FERTILIZER COMPANIES, BANKS AND THREAT OF GOVERNMENT CONTROL
A couple of weeks ago we raised issues against the ill-advised order and threat issued by the Minister of Labour to the Banks to stop laying off excess staff or their licenses could be withdrawn. Some of us took great exception to what we believe was an unwarranted intervention of the government in purely private company affairs. We drew attention to the wrong signals that kind of action would give to the investing community, especially at a time one thought that Nigeria should be desirous of new investments. But recent happenings indicate that either our concerns fell on deaf ears or that we are mis-reading this government. We may actually be wrong in thinking that this government is interested in pursuing genuine private sector investment in the Nigerian economy at this time! Since according to this government "economic management is purely a government affair", we in the non- governmental sector may actually be wasting our time offering suggestions on how to bring our our economy out of the woods. God Help us!
It looks to me that like the Nigerian Government wants to make Nigerian Banks parastatals of the Central Bank. Every day, we hear of new orders being issued to the banks by the CBN as if the Banks belonged to them. Unless things have changed, most of the Nigerian banks are private companies, only regulated by the CBN. Last week I read a story where the CBN was said to have issued directives that Bank officers must declare their assets. And I asked to whom? To the code of Conduct Bureau, to the CBN, to the shareholders or to the public?To be sure, I am for honesty and would wish that the banks are run by "angels" if possible. But that is what I wish for all other businesses and companies in the Nigerian economy. I will have no quarrel if the Company and Allied Matters Act (CAMA) stipulates that all CEOs, Directors, Management or entire staff of Registered entities be required to declare their assets even if publicly. But for CBN to be singling out Banks, is in my view an overreach of its regulatory mandate. It is also not a global best practice and could be a disincentive to investment. Our security agencies can always investigate any infringements, accusations or indictments, but to force everyone to declare their assets may be infringing on privacy and human rights.
But my greatest distress last week came from the accusations by the office of the National Security Adviser (ONSA) and the Minister of Agriculture and Rural Development (MARD ). Both government agencies accused two fertilizer companies of sabotaging the Nigerian economy and undermining the National security. How? That they were exporting fertilizers and making fertilizers available to militants and terrorists to make explosives. Whereas I will not want to comment on the righteousness of the security accusations, I am puzzled that the ONSA will be making open accusations against these companies. In my view, if they thought or had suspicions that any of the fertilizer companies was involved in any criminal activity, they do not have to announce or issue threats. They should use their investigative machinery to establish the veracity and obtain evidence, and then arraign the affected company officials in court. It is then the Court that will determine culpability and dispense punishment according to the laws of the land.That is the way these kind of matters are handled in civilized jurisdictions. To make these kinds of weighty allegations concerning national security and just leave it hanging in the public domain does incalculable damage to both the Nation and the companies!
But if I am careful in interrogating security accusations, I should not be that careful in asking to understand when exporting a product to attract sorely needed foreign exchange has become a crime against the economy? I am currently involved in a campaign to get every company operating in Nigeria to make effort to earn foreign exchange as a way to diversify our foreign exchange sourcing and helping to offset the major economic challenge of this time- scarcity of Forex, especially the US Dollar. It is this scarcity that has devalued our Naira making it exchange 400 to the USD in the parallel market last week. It is partly this massive devaluation that is driving inflation out of control, looking to exceed 17.5% at end of July. It is this scarcity that is making life miserable for many Nigerian companies. So what do I do with my campaign now that it has been dubbed an act of economic sabotage to export to earn foreign exchange?.You see why I think that we have misunderstood this government.
As if these accusations are not bad enough to make investors in companies like Indorama Eleme Fertilizer and Chemicals Ltd to rethink their 1.5 Billion dollar( almost equal to the total Capital budget for the FGN in 2016) investment in their new ultramodern fertilizer plant with capacity to service both domestic and foreign markets, but could make them hold back the total projected investment of 4.2 Billion dollars by 2020. The threat by the Minister of Agriculture to deal with the Fertilizer companies sounds similar to the one made by the Minister of Labour. And I am flabbergasted. Where are we heading to? I hope not back to 1978- the Indigenization era? God forbid!
Mazi Sam Ohuabunwa OFR