Wednesday, 30 November 2011

THE WORD OF THE LORD IN MY HEART FOR NIGERIA

 
"Nigeria, ARISE! You Light IS COME! This is your Season. This is your time. The whole of creation awaits your manifestation. Africa awaits your renaissance. Even GOD waits upon you, Nigeria, to take your place and be what HE destined you to be. Lift up your head. Break the yoke of oppression. Loose the bands of servitude and wickedness. Let righteousness reign from the Sahel to the Atlantic. Arise from your prostrate position. Know you not that your light is come? Know you not that this is your season? Shake yourself from the dust. Shake off your bands. NIGERIA, YOU ARE FREE. Why sit you still untill you die? NIGERIA, MISS NOT YOUR VISITATION!!"

Thursday, 10 November 2011

PETROLEUM PRODUCTS SUBSIDY REMOVAL: AN ALTERNATIVE PROPOSAL NIGERIANS CAN LIVE WITH

Expectedly, the plan by the Federal Government of Nigeria to remove the subsidy on petroleum products with effect from 1st January, 2012, has generated heated debate and stiff opposition from many Nigerians. The government, as usual, has promised "palliative measures" to cushion the negative impact of the policy on the citizenry. Many spokespersons for the government have rightly argued that the subsidy is not economically sustainable. But the issue of "sustainability" is just one issue. A more important question is the issue of AFFORDABILITY. Can the Federal Government afford saddling the already impoverished Nigerian with higher prices for petroleum products? Can Nigerians afford to pay higher prices for imported petroleum products? Is the continued importation of petroleum products sustainable given our depleting foreign exchange reserves and the vagaries of the international market for refined products which make the control of prices uncontrollable?
I am not in support of the removal of petroleum products subsidy. But there are is an alternative which I believe the Nigerian government and Nigerians can live with.
Below is my proposal. It is quite simple:
1. The Federal Government will use its resources and restore ALL the refineries and get them operational ...within three months or whatever period is feasible;

2. It will outsource the management of the refineries to a reputable international refinery operator through an open bid process which will run the refineries for six months;

3. During the six month period of management by the international refinery operator, the Bureau of Public Enterprises will oversee the privatisation of the refineries through an Initial Public Offer (IPO) with a reputable and credible Nigerian company like Stanbic IBTC as the issuing house. The IPO will only be subscribed by individual Nigerians. There shall be no "core investor";

4. After the IPO, under the supervision of the issuing house and the oversight of a firm like Accenture, Deloitte, PWC or KPMG, a management team shall be head-hunted to run the refineries.

5. When the refineries are fully operational at 100% installed capacity and local demand is met by supplies from the refineries, the Federal Government shall BAN THE IMPORTATION OF ALL PETROLEUM PRODUCTS.

6. The Federal Government shall THEREAFTER deregulate the pump prices of petroleum products to ensure sustainability of prices. But the refineries shall purchase the crude oil for local refining from the NNPC at a PRICE EQUIVALENT TO THE BUDGET BENCHMARK OF CRUDE OIL SALES. Hence, the refineries would be able to sell their products at prices affordable to most Nigerians.

The Federal Government would only bear the OPPORTUNITY COST of selling crude oil at the Benchmark Crude Oil Price rather than at the prevailing international market price. This is an economic cost that we can afford as a nation!

Wednesday, 28 September 2011

WHY ARE THE POLICE NOT OUR FRIEND?

Yesterday, Tuesday 27 September, was one of those stressful days. I was tired even as I woke up! I just could not get anything worthwhile done in the office all day even with all the projects I need to get going. I left work at about4.45pm and had to take a taxi home since my car was being serviced and other repairs being done on it at the Dealer's Workshop and they said it required 48 hours to complete. My wife was stuck in traffic and there was no way she could get to me in Opebi, Ikeja, from Apapa before 7pm.

At my instance, the taxi driver went through the local airport. I did not know that taxis are barred from going through the airport internal road which connects Ikeja to Ajao Estate! Trust our Police; the ones at the Hajj Camp check-point dutifully stopped us. One Inspector Kadiri, whom I later heard speaking Esan, insisted that he would not heed my pleas on the driver's behalf. I even spoke Esan to him. He said his boss would be upset if he let us go.

Suddenly, the area was engulfed with Tear Gas! What was going on?! I put my handkerchief to my face and tried walking away for some fresh air. In an instant, the entire place between Hajj Camp and the Cargo Terminal was polluted with Tear Gas! I was later told that some Tear Gas canisters in the Hajj Camp Police Armoury had "exploded"(?) and released the gas. The Policemen appeared unaffected. One of them said Tear Gas is their "snuff"!! I was too much in pain to laugh!! I had NEVER experienced Tear Gas. My wife later told me if I had soaked my handkerchief in water I would have coped better. My eyes were burning as if very hot liquid pepper had been poured in them! My throat was itchy and I soon started sneezing.

But the Police would not let the taxi driver go. Inspector Kadiri had left and one plain-clothed guy called Omo (who I later learnt was also from Edo State - Sabongida-Ora) took over. Omo was very hostile and violent. You would think he had apprehended a Boko Haram suicide-bomber!!

He rejected my pleadings and said I could go. I had already taken my laptop, folder and lunch bag with my food and water flasks, and newspapers from the boot of the taxi, and paid the driver the N1,500 fare we agreed on (it should not have been that high but I could not be waiting for the staff I sent to get me a taxi to be "pricing" each taxi that came by Opebi Road at rush-hour! I had even budgeted to pay N2,000!!). I told Omo I could not just leave the taxi driver to his plight. Omo asked for the car key and, when the driver appeared to resist while still begging, Omo decided it was time to use force and engaged the driver in a wrestle hold and threatened to seize the car. Force was totally unnecessary as there were as many as four or so armed Policemen present at the check-point; so there was no way the taxi driver could successfully resist arrest. The driver then tried to start his car and the ignition would not even roll! Omo decided that the driver was being overly clever and that he had manipulated something to disable the car so as to evade arrest.

The Police Stations "CDO" (what is that?!), an Igbo-speaking robust woman who looked nothing like a security personnel with her flabby look, eventually joined the unfolding drama. She was cross with Omo that he was being "lenient" with the taxi driver. The driver was ordered to drive his vehicle to the station. Of course, this was not possible since the car's ignition had failed. She then directed that a second taxi which had equally been stopped for the same "crime" should take Omo and my taxi driver to their station which was just about 100 metres ahead of us. As they drove away, I walked along with the "CDO" to the station still pleading with her. She was polite to me but I'd not agree to "have mercy" on the taxi driver as I requested. When we reached the Police Station, I entered the reception and asked for Omo and the taxi driver. One of the Policeman retorted "Oga, I dey greet you and you no even answer me; na question you dey ask. Oya, go find the person wey you dey look for na!" The Tear Gas concentration inside the Police Station was too high and I was too dazed from its burning in my eyes to respond. I simply hurried away to take another taxi home! And I said a prayer for God to protect and grant my taxi driver His Favour so he will not be extorted.

Why are we like this? Why do we hate ourselves so? Why do the poor oppress the poor? Why are our Police so corrupt? Why are the Policemen so uncivil, uncouth, crass and illiterate?

Why are the Police not our friend? Why?

I now understood better why Boko Haram may remain a menace for some time if God does not help Nigeria whatever President Jonathan and his security chiefs do by way of strategy, intelligence and counter-terrorism. It came home to me lucidly why the anti-corruption war must be a Citizens Action Movement. I realised the more why we must Stand Against Corruption and Kleptocrats (SACK!) in Nigeria!

And we need a rebirth of our Police Force from the top shots down to the strap-less recruits just leaving the Police Training College!

The good news is: We Can Do It!! I believe in God. I believe in Nigeria.

GOD BLESS NIGERIA!



Eghes Eyieyien

Lagos.

28th September, 2011



Monday, 5 September 2011

PRESIDENT GOODLUCK JONATHAN’S FIRST 100 DAYS: MY CONCERNS

I am an ardent supporter of President Goodluck Ebele Jonathan (GEJ). I am one of those that believe that his emergence as President was not borne out of “good luck” but God’s divine selection and ordination. For reasons that God knows best, He chose Dr. Goodluck Jonathan to be Nigeria’s President in the nation’s Year of Jubilee which has immense spiritual and prophetic significance. I have wondered many times if President Jonathan himself knows why God had chosen him and if he understands the enormous responsibility that election (by God and, subsequently, by the Nigeria people through their votes) imposes on him.
I am very active on Facebook and have used the platform to defend, explain, promote, justify, and hype President Jonathan since late President Umaru Musa Yar’adua became terminally ill in October, 2009. My support for President Jonathan has earned me many enemies and caused even some “friends” to question my motives. My former Pastor, who is no fan of President Jonathan, actually told me during the pre-election campaign season that if he did not know me as well as he did he would have had no doubt that I was a hireling who is being paid handsomely by the Presidency to write all the complimentary articles I had published promoting GEJ’s candidacy. I was relieved that he knew I could not have been paid by anyone to do anything unethical. In today’s Nigeria, it is difficult not to believe that everyone has a price. One can hardly be expected to give praise gratuitously. Why should one promote another’s views, particularly a politician’s, altruistically? Unfortunately, I have had to put aside modesty sometimes and speak about my own professional (and even spiritual/ministerial!) pedigree to prove to the cynics and naysayers that I was not doing a hatchet job for the Jonathan-Sambo Presidential Campaign Organisation.
On 31st May, 2011, just a couple of days after the Presidential Inauguration which I had the privilege to attend in Abuja, I wrote an article which I titled “PRESIDENT GOODLUCK JONATHAN AND NIGERIA'S NEW DAWN”. The article is available using these internet links:  

http://www.facebook.com/#!/note.php?note_id=10150211734687022 and

http://eghes.blogspot.com/2011_05_01_archive.html

Here is an excerpt from that article:

“But God's election carries grave responsibilities. Sadly, many men and women whom God called and anointed to accomplish His Purpose very often fail Him. The Bible is replete which such people. Talented, gifted, anointed, graced, blessed people who miss it badly and derail God's Agenda, howbeit for a season. People like Lot, Esau, Reuben, Balaam, Samson, Saul, Jeroboam, Ahab, Uzziah, Gehazi, Judas Iscariot....etc. Few men follow God and do His will completely. God still seeks men even today. Men after His own heart. MEN. REAL MEN (....and women).

President Goodluck Jonathan must understand why God has raised him, despite his lowly background and many disadvantages which he himself openly acknowledges and is well aware of. Who would have thought Otuoke would be the place where Nigeria's President would arise. Can anything good come out of Otuoke? President Jonathan alone can help us answer that question as he steps into office.

President Jonathan must covenant to follow God and Him alone. The godfathers, party-men, political organisers, campaign managers, family, friends, well-wishers, supporters and voters, have played their role. He must now allow God to bid where he goes and lead so he follows. The name "GOODLUCK" and the slogan "GOODLUCK NIGERIA" might have been good to market his candidacy. But the name "JONATHAN" is now more relevant. Jonathan means "YAHWEH has given" or "God has given" in the Hebrew language. No man can have anything except God has given. Power belongs to God and He gives it to men as mere stewards. President Jonathan must live up to his name as God's Gift to Nigeria. He must be a blessing not a curse. He must give not take. He must be different. So God (and Nigerians) can say in 2015, "WELL DONE!".

My prayer is that the Lord God would turn him into "Another Man" as it was for King Saul after he was anointed King over Israel. I pray that God emboldens him and grants him uncommon wisdom to do His Will for Nigeria.”


One hundred days after President Goodluck Jonathan’s Inauguration, I still remain a keen supporter. But, now, I am worried. I have serious concerns.

I am worried that President Jonathan still appears not to understand why God chose him and what exactly God would have him do. I am worried that the President appears still unsure so he takes tentative steps. I am worried that, while he is no doubt very well meaning and has good intentions, he has not moved with the confidence and assurance of one who knows exactly what to do. I am worried, very worried, that the remaining one thousand, three hundred and sixty (1,360) days of the Jonathan Presidency might be like his first 100 days!

To be sure, the President has done some things in the last 100 days that I am pleased with. For example, unlike many critics, I am happy with very many of those he appointed as his Ministers. Realising that a few performers can be the catalysts that galvanise and inspire others to step up their performance, I am excited that people like Prof. Bart Nnaji, Mrs Mobola Johnson, Dr. Yerima Ngama (who was my colleague at the Nigeria Deposit Insurance Corporation), Dr. Mrs. Ngozi Okonjo-Iweala, Prof. Onyebuchi Chukwu, Ms. Ama Pepple, Ambassador Olugbenga Ashiru, Olusegun Aganga, and Alhaji Bolaji Abdullahi, who have strong and enviable antecedents are in the President’s team. I am also happy that Dr. Shamsudeen Usman is continuing as the Minister of Planning; so we should see some continuity in our economic agenda. You only need a few super-stars in a sports team to win laurels. There may be others in the Ministerial team who are stars in their own right but the names I mentioned give me cause for great expectations. But I am yet to understand why the President needed an Adviser on Ethics and a Special Assistant on New Media. What do these two appointees do from day to day? What is their job description?

I applaud President Goodluck Jonathan for his leadership in the Libyan matter. Nigeria's decision to side with the Libyan people is arguably the best initiative we have taken in our foreign policy probably since the anti-apartheid struggle in which we played a leading role. The other African countries would inevitably recognise the National Transitional Council of Libya soon enough; but then it would be with shame and its tongue in cheek. I hope Nigeria continues to lead the way in acting on the side of African people, truth, justice, freedom and good governance on the African continent and indeed the world stage.

But in the main, President Jonathan has been slow in the last 100 days. Even the undue delay in the nomination of his Ministers was disappointing; he did not hit the ground running as I expected him to given that he had said he would release his Ministerial list within two weeks of his Inauguration. I was, however, relieved that he virtually discarded the lists of proposed ministerial nominees submitted to him by the State Executive Committees of his political party. For me, that showed his ability and willingness to ignore pressure from his political party. So why does the President still seem to be cautious in not displeasing certain vested interests? There are too many faces one sees around the President too often that give cause for concern. I am concerned that the President appears unperturbed to allow some discredited politicians and some people who were convicted for crimes by Nigerian Courts to be seen around him and, in the case of a particular ex-Governor, even in the Aso Rock Council chamber!  

More importantly, the security situation is what gives me the greatest cause for worry. When the October 1st Bomb Blast happened in 2010, I was upset with the perpetrators that they were enemies of Nigeria and the President who just wanted to embarrass the country and the President on such a historic day. When the bombs went off in Jos, Suleija, and Minna, I was livid that those that said they would make the north ungovernable for President Jonathan if he won the Presidential election were probably making good their threat. I sympathised with the President and joined the chorus of condemnation of the evil persons behind the attacks. Then the Nigeria Police Headquarters was hit by the bombers.

And then, the United Nations’ Office Complex in Abuja’s Diplomatic Zone was bombed.

I am still unable to understand why the National Security Adviser, the Inspector General of Police, and the Director General of the State Security Service still have their jobs. Is it not clear that they have failed? I have no doubt that they have the requisite qualifications and experience to have been appointed into those positions. I am sure they mean well and are loyal to the President. But their continuation in office is just not tenable now. It is time the President shook up the leadership of the security agencies and appointed new people who can deliver. The incumbents may be doing their best, but their best is clearly not good enough. I am even worried, like many Nigerians are, that President Jonathan himself is not safe. No doubt, as he himself affirmed when he visited the Police Headquarters after the bomb blast there, if members of Boko Haram could kill him they would.

Time has come for President Jonathan to take off the kid-gloves and hit hard at the terrorists and their sponsors. He must now match his tough-talking with tough actions! He must now show that he can bite! He is not only in office; he is in power. The President must remain tolerant, calm, strategic and deliberate. But he must also act with courage and boldness. He once wrote on his Facebook page that he had no enemies to fight. I am sure he knows better now. You do not seek enemies. Being Nigeria’s President is enough to give you enemies aplenty!

My faith in President Jonathan is unshaken. I know he is intelligent, humane, wise, humble and people-loving. In my view, he is still the best President Nigeria has ever had. He is positioned uniquely to make a difference. He is not Nigeria’s Messiah. No man can be. That job was already done over 2,000 years ago! But President Jonathan can do something significant and bring the transformation he promised during his election campaigns.

It is time that Nigerians begin to truly experience the Breath of Fresh Air.


God bless President Goodluck Ebele Jonathan.

GOD BLESS NIGERIA!




Eghes Eyieyien

6th September, 2011

Tuesday, 30 August 2011

Rejoinder to Punch newspaper's article titled "Libya: Nigeria's Foreign Policy faux pas" by Sabella Abidde

The Punch newspaper of today (Tuesday, 30th August, 2011) carried an article on its back page titled "Libya: Nigeria's Foreign Policy faux pas". It was written by Sabelle Abidde of the Department of Humanities, Alabama State University, Montgomery, U.S.A. The article is available at this link: http://www.punchng.com/Articl.aspx?theartic=Art20110830231451

Below is my rejoinder to the article which I emailed to the author and the newspaper.



Dear Sabella Abidde,

I just read your article with the above title in today's Punch newspaper. I was drawn to it not just by the strategic back-page position it had in the paper but the compelling headline.

I was expecting a critical analysis of why you deemed the action of the Nigerian government, which even some strong critics of President Goodluck Jonathan had hailed as timely, proactive and forward-looking, a blunder. Reading through the piece, it appeared you felt recounting what you wrote about former President Olusegun Obasanjo's "betrayal" of Charles Taylor was enough proof of the error of Nigeria's decision to recognise the rebel transitional council in Libya. You did try to portray the Jonathan administration as pandering to Obama and the NATO countries but provided no empirical basis for this line of thinking. I didn't expect a mere rehash of baseless conspiracy theories about the west being behind the revolution in Libya.

What I found most interesting in your article was your effort to show that the Libyan revolution was not the same as that of Tunisia, Egypt, Yemen and Syria which you dismissed as "the fabled Arab Spring”. I was expecting a lucid analysis to underscore this view but was disappointed that you offered none. Then you went on to eulogise Muammar Ghaddafi, despite his "shortcomings" as you noted, as having "ruled his country far better than most in the developing south". You described him as "a man who cared deeply for his country's ecology and who refused to mortgage his country to foreign concerns". Saif Ghaddafi could not have done a better job of laundering Muammar Ghaddafi's ignoble image of being the despotic tyrant which most Libyans knew him to be in the last 42 years!

It is surprising that you have not even reckoned with the wishes of the Libyan people in all these. You are convinced that the Libyan revolt was instigated by the west while the evidence is to the contrary. At what stage did the west get involved in the revolution? How could you so easily discount the Libyans' brave opposition to Ghaddafi's government which cost many of them their lives well before the west took notice?

Nigeria's decision to side with the Libyan people is arguably the best initiative we have taken in our foreign policy probably since the anti-apartheid struggle in which we played a leading role. What is the African Union waiting for? Is the hand-writing on the wall that Ghaddafi is history not clear enough? How does the AU expect to relate with the emerging government in Libya and the Libyan people hereafter? The AU has only knocked another nail in its coffin of irrelevance!

I applaud President Goodluck Jonathan for his leadership in the Libyan matter. The other African countries would inevitably recognise the National Transitional Council of Libya soon enough; but then it would be with shame and its tongue in cheek.

The self-serving camaraderie among African "leaders" which has being indulgent of the continent's sit-tight rulers with no regard for the legitimate aspirations of their long-suffering people must end. And who really are these African Union leaders whom Nigeria should not have broken ranks with regarding Libya? People like Robert Mugabe of Zimbabwe who is been in power for 31 years, Paul Biya of Cameroon (29 years), Yoweri Museveni of Uganda (25 years), Blaise Campaore of Burkina Faso (24 years), King Mswati III of Swaziland (24 years), Omar Bashir of Sudan (21 years), Idrissu Deby of Chad (21 years), Meles Zenawi of Ethiopia (20years), Isaias Afewerki of Eritrea (18 years), Yahya Jammeh of Gambia (17 years). What a company!!

I hope Nigeria continues to lead the way in acting on the side of African people, truth, justice, freedom and good governance on the African continent and indeed the world stage.


Best regards,

Eghes Eyieyien
30th August, 2011



Sunday, 14 August 2011

THE CENTRAL BANK OF NIGERIA, FAILED BANKS RESOLUTION, AND CORPORATE GOVERNANCE

I was a guest on Channels TV's programme, SUNRISE, on Saturday, 13th August, 2011, as an analyst invited to discuss the recent nationalisation of Afribank (Mainstreet Bank), BankPHB (Keystone Bank) and Spring Bank (Enterprise Bank). Also on the programme was Mr. Mustapha Chike-Obi, the Managing Director and Chief Executive Officer of Asset Management Corporation of Nigeria (AMCON), which now owns the banks despite the pending court cases filed by the banks' shareholders against the Central Bank of Nigeria (CBN) regarding the 2009 take-over of the banks. In other climes the banking supervisors would have refrained from taking steps which were clearly subjudice and in contempt of the Courts. 

My encounter with Mr. Mustapha Chike-Obi was yet another experience that underscored for me the fact that many Nigerians in high public office apparently think Nigerians are simple-minded and that they can play on our collective intelligence ALL THE TIME!

It appears to me that, despite his professional pedigree which I respect tremendously, the AMCON MD may not as yet have fully familiarised himself with the Nigeria banking legal and regulatory environment. From my discussions with him, he obviously did not realise that the Nigeria Deposit Insurance Corporation (NDIC) is actually the only government agency empowered by law (Sections 38 and 39 of the NDIC Act 2006) to do what AMCON is being asked to do. Rather than face its primary objective of managing the non-performing assets of failed and failing banks it is being led by the CBN/NDIC on a misadventure which it has no competence or experience to handle.

I was utterly taken aback by the mild drama that happened between me and Mr. Chike-Obi off-camera at Channels TV's new swanky office and studios in OPIC Estate, Ogun State. Permit me to tell you the story as it is somewhat symptomatic of the attitude and disposition of the regulatory/supervisory regime in our banking industry in the last two years: When we greeted upon my meeting him in the Producer's office just before the programme began, I gave him my complimentary card and he said he didn't have his. We started discussing the topic of the programme and he made a remark about my being "ignorant about the provisions of the AMCON Act". That presumption made a first impression on me as to whom I may be dealing with.  After the programme, during which he said I was being "emotional" when he saw my vehement criticism of the charade he had come to defend, I saw him give the male presenter his complimentary card as soon as we went off the air. I then said to him "Oh, so you have your complimentary card with you after all!" And, obviously embarrassed, he then handed me his card! I was bewildered why he felt a compulsion to lie when he could have simply refused to give me his call card since he had made no effort to be polite or treat me with respect.

In the course of the programme and in response to his assertion that AMCON had been “very thorough” in the way it has gone about appointing the new management teams, I raised the issue that the evidence was to the contrary and cited the appointment as an Executive Director of an ex-staff of Nigeria International Bank (now Citibank Nigeria) who committed a fraud in 1991 and was sacked by the bank. I refrained from mentioning the person's name. Chike-Obi's response was to say AMCON "is not perfect" and that "it was a mistake". To his credit, owned up to the blunder and offered apologies to the nation there on live television. 

Now, if AMCON could make that kind of blunder about an issue as simple as the appointment of credible Executive Directors and its MD/CEO was compelled to acknowledge error and apologise to Nigerians on national television, then what other "mistakes" might have already been made but of which we are yet unaware?

We have real problems in the banking industry and the CBN, NDIC and AMCON are clearly not atop of their game in addressing them. The statutory functions of the NDIC and AMCON are very explicit. AMCON is not the agency saddled with the power to "own" a failed bank; that is NDIC's role which is spelt out in Sections 38 and 39 of the NDIC Act 2006. The NDIC set up bridge banks on Friday, 5th August, 2011, and "sold" them to AMCON on Saturday, 6th August, 2011. The following day, AMCON announced new management teams and even released the new bank logos. What uncommon surgical efficiency! What was the haste all about? Why intervene 50 clear days before your self-imposed dead-line? What was the hurry for? Could the CBN and NDIC not have waited just ten more days for the new Minister of Finance, Dr. Ngozi Okonjo-Iweala, to assume office and make an input into the decision-making process? Why the enormous effort to present her with a fait accompli?

NDIC can operate a bridge bank for up to FIVE years per Section 39 of its Act. What magic is AMCON going to perform which NDIC is unable or incompetent to do? NDIC would not have had to inject N678.5Billion into the banks as "Share Capital to achieve 15% Capital Adequacy Ratio" because the law says a bridge bank needs no Share Capital. All NDIC would have done is provide liquidity by way of 90-day "Accommodation Bills" which it is empowered by law to issue as "Financial Assistance" to the banks which is one of its fundamental functions.

Chike-Obi said during the programme that AMCON had already sourced fifteen investors who wish to acquire the three banks. What a miracle!! Within just seven days of its acquisition of the bridge banks, which the NDIC Managing Director (Alhaji Umaru Ibrahim) told Nigerians on NTA News just about five days ago had no chance of being recapitalised before the CBN dead-line of 30th September, 2011, and that the CBN/NDIC acted seven clear weeks before the time-line because by end-September the banks would be "more than dead".  The NDIC should then have had no problem negotiating with the "AMCON Fifteen Investors" to buy off the banks from it directly. That route would have been the cheaper, more transparent, credible, efficient and legal way to resolve the three failed banks' affairs.


To date, the CBN and AMCON have doled out N1,298,500,000,000 (One Trillion, two hundred and ninety-eight Billion, and five hundred Million Naira only!!) to salvage the eight banks it took over in 2009. Is Nigeria so much in need of what to do with money again as it was during the Oil Boom years of the early 1970s such that spending N1.3Trillion to save eight banks has become inconsequential? Is the cost-benefit analysis of a failure resolution option no longer relevant in choosing the most viable path of action which makes the best economic/financial sense? Are we not operating a free market economy where the principle of “Free Entry and Free Exit” holds sway? This latest injection of N678.5Billion into the three nationalised banks is an unnecessary waste of funds since the NDIC could have statutorily managed them as bridge banks without them needing to have any Share Capital and NDIC would only provide them temporary liquidity support until they are sold to new owners.

And why the opacity of the CBN in its handling of the acquisition bids for the three banks just nationalised. Particularly curious is the case of Afribank which had signed a Memorandum of Understanding with Vine Capital Partners Ltd. led by Mr. Tosayee Ogbomo, who resigned as a divisional Managing Director of Goldman Sachs, New York, to pursue the Afribank acquisition transaction. Dr. Kingsley Moghalu, CBN's Deputy Governor, Financial System Stability, was reported in the news media about three weeks ago to have said: “We have information you don’t have. It is not a matter of proving beyond reasonable doubt. It is based on the judgment of the regulator. The record of the proposed investor did not go well. There was an attempt by the proposed investor to acquire two banks. From the point of view of financial systems stability, we will not approve one party taking control of two banks, especially two intervened banks by a party that has not demonstrated a track record of managing a commercial bank”.
My sources told me that the CBN was suspicious of a possible relationship between Mr. Ogbomo and the erstwhile Chairman of Afribank, Chief Osa Osunde, especially since they are both Bini from Edo State. The CBN was also said to be concerned that an Adviser to Vine Capital Partners, Constant Capital which has Cally Udalor as the Principal, had done some repurchase deals with Afribank (among other banks) in the past which it frowned at. But, surprisingly, the CBN as at 5th August, 2011, when it withdrew Afribank’s banking licence had not even written Vine Capital Partners to explain why it voided the MOU.

Pray, what led the CBN to conclude that the folks at Vine Capital Partners were apparently not "Fit and Proper Persons"? One of the abuses I have seen on the part of the CBN over the years when banks are being licensed or acquisition transactions are being done in the industry is the issue of deciding whether the prospective investors are "Fit and Proper" persons. The CBN decides if people are "fit and proper" in such a subjective and opaque manner that it appears one's face alone could disqualify one! Yet we have seen many cases where people who were known treasury looters, fronts for politically exposed persons and even 419ners being approved as significant shareholders in banks! If the CBN were sincere about these matters, why has it found it convenient to retain as its acquisition advisers persons whose interests clearly conflict?  

The CBN Governor has done some commendable things since being appointed to the office in 2009. For instance, the take-over of the eight banks in 2009 and the injection of funds then were steps in the right direction. I also applaud him for the enforcement of the CBN Code of Conduct for banks which Prof. Chukwuma Soludo merely paid lip-service to as Governor; the issuance of the new Prudential Guidelines for Loan-loss Provisioning and the creation of the bail-out fund for the real sector were other commendable steps he took.
But Mallam Sanusi Lamido Sanusi has done poorly with regard to the CBN flip-flop on the removal of ATMs from non-bank premises; the retail cash policy and cash withdrawal and deposit thresholds when the technological and logistic infrastructure for a cash-less society is still at the nascent stage even in Lagos and Abuja; the shoddy and ill-informed withdrawal of Micro-finance Bank operating licences only to restore some of them later; and, of course, the contrived and unwarranted Islamic Banking controversy which has led to war cries from the Supreme Shariah Council of Nigeria.
Sanusi's Monetary Policy failures are also evident. For instance, our foreign reserves have been considerably depleted while crude oil prices have been positive just because he feels he must defend the Naira and keep the value at sub-N155/$1. Meanwhile, the Naira's real value is reflected in the Parallel Market which has now given room for Round-tripping and FX arbitrage given the growing margin between the CBN rate and the Black Market Rate. The Monetary Policy Rate (MPR) was recently increased by 75 basis points to 8.75%. The MPR mechanism has been a grand failure. It has no meaning any more since the CBN has been indulgent of the banks allowing them to get away with spreads as high as 2000 basis points between their weighted average cost of funds and their effective lending rates instead of the CBN-stipulated 750 basis points.

The former Minister of State for Finance, Mr. Remi Babalola, famously described Mallam Sanusi Lamido Sanusi’s banking reform actions and policies as being conducted “as the spirit leads”. Mr. Babalola must be feeling vindicated today!

Time has come for the amendment of the Central Bank of Nigeria Act to strengthen corporate governance at the Bank. The Act provides that the CBN Governor shall be both the Chairman of the Board of Directors and also the Chief Executive Officer. That situation has been abused since Prof. Chukwuma Soludo became the CBN Governor in 2004. He carried on like a Sole Administrator in many ways and forced out two of his Deputy Governors Mrs. Wahir Mshelia and Dr. Obadiah Mailafia. The CBN Board was not even aware of Prof. Soludo's plans for bank consolidation and sectoral reforms until he announced them at a press conference!

Unfortunately, Mallam Sanusi Lamido Sanusi has continued that adversarial, combative, domineering and knee-jerk policy style of Prof. Soludo. Some of his colleagues on the CBN Board are apparently intimidated by his personality to acquiesce with many of his ill-advised ideas as what they say in private on CBN policy matters is at variance with the Governor’s position. The CBN's autonomy has not helped matters since the CBN Governor does not report to any Minister. For proper corporate governance, I believe the time has come to amend the CBN Act to create the position of a CBN Board Chairman who shall be non-executive and so part-time while the Governor remains the Chief Executive Officer. The status quo has been abused thereby jeopardising the banking system and the monetary policy direction of the country. The office of the CBN Governor must be protected from the temperament, idiosyncrasies,​whims and caprices of the occupier.

The CBN is the ONLY government regulatory organisation that has the CEO as its Board Chairman. Similar bodies like the Nigeria Deposit Insurance Corporation, Securities and Exchange Commission, Pension Commission, National Insurance Commission, National Universities Commission, Nigeria Communications Commission etc. all have Board Chairmen distinct from the CEOs so why not the CBN? The CBN will be more efficient and effective if the corporate governance structure is strengthened by having a non-executive Chairman for its Board and to whom the Governor, as the CEO, reports. Regulators need to be regulated too. And supervisors must also be supervised. Two good heads are always better than one no matter how brilliant and well-intentioned.



EGHES EYIEYIEN
15th August, 2011

Monday, 18 July 2011

THE IMPERATIVE OF DEFENDING NIGERIA’S SECULAR STATUS

There have been renewed calls by non-Muslim Nigerians for the Central Bank of Nigeria to remove the Arabic writings on the nation’s currency, the Naira. The most notable of these is the statement by the Christian Association of Nigeria (CAN) in its press release issued some weeks back in reaction to the introduction of Islamic Banking by the Central Bank of Nigeria. CAN also called on the Federal Government to terminate Nigeria’s membership of the Organisation of Islamic Conference (OIC) which it said the government of Gen. Ibrahim Badamasi Babangida “surreptitiously smuggled” Nigeria into in 1986. CAN equally asked the government to stop the reported plans by the Debt Management Office (DMO), as announced by the Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, while attending an Islamic Banking Conference in Senegal, that the government would be issuing “Sovereign Islamic Sukuk Bonds” within 18 months.

Last week, the newspapers reported that there was a meeting in Abuja to facilitate the use of Sovereign Islamic Sukuk Bonds to finance Nigeria’s infrastructural development. Reportedly, the meeting had in attendance Mallam Sanusi Lamido Sanusi (the Central Bank Governor), Dr. Abraham Nwankwo (the Director General of the Debt Management Office), Mr. Mansur Ahmed (the Director General of the Infrastructure Concession Regulatory Commission), Mrs. Hajara Adeola (Chief Executive Officer of Lotus Capital, which has as its corporate slogan “pioneering Islamic Finance in Nigeria”), and a representative of Jaiz International Bank Plc, which has purportedly been given an “approval-in-principle to operate as an Islamic Bank in Nigeria” (a concept which is totally unknown to Nigeria’s extant banking law and the Nigerian Constitution). It appears the CBN Governor is determined to present the nation with a fait accompli with regard to the issuance of “Nigerian Sovereign Islamic Sukuk Bonds” even though Nigeria is not an Islamic country and it even makes no economic sense to choose that form of financing which is much more expensive in real terms than the international bond market where our Eurobonds are trading very well.     
But that is a topic for another day. Back to the subject of our discourse....

 The Arabic words on the Naira are actually Hausa words in Arabic text. Here are the meanings: Naira Dubu daya (N1,000), Naira Dari biyar (N500), Naira Dari Biyu (N200) and Naira Daya (N100). The problem is that the Hausa language, like other Nigerian languages, is written in our "a-bi-di" anglicised text which is essentially English. Hausa is not usually taught, written or read in Arabic scripts in our schools in the north. Hausa newspapers are written in "a-bi-di" or our local version of English script. 

Prof. Chukwuma Soludo removed the Arabic words from the Naira when he became the CBN Governor and wrote the meaning of the Naira notes in our three major languages: Hausa, Igbo and Yoruba. The words were written in "a-bi-di" which is the usual way ALL the languages are taught, written and read. However, Mallam Sanusi Lamido Sanusi removed the Igbo and Yoruba words from the Naira notes soon after he became the CBN Governor and changed the Hausa to Arabic script.
How many Hausa speakers in Nigeria can read, write and speak Arabic? Very few Muslims who pray by reciting the Arabic texts from the Quran actually understand the Arabic language. Most of them have memorised the Quranic quotes and some of them actually understand the specific words they recite.
Even if one concedes that Hausa must be written in Arabic script, why did Sanusi Lamido Sanusi leave out Igbo and Yoruba? And should Igbo and Yoruba also be written in Arabic script?
The insistence that there must be Arabic text on the Naira, just like the Arabic text on the logo of the Nigerian Army, underscore the genuine concern of non-Muslims that there is indeed an Islamisation agenda which dates as far back as the days of Usman Dan Fodio when Nigeria did not even exist. The Sardauna of Sokoto, Sir Ahmadu Bello, never hid his desire to Islamise Nigeria. He famously said that he would like to "dip the Quran in the Atlantic Ocean"; meaning he would like to see Nigeria become an Islamic nation.
I am an evangelical Christian. I have been born-again since 16th April, 1983. While I wished ALL Nigerians would accept Jesus Christ as their personal Lord, Saviour, Redeemer, King and God, I cannot force anyone however subtly. I preach the Word and hope people come to conviction. But I do not need "Jesus is Lord" or any other such overtly Christian words, gestures, insignia etc. to be inscribed on the Naira or other official Nigerian documents. Salvation is personal. Religion is personal. And I respect the right of my many Muslim friends to follow Islam.
Nigeria is a secular state. Nigerians are multi-religious. The ONLY safe-guard for the liberty of every Nigerian to worship as he or she wills is the preservation of Nigeria's status as a secular state. Being a secular state does not mean Nigerians are godless. It means that, as Section 10 of the 1999 Constitution of the Federal Republic of Nigeria as amended states, the government shall not adopt any religion as a "State Religion". Every action, policy, statement etc. by the government or any of its agencies or organs which show preference of any religion(s) or promote any religion(s) is a breach of the Constitution.
The erosion of Nigeria's secular status has been going on in small measures for many decades. What business does Nigeria have in sponsoring Christian and Muslim pilgrims? What business does Nigeria have in building Churches and Mosques with state funds? We must put aside our prejudices, emotions and sentiments and arise as one people with one voice to protect Nigeria's secular status and the freedom of every Nigerian to worship without the state’s support or hindrance.
GOD BLESS NIGERIA!

Eghes Eyieyien
Lagos; 18th July, 2011.

Friday, 24 June 2011

THE CENTRAL BANK OF NIGERIA, ISLAMIC BANKING, THE LAW AND APPROPRIATE REGULATION OF NON-INTEREST FINANCIAL INSTITUTIONS IN NIGERIA

PREAMBLE
The Central Bank of Nigeria foisted on the nation a needless controversy when, in its inordinate ambition and misplaced over-zealousness to establish Islamic Banking in Nigeria, it purported to assume legislative powers which it does not have and introduced provisions in its Framework on Non-Interest Financial Institutions (NIFI) issued on 13th January, 2011, which are illegal, unconstitutional, unjust, inequitable and blatantly discriminatory against non-Muslim Nigerians. 
The CBN Guideline, the Framework for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria (NIFI Framework), essentially redefined Non-interest Financial Institutions as Islamic Banking contrary to the spirit and letter of the Banks and Other Financial Institutions Act (BOFIA) of 1991 as amended ostensibly in the mistaken belief that only Muslims are interested in that form of financial services.


WHY THE CBN NIFI FRAMEWORK IS ILLEGAL AND UNCONSTITUTIONAL

The NIFI Framework stated that: “A Non-Interest Financial Institution (NIFI) means a bank or Other Financial Institution (OFI) under the purview of the Central Bank of Nigeria (CBN), which transacts banking business, engages in trading, investment and commercial activities as well as the provision of financial products and services in accordance with Shariah principles and rules of Islamic commercial jurisprudence.” The Glossary of Terms of the CBN’s NIFI Framework states that: Shariah Principles refers to “the divine guidance as given by the Holy Qur’an and the Sunnah of the Holy Prophet and embodies all aspects of the Islamic faith, including beliefs and practices”.

The only legally valid definition is stated in Section 61 of the Banks and Other Financial Institutions Act of 1991 which speaks of a “Profit and Loss Sharing Bank”. That is, “a bank which transacts investment or commercial banking business and maintains profits and loss sharing accounts”. Profit and Loss Banking has always been the interpretation and understanding of Non-Interest Financial Services in Nigeria. When the CBN granted an Approval-in-Principle Licence to Jaiz International Bank PLC in 2004 while Chief Joseph Sanusi was the CBN Governor, the licence was issued for it to carry on business as a Profit and Loss Sharing Bank. Curiously, the present CBN Governor, Mallam Sanusi Lamido Sanusi, was widely reported in the mass media to have announced on Monday, 20th June, 2011, at a Conference on Islamic Banking in Dakar, Senegal, that the CBN had issued (?) Jaiz International Bank PLC an Approval-in-Principle as the “first Islamic Bank in the country”. Jaiz Bank was unable to operate as a Profit and Loss Sharing Bank not because there was no Islamic Banking Guideline but simply because it was unable to raise the minimum capital requirement of N25Billion. The CBN has now inexplicably lowered the capital requirement for Islamic Banks to just N10Billion to achieve “National Bank” status as against the N25Billion it stipulated for Deposit Money Banks. Why is the Sanusi Lamido Sanusi-led CBN unduly eager to make life easier for Jaiz International Bank and other proposed Islamic Banks?

By insisting that Non-Interest Banking products must be “Shariah compliant”, the CBN had also unjustly excluded non-Muslim Nigerians from the emerging Non-Interest Banking business sub-sector contrary to Section 16 1(d) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) which states that “without prejudice to the right of any person to participate in areas of the economy within the major sector of the economy, protect the right of every citizen to engage in any economic activities outside the major sectors of the economy.

Another shocking and offensive aspect of the NIFI Framework was that it provided for the creation of “the CBN Shariah Council”. The CBN Shariah Council was to “advise the CBN on Shariah matters for the effective regulation and supervision of NIFIs in Nigeria”. Since such a body must necessarily comprise only Muslims, the CBN would be flouting fundamental provisions of the Nigerian Constitution as follows:

                 i.          Contravening the Federal Character Principle entrenched in Section 14(3) which states that “The composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such a manner as to reflect the federal character of Nigeria and the need to promote national unity, and also to command national loyalty, thereby ensuring that there shall be no predominance of persons from a few State or from a few ethnic or other sectional groups in that Government or in any of its agencies”.
                ii.          Contravening the secularity of Nigeria enshrined in Section 10 of the Constitution of the Federal Republic of Nigeria which states that “The Government of the Federation or of a State shall not adopt any religion as State Religion”;
              iii.          Contravening the constitutionally guaranteed freedom of religion as stated in Section 38 (1) that “every person shall be entitled to freedom of thought, conscience and religion”.

But unarguably the most significant issue is that fact that the CBN was introducing religion into Nigerian banking contrary to the spirit, letter and intendment of Section 39(1) of BOFIA which states: “Except with the written consent of the Governor (a) no bank shall, as from the commencement of this Decree, be registered or incorporated with a name which includes the words “Central” “Federal,” “Federation,” “National”, “Nigeria”, “Reserve”, “State”, “Christian”, “Islamic”, “Moslem”, “Quaranic”, “Biblical” ”.

The BOFIA was originally issued in 1991 as a decree and signed into law by the then Military President, Gen. Ibrahim Badamasi Babangida. The Governor of the CBN at the time was Alhaji Abdulkadir Ahmed. Though committed Muslims, Gen. Babangida and Alhaji Ahmed were obviously sensitive to the religious sensibilities of Nigerians, especially with the crisis the country was thrown into over the issue of Nigeria’s membership of the Organisation of Islamic Countries (OIC) at that time. The Babangida government saw that it was imperative to include an unambiguous statutory provision in Section 39(1) of the BOFIA which would ensure that no religious colouration was given in any guise to banking in the country.


Obviously, the anticipation and intendment of the law was that the Governor of the Central Bank of Nigeria would not be swayed by religious considerations to grant a waiver to allow the use of those religious appellations even though it invested him with that power. Some have erroneously argued that the present CBN Governor has now exercised that power by introducing Islamic Banking! Is this expedient? What was the over-riding and compelling reason for this exercise of the Governor’s discretion? What has changed in Nigeria between 1991, when Gen. Babangida signed the BOFIA into law, and 2011 when we are now confronted with even more extreme religious zealotry and fundamental Islamic terrorism with the advent of Boko Haram?

Even more strange is that the CBN NIFI Framework even re-affirmed the statutory provision in Section 39(1) of BOFIA in Section 10.1 of the NIFI Framework under the heading “Branding”. That section states:

In line with the provisions of Section 39 (1) of BOFIA 1991 (as amended), NIFIs shall not include the word “Islamic” as part of their registered or licensed names. They shall, however, be recognized by a uniform symbol designed by the CBN. All the signages and promotional materials of NIFIs shall bear the symbol to facilitate recognition by customers and the general public”.

Is this then not superfluous? What is in a name after all, one might argue. Clearly, the law is really not as concerned about names as it is with keeping religion out of Nigerian banking.

Already, many non-Muslims have, understandably and expectedly, read religious motives to the issuance of the Framework and the passion with which the CBN is pursuing the establishment of Islamic Banking in Nigeria. This is more so since it is being introduced by the CBN under the purview of its current Governor, Mallam Sanusi Lamido Sanusi, who is known to be an Islamic Scholar with expertise in the Shariah Law having obtained a degree in that regard from the University of Africa, Khartoum, Islamic Republic of Sudan.


UNDERSTANDING NON-INTEREST BANKING

It is important they we have an accurate understanding of Non-Interest Financial Services.
Non-Interest Banking dates back to about 1444 B.C. It has its origin in the Jewish practice of lending money by an Israelite to a fellow Israelite without charging usury or interest as commanded in Exodus 22:25 and Deuteronomy 23: 19- 20.
Exodus 22:25.... “If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury”.
Deuteronomy 23:19-20.... Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest. Unto a foreigner thou mayest lend upon interest; but unto thy brother thou shalt not lend upon interest; that the LORD thy God may bless thee in all that thou puttest thy hand unto, in the land whither thou goest in to possess it”.
So clearly, Non-Interest Banking pre-dated Islam. It cannot, therefore, be the exclusive preserve of Muslims or Islam. Non-Interest Banking is NOT SYNONYMOUS with Islamic Banking.
In modern times, the principle of Non-Interest Banking is evident in Venture Capital and Private Equity firms where projects and businesses are financed through equity funds after the financier has assessed the risk as acceptable. Non-interest banking works essentially on the principle of RISK SHARING between the capital provider and the user. The profit or loss arising from the transaction is shared on an agreed basis. Non-Interest Banking enables persons (and projects) whose credit risk is high and unattractive to conventional lenders and who have no adequate collateral for loans to access capital.
Islamic banking as we know it today is actually a recent innovation and begun in Egypt just about 50 years ago. The first Islamic Bank, the Dubai Islamic Bank, only commenced business in 1975. So Islamic Banking is merely a sub-set of Non-Interest Banking.
There are successful models of Non-Interest Banking in the world that are not “Shariah-compliant” or in line with “Islamic jurisprudence.” The JAK Members Bank of Sweden (please visit http://jak.aventus.nu/22.php) is one. The co-operative society Jord Arbejde Kapital (JAK) was founded in Denmark during the Great Depression in 1931. The experiments with JAK banking in Denmark inspired a group in Sweden to develop a non-profit named Jord Arbete Kapital - Riksförening för Ekonomisk Frigörelse (National Association for Economic Emancipation) in 1965. This pioneers' group developed the mathematical system based on saving points, called "balanced saving system". The association has been operating as an interest-free savings and loans system in Sweden since 1970 but eventually received a banking licence from the Swedish Financial Supervisory Authority at the end of 1997.

THE REVISED CBN NIFI GUIDELINE

After initially defending the guideline astutely and vehemently for over six months, the CBN finally agreed its NIFI Framework was faulty and required to be revised. On 21st June, 2011, it re-issued its NIFI as the “Guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria”. While it is commendable that the CBN has yielded to superior reasoning on the subject, sadly, the new guideline only made merely cosmetic modifications of the previous NIFI Framework and seeks to perpetuate most of the illegal, discriminatory and unconstitutional provisions which caused the controversy in the first place.
The highlights of the revised NIFI Framework are as follows:
        Established two categories of NIFIs:
v  Islamic Financial Institutions; and
v  “Other Non-Interest Financial Institutions”.
        The illegal, unconstitutional, unjust and discriminatory exclusion of non-Muslims from owning and operating NIFIs now addressed. The revised NIFI Guideline now states “Islamic banking as one of the models of non-interest banking, serves the same purpose of providing financial services as do conventional financial institutions save that it operates in accordance with principles and rules of Islamic commercial jurisprudence that generally recognises profit and loss sharing and the prohibition of interest, as a model”.

So, in essence, the previous NIFI Framework has been retained as is but only applicable to Islamic Financial Institutions.
        CBN is to licence “Other Non-Interest Financial Institutions if it receives applications.
        CBN Shariah Advisory Council renamed “Advisory Council of Experts”

But these provisions do not address the fundamental issue that Islamic Banking as of today remains ILLEGAL and UNCONSTITUTIONAL in Nigeria given the provisions of the Banks and Other Financial Institutions Act of 1991 as amended and the Nigeria Constitution.

UNANSWERED QUESTIONS AND CONTENTIOUS ISSUES
Very many questions remain unanswered:
        Why the special and illegal treatment of Islamic banking in contravention of Section 39(1) of BOFIA and the Nigerian Constitution?
A special CBN NIFI Framework for Islamic Banking contravenes the secularity of Nigeria enshrined in Section 10 of the Constitution which states that “The Government of the Federation or of a State shall not adopt any religion as State Religion”.
·       Why introduce religion into Nigerian banking in contravention of the spirit and letter of Section 39(1) of BOFIA?
·       Why have an “Advisory Council of Experts”?
·       Who are these “experts” in Islamic Banking?
·       The Advisory Council of Experts if comprised of Muslims alone is in contravention of the constitutional provision regarding Nigeria’s secular status and the Federal Character Principle?

Section 14(3) of the Nigerian Constitution:  “The composition of the Government of the Federation or any of its agencies and the conduct of its affairs shall be carried out in such a manner as to reflect the federal character of Nigeria and the need to promote national unity, and also to command national loyalty, thereby ensuring that there shall be no predominance of persons from a few State or from a few ethnic or other sectional groups in that Government or in any of its agencies”.

·       Why is CBN a member of the Islamic Financial Services Board (IFSB)?
Even the United Kingdom and the United States of America which the CBN puts forward as some kind of examples of “best practice” in the area of Islamic Banking and tolerance are not even Observer Members of the IFSB. In North and Sub-Saharan Africa, the only “Full Members” of the IFSB are Egypt, Sudan and Djibouti.
Who made Nigeria a “Full Member” of the IFSB?
·       Why will CBN surrender bank regulation to Muslim clerics?
·       Will CBN also have councils for every other faith-based NIFI?
·       What is CBN’s competence to delve into religious matters which are subjective and open to various interpretations?

AN ALTERNATIVE NIFI FRAMEWORK
The CBN should have a uniform NIFI Framework which is not religion-specific in line with BOFIA. In the education sector, for instance, the Federal and State Ministries of Education set guidelines for private sector participation which stipulate UNIFORM licensing/registration requirements, standards for required infrastructures, and a uniform curriculum in line with the nation’s National Education Policy. The regulatory guidelines in the education are not religion-specific yet promoters and investors who wish to establish faith-based educational institutions do so without breaching the law or regulation. Why is it difficult for the CBN to adopt a religion-neutral NIFI Framework as envisaged by the extant banking law if the motivation is not religious?
Consequently, the CBN NIFI Framework should focus on the following issues:
1.     Minimum Paid-up Capital and Licensing Requirements;
2.     Corporate Governance;
3.     Acceptable characteristics of products that qualify for NIFI status;
4.     Enhanced operational standards for banks and other financial institutions that offer NIFI;
5.     Enterprise-wide Risk Management
6.     Accounting, Audit and Disclosure Requirements;
7.     Rendition of Periodic Regulatory Returns; and
8.     Prudential Guidelines with regard to:
                                     i.          Capital Adequacy Ratio;
                                    ii.          Cash Reserve and Liquidity Ratio; and
                                  iii.          Provisioning for Asset Losses.

CONCLUSION

Non-Interest Banking is a veritable means of providing access to capital to the un-banked and those who would ordinarily not qualify for debt financing. It can provide leverage for Nigeria’s economic development and must be encouraged. BUT NON-INTEREST BANKING MUST NOT BE RELIGION-SPECIFIC. This is not about religion. This is really about the rule of law, constitutionality, equity and justice in a plural state.



Eghes Eyieyien,
CEO, Pharez Consulting

24th June, 2011