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Sunday, May 11, 2014

ISLAMIC BANKING IN NIGERIA: SIX YEARS OF LOTUS HALAL FUND




   Lotus capital is a pioneer in the field of Islamic fund management being the first institution in the country to lunch halal management fund in 2008 when it made its initial public offering to the public. Since that time the fund has achieved a lot including the revolutionary lunching of Islamic shares index in association with the management of the Nigeria stock exchange in 2012. Its Halal fund has attracted patronage from across the country, with investors cutting across all faith. Among other activities of Lotus capital is giving advise to state governments on how to manage their budgets and avoid budget deficit through the use of Sukuk, the Islamic bond that do not use interest. The first Sukuk issued in Nigeria by the state of Osun in South West Nigeria was managed by Lotus as the leading issuing house of the project. At the end of the issuing in October 2013, a total N11.4 Billion was realized. Among the major investors in the Sukuk issue is Jaiz Bank Plc, the first fully fledged Islamic Bank in the country.

    For a country the size of Nigeria with a population of over 170 million people not lest than half of them belonging to the Islamic religion, it is surprising that there are only two major institutions in the country who called themselves Islamic financial institutions. looking at the size of Nigerian economy being recently ranked the biggest economy on the continent with annual GDP of half trillion Dollar, the country should ideally have sizable number of Islamic financial service players running their businesses in the country. Thus, the ideal thing to do for a country like Nigeria is not to depend on only Jaiz and Lotus as the only two major players in the field. While all business people who care much about ethics and their business shall patronized them, efforts shall be made to see that many others like them come on stream. This will go along way in ensuring the survival of the system in the country and ensure that the country and its people benefit from this unique system of financial and business transaction. 

Friday, May 9, 2014

ISLAMIC BANKING IN NIGERIA: A LOOK AT JA'IZ BANK PLC




     During a recent visit to the head office of Daily Trust newspapers in Abuja, the management of Ja'iz Bank Plc (Nigeria's first fully fledged Islamic Bank) under the leadership of its Bangladeshi Managing Director Muhammad Nurul Islam revealed that the growth witnessed by Ja'iz Bank Plc in the last two years surpassed what was seen in the case of Bangladesh and some Nigerian conventional banks. Since inception in January 2012, Ja'iz Bank has grown investment to about 22 billion Naira despite the numerous obstacles on it path as being the only non-interest bank in the country. These successes are coming at a time when there is a major change in the Central Bank of Nigeria with a new governor coming to office in the first week of June this year who nobody knows of his policies and plan for the apex bank. It will, therefore, require extra effort on the part of the management of the bank and other key stakeholders to ensure the sustenance of the feats achieved so far by the Bank. Looking at the performances of Islamic Banks elsewhere around the world one can be confidence about the future potentiality of Ja'iz Bank if handle very well by the management. Already the bank has grown it customer base from zero when it started operations to over 60,000 customers as at today, deposits grow by some 1500% in the period.

     I also learnt from the visit of the Bank's management that Africa's richest man is among the biggest shareholders of the bank, in addition to many small shareholders. With about 14 branches and still counting (it plans to open 12 more branches before the end of this year) the bank is on it way to become a national bank from it current position of a regional bank, this according to the plan of the bank will happen sometime in 2015. Being the only Islamic Bank operating in the country put a lot of obstacles on the way of Ja'iz Bank which people familiar with the operations of Islamic Banks around the world are aware of; but despite these the management of the bank have managed to grow its investment portfolio at the rate of 380% in the last two and half years. Its customer's deposit grow even higher at the rate of over 460% in the same period. Still higher for overall period at the rate of 750% during the year. According to the MD, the use of state of the art IT equipments have contributed a lot to this success, this is despite the fact that its plan introduction of VISA and Master Cards is coming in the next months. The vision of Ja'iz Bank plc is to be the largest non interest financial service provider in the Sub Saharan Africa.

Friday, April 18, 2014

ISLAMIC BANKING IN NIGERIA: THE FUTURE OF THE SYSTEM AFTER SANUSI LAMIDO SANUSI


   


      The suspension of Sanusi Lamido Sanusi from his position as the governor of the Central Bank of Nigeria by Nigerian President Goodluck Jonathan and the appointment of a new governor Mr Godwin Emefiele who was former Managing Director of Zenith Bank Plc has left many people wondering about the future of Islamic Banking and finance in Nigeria. The movement for the establishment of a fully pledge Islamic Bank (Ja'iz Bank) in the country has been on for almost a decade before the coming of Sanusi Lamido as CBN governor. But, it was only after he became CBN governor that that dream was realised with the starting of operation of Ja'iz Bank plc in January 2012. Before him other Central bank governors (especially Soludo) have made noises about how they wanted to see the realisation of the bank, including drafting policy documents, but up to the time they left the apex bank Islamic banking had remain on papers locked inside CBN headquarters. Now that the person who has put into practice what had been locked in archives of the apex bank has left the bank, what is next for Islamic Banking? Which direction will it possibly take? Would its growth and dynamism be sustained looking at the controversies that trailed the establishment of the system in the last two years and the antecedent of the new governor? These are some of the questions we will be looking at here, because no body can tell you the agenda of the new CBN governor and whose interest he is there to protect.

   Mr Emefiele spent most of his 26 years in commercial banking business with Zenith Bank Nigeria Plc. He is not very well known outside the banking industry or known to harbor any animosity against Islamic finance. But, that is where it stops as stakeholders in the industry have to watch his move closely (now) to see whether he will continue from where Sanusi stopped. Already Ja'iz bank plc has seen multiplications in its capital base and deposits, and has continued to open new branches almost on monthly basis hoping to became a national bank in the nearest future, from it current position of a regional bank. On April 17-19 this year, precisely at the time of the writing of this article, the international institute of Islamic Banking and finance (IIIBF) Bayero University Kano is holding an international conference on Islamic Banking and Finance. This effort no matter how small it is, is commendable as it will go along way in keeping the fire of Islamic finance in Nigeria burning. If the past pronouncement of the current finance minister Dr. Ngozi Okonjo-Iweala is anything to go by it shows that the minister appreciated the contributions of Islamic finance to the global economy. Thus, the Islamic banking and finance industry in Nigeria has not much to fear from her. As a matter of fact her former employer, the World Bank has recognized the contributions of Islamic Economics and finance to the global economy for over two decades now; and has commission a lot of research works on the area.



   Nigerian Wealthy, academics and professional bankers has not done enough for the development of Islamic banking in Nigeria. Imagine the fact that the richest man on the continent is a Muslim from northern Nigeria, but despite that he has done little for Islamic finance because of fear of being seen as Islamic enthusiast by non Muslims. Other wealthy Nigerian Muslims are in abundance but only handful of them has shown any desire to contribute to the field, if not for the sake of God then for the sake of profit or both. This will go a long way to tell you that most of the Nigerian Muslim communities are ignorant of the workings of the system and the profitability hidden their. Many recent studies have shown that on average Islamic banking is more profitable than conventional banks and more risk averse (Hassan and Dridi, 2010). Despite efforts to establish Islamic banks in Nigeria dating back to over two decades ago, there is only one Islamic Bank in Nigeria today. But take for example in the D8 group where Nigeria is a member, all the rest of the seven members countries (including secular Turkey) has more than one Islamic Bank and their numbers is fast increasing. The reasons for the rapid growth in the Islamic financial sector in these countries are not difficult to fathom. First, the authorities has provided the enable environment for the sector to grow; second, elites have recognised the advantages inherent in getting involve in the system; third, the general populace are being educated about the workings of the system.

   Nigerian academics are slow in catching up with their counterparts around the world in the area of making scholarly contributions towards the development of the field. When compared with any other member of D8, the number of scholarly papers on Islamic economics and finance produced in Nigeria in a year is insignificant; it is not up to the volume produced by a single university in Malaysia or Pakistan. This is very worrying looking at the fact that more than half of the population of Nigeria is Muslim and the fact that there are more than 30 universities in Muslim dominated states, half of them offered some economics, finance or management courses. The number of Muslim economists who are actually interested in Islamic economics and finance and are ready to contribute their quarter to the field is insignificant. Most are afraid of the field for fear of discrimination in Nigeria's charged labour market, where being associated with a particular religious thing is seen as being sensitive matter. Though, the coming on stream of Ja'iz bank has changed that perception a little bit by bringing Islamic finance into the main stream and demonstrating to the non Muslims in Nigeria that they have nothing to fear, a lot need to be done. Among the current employees, shareholders, and customers of Ja'iz Bank Plc there are many non Muslims who are happy to be associated with the bank and who feel at home when dealing with it. 



   With only one Islamic bank, two conventional banks operating a window of Islamic bank, and a shariah base Mutual Fund Company, it is just the beginning of Islamic banking in Nigeria as there is more room for growth. Without the will on the part of the authorities in the apex bank the continuous rapid growth the sector has witnessed in the last three years will be jeopardized. Hence, the need on the part of Muslim leaders in the country to make it clear to the authorities the fact that they need Islamic banking or their (Muslim) economic and religious interest will be jeopardized. Sanusi's tenure as CBN governor has done a lot in laying the foundations for the take off of a robust Islamic Banking industry; what remains is for stakeholders in the industry to insure that nobody comes and take them backward. First, the rich Nigerian Muslims should join hand together with Muslim banking professionals to establish another Islamic bank. This will ensure that unnecessary pressure is not mounted on Ja'iz and that a partner bank is provided to Ja'iz which will help to ensure that authorities provide the necessary infrastructures needed for the development of Islamic banks such as Islamic liquidity facilities. Second, more capital should be invested in Ja'iz and more Muslims should patronized the bank in order to make it more profitable and ensure that additional investors both within and outside the country bring their money to the industry. 

NOTE:
Hassan, M. and Dridi, J. (2010), “The effects of the global crisis on Islamic and conventional Banks: A                                                              Comparative study", IMF working papers, WP/10/201

Saturday, April 12, 2014

MINTs, PINEs, and NIGERIA'S NEWLY REBASE GDP NUMBERS





Last Sunday the 7th of March 2014, Nigeria announced it newly re-base GDP figure last revised in 1990. This year January Jim O'Neil, a British economist and former employee of the investment Bank Goldman Sachs came out with the new acronym of MINT (Mexico, Indonesia, Nigeria, and Turkey) more than a decade after he coined the popular acronym BRIC (Brazil, Russia, India, and China). Very recently come PINE (Philippines, Indonesia, Nigeria and Ethiopia) another acronym that added Philippines and Ethiopia as possible important players in the global economy or the region of the world they are located. Now that Nigerian economy is the biggest in Africa and 26th in the world, the important of Nigeria inside MINT and similar groups will increase. Nigeria's journey to the present has been thorny full of up and down and some time threats of breaking up into pieces. Some time during the tenure of President Obasanjo an American forecast saw Nigeria breaking up in 2015, other different forecasts saw Nigeria entering the league of 20 biggest economies in the world, 3rd most populous country in the world, etc. MINT and PINE acronyms are among the positive predictions on Nigeria that see it as playing a positive role in the global economy.


     The last re-basing of Nigeria's GDP have shown the world the potentiality of the Nigeria economy different from the picture the outside world has been relaying on in the past that show Nigeria as a slow growing economy and extremely comatose. Though, the re basing has changed nothing on the ground, neither the poverty level nor the absence of electric power has improved. But, the fact that it has provided a new reality, a new way of looking at things, from the point of both the authority and the business world, is a welcome development. Nigerians will now be sure that their governments have not been doing enough to improve their lot, looking at the size of the GDP and the enormous potentiality on the ground. Already a trend has become clear that shows consistent government in ability to direct the economy in the right direction. The main question to ask is what next after the re-basing? Should Nigerians go to sleep knowing that their nation is now the biggest economy on the continent? The answer is absolute no, if anything this newly release GDP figure is a call to duty for the authorities to rise up to the expectation and do the needful to take the country to where it truly belong. Instead of talking and making noise about our potentials which has been the norm since after Independence we should pay more emphasis to seeing that we realized those God given potentials. 

   With a big population such as ours Nigeria should have utilized the opportunity to modernize its retail sector, instead; just like with most other sectors of the economy the retail sector has been the way it was in the last 30 years with little changes. Government should have encouraged the rapid modernization of the sector embark on by some few foreign retailers as well as pockets of our local retailers. Just last three weeks, the ancient city of Kano witnessed the opening of its first modern retail market when Ado Bayero Mall was opened to the public with retailers such as South Africa Shoprite among it first tenants, with others such as  Massmart (a subsidiary of Walmart) joining them in the next few weeks. With population of over 10 million people, Kano and Lagos are the places to be for any retailer who wants to get across to the Nigeria's growing population of the middle class. When you compare Nigeria with some members of these groupings (MINT, PINE, even D8) you will find out that Nigeria has a lot of ground to cover. Take for example Mexico, it is already a manufacturing hub that exports automobiles, electronics, etc., to countries such as United States; Turkey Exports the same category of things to the European Union, the same thing cannot be said of Nigeria. Even Indonesia cannot be compared to Nigeria in term of manufacturing, they are ahead of us in this area. In fact for some years, made in Indonesia products have been all over Nigerian market. 



         Already an argument has been growing in the country on the newly released GDP figure with many Nigerians questioning the accuracy of the figure given as our new GDP number, as well as our position of being the biggest economy on the continent ahead of South Africa. On my part, i am not in any way doubting the figure, the fact that IMF and World Bank are involved in the re-basing program gives it some authenticity. But, the reality of our poverty is also real, world Bank has just released it study on global poverty where Nigeria is ranked third. This did not in any way contradicted the earlier released GDP figure, just like it is in the case of China and India. China is the 2nd largest economy in the world ahead of Japan, Germany, France and UK; but, at the same time it is grouped alongside Nigeria and India among the countries with largest concentration of poor in the world. Just as i read one Nigerian government official disputing the world Bank study, arguing that Nigeria is not as poor as the World Bank put it. I don't think this highly place government official is going around the country, it is most likely that he lives most of his live in Abuja luxury where life is like in other big world cities. He has forgotten that here in Kano city people spend a week without seeing electric light; Nigerians in rural areas have adjusted to the live of penury and hardship, and have lost any hope that government will remember them one day. Therefore, for those disputing the World Bank study that ranked Nigeria number three should please have a rethink and travel to their villages back home so as to share time with their people and feel how it is like to live their.

Saturday, March 29, 2014

FRANCE AGAINST NIGERIA: THE NEW SCRAMBLE FOR AFRICA


      

      The Daily Trust business story of Monday, March 24, 2014 caption "Dangote draws Nigeria, France into 'cement war' in Senegal" is very quick in firing my imagination on what particular topic to write my blog post on. Normally it took me some time before deciding on what to write, but looking at the fact that my last post was on Nigeria's economic interest abroad, particularly within emerging markets of Africa and Asia, i found it necessary to comment on this topic which i have already developed an interest on; particularly with the story currently going round in Nigeria that linked some foreign powers with support of insurgency in Nigeria's North East.  The Daily Trust story said that French President Francois Holland has written his Senegalese counterpart Macky Sall in January this year in order to intervene on Behalf of the French cement company SOCOCIM which has already dominated about 65% share of the local cement market in the West African country. This is on the back of the reality that Dangote cement plant in Senegal did not even started production, though, the story said that it would start in the next 90 days with annual out put of three million tonnes of cement about three-fifths of which will be sold inside Senegal. The building of the plant cost Dangote some $630 million and is reputed to be one of the largest cement plants on the continent.




       It, thus, led me into looking at the map of Dangote cement plants distribution in Africa and remembering that a particular French company (Lafarge) is the biggest cement producer in the world. Then i connected this fact with the ambition of Dangote to make his company the largest producer of cement in the world in the shortest period possible. Already Dangote cement has operations in 15 African countries where some French cement companies have already made footprints over many years, after French granted independence to its colonies in Africa. And, the fact that Dangote cement has dominated Nigerian market currently Africa second biggest economy with rising GDP in the region of 6-7%, make Dangote cement a threat to France major cement mafias. The importance of cement production as a sign of growth in a country economy cannot be skipped here; as the consumption of cement in a particular region or nation increases so it GDP.




       Of all the major European imperialist countries that colonized Africa it is only France that continue to stick it nose in the continent affairs (more often than usual) who do not want let go, and read the bold writing on the wall that the era of colonialism is over. But, Africa is now free and Africans have the right to determine their fate without constant interference from an old colonial power. France has more colonies than any other European nation in Africa, but unlike Britain which was more of a sea power (during that period) and who colonised countries that had direct access to the sea, France (due to it less advantage in the sea) had a lot of it colonies in the hinterland. The old colonial policy of assimilation of the French is still being used by France in albeit a modern form in order to protect the interest of France companies on the continent. Hence, the desperation to use any means possible to achieved that, including propping up of dictators as we have seen in Algeria (Bouteflika), Chad (Idriss Debi), Cameroon (Paul Biya), Zaire (Mobutu Sese Seko), her role in Rwandan genocide of 1994, or supporting rebels who threatening to secede from a country that could be a treat to France interest on the continent as was the case with France support for short-live Biafra Republic in Nigeria.




     Dangote is not the only Nigerian businessman who is increasingly becoming a threat (competition) to France business on the continent, other Nigerians business moguls with wider interest on the continent should beware. Business people such as Tony Elumelu who control Heirs holdings and has bigger interest in UBA bank (who has spread on the continent and promise to rich more countries), Mike Adenuga who control Glo telecommunication company as well as many ambitious other Nigerian businessmen with plan to diversify into the continent have France and other world powers interested in Africa to contend with. French companies, according to Melly and Darracq (2013), "are particularly strong in sectors such as logistics, port and rail operations, telecoms, shipping, banking and air transport; they also have significant interests in tropical commodities and agriculture". of all the regions of Africa that France maintain its interests, West Africa is of more strategic importance because of the economic interests of France and its people there. Hence, the France keen interest on major players in the region; particularly Nigeria whose economy is predicted to become the largest economy on the continent, ahead of South Africa in the very near future. The fact that in term of population Nigeria alone make up half of the entire population of the 16 member ECOWAS community and likewise in GDP, France attention will always be on any move Nigeria makes in the region.




       It is no coincidence that despite Nigerian contribution to peace keeping in Mali the leadership of AU Joint forces that restore peace to the country was quickly taken away from Nigeria and given to a former French colony. We all knew the antagonism of big western countries to Nigerian leadership of ECOWAS, and her achievements in restoring peace in Liberia and Siera Leone; hence, the rush in reducing her influence in Mali which unlike Liberia and Siera Leone was colonised by France during the hectic days of imperialism. Economic interest is always in the front burner in France incursion into Africa, writing for Aljazeera English website, Faten Aggard-Clerx observes: "Over the last 10 years, France's share of African trade plummeted from 10 percent to 4.7 percent [Fr]. France is not the only country that lost ground. In fact the Western countries' share of African trade and investment has declined as a result of the increased engagements of emerging countries notably Malaysia and China. Hollande seems resolved to regain such space and put a bold commitment forward to double trade with Africa in the next five years"




   Niger republic, Nigeria northern neighbor, remain the main supplier of Uranium to France. Recently, there were wider demonstrations across the country calling for stop to the exploitative and damaging term of trade base on which France companies export uranium out of Niger to France. France energy production is heavily skewed in favour of nuclear energy with more than 30% of her energy needs supplied by nuclear power plants spread around the country. France has recently rediscovered her reliance on its former colonies and the need to further widen it economic interests there. Analysts such as Mehdi Taje of the strategic security center for the Sahel and Sahara is of the opinion that France is determine to "secure the energy resources of the Sahel and deter rival powers such as China, Russia, India and, to a lesser extent, Brazil......., For the French, the time of the conquest of territories is already completed,...... “France wants to strengthen its presence gently, but still strong enough to scare the Chinese”. On this French interest on Africa, Melly and Darracq (2013) have this to say, "French policy matters in Africa in a way that elsewhere outside Europe it does not". It is, therefore, out of focus for any Nigerian businessman who want to expand out of Nigeria into other Africa countries to make mistake of not putting France and her Africa interests in his radar. 


SOURCES:
Bresler, I. "Mali: why France is fighting for West Africa", available at,
                 www.theforeignreport.com/.../mali-why-france-is-fighting-for-west-afric.

Aggad-Clerx, F., "France: Out of Africa and Back?", available at,
                  www.aljazeera.com/.../france-out-africa-back-20131214112634946877
Melly, P. and Darracq, V., "A new way to Engage? French policy in Africa from Sarkozy to Hollande",
                   Chatham House, Africa 2013/01, available at,
                  www.chathamhouse.org/sites/default/.../Africa/0513pp_franceafrica.pdf‎

Sunday, March 23, 2014

DEVELOPING COUNTRIES 8: WHAT IS IN FOR NIGERIA





      Developing countries group of eight, more popularly known as D8, is a group that comprises the countries of Nigeria, Turkey, Pakistan, Indonesia, Bangladesh, Iran, Egypt, and Malaysia. The bloc came into being on June 15, 1997 in Istanbul Turkey, the idea of which came from the then president of Turkey Dr Necmettin Erbakan, in what is today commonly refers to as the Istanbul declaration. According to the website of the organisation 'the objective of D-8 organisation for economic cooperation are to improve member state's position in the global economy, diversify and create new opportunities in trade relations, enhance participation in decision-making at international level, and improve standards of living'. With a combine population of bout 1 Billion people which is about 13% of the total world population and combine global trade figure of $1.8 Trillion at the end of 2012 which is about 5% of the total global trade that year, the bloc is set to become one of the most important trading bloc in the world that transpass more than one region. Unlike trading unions such as European Union, ECOWAS, NAFTA, or COMESA, D-8 cut across regions of the world from Africa to Middle East, South Asia, to South East Asia. The bloc has set a target of $500 billion of trade between member countries by the year 2018 from the current figure of around $160 billion. 
      The much talk about MINTs economies that comprises of Mexico, Indonesia, Nigeria, and Turkey have three members of D-8 out of the four countries that made up the group. In the very recently concocted acronym of PINEs that include Philippines, Indonesia, Nigeria, and Ethiopia, two out of the four members of the group are from D-8 group. This further drive home the potential of the D-8 as the future mover of the global economy. If you look at the rate of economic growth in the individual members of this group you will see that Nigeria is making, 6.9; Turkey, 2.2%; Indonesia, 6.11; Malaysia,5.6%; Pakistan, 4%; Bangladesh, 6.7%; Iran, - ; and Egypt, - . The fact that they all form part of the most potential members of the high potential emerging economies in the world, with stable regimes in about 90% of them and prevailing peaceful atmosphere in about 80% of them making it the more likely for them to help shape the global economy in the near future. That is why it is very pertinent for Nigerian authorities to develop a good strategy to utilize this opportunity that promise a more positive outlook for Nigeria. Because it is not enough for Nigeria to be contented with its membership of regional economic bloc like ECOWAS or quasi economic bloc like AU; D-8 membership span four regions of the world with different geography and economic potentiality.



    The benefits that await Nigerian membership of D-8 is enormous, to start with all these countries have some few things in common, starting with population which ultimately determine the size of their domestic markets. The fact that their large populations compose of growing number of young people make the potentials of these economies more brighter, unlike say G-8 (sorry, G-7 without Russia). They are all fast growing economies as we have seen from their GDP grow rate earlier. Some of them have superb infrastructures such as Turkey, Malaysia, and to some extent Indonesia and Iran. Two of them are members of G-20, Turkey and Indonesia. Two of them are near the point of inclusion into the (so-called) status of a developed country, Turkey and Malaysia. Five of them are energy producers, Iran, Nigeria, Malaysia, Indonesia, and Egypt. Three are top tourist destinations Turkey, Malaysia, and Egypt. Two have world class education system that attract all sorts of students from around the world, Turkey and Malaysia. Two have a growing civil aviation industries that have the capability to produce commercial aeroplanes, Indonesia and Turkey. In term of manufacturing Turkey is far advance than any other D-8 member country, with an industry that produces electronics (for example, two of Turkish manufacturers -Vestel and BEKO major TV producers in Europe - supply most of Western Europe with domestic electronics). They have well grounded automobile manufacturing industry that supply neighboring regions with cars.
    Nigeria's big-time investors such as Dangote can size the opportunities provided by the higher emphasize the group has placed on private sector activities to exploit investment opportunities in the vast regions that made up the bloc. Already Turkish investors have sized the moment looking at the level of investments they are making in our country in sectors such as education, health, and transportation. One area that Nigeria should placed more emphasis on is the field of agriculture where Nigeria will have much to learn from countries such as Turkey, Indonesia, Pakistan and Malaysia. Mechanization and use of fertilizer in all these countries have reached an advanced stage. Fertilizer production and trade among member countries is already on the agenda of the group as meetings have already been hosted on its by the group, the last one being in Turkey last year. Dangote foray into the making of fertilizer with his investments of billion of Dollars will be comfortable with this D-8 emphasis on the sector. Nigeria's growing banking industry can make use of this opportunity to open shops in locations where Nigerians frequent such as Istanbul, Cairo, and Kuala Lumpur. In term of development of our financial industry, Nigeria has much to benefit from closer tie with Malaysia particularly in the area of Islamic banking and financing. 



        In terms of military and security, Nigeria has already started to cooperate with Pakistan on ways the two countries can share ideas and resources on how to deal with insurgencies bedeviling the two nations. Pakistan has longer experience in dealing with Taliban insurgence than Nigeria has with Boko Haram, though they are all very violent and deadly. But, as Nigerian military authorities have already found out Nigeria has much to learn from Pakistan in term of strategy to counter the insurgence. Pakistan is already a nuclear power with a rapidly growing weapons production industry that boost of local productions of military tanks, war planes, drones, etc. Nigeria should use this opportunity to revive it comatose defense industry base in Kaduna. This will substantially reduce Nigeria's usage of foreign exchange to procure military equipments which would henceforth be locally produced. This is a vast area, remember the country defense budget currently runs into over a trillion Naira.  By reducing the use of hard earn foreign exchange to buy weapons from abroad, a substantial amount of money will be freed for better used by other sectors of the economy such as education and health. Already the countries are looking at a proposal for setting up military textile industry by two countries in Nigeria; but this should not stop their, it should be extended to other areas such as Pharmaceuticals, agriculture, and energy supply.

Sunday, March 2, 2014

STILL ON THE QUESTION OF POVERTY AND INEQUALITY IN NIGERIA AS 2015 GENERAL ELECTION APPROACHES



    To philosophers such as Karl Marx and even to some extent Ibn Khaldun the process of history, the dominant happenings in this world, were all explained by one major theme: material acquisition. To Karl Marx, the type of cloth we wear, the food we eat, our culture, religion, and politics are all influenced by various economic factors. The Marxist theory of Dialectical materialism centred as it is on materialism and opposing social forces, associated changes in our society and history to these major worldly factors. The same thematic methodology need borrowing here if the current mess Nigeria found herself in is to be properly position in it right perspective. From the issue of Boko Haram insurgency in the North, ethno-religious crisis in central Nigeria to Niger Delta militancy in coastal Nigeria, the single underlying cause behind all these is economic need of opposing sides. The corner of Nigeria from where Boko Haram originated is the poorest section of the country, the underlying factor behind the recurring crisis in central Nigeria is control of economic resources particularly land, while Niger Delta militancy, as all the world knew about, is on resources control - crude oil. The earlier our policy makers in Abuja come to the realization that the first genesis of Boko Haram is economic problems and needs, that is poverty, followed by an ideology of a particular sect, the better for government efforts to contain the crisis. The current amnesty program in place in the Delta region has to some extent reduce the militancy but not eliminate it, as part of the underlying causes of the problem ( and also a consequence of it) youth unemployment and inequality remain. 




    The states of Borno, Yobe, and Adamawa are the most poorest in the country if you take the major indicators of poverty into consideration. The encroaching desert has made hundreds thousands of farmers to abandon their farms while cattle rearers migrated South for greener posture for their animals. Inside big cities such Maiduguri, the capital of Borno state, the growing army of unemployed who are available for recruit by any criminal is very worrying. The fact that the region share border with the impoverish parts of Niger, Chad, and Cameroon is a clear pointer to the role played by poverty in putting the region in the current mess it founds itself. Thus, it will seem naive or deliberate for anyone to discountenance the role of poverty in all these. The degree of inequality in the Niger Delta and the gap between oil barons and ordinary citizens is very glaring, hence the haste by everyone in the region to enter oil bunkering in order to make millions quickly and become rich. It is well known fact that some of the most expensive mansions in the capital city Abuja are own by people from Niger Delta who equally own other choice properties in their region. But, enter their villages -the country side- there you see people suffering and crying of absence of amenities such as good roads. The main cause of crisis between the so-called settlers and indigenes in the central Nigeria is control of resources such as land, business premises, farmlands, and grazing grounds; it become clear and more pronounce in recent years because poverty have beaten harder and youth are out of jobs. 



     The above factors define the current scenario in Nigeria and were at play for some number of years before now. Problems such as that of absence of regular electric light, scarcity of farm employment, and other jobs, deteriorating security situation and crimes, and poor condition of health institutions have combined to make things difficult for ordinary Nigerians. Like i mention in my previous article here, in an environment where free and fair elections are conducted it is easier for the people to make their choices and vote those that can salvage them from their current bondage. But, in absence of such an environment citizens will be left in confusion and total lost of confidence in Democracy and it ability to bring about the desire changes. Hence, the need for building of effective media and civil society organizations as watch dog for the people; who will put government back on track when ever its goes astray. But, where media (the so-called fourth estate) and the civil society are bought by the political class and big corporations the ordinary man confidence in the ability of the civil institutions and with it democracy to provide for him the minimum standard of welfare will further nosedive, leaving him at the mercy of any alternative ideology even if it is Utopian. The poor man don't care since it is a matter of survival, and those that are supposed to care for him has abandoned him for nature to take it cause. That is the peril and risk to the government that abandon its people and a system that is so corrupted that leaders can do what ever they want and no one will held them responsible for it. 


    The rich become richer and poor poorer has been in play since this country got its independence, it is only the rate at which this take place that has upped in recent years; making commentators such as myself to wonder whether our government care for a moment about the consequences of this widening gap between the haves and the have nots. But, for any reasonable observer of the happenings in this country, the reason for governments lack of concern is not difficult to forthom. The single most important weapon by which the poor can punished any government in power for its actions or otherwise -democratic election- has come under heavy abuse and being twisted to favour the corrupt elites that has been in power since the demise of colonialism. It is even more surprising in a country that claim to be conducting free and fair elections, that less than a year to election the government did not care about the dire condition majority of voters are in. This tells you that elections in Nigeria are being rigged all this while. While this is happening some radical elements in different regions of the country are taken advantage of the situation to sell their dangerous ideologies to the gullible public, majority of whom are the poor left abandoned by a careless government. Thus, we are in a country of extremes: a government that compose of unsympathetic capitalist class on one hand and growing number of religious and ethnic extremists on the other hand. It is the innocent poor that is left in the middle, while the radical elements are doing all they can to recruit him the government don't seem to have care for him. It is, therefore, easier to see why people are being recruited into the hands of these religious and tribal radicals. 



    As Nigeria march towards becoming the largest economy on the continent, surpassing South Africa, the issue of how to tackle poverty and the widening gap between the rich and poor will continue to pop up. We wait to see whether Nigeria will become India or Brazil of Africa or both; where in the case of India you have extreme poverty going side by side with rapid economic growth, while in the case of Brazil you encounter a peculiar case of inequality going together with economic growth. But, despite the poverty of India and inequality of Brazil their democratic system seem to be working better than that of Nigeria, increasingly given hope to the poor in these great nations. Unlike our case where the democratic transition has been punctuated by election rigging and poor governance. Nigerian economy will be better if we can have a free and fair elections as well as good governance. But, where non of these exist then there is trouble and less hope. It is, therefore, up to the Nigerian elite to see that they provide these things. In a world where protest has become normal and toppling of government by ordinary citizens on the street has become common, it is in the interest of our government to ensure that it listen to the people cry. Otherwise, what happen in Ukraine in the last few weeks and North Africa in the last two years would come here. Remember that the only constant thing in this world is change, therefore anything is possible including changes to the present system.