Tuesday, January 24, 2012

Too big to jail?

It appears that in Nigeria some thieves are too big to jail.  Even if prison terms can not be set in direct proportion to the amount stolen, we need to at least entrench a mo' money mo' problems policy, as in, the more money you steal, the more punishment you receive.

Everyday in the newspapers, you find minor headlines such as these two from Page 10 of yesterday's BusinessDay:
"2 bag one year in jail for robbery" - how much?  N10,700 during the strike free-for-all and also a motorcycle valued at N120,000, plus possession of a cutlass.
"Man sentenced to 2 months imprisonment for theft" - he stole clothing worth N45,000, he is also required to pay back N45,000 to complainant or face one additional month in jail.

On the other hand, for grand theft in the millions, we have witnessed several "probes" to nowhere, that is, zero jail time.  

What if jail time was measured out in Direct proportion to the amount stolen?  Here's the math:
N45k --> 2 months + "payback" and N130,700 + "cutlass" --> 12 months  means that* a month in jail is the punishment for something like N10k to N20k, or $100, of theft.
In this model, if you happen to be found guilty of stealing N1 million ($6000), you've got 60 months in jail, that is five years.  For stealing N100 million naira, you're in jail for 500years, or your whole life.

For those who find this too harsh, another option is to make a more gradual, say logarithmic increase in jail time.  It may look something like this:  under N20,000 --> 1 month or less
around N200k --> 1 year
 N400k --> 2 years
 N800k --> 3 years
thus, stealing N100 million gets 10 years
while stealing $100 million gets the offender 17 years out of circulation

It's about time there were rules from pickpocket level all the way to large chunks of the GDP.  Everybody must understand that if you try to take a shortcut, you will get caught and you will have a large penalty to pay.  For now, how many do you know popping champagne about town who properly ought to be in prison? 

* - assuming reasonable monetary equivalents for payback and cutlass , set N45k fine at value of 1-3 months of freedom and cutlass possession at value of additional N10k - N100k of theft.  Note, at present $1 is about N165

Saturday, January 14, 2012

Hug a capitalist today

From The Economist

...Scorn for moneymen has a long pedigree. Jesus expelled the moneychangers from the Temple. Timothy tells us that “the love of money is the root of all evil.” Muhammad banned usury. The Jews referred to interest as neshek—a bite. The Catholic church banned it in 1311. Dante consigned moneylenders to the seventh circle of hell—the one also populated by the inhabitants of Sodom and “other practisers of unnatural vice”.

...This prejudice has proven dangerous. Without money to grease them, the wheels of commerce turn slowly or not at all. Civilisations that have eased the ban on moneylending have grown rich. Those that have retained it have stagnated.

...Prejudice against financiers can cause non-economic damage, too. Throughout history, moneylenders have been persecuted. Ethnic minorities—most obviously the Jews in Europe and America but also the Chinese in Asia—have clustered in the financial sector first because they were barred from more “respectable” pursuits and later because success begets success. At times, anti-banking prejudice has acquired a strong tinge of ethnic hatred.

...In medieval Europe Jews were persecuted not only because they were not Christians but also because killing them was a quick way to expunge debts...The crisis of 2008 showed that global finance requires tough medicine...but demonising bankers will not solve these problems—and may well, if unchecked, bring a lot of ancient ugliness back to life.  (...Read more)

How many people are anti-Igbo (among Nigerians), hate Ijebus (among Yorubas), feel mad at Nigerians (in Africa), abhor Jews, or maybe believe that Wall Street "casinos" are evil?  Read The dangers of demonology to appreciate the long history of banker-hate and its dangers.

Friday, January 13, 2012

Engaging the Propaganda

A thousand and one lies indeed start appearing to be true, unless tackled. Been watching the Channels debates lately as the subsidy protests take over the nation, and here are the delicate under bellies of the government's half truths:

1. Deregulation is good in telecoms, Banking etc. It will be good in Petroleum Too – By NESG Chairman, Fred Nweke (Former Information Minister) & Others

Response: Well, not exactly. Deregulating the marketing of petroleum (which is usually money losing) and not the upstream production (where the easy money is) is analogous to government owning MTN and Globacom, but privatizing sale of recharge cards! Our right to subsidized petroleum is a derivative of government’s insistence on managing that asset directly in trust for the people: who demand it cheaply. Moreover, in developed countries (like the US) where the price at the pump is deregulated, if you find oil in your backyard you also own it. In these countries as well, important resources like food are subsidized. What has the Nigerian government done for you lately?

2. Subsidy breeds corruption and the cabal benefits – By Governor Sanusi
Response: This argument is basically saying the government cannot deal with corruption or is not willing to confront their buddies that are the “cabal”. Was Femi Otedola (the Diesel Prince) not the biggest sponsor of the President’s ambition in 2011? What happened to prosecution, forensic accounting, investigations, trial of these cabal for anti-market tactics, fraud, forgery, tax evasion and perhaps treason? Guess the President does not take his Chief Security Officer role very seriously!

3. Oil is lower in surrounding markets and if lower in Nigeria it will lead to leakage – Minister Okonjo-Iweala
Response: This argument is preposterous. If this were true, then refined oil prices will be the same around the world except for islands! Think about it, every nation have a border and oil prices vary widely across them because those borders are monitored for smuggling. If the government cannot do its job, with simple technology, why should the people pay? Moreover with 75% spent on overhead, we still cannot find people to guard that border to avoid seepage? Moreover, these surrounding countries don’t produce oil. Cameroon that produces mere 85,000 barrels per day, subsidizes petroleum with up to $100 million per year. 

4. Only the Middle & Upper Class benefit– Governor Sanusi & Minister Okonjo-Iweala
Response: This argument is bogus. The price of energy affects everything in every economy and more so in Nigeria. In the US, for every 15 naira rise in energy price at the pump, the GDP is reduced by 0.5%. In Nigeria it will be worse since we are not just poorer (by many thousands) but also depend on it not just for transport but power and cooking because our government is inept! The price of everything, on everybody is going up.

5. We are borrowing money to pay subsidy – President Jonathan & Mrs. Okonjo-Iweala
Response: This is a big fat lie. The NNPC pays money for the current subsidies from sale of crude oil directly to PPRA before the balance is deposited in the Federation Account. Albeit illegal, this is what the Senate found out. How then can it be said to be borrowed? If Nigeria is borrowing, it is only because our political class of less than 10,000 people arrogates 30% percent of the budget for itself, allocates 45% for its work force (of about 350,000) and asks the rest of us (149.5 million) to make do with 25% of the budget which never gets to us!

6. The money saved by subsidy will be spent on job creation and infrastructure – President & Ministers
Response: Again, the previous point they make is the answer to this. Where will this be saved if the money is borrowed? See, we received the 2012 budget and they did not indicate any subhead as SURE Projects or whatever that is called. Fact is the SURE Initiative was an afterthought. Evidence is slowly emerging that document was put together hurriedly by his spin doctors, in the last few weeks to the end of the year before GEJ sprung us a surprise of the year. By the way, how can a government with 4.3 trillion and no evidence of good spending convince 1.3 trillion will make a difference? Or a government that cannot even organize a medal ceremony be trusted with huge infrastructure projects? The best way to restore the economy is to increase the buying powers of the people not reduce it by 1.3 trillion naira that will go into foreign accounts! Tax cuts not increases!

7. 25% cut in salaries of political officers is sharing the pain- President Goodluck Jonathan
Response: For one, let us be clear here: basic salaries amounts to nothing to political officers. They make more from security votes and allowances than anything else. They get enough freebies from us including free fuel and house helps; they basically dash away their salaries. Also, the President has no such powers to reduce salaries of political officers. They are set by the Revenue Mobilization and Fiscal Commission (RMAFC) which sends it to the National Assembly for approval. The President also did not reflect this reduction in his budget. Nice! 

8. The protests are sponsored and being used to discredit the government – Reuben Abati & the Statehouse Press Folks
Response: No, it is the policy that is sponsored: by World Bank and IMF types. The protesters need no sponsors like the President and his cabinet does; we have our minds. Being an opposition politician does not disqualify anyone from voicing their opinion against arrant policies especially popularly unpopular ones (emphasis mine). What is the point of being in opposition anyway?

Previously on UpNaira