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Where is $7bn CBN placed with 14 banks?

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The subject of the narrative, in this column, last week, was the $7bn which Festus Odoko, a former Central Bank of Nigeria Corporate Affairs Director, confirmed had been deposited with 14 Nigerian banks in October 2006. It is not clear how many banks, actually, succeeded in raising the mandatory capital base of N25bn, and the additional N35bn steep threshold, required to manage part of Nigeria’s foreign reserves. Nevertheless, on hindsight, the CBN might have quietly dropped this clearly ambitious requirement so as to pursue its declared agenda.

Regrettably, despite several promptings in repeat publications of the above title by this writer since 2006, the CBN management remained inexplicably, and taciturn to any request to confirm the status of the $7bn placed with Nigerian banks, without collateral, equity participation or profitable return after 13 years!

Lately, however, the Chairman of the Special Presidential Panel for Recovery of Public Property, Mr. Okoi Obono-Obla, noted in a NAN report, in Abuja, on September 7, 2018, that these banks have not repaid the $7bn to government’s treasury “after 13 years.” Curiously, according to him, “when we enquired from the CBN the state of that money, the banks told us that the money was ‘dashed’ to them.”

Consequently, upon the presidential panel’s request, the Economic Financial Crimes Commission ultimately invited Dr. Obadiah Mailafia, a former CBN Deputy Governor, to shed light on the controversial $7bn ‘gift’ to banks, when Chukwuma Soludo was the CBN Governor in 2006. It is a story of how hapless Nigerians may have been insensitively betrayed when the CBN dashed $7bn of scarce forex to 14 banks, even when the apex bank and the same government were already neck deep in debt to these bankers.”

Below is Mailafia’s testimony, which was published in BusinessDay edition of 24/1/2019. Please read on.

“On request from the Federal Government of Nigeria, I was seconded from the African Development Bank Group as Deputy Governor of the CBN in May 2005. I left a highly paid and pensionable post as Chief Economist, Planning and Budgeting, to serve at the CBN at a much lower salary. I have always believed that serving one’s country is one of the noblest tasks anyone could be called upon to do.

In early October of 2006, the then Governor of the CBN, Prof. Chukwuma Soludo, brought a proposal to the Board to the effect that he wanted 14 of our commercial banks to take part in the management of our external reserves in partnership with foreign banking associates. He explained that it was rather unfair that only external custodians such as J. P. Morgan, Goldman Sachs and others were having a piece of the action. At the time, we were feeling rather triumphal. The banking reforms had been a success. We had managed to reach a deal with the Paris Club of international creditors. The economy was booming. Our foreign reserves had grown from a lowly US$10bn in 2004 to an impressive US$38bn in 2006… We had just launched the FSS2020 project which aimed to position our country as the financial hub of the continent by 2020.

As I recall, there was a lively debate on the matter. On the face of it, it seemed a good idea to allow our banks to have experience of managing our external reserves as a means of socialisation into the complex world of financial engineering and global financial markets. I had a modicum of doubt, but, alas, could not voice it. The professor was a Mister Know-All with an ego of the Order of Lucifer. The Curse of Mephistopheles.

Moreover, he always brandished his closeness with Aso Villa to neutralise any dissent. There was a whispering campaign about me being ‘the black sheep’ that would not play ball…

At the end of the day, the majority carried the day with regard to local participation in foreign reserves management. I must emphasise, for the avoidance of doubt, that at no stage did anyone get even the remotest impression that it was meant to be a loan, bailout or forbearance.

Of course, it would be another matter entirely if the banks, as an afterthought, after more than a decade, would now prefer to give a different interpretation to that financial deal. This should be confirmed from the archival records of the CBN. The banks had a mandate as fund managers of the US$7bn that was distributed to them; of which principal and interest were to be returned within the agreed tenor. But I was not privy to those details.

On March 26, 2007, while busy at my desk in the early afternoon, news came on national radio that I had ceased to be the deputy governor and had been moved to the Presidency to a 419 position as Special Adviser to the President on Political Economy. I resigned myself to the will of God. I had worked alone in the office up to midnight of December 31, struggling to meet the IMF liquidity targets set for us under the Special Support Instrument. Unfortunately, my colleagues deliberately sabotaged me. That may have explained my unceremonious departure. I later got to know that the late President Umaru Yar’Adua, having studied my dossier, had instructed that I be reinstated immediately. Unfortunately, that same week, he went into coma, never to recover. His presidential directive was never obeyed.

I mention these events in order to explain that, from October 2006 when the reserves were allocated to 14 banks, up to the time I left in March 2007, was only slightly over five months. The Directorate for Economic Policy which I headed is the most important function of any central bank, but it is the one Directorate where we do not handle money. We work with computable models for monetary policy while undertaking research and statistical-analytical work to drive economic development.

I was therefore surprised when, two weeks ago, a friend in the security services sent me a circular emanating from the Villa in which my name had been included on a list of 30 people slammed with a travel ban under Executive Order No. 6. Dated 11, December 2018. I managed to trace their office to a sprawling nondescript building in the outskirts of Asokoro. There, I met a squadron of investigators who gleefully welcomed me as a new captive. I was detained for questioning for the whole day and had to fill wads upon wads of paper about a “missing US$7 billion dollars” during my time at the CBN…’

Without prejudice to the ongoing investigations, my position is that whatever monies that were given to banks to be managed on behalf of the CBN, must be returned with principal and interest. I feel duty (bound) to share with the panel all that I know about this case. But I will first affirm my legal rights to be treated above board as a witness rather than suspect.

The way I have been treated so far evokes bitter memories. My time at the CBN was one of the worst in my entire professional career. I was to discover only after I left that my coffee was doused with poison on at least three different occasions.

I have spent most of my professional life outside Nigeria. I have enjoyed honours and privileges. My most recent job was as Chief of Staff of the 79-member African, Caribbean and Pacific Group of States in Brussels.

I coordinated more than Є50 billion of development and investment funds. Throughout my sojourn abroad, I had no police record for a traffic offence, let alone financial fraud. It is a shame that I can be treated with such humiliation in my own fatherland. My family has paid a heavy price.

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Editorial/Opinion

Atiku 2019: Bumpy road of a presidential hopeful

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The presidential election petition tribunal has given its verdict in the petition brought by the Peoples Democratic Party (PDP) and Atiku Abubakar challenging the February 23 election won by President Muhammadu Buhari.

Buhari was declared winner with 15,191,847 votes while Abubakar came second with 11,262,978 votes.

Buhari also won the election in most of Nigeria’s States as well as met the constitutional requirement of at least 25 per cent of votes in 24 states.

The PDP, which had ruled Nigeria for 16 years before 2015, challenged the election results on many grounds.

The PDP and its presidential candidate, Atiku Abubakar, had argued that the ruling APC connived with government institutions like the electoral umpire, INEC, and security officers to rig the election in favour of Buhari.

The PDP also alleged that INEC manipulated the results and that original results sent to an INEC ‘server’ electronically by electoral officials showed a PDP victory. The PDP and Abubakar sought access to the server.

The party also alleged massive non-compliance with election guidelines in a majority of the polling units.

The PDP further challenged the emergence of Buhari as a candidate for the elections on the grounds that he failed to meet educational qualifications to contest the election.

The petition was filed on March 18, about 177 days ago.

According to section of the electoral act, a petition of this nature must be determined before the expiration of 180 days.

Although the petition was filed on March 18, hearing into the main issues did not commence till July 3.

The hearings had partly been delayed because of an objection raised by the PDP against the leadership of the panel as earlier constituted under the leadership of the Court of Appeal President, Zainab Bulkachuwa.

The PDP cited the active membership of Mrs Bulkachuwa’s husband, Mohammed Bulkachuwa, and son, in the APC, as reasons for their objection.

The petitioners also alleged that a statement made by Mrs Bulkachuwa at the opening session of the tribunal suggested that ”she had taken a stand in favour of the APC when she submitted that elections were bound to result in a dispute no matter how properly conducted.”

Following that objection by the petitioners, Mrs Bulkachuwa recused herself. This resulted in the emergence of Garba Mohammed as the chairman of the tribunal.

Subsequently, on July 3, the PDP began its hearing and presented 62 witnesses to support its claim.

Among the witnesses presented by the PDP was the media adviser and spokesperson for Abubakar, Segun Showunmi; a former ally of President Buhari, Buba Gamadima and a former aviation minister, Osita Chidoka who appeared as the last witness among others.

The PDP also showed a video clip where an INEC resident electoral commissioner from Bayelsa State, Mike Igini, made comments related to the central server which the petitioners believed was in support of their claim.

According to the video, Igini submitted the election results would be transmitted through a central server, a point alluded by the petitioners in their request.

The APC reacted to the deposition of the video evidence by producing a similar video clip where the INEC Chairman, Mahmood Yakubu, debunked claims regarding the server.

The PDP had named INEC, Buhari and the APC as respondents in the suit.

Consequently, the respondents made several applications also challenging the petition by the PDP.

The first respondent, namely INEC, questioned the validity of the PDP petition ”because it did not include Vice President Yemi Osinbajo whom INEC described as a necessary party to the matter”.

But in a ruling on the issues, the tribunal said section 137 (2) of the constitution does not imply that Mr Osinbajo is a necessary party to the suit.

According to the court, the section mentioned above was specific in its mention of those to be categorised as parties to a petition.

They include: “the candidate in an election, the political party who participated in an election,” among others.

“It is the conclusion in the judgement that running mates to an election are not a necessary party,” the court ruled.

The tribunal then dismissed the application filed by INEC.

The court also dismissed an application by INEC suggesting that the PDP petition was not properly attested to, by the lead counsel, Levi Uzoukwu.

The five-member panel then decided against a submission by the APC that the claims concerning President Buhari’s certificate were pre-election in nature and should not have been raised as part of the PDP’s petition.

According to the court, section 138 which focused on the educational requirements for contesting ”did not refer to the issues raised in the section as pre-election in nature”.

Regarding the allegation that Buhari was not qualified to contest in the first place, the court ruled that there was sufficient evidence before it to conclude that President Buhari ”was not only qualified but that he was eminently qualified to have contested the election”.

The PDP challenged Buhari’s results on the grounds that the Cambridge University and the West African Examination Council copies of the result contained a number of discrepancies including the spellings of Mr Buhari’s name.

“There is no doubt the second respondent is not only qualified but is also eminently qualified.”

The court also said Buhari ”is not the maker of his certificate, and there is nothing to show that the errors in the names of Buhari as indicated on the certificates from Cambridge and WAEC implied that the certificate did not belong to Mr Buhari”.

“I am of the opinion that whether it is Muhammadu Buhari with a U and Mohammed Buhari with an O, they relate to the same person,” the court ruled.

In another application by INEC challenging the PDP’s failure to name the security operatives as parties to the election, the court ruled that INEC was right in submitting that the PDP ought to have included the security officers mentioned in the petition.

The PDP had argued that the government rigged the election by deploying security operatives to disrupt the proper conduct of the elections.

Reading through the section of the petition regarding the controversies surrounding the alleged use of a central server, the court noted that the PDP had said that Section 9 of the Electoral Act was amended in 2015.

“The issue is: Can it truly be said that the section amended actually empowered INEC to transmit election results electronically?

“The court only has a duty to interpret the law. The court has no power to amend the law.”

The court read out the import of the provision. It stated that Section 22 (a) does not provide for electronic transmission of results.

The court then read through other sections of the law.

“It is undeniable that the transmission of election result is manual at different and all levels of the elections at different stages from the states to the national level.

“There is no provision authorising the first respondent or any of its officers to transfer election results to any of the servers. There is also nothing allowing the first respondents to use the smart card reader for the collation of results.

“I’m not aware that the card reader machine has replaced the voters’ register,” the court ruled.

Regarding the allegation that the election was marred with widespread irregularities, the court said the petitioners pleaded ”that so many of their agents were situated in various polling units and that members of the first respondents connived with security agents to conduct massive rigging”.

“They also alleged that no real voting took place in Dekina Local Government Area, among others,” the judge said.

The judge, however, added that the ”PDP failed to call the polling unit agents who would have testified that they were arrested harassed or affected by the violence pictured by the petitioners.”

“There is no admissible evidence on record to support the petitioner’s allegations,” the court ruled.

Subsequently, the court decided that the PDP had failed to satisfactorily prove its allegation and dismissed the petition in its entirety.

All the panel members agreed with the lead judgement.

For Abubakar and his party, the next option will now be to head to the Supreme Court for legal redress.

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Zimbabwe’s Mugabe: from liberator to oppressor

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Zimbabwe’s Robert Mugabe was feted as an African liberation hero and champion of racial reconciliation when he first came to power in a nation divided by nearly a century of white colonial rule.

Nearly four decades later, many at home and abroad denounced him as a power-obsessed autocrat willing to unleash death squads, rig elections and trash the economy in the relentless pursuit of control.

Mugabe, who died in Singapore aged 95, was ultimately ousted by his own armed forces in November 2017.

He demonstrated his tenacity – some might say stubbornness – to the last, refusing to accept his expulsion from his own ZANU-PF party and clinging on for a week until parliament started to impeach him after the de facto coup.

His resignation triggered wild celebrations across the country of 13 million.

For Mugabe, it was an “unconstitutional and humiliating” act of betrayal by his party and people, and left him a broken man.

Confined for the remaining years of his life between Singapore where he was receiving medical treatment and his sprawling “Blue Roof” mansion in Harare, an ailing Mr Mugabe could only observe from afar the political stage where he once strode tall.

He was bitter to the end over the manner of his exit.

On the eve of the July 2018 election, the first without him, he told reporters he would vote for the opposition, something unthinkable only a few months before.

Educated and urbane, Mugabe took power in 1980 after seven years of a liberation bush war and – until the army’s takeover – was the only leader Zimbabwe, formerly Rhodesia, knew since independence from Britain.

But as the economy imploded starting from 2000 and his mental and physical health waned, Mugabe found fewer people to trust as he seemingly smoothed a path to succession for his wife, Grace, four decades his junior and known to her critics as “Gucci Grace” for her reputed fondness for luxury shopping.

Born on February 21, 1924, on a Roman Catholic mission near Harare, Mr Mugabe was educated by Jesuit priests and worked as a primary school teacher before going to South Africa’s University of Fort Hare, then a breeding ground for African nationalism.

Returning to then-Rhodesia in 1960, he entered politics but was jailed for a decade four years later for opposing white rule.

When his infant son died of malaria in Ghana in 1966, Mugabe was denied parole to attend the funeral, a decision by the government of white-minority leader Ian Smith that historians say played a part in explaining Mugabe’s subsequent bitterness.

After his release, he rose to the top of the powerful Zimbabwe African National Liberation Army, known as the “thinking man’s guerrilla” on account of his seven degrees, three of them earned behind bars.

Later, as he crushed his political enemies, he boasted of another qualification: “a degree in violence”.

After the war ended in 1980, Mugabe was elected the nation’s first black prime minister.

“You have inherited a jewel in Africa. Don’t tarnish it,” Tanzanian President Julius Nyerere told him during the independence celebrations in Harare.

Initially, Mugabe offered forgiveness and reconciliation to old foreign and domestic adversaries, including Mr Smith, who remained on his farm and continued to receive a government pension.

In his early years, he presided over a booming economy, spending money on roads and dams and expanding schooling for black Zimbabweans as part of a wholesale dismantling of the racial discrimination of colonial days.

With black and white tension easing, by the mid-1980s many whites who had fled to Britain or South Africa, then still under the yoke of apartheid, were trying to come home.

But it was not long before Mugabe began to suppress challengers, including liberation war rival Joshua Nkomo.

Faced with a revolt in the mid-1980s in the western province of Matabeleland that he blamed on Nkomo, Mugabe sent in North Korean-trained army units, provoking an international outcry over alleged atrocities against civilians.

Human rights groups say 20,000 people died, most of them from the minority Ndebele tribe from which Nkomo’s partisans were largely drawn.

The discovery of mass graves prompted accusations of genocide.

After two terms as prime minister, Mr Mugabe tightened his grip on power by changing the constitution, and he became president in 1987. His first wife, Sally, who had been seen by many as the only person capable of restraining him, died in 1992.

A turning point came at the end of the decade when Mugabe, by now a leader unaccustomed to accommodating the will of the people, suffered his first major defeat at the hands of voters, in a referendum on another constitution.

He blamed his loss on the white minority, chastising them as “enemies of Zimbabwe”.

Days later, a groundswell of black anger at the slow pace of land reform started boiling over and gangs of black Zimbabweans calling themselves war veterans started to overrun white-owned farms.

Mugabe’s response was uncompromising, labelling the invasions a correction of colonial injustices.

“Perhaps we made a mistake by not finishing the war in the trenches,” he said in 2000.

“If the settlers had been defeated through the barrel of a gun, perhaps we would not be having the same problems.”

The farm seizures helped ruin one of Africa’s most dynamic economies, with a collapse in agricultural foreign exchange earnings unleashing hyperinflation.

The economy shrank by more than a third from 2000 to 2008, sending unemployment above 80 per cent. Several million Zimbabweans fled, mostly to South Africa.

Brushing aside criticism, Mugabe portrayed himself as a radical African nationalist competing against racist and imperialist forces in Washington and London.

The country hit rock bottom in 2008 when 500 billion per cent inflation drove people to support the challenge of Western-backed former union leader Morgan Tsvangirai.

Facing defeat in a presidential run-off, Mugabe resorted to violence, forcing Tsvangirai to withdraw after scores of his supporters were killed by ZANU-PF thugs.

South Africa, Zimbabwe’s neighbour to the south, squeezed the pair into a fractious unity coalition but the compromise belied Mugabe’s grip on power through his continued control of the army, police and secret service.

As old age crept in and rumours of cancer intensified, his animosity toward Tsvangirai eased and the two men enjoyed weekly meetings over tea and scones, in a nod to Mugabe’s affection for British traditions.

On the eve of the 2013 election, Mugabe dismissed cries of autocracy and likened dealing with Tsvangirai to sparring in the ring.

“Although we boxed each other, it’s not as hostile as before,” he told reporters.

Even as he spoke, Mugabe’s agents were busy finalizing plans to engineer an election victory through manipulation of the voters’ roll, according to the Tsvangirai camp.

It was typical of Mugabe’s ability to out-think – and if necessary out-fight – his opponents, a trait that drew grudging respect from even his sternest critics.

Writing in a 2007 cable released by WikiLeaks, then-U.S. ambassador to Harare Christopher Dell reflected the views of many: “To give the devil his due, he is a brilliant tactician.”

(Reuters/NAN)

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20 days in DSS pits of silence: We must not forget Sowore

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It has been 20 weary days since Omoyele Sowore was taken into a hovel of silence by the DSS. The outrage over his abduction and detention is tapering off; dissolving with every quotidian day.

It is human nature to quickly glide past shock, happenstance or pain after sometime, but in Sowore’s case we must bring this weakness into capitulation and into conformity with the realities of our country. Sowore could have elected to stay in the US, where he is a citizen, and enjoy the salubrity of a well-managed country.

He could have chosen to clink glasses and drink champagne with the predatory ‘’owners’’ of Nigeria. He had no insular reason to call for a protest; he was well-off, managing successful businesses. But like Buddha who abandoned prince-hood, Sowore traipsed an uneasy path to awaken Nigerians to the duty of taking charge of their destiny.

Sowore is not an activist with pretensions of glory. He has been an unrelenting advocate of good governance, freedom and human rights since the early nineties. He led the students’ struggle against the June 12 abomination and lived in the trenches fending off military bullets with words of hope, passion and defiance.

The DSS has filed five charges which border on treason against him. The secret police say he ‘’planned to violently overthrow the government through a protest; he planned to join forces with the Shiite group to bring down the government; he planned to mislead the public to overthrow the government, and that he formed an alliance with Nnamdi Kanu to launch attacks on Nigeria and topple the government’’.

I believe the DSS in truth knows these charges are farcical. But it appears ‘’farcicality’’ has become the job description of the service. Since 2016, when the residences of judges were invaded in the dead of night and since when Nigerians who criticise the government are abducted, the secret police has become accomplished in ludicrity.

It has become a norm to arrest citizens and rustle-up jocular charges to keep them shut out of civilisation. ‘’Threat to national security’’ is now a password for neutralising citizens and keeping them locked up indefinitely.

As I said in a previous essay, the DSS must evolve. It should not be suspended in a militarised past. The agency must serve citizens’ interest and not regime interest. It must understand civil protest or the call for it is democratic.

And what is the endgame in keeping Sowore? How is he a threat to national security, really? Why are the real threats to our security rehabilitated, negotiated with and pampered with promises?

There are speculations that the regime is exacting punishment on him for being critical of the government. His news platform, Saharareporters is not letting up in publishing reports that agents of the government find abrasive. So, for them, it is about taking a pound of flesh.

The DSS is a critical security agency that must not lend itself to the neurotic pursuits of any regime. The detention of Sowore, an ex-presidential candidate, is reminiscent of an ‘era of tears, sorrow and blood’ in Nigeria; a crimson season of oppression and suppression.

Over the years, the secret police has racked up abysmally poor human rights records, and its perception by most Nigerians, judging by widespread condemnations, is of dread and scorn. This should not be the case.

This is a time secret services across the world are becoming open, humane, civil and cordial. Even the CIA, which in the past was dreaded and considered a ‘’dangerous’’ organisation has evolved. Our own secret police should not remain in a jackbooted past. Secret services today are not to be feared, but respected and cooperated with.

Also, the DSS should not be political police. Governments will come and go, but the service will remain. The integrity of the agency and its perception by Nigerians should matter to it. The agency exists for Nigerians; it must serve and protect them.

The DSS must know that releasing Sowore will be a step in redeeming its image.


@FredrickNwabufo

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