32 — Vanguard, MONDAY, APRIL 9, 2018 (08052201997) MPC and the blind leading the blind THE Central Bank’s Monetary Policy Committee, decided on Wednesday, April 4, 2018, to retain its Monetary Policy Rate (MPR) at 14 per cent, while mandatory Cash Reserve Ratio for banks, would remain at 22.5 per cent. Disturbingly, however, there is no real hope that, such rates which have subsisted for almost three years and inflicted so much social agony will now redeem the economy! Clearly, the prevailing 14 per cent inflation rate will make Naira income earners poorer this year, while, industries will struggle to survive, if they pay well over 20 per cent to borrow. Similarly, government will be compelled to pay over 14 per cent to ironically borrow to service its risk free sovereign debts! The above title was first published on October 5, 2015, when MPR was 13 per cent, CRR 25 per cent while inflation trended at 15.5 per cent; a summary of that article follows hereafter. Please read on. “The Monetary Policy Committee is the 'Think Tank' for best practice strategies that should drive Nigeria's economic growth and prosperity. Thus, if the MPC's recommendations were appropriate, inclusive economic growth would evolve; conversely if MPC's diagnosis and prescriptions are wrong, then our current stunted growth experience, must inevitably be the product of Policies mid-wived by the MPC. Nonetheless, while the complimentary role of fiscal policy in a nation's economic growth is undeniable, best practice money supply management, can however redeem a grotesque fiscal plan; conversely, an "excellently structured" budget will grossly diminish in value if extant monetary strategies sustain rising inflation with, increasingly high cost of funds and an unstable Naira exchange rate determined by fiat! Consequently, a nation with a benevolent spread of latent wealth, with diverse agricultural and mineral resources, will remain poor if there is brazen indiscipline in managing its money supply; for example, if the authorities recklessly and liberally, continuously print or create money (values), inflation would hit the roof, and all income earners, will ultimately become traumatized and pauperized as the Naira’s purchasing power becomes steadily whittled down. Furthermore, subsisting high cost of loanable funds will also make sustainable real investments a challenge, and ultimately deepen our already suffocated job market to precipitate a wave of social insecurity! Consequently, the MPC’s role in promoting best practice management of money supply, is recognised to be pivotal for achieving enhanced social and economic welfare for our people. Regrettably, however, for over two decades, the best efforts of MPC/CBN 'collaboration' have failed to successfully manage money supply and keep inflation, below best practice level of 2% to stabilize the value of all incomes; furthermore, subsisting monetary policy directions have also failed to bring down cost of borrowing, to supportive levels below 10%. It is clearly unrealistic and foolhardy to expect credible economic growth or indeed successful diversification, when cost of funds approaches 30% for real sector domestic investors. Regrettably, however, it is inexplicable that despite Nigeria’s heavy unemployment burden, our MPC 'Think Tank' has, consistently endorsed inappropriately higher doubledigit Monetary Policy Rates, which in turn, compel banks to lend to customers, including the productive sector at clearly oppressive rates, well above 20%. Incidentally, when the MPC concluded its 103rd bimonthly meeting last week (21/9/2015), it retained its existing, anti-growth, 13% benchmark for CBN advances to banks, while it slashed the cash ratio, which commercial banks must retain as The Monetary Policy Committee is the 'Think Tank' for best practice strategies that should drive Nigeria's economic growth and prosperity reserves, from 31% to 25%. The overt interpretation of such monetary indices, is simply, that CBN appears impervious to the crying needs of the real sector for access to cheaper funds; furthermore, the adoption of a cash reserve ratio which is as high as 25%, also suggest that the CBN clearly considers the prevailing level of money supply worrisome and counterproductive to price stability; consequently the apex bank’s intention is clearly to reduce both consumer spending and the capacity of banks to extend credit to their customers, despite the downside, that the high monetary policy benchmarks adopted for this purpose, would restrain investment and industrial capacity utilisation and significantly impede job creation in the economy. Thus, for these reasons, the MPC's regime of inflation and interest rates have historically been clearly out of tune for an economy with very low consumer demand, a shrinking industrial base, and an irrepressible and socially poisonous rate of unemployment. “The MPC's tight money policy is clearly traceable to the fear that a lower cash reserve requirement for banks will expand the economy’s already, dis-comfortingly bloated money supply to facilitate increased consumer spending, which could trigger inflation well beyond 10% to threaten price stability and the purchasing power of all Naira incomes”. “Instructively, the recent enforcement of the Treasury Single Account, reportedly, led to a 10% reduction in the size of perceived surplus Naira supply in the system. Regrettably, this reduction appears to be clearly insufficient to tame the Naira liquidity surplus which drives oppressive inflation rates, and instigate higher cost of borrowing with collateral threats to job creation, social prosperity and national security.” “The persistence of incurable systemic, surplus money supply, is clearly demonstrated by CBN's notice of the 4th September, 2015, that it removes some of the perceived excess money in the system to restrain inflation by borrowing over N800bn from the money market between September and December this year (2015). Incidentally, the banking subsector, primarily, will earn between 12-15% interest on these loans which CBN will, inexplicably, keep sterile or idle in order to reduce the inflationary pressures propelled by the threat of unbridled systemic money supply, chasing relatively few goods and services.” “Alarmingly, the CBN now makes annual interest payments of over N500bn to warehouse such ‘burdensome’ surplus cash it borrows and simply keeps idle in CBN vaults and records, while the real sector inexplicably suffers severe funding deprivations which invariably engender contraction in production and job opportunities. In this event, any sectoral cash intervention funds provided to stimulate economic activity and job creation, will inadvertently, ironically, further expand the subsisting bloated cash surplus in the system; so that, ultimately the additional liquidity injected will still be, indiscriminately subsequently mopped up also, once again, by CBN despite the attendant high interest rates that are clearly discordant with rates payable on sovereign risk free loans, particularly by a country with robust resource endowments such as Nigeria.” Worse still, it has been suggested that the latest reduction of cash reserve ratio from 31% to 25% would supplement/compound liquidity by over N300bn; invariably, reduction in CRR will inadvertently also increase the CBN’s portfolio for idle debts which nonetheless, tragically attract industrially counterproductive interest rates. Incredibly, inspite of these policy contradictions, a gullible media and a trusting but misguided public still believe that the MPC/ CBN will lead our nation to Eldorado.” SAVE THE NAIRA, SAVE NIGERIANS FINANCIAL VANGUARD cess and are now telling the banks to adopt it. But it does not remove, by law the relationship, from the money moving perspective, it is still the banks. I don’t see it changing. I hear people talk about cryptocurrency, it will not play a significant part in the world for their local transactions. No government in the world will give up its ability to generate or create its own currency with third parties it does not know. So we will have cryptocurrency for selected use the same way even today I can buy dollars when I want to send somebody to buy something for me in America. But for my day to day, it is Naira. The only way you have local cryptocurrency is if the central bank issues it itself. But not that anyone of those out there will come in. So will the banks be threatened by the Fintechs? Yes. I think there is even other business that is easier for the Fintechs to get involved in. Insurance, anything that requires a lot of technical use is actually easier. Even in some aspects of health, but the money bit of the business is banks, which is why they are focusing on banks. It is a collaboration that will happen. It is not one taking over from the other. The trend for e- payment transactions last year was that, yes there was still growth but the rate of growth slowed. What happened last year that slowed down the growth rate of e-payment transactions? Why the slow pace of growth? We also noticed slow pace of growth in BVN enrolment. Why is this so? Starting with transactions, if you look in absolute terms, the growth in 2017 was more than the growth in 2016. But the base had increased. So if you look in absolute terms there were a lot more transactions. It is because the base has been increasing over time so that is why we are seeing a slowdown in the build up. But there is a lot more transactions in 2017 than in 2016. We think that will happen for a while. But are we going to back to such massive growth? Now that goes back to your question on the BVN; Almost all bank customers now have BVN. The number of account continues to grow but the numbers of individuals that have account are not going as fast. So unless we bring more people in you will find you and I will be doing more transaction but at some point, all my payments are electronic. So there is no more growth in electronic transactions. So now I am still doing some cash, but more and more we we ECONOMY No government will submit its currency to cryptocurrencies - Shonubi, NIBSS CEO Continued from page 30 are doing cards, we are doing transfers. Soon those of us that have bank accounts will only be doing electronic payments. So, what next? Those who are outside the banking space will continue to do business even though with cash. So the focus has to do with, how do we increase the 33 million to 40-50 million? How do we bring people in, into the banking space and then we will begin to see the growth again pick up significantly and that is one of the aims this year from the CBN to the banking industry to focus on financial inclusion and getting more customers into the banking system.
Ayo Adebanjo: The path of our fathers CHIEF Ayo Adebanjo, a thread that links our problematic unitary system to our enviable past as a viable federation, will be 90 tomorrow, April 10. He is the thread in our needle that can lead us back to the days when Nigeria strived as a federation to build a selfsufficient country with each region developing at its pace and engaging in healthy competition amongst themselves. This is in contrast to the mist that has enveloped the country since 1966 when military rule abolished the federal system and nurtured in its place, parasitic unitary politics where every region and state is unhappy with the polity and all cry about being marginalised. Adebanjo is a fighter who believes in principles and justice. His brand of politics saw his being charged on November 2, 1962 along with 30 other persons for treason. He was charged with the intention to levy war against the country with the intent of overthrowing the government. The accusations against him included the alleged importation of arms and ammunition from Ghana and the unlawful purchase of explosives. The prosecution claimed he travelled to Ghana for military training under the radical Kwame By Peter Obi COMING shortly after the Millennium Development Goals ,MDGs, was wound down, Sustainable Development Goals, SDGs, is one among the cocktail of measures by the global community towards making the world a better place. I am a strong advocate in Nigeria and Africa for exploring the synergy between SDGs and good governance and leveraging the Goals to work for our people and humanity at large. Most of us are still saddened that we never fully explored the utility of MDGs as key development tools for the 15 years they lasted. I remain mindful of missed opportunities and lessons learned, more so as a former state Governor who appreciated fully how subnational governments could benefit from, and be instrumental to the implementation of MDGs in the interest of humanity. One of the lessons was that as much as we tried as individual leaders to attain the MDGs, such measures fell far short of the full effects of collective action. I am concerned about the same fate befalling the implementation of the SDGs. From my leadership, political and personal perspectives, it seems difficult to address SDGs without first grasping the harmful effects of not giving unfettered support to meeting the MDGs targets. If the MDGs did not fly fully, will the consequent SDGs fly – since the SDG programme is a follow-on to the MDGs? I recall the then UN Secretary-General, Mr. Ban Ki-Moon’s frank observation that ”The Millennium Development Goals were a pledge to uphold the principles of human dignity, equality and equity, and free the world from extreme poverty… The MDGs measured what mattered to people. As we look ahead, we must do more to reach those who are most vulnerable, are not counted and have not shared the improvements of the past 15 years.” Unquestionably, there was a void, but it must be admitted that where faithfully pursued, MDGs added value not just to good governance, but to overall development and quality of life, as exemplified in China. China’s successful integration of MDGs into its national development planning, with effective and coordinated implementation from national to local governments, Nkrumah Government. One of the prosecution witnesses, Patrick. M. Dokotri claimed that Adebanjo offered him a hundred pounds in May, 1962 to travel to Ghana for military training. But Adebanjo could not be apprehended. He was yet to be tried when on January 15, 1966, the military overthrew the Alhaji Abubakar Tafawa-Balewa administration. He continued his political activism over the years, but I did not get close to him until the annulment of the June 12, 1993 presidential election by the military junta. To many of us, it was an affront, a challenge that must be met. I had been part of the leaders of the Campaign for Democracy, CD, which led street protests leading to the forced exit of military strongman, General Ibrahim Babangida in 1993. But soon after the overthrow of the Interim Government contraption, the country was faced with the fascist Abacha regime. There was need for a broader alliance to tackle this regime. Dr. Beko Ransome-Kuti and I represented the Civil Society Movement in this alliance which held its meetings at the 100, Oduduwa Crescent, GRA, Ikeja residence of veteran nationalist, Pa Alfred Ogbeywa Rewane who also chaired. It was at these meetings I got close to Pa Adebanjo; we seemed to share the same position on a number of issues. These meetings for me, were also like learning at the feet of the masters. Apart from a few like Chief Cornelius Adebayo, many of those at the meetings were veterans of independence struggles. It was not lost on me that some of them like Rewane, his deputy, Chief Anthony Enahoro and Adebanjo were defenders at the 1962 Treason Trial while Senator Abraham Adesanya was part of the defence team. Then in the morning of Friday, October 6, 1995, three gunmen entered the house and shot Pa Rewane dead. A few of our African leaders and SDGs helped the country to achieve an unprecedented transformative result, using the three most critical Goals: lifted 439 million people out of poverty; achieved universal basic education ahead of schedule; and made tremendous improvements in health care for women and children, and disease prevention and control. In contrast, within this period in Africa, there was drastic under-performance in the three critical Goals: Poverty rose from 290 million to 414 million persons; Less than 70% was achieved in universal basic education; the number of under-nourished children rose from 27 million to 32 million. An example of what could have been done to achieve better results could be drawn from our efforts in my home state, Anambra, in Nigeria, where we domesticated the MDGs If we desire truly to attempt to end poverty and ensure that people’s human dignity and human rights are respected, we should be less concerned about the multiplicity of goals, targets and indicators; rather, we should get to work – moving from agenda to action via a home-grown mechanism tagged Anambra Integrated Development Strategy (ANIDS). This approach enabled us to simultaneously engage constructively in seamless planning, budgeting and implementation of all the MDGs. These enabled us to achieve remarkably visible results across the MDGs, especially in the first three critical Goals as will be seen in subsequent paragraphs. We became the first state in Nigeria to conduct mapping to establish the statistics of poverty. A major finding from the study was that poverty was fuelled by inadequate access to rural communities, which made us construct rural roads across the state to open up those areas to development opportunities Adebanjo continues to point to us, the path of federalism our fathers took at independence and nudges us to return to that path rather than live in the delusion that we can continue to impose an unjust unitary system on the diverse and freedomloving Nigerian people meetings in a broader form then shifted to the house of detained Chief Moshood Kashimawo Abiola. They were hosted by his highly perceptive wife, Mrs. Kudirat Abiola. Enahoro who had taken up the reins of leadership after Rewane was assassinated, presided. A major achievement at these latter meetings was drawing up and campaigning for an alternative Transition Programme to that of the Abacha regime. Vanguard, MONDAY, APRIL 9, 2018 --33 Nine months after Rewane’s murder, the assassination squad of the regime caught up with Mrs. Kudirat Abiola and shot her dead. Our meetings were shifted from the Abiola residence. Things were tough and many of the resistance leaders like Dr. Ransome-Kuti were in jail and some, including Enahoro, went into exile. It was the second time Enahoro had to flee the country; the first time was the period leading to the 1962 Treason trial. Meanwhile, Pa Adebanjo remained in the country, fighting the junta, not even the 1997 assassination attempt on his close comrade, Senator Adesanya by the regime’s killer squad could frighten him. We continued our joint meetings and struggles, bringing in personalities like Chief Gani Fawehinmi. Then suddenly on June 8, 1998, Abacha died, political prisoners were freed, exiles returned and the remnants of the politiciangenerals, agreed to hand-over power peacefully. Adebanjo and the Afenifere group led by Adesanya decided to go into politics entering into alliance with some of the associations they had allied with to fight the military junta. Some, like the Eastern Mandate Union led by the fearless intellectual, Dr. Arthur Nwankwo joined the Adebanjo group to found the Alliance for Democracy, AD, while the rest of us opted to stay out. The AD swept the West. In a particular case, there was almost a stalemate on the candidate of the party for the Lagos State gubernatorial elections. The choice was between Mr. Funso Williams who had served in the military junta and Senator Bola Tinubu, one of the prodemocracy leaders who had returned from exile. Not wanting to leave anything to chance, and grant rural farmers access to urban markets for increased earnings from their produce. As affirmed by the then Federal Minister of Works and the Senate Committee on Works, Anambra State during our administration, had the best road network, particularly rural roads, in the country. Poverty alleviation also received a boost from the reconstruction and rehabilitation of our Industrial Estate in Onitsha; attracting investments from such Fortune 500 companies like the then SABmiller. We further accelerated the pace of industrialisation as the first state in Nigeria to partner with the Bank of Industry to obtain low-interest loans for MSMEs domiciled in the state. Our decision to return schools to their original Missionary proprietors gave rise to a novel and unprecedented Government- Church partnership. The state consistently earned the first position in most national examinations, with the added value of raising productivity in different walks of life. So unique were ANIDS and its dividends that the World Bank commissioned a study of our achievements by a team led by renowned Oxford University’s Professor Collier, for possible adoption by other governments. The World Bank supports Anambra State because of that revolutionary approach. In Health, again with novel partnership with the missionaries, we were able resuscitate 10 Schools of Nursing, Midwifery and Health Technology. Existing hospitals were rehabilitated and revamped through huge investments in facilities and staffing. We also established 10 Primary and Maternal Health Hospitals in rural communities across the state from the money we won from Bill and Melinda Gates Foundation by being the best state in the eradication of Polio; and at the tertiary level, a Teaching Hospital. With these efforts, Anambra State achieved reduction in infant mortality ahead of the MDGs deadline of 2015. Our efforts to achieve the MDGs Health Goals were widely acclaimed, including commendations from the Head of MDGs in the Presidency, Send Opinions & Letters to: firstname.lastname@example.org Tinubu approached us in the Civil Society to talk to Adebanjo and the Afenifere leadership to swing the ticket in his favour. Dr. Ransome-Kuti and I intervened in his favour and Tinubu went on to become the Lagos State Governor, a step which has seen him rise to become the leader of the ruling APC party. At 90, Adebanjo remains in a combative mood, insisting correctly, that Nigeria must be restructured into a federation as it was when the country achieved independence in 1960, and became a Republic in 1963. On April 3, he launched his autobiography appropriately titled Telling It As It Is which is reflective of his character. At the launch, he told it as it is as regards former President, Olusegun Obasanjo: “The man who carried on as if he was all-in-all, failed woefully on all counts as President. His eight-year tenure (1999-2007) was a tragedy. His scorecard was nothing to write home about. What did he do in eight years? Before he came, we were buying fuel for N20 per litre, and crude oil was $23 per barrel. In 2007, under his regime, we were buying fuel at N75 per litre, and crude oil was between $65 and $75 per barrel. In the worst days of Abacha, one dollar was over N120 …when a real government of the people comes into power, they would take Obasanjo’s Presidential Library Complex in Abeokuta.” Adebanjo continues to point to us, the path of federalism our fathers took at independence and nudges us to return to that path rather than live in the delusion that we can continue to impose an unjust unitary system on the diverse and freedom-loving Nigerian people. (Dr. Precious Gbenieol) and other stakeholders. Apart from these three critical Goals, our administration made concerted efforts to achieve other MDGs. On Environmental Sustainability, we partnered with other state governments in the South-East region, the Federal Ministry of Environment and the World Bank on the National Erosion and Watershed Management Programme, NEWMAP, working on various erosion sites in the seven participating states and towards mitigation of perennial flooding in major cities as Onitsha. On Global Partnership for Development, we attracted several development partners, including donor agencies whose support was indispensable in bridging funding gaps in our state, Anambra, which is not an oil-producing state. It has been argued that the framework of the SDGs and Agenda 2030 (with 17 goals, 169 targets & 230 indicators) is too broad to make any meaningful impacts possible. But the reality is that the SDG framework is only as broad as the prevailing global challenges and unmet development needs. If we desire truly to attempt to end poverty and ensure that people’s human dignity and human rights are respected, we should be less concerned about the multiplicity of goals, targets and indicators. Rather, we should get to work – moving from agenda to action. I share the views of Helen Clark, the then UNDP Administrator, who recognised in 2015 that world leaders had the unique and unprecedented opportunity ”to shift the world onto a path of inclusive, sustainable and resilient development.” If the SDGs Programme is a continuum and should kick off where the MDGs ended, then the African continent needs to acknowledge that it failed in the three most critical MDGs and that such poor results must not be repeated with the SDGs. Continues Online @www.vanguardngr.com •Being excerpts from the remarks by Mr. Obi, former Governor of Anambra State at the Global Festival of Action for Sustainable Development Goals, at the World Conference Centre, Bonn, Germany, 21-23 March, 2018 C M YK