Monthly Archives: May 2017

Doing Business: Can Nigeria replicate the Singapore model like Mauritius did?

By Rafiq Raji, PhD

It is undeniable that there is a correlation between a country’s business environment, foreign direct investment inflows and international trade performance. Countries that make setting up businesses easy, allow clearance of goods at ports with little hassle, grant entry and exit visas to investors and visitors alike in quick time, enable the registration of property with little trouble, provide reliable electricity, and make documentation like construction permits easy to acquire, attract more foreign direct investment (FDI). [1] The easier it is to do these things, the more likely cross-border and broader international trade would flourish.[2] These benefits are what motivate countries to try to improve their business environments, more so now that capital is increasingly choosy and circumspect.

Country GDP per capita(US$) (2016) (PPP) Overall DB rank (over 190) Trading across borders (over 190)
Singapore 87,855 2 41
Mauritius 20,422 49 4
Rwanda 1,977 56 6
Botswana 17,042 71 3
South Africa 13,225 74 25
Kenya 3,361 92 9
Seychelles 27,602 93 5
Zambia 3,880 98 31
Lesotho 3,601 100 2
Namibia 11,290 108 17
Ghana 4,412 108 29
Nigeria 5,942 169 181

Source: IMF, Doing Business 2017: Equal Opportunity for All (World Bank, Oct 2016) [3]

Singapore as role model
Singapore is the quintessential example. In the World Bank Ease of Doing Business (DB) 2017 rankings, Singapore is second out of 190 countries ranked globally, having topped the rankings at least nine times since they began in 2004.[4] With a GDP per capita on purchasing power parity (PPP) basis of US$87,855 (2016), it is one of the wealthiest countries in the world. More than three decades earlier, its GDP per capita of about US$8,852, was just one-tenth of its current level. Between 1980-2016, the Singaporean economy grew twenty-five times over from US$12 billion to US$297 billion. Its remarkable success is testimony to the heights any country can reach on the back of sustained reforms and reinvention. In Singapore, contracts matter and are readily enforced, the resolution of insolvencies are not tedious, there is little or no red tape in conducting tax affairs and cross-border trade thrives consequently. In spite of the second place ranking referred to above, Singapore is still widely acclaimed as the easiest place in the World to do business in.[5]

One aspect of doing business in foreign countries that investors dread, is that of dispute resolution. Court processes can be unnecessarily long and slow in most jurisdictions. Singapore overcame this constraint by automating the process, with almost all litigation activities (e.g., submission of claims, payment of court fees, serving of initial summons, etc.), outside of those requiring the physical presence of the litigants or their lawyers, doable online.

Even as some aspects of the Singaporean model are clearly replicable, attempts at copying it often falter when some of the necessary conditions that enabled the Southeast Asian nation to succeed, are missing. “Remaking is essential”: A country must be willing to reinvent itself when the variables change. [6] So just because a model proves successful over a certain period, does not mean it would be a good fit when the times change, as they always do. “Collective response” and “social consensus” also matter a great deal. [7] A determined leadership in the absence of an equally enthused followership may still flounder. Singapore has the unique distinction of having both. Still, there are probably just two essential ingredients for success. First, there must be the political will for reforms.[8] Second, and probably most important of all, the political leadership must be in a secure position and endure long enough for what are sometimes painful reforms, to translate into concrete progress.[9] The two identified prerequisites go together. Otherwise, longstanding African regimes could easily have been similarly transforming. Unsurprisingly, with political will lacking, most are not. There are a few exceptions, however. That is, cases where there have been both the political will for reforms and stable government to see them through. Successes recorded by Mauritius, Botswana and Rwanda, as the DB rankings show, offer a ray of hope for the continent. In line with the Singaporean evolution, their experience also adds to evidence about the identified necessary ingredients for success. In other words, they offer a template on how to assess the likelihood of success of many other countries, African ones especially, who now seek to be similarly attractive to foreign investors.

The case of Mauritius
The one African country that has consistently topped the rankings on the continent, and sometimes dubbed the “Singapore of Africa” – Rwanda also shares the epithet these days – is Mauritius (ranked 49 in the latest DB rankings).[10] [11] [12] Although the Mauritian economy (GDP of US$12 billion) is relatively small when compared with continental giants like South Africa (US$294 billion) and Nigeria (US$406 billion), it is one of the wealthiest. Its remarkable evolution especially suggests the Singapore model can be successfully replicated by African countries. Like Singapore, Mauritius ranks high for good governance and its politics is quite stable.[13] Mauritius’ strong institutions have also been widely acknowledged to be a key success factor.[14] Its cosmopolitanism, similar to that also evidenced in city and coastal states like Singapore, together with similarly close ties to China and India, were also crucial to the development of its manufacturing sector.[15] There is also a consensus in the literature about the huge role its trade policies played in its rapid development.[16] Preferential trade access agreements with key export markets and investment incentives via export processing zones (EPZs), enabled it to develop an apparel and textile manufacturing base, for instance. There is also now a vibrant light manufacturing sector. In addition, tax incentives have enabled Mauritius to become a preferred destination for offshore financial services, and was hitherto a major channel for Indian capital flows, a feat it competes with Singapore to achieve. Unsurprisingly, Singapore and Mauritius already explore palpable synergies between them, signing an air corridor agreement in October 2015, for instance.[17]

Mauritius especially highlights its DB ranking when pitching to foreign investors, and is acknowledged to be for Africa what Singapore is to Southeast Asia. However, unlike Singapore, it has not been similarly successful in getting foreign businesses that register within its jurisdiction, to actually situate the bulk of their operations within the country. That is why it is widely considered to be mostly a tax haven, a characterisation Mauritian authorities dislike and would like to disabuse. Unsurprisingly, its goods exports trend is not impressive, unlike the Singaporean example. It is noteworthy though that a bulk of its goods exports emanate from its EPZs. Lately, Mauritius has been forced to address these deficiencies, as developed economies crack down on tax havens and avoidance schemes and hitherto lucrative tax arrangements are renegotiated. Mauritius, which does not charge a capital gains tax, used to be the preferred destination for channelling capital to India, where capital gains tax can be as high as 40 percent and accounted for a quarter of its foreign capital inflows.[18] This may change from April 2017, when India started charging taxes on investments from Mauritius, after the more than 3-decade tax treaty between the two countries was amended in May 2016.[19] Consequently, Mauritius has ramped up its African focus, with more than half of foreign companies registered by it in the past few years, aiming to do business on the continent.

Corruption and poor governance may weigh on Nigerian reforms
Other African countries have been trying to improve their business environments.[20] Even so, most African countries remain in the lower rungs of the DB rankings, with South Africa and Kenya respectively at 74 and 92 out of 190 in the most recent one. Still, more than a quarter of ease of doing business reforms in 2015-16 were by Sub-Saharan African (SSA) countries, with Kenya one of the top 10 improvers globally. [21] Others seek to join the list of top improvers. Most recently, Nigeria (DB rank: 169) has made a splash about its DB reforms, announcing a 60-day action plan in late February 2017.[22] Nigeria’s abysmally poor non-oil goods exports is another motivation for the authorities’ forced reformist stance, after low crude oil prices over the past two years starved the government of revenue. Crude oil exports constituted more than 90 percent of total goods exports between 2009-15. That is, even as total goods exports were less than 20 percent of GDP on average. Unfortunately, attempts at using EPZs to spur export of manufactures have been slow-moving, with the most promising one (Lekki Free Trade Zone) still largely at development stage.

Fundamentally, the recently proposed DB reforms are aimed at increasing international trade and FDI. This is what motivates the three broad areas that Nigerian authorities have identified for reform: entry and exit of goods, entry and exit of people and government transparency and procurement. Agencies at the ports are to be reduced to six, from almost a dozen. Visitors to the country would be able to get visas on arrival, and those that apply at the country’s embassies, would hopefully get theirs within 2 days.

Incidentally, attempts were made in the past to sanitize the maritime ports.[23] That the bottlenecks remain point to the intense pushback reformers tend to face. Corruption is a principal motivation and is why Nigerian ports are some of the most expensive to clear goods at.[24] A report commissioned by the ports authority in October 2016, found that Nigerian authorities lose about N1 trillion annually to corruption at the ports. [25] Under new leadership, the ports authority has embarked on an anti-corruption war. Expectedly, it has come under attack, with death threats and mudslinging in tow.[26]

To demonstrate progress, Nigerian authorities announced in April 2017 that the number of days for registering a business had been reduced to two days from at least ten days, as part of reforms to ease doing business in the country.[27] Ordinarily, the activity takes longer than the statutory 2 working weeks hitherto. With that now reduced to two days, it could be reasonably expected that new business registration would be accomplished in a week, say. How was this achieved? Automation. Similar to how Singapore (and many other countries that copied its model since) was able to get rid of human-related bottlenecks to the ease of doing business, some of the tortuous tasks would now be done electronically. For instance, a lawyer would no longer be required to prepare registration documents, as some of the tasks they charge for could easily be done online by the prospective business owner. Also, such arduous tasks, in the Nigerian context at least, like registering with tax authorities, have been integrated into the government’s company registration portal. Additionally, lawyers at the business registry can now certify incorporation forms and other statutory compliance declarations for a token fee, tasks previously done by lawyers hired by the prospective business owner.

Considering how extraordinarily frustrating the Nigerian legal system is, the knotty issue of dispute resolution may be a hard nut to crack. Setting up specialist courts like Singapore did has not been similarly effective because the judiciary is as yet not equipped for the automation element. Judges still write their judgements by long-hand, there are no audio recording facilities in courts and virtually all documentation is in hard copy form. These deficiencies are why even with specialist courts like the National Industrial Court, Investments and Securities Tribunal and so on, cases can sometimes take years before resolution. And even when successful after years of litigation, red tape can be craftily deployed by a well-connected local partner or disputant to make the whole exercise seem like a total waste of time. A much broader reform of the Nigerian judiciary would have to presage any potential measure directed specifically at the ease of doing business. Understandably, the proposed DB reforms focus on those issues that can be easily fixed. But considering how important dispute resolution is to increasing investor confidence – as the Singaporean and Mauritian examples show – lack of progress in this regard only buttress the poor governance characteristic of the Nigerian business environment. And as earlier highlighted, entrenched interests, corruption and inter-agency rivalry at the ports, mean multiple inspections and continued unwholesome practices, which increase the lead time of goods clearance, would probably endure and continue to stymie the country’s trade performance. Patronage networks around doing business in Nigeria, beneficiaries of which include politicians and their lackeys in every facet of government, would be difficult to dismantle as well.

Conclusion
Nonetheless, even the slightest attempt at improving the Nigerian business environment should be applauded. Still, it would take at least a year of monitoring to determine how much difference the announced reform moves would make and if that would eventually be reflected in the Doing Businessrankings. Besides, there are other more entrenched problems that would require time and determination to fix. With Nigerian politics still relatively fragile, and even simple activities like passing the budget enmeshed in much wrangling, the risk remains that these new reforms may suffer the fate of earlier botched ones. That said, the legislature has expressed support for the efforts of the executive and aims to pass relevant legislation to ensure the DB reforms become codified in law and hopefully survive future administrations. As at late April 2017, two of the identified fifteen DB legislative bills had already been passed.

Despite recent crackdowns on treasury looters and other corrupt persons, corruption would be harder to tackle, however. There is the impression that should there be a change of government after the 2019 elections, the current anti-corruption momentum is likely to slow. Besides, a judiciary not in trend with the times would likely continue to slow the wheel of justice. And defense lawyers have proved to be quite deft at beating the system: successful prosecutions of high-profile corruption cases are rare. Thus, if one were to use the Singaporean and Mauritian success stories as templates, scepticism about the potential success of current reform proposals would be somewhat justified. Still, even the slightest reduction in red tape would bring tremendous relief to those foreign investors who are already decided on doing business in the country. Besides, foreign companies who have anyway managed to make hay despite the many constraints, could do with the efficiencies that some of the reforms would potentially bring about; that is, despite the risk of holdups down the line. But with a still fragile political fabric – evidenced by much infighting within even the ruling political party, which is an agglomeration of strange bedfellows of sorts – endemic corruption and poor governance, the reforms may yet flounder. There needs to be a “collective response” and “social consensus” around the reforms for them to succeed.

Dr. Rafiq Raji wrote this article for the NTU-SBF Centre for African Studies at the Nanyang Business School, Singapore, where he is an adjunct researcher. See link viz. https://www.ntusbfcas.com/african-business-insights/content/doing-business-can-nigeria-replicate-the-singapore-model-like-mauritius-did

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/business-can-nigeria-replicate-singapore-model-like-mauritius/

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No place for coups

By Rafiq Raji, PhD

Today’s Nigeria is very different from that of the 1980s and 1990s. Any coup attempt will fail. So those who might be contemplating one against the Muhammadu Buhari adminstration are forewarned. There might actually not be a country for them to govern in the event they choose to act so foolishly. Former military generals from across the country have being vociferous in their condemnation of any such plots. Curiously, their northern contemporaries have been relatively silent. True, their brethren in active service, chief of army staff Lt General Tukur Buratai, was the one that “blew the whistle”. They must join their voices to his nonetheless. Since the information that some politicians (I suspect of northern extraction) were plotting with some military officers to topple the government broke, the army leadership has made overt and covert moves to forestall any such move. Division commanders have been redeployed across the country and there are reports that the army’s intelligence service has been ordered to infiltrate the rank and file. There is a self-preservation motivation to why senior military officers (whether from the north or elsewhere) would be averse to the truncation of Nigeria’s democracy. Some relish with pride the renewed professionalism in the military. There is also an external dimension. The American military is so entrenched now on the African continent that any coup could easily be quashed by their special forces. Proud Nigerian military men would be loathe to give them an excuse to invade the one truly African country with the potential to resist their neocolonial tendencies. So if there is a coup plot afoot, I am almost certain Mr Buratai and his men are well-motivated to bring it down.

If you must rule, win the votes
Other high-powered schemes are about at the moment, it is believed. Whether it is the curious visit of former president Olusegun Obasanjo in early May to Minna to meet his fellow former military heads of state Ibrahim Babangida and Abdulsalami Abubakar (both are neighbours), or the “beauty parade” of the “who is who” of Nigerian politics at the wedding of Mr Babangida’s daughter almost two weeks after (thankfully, acting president Yemi Osinbajo stayed away), there is a lot of scenario planning ahead of either a resignation of the presidency by President Buhari or his death on the back of ill health. Even though one is not a fan of any of them, we may call the trio “the stabilizers”. Well, they should do the needful with dispatch.

To put it bluntly; the seeming déjà vu of another southern christian potentially taking the place of a sick northerner as president is what underpins the growing rumblings in the north. Left to likely candidates from the region who might replace Mr Buhari in the event of his exit from the scene, there should not be much to worry about per se. It is the possibility that a diligent and clearly hardworking Prof Osinbajo could become so popular over the next two years that should he choose to contest the presidency in 2019, he might win, that has their antennae up. If that is the case then, it behoves Prof Osinbajo to douse the tension. In this regard, he should try his utmost to assure the “worriers” amongst his northern brothers he has no such interest. Of course, it would not stop them being concerned. In any case, their worry is needless: Nothing ever stopped God from doing His Will. If He has willed Prof Osinbajo would remain president after 2019, it is a done deal. That said, if the north wants a shot at keeping the presidency instead, there is only one viable way for it to do so: the ballot box. Instead of nonsensical rumours about coups and needless threats, it should start to coalesce its political resources towards ensuring that it is able to field a candidate, a healthy one hopefully, for the 2019 presidential elections. Incidentally, to do so, it would need the support of the southwest. Because it certainly cannot hope for any support from the southeast which it has belittled under Mr Buhari’s leadership thus far.

Too fragile to yield
But what could a potential coup plot be looking to achieve? In the 1980s and 1990s when almost every lever of power and influence in the polity was state-owned, these nefarious schemes were relatively easy to execute. Today, with social media and a highly interconnected world – the United Kingdom has already issued warnings of its own – coup plotters would be hard-pressed to maintain secrecy during their planning stages on the one hand and control after the event on the other. My reckoning therefore is that perhaps the evil politicians behind the plot hope to use the military to force Prof Osinbajo’s hands at some point. Because they definitely cannot push Mr Buhari in any way or manner. It must be then that the plot is aimed at the event of Mr Buhari’s death. With the northeastern part of the country barely stable, the Niger Delta still largely fragile, and the vulnerabilities of the Nigerian military all too exposed under the erstwhile Jonathan administration (albeit increasingly redeemed under the current administration), a coup would almost definitely be destabilizing. Surely, the plotters need not be reminded that Nigeria’s forced unity is also why they covet ruling it so much.

Published in my Premium Times Nigeria column on 22 May 2017. See link viz. http://opinion.premiumtimesng.com/2017/05/22/no-place-for-coups-by-rafiq-raji/

Nigeria – 2017 Budget: Counting the costs

By Rafiq Raji, PhD

After much ado, the Nigerian legislature finally passed the government’s budget for the 2017 fiscal year in May, almost five months into the period. For the umpteenth time, the budget was passed late. Had the executive submitted the budget on time, it could have been passed earlier, reckons the legislature. The lawmakers could have been sprightly regardless. They are both to blame.

Time costs money
Although making into law the government’s spending plan almost mid-year into the fiscal period did not hamper its activities (the 2016 appropriation law allowed for spending till then), there were costs. Besides, the lagged spending could have created more value if it had been dispensed with as originally planned. The time value of money, one of the first lessons one learns in finance, is often not contemplated with the seriousness it deserves in public circles. Incidentally, some of the officials and legislators who clearly give it no consequence in their public functions, are not similarly wasteful with their own resources. It is simple really. Money not appropriated for almost six months into the fiscal year could easily have created value of at least half the average annual inflation rate, proxied by the prorated return that could be earned from government securities during the period; currently yielding between 16-20 percent. In the public context, the time value of money is more encompassing than that, however. Myriad procurement and construction contracts that could have been paid for, with the value they create subsequently trickling down to numerous other entities in their respective value chains, could easily have metamorphosed much more further afield. A simpler instance is how wages by the beneficiary entities to their workers translate into money for food staples, school fees, and so on. Point is, there are huge monetary costs to delaying the preparation and passage of the budget.

Realpolitik at the outset is best 
Tipped off by a whistleblower, the police raided the house of Danjuma Goje (an influential senator and chair of the Senate’s appropriation committee) in April, carting away valuable documents and monies. In his fightback, the clearly infuriated senator wondered if the budget might not suffer further delays by the police action. His reason? Some of the documents taken from his house were purportedly related to the budget itself. A charge the police fervently denied. Sensing the police might have stirred up a hornet’s nest, the executive branch quickly ordered them to return Mr Goje’s belongings. That is, even as some were potentially incriminating. Had he not been so crucial to the achievement of the government’s goals, some wondered if they might have been as accommodating. Still, the actions of the police in bothering Mr Goje at such a crucial time were clearly impolitic. With the budget now passed into law, might Mr Goje be again bothered? That is for him to worry about.

The point here is that in addition to the executive not preparing the budget on time and the naturally slow pace of the legislative process, it could still have been passed into law much earlier if similar wisdom had been applied at the very beginning as well. For instance, the senate president, Bukola Saraki, whose support is even more crucial to ensuring the incumbent adminstration is able to get its sponsored bills passed and so on, was made an enemy of at the outset of the administration. As Mr Saraki still battles a false assets declaration court charge, some of the holdups at the Senate related to approving executive appointments (that of the anti-corruption czar for example) and other business the executive needs legislative approval for, could easily be adjudged as its own institutional response to what it rightly believes is an assault on its independence. The Senate was likely to use whatever leverage at its disposal in a fightback. So even as the curtains have now been drawn on this most recent executive-legislature drama, it is dearly hoped both sides would for all our sakes apply the lessons to their future dealings.

Earlier and quicker next time
Fortunately, Mr Saraki has admonished the government to submit the 2018 budget on time to avoid a repeat of this year’s tardiness, by September, say. It should probably sound the bells months before. And if when the time comes, the executive does not act responsibly, the legislature should halt consideration of all the administration’s business with it until this is done. More proactively, the legislature may need to create a bipartisan budget office of its own. To stir the executive into action if it drags its feet, the lawmakers could even propose a “shadow” budget for debate. Amidst the uproar that would likely ensue, the fabled slow-turning wheel of government might miraculously pick up steam.

Published in my Premium Times Nigeria column on 14 May 2017. See link viz. http://opinion.premiumtimesng.com/2017/05/14/2017-budget-counting-the-costs-by-rafiq-raji/

The Osinbajo imperatives

By Rafiq Raji, PhD

Evil men are forever in bondage of their schemes. Just when they think victory is within their very grasp, that ever-patient Omnipotent simply declares otherwise. It is sometimes no more than a blink of the eye. So to speak. All of a sudden, the variables just change. A man whose aspiration was no more than a life in academia has power thrust upon him without even the slightest effort. Yet, many abound in those stained corridors who have twisted knots to no end for the exact same thing. To simply watch how the varied machinations of these sort of people often come to naught is to put it mildly: awe-inspiring. Who would have thought such mischief possible from just a word. “Co-ordinate” in place of “act”: who knew? Of course, the law is clear. Following the letter by the Nigerian president, Muhammadu Buhari, to the legislature declaring his intention to proceed on medical leave – the second one this year already, power transfers automatically to his deputy, Yemi Osinbajo. But the drafters of the letter already knew that. So why did they do it? The shadowy figures probably wondered if anyone would notice. How about we test the waters to see what we can get away with, they probably reckoned. Well now, they know. It is not likely that the president had the time or the strength to bicker with his clearly mischievous aides over the wording of a simple letter. The ailing leader is excused.

Act without fear
With such mischief about though, it has been suggested in some quarters that the life of the acting president might be in danger. Complete nonsense. Prof Osinbajo is not any safer being guarded by his kinsmen than he is by those of his principal. His enemies are not fools. But if they could just guide his hand, slow it perhaps and our destinies in tandem, that may be just right for them, say. Courage beckons on Prof Osinbajo. He must embrace it. Should he act with the needed firmness, he may even come to earn the respect of those who are counting on the stereotype of the faint-hearted Yoruba man. With power now placed by Divinity in the hands of one who has the twin blessings of salubrity and diligence, and might actually be able to do some good with them, even the slightest compromise by the one so chosen would be the greatest betrayal. The acting president must act with dispatch to fix some of the rubbish that has been festering due to the failing health of President Buhari; who could not attend to many government business consequently. It is widely believed a lot of official memoranda which required his approval were either not brought to his attention or even when they were, he could not attend to them.

Ordinarily, a president should not have to personally approve everything. In the American or British jurisdictions, some of these are delegated to the chief of staff or cabinet secretary. And such mundane tasks like the signing of greeting cards, routine letters and so on are done using a so-called “autopen” programmed with the president or prime minister’s signature. That type of leeway would be prone to unimaginable abuse in the Nigerian context, however. Still, it is unbelievably astonishing how some very inconsequential activities require the approval of a Nigerian head of state. A still existing command-and-control structure inherited from the military is partly why. Unsurprisingly, the healthiest president might still find the office a little overwhelming. Even so, Mr Buhari was not able to consider even the very important ones, it is believed. Unfortunately, there have also been actions emanating from the so-called “presidency” in his name that seem alien to his character and thus he probably did not approve of. To have to reverse these likely presidential usurpations whenever he became acquainted with them would have been problematic; especially as the erring officials are believed to be some of his closest. This understanding probably motivates their daring. With Mr Buhari now rightly taking care of himself in England, such mischief would be hard to pass by Prof Osinbajo. Thus, the president’s close aides may be reluctant to give Prof Osinbajo a free pass this time around: during Mr Buhari’s penultimate medical leave, the heavens simply poured rain on the second house. Understandably, the occupants of the first house cannot soon forget the lessons that the drought brought with it: shall we not hold the heavens this time with such conjurations as “co-ordinate” or whatever, some smart aleck probably mused. Well, good luck with that.

Be quick, firm and transparent
Prof Osinbajo’s imperatives this week are as follows. Firstly, he must sign the 2017 appropriation bill without delay. For sure, there would be someone who will likely come with identified “paddings” in the budget: truth can be deployed towards mischief as well. Such issues (if they arise) should be handled through back channels. Time is of the essence. Secondly, swear-in the two new ministers recently confirmed by the Senate at cabinet on Wednesday. Thirdly, deploy the about forty-three already languishing ambassadors-designate. Fourthly, the acting president should relieve the suspended government scribe, Babachir Lawal, of his appointment. (That is, if it has been found that he indeed corruptly enriched himself with humanitarian aid meant for internally-displaced persons in the northeastern part of the country.) Doing these for starters would hardly be reckoned as “co-ordinating” or any such nonsense.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/the-osinbajo-imperatives/

The Buhari dilemma

By Rafiq Raji, PhD

After Friday Muslim congregational prayers last week, as I was waiting for just the right “danfo” – local parlance in Lagos for often rickety but sturdy german-built public buses – to board home, I did the unusual: I decided to check my phone. Ordinarily, I prefer to take in the surroundings. If you have travelled to a few places like I have, the beauty and sheer humanity of fellow Nigerians can be both thrilling and exasperating. It is my experience that what you feel in the end is sheer relief: there are not many places in an increasingly ‘zombied’ world where people are just themselves. But this day could be epochal was the refrain that broke the rule that day. Should Muhammadu Buhari, our ailing president, not make a public appearance at perhaps the one activity he likely derives some consolation from, it could trigger a series of potentially destabilising events. So it was with some joy that I received the news that not only was he able to attend the weekly Jumat service, he did it with his usual calm and grace. I almost had my two hands in the air out of sheer delirium before it dawned on me where I was. On the often interesting bus trip back home, I couldn’t help wondering how when a supposedly good man finally takes the helm of leadership in Nigeria, it is either he suffers some ailment or he is removed. Or he is killed. Thus far, there has been some consistency to this. Murtala Mohammed, another benevolent dictator, was killed before he could fulfill his promise. With the benefit of hindsight, many Nigerians argue the late Umaru Musa Yar’Adua – kinsman to President Buhari, whose successor he defeated – could have changed the fortunes of the country were he not ailing. Thus, when the incumbent, whose draconian military dictatorship also had the unique distinction of being the least corrupt in Nigerian history to date – made his second coming, not a few wise men wondered if his rulership would endure this time. Within the Nigerian context, Mr Buhari is a good man. And he means well. But then the road to hell is paved with good intentions.

Take care of yourself
Still, Mr Buhari remains unwell. Even so, there is no place in our laws that says he is not entitled to remain in office. In fact, the law allows him to seek medical attention for as long as it takes. Nonetheless, he has a responsibility to ensure governance does not suffer on the back of his poor health. He should take medical leave and delegate his authority to his deputy. The dilemma for him and his close aides, I suppose, is that another trip to his doctors in England would make him easy prey for the many vultures already circling overhead. (Unfortunately, these odious creatures are the ones that often finish their terms in office.) His aides likely also fear they would lose relevance in the event. But considering Mr Buhari himself announced he needed to return abroad shortly after his last medical holiday, suggestions that he is being held hostage by his inner circle also has some currency. Besides, they most definitely fear should Mr Buhari reveal what is ailing him, there could be sufficient grounds for the Senate to constitute a medical panel to ascertain whether he is fit to remain in office. Those scheming towards this scenario should tread gently, however.

Because even as Mr Buhari is increasingly becoming a figurehead, there is relative value in allowing him to finish his term. This would give another good man, Yemi Osinbajo, who has proved capable of acting in Mr Buhari’s stead, the needed political cover to get some necessary work done for the remainder of their joint mandate. It should not be mistaken that Prof Osinbajo – a southerner – would be able to discharge his duties without the support of the north, where his boss is from. Fortunately, Prof Osinbajo has deftly endeared himself to them. The reason they are comfortable with him is not farfetched: Apart from having the full support of Mr Buhari, he has also proved himself to be principled, unassuming and above all, very competent. And as far as it is humanly possible to gauge ambition, Prof Osinbajo has no desire to contest the presidency in 2019, when another northerner is expected to complete the region’s informally arranged 8-year mandate.

Handle with care
Of course, Mr Buhari could simply resign and a northern vice-president be chosen for Prof Osinbajo. Unbecomingly, the north is at odds on who that should be. Already, potential candidates have recently been bizarrely battling one corruption allegation or the other. One of them, Sule Lamido, a former state governor was only just released on bail by the police. The house of the relative to another, Rabiu Kwankwaso, a senator and former state governor as well, was recently raided by the police. One has to assume the police were simply doing their job. But when their obviously ‘directed’ reversal on a similar raid on another influential northern senator and former state governor, Danjuma Goje – whose support is needed to pass the budget – is countenanced, it is hard not to read political meanings into their recent actions. Bear in mind, the farfetched but still plausible candidate from a part of the country that is northern when it suits it and southern when the winds are favourable, Bukola Saraki (currently president of the Senate), has been sufficiently kept on a short leash with legal troubles over allegations of false assets declaration. The other scenario that is only whispered, which the north is incidentally believed to be somewhat comfortable with, suggests that should Mr Buhari resign, Prof Osinbajo must do likewise. Without restraint by all, it could all be a mess.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. http://www.businessdayonline.com/the-buhari-dilemma/

The Malikane Proposals

By Rafiq Raji, PhD

Much dust has been raised over increasingly louder calls for more economic equality in South Africa. If a country’s wealth is concentrated in a few hands, it is almost inevitable that those who feel left behind would some day make bold their misgivings. The growing disenchantment amongst the mostly poor black but majority population with the stranglehold of so-called “white monopoly capital” should not be trifled with in any way. The resentment runs deep. Christopher Malikane, whose brightness and erudition is well-known at Wits University where he is an associate professor of economics, has proposed what some may consider radical views over how to resolve entrenched racial inequalities in South Africa. Prof Malikane proposes that the South African Reserve Bank (SARB), which is privately owned, be nationalised. He also wants banks and mines to be state-owned. And like an increasing number of black South Africans not as radical, Prof Malikane wants currently white-owned land to be expropriated without compensation. Were he not an obviously close adviser to new finance minister Malusi Gigaba, scant attention would probably be paid him. After all, his current views are not significantly different from those he has long held, most recently before his current position, as an adviser to the Congress of South African Trade Unions (COSATU), one of the partners in the ruling African National Congress (ANC) party tripartite alliance that also includes the South African Communist Party. Prof Malikane is entitled to his views. Those who disagree with him should simply offer theirs.

Time for a new deal
True, Jacob Zuma’s newfound economic radicalism smacks of desperation by a beleaguered politician with limited options. There is no gainsaying that his populist motives are writ large. Still, Nelson Mandela’s magnanimity to the white minority population has over the years proved to be costlier for black South Africans and the pace of economic progress slower for an increasingly antsy majority than even he probably ever envisaged. The need for a new deal can hardly be refuted. But what shape should this deal take? Better still, what would be an ideal compromise? If Prof Malikane’s proposals are taken as one extreme and that of the ANC hitherto another, is it so out of the realm of possibilities that a negotiated middle ground could still be reached? And quite frankly, it would be disingenuous of white South Africans to think that the current economic configuration is sustainable. But the argument could also be made that so was apartheid. And look how long that lasted? An anomaly could endure long enough that when change does eventually come, it may not matter much. With distortions and divisions already entrenched then, it would be too late for the type of negotiated and accommodative change that also does not destroy. This is why all views, no matter how extreme they may seem, should at the very least be heard. Truth be told, without some push now, current inequalities would deepen further and the economic apartheid that has persisted since 1994 would further endure. Ordinarily, black leaders should have the foresight to recognize this exigency and not be only enthused about it when their political survival depended on it. In any case, wondering about the motives of politicians is needless. So irrespective of the likely ulterior motives behind Mr Zuma’s “radical economic transformation” what should matter at this time is that finally a proper debate can be had on the issue.

Learn from past mistakes
Should land be expropriated without compensation? But what is compensation really? Besides, value already accrued to current beneficiaries of the land could easily be justified as enough compensation. Better still, is a scenario not possible where land though expropriated could be leased to the clearly more skilled white farmer with some technical arrangement for skills transfer to blacks in the mix? To use the minerals sector as an analogy: with extractive industry economics in favour of beneficiation, of what use have extracted minerals sold in their primary form been to owner African governments? The same applies to land. And examples abound of land transferred to unskilled black South Africans that have proved to be less than productive. Zimbabwe is not so far off that the potential pitfalls of a land “re-grab” which does not address the intricacies that govern the creation of wealth are not so palpable. Owning land is not enough. It is hard to argue against the nationalisation of the SARB, however. A central bank should be owned by its government. But it would most definitely be counterproductive to do the same for commercial banks. Besides, what should matter more should be how to ensure that every South African, whether black or white, has access to capital, possesses the requisite skill to acquire it and ensure its efficient allocation. Bear in mind, much of the capital that drives the South African economy is foreign. Thus, taking over local banks would hardly alter the configuration of global finance nor inoculate the economy against its reach. So it behoves policymakers and their eggheads to ensure South Africa remains friendly to global capital even as they strive to ensure opportunities abound for all.

Also published in my BusinessDay Nigeria newspaper column (Tuesdays). See link viz. https://www.businessdayonline.com/the-malikane-proposals/