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Tag: Etim Etim

  • Why we should protect the independence of CBN – By Etim Etim

    Why we should protect the independence of CBN – By Etim Etim

    By Etim Etim

    The Senate is currently undertaking a comprehensive amendment of the Central Bank Act of 2007, but the exercise is generating mixed reactions in the banking industry. Operators are worried that some of the new clauses being proposed by the lawmakers are capable of eroding the autonomy and independence of the apex bank and therefore weakening its capacity to perform.

    The amendment bill is being sponsored by Senator Mukhail Adetokunbo Abiru (Lagos East) and is co-sponsored by 32 others. Wednesday, May 29 was slated for a public hearing for this amendment.  Senator Abiru was once the chief executive of Polaris Bank, a fellow of Institute of Chartered Accountants of Nigeria (ICAN) and a member of Chartered Institute of Bankers (CIBN).

    He holds a first degree in Economics from Lagos State University. In August 2020, Abiru resigned from the position of CEO of Polaris Bank to run for the senatorial seat. Many in the financial services sector are worried that a man with such credentials is leading the charge to weaken our central bank, and this is the context of my intervention today.

    The proposed amendments include setting the tenure of the Governor and Deputy Governors at a single, non-renewal term of six years; appointment of a minimum of one career staff of the Bank in the Committee of Governors; appointment of at least one woman among the external directors and the establishment of the position of Chief Compliance Officer in the rank of a Deputy Governor.

    It is also proposed that the five external directors should hold office for a non-renewal single five years. In addition, the amendment intends to increase the Ways and Means to government to 10% of the total of total revenues of the previous three years.

    These are quite commendable innovations. I’m particularly pleased with the single tenures for the Governor and the Deputy Governor and the creation of the Chief Compliance Officer. I’m surprised that the CBN had not established the Chief Compliance Office all this while, yet the apex bank had since mandated the commercial banks to create the position in the last 15 years or so.

    I remember that Access Bank has a Chief Compliance Officer as far back as when I joined in 2008. How could the CBN not have had one? There is also a provision in the proposed review of the law that states that changing legal tender should be done in phases and in a manner that does no cause any distortion to the economy. Nobody would disagree with this given our recent experience. I also support the proposed increase in the CBN’s paid up capital from One billion Naira to one trillion Naira, and the provision that such reviews should be done as regularly as is necessary.

    But there are a few provisions in the proposed amendment bill that have jolted stakeholders, the banking industry and even international partners like the IMF. The bill seeks to establish a seven-member Coordinating Committee for Monetary and Fiscal Policies to be chaired by the finance minister. The Coordinating Committee will set ‘’internally consistent targets of monetary and fiscal policies that are conducive to controlling inflation and promoting financial conditions for sustainable growth’’.

    In other words, the bill, if passed and signed into law, will give the finance minister powers to fix interest rate – a traditional duty of any central bank the world over. In addition, the CBN’s budget would be approved by the National Assembly while the Governor will have to appear before the lawmakers twice in a year to give accounts of his stewardship, in addition to answering to their routine summons as often as they deem fit.

    With these amendments, the CBN will essentially revert to its former status as an appendage of the Finance Ministry, about 20 years after it secured an autonomy.

    A central bank independence matters for price stability which in turn conduces for a consistent long-term growth. During the COVID-19 pandemic central banks responded swiftly to steer the global economy out of meltdown due to their independence.

    Now, facing rising inflation, central bankers are responding to the challenges – although at different speed and timelines. In many countries, their responses helped to tame inflation. Compare this to the 1970s when most central banks were still subjugated under bureaucratic and political influences and how sluggishly the central banks responded to the high inflation then.

    This is why the IMF was among the first to kick against the proposed amendment of the CBN law, stating that the proposed amendments ‘’could undermine the authority of the CBN and weaken its capacity to respond to emerging challenges appropriately’’. Indeed, Turkey and Venezuela are good examples of this.

    Eminent economist and former director of the CBN and former member of its Monetary Policy Committee (MPC), Prof Akpan Ekpo, is unsparing in his assessment of the proposal. Speaking to this writer, he said: ‘’The Coordinating Committee is unnecessary. The Finance Ministry may have its own committee to determine crucial fiscal variables, while accommodating monetary policy. That is, the CBN will be represented in that committee as is the case in the MPC where the Finance Ministry is also represented. The seven-member Coordinating Committee will undermine the independence of the CBN and place it under the control of the Finance Minister.

    The CBN (Monetary policy) and the Ministry of Finance (Fiscal Policy) must coordinate and collaborate. Its global best practice that doesn’t require any legal backing. The misnomer of the Coordinating Committee will create further distortions resulting in the mismanagement of the economy. I am particularly worried that the Senate is increasingly becoming an institution of revisionism.

    Just this week, it reverted to the old National Anthem without as much as a debate or convincing reason; and now the senate is taking the CBN back to the apron string of the Ministry of Finance. What else should we expect from this senate?

  • Wike vs Fubara: A prophecy foretold – By Etim Etim

    Wike vs Fubara: A prophecy foretold – By Etim Etim

    By Etim Etim

    In December, I wrote an article titled ‘’Wike, Fubara and the 48 Laws of Power’’ in which I predicted that Gov. Sim Fubara will emerge victorious in the war of attrition between him and his predecessor, Nyesom Wike. The intervention was prompted by President Bola Tinubu’s efforts to facilitate a truce between the two and the subsequent peace resolutions that emerged from the presidency.

    Gov. Fubara had eagerly conceded some grounds to Wike and endorsed the peace treaty. For some, that was a sign of weakness. A TV anchor, fuming said to me, ‘’The governor is too weak. He is dumb. How could he have agreed to such an agreement?’’

    But I understood the whole thing differently, having studied and participated in Nigerian politics for a while. In the December article, I wrote in the opening paragraph, ‘’In words and actions, Governor Siminalayi Fubara has shown that he is a good student of history and power dynamics. He has surprised and outsmarted his enemies and impressed his admirers in the manner with which he’s dealt with the political crisis in his state’’.

    I went further to state that ‘’we need to pay attention to Fubara’s strategy in the context of Nigeria’s politics of avarice, corruption and application of power to serve selfish interest’’. I argued that Fubara was applying some of the laws of power well-articulated by Robert Greene in his famous book, ‘’48 Laws of Power’’, notably the 3rd, 12th, 21st and 33rd law, while Wike was busy flouting the 34th law.

    Today, all signs point to the fact that Fubara has used his incumbency advantage to dislodge Wike’s base from the politics of the state. He has driven away the pro-Wike members of the House of Assembly and completely taken over the legislature. There are only four members of the House of Assembly left – all pro-Fubara – as the State High Court has declared the seats of 27 pro-Wike members vacant.

    The court has also sacked Local Government chairmen appointed by Wike, and just the other day, the governor has appointed eight new commissioners to replace Wike’s men in his government. Furthermore, Wike has lost the support of key stakeholders in the state, including former governor Peter Odili, who was his major backer before this war broke out.

    Dr. Goodluck Jonathan has also recently weighed in and publicly reprimanded Wike for stoking the crisis. Gov. Fubara is reaching out to and enticing every important person in the state with money, favours and patronage. Clearly, Wike’s influence` is waning fast. My December prognosis has come out spot on. It is a prophecy foretold.

    In the PDP, the FCT minister has been equally sidelined. He has made too many enemies for his own good. Ali Modu Sheriff; Ahmed Markarfi; Uche Secondus and Iyorchia Ayu are all former National Chairman of the PDP whom Wike humiliated out of office just because they refused to be pocketed by him.

    Of course, the baba of that party, Atiku Abubarkar, will never have anything to do with him again. None of his other predecessors – Peter Odili; Celestine Omehia and Rotimi Amaechi – is his friend. Odili was his major supporter until the crisis broke out. The old man has since realized that in the snake pit of Nigeria’s politics, it is safer to side with the incumbent governor. That’s why Nasir el Rufai is treading softly with his successor, Senator Uba Sani.

    A man of oversized ego and grandiose self-indulgence, Wike is now a shadow of his former self. Surely, greed, avarice and bawdry have their limits. He underrated his successor and is paying dearly for his bad judgement. I posit that Wike’s final political disgrace will unfold during the next PDP congresses. That’s when his beloved ‘structure’ will finally collapse.

    Meanwhile, presidency insiders and APC strategists are watching the whole drama with some discomfiture and amazement. First, they are embarrassed that the truce negotiated by the President has been discarded; and that’s a sign of disrespect to the president.

    Second, they’re astonished that the FCT minister has been practically dislodged from the state. The initial assumption within the APC was that Wike would be in control of Fubara and the PDP in Rivers, amass all the cash till 2027 and use the war chest to launch a blitzkrieg into Akwa Ibom, Delta and Enugu or Abia.

    But the steady erosion of Chief Nyesom Wike’s political standing within the PDP has belittled him before the presidency and the APC leadership, so much so that they are now having a rethink about his future political value. In terms of his official duties, the FCT minister seems to be doing well. Many residents are impressed that he’s completing long abandoned roads and other projects in Abuja.

    They are not interested in the crisis in his home state. But the politicians within the APC are wondering what to make of the situation. Here now are what to expect. Chief Wike will lose out completely within the PDP and will decamp to the APC around 2026 with folks like Senator Magnus Abe.

    The minister will move to assume leadership of his new party, APC, in the state, but would be resisted by chieftains like Tonye Cole and all those he had offended within the party. Nonetheless, since former governors automatically assume leadership of a party in the state where the incumbent governor is from another party, Wike will, one way or the other, anoint a governorship candidate in APC and launch a noisy campaign to unseat Fubara. Will he succeed?

  • NDDC’s N84 billion projects – By Etim Etim

    NDDC’s N84 billion projects – By Etim Etim

    By Etim Etim

    There is calm these days at the corporate headquarters of NDDC, the 24-year-old interventionist agency established by the Federal Government to fix developmental gaps in the Niger Delta region. The 13-storey edifice, commissioned in 2021, breaks into view as you turn into Eastern bypass in Port Harcourt. Inside, executives are hard at work on the 2025 budget and completing ongoing projects. The rest of the workers are no less busy.

    The tranquility is a far cry from the brouhaha that enveloped the commission three years ago in the wake of the forensic audit ordered by the Buhari administration into its affairs. A new management team, headed by Dr. Samuel Ogbuku, seems well determined to leave the ugly past behind. For two weeks beginning Saturday, May 18, NDDC will commission 92 high-impact infrastructure projects executed at over N84 billion across the nine states. They include roads, bridges water, electricity, electrification, a police station, health centres and school blocks.

    Among the projects is the 25.7-kilometre Ogbia-Nembe Road, which has created a road link to the ancient city of Nembe in Bayelsa State, for the first time in living memory. It includes 9.15 km of pre-fabricated vertical drains on the swamp and seven bridges. Executed at a cost of N24 billion, the road cuts the travel time to Yenagoa, the Bayelsa State capital from 3 hours on dangerous water routes to a mere 45 minutes. It also opens up 14 communities for development. The project was executed in partnership with Shell Petroleum Development Company (SPDC), and is regarded as a model of the commission’s partnership approach in tackling the challenges of the region.

    Also slated for commissioning is the 132KV Transmission Line and I32KV/33KV Substation electrification project, executed at a cost of N8.3 billion to optimize power supply to five local government areas in the southern part of Ondo State. The project covers the construction of 45km double circuit 33KV feeder lines from Omotosho Power Station (Hook-up point) to Okitipupa and two 30MVA, 132/33KV Injection Substations with breakers, gantry and substation automation. It also includes the construction of a three-bedroom semi-detached bungalow as service quarters.

    The capacity of this power station is optimized with the provision of 2 x 60MVA, 132/33KV transformer and other ancillary works at Okitipupa Injection Substation, rehabilitation of 35km 33/11KV transmission from Okitipupa-Igbokoda-Ugbonla and environs and the construction of 1km rigid pavement. The electricity project will complement the Federal Government’s effort in the power sector by improving power supply to Okitipupa, Igbokoda and about 2,000 neighbouring communities in Ondo South Senatorial District with direct value chain in small and medium scale industries, job creation and consequently engender growth and development in Ondo State.

    NDDC’s executive director in charge of projects, Victor Antai, sounded ecstatic when I spoke with him early Saturday morning. It is his brief to deliver on all the projects undertaken by the agency. And so, for five months since late last year, Antai has been touring the nine NDDC states, inspecting projects and ensuring that contractors are up and doing. He told me: ‘’As you know, I have been on the road, inspecting these projects, meeting with contractors and the communities, just to ensure that every project is delivered on time. It is the decision of the executive management to deliver dividends to our people.”

    Before he assumed duties in November, Antai has been a businessman, a Local Government chairman and a commissioner in Akwa Ibom government. To his folks, he is known for his simplicity, affability and generosity. Unlike many ‘big men’ in public service, Antai has no airs and does not encourage partisan divisions and ethnic bigotry. So, I asked him, among all the 92 projects, which one do you have for Akwa Ibom state?

    In Akwa Ibom State, NDDC will commission the 6.87-kilometre Iko-Iwuochang road in Ibeno LGA the southern part of the state. The road project consists of two-lane single carriage way, a 600-metre bridge and side drains. The N10 billion virgin road project links 20 communities, hitherto separated by the Qua Iboe River. Three years ago, NDDC completed and commissioned a 1005-student hostel at the University of Uyo. I attended the event. In Abia State, NDDC will commission the Obehie to Oke Ikpe-road reconstructed at a cost of N3.5 billion. The nine-kilometre road restores the road link between Rivers and Akwa Ibom states, through Abia (Ukwa East/West). It involved the reconstruction of seven kilometres of failed section of the road and the construction of drainage.

    It is commendable that Dr. Ogbuku and his team are completing and commissioning these projects, many of which were started by previous managements. It is indeed pleasng that he has not fallen into the temptation to abandon them and start news ones as it has often been the case in public service. Said the chief executive: ‘’The most compelling need in completing and commissioning these projects is to put them for use in the communities and help in renewing hope in the people in line with the Renewed Hope Agenda of President Bola Tinubu.”

    It is also important that the NDDC is now generating more good news than the negative ones. I was in the center of the fight in 2021 during the forensic audit controversies, defending the commission in the media. It is my pleasure to report on the calm and the progress that we now have.

    ETIM is a former media consultant to the NDDC

  • Another helicopter crash, another dignitary perishes – By Etim Etim

    Another helicopter crash, another dignitary perishes – By Etim Etim

    By Etim Etim

    I am writing with a heavy heart. A helicopter carrying the President of Iran, Ebrahim Raisi, Foreign Minister, Hossein Amirabdollahian and several others, crashed in a heavy fog yesterday, Sunday, May 19, in the northwestern part of the country.

    They all perished. The weather was bad, I understand, and the area mountainous and forested. It took many hours for first responders to reach the crash site and recover bodies. The crash occurred exactly one month after Kenya’s military chief, Francis Ogolla, died in a helicopter crash in the Western part of the country. Nine others perished with him.

    These accidents evoke sad memories of February 9 when another helicopter accident in California took the lives of our dear Dr. Herbert Wigwe, his wife and son. Many of us are still in shock and pain.

    Kobe Bryant, a US sports star died with his daughter in January 2020 in another chopper crash in California. In December, 2012, the governor of Kaduna State, Patrick Yakowa; the former NSA, Gen. Andrew Owoye Azazi and four other persons perished when the helicopter they were travelling in crashed and burst into flames in the forests of Okoroba, Bayelsa State.

    I also remember the crash of August 2015 involving a chopper belonging to Bristow Helicopters. The machine crashed into the Lagoon near the Oworonshoki end of Third Mainland Bridge in Lagos. It was coming from the Escravos oil terminal and was heading for the Island. Three persons, including co-pilot, Mr. Peter Bello jnr, died. The pilot’s parents were my customers when I was managing the bank’s business in the Akwa Ibom-Cross River region.

    It was a devastating blow to Mr. & Mrs Bello of Pekab International, the Calabar-based construction and real estate company.  Mr. Bello, from Edo, I think, came to do his NYSC in Calabar in the early 1980s, fell in love with the city, settled down and made a home of it. With his wife, they built a good business and raised a family. Their pilot son’s death has been crushing. When I took over in Calabar, Mrs Bello was particularly warm and welcoming to me. Her hotel on MCC Road served one of the best edikang ikong meals in the city. Well, that was over 10 years ago.

    There have been many other chopper crashes in the last several years, but I can’t forget the one involving Gen. Muhammad Zia Ul Haq, Pakistani’s military Head of State, who died in a chopper crash on August 1988. Ul Haq was a mean military leader (think of Sani Abacha) who had his civilian predecessor Ali Bhutto executed despite international appeals for clemency.

    Many Pakistanis celebrated Ul Haq’s death just as many in Iran are today celebrating the death of their President, Mr. Raisi for his hardline and scorched-earth decisions. Recall the death, las year, of that young Iranian girl who was killed for not wearing head scarfs and all the riots and demonstrations that came after it? Remember how security forces mowed down the demonstrators?  Cast your mind back to how Sani Abacha ordered troops to mow down the June 12 demonstrators. Wole Soyinka, in his memoire, ‘’You must set forth at dawn’’, gives an epic recollection of that era.

    Helicopters were invented to help us hop across bad terrains or take us on short trips if we don’t want to go by road. It is widely used in the oil industry to ferry workers from between offshore platforms and onshore facilities. The military also uses choppers quite frequently.

    US Presidents use their dedicated choppers, called Marine One, to hop from their dedicated airport in Maryland to the White House. President Obama wrote in his memoire how a bad weather prevented him from using Marine One one day when he arrived from a foreign trip. He opted for a 30-miute road trip, instead .

    Clearly, a helicopter flight is the worst form of air travel. I will never be caught dead in it. I didn’t know how wicked and dangerous helicopters could be until the crash that took Herbert’s lives. I had always had a bad feeling about the machine, but on Feb 10 (Nigerian time), I vowed never to climb into it, no matter what. I rather swim across a river than board a chopper. It is treacherous, wicked and merciless.

  • Business diplomacy and Africa’s development – By Etim Etim

    Business diplomacy and Africa’s development – By Etim Etim

    By Etim Etim

    From May 16 to 17, over 2,000 of Africa’s business leaders, investors, policy makers and political leaders as well as their counterparts from around the world met in Kigali, Rwanda under the auspices of the Africa CEO Forum 2024 to discuss the continent’s development, opportunities and challenges.

    The Africa CEO Forum is the largest international meeting of the African private sector, and is typically two days of conferences, debates, panel discussions and high-level meetings dedicated to highlighting the driving role of the private sector in the development of the continent.

    Rwanda is hosting it for the second time since its maiden edition, held in Geneva, 10 years ago. Last year, it was held in Abidjan and next year, it is going to somewhere in North Africa. Nigeria has never hosted it, and that’s surprising. You can think of the Forum as our own equivalent of the World Economic Forum (WEF), which holds in Davos, Switzerland, every January.

    The 2024 CEO Forum in Kigali was the biggest since its inception, according to the Chief Executive of the Forum, Amir Ben Yahmed. The theme this year was ‘’At the Table or On the Menu? A Critical Moment to Shape a New Future for Africa.” President Paul Kagame and a few African Heads of States and Governments were there. In attendance were many notable Nigerian businesses and NGOs. Kagame gave a brief opening statement.

    The phrase, ‘’At the Table or On the Menu’’ was popularised by the US Secretary of State Antony Blinken at the Munich Security Conference last November. Responding to the moderator’s question concerning tensions in the US-China relations, Blinken had said ‘’if you are not at the table at the international systems, you’re going to be on the menu’’. Blinken had also used the same phrase in 2022 to describe relations between the two superpowers.

    But he did not invent this coinage. As far back as 1993, this phrase was used in an article in an American Middle East Affairs journal, describing the situation in Lebanon at that time. At a time that our continent seems to be making little progress in the global stage, it was therefore apt that the Africa CEO Forum 2024 adopted this same phrase as its theme. It was also the central point of discussions among panel members on the opening day of the summit.

    The panelists were Group CEO of MTN, Ralph Mupita; Regional VP for Africa, IFC, Sergio Pimenta; Access Holdings Chairman, Aigboje Aig-Imoukhuede; Rwanda Minister of State in charge of Public Investments and Resource Mobilization, Jeanine Munyeshuli, and President of Arab Bank for Economic Development in Africa, Sidi Ould Tah.

    It was a very enriching and profound discussion on the experiences and future of our continent. Aig-Imoukhuede opened his contributions by acknowledging that the theme was quite poignant given that this year marks the 140th anniversary of the Berlin Conference.

    ‘’At the Berlin Conference, Africa was at the table, but that’s where they had us for breakfast, lunch and dinner,” he said, eliciting applause and laughter. “But Africa has come a long way since then. Today, there are many tables across the world in IMF/World Bank (finance), WHO (health), WTO  (Trade), G20 (politics), etc, and it is important to note that Africans are CEOs of some international organisations in these areas,” he added.

    In as much as Africans are now at the table, he however wondered whether we are sitting on the right seats or low stools, eliciting another round of laughter and applause. The Access Holdings chairman elucidated further that Africans should create their own tables just like the Asians have done. ‘’Our big population, common markets and youths should give us a table for the future’’ he said. He noted that Africans have made considerable progress in finance, noting that foreign banks that have divested from the continent have been replaced by African banks.

    He illustrated: ‘’If an African investor, for example, goes to the Eurobond market, he should be ready to be dictated to by the regulators and the operators in that market; and they necessarily don’t have your interest in mind. But if an African investor goes to an Afrobond market to raise capital, chances are that the market will be sympathetic to Africa’s needs and nuances, but the standards and regulations should not be lower than what you have in the Eurobonds markets.”

    He called for partnership between the public and private sectors in the continent and announced that Access Holdings and the Aig-Imoukhuede Foundation are launching a Super NGO which will provide funding and talent for transformational government initiatives that deliver much needed value. The Aig-Imoukhuede Foundation and Access Bank Group have pledged $300 million over the next 20 years. Access Bank has committed $200 million and the Aig-Inoukhuede Foundation committed $100 million.

    The Africa-led Super NGO will be established in partnership with academics, experts and philanthropists across the globe who are committed to closing the gap between Africa and the rest of the world. The NGO will work with African governments to provide the funding, governance and talent He invited other businesses to join him in promoting the initiatives. The commitments, spread over 20 years, will fund African governments’ initiatives with proven potentials to transform national economic performance.

    Said Aig-Imoukhuede: “African leaders cannot sit back and watch the 4th Industrial Revolution transform the rest of the world while leaving Africa falling further behind. We have to create our own ‘table’ by using technology to unlock the power of our youth, giving Africa a greater voice in the world. It’s today’s leaders who will determine whether or not we grab this opportunity.”

    The Africa CEO Forum and similar platforms provide ample opportunity for African businesses in general and Nigeria’s companies in particular to deploy the art of business diplomacy to their advantage and to the benefit of the continent. Just as Kigali event was kicking off, Roosevelt Ogbonna, Access Bank’s CEO was speaking at Cannes International Film Festival on the importance of Nigeria’s film industry and the roles of banks in funding the creativity industry.

    Business diplomacy, according to specialists in that area, is the capacity to build and maintain strong relationships with several domestic and international stakeholders to shape and influence the environment and eventually create a favourable business environment and exploit new opportunities.

    It is an important business tool in today’s globalised markets, and its goal is to create and manage efficient networks of information that allow the company to influence the policy environments in their favour and predict future issues.

    This is why key African businesses and their partners have been the major sponsors of the CEO Forum, with the 2024 edition backed mainly by the MTN Group; IFC; Access Holdings; The Coronation Group and the Aig-Imoukhuede Foundation.

  • CBN, fintechs and money laundering – By Etim Etim

    CBN, fintechs and money laundering – By Etim Etim

    By Etim Etim

    An important development that occurred in the financial services industry the other week went largely unreported in the press; perhaps because the media is still engrossed in all the corruption dramas of the last few weeks. On Friday, April 26, Central Bank officials, led by a director, met with the chief executives of major fintech companies in the country and ordered them to discontinue onboarding of new customers.

    The CBN, I understand, has been dissatisfied with the manner with which the fintechs have been handling KYC checks in opening accounts for their customers and is convinced that such loopholes could be or have been exploited by money launderers and terrorist financiers in moving illicit financial resources. KYC (Know your customer) is the mandatory process undertaken by a bank to identify and verify their customer’s identity and address when opening account.

    Periodically, over time, those requirements are reinforced by the banks. I recently had to forward new utility bills to my account officer and perform BVN confirmation just to reactivate an account.

    In addition to the provision of the utility bill by the customer, bank officials are expected to physically inspect the address provided by the customer. But the fintechs don’t have not been this diligent in verifying the identities and addresses of their customers and the authorities are convinced that these lapses could be exploited by the bad guys.

    A fintech customer only has to complete an online form and provide BVN, ID card and address. Among the top deposit-taking fintechs that attended the meeting with the CBN are Opay, Moniepoint, Palmpay and Kudak. Opay has however assured that it is committed to being compliant with all regulations. In a statement after the meeting, the company stated that it will ‘’support government efforts to clean up the financial industry’’.

    The CBN’s order is coming a few months after it directed all financial institutions to collect ID cards before opening accounts for customers, voiding its 2013 guidelines which waived IDs to encourage financial inclusion. The order also coincides with a major crackdown on suspicious bank accounts by the authorities.

    Just last week, a Federal High Court in Abuja granted the EFCC an interim order to freeze 1,146 accounts belonging to persons and organizations being investigated for unauthorized forex transactions, terrorism financing and money laundering. In giving the order, Justice Emeka Nwite noted that ‘’preliminary investigations reveal that the bank accounts are linked to persons who take advantage of the virtual cryptocurrency exchange platforms to illegally manipulate the value of the naira and launder proceeds of unlawful activities’’.

    The reason for all these feverish curbs is because authorities are worried that Nigeria’s fight against terrorism and money laundering has been poorly rated by the Financial Action Task Force (FATF), the global money laundering and terrorist financing watchdog.

    ‘’Nigeria has been grey-listed by FATF as of February 24, 2023 and this is very bad for us as a nation’’, a director at the CBN told this writer last week. South Africa and 22 other countries are also grey-listed. Grey-listed countries are those deemed to have deficient anti-money laundering and terrorist-financing mechanisms.

    There are two categories of grey-listed countries: those that are currently working hard with under FATF monitoring to address the lapses and those that are doing nothing about it for which stiff sanctions may apply. Obviously, our country is desperate to be taken off the grey list. But the hurdles are high.

    The country has suffered severe security challenges in the last 15 years and its currency has undergone significant devaluations in the last one year or so partly due to the trading activities on the cryptocurrency platforms. Nigeria’s inability to arrest financiers of terrorism and the recent escape of an executive of Binance, a cryptocurrency-trading platform, from detention in Abuja are pointers to gaps in the nation’s security framework.

    By ordering the fintechs to discontinue further customer acquisitions, the CBN is hoping to tighten its surveillance on this component of the finance sector. The bank should go farther and scrutinize their books as keenly as they examine the records of the banks.

    Across the world, the fight against financial crimes is not letting up. Financial crimes cause economic distortion, loss of control over economic policy, revenue loss and weakening of the integrity of financial markets.

    This week, the founder and former chief executive of Binance, Changpeng Zhao, was sentenced to four months in prison in the US after pleading guilty to violating that country’s laws against money laundering at the world’s largest cryptocurrency exchange. It is this same level of seriousness that the global community expects Nigeria to apply in its fight against money laundering and terrorism financing.

    Going after abusers of the Naira is good, but the nation will fare far better if big-time criminals are brought to book.

  • Alex Otti’s revelations and the grave dangers of corruption – By Etim Etim

    Alex Otti’s revelations and the grave dangers of corruption – By Etim Etim

    By Etim Etim

    Corruption has been in the news lately, grabbing headlines and seizing national attention. In the week that Yahaya Bello arrayed the police against the EFCC and prevented the agency from arresting him, Gov. Alex Otti of Abia State made startling revelations on the humongous corruption perpetrated by his predecessors. He announced that on assumption of duty last year, he had commissioned one of the biggest audit firms in the country to conduct a forensic examination of the major contracts awarded by his predecessors and the audit reports recently submitted to him showed that some contracts were just fraudulent activities designed to steal money. The governor listed them as N79.3 billion paid to seven contractors for contracts that were not executed at all up till today; another N15.9 billion paid to 63 contractors with no supporting documents anywhere in the state and another N12 billion paid to two contractors for contracts that do exist. Of these, N10 billion was paid in September 2020 to a contractor for the construction of Abia State Airport. ‘’We have spent time looking for the airport, but we have failed to locate it’’, the governor said, indicating that he had reported the matter to the security agencies. To drive home the enormity of the crime, Gov. Oti stated that the N10 billion stolen through phantom airport fraud was the exact amount he spent to clear backlog of salaries and pensions he inherited. Gov Otti’s predecessor, Dr. Okezie Ikoeazu, has denied any wrong doing. In a statement, he says that the airport project was suspended because of community feedbacks.

    I was not particularly shocked by Gov. Oti’s revelations because scams occur almost daily in all the states of the federation and the FCT.  In Akwa Ibom State, an ICT center is lying uncompleted not far from the Government House. The contract for construction was fully paid for, but the job was never done, and the two succeeding governors that came after refused to complete it. Gov. Umo Eno has not even mentioned it. Contract for the construction of a terminal building of the state-owned airport was awarded by another governor and the foreign contractor paid in full. Again, the job was not done. Another governor came, re-awarded it to another contractor, paid handsomely for it, but turned around to create his own schemes, awarding a different set of fraudulent contracts of his own for the building of a toothpick factory and dairy farm. Neither the toothpick factory nor the dairy farm has been found until this day, but the terminal building has made progress, and hopefully, would be completed by the incumbent governor. In neighbouring Cross River State, I am told that a former governor known for ‘olympopo budgets’ was a specialist in awarding illusory projects, fully paid for. Imo State under Rochas Okoracha deserves a book to be written on it.

    Everywhere you go around the country, phony schemes are used as conduit pipes to steal from the governments. The war between the two political gladiators in Rivers State is connected with sharing of the proceeds of contract scams. The incumbent governor’s decision to turn his back on the agreement he had with his predecessor has apparently saved the state billions of Naira. In Kogi, Gov. Usman Dodo is still loyal to his predecessor, Yahaya Bello. He helped him escape arrest by the EFCC. The same EFCC had last year indicted a former governor of Zamfara State, Alhaji Matawale, who is now the Minister of State, Defence, of conspiracy to commit fraud and money laundering to the tune of N70 billion. I’m sure that case has died a natural death. And who is the new governor of Zamfara? He was once a bank executive widely mentioned by the EFCC in the Diezani Allison-Madueke case years ago. These people keep reinventing themselves, from one lucrative job to another.

    The magnitudes and complexities of corruption in government houses across the country, including Aso Rock itself, are bewildering. But it is the standoff between Yahaya Bello and the EFCC that has raised questions about the fragility of the Nigerian state. If Bello could succeed in employing the services of the Nigerian police against the authority of the Nigerian state; and if Gov. Dodo could successfully mobilize a reinforcement of the Nigerian police to spirit Bello out of his home, thus subverting the authority and sovereignty of the state, you can imagine what the governors can do when they have state police. Bello and Dodo have shown how weak, fragile and vulnerable our institutions are and the extent the corrupt ones can go to capture the state and escape justice. A criminal suspect using state apparatus to defeat and embarrass the country shows how far we’ve sunk. Corruption continues to suffocate Nigeria, constituting our single biggest existential threat. It fuels terrorism, banditry, kidnapping and other forms of violent crimes in the country. It denies our people education, healthcare, roads, rails and other amenities we deserve. Corruption, incompetence and decadence in all facets of our national life are the main reasons Nigeria has become a big global embarrassment. It’s never been this bad!

    In 2022, Yahaya Bello wanted to be President. He launched an ambitious campaign for APC presidential nomination in the party’s primaries. Although he scored a paltry 47 votes, his audacity did not go unnoticed. There’ve been speculations that he’s warming up for another bid in 2027. What kind of President will he be? At the federal level, the Tinibu administration is struggling with its own moral dilemma. For awarding a N15 trillion contract for the 700-km Lagos-Calabar highway to Hitech Construction Company (we all know those behind this company and their antecedents in Lagos) without due process, the government has received condemnations from many, including top opposition leaders like Atiku Abubarkar. Many are then asking if the administration possesses any iota of moral rectitude to even raise a voice against corruption.

  • Shareholders remember Wigwe, others at Access Holdings’ AGM – By Etim Etim

    Shareholders remember Wigwe, others at Access Holdings’ AGM – By Etim Etim

    By Etim Etim

    Out of deference and honour to their departed chairman, Mr. Bababode Odunkoya and Group Chief Executive, Dr. Herbert wigwe, shareholders of Access Holdings Plc, declined to scrutinize and comment on the 2023 Annual Report and Account of the company laid before them at the company’s second AGM on Friday, April 19. Instead, they proceeded to approve all the resolutions proposed by the new chairman, Aigboje Aig-Imoukhuede, including raising N365 billion by Rights Issue and amending its memorandum and articles. “Mr. Chairman, I will say that this is a condolence meeting. In honour of our departed Group Chief Executive, Dr. Herbert Wigwe and his wife, Chizoba and son, Chizzy, and in remembrance of our late former chairman, Mr. Osunkoya, we shall not comment on this account’’, said Chief Sunny Nwosu, a revered shareholder in many Nigerian companies. The rest of the shareholders chorused ‘’yes’’.  Osunkoya died of an illness in Lagos on November 21, 2023, while Wigwe, wife and son died in that horrible helicopter crash in California in the night of Friday, February 9, 2024 (which was early Saturday morning, February 10, Nigerian time). Dr. Wigwe’s death shook the nation and the international community, eliciting eulogies and tributes from world leaders like President Emmanuel Macron, President Bola Tinubu, President Paul Kagame, President Cyril Ramaphosa, President Bill Clinton and President Olusegun Obasanjo. This writer was equally devastated.

    AGMs are typically well-choreographed and rehearsed events, but they, nonetheless, provide investors with opportunity to review the report and accounts of their company in the preceding year, examine the performance of their companies and the directors, take the Board to task and ask probing questions on the profitability and returns of the company. In some cases, they could be embarrassing to the directors, especially if the performance is below expectation. But this particular one was clearly unscripted and sombre, and the shareholders were pleased with a whopping 334% jump in PBT from N67.7 billion to N729 billion. The performance was driven by improved gross earnings from N1.38 trillion to N2.59 trillion, an 86.7% jump. By skipping to scrutinize the accounts, however, the shareholders only demonstrated an uncommon sense of moment. Said Mr. Boniface Okezie: ‘’The man who prepared who this report and accounts is no longer here with us. He is not here to respond to our comments and questions. We all like the final dividend of N1.8 per share. But Dr. Wigwe had paid the supreme sacrifice to bring this company to this level. Some of us did not attend his funeral, and so we wish to honour him today’’. A pall of sobriety hung in the air in the cavernous hall at the Federal Palace Hotel, Victory Island, Lagos. If Chairman Aig-Imoukhuede had had an idea of what the shareholders he were planning, he did not betray it.

    To further demonstrate their love and regard for the late Wigwe, the shareholders also proposed to approve all the six special/business resolutions presented by the directors in a single resolution. But Aig-Imoukhuede, a veteran boardroom player, advised against a single resolution to avoid ‘’a procedural hiccup in future’’. He’s right. I know of some companies that have run into problems with the law and regulators for passing different resolutions in a single vote. The shareholders then formally elected Aig-Imoukhuede as a non-executive director and reelected Pastor Olusegun Ogbonewo and Mrs. Ojinika Olaghere also as non-executive directors.  In addition, they overwhelmingly approved  the company’s plan to shore up its capital by to N365 billion, in addition to establishing a capital raising program of $1.5 billion program.  Access Corporation thus becomes the first, of all the 31 banks in the country, take formal and serious steps to meet the CBN’s new minimum capital base.

    At the end of the meeting, the shareholders sang “for he was a jolly good fellow” in honor of Dr. Wigwe, signifying, as one of them said, Wigwe’s formal disengagement from m the institution.

    Other directors present at the AGM were Bolaji Agbede, the acting Group Chief Executive and Roosevelt Ogbonna, who is also the Chief executive of Access Bank.

  • Price war in our skies – By Etim Etim

    Price war in our skies – By Etim Etim

    By ETIM ETIM

    A price war has broken out in a submarket of the nation’s aviation sector, and the passengers are the major beneficiaries. But in the long term, this may hurt the airlines and put the fliers in a bind. A price war or price competition occurs when businesses in a particular industry compete against each other by repeatedly lowering their prices in an attempt to gain market share and drive out competitors.

    Since Nigeria’s carrier, Air Peace Airlines, launched its Lagos-London route over two weeks ago with a drastic slash in airfare, its main competitors on the route, BA and Virgin Atlantic, have announced reduction in ticket prices to levels not seen before. From N15 million for a first -class seat and N5 million in an economy, the two British carriers are now charging over 80 per cent lower in response to Air Peace’s introductory offer of just N5 million for first-class and N1.5 million for economy.

    For a six-hour flight, this was the most outrageous pricing in the industry.  Other carriers like South African Airlines, Morocco Air, Ethiopian and Turkish Air who do not fly direct from Lagos to London have equally reduced their fares. There has never been such a fierce price war in the nation’s aviation business before.

    Allen Onyeama, Chairman of Air Peace, said in a TV interview last week that the foreign carriers are engaging in price war to drive his airline out of business so as to return to their cut-throat pricing.

    He appealed to Nigerians to fly Air Peace, not just out of nationalistic considerations, but also for their strategic self-interest. Price competition is rampant in many industries.

    Notable examples of recent price wars include the 1992 airline price war in the US during which American Airlines, NorthWest Airlines and other US carriers matched and exceeded the reduced prices of one another, resulting in increased sales volume but huge losses.

    There was also the 2020 Russia-Saudi Arabia oil price war which led to a 65% quarterly fall in the price of oil.

    Price wars could hurt the competing businesses as revenues and profits dip; and in some cases, weaker competitors who cannot cope may go out of business by the time prices eventually stabilize at lower level.

    But in this case, if Air Peace is forced out of the London route, the international carriers, which apparently have the tacit support of their home governments, will jack up the fares again, and Nigerians would be the ultimate losers.  This is why we must stand by the Nigerian flag carrier.

    Companies that typically win price wars are those with better cost structures and widest profit margins. Among the three – BA, Virgin and Air Peace – the British carriers have deeper pockets and can cope better with the raging price war.

    This war will last for the remaining part of the year, but I suspect that the British authorities will employ other tactics to frustrate the Nigerian flag carrier and weaken its resolve and resilience. The British carriers may also continue in the fight by lowering the quality of inflight services just to cut costs.

    By entering the market with impressively high standards, Air Peace has captured a good size of the market. Its mostly Nigerian passengers are clearly enthusiastic about its offerings, and from all indications, the Nigerian carrier is currently enjoying overwhelming home support from both the public and the government.

    But it is not enough for the airline to rely on emotional nationalism alone. The airline should create loyalty programs to keep its customers. Many passengers have also accused Air Peace of price gouging and price discrimination in its domestic routes, especially during the peak seasons of Christmas and Easter holidays. The airline has a responsibility to be fair to its domestic passengers too.

    On a final note, competent management and good corporate governance are important for the success and sustainability of any business. Many family-owned Nigerian businesses have failed to thrive once the founder is no more.

    For how long will Air Peace remain as a one-man business? With the rapid expansion and growth of the airline, Onyeama may consider bringing it to the capital market to open up the business for wider ownership, more diverse management, good governance and market discipline.

    He should also fortify the airline’s communication portfolio with competent professionals so that he will appear less and less on TV, and cede that responsibility to others.

  • How Aig-Imoukhuede Foundation saved me from a difficult situation, Yemi-Esan – By Etim Etim

    How Aig-Imoukhuede Foundation saved me from a difficult situation, Yemi-Esan – By Etim Etim

    By Etim Etim

    The Head of the Civil Service of the Federation, Mrs Folashade Yemi-Esan has spoken of how Aig-Imoukhuede Foundation saved her from unexpected difficulties associated with the passage of her budget by the National Assembly when she was appointed to the position in 2019. At a public event recently in Abuja, Mrs. Yemi-Esan observed that but for the intervention of the foundation, she would have had a very difficult first year in office. ‘’We have been able to do a lot in the last four years, but it was not easy initially’’, she said in a sombre tone to a packed audience of Nigerians and foreigners.

    She said: “I became Head of Service in 2019, just before the budget process closed, and so I went to the National Assembly to get our budget approved. But while waiting for our budget to be passed, Mr. Aigboje Aig-Imoukhuede came to see me in the office to congratulate me on my appointment. He briefed me on his foundation and its initial contacts with the Office and the teething problems it had encountered, and noted that the foundation was desirous of moving forward on the partnership. He then proposed to give technical assistance to the Office of the Head of Civil Service of the Federation (OHCSF) and support the digitalization of the Office.’’ ‘’I just want to make a difference in the work you do’’, Yemi-Esan recalled Aig-Imoukhuede telling her in that meeting.

    The Head of Service and her team and the foundation thereafter signed an MOU to digitalize the work of the OHCSF and this involved the foundation providing the resources, funding, technical assistance and the vendor to digitalize the operations and activities in the OHCSF. ‘’I told Aigboje, ‘We don’t need your money. Don’t give us money. Just ensure that you implement the program to the letter’, Yemi-Esan recalled. The foundation placed adverts in the newspapers, selected vendors and paid for the software; and thus began a complex and difficult process which sought to replace manual and paper-based operations with automation of the processes that enables civil servants to work online from any part of the world without dealing with physical files.

    ‘’So, with the support from the foundation, we were able to continue our in work in spite of the difficulties we experienced in getting our budget approved. The foundation saved from us from a very difficult situation’’, she said, adding that the digitalization program has succeeded far beyond expectations and the technical support from the foundation is huge. ‘’Everybody around me has been touched and the mentorship is superb. As busy as Aigboje is, he makes out time to meet with us regularly’’, she recalled.

    The foundation believes that only an automated public service manned by well-trained professionals can deliver development in Nigeria. Its MOU with the OHCSF therefore contains shared responsibility in reforming the civil service with the digitalization program at its core. To achieve this, the foundation plays multiple roles including providing funding, project planning and management, vendor management and capacity building, project quality assurance and stakeholder management, while the OHCSF makes its staff available to participate in trainings and project implementation; provides devices, internet and power to enhance digitalization. A steering committee of both organizations is responsible for oversight and monitoring. It meets regularly to review progress and deal with hiccups.

    An integral component of the program is focused on changing the mindsets of civil servants to accept automation as a new way of life, and this entails advocacy, change management, project management, stakeholder categorization and management. The overall objective is to make the civil service more efficient and resilient to deliver quality service. As in many projects, there have been many hurdles and this include lack of standard operating procedures, insufficient devices and poor funding, high level of digital illiteracy, poor internet connectivity, poor power supply, absence of guidelines on use of personal IT devices, lack of official email addresses and poor email use culture for those who had. But both parties have been determined to scale them as they arise

    So far, the outcome has been outstanding. The digitalization program has positively impacted on the work of the 1,100 civil servants in the OHCSF, and in addition, it has impacted the work of the MDAs who can no longer take physical files to the OHCSF, but have to mail them electronically. Gushes Raymond Uwaenyi, Director, Human Resources Management at the OHCSF, ‘’the automation by the Aig-Imoukhuede Foundation has made my work faster and easier. It makes filing and references to materials in files far easier than it’s ever been. I can easily track any file wherever it has gone; you’ll be able to follow up to know if there are any challenges right where you are sitting’’. Uwaenyi recalled even when he travelled out of the country recently, he was able to keep working ‘’because the materials and information I need are always on the ECM (the enterprise content management system’’.

    The multiplier effects are palpable across the bureaucracy. Says Chioma Njoku, the foundation’s Director of Programs. ‘’Civil servants in the OHCSF and across other MDAs have had to learn to document their standard operating procedures, learn to use Microsoft software, get more comfortable with technology and learn to use the ECM solution platform’’.

    Last June, President Bola Tinubu sent a thank you letter to the foundation for its contributions, but as Mrs. Ofovwe Aig-Imoukhuede, its executive vice chairman, says, the work is not yet done.  She chimes, ‘’our long-term goal is improved efficiency in the civil service both at the federal and subnational levels. We want to see a Nigeria and Africa where automation drives governance, the public sector works efficiently and effectively, and is responsive to changes and the public they are called upon to serve’’.  So far, the foundation has spent over N500 million on the digitalization program.