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Wednesday, October 30, 2013


       In a chart with a Facebook colleague discussing Nigerian economy and the growth it is said to be achieving, he kept wondering, ‘how could Nigeria be rated as one of the fastest growing countries on the continent while its citizenry are wallowing in abject poverty?’. According to recent statistics the rate of poverty in the country was put at around 70%, ‘but still those in the corridors of power want to cheat the population that they are doing good things to improve their welfare’, he argues. This paradox is not restricted to Nigeria alone; as a matter of fact it is the paradox of the capitalist economy the world over. Growth in the midst of poverty, jobless growth, high inequality, wealth concentrated in the hands of 5% of the population, wastage on the part of the richer echelon of the society while the poor hardly find something to put in their mouth, etc. In the specific case of Nigeria for example, the amount of electricity that is received by the households since the return to democracy in 1999 has consistently declined putting households and the economy at the mercy of generators sellers.

     Corruption that bedevil all the sectors in Nigeria make this paradox more apparent, this regime like all the regimes before it has done little to fight the menace, if not encouraging it in some subtle ways. In one of my articles earlier published on this blog, “Of Corruption, Bad Governance, and Economic Development”, I quoted a paper by late famous Nigerian economist Prof. Sam Aluko where he observed that ‘corruption distributes income in favour of the rich’ further widening the gap between the rich and poor. Thus, at the heart of this regime inability to deliver on its campaign promises is it poor record in the fight against corruption. Nigeria might have achieved growth of 7,6 or 5 percents but welfare of the poor have stagnated at the rate of 14, 12 or 10 percents annually. Though, rate of growth as measured by the World Bank might have increased, but measures of welfare as released by such bodies as United Nation Human Development Index shows otherwise. Nigerian schooling system is no better as it churned out half bake graduates into the labour market, further reducing their chance to get job that will ease their hardship. The bulk of the country’s wealth is being circulated between major cities such as Abuja, Lagos, Port Harcourt, Kano, Kaduna, while the majority of the populace in ruralties are left to die of poverty and starvation.
      The country’s banking system is a poor measure of financial deepening (the percentage of the population with account in banks), as a matter of fact more than two third of the population are out of the banking system; making it difficult for the poor to access credit. In the whole country there is no any genuine welfare system as you find in Europe or the not distance Middle East.  Education is not free, is only partially subsidized at some level, likewise the provision of health care, the poor has to find money to pay for his medical bills. To enjoy a minimum welfare you have to do most things yourself, generate your own light, employ security guards, built roads, dig a borehole, and in some cases contribute to build a community clinic. The government poverty alleviation schemes are not working, instead money means for the welfare of the poor are stolen by crooks government officials who use the proceeds of the loots to send their children abroad for studies and go outside for medical checkup.  At the level of state governments, most of them are not doing what is expected of them when it comes to the welfare of their people, assuming state governors using public money to buy private jets when many household do not have access to light.

Wednesday, October 23, 2013


SANUSI LAMIDO SANUSI – Governor, Central Bank of Nigeria
As the current central Bank governor Sanusi plays the most important role that led to the starting of operations of Ja’iz Bank, the first fully fledge Islamic Bank in the country; by removing obstacles to its take up. The move to establish an Islamic Bank in Nigeria has been on and off for some three decades, but it was only in January 2012 that a registered Islamic bank opened it doors to the general public and the credit for that should (among others) goes to Sanusi. This is because past Central Bank governors were not as serious with the creation of Islamic Banking landscape as Sanusi. Soludo has promised to introduce non-interest banking into Nigerian banking landscape but up to the time he left office Islamic Banking existed only on papers lock inside CBN. In addition to facilitating the starting up of operation of Ja’iz Bank Plc, Sanusi is currently pushing for Nigerian authorities to issue their first SUKUK Bond, already a state in South West of the country has kicked started the process of issuing first Sukuk (Islamic Bond) by any state in the country.

ALHAJI UMAR MUTALLAB – Chairman, Ja’iz Bank Nigeria Plc
He is one of the pioneers that championed the establishment of Ja’iz Bank where he currently serves as its pioneer chairman. Before that position he was the chairman of First Bank of Nigeria Plc, the Nation’s oldest and biggest bank, as well as UBA where he served as Managing Director. As a very wealthy person in the country he has used part of his wealth to invest in Islamic finance with the view to see the actualization of the old dream of establishing Islamic Banks in the country. He and management of the bank are currently pursuing the vision of transforming Ja’iz bank into the biggest Islamic Bank in Sub Saharan Africa.

      She is behind Nigeria first Halal capital management fund, which came on stream in 2008. Before that period there was no any publicly traded company that fully serves the Islamic fund management industry. Today Lotus capital is very active in the Nigerian capital market; it recently lunched together with the management of Nigerian stock exchange Nigeria’s first Islamic share Index. Now about one year since the formal lunch of the Index, it has recorded an impressive performance. Since its establishment some five years a go, Lotus capital has seen grow in it businesses making it very active in the Nigerian capital market. She has also contributed to the nation wide movements for the development of Islamic financial sector in the country, through input in major government policy drafts.

        He was among the few academic scholars (as at that time) that pioneered serious academic work in the field of Islamic Economics in Nigerian Universities. His PhD thesis Written under the supervision of Professor Mohammed Najatullah Siddiqi has made important contributions in the field. He has contributed scholarly papers to main Islamic economics journals around the World. He and late Sule Ahmed Gusau have contributed a lot to the development of manpower for former Habib Bank Nigeria plc. He currently serves as Shariah adviser to both Ja’iz Bank Nigeria plc and Lotus Capital plc. He was involved in the building process of Ja’iz Bank Plc right from the beginning of the move to establish the Islamic Banking giant.

LATE SULE AHMED GUSAU (PHD) – Usman Danfodio University, Sokoto
        Sule Ahmed Gusau of bless memory has made unforgettable contributions to the development of Islamic Economics, Banking, and Finance in Nigeria. He was very active in the process that led to the Islamization of economics courses at Usman Danfodio University Sokoto. His books and papers are still been used as reference materials in and outside of Nigeria. He was particularly very active in the then few movements and groups since 1980s that wanted the establishment of Islamic banks in Nigeria. He helps in the training of the next generation of Islamic Economics enthusiasts in Nigeria. Sule Ahmed Gusau and few other enthusiasts for Islamic Economics and finance remained steadfast at a period when few people have confidence in the area, a time when little was known about Islamic Economics, Banking and Finance in Nigeria. He has contributed papers on Islamic Economics (particularly Zakat) in conferences in and outside of Nigeria.

LATE ALHAJI ABDULLATEEF ADEGBITI – Former Secretary, Nigerian Supreme Council for Islamic Affairs (NSCIA)
       He was part of the pioneering team that supported the creation of Ja’iz Bank Nigeria Plc. Late Alhaji Adegbiti was very passionate about Islamic finance, he contributed to the actualization of Ja’iz bank both by his physical presence and capital. He has participated in setting up of conferences that help kept the fire of Islamic finance on, when few many had given up. His contributions to the development of Islam in Nigeria cannot be overemphasized. He served as patron to Zakat foundations in the South west of the country as well as contributed to the development of Islamic education in the country.

ALHAJI FALALU BELLO – former MD, Unity Bank Nigeria plc
     He is a pioneer in the field of Islamic banking operation in Nigerian right from his days as Managing Director of former Habib Bank Nigeria Plc, who started the first window of Islamic Banking by any conventional bank in the country. He continued with his interest in Islamic Banking and finance even when he left Habib Bank. He was part of the pioneers that help set up Ja’iz bank of Nigeria. He has made inputs in many government drafts on the development Islamic Banking in the country. At Unity Bank he started the movement for opening Islamic Banking window in the bank.

ALHAJI UMARU IBRAHIM –Chief Executive Officer, Nigeria Deposit Insurance Corporation (NDIC)
     He championed the introduction of programs for insuring non interest (Islamic) banks in Nigeria. The primary function of Nigerian Deposit Insurance Corporation is to insure Nigeria’s bank depositors against the risk of collapse of these banks. Before this time there was no any arrangement on the ground to protect depositors of Islamic Banks in the country. He has been very supportive of efforts to train manpower on Islamic banking and finance within NDIC, including staffs trainings abroad. His collaboration with the management of CBN towards the development of Islamic banking in the country is unique in itself.

PROFESSOR MAHDI ADAMU NGASKI – Former VC, Usman Danfodio University Sokoto
      He spearheaded the Islamization of academic courses offered at Usman Danfodio University Sokoto in the 1980s, the first time by any university in the country. The major beneficiary of this was Economic Department of the university. In 1985 Usman Danfodio University Sokoto under his leadership organized the first International conference on Islamic Economics on Nigerian soil that attracted the Who’s Who of Islamic Economics in the world as that period. Because of his Islamization efforts at the university, he was rewarded with the Vice Chancellorship of International Islamic University Uganda after the expiration of his tenure in Sokoto. As the VC of Usman Danfodio University Sokoto, he championed the training of manpower on Islamic Economics leading to PHDs in the field, and that of the fields of Islamic accounting and Management.

ALHAJI MOHAMMED BINTUBE – Pioneer MD, Ja’iz Bank Nigeria plc
      Alhaji Mohammed Bintube was the pioneer Managing Director of Ja’iz Bank right from the initial public offering of shares of the bank in 2003. He piloted the affairs of the bank for ten years including the period when the bank did not start operations. He left the bank earlier this year after attending ten years at the helm. He has participated and helped in organizing conferences on Islamic Banking in Nigeria. As a result of his efforts and that of other members of Ja’iz team, foreign investors were wooed into investing in the bank; particularly the Jeddah based Islamic Development Bank. He made wide ranging inputs into government formulation of policies for Islamic finance in the country.

ISMAIL M. ZAKARI – Partner, Zakari and Co. Chartered Accountants
       His accounting firm, Zakari and Co. pioneered Islamic accounting practice in the country. His company has in the last one decade help organized a number of international conferences on Islamic Banking in Nigeria; as well as in the area of manpower training for the nascent field of Islamic finance. His company is involve in the accounting of the two major corporate Islamic finance institutions in the country: Ja’iz Bank Plc and Lotus capital Plc. His dream of seeing to the actualization of Islamic finance in the country has taken him to many countries around the world.

MALAM BASHIR ALIYU UMAR (PHD) – Shariah Adviser to the CBN Governor
        Bashir Aliyu Umar is an Islamic scholar who has been contributing to the current efforts by CBN to develop Islamic Banking in the country. As the Shariah adviser to the apex bank governor he has help in formulating documents that guide Central Bank of Nigeria regulation of the Islamic finance industry. He has contributed also in advising other regulatory agencies such Security and Exchange Commission (SEC) and Nigeria Deposit Insurance Corporation (NDIC) on Shariah rulings pertaining Islamic Banking and finance. As Islamic scholar he preaches on Islamic Banking and finances to his numerous followers both during Friday sermons in his Juma’at mosque and lectures.

Monday, October 14, 2013


    In most of the developing world of Africa, Asia, and Latin America it has been the tradition to castigate and condemn economic policy prescriptions coming from the ‘West’ or rather the countries of Western Europe and North America. The reason for this disdain is not farfetched, emerging from the clutch of imperial powers who have colonized them for decades, third world countries professionals and academics became wary of anything ‘West’. This show of disdain reached it peak with the creation of World Bank and IMF who pushed all kind of beggar thy neigbour policies toward these countries as economic prescriptions. One such policy that Nigerian academics always like to refer one back to is structural adjustment program of the 1980s, that imposed harsh economic policies on the country populace. Since that period according to these academics, Nigeria has never been the same again. Cost of goods and services have sky rocketed, Naira value relative to foreign currencies has depreciated, privatized government agencies have failed to take off, poverty has multiplied, major infrastructures have collapsed, and criminal activities have become the order of the day. 

                                                                        ABU, ZARIA

    In most of the next four decades after the country’s independence, Universities’ Economic departments were not much different from the departments of political science and Sociology who were known for their composition of Marxist academics. Though, there were substantial number who did not subscribed to such world views, but there antagonism towards the Western neoliberal economic policies made them to become silent on the issue of increasing encroachment of Marxism. Just like in other developing countries of the world, their focus was on rapid development of the country by any other means than the draconian IMF World Bank economic prescriptions. Name of radical economists such as Karl Polanyi, Raul Prebisch, Samir Amin, Dani Rodrik, and Torsten Persson, featured frequently in their writings. Central planning, import substitutions and other inward looking economic policies of the past were championed by Nigerian economists of that period. Famous economists such as the late Professor Sam Aluko, Prof. Ibrahim Ayagi, etc., despite their trainings in Western Europe and United States did not support the increasing encroachment of neo-liberalism into government economic policy making. What happened during the military junta of Gen. Ibrahim Babangida is another point of reference, IBB had to literarily and physical fight the Nigerian academia opposition to his economic policies. To implement his failed structural adjustment program (SAP), IBB resorted to using professional economists, who were outside of Nigerian universities, for support and necessary input - people like Olu Falae.
   With the return to democracy in 1999, Obasanjo resorted to the same class of Nigerian economists and professionals for economic policy making input. His minister of finance was Adamu Ciroma, an old school administrator cum economist, Prof. Ibrahim Ayagi, another conservative academic economist, as national economic adviser, and the Central Bank governor in his first tenure was Joseph Sanusi, another old school conservative. In his second tenure (2003 – 2007) he brought on board a new group of technocratic economists, most of them of the World Bank IMF School. They include Ngozi Okonjo-Iweala of the World Bank as finance minister, Charles Soludo, a neo liberal economist, as national economic adviser later Central Bank Governor, and Obiageli Ezekwesili of the World Bank as education minister. Despite this apparent change of guard there was no substantial change in the general level of poverty in the land, death of infrastructures, or absence of industries needed for the creation of jobs; the mother of all problems in the nation, corruption was never tackled and eliminated. As at today, the same neo-liberal economic policies that Nigeria’s academics fought against in the 1980s are relentlessly been implemented in all sectors of the economy with little or no serious opposition from the country’s ivory tower; this may not be unrelated to the widespread invasion of these economic ideas of the global economic scene. I will, therefore, conclude by asking, ‘do globalisation finally concurred Nigerian Universities or is it our Universities are weaker than where they were in the 1970s and 1980s? Someone (desirably, bespectacled) should please provide an answer here!

Sunday, October 6, 2013


     The Asset Management Corporation of Nigeria (AMCON), the otherwise toxic assets company have been in the news in recent months for no other reason than the purpose of its continue existence.The institution that came into being in 2010 to help rescue Nigerian financial system from total collapse, after Nigerian version of the global financial crisis nearly brought the Nigerian economy to a halt. It is now more than three years since its establishment on July 19th, 2010, which in the wording of AMCON was created to be "a key stabilizing and re-vitalizing tool established to revive the financial system by efficiently resolving the non-performing loan assets of the banks in the Nigerian economy". Whether the institution has achieved that or not is debatable, as well as the duration of time it should take the authorities to wind down it functions.

    The activities of AMCON has come under increasing political interference of recent, as to who should be pressured into quickly settling his debt with the institution or not. Now that elections are fast approaching and the political temperature is high those with debt in AMCON books have to be careful how they show their opposition to the current regime. Just like in the case of EFCC, AMCON is likely to be used in hunting political oppositions with debt up to their neck. The continue presence of AMCON  to me will only spur the springing up of next round of financial crisis as it guarantees the build up of bad loans by the existing banks who have the assume assurance of Nigerian government coming to their aid through AMCON. Like IMF have observed it continue operation may " wittingly and unwittingly increase instances of moral hazards and fiscal risks".

    I do not agree with Mr. Chike-Obi, the chief executive officer of the company, who in a recent interview with The Guardian said that AMCON should be allowed to operate for at least 10 years. The man is just trying to protect his job not mindful of the cost that single act will impose on the Nigerian banking sector vibrancy and strength of the economy. While i am not in support of rushing the winding down of the agency as that will affect the banking sector and the economy negatively, i agree with those analysts that suggest a life span of four to five years for AMCON to conclude it business. The huge after tax loss announced by AMCON recently is a clear indication of the huge cost of AMCON operations to the Nigerian economy. It continue existence in it present form will only maintain the memory of the 2008/09 crisis on the mind of the Nigerian public which in itself is not good for business.

   Remember the Asian financial crisis of 1997/98 that devastated the South East Asian economies. One of the measures taken as at then by these econmies to get their financial system out of that mess was the creation of asset management companies, just like in Nigeria. In Indonesia IBRA (Indonesian Bank Restructuring Agency) was created in January 1998 to protect and restructure the country's banking system within a five year period lifetime. One of its key success factors was rapid assets disposal in order to return assets to the real economy. Money recovered by IBRA was expected to be channelled into quick resolution of Indonesia's huge budget deficit. How far did our AMCON succeeded in channeling it recovered money into government budget is still open to some questions, at a period when Nigerian economy is in need of some cash injection not the usual resort to external borrowing that this government is keen on doing.

  Thai Assest Management Company (TAMC) of Thailand was established on June 8th 2000 as a state agency tasked with the responsibilities of restructuring business and returning debtors' business back to profitability. Although, TAMC has a time period longer than five years to wind down its functions there are clauses inserted in the documents establishing it that urgeed it to quickly bring it operations to an end.  In Malaysia, another South East Asian country, Malaysian Asset Management Corporation was created in June 1998 to remove non performing assets from the economy and manage them. It also has finite lifetime of five years to wind down it functions, at the end of it mandate in 2005 MAMC can be said to have performed reasonably well. It is therefore not justifiable that AMCON should take ten years or more to do what it can do in five years. If Mr Chike-Obi and his staffs are looking for job they should apply elsewhere at the end of their five year period.