macroafricaintel | Jobs, jobs, jobs (5)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the final and fifth part of the highlights of my speech.

Take a charge on bank deposits to raise revenue
For the authorities, the most pressing matter is revenue. When there has been a boom in the economy, it was largely because crude oil prices were high. I doubt very much that it was crude oil itself that caused the boom, though. After all, oil is just about 10 percent of GDP. My reckoning is that a buoyant public purse and consequent free-spending government tend to inspire confidence all around. In other words, when the government is “happy”, it tends to be contagious. As oil prices are volatile, the weight of that purse varies with the times. Thus, there is a need for it to be reliant on more stable sources of revenue. In other words, we need the government to be “happy” most of the time.

Nigerians in formal employment are already taxed automatically. Those in the informal economy are not. And while even those Nigerians would not mind paying taxes, there is a lot that discourages them. Taxing consumption via value added tax (VAT) tends to be an effective way to bring as many people as possible into the tax net. At 5 percent, Nigeria’s VAT rate is relatively low. (Kenya’s is 16 percent.) So, the Nigerian government could certainly increase the VAT rate. Judging from the recent public reaction to a “testing of the waters” of sorts about such a move, however, it may not be ideal at this time.

There is another way. Nigerian banks currently charge all their customers, without exception, an account maintenance charge. And in spite of the complaints, they have by and large been able to get away with it. So, what stops a government, which has authority over the banks, and is probably more deserving of such a charge, from doing the same? In other words, the Central Bank of Nigeria could simply deduct a percentage of banks’ deposits (US$82 billion in 2018) as a “patriotic tax”; 5% should probably do the trick.

It would certainly be more efficient and palatable than increasing the VAT rate. The key thing here is that you are not going to be chasing anyone to get revenue. You simply tax the deposits of all Nigerians with a bank account the way banks already “tax” them via an account maintenance charge. When you add the US$4 billion from a potential 5 percent charge on bank deposits to about US$26 billion (2018) revenue the government already gets from oil, we could easily have a deficit-free budget this year and years to come.

Unify the exchange rate to attract investment
Growth is at an anaemic 2 percent. Such is the pessimistic outlook that an economy that not too long ago ran at a rate of more than 5 percent is now only expected up by about 2.5 percent in about three years or so. And considering that population growth is about 2.5 percent or more, this level of growth would still not be adequate to deal with the problems that we have. Most experts agree we would be able to accelerate the current tepid growth by attracting more investment; which is currently quite low at 13 percent of GDP. (Ethiopia’s is 38 percent of GDP.) A major impediment is our multiple exchange rate regime, however. Thus, a unified market-driven exchange rate would be ideal at this time.

Authorities on track; try harder
To be fair, the authorities are already doing some of these things (see earlier published parts 1-4 of the column). Still, we need to put pressure on them to do the following urgently. Raise power tariffs, raise VAT or take a direct charge on bank deposits, remove fuel subsidies, unify the exchange rate, list the state oil firm on the stock exchange. And for ongoing infrastructure projects, like rail and roads, a higher priority should be placed on those that connect key trade infrastructure; the Lagos sea port, for instance.

And considering there is increasing interest in Nigeria’s digitial economy by global tech firms, there should be a deliberate drive by the government to attract more tech foreign direct investment (FDI). Also, action should be afoot to build the relevant pipeline infrastructure that the soon-to-be-completed Dangote oil refinery would need to transport its output across the country. That way, it would not create another traffic gridlocked area in another part of Lagos, the commercial capital; where incidentally, another port is being built. These are simple and practical things that can be done now to improve our lives.

macroafricaintel | Jobs, jobs, jobs (4)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the penultimate and fourth part of the highlights of my speech.

Scale-up the digital economy
The importance of the internet for job creation cannot be overemphasized. Making data, which 116 million Nigerian internet users (about 60% of the population) currently buy expensively, cheap or available for free at ubiquitous wifi hotspots is a simple way by which the authorities could easily scale-up the digital economy. The ministries and parastatals of the federal, state and local governments should all have free wifi hotspots at their various buildings and locations. Instead of sometimes meaningless and self-serving corporate social responsibility initiatives by the private sector, companies could instead make free wifi hotspots available to the extent they could across the country.

If the labour ministry is tasked in tandem with a massive public media campaign on where to find opportunities for digital skills acquisition and abundant digital economy jobs and opportunities to apply them to afterwards, many young Nigerians, who currently engage in fraudulent digital economic activities (“Yahoo, yahoo”, in local parlance) could be diverted towards positive and value-adding activities in the digital economy.

Recent research by Jonas Hjort and Jonas Poulsen in the American Economic Review, a highly rated academic journal, titled “The arrival of fast internet and employment in Africa” show how the arrival of submarine cables to various African countries increased employment and productivity. There were new firm entries into South Africa, for instance. And because fast internet infrastructure enabled firms to sell their wares abroad much easily, exports increased. And in Ethiopia, improved firm-level productivity was observed. This is not surprising considering employees were able to get real-time on-the-job training without having to travel abroad and so on. And these are just examples of how the internet enhanced local legacy industries.

But tech and the internet are also creating new industries that could very well help Nigeria and other African countries to leapfrog easily into services. In this regard, the experience of India is instructive. Of course, the downside to this is that the services sector tend not to be as labour-intensive as manufacturing. But put together with the suggestions for building our industrial base, the combined effort could easily reduce the employment rate by more than half.

Nigeria could easily be a talent factory; tech talent, especially. One of the abundant resources we are endowed with as a country is people. Intelligent people. And it is the one thing that does not require too much hard infrastructure to develop for what is an increasingly global digital economy.

How do I mean? You may wonder about the poor quality of our educational institutions, for instance. True, that is a constraint. But increasingly less so. How so? Anyone who genuinely desires a good education can avail themselves of abundant resources online. It then means that the priority of government should be to ensure that basic education at the primary level, is of high quality, available and compulsory for everyone. As most Nigerians already know how to use a smartphone, regardless of their education level, it is relatively easy for them to get assess to these online educational resources, if they choose to.

What if they cannot afford data to browse the internet? That is where government comes in. Whereas in the past, the poor went to the library to avail themselves of educational resources, the internet is now where they would be able to similarly do so in today’s didgital economy. So the authorities should make available free internet/wifi/hotspots across the country for the poor to go to for such purposes.

There should probably also be an aggressive awareness campaign to inform youths about the numerous opportunities on the internet for education, skill acquisition and indeed jobs. Perhaps a second initiative should be to do something about making data cheaper or free. For instance, it is probably more optimal to invest in free wifi spots than libraries at this time.

As you are well aware, a sizeable portion of Nigerians now have smartphones; purchased brand new or used. The current numbers range from 25-40 million smartphone users. One forecast (Statista) I am privy to suggests there could be more than 140 million smartphone users in another 5 years. If a diligent citizen has a smartphone, and the knowledge on where to find productive resources on the internet, surely such a diligent citizen should not be handicapped by not being able to afford data to browse the internet.

These are relatively easy things to do. Raise power tariffs, create free wifi spots anywhere and everywhere. Together with an imminent boom in the petrochemicals sector via the Dangote et al. refinery, we could be telling a very different but very positive story in just about three years from now.

macroafricaintel | Jobs, jobs, jobs (3)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the third part of the highlights of my speech.

What is to be done in the immediate term? Power and data. Any diligent Nigerian can be gainfully employed if he or she has access to electricity and internet data that are readily available, reliable and cheap. If the authorities want to create jobs, power and data should be like air for the citizenry: almost free for the poor. Thus, the government should do the following right away.

Raise power tariffs
Power is expensive” is a better narrative than “there is no power”. At about 4,000MW on average, Nigeria’s current power generation level is about 10 percent of South Africa’s 50,000MW (rounded for simplicity). Despite this deficiency and myriad others, Nigeria’s 2018 gross domestic product (GDP) of $397 billion puts it ahead of South Africa’s more advanced $368 billion economy.

Imagine how much bigger Africa’s biggest economy could become if it were able to ramp up its power generation to South Africa’s current level. However, that would only be possible if the Nigerian government allows the electricity business to be a lucrative one for private actors. It should allow power firms set their own tariffs for an extended period; akin to the typical concession periods of 20-30 years. That is, a time long enough for profit-seeking agents of the economy, domestic and foreign, to see investing in the power sector as a huge opportunity. The price-setting process could still be coordinated by the electricity industry regulator, of course. But it should be one that makes power executives leave the room with a smile on their faces. What about the poor?

There are currently 5 major power tariff classes; namely: residential, commercial, industrial, special and street lights. We know where the rich live. And we know how much they currently spend on generators and diesel. They wouldn’t mind higher tariffs if you can guarantee them 24-hour power supply. Businesses won’t mind, either. Charge businesses and the rich with tariffs high enough to subsidise the poor.

I do not need to elaborate on how constant, reliable and abundant power would engender economic activity. Because if power is regular and cheap for the poor, aritisans can earn a living. And if power is abundant because it is a lucrative business, manufacturers would produce more and hire more. It is a virtuous cycle.

Scale-up legacy & budding economies
The mainstream view about manufacturing foreign direct investment (FDI) migrating from China and elsewhere, where wages are rising, to African countries where wages are relatively low, is increasingly unlikely. The informed view is that wages are not low enough in many African countries to compensate for inefficiencies like poor infrastructure, unskilled or semi-skilled labour and consequent low productivity.

In other words, as labour-intensive manufacturing has been migrating from China to emerging Asian countries like Vietnam, where wages are also now rising, the expected next transition to lower wage jurisdictions in Africa might be a pipe dream. And in any case, in the unlikely scenario that this changes, automation might have become so widespread that the thesis would have become irrelevant or untenable.

So should African countries give up on industrialisation? Not necessarily. African manufacturers could aim to cater for domestic consumption. And with the African Continental Free Trade Agreement (AfCFTA) in force by end-May, they could also aim to serve the continent. So, fast moving consumer goods, cement, petrochemicals, and so on, are industries that could still be developed. Yes, you guessed it. Nigeria should sign the AfCFTA right away.

Aliko Dangote, Africa’s richest man, is a good example of what is currently feasible. If you look at his portfolio of manufacturing endeavours, which mirror the aforementioned, it is only cement that he is probably able to export currently. And it is largely to neighbouring African countries. Dangote’s soon to be completed crude oil refinery in Lagos would probably also enable him export fuel and petrochemicals; likely to other African countries as well. These are the types of manufacturing that could now be reasonably hoped for. In other words, Dangote’s industrial endeavours already exemplify Nigeria’s currently feasible or optimal manufacturing possibilities frontier. So, the authorities should enable more Dangotes.

Put simply, our industrial development goal as a country should no longer be to be part of global value chains (GVCs) as being advocated by mainstream experts. This is because recent and likely future trends of nationalism and automation would likely make current GVCs not very “global” pretty soon.

In the Nigerian case, the agricultural value chain, from the farm to the factory gate, is still viable and would accommodate a lot of jobs. Nigeria could also begin to develop new industries. With lithium, a key input for batteries of electric vehicles (EVs), which Nigeria has in abundance in the northcentral state of Nassarawa, the authorities could certainly aim to make Nigeria an intergral part of the battery segment of the global EV value chain.

The movie industry (or Nollywood), which reportedly already employs more than 1 million people, could also be scaled-up. Other sectors of the entertainment industry probably employ just as much. And certainly, stronger intellectual property laws and enforcement could easily double that number; talk less of other more substantive measures. Of course, it is important to mention that Nigerian banks are already doing their bit to enhance the creative industry; with affordable loan facilities, for instance. What needs to be done is to find ways to scale-up that effort as well.

macroafricaintel | Jobs, jobs, jobs (2)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the 2nd part of my speech. I also include some of the points raised by other participants.

Happy people, good government
In a matrix I presented at the dialogue, I identified the key issues the average Nigerian would consider to be “development”. A happy people have jobs, enjoy good infrastructure and live in security. A good government is elected through a credible political process. And because corruption is frowned upon, a good government uses the revenue it earns to provide or facilitate what would make its people happy: jobs, infrastructure and security.

On the panel at the KAS economic dialogue, security was the number one priority for Dr Obadiah Mailafia, a presidential candidate in the 2019 elections. He related a story of the harrowing experience of a relative of his in violent clashes in his area of the north to justify this. Dr Mailafia also asserted the need for every Nigerian to be registered with the authorities. In other words, every Nigerian should have a national identity card.

For Olaf Schmuser of Commerzbank, the government spend on debt servicing was a major source of concern. In addition to highlighting the need to address the problem of power shortages, her forte, Onyeche Tifase of Siemens asserted the need to develop the country’s human capital; especially in light of our increasingly digitalised world and how information technology has democratised access, thus allowing Nigerians and indeed other Africans to be active participants. The cultural constraint on development was also an issue that resonated with her; albeit she reckons a shift in mindset towards one of excellence in our part of the world is inevitable.

To achieve the things that would make the people happy, that is, jobs, infrastructure and security, a country must be able to attract investment. And for the state to do its part to bring this about, it must have the capacity to do so. Simply put, the two things needed to make the people happy and the government good, are investment and state capacity.

Underpinning whether all these would be achieved in Nigeria, or in fact any other country, however, is culture. Incidentally, the culture of Germany, the sponsoring country of the economic dialogue, is an excellent example of how a society’s culture is germane to development.

Germany has a culture of excellence, precision and persistence. Such is its culture’s knack for precision that there are no two words in the German language for anything, one Nigerian employee of its consulate in Lagos tells me at the dialogue. Unfortunately, our culture cannot be similarly praised in regard of these values. And because culture is the foundation of everything else, which I show in my matrix by putting it at the bottom, it can be attributed for why Nigeria continues to flounder.

In fact, I am convinced that the ongoing exodus of middle-class Nigerians to Canada and elsewhere abroad, is motivated not only by a desire for a better education for their children, but also to inoculate them against some of our bad cultural practices. True, they do not entirely escape it even while abroad. But they are better able to make informed choices with relatively little or no costs.

That said, what is to be done in the immediate term?

macroafricaintel | Jobs, jobs, jobs (1)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) in the week just past (23 May 2019). Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari.

On the panel afterwards, moderated by Marc Lucassen of AHK and Vladimir Krech of KAS, were Obadiah Mailafia, former deputy governor of the Central Bank of Nigeria (CBN), Onyeche Tifase, chief executive of the Nigerian subsidiary of Siemens, the German industrial conglomerate, Olaf Schmuser, senior representative of the Commerzbank franchise in Nigeria, and myself.

I started my speech with the one issue that is undoubtedly uppermost on the minds of Nigerians at this time: Jobs!

We have a jobs crisis in Nigeria. As I recall, during the 2019 election campaigns, when it became quite clear the prosperity messaging of “jobs” by the main opposition People’s Democratic Party (PDP) was resonating with the populace, the ruling All Progressives Congress (APC) changed its broad emphasis on what it likely saw as an array of achievements in fighting corruption and building infrastructure, for instance, to one of how many jobs it had created in the past four years.

How is it possible that we have a jobs crisis with only about a quarter of the labour force not employed, you probably wonder? At 23 percent, the unemployment rate would probably be considered relatively mild; if our challenging circumstances are considered.

There is nothing wrong with the statistics. Because when the under-employment rate of 20 percent is added to the unemployment rate of 23 percent, totalling 43 percent, the statistics reveals what comes close to what you and I probably see and feel on the proverbial “streets”.

43 percent of the labour force is without a full-time job or any job at all. That is a labour crisis. And to think just about four years ago (Q4 2014), that is, relative to the most recent data of Q3-2018 that I quoted, the unemployment rate was 6 percent; albeit the underemployment rate was still quite high at about 18 percent.

The poor economic growth of recent years is attributed for this sorry state of affairs. In light of the abundant evidence that the Nigerian economy enjoys a boom when oil prices are ascendant, it could also be said that relatively lower crude oil prices are to blame when the economy underperforms.

When the Nigerian economy grew by 6.2 percent in 2014, Brent crude oil prices averaged at $99 per barrel, for instance. In the three preceeding years of 2011, 2012 and 2013, when growth was 5.3 percent, 4.2 percent, and 5.5 percent respectively, oil prices averaged above $100 a barrel.

In 2016, when the economy recorded negative growth of 1.6 percent, oil prices averaged $45 a barrel. And when oil prices recovered to above $50 in 2017, the economy started growing again; albeit below 1 percent. Incidentally, medium-term growth expectations of above 2 percent from 2019, are also based on expectations of high oil prices; above $60 a barrel, at least.

Still, considering how oil GDP is less than 10 percent of the country’s output, it is highly unlikely that the sector itself is responsible for the growth push when oil prices are high. What is it then?

My theory is viz. Oil prices affect the economy so because government spending is a major catalyst of economic activity in Nigeria. And when oil prices are high, the government has more revenue and thus spends more.

If that is the case, the authorities have to find a way to tax more of the citizenry with little or no upheaval. A recent testing of the waters on increasing value-added tax (VAT) was met with resistance. I suggest perhaps another way in later sections. Why not take a direct charge on bank deposits, for instance? The banks do it, why can’t the government?

This is even more pertinent considering how now the government uses 60 percent of its revenue for debt servicing. At 28 percent of GDP, the country’s gross public debt is not alarming. But if the debt of the federal government of 25 percent of GDP takes more than half of its revenue to service, that would be alarming indeed.

Also published in my BusinessDay and Premium Times newspaper columns

macroafricaintel | In Conversation: Adesola Adeduntan, CEO, First Bank (1)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Adesola Adeduntan, CEO of one of sub-Saharan Africa’s oldest and largest private sector banking groups, reviews the dominant trends of the sector in Nigeria and the wider West African region and discusses the relationship between the banking industry and the increasing number of telcos which are providing alternative financial services. Interview by Rafiq Raji.

What are the notable banking industry trends in Nigeria and wider West African region you’ve observed over the past year?

Within the past year, banks across Nigeria and West Africa have made good progress towards being more customer-centric. There is a greater emphasis on putting the customers at the heart of business decisions and actions. Significant number of Nigerian and West African banks have been deliberate in accelerating the implementation of their digital transformation agenda. This trend is supporting the drive towards turning banks’ operations into more agile, strategically focused and technologically-driven organizations.

There is increased focus on leveraging artificial intelligence and robotics to drive improved customer experience as well as internal operational efficiency. Many of the banks are making strategic investments in data and analytics as data has been tagged ‘the new oil’. Overall, we have observed an increase in the deployment of digital banking platforms, artificial intelligence, robotics and analytics capabilities.

We have seen many banks setting up digital and innovation laboratories as a means of institutionalizing new ways of working and serving customers.  As the industry and its ecosystems continue to evolve, Nigerian and West African banks are embracing innovation to achieve institutional agility. Banking industry players are also collaborating with key partners within the broader ecosystems to curate lifestyle banking solutions for various customer segments from wealth management to a bouquet of digital retail products that will improve financial inclusion. As these transformations continue to shape the way that banks transact, numerous trends will continue to emerge within the banking sector.

With respect to revenue generation and profitability, we have witnessed a significant drop in the rate of return on government securities in Nigeria and other West African economies over the last one year. For instance, we have seen Nigerian treasury bill rate drop from about 19% to below 13% over the last 12 months. In other West African economies such as Sierra Leone, Gambia, Ghana, etc, we have seen rates drop from over 20% to as low as single digital. This trend has made it imperative for Nigerian and West African banks to refocus their business strategies towards growing risk assets portfolio by funding quality wholesale transactions and aggressively driving consumer lending.

How do you see the banking industry evolving over the next year or so; in Nigeria, Ghana and broader West African region?

Over the next year, we envisage an upsurge in fully digitized bank operations that target digital customer segments with increased collaborations with FinTech. The overall outcome will be increased emphasis on innovative banking products from micro-lending on mobile platforms to enhanced retail banking offerings for the mass market leveraging social media platforms. Generally, the goal would be to ensure that the users of financial products can carry out self-service banking services across several platforms. Additionally, with improved use of analytics and customer relationship management tools; the industry will experience a shift from generic banking products to customized products that directly address specific customers’ needs.

For Nigerian, Ghanaian, and wider West African customers, I see a future where the industry players will reinvent traditional banking and the way services are offered to customers. A future where customers can acquire over 80 percent of banking products online, have access to automated credit, peer to peer lending, one stop shop for small and medium scale businesses and other banking product innovations driven by technology. I also see a future, in Nigerian and other West African banks, where there will be increased focus on deploying and leveraging omni-channel capabilities to improve overall customer experience.

Interview was first published in the first quarter 2019 issue of African Banker magazine

macroafricaintel | Nigeria Decides 2019: Void votes & inconclusive state polls – something is not right

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Turnout was abysmally low in the 9th March governorship elections. Militarisation of the process and voter disillusionment on the back of the 23rd February presidential election have been blamed. That is apart from the typical disinterest associated with state elections owing to the overbearing influence of so-called political godfathers on the process.

It is somewhat bizarre how the states in which governorship elections were declared inconclusive, namely Kano, Sokoto, Adamawa, Bauchi, Benue, and Plateau, either had the main opposition People’s Democractic Party (PDP) candidate in the lead, or the PDP candidate had a fighting chance at winning, or the states were strongholds of the PDP.

And almost consistently, the gubernatorial candidates who expressed satisfaction with now upcoming re-runs, were mostly from the All Progressives Congress (APC) party, while those who were displeased were mostly from the PDP.

In Adamawa, the PDP’s Ahmadu Fintiri, got 367,471 votes, while the APC’s Jibrila Bindow, the incumbent, got 334,995 votes. As the margin of 32,476 votes was less than cancelled votes of 40,988, the Adamawa election was declared inconclusive.

In Bauchi, the APC’s Mohammed Abubakar, the incumbent, garnered 465,453 votes, while the PDP’s Bala Mohammed got 469,512 votes. The poll was also declared inconclusive, as the 4,059 votes margin is lower than the number of cancelled votes.

In Sokoto, the PDP’s Aminu Tambuwal, the incumbent, got 489,558 votes, while the APC’s Ahmed Aliyu got 486,145 votes. With the margin of 3,413 votes between the pair less than cancelled votes of 75,403 votes, the Sokoto poll was also declared inconclusive.

In Benue, incumbent Samuel Ortom of the PDP secured 410,576 votes, while the APC’s Emmanuel Jime got 329,022 votes. Similarly, as the margin of 81,554 votes between the pair was lower than the 121,019 cancelled votes, the poll was declared inconclusive.

In Plateau, incumbent Simon Lalong of the APC got 583,255 votes against 538,326 votes for the PDP’s Jeremiah Useni. With cancelled votes of 49,377 more than the margin between the two of 44,929 votes, the poll was also declared inconclusive.

While the final collation at the state headquarters of the Independent National Electoral Commission (INEC) in each of the states followed the Commission’s guidelines in ruling as such, it is also noteworthy that the key variable in coming to these decisions is the number of cancelled votes; which is rules-based but discretionary, and typically done at the respective collation centres. And since the basis for cancellations is well-known, political actors could quite easily engineer events to make them happen.

Of course, a rebuttal by those who favour the ‘inconclusive’ decisions is that if the aggrieved parties were really that popular, they would have unassailable leads that void votes would hardly be able to change. As re-runs tend to favour incumbents, however, those who argue that some state interference was involved can hardly be blamed as well.

So while the opposition PDP has made a determination to protest the bizarre trend, it might be more important for it to put in greater resources and efforts towards winning the soon-to-be scheduled re-runs, which must take place within the statutory 21 days from 9th of March. In any case, if it has evidence of wrongdoing, the courts are also at the disposal of its candidates.

What is abundantly clear is that the quality of the 2019 elections would have been greatly enhanced had the amended electoral law been assented to by President Muhammadu Buhari. Now that he has won re-election, Mr Buhari should do the great service of, firstly, signing, before the end of the current legislative term, the amended electoral bill that was forwarded to him ahead of the 2019 polls.

Secondly, the insights garnered from the likely numerous election petition tribunals across the country should be incorporated into a second amendment to the signed amended electoral law, which should be assented to by the president during the upcoming legislative term but before the end of 2019.

In other words, political stakeholders should not now wait again until the 2023 elections are about, before making amendments to what is clearly a flawed electoral process.

The service required of the PDP is to go to the tribunal for all the elections it considers to be below par, with the primary intent of ensuring that the process becomes fairer; and thus only seeing potential wins of mandates for its aggrieved candidates as additional gains.

Jagaban redeems himself in Lagos
In Lagos, the ruling APC pulled its weight this second time around, with its gubernatorial candidate Babajide Sanwo-Olu getting 739,445 votes, beating the main opposition PDP candidate Jimi Agbaje, who garnered 206,141 votes.

In the presidential election, the APC secured 580,825 votes in Lagos, while the PDP got 448,015 votes. Clearly, the APC upped its game in the second vote. More importantly, Mr Agbaje was quick to congratulate Mr Sanwo-Olu for his victory; a good end to a good fight.

Also note how the sum of votes for the APC and PDP in Lagos for the two elections was virtually the same. In the presidential election, both parties’ sum of votes was 1,028,840, while in the governorship, it was 945,586; about 1 million in each case.

So clearly, some of the votes that went to the PDP in the presidential election moved to the APC in the governorship poll.

APC’s poor showing in the presidential poll in Lagos was clearly a wake-up call for the leaders of the party; who were perhaps getting a little complacent. A video recording of one of the post-mortem meetings of the party after the poll which I watched, showed party leader Bola Tinubu (‘Jagaban’) calling out the leaders of each of the key sections of the state, publicly applauding those who came through for the party in their areas of responsibility and deriding those who did not.

Thus, you did not have to be clairvoyant to know it was almost a do-or-die affair for the laggards in the Lagos APC to prove their worth. Thankfully, they did so in a non-violent manner. Because unlike the many reports of wanton violence across the country, there was relatively no violence in Lagos.

And the spirit of sportsmanship was clearly displayed by the main opposition PDP candidate, Jimi Agbaje, who called the victor, as soon as it became clear he had lost; that is, even before the official results were announced.

Game of thrones in Kano
Kano sprung a huge surprise. Or maybe not. For some reason, the PDP woke up from its slumber in the governorship election. The ruling APC candidate Abdullahi Ganduje got 987,819 votes, while the main opposition PDP candidate Abba Kabir-Yusuf got 1,014,474 votes.

The election was declared inconclusive because the 26,655 votes margin was less than the cancelled votes of 128,572. This is a far cry from what happened during the presidential election where the PDP secured 391,593 votes and APC garnered 1,464,768 votes. Note how the sum of the votes for both leading parties in both elections was about 2 million; albeit the tally was lower in the second vote.

So why the very wide margin in the presidential election and tighter one in the gubernatorial election? When the Kwankwasiyya political group led by former Kano state governor Rabiu Kwankwaso turned up en masse for the rally of PDP’s presidential flagbearer Atiku Abubukar on 10th February, some of the assumptions about the strenght of Mr Buhari’s followership in the state began to unravel a little bit.

Or so it seemed. Because Mr Buhari went on to prove the doubters wrong. It was thus logical to suppose the APC governorship candidate would similarly coast to victory quite easily. That has proved not to be quite the case as yet.

An objective interpretation could be that Kano state voters, Mr Kwankwaso’s followers at least, did not quite like Mr Abubakar, the PDP presidential candidate, but turned up at his rally to honour their benefactor. It could also be that, that was the script sent down by Mr Kwankwaso to his followers in fact.

With likely no such dilemma for the governorship poll, Mr Kwankwaso was likely then able to pull his weight much more forcefully. Still, it could also be that the results were rigged in the presidential election. Proof of this or otherwise should be revealed at the presidential election tribunal, where Mr Abubakar is contesting the results.

Some have attempted to spin the close race in Kano and the clear PDP lead there as Mr Buhari’s doing, suggesting that when the president raised Mr Ganduje’s hand at his rally in Kano, he made a subtle remark in Hausa to suggest he did not wholeheartedly support the governor’s candidacy. That is nonsense.

Buhari, even as he has a cult following in Kano, needed Ganduje’s support. That is, even as he likely also put in place an ‘insurance’ policy in the person of the now widely applauded Kano state commissioner of police, Mohammed Wakil.

I do not agree with the suggestion in some quarters that the Kano police boss got instructions from Abuja to take some of the laudable steps he took recently; like taking into custody the deputy governor of the state, Nasiru Gawuna, for attempting to manipulate the results of the state election.

Instead, what I think happened is what is likely already well-known. If you want to keep a keen eye on a governor (or any public official for that matter), you send an honest cop (or official) to work with him or her. What Abuja was likely counting on, was that the police commissioner would live true to his reputation; and he did.

From the outset, the intuition was that PDP’s Abubakar would have a difficult time winning the hearts of voters in the Northwest. But with Sokoto’s governor Aminu Tambuwal and former Kano state governor Kwankwaso in his camp, some of these assumptions required a re-examination.

And with those sea of red caps of Kwankwasiyya adherents at Mr Abubakar’s February rally in Kano, any objectively minded person would have re-evaluated his or her assumptions. Based on the Kano state governorship results thus far, however, some firm and likely more reliable inferences can now be made.

The issue with Mr Abubakar in Kano and the Northwest at large was a moral one. Left with the choice between Abubakar and Buhari, Kano voters had no dilemma about who to choose. It was also one of the reasons why the APC camp was very jubilant when Mr Abubakar won the PDP presidential primaries.

Against a Tambuwal of Sokoto state, who was a frontrunner for the ticket back then, it might have been a different story. This is because, apart from being young and scandal-free, the argument of a potential eight years for the north in the state house in Abuja would have been hard to beat.

When the fanning of negative tribal sentiments against Mr Abubakar’s running mate, Peter Obi, who hails from the southeastern part of the country, by some northern religious leaders is also considered, it is not surprising the PDP aspirant had a poor showing in the region.

It raises the question then of whether Mr Kwankwaso backed Mr Abubakar wholeheartedly. No one can say for sure. But I doubt very much his followers got orders from him to vote Mr Abubakar no matter what. Because when it came to the elections that likely really mattered more to Mr Kwankwaso, the governorship, that is, his followers clearly delivered.

It is also clear Mr Ganduje has a solid following in Kano. Because despite the bribery scandal hanging around his neck and the formidable Kwankwasiyya opposition he faced, he still managed to compete neck-on-neck with the PDP candidate.

Quietude wins in Ogun
Ogun went to APC in the end. And quite easily; proof that turnount at rallies is not a reliable indicator of popularity. The APC candidate Dapo Abiodun got 241,670 votes, while Adekunle Akinlade of the Allied Peoples Movement (APM) got 222,153 votes.

The outgoing governor, Ibikunle Amosun, of the APC, who is now a senator-elect, backed the APM candidate. Of course, the APC would be wise to keep Mr Amosun within the fold. Because since the APM has already announced it would be going to the tribunal to contest the results, the APC could ask Mr Amosun to stop the court challenge in exchange for the APC lifting his suspension from the party.

Demystification of Okorocha in Imo
The main opposition PDP candidate, former deputy speaker of the federal House of Representatives, Emeka Ihedioha, won the day in Imo state, garnering 273,404 votes.

From the look of things, Mr Okorocha’s popularity was probably a little exaggerated. The candidate he backed, his son-in-law, Uche Nwosu of the Action Alliance (AA) got 190,364 votes. Hope Uzodinma, the candidate of the ruling APC, which is officially Mr Okorocha’s political party, got 96,458 votes.

But for the divisions in the APC in Imo state, all 286,822 votes, the sum of the votes garnered by Nwosu and Uzodinma, would have given the ruling APC party a clear win in the state.

And not only did hoodlums burn an INEC office in Imo state, it is alleged Mr Okorocha forced an INEC returning officer to declare him winner of the Imo West senatorship in the 23rd February elections. In response, INEC did not publish his name in the list of senators-elect to be issued certificates of return.

Would there be a re-run? And if there is one, would he be barred from participating? Or would the hitherto 2nd place candidate be declared winner instead? Time will tell.

War of the ‘Generals’ in Rivers
The security situation in Rivers that led to INEC cancelling the electoral process there is deplorable. This is because it was unnecessary and avoidable. With APC not officially on the ballot, it also looks bad for the ruling APC party in Abuja. Because without the military’s involvement, there probably would not have been as much tension as there was. And this is the assessment by most objective observers.

Ordinarily, the incumbent governor Nyesom Wike of the PDP would be expected to carry the day in Rivers; since the APC is not on the ballot owing to court orders. Undaunted, the APC put its weight behind African Action Congress candidate Biokpomabo Awara, who claims to be leading in the 7 of the 23 local government areas of the state for which results are already in the public domain; which reports put at 289,773 votes for Awara and 76,633 votes for the incumbent Wike of the PDP.

The key two actors, Rivers state governor Wike, and former governor Rotimi Amaechi, must accept responsibility for all that has happened. Irrespective of who started what, they are both to blame for the deplorable state of the electoral process in the state. My view.

Besides, the European Union (EU) observer mission’s report on the electoral process in Rivers is very instructive. “Observers, including EU observers, were denied access to collation centres in Rivers, apparently by military personnel. In Rivers, INEC…suspended until further notice the elections due to violence in polling units and collation centres, staff being taken hostage and election materials, including results sheets, seized or destroyed by unauthorised persons. There is no doubt that the electoral process there was severely compromised.” If this conclusion is also made of the entire 2019 electoral process, one would be justified.

Nigeria Decides 2019: The lesser elections that really matter

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Will people go out to vote on Saturday, 9th March? Maybe that is not the right question. Would more or less people vote in the gubernatorial elections than they did a week ago in the presidential and parliamentary elections?

A lot of Nigerians care a great deal about the presidential and parliamentary polls. For those of states and local governments? Not so much. So, considering how turnout was quite low for the former, there are concerns the potential disinterest might be worse for the latter. Still, it is best to be optimistic.

The big states, like Lagos, Kano, and Rivers, get some attention, though. And deservedly so. But because state politics tend to be in the firm grip of so-called ‘godfathers’, most people do not even bother to make the effort. I reiterate the need for conducting the presidential, parliamentary and gubernatorial polls on the same day.

The states I am watching closely are Lagos, Ogun, and Imo.

Kano would have been part of my watchlist. But after the poor showing of the People’s Democratic Party (PDP) in the state during the presidential poll, despite its aplomb beforehand, I am not so sure there is a contest there.

The PDP secured 391,593 votes in Kano state during the presidential election, while the APC garnered 1,464,768 votes. So, the incumbent, Abdullahi Ganduje of the All Progressives Congress (APC), would probably secure a second-term in office.

The Lagos gubernatorial poll is one to watch. In the presidential election, the two leading parties, the ruling APC and the main opposition PDP garnered about the same votes. The APC secured 580,825 votes, while the PDP got 448,015 votes. Clearly, the underdog PDP has a fighting chance.

Ogun is perhaps the most interesting one. The outgoing governor, Ibikunle Amosun, of the ruling APC, who has already secured a senatorship, is supporting Adekunle Akinlade of the Allied Peoples Movement (APM).

True, Mr Akinlade and his supporters were forced to move to the APM after allegedly losing out to the powers that be in the APC. But as party men, it was ordinarily expected Mr Amosun and his protégé would lick their wounds and toe the party line thereafter. Mr Amosun would have none of it and has not hidden the fact that his support is with the APM candidate.

And there is ego at stake as well. Should Amosun prevail in Ogun state, it might be the beginning of serious divisions within the Yoruba political household currently under the leadership of Bola Ahmed Tinubu. Amosun’s close relationship with President Muhammadu Buhari also means Mr Tinubu has to exercise tremendous restraint.

Incidentally, there seems to be popular support for Mr Amosun’s choice. On the face of it, at least. But considering how turnout at rallies has been a poor indicator of success at the polls, proof would be in whether Akinlade’s percieved lead translates into the majority of votes on polling day.

Should the Akinlade-Amosun alliance prevail, however, the APC would still need to figure out a way to punish Mr Amosun for his ‘anti-party’ activities on the one hand, having already suspended him, while on the other hand remaining well-positioned to benefit from his political fortunes.

Another state I am watching closely is Imo, where outgoing governor Rochas Okorocha has also been suspended by the APC. Mr Okorocha has also secured a senatorship. And just like Ogun’s Amosun, he is supporting Uche Nwosu of the Action Alliance (AA), a candidate from another party, to replace him as governor.

What the APC does after the results are released is up to it. But it clearly cannot afford to lose these states. And it must do its utmost to keep the two senators within the fold. But should the party also tolerate indiscipline? Certainly not.

Still, most would recall how similar infighting within the APC four years ago literally created an opposition bloc within the party, thus making it difficult for Mr Buhari to govern properly. The same mistake should not be made again.

macroafricaintel | Nigeria Decides 2019: Post-election note (2)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

Turnout conundrum
One of the facts that struck me after the release of the 2019 presidential election results in the last week of February was the relatively low turnout. Hitherto, anecdotal evidence suggested turnout was ‘impressive’. On a relative basis, it was not. But it was indeed impressive on an absolute basis; especially in light of the prevailing factors of the one-week delay of the poll, security fears and the logistical challenges of the Independent National Electoral Commission (INEC).

29 million registered voters were accredited for the 2019 presidential poll; the same number of voters that participated in the 2015 poll. Relative to the number of registered voters, however, the 36 percent that voted this time around was lower than the 44 percent of 2015. 82 million Nigerians registered to vote in 2019, more than 20 percent higher than the 67 million that registered to vote in 2015.

A well-known public figure made an interesting point about what could be responsible for the relatively low turnout. His view was that the turnout figures for the elections in 1999 (30 million), 2003 (42 million), 2007 (35 million) and 2011 (40 million), which did not use card readers for voter accreditation, were probably bloated. Put simply, they were higher because it was easier to rig elections back then when card readers were not part of the process.

So, the more reliable base to compare the 2019 turnout of 29 million should be the 2015 poll figure of the same amount. Why? Card readers were first used in 2015. In a nutshell, the turnout would be poor or good depending on whether you choose to look at the proverbial ‘glass of water’ as half-full or half-empty. Still, there was indeed significant voter apathy. And it is likely the one-week delay contributed to the disinterest.

Nothing wrong with going to court
I have been asked whether the decision by the main opposition People’s Democratic Party (PDP) candidate Atiku Abubakar to go to court is good or bad for the economy. My view is that it is good for our political development. Thus, unlike the popular view that Mr Abubakar should choose to be a statesman by conceding defeat, I think he would do a greater service to the nation by going to court.

Since it is highly unlikely Mr Abubakar would prevail in court, his primary object in taking legal action should be the improvement of our democracy. It could be hoped that the process would reveal certain irregularities and mis-steps that could in the aftermath of his legal action be corrected by a better electoral law.

Reform INEC & electoral process
There is clearly a need to unbundle INEC, for instance. While it could never be ‘independent’ in the real sense of the word, it could certainly be made more efficient. I would certainly recommend that the sequencing of the presidential, parliamentary and governorship elections be revised. A suggestion might be for the three to be held on the same day. Because after the presidential and parliamentary polls, which are held on the same day, there is a tendency for most politicians and voters to align with the ‘winning’ party in subsequent polls down the line.

Another reason is already palpable. After winning re-election for its presidential candidate, Muhammadu Buhari, the ruling All Progressives Congress (APC) almost momentarily suspended Imo state governor Rochas Okorocha and Ogun state governor Ibikunle Amosun for anti-party activities. While the party is justified in doing so, in light of their quite well-known political preferences, it is highly unlikely the party would have made the move before the presidential poll, when their political capital was needed to support President Buhari.

Is the Abdul-Salami Abubakar peace committee wasting its time trying to nudge the opposition PDP’s Abubakar to concede defeat? Not really. But I do not think it is necessary. Mr Abubakar has promised to only go to court. He has not, however, said he would engage in any form of public disturbance. Besides, the court action, which could take up to a year to finalise, may serve the additional purpose of keeping Mr Buhari on his toes. What do I mean? There is a risk of complacency in any second presidential term. An active opposition may help to ensure that Mr Buhari’s administration is more inclusive this time around.

The Kenyan precedence
When Raila Odinga, the main opposition presidential candidate in the 2017 Kenyan presidential election lost to the incumbent, Uhuru Kenyatta, an aggrieved Odinga engaged in protests, and even swore himself in as substantive president. A wise Kenyatta, after initially taking the aggressive route, came to the realisation that both of them actually wanted the same thing.

They both loved their country. They both wanted to fight corruption. They both wanted a more inclusive politics and government. They both wanted Kenyans to have better lives. In what is now termed the ‘Handshake’, President Kenyatta and Mr Odinga decided they would work together instead. And today, the fight against corruption in Kenya is gaining momentum. And a referendum towards a more inclusive government is now in the works.

The Nigerian case is not as serious as the Kenyan one, however. Politics in Kenya is almost strictly along tribal lines. Kenyan politics is also dynastic. In Nigeria, some tribal loyalties exist. But Nigerians do vote across tribal lines when they want to. And there is yet to be a political dynasty at the federal level in Nigeria.

A potential legal action by PDP’s Abubakar could also engender continued debate about how we want to move Nigeria forward, how to move our politics to one of ideas and not the pocket. In the aftermath of a possible loss at the courts, Mr Abubakar could go on to organise policy dialogues and debates that could even include the ruling APC officials in government. He would also likely get opportunities to give lectures at think-tanks and universities around the world. In the process, a new set of conservatives (‘Buharists’) and progressives (‘Atikulates’), that are younger, more enthused, detribalised and bound by a patriotic desire to serve Nigeria, might emerge.

macroafricaintel | Nigeria Decides 2019: Post-election note (1)

By Rafiq Raji, PhD
Twitter: @DrRafiqRaji

I spent the election weekend power-reading two books about Nigeria’s recent political evolution.

The first, “My transition hours” by former president Goodluck Jonathan, details the author’s version about the events that led to his concession of defeat in 2015 to incumbent president Muhammadu Buhari.

The second, “On a platter of gold – How Jonathan won and lost Nigeria” by former sports minister, Bolaji Abdullahi, provides a more objective view of the same events during the Jonathan presidency.

I also did a quick recap of two other books; namely: “Against the run of play: How an incumbent president was defeated in Nigeria” by former presidential spokesman, Olusegun Adeniyi, and “Fighting corruption is dangerous” by former finance minister Ngozi Okonjo-Iweala.

I was trying to get a better understandng of the workings in the corridors of power, the State House especially, during an election in which the incumbent is seeking a second term.

True, the circumstances now are very different from those of four years ago. But as far as I know, there has probably not been an administration, with as many books by former insiders, so quickly after its end, as that of Mr Jonathan.

A fifth book, “Political order and political decay” by Francis Fukuyama, which I have to admit, I am yet to finish, has a whole chapter on Nigeria. It makes for sober reading.

The book reflects on the political evolution of different parts of the world. Why is northen Europe (“Germany, Holland, and Scandinavia”) more prosperous than southern Europe (Greece, Italy), for instance? Fukuyama identifies “clientelism” (or patronage) and “corruption” as key reasons why.

Still, these countries, though still troubled, have managed “to provide basic public goods at a level sufficient to turn their societies into wealthy developed countries.”

When we turn to the African country of Nigeria, however, we observe clientelism and corruption of an entirely different order of magnitude and, correspondingly, one of the most tragic development failures in the contemporary world.”

What is abundantly clear is that any candidate seeking to unseat an incumbent president of this country deserves our sincere best wishes. Because he or she would need it.

When you read the accounts of these former government insiders and reflect on the comments of key government officials during this election period, it is unbelievable how much you begin to understand. And how much more you do not.

You certainly know for sure that there is no such thing as an “independent” electoral commission in the Nigerian context, for instance. That is, in the practical sense of the word.

Because judging from the accounts of various schemes around elections during previous administrations, you realise there is a lot people in the executive branch of government can do to determine how “independent” or not an electoral commission would be.

Let us just say when the current insiders also write their books, there is likely a lot we would learn that is likely very different from what they have been telling us.

Was the adminstration totally caught by surprise by the postponement of the polls by one week, for instance? I have a view. But it is irrelevant now.

Still, I thought the consistency in the responses of ‘surprise’ by top officials of the ruling party in and outside of government, when the news broke, to be a little odd.

Regardless, as far as one can objectively assess what happened on election day, the presidential and federal legislative polls on the 23rd of February were likely better than they would have been had they been held a week earlier.

Turnout was impressive. And it was pleasantly surprising how the new accredit-vote-and-go process turned out to be quite effective. It reduced bottlenecks, as people did not have to wait till accreditation was over before voting.

It was also heartening to see governors, those of Kaduna and Ogun for instance, and other gubernatorial aspirants, stand in line with ordinary Nigerians, genuinely waiting to get accredited and cast their ballots.

True, there were some problems here and there. Card readers malfunctioned in some places. Ballot boxes were snatched in a number of places as well. Violence was also reported in at least three states. But by and large, these incidents were not outside the realm of expectations about a typical Nigerian election.

But that is the calm before the potential storm. It is the aftermath of the announcement of results that bears watching. The admonition to all the candidates is that in the event the outcome is not to their satisfaction, kindly do one of these two things: Go to court or go home and rest.