The headline above seems a little inappropriate given the earnings of Bankers, vis-à-vis statistics on salaries and wages in the Nation.
The average Nigerian Banker earns at least four times the poorly implemented National minimum wage of N18,000; gets his pay promptly without being owed arrears, and enjoys other employment benefits, such as healthcare, without hassles.
Why then would these privileged few, whose wage bill cost the 13 NSE listed banks, a whopping N178b in the first three months of 2020, lockdown notwithstanding, need to supplement their already impressive income?
Simple, because they need to meet up with their financial obligations.
The expectations are high for anyone with a decent job in a country where the unemployment rate is currently 27.1%, and where 28.6% of its population are underemployed.
The expectations are even higher for those whose work is in the banking sector, of whom it is erroneously believed, have access to unlimited funds, and an endless flow of credit facility, because they facilitate the consummation of volumes of such transactions daily.
The peculiarity of HR policies in Nigerian banks does not allow for ‘helping’ of relatives into the same system, as is obtainable in the Nigerian Civil service. Hence, the basic assistance which Bankers can offer their ever-expanding network of dependants is direct financial aid, forcing them to engage in moonlighting activities to meet up the ‘hype’.
The activities below are from close observation and interactions with Nigerian Bankers.
The existence of different exchange rates, coupled with the scarcity of FX for most sectors of the economy has given rise to opportunities for arbitrage and round-tripping. Most bankers, who by virtue of their jobs have become privy to their customers’ FX needs, are able to broker deals; matching the demand of FX with supply, and earning handsome margins in the process. Gratitude, loyalty, and referrals from their customers are an added bonus for flouting their Bank’s internal policies on staff participation in FX dealings.
Such dealings have in recent times expanded to include transactions in cryptocurrencies.
Personal professional practice
Nigerian Banking industry is a melting pot of various first degrees, with some using their bank jobs as a stop-gap for their employment problems, as they seek to improve on their chosen professions. Hence, it is not uncommon to see bankers start and run their startups in other fields, while still in paid employment of their banks.
Although, the Banks are likely to frown on not getting 100% commitment from their employees; they continue to provide a rich base of potential clients for these startups and have been their customers too.
Sports betting and Mobile Money agencies
Sports betting in Nigeria has opened up a new world of investment possibilities for sports enthusiasts and shrewd businessmen. Since 2009, when the first online sports betting site launched in Nigeria, over twenty more have joined to compete for the market in Africa’s most populous black nation, and they all seem to be thriving, as each sports competition sees the unveiling of another sports betting site in Nigeria.
Bankers, with their knowledge of the industry figures, have had a first mover’s advantage in being agents of these sport betting firms.
The same holds true for Mobile Money agencies, where Bankers have been known to use the influence of their office to expedite mobile money agent approvals and secure POS terminals, which have consequently become inaccessible to the common man.
As with most business endeavours, Bankers generally indulge in businesses, in which they have a comparative advantage. Bankers in big cities use their cars to run shifts under popular cab-hailing services; some moonlight as real estate agents, because they can match customers with their real estate needs. A few others have become millionaires, by investing in their customers’ businesses. The possibilities are endless, as Bankers seek to make ends meet through their ingenuity, while staying relevant in their careers.
Explore the Nairametrics Research Website for Economic and Financial Data
Cyprian Ekwensi in his classic novel ‘Chike and the River’, made popular the phrase of a man who lives by the bank of the Niger, washing his hands with spittle. Sadly, this has become the lot of most Nigerian Bankers, as they live from paycheck to paycheck, exploring one loan option to pay off a previous loan, even as they condescend to their customers in volunteering financial advice, that they are better off implementing in their personal finances.
No one is immune to the economic squeeze our double-digit inflation has brought on fixed income earners, especially not our beloved bankers.
The Nigerian insurance sector; repositioning for efficiency
For the industry to thrive, the regulators may also need to deepen micro insurers’ activities in the Nigerian economy.
The Nigerian Insurance sector is critical to propelling income equality and reducing the poverty level of any society, but the industry’s performance has continued to drag amid many factors, such as; low underwriting capacity of players, lack of trust by consumers, poverty and the inadequacy of distribution infrastructure.
These factors have jointly contributed to the abysmal level of insurance penetration – the proportion of insurance business to the gross domestic product over the years.
The Nigerian Insurance sector remains largely underdeveloped with Insurance penetration still at c.0.5% to GDP. The sector which contracted by 18.67% y/y in the Q3 GDP report released by the National Bureau of Statistics (NBS) is set for a deep recession in 2020.
The covid-19 pandemic effect has increased health, travel, and business disruption claims. These claims, coupled with underwriters’ inability to write risks in Q2 and the tapered household income should amplify the sector’s expected recession.
In a bid to rid the sector of these known drags, the National Insurance Commission (NAICOM), the primary regulator in the industry launched its recapitalization exercise in May 2019. The plan’s proponents intend to improve the industry’s minimum paid-up capital in each business segment, thereby solving premium flight issues that have continued to plague the industry.
Following the lingering impact of coronavirus, the deadline was adjusted from June 2020 to December 2020 to implement Phase I of the project while the deadline for the second phase’s performance was moved to September 2021. Some players have called for an extension of the regulator’s deadline given the impact of Covid-19 on their businesses.
However, most of the industry’s bellwethers have entirely shored-up their minimum paid-up capital to the required level. In our view, firms that are yet to meet the required capital threshold may likely lose out on the opportunities available on the supply side of the market.
Furthermore, for the industry to thrive, the regulators may also need to deepen micro insurers’ activities in the Nigerian economy.
CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.
Imposters, uniforms and our collective awe
The uniform of the Nigerian Armed Forces, Police, and other Government Security Agencies have become so powerful, that they serve as a form of identification.
On a bright, sunny Tuesday morning in Lagos, Col. Saki Abdullahi (not real name), got into his personal car and hurried to the bank to sort out some issues with his account and perform some transactions. He was dressed immaculately in his well ironed and starched uniform and you could see your reflection in his well-polished shoes.
As he approached the gate of the New Generation Bank in Victoria Island, one of the Security Guards beckoned on him to open his boot for the usual search. Col. Saki knew the drill and with one touch of a knob near the seat, he flicked open the boot just as the guard walking past him noticed his uniform and rank.
The Guard immediately closed the boot with the briefest of glimpses into it and signaled for his colleague to open the gate. Col. Saki found this rather curious because, on previous visits to the same bank branch, he had been subjected to more scrutiny by the guards on duty.
He parked his car and walked towards the security doors that granted access into the banking hall. He was briskly saluted by the guard and when the door appeared to disallow him entry (on account of his car keys and belt), he was still given swift access. Generally, the Staff was all super courteous and helpful and he left the bank in next to no time.
On the drive back to his office, he had a call and he hesitated as he could not find his hands-free device, but the person on the other line was not someone he could ignore his call. So, he picked and put the phone to his ears and began a conversation. He got to a point and had to slow down in traffic. A Lagos State Traffic Official (LASTMA) who got in front of his car and attempted to stop him because he was on the phone and driving, took one look at him and moved on.
Then it dawned on him that the reason the LASTMA Official did not bother to approach him was the same reason the guards and bank staff were so nice to him. He was in his Army uniform and in Nigeria that confers a special status and privilege on the wearer.
All over the World, members of the Armed Forces, Police, and other Uniformed Government Security are accorded some form of respect and privilege. It is an unwritten rule borne out of respect for the sacrifices that they make daily for the rest of the citizenry to enjoy the most basic freedoms and security. These privileges however do not in any way place uniformed personnel above the laws of the land or above the rest of the civil populace.
The unbridled privileges and rights that years of Military rule have inadvertently conferred on Uniformed Personnel have created a class of citizens that cannot be questioned and led to a growing army of Impostors, fakes, and impersonating Uniformed Officers of the Law.
In Nigeria, it is a normal sight to see men of the Armed Forces beating up and molesting citizens for daring to wear camouflage clothing on the Streets, as this is deemed as an attempt to impersonate a member of the Armed Forces. Curiously, these outfits are readily available online, and wearing them in other parts of the developed world is not considered a crime or impersonation.
Section 110 (1) of the Criminal Code makes it unlawful for any person who is not serving in any of the Armed Forces in Nigeria to wear the uniform of the Armed Forces or any part of the uniform of such Forces, or any dress having the appearance or bearing any of the Regimental or other distinctive marks of such uniforms. Camouflage is a part of the military uniform and so it falls under this law.
So, the basic reason for outlawing the wearing of camouflage amongst civilians is security, but if we look at countries with the strongest armies in the world and the prevalence of citizens being allowed to wear camouflage and other dress articles associated with the military, we also notice crimes committed do not have a correlation with the wearing of uniforms. So, the real issue is not the uniform itself, but the access, privilege, power, and rights it confers on the wearer.
Just this past week, it was widely reported that 2 suspects were nabbed by the Oyo State western Security Network codenamed, Amotekun for producing and selling fake Amotekun uniforms. This was after 6 persons were arrested while posing as members of the Corps. Amotekun has launched just over a year ago on January 9, 2020, and already criminal groups are making counterfeit versions of its uniforms. So, you ask yourself, why would anyone want to buy counterfeit versions of Amotekun uniforms if not that they believe it’s a means to access power and riches that they would otherwise not be able to get if they were in civilian dress.
While growing up in Lagos in the early ’80s, uniformed personnel boarded public transportation and were exempted from paying fares. This was done as a form of respect and appreciation (especially after the Civil War), but the sight of uniformed personnel wearing just an article of clothing in the uniform e.g., the Cap, T-Shirt or Pants on a weekend private outing just to avoid paying their fare has become embarrassing. Once Commercial Drivers put uniformed personnel in the front seat of their vehicle, they are emboldened to break all the traffic rules including driving against traffic (One Way Driving).
The uniform of the Nigerian Armed Forces, Police, and other Government Security Agencies have become so powerful, that they serve as a form of identification. You are not allowed to request to see the identification card of anyone in uniform, to do so can lead to physical intimidation.
The Military High Command has done its best in recent years to improve military and civilian interaction and to create lines of communication for the civil populace to report incidents of misconduct. These actions have led to a manifest improvement in the civility of interactions between the two sides.
During the last nationwide #EndSARS protests, an Airforce Officer was lauded by all for the manner he was able to calm down the protesters and ensured there was no destruction of property and no loss of lives.
As we continue on the journey of nationhood, we have to decide as a people what form our respect and the privileges, we accord our men and women in uniform should take.
As we mark Armed Forces Remembrance Day and the sacrifices of our Fallen Heroes, we owe it a duty to discuss how we honor them, while maintaining the rule of law across the board and the dignity of the rest of the civil populace.
‘Long live the Armed Forces, Long Live The Federal Republic of Nigeria’
A Joe Biden presidency and its impact on Nigeria’s oil
With Joe Biden’s imminent inauguration as the President of the US, his policy on energy and renewables could very well determine Nigeria´s prosperity for the next 4 years.
A couple of months ago, I wrote on the impact of the Joe Biden Presidency on the oil markets. Now that he is President of the United States with his inauguration on the 20th of January, every country would go back to their political and foreign drawing boards to analyse the impact of his swearing-in on their respective economies or governments.
While some countries would face pressure from Biden in respect to their human rights issues, climate change policies and other diplomatic matters, countries like Nigeria will be analyzing the impact of Biden’s policies on the fate of Oil.
Three standpoints are crucial here;
- Will shale oil, which has been the albatross on the neck of oil prices for years, weaken in respect to Joe Biden and notably Kamala Harris’ views on fracking?
- Will Joe Biden’s soft foreign policy on Iran enable Iranian oil to return to the market?
- Will Joe Biden emulate Trump in meddling with OPEC+ affairs?
The answers to these three questions would give an outlook on the fate of Nigeria’s black gold.
Over the years, the investment in the Shale industry in America has seen the United States increase oil production significantly. In understanding market dynamics, increased production of oil has a negative effect on oil prices. This is why we have not seen $100 oil in many years now.
An increase in US oil has significantly reduced OPEC+ market share and dominance in the oil markets. Historically OPEC could influence prices with their policies, but nowadays, US oil appears as a barrier in the oil markets.
The dominance of shale is enabled by a few factors. Firstly, Fracking. Fracking is the process of drilling down into the earth before a high-pressure water mixture is directed at the rock to release the gas inside. It is highly controversial as it threatens to cause pollution and is detrimental to climate change.
Now, climate change is at the forefront of Joe Biden’s energy policy. Inadvertently, it will hamper the production of fossil fuels in the long-run.
Additionally, Wall Street would be wary of investing in the oil and gas sector as the future looks more into renewable energy.
Joe Biden’s relations with Iran would differ from Trump’s relationship with Tehran. While Donald Trump gave tough sanctions during his tenure, Biden would seek to pamper Iran just like Obama did and this will mean Iranian oil can come back to the market. Although private intelligence shows Iranian oil is still exchanged in the markets, this diplomatic relation would still be significant especially with Iran accounting for about 9.5% of the world’s total oil reserves.
Meddling with OPEC+
During Trump’s tenure, OPEC+ was rattled several times. Trump has never hidden his mistrust in OPEC. He has previously labeled them a cartel in the past. When oil prices go high and affect the cost of gasoline on American consumers, Trump calls out OPEC to find ways to reduce the prices.
However, when prices are so low and energy companies in America can’t break even, Trump, like he did in April 2020, interferes and calls out OPEC to intervene. Interestingly, according to trumptwitterarchive.com, Donald Trump tweeted 271 times about “oil”; 70 about “OPEC”; 351 about “gas” (gasoline and natural gas); 68 about “Saudi Arabia”. It would be rare for Joe Biden to do the same thing as his style of governance will be seemingly different from Trump´s.
Additionally, America as one of the largest consumers of oil will need to improve its demand overtime before supply outweighs demand as a result of the pandemic. How Joe Biden handles the pandemic would be significant in American demand. Would he endure lockdowns or not? That’s very important in the conversation on his impact on gasoline prices and demand.
Nigeria’s black gold – Oil, would be dependent on the future outlook of the oil market and Biden’s policies. It would be interesting to see if Biden would allow OPEC to seize market share from American oil. The first few years would be very important.