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Sunday, 27 September 2015


  There can never be a perfect Policy. Every Policy must have its downsides just as every medicine must have some side effect. The only reason most drugs( which are essentially poisons) are allowed to be sold and administered on human beings by the regulatory authorities is that on the balance, the side effects or adverse effects are much less than the therapeutic or beneficial effects, and that without the administration of the drug, the condition of the patient may worsen and morbidity and perhaps mortality will follow. Any medicine that will cause more harm than good or that has the potential to neutralize its beneficial effects will not be allowed in the market.
  However the major difference between the downsides of medicines and those of many of our policies is that makers of medicines take the pains to warn us in copious documentations and even in adverts of the expected side effects and possible adverse reactions to the use of the medicines. They even go further to advise us on measures to take when the side effects or adverse reactions manifest. But not so with our policies and policy makers. Sometimes, because the policies are not properly synthesized or thought through, the adverse effects are not contemplated. At other times, because, we do not want opposition to the policies, we ignore or deny the possible down sides of the policies. And even when we recognize such downsides, we are poor at communicating them effectively or even taking preemptive actions to counter or hedge against the side effects or adverse reactions. Often therefore, when the adverse reactions show up and we are unprepared to handle them, we often resort to policy reversals or policy abandonment. Our environment is littered with examples of policy reversals, summersaults and total abandonment, that I do not need to prove my point.
   The TSA policy is a good one but it definitely has its downsides which we must recognize and do something to hedge against.The benefits are many as have been articulated by the government and other commentators :It will enable the government, aggregate its cash in one account or set of accounts in the Central Bank of Nigeria(CBN), so that at each point, the accountant General as the National treasurer will know how much cash the Nation has, it will prevent having to have government funds sitting in one account, while it goes to borrow money with another account and hopefully prevent revenue generating agencies from tampering with the government revenue or even holding on to it, before remitting it to the National treasury and importantly  it will help to limit corruption often connected with government revenue cycle. If all things go well,this policy should result in more efficient revenue and cash flow management by the government.  But all things never go well in life and in government, they seldom go well.
   First, the TSA will tantamount to centralization of the accounts of the government. And everywhere and worse in the government sector, centralization soon leads to overcentralization. The challenges of centralization are many and only gets complicated with overcentralization. The accountant General and his staff will now hold the strings of the purse and the over 900 Ministries, Departments and Agencies( MDAs) of the Federal Government will look unto them to decide how much cash they get, when and how they will get the cash and for what. He and his staff will decide whether the MDAs will receive the cash for onward payment to suppliers and contractors or they will be required to submit the vouchers and bills from suppliers and the Central Bank will credit the accounts of such suppliers and contractors directly. I shudder to think of the complexity of how this will work. And I am not sure many people in the MDAs know how it will work. All we have heard is Treasury single account and everybody must comply by the 15th of September. 
  Now if every MDA has remitted all the money they held in different accounts in commercial banks to the TSA in the CBN, do they still have a say on what happens to the cash or have they fully lost control? If they have maturing commitment or bills due for payment, what do they do? Assuming the cash which they had kept or saved in their account to meet a maturing commitment, now transferred to the central pool in the TSA has been deployed by the Accountant General to meet a pressing need in another department of Government, what do they do? Disappoint the commitment and queue up at the office of the AGF to await allocation or release of cash to meet this commitment?. In normal times, there was hardly sufficient cash to meet commitments, not to talk of now with severe reduction in National income, the bottleneck will be better imagined than experienced. I am forseeing the type of lobbying that will be at the AGF's office for preferential allocation of cash which could promote corruption, rather than curb it. That is what will happen when you centralize and create monopoly in dispensing scarce commodity.
 What will happen to the revenue earning and collecting agencies like the Customs, NNPC,NAFDAC and FIRS which hitherto retained some of their collections to facilitate their work and motivate their staff. While it is true that many must have abused this priveledge, will the new bureaucracy introduced by TSA not affect their work? In the government system, it may be easy to pay money into the treasury but never easy to get it out. There is a real danger that productivity may decline in these agencies if they have to wait for intermittent and certainly irregular release of cash from the TSA. The truth is that it was in an effort to motivate improved performance in some of these agencies that the provisions were made which have now been extinguished by the new policy.
  Another downside to this 'revolutionary' TSA policy is that in one fell swoop about 1.2 trillion Naira in the different commercial banks were taken out and sterilized in the CBN. This is bound to affect both the liquidity and soundness of the banks and the entire financial system. Certainly there will be less loanable funds in the banking system and as such, interest rates which are already high will worsen. There is already talk of banks scaling down activities and many of the staff in the public sector departments whose main job was to go after Public sector funds may be out of job, worsening an already bad unemployment situation in our Country at this time. All these will naturally lead to contraction of the economy and further depression of the Gross Domestic product( GDP), which in the second quarter showed an all time decline to 2.35% growth.
  The question then is, how do we diligently implement this good policy while minimizing the downsides, some of which have been highlighted above. The First and most critical step, should be to undertake a study to truly understand the ramifications of this new policy. I am not sure that such study was undertaken before the policy was rolled out. Though the policy has become effective, it will still be necessary to undertake a holistic study to help make adjustments early to assure long term success of the policy. The second is to establish the capacity and capability of the office of the AGF to carry out the complex cash flow management operations that comes with this centralization. A high level of technological innovation is required to manage the TSA policy to sequence disbursement in a timely manner and avoid the bottleneck that may develop soon. I do not think that capacity and technology exists in the right quantity in the AGF's office today. Thirdly is that we need to find a way to maintain liquidity in the interbank system and in the economy. The CBN must take proactive actions to balance this critical index so as to keep interest rates and inflation rates at acceptable levels that will promote economic growth. Many actions taken by the government in the last three months have led to market contraction and we must begin to reverse this situation immediately before the people begin to groan. 
 Fourthly, the CBN has to consider relaxing the cash Reserve Ratio (CRR), just as it has recently began, to enable the banks breathe and have some latitude to service the economy. Fifthly, I believe that first,contingency measures need to be put in place to deal with MDAs that may be inadvertently asphyxiated by this policy, so that atrophy does not set in, destroying the capability of the agencies to deliver. Thereafter, an innovative mechanism may be adopted that will enable the government cut its nose without spitting the face. Eventually, some exceptions may become appropriate.
 Finally, a lot of rigour is called for in articulating new policies especially those that have such far reaching consequences and impact on the economy as the TSA. Implementation may also have to be phased to avoid shocking the market too much too soon and too often.
 Mazi Sam Ohuabunwa OFR 

Monday, 14 September 2015


  Nigerians have been expectant that Buhari will assemble a crack team to help him deliver on the several promises, he and his party made to Nigerians, though I am dis appointed with the disingenuous methods being adopted to repudiate some of these promises. This will be my second effort to advise that President Buhari should not dampen the expectations of Nigerians or give Nigerians the impression that the President is just another Nigerian politician whose words should not be taken very seriously. When the President's spokesman joins the APC spokesman to enter into unnecessary arguments with citizens on promises made and barefacedly denying documents that were used as campaign material, my heart skips a beat.First it casts a doubt as to the integrity of the Party and its promises and unfortunately this may rob off on Mr President as well. The President's greatest asset is his integrity and this must be protected. When Shehu Garba says he did not have his authentic signature on some of the campaign documents used to promote the President, how were we to know which was his authentic signature and which was fake? Is that the responsibility of the voter to first verify the signature on a campaign material before believing its content? Did he issue a disclaimer to alert voters that false posters or handbills were in circulation ? I believe it was better to insist that the President was not minded to focus on the traditional 100-day Milestone and had chosen a longer term milestone, than to begin to argue with citizens about the authenticity  of campaign materials. This President has a quantum of goodwill that is unsurpassed in recent political history and I pray that he and his men do not take Nigerians for granted. He said, he would not appoint ministers till September, Nigerians are bearing with him. He refused to declare his assets publicly on assumption of office as he had promised, yet Nigerians did not rebel and he has now done it at his own time and nobody is rebelling either. I believe we will accept all these as part of the change and perhaps as his style of governance but to begin to argue with citizens and asking them to provide authentic evidence that promises were made ,is to my mind, the fastest way to erode the President's credibility.
  The expectations that the President will have a crack team is heightened by the time it is taking him to name them. The rate at which he is going, I will not be surprised if it takes the greater part of a full year to fill all the vacancies.Everybody expects that he will appoint honest men and women to positions of authority, people who are incorruptible as he is reputed to be. But I was not sure whether he would also focus on ability to deliver. People who focus on results while doing things righteously, because I know a few very honest but dump people. Like the servant in the Parable of Talents, who received one talent, buried it in the ground, and returned it intact to his master on his return from his trip, while his fellow servants traded with theirs and made profit, but our "honest" but dump servant was rebuked by his master. 
  So far, it is difficult to know exactly how many of the 31people the President has appointed to significant office in his first 100days are honest and smart. One or two that I know have demonstrated both in the past, but in different circumstances. As we all know, the motivation, the controls, checks and balances in the private sector are not exactly the same in the public sector.The 'honesty' virtue or competency takes a while to show up. In some cases, we may never know until after four years or until the EFCC Steps in. What we can easily get a glimpse of quickly is the 'smartness' virtue or competency. In this wise, I must say that I have been impressed with the new NNPC group managing director, Dr. Emmanuel Ibe kachikwu. 
  First, he hit the ground running. This rarely happens in the Public sector. Most Public sector CEOs spend their first few weeks reading handover notes, where they can find them or poring through files and holding series of briefing meetings. Then they begin to put their thoughts together and try to seek audience with the boss to sell their vision or get permission to make the first appointment. Not with Kachikwu. He arrived the NNPC towers and within 24 hours, he had fired the eight Group Executive Directors( GEDs) and before the news got digested, he had appointed 4 new ones, shrinking top management by at least 50%.
  Then he speaks of his Vision for NNPC within days of assuming office, both in structure, format and mandate. One of our greatest challenges in Public sector leadership,is that many come to office and leave office running round in cycles and being essentially reactive. Kachikwu has already marshaled his vision for NNPC and has even begun to drive it. All of a sudden, the Refineries are back to life . The unending turn-around- maintainance of all the local refineries eventually turned around and the refineries began to produce, albeit at different capacities. Was it a mere coincidence or was there a spell on the refineries which has been exorcised?
  Kachikwu is speaking authoritatively like a man who has authority or who is prepared to test the limit of his authority. He says without fear of contradicting his principal that there is no escaping full deregulation of the down stream petroleum sector and the consequent removal of the discredited subdsidy regime. He announces that the refineries will not be sold, promising to turn them around and perhaps make them efficient and profitable. He says PPMC will be broken into three companies. He announces that the PIB rigmarole will start afresh. Then he looks at the oil theft for which past NNPC GMDs and even ministers of Petroleum and Finance have raised several alarms and  Lamentations without much visible improvement, and announces that oil theft will be a thing of the past in a couple of months and recent news report indicate that drones will be used to monitor the pipelines. He makes a promise and gives a deadline to deliver. True, I love people who hold convictions and are ready to speak about them and then do something. We may not all agree with what he says or how he is proceeding, but the Fear of not being politically correct, does not paralyze him as often happens to public sector CEOs. This is a robust display of professional confidence and deep understanding of the industry. 
 From the swagger of Kachikwu, I can surmise that he has been empowered by the President and given some latitude to recreate the NNPC and reinvent the Petroleum sector. I am excited about this development.  Often, we find public sector officials or CEOs who seem afraid to take actions or who must wait to be told what to do by their bosses. And this is one reason, we have not achieved our goals as a Nation. The President is made to look or act as a super human. He appoints people to offices and expects them to take decisions and run with their mandates but many of the appointees turn around to pass the buck to the President queuing up for days to see him or waiting endlessly for their files to be treated. How many People can the President see and how many files can he read in a working day? It looks to me, using Kachikwu as an example that the President may actually be hiring competent people to whom he will commit his vision and then allow them to run with it.
  If this is a sign of things to come, then there is hope that the change we desire may be realized. That we will have in the executive arm of government, people of integrity who are professionally competent and who are sufficiently motivated and empowered to execute and deliver. All of a sudden, the image of NNPC is changing and despite the precipitous fall in crude oil price, production has improved ,oil theft is on the decline and income stream is better assured. There is a strong feeling that some one has taken control, and the free fall and uncertainties in the Petroleum sector seem to be under control. Hopefully, we can expect similar changes in the management of our customs, immigration, Nigerian Ports, Maritime safety and other sectors where the President has made new appointments. That will certainly please Nigerians and hopefully improve our global competitiveness.
Mazi Sam Ohuabunwa OFR


 After 100 days of assuming office, President Muhammadu Buhari( PMB) and his deputy Professor Yemi Osinbajo( PYO) have published the details of their assets and liabilities. Many people had expected them to do so, on the day they were sworn into office. Indeed some people were beginning to cast aspersions on PMB's anti corruption credentials just because of the perceived delay in doing so. From the public interest and comments on this matter of public declaration of assets by Public servants, it is evident that many Nigerians regard this as a very important and critical step in the ANTICORRUPTION war. Looking back, President Good luck Jonathan must have realized that one major reason his government was perceived as being 'pro' corruption, was his surprising refusal to declare his assets openly. Since he did not do this despite strong prodding, people felt, he had something to hide, especially as he only did so reluctantly as Vice President, following President Yardua's example. Naturally his deputy, Namadi Sambo and his ministers followed his example and did not see any justification for openly declaring their assets. For me this was a big error of judgement.
  It may be true as some argue that openly declaring assets may not necessarily stop corruption, nor does it show that the one declaring the asset openly is not corrupt, or may not be corrupt in future, just as it true that not openly declaring your assets does not mean that you are corrupt or may be corrupt in the future. It is common Knowledge that many corruptly acquired assets are held in third party names. Most 'smart' corrupt officials do their utmost to cover their tracks, hide their loot from the eyes of the law and even from the public and only a small proportion of their corruptly acquired assets are connected to them. Many use their wives and children like Abacha was said to have done. Others use 'trusted' friends, allies, surrogates, attorneys, proxies, phony names and companies to hide their assets. And this is not a new phenomenon. We hear of First Republic politicians who acquired large swaths of landed properties, in the names of their 'trusted' allies, some of whom turned around to appropriate the properties or some of them to their own use or ownership. Some big families have not forgiven some other big families because of this alleged 
  Evidence abounds in our Country of some really smart Alec's who have held offices and whom many Nigerians perceive as very corrupt while in office, but after several years of leaving office, no one has been able to link them to corruptly acquired assets-liquid or solid and perhaps that's why no one has been able to prosecute them. Indeed the EFCC and ICPC have hardly laid their hands on any assets of officials accused of corruption. The most they have often been able to do, was to charge them with Money laundering, deriving mostly from the utilization of security votes and sundry bank transactions.So those who say open asset declaration is not a strong ANTICORRUPTION tool may have a point. 
 Personally, I believe that it can be made a strong weapon if we can do things differently. The truth is that public declaration of assets serves a major psychological purpose. First it gives the public a psychological satisfaction that whoever declares his asset openly is transparent and has nothing to hide. The trust factor between the official and the public is enhanced. But the more important psychological impact is the fact that the official has laid himself bare and would from that moment be conscious that the public will have their focus on him for good and for bad. This consciousness of the prying eyes of the public, could be a major deterrence to him and make him sensitive to anything that will suggest corruption or wrongful acquisition of assets. It is akin to the psychological impact on a man who openly condemns smoking or drunkeness or who announces openly that he has given up a particular bad habit. The shame of being cut in the act he has openly decried becomes a major impetus to resist temptations when they arise, as they often would. If he did not make such open declarations, it will be much easier for him to fall back to his old habits, since nobody will hold him to anything. So let us encourage all public servants to declare their assets openly. Those who can not should not be given public offices. They should be left alone in their private lives where they are free to keep their assets and networth secret. I have been reading statements by APC Governors that they would not follow PMB's example. I pray that they would change their minds soon as it would serve them better to have this voluntary restraint placed on them. Indeed all public servants included the PDP governors and local government chairman should follow suit.
  In addition to the psychological restraints and impact identified above, we can make the Public asset declaration become a more effective anti-corruption tool by doing the following. First, when officials declare their assets openly, there should be a mechanism to verify them. The Code of Conduct Bureau( CCB) says they do so or 'pretend' to do so as one commentator described it. To remove the 'pretence', they should publicly certify that they have done so. Second, they should publicly invite those who have any contrary or additional information to supply such data with proofs and if they find any valid discrepancies, such officials should be openly indicted. Third, this exercise must be carried out at entrance and exit to every public office. For example PMB has held previously at least three public offices - Minister of Petroleum, Head of State and Executive Chairman of PTF. In which case he should have declared his assets six times before becoming President on May 29th this year. That is to say that as today, he should have declared his assets seven times. But as he himself announced from Accra recently, he has done only four times, leaving a deficit of three. So what do we say to CCB? Thank you for a job well done?. It must be an article of faith, that the declaration of assets is enforced at least as currently prescribed by the constitution and hopefully we will make public declaration compulsory someday, if moral suasion will not do it.
 Fourth, public officials must state how they got the money to acquire the assets. It is not enough to declare that somebody has six houses or 800,000 dollars in his account, he should be made to declare how he earned the money or how he raised the funds to acquire the assets. This is critical to justify ownership of such cash or houses. Those who worked for their monies and wealth honestly should have no qualms showing how they made their money,even if it will entail some inconvenience. I do not need to be told what conclusions some people would come to if the sources of the declared cash are not disclosed. Fifth, we should develop a genre of investigative journalists and NGOs who will dig in to confirm or contradict such declarations. These investigative journalists will go beyond the openly declared assets to scoop the ones that were not declared and the ones held in trust by close allies. And such officials should be quickly prosecuted and dis graced. Since we do not have death sentences for corrupt officials as they have in China, the minimum should be open disgrace and the return of such assets to the national treasury.
  I have made the above suggestions in the belief that we are truly determined to wipe out corruption in the public space, and not just seeking escape goats or just playing to the gallery. When Nzeogwu and his team carried out the first coup in Nigeria in 1966, they used corruption as one of the major reasons for disrupting our normal democratic evolution as a Nation. When Olusegun Obasanjo returned as President in 1999, he found that corruption had grown wings and now that Buhari has returned in 2015, he has said that we must kill corruption or corruption will kill our Nation. It will be a shame if Goodluck Jonathan or Ibrahim Babangida decides to return in 2019 or 2023 and we will still be talking about corruption in high places in Nigeria. Let us all unite to kill corruption in Nigeria now!
Mazi Sam Ohuabunwa OFR

Wednesday, 2 September 2015


   I am troubled with the latest economic performance indices being reported for our Country. The price of our major export commodity, crude oil has continued an unmitigated decline since June of last year, and at a time we had thought the fall had buttoned out, the decline intensified with oil prices dipping below Fourty dollars per barrel. For an economy that began to tremble and quake when prices were only at seventy dollars, it is little wonder to receive the report that the economy is gasping for breath. 
  Last week, the National Bureau for Statistics, announced that our GDP growth for 2nd guarter has taken a precipitous dip to 2.34%. This is the lowest growth in at least ten years. In 2014, the Q2 GDP growth was nearly 6.54% which is to say that our growth has declined by at least 60% by the second quarter of this year when compared to last year. This is a very troubling development but I am more troubled that our response to this bad news has been tepid and muted. Indeed there has been no comment by the government on this depressing development. Could it be that we do not care, or that we do not understand the ramifications of this or that we do not want to admit reality or is it that we are distracted. The National focus seems riveted on the anti corruption issues and the patently lopsided appointments of President Buhari. As important as those issues are, it is beginning to look to me that our eyes are off the economy. 
  It is not sufficient to make reflexive political remarks on the economy. Every government will always talk of growing or improving the economy, so just making daily remarks about how bad the economy is or how good we wish to make it, will not change anything. Blaming the previous government for everything is escapist. What will change things is implementing a coherent and well thought through bundle of economic policies. Not the fire brigade  actions that the Central Bank of Nigeria seems to be taking in a desperate bid to deal with evolving economic realities. I have repeatedly said that the economy does not respond to decrees nor to platitudes, not to talk of wishes. Since May when the new government came to power, all the economic indices have been getting worse. Inflation has increased,almost going back to double digit, the exchange rate has worsened, despite a well advertised promise to vastly improve the rate, and bank interest rates have increased. GDP is on a precipitous slope and what is worse, the non oil GDP which has shown consistent growth in the last five years has begun to decline and  in the Q2 report , it declined faster than oil GDP. Industrial production declined by 3.31%, manufacturing declined by 3.38% while mining and quarrying declined by 6.62%.
  For sure, this trend can not be entirely blamed on the new government but they have to take the responsibility, just as they are taking the shine on the apparent improvement of electricity in the Country. There are always two sides to every balance sheet, the assets and liabilities. You can not take one and deny the other. What is surprising me to no end, is both the spoken and body language of the government. There is no hurry. There is all the time in the World to fix the Country and the economy! I believe that we owe the government in power, the notice that they do not have that luxury. We can not be watching the economy continue on this ride to recession and hope that the aura of President Buhari will automatically reverse the trend.            After all the hype on corruption and the daily announcements of homongous amounts alleged   to have been stolen by some past ministers and other members of the last government, we must re-focus on the economy. Because soon, Nigerians are going to get tired of this and will begin to demand results, as unemployment is increasing and poverty is exacerbating .Over a month ago, Governor Adams Oshiomhole who seems to be the purveyor of the secret information of where the stolen funds are located and indeed on who the thieves are, announced that one minister has 6 billion dollars in his account from stolen oil. Nigerians are wondering what we are waiting for to go and bring back the money or arrest the minister since we know in which accounts they are located and who placed them there. If this can not be done immediately, I will advise that people like Oshiomhole should face governance and leave EFCC and Other security agencies to follow up on corrupt officials. If they have information from America or Russia of from anywhere concerning where our looted funds are, they should pass their information to the relevant anti crime agencies. We hurt the image of our Nation terribly when we make unsubstantiated and unsubstantiable claims about mind bugling amounts claimed to have been stolen by Nigerian officials. Every one must remember that they can be at the receiving end someday. Soon we shall all be ex this and ex that and we should imagine the pain of being accused unjustly or without any iota of  evidence. That we have access to free media should not make us blab without control .Some level of decorum is expected of those who occupy high political office. When the transparency International rates Nigeria amongst the most corrupt Nations in the World, they rely largely on what we say or write about ourselves. Let us not bite our noses to spite our faces! After all, the political campaigns have long ended!
  Now my point is that our economy is in dire straits and how to halt the decline and return it to high growth should be the primary concern of our governments. This can be done while fighting corruption, using the anti corruption agencies. One of the declared cardinal objectives of the new government at the federal level is job creation. What are we doing about this after 100 days in office? Job creation can not happen when the economy is contracting, when manufacturing is declining and when mining and quarrying are on the decline and the growth of agriculture has declined to only 3.49%. If we continue the way we are going and with the speed with which we seem to be addressing economic issues, then the chances of our economy going into a recession may increase. Because the consequences of that will be too disconcerting to contemplate, I suggest that this is the time to declare a state of emergency on our Economy. 
 The first element in the emergency will be to immediately appoint the Economic Ministers- Finance & the Economy, Manufacturing & Value creation and Trade & Investment. This should be accelerated and must not wait to be made with all the other ministers. Waiting for another day before this is done is dangerous. The second element will be the immediate release of the economic policies of the government. Many investors are waiting on the wings for this. There is so much uncertainty in the Nigerian economy today and investors are wary and hesitant. Let it be known that investments create enterprises and enterprises create jobs. Which means that if we need jobs, we must promote investment and to do so, we must remove uncertainties. There is no short cut. The third measure, will be a quick effort to align the monetary policies with fiscal policies to restore macroeconomic stability. The current volatile macroeconomic stance is very injurious to the Nigerian stock market, the Nigerian businessmen and to the Nigerian consumers. It must be stabilized quickly before more damage is done.  
  Fifthly, the Agric-promotive policies and programs started by the last regime should be reformatted and re energized. Currently, there is loss of momentum and this can not help job creation. Sixthly, we should proceed with the completion of the Privitisation of the Power sector and other sectors including the railways . Seventhly and very importantly, we must completely deregulate the down stream petroleum sector now. Somebody should let the president understand, that we are dangerously shooting ourselves on the feet and may soon bleed to death if we do not fully deregulate and fully remove the subsidy.  So much beneficial  developments will be thrown up with this singular action including the establishment of new refineries and the further evolution of the petrochemical industry, all, opportunities for new investments and plenty of new jobs.There are many other elements of an emergency state on the economy, but these seven elements are primary as they will help refocus on the real issues of economic management and wean us from the entertainment of accusations and counter accusations on corruption between Lai Mohammed and Olisah Metuh on one hand, and between Adams Oshiomhole and Godsday  Orubebe on the other side. Let's get serious please! 
  Mazi Sam Ohuabunwa OFR