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Leave Benin or face Oba’s wrath, Chief Arala tells evildoers



Leave Benin or face Oba’s wrath, Chief Arala tells evildoers

Prince S.B. Omo Osula is a musical icon, who has travelled round the world using his traditional Benin melodious songs to preach peace, love and unity among humanity. He is also the Arala of Benin Kingdom, one the most highly respected chiefs in the land. In this interview with OJIEVA EHIOSUN he bared his mind on a number of issues including the recent curses placed on human traffickers, cult members and other criminals by the Oba of Benin. Excerpts…


Oba of Benin’s curses

Benin City, in fact Edo State, is blessed to have His Royal Majesty Omo N’Oba N’Edo Uku Akpolokpolo Oba Ewuare II as king of the great kingdom. I normally address him as the Imperial Majesty. Look, when the Oba has spoken, the Oracle has spoken. Once the Oba has spoken, God Almighty has spoken. Once the Oba has spoken, the gods have also spoken. All the world over, it is only the Oba of Benin that the gods speak through to the people. That is why Benin Kingdom is a special kingdom with rich cultural heritage that draws attention of the world. When Oba pronounces something or make a decree, there is no going back on it, nobody questions the authority of the Oba; what the monarch has done by that pronouncement is for the general good of the people. He is a Royal Father who has come to sanitise the land not only Benin, but Edo State as a whole. If deviants in the land think that they can try the powers and potencies of our deities then they must wait for the consequences. In the history of the great Benin Kingdom, nobody, group or communities have ever questioned the authority of the Oba.

Reversing the curses

When sacrilegious and abominable offences are committed in the land warranting a curse by the monarch, it is only the monarch that has the powers and authority to reverse them. It is the Oba that can create and abolish. Nobody has the power to tell him to revoke a curse or not; only himself can decide to revoke that is when there is sober reflection, when the thing is becoming unbearable and there is deep reflection on the faces on his people, that is when he can do that if he so desires. But one thing people must know, is it is always very rare; the best thing for people involved in these heinous crimes to do, if they decide not to yield to or obey the Benin monarch, is for them to vacate this land, otherwise they will have themselves to blame at the end. Let me tell you again, there is no right thinking Benin or Edo man that is not in support of what the current monarch has done. Anybody who goes against it will pay dearly for it. I’m highly in support of it, every member of my family is in support of the Omo N’ Oba. People who are against it have just two options: is either they obey the Oba, or pack their properties and leave Benin City. We want total sanity in our land, the Imperial Majesty has done so much in this kingdom.


Like I have said before, the Omo N’Oba is totally determined since his ascendance to the throne. He has continued to reiterate his commitment to wiping out all traces of moral decadence, negative youthful exuberance, misconducts and overzealousness amongst community leaders. The consequences of non-adherence to the monarch’s directives are great; there will be devastating effects on the offenders. I do not want to say more than that, because I know that any disloyalty from anybody to the monarch carries a heavy penalty. So, my advice to those involved crime is they should try as much as possible to desist from them.

Musical life

I am a renowned musician of the great Benin Kingdom, and as Christians would say that they got their calling from God, I equally have the calling and inspiration of God Almighty to speak to man through music. And since 1961, I have touched the soul of both the dead and the living through my music. Those who are really in love with mature music are my fans. Last year, I was in Europe for a four-month concert, and very soon by the Grace of God I will be travelling again for another two-month concert. The moment I arrive, our people over there are always proud to come with crowd to receive me. And because of my uniqueness in my creative and musical outings, the Binis over there carry me shoulder high, they always want me to come over there and sing for them. They come with friends both black and white to watch me perform live on stage. They often wonder whether I am from Benin or Yoruba, because when I sing in Yoruba, you will think that I’m from there. This is why someone like Dr. Olusegun Obasanjo is one of my biggest musical fans and a life grand patron. I have performed for him in his country home alongside King Sunny Ade.

My limelight album

The album that brought me into peoples’ mind is ‘Agbon Wuo Egbe gbe’ which was released in 1975. It might interest you to know that His Royal Majesty Oba Erediauwa of blessed memory played a major role in that album; I recorded that album to welcome him back home when he retired from the Federal civil service. He later became the Oba of Benin, father of the current Oba Ewuare II the Ogidigan of Benin Kingdom. This particular album sold thousands of copies.

My musical fans

I must continue to be grateful to my fans because they have always kept faith with me. They have never left me behind, they always queue behind me, giving me all the necessary support. In fact, I have made up my mind now to record two albums quarterly as musical tribute to my fans till the end of my life. This is to thank them for their support, for believing in me for over 57 years of my musical career.

Osula as a family of musicians

As you know, I brought my wife into music. Every child born into this family, his or her first skill must be in music. It does not stop you from other skills or being what God has ordained you to be. Five years ago, I was playing in Belgium, Chatty Sula was playing in Valencia, Kola Osula was playing in Bronchia and my crown prince was playing in New York. I left a musical group led by another son performing in Benin the same day. We were playing in four continents out of the five continents of the world. That is the uniqueness that I’m talking about. It is very clear that the largest family band that ever came in this world is my band. It is very unfortunate that people here don’t encourage music artistes like the Yoruba do for their own. If not, I don’t see what can make Chief Sunny Ade more successful than me. I am married to 14 wives and have 55 children but presently I have eight wives living under my roof. The majority of my children are graduates of various disciplines but they are all vast in music. My closest son is the one they call Fela and he is doing very well too in his area of discipline.


Talking about sponsorship, I personally sponsor myself and also co-sponsored by my children. But the moment I get to Europe, Edo sons and daughters would say ‘Daddy let me promote your show in other cities. In Europe, I travel round cities doing musical concerts, entertaining fans with my musical genre.


I will remain grateful to God for all He has done for me in my musical career. I will tell you that I am fully fulfilled in life when it comes to doing what I know how to do best as a musical icon in Benin traditional songs and also singing in Yoruba. I have achieved a lot as a man vast in expressing the rich Benin cultural heritage. I have hosted 79 diplomats in my home here in Benin City as a result of my vastness in bringing everything about Benin Kingdom to outside world. I have also performed in high commission offices in Abuja entertaining people of various nationalities. For the president to have visited the crown priest at Uselu when he was not yet the king is enough reason for people to respect Benin culture. Benin is the home of high cultural heritage that is why I refer to the present Oba as His is Royal imperial Majesty. So, I call on all indigenes of Edo State the world over to join hands with His Royal Majesty to bring sanity to the land.

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Eze: Banks must see Fintechs as partners



Eze: Banks must see Fintechs as partners

Dr Emmanuel Eze is the Chief Technical Officer/Executive Director at SystemSpecs. In this interview with SAMSON AKINTARO, he speaks on the critical roles being played by financial technology (Fintech) companies in Nigeria and how technology can be used to improve the economy. Excerpts:


SystemSpecs is a pioneer in Fintech space, can you give us an overview of the Nigeria’s market?
In the past, people used to talk about financial services and it got transformed into what we now know as Fintech. It is a big space and we have a lot of players there, part of what people try to do around Fintech is to design solutions that drive financial technology, within Fintech you find things about payments, even around automating insurance.
There are different aspects of Fintech, sometimes people kind of misinterpret it to mean payment services but it actually extends beyond all of that. Within the Nigeria Fintech ecosystem, we have different people offering different services, we have payment services, lending, financial inclusion and all of that within the space. So, it is quite a big space and we have known ones; the fully established ones in which we are one of the key players. We have been in financial technology for about 12 years and when we even developed the first version of Remita, right then we set out to solve a very simple problem of ensuring that when people are paid salaries that money should automatically get into their bank account and over the years things have evolved from there and we have been able to make payments happen efficiently and we have started embracing some other aspects of Fintech. I am sure you are aware of what we are doing in the lending space as well, ensuring that people should be able to borrow funds and when they do we help all the people within the ecosystem to ensure that they are able to repay, that way they can have very good ratings and they could come back for more and everybody is happy both the lenders and the borrowers.

What is the perception of the banks towards the financial solutions you are offering to people?
It depends on the individual and the banks but generally it could be argued that some banks will perceive Fintech as threat as if we will take some of their businesses from them. But I have mentioned earlier that Fintech is not a money-keeping bank. We are not banks and we will never be banks – anything we do with money has to sit in banks. Banks should realise clearly that money will always sit with them and they will enjoy the float and Fintech is just providing services on top of the banking system, which makes it easier for the different customers using our platforms to enjoy the services. I believe once the banks have the understanding that we are partners, that problem will go away and they will stop perceiving us as threat to their business.

Apart from government and corporate organisations benefitting from your services, what can individuals benefit from your solutions?
Remita is for everyone, not just for private, corporate, and public sectors. An individual should be able to use Remita. Like I mentioned earlier, an individual can access loan, borrow, they can actually use it as their electronic payment platform, so I should be able to withdraw money from my account X and then credit anybody that banks within the Nigeria ecosystem. The beauty of Remita is that as an individual, I can actually profile all my different bank accounts. You know that it is a common thing in Nigeria that people have more than one account, rather than using different applications or solutions that are provided by these individual banks, I can as well profile these my several bank accounts unto Remita and use it as a single source of truth and from there I can make payments to anyone. I can view my balances across those banks and I know everything that is going on from my own financial point of view. So, that is the beauty that Remita creates for individuals. In a nutshell, individuals should be able to sign up to Remita and use Remita for all their payments and they can borrow as well.

Beyond the TSA and Remita, is there any other project that systemspecs is collaborating with government on?
First of all, Remita is not for government only. We actually set out designing and developing Remita with a focus towards solving some problems we see within the economy, it just happened that with Remita comfortably playing in that space government took an interest and when government was looking out for a solution that will power Treasury Single Account (TSA) we bid and Remita got selected.
Beyond TSA, Remita still does what it does. A lot of corporate organisations across Nigeria use Remita today, they use it to make their payments, pay their staff salaries and we have individuals using Remita to transfer money and people can download the Remita mobile app and use it to register a business, to pay the Corporate Affairs Commission (CAC) and use it to pay any bills and for corporates. Remita is not just for the government and we still have state government using the application for their payroll. We have biometrics integrated, it sets out to solve problem that we see within the economy, it just happens that the government is one of our customers but the government is not the only customer we have.

As a business, has it been a smooth sail for Systemspecs and if there are challenges what do you think the government can do to address them?
As a company, nothing is rosy. We have had a few issues. And in terms of what the government can do to make things better generally within the business space, I think the area of providing the necessary infrastructure is very important. Government should be able to look into that and make sure they provide an enabling environment for businesses to thrive. In addition to that, the government is already doing something in the area of regulation and I think that regulation can be a lot better. In Fintech, we kind of innovate, we break new grounds and we come out with something new and we have this regulator that has to tell you how to do things, that has to define some boundaries for you. Where the problems lies is that because as innovators we are breaking new grounds, we are creating these things, you find a situation where the regulator is constantly playing catch up. There has to be some ways to solve out this problem and in my own view I think the regulators must be more agile in terms of how they respond to this innovation coming within the Fintech space because when guys are busy thinking about how best to solve the next problem they are using emerging technologies and regulations has to stay on top of this as well to battle with all these technologies. The regulator should understand the innovation and be able to come up with the right regulation for new innovations as they come up. For me, agility is quite keeping rather than what is obtainable currently when it takes too long for them to pay catch up on those things.

How would you access the impact of technology in Nigeria’s economy and would you say the government has really recognised the importance of technology and embraced it?
Before now, things weren’t getting to where people would naturally expect them to be, but in recent times especially the recent government that has been in power, they have been making some efforts to ensure that within the public sector and equally in the private sector, that technology is embraced. There are efforts to ensure that technology drives what we do around the country but we are not there yet. There is still a lot to be done. When we talk about things such as the TSA project that helps to bring transparency to the economy and displays some level of accountability, we see how technology has helped the country to manage money efficiently. However, there is always room for improvement. There are still a lot of things that we could do in terms of ensuring that we use technology to drive the government, an example will be using technology to drive our voting system.
Technology can power our voting in that you can do e-Voting. There are many things we could do as a country in terms of leveraging technology to drive our economy but it is something that will take some gradual process, ultimately I believe we will get there to enjoy things lot more.

You operate in the financial service sector and in technology space, which has two separate regulators, do you face multiple regulations?
Not quite. We basically work with the Central Bank of Nigeria (CBN) in terms of financial services and we work with the National Information Technology Development Agency (NITDA) for technology and I do not see much problems with that. So far so good, regulation is okay.

Recently, the Committee on e-Business visited Systemspecs and harped on the need for collaborations in the industry, how have things panned out after the meeting?
It was actually a very exciting meeting because one of the ways to move things forward within our industries is collaboration and partnership and that is the summary of what that meeting was all about. As Fintech, at the end of the day, we are not banks, we do not keep deposits; we do not give money, there is hardly anything you can do at Fintech without having to work with the formal banking sector and that is what the guys brought to the table when they came around for that meeting. So collaboration is the key thing that we are working on how to partner with them to ensure that we create a common ground for everybody to excel.

You earlier talked about local content and government said there is a policy in place to address that, do you think the policy is being implemented the way it should?
Well, I will say government had done the right thing by putting in place the policy, but the implementation is questionable. But as usual with anything government, a lot of people are involved and a lot of things are to be put in place to implement. So, it hasn’t worked out well as one would naturally expect but I think we are on the right track towards ensuring that local contents succeed in Nigeria. In my own view, one of the key areas we need to look at to ensure that local content succeeds is education. This is because you can’t really talk about local content without looking at the human resources.
If we are talking about human resources, we need to have very strong research facilities and I tried to liken it with what is obtainable in Europe where they have a very good research labs. So, my first call will be on our education system, and we need to ensure that we have a thriving education system especially at the tech level where things are very agile and things are changing quite fast. Our institutions should not be teaching modules or courses that are taught10 years ago. One of the key things we need is making sure we have the right resources.

Election is coming soon, what technology do you think can be deployed to actually sanitise the political space?
There are different models or possible solutions to having Tech play in politics, but some of them are theoretical models and we need to get practical here and it all depend on the resources or the company or solutions or the people that are going to implement it. Another way is what is termed e-Government and in Nigeria I can say we are trying in that regard. A lot of things are getting digital unlike in the past where things are mostly manual. So, e-Government encompasses different ways of interacting with government via e-Channels and we are already doing quite well in that area and I believe we will still do more.
Talking about elections specifically, I did mention earlier about E-Voting system but I don’t think we are there yet, there a lot of problems with the electronic voter’s card. I will say we need a central database for all these things and part of the problem I saw with them is that they use some kind of decentralised databases. It will be good if they can improve on that. Assuming there is a central place where everything is harmonised, it can be of good help in the voting system during the election.

You earlier said your solutions can also be used by individuals, how about small and medium enterprises (SMEs), do you have some specific solutions tailored to their business needs?
Ultimately, that is what we do at Systemspecs. We offer some solutions to SMEs that makes it quite easy for them to sign up to Remita and start collecting money with ease. They are able to set up the system or register within a few minutes and just supply a few basic information and they will be able to start receiving payments from their customers. We also give them the option of making payment on our platform to different entities as well and they should be able to use Remita as a one-stop solution to make payments to them and at the end of the month they should be able to use it to make payments of their staff salaries.

Finally, what do you think can be done to provoke national development in Nigeria, using technology?
The rule of the game in my own view is innovation. I believe innovation is the key and we still need to keep pushing the boundaries and keep thinking and ensure that we come up with world class solutions that can actually solve problems within the economy. Another thing we need to look at is regulation, as we know, regulation can stifle innovation if not managed properly. So, when there is that understanding from the side of the regulatory bodies without attempting to stifle innovation, we will be able to solve an array of problems within the economy and everybody stands to enjoy that.

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2019 elections will decide Nigeria’s future –Agol



2019 elections will decide Nigeria’s future –Agol

Honourable Ebun Tracy Agol is the Edo State chairperson of the Peoples Party of Nigeria (PPN), she is also the party’s candidate for Etsako Federal constituency. In this interview with OJIEVA EHIOSUN, she spoke on a number of national issues. Excerpts…



As a politician, what is your perception of the forthcoming 2019 elections?

The general election will go a long way in determining so many things in Nigeria, especially our continuity as a nation. It is an election that will likely generate tension, an election that will attract observers from all over the world, that will make Nigerians with conscience take their destinies in their hands. The 2019 general elections will bring out the best from our politicians; it will either keep us as one united indivisible entity, or divide us into parts as it happened in the former USSR. In 2015, the generality of Nigerians wanted change, and the APC came with matrix of change; we expected a genuine change, but what Nigerians have now are sorrow, tears and pains. 2019 will be a year to be remembered in the political history of our great country Nigeria. I’m not an apostle of doom, but if our leaders and politicians fail to do what is right, we might see a situation where violence will be the order of the day. Our votes must count, the people’s will and voice must be heard in matters that concern their well-being. 2019 election should not be seen as a do-or-die affair, people must learn to accept defeat. As a pastor, God’s patience with Nigeria is running out, it is by His Grace that we are still alive. What is happening in Nigeria now is worse than what happened in Sodom and Gomorrah that made God to destroy them. As a matter of fact, Nigerians must pray for forgiveness of sins and for the peace of God to reign in our country before the 2019 polls.

Looking at the political configuration in the country currently, do you think your party PPN has the capacity to compete against either the PDP or APC in the general elections?

Our great party is the one to beat at the forthcoming elections across the country. We are very organised, we have competent politicians with clean records that have all it takes to be governors, senators and president. PPN is a fully regis-tered political party that has come a long way, we are not rookies in the game of politics, all our candidates that are contesting for various political positions in the 2019 elections have been tested and trusted, they are all aware of the situation in Nigeria, they are coming to salvage the situation and find lasting solution to the political quagmire that has entangled this country since 1999. Look the way things are going in this country now, Nigeria needs people that have business acumen, men with high industrial abilities to help govern this country. We are in the era where our electorate will begin to vote personalities not political party. The anger on the faces of Nigerians will tell you that all is not well with us. We must not allow people to fool us again. As a top ranking member of Inter-party Advisory Council (IPAC) we are highly interested in the progress and development of this country, so when we see anything that is going wrong we should not be afraid to express it. So I want to use this medium to call on Nigerians to rally round PPN candidates in the 2019 elections because we have answers to the problems of this country.

How do you intend to change the situation in Etsako if voted into power to represent them at Federal House of Reps?

Even before my party PPN gave me the ticket for the Federal House of Representative, they must have considered many factors. As a politician, I’m a grassroots woman, I know my people and my people know me. I know the political terrain in Edo North, Etsako people have always been at the losing end when you talk of political development, since 1999. You cannot see or feel federal presence in our place, yet our people have senators and members of the Federal House of Reps in Abuja, but there is nothing to show for it. By God’s grace if I’m voted in, I will do all within my power to ensure that we have federal presence in Etsako Federal Constituency. I do not want to praise or raise people’s hope, but I will make my people feel and see the dividend of democracy.

The battle between Buhari and Atiku Abubakar the candidates of the two major political parties in Nigeria has been described by political analysts as titanic; what is your candid view about it?

Look Nigeria is a very complex country with so many people seeking for power, but let me make it known to you today that power belongs to God. Yes both Fulanis, from the Northern part of the country. It is God that will determine who becomes the next president of Nigeria, not man. As human beings, we would only perform our civic responsibility, but the person that God will give power to, that will lead Nigeria into the Promise Land is known to Him alone. As a woman of God, I must warn our politicians to apply caution so that they would not plunge Nigeria into crisis. People should vote candidates of their choice, shun money bags and say no to intimidation, violence and any act that is capable of pulling us backwards. The ruling APC party must allow the masses have their say, the people’s votes must count; rigging of any kind must be resisted at all levels of the elections. We want peace to resign in Nigeria not war.

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FG shouldn’t sacrifice ERGP for politics –Prof. Uwaleke



FG shouldn’t sacrifice ERGP for politics –Prof. Uwaleke

Nigeria’s first Professor of Capital market, Professor Uche Uwaleke, is the head, banking and finance department, Nassarawa State University, Keffi. In this interview with ABDULWHAB ISA, he speaks on various issues affecting the economy and how to return Nigerian economy to the path of sustainable growth. Excerpts



As a financial analyst conversant with recent economic developments, what is you take on the state of Nigeria’s economy bearing in mind the National Bureau of Statistics’ 2018 first and second quarters’ Gross Domestic Product (GDP) reports?
The 2018 Q1 and Q2 GDP (Gross Domestic Product (GDP) reports by the NBS give cause for concern in the sense that economic output resumed a downward trajectory not long after the economy exited a recession. According to the latest NBS report, GDP growth fell again to 1.5 per cent compared to 2.11 per cent in Q4 of 2017. Recall that it was 1.95 per cent in Q1 2018. So, this trend is worrisome.
What the NBS report has shown is that we still have a long way to go regarding the diversification of the export base of the economy. This is because if you look at the numbers critically, it becomes clear that the growth in GDP was dragged down primarily due to a fall in the average daily oil production recorded at 1.84 million barrels per day from about 2.0 mbpd recorded in the first quarter of 2018. This was despite the fact that crude oil price in the international oil market maintained a steady rise over the period. What this means is that the economy is still highly vulnerable to external shocks.
Other key NBS reports such as the capital importation report leaves little to cheer. We have been told that capital inflows fell to a mere $5 billion in the second quarter of 2018 and it was dominated by the highly volatile portfolio investments. The proportion of Foreign Direct Investment (FDI), which really drives growth and employment opportunities has remained insignificant over time. It is therefore not surprising that unemployment rate has remained high. So, with respect to rebuilding the economy, there is much work to be done.

There is anxiety by some experts that Nigeria’s economy risks relapsing into recession should the tempo of contraction continue? If you were to advise the authorities, what steps should be taken to get the economy on a sustainable growth path?
I am sure you are aware that South Africa’s economy has just entered a recession, having experienced two consecutive quarters of contraction in GDP. After going through about five quarters of negative growth in GDP, another economic recession in Nigeria would have a devastating effect on socio cultural lives of the people. Honestly, I shudder at the thought of another recession closely on the heels of the last one in Nigeria. So, I do not want to be pessimistic regarding the future of our economy in the near term. It is important to point out that the economic recession we went through was largely on account of the drastic fall in oil revenue. I do not see this happening soon given where crude oil price is now and the level of our foreign reserves.
Regarding what to do to put the economy on a sustainable growth path, the government needs look no further than the blueprint, which it already has, that is talking about the Economic Recovery and Growth Plan (ERGP). In a recent article I wrote following the release of the Q2 GDP report for 2018, I talked about key lessons from that report. One key lesson is to recognize that time is running out in the light of the current slow pace of economic growth, which is a far cry from the set target of 7 per cent by the year 2020, only a few months away. Therefore, a sense of urgency is required in the implementation of the various strategies set out in the ERGP to address the five execution priorities of stabilizing the macroeconomic environment, achieving Agriculture and Food Security, ensuring energy sufficiency in power and petroleum products, improving transport infrastructure as well as driving industrialization through Small and Medium Enterprises (SMEs). Therefore, in order to restore confidence in the Nigerian economy and set it on a sustainable growth trajectory, the government must hit the ground running with regard to the implementation of the ERGP.

Agriculture is one area the current administration made strong commitment to leverage on its untapped potential to diversify the economy. The Anchor Borrower’s Programme of the Central Bank of Nigeria (CBN) is an integral part of this commitment. Given the escalation in farmers/herders attacks, what should government do?
There is no gain saying the fact that the incessant attacks by herdsmen on farming communities, especially in the North East and North Central regions of the country, have impacted negatively on food output. The GDP numbers I referred to earlier corroborate this fact. The agric sector in the second quarter of 2018 recorded disappointing performance, growing by just 1.19 per cent (year-on-year) in real terms. This is not a good commentary for a sector that used to be the star of the Nigerian economy even during the recent recession when virtually every other sector was in the negative territory.
To change this narrative therefore, the incessant farmers/herdsmen clashes must be tackled squarely including through disarming criminals who masquerade as herdsmen. The Anchor Borrower Programme you mentioned is one laudable intervention measure by CBN, which has helped the growth of the agric sector. What CBN needs to do now is to upscale it to cover not just rice, but other imported products that consume a large chunk of our scarce foreign exchange. A roadmap already exists for ramping up food production. Government should therefore be seen to be walking the plan spelt out in the ERGP to achieve self-sufficiency in food production.

Nigeria’s debt stock has grown phenomenally in the last few years and currently stands at about N22 trillion (or $73 billion) with the Federal Government having the largest chunk. This huge size, with its associated debt service burden, has attracted varied comments. Given the poor state of infrastructure in the country, do you think the mounting public debt is healthy for the economy?
I quite agree with you that the country’s growing debt stock is generating concerns both within and outside Nigeria. Only recently, Amina Mohammed, the Deputy Secretary-General of the United Nations (UN) was reported to have decried the country’s rising debt burden only a few years after the country negotiated debt forgiveness with some external creditors especially the Paris Club.
Be that as it may, it is important to mention that the idea of borrowing in itself is not bad as long as the loan is put to fruitful use. In my opinion, the country’s huge infrastructural deficit can best be addressed through concessional loans until the economy becomes a lot more diversified to be powered by export revenue. To be sure, other alternatives exist but in the face of shrinking revenue to finance the capital budget, uptake in loans lends itself is the most viable option. Of course, printing of money is a no-go area in view of the high rate of inflation. You will also agree with me that the current attempts at diversifying the export base, reducing wastes in the public sector, recovering stolen funds and widening the tax base through the Voluntary Asset and Income Declaration Scheme (VAIDS) are other viable options but these measures will take some time to yield any significant result. So, as a low hanging fruit, securing loans for infrastructure development stands to reason.
The debt burden manifests more in the debt service to revenue ratio, which is becoming unsustainable. So, the present strategy of substituting domestic debts with relatively cheaper and long-term external debt should lead to a significant decrease in debt service cost. It would equally create more borrowing space in the domestic market for the private sector. Also, if government borrows less from the domestic market, it could lead to lower interest rates with positive effect on inflationary pressure and stock market activity. The answer to your question therefore is that borrowing to improve the poor state of infrastructure in the country will generate a multiplier effects for the economy by stimulating growth, creating employment, increasing income, generating more tax revenue and eventually repaying the debt in the future. So, it is healthy for the economy.
Let me emphasize at this juncture that to deal with the public debt challenge fiscal discipline is required at all levels of government. Alternative funding sources should be explored including privatisation through the Nigerian Stock Exchange (NSE) to engender inclusive growth as well as through Public-Private Partnership (PPP) arrangements. State governments should be made to implement the 22-Point Fiscal Sustainability Plan (FSP) aimed in part at managing debt sustainably at the sub-national level. Sticking to the “golden rule” of debt management that requires governments to borrow only to fund investments that produce high returns is the right path to sustainable debt levels.

What advice do you have for DMO in managing the debt portfolio?
I think the DMO has done fairly well in its primary task of managing the country’s debt portfolio. Recognizing the fact that the increased financing requirements needed to fast- track economic recovery and address the huge infrastructural deficit would entail enormous funding resources including borrowing, it has developed a strategy that seeks to rebalance the debt portfolio in favour of foreign loans.
Nevertheless, the preponderance of fragilities in the Nigerian economy warrants a cautious approach to new external borrowing that is already making the debt portfolio overweight in Eurobonds. In this regard, my advice to the DMO is to prioritize concessional external loans over commercial debts, which carry considerable risks. The DMO should realize that commercial loans such as Eurobonds issuances come with little or no conditions attached, allowing governments more control over where they channel the funds. This discretionary power can be abused thereby turning the loans to a curse instead of a cure. This is why I welcome recent efforts by the government at securing soft loans from China and Japan. Emphasis on external loans should be more on Multilateral and Bilateral sources rather than the international capital market.
I also think that linking borrowing plans more to debt service ceilings than other debt indicators will enhance debt management. Debt-service indicators, which are typically expressed relative to fiscal revenues and exports, measure the extent to which debt service crowds out alternative uses of resources and are arguably more suitable measures to capture a country’s effective constraints. Therefore, it is vital not to crowd out priority spending by establishing tight limits on debt service relative to revenues as opposed to limits based on GDP, which is a less suitable metric. So, my advice to the DMO here is to refocus its notion of debt sustainability away from GDP to revenue for optimal outcomes. That said, the DMO should be empowered to monitor the use of loan proceeds. As mentioned earlier, the key challenge remains to ensure that loans to the government are put to very good use and in ways that enable the needed traction to the country’s economy.

How soon do you expect the Central Bank of Nigeria (CBN) to begin easing its tightening in the lending rate (MPR) that was left unchanged at 14 per cent for over a year given that high cost of lending by commercial banks is tied to CBN’s lending rate?
I am afraid monetary policy easing is not in sight especially on the back of the halt in disinflation trend, which was noticed in the August Consumer Price Index figure that rose to 11.23 per cent from 11.14 per cent the previous month. If the Monetary Policy Committee (MPC) could not reduce the policy rate during the downward trajectory of headline inflation, it is unlikely to do so now in the light of this uptick in the general price level.
The CBN has always taken the view that although headline inflation might be trending downwards; the level is still in breach of the upper reference band of 9 per cent. Besides, the food index component remains elevated. Another argument by the bank is that a rate cut at this time can only be at the expense of the progress already made in the area of exchange rate stability – which is itself a prerequisite for achieving lower inflation rate. Inflation has partly been driven upwards by the rising cost of imports on account of high exchange rate. So a lower MPR would put pressure on the exchange rate and exacerbate inflationary pressures. I think these arguments make a lot of sense.
So, it is not difficult to see why the present tight monetary policy stance will remain for quite some time. Many of the reasons adduced by a majority of the MPC members for not relaxing policy have not changed notable among, which are the liquidity impact of the 2018 expansionary fiscal budget, increasing FAAC distribution due to the rising prices of crude oil, the build-up in election related spending ahead of the 2019 general elections, the effects of the sustained monetary policy normalization in the United States with implications for capital flow reversals as well as the threat to disinflation posed by incessant herdsmen-farmers crisis in some major food producing states. These, including the recent upward inflationary pressure, will continue to provide the MPC with compelling reasons not to lower the MPR in order not to jeopardize the primary mandate of the CBN, which is the maintenance of monetary and price stability

How do you fell about the recent CBN lending policy strategically designed to lift the manufacturing and agriculture sectors of the economy?
I am sure you must be referring to one of the fallouts of the July MPC meeting. It is what I call an “outside the box’’ measure taken in recognition of the need to strengthen the country’s weak economic recovery given limited monetary policy tools. So, it is quite commendable. CBN is saying it is ready to give incentives deposit money banks to increase lending to the manufacturing and agriculture sectors through an innovative approach that directs cheap long-term bank credit to employment elastic sectors of the Nigerian economy. There is also the corporate bond funding facility, which allows CBN to invest, alongside the public, in corporate bonds issued by large companies.
You will also recall that the CBN not too long ago activated the N500 billion non-oil export stimulation facility managed by the Nigerian Export Import Bank in a move to reverse the declining trend in the flow of credit to the non-oil export sector, lower costs for Nigerian exporters and make their products competitive in the global market as well as boost the level of non-oil export earnings.
Through these initiatives, CBN has demonstrated a willingness to be flexible and responsive to the growth needs of the economy, while at the same time keeping a handle on its primary mandate of maintaining price stability. The Real Sector Support Facility comes at a maximum interest rate of 9 per cent with a minimum tenor of seven years and two years moratorium. Barring other exogenous factors such as high exchange rate and inflation, these should help to lower the cost of operations in addition to addressing the problem of mismatch whereby long-term assets are funded with short-term facilities. Just like the highly rated Anchor Borrower programme, it is crucial to recognize critical success factors early in the implementation stage. CBN should ensure that the participating financial institutions put in place adequate risk management framework given the high level of Non-Performing Loans in the banking industry. I am optimistic that a successful implementation of the intervention programmes will be positive for the faster recovery of the economy.

Inflation has trended downwards for quite some time. Ironically, the ordinary Nigerian appears not to feel the impact, as prices of basic food items and services have remained high. How do you explain this seeming contradiction to the layman on the street?
You are very correct. Except for the month of August when the figure stood at 11.23 per cent, the inflation rate since January 2017 has been trending downwards from about 18.7 per cent to 11.14 per cent in July 2018. To the ordinary Nigerian, nothing has changed significantly in the price of garri, bread, footwear, clothing or cost of transportation. If anything, the prices of basic commodities have increased over the period.
The reason is because the Consumer Price Index, which is used to measure inflation, is applied to not just a few commodities but over 700 different types of goods and services. While the prices of some are increasing, others are decreasing. The CPI only shows the average increase. Let me also mention that headline inflation has two components namely the core and food components. Most of the time, the food index, which matters more to the ordinary Nigerian is usually higher than the headline inflation reported in the media.
There is no gain saying the fact that high inflation rate erodes purchasing power of the naira, increases poverty rate and impacts negatively on the economy. It must therefore be put in check especially if driven by cost-push factors. The high cost of fuel, road transport, electricity and food will go down if the government spends right in fixing the refineries, roads, rail, housing and power infrastructure as well as committing huge funds to agriculture. Going forward, the panacea for taming the inflation monster in the medium-to-long term remains the diversification of the productive base of the Nigerian economy. Once again, the solution lies in not sacrificing the ERGP on the altar of politics.

We are already in the third quarter of 2018 and no tranche of capital release has been done in respect of the 2018 budget. What would you propose as a solution to poor budget implementation in Nigeria?
Your observation is disheartening to say the least especially considering the fact that this is one fiscal document that has given some attention to capital projects. The breakdown of the capital spending shows that it has been prioritised in favour of critical on-going infrastructural projects such as power, roads, rail and agriculture. It goes without saying that large-scale infrastructure development is a potent stimulus in driving economic recovery and growth.
As you rightly pointed out, the 2018 federal budget is already running behind schedule like virtually all the ones before it. The negative impact of non-implementation of the capital component cannot be overstressed especially on an economy that has just exited a recession. This is not unconnected with the undue delay it suffered in the first instance and the current sour relationship between the Executive and the Legislature. This has created fiscal uncertainties, dampened investors’ confidence and presented a drag on the current tempo of economic recovery. My answer to this question is that the government (particularly the Executive and the Legislature) should work together to ensure that the country returns to a predictable budget calendar as quickly as possible.

The stock market has remained bearish for a long time now with retail investors’ apathy growing by the day. As a professor of capital market, what do you think should be done to change this narrative?
The bearish trend in the stock market is not unconnected with developments in the country’s economic and political space. Earlier, I spoke about the downward trend in GDP growth rate. So, all over the world, stock market performance is tied to the fortunes of the domestic economy. Essentially, the weak investor sentiments in the Nigerian stock market can be attributed to increasing country risk on account of increasing political tension and non-implementation of the capital component of the 2018 budget. There is also the fact that many foreigners are taking their investments to the US and other developed economies where returns are higher on a risk-adjusted basis.
To boost investors’ confidence in the stock market, we need to attach premium on the economy and defuse political tension, continue to improve on the ease of doing business and invest in infrastructure. The government should use fiscal incentives to attract companies to list on the stock exchange as well as reward already listed firms through government patronage and preferential business access. This is because more listings will help the stock market better play its role of wealth creation in the economy. It is my expectation that the recent issues MTN Nigeria is having with the authorities do not put a stop to the company’s plans to be listed on the Nigerian Stock Exchange. Undoubtedly, widening the retail investor base would help to de-risk the market and detach it from the apron-string of foreign investors. This will require a great deal of education efforts including developing financial markets courses in secondary and tertiary educational institutions. Finally, the government should intensify efforts at implementing the 2018 budget particularly directing capital spending at the growth-stimulating sectors of the economy in line with the Economic Recovery and Growth Plan.

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