Sanusi Lamido's tenure as Central Bank Governor and monetary policy

CC Introspective

Sanusi Lamido Sanusi, Executive Governor of the Central Bank of Nigeria (CBN) will vacate his position as the chieftain of the country’s apex bank, within the next year. He showed no interest in asking for the renewal of his job when the first term elapses in 2014. 

Sanusi's policies have without doubt contributed to the macro-economic stability of Nigeria's economy. But his tenure has been a contentious one as some of his undertakings have not gone down well with the "establishment."

However, with the monetary tool at his disposal, he has managed to maintain a fairly stable monetary policy. By lowering inflation, Sanusi established and was able to maintain much-needed price stability. A reasonable price stability will of course be taken for what it is within the context of Nigeria’s reality; considering the economy is largely an import-oriented economy with oil still a major source of foreign exchange. 

When Sanusi came in, there was financial instability and liquidity crunch, which was  triggered by poor management especially within the banking system (much of which was over-laden with toxic debts). He was able to reform the failed banks and re-capitalized them.  Sanusi performed a delicate task of infusing capital into the banking sector without overheating the economy. 

Although he was successful with the fixing of the banks, the inflation rate was not immediately suppressed.

He promised to reduce inflation (a rather tall order in light of the pervading economic climate) but this was eventually accomplished with inflation rates ultimately at less than ten percent.

The tightening of monetary tools may have brought down the inflation rate, but the downside was the high interest rate that stood at over 12 percent. While high interest rates may be attractive to investors in the capital market, it is not conducive to sustainable economic growth as it tends to discourage borrowing and dampen over-all economic growth. 

In reality, with regard to an import-oriented and oil-based economy, the power of monetary policy may be limited and even unsustainable. The best possible paradigm is to get the monetary and fiscal policies to be at worst, complimentary. This is where the intervention of the executive and legislative branches becomes imperative. The complementary objective is to fashion out a pro-growth tax policy while building requisite infrastructure, in order to engender economic growth and achieve desired macro-economic stability. 

The answer to the economic problems may be found in the fiscal policy. The executive and law makers must work together to implement policies that help stimulate the economy and encourage investors to infuse capital into the economy. The tax policy that is favorable for investment and repatriation of capital are necessary to make the economy grow faster and maintain momentum. Lower taxes and meaningful regulations are also needed to help guard against economic regression.

Moderation in taxes and logical regulations with regard to fiscal policy may open the door to a steady and faster economic growth. The provision of durable infrastructure, especially electricity and security, also hold the key to sustainable economic growth.

Sanusi’s tenure was not all rosy; as some of his signature achievements including the introduction of Islamic banking were downright controversial. The opponents of Islamic banking argued that Nigeria's constitution is secular, hence the introduction of Islamic banking only serves to reinforce sectarian politics. But Sanusi stood his ground and judiciously defended the premise of Islamic banking in Nigeria.

Furthermore, Sanusi's support for the removal of fuel subsidies did not go down well with most Nigerians especially the large chunk of the country's poor who subsist on less than two dollars a day. The danger they perceived with the removal of the subsidies were confirmed when the removal was partially implemented. 

The prices of household products went up, transportation fares and prices of petroleum products went even further beyond the reach of the average Nigerian. Even inflation rates were briefly higher than anticipated and all these slowed down, if not muted  the full implementation of fuel subsidies removal. 

Sanusi will hope to leave behind a stable monetary policy although the work of macro-economic stability is beyond the limited function of the Central Bank Governor. When fiscal and monetary policy becomes complimentary, a more stable, successful and sustainable economy becomes the result.

The next few months of Sanusi's tenure as Central Bank Governor will ostensibly further solidify his legacy as he has always been his own person with a resolve and principled consistency never seen from someone in that position, however "controversial" some of his actions might be.

President Goodluck Jonathan misses his speaking slot at AU 50th Anniversary event.....

CC Video Insight

With over 50 African heads of states and other international dignitaries in attendance, a call went out for President Goodluck Jonathan of Nigeria to address the special session of the African Union. 

You must have heard that President Goodluck Jonathan missed his speaking slot at the 50th anniversary of the founding of the Organization of African Unity (OAU) in Addis Ababa. But do you know what the president was doing when he missed his slot? Dr. Damages brings you video clips of what "actually happened".....

Hint: Lighthearted Comedy

Oputa Panel Moment: Major Hamza al-Mustapha talks about the death of Chief M.K.O. Abiola

CC Video Insight

Major Hamza al-Mustapha was cross examined at the Human Right Violation Investigation Commission (HRVIC) - Oputa Panel on the death of Chief MKO Abiola. He aggressively responded to the counsel. 

Major Hamza al-Mustapha was the Chief Security Officer of General Sani Abacha, military dictator from November 1993 to June 1998. After Abacha's death he was arrested and tried for murder and attempted murder.

Former IMF Chief and alleged "pimp" now head of investment firm.....

Disgraced Former IMF Chief Dominique Strauss-Kahn

CC Insight

Former IMF Chief, Dominique Strauss-Kahn, has been named head of an investment firm, marking another step in the business comeback of a man whose career and French Presidential hopes were ruined by a sex scandal.

The 64-year-old economist, who fronted IMF rescue of debt-crushed countries in his time at the helm, was forced to quit the Washington-based public lender in 2011, after a New York hotel maid accused him of sexual assault.

He has since settled a civil case instituted by the maid, after criminal charges were dropped, but now awaits trial in France over a separate affair– where he faces pimping charges over sex parties he attended.

He denies any wrongdoing.

In a statement published by his public relations aide, the man known to many as DSK said he had been appointed President of an investment firm with operations in finance centers  including Switzerland, Luxembourg, Monaco, Belgium, Israel and Romania.

It said that the firm, founded by French banker, Thierry Leyne, in 1994, will undergo a name change from the current Anatevka to LSK - Leyne, Strauss-Kahn and Partners (hopefully not pimping partners).

Strauss-Kahn will develop its investment banking and debt-restructuring activities.

Strauss-Kahn has used his IMF experience and reputation as a talented economist to rebuild a career in finance, as an adviser to the governments of Serbia and South Sudan, as well as Russian and Moroccan banks.

Kenyan Mall Stand-off: Israeli special forces join ranks with Kenyan counterparts as 59 dead and 200 wounded thus far.....

Kenyan Special Forces move in at the site of the attack

CC Breaking News

Israeli special forces have joined ranks with their Kenyan counterparts as both lay siege on the upscale Westgate Mall in Nairobi, Kenya; scene of a deadly terrorist attack against non-Muslims on Saturday.

Kenya's president Uhuru Kenyatta has vowed that his government will hunt down and defeat the terrorists that carried out the attack.

Somali Islamist group, al-Shabab had vowed to carry out an attack in Nairobi in retaliation for Kenya's sending of troops into Somalia to fight Islamic insurgents in 2011.

According to reports from a senior security operative who spoke on condition of anonymity to CC, the approach is one where the Kenyan forces have been given the directive to take out the terrorists summarily, with minimal collateral damage.

More than any other East African country, with probably the exception of Ethiopia, Kenyan has taken a very aggressive disposition towards dealing with al-Shabab (with strong links to Al Qaeda) in East Africa.

This attack on innocent civilians will only serve to strengthen the resolve of the Kenyan government hunt down and destroy al-Shabab and its network in the region.

Shameful Exhibition: Nigeria's MPs come to blows.....

CC Video Insight

Not sure if this was what the "New PDP" had in mind. I am sure most, if not all Nigerians would rather have a new orientation rather than have these miscreants continue to bring the nation into disrepute.

Atiku Abubakar: The gift that just keeps on giving.....

Atiku Abubakar 

Editor-in-Chief

There is an old adage that states.... "when in doubt, stop digging." In the case of Nigeria's former Vice-President and perennial presidential aspirant, Atiku Abubakar, one has to conclude that he is either oblivious to that old adage or he is just downright deluded.

Coming on the heels of his latest exercise in prototypical self-aggrandizement with the "usual suspects", Atiku, while responding to criticism from those who are all-too-familiar with his antics, claims he bought a house for his mother when he was only 14 years old. 

Atiku asserted that contrary to widely held claims that his "wealth" was untowardly accumulated as head of the Nigeria Customs Service, as well as during his eight-year tenure as Vice-President; he had a history of genuine "business success."

The former Vice-President further stated that as a customs official, he "maintained one of the best records of returns to government" (whatever that means) and that after leaving the customs (fully loaded as one would imagine), he "used his knowledge and drive to build a very successful string of business ventures."

Ironically, Atiku would later go on twitter to clarify his position on the house he bought his mother at 14 years of age saying it was only a thatched mud bungalow, with two rooms, a kitchen and a bathroom at a cost of just £9 ($14.50), saved from his £3 ($4.81)/month earnings, from his vacation job.

How Nigeria and indeed Nigerians have continually been saddled with characters such as Atiku as leaders, remains an ongoing mystery. The issue here is not necessarily on the substance of Atiku's claim or claims, but on exactly why, rather than focus on germane issues that affect the everyday lives of Nigerians, most notably the provision of basic electricity, food and water, Atiku and his colleagues are much more concerned about their own political and personal survival, even at the expense of the very people they claim they are fighting for.

The real problem is that his narcissistic predisposition is not unlike that of his band of rogues and predatory urchins within the Nigerian political theater. It is all about them and will always be, regardless of how much devastation they have wrought, not only on the economic and social institutions of that great country, but also on the collective psyche of the Nigerian people, irrespective of ethnic nationality, religion or background.

Nigerians must resolve within themselves to rid our nation of these relentless parasites, who have absolutely no vision and lack even the most basic human decency and dignity, requisite of true leadership, in any civilized society.

British court shown footage of James Ibori's display of ill-gotten wealth

Disgraced former governor James Ibori

CC Global Insight

A court in the United Kingdom was shown footage of disgraced former governor, James Ibori's sprawling home in Nigeria. 

Complete with marble columns, a private gym, cooks, maids and chauffeurs, the mansion offers a revealing and rather unfortunate glimpse into the egregious excesses of Nigeria's leaders. 

Footage of the property at Clement Isong Street in Abuja, taken by Nigeria's Economic and Financial Crimes Commission (EFCC) when it searched the home this year, revealed a level of luxury unimaginable to most of Nigeria's 170 million people. 

The film showed a monumental facade with white marble columns two storeys high. Inside were vast reception rooms adorned with crystal chandeliers, gilded mirrors and marble-topped tables.

The property also boasted a large private gym with a treadmill, cross-trainer and other fitness equipment. A close-up shot inside one of several marble bathrooms showed a power shower with electronic control panels.

Last year Ibori pleaded guilty at London's Southwark Crown Court to 10 counts of money-laundering and fraud in one of the biggest embezzlement cases seen in Britain. He is serving a 13-year term at Long Lartin maximum security prison in England.

Shown as part of a confiscation hearing in which prosecutors are seeking court orders for Ibori's assets to be seized, the film featured a directory of telephone extensions across the property including the "children's parlour" and "staff house".

A list of staff and suppliers included multiple chauffeurs, cooks and housekeepers as well as details of how to reach the "TV man".

Footage of what appeared to be the master bedroom showed an enormous bed with an ornate velvet and silver headboard, facing a large flat-screen television flanked by four high-tech standing speakers.

Outside the house were parked a luxurious Range Rover with TV screens on the back of the leather seats, a red Lexus car and a Toyota pick-up truck. EFCC investigators were filmed searching under mattresses, inside drawers and inside a toilet tank.

They could also be seen looking through papers found in the property including what appeared to be an invoice from French luxury goods maker Louis Vuitton.

That such footage was shown in open court in London will be a humiliation for a man who was once addressed as His Excellency and courted by crowds of people seeking his patronage.

Ibori was not present in court, having declined to attend the confiscation hearing.

In his heyday, Ibori was a power broker at the heart of Nigeria's ruling party, the PDP. He is by far the most prominent Nigerian politician to be held accountable for the corruption that blights Africa's most populous nation and top oil producer.

Also on Tuesday, there was startling revelation that the former governor also owns a third of Oando Oil, PLC. The same Southwark Crown Court in the U.K. was told on the second day of the confiscation hearing, that Ibori himself made the declaration to a bank with which he wanted to open an account a few years ago.

Ibori is said to have described himself as a “very rich man who owned 50 per cent of a bank and 30 per cent of an oil company,” when he wanted to open a foreign bank account in 2004. The court was told Ibori said he “earned $10 million per year and has a net worth of $100 million." 

More to follow.

Howard Schultz finally gets it right..... for once.....

Howard Schultz

Editor-in-Chief

Starbucks CEO, Howard Schultz on Tuesday night wrote this letter requesting that customers no longer bring their guns into Starbucks stores. This request also extends to the stores in states where it is permissible to carry guns.

It has been an open secret for a while, that Schultz has not been favorably disposed to the so-called "Starbucks Appreciation Day" events that pro-gun supporters have held at the Starbucks' office location.

Schultz obviously wants an end to the charade, hence this latest move, one that is sure to anger a potentially "large segment" of his clientele; or maybe not, depending on where the stores are located. 

The truth is most of Starbucks' customers tend to be educated, progressive and not tied to gun-grabbing or gun-wielding positions or laws. They just want to go into a dignified environment, fire up their laptops/tablets while enjoying trendy treats, some good coffee and some ambiance-inducing music. 

Here (below) is the full text of the letter.....

Tuesday, September 17, 2013

Posted by Howard Schultz, Starbucks chairman, president and chief executive officer

Dear Fellow Americans,

Few topics in America generate a more polarized and emotional debate than guns. In recent months, Starbucks stores and our partners (employees) who work in our stores have been thrust unwillingly into the middle of this debate. That’s why I am writing today with a respectful request that customers no longer bring firearms into our stores or outdoor seating areas.

From the beginning, our vision at Starbucks has been to create a “third place” between home and work where people can come together to enjoy the peace and pleasure of coffee and community. Our values have always centered on building community rather than dividing people, and our stores exist to give every customer a safe and comfortable respite from the concerns of daily life.

We appreciate that there is a highly sensitive balance of rights and responsibilities surrounding America’s gun laws, and we recognize the deep passion for and against the “open carry” laws adopted by many states. (In the United States, “open carry” is the term used for openly carrying a firearm in public.) For years we have listened carefully to input from our customers, partners, community leaders and voices on both sides of this complicated, highly charged issue.

Our company’s longstanding approach to “open carry” has been to follow local laws: we permit it in states where allowed and we prohibit it in states where these laws don’t exist. We have chosen this approach because we believe our store partners should not be put in the uncomfortable position of requiring customers to disarm or leave our stores. We believe that gun policy should be addressed by government and law enforcement—not by Starbucks and our store partners.

Recently, however, we’ve seen the “open carry” debate become increasingly uncivil and, in some cases, even threatening. Pro-gun activists have used our stores as a political stage for media events misleadingly called “Starbucks Appreciation Days” that disingenuously portray Starbucks as a champion of “open carry.” To be clear: we do not want these events in our stores. Some anti-gun activists have also played a role in ratcheting up the rhetoric and friction, including soliciting and confronting our customers and partners.

For these reasons, today we are respectfully requesting that customers no longer bring firearms into our stores or outdoor seating areas—even in states where “open carry” is permitted—unless they are authorized law enforcement personnel.

I would like to clarify two points. First, this is a request and not an outright ban. Why? Because we want to give responsible gun owners the chance to respect our request—and also because enforcing a ban would potentially require our partners to confront armed customers, and that is not a role I am comfortable asking Starbucks partners to take on. Second, we know we cannot satisfy everyone. For those who oppose “open carry,” we believe the legislative and policy-making process is the proper arena for this debate, not our stores. For those who champion “open carry,” please respect that Starbucks stores are places where everyone should feel relaxed and comfortable. The presence of a weapon in our stores is unsettling and upsetting for many of our customers.

I am proud of our country and our heritage of civil discourse and debate. It is in this spirit that we make today’s request. Whatever your view, I encourage you to be responsible and respectful of each other as citizens and neighbors.

Sincerely,

Howard Schultz

Former Abacha Chief Security Officer and head of notorious Strike Force Unit seeks promotion to Major-General....

Hamza al-Mustapha

CC Breaking News

Major Hamza al-Mustapha, former Chief Security Officer (CSO) to late dictator, Gen. Sani Abacha, has written the Army High Command, requesting for concessions on his position in the Army.

Sources in the Army told CC that al-Mustapha is seeking his
accelerated promotion to the rank of a Major-General and his consequent retirement with his full benefits paid.

The argument had been that due to his “age on rank”, he should be retired as a Major from the Army but the former CSO is seeking a waiver on the grounds that he was unjustly incarcerated.

For the over 14 years that al-Mustapha spent in prison, the Army high command had paid half of his monthly salary to his family.

While al-Mustapha’s case has been presented to the Army council, the Legal Department is said to be studying the issue with a view to coming up with mutually acceptable recommendations.

CC has been informed that al-Mustapha’s lawyers were waiting the Army’s resolution of the issue with a view to either accepting it or approaching the law courts to get a fair deal for their client.

The Army Council is composed of the Minister of Defense, Permanent Secretary, Chief of Defense Staff, Chief of Army Staff and some other administrative staff.

Director, Army Public Relations, Brig- Gen. Ibrahim Attahiru, said that as a professional force, the Army had already looked into al-Mustapha’s case and had forwarded his petition to the Army Council.

He also confirmed that the Legal Department was already handling the issue.

The former CSO wrote the Army requesting that his case be treated fairly and that he should be granted certain concessions.

Gen. Attahiru was, however, silent on the concessions being sought by al-Mustapha.

“The Army, as an organisation looked into this matter and it has been presented to the Army Council – the highest body.

“But the specific departments handling the issue now are the Legal Department and another, which are looking into it and will come up with their submissions soon.

“Al-Mustapha wrote to the Army requesting for certain concessions but the Army is still looking at it and very soon, we shall take a position on the matter and it would be made public,” he said.

Attahiru said the Army has nothing to hide on the issue and that it will never deviate into partisan politics.

The Army had in July debunked speculations that al-Mustapha had been promoted and decorated with a new rank of Brigadier-General, explaining that all administrative procedures are guided by extant rules and regulations such as the Armed Forces of Nigeria Harmonised Terms and Conditions among others.

The Court of Appeal, sitting in Lagos, had on July 12 discharged and acquitted al-Mustapha over an alleged conspiracy and the murder of Alhaja Kudirat Abiola, the wife of late M.K.O. Abiola, on June 4, 1996.

Abiola won the 1993 presidential election, annulled by the military government of Gen. Ibrahim Babangida.

The court had overturned a death sentence handed down on him on January 30, 2013, by a Lagos High Court.

Three days after his release, the Army had confirmed that al-Mustapha was still in its fold and that his case would be handled administratively in line with the harmonized terms and conditions of service.

Already, the Lagos State Government has challenged the ruling before the Supreme Court.

Al-Mustapha joined the Nigerian Army and was trained as an intelligence operative. He was involved in at least two investigations of coup attempts. His conduct of interrogations brought him to the attention of Sani Abacha. When Abacha was Chief of Army (August 1985 – August 1990) al-Mustapha was his Aide-de-Camp.

Hamza al-Mustapha was appointed Chief Security Officer to the Head of State (CSOHS) with a Special Strike Force Unit during Abacha's blood-thirsty tyrannical reign (17 November 1993 – 8 June 1998). Other security outfits at the time were the Office of the National Security Adviser, the Directorate of Military Intelligence, the State Security Service and the National Intelligence Agency. All of these units engaged in extrajudicial killings of people seen as threats to the regime. Both Ibrahim Babangida and Sani Abacha gave Captain (later Major) Hamza al-Mustapha exceptional power, considerably greater than other officers who were nominally his superior.

After being appointed Chief Security Officer, al-Mustapha established a number of small security outfits recruited from the military and other security organizations, and trained in Israel and Communist North Korea. Abacha's National Security Adviser Ismaila Gwarzo and al-Mustapha were said to be responsible for much of the "torture, killing and wanton looting" during Abacha's rule.

As head of the State Security Service (SSS) al-Mustapha was also said to be involved in drug trafficking, using diplomatic pouches to transport the drugs. His wife, an Arab in origin, coordinated a ring of traffickers in the Gulf states.

That a convicted murderer (later effectively "politically pardoned" through a questionable acquittal) would now seek full remuneration from the same tax payers he essentially terrorized and violated their human rights, is quite befuddling.

If there is one thing al-Mustapha deserves, it is not a promotion, but rather a seat in the docket at the Hague, the offices of the International Criminal Court, for Crimes Against Humanity.

More to follow.