I welcome you all to this meeting whose purpose is firstly, to familiarize ourselves with our colleagues with whom we shall be working closely for the next four years GOD willing; secondly, to reflect and assess the country’s position in 2015 and today; and thirdly, to chart a course for the country for the foreseeable future.
2.I congratulate all the new comers who your country has chosen above others to join the first term Ministers whose performance has been outstanding. All of you are appointed to assist and advise the President in running the affairs of our country. At the end of the Retreat, it is hoped that all of you will be in tune with the roles and responsibilities of positions you will occupy in Government. Many national issues require unified decisions.
3.It is a great privilege for you to be called upon to serve in these Great Offices of State and you must grasp the chance with two hands and put in your best efforts as Nigeria today needs top managers to handle our numerous challenges. There will be long hours and you must be prepared to live laborious days if we are to serve our people optimally.
4.Ladies and gentlemen, we are all aware of the looming demographic potential of our country. By average estimates, our population is close to 200 million today. By 2050, UN estimates put Nigeria third globally behind only India and China with our projected population at 411 million.
5.This is a frightening prospect but only if we sit idly by and expect handouts from so-called development partners. The solution to our problems lies within us.
6. Honourable Ministers-Designate, in our first term we identified three salient areas for close attention and action, namely to secure the country, to improve the economy and to fight corruption.
7.None but the most partisan will dispute that we have made headway in all three areas:
First - we have rolled back the frontiers of terrorism; we are actively addressing other challenges such as kidnappings, farmer-herder violence, improving the safety of our roads, railways, air traffic and fire control capacities.
Second - we are steadily turning the economy round through investment in agriculture and manufacturing, shoring up our foreign reserves, curbing inflation and improving the country’s infrastructure.
Third – on corruption, we have recovered hundreds of billions of stolen assets and are actively pursuing control measures to tackle leakages in public resources. We will not let up in fighting corruption.
8. As Ministers, I am counting on you together with Advisers and Nigerians willing and able to contribute to build upon our road map of policies, programmes and projects that will lift the bulk of our people out of poverty and set them on the road to prosperity.
9.Our Administration’s eight years will have laid the grounds for lifting 100 million Nigerians out of poverty in 10 years. This outcome will fundamentally shift Nigeria’s trajectory and place us among the World’s Great Nations.
10. Honourable Ministers-Designate, you will be responsible for the development and implementation of policies, programmes and projects in your various Ministries, Departments and Agencies in line with Government priorities. You must also ensure that Agencies under your Ministries are effective, efficient and accountable in the discharge of their responsibilities.
11. Honourable Ministers-Designate, we must work as a team. Although you have been chosen to represent your states as a constitutional imperative, it is vital for all of you to work as Nigerians.
12. Furthermore, working as a team demands that we know what the next person is doing. You must open communications with your colleagues. Lack of communication leads to lack of cooperation and sub-optimal performance.
13. Finally, although this is called a Retreat, I would like to think this is a preparation for an advance to the Next Level. Thank you ladies and gentlemen. I wish you fruitful deliberations.
Board disharmony and a persistent breach of governance rules, manifested in the avoidable exposure to the risks and liabilities, including the huge Non-Performing Loans (NPL), portfolio from the pig-headed acquisition of Diamond Bank, is threatening to bring Access Bank to its knees, according to a portfolio review report of Access Bank by Moody's Investors Service.
“Access's b3 BCA reflects the negative pressure on the bank's solvency profile following its merger with Diamond Bank Plc (Diamond), a bank with a significantly weaker credit profile, which resulted in a higher NPL ratio and lower capital buffers. These challenges are balanced against Access's strong track record in mergers and acquisitions, the bank's fair capital buffers, although now lower and its resilient profitability,” Moody’s noted in the report, released on Thursday, August 8, 2019.
According to Moody’s, Access bank was already burdened with a huge portfolio of Non-Performing Loans when it acquired an overburdened Diamond bank. After the acquisition of Diamond bank in March, Moody's assigned a Senior Unsecured National Scale Rating (NSR) of A1.ng to Access Bank's issuance of up to NGN15 billion five-year senior unsecured notes. The Senior Unsecured NSR rating was recently reviewed and downgraded, in line with Access Bank's other downgraded credit profile ratings.
The report noted that the failure by Access bank to redeem its promise to pay back its $400m Eurobond in 2019 two years early as the bond will no longer qualify as capital for capital adequacy ratio purposes, hence uneconomical to continue to pay interest; has set-off alarm bells in the industry. Banking sources told Huhuonline.com that Access CEO, Herbert Wigwe’s recurring insistence to take final decisions on issues of importance, rooted in "ownership" mentality, irrespective of assessed consequences, have aggravated board politics and might precipitate the bank’s collapse.
With the June deadline to pay back its $200m Eurobond inherited from Diamond bank now passed and gone, Access Bank still needs about N240B to pay the cash due to Diamond Bank's shareholders and pay the $600m (N216B) due to bondholders of both banks in 2019. As a consequence, the bank is raising fresh debt of $250m and also embarking on an equity rights issue to generate $200m naira equivalent to enable it pay off these obligations.
Sources at Access Bank who elected anonymity confided to Huhuonline.com that Wigwe was overly confident that Access Bank will muzzle the delinquent debtors of Diamond Bank to repay their debts. That confidence turned out to be a luxurious desire as the so-called VIP debtors simply ignored Wigwe’s threat to publish their names in an apparent naming and shaming campaign. Access had threatened to publish the names of all its delinquent debtors, associated persons and directors of the entities if they failed to pay up in two weeks. Access Bank stated in a statement on its website that the decision was in line with the directive from the Central Bank of Nigeria (CBN) and advised all debtors (including former Diamond Bank debtors) to pay up their past due obligations in order to avoid punitive actions.
“Please note that we shall publish our debtors' names in newspapers in two weeks. Similarly, in the event that these obligations are not fulfilled, we shall take such further actions against such delinquent individuals and companies as we may consider necessary and shall relentlessly pursue full recovery of all our debts. For incorrigible debtors, who continue to pose a risk to our system, we will use all means available and collaborate with our colleagues in the industry to ensure that they are excommunicated from the banking system. Furthermore, all debtors will be sanctioned by the CBN and banned from participating in the Nigerian Foreign Exchange and Securities Exchange Markets, and registered on the Credit Risk Management Systems (CRMS) Bureau as bad debtors making them, their directors and related entities illegible for any credit in the Nigerian Financial Markets,” the statement read.
Access Bank acquired Diamond Bank in a deal worth more than $90 million. The move, analysts said, may make Access Bank Nigeria's largest bank by customer size and capital base. Business Insider's analysis of the deal showed it was worth more than the publicly stated $90 million. Bloomberg news estimated the real value of the deal at a figure around $200 million. For Access CEO, Herbert Wigwe, the "merger" with Diamond Bank and its leadership in digital and mobile-led retail banking, "will accelerate our ambition to become a leading corporate and retail bank in Nigeria and a Pan-African financial services champion. This is a huge step towards the delivery of our goal to bring the power of banking to millions of people across Nigeria and an exciting transaction for Access Bank and Diamond Bank's customers, staff and shareholders," he noted in March when CBN sanctioned the hostile take-over.
The Moody's report also noted that Access Bank’s senior unsecured NSR rating was downgraded “to reflect the potential negative pressures on capital and asset risk metrics as a result of Access Bank's merger with Diamond Bank Plc.” Moody’s also sounded the alarm that the precarious loan default risks are bound to persist because Access Bank’s solvency indicators have deteriorated and funding metrics have been materially strained by the Diamond Bank merger. Access Bank has a very limited angle of manoeuver to improve its capital position in order to support its larger balance sheet, hence “an upgrade is not likely given that Access's ratings are on review for downgrade,” Moody’s noted.
The Moody’s report underscored Access Bank's weak asset quality metrics and relatively fragile loan underwriting standards and risk management processes, insignificant local currency liquidity buffers, and precarious capital buffers; weaknesses which are exacerbated by “Nigeria's challenging operating environment which negatively affects banks' asset quality and revenue growth, and concentration risks in the bank's loan book, including its exposure to loans denominated in foreign currencies.”
The report cited the Central Bank of Nigeria’s (CBN’s) last month’s directive that all deposit money banks (DMBs) should maintain a minimum loan to deposit ratio of 60% by September 30, 2019 to promote investment in the real sector and enhance economic growth. The apex bank also reduced to N2 billion from N7.5 billion the maximum remunerable daily placement by a bank at the CBN Standing Deposit Facility (SDF) at the interest rate prescribed by the Monetary Policy Committee (MPC). At its meeting in July, the MPC retained the monetary policy rate (MPR) at 13.5%, the SDF at 8.5%, the cash reserve ratio at 22.5% and the liquidity ratio at 30%. Obviously, the CBN directive is designed to plump up loanable funds, but the MPR-in-corridor is a strange CBN contraption, which has hamstrung the economy.
The point must be made and with emphasis that Access Bank does not pay up to 8.5% interest on fixed deposits by customers? Worse still, the remuneration of the SDF is made up of an unmerited fiat printed and inflation-causing subsidy that is doled out on loanable bank deposits, which prospective borrower businesses and individuals find unattractive owing to Access Bank’s high prime and maximum lending rates. Consequently, with unchanged high MPR, Access Bank will still be unable to serve cash strapped real sector operators with loans under the CBN 60% loan to deposit ratio directive.
The CBN switched focus to boosting economic output post-recession by telling banks to lend more or face a rise in minimum reserve requirements. Access Bank has to walk a tight rope as the bank now poses a systemic risk to the Nigerian economy. Following the hostile takeover of Diamond Bank, Access Bank inherited a 19 million customer-base, comprising 10 million mobile users; 7,000 digital and financial inclusion customers; 277- branch network; and 10.2 million credit/debit cards issued by Diamond Bank. Unfortunately, those assets came with a huge cost to Access bank which also inherited a portfolio of Non-Performing Loans of 12.6%, against 5% industry benchmark, with attendant high impairment charges. Specifically, the huge NPL predisposed Access bank to yearly impairment charges of over N25 billion, with outstanding loans and advances to Diamond customers standing at N749.3 billion.
Apart from the assessed poor risk culture, inefficient capital management was also identified as having eaten deep into Access Bank leading to low returns on assets, while cost-to-income ratio is high. Even more worrisome, operating costs of Access bank rose by 6.2 per cent due to foreign exchange rate impact following the devaluation of the naira. Although Access Bank sources said that inherited legacy debts from Diamond Bank remain in the books, there were hundreds of others added by the bank's current leadership, but worsened by strong defiance of venture into other areas of banking.
While Access bank intends to be the leading retail bank in Nigeria following its acquisition of Diamond, the income from retail cannot accommodate fully provisioning requirements in corporate and business banking. The only option for the troubled Access Bank is to trade its independence by going cap in hand to beg for a bailout by the CBN. The Moody’s report indicated such a possibility was already underway, explaining that the Buhari administration is well aware that Access has become too big to fail. “Access Bank Plc's (Access) B2 long-term local currency deposit rating incorporates one notch of government support from the bank's b3 baseline credit assessment (BCA), reflecting our assessment of high probability of government support,” the report concluded.
“Access has a strong track record of acquisition and integration and has a clear growth strategy. Access and Diamond Bank have complementary operations and similar values, and a merger with Diamond, with its leadership in digital and mobile-led retails banking, could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion," Access CEO, Herbert Wigwe, said in a statement after the hostile takeover of Diamond Bank in March.
It is not easily believable to say that the deal was merger, when Access Bank offered N3.13 per share of Diamond Bank, which was trading at N1.37. If one party is paying the other in cash consideration, by buying the other's shares, it cannot be called merger; rather it is an acquisition, and in this case, it was a hostile take-over which left the investors of Diamond Bank better as it is, than those of Access Bank, as the load of non-performing loans inherited from Diamond is weighing down Access bank’s lending operations and performance, and as such, a huge threat that could eventually bring the bank down.
In The Spotlight
“So, did you join the #RevolutionNow protests yesterday?”
“The #RevolutionNow protest led by Omoyele Sowore. The security people grabbed him ahead of the August 5 protests, but the Grand Coalition for Security and Democracy still came out in full force in Lagos and Abuja.”
“Yes. Yes. We did. But it rained in Abuja.”
“And were you part of it? The Coalition for Revolution in Nigeria”
“I am part and parcel of it. This country cannot continue like this. We need a revolution. Nobody can tell us that the change they promised in 2015, we now have it. The 2019 General election, did they get it right? No. Revolution is about change. We need to change this system. They told us in 2018 and 2019 that they will take us to the Next Level. But nothing has changed. Look at Nigeria. Look at our country! Our country has become a theatre of fear, regret and failure. Six months after election that they claim they have won, we are still fumbling and wobbling like the Super Eagles.”
“You didn’t answer my question. I asked you: were you part of the protests?”
“No. I wasn’t. It rained in my part of the town. And by the time I set out to join the group at the National Stadium in Lagos, I heard that the agents of state capture and their tools were already tear-gassing the people. Tear gas is not good for my system. The last time I inhaled tear-gas I sneezed for three years non-stop. I am not so young anymore. I have to be careful. But aluta continua! Victoria Acerta! But why were you yourself not at the barricades? We have a collective responsibility to save Nigeria from this drift, this creeping anarchy, this reign of confusion.”
“I am sorry. Speak for yourself. I am not a revolutionary like you. I am simply a realist, a pragmatist, a student of realpolitik.”
“Are you saying what the Buhari government is doing is okay? Have you not heard that we face the threat of a return to the Abacha days, and the possibility of losing everything that we worked for to secure this return to democracy?”
“You mean civilian rule?”
“You call this civilian rule? As far as we are concerned in the revolution, this is still military rule masquerading as civilian rule. When you look at anybody in this present darkness, do they look like any one of us? This is Sowore’s message. We must take back our country. We must seize the momentum. We must seize the day.”
“I am sorry. I don’t join revolutions.”
“Yes. You won’t because the Middle class has failed Nigeria. You talk like one of them. You belong to the class of non-citizens who think Nigeria must be kept the way it is so that they can thrive. You selfish Nigerians! They link up with the establishment and get subsidies for their businesses and imports. They contribute funds to support political campaigns and when the time comes they ask for returns and insist on entitlements. Those are the real enemies of Nigeria, the soldiers of the stomach vs we the people who want national progress, security and development. Our #RevolutionNow is about long-lasting changes in the system. We want to make Nigeria better.”
“Sowore says he is going to take back Nigeria. In other words, what he could not achieve through the ballot box on February 23 when he was Buhari’s rival as Presidential candidate on the platform of the African Action Congress (AAC), he wants to take through a revolution.”
“You are putting words in his mouth. You are an enemy of the revolution, just say so. He did not talk about regime change. We are focused on system change.”
“Did he say or not say that the government will cease to exist?”
“No. He talks about positive change for all Nigerians and better life for all. Minimum wage. Free tuition and access to quality education. Employment opportunities and justice.”
“Those are populist campaign issues. I disagree with you. The Presidential election ended on February 23. If anybody is aggrieved, the place to go is the tribunal, not the streets.”
“Sowore is the voice and the symbol of the emerging revolution in Nigeria today. He is prepared to lay down his life if need be. I stand by him, the same way Professor Wole Soyinka stands by him. Femi Falana SAN, Shehu Sani. Amnesty International Nigeria. Street credibility. We no go gree.”
“And you? Are you prepared to die for Nigeria? Where were you on August 5?”
“I have a very busy week ahead. Besides it rained in my neighbourhood. This climate change. Nobody can tell. And as I told you, I don’t do well with tear-gas. My bones are fragile too. I have not yet recovered from the last protest I took part in. “
“I don’t blame you. It is very easy to talk. The people I blame are the security agencies. They have turned Omoyele Sowore into a hero. He has become the symbol of the opposition in Nigeria. In Uganda we have Bobi Wine. In Sudan, they have the African Queen. In Hong Kong, there is Andrew Leung, leading the revolution from behind bars. In North Africa, the Arab Spring spread from Tunisia to Algeria to Egypt. In Nigeria, we now have Omoyele Sowore. I believe the Nigerian government has played into his hands. Big mistake. Big, big mistake. They could have managed the situation differently”
“You are beginning to sound like one of them. I must tell you that whatever you think, or believe, this Revolution will survive and when it is over, we will remember those of you hiding in your comfort zones to talk nonsense.”
“I am not talking nonsense. I don’t believe in the idea of a Revolution.”
“You don’t know the meaning of the word. It is a terribly mis-used and mis-understood word. This same ruling party, the APC, used the same word when they fought President Goodluck Jonathan. You didn’t complain then. You are a hypocrite. You are one of them.”
“Anybody that wants a Revolution should do so through the ballot box. Or go to court. I understand what Revolution means. The French Revolution. The American Revolution. The October Revolution of 1917. The Velvet Revolution in former Czechoslovakia in 1989. The Orange Revolution in Ukraine after the 2004 Ukranian Presidential election. The Arab Spring in the Middle East. The recent people’s revolution in Algeria, Egypt and Sudan. The on-going Revolution in Hong Kong. Tell me about one revolution that did not result in a cycle of crisis and violence. Nigeria is too fragile. One careless push right now, we could become another Somalia or the old Rwanda.”
“You don’t understand the meaning of Revolution, then. Don’t you get it? We are saying this government lacks legitimacy. It lacks the capacity to deal with Nigeria’s pressing problems. There is insecurity in the land. The people are hungry and poor. The government can’t even inaugurate a cabinet, six months after the elections. Rapists and bandits have taken over the land. Only a Revolution can save Nigeria.”
“That is treason. Mind what you say. I will be the first to hand you over as an accessory to the fact of treason.”
“A protest march is not treason. Free speech is not treason. Freedom of assembly is not treason.”
“I just need you to know that in this country, the threat to commit suicide is a felony. If you succeed however, you are on your own, totally free.”
“The people have the power and the right to express their grievances. If they won’t allow us to protest inside Nigeria, we will do so in every Nigerian embassy in every part of the world. No government should ever test the people’s resolve. No. Never again!”
“I see that the government will still need to arrest more people. Please don’t call me when they come for you.”
“Let them arrest all of us. This is not a one-man protest. This is a movement. This is how it starts. They have taken the bait. They will keep making mistakes. Nigeria is now on the front pages of the world media. After the 2019 election, chaos in Nigeria! The Coalition for Revolution owns the game right now.”
“Let me ask you: who are your sponsors? Who is the author of this hidden agenda?”
“There is no hidden agenda. The people of Nigeria are angry.”
“Please speak for yourself. Members of the Coalition of Northern Groups are not angry. They say they are not part of the Revolution. The Arewa Consultative Forum (ACF) is also against the idea. You people cannot be allowed to blow up this country just because you lost an election.”
“Point of correction. We have gone beyond the election. And for your information, this is not an anti-RUGA protest. It is a struggle for the soul of Nigeria.”
“You cannot convince me that the declaration of a revolution is well-meaning.”
“I don’t know what you are afraid of. Have they given you an oil bloc, or they have promised you something? You are busy opposing the Revolution. Where were you when the US announced a visa ban on Nigerian politicians who promoted violence and rigging during the 2019 general elections in Nigeria?”
“Please. Please. Please. Nigeria is a sovereign state. The Americans have their own problems and Nigeria’s election should not be one of them. If I were the Nigerian President, by now I would have asked the Ministry of Foreign Affairs to issue a travel advisory on the United States telling Nigerians to stay away from that country where hate and white supremacy are on the rise. I will insist that Nigerians should stay away in particular from the troubled states of Texas, Ohio and California until further notice. America. America. America. Please. Is Donald Trump better than President Muhammadu Buhari?”
“I say Yes”
“Let me hear word, with this copycat revolution. To keep Nigeria one is a task that must be done.”
“That’s analogue thinking. Wake up! We are in the age of social media. If you and your people block the streets, we will have a revolution on social media and you people will watch it online.”
“This is precisely the problem. The social media has become the space where anarchists and subversive elements are bred. Will I be correct to say that you are an online revolutionary?”
“Get it right: We are determined to occupy every space, including the offline space of revisionists like you. Your people made a mistake to have ordered the arrest of Comrade Yele Sowore. The Coalition of the Revolution cannot be intimidated. I hope you won’t spoil everything by saying we are terrorists.”
“Is Sowore also a comrade?”
“Yes. A comrade of the Revolution over a 30-year period, a tested fighter of the people’s revolution.”
“I am trying to get it.”
“You can say what you like.”
“But please, one more thing. This Sowore: does he have a family? Children? A wife? And why would he run to the gym to hide when state security came knocking on his door?”
“Irrelevant questions. The Revolution is all that matters.”
“Toh. It’s aw-right. Make all of us siddon begin watch this season film, then. Whether you like it or not, the Devil has rented a flat in people’s heads inside Nigeria.”
by Reuben Abati
In The Spotlight
There is pain. There is anger. And there is collective rage in the land. Nigerians are empty of options and are seeking avenues for a purge; for catharsis. The season of retribution may be upon us sooner than we imagine.
The physical abuse of former deputy senate president Ike Ekweremadu at an Igbo forum by some young men in Germany, though condemnable, betokens the onset of nemesis. In a video recording in circulation, while the lawmaker was being assaulted, his abusers could be heard saying: “What have you done? People are dying.’’ This is the question most Nigerians have been asking their leaders helplessly.
Ekweremadu may be a victim of constrained anger – if one is to go by the confessions of his assaulters in the video. He may not be the worst of his ilk. But situating his antecedents and the expectations of most people from the southeast, he, perhaps, set himself up for criticisms. He has been a senator since 2003. And he has been deputy-senate president for eight years. But the question is, in what way has his exalted position being of benefit to the area or the region he represents? What development has he influenced to the section?
Inland ports are an essential transportation need of the southeast, a bill to establish them has often been ignored at the senate, where Ekweremadu was the second most powerful man. Even in the 16 years of the PDP, a party the southeast bent obsequiously for, bills to have these facilities and other projects sited in the region were not considered.
I have often wondered aloud, ‘’what exactly did the PDP do for the southeast in 16 years besides empowering a few people in the neighbourhood of power?’’
However, a statement by the media office of Ekweremadu says the attack was orchestrated by members of the Indigenous People of Biafra (IPOB). This is plausible, but does it obviate the kindler of the outburst? Though, the lawmaker had run the gauntlet in certain cases, there is an assumption that he did not and has not taken up the responsibility providence surrendered into his hands.
Nigerians are peeved. And the parlous state of things is breeding more children of anger. Some months ago, a seething mob hauled stones at some (APC) lawmakers who visited their constituencies in Katsina. They escaped, but not unscathed.
The citizens’ rage is not spared for any party. Some lawmakers in the APC cannot go to their constituencies without heavy security escort. The situation is progressively-degenerative; citizens are angrier now than before, seeking outlets for quick release.
But I must concede that Nigerians are still too tranquilised for a mass action against the factors of their suffering. That ‘’uprising’’ happened in Germany because the country is a ‘’liberte’’ society; not where ‘’uprisers’’ will be neutralised with live bullets. Ekweremadu went to a country where Nigerians live untamed.
Nevertheless, violence is not an instrument of change, but of destruction; it should not be found in the quarters of civilised people. Violence is not only physical. Corruption is violence. Stealing is violence. Nepotism is violence. Incompetence is a form of violence.
Leaders quench this fire.
by Fredrick Nwabufo @FredrickNwabufo