‘Morning’ the old adage says, ‘shows the day’. And this was probably the basis for the agitation of many Nigerians particularly those not particularly sympathetic to either the ruling All Progressives Congress (APC) or President Muhammadu Buhari’s government when it clocked 100 days in office. Buhari was inaugurated on May 29, 2015 and was four months old in office on September 29, 2015. The first hundred days ritual is a sample of the first 100 days of a first term presidency of a president of the United States. Wikipedia says it is used to measure the successes and accomplishments of a president during the time that their power and influence is at its greatest. The term was coined in a July 24, 1933, radio address by U.S. President Franklin D. Roosevelt, although he was referring to the 100 day session of the 73rd United States Congress between March 9 and June 17, rather than the first 100 days of his administration. Nigerians also believe that a government would within one hundred days of existence display characteristics of competency or incompetency regarding policy formulation and implementation that will bring about social and economic prosperity of the country.
President Buhari, having rode on the crest of the change mantra to attain the historic victory of defeating an incumbent president, is expected to literally performed miracles on the economy by seriously prosecuting war on terrorism, tackle corruption, embark on structural reforms, fiscal discipline and responsibility, enhance investment regulatory regime, improve power supply and pursue policies with emphases on economic growth revival and massive infrastructural build ups.
In four months, journey so far, the macro-economic scorecard, according to economic analysts, reveals average performance with major successes in power supply, disappearance of petrol queues, reinvigorated war against Boko Haram insurgency, restructuring of the oil sector and restoring the international reputation and pride of Nigeria.
Power generation miraculously rose from 3,000 megawatts (MW) before Buhari came into office to about 5,000MW last month. Speaking on this development, the General Secretary of National Union of Electricity Employees (NUEE), Mr. Joe Ajaero, said: “During this time of the year, there is always a slight improvement in power supply because of the rise in water level. That is, the lake goes up and hydro power stations generate more power. Second is the Buhari factor which has made operators to sit up and added to that, before now, the gas pipelines were usually vandalized.
The attacks on gas pipelines and trunks is attributed to dirty acts of some irredeemably greedy individuals who the government awarded pipeline repair contracts but turned themselves into vandals. According some observers, the pipelines are vandalized and the contracts are awarded for repairs, almost every two months. It was big business.
However, Nigerians expressed fear that the current power situation may not be sustainable; once the rainy season ends and the water level drops, there may be problem. Again, all power being generated is being pumped into the system, there is no reserve in case of any break down, and there is no reserve in case of maintenance.
Until the twilight of the immediate past administration, Nigeria was transfixed by the Boko Haram terrorists especially in the North-east. The military has built on the wave of their successes against the terrorists just before the general elections. The Buhari-led administration scored some quick wins in mobilising a multi-national effort to combat insurgency in the region. The kick-off of the Multi-National Joint Task Force (MNTJF) in July and appointment of new military chiefs appear to be achieving the desired result of bringing the insurgency to an end. The President had also issued a three-month deadline for the military to subdue the insurgents.
Though Boko Haram has killed at least eight hundred civilians since Buhari came on board on May 29, the country has witnessed relative peace across the country in recent time. In defence of his principal, presidential spokesman, Garba Shehu told AFP that the president marked his first 100 days in power by looking ahead rather than behind. The President ran as a hawk on security and with a tough anti-corruption stance, pledging to recover “mind-boggling” sums of stolen oil money and vowing to crush Boko Haram’s six-year Islamist insurgency that has killed at least 15,000.
Concerning the war against corruption and recovery of looted public funds, observers argued that the President has not performed well to the citizens’ expectations. Aloy Ejimakor, a public affairs analyst argued that ‘you don’t need special courts to try corruption cases. James Ibori was not convicted by a special court but by some regular British court. Plus, you can’t get a special court without an Act of the National Assembly – a process likely to become dicey or gridlocked if the alpha males of the National Assembly suspect that they might be caught in the web of the procedural laxity such law is intended to create. Further, if the ultimate intention is to water-down the standard of proof in such courts, then a constitutional amendment becomes a must, all with its many complications, difficulties and profound political risks to the President’.
It is the Constitution, rather than any subsidiary law, that conditioned criminal conviction on proof of guilt beyond reasonable doubt – a rigid requirement that goes to the basic tenets of Nigeria’s adherence to the common law and constitutionalism. The possible exception lies in amending the laws to convert corruption to a civil wrong. In such event, proving an act of corruption will thenceforth be by a preponderance of the evidence but which, instead of imprisonment, results only in civil forfeiture of the fruits of the corrupt act.
The President was reported to be nursing an intention to establish special courts to try looters and corruption-related cases. In August, the President had constituted a Presidential Advisory Committee against Corruption headed by Professor Itse Sagay. The Committee’s responsibility, according to the Special Adviser to the President on Media and Publicity, Femi Adesina, is to advise the present administration on the prosecution of the war against corruption and the implementation of required reforms in Nigeria’s criminal justice system.
While some Nigerians maintained that the president has launched a selective anti-graft war meant to witch-hunt the officials of the immediate past administration, Rev. Mathew Kukah, a member of the National Peace Committee, suggested to the President a full-scale reinvigoration of institutions, such as the Economic and Financial Crimes Commission (EFCC), Federal Inland Revenue Service (FIRS), Independent Corrupt Practice and other related offences Commission (ICPC), Police, Bureau of Public Procurement, Accountants-General, Auditors-General, Attorneys-General, Corporate Affairs Commission, Land/Real Property Registries, the Central Bank of Nigeria (CBN), and other establishments with functions bearing some nexus to nipping corruption in the bud. To him, such decision would be better than constituting a committee to do the same job.
Nigerians have applauded the government on recent reforms at the Nigerian National Petroleum Corporation (NNPC). While refineries are suddenly coming back to life after years of idleness, Buhari sacked the entire board of the corporation, notorious for mismanagement and rampant theft. With installation Dr. Ibe Kachikwu to spearhead reforms as the new managing director, NNPC is now exhibiting true characteristics of transparency and probity in the government business especially in award of the annual crude oil contracts such as evacuation of Nigeria’s crude oil equity from the various crude and condensate production arrangements.
The corporation hinted last month that it had commenced the process of recovering over $7billion (N1.4trillionn) in over-deducted tax benefits from joint venture partners on major capital projects. It was also reported that the NNPC had engaged an international accounting firm to ascertain the exact amount due to government on the Strategic Alliance Contracts entered by Nigerian Petroleum Development Company, where up to $2.46billion (N484.6 trillion) of government money would be recovered.
NNPC Spokesman, Malam Shehu, in a statement, disclosed that the NNPC report indicated that the new measures might lead to further cost recovery for the corporation. The report, according to Shehu, also revealed that after an extensive investigation of the various toxic crude oil for refined products swap contracts, a total sum of $420m had so far been reconciled in favour of the NNPC and was now due for recovery from the legacy OPA/SWAP contracts.
On fiscal discipline and transparency, Buhari issued a directive on full implementation of Treasury Single Account (TSA) which, according to the federal government officials, has led to a further stabilization of N500 billion banking sector float at the Central Bank of Nigeria (CBN). All the government establishments were expected to have complied with the presidential instruction latest 15th of last month.
In addition to the federal government ministries, agencies like the Securities and Exchange Commission (SEC), Corporate Affairs Commission (CAC), Nigerian Ports Authority (NPA), Nigerian Communications Commission (NCC), Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), Nigerian Maritime Administration and Safety Agency (NIMASA), Nigeria Deposit Insurance Corporation (NDIC), Nigeria Customs Service (NCS), NNPC, Federal Inland Revenue Service (FIRS), Department of Petroleum Resources (DPR), among others, are affected by the directive.
The TSA is a unified structure of government bank accounts that gives a consolidated view of government cash resources whereby all funds belonging to the federal government are domiciled in one account with the central bank, with payments and collections into the account done via electronic means. It is a bank account or a set of linked bank accounts through which the government transacts all its receipts and payments and gets a consolidated view of its cash position at any given time.
While some analysts observed that TSA will ensure transparency and improve fiscal revenue inflow amidst falling global oil prices, some Nigerians argued that the performance of banking stocks is expected to worsen as the operating environment remains volatile and economic slowdown persists, saying that the policy would affect the flow of liquidity in the banking system because once the banks collect government’s funds, it will be sent directly to the TSA. The free funds some banks used to enjoy will no longer be there.
Majority of public observers were hopeful that the TSA decision, if fully enforced, would help to ensure the consolidation of government’s revenue. Prior to the initiative, government funds in banks were fragmented, a system that gave room for corruption. TSA will not only allow blockage of leakages and uncover idle cash, it will also allow for complete and timely information on government cash.
Stock market and banking industry
Nigerian banks are heading into financial and operational storms in view of the increasingly difficult condition under which they are operating, financial analysts have said. The banks have had to contend in recent months with the increased vulnerability of the oil and gas sector, pressure on the naira, slower economy, tightening bank liquidity, sharp deterioration in profitability, asset quality and capital ratios. These are all credit negative for the sector. Since the beginning of August, public sector deposits, which represent around eight per cent of total system deposits, have exited the commercial banks and must be held at a single treasury account at the central bank. This adds pressure to liquidity.
Foreign exchange (FX) reserves, which rose to US$31.3 billion as of September 2 from June 1, 2015, was traceable to the reduced oil revenue leakages, as well as the demand management policies of the CBN to constrain FX outflow. Consequently, at the time of filing this report, the exchange rate at the interbank has remained stable at N199.00/US$1.00 although the parallel market rates still trade at higher volatile bands.
Analysts also said creeping inflation, 9.2 per cent for July has, characterized the general price level in the past few months on the back of the exchange rate devaluation and the ban of some consumer items from accessing FX at the interbank. Investors in the financial markets have remained on the sideline as a result of lack of fiscal policy direction from the President, coupled with exchange rate uncertainty. The Nigerian equities market lost 14.0 per cent since June till date, while the bonds market (as measured by FMDQ index) shed 3.0 per cent in the same period.
The situation may be worsen as, last month, JP Morgan exited Nigeria from the emerging currency bond index it manages, citing lack of liquidity in the foreign exchange and bond markets. CBN has disputed this assertion though, insisting the naira is correctly valued. Investors have $216 billion benchmarked to the Government Bond Index (GBI-EM), the most popular emerging local debt index. But the bank said the current liquidity issues made it hard for foreign investors to replicate it.
The bank had, early this year, placed Nigeria on an Index Watch as a result of their concerns in the operations of Foreign Exchange (FX) Market, namely: 1) lack of liquidity for transactions; 2) lack of transparency in the determination of the exchange rate; and 3) lack of a fully functional two-way FX Market. JP Morgan added Nigeria to the widely followed index in 2012, when liquidity was improving, making it only the second African country after South Africa to be included. It added Nigeria’s 2014, 2019, 2022 and 2024 bonds, which make up 1.8 per cent of the GBI-EM Global Diversified index.
It is expected that Buhari would honour his promise to unveil his ministers on the last day of September and they are expected to settle down as soon as possible. Investors in the financial markets are eagerly awaiting the President to unfold his economic and fiscal policy direction. This, they said, will put them in better positions to prepare and determine their business portfolios as well ease the uncertainty in the market.