Every being is considered an economic-man and assumed rational. But we often bring this rationality into play in almost every decision we take (including our choice of belief), without our knowledge.

Nigeria is a very religious country, in which our beliefs come to fore in everything we do (Business, Sport, Social Interactions) but the question of this discourse (sponsored advertisement on buses) is to be treated from no particular religious inclination (Islam, Christianity, Hindu, Judaism, Sango or whatever belief) but rather using the simple principle of probability.

This looks into the likely Risk or likely Reward of our decision (as it relates to the question of God’s existence), Probability of Outcome, Cost of Decision and Weight of Outcome.

The question, “What if God does not exist?” leaves us with two extreme Possibilities.

(i) God Does Not Exist

(ii) God Exists

Our Choice /Decision is to:

(i) Live as if God does not exist
(ii) Live as if God Exists

These choices at the end will lead to 4 outcomes

a) Live as if God does not exist and later find out HE does not exist
b) Live as if God exists and later find out HE does not exist
c) Live as if God exists and later find out HE exists
d) Live as if God does not exist and later find out HE exists

These outcomes can only be found out after death, which implies no opportunity for amendment whatever choice made.

Cost of Outcome & Weight of Outcome:
For those who live as if God does not exist and later find out that God does not exist; they gain nothing and loose nothing at the end. (Since nonexistence of God will imply everything ends at death)

For those who live as if God exists and later find out HE does not exist; they gain nothing and loose nothing bar the worldly pleasures they would have enjoyed.

For those who live as if God exists and later find out HE exists; they gain heaven and loose nothing

For those who live as if God does not exist but later find out He does: they gain nothing and loose heaven.

Considering all these 4 outcomes; the most rational is to believe God exists. This is not because the probability of an occurrence is higher than the other (they can all be given 25% chance). Neither, because the cost of outcome is significantly different but because, the weight of outcome is great, if one does not believe and it eventually happens that God exists.

In investment decision and psychology of crime, what matters is not just probability of failure or probability of being caught, but how big the consequence of failure or sanction if caught.

Likewise, we conclude it is more rational to believe God exists and find out HE does not exist than not believing then later find out HE does.


Educated Presidents are Better Leaders. This is the conclusion reached by Timothy Besley and his co researchers. But prevailing scenario in Nigeria may negate history.

Data on 1654 political leaders in 197 countries (including Nigeria) between year 1874 and 2004 was analysed by those renowned scholars.

They analysed leaders who exit office randomly (death of the leader) by studying a fixed period of time before they came into power and after they left power. They then measured the economic contribution of every leader and how it relates to their educational attainment.

In Nigeria history, three of our leaders so far exited power as a result of death (Sir Abubakar Tafawa Balewa, General Sani Abacha and Alhaji Umaru Yar’adua). Sir Abubakar, was excluded from the analysis for 2 statistical reasons (His death was not random and the leadership fixed-effect was zero, because his regime was treated as base year for Nigeria).

This implies that, the data before, during and after General Abacha and the data before, during and after Alhaji Umaru would have fallen into the dataset if same analysis is to be conducted next 4 years, which will automatically consider Nigeria economic fortune or misfortune during President Jonathan.

The question here posed is: What will Nigeria economy look like, 4 years after the transition of Alhaji Umaru?

Despite the incumbent being the most educated of our leaders (so far), one thing been done differently from others is, scheming for longer stay in Asso Rock from beginning. (IBB waited till midway before becoming a “military president”.  Abacha stylishly worked till 1998 before all political parties adopted him as concensus candidate. OBJ feigned indifference until 2nd term was coming to an end)

General Abacha, was not consider among the highly educated in the research conducted by Professor Timothy Besley and his colleaques (Graduate = 0. College = 1). But looking at Nigeria’s economic figures, 4 years after General Abacha took over power:

Real GDP grew by 10% (N274B to N302B)

Inflation fell from 57% to 11%

External Reserve quadruple  (N67B to N262B)

External Debt fell by about 6% (N633B to N596B) even

Stock Market Capitalisation jumped from N47B to N282B (500% increase).

PTF constructed roads all over the country (not just Abuja) and supplied drugs to rural hospitals. On security front; the country recorded less religious crisis relatively.

Although some other figures were not positive, (such as budget deficit quadrupling) but “economic history and data” can not call such a regime a failure irrespective of the level of education of the then Head of State.

Prevailing situation and data on ground today are not supporting our a priori expectation that a highly educated president will lead to a greater economic growth and efforts expended on tenure elongation don’t give any signal that things will be different this time 2015.

Let Asso Rock get down to work and forget about tenure elongation (at least for now) and focus on providing stable electricity, generating employment, securing lives, among others, because economic history and data (1875 – 2004) expect better economic performance from an educated president.


If we assume that those who are low-paid (people earning below a certain income-line) are poor; we can use the Low-Pay Persistence Theory to conclude that the “The Poor will always be Poor”.

Most proponents of Minimum Wage in Nigeria have highlighted prevailing reasons why the base-pay should be moved from N,7000 to N18,000. Naijanomics is however positing beyond those present advantages to state that earning a Living Wage today goes beyond survival. It reduces the probability of next generation transiting into poverty.

But can Nigeria afford paying a Living Wage (N58,500 –as estimated by Nigerian Labour Congress in 2009)? YES.

But can the government pay the Minimum Wage (N18,000 – as signed into law in 2011)? NO.

Nigeria can afford and sustain the payment of living wage not only to the lucky-few that have jobs, but can also afford the luxury of paying same to the pool of the jobless (extreme economic imagination outside the scope of this writing).

But government will experience difficulty meeting the minimum wage  obligation because we are currently running about 3% budget deficit, in which 58.6% of the N4.2 Trillion is for recurrent expenditure and 12.8% is for debt servicing.

This is no budget review, but a brief gaze into the budget shows that the government will not be able to pay a living wage when almost 70% of entire allocation to Ministry of Police Affairs goes to salary and wages (N2.2 Billion out of N3.2 Billion). But, while the entire Ministry of Police Affairs has N299 Million as capital expenditure, the Office of the Secretary to Government of the Federation has N288 Million to repair general assets, another N299 Million to procure “Non-Tangible Assets” and a salary (N3.9 Billion) that can pay almost twice that of the entire Ministry of Police Affairs.

Another ministry has over N29 Billion to spend in which salary and wages is just barely over 2% (N614 Million) of the entire allocation. Same ministry has over four times (N2.6 Billion) of amount allocated to wages for “Research & Development”.  Construction and provision of fixed asset will gulp almost N22Billion (of course we have been buying transformers and high-tension-cables yearly, since 1999).

These figures may show structural imbalance but a peep into National Assembly, Presidency figures, among others will confirm reasons why the government can not pay.

We conducted an extensive Micro-Econometric analysis of Low Pay Persistence of about 10,000 economically active individuals in different households interviewed for 16 years  (British Household Panel Survey Data -1991- 2006) and we realise that there is a significant state dependence in low pay status in conjunction with some other individual heterogeneity such as educational qualification, geographical location, nature of jobs, and parental background.

In simple explanation; someone who is poor at a previous time (T1) has a high probability of being poor at subsequent period (T2) and “Initial Condition” particularly parental background has a great portion in determining future poverty status.

There is no need comparing the speculated N16 Million monthly earnings of a senator with the newly approved N18,000 pay for the other end, but the realisation that political office holders’ “official income” has increased at a rate 50 times more than other workers (15% increase relative to 800% increase) between 2006 and 2009 calls for action.

We see this action as a necessity and realise that Nigeria as a nation can afford paying her workers a living wage but government’s structural imbalances is making it difficult to even afford the minimum wage.

We conclude that, what these workers need is a “Living Wage” and not “Minimum Wage” and the reason all parties must see it as a “NECESSITY” is because, it does not only deliver the privileged-minority that have a job from the claws of poverty, but it also reduces the probability that their children will be poor.


No one needs to be an economist to understand the classical assertion that “money is sterile” and wealth can only be genuinely created through assets (physical or intellectual assets). But because providers of funds are often different from users of funds; probity demands that returns on used-funds should be appropriated between the two parties.

This return could be a fixed portion of one’s contribution (Interest) or a fixed portion of returns on one’s contribution (Profit Sharing). If this does not look like two sides of the same coin, it is because they are different with reservations. But why the hullaballoo about non-interest banking proposed by Central Bank of Nigeria?

I emphatically declare that there is nothing wrong (in principle or practice) about Islamic Banking. Besides the massive assets controlled by concerned banks (about $500 Billion) with average annual growth rate above 10%; Torah (which provides common dictum for both Judaism and Islam) forbids usury.

But when Central Bank of Nigeria (CBN) decides to designate a specialised Non-Interest Financial Institution to operate under the principles of “Islamic Commercial Jurisprudence” in a country where two brothers are ready to kill each other on varying religious beliefs, I have got some rhetorics for CBN based on the guidelines released.

Why dividing Non-interest banking and finance model into 2 (one based on Islamic Commercial Prudence and the other on “Any other principle)? When CBN could simply license Non-interest banking based on any non-interest principle and allow banks like JA’IZ Bank (and other Sharia Compliant bank like IBB in UK) to define their product compliance?

This categorization will not raise any issue if there are guidelines (in pipeline) for Amadioha Commercial Jurisprudence, Sango Commercial Jurisprudence, Penticostal Commercial Jurisprudence, Protestant Commercial Jurisprudence, Rosicrucian Commercial Jurisprudence, among so many that we know have different business ethics.

We do not need the division the niche categorization is bringing. A non-interest banking licence which enables each institution to tailor its products towards its market of interest would have served all without all this religious sentiments in which CBN seems to be the one playing the drum.

If I were to deposit my cash in a non-interest-giving institution, I will need to know where they are investing my cash into to consider the risk of return and the weight of outcome. And I will certainly recline if it comes to financing gambling, speculation, unjust enrichment, exploitation or unfair trade practices. But when CBN defines “dealing in pork” as a non-permissible transaction (a big segment of livestock farming); is there an economic or religious justification for this?

My last employer in the banking sector then avoided touching livestock financing like a plague simply on business justification but when CBN picks out a particular animal that gives a company like Smithfield Food annual revenue of $12Billion (4 years ago) greater than aggregated internally generated revenue of so many single states in Nigeria within same year (Abia, Kebbi, Katsina, Plateau among others) then CBN creates the avenue for the hullaballoo when each institution could simply decide product areas based on their belief or strategies.

If “murabaha”, (credit that enables customers to make purchases without taking an interest-bearing loan) becomes prevalent; the banks can veer into procurement for customers and avail the goods to customers with margins. There are more technical areas for CBN to handle than simply bringing grey areas of a presumably mere product that has been exalted to a sub sector.

Why requesting evidence of a technical agreement executed by the promoters of proposed institution with an “established and reputable Islamic bank or financial institution” when a technical agreement with a “reputable bank with background in the product/service they want to offer” would have sufficed?

CBN is licensing banks based on Belief-Jurisprudence and they are marked to be regional banks such that they shall be entitled to carry on banking business operations within a “minimum of six (6) and a maximum of twelve (12) contiguous States of the Federation, lying within not more than two (2) Geo-Political Zones, as well as within the Federal Capital Territory (FCT)” and we blame those who accused CBN of regional agenda? A bad reminder of post-election North East, North West, North Central, South East, South South and South West?

The same bank has the permission to receive commissions and fees, all it needs to do is not to share such with depositors (less, it may look like earning income without any outlay)?

CBN is either mixing up facts or simply trying to becloud simple reasoning. Islamic banking was an approved product for former Habib Bank, just the way other specialized products were approved for other banks then but present stature giving to Islamic banking is different and should not be used as history of subject in the discussion.

Likewise the much references to Islamic Banking of Britain; when FSA authorised the first wholly sharia-compliant bank (IBB) in 2004, it was clearly stated that the bank will operate under a single piece of legislation that applies to all.  “The FSA’s policy towards Islamic banks, and indeed any new or innovative financial services company, can be summed up simply as “no obstacles, no special favours”. We are keen to promote a level playing field between conventional and Islamic providers. One thing we are clear about is that we are a financial, not a religious, regulator.”

CBN should give interest-free-banking licence to those considered competent and let each institution carve out its market niche with related products. And whatever name an institution chooses to adopt should be left to them (as long as it does not contravene those exclusive names in BOFIA). Besides nobody will be forced to go and bank with any bank.

No problem with Islamic Banking, CBN is the issue

Soludo evoked the 1st Pillar of Basle Accord (Capital Adequacy) to bring down some functional but marginal banks in 2004. Sanusi evoked the 2nd Pillar of Basle Accord (Asset Quality) to bring down Soludo’s mega but toxic-asset infested banks in 2010. We must know that the 3rd Pillar (Internal-Based Ratings) can bring down any institution built now and customers will always be victims of this financial chess game.