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CBN and forex scavengers

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By Omoh Gabriel
The scavenger they say is a patient animal. it can wait hours or weeks for its victim to die before descending to eat it up. But the Nigerian foreign exchange scavengers are not the normal ones. Their breed is the impatient type. As soon as they are not able to access foreign exchange for their private use, they begin to cry out in a very loud and noisy sound. In fact they begin to call for the head of those they perceive as denying them access to the scarce commodity. They will not help to earn the much needed foreign currency but only want to spend it thus creating a hole in the foreign exchange reserve position of the country. They keep making Nigerians believe that the money in the external reserve is spendable. This though is a subject for another day.

At the wake of the present foreign exchange crunch in the country, the CBN in attempt to manage what was available imposed some restrictions on which product should have access to forex. It was like hell was let loose. The apex bank was vilified, and the forex scavengers started calling for the removal of the CBN governor using their surrogates. They organised protests, plan one million man match in Abuja to weep up sentiments. They forget that financial and economic issues are explicit and factual not emotions and sentiments.

The restriction placed by the CBN on 41 items’ access to foreign exchange and Bureaux De Change at the time had generated so much heat that some highly placed Nigerian politicians who spend dollars in Nigeria and foreign portfolio investors were calling for  drastic action against the CBN. It is quite unfortunate that Nigerians have very short memory. As a young rookie reporter in 1987, some of the issues rearing their ugly heads now were the same issues we reported then. Then as it is now the CBN has always been vilified whenever there is drop in the supply of foreign exchange in the country. The difference between then and now is that for once the exchange rate which rose to N520 has come down to a lower level. In the official market it went up to N400 but has come down to N367to the dollar. Since the inception of the foreign exchange market this is the first time the exchange rate went up and was forced down in the official market.

The CBN at critical moment in the economic history of Nigeria had bent over backward in attempt to redeem what looks like a hopeless situation to roll out control measures that in the last three decades have been its last resort but the politicians and greedy businessmen in the country have always resorted to blame games and scapegoating the CBN for problems they created. They are so selfish that they only look at the immediate gains not the welfare of the generality of the people.

Reflecting on the economy in the last six months has shown that the foreign exchange scavengers are tacitly singing the praise of the monetary authorities. The CBN has been able to stabilise the Naira exchange rate, the foreign exchange scavengers now have sufficient access to what they want, they have gone silent. Nobody is commending the bank for bringing the exchange rate of the Naira to the dollar from almost N520 in February to the present N367 to the dollar. One question that is begging for an answer from Nigerians is in which developing economies do you find exchange rates going so high and within a short time comes down to a much lower level?

At the close of business last Friday, market report was that the rates at which the Naira was traded in the investor foreign exchange window and black market came close to converging. This was brought about as the central bank continued its bid to improve dollar liquidity in the foreign exchange market with regular dollar supply.

This is despite the fact that the nation is grappling with a foreign currency crisis caused by low oil prices, which created chronic dollar shortages. The CBN in a determined effort more than before wants to attract foreign investors in one hand and maintain a strong currency to ward off inflation on the other hand. In the bid to meet these noble goals the CBN created a new forex window in April to allow investors to trade the Naira at market-determined rates in a move intended to improve dollar supply and attract foreign investors who fled Nigeria at the start of the currency crisis.
The Naira was quoted at N368 to the dollar on the street market on Friday. In the investor window, it was quoted at N367.83 to the dollar. “The convergence of rates, at least for a segment of the market, demonstrates the success of the central bank’s intervention, according to Razia Khan, Africa chief economist at Standard Chartered Bank. Khan said that by addressing the demand for dollars, the central bank had been able to reduce the extent to which the Naira would have depreciated on the street market.

The big question is why are the Nigerian forex scavengers suddenly quiet? Why are they not speaking up to commend the effort that has been made this far? Are they now ashamed of their position in the past? Nigerians can not forget so soon that the Naira traded at about N520 to the dollar on the street market in February and at N400 in the forex window when it opened in April, three months ago before appreciating towards convergence in the past few months.

Reacting to the new reality Aminu Gwadabe, president Association of Bureaux De Change Operators, said “The convergence … has provided the central bank another opportunity to put in place a sustainable reform of the market to enhance the value of the Naira,”
From the look of things, if the current price level of crude oil in the international market holds and if production of crude is not disrupted in the Niger Delta, the Naira will appreciate further.
The central bank has consistently been selling about $40,000 a week to each of the 3,250 bureaux De change, thus improving dollar liquidity. CBN last week said that the investor window had handled $2.2 billion of trade in the past seven weeks but had accounted for almost 30 per cent of that trade itself as it worked to keep the window operating. The apex bank has sold more than $5 billion since it began its interventions in February, helping to restore confidence in the market.

A look back at the past may help us appreciate the efforts of the CBN in managing the economy. Nigerians who are old enough to know will remember that in 1986 when the foreign exchange market was libralised, there were four exchange rates. There was the first tier market, second tier market, autonomous market, then the never dying street market. It is shocking that many are shouting today that there are several foreign exchange market in the country forgetting that it has been so since the market was taken out of CBN control into the hands of Nigerian banks. It is not the current management of CBN that started giving preferential allocation to muslim and christian pilgrims. It has been with us all along. The questions to ask is at what period since the introduction of the Structural Adjustment Programmed SAP, did Nigeria have a single exchange rate?

I recall that in 1988, in an attempt to save the Naira, CBN under the leadership of Governor Abdulkadir barred eight newly licensed banks from access to foreign exchange market. It denied them access to the market because they were said to be involved in foreign exchange speculation in the interbank that was capable of destabilising the economy. It was in June 1988 that the first and second tier markets were merged leaving behind, the interbank, autonomous, bureaux de change and street foreign exchange markets.

In 2002, Joseph Sanusi, then CBN governor withdrew the foreign exchange dealership licence of 21 out of the 90 banks in the country that were found to be involved in foreign exchange malpractices in the interbank market. Other segment of the market were on.

The CBN has always acted in what it feels is in the best interest of Nigeria. Looking through Nigeria’s recent economic history reveals the activities of foreign exchange scavengers. On October 19, 1987, “The Republic newspaper” carried a report titled “CBN bars 80 firms from FEM.” An excerpt: “The Central Bank has barred 80 companies from further access to official foreign exchange. The order came as a result of the refusal of the companies to submit their shipping documents for scrutiny. Republic investigation revealed that it has become a practice among Nigerian companies to purchase foreign exchange and divert the money to purposes other than the one in which they were intended on purchase. CBN sources disclosed that such companies now refuse to submit their shipping documents for inspection. The shipping document include the bill of lading (clean or dirty) which  importers use to take  delivery of  goods. The bill also gives a detailed description of the type of goods, the state and stage of the goods during shipment.” These companies were run by Nigerians, Asians with Indians taking a lion share”.

On December 7, 1987 the same paper carried a report that 728 companies were barred from access to foreign exchange by the CBN. Excerpt:  “A total of 728 companies and individuals were blacklisted from procuring foreign exchange because of their involvement in different forms of foreign exchange malpractices during the first half of 1987.
Investigations conducted by The Republic revealed that 336 companies, mostly those registered as private companies, 228 individual Nigerians believed to be students and 164 foreigners were involved in the foreign exchanged malpractices.
According to our investigations, none of the companies quoted at the Stock Exchange was involved in the shady deals. It was revealed that most of the companies that were blacklisted by the Central Bank used forged forms‚ “Form A” to apply for foreign exchange. Most of the companies were also caught using Nigerians to front for them in foreign exchange deals especially in companies where Asians have shares.
The 228 individuals blacklisted were those who pose as students in Federal Government approved schools overseas when in actual fact they were not studying abroad. In some of the cases, Nigerians who have access to position of authority faked studentship while they trade with the proceeds of the foreign exchange they got from the Central Bank. Some were known to have connived with embassy officials to obtain the enabling documents to apply for scarce foreign exchange.”

The most prevalent in the series of embargo were  exporting firms that refused to repatriate home the proceeds of their foreign exchange earnings. It is the same thing that is happening 28 years after. On June 18, 1987, another report said that “Inter Bank dealing likely” to be restored. The CBN had in attempt to bring sanity into the foreign exchange market banned inter bank dealing in forex. Excerpt:
“The present ban on inter-bank dealings on foreign exchange will be lifted at the end of the current two-tier exchange system investigation has shown. An informed source at the Central Bank of Nigeria, CBN, said that when this happens the CBN would deal like any other bank selling and buying foreign exchange over the telephone or telex to and from other participants in the inter bank market. The source added that autonomous source of funding is expected to play a significant role or even replace the official sources as the main supplier of funds to the market. The current bidding sessions will pale into insignificance and be phased out when this is realised. The bidding sessions are being used as a vehicle for injecting official funds into the market.” This expectation has not been realised 28 years after the CBN put in place that policy
In another report on 18 June 1987, the “CBN made it mandatory for authorised dealers under SFEM to submit a detailed list of transactions with the Central Bank of Nigeria, CBN, before any bidding session. This CBN order effective from today is contained in a circular issued to dealing banks yesterday which is expected to check illegal inter-bank dealings and participation of banks in the parallel market”.

It is observable that the CBN has used almost the same instruments or modified model to deal with the unending foreign exchange situation in Nigeria. It has always made attempt to avoid the repeat of the Nigeria foreign exchange experience pre-SAP. A classic example is on this report. “Pre-SFEM import: N2.6 billion tied down as at February 1988. “About N2.6673 billion was paid by importers into the account of commercial banks that are still awaiting foreign exchange cover from the Central Bank. A large portion of the money had been paid into the banks since 1983. The Republic gathered that N1.4285 billion is already paid to the Central Bank, while the balance of N1.2388 billion which represents the advance deposits paid by importers against letters of credit is trapped in the commercial banks. The backlog was caused by foreign exchange crunch which hit the country. Accordingly, CBN cannot provide foreign exchange to facilitate the transfer of the money to overseas creditors before the introduction of Second Tier Foreign Exchange Market (SFEM). The hike in exchange rates put the importers who had already settled their bills in a difficult position as they were being asked by their bankers to pay the new rates”. The difference between what the CBN did then and now is the mere fact that in those early days the CBN imposed penalties on those who infringed the rule, but today the CBN is asking Nigerians to look inward in a conscious effort to make Nigeria a productive economy rather than being a consuming economy.

Private sector operators that are viniferous of the CBN, may have forgotten their 1988 experience and perhaps do not want to get to this point where the CBN can not provide foreign exchange cover  for import. Each time a new policy is put in place, those whose vested interest are affected by the decision mounts campaign for the CBN governor to be removed. In each of these cases, the President took side with the CBN. It is note worthy to say that Dr. Ibrahim Ayagi who was the Managing Director of Continental Merchant Bank and Oladele Olashore Managing Director of First Bank that went to court to challenge CBN policy of classifying banks in foreign exchange allocation in 1987 that were unceremoniously removed from office. Then the federal government had control stakes in Nigerian banks. Nigerians, big and small should learn to obey the rules of engagement in the forex market, this is the only way out of this vicious foreign exchange circle.

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Decemberissaveybe: Firstbank sponsors “the caveman concert” thrills audience 

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By Oladapo Sofowora
 
December is a particularly vibrant and deeply meaningful month in Nigeria, imbued with a palpable sense of excitement and celebration that permeates the air. As daily life slows down, this festive season offers a welcome opportunity for relaxation and togetherness. Families and friends gather to create cherished memories, participating in a rich tapestry of cultural activities that showcase Nigeria’s diverse heritage. The month is characterized by a colourful array of events, including theatrical plays, musical concerts, traditional festivals, operas, fashion shows, poetry readings, and various forms of performance arts, all reflecting the dynamic cultural expressions of Nigerian society.
 As December unfolds, the excitement continues to build, with streets and homes becoming vibrant displays of holiday spirit. Elaborate decorations adorn every corner, featuring colourful Christmas ornaments, twinkling lights, and festive paraphernalia that evoke a sense of wonder and joy. Evening skies light up with breathtaking fireworks, illuminating the night and further enhancing the joyous mood of the season. Year-end Thanksgiving parties have become commonplace, offering spaces for loved ones to gather, share meals, and express gratitude for the blessings and experiences of the past year. This period also allows Nigerians to reconnect with family and friends, many of whom travel from various parts of the globe to partake in these significant celebrations.
 As the year-end festivities for 2024 draw near, FirstBank has thoughtfully curated an exhilarating lineup of events under the DecemberIssaVybe program, aimed at enhancing the enjoyment of this festive season. A highlight of this initiative is the much-anticipated concert featuring The Cavemen, a celebrated musical duo. Which was held on Friday, December 27, 2024, at Muri Okunola Park, located along the bustling Lekki-Epe Expressway, the event brought Lagos to life with a captivating performance that seamlessly blends highlife, soul, and folk music. Attendees enjoyed an engaging experience filled with mesmerizing sounds for over an hour, keeping them on their feet and immersed in the rhythm.
 The atmosphere at the concert was electrifying, drawing a diverse crowd of enthusiastic youth eager to experience The Cavemen’s unique interpretation of highlife music—a genre deeply rooted in Nigerian culture and characterized by its rich, rhythmic beats and soulful melodies. The concert also featured an impressive lineup of other notable artists, such as the popular act Ckay, who collectively contributed to a night filled with remarkable entertainment and unforgettable performances. The stage witnessed a pulsation of energy as The Cavemen’s talented band propelled the evening forward, delivering an infectious performance marked by masterfully executed guitar riffs, powerful drumming, and enchanting vocals. Audiences found themselves wholly absorbed in the moment, as the music unites them in joy and celebration, showcasing the revitalization and redefinition of the highlife genre that The Cavemen have pioneered.
In addition to the music, the concert artfully integrates comedic performances, highlighting the vibrant and diverse creative entertainment scene in Africa. Acclaimed comedians took to the stage, drawing laughter and delight from the crowd, while emerging music also had their moment in the spotlight, receiving enthusiastic applause and encouragement from an appreciative audience. Recognising the profound impact of December in nurturing relationships and spreading joy, FirstBank has actively engaged its First@arts initiative to launch the annual DecemberIssaVybe campaign. This initiative is meticulously crafted to inspire and empower individuals across Nigeria to create and experience exhilarating moments throughout this joyous season. By providing fully sponsored access to premium concerts, theatrical performances, shows, and festivals featuring some of the industry’s top entertainers, FirstBank aims to alleviate the financial burdens that often accompany festive celebrations.
 In a time marked by economic uncertainty, FirstBank stands as a crucial support system for Nigerians wishing to celebrate without the weight of added financial stress. With a proud legacy spanning over 130 years, this esteemed financial institution has woven itself into the fabric of Nigerian life. FirstBank has long championed numerous festive concerts showcasing Africa’s music icons, including Kizz Daniel, Davido, Burna Boy, Asake, and Tiwa Savage, crafting unforgettable experiences for music aficionados across the nation.
The DecemberIssaVybe campaign encapsulates the essence of creating lasting memories during this festive season. It serves as a dynamic platform for both local and international audiences to immerse themselves in unique, culturally rich experiences tailored to the holiday spirit. Since its inception in 2018, the FirstBankIssaVybe campaign has quickly become a highly anticipated annual event, delighting participants with exhilarating moments designed to resonate and linger long after the celebrations are over. Olayinka Ijabiyi, the Acting Group Head of Marketing & Corporate Communications at FirstBank, emphasized the institution’s unwavering commitment to crafting a ‘Wow December to Remember’ experience for individuals of all ages. He stated, “FirstBank is devoted to facilitating memorable homecoming experiences this December through gatherings such as weddings, family reunions, and festive celebrations, ensuring that every moment spent together is cherished.” Through this commitment, FirstBank continues to play a pivotal role in the celebration of culture and community during this significant time of year.

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Deadly rice stampedes: Suppose President Tinubu bans rice?

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By Ikeddy ISIGUZO
Once President Bola Ahmed Tinubu addresses Nigerians it is clear that his silence is actually golden, as it gives chances to guess what the President feels about ordinary Nigerians, the hungry, the poor, the weak, those excluded from Tinubu’s concerns because they are not rich. The President rushing in with a media chat, after 18 months in office, and days after the “poverty stampede” in Ibadan, where mainly children died, was thought to be an opportunity to explain to Nigerians, elicit their support as they go through a crushing economic crisis that the President gloats about as if the entire purpose of his policies is to inflict pains. The deaths in Ibadan that were over 35, were followed by similar incidents in a church in Abuja, and an individual’s event in Okija. The deaths resulted from free distribution of rice to the needy. Poverty once personal, private, is now public, and deadly.
Just blame rice.
Are opponents using free rice to distract the President from focusing on his economic policies? The President should ban rice for more clarity. No rice, no stampede, no deaths. One of my teachers said the solution to headache was decapitation – no head, no headache, or any ache for that matter.
We remember Tinubu promised Nigerians “agbado (corn) and cassava”. Not rice. More people have fallen into poverty without the President’s permission. Should they? Could this account for the President not knowing about them? What really does the President know about Nigerians?
Does he know that more people would have died if they knew of these events? Food is beyond the reach of ordinary Nigerians. Tinubu does not feel the impact of his harsh economic practices of lavish spending on presidential consumptions, unproductive as they are. Some call the spendings reckless.
Would you blame them? In the midst of a drifting economy, soaring inflation, no jobs, hunger, anger, capped with insecurity, the President bought jets, including one for the Vice President, and maintains a bloated cabinet.
He used the presidential chat as a platform to defend his Ministers. They are performing. He sounded as if he needed more people like the bunch that maintains a distance from the daily challenges people face.
For the President to see “switching off things” as the solution to poor electricity supply – and the frequency with which the national grid collapses – was one indication that governance has become a joke. When the Minister of Power, months ago, held the same position on electricity, the public tore him to shreds. The Minister apologise. Tinubu blamed the organisers for the stampede, “I see this as a very great error on the part of the organisers.” He said he had been giving out foodstuffs, including envelopes, smoothly at his Bourdillon residence in the past 25 years. “If you do not have enough to give, don’t publicise it,” he advised organisers.
The organisers too are poor, and have no Bourdillon pedigrees. These things count.
Do not expect Tinubu to blame the new wave of incremental poverty his hope agenda has renewed. He did not. He will not. If Tinubu halts the slide to absolute poverty for more Nigerians, there would be no deadly rice stampedes, and no organisers to blame. Other Nigerians have organised these events for years without incidents. Large crowds would turn up and go home home safely. Was it not rice they shared? What is the difference now? People are out searching for something to eat, anything. Even if “pure water” is being shared, there will be stampede. Our people are living by the minute.
They have lost hope. Nigerians have no assurance that someone cares about their efforts to survive. Millions of our compatriots are ready to do anything to survive. While at it, insecurity is not allowing them to breathe.
Sadly, more of our people are falling into crimes with the times.
Employment opportunities are shrinking. The few jobs available are for relations of those in power, the rich, the very rich, the same ones who accuse us of greed. Do they have a different meaning for greed?
Last October, the Senate President, His Excellency Obong Godswill Akpabio on the floor of the Senate advised poor Nigerians, “Times are difficult, wherever you see free food, please endeavour to avail yourself”. Could the people have followed Akpabio’s perspective of the solution to poverty and the hard times? Mocking the poor is Akpabio’s favourite idea of enlivening Senate sessions.
“The prayer is that, let the poor breathe, and Senator Mustapha has seconded that the poor should breathe. Those who are in support of the additional prayer that the poor should be allowed to breathe, say ‘ayes’ and those who are against say ‘nay,’” Akpabio had said in July 2023 during a debate on the 15 per cent hike of electricity tariff. “The ayes have it! The poor must be allowed to breathe,” Akpabio concluded.
At a Niger Delta Development Commission event in July 2024, Akpabio mocked those who called for demonstration over the economic hardship. “Those who want to protest can protest, but let us be there eating,” the former Akwa Ibom State Governor had said. In Tinubu’s 18 months, poverty has pole-vaulted to dizzy heights that left Nigerians dazed.
The only thing worse is the President’s spectacular performances when addressing his failure to rein in inflation as he drives the economy with the enthusiasm of kids playing with new toys. People are hungry. Some people around the President call poor, hungry Nigerians “greedy”. Someone looking for what to eat is greedy? Have we fallen so low to justify the President’s unwillingness to accept that the problem is well beyond him?
Is he using his uncaring attitude as a buffer? He is the bigger problem by refusing to engage the people. Rather, he talks down on them when he decides to talk, well aware that he has nothing to say.

Take the tax bills, for instance, they have their merits. Tinubu thinks it is beneath him to discuss issues the radical bills raise. He sneers, the bills will be passed. He takes responsibility for nothing. Tinubu sounds like Rik Rok and Shaggy in their famous 2000 hit song, “It Wasn’t Me”. The President provides answers without addressing our concerns. The answers are always dismissive. The major lesson of 2024 is that Nigerians have to continue looking after themselves. It may even annoy those who are just discovering that they cannot decide when we should stop breathing.
Happy New Year, that is peaceful – prosperity will follow peace.
Finally… INFLATION to crash from 34.6% to 15% in 12 months, is what the President has promised in 2025. Safe trip, Mr. President.
FEDEERAL Capital Territory Minister Ezewoke Nyesom Wike said of those who accuse him of land grabbing, “Peo­ple say land grabbing, do you grab what you are in charge of? I am in charge of land in Abuja how will I go and grab what I am in charge of? Those, who are grabbing land are whom I am dealing with”. Wike, at the Port Harcourt event where he spoke, did not forget to call Governor Sim Fubara, “this boy”.
*ISIGUZO is a major commentator on minor issues

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Building a stronger Nigeria through health, transparency, human rights

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By Ambassador Richard M. Mills, U.S. Ambassador to Nigeria
Every December, we mark three international observances that are at the heart of the U.S.-Nigeria partnership: World AIDS Day, International Anti-Corruption Day, and Human Rights Day.  While distinct, these commemorations underscore a simple truth – Nigeria’s path forward requires progress on health, good governance, and human rights.  The United States remains your steadfast partner on this journey. For two decades, the United States has stood with Nigeria in the fight against HIV/AIDS under the President’s Emergency Plan for AIDS Relief (PEPFAR).  The U.S. government has invested more than $8.3 billion in Nigeria’s health sector and provided life-saving anti-retroviral treatment to more than 1.5 million people.  These numbers represent improved life expectancy and quality of life for these Nigerians and their families.  In clinics across Nigeria, I’ve met dedicated healthcare workers who deliver HIV prevention, treatment, and care, supported by the resources of the American people.  This work has done more than save lives – using HIV as an entry point, Nigeria’s health system has also benefited.  
As Nigeria’s health system is strengthened, this important work will be led by government and engagement with the private sector to sustain the gains.  This commitment was reinforced during Ambassador Nkengasong’s recent visit, where his discussions with Nigerian health officials focused on how the Government of Nigeria would sustain the HIV health programs with strengthened Nigerian leadership and local ownership. But positive health outcomes depend critically on good governance.  When medical supplies are diverted, when healthcare workers go unpaid, when facilities buy dangerous, counterfeit medications or lack resources due to mismanaged funds, it costs lives. 
This is why the United States supports numerous initiatives, not only in the health sector, to enhance transparency and accountability in Nigeria.  Our programs work directly with government agencies and civil society organizations to strengthen fiscal responsibility with the goal of the state ensuring resources reach their intended beneficiaries.
The success of these efforts rests on respect for human rights and civic engagement.  When members of marginalized communities face discrimination in accessing healthcare, when citizens fear reporting blatant corruption like the need to pay for appointments or ‘free’ healthcare, or when vulnerable populations cannot advocate for their needs, development falters.  Through our partnership with Nigeria, we promote the rights of every person to access essential services and enjoy fundamental freedoms without fear or discrimination. These three areas – health, transparency, and human rights – reinforce each other. 
Consider the results: U.S.-supported initiatives have helped strengthen pharmaceutical supply chains, reducing theft and ensuring safe medicines reach patients.  Our human rights programming has empowered civil society organizations to advocate for marginalized communities, leading to better access to health services.  Our health system investments have created platforms for transparency that benefit all sectors.  And, perhaps most importantly, according to a recent survey by the United Nations Office on Drugs and Crime, Nigerians are both more frequently refusing to pay bribes and reporting bribe seekers to investigative journalists and rule of law authorities.  A shift in norms is beginning to take root and must continue.    
 The U.S. Embassy stands ready to support Nigerian voices pressing the fight against corruption in Nigeria.  To Nigeria’s government officials, civil society leaders, healthcare workers, and citizens:  your dedication to building a stronger nation inspires us.  Together, we can continue to advance the interconnected goals of better health outcomes, good governance, and human rights for all Nigerians.  Challenges remain, but the work we’ve done together shows what could be possible on a larger scale across these crucial domains. As we mark these December observances, let us use this moment not just for reflection, but for renewed commitment and action.  The United States continues to stand with the Nigerian people as they carry out this essential work with their elected government.
*Ambassador Richard M. Mills is U.S. Ambassador to Nigeria

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