News
Nigeria: A Chance for Re-Awakening
By Austin Okere
By March 2020, it had become very clear that COVID-19 was a global pandemic. The news media was awash with a shock announcement by the Central Bank of Nigeria on her exchange rate policy; “In what can be regarded as an unexpected yet positive move, the Central Bank of Nigeria (CBN) on Friday moved the official exchange rate from N307/US$1 to N360/US$1.
At the Investors and Exporters Window (I & E), the CBN also adjusted the NGN peg upwards by 5.7%, as it raised its intervention rate to N380 from N366.” this caption was Dateline Mar 24, 2020 on Nairametrics.com.
I wrote this article three years ago on January 20, 2017, after a sharp drop in Oil prices – and surprised how relevant it is even today. What was our experience as a country, what did we learn from it and how is it that we have once again been caught desperately unawares?
Why can’t we fix our educational system and send our children to schools here? And fix our hospitals and treat our sick here, instead of our notoriety as big spenders on medical tourism?
Nigerians are gradually coming to terms that the cheese has indeed moved this time. The days of lucre and easy money, fuelled by petrodollars are far behind us; no thanks to shale oil and other sources of energy.
The aimless swagger has been replaced by a renewed sense of purpose and the need to produce in order to survive. No wonder Agriculture seems to be the only game in town these days. To borrow from the words of Pravin Gordhan, Finance Minister of South Africa, it is now Agri-Cool. All manner of yesterday’s nose thumpers now proudly call themselves farmers; it is beginning to have a nice ring and tone to it.
Unlike other oil boom and busts, it seems that this particular bust is here to stay. We seem to be in a stalemate. If we cut production to shore up prices, the shale producers will seize the opportunity to increase their own production and drive the prices right down. Not to talk of the conscious global effort towards cleaner renewable energy, and the significant improvement in its technology and adoption. COP 21 in Paris cemented the commitment to clean environment and green energy.
Time there was not too long ago in Nigeria, when first class and business class seats on commercial airlines were filled way before economy seats, and private jets littered all our airports.
But how did we get here and how did we subsequently fall from such deluded Olympian heights? The recurrent mistake we keep making as a nation is failing to anticipate and plan for our oil windfalls. There have been many boom opportunities since Nigeria joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971; Oil prices increased by 400% in six short months after the Yom Kippur War following the Arab Oil Embargo. Crude prices doubled from $14 in 1978 to $35 per barrel in 1981 following the Iran/Iraq war.
The price of crude oil spiked in 1990 with the uncertainties associated the Iraqi invasion of Kuwait and the ensuing Gulf War – the so called ‘Gulf War windfall’ under then Head of State Ibrahim Babangida. The report of the panel of enquiry headed by the eminent Dr. Pius Okigbo in 1994 was critical of the government’s role in mismanaging the $12.4b windfall. Perhaps most of it had gone with the wind.
Data from the U.S. Energy Information Administration shows that the latest windfall happened between February 2011 and August 2014, under the Goodluck Jonathan presidency, when oil prices were much in excess of $100 per barrel. Another golden opportunity was squandered, characterised by organised kleptocracy of epic proportions as has now come to light.
There is a saying in my native Igbo culture that an abomination that endures for long enough becomes part of the culture. Corruption came close to achieving this status in Nigeria.
Our inflated egos were matched with the adventure into GDP rebasing in 2014 which put Nigeria as the largest economy in Africa, overtaking poster boy South Africa. Alas this new status, propped up by an artificial exchange rate sustained by huge foreign reserves did not last. As the reserves dwindled, partial reality in the foreign exchange rate has wiped away close to half of the estimated $510b GDP, and along with it our bragging rights.
I say ‘partial reality in the foreign exchange rate’, because I still feel that a differential of over 60% between the official rate and the parallel rate to the dollar seems to suggest that one of the rates is way off the mark. The acute shortage of the ‘Official Dollar’ seems to suggest that the parallel rate is closer to the mark.
The thing about the market is that you can distort it for a while, but you cannot hold it back for long. The market is like water; it will always find its level.
The earlier we let this happen the better for our economy. Within the period of a decade, I have witnessed the British pound at close to £1 to $1.9 and now as low as £1 to $1.22; and yet the British government is not scrambling to shore up the pound by all means (including expensive subsidy of the currency).
It should be understood that such distortions open huge arbitrage opportunities for those with access, which distract from productive pursuit. Rent seeking from allocation of dollars creates a new crop of overnight billionaires akin to those created during the era of petroleum subsidy. In the long run, it blows no good wind.
I have always argued that more important than the exchange rate, is the stability of the rate, which removes uncertainty, and attracts investment.
As it is, we are inadvertently inviting more pressure on the naira because even locals are saving their money in dollars, albeit at zero interest rates. And why not? They have figured out that even at the relatively high interest rates on treasury bills and fixed deposits, savings are halved in real terms due to the fast deteriorating exchange rate of the naira.
We have to understand that the exchange rate is an indicator of the perception of performance, and opportunity in the economy. To shore it up you have to do the hard work of better economic management.
Removing the alert on the dashboard of your car that tells you that the oil level is low puts out the irritating light, but does not guarantee that the engine will not knock further down the road.
There is now a fervent glamour for buying Nigerian and growing what we eat. About time too. According to the Minister of State for Agriculture, Heineken Lokpobiri, Nigeria spends about $22bn annually on food imports. How can a country with a huge population of over 170 million people (a viable consumer market by any standard), squander such a whopping amount on imported food, and in the process export much needed jobs in the agriculture value chain? This is despite the huge fertile landmass and favourable climate?
It is no different in the Education and Health sectors. It was estimated that Nigerians studying in British and American Universities spent over N137billion on tuition and living expenses in 2014.
There were also about 71,000 Nigerian students who paid tuition fees in excess of N160billion in Ghana during the same period (these may have easily doubled in the past year due to the deteriorating foreign exchange rate). And yet the Nigerian Government’s total budget for education in 2017 is N540b (a paltry $1.1b against South Africa’s $22b)
Why can’t we fix our educational system and send our children to schools here? And fix our hospitals and treat our sick here, instead of our notoriety as big spenders on medical tourism?
I understand that luxury shop owners in Dubai and London are asking loudly ‘where are the Nigerians?’ Well, the Nigerians are at home, confronting the new realities of basic survival. You only have to look into the eyes of the average Nigerian to glean the pain of adjustment. This difficult period is too painful to waste. We must seize the opportunity of this painful reality check, for a reawakening and realignment towards doing the right thing. As Maria Robinson said “Nobody can go back and start a new beginning, but anyone can start today to make a new ending”. Let us begin today to write the ending we want for our country.
Austin Okere is the Founder of CWG Plc, the largest ICT Company on the Nigerian Stock Exchange & Entrepreneur in Residence at CBS, New York. Austin also serves on the Advisory Board of the Global Business School Network, and on the World Economic Forum Global Agenda Council on Innovation and Intrapreneurship. Austin now runs the Ausso Leadership Academy focused on Business and Entrepreneurial Mentorship
Ola Olukoyede, chairman of the Economic and Financial Crimes Commission (EFCC), has warned against cash transportation above $10,000 or its equivalent without declaration to the appropriate government agencies.
Ola Olukoyede, chairman, EFCC
Olukoyede gave this charge in Kano at the weekend at a joint sensitisation program organised by the Nigeria Customs Service (NCS), the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the EFCC to educate Nigerians on legal protocols for cash movement across Nigeria’s borders.
He cautioned Bureau De Change (BDC) operators and other business stakeholders across the country against illegal cash smuggling, urging individuals transporting cash exceeding $10,000 (or its equivalent) to declare it to the NCS, as failure to do so constitutes a criminal offence.
According to the anti-graft czar, despite existing laws, many travellers, whether businessmen, pilgrims, or tourists, still engage in illegal cash movements out of ignorance or deliberate attempts to evade financial regulations.
Under the theme, “Illegal Cash Movement Through Nigerian Airports: Consequences, Legal Frameworks, and EFCC’s Enforcement Role,” Olukoyede, who spoke through CE Ibrahim Shazali, Kano Zonal Director of the EFCC, underscored the severe repercussions of non-compliance with Nigeria’s financial regulations.
“Today, we will clarify the legal requirements, reporting obligations, and consequences of non-compliance”.
“The consequences of illegal cash trafficking are grave—ranging from imprisonment and hefty fines to forfeiture of assets.
“The EFCC, in collaboration with sister agencies, remains resolute in prosecuting offenders and safeguarding the integrity of Nigeria’s financial system,” he said.
“Section 3(3) of the Money Laundering (Prevention and Prohibition) Act declares cash transportation above $10,000 (or equivalent) without declaration illegal and Section 18 of the same Act mandates BDCs to report suspicious transactions to the NFIU (Nigeria Financial Intelligence Unit).
He emphasised that illicit cash movement undermines economic stability and fuels crimes such as money laundering, terrorism financing and corruption.
Olukoyede also outlined the legal frameworks governing cash movements, including the EFCC Act (2004), the Money Laundering (Prevention and Prohibition Act) 2022 and Central Bank of Nigeria guidelines.
“Nigeria, as a signatory to international anti-money laundering conventions, has established strict laws to regulate the movement of cash in and out of the country.
“The Central Bank of Nigeria (CBN) Act, Money Laundering (Prevention and Prohibition) Act 2022, and the EFCC Establishment Act provide clear guidelines on cash declarations and penalties for violations.”
The sensitisation program highlighted the inter-agency commitment to enforcing compliance.
Representatives from the NCS and ICPC reinforced the importance of adhering to anti-corruption laws and cross-border financial regulations.
Stakeholders, including BDC operators, were urged to uphold ethical practices and report suspicious activities.
The EFCC’s boss called for stakeholders’ support and collective vigilance against illicit financial flows in Nigeria.
“We urge all stakeholders to prioritise national interest over personal gain. Compliance is not optional; it is a legal and patriotic obligation. Together, we can curb illicit financial flows and promote economic security”, he said.
Against the backdrop of Lagos State’s proactive efforts to reform its electricity sector, the Consumer Advocacy and Empowerment Foundation (CADEF) has launched its ‘Renew Energy Nigeria’ platform, a nationwide initiative with potential synergies for the state’s ambitious energy goals.
Professor Chiso Ndukwe-Okafor, CADEF’s Executive Director, introduced the platform in Lagos, highlighting its aim to empower Nigerians with information and access to decentralized renewable energy (DER) solutions. “The launch of this platform marks a significant step towards democratizing access to information and resources within Nigeria’s burgeoning sustainable energy sector.”
The platform’s launch comes as Lagos State, under the Lagos State Electricity Law, is actively establishing a regulatory framework and attracting private sector investment. Kamaldeen Abiodun-Balogun, General Manager of the LSEB, detailed the state’s progress in creating a functional electricity market, ensuring payment security, and addressing infrastructure challenges. “This law enabled us to create policy documents and establish regulatory agencies to initiate the implementation of the Lagos electricity market,” he explained, adding that private sector involvement will be key in areas where existing Discos face performance issues.
Segun Adaju, a private sector player deeply engaged in the energy sector, lauded Lagos State’s leadership. “In all these, Lagos State is always setting the pace. Many of us in the private sector players like myself, we are also looking up to Lagos State to set the pace,” he said, also mentioning his work on the Centralized Renewable Energy Desk for the state government.
While acknowledging national-level challenges such as import restrictions and forex fluctuations as noted by Professor Ndukwe-Okafor: “The recent federal plan on restrictions on the importation of solar products and the fluctuation of forex rate have made clean energy solutions costly”, the focus on Lagos State’s progress suggests a promising local environment for DER adoption, potentially amplified by CADEF’s new platform.
The broader socio-economic context, as highlighted by Olumide Ajayi, “Over 40% of Nigerians do not have access to reliable electricity”, underscored the importance of initiatives like ‘Renew Energy Nigeria’ and the enabling policies being implemented in states like Lagos.
Professor Ndukwe-Okafor concluded with a powerful call to action. “This platform is not an isolated intervention. It is aligned with our ideal country’s national vision, the 30-30-30 initiative. Let us not build a solar future that only serves the wealthy. Let us democratize clean energy. Let us make it local, inclusive, and scalable.”
The launch of “Renew Energy Nigeria” marks a significant step towards a more sustainable and equitable energy future for Nigeria, driven by innovation, collaboration, and a commitment to empowering its citizens. The platform is now live and accessible to all Nigerians seeking reliable and clean energy alternatives
A federal high court in Abuja has granted permission to the Economic and Financial Crimes Commission (EFCC) to arrest and detain six Crypto Bridge Exchange (CBEX) promoters over allegations of investment fraud to the tune of over one billion dollars.
Emeka Nwite, presiding judge, gave the order following an ex parte application moved by Fadila Yusuf, counsel to the EFCC.
In the application by the EFCC, the six suspects are Adefowora Olanipekun, Adefowora Oluwanisola, Emmanuel Uko, Seyi Oloyede, Avwerosuo Otorudo and Chukwuebuka Ehirim.
The commission sought an order of the court for a warrant of arrest of the defendants.
They also prayed the court for “an order remanding the defendants in the custody of the complainant/applicant pending the conclusion of investigation of the alleged offences and possible prosecution”.
Yusuf said that the defendants are at large and a warrant of arrest is required to arrest the defendants for proper investigation and prosecution of this case.
In the affidavit in support of the motion, the EFCC said preliminary investigation into the intel revealed that the defendants “using their company ST Technologies International Limited, promoted another company Crypto Bridge Exchange (CBEX) by making adverts and lured unsuspecting members of the public to invest crypto cryptocurrencies on the CBEX investment platform”.
The EFCC said the defendants promised an unrealistic return on investment of up to 100 percent.
“The victims were made to convert their digital assets into a stablecoin of USDT for onward deposit into the suspects’ crypto wallet,” Yusuf said.
“The victims were initially given full access to the platform to monitor their investment.
“Following the deposits valued at over $1 billion by the victims, the CBEX investment platform became inaccessible to them, and they could no longer withdraw from the investment made.
“The victims later discovered that the said scheme is a scam.
“During the course of investigation, it was discovered that the said ST Technologies International Limited, though registered with the Corporate Affairs Commission (CAC), it was not registered with the Securities and Exchange Commission (SEC) for investment purposes.
“It was also discovered during the investigation that the defendants had moved out of their last known address in Lagos and Ogun states.”
The anti-graft agency said obtaining a warrant of arrest was necessary in order to place the defendants on a watch list, enabling authorities to trace and apprehend the suspects to face the charges brought against them.
Nwite granted the request for a warrant of arrest and remand, adding that the order was necessary to enable the commission to apprehend the defendants and conclude its investigation.
“I have listened to the submission of the learned counsel for the applicant,” Nwite said.
“I have also gone through the affidavit evidence with exhibits thereto, along with the written address.
“I am of the view and I so hold that the application is meritorious.
“Consequently, the application is granted as prayed.”
Earlier in April, reports emerged that CBEX users could no longer withdraw their funds.
On Monday, angry investors stormed and looted the office of Smart Treasure (ST Team), an affiliate of CBEX, in Ibadan, Oyo State.
The EFCC recently confirmed receiving multiple complaints about the platform.
Dele Oyewale, the commission spokesperson, assured affected investors that efforts were underway to recover their funds.
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