A rough idea on funding infrastructure

A rough idea on funding infrastructure….

In addition to all the reasons espoused by Dr Nonso as to why this $30b loan request by the FG is a no-no and that the senate was right to say no, my personal grouse is that this government suffers from trust deficiency when it comes to economic management. In addition, Nigeria’s governments at all levels have proven to be inefficient allocators of capital. There have been little instances where the government has successfully intervened in sectors and have been prone to interference. Finally, the election cycle of governments incentivises short-term decision making which, if our history is anything to go by, near guarantees that the infrastructure projects that this loan will be spent on are likely to be influenced by political considerations rather than economic productivity expediency.

Given the above, I have this rough idea on how we could potentially navigate these Achilles heels. The idea is centred on exploring the ‘off balance sheet’ concept. Nigeria’s government finances are in dire straits, our debt to revenue ratio is atrocious so adding more debt to an already overburdened revenue profile doesn’t seem smart to me.

We can avoid all of the inefficiency, debt burden and potential politicisation of the selection of infrastructure projects if we turn the Nigerian Infrastructure Fund into a Special Purpose Vehicle (SPV) that is listed on the Nigerian Stock Exchange (NSE) but with the same vision and mandate. The government’s current holding in the Fund can be turned into equity. The NASS can legislate that the government must not hold more than 15% of the equity of the Fund. Given the strategic nature of the SPV, government can through the NSIA have a non-executive director on the Board of the SPV. The management of the SPV can then source for capital, raise debt from the financial markets as it deems fit to finance its projects. So rather than the FG looking for $30b to invest in infrastructure, it’s the SPV that will do this. The SPV could source for funding or enter into strategic partnerships with multilateral organisations like the IMF, AFC, IFC, World Bank, China EXIM etc.

NSE’s listing rules will apply to the SPV. Nigerians will be able to buy shares in the SPV directly, Pension Fund Managers (better than Fashola’s plan to raid pension assets)will also be able to buy shares or debts issued by the SPV. Foreign investors will be able to do likewise too. The SPV will pay dividends and interest on issued debts like a normal company would. Whilst Nigerians may be charged tolls or some other fees for using the infrastructure projects owned by the SPV, they can get this back through dividends or coupon payments.

Of course the initial executive management of the SPV will be influenced by NSIA but can be done in an open and transparent manner. Over time this will change as the broad shareholder base vote for subsequent management changes. As per normal listing rules, the SPV will need to publish audited accounts, release regular trading statements and provide guidance on the company’s financial performance. The current opacity of getting project details from government will be avoided as transparency will be inherent. The management of the SPV can have an endowment type mentality where its focus will be on generating healthy and steady long term returns. This will provide steady long term strategic vision with aligned implementation and efficient allocation of capital. The SPV can issue debts with long maturities say 25 years+ which should also help deepen our local corporate debt market.

The NSIA lacks real funding to make any meaningful impact, going down this SPV route can potentially unlock this.

The above is a rough idea I think has leg to run.

Written hurriedly, errors regretted.

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A rough idea on funding infrastructure

Profiling PresidentNG for 2019

The Presidency is an institution, an institution granted executive powers by our (dysfunctional) constitution. The duty of the necessary bureaucracy of government is to serve that institution as the institution serves the public and to ensure that certain aspects of the institution cannot be abused by the occupier of the office. Whilst the doctrine of separation of powers in a democracy exists as a “check and balance” measure that aims to prevent one branch of government from abusing its powers, the effectiveness of this doctrine can only be as strong as the quality of the members of the various branches of government. However, what can other branches of government do when the constitution of a country grants the Presidency outsized powers relative to other public executive offices? How will the Presidency check itself from abusing others?

For example, should Nigeria continue to fuse the office of Attorney General of the federation with that of the Minister of Justice? With the Ministerial part of the fused portfolio being a political appointment, can they really operate independently of the Presidency in its mandate as AG to pursue fairness of justice for all? Can a fused office provide both legal advices to the Presidency whilst also making decisions that are binding on the same government as AG? More recently, a separate Attorney General will be defending the CJN and other judicial officers in the Presidency’s DSS onslaught on judicial officers but with our approach being a fused one, the office is conflicted and neutralises the checks and balance offered by separation of powers!

In this article, I mentioned the need for us to create a profile for the Presidency and hence a job description for prospective Presidents. I argued that by creating this profile, some candidacies will become non-starters as the profile will readily rule them out of the running leaving us to get on with the serious duty of electing a fitting President by only considering high quality candidates. I also argued that the Presidency profile should be broadly based on inclusion under three overarching categories: political, economic and social. Subsets of these three categories can then become the basis of the President’s job description. We could potentially apply this vetting framework to any public executive office.

What do I mean by economic, political and social inclusion?
A lot of inhumane atrocities and discrimination passed off as ‘culture’ has been committed in our country over the years. Even if it is indeed culture, this is the 21st century and culture by nature is evolutionary so some practices like female genital mutilation, child marriages, inadequate support for disabled persons, gender inequality are all social imbalances that the Presidency should be concerned about on an ongoing basis until appropriate mitigating laws are passed, policies implemented and desired outcome observed and a new more-socially-aware culture becomes mainstream. In vetting Presidential candidates, we should seek to ensure that candidates have a sound grasp of the gaps in our laws; have clear understanding of required policy changes but importantly also have demonstrable history of advocating for a socially aware society and experience of successfully implementing same in their area of career expertise.

As has been written several times by a plethora of political commentators, Nigeria is suffering from a political crisis – a crisis that dates back to pre-independence and has afflicted both civilian and military administrations. With hindsight, we now know that the way the British divided Nigeria and handed it over on independence was a ticking political time bomb. As surely as night follows day, the country has been in one form of political crisis after another ever since the first coup in 1966. We know that we cannot continue to pay lip service to federalism. We need the Presidency to pursue and fully implement all aspects of federalism. The President must realise and act like s/he is the President of all of Nigeria and not just their party or those that voted them into office. Candidates for President must be able to articulate what our fault lines are and have a clear strategy of reducing the fault lines in an equitable, fair and just manner. Candidates for President should have demonstrable and independently verifiable history of being bridge builders, promoters of one Nigeria whilst restructuring the nation in a manner that gets every division to buy into the vision of actualising a Nigerian dream. Candidates for President should be able to enunciate the imbalances in our political institutions, structure and establishment. Candidates should have clear and implementable ideas for dealing with our imbalances with the aim of reducing it, allowing for dissenting views and the need for political opposition whilst appreciating historical grievances and their relevance to moving our nation forward.

We need to clarify the default ideological views of candidates on the rule of law. Is it sacrosanct to them? Will they respect it? What demonstrable history do they have of respecting the rule of law? What is the candidate’s ideological position on corruption? How do they believe it should be tackled? Who do they believe should be tackling it? What are their views on using the carrot or stick approach to tackling corruption – more stick than carrot or vice versa? What does the candidate know about our political history? What is their default ideological view on how we should be politically structured? Why do they believe this is better for us as a nation? What in their history demonstrates consistency with this view? If there have been ideological changes to their view over time, what instigated the change in view? Have they read the various Confab Reports and what is their view of it? Do they intend to reinvent some wheels? How do they intend to go about implementing their ideological views on our political structure? What is their view of security and policing structure? What is their view on establishing state police? If they believe in it, what implementation timeline will they commit to? What hindrances do they foresee and how do they hope to navigate these? What issues have candidates identified with our Constitution? Why are they issues? What are the solutions to these issues? Are their solutions visionary and ideological or practical and only provides short term respite? Can the solutions be implemented within a reasonable time frame? What is their view on the cost of governance? What changes would they propose and at what level? How would they go about securing universal buy-in from all arms of government and the public? Do they have demonstrable and independently verifiable history of implementing structural and strategic change?

Typically, citizens in a country practising the democratic system of governance reward political parties that meet their needs for jobs, earnings, security and a decent living standard with more tenure in public office. This implies that the point of political power should be to improve the living standards of citizens as well as their aspiration for growth and development. Political power becomes unstable in an environment of declining economy. The foundation for our country’s recent recession was laid year’s prior to President Buhari’s tenure. No matter what the current government says, this recession was not inevitable – slower growth and development were, but the recession could and should have been avoided with better policy reaction. Besides being in recessionary environment, the level of human development, income & economic inequality in Nigeria is at crisis level. UNDP, World Bank, Ease of Doing Business and our own official Statistical data show that the trends are getting more worrisome. The Presidency as an institution must make economic inclusion a key and permanent policy focus. Our economic challenges require that those in leadership positions need to have excellent knowledge of economics and investing for growth and development. To this end we must ensure that candidates for Presidents have the required level of economic knowledge that will be useful in this regard. Candidates must clarify their view of markets and the role of the financial market. Where on the economic spectrum is their belief system? Are they philosophically inclined to free-markets or have preference for a planned economy? What is their view of the role of monetary authority and policy in the economy and its independence? What is their view of the role of fiscal policy and what policies do they intend to pursue in that regard? What is their view on currencies and what role will the exchange rate play in their overall policy strategy? What is the candidate’s opinion on sources of government revenue in relation to taxes and extracting resource rent? What sort of economic growth do they want to pursue – export led or more emphasis will be on import substitution? How does this fit in with fiscal policy? Do candidates have demonstrable business experience that shows appreciation for issues facing businesses in Nigeria? What sort of economic or business relationships have candidates cultivated over the years? Are these relationships aligned to proposed manifesto promises? Can we observe philosophical alignment between the candidate and their network of connections? Does the candidate have demonstrable experience of creating and managing a team of experts and have delivered positive/desired outcome? Has the candidate’s ideology on economic system been longstanding? Have there been any changes? When did this occur? Is there an empirical, intellectual and rigorous basis for this change or was it just politically convenient?

What am I getting at?
We need Security Reform, Judicial Reform, Education Reform, Healthcare Reform, Gender Reform, Industrial Reform, Political Reform, Governance Reform, Economic Reform, Technology Reform, Census, Welfare Reform basically there’s so much to do and the rest of the world isn’t waiting for us that we run the risk of being permanently left behind. We cannot afford to be distracted by partisan considerations that perpetuate the sorry state we’ve found ourselves and that keeps the worst of us in the corridors of power or make it impossible for the best of us to deliver when they find themselves near power. The solutions to most of our challenges exist in the world, we just need to copy and implement right. We need to elect those that understand complex political and economic models with the empathy and resolve to apply it successfully.

#PresidentProfileNG

Profiling PresidentNG for 2019

Nigeria’s fiscal policy opportunities

Our current dalliance with democracy has been going on for 16+ years. That is a lifetime in politics. Given that our structural imbalance has been a challenge for even longer and remains substantially unchanged, it is extremely annoying that President Buhari and his government remain largely lacking of strategic short, medium and long term solutions to our challenges. Whilst it is true that APC as a party was unprepared for governance, those elected at the very least have had 16years to fine-tune their ideas or fraternise with those that have ideas. To now have a federal cabinet lacking ideas is quite frankly irksome given the goodwill enjoyed by this government when it assumed office in May 2015.

President Buhari was presented with a huge opportunity to reset our economic, political and social structure, an opportunity that even small (positive obviously) policy changes would have had meaningful impact. The President has the opportunity to change our approach to the fiscal side of policy at all levels of government. The possibilities are plentiful:

We can be a low tax economy. CIT at 10% or lower for the FG, States can bolt on their own CIT rate. VAT need not be as low as it currently is at 5%. FG can collect 5% VAT with States and even LGs bolting on their own. States can compete for businesses through tax or other infrastructure. So States with better infrastructure will be able to get away with charging higher business and consumption tax. Nigeria can become the destination of choice for international corporations looking to set-up in Sub-Saharan Africa. Like Ireland has done in Europe, Nigeria can do same. We’ll need to sort out our education sector though but there are enough young people to employ to make it attractive. Like India did with technology, Nigeria can do same with the recent ZuckPress on NigeriaTech. Government can use fiscal policies to induce global corps to set-up shop in Nigeria as their African hub. Whatever is given up in CIT can be made up with PAYE. Our PAYE seems competitive at current levels so little need for downward review in my opinion.

Government can devise fiscal policies that stimulate exports and incentivise Nigerian companies to be globally competitive. For example, the FG can grant CIT relief on a sliding scale that is linked to export, number of Nigerian employees and the volume of returned exported goods and if service, foreign customer complaints. So Dangote could get 0.5% CIT relief for every 100k Nigerians he employs, 0.5% relief for every $1bn of exported cement up to a maximum of 2% (so gets the 2% relief if he exports more than $4bn worth) and 0.1% charge for every $10m of returned cement. The foregoing assumes the nonsense that is the “Pioneer Status regime” is scrapped permanently across all sectors. I prefer giving relief to economic activity ex-post (e.g the relief could be claimed on a three year cycle ex-post). This focus on export and job creation will need to be matched with reforming our customs process so that goods are processed in double quick time by linking their pay to the volume rather than value of goods they process. Checking that the quality of products (by industry regulators like NAFDAC) meets the requirements of foreign trade agreements would need to be done before goods ship out of factories. This will intensify and place the cost of low quality product squarely on the shoulder of manufacturers as they won’t want their warehouses clogged with defective goods. The pay of industry regulators too could be linked to returned exported goods that they passed as having met quality standard by reducing their pay accordingly.

Government can also use fiscal policies to incentivise manufacturers on import substitution rather than through monetary policy or currency manipulation. For example, manufacturers like Cadbury could be incentivised through CIT relief to use more of Nigerian cocoa than imported cocoa (I don’t know if Cadbury’s imports cocoa just using it as an example). The amount of relief obtained can be linked to the level of import substitution.

Given how competitive and integrated the global economy is becoming, the need to continue to find ways to innovate and improve productivity to ensure a nation not only retains its share of the world economy but also increase it is forcing governments to think of smarter ways of organising their affairs. Serious governments (eg UK’s Civil Service Reform plan 2012, Singapore’s Public Service Development 2011 etc) are reforming public service to support and promote the private sector and local economy by finding new ways to get more for less. As we all know, our governments and budgets have been burdened with huge personnel cost and ghost workers for years. The amount we spend on civil servants given the output does not indicate value for money. Personally and if I were President Buhari, I’d spend a considerable amount of political capital on forcing the civil service commission to place every federal civil servant at risk. That is everyone should reapply for their job. Prior to doing this, I’d request the World Bank in conjunction with one of the Big 4 consulting firms to review and advise the FG on what the size of the federal civil service should be given our current revenue challenges. Upon completion of this review, I’d ask the Commission to create new higher minimum qualification (educational and non-educational) criteria to be used for a merit based reappointment of civil servants.

If President Buhari and his cabinet continue to struggle for ideas, they can steal ideas from our most recent decent economic team. They can go back to implementing the NEEDS, SEEDS and LEEDS economic programme initiated under President Obasanjo. The programme was well on its way to making meaningful impact. Dr Ngozi Iweala’s book on “reforming the unreformable” describes the programmes successes and challenges in detail and how it can be improved on and moved forward. This will be like giving expo to a student before sitting for an exam. If they can’t be original with ideas, they also can’t struggle with copying best ideas or can they?

As I’ve argued previously, President Buhari should not be dragging economic policy with experts. Not when he is struggling to deliver excellent public goods/services. The output from his own sector cannot be so underwhelming yet he’s spending time dragging the quality of output from the private sector. The private sector is needed to pull us out of this recession, but that is a very short-term focus. The public sector needs to be operating effectively and efficiently first and foremost and that includes letting go of what should be in the remit of the market and letting economic data determine policy thrust.

UPDATE

The best thing about changing our approach to fiscal policy or any of the above is that it is cheaper to implement when compared to the nonsensical monetary manipulation that has been going on with currency and CBN. Government would not require to go cap in hand to IMF or other multilaterals for borrowing. Yet, it is the very measure our saintly President is dilly dallying on.

Nigeria’s fiscal policy opportunities

Thinking ahead of the 2019 election

A positive outcome of the current awful presidential term is that in 2019 anticorruption will not be the anchor of any campaign. President Buhari has clarified to all that incompetence is more debilitating than corruption on a nation. There’s nothing worse than fighting corruption incompetently. You don’t only make corruption worse, you also run a greater than evens chance of halting economic activity and making growth anaemic.

Therefore, between now and 2019, we need to come up with a list of competences that we will use to assess anyone that seeks elective office especially the Presidency. APC successfully made the 2015 election a referendum on Goodluck Jonathan. That presupposes Goodluck Jonathan’s government as a qualitative benchmark for what good governance is. We will only be playing ourselves if we repeat the same in 2019. President Buhari and his government will not and should never be the benchmark by which we must judge whichever actors parade themselves for the presidency job in 2019. Our yardstick of who should be worthy to be our President must go above and beyond the last occupier of the office. By defining this yardstick, shallow but ambitious candidates will readily rule themselves out of the running and not abuse our collective sensibilities by still picking up a form. We also need politicians that have demonstrated without any shadow of doubt, that it is Nigeria before self. We need politicians that will find it worthy to sacrifice their personal ambition if it means the greater good for all of Nigeria.

In my opinion, beyond any other specialist skill that a candidate may have in 2019, we need to ensure that potential candidates have demonstrable capacity of political, economic and social inclusion. This is especially important given the powers vested in the President and the Executive arm of Government by our Constitution. We cannot afford to vote for anyone that has strength in one but weakness in others. Whoever offers him/herself up for President must be strong in all three areas. By strong, I mean we should be able to award them a 70% pass mark after vetting them during the primaries and general campaign. To get 70%, they must demonstrate consistency in any capacity they’re claiming as supportive of their candidacy. The consistency will demonstrate that they are principled. It will demonstrate that the public should expect fewer policy flip flops. Why is this important?

Nigeria’s problems are longstanding, structural and strategic – meaning that the solutions are equally longstanding and structural. There’s been no significant reduction in our problems over the years despite the significant cost – human and capital – expended by successive governments. We are still deficient in the same areas, still running a patrimonial society, governance is still based on patronage and government revenues are still based on resource rent. Ideally, on a principles and structural basis, our political elites shouldn’t really be flip flopping on policy rhetoric because the circumstances haven’t changed, all new information are still confirming ancient problems. What we need most from them is credibility, integrity and stability of policies so economic actors can plan and commit their investment capital over the long term.

I emphasise “inclusion” because our nation is multi ethnic and multi cultural. It is through inclusion that we can turn our diversity into a developmental weapon that acts as a catalyst for our national progress. We can place all other ideal characteristics needed in a President under one of the three overarching requirements of a) Political, b) Economic and c) Social Inclusion.

By creating this yardstick, we can already rule out some actors currently being promoted for the race to be President in 2019. For example, we can rule out Governor Tambuwal. If we are to consider the integrity of our democracy, Governor Tambuwal shouldn’t have retained his position as Speaker when he decamped from PDP to APC in 2014. Whilst there was enough loophole in our Constitution for him to use, he should have taken an ethical stand and vacate the position. It was an opportunity to demonstrate that his ambition was not worth the appearance or perception that questioned the ethical standard of the House or our democracy. Unfortunately, both he and the APC were quite happy to sacrifice Nigeria for their political benefit. So if Governor Tambuwal comes out in 2019, preaching he’s an adherent to the spirit and letter of our constitution and that he is committed to the progress of our democracy, we should ask him why this wasn’t the case in 2014.

We can also rule out President Buhari. He has so far failed to demonstrate that he has the capacity to enshrine any kind of inclusion with his lopsided appointments, his economic policy flip flops and certainly his continued side-eyeing of politically expedient steps towards the South-South displays this. President Buhari has never run a business, it is no wonder he struggles to appreciate the challenges of the private sector or of small businesses. We know the President is a billionaire (his assets are worth billions per Garba Shehu’s statement on the President’s asset declaration), but we don’t know how someone without a business can become a billionaire. Becoming a billionaire shouldn’t be that easy – in fact it shouldn’t be normal. The President’s current fight against corruption that excludes members of his own party demonstrates Nigeria isn’t quite at the centre of his anticorruption drive but more of a settlement of scores. If his anticorruption fight was truly pan Nigeria, then flagrant disregard of court rulings will not be so common nor should some suspiciously wealthy members of his party be roaming so freely. Going after members of his own party may hurt its chances at the next election or his own chance of retaining the party’s ticket, but not doing so suggests he’s comfortable sacrificing Nigeria for his/party’s self-interest.

We can also rule out Governor El Rufai. His comments on social media in the lead up to the last general election further inflamed the fire of ethnic division. These comments were truly shocking. His recent comment pushing for interest rates by political fiat (further eroding CBN’s independence), being against devaluation or floating of the naira given our dire finances (nothing has fundamentally changed about our finances to influence this flip flop on devaluation, so what economic data influenced it?), his action or inaction during the army massacre of innocent Nigerians in his state all demonstrate a limited capacity for political, social and economic inclusion.

Some of these actions, if viewed through the lens of selfishness, are quite sound. But when we place Nigeria’s interest above self, then it is impossible for Gov El Rufai to justify his comments and actions as being beneficial and supportive of moving our nation forward. Governor El Rufai’s best track record in public office coincides with when he was able to implement ‘strong man’ politics when he was FCT Minister and DG of BPE. Given that ‘strong man’ politics isn’t what we need, thanks to President Buhari for clarifying, then we have to mark down this track record of Gov El Rufai when assessing him as a potential President.

I like Atiku Abubakar. He scores highly in my assessment of those in the running to potentially be President. He is politically inclusive – having demonstrated throughout his political life his ability to work with people from other ethnicity, economically inclusive – his businesses are successful, aren’t monopolies that have cornered government patronage but are also filled with competent people that he has assembled and demonstrably works well with. Turaki Adamawa is also socially inclusive – his agribusiness patronises local farmers and his educational establishments have supported pupils from poor backgrounds especially escapee Chibok girls. Unfortunately, he has been unable to shake the corruption tag on him which weakens any positive on economic acumen. We cannot afford any corruption drama to derail what should be a focussed presidency given the huge task at hand. More importantly though, Atiku will be 73 in 2019, we certainly need a younger President. So he too should be out of the running for president in 2019!

“It’s the economy, stupid!” – This statement will be used during the 2019 election campaign and rightly so. Any country that is serious about development has to meet its citizen’s expectations for jobs, economic growth and stability. So anyone serious about becoming President in 2019 must provide a demonstrable track record and capacity of delivering jobs, economic growth and stability. Obviously, the person will not be working alone, so they must demonstrate a track record that shows clearly that they have the capacity to identify, appoint and efficiently and effectively work with competent persons in their cabinet. They have to demonstrate that they can inspire and motivate appointees – knowing when to allow them run with ideas or when to keep them in check. The must demonstrate ability to grasp sophisticated and non-sophisticated economic and social policies for the greater good of Nigeria and be willing to sacrifice their ambition for the sake of Nigeria.

We cannot afford to put someone that doesn’t demonstrate a sound grasp of socioeconomic issues and their solutions in Aso Rock. Our procurement laws are not hidden, nor are the inefficient working practices in federal MDAs. You cannot get into office, waste time and be seeking emergency powers to implement what should have been covered in your policy implementation instrument. We have to ask the what, when and how questions on any economic rhetoric in campaign manifesto. They must show full workings.

 

Thinking ahead of the 2019 election

Nation building ideas for Nigeria

About two weeks ago, Feyi Fawehinmi wrote commendably about his regret of not asking enough questions during the last presidential campaign on the ideas President Buhari intended to pursue after assuming office. A day later, he published another article on how Nigeria can move forward from its current malaise and if Nigerians can organise themselves around ideas or other organising principles that could move our country forward.

About 18 months ago, I published some rants, Rant I, Rant II & Rant III on my blog about how to deliver a sustainable Nigeria and argued that if we can organise ourselves based on ideologies, over time ideology may become a better unifying factor than ethnicity and religion among Nigerians — a long shot I know, but still worth a try.
Feyi focussed on trade as his initial idea on what may bring Nigerians closer together, although he has since admitted (worth a listen if you haven’t already) in a recent podcast with Tola Sarumi that it may not be enough. I agree and as my contribution to the debate which Feyi has now joined, I’ll summarise the ideas in my rants hopefully in a less “ranty” way in this foregoing article.

We currently don’t exist in a power or constitutional vacuum, so there’s nowhere else to start other than the Constitution. The Constitution in one of its opening preamble states “we the people of the Federal Republic of Nigeria; having firmly and solemnly resolved, to live in unity and harmony as one indivisible and indissoluble sovereign nation under God…” That preamble given our history, especially the most recent, is a lie — a lie that needs to be fixed. A lie that can only be fixed when we project dignity on all Nigerian life equally by recognising the unalienable human rights of every Nigerian; by developing a judiciary and civil service that applies the law impersonally and a police service that protects neutrally and uniformly. Without this impersonal application of rights and neutral protection of life, it will be difficult, as we’ve witnessed, to live in unity, harmony and peacefully.

Being a multi cultural and multi ethnic society, disagreements are inevitable — heck even closely knitted families have disagreements. So whilst strengthening our ties through trade is laudable and lofty, not having an institutionally neutral trade arbitration system that inexpensively and efficiently adjudicates disputes will result in a swift breakdown of any ties based on trade. So it is important that we urgently strengthen the Judicial arm of government by making it truly independent, properly funded and by revising its working processes for optimal efficiency and effectiveness.
Linked to the above is the necessity to separate religion from state. Whatever state administration system we agree on, must near militantly, defend the secularity of our laws especially in the implementation and application of such laws. We need to take personal and collective responsibility of defending governance from religiosity. Praying at state functions, expecting state sponsorship of religious pilgrimages, religious rhetoric in political campaigns or party constitutional documents must be firmly rejected. Religion must be separated from state in form, substance, perception or reality. Religion must become personal and personal only. It goes without saying that no one should be killed for practising their religion.

As we are finding out, incompetence is proving to be more expensive than corruption. We need to celebrate the dignity of hard work and increase the value we place on competence. Job openings, contract tenders, political appointments, promotions in public and private sectors, business deals should be made based purely on the hierarchy of competence of those or entities considered. We have to kill the patronage system in all its forms. This is the only way that iron can sharpen iron and the only way we can create an environment for objective competition. Any Nigerian (irrespective of gender, faith, orientation etc) should be confident that regardless of where they are in the country, if they demonstrate competence clearly for any endeavour they should expect commensurate compensation. Any Nigerian should be able to live and participate fully in any locality they choose to be resident. We should be against a patrimonial society. Celebrating and embracing competence as an overarching value system would enable the inclusion that our diversity needs to be the positive developmental weapon that it should be. The elevation of competence in our society should be most visible in our civil service and other societal agencies that facilitate business and trade eg CAC, Regulatory Commissions etc.

As has been mentioned by others, the Constitution of our Republic is in need of a root and branch review. That revision needs to recognise that all constitutional power devolves from the people. The extent of the powers of government has to be clearly defined and limited. The extent to which government can intrude into our lives or prescribe how we should live our lives should be limited. This last sentence is a personal preference but it’s based on recognising the militaristic foundation of our current constitution in the absolute and near limitless powers it confers on and reserves for government. Whilst democratic, this conferment is clearly despotic and must be reversed. The Land Use Act is a case in point. The Constitution gives the executive arm of government too much power in relation to property rights.

In recognising the plurality of cultures in our nation, we need to embrace federalism fully and truly. This can be achieved by having federal laws, which I’ll refer to as Constitutional Minimums, which guarantee federal rights. This idea of Constitutional Minimums is based on “what is yours is yours, what is mine is mine, what is ours we decide”. Constitutional Minimums are the laws that will underpin the rights freely given up by each federating unit to the federal government to form the basis on which we will remain a federal union. For example, a Minimum can be a law that guarantees that every Nigerian child must be educated to at least junior secondary school level. The law could compel every local government to make access to educational institution available to every child. The law should make it criminally punishable for any parent or guardian that prevents their/a child from getting this minimum education. We can have minimums for everything — health, eligibility for security services, citizenship, education etc.

We can have Minimums for taxation for example. During the last presidential primary campaign, Atiku Abubakar in one of his Q&A sessions responded to a question on development with an answer that intrigued me. To fund his idea on driving development, he said he would commit all revenues from oil to capital expenditures only and that recurrent expenditures will be funded by tax receipts! Wow! Let’s think about that for a minute, if we want government to be only focused on facilitating trade (Executive & Legislative arm), securing lives and property (Judiciary) then this is a wonderful way of focussing their minds and aligning governments interest with economic activity and productivity. When government realises that its recurrent expenditure can only be funded from tax receipts and not resource rent, it will start behaving like the Chamber of Commerce that it should be. So the Minimum in this regard, applicable to government at all levels, will be that all revenues earned from resources can only go to capital expenditure. I know this has implication for the size of the civil service at all levels but this is a good thing. Government should do well only when businesses do well and not the reverse.

Finally and in recognition of the plurality of our society I think we need democratic reform. We need to decide what form of democracy suits us. Democracy by default is a system of government that facilitates debate. Plurality of opinions is healthy to any debate and contributes towards a qualitative outcome. A proportional representation electoral system may be more suitable to us than the current simple majority system. A proportional representation system will ensure that all votes contribute to the result of an election not just the majority of votes. We should consider this proportional representation at least for legislative elections. It would mean that the size of parties in parliament will be linked to the percentage of votes they received in an election. I also think we should split the election cycle of the legislature from the executive. Elections for both arms of government should be split two years apart. This should enable, preferably force legislator’s to campaign on their own merit rather than ride on the popularity of a presidential candidate. It would also focus the oversight responsibility of our legislator’s as it becomes difficult to ride on the popularity of the executive especially if the party in office isn’t delivering or is different. We also need political campaign finance reform, something I previously wrote on too.

Hopefully some of what I’ve written above is useful and contributes to the debate of moving Nigeria forward along ideological lines.

Nation building ideas for Nigeria

The insincerity of our elites 

In my last piece I mentioned the insincerity of our political and economic elites and how a change of attitude from them is necessary to move our nation forward. All of these elites travel outside Nigeria regularly for all sorts of reasons. Some of them were born, raised and trained in developed countries. Most if not all of them send their children abroad to study or gain exposure.

These elites have observed with their own eyes what a developed culture, society and country is and should look like. They’ve been on London underground trains, travelled on Japanese bullet trains, driven on Germany’s autobahn, and have houses in the US, UK, Middle East with superb construction and luxurious finishing. They’ve been to world class airports like Heathrow, Dubai, Singapore and have experienced first rate services that should be the norm. These elites have experienced what a proper capital, banking and finance infrastructure should be when they stash some of their (ill-gotten) wealth abroad.

What is befuddling is how these elites see these structures and infrastructures abroad; knowing it was all man made some even within the last 3 decades, yet come back to Nigeria to perpetrate a culture and structure that makes it impossible for Nigeria to rise above a failing or failed state? These elites own banks, yet some of their banking processes, apps and services are 18th century in nature. They just can’t see how development need not be sacrificed for wealth generation.

Issues like bad roads, lack of electricity, lack of proper water or sewage system, fuel queues, lack of train or transport infrastructure, dilapidated airports and such things that are now basic infrastructures in aspiring nations – how can the lack of these things not get on their damn nerves and grate them to their bone marrow? Why in 2016 would they want this type of issues be what is distracting their minds from focussing on more important world problems like eliminating malaria permanently or child poverty globally? I just don’t get it.

The one that is even more perplexing is how young Nigerians below the age of 40 that are either from elitist families or by sheer luck or maybe hard work have plugged themselves in the elitist patronage network, have turned themselves into doormats or enablers of this dysfunctional system. How can you as a young man with a young family not be wound up by the thought of spending what should be the prime of your youth in endless fuel queues or carrying your generators on your head to get fuel to power your “I better pass my neighbour”? Why should your Saturday, better spent with your young family, be spent at a mechanic village? Aren’t we all tired of dealing with poverty type dysfunction? Abi you think because you are not caught by the $2/day metric you are not facing similar challenges to poor people? How can young Nigerian’s explain their short-sightedness and insincerity during the last general election?

President Buhari was elected on three promises – anticorruption, security and economy. Of these three, anticorruption was by far President Buhari’s unique selling point. He self-styled himself as an incorruptible leader particularly playing on the War Against Indiscipline policy he implemented as military head of state. In my opinion, his claim was hollow at best. When President Obasanjo left office as military head of state, he did not disappear into a vacuum. He launched policy groups, was invited to and joined other leadership groups, represented Nigeria in peacekeeping efforts, he wrote books and basically immersed himself in governance and leadership circles communicating his ideas and ideologies whilst allowing himself to be shaped by the ideas of others so much so that he nearly became UN Secretary General. What President Obasanjo was about between 1979 and 1999 wasn’t in doubt. By the time he became President in 1999, he could refer to an established profile within the international community when it was time to beg for debt relief. Those he was begging already knew what he was about. It smoothed the process.

Can we say the same thing about President Buhari? Between 1985 and 2015 that he won the presidential election, corruption became an outsized monster in Nigeria. What did President Buhari do in those years to elevate and progress the anticorruption discussion? What book (ghost writers exists even if he couldn’t write it himself – Dele Momodu would have been too glad to be his ghost writer) did he write to enrich and propose ways that Nigeria can solve its corruption problem? Did he create or sponsor any CSO to pursue the anticorruption agenda? Did he give speeches at conferences to advance the movement? What conferences did he attend – local or international? Did he take his fight to international organisations like the World Bank, IMF or the UN? Did he link corruption to tax haven countries and how they enabled corruption? Did he raise the issue of the difficulty of repatriating proceeds of corruption stashed in tax havens? Did he create any profile of substance for himself beyond shallow rhetoric by referring to a dysfunctional policy he tried to implement in 1984? There’s little to no evidence that President Buhari did any of the above, so why did young people place so much faith in him being able to resolve the nation’s problem with corruption let alone institutionalise it? Now that he has become President and he wants to repatriate stolen funds, he needs to start from scratch what he should have donated his prime years to, yet he is surprised by his slow progress.

President Buhari’s lack of capacity is now being questioned and people are beginning to think ahead to 2019. Of course the elites are intelligent, they too are already thinking ahead and are also beginning to position themselves. One of the people being promoted by the young elites as a potential candidate in 2019 is Mallam El Rufai. This promotion suggests to me that some of our young people haven’t learnt from their 2015 mistake. We are a divided nation, a nation whose elites have used our multi ethnicity as a weapon. One of them, Mallam El Rufai, has been particularly guilty of highlighting our multi ethnicity and uses it against our nation to further his self-interest. His utterances on social media over the years have been truly shocking.

Prior to the general elections, Sheikh El Zakzaky was a good citizen worthy enough for Mallam to visit his home for photo opportunities to further his gubernatorial ambition. After elections, he became a persona non-grata with Kaduna (under Gov El Rufai) and Nigeria’s governments complicit in hiding the murderous rampage of 347 innocent Nigerians committed by the Nigerian army. Think about this, one of Governor El-Rufai’s state resident has been in illegal detention for months by the federal government, what has the governor done to raise this injustice and secure the release of Zakzaky? How will someone that finds it so easy to stoke ethnic sentiments inspire the kind of political and economic inclusion that our nation needs if he becomes President? Has he demonstrated that he has the capacity to inspire this leadership quality? Some will argue that his current cabinet is multi ethnic and say this is evidence enough, but how can this be? Surely we need a longer history that demonstrates this capacity beyond his current cabinet that has been put together mainly for Mallam’s benefit rather than Nigeria’s? Should our bar be so low as they want us to accept?

At the African Pension Summit held in October 2015, Mallam El Rufai said “I am warning the banks to bring down interest rates or we will do it for you”. Does this suggest Mallam understands economics at all? Should someone of his calibre and supposed exposure advocate for interest rates by political fiat – a move that erodes the independence of the Central Bank? It’s one of two things; either he lacks adequate economic understanding or he is pandering to President Buhari knowing fully well it was a wrong economic strategy but one that serves his self-interest of cementing his alleged position as “de facto” Vice President? Either way Nigeria is worse off by Mallam’s positioning and suggests perhaps he may do things that are not in Nigeria’s best interest but furthers his own? We need to shine our eyes.

At Nigeria Summit organised by The Economist in March 2016, Mallam said he was against devaluation as he cannot see the economic benefit for it. He asked “is the market the only way to solve the scarcity problem”? Again, this is something President Buhari will say and something someone of Mallam’s calibre and supposed exposure shouldn’t. In fact he said at the same summit that he’d always been in favour of devaluation and had experienced it thrice but somehow on this occasion, when our finances are in such dire state, he doesn’t think it expedient?

In 2018 when the sound-bites and rhetoric start flying about, I hope we all remember these things so that we don’t repeat the Buhari mistake of blind followership.

In fact what I hope is that a party like Kowa or firm like SBM Intelligence will create a tab on their websites where these shocking statements by elites that should know better will be displayed as a reminder so that when they start spewing their lies in 2019 we will call them out on it and ask the right questions.

The insincerity of our elites 

REQUIRED: new attitude, new leadership

Nigeria’s problems have been extensively analysed over the years by a plethora of intelligent people. In fact, lack of ideas or solutions to our teeming problems isn’t our biggest challenge. The political, visionary and leadership will to do the hard but necessary work to move our nation forward is what, in my opinion, we are most deficient in. The socio political and economic history of the world is littered with examples of the policies and strategies that work in moving a nation forward and firmly establishing it as a developed nation or at least lead it on the right path of development. Whilst right now, global politics is battling with social and income inequality that has led to the rising popularity of extreme political movements; this was not always the case with the global economy experiencing unprecedented wealth creation and transfer in the 40years to the Great Financial Crisis of 2008. To stem the rising popularity of extremism, global politics needs to come up with a new economic and political (democratic) transmission mechanism that efficiently deals with post-crisis income inequality and social mobility.

Sadly for Nigeria, our problem isn’t the same as the global world’s although some will argue its similarity. The number of Nigerians living, sorry existing below the poverty line is such that we need to first solve how these tens of millions of Nigerians can earn any income (sufficient to at least feed a small family thrice daily) at all before we even consider first world problems like those of the developed world of reducing income inequality. The good news however is that we have the economic system that delivered the biggest wealth transfer in global history to observe and copy verbatim. We don’t need to come up with new economic ideas, we don’t need to discover electricity, we don’t need to design new technology and neither do we need to come up with new ways of constructing road, rail or housing in order to move ourselves along the right developmental path. And with respect to politics and or governance, there are tons of countries whose struggles we can observe and learn from to avoid foolish and unnecessary mistakes. There are so many books on nation building that we can read, so many great leaders still living we can learn from, or even autobiographies of great leaders like Lee Kuan Yew, Nelson Mandela etc. Besides, we can also learn from our own history of what doesn’t work. 

At the risk of rehashing what others have already stated, I will summarise what I believe are changes to attitudes and mentality that our nation needs to move forward: 

1. Our history tells us that having an overbearing federal government with outsized powers isn’t supportive of developing Nigeria. It has so far been a burden and a headwind to political and economic development. Therefore, we need to urgently rethink, redesign and agree a new governance structure that reflects our sophistication as a society.

2. We know that true federalism works. It works in the USA, Germany, Canada, Australia and in other places. Most of these countries like ours have a history of similar inter ethnic tensions; some even fought civil wars like us, but have moved past this and are now developed nations economically and politically. So we need not fear true federalism, it will not lead to ethnic domination. Transferring majority of constitutional power to the governments that are closer to the people is one way of minimising our debilitating fear of ethnic domination and developmental bypass.

3. The role of government needs to be clarified especially in relation to the economy. We are at a developmental stage where we need all of our resources to be allocated and managed efficiently. The history of the world with economic systems shows us that a market based economy has been the most efficient at allocating resources – natural, capital, human and goods/services. This economic system was responsible for lifting the greatest number of people out of poverty the world has ever seen. History also tells us that this economic system is most efficient where government intervention is limited, interference (intervention and interference are two different things) a no-no and regulations are designed such that the proper and orderly functioning of markets is of utmost importance. There’s hardly a sector within Nigeria that the federal government does not heavily and unduly interfere in. Government intervention is certainly needed or even required in certain sectors. Such interventions must however be strategic and time pressured. It can never be open-ended as it has become in our case – a near obsession even. 

4. Our history as well as those of most members of OECD countries suggests that government doesn’t always know best and interventions need a specific purpose that is measurable and achievable within a reasonable timeframe. For example, affirmative action to get more of our brothers and sisters in the North educated or into schools may be necessary, but the lowered threshold for admission can’t stay low permanently. If for example admission requirement is 20% cut-off in year 2000 for entry into federal secondary schools, the government must draft affirmative action policy that aims to get that threshold to say 40% in a decade and on par with the highest in the country in two decades. Right now, what we have in the north re education is interference rather than intervention, an interference that has failed and is failing.

5. Our educational reforms need to match and reflect our developmental needs. Everyone needs to be educated at least up to a basic level (JSS) but not everyone needs to go to a university. Adult education needs to be encouraged especially with respect to health and hygiene, civic rights and obligations, role of government and how society should function and basic financial education. 

6. We’ve attached so much value to a university degree that everyone wants one, yet our universities are under resourced to cope. We need to reset our value system such that qualifications from educational institutions that are not universities are as valuable. Wages have to reflect living standards and actual value add from economic activities rather than just qualifications. We have to get to a point where not having a university degree does not automatically mean a decent living standard is unachievable.

7. Whilst it is important that we manage corruption better with stricter consequences and prosecutions that meet international standards, it is equally as important that we emphasise a value system that reinforces the idea that it is more rewarding to do good or right than to circumvent societal systems. We need to evolve our culture irrespective of ethnicity in a manner that makes doing good or doing right more economically rewarding and psychologically satisfying. The shame from proceeds of corruption must be elevated and harsher than even the consequence or punishment for corruption. Our threshold for corruption or corrupt people must be so low that those that perpetrate wrongs against society must prefer to commit suicide than face the shame of being proven to be corrupt. We need to get to a value and ethical place where you must be the low of the low or absolute dregs of society to contemplate let alone carry out acts of corruption.

8. Linked to improving our ethical and value system against corruption above is elevating meritocracy and competence as value systems. We must as a society abhor incompetence especially from public and civil servants. Incompetence must be fought like a plague and not tolerated. That President Buhari is comfortable with the incompetence displayed by some of his Ministers so far is disappointing and telling, even confirming the fears some of us have had all along. The Nigerian attitude that ‘lets get there first and worry about what should have been prior preparation and proper planning afterwards’ must be eschewed from our society. The mnemonic Proper Preparation Prevents Poor Performance that was drummed into us as kids needs to be brought back into our consciousness and imbibed across board.

9. Over the last two decades, the United Nations has published reports (UNHR Report) on an annual basis that supports the idea that diversity is contributory to economic development. The most developed nations, the most successful businesses typically have and aim to have a diverse nation or employee pool. These countries and successful businesses know that diversity isn’t the problem rather inclusion is. They realise that their success and development is linked to how inclusive they can make their diverse citizens or employees be. I am not suggesting that discrimination or racism doesn’t exist in these countries or companies, it does but steps have been taken to ensure it doesn’t compromise development, growth or profitability. So our urgent task is to infuse inclusion in every area of our societal life, systems and institutions. Our diversity should be the weapon that enriches our lives.

10. Finally we need a sincere political and economic elite class. Our current crop of elites must be ashamed of their mental laziness. Their current attitude and behaviour seems to suggest that their continued enrichment is impossible or will be compromised if Nigeria was a developing or developed nation. We know there are some members of the political elite that if not for a corrupt structure; their very limited skill would prevent them from having access to the wealth and power they currently enjoy. There are also others, some foreign born and trained, that do have skill or exposure that should be well compensated if Nigeria were a developed nation yet their behaviour is such that they just can’t imagine themselves being well to do in a developed Nigeria. This insincerity of our elites is what I find most befuddling about Nigeria. A cursory look at the most developed countries in the world or countries that are at the top of the developing list, shows us that it is possible to have billionaires in all works of life of a country whilst not sacrificing the socio-economic development of that same country. The individual and collective ambitions for a better tomorrow are not at odds with each other. Both can and have been achieved simultaneously in other countries. Examples abound around us. Steve Jobs was not born a billionaire, but he died as one. He did not need to sacrifice America’s development for his ambition. Donald Trump, as bigoted as he is and although he got $1m leg up from his dad, his current billionaire status has not stopped the US from remaining a developed nation. Across the Atlantic in UK and Europe, there are lots of millionaires and billionaires that successfully attained and continue to maintain their wealth status without the development of their nation being compromised.

11. So our elites need to stop being mentally lazy and stop perpetrating the depraved culture and structure that sacrifices development for wealth when both can be achieved simultaneously. More importantly though, the youth of Nigeria especially those between the ages of 25 and 40 need to come together en-masse and in sufficient quantity to demand almost militantly for a change in values and attitudes that will stem the hopeless spiral their parents generation seems to have anchored Nigeria to.

REQUIRED: new attitude, new leadership