The judgment of the Federal High Court sitting in Kano, which nullified the candidature of Abia State governor-elect, Alex Otti and other members of the Labour Party, has been suspended by the Court of Appeal in Kano.

The decision, which was made on Saturday by a three-man panel led by Justice Ita Mbaba, also granted Alex Otti’s application to appeal as an interested party.

The Labour Party had filed an appeal challenging the judgment of Justice Yunusa of the Federal High Court. Justice Mbaba and other two Justices, Uche Onyemenam and Usman Musale, temporarily suspended the High Court Judgment after listening to the appellant counsels, Abiodun Owonikoko, Ken Ahia and Bashir Muhammad – all Senior Advocates of Nigeria.

In the ruling, the order for a stay and suspension of the High Court judgment was granted, pending the hearing and determination of the appeal for which leave had been granted

The appellant was also ordered “to give an undertaking for damages in the sum of two million naira in favor of each of the respondents in the event of failure by the appellant to file or diligently prosecute the appeal in terms of the proposed notice of appeal containing ten grounds in Exhibit AO4”.

The respondents, Ibrahim Haruna Ibrahi, Labour Party, and the Independent National Electoral Commission (INEC), were not represented in court, despite being served.

Background of the case

In its May 18 judgment on the suit marked FHC/KN/CS/107/2023, which was filed by one Mr Ibrahim Haruna Ibrahim against the Labour Party and the Independent National Electoral Commission (INEC), challenging the process of the primary elections in the states; the High Court in Kano described the party’s primary election as “null and void.”

Justice Yunusa had held “that the Labour Party had carried on with its activities in the selection for the general election in a manner that is at variance with mandatory provisions of the Electoral Act 2022 which renders its participation in the General Elections of 2023 in Kano & Abia states as null and void.”

The suit had alleged that the Labour Party failed to submit the names of its members in the 35 states of the federation and the Federal Capital Territory (FCT) in both hard and soft copies to INEC, 30 days before the primaries as stipulated by the Electoral Act.

In its judgment, the trial court held that the 1st defendant’s failure to submit its register to the electoral body violates the Electoral Act.

“The fundamentally flawed primary election of the first defendant, (Labour Party) as a result of failure to comply with the mandatory provisions of sections 77(2) and (3) cannot produce a qualified candidate,” the court rules.

The court had also held “that the void primary elections of Labour Party cannot produce eligible candidates to be sponsored by the party in the general election and the participation of the candidates in Kano and Abia states is of no value and a waste of time.

“That the votes cast for all the candidates of the Labour Party in Kano and Abia states in the General Elections of 2023 are wasted votes”.

The Appeal Court judgment means that the inauguration ceremony of Otti, and other members of the Labour Party affected by the High Court ruling, will hold as scheduled on May 29.

The Nigerian Senate has approved the upward review of the Ways and Means loan from the Central Bank of Nigeria (CBN) to the Federal Government from five to 15 percent.

The approval for the amendment of the CBN Act follows the emergency plenary session held by the red chamber on Saturday, less than two days to the inauguration of the tenth national assembly.

The bill, which was sponsored by Senator Gobir Ibrahim Abdullahi, representing Sokoto East Senatorial District, was first introduced on Wednesday May 24, 2023.

During the plenary session which was presided over by the Senate President Ahmed Lawan, Abdullahi said the upward review of the Ways and Means was prompted by the need to help the federal government meet its financial obligations through loans from the CBN.

“The Bill seeks to amend the Central Bank of Nigeria, CBN, Act to increase the total CBN advances to the Federal Government from five percent (5%) to a Maximum of fifteen percent (15%),” he said.

“The Bill was read for the first time in this Chamber on Wednesday, 24th May, 2023.

“The very essence of this Bill my respected colleagues is to enable the Federal Government meet its immediate and future obligation in the approval of the ways and means by the National Assembly and advances to the Federal Government by the Central Bank of Nigeria.”

Most of the senators agreed with the assertion that the bill will help the federal government to execute many of its functions, including important projects that will contribute to economic growth.

Given the agreement of the majority of the senators on the floor, Lawan thanked the lawmakers and passed the bill into law.

Section 38(2) & (3) of the CBN Act stipulates “that Ways and Means shall not exceed 5% of the previous year’s revenue of the Federal Government.”

But in the past seven years, the CBN governor Godwin Emefiele has flagrantly flouted the CBN Act by lending more than N23 trillion to the President Muhammadu Buhari administration through Ways and Means.

The loan, which experts have fingered as part of the reasons the nation’s inflation has hit record high, was recently approved by the Senate to be restructured.

The illegality of the loan, which has generated a lot of criticism from many quarters – who say it further underlines the present government’s no regard for the rule of law, is believed to have inspired the amendment of the CBN Act as a parting legislative function of the ninth senate.

The amendment will now make it possible for the incoming administration to borrow more from the CBN without breaking the law. Already, the president-elect, Bola Tinubu, has hinted that his government will rely on money supplies from the central bank as Nigeria’s revenue generation dwindles.

In this video, I respond to some of the questions on the piece where I noted that more microfinance banks in Nigeria will continue to fade. And the banking institutions which will win will be technology companies which offer banking services, and NOT banks which use technology. This is the video for this article.

(In Tekedia Mini-MBA, I explained the Smiling Curve deeper with positioning implications across sectors like manufacturing, etc)

Cessation of Non-Permissible Activities of Microfinance Banks in Nigeria

• by EMMANUEL IFEANYI OGBUKA

The Central Bank of Nigeria (CBN) on the 19th of August, 2021 released a circular in response to observed activities of microfinance banks that went beyond the limits of their operating licenses.

This article will be looking at the provisions of this circular which focuses on the non-permissible activities most commonly engaged in by microfinance banks(especially digital microfinance banks), mainly wholesale banking and foreign exchange transactions. These transactions are as follows :-

– The CBN Circular is based on the consideration of comparatively low capitalization of microfinance banks dealing in FX and wholesale banking transactions which carry a huge risk for financial system stability.

– The circular is thus as a result of the need to remind Microfinance Banks (MFBs) to comply with the 2012 CBN MFB Guidelines.

– Consequently, MFBs are prohibited from FX transactions.

– MFBs are to focus on rendering services to retail clients and micro-clients.

– Microcredit and retail transaction services rendered or carried out by MFBs are limited to 500 Thousand Naira per Tier 2 unit MFB transaction and 1 Million Naira for other MFB categories.

– Microcredit facilities shall constitute a minimum of 80% of total loan portfolios for MFBs.

– A disregard or violation of the directions contained in this circular can lead to sanctions that include the revocation of an MFB license.