Democracy or Plutocracy?

According to this report from NEXT, the Peoples Democratic Party branch in the Osun East senatorial district has banned any party member with less than =N=500 million in his bank account from contesting for the party's nomination for the 2011 Osun Governor's election.

Apparently the party leaders in the district instituted a screening process that required aspirants for the nomination to provide various details of their wealth, particularly their bank balances. Any aspirants with less than =N=500 million (US$3.3 million) in his bank accounts will be disqualified.

From NEXT's report:

Ebenezer Babatope, a PDP chieftain and a member of the caucus, said the race was not for paupers. On complaints by some aspirants that the group was exploiting them, Mr. Babatope said they failed to meet the requirements.

I guess they are being honest about it. Usually we pretend to have a democracy.

In a way, they are being objective too. Usually the Big Men have to go through all sorts of behind-the-scenes lobbying, threatening, bargaining and begging among various factions of fellow Big Men to get a rigged result in their favour, but this time the Osun East PDP are basically saying the richest man (an objective, mathematical and empirical measurement) should get the district's endorsement for the state party nomination race.

And it will have to be the richest man, won't it? The Osun East PDP are not requiring =N=500 million in assets, nor are they looking for assets minus liabilities .... no, you must have =N=500 million in cash sitting for all the world to see in your bank account.

You know what? I bet there is only one man in Osun East that meets the guidelines. This man, whoever he is, has already successfully won out in the behind-the-scenes lobbying, threatening, bargaining and begging among various factions of fellow Big Men (probably using his vast wealth to "persuade" everyone of the virtues of his aspirations). This new guideline is just the easiest, most legalistic way of rigging the result.

But remember ... no paupers!

Oh, and don't forget ... a "pauper" is anyone with less than US$3.3 million in cash, sitting in their bank account.

News Comments ...

Daily Trust reports the Independent (yeah, right) National Electoral Commission (INEC) does not think it can meet the January, 2011 deadline for the next (s)elections. It seems the "amended constitution" requires elections to be held

not later than 120 days and not earlier than 150 days to the end of the tenure of the office holder, making the next general polls due latest by January.

Leaving aside, for now, INEC and the federal republic's persistent problems with substantive democracy ...

... are they serious? I mean, the people who wrote this new, "amended" constitution?

The amended document requires the federal republic to hold elections no later than 4 months before the end of the term of office of the respective incumbents? So we will have a substantive official (e.g. Governor) as well as an "elect" official (e.g. Governor-elect) concurrently for FOUR MONTHS?

Why?

I understand that the many, many imperfections of our system mean the post-election tribunals and judicial processes often continue up to two (sometimes even three) years after the election itself. And I personally don't think it is right to swear someone into office while there are outstanding challenges to the validity of his "victory".

On the other hand, four months is not enough, if that is what this is about, because, as stated earlier, these challenges (notably the Uba/Ngige/Obi affair) go on longer than four months, and time-limits on challenges (if four months is meant to be a time-limit) only allow for the system to be manipulated to defeat democracy (as happened when Rotimi Amaechi became governor of Rivers State without receiving a single vote).

More to the point, the solution to chaotic, disputed elections .... is to not have chaotic, disputed elections. That is the solution. Writing and re-writing your constitution to adapt to persistently atrocious elections is just counter-productive, counter-intuitive and self-defeating. Well, self-defeating if you are interested in democracy; if, like the men and women who wrote this amended constitution, you actually benefit from the existing state of affairs, it is easy to see why you think that it is your duty to make the existing state of affairs more convenient.

I do believe there should be a gap between the election and the swearing-in of the new office-holder. Aside from the fact that none of the office-holders were properly (i.e. democratically) elected, we have faced a problem of unprepared men and women taking up office.

In the current environment, most candidates don't have any set of policies, positions or worthwhile intentions when the run for office; basically they are just rolling the dice to see if they get a chance to join and chop. And so they enter office with no idea of what they are going to do with their newfound "power". There should be enough time between "winning" and taking office for the "winner" to give a thought or two to what they intend to do beyond "chopping".

But even in an ideal environment, I would want elected officials to have time to shift from campaign-mode to leader-mode. Executives should start planning their cabinets. Legislators should give thought to whom they intend to elect to the legislative leadership positions, and to which committees they want to try to get onto.

And at the other end of the spectrum, I want incumbents to have time to steadily wind down. Where an incumbent is being replaced, there should be meetings, at least one between incumbents and their replacements, and at least two or three between their respective staffs (particularly policy advisers), to discuss where things stood, where things stand, and where things are going.

And the citizens of Nigeria at large should be given time to mentally adjust to the end of one era and the beginning of another.

But FOUR MONTHS?

Come on.

Six weeks would be perfect.

No, it is not the same thing.

Six weeks is 42 days; four months is 120 days.

If we had a properly functioning democracy, a 6-week window would be wide enough to complete most election disputes, even if re-counts were necessary. Obviously, in a properly functioning democracy, protests about "rigging" would be aberrant rather than the norm, and gentlemanly/lady-like concession speeches would be the order of the day.

Gani and Moshood

In my last post, I shared excerpts of a speech by Donald Duke on election manipulation in Nigeria.

A few minutes before I sat to type this post, I had a conversation with someone about this set of accusations in Sahara Reporters directed towards Governor Babatunde Fashola of Lagos and his godfather and immediate predecessor, ex-Governor Bola Ahmed Tinubu.

The person with whom I was conversing is a fan of Fashola's, and of the work the governor has been doing in Lagos, and believes there are too many cynics who don't think that there are "decent" people in Nigeria.

Nigeria is full of decent people, good people. The world cherishes its negative stereotypes about us Nigerians, and we seem to be the only people for whom it is still politically correct to openy express stereotypical views about.

But the thing is, condition makes the crayfish bend as we say, and the system/environment/instiutions/structure/nature/etc of Nigerian politics is such that a "decent" man or woman could not hope to win political office. I didn't need ex-Governor Donald Duke to tell me that you would never "win" (if you can call it that) a Nigerian election if you ran a "decent" campaign, nor can you hope to be effective once in office if you try to do your job "decently".

The same holds true of supposedly "military" regimes (really diarchies led by army generals). Be you a soldier or civilian, a "northerner" or "southerner", a Moslem or Christian, if you are opposed to the way the system functions, then you have a snowball's chance in the Sahara of occupying an important political job. If you manage to deceive the system long enough to stumble into such a job, you have less than a snowball's chance in the heart of the Sun of keeping the job long enough to make a difference.

Actually, to succeed in Nigerian politics you don't have to be personally "bad" yourself ... you just have to be willing to make an endless sequence of compromises with bad people. So long as they know you will keep the gears and levers greased, allowing them to "efficiently" continue doing what they do, the system will leave you alone and might even allow you to make an achievement or two. However, no matter how just, ethical and moral the person once was, the effect, consistency, pervasiveness and totality of his/her ceaseless compromises leaves him/her just as guilty, just as complicit in the "bad" behaviour, as the "bad" people.

A few of our apex political leaders (presidents and prime ministers) were decent men elevated to high office because the denizens of the system would rather a "neutral" figure was referee, rather than one who would use the office to give undue advantage (system-wise) to himself, his faction/machine, and his clients/patrons. But the "compromise" concept appears mostly in appointed positions, like the federal and state cabinets, the federal and state commissions, and the advisory positions.

Don't get me wrong, most of these appointees are denizens of the system, who are given a share of the national cake, as we term it, a niche position from which to milk the polity/economy/society on behalf of their factions/patrons/clients/etc. However, a few appointees, people like the late Dr. Olikoye Ransome-Kuti in the past, and possibly Hajia Amina Az Zubair in the present, work for administrations that are otherwise detrimental to what you assume are their heartfelt aspirations because they think that it will give them a chance to make a difference even if a small one on those aspiration. The thing is, it doesn't really work out well for them; our healthcare system is still nowhere near what I am certain Dr. Ransome-Kuti desired, and I think Hajia Az Zubair continues to overstate the impact of her programme in a country where the numbers of child beggars and child labourers has not changed an iota (and that is just one statistic, just one issue area).

Back to my conversation with an associate about Fashola and Tinubu ....

Without reading Donald Duke's excerpts, I already knew that no one could succeed in Nigerian politics without at least being "tainted" by the system. And the office of governor is so powerful in the Nigerian context, the holder almost an absolute monarch in his state, that the system would never allow anyone "win" the governor's desk if the system was not infintely certain that this person would allow the way of things to proceed as they always have. And to be blunt about it, if Tinubu didn't rig Fashola into office the way Donald Duke described, then he probably rigged Fashola into office some other way. I suspect Fashola would have won a free and fair vote, but in the context of Nigerian politics, if you don't make sure of it through controlling the rigging processes, then you open the door for your opponents to take the seat from you.

The irony is Babatunde Fashola has probably been the best governor Lagos State has ever had. He would still be the best if you extended the period of comparison to include British colonial governors from 1860 to 1960 ... and to be honest, I think Fashola would come out tops even if you included all of the sovereign, pre-1860 Obas of Isale-Eko (Lagos Island).

With that said, like any other successful politician in Nigeria (and frankly, like most of the unsuccessful politicians too), Fashola is most definitely open to accusations of impropriety, waste, corruption, undemocratic and unconstitutional practices, etc, etc. It is what made Olusegun Obasanjo's use of the EFCC as a political weapon so powerful; the EFCC never had to "frame" a target -- if that person was a politician in Nigeria, then the EFCC always had ample true, factual and judicially provable crimes to charge the person with. Because the system is so entrenched, none of the denizens of the system ever pay much attention to covering their tracks (they don't have to, the law enforcement, prosecutorial and judicial institutions are part and parcel of the system), so the EFCC can always find with ample evidence to convict, if they could be bothered to try. Alas, the EFCC, ICPC, NPF, NDLEA and other agencies are ... compromised. You would have to lack political connections, lose political favour, or be a necessary scapegoat before you had anything to fear.

Those who adore Fashola will tell you he has to do these things to maintain Bola Ahmed Tinubu's support, but that is probably too simplistic a way of looking at it.

As I said to this person I was discussing with, the late Chief Gani Fawehimni never came close to becoming President of Nigeria, while the late Alhaji Moshood K.O. Abiola won the annulled 1993 elections. There is a vitally important lesson in that, a vitally important message that I do not think we Nigerians give enough thought to. We take these two facts as fait accompli, not bothering to ponder what these facts tell us about our country and its political system.

Donald Duke explains Election manipulation

Two-term former Governor of Cross River State, Donald Duke, discussed election manipulation (a.k.a rigging) in the federal republic at a conference in Abuja. This is probably just one of the ways it happens, the one most familiar to Duke (if you know what I mean), but there are other methods of manipulation.

Quick note: Normally, I prefer to post links, so the professional news organizations that invest resources in producing these stories can profit from the additional traffic to their websites. However, unlike the other leading Nigerian newspapers, when the Guardian revamps its website, what were working url addresses to fascinating articles suddenly become bridges to nowhere. Its not a problem for me personally, but I have noticed the Guardian links in my earlier blog posts are all dead, and the Guardian as near as I can tell did not migrate those articles to new urls. This speech by Duke is important information, and I want you to read it, so I won't post a link to it that will stop working after a couple of months. If you want the link, here it is.

How Governors Rig Elections, By Donald Duke
Sunday, 18 July 2010 00:00
From Alifa Daniel, Asst Political Editor, Abuja

A comprehensive expose on how elections are rigged in the country has been unveiled by one of the insiders in the political process and former Cross River State Governor, Mr. Donald Duke.

Last Wednesday at the Transcorp Hilton Hotel, Duke gave a blow by blow account to a gathering of pro-democracy advocates, including the Save Nigeria Group (SNG), of the modus operandi of State Chief Executives and Resident Electoral Commissioners to thwart the mandate of the electorate, not just in states controlled by the Peoples Democratic Party (PDP), but all the others.

In his opinion, it is not just a question of replacing the Independent National Electoral Commission (INEC) Chairman, but getting a critical mass to come out to vote and ensuring that votes count.

The Guardian today delivers excerpts of his extempore speech:

“LET me start this way. Professor Maurice Iwu is truly an enigma; he enjoyed the limelight. He enjoyed all the attacks, thrown and meted at him, he remained undaunted. I think, he belongs to the school of thought that believes that bad publicity is better than no publicity. So, even though he was being attacked and scolded and all sorts of things were said about him, he didn’t shy away from even going to the United States and talking to Nigerians in the Diaspora about his work, he didn’t shy away from it. I was told he organized a rally to ensure that he will come back to do the work he was appointed to.

Why do I call him an enigma? The truth is, the chairman of the Independent National Electoral Commission has little or no bearing on the success of elections, that’s the truth. To me, it’s actually immaterial because he is head of the administration he takes the brunt. The best he can do is perhaps, draw up a blueprint but the implementation of that blueprint is outside his control. So, if elections are rigged in say -Taraba State- we don’t do that stuff in Cross Rivers State (laughter), ever one looks at Iwu and he proudly says we did this or that. Hogwash!

Let me now take you through the process of an election. We have a hundred and twenty thousand booths in Nigeria. At the hierarchy, you have the Chairman of INEC, then you have the zonal Commissioners, then you have the Resident Electoral Commissioners and they are the heads in every state the zone as the name implies; we have six zones in Nigeria, so you have six of them. Then you have the Resident Electoral Commissioners and there are 36 of them of course, and Abuja. Then for each local government, you have an electoral officer. Beyond that you have a hundred and twenty thousand polling booths, headed by presiding officers. The people think that at the end of the elections, the PDP would just decide who wins and who doesn’t and announces the results. I think the process is a bit more sophisticated than that.

This is what happens; the Resident Electoral Commissioner is usually from another state. The electoral officers, they move around. They are usually from that state, but for the conduct of elections itself, you would probably move from Cross River to Akwa Ibom or to Abia, but these musical chairs don’t mean nothing.

When the Resident Electoral Commissioner comes before the elections are conducted- of course when he comes to the state, usually, he has no accommodation; monies have not been released for the running or conduct of the elections and all that because we always start late. He pays a courtesy call on the governor. It’s usually a televised event you know, and of course he says all the right things. ‘Your Excellency, I am here to ensure that we have free and fair elections and I will require your support.’
Now, at that courtesy call, most governors, at least I did, will invite the Commissioner of Police because he is part of the action and he sits there.

After the courtesy call, the Resident Electoral Commissioner now moves in for a one-on-one with the governor the says, “Your Excellency, since I came, I’ve been staying in this hotel, there is no accommodation for me and even my vehicle is broken down and the last Commissioner didn’t leave the vehicle, so if you could help me settle down quickly;’ and the governor says, ‘Chief of Staff, where is the Chief of Staff here?’ And the Chief of Staff appears. Governor says: ‘Please ensure that the REC is accommodated–put him in the Presidential lodge, allot two cars to him, I give you seven days to get this done. Then the relationship has started; I am going to share some of these things with you so that we don’t leave here with any illusions. A lot of us, folks who have gone through an election or have been elected for one thing or another, see groups like Save Nigeria Group (SNG), the CLP as woolly-eye dreamers, you have to come down to the backsides, since I am now a hybrid between both. I want to bring you both down to backsides. Let me take you down to what happens so that you can change it because if you don’t change it, we here won’t suffer but I think of our children will.

We the elite, I am one of them, we send our kids to the best schools around the World, when they come back they are misfits, they cannot fit in and so ultimately we are designing a system that would destroy us in the end.

Let me take our minds back to Somalia. Somalia is mono-religious, mono-ethnic; they only have clans (but) they have one tribe. What has happened there? It’s a failed state because the elite in Somalia were so disconnected from the people that once they had some money, they buy houses in England, Washington and all those places; they were not investing, putting their best foot forward and I think that was what Pastor Bakare was talking about. If you want to be in a contest, you put your best foot forward; at the end of the day, there was such a disconnect that even till today, they cannot bridge it. Let me tell you, the last recognized President of Somalia is buried in Lagos-Siad Barre.

We are multi-religious, multi-ethnic and multi-problematic. The reason why most people worry about us is if we explode, who will contain us? Let me also say this, I know what I am saying now is an aside, I will go back to the elections. When we conducted the census in 2006 or so, the raw figures said we were over two hundred million; when they went and processed the figures it came down to 140million.
When you look at those figures and compare to those we had in 1991 at a growth rate of 2.1 or something like that, it is really just an extrapolation, because we were too embarrassed to admit our true numbers. If we get it wrong, we will fail like Somalia; in Somalia, half of them are in Kenya, Ethiopia, and a few are in Europe here and there; who will contain us in all of West Africa and Central Africa and for that it is imperative not just for ourselves but for the rest of the continent that we get it right.
Now, back to the elections, once that relationship has been established between the governor and the REC, if you are a governor who is ‘A Governor’, maybe two nights after you just pop by at the governors lodge and see the REC and say ah, ‘ah REC how are you doing? Are you OK?’ He says, ‘ah! Your Chief of Staff has been wonderful. He has been very nice to me; he supplied me the vehicles and everything is Ok’.

A few weeks to the elections, the REC sees the governor; you probably have on the average about three thousand five hundred, four thousand depending on the polling booths in every state. So, REC goes to the governor and says, ‘Your Excellency, could you please give us the names of about four, five thousand people so that we can hurriedly train them, we need them as Presiding Officers.’ You need experience. A good coach is one who has played and has lost matches in the past?

The REC now goes down and says, ‘we need to conduct a training programme for the presiding officers and em, headquarters hasn’t sent us any money yet, you know.’
And the governor is like: ‘How much would that cost?’
REC replies: ‘N25million for the first batch, we may have about three batches.’ Governor: ‘Ok, the Chief of Staff will see you.’
Now, the Chief of Staff, you call him: ‘Make sure, that we arrange N25 million this week and in two weeks time another N25 million and Seventy-Five million in all.’
Chief of Staff: ‘Your Excellency, how do we do it?’
Governor: ‘Put it under Security Vote.’

In other words, its cash, ok, now, cash in huge Ghana Must Go bags – some of my colleagues will shoot me- (turns to the audience) is any former governor here? (Crowd replies no!)
Good. Cash is lodged in huge Ghana Must Go Bags for the REC and of course, to be fair to them, they call their electoral officers and say the governor has been very benevolent; he has given us this and that. I say three batches because they have them in Senatorial districts. So, you have one in Calabar, you have One in Ikom and Ogoja, those are the headquarters of the Senatorial districts. Each one costs twenty-five million. Of course, the sums are not properly retired. I don’t know how much of this twenty-five million worked. But, there is a rapport this is going on.

The governor now turns round and says: ‘call me the party chairman.’ The party chairman appears and the governor says: ‘INEC requires 50 thousand people for conducting the elections. See to it that we meet their needs.’ The chairman goes and you hear in the evening on radio and television: There will be an urgent meeting of all chairmen and secretaries of XYZ party at the headquarters. They should report promptly at 10am (because) matters of urgent interest will be discussed. End of announcement. Now we have texts messages, so its easier, in no time everyone is here.

It’s a very short meeting, please go back and within 48 hours submit from each local government two hundred and fifty names of trusted party members. So in a week the deed is done. The names, sometimes even passport photographs if required are sent to INEC.

And the training programme is carried out. Let me pause a bit, this is at party level. They are usually civil servants. They may be teachers, whatever, but they are party members. The remuneration, for each of them for the elections from Abuja is 10,000 Naira for the day’s work. But the state in its benevolence gives 50 to 100,000 Naira to each of these folks right before this election.

This is even where it gets even more interesting. So, you have each of the three or four thousand polling booths; they are manned by party stalwarts. They are usually party stalwarts. You don’t send any peripheral member. The remuneration from Abuja has not arrived but that of the state was received 48 hours prior.

On the day of elections, each polling booth has no more than five hundred ballot papers, that is standard.

There is not a polling booth that is more than five hundred. So only two hundred people appear here, three hundred there, one hundred there, fifty there, four hundred there, at the end of election what happens. The Presiding Officer sits down and calls a few guys and says, ‘hey, there are a few hundred papers here, let’s thumbprint. This is the real election. Well, this is not a PDP thing. I am not here to castigate the PDP; it’s a Nigerian thing. This process may sound comical and jovial, it happens throughout the country, whether its Action Congress or APGA it’s the same thing. We are all the same. They start thumb-printing, some are overzealous. So at the end of the day you find some voting more than the number of people that were registered to vote.

Other wise they do it, you have 95 percent turnout. You start wondering where were the voters, I didn’t see so many people. And the election results are announced; XYZ party wins and it takes a week for this paltry ten thousand Naira for each presiding officer to arrive.

Listen to this before you ask your question: Who is the most important person in an election? – The presiding officer. And if there are a hundred and twenty thousand of them (booths) there are a hundred and twenty thousand presiding officers, they are the most important people in the elections, not the Chairman.

So, as long as we keep applying that same method, you will get the same results. Its crazy to think that because you substitute Iwu for Jega all will change. In other words, Iwu is a crook, Jega is a saint. Jega is great, he has an impeccable reputation. Iwu was great, now he seems not so great. Ok, they are both professors, they have reached the peak of whatever discipline that they profess. The point is that it is the system and the personnel and the chairman has little or no control over that.

Where are we now, we don’t even know when the elections will be. The Constitution amendment seems to be stalling somewhere. So it’s either in January or in April. Sometimes, we behave as if we invented democracy. We always want to draw new rules. We should know the day of elections. It should be fixed. We should know that on so and so date I think, America is the 4th of November or so and if it falls on a Sunday it doesn’t make a difference. The point I am making here is that date is fixed, you know; because in a democracy, election should be a norm, not an event. In our democracy, election is an event. Its like, we are going to spring on to you with fire works, hey, we are going to have an election, we are all running around- I know most politicians are broke right now, so we are all running around the field.
Secondly, if you have your ears to the ground there, are whispers that may be, we need to postpone this thing. The whispers are there. In a democracy, you postpone an election? You postpone things you didn’t plan for, not things that are there in the Constitution, that says you must do this, that and that, you can’t but –you know two ways of moving forward. This is where I like what SNG and CNP are doing.
We need a critical mass of Nigerians to get out and vote. It is important because the more ballot papers that are legitimately used on election day, the fewer available to be used to rig the vote, that’s the truth. Don’t keep to yourself and think that they will announce results. They are more sophisticated than that. And that’s why the aspirants who felt cheated and had the resources to employ forensic personnel, like those elections had the elections upturned in Edo and Ondo, because they could establish multiple voting by thumbprint.

So, if it’s an AC state the procedure is the same. I remember a state, that state will remain nameless. I hear the story that the then President was so determined that he must change the leadership of this state and he called the IG and said, ‘look, that Governor is a security breach. Let's have elections and flush the governor out, and the governor knows he is under siege. A week before the elections, a new police Commissioner arrives. And you know if you are a governor and a new Police Commissioner arrives before elections, you know something is wrong somewhere and he spends two, three days without going to see the governor, which is again a breach of protocol. The day he decides to see the governor, the governor says, I won’t be at the office. However, if he gives him a particular address they may discuss. Then the chap goes there and smartly salutes and it’s in a highbrow neighborhood of the city. (Shouts of Ikoyi rent the air.) ‘No! It’s Yobe!’ (The hall explodes in loud laughter).

The Commissioner of Police walks up to the governor and smartly salutes and says: ‘Your Excellency, I just came to introduce myself. My name is Mr. So, so and so. And the governor goes: ‘Ah, you are welcome. I heard you were here two or three days ago and I was wondering whether I won’t see you. Anyway, you are welcome. Have you settled down?’ ‘Yes I’ve been given accommodation and all that. And the governor asks, ‘where was your last posting?’ He tells him, he says fine.
Governor: ‘That car over there, this is the key and this is your house.

The Commissioner of Police now says: ‘Your Excellency, this Obasanjo is a very bad man. He is a very, very bad man. If you see all the things he has planned for you eh Olorun maje.’
How do we move on? How do we get out of here? What I have done is I’ve tried graphically to paint a picture of a process. How do we change this process?

One, I think, since we cannot change attitudes as quickly, we must ensure mass participation. In an election where there is a very high turnout, the results are usually genuine. The most celebrated election in Nigeria, June 12, 1993 what happened? People came out. The more people who come out to vote the fewer–there may be mago, mago here and there but there wouldn’t be much in such a critical manner to upset the will of the people. Beyond that, if you don’t vote in an election, you have no reason to criticize the government and I tell folks everywhere that guys, I would say, I have lived my life. You guys have not and you are all criticizing Nigeria but did you vote in the last election? Most of them say no then I say, you’ve lost the moral right to criticize what the government does because you were not part of the process.

Is there a way out? I think there is. I think we need to employ technology. It's just a suggestion and I want to share with you. I have said this in one or two fora and I’ve heard people say it has not been done in America or the West why should we do it here? I say they don’t have the attitude we have here. Necessity is the mother of invention. It is not necessary for us to do what I’m about to suggest.
For the purposes of this, 3455, this number is for a phone and that number is unique to you and valid for that election or the set of elections. And each party has a numerical equivalent. AC could be 1, the PDP could be 5, the Labour Party could be 3, whatever. And on the date of elections you decide that your number even if you don’t have a phone, you can go to a centre where they have a bank of phones and once you put in your number 3455 it recognizes you, it cannot be duplicated. Its only you that has that number and for that election on that date, once its used it cannot be used by anyone else. Then you can do this one from your house or anywhere, and any time between the hours of 9-12. When it says which party, you say 3 or 4 whatever the number, they ask you, ‘are you sure you say Yes’. You press it then you’ve voted. With that, I think we can conduct election but people say ah, it’s to technological and I say, why do you always underestimate the people in the rural areas? If you send them money this way, won’t they be able to cash it? Why is it that when it is to conduct their civic responsibilities it becomes high tech? I know this country, I ran a state for eight years, I know the nooks and crannies of my state. We are not the most enlightened of states in the country, but you see, I had a deal with MTN and Glo to ensure that every community in Cross River State has a base station; for that I gave them sites free of charge; so, virtually every nook and cranny of Cross River has a base station. Even the most rural of places; even in Bakassi when we still had control of it. And they all use it. They still use it to call their folks in the urban centres to say send us money. Why is that when it comes to civic responsibility it is high tech? Because the politicians don’t want to use it, that’s the truth.

I am not saying this is a perfect system, it can be fine-tuned, that will ensure that within an hour or two every one has voted and the results are near perfect.

Of course, once you design a system, there are those whose work is to un-design the system. There are people like that and they work backwards. Once you have that we also think the same way. How do we work backwards, where can this be faulted? It can be faulted in many ways. The service companies if you are able to break-through the integrity of the system, you know, here and there; but I think we are going to think outside the norm.

The point I’m trying to make is we have to think outside the box. I want to commend the federal government, each time the government talks about elections, it keeps on talking about credible elections with brilliant sound bite. But it must go beyond the sound bite and lets not kid ourselves, by thinking that by putting a Jega there that all is well. With Jega there, all will be well if he is able to design along with his team a system that is virtually fool proof. In other words, he himself must understand the system of elections, he needs to know how it works and how its been holding.

As I speak to you, we’ve not started voters’ registration. That exercise will take any where from three to four months. It will take at least, ninety days to run through its course, another six weeks to tidy up before it is published; lets not kid ourselves. You can have elections anytime, but you can’t have credible elections in January. So, for those thinking we can have elections in January, I think we have to rethink the process; we cannot have credible elections in January. We may have elections but it may not be credible. Where are we? We need to get out of these holes; we need to traverse the length and breath of this country. We need to recruit an army of people may be 5, 000 in each state, two hundred young men and women who will reach our (people), give each of them a task to ensure that he registers at least a hundred person. That alone, will bring twenty million people into the fold. This is what they did in the Obama election.

Fortunately, I was monitoring the Obama election, whether you attain voting age or not, you are able to send text and move around and get people to vote. It's one thing to register, some folk tell me, ‘how can I go to line up for hours to vote for this person’. This is again what pastor Bakare was talking about, if people are not excited about the candidates they will not come out. ‘Look at the four people running, they are all clowns. I’ m going to watch television; I’m not going to vote because either way a clown is going to win’.

So, we have to get involved in the process. We can’t all run for offices, we all can’t. ...”

News Comments

AZ ZUBAIR TESTIFIES BEFORE THE NATIONAL ASSEMBLY

First an update on this story.

Amina Az Zubair testified before a hearing at the House of Representatives to defend her Office's efforts to achieve the Millennium Development Goals by 2015. The federal republic has, apparently, spent $6.93 billion (=N=1.04 trillion) since 2006 on achieving the MDGs.

Hajia Az Zubair reeled out quite an impressive list of achievements but there is no way of knowing if these achievements are real.

Before you get on my case for being a cynic, you know that our government officials generally invent fictional statistics to support whatever they want to say that particular day.

In fact, given the way we do things, even if the statistics are true, there is no way to know for suif re the improvements are attributable to the MDG programme, or if something else caused it.

Again, before you pillory me for being an incorrigible critic, lets not forget that our officials are forever taking credit for things they did not do. In the 1980s, the Directorate of Food, Roads and Rural Infrastructure would put up a sign on an existing road, announcing that they had just built the road. A primary school that was standing in my village when my father was a school-age boy was "launched" during the Fourth Republic by the state governor, as a school he had just built (sadly, the villagers played along witht he charade because the governor had promoted one of our townsmen to a high office in his administration). Here are Delta State youths complaining their governor is taking credit for roads built by Shell Petroleum Development Company.

And there are still people who insist that the return of civilian rule in 1999 and the policies of the Obasanjo II administration were responsible for the strong growth our economy experienced in the first decade of the 21st century, when in fact our good fortune was driven exogenously by the impact of China and India on commodity prices ... a phenomenon that drove growth in lots of countries, Brazil and Australia inclusive, that were unaffected by anything Obasanjo or the Fourth Republic civilians ever did.

Look, $7 billion is a lot of money, and while I do not trust the National Assembly, I am not about to give Amina Az Zubair (or any other government official) such unquestioning trust as to believe everything they say even when they don't present any concrete proof or evidence.

OUR POLITICAL PARTIES REMAIN MEANINGLESS

The Progressive Peoples Alliance, a political party created as a sole proprietorship to advance the economic and political interests of former Abia State Governor Orji Uzor Kalu, has more or less ceased to exist.

After the (s)elections of 2007, the party took control of two states, Imo and Abia. Since then, the Imo State governor (Ikedi Ohakim) has decamped and rejoined the Peoples Democratic Party, the Abia State governor (Theodore Orji) has fallen out with his godfather (Orji Uzor Kalu) and joined the All Progressives Grand Alliance. Given the unchecked, unaccountable, unquestioned, near-imperial power wielded by state governors in Nigeria, these two carpet-crossing incidents more or less moved the entire states out of the PPA column.

And now the coup-de-grace .... Orji Uzor Kalu himself has decamped from his own party to rejoin the Peoples Democratic Party. From within the PDP, Kalu will no doubt plot the fall of his erstwhile godson, Theodore Orji, in next year's (s)elections.

Elsewhere, Alphonsus Igbeke, the All Nigerian Peoples Party candidate who recently (following the verdict of a court case) replaced Joy Emordi of the PDP as federal Senator for Anambra North, has decamped from the ANPP to rejoin the PDP. Like Bauchi Governor Isa Yuguda, Senator Igbeke was a PDP member who left the PDP to join the ANPP purely becuase he failed to get the PDP nomination to contest the 2007 elections. Igbeke lost the PDP ticket to Emordi (knowing the PDP, there was probably nothing "democratic" about its primaries), ran under the ANPP flag, lost the (s)election according to the official results, won the seat in the courts, and is now rejoining the PDP ... just like Isa Yuguda.

We don't really have "political parties" in Nigeria. We have machinery for winning elections. This machinery can take whatever name it needs to take to meet basic legal requirements. Some machinery are effective, and some are ineffective; the strength of the PDP lies in the fact that it has absorbed the vast majority of these machines, and the role of the "party" is to moderate the distribution of largesse and patronage to various machines to make sure they stay on board.

Our politicians shop around for a machine willing to support their ambitions. The most ambitious shop within the PDP first, find a machine, cut a deal with the man or men who lead the machine (people like the late Lamidi Adedibu) and first try to win the nomination within the PDP (i.e. get the other machines to acquiesce to yours being in charge of largesse-distribution). If that fails, they try the other machines that have remained independent of the PDP, largely because there is a market (literally) for their services; there is money to be made serving as one of many independent machines that can be temporarily rented by a politician and his financial backers.

Nobody knows what polices these candidates support or oppose ... and nobody cares.

That isn't the point of Nigerian politics.

National Assembly versus Amina Az Zubair

In this prior blog post, I talked a bit about Hajia Amina Az Zubair, the President's Special Adviser on the Millennium Development Goals.

Both chambers of the National Assembly, the Senate and the House of Representatives, have critized Hajia Az Zubair's handling of the "constituency projects" that masquerade as MDG fulfillment. These projects are really just pork barrel spending to reward allies and to provide a bit of a spectacle for those citizens who approve of any politician that seems "active", even if the "activity" leads nowhere.

I have been critical of Hajia Az Zubair (and was critical in the blog post linked above). My impression of her is that she is one of those "progressives" who seem to think it is possible to operate within the system and still achieve the "progressive" goals they espouse and profess to believe. [As often when I use words like "progressive", I remind readers from outside Nigeria that "progressive" in the Nigerian political environment means something different from what the word means in other countries.]

Hajia Az Zubair does not have any real political clout. I fear she has been retained in her position by three presidents in a row (Obasanjo, Yar'Adua, Jonathan) for the same reason President Lula of Brazil kept Marina Silva in his cabinet, or General Ibrahim Babangida had Dr. Olikoye Ransome Kuti in his cabinet, or why British politicians like Margaret Thatcher or Tony Blair would include in their cabinets leaders of alternate/competing wings of their own political parties.

Hajia Az Zubair seems to believe in what she says. Of course I can't know for sure, but then that is kind of the point. She is a good communicator, and if you listen to her for a few minutes, you would be forgiven for thinking that the last three Nigerian governments prioritized social welfare and the MDGs.

If she is engaged in the time-honoured politician's trick of telling people what they want to hear even if she doesn't actually believe it, then she is very good at spin.

It is equally possible that, like other such "progressives" she believes as long as she stays in the good graces of the political powerful (and specifically in the respective president's favour) then she will be in a position to do some "good", and if that involves publicly polishing the respective presidents' images, then she would do that. The three presidents she has worked for have all given her a budget and a staff, and I think she may believe that she is better off working in the system (with her staff and budget) than complaining outside the system (I know from personal experience that complaining about stuff from the outside changes nothing on the inside.

But if it were true, and she were sincere about her work, wouldn't Hajia Az Zubair know that these "constituency projects" have nothing to do with achieving MDGs?

She seemed to acknowledge the contradiction in this interview with Economic Confidential, viz:

What of issues of Constituency Projects?

I’ll tell you what I deemed a very big challenge, but I believe we have resolved it in favour of the MDGs. It is a qualified success. And for me this is when we had to attend to constituency project. Essentially, it’s not something really that we should be doing at this level if we look at the kind of projects we are doing. But because states and local governments have not been able to provide portable water and basic education. You’ll find national assembly members who come to the federal level and have to deliver on dividends of democracy; at the local level, people will only understand what they can touch and feel, and so this become a necessity. And when we are first asked to do this by Mr. President, we had to work out a framework; how do we make this a success. Because when anybody will hear constituency projects, it may be view from negative perspective. But I think we made a success of it, we put the framework round, and we made a point of trying to engage with the national assembly, and we are been able to focus this project from health, on education, on water; and I think the big plus is that, these projects have gone to every Federal constituencies in the country. So by the time you look at the impact, is about us now trying to harmonize and report on that that there has been portable water where they’ve never been before, there have been additional classroom block where they are much needed, and there has also been a health facility. It’s not all a success story because that health facility needs to be staffed, people need access to it. So for me, the MDG is part of being a work-in-progress, this is the foundation, vision 2020 is the mid-term, and we will get to the promise land, the potential of Nigeria that we’ve talked about.

Maybe it is just my perception, but it sounds like she knows this is not what she is supposed to be doing, but has been given an order from the President and is now rationalizing it to herself and to the rest of us citizens.

I could be right or wrong on Hajia Az Zubair, but as far as the National Assembly is concerned, both chambers are dominated by the usual Nigerian politician, and as such I find it hard to take them seriously, least of all when they profess to be outraged by someone else's supposed poor performance. Physician heal thyself!

Indeed, the MDG Office had defended itself by counter-accusing the National Assembly members of undue political interference in the constituency projects ... and have said this interference is the cause of the delays and the underachievement. The MDG Office's allegations about the Assembly members are rather plausible.

It doesn't really matter though. The Assembly are looking for a scapegoat to blame for the Assembly's own incompetence. In a sense Hajia Az Zubair is a soft target, partly because she doesn't have a power base that they would otherwise risk alienating, and also because they can criticize her all they want, assured as they pillory that President Jonathan will not sack her.

If it seems that I spent more of this post talking about Amina Az Zubair than I did talking about the Assembly, it is for a simple reason. People who think they can work within the system to change the system .... are wrong, and they will find out eventually that the system is not designed to do the things they think they can do within the system.

After years of Pollyanna-like optimism about her MDG Office, it is refreshing to see Hajia Az Zubair bluntly let us know that politicians are interfering with her work. The next step would be for her to admit that five years on, the MDG Office hasn't had the impact that she had thought it would. Eight months ago, she actually said Nigeria would need to spend $170 billion in the six years from 2009 to 2015 to achieve the Millennium Development goals, which breaks down to almost $30 billion a year.

I don't know how that number was derived, but I do know Hajia Az Zubair has not had, nor will she ever be given, $30 billion-a-year to spend.

Economic growth.

Economic growth.

We need Economic growth .... not gimmicks.

Fiscal difficulties make geographic consolidation imperative

With the passage of the Asset Management Company bill, the Nigerian federal government will bailout the banking, financial services and equity/securities industries, clearing $10 billion in toxic assets from their balance sheets. These industries were responsible for creating the toxic asset problem in the first place.

The estimated budget deficit across all three tiers of government in 2009was $11 billion).

Thus far in 2010, there has been the same confusion over budgeting and (more importantly) over budget implementation.

A month after the revised 2010 federal budget was signed by President Jonathan, the Minister of State (i.e. Deputy Minister) for Finance, Remi Babalola, said in an interview that spending levels in the 2010 budget were "unsustainable".

President Goodluck Jonathan's 2010 Budget is 50% bigger than the 2009 budget. The Governor of the Central Bank, Lamido Sanusi, and a Vice-President of the World Bank (and former Nigerian Finance Minister), Ngozi Okonjo-Iweala, have both said the 2010 budget is unrealistic. The federal government does not have enough revenue to meet its 2010 budget obligations, prompting NEXT's sensationalist headline about "financial doom".

Remi Babalola says the federal government may have to one, two or all of:
(a) slash the 2010 budget;
(b) borrow to finance the 2010 deficit;
(c) deplete what little savings we have left in the Excess Crude Account.

This is curious, because constitutionally, the Minister of State for Finance would have been involved in putting together the budget and in getting it passed by both Houses of the National Assembly. Our fiscal fundamentals have not changed over the last few months, so Babalola would have known, while participating in drafting the budget, that it was fiscally irresponsible. His belated admission does not spare us the effects of bad budgeting.

Debt service on new debts borrowed since the 2005 debt cancellation have probably wiped out that supposed $1 billion in savings per annum on debt service the cancellation supposedly produced. Not that we were saving anything to begin with; I have shown in a prior blog post that the future value of the $12 billion lump sum we paid out is roughly equal to the yearly interest we would have paid over the next 20 years.

In the meantime, the National Assembly has raised the salaries, allowances, bonuses and sundry financial benefits of the members of both houses. We have some of the highest-earning legislators in the world.

And with (s)elections just around the corner, next year, the federal government is buying popularity with an increase in the minimum wage.

It is a bit like the Second Republic, when politicians continued spending as if the 1970s Oil Boom hadn't ended by 1980. What had been a manageable (though utterly unnecessary) debt portfolio in the 1970s swiftly became an unmanageable national albatross in the 1980s and 1990s. I fear we may be on the same path, with Fourth Republic politicians at all three tiers of government spending as though the price of crude oil were still near $150/barrel.

I don't mind the increase the minimum wage, though I doubt there was any empirical analysis of the economic effects of the increase; frankly, given the junior Finance Minister's comments about the budget, I suspect they would have gone through with the increase even if economic arguments suggested otherwise.

The real problem comes at the top of the pyramid, from our attempts to fund the existence of an excessive and uneconomic number of states and local government areas. We waste so much money funding our bloated, redundant and superfluous administrative structure. No plan for constitutional, political, economic or sociocultural reform can be taken seriously unless it deals with this issue as priority one. Without consolidation, the likelihood of achieving anything else on the priority list coming to pass is virtually nil. Aside from the fiscal benefits, we would gain from greater cohesion in policy-making and policy-execution.

Unfortunately, the politicians, the labour unions (who principally represent civil servants), and big business (rent-seekers who see more governmental entities as more troughs to feed from) are all keen on inflating the number of governmental entities. Indeed, the state governments are busily creating new local government areas (creating useless new political jobs with which to reward their patrons and clients), and the federal legislature has promised to create 10 new states next year.

Why is Nigerian politics perennially irrelevant and counterproductive?

We should have 6 states instead of 36, and 80 districts instead of 774 constitutional (and several more unconstitutional) LGAs. Instead of the single, land-instensive federal capital territory, we should have 4 federal territories, each restricted to the municipal boundaries of the affected cities (e.g. in the case of Abuja, the Metropolitan Area Council).

Done properly, we could reduce the number of constitutional political offices by 63%, while improving administrative capacity, service delivery and quality of governance. Attached to each of the political jobs represented by that 63% reduction are a variety of official (e.g. assistant, senior assistant, special assistant, senior special assistant) and unofficial (patrons and clients, contractors, girlfriends, political machines, hangers-on) positions that would de facto be cut as well.

We could save BILLIONS.

Finally - A crumb of honesty

When I started this blog, Nigeria's banks were estimated to be carrying $10 billion in so-called toxic assets on their balance sheets. In those early months, I probably devoted more posts to the toxic asset problem than any other single issue.

I am a critic of the Nigerian banking, financial services and equity/securities industries ... but not a fanatical critic. I am proud of the way our banks have expanded in West Africa, Central Africa and East Africa. This will prove an important stepping down in the economic development of the entire continent, but only if our banks drop their current modus operandi. The banks are emblematic of the federal republic; we do just enough to give ourselves genuine reason for hope, but do far too little to ever bring our hopes to fruition.

The banks created their own troubles, and the collapse in banking share prices intensified the broader collapse in the Nigerian Stock Exchange when the self-created bubble burst. In order to inflate their balance sheets, banks lent money to investors (and to the banks' executives) for the express and specific purpose of buying the banks' own shares, to artificially raise the banks' share price. The manipulation of share prices extended beyond the banking industry, and the Nigerian Stock Exchange became a giant bubble waiting to pop, a bubble that would have popped eventually with or without the wider global credit crunch. The bubble in the banking sector was the biggest of all, and the fall in bankits demise severely hit the capitalization of the NSE, which is now worth 60% less than it had been 3 years ago

Nevertheless, we cannot allow the toxic asset problem continue to depress the banking, financial services and equity/securities sectors. And I have repeatedly said on this blog that if the full extent of the problem really is $10 billion, the federal republic can and should deal with it expeditiously.

We are not a "wealthy" country; our federal and state budgets are firmly in deficit territory, and have exhausted the Excess Crude Account, but even so our budgetary expenditures remain insufficient to fund the public goods that underpin any social contract. We have also drawn down massively on our foreign reserves to defend the Naira.

Our needs are great, and our funds are comparatively scarce, yet I believe we should muster $10 billion to get our banking, financial services and equity industries back on firm ground.

True, baling out the banks with government funds, and without any endogenous reforms in the industyr, is a recipe for the continuation of the stupid things they were doing that created the problem in the first place. However, our banks operate in an environment that hadnsomely rewards bad behaviour and too frequently punishes (or at the very least discourages) good behaviour. To paraphrase a popular colloquialism, "it is condition that makes the crayfish bend", and until we fix the overall "condition" or circumstances, it will continue to "bend the crayfish" in directions that prove problematic for societal/economic growth and development.

There is quite the tangled web of interconnected, systemic and instiutionalized problems; the core nature of our polity, economy and society reinforces dysfunction. You can't even look to the National Assembly to attach sensible conditionalities to any federal bailout of Nigerian banks. If anything, the Assembly is far more likely to weaken any reform efforts; politicians rank very high on the list of groups that exploit the gaping loopholes in our banking system. Heck, the create and exploit loopholes in every system!

I am not a fanatic critic, and I credit Professor Charles Soludo, CBN governor from 2004 to 2009, with some good things, notably the bank consolidation exercise. On the other hand, he most definitely neglected the apex bank's watchdog and oversight roles. I criticize him for this, and he deserves the criticism, but he was just a cog in a much bigger systemic mess.

Soludo was the CBN supremo in the second term of the Obasanjo II administration, when a strong nexus of mutual interests bound the ruling PDP and (separately) the Obasanjo-led federal government to Big Business. Warm, personal ties linked Obasanjo, Soludo, Nuhu Ribadu, Ndi Okereke-Onyiuke and the post-consolidation titans of banking. The plutocrats funded Obasanjo's 1999 campaign, his 2003 reelection campaign, his campaign to amend the constitution to give himself a Third Term, and his imposition of the Yar'Adua/Jonathan ticket in 2007. Some plutocrats made Obasanjo a silent partner in business projects, and Obasanjo ensured federal government policy favoured those plutocrats who supported his political machine. The mutual back-scratching peaked with the founding of Transcorp, a federal-government-created Big Corporation uniting Big Politicians with Big Businessmen to buy public (i.e. government-owned) assets with commercial potential.

The institutions constitutionally mandated to guard against conflict of interest were uninterested. There was a similar lack of interest from the Central Bank and the Securities and Exchange Commission even as the banks and the NSE build up frighteninggly large bubbles. Nothing practical was done to promote the chances of a soft-landing; I am not even sure a soft-landing was possible beyond a watershed date that no one paid attention to.

You see, there is a way things work (or don't work) in my homeland, a game being played. The game has rules and boundaries that all of us Nigerian citizens understand.

It is why we don't react when elections are rigged or when politicians are assassinated, or when communal violence results in dozens or hundreds of deaths, or when coups-de-tat overthrow governments -- these things are the normal, day-to-day workings of the system.

It is why we just dutifully pay the illegal =N=20 bribes demanded by the police at illegal checkpoints that exist to harass law-abiding citizens while kidnappers, robbers and murderers roam free (it is also why some police officers feel no compunction in shooting us if we don't pay the illegal levy; they have no sense that it is wrong, because in the Nigerian context, it is right).

In fact, it is why no one is bothered by the fact that our current President was caught trying to steal $13.5 million (=N=2,025,000,000.00) from the Bayelsa State treasury. No one cared that such a person became PDP vice-presidential candidate (or that Nuhu Ribadu abruptly stopped prosecuting him the moment it became clear Obasanjo was going to use him in Plan B of the Third Term bid -- the imposition of the Yar'Adua/Jonathan ticket). No one wants to know if Jonathan took more than the $13.5 million that was seized from him. Within the Nigerian context, nothing strange or abnormal happened; there would have been more shock and surprise if he had been honest.

It is why Soludo, the CBN and the SEC did not do their job. Actually, they did do their jobs, except their jobs were to do nothing. Sharles Soludo was never meant to hold the titans of the industry to proper standards. He was supposed to look the other way, to be a good friend of the people who were setting up the collapse of the stock market.

Like the famous former Iraqi Information Minister, Soludo kept insisting there was nothing wrong with the stock market or the banking sector, even as the bubble inevitably burst and the NSE All Share Index dropped. Even after the Eurasia Group estimated Nigerian banks were carrying $10 billion in toxic assets, Soludo insisted the number was $5.3 billion . Then he began spending our foreign reserves to defend the Naira, a process which has continued into the Sanusi Lamido Sanusi era, and which has probably consumed over $23 billion so far.

I supported former President Yar'Adua's appointment of Sanusi Lamido Sanusi, who was then Managing Director of First Bank, to replace Professor Soludo. I've read many commentaries and essay written by Lamido Sanusi over the years, and whether I agreed or disagreed with his conclusions, his writings conveyed the sort of politics of ideas that I've long wished would replace the determinedly vacuous politics we've practiced seemingly forever. In a country where the political and economic power-structure are very thin-skinned and prone to take offence at perceived slights and disrespect, Lamido Sanusi also impressed me by taking positions in his essays that had me wondering at times if he was not concerned that First Bank would sack him rather than risk political consequences from his literary utterances. Last November, Sanusi, true to form, took a contrarian position at a conference designed to celebrate and reiterate the conventional falsehoods underpinning our dysfunctional system.

With that said, Lamido Sanusi is a man of the banking industry, even more so than Soludo. Such a person could either be a reformer who uses his inside information to better target reform, or such a person, after years steeped in the practices of the industry, could potentially see nothing wrong with business-as-usual and move instead to protect his fellow bankers from reform ... or sanction.

As it turns out, Sanusi hit the ground running, shaking up the industry with a number of hard-hitting measures -- the media termed his early months in office the "Sanusi Tsunami". There has been much debate over his actions (search for "Sanusi" on this blog for posts with links to articles, or do a general web search if you prefer), and I don't think we will have a final verdict until enough time has passed for us to see the output of his input.

With that said, Sanusi's Tsunami weakened to a drizzle following the incapacitation of the late President Umaru Yar'Adua. The Central Bank of Nigeria should be an independent institution, and I am perturbed by the fact that CBN Governor are dependent on the political favour of Aso Rock (the Presidential Villa) to be effective at their jobs. Charles Soludo was one of the most powerful men in Africa when his patron Olusegun Obasanjo was President; as soon as Obasanjo left, Soludo became a lame duck. Likewise Sanusi acted almost as though he was a law unto himself when Umaru Yar'Adua was alive. I remain uneasy about Sanusi's tactic of publishing the names of the banks' politically-connected delinquent debtors (powerful individuals and corporations owned by powerful individuals). In a practical sense, trying to do things "normally" in an "abnormal" environment makes failure more likely, but if you respond to this dillemma by becoming very good at "abnormality" yourself, then you become just another person promoting and sustaining our "abnormal" way of doing things. It is a chicken-and-egg scenario -- someone, somewhere, somehow must become the first person to stand up and do things "normally", and succeed (and keep doing it until he or she makes "normal" the new "normal").

Even after President Yar'Adua's death (RIP), Sanusi continued pushing for the National Assembly to pass a bill creating an Asset Management Corporation. The AMC, which has been was passed by both the Senate and the Representatives, will be the vehicle through which the federal government purchases toxic assets from Nigerian banks.

The company, when established, will have a life span of 10 years and will be owned equally by the bank and the Federal Ministry of Finance, which will both provide the =N=10 billion capital base.

It will issue government bonds and other government-backed debt instruments to buy =N=1.2 trillion ($10 billion) in "non-performing" (a.k.a. "toxic") assets from Nigerian banks. According to Sanusi:

"We do expect that some of those loans will be sold off, some ... will be restructured, and some ... will be fully provisioned on the books of banks," he said.

"But we think on the outside 1-1.2 trillion (naira) is what the AMC will have to lay out to purchase and to clean up the system and the bad loans, and we should recover about half of that over the life of the AMC," he said.

I am glad we are finally moving in the direction of cleaning up the banks' balance sheets, and remain generally supportive of the CBN governor.

But I am perturbed by the lack of honesty about what we are really doing.

I do not think we are going to recover anything of statistical importance from this bank bailout. The AMC is going to give the banks $10 billion to clean up their books, and will eventually have to write-off nearly the entire sum at the end of its decade-long life-span.

Except the AMC will be using government-backed debt instruments (as opposed to "cash") to buy the toxic assets so "write-off" really means the government will have to pay up the $10 billion plus interest the AMC will owe bond-holders and other creditors.

Essentially this is a convoluted process, designed to disguise the fact that the federal government is going to give the banks $10 billion in free money, in exchange for nothing, a gift, a subsidy, a bailout with no strings attached.

Don't misunderstand me. I support the bailout, well, everything except the no-strings-attached part. It is a lot of money, but we have to do it. It is unfortunate that in the absence of broader institutional reform we might find ourselves back in this mess sooner or later, but we can't let the "perfect" be the enemy of the "necessary". In order to be in a position to talk about how to reform, restructure and transform the banking industry (and the overall economy) we need to have a healthy banking system in the first place.

What I don't understand is why our officials seem rooted to the belief that we will not let them do the things they want to do if we really knew what they were doing. So they tell us whatever they think they need to tell us to get us to acquiesce to whatever they want to do. They think it is a successful strategy because our response to their actions is apathetic, but they don't realize that they are the reason that nobody in Nigeria trusts anything the government (or any of its agencies or leaders) says. If Nigerian citizens' lack of trust in public institutions could be boiled down to one word, the word would be "Census". We do not trust even the most basic statistics released by our government, the basic statistics on which the federal and state budgets are putatively based.

I would rather someone had the courage to explain what we were doing with regard to the bailout, rather than pretend that we are somehow going to make some of this money back.

I like Sanusi. I will freely admit it has more to do with his essays on political, social and cultural issues than any opinion formed of his time as MD of First Bank.

With that said, Sanusi Lamido Sanusi needs to study his predecessors, all of them, and ask himself what made them effective and what made them ineffective.

Professor Charles Soludo had a brilliant academic career before becoming boss of Nigeria's Central Bank. And as I have said earlier, there are things he did as CBN supremo that I am glad for, the bank consolidtion principal among them. But I stopped taking Soludo seriously when I heard his comments on the West African Monetary Zone plan for Nigeria, Ghana, Sierra Leone, Libera and Gambia to adopt a single currency in three years.

From the beginning, the WAMZ plan was unrealistic. It was so unrealistic, I couldn't believe it. In the year 2000, they declare that all five countries would adopt the single currency in 2003 ... just three years later! If you do not understand why that was an almost cartoonically silly thing to declare, then I don't know what to say, because a web-blog is no place for the long detailed expatiation of why their plan made no sense from the start.

Unsurprisingly in 2003, no such single currency emerged. The WAMZ countries merely announced that the new currency would begin in 2005, still an unrealistic target. In 2005 they pushed it to 2009. And in 2009, they pushed it to 2015, where it stands today.

Soludo was not CBN boss when this plan started. However, once he became CBN head, he never (not to my knowledge anyway) publicly pointed out that the plan didn't make sense. He never (to my knowledge) pushed for the plan to be made more realistic. If anything, all of his public statements that I am aware of were supportive of the plan; much as he would later insist there was nothing wrong with the Nigerian Stock Exchange, he insisted the WAMZ project would meet its declared deadlines, even as any sensible person knew (or should have known) that those deadlines would never be met.

I know that Soludo is a brilliant economist, and so I know that Soludo knew the WAMZ wouldn't happen. I also that he knew that the Nigerian Stock Exchange was not okay. For political reasons, he watched as the NSE bubble grew, and endorsed the "pan-African" ideal of a currency plan based on unrealistic targets and expectations.

But that is not my criticism right now. My criticism is of a CBN Governor looking me in the face (metaphorically speaking) and insisting something is true when I know it is not.

Once that line is crossed ....

Which is why I am glad someone is finally displaying a crumb of honesty. Abraham Nwankwo, Director-General of the Debt Management Office (DMO) has admitted, albeit none-too-loudly that Nigerian tax-payers will bear the brunt of bailing out the banks (I suppose "tax-payers" is his euphemism for the proceed from crude oil sales).

Where Sanusi said the Asset Management Company could recover as much as half of the value of the toxic assets, Nwankwo has adjusted this downward, albeit cleverly offering an estimated range of 35%-45% recovery. This means it will likely be closer to 35% ... close from below 35%).

Abraham Nwankwo is an interesting man, who as recently as March 2009 declared Nigeria to be "under-borrowed", which is what multilateral lending agencies tell countries when they want to saddle those countries with unnecessary debt.

But I thank him for his honesty ... or his approach towards honesty anyway.

Even if the money for the bailout comes from oil revenues, we the people will be giving up use of those revenues for infrastructure, healthcare, education, electricity and other strategically vital needs. Directly or indirectly, we are paying the price.

I support the bailout, but ideally, there would have been a national debate BEFORE the National Assembly approved the Asset Management Company. Ideally, the debate would boil down to a "compromise" where the people grumble but accept the Asset Management Company, the National Assembly passes a raft of laws that constitute top-down reform of the industry, and the banking industry sanitizes itself by sloughing off the detritus of decades of uneconomic thinking.

But this is Nigeria ... which means most Nigerians are probably blissfully unaware that we are about to bailout a banking industry that created problems for itself and for the rest of the economy. How can you build up pressure to change, pressure to reform, to restructure, to transform, when people don't even understand the full extent of the problems that were create by the persistence of abnormal ways of doing things?

News Comments

KANO

As I said would happen yesterday, the EFCC has released Alhaji Takai, and has made some vague, indecipherable noises on how the investigation will be on-going. Interestingly, the article named the specific political rival who called the EFCC in, Alhaji Abdulkareem Dayyabu. What will happen next is Governor Shekarau will deploy the powers of the Governor's Office to crush Dayyabu ... or the governor will have a private chat (more like a negotiation) with President Jonathan. Basically, Shekarau wants to be free to impose Takai on Kano, without interference from Abuja, while President Jonathan wants to impose himself on Nigeria in 2011 and needs the support of the political machines controlled by the all of the governors (particularly one is so key a state as Kano). A simple quid-pro-quo will be worked out.

In better news, the Kano Metropolitan Area looks to be getting some version of rail mass transit. The Kano project is the latest on a list that includes the Lagos State rail mass transit project, and the mono-rail line planned in Calabar to link Margaret Ekpo International Airport with the Tinapa Resort, Shopping, Conference and Entertainment complex.

HEALTH AND WELFARE

I doubt any high-ranking government official reads this blog. But on the off-chance that any of them do, could they please take a look at this news report and do something about it? Haba. Why would you build a clinic, equip the clinic with everything it needs ... but fail to connect it to the electricity grid? In fact, why was the clinic opened for business if it has no electricity?

News of the day

ABUJA

Mobile Police in Abuja shot a bus conductor in the knee. The conductor's crime? He had the temerity to ask the officers to pay their bus fare. Apparently the Mobile Policemen felt they had the right to ride commercial buses for free, and the right to enforce this freedom-from paying their due bills by using gunfire on innocent blue-collar workers who are only doing their jobs.

KANO

Nuhu Ribadu has barely returned from self-imposed exile, yet the EFCC is already reverting to its Ribadu-era form.

Being that Big Men dislike subjecting their ambitions to democratic votes, the many ANPP aspirants seeking to succeed Ibrahim Shekarau as Governor of Kano State after the 2011 "elections" decided against having a democratic intra-party primary decide the All Nigeria People's Party candidate for next year's "elections". No, the ANPP powerbrokers decided to give Governor Shekarau the right to singlehandedly designate one of them as his automatic successor; since governors control their respective State "Independent" Electoral Commissions, control their respective state treasuries (with fully bought-and-paid-for rubber-stamp State Assemblies), and control their respective local government areas (appointing chairmen and councillors as though they were handmaids), being your governor's handpicked successor is as good as "winning" the election before it is held.

Each of the aspirants had spent the last 8 years kissing Shekarau's ... never mind. The point is, they each thought they were the governor's favourite, and they each thought that this undemocratic arrangement would result in the governor picking one of them and using his power to shut their rivals up.

As it turns out, the governor picked none of them. The would-be aspirants have reacted very negatively to Shekarau's selection of Alhaji Salihu Sagir Takai as his imposed replacement (sample stories here, here and in most detail here.

Some of Alhaji Takai's expanding list of opponents seem to have remembered that manipulating the outcome of "elections" was the most important role of the Economic and Financial Crimes Commission during the Obasanjo II administration.

Since almost everyone involved in politics in Nigeria is tainted with the pervasive corruption of the system, you can ALWAYS find proof of wrongdoing by any politician ... provided you are actually interested in finding it. Indeed, as much as I am no fan of Nuhu Ribadu (working to make one corrupt faction stronger at the expense of another corrupt faction does not constitue fighting corruption), or of Farida Waziri (who only has the job as a scratch-my-back-I-scratch-yours recognition of her husband's political influence in Gombe State), no one, not even a saint, could fight corruption from within the system. The system itself is so corrupt in its entirety, that "fighting corruption" would entail prosecuting almost everyone in the political system, which the political system (by definition) would never allow.

In any case, Alhaji Takai's opponents have set the EFCC on him. The ANPP does not control the EFCC, so one can see the hidden hand of the Peoples Democratic Party, and the federal government, trying to exploit divisions in the ANPP ahead of the 2011 "elections".

In Fourth Republic politics, aspirants who fail to get the nomination ticket for their current political party simply decamp to one of the other 35 registered parties from where they battle their rivals in a contest to see whose machinery will be more successful in manipulating/dictating the outcome. Specifically, one or more of Shekarau/Takai's rivals is clearly in discussions with the Peoples Democratic Party (and with President Jonathan) about decamping to the PDP ... and Alhaji Takai's arrest may be the first step in the eventual replacement of the ANPP with the PDP as the controlling faction in Kano State.

Oh, don't worry. I doubt Takai will be held for long, or charged with anything. They will hold him for a while, "question him", and then release him. Farida Waziri (like Ribadu before her) will make vague sounds about planning to prosecute him at some unspecified future date.

The PDP has made its point.