeria. He firmly believed that he would impart society by using businesses to provide solutions to society’s needs and create wealth that would touch the lives of many. He was unapologetically capitalist, in the proper sense of it, and he lived his life using capital to solve many societies’ needs, such as creating employment, paying taxes, providing lots of charity, and investing heavily in world-class university education. He used capital as an instrument for socio-cultural upliftment across Africa.

    Herbert was a man of bold dreams and obsessed with excellence while making room for unavoidable mistakes. Herbert never gave up on any bold dream, no matter the odds. He rode the waves of challenges and was filled with the spirit of hard work, dedication, and strokes of ingenuity. He had bold dreams in all ramifications, and this was self-evident. First, as a young banker, he teamed up with his friend and partner to acquire “a distressed bank”, rated number 89 then, and turn it around in two decades to become one of the top five banks, with an assets base of over N20.9 trillion, is phenomenal. Herbert, as CEO, set out to build an Access Bank with the vision of becoming the gateway to Africa and the world’s most respected African bank. With a presence in more than 13 African countries plus a footprint in other continents, Access Bank was working towards realising this vision. Second, Wigwe University, which Herbert personally referred to as the “Future Harvard University of Africa”, was another extraordinary, bold dream. He set out to build the best University in Africa, investing $500m in the initial set-up. You do not need further testament that he was a man of bold dreams.

    An entrepreneur extraordinaire, his mystique was his ability to sniff out opportunities where others see none, multiplied by the fact that he was one of the most persistent persons I know when going after opportunities. He mentored many budding entrepreneurs, top managers, and top academics in entrepreneurship. Apart from his well-known flagship, Access Bank, he was active in other financial services, construction, oil and gas, aviation, film, and music, and, most recently, the education sector. He made a star success of all his multiple business pursuits.

    Herbert’s hidden strength was his ability to connect with people of all classes and cadres, accompanied by a related instinct to simplify complex things in the most basic way. His mastery of Rivers’ version of Pidgin English could only equal his fluency in Queens English. He was among the few successful people referred to as the “original old Port Harcourt boy”. Another strength of his was his courageous, daring, patient, and persistent nature, which added to his relentless ambition to accomplish exceptional things. This attracted to him friends and foes in equal measure.

    His philanthropic work in the Herbert Wigwe Foundation, which he founded in 2016, focused on youth empowerment, health, arts, and education. This focus on youth development was central to his mentoring, given his strong belief in the importance of the youth in the development of Nigeria and Africa. He was an art enthusiast and contributed to art development in the country. As the art connoisseur he was, his collection reflected his passion for excellence, diversity, and social purpose. The HOW foundation extensively supported many healthcare projects for the downtrodden among us. His charity works were unique because he loathed publicity about it.

    Herbert’s enduring legacy is the power of vision, bold dreams, courage, and determination to pursue it and rally people to accomplish the objective. This is what we need to improve in our public space. History has shown that bold dreams have the power to transform societies. He was exceptionally enterprising and entrepreneurial.

    Listening to Herbert talk about his vision was to find yourself in the oasis of inspiration. He genuinely believed that there was nothing you fixed your mind on that you could not accomplish. He had bold dreams for the banking sector, tertiary education, the oil  and gas industry and most importantly society.

    What lessons can we learn from him? Herbert epitomised a life of passion, dedication, resilience, and boldness in achieving grand personal and societal visions. He was bold in setting out great goals and pursuing them relentlessly until he reached them. He proves that an unexamined life is not worth living. To achieve greatness and impact on society maximally, one must be purposeful, bold, and patient. Herbert’s hidden strengths prepared him for an eventful life – a life he lived on his terms. His ability to connect with people, courage, daring attitude, ambition, and excellent work ethic are the ingredients of his success and must be emulated. Peter Drucker posits, “The best way to predict the future is to create it.” Herbert created his future and lived it to the full of those he loved.

    For our budding entrepreneurs, Herbert left a legacy. He proved the axiomatic expression true: “Entrepreneurship is living a few years of your life like most people won’t so that you can spend the rest of your life like most people can’t.” He made the needed sacrifices at the start of his entrepreneurship and built capital enough to be reckoned among his contemporaries. Steve Jobs posits that “your work will fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work.” Herbeth did outstanding work; the only way to do great work is to love what you do. Success is not just a product of luck. Hard work, knowledge, skills, and integrity underpin it. Thomas Jefferson argued, “The harder I work, the more luck I seem to have.” Herbert worked hard enough to be lucky. He had an eye for greatness. It is little wonder he set great goals for himself.

    John Rockefeller advised that one should not be “afraid to give up the good to go for the great.” Both in banking and establishing a University, Herbert went for greatness and achieved it. We should do the same. As a business and community leader, Herbert understood that the function of leadership is to produce more leaders, not more followers. He created leaders of industries and global advocates of responsible capitalism in the 21st century.

    My friend and brother Herbert lived like a candle in the wind. His star burned so brightly but ended so shortly. Greatness in life is not measured in how long one lives but in the impact of one’s life on society. Herbert lived, and he conquered. Adieu, my great visioner!

  • The danger after AFCON 2023 – By Dakuku Peterside

    The danger after AFCON 2023 – By Dakuku Peterside

    Most Nigerians are tense and not at ease. The reasons are plausible. The scourge of hunger, spiralling inflation, insecurity, and a sense that the country is in distress stares us all. The cumulative effect of these is anger in the land. A combination of hunger and anger is a time bomb. It is the emotional underpinning of every populist revolt.

    There is absolutely nothing a hungry and angry man or woman cannot do. The signs are self-evident that the product of hunger and anger is upheaval. Ask the residents of Minna, Suleija, Kano and most recently Osogbo. They took to the streets last week to register their frustrations and distress on the level of hunger in Nigeria. Other cities may follow suit if the government does not respond promptly and concretely.

    Nigerian workers represented by the Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have already given the federal government two weeks to implement policies that will reduce the impact of the government’s economic policies on citizens.

    The NLC and TUC said they are concerned about the “non-implementation of the 16-point agreement reached with the Federal Government on October 2, 2023.” “These agreements which were reached with the federal government were focused on addressing the massive suffering and the general harsh socioeconomic conditions prevalent in the land,” they added. Labour further acknowledged the fact that widespread hunger is now ravishing millions of Nigerians, with the workers’ purchasing power significantly eroded, while insecurity has assumed an increasing dimension.

    These harsh economic realities have widespread social implications, including increased crime rates and social unrest. We have increased poverty levels, making it difficult for individuals and families to meet their basic needs. Many people struggle to afford necessities such as food, shelter, healthcare, and education.

    Nigeria’s economic hardship exacerbates existing social disparities. Vulnerable groups, such as women, children, and older people, are disproportionately affected. These demographics face increased challenges in accessing resources and opportunities causing   significant psychological toll on individuals. Anxiety, stress, and mental health issues are becoming more prevalent as people grapple with financial uncertainty and the challenges of making ends meet. This hardship strains social cohesion, increasing community tensions and contributing to social unrest or conflict as people express frustration over economic inequalities and lack of opportunities. Traditional community support systems have become strained as individuals and families face economic difficulties. Networks that once provided a safety net may find it challenging to cope with increased demands for assistance.

    This economic uncertainty is negatively affecting investor confidence. Foreign and domestic investors are increasingly hesitant to invest in Nigeria despite the effort of the current government to woo them . This lack of foreign direct investment and local investments has led to a slowdown in economic growth. We are experiencing one of the worst exchange rate fluctuations in our history. Within one year, the exchange rate has increased by about 200%, which has devastated businesses, particularly those reliant on imported goods and services, and foreign investors considering the Nigerian market.

    Small businesses, which often form the backbone of many economies, face closure or reduced operations due to economic challenges. This directly impacts entrepreneurs and employees, leading to financial insecurity. And migration patterns are changing as many are either ‘japaing’ to faraway lands seeking better economic opportunities while others are internally displaced due to insecurity and banditry . This internal and external displacement has potential social and cultural implications for communities.

    It may not have occurred to the leadership that the just concluded AFCON football tournament may have been the pause to a potential national upheaval. The emotional attachment of citizens to the game of football resonates. By the last count, as a country, we have lost not less than six persons during the Nigeria-South Africa semi-finals clash. Citizens may have channelled their emotional reaction to the economic hardship to their passion for football.

    It has been proven elsewhere that sports, in general, and football in particular, can relieve people in distress. It has put a pause in wars. It happened during World War One (1914), the Nigerian-Biafra Civil War (1968), and Côte d’Ivoire (2005). Although there is no consensus or empirical evidence yet, the love and passion for football have been an antidote to the potentially provocative reaction of Nigerian citizens to misery, anger, and hopelessness.

    Psychologists have told us that football triggers a chemical known as endorphins, responsible for happiness and a relaxed mood. It promotes social bonding, community spirit, and a sense of patriotism that can help our anxiety. Football also acts as a distractor and relieves us from stress, the type most Nigerians are going through. In fact, “Football is the ballet of the masses”, as posited by Dmitri Shostakovich.

    Football is more than just a game. It’s about life, struggle, and the beautiful moments that relieve us from our daily concerns. To the average Nigerian, football brings out 90 minutes of pure nationalism in us. In economic challenges, sports, especially football, provides a sense of unity and joy that transcends financial worries. The beautiful football game lifts  spirits, create camaraderie, and offer respite from economic anxieties. Football tournaments unite communities, fostering a sense of pride and joy that transcends economic challenges. The AFCON tournament entertained us and reminded us that, despite our differences, we can come together for a common passion.

    It is not the narrative of government officials nor the ingenuity of “palace jesters” that have kept the country calm in the past few weeks. With AFCON  now over, it is time  the government acted fast to relieve the tension in the land. If the AFCON has brought welcome distraction, its end could unleash a collective depression from the present crises of hunger and poverty. Attention will return to domestic issues. Economic and existential problems will magnify. As hunger escalates, misery reigns, and prices of essential food items surge, the government cannot misread the morbid silence enveloping the land as normal. It is not. As seen elsewhere, the anger and hopelessness associated with this situation is a natural path to popular revolt. The government can get away with impunity but not with the chronic hunger of the ordinary man drawing complementarity from  the anger of the elite.

    The signs that danger lurks can only be ignored by all at significant risk to the country’s existence.

    Addressing economic hardship requires honesty, inclusiveness, innovative thinking and sustained government and private sector efforts. Policy reforms, anti-corruption measures, diversification of the economy, and investments in education and infrastructure are some strategies that can contribute to economic recovery and long-term stability. Also, targeted interventions that focus on social welfare, education, healthcare, and community development are crucial to improving the well-being of individuals and fostering resilience in the face of economic challenges. Economic hardship and poverty are the worst forms of violence against the people. They are like punishment for a crime you did not commit.

    The government must create an enabling environment to confront hardship and poverty. Franklin Roosevelt aptly posits, “The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” And Mahatma Gandhi argued that “A nation’s greatness is measured by how it treats its weakest members.”

    AFCON was the opium of the Nigerian masses. It has come and gone with its glory, impact on our collective psyche, and the emotional relief it gave us during these harsh economic times. The emotional excitement about the nation is a passing mass phenomenon. It can only last long and linger afterwards if the populace feels the government has given them so much. The excitement of a football tournament turns into heightened anger soon after the excitement blows over if there is no realistic solution to the misery. The danger lies in the government assuming that post-AFCON, if nothing realistic is done to ameliorate the economic hardship millions of Nigerians face, things will continue as normal. That may be a pipe dream. With the opium effect of AFCON gone, many Nigerians will focus on demanding an improvement in their quality and standard of living. This demand may come in ways we never anticipated, as demonstrated by the uprising in a few flashpoint areas across the country. We must not allow this to happen, for it may not portend well for Nigeria. Now is the time to “let Nigerians breathe” and avert possible doom.

  • Naira: Comedy inside a tragedy – By Dakuku Peterside

    Naira: Comedy inside a tragedy – By Dakuku Peterside

    On Sunday, August 15, 1971, the United States economy was literally facing a firing squad. The Dollar was in a mess. Price gougers were everywhere and foreign exchange was cruel to the Dollar. The newspaper headlines were of scorn and ridicule but President Richard Nixon did one thing. He faced the issue squarely. “The strength of a nation’s currency is based on the strength of that nation’s economy,” he said. Nixon nipped the problem in the bud. Everything changed. He rescued his country from financial and social crises. Today, Nigeria is in a similar situation, albeit slightly dissimilar, given that the American economy is by far the strongest in the world. Thus, President Bola Tinubu needs to act in a manner that moves the nation from “Renewed Hope” to “Renewed Confidence”.

    The loss of hope was what triggered the Arab Spring and other springs. In December 2010 in the town of Sidi Bouzid, Tunisia, Tarek El-Tayeb Bouazizi, a street vendor who had lost hope in the economy of his country set himself on fire. That act became a catalyst for countrywide protests. The protests included several men who emulated Bouazizi’s act of self-sacrifice. Hope is good. However, hope is not edible.

    In Nigeria, there are reported and unreported suicide cases due to economic hardship in the country. A few weeks back, a woman who works at a Bank locked herself in the convenience of her company and swallowed poison, leaving behind a suicide note which points at her giving up on Nigeria.

    With the free fall in the value of our currency, we are beginning to see more public expression of frustration. In the coming months, the unrelenting fall of the Naira could lead to an increased risk of suicide and even social unrest. In Kano State, where social unrest forms quickly, a group of local bakers warned the government about things to come. They protested the high cost of flour with a bag that sold N10,000 a few years ago now selling at N41,000. The Kano bakers cannot afford the price spiral and social unrest arising therefrom could pose additional risks to economic recovery and create setbacks with lasting impact on general economic performance.

    For a government looking for an economic spark plug through Foreign Direct Investment (FDI)and business startups, the fall of the Naira and global jokes about it are downright depressing. The fall of Naira indeed poses grave dangers to the viability of businesses in Nigeria. Last August, Iyinoluwa Aboyeji, a young Nigerian celebrated all over the world for creating two unicorns and a general partner at early-stage venture capital firm, Future Africa, told Rest of World, an America-based publication, that his firm is advising its portfolio companies to explore business abroad to avoid Naira-related challenges. “Generally speaking, we want to move as many of our companies as possible to start to export software and labour because we think that’s the only way to stay on the better side of this crisis — when revenues are in US dollars,” he said.

    Over the past two weeks, social media have been awash with hilarious jokes about the Naira. This is not restricted to Nigerians. First, a Toronto-based Television station announced that Nigeria’s currency was now worth 0.0011 American Dollars. This was followed closely by a South African Prokerala showing that one Zimbabwean Dollar equals 2.77 Naira. In its 2nd February 2024 edition, Bloomberg described the Naira as the worst-performing currency in the world. In their cartoon section, two US newspapers taunted Nigeria over the Naira. This is infinitesimal compared to the number of local jokes about the Naira in our media. Besides, social media has amplified the crash of the Naira to such an extent that Nigeria has literarily and metaphorically become a laughing stock. Nigerians are either losing faith in the country or have lost a sense of patriotism.

    These hilarious jokes and caricatures are a metaphor for a bigger problem.

    There are genuine concerns that Nigeria may follow a similar trajectory to Zimbabwe and Venezuela. This concern is well-founded. The echoes of Zimbabwe ring eerily and loudly in Nigeria today. There are many reasons why history students could look back on the crash of the Naira and its impact on our reputation, global stature and the living standard of our people. This concern is heightened for many reasons. However, I will highlight only a few.

    The first is poor policy articulation and implementation. Recall that the policy origin of the current Naira tumble can be traced to the simultaneous removal of subsidies and years’ long currency pegs last year by the current administration. This was done without considering other factors that need to be in place to make the economy function optimally. Nigerians are worried that our economy handlers are not doing enough to stem the decline .

    The second is the damaged reputation of the country occasioned by the Naira crash and the ongoing economic and security instability. Local and foreign investors are losing confidence in the Nigerian economy because of high-level financial, economic and policy  instability.

    The next is that the cost-of-living crisis escalates and inflation ravages the country. Prices of essential goods and services are going off the roof and people are perplexed at the rate of degeneration.

    The fourth is that microeconomic indices are unfavourable given the reduction in demand for goods and services due to high prices and reduced supply. The latter itself is due to lack of production or high cost of importation.

    Also, there are unfavourable macroeconomic indices such as escalation of unemployment. This correlates with a high crime rate, high inflation occasioned by a fall in the value of the Naira, banks’ inability to grant medium to long-term loans and general perception of impending economic catastrophe hovering over Nigeria like an ominous overcast.

    The fifth is that wealthy Nigerians and other average citizens worried about the erosion of the value of their money and assets are converting them into Dollars or are moving their assets to dollar-denominated investments abroad to hedge for further loss.

    Finally, the volatility of the Naira implies that fresh capital investments in infrastructure and power, mainly dependent on imported plants and machinery, shall be negatively impacted, leading to projects being put on hold.

    How did we tumble in such a short time from a respectable nation to a butt of jokes? Not only amongst us but within the global community?

    A brief historical odyssey on Naira volatility suffices. The tragic history dates back to 1983 when the Naira began her nosedive and successive governments have failed to ameliorate the plunge. In 1983, $1 was exchanged for about 72 Kobo. But the Naira fell to trade at about N9 to $1 by 1990. In 2000, $1 was exchanged for about N85 at the official window. In 2010, $1 was officially exchanged for about N150, but more at the notorious black market. By 2020, $1 was exchanged for about N360 at the official window. In recent years, the Naira has faced challenges related to external factors. These include fluctuations in oil prices, the global economic impact of the COVID-19 pandemic and serial mismanagement.

    A cursory look at this Administration’s response to the Naira crisis shows an attitude of calm amidst the panic at the early stages of the free-floating of the Naira, as policymakers expected the fall in Naira. However, there were more panic reactions to this problem as the President and his economic team worked to stem the tidal wave blowing the Naira. Recently, we have seen monetary policy adjustments and currency interventions to boost the Naira. They have implemented fiscal policies to promote economic growth and stability while adjusting tax policies to encourage investment and economic activity. Structural reforms by taking steps to diversify the economy to reduce dependency on a single sector and improving the business environment to attract foreign investment is ongoing. Unfortunately, these policies and actions have not stabilized the Naira in the short run. More needs to be done and quickly too. There is no one-size-fits-all solution, and a combination of strategies may be necessary.

    Additionally, the success of these measures depends on practical implementation and the cooperation of various stakeholders. Investor confidence remains our greatest challenge. It is advisable for this Administration to carefully analyse the specific economic conditions and consult with experts to tailor appropriate solutions for the country. Every good head, home and abroad must be brought into the room to stop us from remaining a butt of jokes. Saving the Naira is most important now and all stakeholders must work together to end this comedy show.

  • Growing helplessness of Nigerians over insecurity – By Dakuku Peterside

    Growing helplessness of Nigerians over insecurity – By Dakuku Peterside

  • Looted funds and Nigeria’s public accountability gaps – By Dakuku Peterside

    Looted funds and Nigeria’s public accountability gaps – By Dakuku Peterside

    Nigeria lately has been lucky, though, for the wrong reasons. Money has metaphorically been falling from the sky when the nation is in severe economic distress and needs every dollar to meet her obligations. First, it was the series of Abacha loots. From the United States alone, approximately $332.4 million were recovered. Between March 2021 and May 2022, €6,324,627 was recovered from foreign countries, according to the former Justice Minister, Abubakar Malami. This is among recoveries from other countries. The latest is from unknown persons and unidentified sources in Jersey, a Channel Island. The funds worth $8.9m are believed to be proceeds of corruption disguised as government-sanctioned contracts in 2014 for arms purchases but diverted to shell companies. The silent heist in Nigeria is not executed with masks and guns but with pens and deceit. The nation is robbed of her promise with the bleeding dry of public funds. In the dance of corruption, Nigeria’s public funds are the unwilling partner, waltzing away from the grasp of those who need it the most. The key actors are those we entrust with our commonwealth.

    Though these alleged looted funds, though  were never declared missing  before being recovered now,  raise a lot of fundamental questions and concerns about our public finance management and accounting systems. To the best of my knowledge, our government has never declared any fund missing, our auditors never raised any red flags about some money that cannot be traced, and nobody has been prosecuted on account of public funds traced to foreign countries. Since there is no justification for this kind of unaccounted fund that escaped our public finance gatekeepers and National Assembly oversight, the proper inferences  to draw are ; there is a failure of our public finance management system, official fraud, or we are simply a criminal enterprise posing as a responsible Sovereign.

    This issue is not peculiar to Nigeria though . The United States, the bastion of democracy and policeman of transparency, once invited Ernst and Young to audit the Pentagon as its Department of Defence is called. The auditor, mid-way into the exercise, concluded that the financial records of the Pentagon were riddled with irregularities to the extent that a reliable audit was simply impossible. However, the US case is a different context; some funds were untraceable, leading to significant changes.

    The Nigerian case is hard to understand. Almost all recovered looted funds can be traced to government officials under the guise of legitimate transactions but end up in private accounts abroad.  Yet nobody is punished, not even the civil servants who are the enablers and the contractors who serve as conduits are called to account .

    Each time news of discovery or recovery of looted fund breaks , we are happy. However, the  painful realisation that each recovered loot speaks to the gaps in our governance accounting and audit reporting system is yet to dawn on us. The brazenness with which  government actors loot  public funds, inspired by the conviction  that there will be no consequences, erases any hope of a pause in official corruption.

    Lack of effective internal control, non-tracking of financial transactions, absence of proper and regular audit trails, and weak oversight have combined to rub us of any sense of financial discipline and responsibility. This explains why no alarm or red flag is ever raised about the misuse of public funds. The criminal prosecution of  the immediate past Accountant General of the country, whose office administered the state treasury, for alleged fraud depicts the depth into which we sank in official corruption.

    Failure of governance often goes hand in hand with corruption and lack of accountability. Nigeria’s weak institutions and governance structures generally lead to a lack of stability and hinder the government’s ability to address corruption and public theft issues effectively. This theft of public funds and failure of governance have had severe consequences for Nigeria’s social and economic development. It has resulted in enduring poverty, inadequate public services, a weakened economy, and a loss of public trust in government.

    Another peculiar thing about Nigeria’s official corruption ring is that no tangible effort has been made to address the gaps in the public accounting value chain and our procurement regime and execution monitoring frameworks that serve as enablers. It sends the signal that it is an embedded culture that is generally acceptable. This is a big dent in our reputation and a significant negative in requesting assistance from multilateral agencies and the global community.

    It ought to concern our government that it is the vigilance of other nations financial systems that has helped in the recovery of vast sums of looted funds from Nigeria. There is an urgent need to bring our financial systems surveillance in line with international best practices.

    Like  elsewhere, the theft of public funds in Nigeria  is a betrayal of the dreams of our people, a crime that shackles progress and strangles the hopes of a nation. Theft of public funds in Nigeria isn’t just an economic crime; it is a theft of education, healthcare, and infrastructure, leaving the people to pay the price for the greed of a few. When public funds vanish into the shadows of corruption, the light of opportunity dims for every Nigerian. We must stand united against the theft that darkens our collective future.

    Nigerian citizens who are supposed to be victims of looted funds are either indifferent or complicit by default. Citizens’ activism and demand for accountability on institutions and government officials and a more open government is almost non-existent. Tolerance for corrupt government officials is relatively high for various reasons.

    Theft of public funds and failure of governance are serious issues that can have significant consequences for a society. Addressing the theft of public funds and failure of governance requires a holistic approach that involves legal, institutional, and societal changes. It is an ongoing process requiring sustained efforts from domestic and international stakeholders.

    We must overhaul our financial management systems and procedures to track and monitor public funds at every stage. We must deepen the adoption of technology for financial transactions and reporting. Government must embrace digital technologies and e-governance initiatives to minimise the manual handling of funds management, reduce corruption opportunities, and enhance transparency and efficiency in public service delivery. This is more important not only to checkmate the continuous looting of public funds but also to stop the re-stealing of the recovered stolen funds from abroad.

    We must strengthen our anti-corruption institutions, such as the Economic and Financial Crimes Commission (EFCC) and the Independent Corrupt Practices and Other Related Offences Commission (ICPC). These institutions must ensure that existing anti-corruption laws are rigorously enforced. This includes prosecuting individuals involved in corrupt practices regardless of their status or influence.

    The government must demonstrate a strong political will at the highest levels of government to stop the theft of public funds at all levels of government. Leaders must set an example of integrity and accountability, creating a culture of transparency throughout the government. They must strengthen internal and external auditing processes to ensure a thorough examination of government expenditures. Independent audit bodies can be crucial in identifying irregularities and holding officials accountable.

    The government must establish effective mechanisms to recover stolen assets domestically and continuously through international cooperation. This includes cooperation and collaboration with the international community, international institutions, and other countries to trace and repatriate funds from abroad, share best practices, receive technical assistance, and coordinate efforts against transnational corruption.

    We must adopt a multi-dimensional and multi-stakeholder engagement approach to make any meaningful improvement in tackling public funds theft. Civil society organisations, the media, and the public must actively monitor government activities and expose corrupt practices. This can help create a checks-and-balances system. Citizen activism, advocacy, and public awareness campaigns can help shed light on corrupt practices and push for necessary reforms.

    The return of looted funds is not just a financial recovery but a wake-up call to take necessary steps towards rebuilding Nigeria’s integrity, public sector financial control mechanism, audit reforms and securing a brighter future for all Nigerians. As looted funds find their way back to Nigeria, it is a testament to the global commitment against corruption. We must ensure these resources are invested in projects that benefit the people and strengthen the nation. Repatriating looted funds is more than a legal process; it is a moral imperative. Nigerians are watching and will hold the government accountable for using these funds.

  • Greed, ethics, and public service in Nigeria – By Dakuku Peterside

    Greed, ethics, and public service in Nigeria – By Dakuku Peterside

    Nigeria, a country with a rich cultural heritage and abundant natural resources, has grappled with the complex interplay of greed, ethics, and public service throughout its history. The nexus between these elements has had profound implications for the nation’s development, governance, and the well-being of its citizens. The interplay of greed, ethics, and public service in Nigeria is a complex and ongoing challenge that requires sustained efforts from the government and the citizens. Addressing these issues is essential for the nation’s progress and fostering a society where public servants are dedicated to serving the common good rather than their personal interests. Margaret Smith opines, “Public service must be more than doing a job efficiently and honestly. It must be a complete dedication to the people and to the nation.”

    The greed of the political elite and civil servants has led to the deepening of low ethical and moral values in government and society. The arithmetic sum of this geometric rise of greed and the catastrophic decline of ethical values is an epidemic of corruption. I will demonstrate how far we have gone on this cancerous path and why the political leadership, bureaucracy and a docile cum compliant civil society are all responsible.

    Greed and excessive desire for wealth, power, or material possessions have been pervasive in Nigerian society, not just in public service. This insatiable appetite for personal gain has prominently manifested in public service corruption. Fuelled by greed, corruption undermines the foundation of public institutions, erodes public trust, and hinders socio-economic progress. The multiple manifestations of greed and unethical conduct in Nigeria’s public service are so common that they no longer make the news or attract public opprobrium unless they are humongous in nature.

    It is a cliché that a budding politician of average means will, in just a short time in office, buy the latest car , ‘choice-houses’ at home and abroad and live a life of luxury greater than his official emoluments can cover. This is so normalized that people expect that of him, and if he fails to live up to this expectation, he is told off by his peers and family members.

    Civil servants are not exempted from this cankerworm that has destroyed the fabric of our society. Political appointees rely on civil servants to guide and advise them; however, evidence abounds that they are the first to compromise and bend the rules for personal gain. Almost all spectacular public sector scandals have the seal of civil servant’s compromise or are perpetuated by one. The establishment of EFCC, ICPC and many rules and regulations has yet to help matters. This unchecked greed by bureaucrats impedes developmental initiatives and perpetuates inequality and poverty. Joe Biden laments that “corruption is cancer: cancer that eats away at a citizen’s faith in democracy diminishes the instinct for innovation and creativity; already-tight national budgets, crowding out important national investments.”

    A situation where a director in civil service or MDAs owns billions of Naira worth of choice assets in major cities in Nigeria and abroad when his earnings, both from the service, his businesses, if any, or inheritance cannot cover the value of these assets demonstrates the malady of greed and corruption. A cursory look within our major cities will show a panoply of these circumstances, and most citizens know this. There is no accountability and no consequences for perpetrating such crass greed and corruption against Nigeria.

    To demonstrate the extent of the rot within our system, I will compare two examples of greed, corruption, and response to ethical issues in Nigeria and Australia. A certain Barry O’Farrell was New South Wales Premier in Australia. Under investigation, it was proven that he had received a gift of a bottle of wine from a businessman, which he did not disclose. The ethical standard of Australian society forced him to resign his exalted office. Compare this to Abdulrasheed Maina, who, at  the time, oversaw pension funds, among other infractions, bought a property in Abuja and paid cash of $1.4m. Maina did not resign. It took a tedious court process to convict him of obvious malfeasance for which ethical standards should have made him take an honourable exit.

    Without prejudice to the facts of the matter, in the past one or two weeks, we have been inundated with unpalatable stories of public officials who have completely jettisoned ethical and moral standards in public service. It is not just about the law and public service rules but the standard of decency acceptable in any sane society.

    We have the infamous cases of the alleged $6 billion electricity contract fraud, Minister Betta Edu, and the alleged diversion of funds into a private account, and Hajia Halima Shehu and the alleged N37b fraud. These are not isolated cases and represent the preponderance of allegations of fraud and misuse of public funds by public servants. At the sub-national level, things seem worse as the institutions and framework to check unethical behaviour and corruption are weak and, in most cases, non-existent. Here, accountability and transparency belong to the museum. This deserves serious focus.

    On the other hand, ethics are the moral principles that govern individuals’ behaviour, emphasizing honesty, integrity, and accountability. In the context of public service, ethical conduct is crucial for maintaining public trust and ensuring that the interests of the citizens are prioritized over personal gains.

    Unfortunately, ethical lapses have been a challenge in Nigerian public service, contributing to a culture of corruption and maladministration. When driven by ethical considerations, public servants are more likely to act in the public’s best interest, but when ethics take a backseat to personal gain, the consequences are felt across society.

    The real issues are questions of integrity, ethical standards, and greed. Overcoming the challenges of greed and a lack of ethics in Nigerian public service requires a multi-faceted approach. Legislative reforms, institutional strengthening, reorientation and a commitment to fostering a culture of integrity are essential to this process. At the core of achieving this is proactive leadership, demonstrating a political will to tackle corruption and enthrone an ethical environment strengthened by enforcement of the rule of law, where all forms of maleficence are condemned, and the guilty are held accountable .

    Let us examine a few factors that are imperative to consider the issue of greed, corruption, and ethics in public service in Nigeria. First, self-interest among political appointees and politicians is more of a global convention. Politicians access power, allocate patronage to themselves and often corner the benefits in cash. Apportionment of pork is a feature of politics everywhere. It may be cash, favours, influence, and project siting. However, politicians’ self-interest should be enlightened and not primitive, and money for politics comes by following the bureaucratic due process of contract procedures and procurement laws, and they must sensibly do this. But the self-interest of these politicians feeds on the “compromise of the bureaucracy”. If politicians and political appointees try to access resources while bypassing the bureaucracy, it becomes corrupt because it violates due process and extant rules.

    Second, the processes of the bureaucracy on matters of resource appropriation constitute the ethics of the public sector. The rules and procedures exist to protect the state, the officials, and resources. If they are violated, it becomes a free-for-all; people help themselves to whatever resources they can lay their hands on. In Nigeria, there is first a collapse of public service ethics and a lack of capacity to enforce the rules. There is also the self-interest of politicians and political appointees in a manner that needs to be more refined and enlightened. This is the foundation of greed, which feeds corruption.

    Third is the issue of consequence management, which must be taken seriously. Where unethical behaviour has no consequences, it becomes an incentive for others to follow suit. Charles Colton argues, “Corruption is like a ball of snow; once it sets rolling, it must increase.” This is the weakest link in our fight against corruption.

    Thus far, we have explored the dynamics of greed, ethical considerations, and their impact on public service in Nigeria. This government must fight greed and corruption at all levels to achieve our shared aspirations of a developed Nigeria, a true giant of Africa. As Alice M Rivlin propounds, “If citizens lose faith in the integrity of public officials, democracy is at risk”.

  • Wishful thinking as a state strategy – By Dakuku Peterside

    Wishful thinking as a state strategy – By Dakuku Peterside

    It is cultural in Nigeria to wish your loved ones a prosperous new year. There is nothing wrong with having such lofty aspirations. Of concern is that, lately, this culture has crept into governance and development. Our leaders wish us a hunger and poverty-free new year. They extend it to make statements of intent without any plan to translate the aspiration into concrete results. It is normal to hear, “We shall have stable power this year”, and “lift 50 million Nigerians out of poverty this year “. What is lacking is a measurable plan built on an overarching vision to achieve this goal.

    The art of wishful thinking is shared by our government and people alike. It is one of two things among the people: either a resignation to a culture of long disappointment or a relapse into habitual superstition. The belief is that Somehow things will be alright.  For the government, it is a surrender to routine and a lack of creative and deep thinking. It’s like in the prayer: As it was in the beginning! The challenge of the moment is to burst the routine bubble and venture beyond the familiar in policy thinking and service delivery.

    “Wishful thinking” as a state strategy refers to adopting optimistic views without a realistic or well-founded basis. While optimism and hope are essential for motivation and national morale, relying solely on wishful thinking as a state strategy can have significant drawbacks, especially in governance and policy formulation. State strategies need to be grounded in realism, evidence, and comprehensive planning to address the complex challenges faced by Nigeria effectively.

    We are currently experiencing many negatives of relying on unbridled optimism, hedonistic fatalism, and political gimmickry in dealing with matters of great importance in governance and political craftsmanship. These negatives are accentuated by the hopeless anomaly of state actors misconstruing electioneering campaign mantras or projects and programmes as a strategy. Annual Budgets or Midterm Expenditure Frameworks are erroneously  deemed strategies at the national and sub-national levels. This is a farcical matter, reflecting the vicious circle of bad choices and failure of outcomes prevalent today in government.

    We need an overarching vision for Nigeria and significant national strategy, goals, Key Performance Indicators (KPI),and actionable plans across the entire federal, state and LGA governance structure. It is correct that in the past, we have done some strategic or National Development Plans such as the first to fifth National Development Plans and Vision 2020. We need a clear, coherent, strategic plan driven by data and evidence and, most importantly, disciplined, transparent, and consistent execution.

    Universally, we acknowledge that a goal without a plan is wishful thinking, our bane. Wishful thinking and boisterous slogans have never resulted in tangible results – compelling vision, planning, and diligent implementation of projects do. Across government MDAs and at the subnational level, we must go beyond manifesto thinking to strategic thinking and planning.

    Throughout history, no nation has achieved a substantial leap without a vision, strategic thinking by its leaders, and a clear, coherent plan built on evidence and realism. China under Deng Xiaoping, Singapore under Lee Kwan Yew, and South Korea under Park Chung Hee are ready examples. On the contrary, an executive presidential system requires that government planning take the form of a political action plan and a business plan combined. No amount of whimsical, unplanned, and hurriedly reactional actions or even inactions can trump an excellent and well-articulated strategic plan judiciously executed for the sub-national or country’s benefit.

    Most 36 states and local governments need actionable strategic plans, not political gimmickry. The prevailing practice is to embark on projects based on convenience, political exigency, and personal interest and wish they could translate to holistic, sustainable development.

    The first major drawback of relying on wishful thinking as a state strategy is that it often leads to overestimating the ease of implementing policies or achieving specific goals. Policies may need a realistic understanding of the challenges and complexities involved in successful implementation. The runaway inflation and the problem of insecurity in Nigeria are good examples. From all indications, the previous administration misdiagnosed the national security threat posed by non-state actors, terrorists, and bandits as just a herder vs farmer conflict. This misdiagnosis created a problem of resource application. The government misdirected both human and capital resources to resolve this conflict.

    As seen in recent times, the insecurity issues in Nigeria are multifaceted, hydra-headed, and humongous compared to a linear causal narrative of herder vs. farmers’ clashes. Nigeria cannot wish away insecurity. We must have a realistic diagnosis of the security situation, understand the multidimensional aspects of the problem, and put together a robust, actionable strategic plan to achieve the goals we set for our national security. Anything short of this will amount to reinventing the wheels and will not augur well with Nigeria.

    Besides, unrealistic optimism results in the misallocation of resources – if the government expects positive outcomes based on wishful thinking rather than a thorough analysis, it may allocate resources inefficiently, leading to suboptimal results. The 2024 National Budget and most state government budgets have recently drawn criticisms from Nigerians, civil societies, and the media. Some aspects of the budget were either preposterous or the amount assigned needed to be revised. Although budgets do not represent a national development plan or strategy, they show how and on what all the expected income of the federal or state is to be spent. If the budget is full of frivolities and non-essentials, how can we allocate resources effectively to bring about development in Nigeria?

    Furthermore, the economic consequences of wishful thinking as a strategy are all around us: cost of living crisis, collapse in the value of the Naira to USD, food insecurity, infrastructural decay,and an increasing perception of economic doom that permeates the system. Government strategic thinking, planning, and determined implementation could have given us better outcomes. This planning requires realistic assessments of the country’s economic potential and challenges. Wishful thinking leads to economic policies not aligning with the actual economic conditions, potentially resulting in economic downturns or crises – the public is disillusioned and is quickly losing confidence in the government.

    Relying on wishful thinking can hinder effective long-term planning and jeopardize the country’s future stability and growth. At this auspicious time when this administration is wooing foreign investors, it behoves the government to provide a clear vision, strategic direction, and goals and implement policies and actions that will inspire confidence that Nigeria is on a trajectory to developmental growth in the midterm to long term.

    Some federal parastatals, state governments and LGA leaders have put out their strategic plans, and I commend these leaders. I must specifically single out the Jigawa state government for commendation. Through my interaction with state functionaries, I noticed that the state and MDAs have their strategic plans and KPIs, and sector leaders have been made to sign performance agreements. Several policies have been developed to facilitate the state’s strategic goals. The state is ready for business!

    Based on the prevalent transactional and knee-jerk approach to development intervention at all levels of government, I make these few recommendations and suggestions on moving from “wishful thinking” as a state strategy to a robust strategy that is fit for purpose and easy to implement. First, State strategies must be evidence-based. It should be based on thorough research, data, and evidence. There is no room for hunches, guesswork, or mere intuition. Second, these governments should communicate their strategies transparently and be accountable for the outcomes. Open communication about challenges and setbacks can help manage public expectations and build trust.

    Third, strategic actions and policies must undergo comprehensive risk assessments. This involves identifying potential obstacles, considering worst-case scenarios, and developing contingency plans. A situation where policies are not adequately thought through may devastate people’s economy and quality of life, for example, the ill-fated Naira Redesign. Finally, strategies should be adaptable to changing circumstances, adjusting based on real-time feedback and evolving challenges.

    In conclusion, while optimism and hope are essential, they should be complemented by realistic assessments and evidence-based strategies. Wishful thinking, when used as the sole basis for state strategies, can lead to adverse consequences, and governments must adopt a balanced and pragmatic approach to addressing the challenges and opportunities facing Nigeria.

  • 2023: Reflections and future outlooks – By Dakuku Peterside

    2023: Reflections and future outlooks – By Dakuku Peterside

    The passing 2023 was a year of significance for Nigeria’s political and economic landscape. Reflecting on the year underscores the need for heightened vigilance against the emergence of small ,yet consequential political challenges that threaten our democratic fabric. Domestically, the ascent of Peter Obi and the Labour Party during the 2023 elections signals the ongoing momentum of our democracy. The rise of a populist candidate post–Buhari indicates a desire by some Nigerians to have a radical change and depart from the orthodoxy. The successful transition from the Buhari administration to the Bola Tinubu administration is a commendable milestone because the consistent adherence to periodic elections, a pivotal democratic pillar, has been sustained for five consecutive terms since 1999.

    However, these achievements are marred by localised challenges. Instances in the states of Ondo, Edo, and Rivers reveal that issues were less about state development and more about upholding the rule of law, respecting democratic principles, the rise of strongmen, and the absence of consensus-building. Politics of cronyism and clientelism is still prevalent. Leadership at the state level is crucial to the development of Nigeria. The paucity of leadership at the grassroots level in Nigeria is our bane. Furthermore, a critical concern that requires attention is the judiciary’s role in fortifying democracy, with Kano State emerging as a potential litmus test. These seemingly isolated issues, though apparently  benign, have the potential to converge into a more significant threat to national cohesion and democracy, with historical lessons offering stark reminders. We must pay attention to these localised “cancers” before they spread, causing national political upheaval.

    Nigeria found itself confronted by deep-seated issues because of ethnic and geopolitical tensions, rendering the resolution of national problems increasingly complex and, at times, impossible. Through 2023, there are pockets of mass killings by bandits across some Northern regions and secessionist bruhaha in the South- East. Even lately, some communities in Plateau State were ravaged by  suspected bandits and over one hundred people were murdered with no consequences. Kidnapping is rampant across major cities in Nigeria. The Southeast states shot down every Monday without economic activities because of fear of reprisals from groups enforcing sit-at-home orders.

    The general elections were fought along ethnic and religious lines; prominent candidates resorted to exploiting divisive narratives to secure support, detrimentally impacting the overall fabric of national unity. The aftermath of the elections revealed a persistent reluctance among Nigerians to unite and a preference for clinging to ethnic identities over fostering national cohesion. This inclination became glaringly evident in the election campaigns’ content, tone, and themes, further contributing to the widening ethnic fault lines. However, Atiku Abubakar, former VP, argues that ethnicity and religion are not our main problems but symptoms of absence of leadership and negative attitude. He posits, “Nigeria’s problem is not ethnic or religious. It is systemic. It is the leadership system. It is an attitude problem.” It is only leaders that perpetuate and stoke the fire of ethnicity and religion for political gains.

    On the economic front, three noteworthy events posed hurdles to the deepening of democracy: the Naira redesign amid elections, rampant inflation, and the near collapse of the Naira against the dollar, eroding the national currency’s purchasing power and exacerbating poverty. The pervasive cost-of-living crisis is disproportionately affecting most of the middle- and low-income earners, aggravating the inequalities gap . People experiencing poverty are more economically vulnerable, with inflation reaching alarming levels, pushing staple prices up. The escalating Dollar rate is disturbing. 2023 started with $ exchanging rate of about N460/N in the parallel market. It ended with $1 exchanging at over N1200 —further compounding the issue and causing a ripple effect on the prices of various goods. The removal of the subsidy on Premium Motor Spirit (PMS) forced an increase in fuel price to about N600 against about N190 it was earlier in the year. The rise in fuel prices and the concomitant increase in transport costs has profoundly affected commodity prices in the market, whilst the income of most Nigerians remains stagnant, and the palliative measures are proving inadequate to cushion the harsh effects.

    Insecurity directly correlates with food security. The prevailing insecurity in the country worsened the already cost of living crisis Nigerians faced. Many farmers faced hindrances in cultivating and harvesting crops due to insecurity and other forces, causing disruptions in the national food-producing regions. Addressing the national food insecurity challenge is a sine quo non. The government must find solutions to the undue pressure the farmers face nationwide due to the siege of insecurity .

    On the global stage, the Israel-Hamas conflict resisted international intervention, and the Russia-Ukraine war posed a substantial threat to the worldwide economy. Nigeria is not insulated from the vagaries of global economic upheavals. When the world coughs, Nigeria catches a cold. We must be prepared to deal with these global uncertainties and develop structures and systems to serve us in adverse global economic impacts. We must not allow ourselves to be docile victims at the mercy of global crisis. Instead, we must be bullish and active participants hoping to take advantage of such a global crisis presents.

    Collectively, these challenges constitute unenviable markers of our current reality, carrying profound implications for Nigeria’s political and economic growth. Extrapolating from these “fires,” it becomes evident that substantial efforts are needed to foster deeper democracy. Political crises in Rivers, Ondo, and Edo underscore the fragile nature of our democracy and the imperative of respecting the rule of law. In the future, eternal vigilance is the price to secure democracy. The economy, regrettably, appears even more fragile, raising questions about whether deliberate actions have led to its erosion for the benefit of the political elite. Nigeria’s former President, Goodluck Jonathan, argues, “We need to correct our politics; we need to correct our economics. We need to correct everything that was wrong.”

    As we step into 2024, the paramount concern and developmental priority for the government should be fostering unity among Nigerians. A national peace and unity dialogue is imperative now, aiming to address the divisive lines that have emerged over the years. It is essential to plan and convene a national meeting, engaging in discussions that focus on healing the nation and redesigning governance structures to ensure the equitable delivery of democracy’s dividends to all Nigerians. Rebuilding trust among citizens and fostering complementary national growth and development actions are indispensable for the country’s progress.

    Amidst the backdrop of global economic volatility, the Nigerian economy is anticipated to grapple with challenges throughout 2024. Although the inflationary trend may slightly decelerate, the Naira is expected to exhibit marginal stability in the first quarter but could face a subsequent decline. The real sector is poised for subdued growth, compounded by the persistent challenge of the electricity deficit, notably impacting the manufacturing sector. A substantial obstacle lies in the need for more confidence in the management of the economy; the absence of a clear blueprint has left investors and citizens sceptical about significant changes. There is no indication that the government will make substantial investments in agriculture suggesting that food inflation will likely continue its upward trajectory.

    In 2024, 18 African countries are slated to hold elections, making Africa the continent with the most electoral events. Widespread challenges with credible elections and good governance prevail across most African nations, contributing to growing disillusionment among citizens with the democratic process. Ineffectual leadership significantly burdens Africa, fostering an environment where corruption thrives. Military involvement in politics and governance has become more prevalent, with nine countries experiencing military rule between 2020 and 2023. Without drastic interventions to enhance governance quality and improve the economic fortunes of citizens, this trend is anticipated to persist in 2024.

    President Tinubu’s primary focus for 2024 is to restore macroeconomic stability. Nigerians are grappling with tangible economic hardships, and all indicators point to the continuation of a cost-of-living crisis. Political figures must actively work to mitigate the escalating risk of these more minor challenges that imperil our democracy and the nation’s survival. The answer lies in upholding the rule of law, respecting democratic values, and embracing selflessness. We can only achieve this through exemplary leadership. Ngozi-Okonjo Iwela, DG WTO, posits, “The problem of Nigeria is not a problem of ethnicity or religion. The problem in Nigeria is the problem of bad leadership. This is the problem we need to tackle.” If we get our leadership right, everything will fall into place.

  • Cashless festivities – By Dakuku Peterside

    Cashless festivities – By Dakuku Peterside

    The world is moving into a new financial epoch. The era of physical currency is fading, making way for the rise of a cashless society thriving on digital transactions. In a cashless world, financial inclusion is both a promise and a challenge of bridging the gap while ensuring security for all. However, we are far from a cashless economy in Third world countries. In Nigeria, cash is still King. This may result from our love relationship with cash and the poor technology adoption syndrome. The love for cash reaches a crescendo during seasonal celebrations.

    Nigerians from all regions and religions love to spend extravagantly during the festive period. Such spending boosts the micro economy as well as the spirit of festivity. The digital mode of payment is yet to take root in this country and is not the natural alternative outside elite circles. This holiday season may be different. The system has been starved of cash and Nigerians face an unusual cash crunch. This scarcity of cash will no doubt have excruciating effect nationwide on both Christians and non-Christians, rural and urban dwellers.

    Most transactions in the country are cash-denominated. The survival of small businesses and ease of doing business transactions in the informal sector rest on this. Transitioning to a cashless society is not just about technology; it is about reshaping our relationship with money and embracing the digital age.

    We may link the root cause of the present cash crisis to ex-Central Bank of Nigeria (CBN) Governor Godwin Emefiele’s failed Naira redesign policy, which this government promised to fix. The Naira redesign policy of the first quarter of 2023 led to a booming trade in Naira notes as articles of commerce. The more scare, the higher the premium and the more profitable it became for POS operators and their collaborators in the Banks who made a kill in this nefarious business.

    Unfortunately, POS business appears established like other unconventional profitable enterprises in Nigeria. POS operators shamefully rejoice in exuberance at the excruciating cash crunch that destabilises the entire cash transaction system. One year after Emefiele’s ill-thought-through policy, cash is still being rationed. ATMs do not have  money. Banks are still implementing a cash withdrawal limit policy and inflation is still rising. A scarcity of cash in an economy can have several implications and impact various aspects of financial transactions, economic activities and the overall well-being of individuals.

    For instance, cash scarcity may lead to declining consumer spending as people may need more access to physical currency for everyday transactions. This can result in a slowdown of economic activities and negatively impact businesses.

    Secondly, small businesses that rely heavily on cash transactions may need help conducting daily operations. Cash scarcity can hinder their ability to make payments, restock inventory and manage cash flows.

    Furthermore, cash scarcity may accelerate a shift towards digital transactions. While this can enhance efficiency and transparency, it may also exclude individuals unfamiliar with digital payment methods or needing access to technology.

    Again, informal economies may thrive without sufficient cash whereas transactions are often conducted in cash. This can lead to challenges in tax collection, regulatory compliance and overall economic governance. In extreme cases of cash scarcity, there could be a resurgence of barter systems where goods and services are exchanged directly, thereby bypassing traditional monetary transactions.

    Going further, cash scarcity may exacerbate issues of financial exclusion. Particularly in regions with limited access to banking services or where digital infrastructure is inadequate.

    Cash scarcity may also disproportionately affect vulnerable populations such as older people, rural dwellers, or those without access to banking services. These groups may need help meeting their basic needs and conducting daily transactions. Some villages in Northern Nigeria are over 98% reliant on cash for transactions with little or no presence of digital transactions.

    Furthest, if cash scarcity leads to financial stress for a large portion of the population, it may contribute to social unrest and dissatisfaction with the government or financial institutions. However, the cash crunch has some positive effects on the Nigerian economy. But we must note that these positive effects pale in significance compared to the detrimental effects.

    Some of the positive impacts of a lack of cash in the Nigerian economy include minimising opportunities for corruption and bribery since digital transactions leave a more transparent and traceable trail, facilitating greater financial inclusion by providing easier access to banking services for individuals who were previously unbanked, making financial transactions more efficient and convenient. Ultimately, the time and effort required for both consumers and businesses to conduct financial transactions by use of digital means is reduced, with more transactions occurring electronically. Thus giving the CBN better control over monetary policy.

    It is essential for policymakers to carefully manage cash scarcity to address the concerns of various stakeholders. They must ensure that measures are in place to mitigate potential negative impacts on the economy and society. The CBN, the authority responsible for money control and liquidity management, fails in this respect. CBN is attributing the situation to citizens’ panic withdrawals, hoarding and fear that CBN may phase out the old Naira notes early next year.

    CBN is also accusing POS operators of colluding with Banks to starve the system of cash. These excuses, in every material sense, are untenable. It simply shows that CBN is not in firm cash management control. This is totally unacceptable. The apex banking institution ought to know that cash scarcity would have an adverse rippling effect on the already distressed economy and may last longer than the festive period. It is time we drew a curtain on the ill-fated experiment of the Naira redesign  and its ripple effect and do a structured transition to a cashless system with minimal adverse impact on citizens and the economy. In implementing a cashless system, policymakers must address these challenges and ensure that the transition is inclusive, secure and beneficial for all population segments. Public awareness campaigns, robust cybersecurity measures, and infrastructure development are essential to successfully transitioning to a cashless economy.

    The festive end of year is a time of heavy transaction traffic.

    Cash scarcity or shortage means more frustration for Nigerians who are already on edge, shrinking economic space for market traders and service providers, loss of confidence in the economy, especially the banking system, and most importantly, citizens’ quality of life. And it would eventually lead to the shrinkage of the endangered business environment and a worsening of the economy. In the face of cash scarcity, this Christmas and New Year celebrations may lose the spirit and flavour of the season. This would add to the endless economic challenges Nigerians face.

    Nigeria needs a cashless transition that is robust and fit for purpose. One that benignly softens the negative impact of the transitioning through adequate provisions that negate cash scarcity. A smooth technological push that is seamless and transparent would do. A cashless society is the future, where convenience meets digital innovation, transforming how we exchange value.

    This cash crunch may ‘steal’ Christmas from many Nigerians if it continues exacerbating. The implications of this cashless festivity are multifaceted and painful in a country where many Nigerians are enduring economic difficulties and need this festivity to escape their daunting reality. To deny them this respite and add to their misery is challenging to contemplate. We must always remember that Nigeria has a significant informal economy. Moving to a cashless system may pose challenges for individuals and businesses operating in this informal sector, which relies heavily on cash transactions. There may be resistance from individuals accustomed to using cash, particularly in rural areas where assessing digital infrastructure may be limited. Time is needed for the change to a cashless society to happen.

    Nigerians are not late adopters of new technology. However, in the case of financial technology, many, especially in the informal sector, are suspicious of the move to a cashless society and are hardwired to insist on the financial path they are familiar with – cash. I implore the government and CBN  in particular to be proactive and  innovative in solving this Naira note scarcity challenge and give Nigerians some respite.

  • FDI: Tackling poor signaling – By Dakuku Peterside

    FDI: Tackling poor signaling – By Dakuku Peterside

    Nigeria faces unprecedented economic uncertainties and desperately needs to “bend the curve” on most economic indices. Even the optimistic people among us struggle with what to hold onto to defend our slide into economic quagmire. This results from several years of economic mismanagement and the devastating global impact of COVID-19.

    We need urgent economic recovery, and Foreign Direct Investment (FDI) flows are fundamental to support such recovery. We must make a great effort to restore and increase capital inflows through FDI; attracting such capital must be a key  strategy of this government.

    Kofi Annan, the former UN Secretary-General, underscores the importance of FDI when he argues, “Foreign direct investment can be a catalyst for economic growth, job creation, and poverty reduction in developing countries.” This administration understands this, and Mr. President is leading the campaign to attract FDI. He is rolling out the red carpet for global investors to come to Nigeria to invest. However, the result of such an effort is yet to manifest , and some may argue that it is too early to appreciate the outcome. But I assume that although the economic propaganda and narrative, the body language of Mr President, and the economic decisions he has made so far are FDI friendly, the signals coming out of Nigeria are counterintuitive to this effort. And we know that in economic perception, signals matter, sometimes even more than reality.

    Narendra Modi, Prime Minister of India, argues that “FDI is not just about money; it’s about creating an environment that fosters innovation, entrepreneurship, and economic prosperity.” The message from the Nigerian economic environment is antithetical to our FDI drive narrative and calls for capital inflow. We have yet to create an environment that fosters innovation, enterprise, and productivity. This is the anchor for FDI.

    To be fair to the BAT government, it has taken  some measures to boost foreign investment, including tax reforms  at its formative stage , repealing laws that allowed retrospective taxation, overhauling the foreign exchange regime, clearing all FX deficits, and offering incentives.

    These signals, albeit substantial, are poor compared to the competing negative signals emanating from our political economy that global capitalists pay very close attention to. International capital investments are not products of whimsical and serendipitous decisions. They are based on analysing short- and long-term economic facts and realities. No amount of window dressing of the fundamentals would convince foreign investors to come to Nigeria unless core economic facts back our rhetoric. What strong signals are we emitting?

    Our business environment has become so toxic in recent times that we are not retaining FDIs that came in the past. Global manufacturing conglomerates and oil multinational companies are quickly moving out of Nigeria and are not replaced by new ones (Not a peculiarly Nigerian problem, though: Kenya and Ghana – but particularly the former – are facing similar problems!). Nigeria is the second most indebted country to foreign airlines because of non-repatriation of earnings.

    Our foreign exchange regime is still weak, and the value of the Naira is collapsing like a pack of cards. Imagine an investor brought in $1m at the rate of N500 per dollar (N500,000,000} at the beginning of this year and by the end of the year makes a 20% profit (N100,000,000}. If the exchange rate now is N1000 per dollar, the total value of his investment will shrink by 40% ($600k against the original $1m invested}. This volatility will scare most would-be investors, especially investors focusing on the short run. Even at that, the investor is likely to struggle to get FX to repatriate profit or sometimes even import raw materials .

    Poverty and economic hardship have reduced the purchasing power of the people, and demand for non-essential products and services is dwindling. Our micro and macroeconomic environment is harsh and has thrown some erstwhile middle-class Nigerians across the poverty lines. There is no gainsaying; we are the world’s poverty capital, and we have accepted our fate, and nothing measurable has been done about it.

    High inflation and high interest rates are combined to stifle business. We are and have remained a mono-product economy. Nigeria has historically been heavily dependent on oil exports. The lack of diversification in the economy makes it vulnerable to fluctuations in oil prices, affecting investor confidence.

    Politically, we have made some democratic gains, but we are still struggling with the rule of law. A viable business environment thrives when the rules of business engagement are clear and sacrosanct. And when there is a breach, a transparent judicial process ensures justice. However, our judiciary has significantly lost the confidence of many of our citizens and foreign investors. Court processes take forever to resolve disputes.

    Corruption is rampant and has eaten deep into the system. This has led to a high cost of governance and decay in the system. Government officials’ lifestyle is inconsistent with that of those who need support or investment. Nigeria is heavily indebted and has continued to borrow, most painfully, to cover recurrent expenditure and service debts.

    Public and private sector organisations have to deal with the  burden of bureaucracy and red tape. There is a sense of pervasive hopelessness and despondency among the youth, who comprise more than 70% of the population. The paradox is that the high youth population is now a curse rather than a blessing. We have a dearth of highly educated and skilled youths, yet many have “japaed” or are planning to do so. Never in our history have we had this unprecedented exodus of trained professionals in all spheres.

    We have weak institutions, weak infrastructure, and massive insecurity. We have a complex regulatory environment with many bureaucratic hurdles, which has affected the ease of doing business. Starting and operating a company could be more efficient and more investor friendly. Multiple taxation and other unnecessary interference impede business confidence.

    Besides, the state of infrastructure in Nigeria, including transportation, energy, and telecommunications, is disturbing and anti-investment. Infrastructural development is the backbone of business, and investors may hesitate to invest in a country where inadequate infrastructure can hamper business operations.

    The level of insecurity is alarming. Some regions in Nigeria have experienced security challenges, including incidents related to terrorism, secessionist agitations, civil unrest, kidnapping, high-level criminality, and general low-level insecurity. These concerns impact the perceived safety of investments and lead investors to consider more stable environments.

    All these signals mentioned above are powerful and are dousing the poor signals this administration’s effort is putting out. So, we must go back to basics. Addressing these challenges and implementing reforms in governance, infrastructure, and the business environment can help improve Nigeria’s attractiveness to foreign investors.

    The Nigerian government has recognised these issues and has been working on initiatives to promote economic reforms and improve the investment climate. The situation can evolve, and ongoing efforts to address these challenges may positively impact FDI. Let’s continue with the hardcore reforms that will improve our economic outlook in the medium to long term. The sacrifices we make now will reward our posterity.

    Ngozi Okonjo-Iweala, Director General of WTO, argues that, “FDI is not just about capital inflow; it’s about knowledge transfer, technology sharing, and building sustainable partnerships.” We must explore options beyond capital flow and look at knowledge, technology, and skill flows.

    In our globalised world, attracting foreign direct investment is essential for the competitiveness and development of any nation. Foreign direct investment is a vote of confidence in a country’s future economic potential. Therefore, prosperous countries can attract and retain foreign direct investment by providing a stable and business-friendly environment.

    Arun Jaitley, former Indian Minister of Finance, posits that, “The flow of foreign direct investment is like a river – it seeks the path of least resistance, and nations must build bridges, not barriers.” We must create an environment with the least resistant barriers to allow a free flow of capital, talent, and technology.

    Undoubtedly, we know that FDI is a powerful engine for job creation, technology transfer, and economic development and like rainwater, it nourishes the growth and development of the economy. We must send strong signals that we are open for business and create the right environment. Nigeria is a sleeping giant, and when the world sees that we have woken up for business, the FDI will flow freely without theatricals.