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.