On June 3, the Central Bank of Nigeria (CBN) revoked the banking licence of Heritage Bank Plc, raising curious questions about how depositors and shareholders would fare in terms of getting back their funds.

The CBN had explained that its decision on the licence revocation was made due to the bank’s inability to improve its financial performance.

The regulator said Heritage Bank, which was nationally licensed, has not improved and “has no reasonable prospects of recovery”, thereby making revoking the licence the next necessary step.

According to the CBN, the Nigeria Deposit Insurance Corporation (NDIC) has been appointed as the liquidator of the bank in line with Section 12 (3) of the Banks and Other Financial Act (BOFIA) of 2020.

A liquidator is an organisation with the legal authority to act on behalf of a company to sell the company’s assets before the said firm closes, in a bid to raise capital for various purposes such as debt repayment.

Following the licence revocation, the NDIC said it would pay a maximum of N5 million insured deposits to each customer of Heritage Bank.

However, the corporation said depositors with funds more than “the insured deposits will be paid as and when the assets of the closed bank are realised”.

Deposit insurance involves insuring a financial institution so that depositors are guaranteed against loss in the event the bank fails.

HERITAGE BANK NOT NEW TO REGULATORY ISSUES

This is not the first time the bank has run into issues with regulators.

Heritage Bank was founded in the 1970s as the Societe Generale. The CBN, in 2006 closed down the institution due to failure to meet new capital requirements of N25 billion ($155 million), after which the bank successfully challenged the closure in court. The CBN reissued the licence as a regional bank in December 2012.

Having acquired the banking licence, the new ownership rebranded the bank as Heritage Banking Company Limited and opened for business on March 4, 2013.

In October 2014, Heritage Banking Company met the requirements of Asset Management Corporation of Nigeria (AMCON) and the CBN for 100 percent shares in Enterprise Bank Ltd.

In January 2015, AMCON officially transferred ownership of Enterprise Bank to Heritage Bank.

With the bank now enmeshed in another regulatory woes, TheCable looks at the implications of Heritage Bank’s licence revocation on depositors’ funds and stakeholders.

WHAT HAPPENS TO CUSTOMERS?

According to the CBN, the NDIC is required to commence liquidation of the revoked bank’s licence and the payment of depositors.

The insured institution’s assets, according to the NDIC, must be available to cover its deposit liabilities, which will be prioritised over all other liabilities.

Payment of the insured deposit to customers of banks — in this case, Heritage Bank — is expected to be done by the corporation within 30 days of being appointed liquidator, according to Section 28 of the NDIC Act.

The payment can be made by cash or a negotiable instrument, and customers can also receive the specific amount payable via transfer to another financial institution.

The NDIC, at its discretion, would require proof of claim from all qualified depositors of the bank, the Act also states.

The corporation may also seek a final determination by a court of competent jurisdiction if it is not satisfied with the validity of a claim for an insured deposit.

According to Section 31 of the NDIC law, after payment of insured deposits, the corporation may make interim dividend payments from proceeds of realised assets of the failed insured institution.

The law, in Section 57, emphasises that shareholders and directors are individually liable after a bank’s licence revocation.

STEP-BY-STEP PROCESS FOR DEPOSIT REPAYMENT

In a statement on June 3, Bashir Nuhu, spokesperson of NDIC, assured that depositors would retrieve their funds, stating the process for such retrieval.

“Visit the nearest branch of the bank with proof of account ownership, verifiable means of identification such as driver’s license, permanent voter’s card, National Identity Card, together with their alternate account and Bank Verification Number (BVN) for the verification of their deposits and subsequent payment of insured sums” he said.

“Creditors are advised to visit the nearest branch of the bank to file their claims or via the online platform. Please note that the process of payment of creditors will commence immediately after all depositors have been paid.

“Debtors’ Repayment of Loans: Debtors who have yet to repay loans are advised to contact the Corporation’s Asset Management Department (AMD). Visit the NDIC website for more details.”

WHAT HAPPENS IF DEPOSITIORS DO NOT CLAIM PAYMENT?

Section 30 of the NDIC Act mandates that a corporation must give depositors at least three months’ notice to pay, either by mailing a copy to their last known address or publishing a general notice in at least two national dailies and electronic media houses, notifying them of the venue and dates for payment.

According to the regulation, any depositor who fails to claim the insured deposit within six years after the notice would forfeit such sums to the corporation.

To protect depositors, the NDIC could decide to appoint another financial institution to assume the deposits of Heritage Bank.

If the customers fail to claim or arrange to continue their transferred deposit with the new insured institution within six years, all of their rights against Heritage Bank and its shareholders will be reverted to the corporation.

The amount of any transferred deposit not claimed within six years will be refunded to the corporation.

Section 30(6) of the Act states that a court proceeding cannot be commenced against the corporation in respect of its obligation to make payment to depositors of the failed financial institution after six years.

CAN AGGRIEVED DEPOSITIORS, SHAREHOLDERS SUE NDIC OVER PAYMENT ISSUES?

Moreso, depositors or shareholders who, for instance, do not receive deposits or dividends from the NDIC after following due process, can sue the corporation.

According to Section 29(2) of the NDIC Act, in case of any suit against the corporation, what will be paid (remedy) to claimants would be limited to the amount of actual loss suffered.

For depositors, it is the maximum insured deposit, while shareholders get the nominal value of the shares in the insured institution. A group of shareholders will receive the nominal value of the aggregate of the shares in the insured institution.

Like depositors, financial institutions and its shareholders can challenge their licence revocation, according to the CBN.

However, aggrieved parties can only do so within a 30-day period after licence revocation.

In the BOFIA Act, Section 12(5) states that no action in respect of the licence revocation of a financial institution must be filed or maintained unless it is filed within 30 days from the date of the revocation.

One year into his administration, President Bola Tinubu is yet to fulfill the pledges he made on women and youth inclusion in governance and empowerment, an Agora Policy paper has found.

Ahead of the 2023 general election, Tinubu launched an 80-page document on his ‘Renewed Hope Agenda’ for the country.

The 2021-2026 national gender policy mandates 50 percent female representation in political spaces. In his campaign document, Tinubu earmarked a 35 percent slot for women but even this has yet to be met.

Only nine(18.75 percent) of 48 ministerial appointees are women while four females are special advisers.

“Nigeria’s ‘gender character’ cannot continually be overlooked,” Ejiro Otive-Igbuzor, a gender, social inclusion expert and a monitoring and evaluation specialist, wrote in the latest policy paper of Agora, a Nigerian think-tank.

“Just as the ‘Federal Character Principle’ enshrined in the Nigerian constitution provides for fair representation in appointive and elective offices among geopolitical zones, gender character needs to be engraved in laws and policy.

“Women, who comprise 49% of the population and who actively participated in the struggle for democracy, rightfully deserve a seat at the decision-making table. This is the fairness argument.”

FULL INCLUSION OF DIVERSE GROUPS FOR ECONOMIC GROWTH

While the GESI expert lauded Tinubu for his efforts in improving inclusion, she noted that more can be done.

Otive-Igbuzor urged the president to fulfil his promise of 35 percent affirmative action for women and to effectively engage the country’s youthful workforce as part of the 30 percent inclusion pledge.

The monitoring and evaluation specialist also called for the prioritisation of PWDs and the involvement of sub-nationals to promote active ownership and coordination in implementing the country’s development plan.

“Beyond the ‘right speak’, concrete actions and accountability are crucial to ensure meaningful progress and full participation of marginalised groups in governance, and to ensure that no one is truly left behind by 2050,” she said, noting the importance of stronger political will.

Otive-Igbuzor said the failure of the president to prioritise these issues puts him at risk of repeating past failures.

[TheCable]

It made a lot of sense that President Bola Ahmed Tinubu chose to mark, not celebrate, his first year in office. Celebration would have been termed insensitive by many, and the president would have been charged for profligacy and extravagance. Which serious or sane leader celebrates when the people he leads are in great and excruciating pains?

Truth be told, the suffering in the land beggars belief. In that, I am one with the critics of the president. But we part ways when they say one year is enough - or even more then enough - for Tinubu to have cleansed the country’s Augean stable.

The rains started beating the country a long time ago; unfortunately, we seemed not to have taken notice until it began to pour, if I must quote “Ogbuefi” Godwin Nzeakah (where are you?), my colleague on The PUNCH newspaper’s Editorial Board. Godwin was fond of saying it doesn’t just rain for him but that it pours!

Nigerians did not take notice of - or they ignored - the incremental damage done to the country right from Independence in 1960, through the time of the first military coup in January 1966, to the wasteful years of Yakubu Gowon, who was credited with saying that Nigeria’s problem was not money but how to spend it. Oil money that should have been invested in agriculture and industrialization, thus, was wasted.

Military ruler after military ruler continued where Gowon stopped, with the gap-toothed one, IBB, acclaimed for institutionalizing corruption and the “settlement” syndrome as well as destroying esprit de corps and discipline in the military. Since 1999, mention a Nigerian leader whose administration did not add heaps of rot on the country’s Augean stable?

Pardon me, I am not one of those who expect a miracle or magic from President Tinubu. I know it is easier to destroy than to repair or rebuild. So, I expect that more than one year is needed before we begin to see appreciable results. But my worry is whether or not the president is headed in the right direction; whether or not he is pursuing the right policies; and whether or not he is clear-headed and deeply-foresighted as to where he is taking us.

Are we heading farther into the dark tunnel? Are we sinking deeper in the miry clay? Is the president leaving the substance and chasing shadows? Unfortunately, two decisions of his which coincided with his first year anniversary got me deeply worried. The first was his decision to drag the 36 state governors to court over so-called autonomy for local governments.

I have said quite unambiguously in my “Nigeria: Federalism, unitarism, hybrid or what?” that what is needed is the total scrapping of the 774 local government areas and not strengthening them in any form. It is the duty of federating units to create, manage and fund local governments, not that of the Federal or Central Government. The question must also be asked: The 20 local governments and the additional 37 Local Council Development Areas created by Tinubu as governor of Lagos State (1999 - 2007) - did he let them enjoy the fiscal autonomy he (Tinubu) is now demanding from the present governors?

The second decision of the president that has made him the butt of cruel jokes is the return of the country to the old national anthem. Please, get me right: old or new, I am not a fan of any of the anthems. As my people will say, a man is engulfed by fire and you are still asking after his lush beards! Nigeria itself is on fire and some wailing wailers (apologies, Femi Adeshina) are bringing down the roof on our head over a common anthem!

If I may ask, which of the anthems is better than the other? There may, however, be a spiritual significance lurking somewhere; to wit, that the country’s glory years remain in its past! May we not know better yesterday! Ask Nigerians, they will tell you that this country has known better yesterday. My people say where going forward is impossible, going backward becomes inevitable.

Is that also what is playing out in Kano? Why the hullabaloo if not that our people have very short memories like Adolf Hitler did posit? How dare we easily forget the many lives lost to the fire of religious extremism stoked by this Emir, even if we overlook his shenanigans at our apex bank? Was he the rightful occupant the first time he was dashed the throne? And then he lost it the same way he had got it. A new Emir then got to the throne the same way the old Emir did. He, too, now lost it the same way the old Emir did. New/Old. Old/New. Game of musical chairs. What goes around comes around. Every usurper has his cup full some day. If the House of Uthman dan Fodio becomes like the House of Abraham in the land of Palestine, then, their cup of tea! Let them drink it!

Back to Tinubu! I read Bayo Onanuga’s “One year after: The legacy man and his strides” and Tunde Rahman’s “Tinubu’s silent and unreported achievements” and felt empathy for the two presidential spokespersons, who are both my friends and professional colleagues. They have a task to perform. And it is not an easy one. Besides, I agree with them that their principal has done a lot within such a short time. The chicken sweats but the feathers wont let us see.

The task before Tinubu is gargantuan. And one year is such a short time. When trees fall upon trees, you start by first pulling off those on top before you get to those at the bottom of the pile. In Nigeria’s present predicament, the trees on top are the powerful and mighty; those with a voice, and those we call the ruling class. We have seen how Tinubu has quickly attended to them. Those underneath, the underlings, the hoi polloi, the suffering masses, will have to be patient. It is turn-by-turn. Emilokan before Eyinlokan!

I am not a fan of Ayinde Wasiu but there is a song of his that I love so much: Nwon maa pe yin, ijo o ti kan yin/Ijo maa kan yin, nwon o ti pe yin! It is a song of appeal at a party to those rushing to take their turn on the dance floor that it is not yet their turn. Be patient! It will still/soon be your turn. The big masquerades are the ones dancing now. Lesser mortals, be patient. Has it not been said that the patient dog eats the fattest bones? But I heard it in my spirit: Not in Nigeria! Here, the fastest and smartest dogs eat the fattest bones!

But let us remind Onanuga and Rahman that what the people are saying is not that the President has not been working his arse out in the past one year. No, the people have eyes and can see their president working real hard. What they are saying is that he is not working in their direction yet. The great work the President has done in the last one year has not added value to the life of the majority of our people. Instead, they get more impoverished by the day.

Our people say if you give a mad man a hoe, he will make the first ridges to benefit himself. That is natural. What the people are saying is that, lest the suffering in the land kill them before it is their turn to enjoy the proverbial dividends of democracy, the President should quickly look in their direction - NOW! They are also saying that delay is dangerous. And they are not asking for the Moon!

Permit me to be their spokesperson as I list their demands as follows: 1. Tackle insecurity, which still struts the arena like a colossus 2. Curb inflation, which is making nonsense of every decent effort to eke out a living 3. Arrest epileptic power supply and bring down the cost, which is frustrating big and small businesses, and making life miserable for the people 4. Do something about the Naira that is rising and falling every day in the forex market 5. Resolve the lingering ASUU/FG dispute so our children’s stay in school is not unnecessarily prolonged with the attendant cost implication on parents; not to talk of the frustration it causes students and lecturers alike 6. Resolve the dispute with Labour once and for all so that the losses and damage inflicted on the economy and on individuals by incessant strike actions can cease 7. Drive a vigorous return to the land (agriculture) so that soaring cost of foodstuffs can be arrested. 8. Decrepit infrastructure, especially inland and township roads, should be addressed expeditiously as Tinubu has done the Lagos - Calabar coastal expressway. 9. The unemployment rate has become damn too alarming for comfort; the “Japa” syndrome is an ill-wind that blows the country no good. 10. A prayer that everyone prays these days is: May we not fall sick! The cost of medicine and medicare has soared beyond the reach of many. Our hospitals are bereft of quality hands and are now worse than the “mere consulting centres” of the military era.

I as a person appreciate our President. As our people will say, “Okunrin l’ada”. Tinubu is the Lion Heart. But now is the time for him to come to Macedonia and help the perishing poor!

I hope I have spoken well!

Being a statement released by Policy House Int'l on the sidelines of the 2024 Korea-Africa summit held on June 4-5, 2024 in Seoul, South Korea.

Although Africa as a continent with its estimated 1.2 billion population accounts for less than 4% of global greenhouse gas emissions, it is significantly negatively impacted by global economic activities, forcing most of its population into poverty. The devastating effects of climate change are evident in degraded forests and agricultural lands across the continent, resulting in famine and food shortages.

Recurring landslides in East Africa and uncontrolled natural rainfall in large swaths of the continent have led to loss of lives and economic livelihoods. Although the continent's contribution to global economic growth hovers around 3% over the last 5 years, cumulative economic activities globally have reduced the quality of life due to ozone layer depletion and other negative consequences.

Most heartbreaking is that indigenous African women farmers, who have always depended on farming for survival, have lost their farmlands to drought, occasioning hunger and forced migration. The traditional rain-fed farming system, which promotes social protection, has reduced significantly, resulting in forced rural-urban migration, early marriages for teenage girls, and modern-day slavery via forced labor for underage boys across most parts of the continent, increasing the cases of out-of-school children and worsening the already dire situation.

Rising cases of street trading and homelessness in urban centers and major cities in Sub-Saharan Africa are traceable to the collapse of agricultural lands due to climate change, animal husbandry, and clashes between traditional farmers and herders, as in the case of Nigeria. This is a disaster waiting to happen.

Available data shows that only 20% of global pledges made for climate change adaptation and mitigation have been met, calling into question the commitment of world leaders. According to the immediate past UN Secretary-General, His Excellency Mr. Ban Ki-Moon, most initiatives taken to fund climate change in the last decade have fallen off the cracks, which is discouraging.

As African policymakers have gathered in Seoul, South Korea, to discuss business, agriculture, social protection, infrastructure, trade, and human development, it is a great opportunity to call our human nature to order and, for once, think about our neighbor and take that step that will reduce poverty and hunger while improving the quality of life through deliberate climate policy action that protects us all as a collective humanity.

On their part, African leaders must cut down on the cost of governance, profligacy, unending white elephant projects, address weak public institutions and their capacity to respond to the climate crisis. African leaders must invest significantly in irrigation technology and the associated value chain, reducing over-reliance on rain-fed agriculture, embark on urban renewal programs to save the cities from erosion and waste management disasters, invest in recycling research and technology, and tackle land-related struggles between traditional/indigenous farmers and animal pastoralists.

As an organization, we believe that while encouraging large-scale commercial agriculture, efforts must be made to protect traditional farmers, especially women, which will in turn reduce rural-urban migration, encourage basic education and skills development for their children, and reduce criminality and homelessness in urban centers across the region.

Thank you.

Taiwo Akerele
Executive Director, Policy House Int'l and Convener, Independent Working Group on Social Protection (IWG-SP)
Seoul, South Korea, June 5, 2024.

If you ask an American, they are the world. Just check everything of theirs, it’s not only humongous, it is designed for immense things – the cars, the homes – even the concrete jungles called cities. On the political scene, no-one does it like America. They are the real democracy – forget the Greeks and their claim to the invention of the concept, or the Indians with the longest practice. These Americans have provoked hatred for other forms of government and incited wars with the exception being Saudi Arabia, the only sacred cows. America needs affordable gas to power those monsters.

When it comes to morality, America is Sodom and Gomorrah. Every idea capable of leading to upheaval comes from America. From benefitting and ending slavery to hip-hop and the acceptance of institutionalised same-sex relations America is the curator of them all.

Until our own Professor Farooq Kperogi weaned us from calling America God’s Own Country, we were forgiven for thinking that God lives in Washington DC. Kperogi is a naturalised citizen, a mind moulder and an avowed critic; so we accept his correction and America is just America; that works for them as it works for us.

Englishman Jeremy Bentham might have been the father of jurisprudence, when it comes to testing the elasticity of law, America wins the tug-of-war game. Until its justices have made a pronouncement on an issue, the remaining silks in the world are merely clearing the field. Yet, the last five years have pushed America to the brink of jurisprudence for better or worse.

 Its supposedly aged and enlightened electorate chose a now certified conman, Donald J. Trump, over Hilary Clinton at a time the world’s under-represented gender was waiting for the prime nation to show that what men do could be done better by their better half.

Just as the Jews of yore chose Barnabas over Jesus the Christ, Americans preferred Trump to browbeat Hilary with all crudeness and misogyny. As president, Trump would play Jacob’s voice with Esau’s hand. He insulted his way to Kim Jung Un’s heart, pumped Vladimir Putin’s hands and even borrowed Putin’s show of force in Washington DC. Trumpism changed the trajectory of American politics and even tried to introduce civilian coup into the mix after manifestly losing his re-election bid.

Trump wants to come back and Joe Biden, the man that roundly defeated him four years back, wants to stop him by every and all means. Some swear that some of those means are not so fair. After a long trial, Trump was last week indicted on all 34 felony counts of falsifying his business records. As usual, Trump ignores the facts and focused on the politics of the trial while professing his innocence. He blames everyone but himself for his own actions.

While we wait for the final verdict Trump becomes the first ex-US president to wear the title of convict to his many titles. According to American law, convicts are forever banned from owning or firing a gun in their gun-loving nation. Trump pulls the majority of his motley crowd from gun-owners and big arms dealers and he is not dropping out of the November election race. Like his democratic counterpart, the Republicans can’t seem to find an injury hour replacement. While he is banned from putting his fingers on the trigger of a firearm, if elected president, Trump would have the combination of the world’s deadliest weapon – America’s nuclear arms.

Anyone that has followed the American maverick might be losing sleep over this denouement. We all know that Trump is that kind of a personality that would say – I have a nuclear weapon and I know how to use it! Unfortunately, or fortunately, or both, there is no law in America that could stop his ambition of returning to the White House.

On the global scene, there is enough gunpowder spread over the universe to test the limits of an unhinged person with the combination lock to human survival. Fear is okay here.

Nigerians might be wont to say that the joke is on America – but is it really? It sounds like the kind of thing that only those without precedent would dare to say. We have had our own big moments where the law becomes the ass that big wigs ride to victory.

Going down memory lane, in 1999 Senator Nuhu Aliyu was shocked to discover that he would be sharing the hallowed chambers of the Senate with some of the crooks he had investigated as a deputy inspector general of police. They would wear the title of distinguished to cover their sordid past. It broke Aliyu’s heart and he voiced out. That revelation outraged his ego-vaunting colleagues who asked him to swallow his fears and get ready to tango. In 2003, Senator Iyiola Ajani Omisore, found himself in a detention cell from where he comfortably won his first Senate seat.

All that paled into insignificance when Esho Jinadu aka Buruji Kashamu won a Senate seat from Ogun State. A fugitive drug baron wanted by the Americans, Jinadu upon assuming his monicker, Kashamu, denied he was ever in America but would fight every attempt to repatriate him there to prove his innocence. He stood on the claim of mistaken identity. He did not stop at being a senator, he contested the governorship of Ogun State.

For that adventure, he recruited Reuben Abati, President Goodluck Jonathan’s chief spokesman and former chairman of the Guardian Editorial Board, as his running mate before COVID terminated his quest. May Allah overlook his bad records and grant him al-Jannah Firdaus, because Allah is all-generous and all-forgiving.

We had to travel this far down memory lane to clear the halitosis of those who might be tempted to laugh at America. Our incumbent president was accused of criminality, but nobody could prove anything against him, not even America that always knows everything according to President Jonathan. So, hold your tongue and let Trump breathe! The joke is on humanity.

The National Anthem

Even if he achieves nothing in the next seven years of his presidency, President Bola Ahmed Tinubu has won his top priority project – a revert to the colonial anthem. It was rubberstamped through both chambers of the legislature in six days. That speed shows that change could happen whenever the interests of the ruining class is at stake. He could have done it with an executive order on May 29, 2023 without the heavens falling.

Here would have been my tweak on the old anthem.

Nigeria, we hail thee

Our own dear motherland

From east or west; from north or south

In nationhood we stand

Nigeria calls on us to serve

Our sovereign motherland.

This is gender-neutral, devoid of the pejorative term ‘native’. We all know the labour of past heroes are swallowed in corruption. Rising debts, inflation, underdevelopment and policy flip-flops are obvious signs.

With a level of cluelessness that makes Jonathan a wise man, we probably should ask the Commonwealth to ask Britain to retake us and send administrators except that even Britain is looking for a saviour. It goes to the polls in a month’s time. In the eyes of the world, Nigeria is a huge joke.

President Bola Tinubu extends his warm congratulations to the Prime Minister of India, His Excellency, Narendra Modi, on his epoch-making victory in the nation's parliamentary elections.

Prime Minister Modi's coalition - the National Democratic Alliance - won a majority of the parliamentary seats, paving the way for a third consecutive term, which is a rare feat and the second time an Indian leader will retain power for a third term after Jawaharlal Nehru, India's first Prime Minister.

The President states that the outcome of the elections is a resounding affirmation of Prime Minister Modi's exceptional leadership of the world's largest democracy.

On behalf of the government and people of Nigeria, President Tinubu congratulates the people of India and assures the South Asian nation of Nigeria's commitment to strengthening relations and advancing shared goals and values as strategic partners in the league of nations.

Chief Ajuri Ngelale

Special Adviser to the President

(Media & Publicity)

The attention of the Central Bank of Nigeria (CBN) has been drawn to some information circulating in the public domain, suggesting that the CBN is set to revoke the licenses of three additional banks following its regulatory action against Heritage Bank Plc on Monday, June 3, 2024.

The CBN unequivocally states that these allegations are false and intended to trigger panic in the financial system.

The Nigerian financial system remains safe, sound, and resilient. Our banks have begun submitting implementation plans for the Banking Sector Recapitalisation Programme in compliance with the CBN Circular reviewing the minimum capital requirements for Commercial, Merchant, and Non-Interest Banks (CMNIBs). These plans are currently being reviewed by the Bank.

In addition to enhancing buffers to withstand economic shocks, this proactive measure by the CBN to require CMNIBs to recapitalize will result in increased capital for Nigeria’s banks, enabling them to provide much-needed credit to critical sectors of the economy. This will increase the financial system’s contribution to the growth and development of a $1 trillion Nigerian economy.

The CBN would like to reassure all stakeholders of its unwavering commitment to ensuring the financial system’s stability. Our financial system remains on a solid footing, and the CBN will continue to take all necessary steps to maintain its safety and soundness.

Hakama Sidi Ali (Mrs.)

Ag. Director, Corporate Communications

South Africa’s election has produced a stunning result, with the ruling African National Congress losing its majority for the first time since 1994, when Nelson Mandela led the party to its first post-apartheid victory. The ANC will now have to form a coalition government – and may never be able to rule alone again.

JOHANNESBURG – South Africa has just completed its seventh national election since Nelson Mandela’s post-apartheid victory in 1994. Mandela’s African National Congress (ANC) had won the previous elections with comfortable majorities, from a high of 70% in 2004 to a low of 57% in 2019. Not this time: the ANC is now in the minority.

Over its three decades of political dominance, the ANC made some progress in providing social welfare, housing, electricity, and piped water to millions of people. Though its total vote had fallen in each of the last four polls, it had never declined by more than five percentage points. This time, however, the ANC lost 17 percentage points, receiving just 40.2% of the vote, which means it will have to govern as part of a coalition for the first time.

Before this election, the ANC controlled eight of the country’s nine provinces. The white-dominated Democratic Alliance (DA) controlled the tourist hub of the Western Cape, with its large mixed-race population, and had been making gains with the black middle class in the industrial heartland of Gauteng.

This time, the ANC lost its majority in two provinces, KwaZulu-Natal (home to one of Africa’s largest ports), and Gauteng, rendering the ANC a rural party based on large majorities in the Eastern Cape and Limpopo. Though it still received nearly double the votes of the next largest party – the DA won 21.8% – this result represents a stunning reversal for the ANC. So, what went wrong?

The main cause of the ANC’s precipitous decline is its failure to reverse 32% unemployment, with nearly half of the country’s young people out of work. After 350 years of colonialism and apartheid, South Africa remains the world’s most unequal society, with 10% of the population controlling 80.6% of financial assets. Widespread corruption, particularly under President Jacob Zuma’s administration (2009-18), has exacerbated the problem, with state capture during this period estimated to have cost the country $26 billion.

In addition, state-owned enterprises have been looted, reducing the provision of electricity, water, and train services. Even though the black middle class grew from 2.2 million in 1993 to six million in 2018, there remains a widespread perception that a tiny cohort of black billionaires have used their ANC affiliations to benefit from cozy deals with white business. 

UPGRADE NO

Crime also represents a major concern, as South Africa has one of the world’s highest murder rates. The ANC’s support had already tanked at the local level, and before these polls, it governed only two of eight metropolitan municipalities, with the other six run by fractious coalitions.

At the same time, the 82-year old Zuma turned against the party he once dominated. His administration was excoriated by the independent Zondo Commission for grand corruption (which Zuma has denied), while the current president, Cyril Ramaphosa, condemned Zuma’s presidency as “eight wasted years.” (Zuma retorted that Ramaphosa had been his deputy for four of those years.)

Having built up the ANC’s comfortable majority on the back of his home province of KwaZulu-Natal, Zuma felt deeply aggrieved. Determined to give the party a bloody nose, he formed the uMkhonto we Sizwe (MK, named after the ANC’s paramilitary wing during apartheid) six months ago. MK pledged to replace “constitutional supremacy” with “parliamentary supremacy,” expropriate land without compensation, and nationalize mines and banks.

Remarkably, MK gained a whopping 14.6% of the national vote, including 45% in KwaZulu-Natal, where it will almost certainly form the government. MK also became the official opposition in Mpumalanga as the second largest party, with 17%. The paradox is that the alleged architect of the corruption for which the ANC was punished won a sixth of the national vote, making MK the country’s third largest party.

So, with which party will the ANC form a coalition? Many believe there are only three realistic choices. The first option is the white-dominated, business-friendly DA, which Ramaphosa seems to favor. But many within the ANC would oppose this. The DA’s campaign slogan, “Rescue South Africa,” echoes “White Man’s burden” tropes. And the DA has consistently criticized the ANC’s social-welfare programs benefiting impoverished black people. A coalition could also pose risks to the DA, as it did to the apartheid era’s ruling National Party, which was swallowed up in an earlier coalition with the ANC.

The second plausible coalition partner is the left-leaning, youth-supported Economic Freedom Fighters (EFF), which is often caricatured as a “Marxist party” of extremists, having called, like MK, for uncompensated land redistribution and nationalization of mines and banks. But the EFF has also consistently maintained an anti-xenophobic Pan-Africanism, and raised issues of structural inequality that no other mainstream party has addressed.

An ANC-EFF alliance would be deeply opposed by the powerful white corporate sector and many white voters, with the DA describing it as a “doomsday coalition.” But it is unlikely that the EFF tail would wag the ANC dog, which won four times as many votes.

The third option could be a return to the 1994-96 government of national unity in which South Africa’s largest parties share portfolios according to their electoral support. There is also speculation about Ramaphosa’s future, with MK already conditioning an unlikely coalition deal on his removal. (Deputy President Paul Mashatile and ANC Chair Gwede Mantashe touted as likely successors.)

A president must now be chosen by parliament within 14 days, even as this election has raised two serious concerns. The first is that the pathologies of South Africa’s unstable government coalitions at the local level will become a national problem, triggering political paralysis. Second, it is feared that Zuma’s Zulu-led victory in his home province could lead South Africa to an atavistic ethnic politics that revives the violent clashes once stoked by the apartheid regime.

With the death of Inkatha Freedom Party leader Mangosutho Buthelezi last year, Zuma now towers over the country’s second-largest province like a political colossus. The astute South African pundit Steven Friedman predicted that this election could be the last time that any party gains a majority in a South African national election. Coalition politics could be here to stay.

Adekeye Adebajo 

Writing for PS since 2023

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Adekeye Adebajo, a professor and a senior research fellow at the University of Pretoria’s Centre for the Advancement of Scholarship in South Africa, served on UN missions in South Africa, Western Sahara, and Iraq. He is the author of Global Africa: Profiles in Courage, Creativity, and Cruelty (Routledge, 2024) and The Eagle and the Springbok: Essays on Nigeria and South Africa (Routledge, 2023).

Many Nigerians were caught unawares by yesterday’s revocation of the license of Heritage Bank by the CBN, but among many industry operators, it was widely known that the bank has been severely distressed in the last five years. Under Godwin Emefiele, the CBN did not have the appetite to close down a bank, and so Heritage was under life support for a long time, relying mostly on borrowing from the CBN and the interbank market to support its businesses. But Yemi Cardoso is taking the apex bank in a different direction. He’s trimming the workforce, streamlining functions and divesting it from noncore regulatory duties. Heritage has therefore become the first bank since the 2005 consolidation to be allowed to crash. There have been a few sick ones since then – notably Intercontinental and Diamond – but they were not liquidated. They were purchased by a healthier one. So, why was Heritage not purchased by one of the stronger banks?

According to CBN’s Revocation Order signed by Cardoso, dated June 3 and seen by this writer, Heritage Bank contravened Section 12 (1) of the Banks and Other Financial Institutions Act (BOFIA) 2020 in five different ways: It has insufficient assets to meet its liabilities; conducted its business in an unsound manner; failed to comply with specific obligations imposed upon it under BOFIA, 2020 and the Central Bank of Nigeria Act as well as rules, regulation, guidelines and directives made under both Acts; is critically undercapitalized with a capital adequacy ratio below the prudential minimum applicable to its license category; and its financial performance and condition constitute a threat to financial stability.

 Based on Heritage Bank’s 2021 audited (but qualified) Statement of Accounts and Annual Report, its net interest income (that is interest income less interest expense) was in the negative. Net interest income measures the profitability of a bank and is a major source of income for a bank. It is the difference between what a bank earns as interest on loans and what the bank pays out to depositors as interest on their deposits. Heritage was paying out more to its depositors (mostly interbank lenders and CBN) than what it was earning on loans. This is largely because the bank’s non-performing loan (NPL) ratio was as high as 81.2 per cent. In other words, Heritage had too much bad loans in its books and so was not earning enough interest income. Out of every N100 it gave out as a loan, N81.2 was bad and unrecoverable. This is a recipe for disaster for any bank.

In addition, the bank’s operating expenses were also higher than its interest income, and so for the 2021 financial year, the bank recorded a loss of N82.928 billion and an accumulated loss of N459 billion. It is the largest loss recorded by any bank in this country in the last 30 years. Heritage Bank’s shareholders’ funds were -N230 billion (Negative N230 billion). At 81.2 per cent NPL, accumulated losses of N459 billion and Negative Shareholders’ funds of N230 billion, Heritage was a dead bank in the world of the living. There was nothing to do to revive it. Just imagine putting a cadaver in a shop and claiming that it is the shopkeeper!

You can now understand why no other bank was willing to buy Heritage. A distressed bank is bought for the value it would add to the purchaser despite its ill health. It could be the large branch network; size of customer base or its retail franchise with considerable savings and current account balances. Diamond Bank was distressed when Access Bank bought it in 2014, but it was an attractive investment because it had a lot of retail customers which Access didn’t have then. Intercontinental was very distressed too (I wrote a lengthy article on this in February), but Access went into it because it had a wide branch network which Access didn’t have then. And so, because of these two acquisitions, Access automatically became the nation’s biggest bank by assets and customer base.

Heritage had nothing to offer any potential buyer apart from its long and complicated history which might have been its Achilles heel. It was founded in the 1970s as Société Générale Bank (SGBN), a subsidiary of a French Bank, by the late Kwara politician, Dr. Abubarkar Olusola Saraki. He was the leader of the Senate in the Second Republic under the NPN, and his son, Bukola Saraki, a medical doctor like the father, was Kwara State governor in 2003 and senate President in 2015. In 2006, the CBN closed down SGBN after the Soludo consolidation for failure to meet the N25 billion minimum capital requirement. But SGBN successfully challenged the closure in court.

 In December 2012, the CBN reissued SGBN promoters a regional banking license and with new new owners, the bank was rebranded as Heritage Banking Company Ltd. It opened for business under the new name in March 2013. Heritage was eager to grow inorganically, and so it acquired Enterprise Bank, a distressed bank formerly known as Afribank, from AMCON (Asset Management Corporation of Nigeria) in 2015 for N56.1 billion. A rebranded distressed bank buying another rebranded distressed bank! The Holy Book says ‘‘when the foundation is weak, what can the righteous do?’’ (Psalms 11:3).

Now, the NDIC has its job cut out for it. It should move quickly to take possession of whatever remains of Heritage, liquidate it and pay off the insured depositors. There are a few lessons to learn from this, and we shall explore it in the next article.

The latest data from the National Bureau of Statistics (NBS) indicate that the average national petrol price has risen by 176.02 per cent year over year (YoY), from N701.24 per litre in April 2024 to N254.06 per litre in the same month of 2023.

On a month-to-month, or MoM, comparison, there was a 0.64 per cent increase from N696.79 per litre in March 2024.

Naija News reports that in the last few months, the price of foodstuffs and other commodities has skyrocketed due to the high cost of fuel across the country.

This development has further worsened the country’s economic challenges, as some businesses find it difficult to cope with the price changes, though recently, the price of petrol dropped.

However, there are indications that the price of Premium Motor Spirit (PMS), commonly known as petrol, has increased significantly year-on-year. In May 2024, the landing cost of PMS rose by 46.8% to N1,026.71 per litre, compared to N545.83 per litre in the same period of 2023.

It is important to note that the landing cost does not include additional expenses such as depot-related charges, transportation logistics, and marketers’ margins.

When these costs are taken into account, the total cost of delivering petrol to filling stations is estimated to be nearly N1,052.39 per litre, assuming an exchange rate of N1,510 to a dollar (resulting in a differential of N458.71 per litre).

These findings contradict the federal government’s claim that petrol subsidies have been eliminated under the Bola Tinubu administration.

Sources within the oil marketing industry have informed Energy Vanguard that the landing cost for June is expected to increase further due to worsening factors that contributed to the rise in May.

Furthermore, foreign exchange scarcity and a deteriorating exchange rate have been highlighted as major concerns. Additionally, the cost of fuel imports has risen in response to recent increases in international crude oil prices.

According to Vanguard, a transactional analysis conducted recently by a major operator revealed that marketers are currently paying a total direct cost of N1,052.39 per litre.

The breakdown reveals that the product cost per litre is N1,026.71, with additional costs such as freight (Lome-Lagos) at N10.37, port charges at N7.37, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) levy of N4.47, storage cost at N2.58, Marine insurance cost at N0.47, fendering cost at N0.36, and miscellaneous expenses at N0.06, along with a finance cost totalling N28.04.

The detailed analysis indicates that the landing cost of 28,000 metric tons of imported petrol exceeds $25 million, encompassing the total product cost, total direct cost, and total finance cost.

This could potentially yield sales revenue of over N39 billion, highlighting a loss of more than N19 billion.

In light of these findings, marketers have expressed concerns about the lack of profitability in importing at the current pump price, especially with the absence of a guaranteed free float of pump prices by the government.

Consequently, the Nigerian National Petroleum Company Limited (NNPCL) remains the sole importer of the product.

The situation is further exacerbated as Nigerians grapple with the rising cost of living due to increased transportation expenses, leading to higher prices of goods and services nationwide.

Nigeria Still Paying Fuel Subsidy

In a recent chat with journalists, the Managing Director/CEO of Pinnacle Oil, Robert Dickerman, mentioned that Nigeria is currently spending approximately N1 trillion each month on petrol subsidies.

He highlighted the significant subsidy that is still in place, which results in the product being sold at a lower price and leads to smuggling activities to neighbouring countries.

He added: “The consequences of this subsidy are: the cost of gasoline in Nigeria is the lowest in Africa by far, which encourages smuggling out, further depriving Nigeria of value. Smuggling causes Nigeria to subsidize neighbouring countries even while our economy struggles. The cost is hurting the entire budget, federal and state, as critical programs cannot be funded to pay this subsidy. It is currently calculated to be about 1 trillion Naira/month.”

In the meantime, the Nigerian government has quietly reinstated the payment of subsidies on petrol, also known as premium motor spirit (PMS), as reported by the International Monetary Fund (IMF).

The IMF recently released its Post Financing Assessment report on Nigeria, highlighting its concerns over the government’s decision to set price limits for fuel at retail stations.

To ensure efficient governance, the global financial institution advised President Tinubu’s administration to cease all subsidies on petrol, emphasizing that this practice disproportionately benefits the wealthy at the expense of the less privileged.