24092020 - BLACK WEDNESDAY: 30 killed in Kogi petrol tanker explosion

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16 — Vanguard, THURSDAY, SEPTEMBER 24, 2020 RECENTLY, after reading,for the umpteenth time,about President Muhammadu Buhari’s “orders” to the Central Bank of Nigeria, CBN, I tweeted: “All this @MBuhari ‘asks’, ‘orders’, ‘directs’, ‘instructs’ the @cenbank to do this or that is doing enormous damage to the credibility of #Nigeria’s central bank.” Hundreds of people liked and retweeted the tweet, an indication that the issue generated a lot of interest. And rightly so! The central bank is too critical an institution to be subject to political influence. As Milton Friedman, the renowned economics Nobel laureate, said, the relation between the central bank and the government is comparable to the relation between the judiciary and the government. Just as one wouldn’t expect a president to tell a court how to decide a case, it’s anathema for a president to instruct the central bank how to discharge its mandate. But President Buhari ignores such niceties. “I have ordered the central bank to …” is the language he has used since assuming office in 2015, despite former CBN leaders’ warning that such authoritarian language would harm the credibility of the apex bank. In 2015, Professor Charles Soludo, former CBN governor, said in a speech that frequent reports in newspapers that “‘Presidency directs central bank to …’ got many players in the economy seriously worried”. He added that:“When the market knows or believes that the central bank is merely an extension of the Presidency and takes daily ‘directives’ from there, the Bank loses credibility.” Nations grant independence to Buhari’s orders to the central bank are harming its credibility their central banks to safeguard their economic credibility with the market and investors. For instance, the creation of independent central banks in many former communist countries was a signal of their readiness to embrace the free market system. Similarly, after nearly 20 years out of power,due to perception of economic incompetence, the UK Labour Party had to announce in 1997 that it would grant operational independence to the Bank of England, if elected, to win the confidence of the market. Foreign investors would shun a country whose central bank is believed to lack operational independence over monetary and foreign exchange policies. Furthermore, where a central bank regulates other financial institutions, the integrity of the entire financial system is at risk if the bank is perceived to be prone to political influence. Sadly, the CBN lacks both political and economic independence. It lacks political independence because it cannot determine its policy objectives without political interference. And it lacks economic independence because it is apparently taking orders from the president on how to use the policy instruments at its disposal. For instance, the CBN could do nothing until President Buhari reluctantly agreed in 2016 to partially float the naira, even Foreign investors would shun a country whose central bank is believed to lack operational independence over monetary and foreign exchange policies when Nigeria was experiencing massive capital flight and rapidly haemorrhaging foreign exchange due to the naira’s fixed value. President Buhari accused anyone calling for a flexible exchange rate of wanting “to kill the naira”. The CBN was in lock-step with him, legitimising the fallacy that allowing the naira to find its market value was “killing” it! Scholars say that a central bank is independent when it has four characteristics. First, its governor is insulated from political pressures; second, the bank can make policy decisions independently of government involvement; third, its sole mission is to maintain price stability and a sound financial system; and four, there are limitations on the extent to which the bank can lend to government. On the four characteristics, the CBN, under the Buhari government, falls far short of being independent. In fact, it is not independent at all. I mean, Godwin Emefiele, the central bank governor, is probably the most political CBN governor in recent memory. While central bank governors tend to favour liberal policies and reforms, Emefiele does President Buhari’s bidding at every turn, supporting his statist, protectionist and interventionist policies. What’s more, Emefiele made a shocking partisan intervention in last year’s presidential election. He publicly criticised the manifesto of former Vice President Atiku Abubakar, telling him: “Don’t drag Nigeria back to the Structural Adjustment Programme, SAP, era.” There is hardly anywhere in the world where a central bank governor would blatantly intervene in a presidential election campaign in that way, apparently taking sides in a political contest! Of course, by criticising Atiku’s programme of economic liberalisation and deregulation, Emefiele nailed his own colours to the mast:that he was Buhari’s ideological kindred spirit.It is thus not surprising that, rather than market reforms, Emefiele’s central Send Opinions & Letters to: opinions1234@yahoo.com bank is pursuing a socialist agricultural policy and feeding the Buhari government’s appetite for debt by lending heavily to the government to finance its huge fiscal deficit. Being banker and financial adviser to the government is not the same thing as printing money to bankroll it! The CBN has been somewhat independent under governments pursuing liberal economic policies. For instance, following the adoption of the SAP in 1986, General Ibrahim Babangida’s regime granted the CBN limited autonomy under Decree 24 of 1991. But the Sani Abacha regime, which operated a closed economy, especially after becoming extremely authoritarian,enacted Decree No 4 of 1997, which removed the CBN’s limited autonomy. Ten years later, the central bankwas granted full autonomy under the CBN Act of 2007. The act says that “the Bank shall be an independent body in the discharge of its functions”. Surely, no reasonable interpretation of those words could justify President Buhari’s “orders” to the CBNon how to discharge any of its functions. Thus, Dr Kingsley Moghalu, former CBN deputy governor, was right to say, according to the BBC, that President Buhari’s directives contradict the law, and that the central bank's economic policy should not be "imposed by a political authority". Apparently, President Buhari sees the CBN as arm of the Presidency and has no regard for its independence. But he is harming the Bank. The CBN’s credibility would be in tatters if Buhari continues to order, direct or instruct it to do anything! Deregulating Nigeria’s oil sector: Travailing to bring forth By DAN AIBANGBE OIL exploration commenced in Nigeria as far as 1903 under licence given to Nigeria Bitumen Company and later to Shell BP (1908). A series of realignments and some six million British pounds worth of exploration expenditure culminated in the discovery of the first active oil well in Oloibiri in 1956 and production in 1958, some 50 years later! Incidentally, the first three refineries built in Nigeria were of the ‘Complex’ class. It is worthy of note that the three were built by government rather than private/commercial ventures. These are among the possible reasons for their current decrepit states and the refusal of International Oil Companies, IOCs, to invest in that sector. The fear of competing directly with government! Another historical element worthy of exploration is the history of oil (PMS) price adjustment in Nigeria. From the regime of General Yakubu Gowon, right through to the current administration of President Muhammadu Buhari, there have always been price increases, except for during the short regime of the late President Umaru Musa Yar’Adua. Most recently during this present administration, precisely at the end of May, 2020, the current administration reduced fuel price by an unprecedented 16.55 per cent, from N145 to N121! During that space, the Group Managing Director of NNPC, Mr. Mele Kyari, indicated that government had decided to scrap the subsidy regime, recently nicknamed ‘under-recovery’ by the NNPC. The fact that this government reduced fuel price at all is an indication of the good intentions and the hope that we may yet experience another reduction if and when the parameters are right. What was not made clear then is whether government has commenced total privatisation. It now appears government has been checkmated from the prodigal subsidy regime by a number of factors such as declining revenues from crude oil exports and worsening Naira-Dollar exchange rate, both caused by the COVID-19 economy. In addition, the Bretton Woods ‘Big Brothers’ have been watching and warning the nation of the unsustainability of the Nigerian economic anathema called oil price subsidy. It is a grotesque economic phenomenon that government would ever consider subsidising consumption of a generic utility (energy) in an economy suffering acute under-development. This evil has been sustained by the warped logic that uncontrolled fuel (PMS) prices will cause untold hardship for the common man, when, in fact, it is the subsidy of the widely consumed product that actually fuels corruption, mis-allocation of scarce government revenue and most importantly, vital foreign exchange to the detriment of the development of vital infrastructure and the real sector. The case for complete removal of subsidy is extensive. Firstly, subsidies on fuel consumption are unbudgeted and cannot be budgeted for in a scientific manner that would ensure expenditure is controllable. That is a perfect recipe for extensive corruption. Secondly, there is no doubt as to the need for complete deregulation or privatisation of the fuel supply sector of the economy. A full analysis of this will come in subsequent parts of this article serial. Suffice to say here that privatisation magnetises foreign direct investment and creates jobs in a sustainable manner. This midstream and downstream sectors of this our Godgiven natural resource should have been the largest employer of labour in the last six decades! Thirdly, considering that the PMS consumed in Nigeria is virtually 100 per cent imported, it carries with it imported inflation due to the declining exchange rates of the naira to the dollar. This phenomenon is apparent to a basic student of accountancy. If fuel price is N145 per litre when a dollar exchanges for N360, then the price must be automatically adjusted to N156.6 now that the exchange rate has become N387 to a dollar! What I am saying is that government has not really increased the price of PMS, but merely reflected the current reality of the increasing weakness of the dollar, which is a result of our reducing export earnings, increasing external borrowing and reducing foreign reserves. All these would have been needless had Nigeria been refining her own crude for domestic consumption! A fourth reason for the necessity of increasing the fuel price is the need to dump this economic anathema of subsidising the consumption of a foreign good. Yes, PMS is PMS is a foreign product in Nigeria as of today, a big shame; it is even far worse than rice importation a foreign product in Nigeria as of today; a big shame. It is even far worse than rice importation. I had argued on another platform that government did not fully maximise the rice project. It would have been better to use the rice project to solve the petroleum issue (one stone to kill two birds). The mechanics of that model will be presented another day. Fifthly, there must be something compelling about fuel price deregulation if all but one regime since Gowon to date have embraced it. Military, Civil-Military, Civilian, PDP, APC and any other will always return to this crossroad, unless the present regime finds the courage to go the whole hog of privatising the sector. The maxim that government has no business in business may be roaring here. A sixth reason is that the recurring error in idea that there is any benefit in maintaining a unitary price of fuel across the Nigerian jurisdiction is desirable or beneficial to any part of the country is a mirage. For simple illustration, assuming fuel price in the North is 15 per cent higher than in the South, economic arbitrage will even out the negative impact on the North with the positive impact in the South within six months, max. The reason is that the goods in the North required in the South will import the excess price to the South, while the goods and services in the South will export the reduced fuel price to the North. That is the power of allocation of resources, a basic economic principle! Seventh, government subsidies are disincentive to the real sector from providing a lasting and sustainable solution to local production of fuel and derivative refinery products. By my experience in value-chains, about 60 per cent value is created between harvest of the raw or crude product and delivery of the final product for consumption. Of this 60 per cent, Nigeria loses at least 50 per cent to the external refineries in the fuel sector. The eighth reason why fuel prices need to go up is to discourage smuggling. You may ask whether smuggling is still going on with the border closure. The answer is blowing in the wind! But outside the direct smuggling, there is indirect smuggling, the mechanics of which will be explained in later serials of this article. I rest with a ninth reason why the current fuel price increase is a necessary travail for Nigeria to emerge unhurt from the impending doom. Government revenue has been seriously impacted by COVID-19. Nigeria is approaching her borrowing peak. The creditor institutions are demanding for a stop to our crazy subsidies on utilities, failing which they will blacklist the nation. This may not be apparent for now, but the international financial market can be unforgiving and cruel. You do not wait for them to come calling. You better go to them before they come! •Aibangbe, a media and public relations consultant, wrote from Lagos.
The Obaseki blowout in Edo poll IT was a real shellacking. Even those who predicted a Godwin Obaseki win in the Edo governorship poll on September 19 didn’t foresee a blowout. And four days after the result was announced, some are still pondering how Osagie Ize-Iyamu, a man reputed as a grassroots politician, took such a drubbing. He should blame his political party, the All Progressives Congress, APC, and its two chieftains - Adams Oshiomhole and Bola Tinubu - for his loss. I will explain. Oshiomhole, former governor of Edo and sacked APC national chairman, is quite a character. The former Nigeria Labour Congress, NLC, president loves picking fights, most times gratuitously. As the smart alec he thinks he is, he behaves as if he knows everything. And because he is Mr. Know-All, he is opinionated, intolerant and blinkered. Like every smart alec, he is irritating. Little wonder he is the best hated man in the APC today. Oshiomhole’s APC-Obaseki-Iyamu odyssey echoes the allegory of the tortoise who embarked on an illadvised trip. Advice by friends who were apprehensive the trip would end badly was derisively rebuffed. “Must you go on this journey?” they asked in a last ditch effort to save him from himself. The wily animal riposted affirmatively. Exasperated, they made the final push. “If you have to go, when will you return?” Tortoise retorted: “Not until I am disgraced.” That is exactly the story of Oshiomhole. Many who are celebrating the outcome of the poll are as happy for Obaseki’s triumph as they are over Oshiomhole’s humiliation. Blinded by infantile hubris and quest for vendetta, Oshiomhole could not correctly interpret the handwriting on the wall even when he saw and read it. If he was perspicacious enough, he would have noticed that his antagonism and Obaseki’s forceful pushback burnished the governor’s political credentials. Obaseki won the battle when he successfully framed it as a resistance against wannabe godfathers. Most APC stalwarts in the state agreed with him. John Odigie-Oyegun, former Edo governor and former APC national chairman, not only refused to endorse Ize-Iyamu, he also distanced himself from the hustings. He put it succinctly in his congratulatory message to Obaseki: “You and your exemplary deputy have shown that with good work and principled leadership, the ills of overbearing and egocentric politicking in our nation can be overcome.” As the election drew closer, Oshiomhole became more boastful and conceited, likening himself to a “political lion”. Told that Obaseki had vowed to end his political career after the September 19 election, a visibly irritated Oshiomhole thundered: “A political lizard is saying that he is going to end the political relevance of a political lion … examination day is on Saturday and we will find out.” Of course, the result was announced a day after the examination and the political lion’s voice is now muted. Beyond Oshiomhole’s theatrics, composition of the 49-member Edo APC campaign council was a study in self-hate. By appointing the Kano State Governor, Abdullahi Ganduje, and Hope Uzodinma, the Supreme Court governor of Imo State, chairman and deputy chairman, respectively, the Mai Mala Buni-led APC Caretaker/ Extraordinary National Convention Planning Committee sent a very wrong signal to the Edo electorate that were already wary of APC. What informed the choice of both men with purloined mandates, who most Nigerians believe typify all that is wrong with the country’s democracy, as arrowheads of APC’s quest to wrestle back Edo to its column? What were they expected to bring to the table - ability to rig elections? But the most egregious assault on the sensibilities of Edo people was Tinubu’s recorded broadcast which was released shortly before the election. Perhaps, deceived by the selfappointed, albeit non-existent position of APC national leader, Tinubu overreached himself by directly calling on Edo people to reject one of their own at the polls. His action was as needless as it was tactless. If the video was intended to help Ize-Iyamu, it backfired spectacularly, energising the Obaseki camp. Even undecided voters easily made up their minds thereafter. A vote for Obaseki became a vote not only against Ize-Iyamu and homebrewed godfathers but their ilk from outside the state seeking to extend the reach of their political empire. By brusquely injecting themselves into Obaseki won the battle when he successfully framed it as a resistance against wannabe godfathers the Edo political fray, Oshiomhole and Tinubu freely handed Obaseki the surface-to-air missile to shoot down Ize-Iyamu’s political copter. It was the axiomatic free chicken. Instead of the election being a referendum on Obaseki’s first term, it became a referendum on the godfather scorecard of both. The result was predictable: An Obaseki blowout with 307,955 votes to Ize-Iyamu’s 223,619 votes. But the election, which many consider relatively free, fair and violence-free, has also thrown up a fundamental issue. Many observers - local and foreign - have given kudos to the Independent National Electoral Commission, INEC, for a well-conducted poll. Ditto for security agencies, particularly the police, for creating the enabling environment. But there is also a school of thought that believes that the bulk of the credit should go to President Vanguard, THURSDAY, SEPTEMBER 24, 2020 — 17 Muhammadu Buhari for giving the abiding by his May 29, 2015: “I belong INEC and the security Economy agents the to everybody, and I belong to nobody” freehand to conduct the election. Obaseki reflected this sentiment in his thank you message. “We thank President Muhammadu Buhari for defending our democracy and allowing the Independent National Electoral Commission and the security services to perform their constitutional functions without interference,” he said. Many others are falling over themselves to eulogise Buhari for allowing free and fair election in Edo and pleading with him to do same in subsequent elections. I find the supplication insulting. The president is not the guarantor of our democratic rights, and free and fair polls should not be at his pleasure. In any truly democratic country, the idea of pleading with a president to allow institutions of state the free rein to deliver on their constitutional mandates is offensive and ridiculous. Not when Buhari himself acknowledges that “without free and fair elections, the foundation of our political and moral authority will be weak”. In his congratulatory message to Obaseki, the president rightly noted that: “Democracy will mean nothing if the votes of the people don’t count or if their mandate is fraudulently tampered with.” Threat of sanctions There is no doubt that Buhari kept his distance from the Edo election. And there could be a million and one reason for that. Having secured his second term, he may no longer be interested in do-or-die elections, thus vow. It could also be that he was truly embarrassed by Oshiomhole’s antics and did not want to be seen as supportive, or it may well be that he was simply scared from interfering by the threat of sanctions from the international community. Truth be told, those praising the police and the INEC for the success of the Edo poll are only telling a single story. The other side of the story and perhaps the most important is what Buhari decided to do, which is, remain neutral and allow the democratic will of the people to prevail. The police remain the same and Mohammed Adamu who superintended the bloody Kogi governorship election in November 2019 is still the Inspector General of Police. The only difference is that this time around, there was no indication from Aso Rock where the pendulum should swing. If not, we would have had another Kogi drama. The same goes for the INEC. Nothing has changed. Mahmood Yakubu is still the helmsman. If the body language from Aso Rock indicated otherwise, at best the Edo vote would have been inconclusive as happened in Osun in 2018 and Kano in 2019. Therefore, while the outcome of the Edo poll is a huge big step forward in our democratic peregrination, the fact that it was only made possible because the president decided to be presidential is an issue. There is a fundamental problem when a country depends on the benevolence and goodwill of one man, even if that man is the president, to get free, fair and transparent elections. It is not yet uhuru. C M Y K
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24092020 - BLACK WEDNESDAY: 30 killed in Kogi petrol tanker explosion

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