30 Jun

The week ahead – We need to see in order to detect stunted growth

Nigeria’s Excess Crude Account tied for the world’s most poorly governed sovereign wealth fund, according to a report by the Natural Resource Governance Institute released on Wednesday. The $2.4 billion account was ranked alongside the Qatar Investment Authority as the worst in terms of oversight and transparency in NRGI’s index of resource management. NRGI rated 11 sovereign wealth funds, managing least $1.5 trillion in total, as “failing”. “The government discloses almost none of the rules or practices governing deposits, withdrawals or investments of the ECA,” the report said. It added that the account, along with the other worst performers, is “so opaque that there is no way to know how much may be lost to mismanagement.” Nigeria’s finance ministry did not immediately return a request for comment. Nigeria also runs the Nigeria Sovereign Investment Authority, with some $1.25 billion under management, but NRGI said it had ranked the ECA due to its larger balance sheet. The NRGI report ranked Nigeria 55th in overall resource management, with a high score on its taxation ranking helping to balance its last-place finish in sovereign wealth fund management.

An investigation by the Punch claims that three years after the Pension Reform Act required organisations to increase the minimum pension contribution of both employers and employees to the Retirement Savings Accounts of workers, the federal government has not complied with the law. Some pension fund operators blamed the recession, while Bobboi Kaigama, Trade Union Congress president, said that his union was concerned about the under-payment into the workers’ RSAs.

At least 20,000 INTELS Nigeria jobs are on the risk, as the rift between the oil and gas logistic giant and the Nigerian Ports Authority lingers. The NPA’s Managing Director, Hadiza Bala Usman had recently ordered that every terminal in the port was free to receive any cargo as far as it has the technical competence to handle such goods. INTELS has protested against the new policy and challenged it at the Federal High Court Abuja. According to the National President of the Nigerian Importers Integrity Association, Godwin Onyekazi, who expressed displeasure about the situation, said it was unfortunate that a simple business disagreement, which could have been amicably resolved “at the coffee table” was allowed to degenerate to the point where more than 20,000 jobs are on the line. “We do not think that companies operating in the country should be subjected to political persecution especially at this time when the Federal Government is pushing hard for peace to reign in the Niger Delta region,” he said.

Nigeria’s security agencies have denied a statement by Boko Haram leader, Abubakar Shekau that 16 female police officers recently abducted in Borno have been turned to slaves of the group. According to multiple news reports, the abduction followed an attack by Boko Haram fighters on a security personnel convoy in the Damboa district of Borno on Tuesday, June 20. The ambush reportedly occurred at about 10am when a large convoy of commercial, private and government vehicles were travelling from Maiduguri to the southern part of the state, passing through Damboa. A number of policemen lost their lives with survivors of the attack told Nigerian media that 16 women were among those kidnapped. The Borno Police Command has said at least two persons, including a police officer were killed while six others were injured. It, however, denied being aware of any abductions even though relatives and colleagues of the abducted persons lamented that the 16 policewomen were missing.

Suggestions

  • In its short history, the ECA has been burdened with a level of politicisation that was bound to bode ill for the fund. Payments into the fund were only resumed again this year, and beyond piecemeal information pieces dropped by the minister of finance at public forums, not much is available to the public in the form of accountability on management and performance of the funds managed by the NSIA. This ties back into the more general problem with public policy in Nigeria – the issue is not conceiving or passing policy but with how policy is implemented.
  • The enthusiasm and constructive feedback that greeted the advent of the Pension Reform Act in 2004 was to herald a new era in Nigerian pension administration and management. The country’s pension architecture that introduced the Contributory Pension Scheme is widely recognised as one of Nigeria’s few economic bright spots. For instance, the pension industry has tripled in asset size from about ₦2.5 trillion to ₦6.5 trillion since 2014, this, along with a growing awareness about the importance of saving for the future among employees. A finding that the government has not been complying with the law while simultaneously driving hard nosed compliance on the private sector smacks of hypocrisy and hints at irresponsibility. This is further compounded by reports which suggest that the Presidency may not have substantially complied with the law when getting rid of the former Director-General of the Pension Commission, Chinelo Anohu-Amazu. The law only works when all stakeholders maintain respect for it and act in good faith concerning it. The federal government is no exception.
  • It is perplexing that the Nigerian Importers Integrity Association finds a directive that will open up competition,which gives us an actual chance of increasing the number of jobs problematic. We indeed agree with the position of the NPA MD. Whenever there is change that will break monopolies or level the playing field better in Nigeria, those benefiting from the monopolies are quick to bandy job figures around as emotionally charged ammunition to stop the process. We advise INTELS to prepare for competition which can only mean better efficiency, and ultimately, more jobs for the industry.
  • Nigerian security agencies have a history of denying attacks or accidents that happen to their personnel with huge losses. In 2014, the Nigerian Air Force denied that its plane had been shot down by Boko Haram and the pilot, Wing Commander Chimda Hedima captured by the terrorists. It was not until after the video of Hedima’s beheading was released that the Air Force admitted the incident. In November 2015, 105 Nigerian soldiers were reported missing after a gun battle with Boko Haram. The Nigerian Army first denied that the soldiers were missing, then later claimed that they returned to their units. Eventually, admitting, when the newspaper, Premium Times, reported that their bodies had been found. Given such bad habits, it is not surprising for the Police to follow suit. This is a losing strategy as it will affect morale. We advise the DHQ and the FG to make efforts to rescue the abducted women and also ensure admit when things go wrong, in order to prevent handing the terrorists propaganda victories.