Monthly Archives: April 2016

Saraki should resign

By Rafiq Raji, PhD

The president of Nigeria’s Senate, Dr Bukola Saraki, is on trial for alleged false asset declaration. There have been calls for him to resign. If he chooses to stay on, he would not be violating any law. The ‘right to fair hearing’ is one of the fundamental rights stated in Chapter IV of the 1999 Nigerian Constitution. He is innocent until proven guilty. Still, the fundamental question is: what is the right thing for him to do, for himself and for country? His ongoing trial certainly hurts the prestige of the Senate. That said, his travails are not random. It is clear he was targeted by powers that be within the ruling political party who are unhappy about his emergence as the leader of the legislature – the party machinery endorsed somebody else, who clearly still desires the office. In any case, it is not all too clear he would succeed should Dr Bukola Saraki resign or is removed by the Code of Conduct Tribunal (CCT) – the quasi-legal body charged with trying public officials when they are accused of not abiding by the government’s code of conduct; its chairman, Justice Danladi Umar, has been somewhat controversial, having only recently been cleared of bribery allegations by another anti-corruption agency – the Economic and Financial Crimes Commission (EFCC) – for lack of evidence. I do not agree however with those who think Justice Umar would be biased. Yes, he seems a bit temperamental and somewhat eager. But attention has not been given by the media to other reasons why he could be so. The CCT is largely a very boring posting for judges. Thus, any judge at the CCT would welcome an opportunity to do some actual work, albeit fairly. This in my view is why Justice Umar is determined to ensure the Senate President’s case reaches a logical conclusion. It is important to him I think that public officers fear the CCT as much as they do the more effective EFCC. Just like Dr Saraki is entitled to fair hearing, so is Justice Umar entitled to exercising the powers of his tribunal. Thus, I am willing to give the clearly boisterous but brilliant judge the benefit of the doubt. In any case, Dr Saraki has right of appeal if he is dissatisfied with the judgment of the CCT – which could be as far-reaching as removal from office or ban from public office upon a guilty verdict. Judging from his recent open letter, Dr Saraki intends to remain as president of the Senate until he has exhausted all the legal options open to him – ill advised in my view. He could appeal a guilty verdict by the CCT up to the Supreme Court. In the intervening period, the prestige of the Senate would certainly be hurt. This is why it is important that he seriously considers resigning the presidency of the Senate.

That said, it has been quite surprising Dr Saraki did not seem prepared for the high stakes game underpinning his travails. Apart from the fact that very large egos were bruised by his emergence as Senate President, Dr Saraki violated some key rules of victory. As his victory was tenuous, it was unwise of him not to accommodate some of the candidates proposed by his party for key positions in the Senate. And his opponents – who have proven to be better strategists – have had more arduous training and are certainly more experienced. Dr Saraki’s response to his troubles has bordered on fatalism. And with his opponents smelling victory, he has limited options. Considering he knows those throwing stones at him also live in glass houses, it has also been a little surprising he has not been able to even the scales. With little leverage, small wonder his attempts at seeking a political solution have been futile. I also get the sense Dr Saraki’s strategists have been unwilling to consider the possibility of their principal not being Senate President. And because of that, they are bound to be irrational up to a point. Resigning is better than being removed. He wanted to be Senate President. Well, he succeeded. And no one can change that. It is time he moves on. His advisors would do well to tell him that sometimes to get a better view of the front, you need to withdraw to a vantage position. If he resigns with a plan in mind – not for a return to the Senate presidency surely – on how to either become president of the country, his ultimate ambition, or increase his influence within the ruling party if he is unable to, that would not be an entirely bad outcome. The worst possible outcome of his current troubles would leave him utterly battered. He would do well to cut his losses while he still can.

More importantly, the ongoing disagreements between the two arms of Nigeria’s government – writ large in the continuing 2016 budget impasse – brings to fore the need to strengthen the principle of separation of powers. There is no way the legislature would be able to independently check the executive if its leadership does not enjoy prosecutorial immunity. Of course, none of that can be corrected while Dr Saraki is still being tried for corruption. When his trial is over, the Senate should as a matter of urgency put in measures to ensure it could not be unduly influenced or punished by the executive arm of government. And unlike popular opinion, I strongly believe the CCT’s place is not under the office of the country’s top scribe but in the judicature. The proposed amendments to the relevant legislation should be re-considered once Dr Saraki’s trial is over. This is because I fear a great deal that President Buhari’s power may grow significantly in the coming years, making him prone to dictatorial tendencies. It is also no longer just coincidental that the Senate seems to always be at odds with the executive whenever a former military general leads the latter. More fundamentally, Dr Saraki’s trial has made the legislature seem subordinate to the executive arm. This should not be so. Under the Nigerian Constitution, the executive, legislature and judicature are on the same level but with responsibilities for specific dimensions of governance. To safeguard the country’s democracy, the leadership of each arm has to be fully protected. It must also be pointed out that President Buhari’s anti-corruption fight would suffer a perception problem if it seems only those who are not in his good graces end up being prosecuted for corruption. Bottom-line, Nigerians are simply tired of all the bickering. Almost 200 million people must not be held hostage to the political troubles of one man. If Dr Saraki would not resign for his own sake, he should do it for country.

Also published in my BusinessDay Nigeria newspaper back-page column. See link viz. http://businessdayonline.com/2016/04/saraki-should-resign/

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Nigeria-China relations may work this time

By Rafiq Raji, PhD

This past week, Nigeria’s president Muhammadu Buhari was in China. He was given full honours by the Chinese government. Nigerian authorities are hailing the trip as a huge success. They point to the more than US$6 billion worth of investments agreed between Nigerian and Chinese businesses – earlier statements credited to Nigeria’s foreign minister, Mr Geoffrey Onyeama, by Reuters suggested a US$6 billion infrastructure loan was agreed, later debunked by President Buhari’s spokesman. In fairness to Mr Onyeama, he did not say a new agreement was signed. Quoting him in the 12 April 2016 Reuters article: “It won’t need an agreement to be signed; it is just to identify the projects and we access it.” With more clarity on what actually took place, it is now known that what President Buhari did was to re-negotiate loans already agreed with the Chinese by previous Nigerian administrations, especially that of President Goodluck Jonathan. Since that is the case, it seems the loans might actually be more than US$6 billion. As I recall in November 2014 amid much fanfare, China Railway Construction Corporation Limited signed a US$12 billion contract for the 1,402-kilometre Lagos-Calabar coastal railway – the line would be a significant boost for the Niger-Delta and Southeastern regions of Nigeria and is currently a source of divisions in the Nigerian legislature: southern lawmakers accuse their northern colleagues of deliberately removing the project from the 2016 budget, putting President Buhari in a bind somewhat as he reportedly threatened to withhold his assent of the budget until the railway project is put back into the bill – China’s largest single overseas contract at the time, probably still is. If you assume the typical 85 percent Chinese funding format for Sino-Nigerian infrastructure projects, we could say the loans President Buhari successfully re-negotiated might actually be at least US$10 billion for the Lagos-Calabar railway modernization project alone. And there are others. There is the US$8.3 billion Lagos-Kano railway modernization project (contract was initially signed in 2006); Chinese funding commitment using the same ratio would be about US$7 billion. Although some of the funding for these projects were provided by the Chinese government to earlier Nigerian administrations – and diverted to other means by Nigerian authorities to the dismay of their Chinese counterparts – there could be about US$13 billion (taking a median figure) in re-negotiated debt obligations for the Nigerian side. It is probably why Nigerian authorities might not want too much focus on the loans because they are likely more than has been reported. While I worry about Nigeria’s rising debt burden, what worries me more is that most of the borrowings usually end up being spent wastefully on recurrent expenditure. Only recently, Nigeria’s top scribe revealed US$3 billion (600 billion naira) is borrowed monthly by the government to pay wages, based on media reports. Still, if indeed the funds – Chinese or otherwise – are actually used for the designated infrastructure projects and are completed, it would not be overly concerning. Although Nigerian authorities have not revealed whether the local content of the infrastructure projects was re-negotiated as well, it is likely Chinese companies would still supply the labour, equipment and materials for them. Notwithstanding, if Nigeria gets the infrastructure in the end, it would be just as well.

A currency swap agreement with the Industrial and Commercial Bank of China (ICBC) – that country’s largest bank – was also signed by Nigeria’s central bank during the trip; and has since been a source of controversy of some sorts. Most initially wondered why the agreement was not with the Chinese central bank, the People’s Bank of China (PBOC). News making the rounds is that both central banks actually agreed in principle on a currency swap – potential size of US$4-5 billion – with modalities still being negotiated. It is being reported in the media that the Central Bank of Nigeria (CBN) actually proposed a US$10 billion currency swap. A demurral by the Chinese is why about half of that is being considered as more likely. Still, it would be a relatively good outcome. As there are potential downsides, its significance should not be exaggerated however. A currency swap is a two-way instrument. Just like Nigerians would be able to buy Chinese goods using the naira – as opposed to first purchasing the US dollar and then converting to Chinese Yuan – the Chinese would also be able to buy Nigerian goods in naira. And what do the Chinese buy from Nigeria? Crude oil mostly. And since the naira is overvalued, Nigeria would lose significant value for that commodity in that case. That is in addition to the valuable US dollars the country would lose if crude oil sales come under the arrangement. Also bear in mind; the Chinese would be in possession of the US dollar equivalent of the Chinese Yuan Nigeria keeps with the PBOC as foreign exchange reserves. There are other concerns. With the swap, Nigeria’s net position would likely more often be negative. How so? China sells at least four times as much goods to Nigeria, mostly manufactures. And if Nigeria is looking to diversify its economy, it is not in its best interest to make it easier to import Chinese goods. Probably to put some modicum of dignity on the fact that Nigeria was actually in China with a begging bowl, the Nigerian president kept harping on the trade imbalance in favour of China – China accounts for more than 80 percent of its total trade with Nigeria. But is that the fault of the Chinese? You correct a trade imbalance by first building your own industries or say only importing as much as you export. Whereas China’s exports to Nigeria are largely manufactures – machinery, equipment, processed goods, etc. – and very diversified, more than 80 percent of China’s imports from Nigeria are crude oil and gas. In 2013 – most recent annual data available from the National Bureau of Statistics of China – China’s exports to Nigeria was US$12 billion (88 percent of total trade) and its imports were US$ 1.6 billion (12 percent of total trade), putting its total trade with Nigeria in that year at US$13.6 billion. Nigerian authorities put total 2015 trade with China at US$14.9 billion. In two columns in February 2016 – “Africa should renegotiate EPAs for manufactures’ trade parity” – I make a case for manufactures’ trade parity as a model for correcting the significant trade imbalances that exists between African countries and their western and eastern trade partners. So is there any advantage to the swap agreement? Oh yes. Nigerian banks are saved some hassle. And Lagos would effectively be the West African hub for Renminbi transactions. But in light of the aforementioned concerns, the CBN has to ensure that Nigerians are protected as it negotiates the terms.

So what does China get in return? China seeks influence primarily. In any case, it is not really giving much away. On 8 April 2016, acting on instructions from Chinese authorities, Kenya forcefully repatriated eight Taiwanese – charged and acquitted by a Kenyan court in a cyber crime case – to China, not Taiwan. It probably had no choice in the matter. Apart from the many Kenyan infrastructure projects being funded by China, Kenya is also currently negotiating a US$600 million Chinese loan. Nonetheless, the relationship with China is an excellent opportunity. China does not see the relationship as competitive. What Nigeria – and indeed Africa at large – could gain from China is what China is giving up. There is an opportunity in labour-intensive manufacturing as China ascends to advanced stuff. Still, power and infrastructure deficits are constraints. Even so, Nigeria could use special economic zones with designated infrastructure assets to get around them. Progress on this front has been slow, however. More importantly, the real potential gain from the China-Nigeria relationship is if it engenders the transfer of skills and technology from China. This is possible. China is helping Ethiopia in diverse ways in this regard – see my column on 22 December 2015: “East African countries seem to have cracked the Chinese code.” This should also be Nigeria’s emphasis. Fundamentally, China would be happy to help if it finds a Nigerian side that espouses some of the values it holds dear. Integrity and honesty are few examples. At this point, it is important to point out that there are aspects of Chinese culture that are not entirely pleasant. Racism is entrenched in Chinese culture and is at the root of its unpleasant labour practices in Nigeria and other African countries. Still, if the Chinese find honest Nigerian partners who fulfill their promises, there is no limit to the potential gains for the Nigerian side. In this Nigerian president at least, they may have found one such partner. That is also the impression one senses from the Chinese side.

Also published in my BusinessDay Nigeria newspaper back-page column. See link viz. http://businessdayonline.com/2016/04/nigeria-china-relations-may-work-this-time/

Buhari needs to be pragmatic

By Rafiq Raji, PhD

These days, I find myself eavesdropping on conversations. Sometimes, it may be people venting their frustrations in the bus or taxi. Other times, it is in restaurants, the mosque, grocery store or just on the good old radio. Nigerians are not happy right now. Although recent rains have doused the hot temperatures somewhat, continuing power cuts and fuel scarcity make the relief a little fleeting. Never mind the rising cost of food, which even local produce sellers blame on the strong US dollar. To my chagrin this past weekend, the local shopkeeper in my neighbourhood did not have bread for sale. He tells me bakers are contemplating a strike as the price of a bag of flour has increased by one-third due to scarce dollars. He wondered aloud why the bakers could not just reduce the size of the loaf if increasing the price proved too difficult. These economic difficulties are due to bad policy choices by Nigeria’s current leader, Muhammadu Buhari. The scarcity of foreign exchange and fuel can be traced to his administration’s penchant for price control. The naira is depreciating in the parallel market because of speculation fueled by inappropriate pricing of the currency by the country’s central bank. Fuel is scarce because marketers stopped importing the commodity to avoid losses. With fuel subsidies stopped and foreign exchange needed to replenish supplies scarce, marketers have little incentive to fill the supply gap; especially as the regulated price provides meagre margins. Until a market-driven approach is adopted on all these fronts, the problems are likely to remain.

As we rode past the long queues for fuel in Abuja – Nigeria’s capital city – this past Friday, fellow commuters remarked about the needless suffering. Surprisingly, one of them said the inconvenience was a necessary cost before the ease expected to come – “after 16 years” – from President Buhari’s administration. My co-passenger did not finish his sentence. Still, we knew he was referring to past governments. He was clearly a “Buharist” – term used to describe ardent supporters of the country’s leader, as are many in northern Nigeria. Still, I was a little skeptical about taking his views as a reliable sample. However, when I saw the rapturous welcome Kano – city in northwestern Nigeria – residents gave Vice-President Yemi Osinbajo last week as he visited victims of the recent fire at a major market in the ancient city, I thought to myself perhaps the views expressed during my earlier commute was reflective of popular sentiments; at least in the northern parts of the country. Not that Kano residents did not complain about their economic hardships. It was simply that they remain hopeful nonetheless. Such is the trust they have in President Muhammadu Buhari. This does not surprise me. During my high school days in Kano, conversations among humble people were usually about politics and any time, every time General Murtala Muhammed – another much loved former head of state killed in a military coup in 1976 – and Major-General Muhammadu Buhari were mentioned, no one had a bad thing to say about them. This enormous goodwill made retirement for the former military head of state a little easier, as a grateful populace ensured he could walk unguarded if he chose to. And most of the time he did. He could go for walks in his hometown and not fear for his life. His former military contemporaries would not dare. This is why it is quite heartbreaking to see his administration flounder like it is currently.

About one year into his first term, President Buhari is increasingly running the risk he would not be able to fulfill most of his promises. At least, not if he is unwilling to be pragmatic and adapt to the very messy politics of Nigeria. There is actually now talk of a one-term Mandela type presidency. The old man is certainly not helped by significant divisions within his political party. Just before he left for his most recent trip to China – and this particular one is probably the most important since he came to power, he received details of the controversial 2016 budget passed into law by the Nigerian legislature. Such was the still shoddy form of the budget that the president was probably in so foul a mood he chose not to attend the emergency cabinet meeting he called to discuss the details. His displeasure was not totally warranted. Changes to the budget by the country’s lawmakers were not entirely mischievous, new information suggests. More importantly, the Buhari administration is yet to put in place a proper budget four months into the year. There is no excuse for this. The ruling party controls both the executive and the legislature. It is President Buhari’s responsibility to ensure that members of his party come to heel with his vision. In a democracy, it is not often the case that you are able to do this by just ordering people around. Much of the controversy around the 2016 budget is due to a departure from the practice of co-operation between the executive and legislature. There have always been issues with budgets. In the past, these were resolved internally. The president’s current troubles are due to his refusal to make deals with his adversaries. His intransigence on certain issues due to his personal principles has also been a constraint. Nigerian politics is not for honest men. In a country of very clever people, Nigerian politicians have to be extremely shrewd. That is, if they want to succeed. President Buhari is courageous, honest and has the will and intention to do good. Unfortunately, that is not enough. He has to be pragmatic as well. While his anti-corruption stance is laudable, it should not take all of his time. His primary priority should be how to reboot the economy, create jobs and return Nigeria to the path of prosperity. And in this regard, time is the resource he has little of, not money.

Also published in my BusinessDay Nigeria newspaper back-page column. See link viz. http://businessdayonline.com/2016/04/buhari-needs-to-be-pragmatic/

Zuma and the coming winter

By Rafiq Raji, PhD

“I don’t think we should have people who are almost like God in a democracy.” These were Jacob Zuma’s words in April 2009 as it became all but certain he would lead South Africa. He was referring to the country’s Constitutional Court. His chance to make the court potentially bend to his will came in September 2011 when a new Chief Justice needed to be appointed. His controversial choice – Justice Mogoeng Mogoeng – was viewed with suspicion. Human right groups accused Justice Mogoeng of being lenient with rapists. Because of his outward religiosity, there were also fears Chief Justice Mogoeng would put God before the country’s Constitution. Having been a junior member of the Constitutional Court before his appointment, many worried the Chief Justice might chose comradeship over the rule of law if ever a matter arose concerning Mr Zuma, his benefactor. And in the case of President Zuma, it was not to be too long before that view would be tested. Chief Justice Mogoeng would prove to be an excellent choice. Not for President Zuma certainly. It is ironic that most of the time when African politicians think they have captured the judiciary, the judges surprise them. Chief Justice Mogoeng and his colleagues gave a damning verdict of President Zuma’s behavior on the inappropriate use of public funds to upgrade his rural homestead, the so-called Nkandla scandal.

The real issue in question was whether the remedial actions requested by the country’s anti-corruption agency – The Public Protector – on the Nkandla scandal were binding on the President. Using his executive powers and control over the ruling African National Congress majority in parliament, Mr Zuma frustrated the process of making him account for his actions. In response, the ultra-leftist Economic Freedom Fighters party took him to the Constitutional Court to force his compliance. But the fatal blow did not come from the EFF and the other opposition party – the Democratic Alliance – that later joined the suit. Sensing an unfavourable judgement at the Court would prepare grounds for a potential impeachment of their client, Mr Zuma’s lawyers made the unwise move of asking the Court not to rule on the constitutionality or otherwise of Mr Zuma’s actions. Doing this forced the hands of the Justices of The Constitutional Court. Left with little choice, they unequivocally stated President Zuma’s refusal to abide by remedial actions requested by the Public Protector violated the Constitution. Instead of resigning after such a damning verdict, Mr Zuma has opted for an apology. Clearly, he is determined to test the limits of the law. Unfortunately, the alternative is his forte. In the absence of law and order, chaos reigns. By his actions, Mr Zuma most certainly prefers the alternative. His opponents – who without any doubt now include the people he swore to protect – must not take the bait.

What would it take to remove Mr Zuma from office then? Because if the ruling ANC party refuses to recall him and its members in parliament would not vote to impeach him, what then? Mr Zuma knows all too well how ‘cold’ it is out there. Having fought so hard to rule South Africa, he is unlikely to let go easily. The man seems unfazed certainly. That is because the people who must remove him are likely tainted as well. To move against him abruptly – even in the face of such overwhelming evidence – would be politically injurious for the ANC. In a party that values loyalty above all, they have to seem reluctant to remove him. Even after the damning Constitutional Court judgment, they have to be seen amongst party ranks as affording him respect and comradeship. Mr Zuma is certainly not fooled, judging from speculations about schemes to remove him in publications owned by his notorious associates, The Guptas. There are even murmurings upcoming municipal elections could be postponed. Ironically, a belligerent Mr Zuma might actually best serve opposition parties. The longer he stays, the more unpopular the ANC is likely to become. Strategists at the EFF probably furtively hope he resists calls to resign. That way, they can rally South Africans to push for early parliamentary elections. Signs are the ANC’s loss would be EFF’s gain were early elections to be called. It is probably the prospect of losing their parliamentary majority that may finally push the ANC to give Mr Zuma the boot. Even then, the president’s detractors may still be disappointed.

Another Zuma may already be on President Jacob Zuma’s heels. A move he has all but encouraged, his failsafe option. His ex-wife, Nkosazana Dlamini-Zuma, has already announced she would not be seeking a second term as chairperson of the African Union Commission. The opposition, especially the EFF, may wish President Zuma’s more politically vulnerable but widely acceptable deputy, Cyril Ramaphosa, became the next ANC president. As Mr Ramaphosa is tainted by the Marikana massacre – where the police fired live ammunition at protesting mineworkers, it would be much easier to vilify the wealthy deputy than Dr Dlamini-Zuma. Former President Kgalema Mothlanthe is probably hoping the ANC would open their eyes to his suitability for the job. If push comes to shove, Mr Zuma could ask his comrades to keep him as ANC president while his ex-wife ascends to the country’s presidency. As unseemly as this might seem, it is not a farfetched scenario. An option that could be explored by the opposition should parliament fail to impeach President Zuma might be to go back to the Constitutional Court to ask clearly whether the violation of the Constitution by Mr Zuma made him unfit to remain president and whether an order to parliament to impeach him would not be appropriate. This would certainly test the principle of separation of powers to the limits were this option to be explored. The Justices of the Constitutional Court probably hope they would not be tasked as such. No doubt, this is probably the most uncertain of times in post-apartheid South Africa. To think all these concerns would be unnecessary were Mr Zuma to do the honourable thing. But as Congress of the People party leader Mosiuoa Lekota said recently of the man, “he is no longer honourable.”

Also published in my BusinessDay Nigeria newspaper back-page column. See link viz. http://businessdayonline.com/2016/04/zuma-and-the-coming-winter/