Law News
Why Africa Needs Strong Institutions, by Osinbajo, Others

Despite Africas economic potential many on the continent are poor. Legal experts have identified weak institutions as being at the heart of its underdevelopment.

How can Africa build strong institutions? This was the major topic of discussions at the 57th Annual General Conference of the Nigerian Bar Association (NBA) held in Lagos, from August 18 to 24.

Its theme was: African Business: Penetrating through institution building.

The conference featured about 146 speakers, including Vice President Yemi Osinbajo, former Georgian President Nika Gilauri, several governors, ministers, former ministers, lawmakers, financial and investment experts, corporate icons, representatives of international organisations, and the academia.

Before the opening on August 20, Jumat and church services were held, as well as visits to the Nigerian Stock Exchange, and the Oba of Lagos, a novelty match, a welcome cocktail and a medical screening.

There were six plenary sessions, with the sub-themes: Conversations with the Acting President, institutionalising African investment, the Great debate: We need help to grow, and Transboundary infrastructure development. There were also the governors’ forum and the NBA-United Nations forum.

Over 27 topics were discussed at break-out sessions, such as roadmap to economic recovery, military businesses, creating secondary markets for investors, de-risking infrastructure, maintaining stability through the financial system, the business of cyber law, legislation as tool for national planning, debt as drag to institution building, among others.

There were showcase sessions by Lagos, Rivers, Bauchi, Kano and Ondo states, in which their governors and other officials spoke on investment opportunities in their states.

The conference ended with an annual general meeting of the NBA where officers presented account reports and various agencies highlighted their activities.

They included the Nigerian Law Reform Commission, the Nigerian Law School, the Nigerian Institute of Advanced Legal Studies (NIALS), the Corporate Affairs Commission (CAC), and the National Human Rights Commission (NHRC).

NBA President Abubakar Mahmoud (SAN) said the theme was chosen to underscore the challenge of bringing prosperity to Africa’s most populous country and to the continent.

“The decline of our country’s economic fortunes in the last few years has exacerbated tensions along our traditional fault lines whilst unmasking new ones, making the task of nation building seem even more daunting.

“To rebuild confidence in our country, it is clear that we must address the challenges of institution building. It is only strong institutions that can guarantee social protection, bring about political stability and engender economic prosperity,” he said.

Keys to institution building

Osinbajo expressed optimism on Nigeria’s future. He highlighted efforts to build strong institutions, and ensure efficiency and transparency in governance.

On economic recovery, Osinbajo said the nation was witnessing prosperity through agriculture, citing the Kebbi/Lagos rice initiative as an example.

The sector, he said, is moving towards agro-processing. Nigerian grapes are now in great demand and are being exported to other countries, giving rise to more value-added exports, he said.

On ease of doing business, he said Nigeria has made giant steps in easing regulations in the business environment in Nigeria making it investor friendly and attractive for direct foreign investments.

He spoke about the government’s transparency policy named ‘Executive Order 001.’ This ensures not only transparency in government business, but that timelines must be met.

Unnecessary bureaucracies and bottlenecks have been eliminated; approvals can now be gotten in a matter of days. A one stop center is now in place to process and collect all approvals for a wide range of businesses.

The Vice President said the tax system was being strengthened. According to him, wealthy Nigerians who have been avoiding tax payments have a 90-day period of grace to do so.

The Federal Government, he said, has established a “Beneficial Ownership Scheme” which will enable such tax offenders to be exposed.

“We have established the Beneficial Ownership Scheme where wealthy Nigerians who have been avoiding paying their taxes have been given a 90-day period of grace after which if they don’t disclose what they own in order to pay tax, they will face the full wrath of the law. We have gotten quite a few wealthy Nigerians approach us to disclose what they own,” he said.

He said one of the most important reforms the Buhari-led administration is setting a foundation for the economic recovery of the country.

“We have set a foundation of rebuilding the economy, creating The Single Treasury Account (TSA), monitoring government spending, modified the tax system to be more efficient and implemented executive orders. We are currently in a situation where we have cleared the mess inherited by this administration,” he said.

While restating the government’s effort in tackling corruption as well as Nigeria’s poor reputation abroad, Osinbajo said the Buhari administration spent N1.3trillion on capital projects in 2016, the highest ever spent in the history of the country.

He noted that government ownership of business encourages corruption, adding that the more private sector involvement there is, the more efficient the system would be, and the less corrupt the system would be.

“We have introduced technology into a lot of processes. For example company registration with the Corporate Affairs Commission (CAC). The less human contact, the less incidences of corruption,” he said.

Osinabjo said offenders must be punished. “Fighting corruption is multi-sectoral. We have to work together. Convictions on corruption cases have been slow. From my experience as a former prosecutor, getting cases to court is slow, and the system allows a lot of inefficiencies.

“We have to try cases efficiently and secure convictions so people can see the consequences of corruption. The whole process of reform requires the three arms of government. We have tried to establish the Special Offences Court to combat corruption,” he said.

Lagos State Governor Akinwunmi Ambode attributed Africa’s underdevelopment to weak institutions.

In his remarks at the opening session, the governor called for stronger institutions.

“Weak Institutions constitute a major disincentive for investment which is extremely important for the efficient and effective harnessing of the huge resources that nature has blessed us with.

“Our Institutions are weak because in most cases, their establishment is influenced by personal and short term considerations.

“In some other cases, they are deliberately weakened in order to make them subject to the whims and caprices of the leadership,” Ambode said.

The governor said building and sustaining strong institutions requires collective commitment to the rule of law and developing the capacity of such institutions to enable them discharge their responsibilities effectively and transparently while being accountable to the people.

Minister of Works, Power and Steel, Mr Babatunde Fashola (SAN), who represented Osinbajo at the opening, said building strong institutions takes times, adding that Nigeria must put in place structures that can compete globally.

On how to build strong institutions, he said: “Institution building encompasses an array of steps and procedures, each one building on and reinforcing the other to create a desired whole.

“These may include creating and implementing strong codes of corporate governance, taking the business of audit seriously, listing on the capital market and consummating mergers and acquisitions where necessary.”

The Georgian example

A former Prime Minister of Georgia, Mr Nika Gilauri, said the Nigerian economy can be reformed in three ways namely, Public-Private Partnerships (PPP), Tax to GDP income and fighting corruption.

On PPP, the former Prime Minister said: “Depending on the right formulas, if PPPs are done properly, it can bring about amazing results. In Georgia, we did a huge and successful healthcare reform based on PPP. In a small country like Georgia, it was an amazing feat.

“For Georgia, we were able to lure investors by saying we were poor and in dire need of funding. Investments were one of the driving forces for the reform in Georgia,” he said.

Gilauri, who was prime minister from 2009 to 2012, as well as minister of energy (2004-2007) and finance (2007-2009), said Nigeria’s tax to GDP income rate of one to six percent was significantly low. He called for the reform in the tax policy of the country.

He said his country used to be one of the most corrupt in the world, but is now one of the least corrupt in the world. According to him, if his country could achieve that feat, it was possible for Nigeria.

“In 2004, we were the fifth most corrupt country in the world; in 2010 Georgia became the eight least corrupt country in the world, there is nothing like innate or cultural corruption,” he said.

Gilauri also urged Nigeria to open up its economy, saying it would act as catalyst for growth and development. He said Georgia transformed its economy and created 20,000 jobs within six years by opening up its economy.

According to him, his country became one of the highest exporter of cars even though it did not produce them. “My advice will be: go for a full, open economy,” he said.

“Developing countries need globalisation and need to have very open economies in order to be part of this new technological revolution, which we are facing right now.

“In Georgia, we had very, very fast growth in a very short period of time. In 2004/2005, the main item of export of Georgia was scrap metal. We didn’t have oil.

“But within a six-year period after opening up our economy, the number one expert item of Georgia was cars, vehicles, even though we don’t produce any cars. Because it was open economy, it was simple to Customs-clear the goods; it was simple to do all the transactions.

“Most of the car manufacturers around the world brought their cars to Georgia and traded them to the rest of our region. By making almost zero investment, by opening up our economy, taking out corruption, and by simplifying the rules, we created 20,000 jobs.

“This type of smart openness, smart regulations and fighting corruption, I believe, can be a very, very good way forward for Nigerian economy.

“For the past 15 years, what this kind of competition and openness did was make Georgian businessmen better. Foreign capital was brought to Georgia, and Georgians are managing it. Before then, we had two big Georgian banks doing nothing,” he said.

A former NBA president Dr Olisa Agbakoba (SAN) attributed Nigeria’s underdevelopment to incompetent leadership.

He said the country cannot attract foreign direct investment when it is under by a “non-performing government”.

Agbakoba urged lawyers to put more pressure on government to perform. He said no progress has been made towards addressing the power deficit, adding that he uses no fewer than 10 generators to run his offices.

According to him, bad leadership was manifest in the fact that roads in Apapa, from which port Nigeria earns huge income, has remained in bad state. He said it takes him an average of three hours daily to get to work due to bad roads and trailers blocking access.

“Despite all of the resources allocated to power, we don’t have power. As I stand before you, I run about 10 generators in various offices. The Vice President spoke very eloquently but in real terms, we as lawyers are responsible in the context that we must put pressure on government.

“No one is going to come here on foreign direct investment with the kind of, for want of a better word, non-performing government that we have. It’s not possible.

“In spite of the huge market – 200 million Nigerians – we are very poor. So, sometimes we sit here in fancy suits; but go out to the streets.

“I am a maritime lawyer in Apapa district. The Apapa district contributes 30 per cent of Nigeria’s national budget. Yet, it takes three hours for me to get to work because trucks and tankers have blocked the entire place.

“So, let’s not pretend. We must look for leadership. And I think that is the central challenge,” Agbakoba said.

Breakout sessions

In one of the breakout sessions on the “Business of Cyber law”, Executive Chairman of the Nigerian Communications Commission (NCC) Prof. Umar Danbatta, called for the passage of the harmonised Data Protection Bill and the Electronic Transaction Bill into Law.

The Data Protection Bill, he said, proposes a comprehensive framework governing collection, processing and safeguarding personal data.

He said the Electronic Transaction Bill, which proposes a framework for proof and admissibility of electronic transactions in court, was still pending at the National Assembly. He urged NBA to support effort towards passage of the bills into law.

Danbatta urged Nigerians to report cases of unsolicited messages from service provides to the commission for action. On how to stop receipt of unsolicited short messages from GSM service providers, said subscribers could send STOP to 2442.

If the messages keep coming afterwards, he said the subscriber should call NCC through the toll free line: 622 to lodge a complaint. Danbatta said by also sending HELP to 2442, subscribers can choose the type of messages they want.

According to him, NCC would ensure the refund of money lost through unsolicited text messages or unsubscribed services.

Danbatta called for capacity building for officers, prosecutors, judges and attorneys-general in cybercrime, as well as for standardised cyber insurance policies.

“Data end to end encryption should be encouraged,” he said.

Nigeria, he said, ranks third globally in cyber-related crimes behind the United Kingdom and United States.

He said: “About N127 billion was the estimated loss to cyber-crime in Nigeria in 2015; Nigeria ranks third in global internet crimes behind the UK and US.

“A critical factor militating against Africa’s economic resurgence is the weakness of its institutions. Nigeria ranks 169 out of 199 on the World Bank’s ease of doing business rankings. We are in a middle of a revolution and the rise of what we call the networked society.

“The NCC stipulates the laws of engagement that will make the cyberspace safe and ensure the confidence as well as the safety of the cyberspace. There are benefits and risks of the use of cyberspace and both should be properly managed.”

Business and brand experts called on legal practitioners and law firms to adopt proper business practices and brand strategies.

At another breakout session on “Essence of Strong Legal Brand”, speakers wondered why law firms are not allowed to advertise. Brand experts, Doug Villers, Leke Alder of Alder Consulting and Tunji Olugbodi of Verdant Zeal called for a new approach to law firm branding.

Alder, a Strategy and Brand Consultant, noted with dismay the law prohibiting lawyers from advertising, stating that it was out-dated and antiquated.

“We need to ditch these limiting practices in other to make headway in the profession. The idea of advertising is to project a brand, which of course, is an integral part of any business.

“Branding has its roots in the laws of supply and demand and we must begin to think globally in other to get the best out of it. In today’s reality, a modern law firm should have a global perspective on doing business.

“We need to see the world as our market place. To achieve this and compete globally with other 21st century law firms, we would have to build strong brands,” Alder said.

At a session on “Military Businesses”, a professor of military engineering, Wole Soboyejo, urged the Federal Government to focus on building military hardware in Nigeria.

He called for concerted effort in developing research in military engineering, adding that it could be used to stimulate development.

Soboyejo said rather than spending billions of dollars on importation of military hardware, some of the funds could be invested in research and development towards building them in Nigeria, thereby creating employment.

According to him, Nigeria needs to invest in and development of various forms of military technology.

He presented selected examples to show how investments in military research and development have resulted in commercial applications.

He also gave instances in which military research and development provided the “carrot” for investing in research and development that creates a pipeline of commercial products and platforms.

“The same potential exists here in Nigeria/Africa if we use military research and development as a ‘catalyst’ for developing commercial companies and researchers (between one and four per cent of GDP),” he said.

Soboyejo called for a legal framework for research and development in military technology.

“Legal framework is needed to create value and provide local/global governance, such as in patents, licensing and strategy,” he said.

The professor said military research and development flows into other aspects of the economy.

According to him, such research could be into things like drones and ‘autonomous’ vehicles which can be used on border patrols, as well as in robotics and robotically assisted soldiers, among others.

Soboyejo regretted that achievements made in developing military technology during the Biafran war were not sustained, but the ideas were left to die.

“Those achievements were not sustained because we did not appreciate the business side of things. We didn’t invest in research. We have the capacity on the ground to do research,” he said.

According to him, Brazil, the third biggest aircraft maker, started with making “bamboo aircraft”.

He urged Nigeria to resolve to design and make more drones and other military hardware, including aircraft.

“We need lawyers to develop commercial opportunities and policies that will make the ideas work,” he added.

Governors seek stronger institutions

Kano State Governor Abdulahi Ganduje and his Ondo State counterpart, Oluwarotimi Akeredolu, restated calls for state police at the Governors’ Forum.

According to them, it is the only way to guarantee security and create peaceful atmosphere for development.

The governors said states were already funding and equipping the Police, which they said lack enough men and capacity to provide effective security across Nigeria.

Akeredolu said the time has come for states to have their police. Federal Government cannot fund the police well.

“If we must provide everything for the police, the time has come to have state police. Let’s have our own police. There is nothing wrong with it.

“The Nigeria Police is short staffed. They are stretched. Sometimes even the commissioner of police is helpless. The men are not there.

“The country is vast. We cannot afford to continue under one command where you take orders from the Inspector-General of Police in Abuja.

“You cannot effectively police an area when you bring in people who don’t know the terrain,” he said.

Akeredolu called for stronger institutions, such as the legislature, saying a governor should have no business choosing the Speaker, which he said is the business of lawmakers in line with the principle of separation of powers.

“We should build institutions and allow them to thrive,” he said.

Ganduje said most states pay policemen allowances, besides providing them with other equipment.

He said devolution of powers would mean increasing states’ capacity to fund their police.

“We are still equipping the police, even paying their allowances in some cases. The budget that is supposed to be given to the police should be given to the states,” he said.

On what it takes to build strong institutions, Ganduje said it requires a strong template for recruitment, capacity development through training and setting clear-cut goals.

“You don’t need strong men; you need strong institutions. Strong institutions are indispensable to socio-economic development. Strong institutions surpass those who created them.

“Our institutions need to have clearcut goals and objectives. There must be free flow of information, transparency and accountability.

“There must be a template for reward and punishment. The institutions must be insulated from political interference,” the Kano State governor said.

According to him, institutions, such as the judiciary and the Independent National Electoral Commission (INEC) must be strong for democracy to thrive.

Akuma said Rivers was focusing on strengthening institutions, without which he said there would be no development.

For instance, he said the state ensured that the judiciary, which was closed for several months, was re-opened, while due process was followed in the appointment of the Chief Judge, a non-indigene.

‘Why Africa needs integration’

The sixth plenary session on transboundary infrastructure development had Executive Secretary of African Capacity Building Foundation Prof Emmanuel Nnadozie as the guest speaker.

According to him, African governments have embraced regional integration as an important component of their development strategies and concluded a very large number of regional integration arrangements (RIAs).

However, these commitments, he said, have remained strong on paper, without equivalent implementation and enforcement efforts to make regional integration more effective and efficient enough to tackle Africa’s expanding challenges and opportunities.

Nnadozie said integration would facilitate Africa’s industrialisation and investment inflow.

He said to accelerate regional integration in Africa, the continent must develop efficient and effective institutions that will be in a position to do a number of important things beyond promoting trade and regional infrastructure programmes.

Such institutions, he said, must enhance leadership because leadership is critical for regional integration.

“Transformative leadership and political will are important for identifying and defending Africa’s interests at all levels. Visionary and effective leadership is an essential requirement for accelerating regional integration because, leaders must be able to provide inspiration, motivation and clear direction to ensure that decisions are implemented,” he said.

The Nation News


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