Jonathan’s second coming

As expected, President Goodluck Jonathan swept to a resounding victory at the April 16 presidential elections on the back of a most robust campaign, the incumbency factor and an undeniable sentiment that a member of an ethnic minority group should occupy the top job for once.

Of course, the senseless killings in the North orchestrated by certain disgruntled members of the elite, have sullied this historic moment but the expectation is that the Nigerian state security machinery will quell the disturbances so we can move on.

Nonetheless, the task before Jonathan, who will come into office in his own right rather that as an “accidental” president, is largely to rebuild the national economy and place Nigeria on the path of achieving true greatness by redirecting our fortunes from being a huge nation of dependency prone consumers to a producer nation and an economic power house in the ranks of China, India and Brazil.

It is about taking the right decisions and placing the right people in the right positions to do the job. It is about bringing efficiency to the public service, it is about curbing waste and corruption and holding people to account for their actions.

To me, it is in Jonathan’s advantage the he chose (or was forced to accept) to run for a single term. It will be difficult for the PDP stalwarts to blackmail him with the denial of a second term to get him to do their bidding. That is, if he does not change his mind as the 2015 general elections approach.

In re-engineering Nigeria’s economy, Mr. President’s in tray must necessarily consist of the must-do’s concerning the economy.

Power sector reforms; mass transportation, reform of the oil and gas regime with emphasis on local content development; development of the non-oil sector; active intervention in the industrial sector with all necessary incentives including tariff regime review, a ban on importation of non-essentials, cutting the cost of government overheads and most importantly a significant pull-back on fiscal dominance are required to end the counterproductive consequences of government’s actions and inactions.

Luckily, Jonathan has a fairly firm foundation upon which he needs to build. National GDP growth has defied the global recession clocking a healthy seven per cent plus growth in the last two years, even if largely driven by oil prices.

The non oil sector contribution to export revenues is also on the uptick. Specific government intervention in the agricultural, industrial and aviation sectors is providing concessionary priced loans for sector operators, but the government will need to work with the CBN and financial sector players to create conditions that will facilitate the pooling of longer terms funds for productive sector activities especially the SMEs. That is the shortcut to wealth and job creation on a large scale that will take our youth off the streets.

The massive depletion of the nations’ foreign reserves under Jonathan’s watch in 2010 does not convince a lot of local and international observers about the ability of this government to manage resources.

The monthly vicious cycle where government earns dollars, converts to naira, shares it to the three tiers of government and floods the market will excess funds which the CBN will have to now “mop up” with treasury bills issuances at a cost to the same government hardly make any sense. Huge spending by government also accounts for the inflationary pressures and the headaches the CBN faces each week trying the keep the naira stable at the expense of foreign reserves accruals.

Jonathan was confronted with these issues during his campaign and has promised to something about it. We hold him to his word.

And the simple way to go about this is to trip the size of the government. This is a huge problem in many large democracies where government seems to be expanding at the same rate efficient delivery of services diminishes.

In the case of Nigeria, the scandalous salaries and perks attached to government offices and the practice of appointing scores of special advisers and special assistants on all subjects including “domestic affairs” and to the same portfolios which cabinet rank ministers is what attract politicians to office. Such duplication of functions runs down the entire gamut of the public service, yet noting seems to move.

The Revenue Mobilisation Fiscal and Allocation Commission Allocation will need to review pay for political office holders in a way that narrows the gap with the income of other equally important economic players.

What Nigerians would like to see going forward is that the Jonathan administration exercise restraint on government spending and save more.

Admittedly, this government has also shown some determination to get the power issue resolved once and for all through the power sector privatisation programme being implemented by the Bureau for Public Enterprises.

The Obasanjo administration attempted a massive reform of that sector that cost billions of dollars without improvement in power generation.

Jonathan should not repeat the same mistake if he would not be regarded as just another seat warmer at Aso Rock at the end of his tenure.

Okereke-Onyiuke, SEC and due process

Friday’s verdict by a Federal High Court sitting in Lagos which upturned the purported removal of erstwhile Chief Executive Officer of the Nigerian Stock Exchange, Prof Ndi Okereke-Onyiuke has perhaps reinforced the need to follow due process in all things Nigerian.

In a country, where the culture of impunity holds sway, there is always the temptation to do things with little recourse to legality of such actions, especially where the balance on convenience is tilted on the side popular sentiment and opinion.

There was little or no doubt that by the time of Okereke-Onyiuke ouster by the Securities and Exchange Commission on August 5, 2010, a leadership change was long overdue at the NSE.

The NSE was certainly on the verge of collapse having being dubbed the worst performing stock market in the world by rating firms on account of the massive share price crash that signalled a market correction after the exchange was turned into a bazaar by rouge bankers and crooked stockbrokers who conspired to manipulate prices for months on end.

The former Director General of SEC. Mr. Musa Al-Faki did warn of worrisome goings on in the market but Okereke-Onyiuke, then, at the height of her power as the topmost woman in corporate Nigeria, with the ears of Mr. President, told him to shut up.

The size and scale of insider deals by banks on the market led to accusations that the NSE was in the least tacitly complicit in the sleaze the pervaded the market.

The NSE DG had also courted trouble with her ill-advised “fundraiser” for United States President Barrack Obama during his presidential campaign, an action that led to an inquiry by the Economic and Financial Crimes Commission operatives and an order to refund of the monies raised.

Her dual role as NSE DG and Chairman of Transcorp Plc, a company quoted on the Exchange had also raised a lot of dust but she held on.

So when, Aliko Dangote, then president of the NSE, who was also removed by SEC, fired his damning petition alleging mismanagement of NSE funds, SEC seized the opportunity to nail her, and sent a detachment of policemen to evict her from her office.

While SEC based its decision on the new agenda of restoring confidence and integrity to the markets, the propriety of that action, executed without the former CEO being given an opportunity to defend the allegations, is what the court has condemned in its judgment.

As Justice Idris said, “it is indeed ridiculous that SEC removed the plaintiff within 24 hours, based on bad and unverified allegations and it is not in doubt that SEC did not comply with the condition precedent in removing the plaintiff.

‘‘SEC thereby acted in breach of section 308 of Investment and Securities Act (ISA) and therefore, her removal based on the said section is a nullity.”

In awarding a huge N500m in damages, the court only reinforced a rather cliché phrase - two wrongs do not make a right.

As expected SEC has signified its intention to appeal and pointed out that the court did not refer to the allegations of fraud and misconduct levelled against Okereke-Onyiuke, but one is tempted to ask why SEC has not been able to build a strong case that might warrant the woman’s prosecution in spite of the grave allegations thrown up by the forensic audit into the NSE’s affairs commissioned by SEC.

I am certainly no fan of the ousted NSE CEO, whose otherwise brilliant career as the first woman to head the NSE was sullied towards the end by her apparent inability or unwillingness to stem the rot on the market, but we must not lose sight of the fact that her removal should have followed the terms of her appointment.

The fact that till date no successful challenge has been mounted against the Central Bank of Nigeria’s sack of seven bank chief executive officers in August 2009 on similar accusations of fraud and mismanagement of their respective companies shows that the CBN had a proper understanding of its operating manual.

One must also emphasise that the problems with adherence to due process especially when it comes to enforcement of contracts in one of the major disincentives to investments in Nigeria today and why the nation still wallows at the bottom of the World Bank’s Doing Business Index year after year.

Regardless, as the market regulator, SEC still has a lot of work to do in bringing to book those brokers and other actors that conspired to manipulate that market and took huge profits while millions of retail investors, including pensioners who had put their gratuities in the stock market were left holding worthless pieces of paper when the dust settled.

Scores have been hauled before the Investments and Securities Tribunal, but what has become of the cases?

Investors are worried that the market is yet to pick up as expected despite the release of strong results by banks which means that SEC and the newly appointed Council members of the NSE really have a lot on their plate.

Nigeria's northern elite at it again

The bloody riots that broke out in parts of Northern Nigeria shortly after it became clear that incumbent President Goodluck Jonathan had won the April  16 elections point to a well-orchestrated show of shame by the Northern elite, who insist that it is that power must return to the North.

Emir's palaces, INEC offices and private property including the vice-president home have been destroyed in Kaduna, Yobe, Bauchi and Kano.

The so-called protesters are largely the uneducated, poverty stricken and misguided youth that are usually directed at Southerners and their assets whenever the Northern elite have "grievances" to settle.

Both local and international observers report that Jonathan won fair and square simply because the PDP campaign was well-funded and robust, while Buhari could not even reach all the states.

While most Nigerian do not really care where the next leader comes from as long as he can deliver the elusive dividends of democracy, Jonathan deserves an opportunity to prove that he can be his own man.

Being the first person from the much-marginalised South-South region to ascend to Nigeria’s presidency, history will judge his harshly if he turns out to be a failure.

The Northerners are fomenting a revolt because their failure to secure the PDP ticket at the primaries.

This sort of treasonable actions will only stop when those who send the poor to the streets to kill and main while they hide behind the high fenced mansions, with children safely at of harm’s way in Europe or America, are brought to justice.

How not to develop the tourism sector

How not to develop the tourism sector

I could not help but wonder how the Economic and Financial Crimes Commission got itself involved in the strong arm tactics being employed by the Nigerian Tourism Development Corporation to get hotel owners to register with it ostensibly for security reasons.

The NTDC, charged with promoting the tourism sector and developing its potential as a huge source of non-oil revenue and an avenue for job creation has been engaged in a long running battle with hoteliers over this registration matter and has actually closed down some hotels in Abuja for failing to pay certain operational fees levied by the parastatal.

It could be argued safely that the NTDC is merely doing its job, after all, the NTDC enabling Act Decree 81 of 1992 (now Cap 137 Laws of the Federation of Nigeria, 2004) empowers the corporation to regulate, register all operators of hotels, motels, resorts, restaurants, eateries, travel and tours, tourism consultants and other hospitality and tourism outfits in Nigeria.

The focus on hotels is understandable as they form a critical part of the tourism value chain just as airlines, travel agencies and tour operators, restaurants, theatres and clubs, taxi drivers as well as security agencies.

While there is no denying the fact that the NTDC under the present director general, Otunba Segun Runsewe has been quite active in drawing attention to the sector and has partnered with both private and public sector entities in the attempt to move the industry forward, getting the EFCC to threaten hotels with closure for failing to supply certain information within two weeks starting from April 4 appears rather drastic.

The problem appears to be that while the NTDC wants to assert its regulatory role in the operations of hotels with the added advantage of increasing its revenue base from levies imposed for licensing fees and renewals, the hoteliers are resisting the on the grounds that and they are already groaning under the yoke of multiple taxation since they also pay levies and charges to local and state governments, which even the government admits account for up to 30 per cent of costs.

For sure, getting a data bank of hotels and other similar establishments in Nigeria is a basic function of the NTDC and I cannot imagine any reputable hotelier that would want be left out, but with some states such as Lagos insisting that they have the power to license and regulate hotels in their respective jurisdictions puts the hoteliers in a quandary of sorts.

Indeed, Lagos State just a few weeks ago asked hoteliers in the state to ignore the NTDC as they were subject to its Hotel and Licensing Amendment Law of 2010 and the Hotel Occupancy and Restaurant Consumption Law enacted in 2009.

A government spokesman argued that the state had provided the enabling environment to enable to tourism to thrive and by implication, should reap the benefits of its investments.

However, the EFCC, ever ready to take to spotlight, claimed that its investigations have shown that hotels that refused to provide information were criminal establishments used to perpetrate all sorts of crime. It said over 3,000 hotels nationwide were either not registered with the NTDC or had no signboards making their identification difficult.

It is therefore going to embark on a massive operation to comb for hotels in this category and close them down.

It must be admitted that the EFCC while claims cannot be discountenanced given that hotel patrons with criminal intentions can hide their identities, a blanket condemnation of those not on the NTDC list may be misplaced.

I think the case should be made for the states to handle to hotel registration matter being closer to the ground as it were. The information gathered can be filed with the NTDC.

If it a revenue issue, the revenues collected can be shared between the NTDC and states so that the hoteliers who need to contend with all manner of costs associated with running business in our infrastructure deficient environment will not be overburdened especially under a new tax policy regime that seeks to eliminate multiple taxation.

It should also be noted that the Federal Government filed an action last August before the Supreme Court seeking a determination of which tier of government should regulate hotels and allied establishments which is yet to be heard.

Going forward, however, the NTDC needs to partner is a highly proactive manner with other stakeholders in the tourism sector to enable Nigeria reap the benefits of the abundance of tourism sites and destinations which remain largely undeveloped apart from the big five-star hotels in big cities and small beach resorts.

The Tourism Master Plan, which has recommends among others the development of the five identified tourism clusters; encouragement private development of private three-star and boutique hotels; investments in tourism sites; development of a national cultural calendar; protection of national parks; increasing security nationwide and branding and marketing Nigeria as a prime tourism destination to the global market appears to be gathering dust.

This should be the focus of the NTDC.