bornAfrican - The Convergence of Africana

Nigeria’s President Yar’Adua Assets Declared in 2007

Posted July 13, 2007 · Ejike Okpa II

If the president of the world’s most populous black nation is worth about $6m, less than N1 billion, then there is not much to celebrate as such net worth is palatable. By such net worth, he is not a multimillionaire and falls within a middle class. His liquidity [cash at hand or in bank], is less than $200,000. And since a lot of the assets are physical; landed properties and automobiles, whose valuation is suspect, Mr. President is probably worth less. To put it in perceptive, it takes about $7,200 to achieve N1 million; using a dollar buy back rate of say N140 to the dollar. Mr. President is asset rich and heavy because the value in exchange of his assets is far less than the reported [intrinsic] value. I am interested to know what the make of Mr. President’s car that his late brother gave him valued at N7 million; an equivalent $50,000.

And considering how landed property is valued in Nigeria, the attendant value is suspect. The way and manner assets are valued in Nigeria, leaves a lot to be desired and renders the valuation less credible. Since Nigerian banks hardly have credible and reputable underwriting department, the use of landed property as collateral to secure loans at a ratio hardly more than 25% of the value; means that one can only borrow a quarter of the reported value of an asset. The result is that asset valuation in Nigeria and its attendant value is highly inflated and over reported. Landed property as an asset class in Nigeria does not make the balance sheet a strong declaration. In US/UK, where valuation of assets is x-rayed, checked and ranked along with other reliable economic and financial indicators, a wider array of indices are used in gauging the value of assets, in turn assuring that value is standardized. It’s due to the standardized level with strong regulatory undertones, that US/UK banks can lend up to 95% of an asset’s value.

Nigerians should not be concerned about the assets but rather the growth of the assets while one is serving as a public official. No sitting president, governor, elected official should participate in activities that enriches their personal position either via publicly traded corporations or privately held companies. Once elected, all their assets should be put in a blind trust and managed by a third party Commission sanctioned and appointed by the Senate and the Judiciary. I don’t think Nigeria is ready for such approach.

With the wanton and rampant commingling of public resources with private ones by elected officials, determining what is public and private gets blurry and encourages stealing; basically a ‘petty cash’ form of accounting and use of funds. The focus should be to determine whether crime is committed via official corruption, cronyism and or nepotism. If gift giving is seen as customary and acceptable because Nigeria’s form of public leadership is mostly paternalistic, it is hard to indict an official who breaches and abuses their role. Because it is acceptable for an elected official to award contract and then turn around and receive gift from the contractor, fighting corruption will be hard. For instance, Nigeria Central Bank Governor Mr. Charles Soludo, after completing the consolidation and restructuring of the banks, received gifts from Managing Directors of Banks when he held a grand opening of his personal home. What does anyone make of such gifts? Mr. Soludo probably needs to declare his asset since he went from an obscure starving university lecturer to Economic Adviser and now governor of Central Bank of Nigeria. And I am sure his rate of asset growth and appreciation, will alarm Nigerians.

Nigeria is not ready for serious reform on how its government works with respect to finances and the PURSE politics. When that happens, it means the manner, ways and means government business is conducted by the elected and appointed will render interest in government less attractive. The ease with which persons get rich with government position fuels the penchant for stealing and lax attitudes towards public resources. Minimize and take away the ‘hands-in-the-till’ way of public servants, and Nigeria may experience good governance and get some mileage for its public resources.

Email to Friend

Comments

Add a Comment

Name:

Email:

URL:

Comment:

Enter the word you see below:

We reserve the right to remove comments that are off-topic or disrespectful.