The Executive’s Emergency Powers Bill. Really?

Omolulu Ogunmade reports in ThisDay that President Muhammadu Buhari and the Executive branch of Government seek to secure emergency powers aimed at addressing Nigeria’s economic crisis.

The Bill entitled, ‘Emergency Economy Stabilization Bill, 2016’, according to the report, will be sent to the National Assembly after resumption by the National Assembly from its summer vacation.

The objectives of the Bill include shoring up the value of the Naira; job creation; boosting foreign exchange reserves; reviving the manufacturing sector and improving power supply.

According to the report, the Bill is the initiative of the economic team, headed by the vice-president, which has the responsibility of reviewing various policies in the country and their effect on the recovery of the economy.

Apparently, the rationale behind the Bill is to ensure that the Executive arm of government be enthroned with the powers to take some drastic decisions not currently provided for by extant laws.

The Bill, inter alia, seeks to give the president sweeping powers to set aside extant laws and use executive orders to roll out an economic recovery package within the next year to:

  • abridge the procurement process with a view to guaranteeing stimulus spending on critical sectors of the economy;

  • make orders to favour local contractors/suppliers in the award of contracts;

  • abridge the process of sale and lease of government assets to generate revenue and allow virement of budgetary allocations to projects that are urgent without recourse to the National Assembly;

  • amend certain laws such as the Universal Basic Education Commission (UBEC) Act so that states that cannot access their cash trapped in the account of the UBEC as a result of their failure to meet a counterpart funding, can do;

  • reform visa issuance at Nigeria’s consular offices and on entry into Nigeria and to compel some agencies of government, like the Corporate Affairs Commission, the National Agency for Food Administration and Control (NAFDAC) and others to improve on their turn around operation time for the benefit of business.

The extant procurement laws in Nigeria allows the award of a contract six months after the decision. This is because of the requirement for mandatory advertisement of the contract for six weeks.

The draft Bill also intends to ease the cumbersome and long procedure for the sale or lease of government assets to raise cash.

About N58 Billion is trapped in the UBEC’s coffers. Consequently, states cannot access the funds as a result of the requirement that the states provide 50% counterpart funding. The Executive is seeking an amendment to the law so that states will pay only 10% as counterpart funding. The Bill also seeks to increase the mobilization fee to contracts from a minimum of 15% to 50% of the contract sum.

In addition to the above, the consular offices will be expected to make visas available within 48hours and visitors, especially tourists, who intend to pick up visas at the entry point, will be able to do so. The Bill also seeks to eliminate the duplication of agencies screening incoming passengers into Nigeria.

Undoubtedly, the challenges identified and sought to be resolved by the Bill are real and worrisome. While the intent behind the Bill is commendable, the Bill itself undermines the very basis of our alleged democratic government. Hence, the public outcry of the members of the National Assembly can, on this occasion, be understandable.

The better approach would be to achieve the object of the Bill by either amending the various laws (such as the Immigration Act, Appropriation Act etc)  responsible for the red-tape and bureaucracy  or pass an Executive Order within the limits of the law or adopt some of the measures suggested in Proshare to wit:

  • Laws and measures dealing with the bureaucracy and red tape as seen in Bill Clinton’s government adoption of the National Partnership for Reinventing Government and more recently, India.

  • Changes in laws and trade/procurement agreements;

  • Changes in use of budgeted funds, .i.e appropriation amendments;

  • Policy changes done via trade, tariff and tax adjustment.


Protecting your ideas from Imposters and Competition: An Eaz(s)yhire Case Study


Its being a long time…i will try to post more regularly here…..

Here is a post published in TechPoint…for your reading pleasure. Enjoy!

According to the original article, the founder of Eazyhire alleged that Easyhire adopted his idea (i.e. to provide a platform that allows anyone to rent, lease or hire anything as long as the object of the rent, lease or hire is legal), employed a similar colour scheme in the design of its website, motto, Facebook and Twitter tagline. Apparently, the only difference between both brands is the replacement of the word, ‘z’ with the word ‘s’ in the name of both brands. The above scenario demonstrates the need for companies, particularly startups seeking to build a brand in their chosen industry, to take the necessary legal steps to protect their intellectual property and consequently, their brand.

Without dwelling on the legal ramifications or moral repercussions of the allegations of the founder of Eazyhire, the article attempts to explore the legal issues that could arise from the above scenario.


If You Like a Star Athlete, Now You Can Buy a Share

Peter Lattman and Steve Eder, write that first, there was old-fashioned gambling on football; then, the fantasy leagues. And now, thanks to Wall Street, fans can buy a stake in their favorite player.

On Thursday, a start-up company announced a new trading exchange for investors to buy and sell interests in professional athletes. Backed by executives from Silicon Valley, Wall Street and the sports world, the company plans to create stocks tied to an athlete’s financial performance.

After considering a number of possibilities for its inaugural initial public offering, the company found a charismatic candidate in Arian Foster, the Pro Bowl running back of the Houston Texans.

Investors in the deal will receive stocks linked to Mr. Foster’s future earnings, which includes the value of his playing contracts, corporate endorsements and appearance fees.

The company, Fantex Holdings, has grand ambitions beyond a Foster I.P.O. — it hopes to sign up more football players and other athletes, as well as celebrities like pop singers and Hollywood actors.

If such an investment sounds speculative, that is because it is. In a filing for the Foster deal with securities regulators, Fantex laid out 37 pages of risk factors, including a possible career-ending injury or a performance slump.

Risks aside, the offering is intended to capitalize on the mammoth popularity of the National Football League and fantasy football, where fans draft players and score points for touchdowns, yardage and other notable plays during the season.

If thousands of fans are willing to pay as much as $250 for an Arian Foster jersey, the thinking goes, why wouldn’t they pay up for a few shares of Arian Foster stock?

A market of star athletes calls to mind other unusual investments tied to entertainers. In the late 1990s, a financier created Bowie Bonds, a small bond issue that paid interest from the current and future revenue of 25 albums by the rock musician David Bowie.

The brokerage firm Cantor Fitzgerald runs the Hollywood Stock Exchange, a marketplace for bets on the fortunes of movies and their stars, but participants use only play money.

Fantex wants its venture to be anything but make-believe. Investors can now register with the company and place orders for the I.P.O. The company will market the I.P.O. in the coming weeks, offering 1.06 million shares at $10 a share, or $10.6 million worth of stock. If demand is insufficient, the company may cancel the deal.

Mr. Foster will receive a $10 million payment from Fantex upon consummation of the offering. (The balance of the I.P.O. covers the deal’s costs.) In exchange for the payment, Mr. Foster has promised to pay Fantex 20% of his future earnings.

The company is effectively financing the $10 million payment to Mr. Foster by raising money from retail investors in an I.P.O. In its filings, Fantex says it believes that the stock is intended to track the economic performance of Mr. Foster’s future brand income.

Still, shareholders will not have a direct investment in Mr. Foster or any control over his brand. The company did say it expected to pay a dividend to holders of the Foster stock.

Shares will trade exclusively on an exchange operated by Fantex. The tracking stock will increase in value if Mr. Foster raises his earnings potential with standout play or increased sponsorships.

Then, the investor can try to sell his shares at a higher price. Fantex will make a 1% commission from both the buyer and seller on the trades.

Buck French, the company’s co-founder and chief executive, demurred when asked to predict how the stock might behave in a secondary market.

“We don’t know how it will trade,” he said.

Mr. French made a fortune during the dot-com boom when, in 2000, he sold OnLink, a software company he founded, to Siebel Systems for about $600 million. One of his Fantex co-founders, David M. Beirne, was a general partner at Benchmark Capital, the venture capital firm that was one of eBay’s earliest investors.

Mr. French said Mr. Beirne conceived of the Fantex concept more than a decade ago when working on a sports-related venture with John Elway, the former Denver Broncos quarterback.

“Fantex represents a powerful new opportunity for professional athletes, and I wish it were available during my playing days,” Mr. Elway, a member of Fantex’s board, said in a statement.

Wall Street executives have also joined the company. Fantex’s president is John Rodin, co-president of the hedge fund Glenview Capital Management and a Goldman Sachs alumnus. Its chief technology officer is Joshua S. Levine, a former senior executive at E*Trade and Deutsche Bank.

A big question is whether other athletes are on the sidelines for a Fantex I.P.O. Mr. French declined to discuss future deals.

On one hand, athletes and their agents could view Fantex as a compelling proposition, providing athletes with a large upfront payment for giving up a certain percentage of their future earnings. Such a payment could act as a hedge against an unexpected downturn in a player’s career.

But advisers could counsel against trading a piece of their future earnings for a big lump sum, as some athletes are notorious for squandering money.

Other considerations are the specter of insider trading violations, and complying with the federal securities laws. Mr. Foster, his friends and his financial team will have to be especially circumspect when discussing issues that might affect his earnings.

A fifth-year veteran from the University of Tennessee, Mr. Foster, 27, has led all running backs in rushing touchdowns two of the last three seasons, while racking up well over 1,000 yards each year. In March 2012, Houston signed Mr. Foster to a contract worth up to $43.5 million over five years. He has a handful of endorsement contracts, including with Under Armour and Kroger Texas.

“We see Arian as a unique, multidimensional individual, a trailblazer,” said Mr. French, who added that Fantex cold-called Mr. Foster’s agent to pitch the idea.

Yet during the first six weeks of this season, Mr. Foster’s production has flagged. He has just one rushing touchdown. Heading into the year, there was concern over various injuries. Off the field, Foster admitted in a documentary released in September that he potentially violated  N.C.A.A rules by accepting money when he was a college player.

Those issues underscore the risk of betting on Mr. Foster’s brand, or that of any professional athletes, especially N.F.L. players. Unlike some other sports, N.F.L. contracts often are not fully guaranteed, meaning players are often cut and forced to find a new team, sometimes for a lesser contract.

For investors, the long-term outlook for a player will be difficult to handicap. If a player’s fortunes suffer and the tracking stock declines, there will be no rescue financing from a Private equity firm — or an investor like Warren E. Buffett — to stabilize the share price.

And unlike a stockholder of a public company, investors have no corporate governance rights.

There are no plans to hold annual meetings with the athlete, or quarterly conference calls.

Despite all the risks, some football fans seem poised to buy in. As one tweeted on Thursday after reading the news:  “Wow! This is awesome.”

Culled from the NYtimes Dealbook via

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A Step Toward ‘Peer to Peer’ Lending Securitization

Peter Eavis writes that fresh ideas are scarce now in financial markets, but a New York hedge fund has closed a deal that took innovation – and innovated on it.

Eaglewood Capital was set up two years ago to invest in loans made by Lending Club, a relatively young company that matches individual borrowers with all sorts of investors who want to lend to them.

Fans of this type of “peer to peer” lending say it fulfils a big need in the economy. Banks, they say, sometimes fail to reach certain types of borrowers. Lending Club’s investors include Google, which led a $125 million deal earlier this year to buy a stake from earlier shareholders.

Enter Eaglewood, run by Jonathan Barlow, a 35-year-old former Lehman Brothers trader.

In a new development, Eaglewood took some of its Lending Club loans and sold them in a securitization, the industry term for a deal in which investors buy bonds backed with a type of financial asset. In this deal, the asset is Lending Club loans selected by Eaglewood. Cash flows from the loans effectively pay the interest and principal on the bonds.

Since the financial crisis showed the risks of securitizing riskier loans, investors have avoided anything too experimental. Still, on Friday, Eaglewood managed to pull off a $53 million deal.

“We believe this transaction will be the first of many for Eaglewood,” Mr. Barlow said.

Securitization may be a crucial development for peer-to-peer lending because it might allow a wider array of investors to buy such loans.

The Eaglewood deal mostly went to a large insurance company, according to a person familiar with the transaction. That buyer probably operates under restrictions that prevent it from directly investing in Lending Club loans. The Eaglewood deal, however, effectively allows it to gain financial exposure to such loans.

Eaglewood, which has $130 million assets under its management, declined to identify the insurance company. It also said it did not want to reveal the actual yield that the insurance company was getting on the deal, claiming that it could damage Eaglewood competitively.

It is not clear how many peer-to-peer loans could become available for securitization. It ultimately depends on how much money is injected into the peer-to-peer companies. And the securitization may not end up being the best distribution model for such loans.

One of securitization’s big flaws was exposed in the crisis. Banks made shoddy loans and then dumped them into bonds, saddling the investors in the bonds with searing losses. Since the crisis, financial experts have said firms that do securitizations need to keep a portion of the loans on their own books, so that they have “skin in the game.”

Eaglewood says it is doing that, agreeing to take losses of up to $13 million before other investors take a hit. That works out as a loss buffer of around 25% on the $53 million pool of loans, which, according to Mr. Barlow, is high for deals that contain similar loans to individuals. He added that Eaglewood was legally vouching that the Lending Club loans meet agreed-upon standards.

Eaglewood stands to profit from the transaction. It may be able to book a gain on the loans it sold. And the deal also provides it with cash that it can now invest in other loans.

In some ways, the deal allows the hedge fund to take on leverage, the financial term for borrowing money to enhance returns.

“What we’ve told our investors is that we do not intend to take on leverage of north of four times our equity, Mr. Barlow said. “But, today, we are below three times leverage in our fund.”

The risk is that losses end up higher than Eaglewood or the insurance company expect.

But Mr. Barlow notes that Lending Club has a six-year loan history to analyse. In that period, credit losses have run at a little more than 3% of the value of the loans, he said. In the Eaglewood deal, a majority of the assets are debt consolidation loans. They group together loans in the hope of reducing the overall debt service costs for the borrower.

Lending Club says its loans are made to people with relatively high credit scores.

If they are strongly creditworthy, why haven’t ordinary banks already made such loans to the borrowers? Banks might have perceived them as too much of a risk. A typical Lending Club borrower might have low savings and high levels of credit card debt, but, at the same time, they might have higher-than-average income levels.

In Mr. Barlow’s opinion, the loans hit a sweet spot. He thinks their credit quality is solid, they have an attractive yield and a relatively short maturity.

“Very rarely can you find that combination,” he said.

Culled from The NY times Dealbook <>

Achieving Sustainable Transformation with ICT, Articles | THISDAY LIVE

Leo Ekeh, the Chairman, ZInox Group, called on the Federal Government to intervene in the Information and Communication Technology sector (ICT).

He noted that the FG is making strides in this direction. The FG has inaugurated a 19-man Broadband Council to ensure the execution of the FG’s plan to promote the diffusion of high-speed internet access expected to foster economic growth.

The Plan is a five-year programme which seeks to achieve a fivefold increase of Broadband penetration by the end of 2012, up from the present 6% level.

The Plan, inter alia, would provide security for Broadband infrastructure, encourage a reduction on the cost of deploying infrastructure, use the regulatory bodies to ensure better performance levels of broadband services and use existing national assets to create access for communities for digital literacy.

He noted that developed countries like the United States developed a National Broadband Plan, with the objective to ensure that at least 100 million US homes have affordable access to high-speed internet, making the USA, the world’s leader in mobile Innovation.

In pursuit of this goal, the USA set up the ConnectAmerica Fund (CAF). The government also approved the spending of $ 15.5 billion over the next 10 years from the existing Universal Service Fund. The US government also approved incentives to encourage investors to achieve broadband penetration to the unreached and underserved.

Ekeh also noted that countries like Kenya, Ghana and Thailand were already implementing ambitious ICT Broadband interventions. For example, a Ghanaian company entered into a partnership with the Osun State government to produce tablets for their schools. The Ghanaian company was empowered by a loan of $20 million from China, underwritten by the Ghanaian government.

Leo Ekeh is the Chairman of Zinox Technologies Limited, manufacturers of Zinox computer, Nigeria’s 1st internationally certified branded computer. Zinox computer has some innovative features which include the Naira sign and a power supply designed to contend  with the erratic nature of electric power in Nigeria.

Achieving Sustainable Transformation with ICT, Articles | THISDAY LIVE.

Dell’s Considered Novel Strategy in Buyout

English: Dell Logo

English: Dell Logo (Photo credit: Wikipedia)

In the proposed buyout of Dell by its founder, the company considered but rejected as too risky, a novel strategy that tweaks the now curbed practice of corporations moving overseas to take advantage of lower taxes.

The strategy, drafted by JPMorgan Chase and disclosed in Dell’s regulatory filings, proposed a fresh twist on that practice, which has largely been banned by the Internal Revenue Service(IRS).

Dell and its advisers decided not to use the strategy in part because of potential image problems with the United States and European regulators and investors. But the new strategy could serve as a template for future buyout because it circumvents anti-abuse regulations, said Robert Willems, a tax and accounting expert.

The scrapped tax strategy resembles a corporate inversion, a step in recent decades for tax-dodging corporations like Tyco International and Nabors Industries. Those companies prompted congressional investigations and tougher IRS Rules after they moved their headquarters to the offshore haven of Bermuda, with a post-office box holding company as the parent to the main U.S subsidiary that housed operations and management.

The proposed strategy involved conducting a buyout through a newly created foreign entity that would have effectively owned Dell. Under the U.S tax laws, that foreign entity would have legally escaped U.S corporate taxes because it would have been a partnership for U.S tax purposes.

At the same time, a foreign entity whose jurisdiction was not specified, would have been treated under tax laws in that unspecified jurisdiction as a corporation and would have been subject to foreign taxes. Those two contrasting taxes outcomes, embodied in one structure, would have created a ‘foreign hybrid’, able to navigate different national tax regimes and access offshore cash while paying little or no U.S taxes.

The “unprecedented” piece in the JPMorgan strategy was the proposal that Dell designate the foreign hybrid as a partnership. The foreign hybrid would have held a new entity called Denali, which would have held Dell shares and Denali would have owned Dell’s foreign subsidiaries.

Dell’s physical headquarters would have remained in Round Rock, Tex, while the company would have been able to tap into the cash and tax benefits of being legally based in a lower tax country. And it would have been able to borrow money from cash-rich offshore subsidiaries to finance Dell’s operations, all without having to pay U.S corporate income taxes.

Global tax officials have increasingly criticized foreign hybrids as leaching corporate profits out of higher tax jurisdictions. The Organisation for Economic Cooperation and Development has railed against what it calls “hybrid mismatches” for several years.

Edward D. Kleinbard, a tax law professor at the University of Southern California and a former Chief of Staff of the Congressional Joint Committee on Taxation, called the strategy “a twist on the old corporation inversion that relies on the fact that the U.S company can dress up their foreign entities in different costumes for different tax purposes”.

Culled from the Deal Book @

The Senate’s curious position on Section 29(4)(b) of the Constitution

African Girl by gunnisal
African Girl, a photo by gunnisal on Flickr.


The print and social media have been agog with the news of the Senate’s reversal of its decision to remove from the Constitution a clause allowing a girl to be considered “of age” once married. In effect, the Nigerian Senate resolved to alter Section 29 of the draft Constitution which stipulates that a woman shall not be considered of ‘full age’ until she becomes 18 years old. This is so because the Senate was unable to provide the two-thirds majority votes needed to insert the age specification for married women in the draft Constitution and left the marriage age specification open. By reason of the Senate’s reversal of its position, a woman is deemed to be of “full age” once she is married irrespective of her age.

Section 29 of the Constitution permits a Nigerian citizen of ‘full age’ to renounce his or her citizenship. For that purpose, Section 29(4) (b) stated ‘full age’ to be the age of 18 years and above and any woman who is married. In its current efforts to review the Constitution, the Senate Committee had determined that the subsection dealing with gender should be deleted to make any person, male or female, who had attained the age of 18 years responsible for the decision whether or not to renounce his citizenship.

Senator Yerima from Zamfara State, however, vehemently argued against the removal of the clause on the grounds that deleting same was against Islam even after a vote to delete the subsection was carried. The Senate President rejected the call but later gave in justifying his position on the grounds that the matter was hinged on religion. It is pertinent to point out that Senator Ahmed Yerima made history and caused quite an uproar in 2011 by marrying a 13-year-old Egyptian girl.

There are those who hold the view that the action of the Senate is on point as Section 29(4) merely relates to renunciation of citizenship. Assuming that this far-reaching action of the Senate is merely restricted to questions of citizenship, it still amounts to discriminatory treatment to hold that a member of one sex attains ‘full age’ once married and therefore a breach of Section 42 of the Constitution.

By the provisions of Section 29, a girl-child is considered an adult once she is married but that courtesy is not extended to the male child, even if he marries before he becomes 18 years old. Assuming a man marries before the age of 18 he cannot renounce his citizenship because the Constitution does not consider him of ‘full age’. One cannot help but wonder if this is because our lawmakers do not anticipate a situation where a boy-child would be required to engage in early marriage. Why can’t the same courtesy be extended to the girl-child?

On the flip side, the Constitution by requiring the girl-child to be considered of ‘full age’ once she is married whether or not she becomes 18 years old, discriminates against the girl-child by requiring her to make a decision which her male counterparts are protected from taking on account of their age. The point is and remains that the senate committee was on point in seeking to remove that provision from the Constitution and we urge them to do so.

Many have condemned the decision as encouraging perverts and Section 29 as the “Paedophile Charter”. One can understand the sentiments expressed in view of the recent news filled with pastors raping young girls, fathers raping their daughters, men having sex with 9 year olds, policemen raping young girls and other atrocities committed against our children, particularly the girl-child. One would think that would be a clarion call to the National Assembly in general and the members of the Senate in particular to protect our young girls from sick old men.

This decision is also very curious in view of the Senate President David Mark’s vehement stand against Same-sex marriage even in the face of threats from the international community to withdraw Aids from Nigeria. Curious because while Same Sex marriage is between two consenting adult, the girl-child really has no say in the issue of her marriage to an older man. Curious still because the same Constitution which makes it impossible for a girl below the age of 18 to vote makes it legal for that same girl to be married. If she cannot vote to choose her representatives, how can she be expected to make a decision as to her life partner? Worse still is that she does not understand the consequence of such a marriage. A visit to one of the VVF clinics in the Country will give one an insight into some of the dangers of early marriage.

Inspite of the current amendment exercise, the Constitution of the Federal Republic of Nigeria is the grundnorm and supreme law of the Land. The Members of the National Assembly and indeed, every Nigerian is bound by its provisions. The Constitution not only establishes the National Assembly, but also confers on her the powers to make laws and indeed, amend the Constitution. Thus, the Constitution having declared the Country secular, one can’t help but wonder how our elected representatives can justify taking a decision based on a religious consideration.

What is more, the Constitution declares that every person, including the girl-child is entitled to the dignity of her person and freedom from discrimination. The decision to retain the contentious clause in the Constitution is discriminatory against the girl-child as she is not subjected to similar standards and responsibilities as her male counter-parts who are not required to take such a decision until he becomes 18 years old. As a corollary to this, through their decision, the Senate has deemed it necessary to encourage the rape of the girl-child on account of her sex. For indeed, the language of Section 29(4) (b) which the Senate have voted to retain, encourages the rape of the girl-child repeatedly under the guise of early marriage.

The members of the Senate should refer themselves to the Child’s Right Act 2003, one of its enactments. The Act clearly recognizes that in any action concerning a Child, the best interest of the Child is paramount. The Act further recognizes the right of a Child to respect of her dignity and freedom from sexual abuse. Section 21 of the Act expressly prohibits a Child under the age of eighteen from contracting a valid marriage and punishes the parents, husband and persons who perform such a wedding. I call on the Senate President and all the members of the Senate including Senator Yerima and his cohorts to ask themselves, how the Language of Section 29(4) (b) seeks to protect the interest of a Child. If we cannot trust our elected representatives to protect the interest of our Children, born and unborn, who do we turn to?

Aside from our National laws, international laws which Nigeria is a party to prohibit the import of Section 29(4) (b). For example, Article 6(6) of the African Charter on Human and Peoples’ Rights on the Rights of Women in Africa and Article 21(2) of the African Charter on the Rights and Welfare of the Child, both make it clear that the minimum age for marriage is 18 years. The Senate would do well to be guided by these Charters.

In concluding, the members of the Senate should recall that Section 4 of the Constitution empowers the members of the National Assembly to make laws for the peace, order and good government of Nigeria. It is hoped that the Senators would take this constitutional injunction seriously and reverse their decision on this point while the member of the House of Representatives are encouraged would avoid voting in favour of Section 29(4)(b) thereby making early marriage okay.

Failing which, I hope with a female Chief Justice of the Federation, the Courts would be quick to declare any case of early marriage illegal and repugnant to good conscience.