John Omachonu
Financial impunity of the privileged, elite, politicians and possibly the compromised civil servants who are supposed to be neutral and apolitical is considered by most Nigerians as responsible for near total collapse of the economy.
The feeling on the streets is that the financial impunity, for instance, of the country’s privileged, moneyed elite have heightened the sufferings of the people, resulting in over 133 million Nigerians multi-dimensionally poor.
This is in spite of the fact that the federal government is disputing the figure that is coming from the federal government agency and a development that is obvious to most Nigerians who are feeling the brunt.
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These oppressors, who are being sustained and maintained by their masters who have been hanging onto powers since decades and nurturing their young ones, have not only refused paying reparations and also giving back to the society, but still fighting hard to roll back even more regulations so they can run their financial casinos with full impunity.
Impunity, in all dimensions, ranging from financial, administrative as well as corporate has been the order of the day, manifesting in lack of synergy between the monetary and fiscal policies, personality clashes, among appointed and elected government officials, policy summersaults and sometimes reversals, among others.
This official malady has equally affected the revenue side, so much that the impunity has made for contrariness against the goals of fiscal and revenue compliance in Nigeria.
Economics has been variously defined as “The science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” Social sciences are connected with the study of people in society.
It is not possible to conduct laboratory experiments, nor is it possible to fully unravel the process of human decision-making, but it is possible to study through Economics “how the people engage themselves in production, distribution and consumption of goods and services
In fact, some Nigerians believe that the country is in dire straits and are asking themselves as to how we got to this point on the economic decay curve.
While some believe that the country is not an island and as such susceptible to external influences and happenings like the Russian-Ukraine war, economic crisis in some developed countries, recent happenings, occasioned by the alleged frosty relationship between the Central Bank of Nigeria, (CBN) Governor, Godwin Emefiele and Minister of Finance , Budget and National Planning, Zainab Ahmed may have brought to the fore the undercurrents that may be working against the progress of the economy for the common good.
Some analysts believe that the issue may have to do with personalities, typified by incompetence and lack of finesse needed, particularly on the part of finance ministry.
The agitations on the minds of most Nigerians now reveal a thread of frustration, desperation and near hopelessness.
The economy is confronted with many challenges, including epoch disaster exchange of the local currency against other international currencies like the dollars and Pounds Sterling, among others, naira, slow growth, rising inflation, high debt, rising poverty and unemployment and recently, the dollarisation of the economy.
More worrisome is the fact that there seem to be lack of synergy between the fiscal and monetary policy measures a development that may have resulted in the federal government institutions working at cross purposes.
The analysts say rather that the minister, for instance, working with the CBN to bring the much needed policy measures that would improve the lives of Nigerians, she resorted to seeing herself as a ‘boss’ that must be consulted on any issues bothering the economy.
For instance, with less than six weeks to Christmas, many Nigerians are living on a shoe string whilst those who cannot afford to, are emigrating (Japa-ing).
According to Bismarck Rewane of the Financial Derivatives Company, “the season appears gloomy, especially with elevated food prices. For example, the price of a 50kg bag of rice has surged to N48,000 and could spike further as floods ravage food producing areas in the country. Worse still, fuel scarcity has resurfaced in many states. This has driven the cost of PMS to N300/liter in some filling stations.
In addition, the CBN recently announced a redesign of three of the country’s currency denominations. This could potentially weigh on festive demand and supply as market women will be constrained to exchange goods for a currency that will soon cease to be legal tender. Meanwhile, the naira has continued its free fall, depreciating to N818/$ and could tank further as people go long on the dollar in response to economic uncertainty.”
However, while there are varying views and reactions to the proposed redesignation of the notes, most Nigerians have applauded the exercise, which they believe would contribute in reducing the high level of impunity where opulence and affluence are brazenly displayed by some privileged Nigerians who may not have defined sources of income.
The impunity, particularly by some government officials is worrisome as there seems to be no official reprimand in the action and inaction of some individuals regarded as super ministers.
For instance, as at now, Nigerians are confused as to the official position of federal government on Academic Staff Union of Universities, (ASUU) strike as both ministries of education and labour and employment seem to have compounded the issue, even without official clarification from the president, whose table the bucks stop.
Again, reprieve that was seemingly coming from the intervention of the House of Representatives seems to be either long in coming or may not be coming after all.
Also, the financial sector, which seemed to be run essentially by the private sector operatives, is not left out in this high level impunity.
Between 2007/9, there was the financial crisis which was orchestrated by the global financial crisis and then the Great Recession. Sub-prime mortgages in the United States going belly up were one of the main causes of the crisis.
Sub-prime mortgages were loans to people with bad credit ratings or histories. People who should not have received loans to buy a house did get the loans.
Consequently, millions of borrowers with bad credit histories started defaulting on their loans with the attendant crisis of confidence and losses in the industry.
However, rather than let the bankers and lenders face the consequences, Nigerian government bailed them out with the citizens’ collective wealth.
In other words, they used taxpayers’ money to save the institutions that took bad business decisions for so many reasons.
In the opinion of many taxpayers, the bailouts were shocking examples of corporate impunity.
Today, banks that taxpayers bailed out continue paying their top executives giant bonuses. Even financial institutions that are losing money pay out giant bonuses.
For instance, Polaris Bank which billions of taxpayers’ money was used in bailing out was recently sold at about N50billon, in a deal that is still shrouded in secrecy.
The Asset Management Corporation of Nigeria (AMCON) has become a monster of some sort with exposure of over N5trillion naira and sitting atop billion naira assets seized from debtors, but, for which analysts say, they lack the necessary manpower and expertise to handle.
The Corporation, whose legal existence is fast expiring as it was meant to be a stop-gap- arrangement, recently appealed to the federal government to bar its chronic and serial debtors from government patronage in the areas of award of contracts.
But, views from the streets see the request as hollow and empty as Nigerians are yet to know the circumstances for the advancement of the credits in the first instance, and whether there are no interested parties or beneficiaries from the facilities granted some years ago, even at the institutions that are expected to take some punitive measures against them.
There is no doubt that Nigeria and indeed Africa is facing the worst food crisis in four decades. From insecurity in Nigeria to the drought in Somalia, hunger is ravaging Africa.
Part of the impunity in Nigeria is the weaponization of hunger to command loyalty and respect from poor people.
That may be part of the reasons why Nigerians are not witnessing issues-based campaign but diversionary issues with some candidates, under the guise of ‘grassroots campaign’ are evading national discourse, but rather dolling out largesse to financially and physically deprived electorate.
According to the FAO, 346 million people in the continent (27% of the entire population) are facing extreme hunger. Food crisis is not new to African countries. However, a stronger dollar (due to higher interest rates), weather shocks (resulting from climate change), and limited global supply (resulting from the Russia-Ukraine war) have compounded the issue.
The tight global food supply and the appreciation of the greenback have made food imports more expensive for many African countries, especially as their foreign reserves bleed out.
For instance in Nigeria, external reserves are down by 12% ($37bn) from a year ago, causing the naira to depreciate to a new low of over almost N900/$ before the recent appreciation.
This has left CBN with less to defend the currency, and sadly the food problem caused by insecurity is not going anywhere soon.
Kingsley Moghalu, economists and former deputy Governor of CBN says it is unfortunate that rather than the elite and politicians building consensus to move the nation forward, they are going into government for their selfish interests.
According to Moghalu, who featured on Arise Television, Morning Show, on Monday, November 21, 2022, Nigeria is yet to be seen and regarded as a nation, but state, adding that until the many drivers of poverty such as rising population, inflation, illiteracy, among others are tackled, poverty would continue to rise.
Friday Ameh, Lagos based energy analyst says the contradiction between what the federal government professes, statist and welfarist , and the reality on ground, typified by misalignment and misapplication of funds, may have produced officials that are doing or running their ministries as the ‘spirit directs’.
The situation, according to him, may have unwittingly produced ‘super ministers’ who seem to be untouchable and could issue directives without necessarily obtaining permission from the president or could claim to be acting on behalf of the president, when in actual sense, the directive may not be in the interest of the majority of the people.
The situation may have brought about current campaigns that are devoid of issues on what have been done either by the outgoing administration, during their tenures of some candidates as Governors or ministers.
Price For Financial Impunity
Ever since the Central Bank of Nigeria blacklisted some over one hundred companies and their directors, whose loans – primarily non-performing – are in excess of N5 billion and had been taken over by the Asset Management Corporation of Nigeria, the affected debtors have been lobbying quietly to get the central bank to reverse the decision. The ignominy of being blacklisted aside, they are worried that by barring them from accessing further bank credit, the CBN has sounded the death knell on them and their businesses.
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Some have even argued that they need to keep borrowing to refinance their loans, raise money for working capital to save their businesses from going under and prevent job losses.
However, another argument is that although, they may be right, but the fact of the matter is if the loans were not being serviced, they were already bankrupt. As such, they have no one else to blame for their sorry state but themselves.
Since the crisis in the banking system in 2009, a number of measures have been taken by the authorities to reverse the culture of financial impunity arising from financial recklessness, mismanagement of the banks and a raft of debtors unwilling to repay their loans.
From bank managing directors who were summarily dismissed and dragged to the courts for insider lender and mismanaging the institutions that they ran, the name and shame tactics employed by CBN between August and October of that same year to get debtors repay the loans, to the establishment of AMCON as a resolution vehicle for bad bank debts.
