OPINION: Waivers for the rich, hard labour for the poor – Henry Boyo

Published:10 Dec, 2012

OPINION: Waivers for the rich, hard labour for the poor – Henry Boyo

The primary underlying principle of a social contract in a modern democratic dispensation is that of equality of all persons.

Instructively, the wider the social inequity, the greater also will be the level of national instability, and the more restrained will be that nation’s economic growth trajectory.  Consequently, it becomes inexplicable that some government policies and initiatives should facilitate the prosperity of a favoured sub-group at the expense of the vast majority.

Curiously, government projects and policies overtly intended to improve mass social welfare have often transformed to a bonanza for a select few, while the majority remain victims of such exploitation.  Presidential import waivers are a good example of such misguided government interventions.  However, in spite of the gross abuse associated with import waivers, no beneficiary of waivers has ever been formally reprimanded for improper conduct!

The damning revelation from partial waiver on fuel prices is another example of how a handful of Nigerians can collaborate with government officials to rip-off the treasury!

Regrettably, those who facilitated or approved the fraudulent applications for subsidy payments have not suffered any overt sanction, and probably never will; after all the former Governor of the Central Bank of Nigeria and the auditors who gave the banks clean bills of health prior to the banking meltdown have also presumably enjoyed waivers, as none of them apparently suffered any sanctions.  Indeed, the same officials, who presided over the mess, were retained to also ‘sanitise’ the system!

Plea bargain is another dimension of the waiver system, which protects the rich and powerful at the expense of the masses; several political office holders, who recklessly abuse their offices, ultimately go scot-free after refunding peanuts, to avoid prosecution or the need to repay billions of looted funds!

The interventions of the CBN and Assets Management Corporation of Nigeria in the banking sector also serve the same purpose as waivers; the promise that the injection of trillions of naira public funds would reposition the banks to actively support and energise the real sector has remained largely unfulfilled.  Whether or not all the banks are now truly sound remains controversial, but the positive trading reports currently posted may be evidence that the banks have prospered in spite of their inability to support the real sector, and instigate increasing employment opportunities.

Curiously, the greater part of banks’ profits are still derived from the huge interest payments on government’s borrowings to the same banks bailed out with public funds.

The waiver ‘racket’ has now found fertile grounds in the capital market; the unfettered opportunities for investors to borrow at over 20 per cent in order to acquire the price-manipulated shares of lending banks was primarily responsible for the stock market  crisis in 2008.  Worse still, it has become evident that most of these margin loans were grossly under-collateralised, in contravention of the provisions of the Investments and Securities Act.

Inexplicably, none of the 84 stockbrokers identified by both AMCON and SEC as guilty of this infraction will be prosecuted.  Curiously, these offenders are now adjudged worthy of debt waivers by none other than the Minister of Finance and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, who appears eager to consolidate her image of wilfully giving away public funds.

Although AMCON purchased the stockbrokers’ toxic assets at a discounted price of about N42bn, in reality, the current value of the underlying assets or collaterals is only about N19.6bn, according to the minister.  Consequently, AMCON’s over N2tn incursion in the money market may, in reality also, be worth less than N1tn at current valuation; thus, AMCON may ultimately have flushed another N1tn public funds down the drains.

Since the public did not partake in the profits of these stockbrokers when the going was good, one wonders why AMCON should forego N22.6bn of its asset base as debt forgiveness to speculators, who wilfully engaged in the stock market casino, with the full knowledge that the equity they purchased lacked the fundamentals to justify their inordinately high prices.  There is undoubtedly the moral hazard that this type of waiver will send the wrong signal to stock market operators, that government would underwrite future reckless or unethical market behaviour.

According to Okonjo-Iweala, the cancellation of the stockbrokers’ debt of N22.6bn is primarily aimed “at giving life to our capital market, as it would ‘remove’ the heavy burden (of debt) to allow stockbrokers to fully operate and reenter into the market with more investments and make the market more vibrant”.  It is not yet clear how the reentry of the 84 stockbrokers will reenergize the market as, they certainly cannot bring fresh capital into the market with their current zero liquidity base.

Nonetheless, in view of the constitutional provisions on appropriations, the National Assembly may still have to consider whether or not the minister has the powers to waive this magnitude of debt without legislative approval!

In addition to the debt waiver, the minister also announced the elimination of stamp duties and VAT on stock market transaction fees.  Curiously, while operators in the real sector have ceaselessly decried the multiple taxes on their depleting incomes without any sympathetic response from government, the minister has, with this measure, exempted commissions earned on traded value of shares (stock market gambling) and stamp duties on transaction fees from VAT payments.  How this will positively impact the life of the poor is left to be seen.

Paradoxically, while the ‘gambling’ proceeds in the stock market are now exempted from VAT, the government remains determined to increase VAT rate above five per cent in spite of its adverse impact on inflation and competitiveness of made-in-Nigeria products.

However, the attractiveness of equities in the Nigerian stock market will continue to slip, if the industrial landscape continues to contract, and ultimately, there may be more stockbrokers than stocks, for sale in the market!

In contrast, it is more plausible that reduction in multiple taxation and a reprieve of N22bn for Small and Micro Businesses, which inevitably failed under the yoke of over 70 per cent annual interest rates charged by Micro-finance banks, would certainly have induced a more positive knock-on effect on employment and the economy.

However,  reduction in rate of inflation and a stronger naira remain the most potent waivers for sustaining enduring economic growth and social welfare; instructively, however, such waivers cannot materialise with our permanent burden of a cash surfeit economy instigated by CBN’s substitution of naira allocations for dollar denominated revenue.

 

– Henry Boyo

Related Posts

Recent Posts

19-Year-Old Accidentally Shoots Himself While Taking Gun Selfie

Deleon Smith, a 19-year-old father of two, was found dead in Houston, Texas, yesterday after accidentally shooting himself in the throat while trying to take a selfie, ABC 13 reports. Police say Smith was posting photos to Instagram with his cousin when the gun went off. According to KHOU, Smith attempted to take a photo with the gun pointed to his head when the gun went off. His uncle who lives...

12 Things Guys Will Never Understand About Bras

The pure relief you feel at the end of the day when you take them off.I've had this described to me on multiple occasions through a variety of different expressive mediums, and it sounds way better than how just taking off your underwear feels. If I had to draw a male parallel, it'd probably be the moment your balls touch the water as you jump in a pool on a hot summer's day. And...

Acid Attack Survivor Does Beauty Tutorials To Raise Awareness (WATCH VIDEO)

In 2014, Reshma's brother-in-law allegedly threw sulfuric acid on her face while she was visiting Northern India to take an exam. She lost her left eye as a result, and her right eye is partially closed and infected. She suffers from severe burns and disfigurement and will need cosmetic surgery to repair the muscles around her mouth. Reshma's video on how to get the perfect red lips begins much like any other beauty tutorial. In an upbeat voice, she advises viewers to...

Paris Hilton’s Expensive Diamond Ring Found In Poland

Paris Hilton got lucky in Poland when a firefighter found her extremely expensive diamond ring on a bus, but based on what we know there's something sketchy going on here. Paris apparently lost the diamond-studded ring Friday on an airport shuttle bus in the city of Lodz. Two days later, an airport fireman found it on the floor of the shuttle. Now here's the sketchy part. An airport spokeswoman says the fireman thought the ring belonged...

Oh My! Braless Rihanna All Over Doir Magazine

Called Bad Girl Riri for obvious reasons, Rihanna shares her edgy new photo shoot in the pages of Dior magazine. The pop princess flashed her nipples by going braless in the stunning structured gown, paired with a flowing, velvet coat and grey latex boots with a pink perspex heel. See instagram posts below: https://instagram.com/p/7J3qICBM-k/?taken-by=badgalriri https://instagram.com/p/7J6duPhMyR/?taken-by=badgalriri https://instagram.com/p/7J7YndhMzU/?taken-by=badgalriri https://instagram.com/p/7J8n31BM0w/?taken-by=badgalriri https://instagram.com/p/7J9ETfhM1Q/?taken-by=badgalriri  

AY Shares Holiday Photos With Family In Houston

Stand up comedian, actor and producer, Ay, is enjoying some family time in Houston. He shares these lovely photos of himself, his wife and daughter and captioned "#FamilyTimeIn Houston". See instagram posts below: https://instagram.com/p/7J9VXjm4Py/?taken-by=aycomedian https://instagram.com/p/7J-Bq6m4Ac/?taken-by=aycomedian

Monalisa Chinda Covers House Of Maliq September Issue

The fair adorable beauty, Monalisa Chinda, who now hosts a talk show shared a lovely photo of herself, as captured for House of Maliq magazine. All covered in red, the actress said in her caption that she is on the cover of this month's issue, which is also her birth month. See Instagram post below: https://instagram.com/p/7KoTPxogqN/?taken-by=monalisacode  

Jonathan, Alamieyeseigha, others to attend Dickson’s declaration

Former President Goodluck Jonathan and former Governor, Chief Diepreye Alamieyeseigha, are among prominent Ijaw leaders that will attend the event as the incumbent Bayelsa State Governor, Seriake Dickson, declares for second term ambition next Tuesday. Others expected at the event include the national leadership of Peoples Democratic Party, PDP governors and National Assembly members.

Stephanie Linus Named Ambassador On Campaign Against Women Violence In Election

The heavily pregnant gorgeous beauty and ace actress, Stephanie Linus, shares photos of herself and acting INEC Boss, Hajiya Amina Zakari, among others as she was named the ambassador of Stop-VAWIE (Stop Violence Against Women In Election). She has fast began her responsibility by urging women to participate in the forth coming elections in Kogi and Bayelsa. See Instagram photos below: https://instagram.com/p/7KYks9mOV_/?taken-by=stephanielinus https://instagram.com/p/7Kamf_GOYH/?taken-by=stephanielinus https://instagram.com/p/7KoLo0mOY5/?taken-by=stephanielinus

Change is no longer a mere slogan, it is now reality – Buhari

President Muhammadu Buhari has promised that Nigerians will see the fulfillment of his electoral campaign promises soon. The president who spoke in Abuja on Wednesday through his Special Adviser on Media and Publicity, Femi Adesina, while receiving members of the National Association of Nigerian Students, NANS, who marched to the presidential villa to pledge their full support for his anti-corruption campaign, urged Nigerian youths to be rest assured that his government’s anti-corruption campaign would secure their future.   While promising that the...

Watch How Miley Cyrus’ Family React To Nicki Minaj’s VMAs Drama

Miley Cyrus wasn't the only one caught off guard by Nicki Minaj's harsh words for her at the MTV Video Music Awards on Sunday night. MTV cameras caught the reaction of the Cyrus family sitting in the audience during the epic moment, including Miley's parents, Tish and Billy Ray Cyrus, and her younger sister, 15-year-old Noah. And if you need any more...

What Jay-Z Is Planning To Give His Queen Bey On Her Birthday

According to The Sun (UK), Jay-Z has gone all out for Bey’s 34th birthday, splashing out on some custom-made, diamond-heeled Manolo Blahniks. No word on how much the glamorous present cost Jay-Z, 45, but we can only assume we’d have to sell every single one of our belongings to afford just one of the diamond shoes. Maybe even just the actual heel part. Or a single diamond. As well as gifting his...

Reps summon Finance Ministry, others over delayed implementation of budget

Members of the House of Representatives have summoned the Finance Ministry, Budget Office, Fiscal Responsibility Commission, National Planning Commission, Debt Management Office and Revenue Mobilisation, Allocation and Fiscal Commission to explain what is stalling the implementation of the 2015 Appropriation Act.   The House had, at its August 13, 2015 plenary, constituted an ad-hoc committee to investigate the non- implementation of the budget following a motion promoted by Rep. Patrick Asadu, Enugu PDP, under matters of urgent public importance. He had...

Cameroon Frees Lagos Based Journalist

Cameroonian authorities on Tuesday freed a Lagos-based Cameroonian journalist, Simon Ateba, after detaining him for four days in the country’s far north region. In a statement issued in Cameroon on Tuesday, the journalists union in the country said President Paul Biya himself ordered Mr. Ateba’s release. Mr. Ateba was arrested by the country’s security while investigating the conditions of Nigerian refugees camped in the country’s far north. Read More: premiumtimesng

Boko Haram Horsemen Strike Again, Kill 26

Insurgents rode on horses to remote Kolori and Ba’ana Imam villages in Damboa Local Government Area where they opened fire on villagers, killing no fewer than 26 people. One of the leaders of youth vigilance group; Civilian JTF in Biu told Daily Sun that many of the villagers fled to Biu on Tuesday, a day after the attack. “The attack occurred on Monday evening. Some Boko Haram insurgents rode to Kolori on horses at about...

Soyinka is ignorant, mischievous – Oyinlola fires back at Soyinka

A former Governor of Osun State, Prince Olagunsoye Oyinlola, has described the Nobel laureate, Professor Wole Soyinka’s criticism of him over the status of the Centre for Black Culture and International Understanding, Osogbo, as ignorance and mischief. One of Oyinlola's aides, who spoke on condition of anonymity, said Oyinlola was surprised that Soyinka was...

International Development Partners join forces with Aisha Buhari on maternal, child Health

The United Nations (UN) under Secretary General and Executive Director of UNFPA, Prof. Babatunde Osotimehin and a team of Development Partners, are exploring opportunities through Mrs Buhari’s office to develop a support programme to complement the present administration’s efforts at improving health, nutrition and population outcomes in Nigeria. The Senior Special Assistant to Mrs. Buhari, Dr. Hajo Sani, who disclosed this in a statement Wednesday, said that the wife of the president's concern about the plight of mothers and children...

MDCN nabs fake female doctor in Abuja

A young woman who had been posing as a medical doctor for years using forged documents has been arrested by the Medical and Dental Council of Nigeria (MDCN) on Wednesday. This is the first time the MDCN will successfully arrest a fake female doctor. According to a report by Daily Trust, the fake doctor, Angela Njide Nwosu, was arrested on the first day of her new N280,000-a-month job at a newly opened private hospital in Bwari Area Council of Abuja after...

Police To Strengthen Security Around INEC Offices

Nigeria Police Force, NPF, has disclosed its resolve to tighten security in and around offices of the Independent National Electoral Commission, INEC, across the country. Consequently, Command Commissioners of Police have been directed to ensure adequate security at such offices and also at election tribunal sittings. Inspector General of Police, IGP, Solomon Arase, stated this yesterday when he visited headquarters of INEC in Abuja, where he met Acting Chairperson, Mrs. Amina Bala Zakari. Force...

Why Power Supply Has Improved Significantly

The Permanent Secretary in the ministry of power, Amb. Godknows Igali, has disclosed that the steady increase in power supply recently experienced in the country is occasioned by the charge of President Muhammadu Buhari to power sector operators to redouble their efforts in the quest of ensuring uninterrupted power supply to Nigerians during his tenure. Igali made the disclosure while signing Memoranda of Understanding (MoU) with two indigenous investors in the power sector namely Messrs. New...

PDP admits it made mistake in Akpabio’s nomination form

The Peoples Democratic Party, PDP, has admitted that what was written in the nomination of the former governor and Senate Minority Leader, Chief Godswill Akpabio, as the candidate for Akwa Ibom North-East senatorial district in the 2015 general election was done in error.   Appearing before the Justice Goddy Anunihu-led Akwa Ibom State National and State Assembly Election Petition Tribunal in Abuja, the National Secretary of the party, Prof. Adewale Abiodun Oladipo, clarified that what was intended to be written and...