27 Nov

The week ahead – The anti-corruption crusade is in danger

The Kogi state Governorship election threw up a conundrum that neither the 1999 Constitution nor the Electoral Act anticipated. The APC’s governorship candidate passed away in the midst of the elections, and because of the high number of invalidated registrants, INEC declared the election as inconclusive.¬† The Attorney General of Federation has advised INEC to proceed with the rescheduled supplementary election, amidst an uproar from different camps of the political divide. Meanwhile, the dead candidate, former state governor, Abubakar Audu was buried the next day, and his son, has been picked by a faction of the APC in the state to replace him.

The petrol scarcity has continued to bite Nigerians, making business transactions very difficult both for small and big businesses. The situation has warranted the NNPC to engage the DSS and the EFCC to help arrest marketers accused of hoarding and diverting petroleum products. The involvement of security services is meant to assist the corporation in the monitoring of petrol deliveries to retail outlets nationwide.

The CBN Monetary Policy Committee , concluded it’s meeting on the 24th of November, 2015 and resolved to drop MPR by 200 basis points from 13% to 11%. They also decided to set an assymetric interest rate corridor around the MPR + 200bp and 700bp, which implies that the standing lending rate for deposit money banks would now be at 13% and the standing deposit rate at 4.0%, while reducing the Cash Reserve Requirement(CRR) by 500bp to 20%.

The National Drug Law Enforcement Agency arrested a suspected drug baron alleged to be the brains behind the smuggling of large volumes of methamphetamine and ephedrine from Nigeria to other countries using all kinds of means. The current seizure of 266kg of methamphetamine and ephedrine is valued at N4.6billion, and was concealed in noodle cartons, cereals and palm oil. Some reports have suggested that there was a clandestine operation to smuggle millions of dollars through the Murtala Mohammed International Airport, which caused the shutting down of power supply systems for more than 3 hours while the illicit activities took place.

President Buhari has lamented the deplorable state of the infrastructure across the country and tasked the National Assembly to come up with legislation on how to partner to deliver on good roads and rail. Meanwhile, the President has travelled to Malta for the Commonwealth Heads of Government Meeting having returned from Iran where he attended a conference of gas exporting countries. The President also informed the world at the conference that some people who stole government funds are beginning to return the loot.

COUNSEL

  • Rather than heating up the polity, we recommend that the various gladiators in Kogi, because that is what they are, sheath their swords and head to the courts to resolve the constitutional imbroglio. We also are not in support of the elevation of Abubakar Audu’s son to the party ticket, without a proper congress organised for the purpose.
  • We do not support the actions of the NNPC in getting the DSS involved in restoring sanity to the petrol system. This is a job best left to the police. However, it must be pointed out that petrol marketers have held the country to ransom too often, and drastic steps have to be taken to end this fuel scarcity once and for all. At the current rate, it will happen again.
  • One key observation from the CBN MPC decision is the on the side of credit relationship between lenders and borrowers. While the lenders often jack up interest rates on facilities whenever the CBN adjusts rates upwards, they have found it impossible to do a downward review of interest rates on credits made available to their customers. We urge the banks in the light of recent economic hardship for businesses to also review interest rates of credit to align with the new realities of the monetary policy, since there will be a downward review of deposit rates of their customers as well. It is unfortunate no decision was made on the forex imbroglio, a pity, considering the impact on business environment.
  • We have, in previous weeks, lamented the state of affairs at the Murtala Mohammed International Airport. That airport is a hazard, and if care is not taken, a major terrorist incident could very easily occur from there.
  • It speaks badly of the country that the President would spend weeks in Nigeria, holed up at the Presidential Villa without any communication with Nigerians on some key developments¬† or issues within the government, until he turns up on the international stage. His recent revelations some persons are returning looted funds is not new and has made his government appear to be more of talk, and not much of an action. He promised the country many months ago that the trial of crude oil thieves would start “in a few weeks” at the time. It is almost three months and there has been not a single arrest, not to talk of trial.¬† At this stage, we believe that the President’s anti-corruption crusade will falter.