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Lessons from the 2014 National Conference

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Being Text of the Second Edition of  Chief (Dr.) Chris Ogunbanjo
Lecture Series  delivered by Chief Ajibola O. Ogunshola

Chairman, Sir
Chief (Dr) Chris Oladipo Ogunbanjo
Distinguished Ladies and Gentlemen

The oldest man whose age has been verified, and I intend to confine myself to the male gender here, is J. Kimura (1897-2013) of Japan; he lived for 116 years and 54 days.  May I therefore wish you sir (turning to the Chief), at 93 last December, 24 more years, to start with, as this may enable you to take the crown of long life from Japan to Erunwon  Ijebu , your ancestral home.
To be invited to deliver the second edition of Chief (Dr.) Chris Ogunbanjo Lecture Series I consider an honour, and I am grateful to the directors of AFN Brokers Ltd. for the invitation.

Chief (Dr) Chris Ogunbanjo needs no special eulogy from me: his name and his fame are already in concrete in the legal and business history of Nigeria’s corporate private sector.

My first interaction with him was during the late 1970’s when he was chairman of Metal Box Toyo Glass Nigeria Ltd., a company jointly established by a Japanese and a British company, a few Nigerians and Nigerian companies.  Chief Ogunbanjo was the first and, to my knowledge, only Nigerian chairman of the company.

The Niger Insurance Company Ltd (formerly Yorkshire Insurance Company), which was then a wholly owned subsidiary of NICON and whose executive head I then was, was among the significant Nigerian shareholders and the board of the company had nominated me to represent it on the board of Metal Box Toyo Glass Ltd .
I therefore had the exceptional opportunity, as a very young man in his thirties, to gain more boardroom experience at the feet of established giants like Chief Ogunbanjo and late Chief Adeyemi Lawson who also attended a  few board meetings of Metal Box Toyo Glass.

Then, and thereafter, my interaction with Chief Ogunbanjo resulted in enhancing my respect for him. I therefore had no hesitation in accepting when Dr. Michael Omolayole, my wife’s  former boss whom both of us have come to admire over the years, first mentioned to me the invitation for the lecture.
As I was given unrestricted licence in my choice of topic, my first instinct was to talk on money, finance and some aspects of the Nigerian economy.

Reflecting over a period of nearly fifty years, I have been fascinated, sometimes bemused, by how the principles, maxims and strategies that my generation of (United Kingdom) actuarial students were taught on the investment of long term insurance and pension funds still held broadly true but became less and less sancrosant in the subsequent ages of rapid technological change, of political and economic turbulence, of globalisation, flexible exchange rates, interventionist central banks and, in Nigeria, inconsistent government policies. Stocks ( ordinary shares, equities) were going to outperform in the long term and to constitute a sure hedge against inflation. They still broadly do, but how many of the stocks that were in the  UK FTSE-100 index or in the  US S&P 500  index fifty, forty years ago are still there today, even when allowance is made for those which have been swallowed up by mergers? In Nigeria, where are Daily Times of Nigeria, Tate & Lyle Sugar Company ( Nig.), R. T. Briscoe?

Investment in offices and shops in good locations were more or less sure property bets. But have these been consistently true over long range periods? See what happened to old Lagos  Island : Broad St, Marina, Nnamdi Azikiwe St, Martins St. and others within the space of less than two generations? And what may be the fate of properties in parts of Victoria Island, Lekki, etc. in 30, 40, 50 years if predictions on global warming and its effect on coastal cities come true?

Ultimately, the value derived from any investment is highly dependent on, or highly correlated with, what time in its  life cycle you get in and on what time you get out.  This is also true for fixed income securities.
The corollary of this is that every investment, unless it is of a trivial amount, requires constant monitoring by the investment manager, with a view to entering and exiting it at the best point in time to be able to achieve the fund’s targetted returns on the investment.

Still on economic matters: as a young man under the age of forty-five, I was a strong supporter of currency exchange controls for developing countries, influenced partly, perhaps largely, by the imminent devastation, in terms of US dollar and pound sterling, of the values of assets of Nigerians and Nigerian companies resulting from massive Naira devaluations.  By my middle years, I had swung in the opposite direction, espousing  currency liberalisation. Now in my later years, I find myself nearer the middle: short term currency controls when the nation’s foreign earnings fall, in order to allow time for  manufacturing businesses to adjust,  followed by gradual liberalisation to enable exports to thrive.
To discuss these issues satisfactorily before an audience of this calibre would require an amount of research that is beyond the ken of a retired septuagenarian.
I therefore decided to speak on something else.

The 2014 National Conference
The conference was inaugurated on March 17, 2014 in Abuja by the then President Goodluck Jonathan. Its framework had been set out by a presidential advisory committee, headed by Senator Femi Okurounmu. The objective of the conference was clear: to engage in frank and open debates and negotiations that could help in solving many of the socio-economic and political challenges confronting Nigeria.
In the words of the convener, the conference was expected to “… articulate and synthesize our peoples’ thoughts, views and recommendations for a stronger, more united, peaceful and politically stable Nigeria…”
The output of the conference is encapsulated in the main report of 762 pages, and another one of 360 pages in respect of amendments to be made to the 1999 Constitution. Besides the resolutions that require amending the constitution before they can come into effect, there are hundreds of others where only executive fiat or ordinary legislative action at the federal and state levels are needed for their implementation.

There were 492 delegates drawn from all walks of life, from a broad spectrum of the Nigerian society that comprised 24 groups, ranging from elder statesmen, who were appointed by the federal government; retired military and security personnel; labour representatives; traditional rulers; retired civil servants; Trade Union Congress of Nigeria; organised private sector; Nigeria Youth Organisation; women groups; political parties (the APC as a party refused to nominate representatives); civil society organisations; Nigerians in diaspora; people living with disability; Newspaper Proprietors’ Association of Nigeria; Nigeria Guild of Editors; Nigeria Union of Journalists; faith-based organisations; Broadcasting Organisation of Nigeria; socio-political/cultural & ethnic nationality groups; professional bodies; national academies; the judiciary; former public oce holders; and nominees of state governments and the Federal Capital Territory. Each of the 36 states had three delegates; the six geo-political zones produced four delegates each.

The chairman was Justice Idris Legbo Kutigi, a retired Chief Justice of the Supreme Court and the deputy chairman Professor Bolaji Akinyemi, a former Minister of External Affairs.

Among the resolutions of the conference for constitutional amendment are the following
•    Creation of states
•    Groups of States can establish Zonal Commissions
•    Empowering of States to create Local Governments and               Delisting of Local Governments from the First Schedule of the             Constitution
•    State Revenue Sharing Formula /Creation of State Revenue         Mobilisation, Allocation and Fiscal Commissions
•    Abolition of State Independent Electoral Commissions
•    Provision for State Police and Community  Police by any State         that requires it/ Federal Police Officers of the rank of Deputy         Superintendent and below to serve in their States of Origin
•    Devolution of Powers
•    Bill of Rights and their Justiciability
•    Number of Federal Ministers not to exceed 19
•    Minister of Justice to be separate from Attorney General
•    Membership of National Assembly to be on Part-time Basis
•    Removal of Immunity Clause
•    Rotational Presidency  and  Vacancy in the Office of President
•    Rotation of  the Office of State Governor and Vacancy in the         Office of State Governor
•    Rotation of Office of Local Government Chairman
•    Retired Public Servants to be entitled to Free Medical Services
•    Introduction of Question Time in the National Assembly
•    Timelines for the Presentation of Budget Estimates and Signing         of Budget
•    Establishment of Anti-Corruption Court
•    Creation of Additional Federal Commissions and Councils
•    Setting up of Excess Crude Account/Sovereign Wealth Fund/        Mineral Resources Development Fund
•    Establishment of State Courts of Appeal
•    Establishment of Constitutional Court
•    Cancellation of Grants to  Political Parties
•    Ban of Funds from Associations to Political Parties and             Candidates
•    Independent Candidates  can contest elections
I now proceed to discuss them; it is my deliberate intention to, as far as possible, not express a personal  opinion on the appropriateness or otherwise of  any of the resolutions .
• Creation of states

Additional 18 states are to be created, bringing the total to 54. They are to be created in such a manner that  the six geo-political zones, namely, North-West, North-East, North-Central, South-West, South-East, and  South-South would have nine states each. This  zonal equality , or equilibrium, is absent in the present 36-state  structure, in which the South-East has five states, the North-West seven states, while the other zones have six states  each. Moreover, there will then be 27 states in the North and 27 in the South.

The delegates from the South-West had gone to the conference to demand for six equipotent  zonal/regional  governments as the country’s federating units with each zonal government being able to decide how many  states it finds to be suitable for its own circumstances. The total money which used to be paid to all the 774  local governments will now be redistributed  among the state governments using the formula that is used to  distribute money to state governments. Federal allocations would only be to the zonal governments as they  would be the federating units.
Even among the delegates of South-West origin, this position was not unanimous as some delegates  preferred more zones than six for the country, with Lagos being one of the zones, on grounds of its large  population and that it is the only state which has not been split into more states since its creation in 1967.

The South- East delegation also supported the restructuring of the country into six zonal governments  but, there too, this stand was not unanimous. Several delegates from Ebonyi  State and a smaller number of  delegates from Enugu State that I came across were either against or lukewarm on it. Those Ebonyi delegates  said it was the creation of their state that “brought development” to their area. However, the South-East delegates had complete unanimity on the demand for equality of  states in each of the existing geo-political zones.

The delegates from all the  three North zones were essentially unanimous  in their rejection of any “return to regionalism”, the main reason given being fear of return to marginalization by dominant tribes in the zones; that it was the creation of state governments that enabled their areas to have direct access to the centre.
Most of the delegates from the South-South were also against the establishment of six zonal governments.  So, it was only the South-West  and to a lesser extent, the South-East, that supported the demand.

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