Nigeria Content Online

Labour party seeks fresh voters register

The
national leadership of the Labour Party, at the weekend, made a
passionate appeal to President Goodluck Jonathan to immediately
commence the process for a fresh and transparent registration of voters
in country.

The Party, in a
communiqué issued at the end of its 8th National Executive Council
meeting held in Akure, at the weekend, argued that the present Voters’
Register was totally dubious and full of errors.

The Labour Party,
in a communiqué signed by Dan Nwanyanwu and Abdusalam Abdukardir Salam,
National Chairman and National Secretary of the Party respectively
added that the current voters’ register could not be relied upon for
conducting credible polls in the country.

“We want to enjoin
President Jonathan to ensure that credible elections are conducted on
the basis of one person, one valid vote are put in place.

The Party also
lauded the recent sack of the former boss of the Independent National
Electoral Commmisssion (INEC), Maurice Iwu, saying that his leadership
was characterized by manipulation of votes and fraud in the
announcement of winners of elections.

‘As a party, we are satisfied with the removal of Maurice Iwu because he was not with the job given to him to do.

All we want
Jonathan to do is to appoint credible people to man INEC, people who
will able to conduct credible elections for the nation,” the party said.

The party also
commiserated with the immediate family of the late former President
Umaru Musa yar’Adua and the entire nation over what they termed
“painful exit of a man of peace,”.

For wage increase

The party’s NEC
equally threw its weight behind the Nigeria Labour Congress (NLC) and
the Trade Union Congress of Nigeria (TUC) in their agitation for the
payment of minimum wage of N52, 200 for workers in the nation.

It assured that
the party would be consciously re-positioned by aggressive drive to
further expand its membership base in all states of the federation,
resolving that the Party’s Congresses in all wards, Local government
Areas and States be held and concluded in August 2010 based on the
approved guidelines issued by the National Working Committee (NWC) of
the Party.

The Lucifer effect

The Lucifer effect

I
heard many years ago about the infamous Stanford Prison Experiment,
where normal university students were selected randomly for an
experiment, where they took on the roles of either prison guards or
prisoners, grew to be so brutal that the trial had to be prematurely
ended.

Discussing the
results amongst friends, we marvelled at how circumstance could bring
out qualities in ourselves that we were unaware of.

Philip Zimbardo,
the Stanford professor who carried out the experiment in 1971, names
this ‘transformation of human character’ the ‘Lucifer Effect’, named
after God’s favourite angel, Lucifer,.

Many of us would be
un-surprised to learn that ‘The Lucifer Effect’ is strikingly similar
to ‘The Nigerian Factor’. You know what I mean? It is a phrase that
surfaces when planning for a project or an enterprise in Nigeria is
being discussed in a mixed group that includes expatriates, repatriates
(Nigerians returning home from residency abroad), or ‘virgins’ – those
people we call JJCs (Johnny Just Comes), new entrants to politics,
business, industry, education, or to any sector that you can name.

At some point
towards the end of the planning process, the phrase ‘the Nigerian
Factor’ is introduced and the debate commences. Then comes the
challenge: “Are you saying that something tried and tested in the
world, in both developed and developing countries alike, cannot work
here?!”

Firstly, there is no real consensus about the influences that make up the Nigerian Factor.

I think what we can
agree on is that, while Nigeria is a country that shares elements of
its climate and topography with other countries in the world, and that
while Nigerians share the humanity and beliefs of other citizens of the
world, the combination of geographical environments, peoples and
cultures, have created something both familiar and unique that needs to
be ‘factored’ into our interactions with each other and with outsiders.

We have what
linguists call ‘false friends’. These are words that have the same
spelling in different languages but have dissimilar meanings. For
example, both English and French have the word ‘sensible,’ but while it
means reasonable in English, in French it denotes that you are
sensitive.

Trap of false friends

Visitors to
Nigeria, and Nigerians visiting another region of the country, often
fall foul of ‘false friends’. Because we speak a variation of English;
because Western clothes and mannerisms are common here, because we
share the major religious beliefs, many visitors believe that they can
interact with us as they would another Westerner. Big mistake.

Because we are very
hospitable; others believe that Nigerians accept strangers easily.
Wrong conclusion. Just ask couples who wish to marry someone from a
different religion or another ethnic group, not to mention a foreigner.

Most importantly,
the belief that because, traditionally, we are used to deferred
gratification – to investing money and time in livestock, seeds, and
goods, and seeking the best markets in which to sell them in order to
make a good return – that Nigerians are prepared to wait for the
business deal or the contract to be completed before getting their
return in terms of profit or national gain…THAT is the heart of the
matter.

Perhaps it was true
once upon a time that we were prepared to wait now for future gain.
Now, gratification must be today, NOT later.

The system that we
live and work within that has been evolving for the past 40 years,
almost guarantees that no matter how good or well-meaning you are, the
longer you stay in the public and political system, the more brutish
and greedy you will become. If you don’t ‘play ball,’ your life and
your family are threatened, your business is blacklisted or, if they
like you, you would be powerfully encouraged to leave.

To have any hope of
escaping ‘The Lucifer Effect,’ we have to ditch a system that turns
good people bad, and establish a system that will keep even bad people
relatively honest. Lobby whomever you know for electoral reform.
Support banking reform. Scrutinise and protect your rights as our
constitution goes through review and change. And write to your
legislators regularly and repeatedly. Make the Nigerian Factor work for
you rather than against you.

ENVIRONMENT FOCUS: Death in zoological gardens

ENVIRONMENT FOCUS: Death in zoological gardens

“Can
you imagine how much it will cost to feed that dog, when some people
have nothing to eat?” “This man had better not take that dog near Akwa
Ibom, or it will end up in the soup pot!” I have endured such daily
comments while walking my Labrador bitch. Other Nigerians, especially
children are surprisingly kinder, inquiring politely how the animal
came to look so healthy, and if they could get one to own. All fine,
provided they are prepared to invest time, love and patience taking
care of a dog.

There is a hard
edge to these jokes and spiteful remarks over the impressive anatomical
traits of my canine friend. Defensive answers that the dog is fed on a
diet of eba, okro soup and stockfish, and therefore low budget, have
not satisfied the hecklers. Of course I scavenge weekly at the butchers
for tripe and scrap-meat.

In any case the beast is not maintained on government funds. Its welfare is nobody’s business. End of discussion?

Nevertheless, some
issues could be thrown up for a sensible debate. Must animals be kept
only for economic reasons, as security guards or for meat in livestock
agriculture?

Is a healthy pet
some form of visible provocation for the masses? Resource ecologists
posit that poverty constrains humans to compete directly with animals
for scarce, renewable natural resources on which both groups subsist.

The result is then a state of mutual disrespect and enmity, the perfect postulate for hunter-gatherer societies.

But I sometimes
marvel at how the same Nigerians moaning over a dog’s excellent
condition easily glorify compatriots who possess sprawling mansions in
Abuja and Dubai, beachside condominiums in Florida, jet aircrafts or
gas-guzzling jeeps. It does not bother us even when these objects of
adulation are serving police or customs officers, or pastors.

I have had the
displeasure of visiting most zoological gardens in Nigeria, and
honestly, a BBC documentary on their status is long overdue! The
cruelty in these establishments makes one wonder if the universe was
created for man alone! Nigerian zoos are incapable of keeping insects,
and should be prevented from incarcerating lions, leopards and primates
under abhorrent and criminal conditions.

At the zoo in
Maiduguri, one chimpanzee suffering from hernia had to lift its own
bloated scrotum with both hands whenever it walked. The intelligent
primate’s misery was compounded by children hurling rocks and sand at
it in amusement, while a warden looked on without concern. He too
appeared unwell! The enclosures for the lion and a leopard were empty.
I was told they had died of hunger. No money had been approved for
their meals, even though the zoo charged gate fees.

Lion reduced to bones

A once popular lion
at the Nekede zoo, near Owerri was all bones! In view of the putrescent
conditions the big cat was covered with flies, but still breathing.

Here was the “Lion
king” suffering such an indignity! Another chimpanzee at the University
of Ilorin spent its life in a small metal cage the size of a suitcase!
A bateleur eagle that naturally soars at great heights hadn’t a better
accommodation at the same zoo.

The way out for Nigeria is to raise funds from the private sector for the upkeep of zoos.

Concurrently and ultimately, natural and biodiversity-rich habitats
must be preserved and given heritage status. Why copy the rich world in
creating expensive zoological gardens anyway?

Yerima: Predator, Paedophile or Fundo?

Yerima: Predator, Paedophile or Fundo?

One would have
thought that a two-term executive governor and an elected (?)
representative of the people at the National Assembly would care about
the people he represents. One would have also thought that someone who
is a father to many children of different ages and generations would
care about other people’s children. Moreover, no one would have
imagined that a member of the highest law-making body in the land would
have so much disregard for the laws of the land and by implication, the
people he swore to protect through respect for the Constitution.

It is now becoming
clearer why a man like Yerima would neither mobilise for, nor support
the adoption of the Child Rights Act in some parts of the country. It
is simply to catch the girls young, even if they are still in their
diapers, like all paedophiles do! Never mind the no argument of Yerima
that marrying a thirteen year-old is not against his religion. For me,
the use of religion to support an action like Yerima’s is not a new
excuse, and it is becoming nauseating.

It is not uncommon
to find people resorting selectively to religion and culture when and
where it concerns the rights of girls and women because of their desire
for exploitation and domination. Though I am not a Muslim, in the
course of working to protect women’s rights, I have had the opportunity
to examine women’s lives across the Muslim world and I must say that
Nigeria is almost in a world of its own. I am also blessed with a
spouse who is not only a Muslim, but also a knowledgeable one who does
not get tired of seeking knowledge and sharing with me.

The example of
Ayesha (SAW), the wife of the Prophet (SAW) has been used very often to
support early marriage, as if it was true that the Prophet had any
relationship with her at the age she was betrothed to him. There have
even been research reports that reveal that her age was debatable, as
it could not be ascertained that Ayesha was thirteen! People like
Yerima also conveniently evade mentioning the circumstance of the
betrothal, as if the Prophet (SAW) went out of his way to look for
Ayesha.

It is worth
mentioning that Yerima and his like do not cite the active
participation of Ayesha in decision-making and governance to the extent
of leading the army of the faithful in war, as a good example by the
beloved wife of the Prophet that is worthy of emulation.

What better
illustration of a just religion that provides opportunity for women
take active part in decision-making and politics in order to exercise
their God-given rights to being human. Can Yerima tell us how many
women he elevated to the highest position possible in Zamfara when he
was governor?

Marry older women

The Prophet’s
exemplary life is worth emulating; but should we emulate only those
aspects that are convenient for us? I wonder though why men are not
marrying older women to fulfil their desires of emulating the Prophet.
In any case, is it not also part of the Islamic jurisprudence that
Muslims can also use ijtihad (independent,contextual reasoning), which
has led Egypt and a number of Muslim majority countries to fix the
minimum age of marriage at eighteen? I am sure the Islamic world has
not accused such countries of violating the shari’ah.

With men like Yerima preying on little girls, and other men at the
National Assembly protecting one of their own, it is still a long,
windy road to travel for women and girls!

INSIDE AFRICA: Two of a kind

INSIDE AFRICA: Two of a kind

Last
week the imperial emperor of Zimbabwe, Robert Gabriel Mugabe, hosted
his Iranian counterpart Mahmoud Ahmadinajad. It is not surprising that
the two presidents are friends. They are perhaps brought together by
necessity and the need to search for friends. The world is created in
such a way that no human being is entirely detestable as not to have a
friend.

This, to my mind,
is the case with Mugabe and Ahmadinajad. These are two men whose
mention of their names stirs different emotions in people. Mugabe to
some is a hero and a saviour, same for his Iranian counterpart. To
others the two are odious fellows who deserve to burn in the hottest
part of hell. There is no way they would not evoke such diverse
reactions. The two of them see themselves as the underdogs who are
being demonised by the West because of their ‘‘principled’’ stance.

Both said this much
in their speeches during the visit. Mugabe fired the first shot when he
told the world that his country is in support of Iran over its plan to
build a nuclear power plant. This has not gone down well with the West,
especially America which views this as entrusting a cat with a piece of
meat for safekeeping! Mugabe who has been something like an outlaw in
the West described the stance of Iran as a ‘‘just cause’’ and is in
full support of its plan. He believes that the two countries and their
leaders have been “unjustly vilified and punished by Western
countries”. It is therefore his idea that the two countries should band
together to fight the West.

On his part
Ahmadinajad is accusing the West of trying ‘‘to seize the markets of
the countries [Iran and Zimbabwe] and destroy their economies. The only
sin… we have committed is the cancelling of the concessions that the
West had in our country. The United Nations’ organ of the Security
Council is being used to serve the powerful countries to put pressure
on the smaller countries like Iran and Zimbabwe.” We have heard this
before and will continue to hear such arguments because those who see
themselves as tin gods in power will always cling to any straw or
sentiment to justify their stance. Mugabe and Ahamdinajad can continue
till thy kingdom come to pontificate about the intention and plan of
the West to ‘‘muzzle’’ their voices because of their so called
opposition to the subjugation of their countries by the West. However,
ordinary Iranians and Zimbabweans know who is muzzling them and
trampling on their humanity. The poor Zimbabwean farmer or worker who
cannot get food to eat or get paid knows that the cause of his plight
is not so much the action of the so called West but the
stiff-neckedness of the local tin gods like Mugabe.

Is it the West that
is responsible for his being in power for three decades and presiding
over an economy that has long cascaded from the zenith of the hill to
its rock bottom? Please, choirmaster sing me another song. Or as the
inimitable Fela Anikulapo-Kuti would sing ‘teacher don’t teach me
nonsense.’ The two band together just to rub the nose of the West in
the mud but who cares? They are living a deceitful life. We cannot be
conned.

A new driving experience

A new driving experience

Driving can get better with the sleek, portable, and subtle 2010
Honda Civic. The Civic, which is long known as Honda’s smallest car, now comes
with slightly bigger build. The car has a wider and longer front and rear lights.
It seats lower on the ground, while the front grille and Honda logo is
beautifully designed with shiny chrome.

Design

The 2010 Honda Civic’s structure has been built to offer maximum
comfort both exterior and interior.

The interior has a unique design, with its digital speedometer
and gas gauge located underneath the windshield. The analog tachometer is
located at its standard position, behind the steering wheel.

The car comes in two basic body types; the sedan and coupe. Both
types are available in five line-up models which are the DX, LX, EX, EX-L and
Si. All versions are lined up in different grades, which are distinguished by
slight differences with both exterior and interior.

The DX type steps on 15-inch steel wheels and are fitted with
power windows, but doesn’t come with a stereo except for the DX sedan optional
with a four speaker CD/MP3 audio system.

The LX type steps on 16-inch wheels and features keyless entry,
cruise control and sliding armrest.

The EX type is endowed with a sub woofer six-speaker sound
system and steering-wheel-mounted audio control.

The EX-L type comes with leather upholstery seats and heated
front seats, while the Si type steps on 17-inch alloy wheels, a higher power
and sports tuned performance.

The 2010 Honda Civic sedan also comes with three special
versions, which are the LX-S sedan type with rear spoilers and alloy wheels;
The GX type with similar features to the LX; and then Hybrid model with
automatic climate control and similar features to the EX.

Engine Power

The Civic is powered by varying engine types and transmissions.
The DX, LX and EX models are powered with a 1.8 litre four-cylinder engine that
produces 140 horsepower and 128 pound-feet of torque.

The car comes mated with a standard five-speed manual transmission
and an optional five-speed automatic transmission.

The Hybrid type uses a gasoline/electric hybrid power train to
maximise fuel economy. The Civic Si type is powered by a 2.0 litre engine and
integrated with a six-speed manual transmission.

Safety

The 2010 Honda Civic comes with side curtain and front seat air
bags. It is also built with antilock brakes and active front head restraints.

Some models come with specifics like four-wheel disc brakes
present only in the EX and Si and stability control in the EX-L, Si and Hybrid
type.

Price

The 2010 Honda Civic ranges in price from $16,000 to $ 22,000
depending on the model of the car.

Money

Stock market rally continues

Stock market rally continues

The stock market ended the past week in the green zone with
gains that are mostly attributed to buying pressure of investors. The activity
during the three days of trading in the week was a continuation of the market’s
adopted pattern since the beginning of the year, as trades were dominated by
speculations that were followed by quick profit reaping transactions.

Last week was particularly eventful following the death of
President Musa Yar’Adua, as Goodluck Jonathan became the nation’s substantive
president. Also, the Asset Management Company (AMC) Bill was passed by the
Senate on Wednesday. The bill is expected to unburden banks from toxic waste
and free their balance sheet through purchase of the bad loans, thereby
enabling banks to play their financial intermediation role effectively. With
this new development, we expect further stability in the capital market.

Market review

Activities in the stock market have been upbeat since the
beginning of the year as investors renewed optimism in the equity market due
largely to hopes that recent measures by Central Bank of Nigeria (CBN) and
other market regulatory bodies would sustain market recovery.

Positive earnings results of companies as released last week
reaffirmed hope for a sustained rebound, even as more investors had reasons to
turn positive and put money into the market.

In the past week, the NSE All-share index rose by 103 basis
points to close the week at 27,503.36 points.

Since the beginning of 2010, the market capitalisation has
gained more than 30 per cent. It closed on Friday at N6.65 trillion. Stocks
edged higher on Friday as investors looked to extend a strong run that has left
major indices up 0.38 per cent for the week. The current bullish trend should
continue in the months ahead. However, investors should exercise caution as the
market may witness minor correction phase.

During the week, both the market capitalisation and the NSE AS
Index gained 0.38 per cent respectively. So far, the market has recorded a
YTD-high market capitalisation of N6.78 trillion, representing a YTD yield of
33.33 per cent. Overall, the market traded a total of 1.75 billion units of
shares, valued at N17.11 billion in 25,710 deals.

The Banking sub-sector remains the most active (measured in
terms of traded volume) as it recorded 836.56 million shares valued at N9.42
billion exchanged in 11,033 deals while the Insurance sub-sector was second
with traded volume of 389.61 million shares valued at N349.39 million in 1,802
deals.

Corporate actions and
results

In the past week, ECOBANK Nigeria Plc released its full year
trading result to the floor of the Nigerian Stock Exchange. The company
declared a Gross Earnings of N59.864 billion representing an increase of 8.54
per cent from previous year’s trading result. The company also posted a Loss
After Tax of N4.588 billion.

Furthermore, ECOBANK also released its interim report for the
period ended 31st March, 2010 (First Quarter). A Gross Earnings of N13.703
billion was recorded, while a Profit After Tax of N1.071 billion was declared.

JULIUS BERGER Plc also released its interim report for the
period ended 31st March, 2010 (First Quarter) to the floor of the Nigerian
Stock Exchange. Julius Berger, which has 1.2 billion units of shares
outstanding, declared a Turnover of N31.414 billion and a Profit After Tax of
N780.959 million.

Similarly, JAPAUL Oil & Maritime Services Plc released its
interim report for the period ended 31st March, 2010 (First Quarter) to the
floor of the Nigerian Stock Exchange. The company, declared a Turnover of
N1.615 billion and a Profit After Tax of N425.515 million. The table below
shows full details of companies’ results and performances released during the
week.

Market outlook

Earnings projections of companies suggest that earnings should
continue to improve over the next couple of quarters. Earnings that exceed
expectations have been shown to be conducive to higher equity prices.

Given extremely low levels of interest rates, stock market activities will
surge higher, thereby creating more bullish sentiment.

Money

No systemic risk in the banks

No systemic risk in the banks

Some finance experts have said that the losses declared by some
of the banks in their December 2009 common year end result was not an
indication of a systemic risk in the industry.

According to the experts, majority of the concerns in the
industry have been captured in the joint audit carried out by Central Bank of
Nigeria Nigerian Deposit Insurance Corporation special audit of the banks last
year.

Akintola Akinbamidele, finance research analyst, Renaissance
Capital, West Africa, said there is no systemic risk in the industry.

“A lot of the concern in the banking sector have been captured and
brought into perspective during the CBN/NDIC audit in September 2009,” he said.
“Our outlook is fundamentally positive as we expect real GDP growth in Nigeria
to accelerate in 2010, and now that the expansionary budget has been approved
and the Asset Management Company bill has been passed while oil is still
trading at an average of 80 dollars to the barrel.”

Mr. Akinbamidele said a survey of the banks that have released
results, revealed that a majority of them were in the green.

“First Bank declared a strong set of numbers in the first
quarter, (1Q) and a lot of the other first quarter results from banks have been
in the green,” he said. “We expect concerted effort towards loan recovery in
2010 by the banks and we expect that Nigerian Bank’s 2010 profit forecasts are
well supported, as we forecast robust loan and deposit growth, a wider net
margin, an improved efficiency, lower loan loss provisions and a lower tax rate
of 20 per cent.”

Except for a few banks, majority of banks have declared losses,
especially in their December 2009 common year end results, raising concerns as
to the actual state of the banks and their ability to scale through after such
provisioning.

However, most of the banks have declared profits in their
released first quarter results, in contrast to the losses declared last year,
attributing this mainly to the success in the recovery level of otherwise
non-performing loans.

Diamond Bank Plc released its 2009 results, revealing a loss
before tax of N12.4 billion for the period, due to large one-off provision,
compared to profit before tax of N17.3 billion for the comparable prior year
period (December 2008).

Access Bank also released its 2009 results with a loss before
tax of N3.5 billion Naira.

Eco Bank Nigeria Plc also released its audited results for the
common year end revealing a loss before tax of N5.944 billion and a loss after
tax of N4.588 billion, following a tax rebate, among others.

Managing the risk of
loan-loss provisioning

Razia Khan, regional head of research, Africa Head of
Macroeconomic Research, Standard Chartered Bank said recent measures in
addressing banks’ loan provisioning have included a review of existing
prudential guidelines, in particular the one per cent general loan loss
provisioning regime which was considered to be too pro-cyclical.

“At the end of last year, in order to lessen the burden of the
crisis on banks, the CBN announced that it would be waiving the 1 per cent
general loan loss provisioning requirement for a year,” she said.

“The regime is now being refined further. According to the
monetary authorities, a strong argument exists for implementing a different
provisioning regime for small and medium enterprises financing, agriculture,
and project finance that counters the pro-cyclicality in existing provisioning
guidelines.”

Ms. Khan also added that reforms are aimed at spreading risk
over a longer period of time, which should encourage more lending to the real
sector, despite the economic cycle.

“A framework for collateral adjustments to be taken into account in the
provisioning regime is also being developed,” she said. “With realisable
collateral, transparently valued at regular intervals, the hope is that a more
sound banking sector that is less subject to the volatility seen in the recent
past -when record loan-loss provisioning wiped out the capital of several
banks- will finally emerge.”

Money

FINANCIAL MATTERS: The duties of a Central banker

FINANCIAL MATTERS: The duties of a Central banker

In advance of the
third meeting this year of the central bank’s (CBN) rate-setting
committee (MPC), the quantity of tea taken in our banking halls has
gone up noticeably.

Arguably, the
supposedly rejuvenating qualities of this beverage, and the ungodly
hours that bankers are required to put in daily, could account for the
fact of its increased consumption. But bankers in the country today,
have more problems than this. The industry appears to have fallen in on
itself.

Aside from the
massive loan loss write-offs since August last year, rates in the money
market have nudged record lows on a daily basis. In part, this is
because the central bank’s most recent shot at bringing the industry’s
practices and philosophies up to scratch has made the traditional
haunts of banks’ wunderkinds (the capital market, the downstream sector
of the oil and gas industry, and the top-end of the build-to-own real
estate market) no longer attractive.

Surprisingly, a
much bigger part of the industry’s worries arises from the fact that
the central bank’s attempts to repair the damage to the financial
sector as part of its efforts to help a return to growth and the repair
of households’ balance sheets has had several adverse unintended
consequences.

Better governance
requirements, more robust risk management frameworks, and all of the
apex bank’s quantitative easing have not driven a recovery in the
industry’s intermediation function. Retail rates suggest a total
disinterestedness on the part of bankers with growing the liabilities
side of their balance sheets.

It is as if the
banks were telling deposit-rich segments of the economy to go away with
these deposits. At the same time, there ain’t much activity on the
asset side of the industry’s balance sheet. At this point, no one is
quite certain what the problem is. Nor for that matter what the
possible solutions might be.

Of course, having
taken a rap on the knuckles for immediate past excesses, the industry
is not minded to take risks at the margin anymore. So, one can
understand the reluctance to create speculative credits. But having
offered all manner of inducements and comfort arrangements in support
of a return to credit growth, the central bank ought now to be
concerned about the failure of banks to create meaningful credit in the
last two quarters.

So, what does the
apex bank do in addition to its existing policies? This is where I
think the increased tea drinking in the industry has more to do with
attempts by industry operatives to discern the monetary policy
trajectory through reading the tea leaves, than with the refreshment
offered by the beverage.

On this score, the
central bank has a lot to do still. It is increasingly useful to find
references in the central bank’s publications to the fact that owing to
current policies, inflation expectations in the domestic economy have
become properly anchored.

However, there are
good reasons to believe that there remains some confusion in the
economy about which of two things the apex bank should be addressing
its limited resources to. An independent monetary policy or a fixed
(managed) exchange rate policy? In the face of shocks to the economy in
the nature of recent events, which levers do the markets expect the CBN
to pull? And in which direction? Clarity on this would help to anchor
market expectations better than any declaration to the same effect
could.

But by far the
greatest need is for the central bank to restore the traditional
understanding of its functions. Under its immediate past governor, the
fervour with which the CBN took up the “Vision 20: 2020” thing created
the impression that single-handedly the apex bank could propel the
economy into the league of emerging economies.

The 2004
consolidation turned economic logic on its head. Bigger banks were now
to drive economic growth, rather than banks growing in response to the
needs of a growing economy. With all this focus on the financial
services sector’s capacity to grow the economy, the finance ministry
went to sleep.

Macroeconomic
policy, fiscal and monetary was in the CBN’s court. Truth is that as a
statement of policy nothing could be more wrong. To use an earthier
metaphor, to the extent that it is responsible for fiscal policy,
government has its foot on the economy’s accelerator. The apex bank, on
the other hand, applies the brakes.

Time for the MPC to help remind the economy of this relationship!

Money

Experts call on government to intervene in Aero, Oceanic brawl

Experts call on government to intervene in Aero, Oceanic brawl

Professionals in
the Nigeria aviation industry have called on the federal government to
get involved in the ongoing brawl between Aero Contractors and Oceanic
bank.

Describing the
disagreement between the carrier and its financier as another threat to
the much depleted airline sector, the experts disclosed that our
country’s aviation image will be tarnished internationally should Aero
become grounded.

“The Nigerian
aviation image and heritage will be further dented with the acronym
liquidation, considering that this will be the fourth carrier within a
year, which makes us a very unstable country in the committee of civil
aviation nations, when small Tanzania can have a profitable carrier
called Precision Air which operates mainly with props,” said Olumide
Ohunayo, former president of the National Cabin Crew Association
(NACCA), over the weekend.

Cognizant that the
airline is “not totally grounded,” Mr. Ohunayo disclosed that if both
parties cannot resolve their differences quickly, the government should
take over the carrier temporarily, while the airline sources for
interim managers and new investors.

Describing the
government’s fund disbursement methods as “sketchy,” the one time NACCA
president disclosed that the government should assist the airline,
considering the excellent track record of the carrier.

“I think the oil
companies should also invest and an insider like Captain Olumide be
invited to assist in the restructuring,” he said.

Commenting on the
issue, Gabriel Olowo, chief operating officer Sabre Travel Network,
disclosed that assistance from the government at this point will be
invaluable considering the economic importance of airlines in a country.

“We’ve been talking
about bailout for Nigerian airlines for upwards of three years, without
result. One can only hope that Aero will also not stop flying before
government will come to their rescue, no matter how little,” he said.

According to Mr.
Olowo, no carrier in Nigeria today is free of debt, adding that if care
is not taken, the industry will become starved of carriers.

“A reputable
airline such as Bellview stopped flying for almost six months already
and no airline in the market can boast of a clean bill of its economic
health as we talk,” he said.

Already, three
indigenous carriers, including Afrijet, Bellview, and Capital airlines,
have suspended operations since January this year.

Meanwhile, Mr.
Olowo disclosed that “economic, and not financial, bailout” in terms of
debt forgiveness on landing, parking, over flight, ticket sales charge,
passenger service charge, value added tax (VAT), double taxation, among
others, are not only necessary but essential for continued survival of
Nigerian airlines.

“The airline income has been badly eroded by too many charges, hence
the sector has not witnessed growth, talk less of development, in the
last 30 years,” he said. “Nigeria’s business environment is also one of
the harshest in the entire world in terms of avoidable costs of
infrastructure, bad politics and bureaucratic bottlenecks that negate
good business delivery.”