Opinion
On Home-Banking System
A security consultant made a joke during a private conversation that: ‘The fear of EFCC is the beginning of wisdom’. Obviously, politicians and moneybags are people of great wisdom, otherwise they would hardly be in the positions they are, or have the possessions they have. With the introduction of a Treasury Single Account (TSA) policy and Bank Verification Number (BVN), a new home-banking system came into practice. Operatives of the Economic and Financial Crimes Commission (EFCC) can easily trace bank lodgements as well as projects financed therefrom, but even with smart sniffer dogs, it would be difficult to trace secret holes in the home-banking system.
From impregnable underground bunkers in private homes, to overhead water tanks, politicians, business tycoons and sponsors of political aspirants, adopt many clever ways and means of operating home-grown banking system. The role of king-size dogs in the security of private homes can easily be noticed both in urban cities and rural communities in Nigeria now. The dog-culture has become so trendy that the breeding of killer-dogs has become a lucrative business. One such dog can cost as much as N300,000 to buy and N30,000 to feed in one month. They cannot eat the rubbish that many of us consume daily as food.
So, the home-banking system is not a business engaged in by the hungry or ‘agbero’ class of citizens, neither is it adopted to spite conventional banks. In reality the game of bamboozlement, deceit and mendacity can hardly be successful if money does not pave and smoothen the way. With money and the cooperation of security agencies, including giant dogs, secrets can be kept secret and fingers pointed in the wrong direction in real politics.
The game of corruption is a game of the ruling class and it has to do with the mechanism of capitalist economy. Similarly, the game of money laundering is a global network, of which developing countries and their institutions are the preying grounds. The mind-set of the leadership of developing nations can be programmed to talk glibly about corruption as being the greatest plague of their nations, while the real problem lies elsewhere. While state institutions are deliberately weakened, a few individuals are often glamorised and strengthened, and some demonized.
Especially for an oil-producing nation, the political game employs the antics of name-calling, recrimination and creation of division among the political class, to divert attention away from the game of looting. Truly, the smartest beneficiaries of the looting game in oil-producing countries are the Western nations. Not only do financial institutions in developed nations receive, protect and trade with looted money from developing countries, they also provide consultancy services for top officials on how to launder money.
State institutions are deliberately made weak and unreliable through corrupt patronage and sinecure such that they are ineffective and corruption-ridden. The lop-sidedness in staff postings and deployment in public institutions can be so politicized that it can become dangerous for any patriotic official to raise alarm over obvious malpractices going on. Therefore, the mechanism of global capitalist economy goes by weakening of state institutions through political interferences in the bureaucracy of developing nations. The next strategy is interference in the electoral process to ensure that malleable leaders emerge whose mindset would be supportive to Western capitalist economy.
While calling the people of developing nations ‘fantastically corrupt’, Western nations, through their financial institutions, still encourage money laundering. Thus the global network of financial malpractices fuel corruption in developing nations, whereby the gap between the rich and the poor grows wider and wider. At the same time, the gap between the developed and developing nations also gets wider through abuses and ineffective management of the commonwealth.
With increasing exposure of the hypocrisy of Western banks and their financial institutions, foreign and local banks no longer provide safe havens for looted money by politicians and moneybags. The alternative is the resort to home-banking system, thanks to the activities of EFCC. Despite zero-cash policy and the services of Automatic Teller Machine (ATM), some Nigerians store huge sums of local and foreign currencies in personal vaults in their homes. Perhaps whistle-blowers can do some business, but they may also be risking their lives. Money has power!
Dr. Amirize is a retired lecturer at the Rivers State University, Port Harcourt.
Bright Amirize
From all indications, Nigeria possesses enough human and material resources to become a true economic powerhouse in Africa. According to the National Population Commission (NPC, 2023), the country’s population has grown steadily within the last decade, presently standing at about 220 million people—mostly young, vibrant, and innovative. Nigeria also remains the sixth-largest oil producer in the world, with enormous reserves of gas, fertile agricultural land, and human capital.
Yet, despite this enormous potential, the country continues to grapple with underdevelopment, poverty, unemployment, and insecurity. Recent data from the National Bureau of Statistics (NBS, 2023) show that about 129 million Nigerians currently live below the poverty line. Most families can no longer afford basic necessities, even as the government continues to project a rosy economic picture.
The Subsidy Question
The removal of fuel subsidy in 2023 by President Bola Ahmed Tinubu has been one of the most controversial policy decisions in Nigeria’s recent history. According to the president, subsidy removal was designed to reduce fiscal burden, unify the foreign exchange rate, attract investment, curb inflation, and discourage excessive government borrowing.
While these objectives are theoretically sound, the reality for ordinary Nigerians has been severe hardship. Fuel prices more than tripled, transportation costs surged, and food inflation—already high—rose above 30% (NBS, 2023). The World Bank (2023) estimates that an additional 7.1 million Nigerians were pushed into poverty after subsidy removal.
A Critical Economic View
As an economist, I argue that the problem was not subsidy removal itself—which was inevitable—but the timing, sequencing, and structural gaps in Nigeria’s implementation.
- Structural Miscalculation
Nigeria’s four state-owned refineries remain nonfunctional. By removing subsidies without local refining capacity, the government exposed the economy to import-price pass-through effects—where global oil price shocks translate directly into domestic inflation. This was not just a timing issue but a fundamental policy miscalculation.
- Neglect of Social Safety Nets
Countries like Indonesia (2005) and Ghana (2005) removed subsidies successfully only after introducing cash transfers, transport vouchers, and food subsidies for the poor (World Bank, 2005). Nigeria, however, implemented removal abruptly, shifting the fiscal burden directly onto households without protection.
- Failure to Secure Food and Energy Alternatives
Fuel subsidy removal amplified existing weaknesses in agriculture and energy. Instead of sequencing reforms, government left Nigerians without refinery capacity, renewable energy alternatives, or mechanized agricultural productivity—all of which could have cushioned the shock.
Political and Public Concerns
Prominent leaders have echoed these concerns. Mr. Peter Obi, the Labour Party’s 2023 presidential candidate, described the subsidy removal as “good but wrongly timed.” Atiku Abubakar of the People’s Democratic Party also faulted the government’s hasty approach. Human rights activists like Obodoekwe Stive stressed that refineries should have been made functional first, to reduce the suffering of citizens.
This is not just political rhetoric—it reflects a widespread economic reality. When inflation climbs above 30%, when purchasing power collapses, and when households cannot meet basic needs, the promise of reform becomes overshadowed by social pain.
Broader Implications
The consequences of this policy are multidimensional:
- Inflationary Pressures – Food inflation above 30% has made nutrition unaffordable for many households.
- Rising Poverty – 7.1 million Nigerians have been newly pushed into poverty (World Bank, 2023).
- Middle-Class Erosion – Rising transport, rent, and healthcare costs are squeezing household incomes.
- Debt Concerns – Despite promises, government borrowing has continued, raising sustainability questions.
- Public Distrust – When government promises savings but citizens feel only pain, trust in leadership erodes.
In effect, subsidy removal without structural readiness has widened inequality and eroded social stability.
Missed Opportunities
Nigeria’s leaders had the chance to approach subsidy removal differently:
- Refinery Rehabilitation – Ensuring local refining to reduce exposure to global oil price shocks.
- Renewable Energy Investment – Diversifying energy through solar, hydro, and wind to reduce reliance on imported petroleum.
- Agricultural Productivity – Mechanization, irrigation, and smallholder financing could have boosted food supply and stabilized prices.
- Social Safety Nets – Conditional cash transfers, food vouchers, and transport subsidies could have protected the most vulnerable.
Instead, reform came abruptly, leaving citizens to absorb all the pain while waiting for theoretical long-term benefits.
Conclusion: Reform With a Human Face
Fuel subsidy removal was inevitable, but Nigeria’s approach has worsened hardship for millions. True reform must go beyond fiscal savings to protect citizens.
Economic policy is not judged only by its efficiency but by its humanity. A well-sequenced reform could have balanced fiscal responsibility with equity, ensuring that ordinary Nigerians were not crushed under the weight of sudden change.
Nigeria has the resources, population, and resilience to lead Africa’s economy. But leadership requires foresight. It requires policies that are inclusive, humane, and strategically sequenced.
Reform without equity is displacement of poverty, not development. If Nigeria truly seeks progress, its policies must wear a human face.
References
- National Bureau of Statistics (NBS). (2023). Poverty and Inequality Report. Abuja.
- National Population Commission (NPC). (2023). Population Estimates. Abuja.
- World Bank. (2023). Nigeria Development Update. Washington, DC.
- World Bank. (2005). Fuel Subsidy Reforms: Lessons from Indonesia and Ghana. Washington, DC.
- OPEC. (2023). Annual Statistical Bulletin. Vienna.
By: Amarachi Amaugo