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For An Effective Fight Against Corruption By Colonel Abubakar D. Umar (RTD) Forwarded By Harc Omenyi
The recent threat by former Abia State Governor Chief Orji Uzor Kalu to make Nigeria ungovernable if the Federal Government or its anti corruption agencies continue to investigate and prosecute former Governors while former President Olusegun Obasanjo and his ministers are not subjected to the same treatment may appear to many as empty threat or blackmail but I honestly share Orji Kalu's concern, even if I don't endorse his threat. I also believe that the war against corruption will continue to be ineffective and will actually be meaningless when only a small segment of former public servants are targeted as was the case in Obasanjo's selective war against corruption. There is no doubt that many of the former chief executives have cases to answer for the gross abuse of their offices and they have to be called to account. They cannot use, as their defence, the argument that "we are not alone" in such abuses. The message of Orji Kalu is that what is good for the goose is also good for the gander. After all, the Obasanjo presidency, where over 56% of the corruption allegedly took place, controlled 52% of the nation's revenue.
Although the Umaru Yar'adua administration has been making efforts to reinvigorate the war against corruption in line with his self-imposed "rule of law" mantra, most Nigerians remain unimpressed. The only reason why the routine redeployment of AIG Nuhu Ribadu, EFCC Chairman, generated so much public interest is the popular perception that this government, like its immediate predecessor, is insincere in its fight against corruption.
I am convinced that the Yar'adua administration appreciates the very negative effects of corruption on the socio-economic and political development of the nation. It cannot fail to realize the very serious damage that the Obasanjo administration caused to this nation as a result of that administration's monumental corruption, I want to believe that this administration will do all it can to distinguish itself from the hypocritical regime of Chief Olusegun Obasanjo by prosecuting a sincere and purposeful war against corruption. Actually President Yar'adua has no option than to do right to all manner of people according to law without fear or favor, affection or ill will, as he swore to do. In fact the Obasanjo probe has already started what with al! the revelations originating from government on serious acts of sleaze perpetrated by Obasanjo's government. This administration must also be fair to president Obasanjo, members of his administration and his cronies by giving them an opportunity to defend themselves against all allegations. The general perception currently is that Obasanjo is the most corrupt former African leader living or dead. This is very tragic considering his earlier deification, of course largely based on his claims to piety and holier than thou attitude. This idol must be given the opportunity to redeem itself. A probe will appear to be the best option. In choosing this path, government must not entertain the fear that it will lead to the polarization of the nation or that it will be accused of betrayal and witchhunt since there are precedents. All past administrations have faced some kind of probe. The Obasanjo administration itself probed and sanctioned both the Abacha and Abdulsalam's administrations. Obasanjo was hailed for his efforts in exposing and recovering Abacha's ill gotten wealth.
The following areas and many more need to be investigated. Needless to say that the facts I supplied below are mere allegations that need to be probed. 1 have been constrained in my research by lack of easy access to official documents which will not be a problem to any government commissioned probe panel.
In The Beginning. The first salvo fired by President Olusegun Obasanjo in his well publicized war against corruption on his inauguration on 29th May 1999 was the revocation of all contracts awarded between January to April 1999 by his immediate predecessor, Genera! Abdulsalam Abubakar, on the allegation that all those contracts were hurriedly and dubiously awarded. To most observers this action was proof enough of the seriousness of the new president in this promise to prosecute a war against corruption in which there would be no sacred cows and his resolve to confront all culprits irrespective of their status. How else could one interpret this move considering the crucial role played by General Abdulsalam in releasing Chief Obasanjo from jail and pardoning him of the conviction of coup plot against Abacha's government and making his election as president possible.
This
'act of courage' soon revealed
itself as a ruse. The
sinister motive soon
manifested. It was, as it tuned out, not aimed at sanitizing the system
but the first act of sleaze
shrouded in messianic garb, soon to become the hallmark of the Obasanjo
anti corruption and other
administrative policies. Most
of these contracts were later
reviewed upwards and re-awarded to some of the same companies after
they might have paid bribes.
Not many Nigerians are aware
that the mysterious
NNPC. Nigerians vigorously questioned the rationale of a president choosing to add to his burden by taking over the direct control of the busiest Ministry, that of petroleum, and refusing to give it up despite persistent insinuations and innuendos regarding his selfish motives.
Forensic look at the modus operandi of Obasanjo's control of this cash-cow will reveal that the public is right in its suspicious all along. Let's look at the facts of a few cases.
REFINERIES The Obasanjo administration inherited refineries that were largely unserviceable, operating much below their 450,000 barrels per day installed capacity. The president promised to reverse the trend. Repair contracts worth hundreds of millions of Dollars were awarded for this purpose. It was money thrown down the drains as the refineries continued to loose their refining capacities, which fell from 250,000 barrels per day as at May 29, 1999 to about 150,000 barrels per day by 2001. No explanation was given for this. No one was held accountable. In a surprising move the government directed an increase in the crude allocation to NNPC, for local refining and use, from 300,000 barrels per day to 450,000 barrels per day as if the refineries are functioning at full capacity. What could be the reason behind this? Well, the NNPC was supplied crude for local consumption at a heavily subsidized rate. For example, by 2001 when president Obasanjo decided to increase the local allocation, a barrel of crude was selling at $35 per barrel on the international market. NNPC was being charged $18 per barrel. Now since the refineries had a refining capacity of 150,000 barrels per day, NNPC had excess of 300,000 barrels at the subsidized rate which was exported making a profit of 300,000 barrels per day multiplied by $17 per barrel which comes to $5,100,000 profit for NNPC. The crude allocation was paid in local currency, the Naira. For some inexplicable reason, NNPC paid the CBN at the rate of N110 to the Dollar instead of the prevailing forex rate of N135 to the Dollar. Again, there has not been any explanation for this under payment.
There are two issues that only a probe can resolve:
a) How was the $5,100,000 per day utilized? b) What informed the decision to discount the Dollar by about
NNPC's explanation to the first query that the profit was used for import of petroleum products is unconvincing because the expenditure is an appropriation matter that needed to be approved by the National Assembly and there is no evidence to prove that such approval was ever sought or obtained. The contracts were never a subject of Federal Executive Council consideration and approval therefore lacking transparency. When the RMAFC raised queries, the president felt intimidated enough to set up a committee to investigate allegations of impropriety. One of the findings of the committee was that NNPC's benchmark prices were in some cases higher than the ones quoted by major trading companies. The report was so damaging to the president and NNPC that he quickly suppressed it. Business as usual continued.
CRUDE OIL CONTRACTS No where has president Obasanjo shown so much disdain for due process and displayed greed and crass opportunism as in the management of crude oil contracts. The nation was defrauded tens of billions of Dollars in the most opaque and criminal contract process, which was handled between the president and his willing accomplice, the GMD NNPC.
It will interest Nigerians to know that all crude oil lifting contracts signed by the Obasanjo administration were only advertised once. All subsequent awards were done through a roll over. This was achieved through an arranged delay in notification of the expiration of the ongoing contracts. The GMD NNPC writes to the president seeking his approval to roll over the contracts citing lack of time to adhere to a proper procedure and the president willingly approved. In this way due process was circumvented.
It is safe to say that NNPC contracts were not subject to due process verification, The president decided on the terms. So also were winners and losers decided by president Obasanjo. In some cases, the winners were companies with dubious profiles. They won huge contracts on account of their close relationship to the president or members of his family. For example, Petrodel Resources Ltd which got one of the highest allocations of 90,000 barrels per day was initially not known to NNPC consultants based in London. On further inquiry, it was discovered to have been registered in Isle of man as a one man registered company. This fact was made known to the president by the investigative panel which he set up to probe the crude oil contracts in September, 2003. Once again, no action was taken to correct the system.
LPFO Scam Scarcity of Low Pour Fuel Oil, a cheap source of energy for the nation's industries, led to the unprecedented closure of many of them. An estimated 60% of the industries were known to have totally shut down with the remaining operating at a very low capacity. But what could have been responsible for this scarcity when some of the refineries were still producing this product, at least enough to satisfy the need of our local industries?
Once again, it is all to do with the insatiable appetite of the president and his business associates for wealth. It is the story of wickedness, lack of patriotism and greed. Towards the end of 2002, an Obasanjo business associate, who had grown weary of the president's cash demands on him, broached up an idea on how to raise funds for the 2003 presidential election campaign. If only the president would cause the NNPC to allocate large quantities of LPFO to his companies at the local price he would export and sell at international market price and contribute part of the proceeds to Obasanjo campaign fund. The president saw this as a brilliant idea and immediately instructed GMD NNPC, Mr. Gauis Obaseki to implement. About one million metric tonnes of LPFO was allocated to one of the businessman's companies at the subsidized rate of N8.20k per litre. Over 90% of this allocation was illegally exported and sold at the prevailing international market price of about S187 per tonne. The customs was evidently instructed not to record the export but this was recorded by the USA library of congress. Some other companies were similarly allocated huge quantities of this products.
A senior adviser to president Obasanjo was so incensed by this scandal, which he naively thought was not known to his principal, that he reported to him. The president faked ignorance. To demonstrate this, he summoned the GMD NNPC in the presence of the adviser and informed him about what he termed the shocking report which was just given to him by this patriot, the adviser. He instructed the GMD to verify the facts. The GMD left certainly amused by the president's con act. No further action was taken by the GMD as non was expected. The scam continued. Those of us who had knowledge of this scam were incredulous by the president's attempt to resuscitate textiles industries with a Federal Government loan of N70 billion. Perhaps it was an attempt at atonement but this failed because all the cheques issued proved dud.
OIL BLOCK ALLOCATIONS The allocation of oil blocks was preceded by the usual Obasanjo deceptive maneuvers intended to give the process some semblance of credibility. The real allocations were concluded long before the blocks were advertised. Some of the oi blocks that were allocated by previous administrations and which were found to be highly productive were revoked and reallocated to preferred bidders on the flimsiest of reasons. Over 70% of all blocks allocated by the Obasanjo administration were cornered by him and his business associates through this dubious process. LPG SCAM
If the Liquefied Petroleum Gas (LPG) popularly referred
to as cooking or domestic gas
is beyond the reach of the average Nigerian because of its exorbitant
cost, it is thanks to the nefarious
activities of the Obasanjo business clique. On the
instructions of the
president, the NNPC allocated the bulk of LPG produced
locally to a select group of
LPG marketers. Some of these marketers were allowed to use NNPC storage
facilities at concessionary rates. It is to these facilities that they
shipped their allocations and
sell at international market
price on the false claim that
the product was imported. In this
way, the price rose sharply
from N38,000 per metric tonne as at May 1999 to N98,000 in 2007. That is
to say that government
subsidy was
only enjoyed by the favoured
marketers. Such market manipulation continued to drive the prices
skyward. A tonne of
cooking gas is currently being sold for N250,000. It is
so painful to remember that a tonne of LPG sold at the subsidized rate
of
AGO The Automobile Gas Oil scam took a similar pattern to that of the LPG. The only difference being that in this case, only one company was given monopoly of marketing the product. The evidence of the rip-off could be seen in the stupendous wealth being displayed by the Executive Chairman of the company. A man of very humble means at the beginning of the Obasanjo administration soon became scandalously rich. He is currently the proud owner of many choice properties in London. He once bought a living house i for over £10 million but discovered later that it lacked parking space for his large fleet of Rolls Royces, BMWs, Porches and Mercedes. Whereupon, he decided to purchase the neighbouring house for £7 million and had it demolished so he might have adequate parking space for his cars! So close was he to President Obasanjo that he often kept him waiting for hours in the office to discuss business. He was a major contributor to Obasanjo's pet projects. In eight years, this chap has succeeded in building a business empire which has a daily turnover running into hundreds of millions of Naira all thanks to his close link with President Obasanjo. MOP UP
When Obasanjo exhausted ail tricks but failed he took it out on the defenseless NNPC treasury. Just eight days to his final exit, President Obasanjo embarked upon a contract awarding frenzy, handing out a total of N752 billion worth of it in one fell swoop, as Shakespeare would describe it. It is a measure of the fraudulent nature of these awards that the NNPC board appointed by President Obasanjo bluntly refused to ratify them. In a desperate move and as a demonstration of his personal interest in the contracts, the president responded by sacking the board. He ordered the GMD NNPC to constitute an ad-hoc committee to process and award the following contracts in a brazen violation of all rules governing such awards. a) A - 6793 for $753,287,449 to a company CAMERON b) A - 6795 for S1,790,901,102 to TECHNIP c) A - 6794 for S1 753,787,687 to SAIPEM d) A - 6797 for $969,267,000 to SEADRILL e) A -6817 for $537,000,000 to SKILL BASE
What would you say of the motive of this president who found everything wrong in the actions of his immediate predecessor in similar circumstances. How sincere would Obasanjo have been in revoking General Abdulsalam's 'hurried' contracts in the light of this racket?
POWER The provision of adequate, sustainable, accessible and affordable electric power was one of the cardinal promises of the Obasanjo's administration. This must be in recognition of the crucial role of electric power to any meaningful development in modern society. In his inaugural speech, the president pledged to ensure that power outages were brought to and end within six months. At this point Nigerians believed and had faith that Obasanjo was capable of holding himself to his pledges including this one.
The usual restructuring was started immediately with the appointment of a new NEPA management team headed by a very competent and tested administrator., Engineer Bello Sulaiman. The new team drew up an action plan aimed at the following:
a) Carry out emergency measures to forestall the imminent total nationwide black out. To achieve this, it proposed to connect any spare capacity to the national grid to boost supply. These include:
i) Ompadec - 20mw Gas Turbine ii) Alscon - 540 mw Gas Turbine in) NAFCON - 25mw Gas Turbine iv) ENRON - 270 mw Gas Turbine v) General Turbine System - 1000 mw Gas Turbine vi) Eagle Energy - 340 mw Gas Turbine vii) Swede Power - 500 mw Gas Turbine
Secondly, it planned to upgrade the system so as to achieve a total generation capacity of 8,338 mw. Their plan also envisaged the upgrading of the transmission and distribution facilities which could carry the higher power load. Both plans were estimated to cost about $3.372 billion with a completion period of 20 months barring any delays in contracts approvals, inspections, letter of credit establishment and payments.
But while Engineer Bello Sulaiman's team was diligently drawing up its plans, President Obasanjo was apparently busy perfecting plans to use the power projects to amass personal fortune. The first of the many dubious projects lined up for this purpose was the Irish Generator procurement contract. The story is that one of the President's advisers informed him of the plan of an Irish electric company to dispose off one of its generators which was 'brand new in a package'. The president was convinced as he directed the then Minister of Power and Steel, Late Chief Bola Ige. to make arrangements for its procurement. Ige would not be rushed into this action and therefore advised the president to allow for an inspection of the generator first. The president grudgingly agreed. An inspection team headed by MD NEPA was dispatched to Ireland. While the team was still in Ireland, president Obasanjo raised an appropriation memo to the National Assembly requesting its approval for the expenditure of £40 million on the purchase. A memo was also prepared for the Federal Executive Council's approval. Unfortunately for the president, the team came back with bad news. Their report indicated that the new packaged generator was extensibly cannibalized and was over 30 years old. They valued it at less than £3 million and finally advised government against its procurement at any cost. When chief Bola Ige presented the damning report to Mr. President at Abuja International Airport in the presence of MD NEPA. he flew into a rage, cursing both the Minister and his MD for what he termed as their incompetence in the handling of the power sector. He threatened to take over direct control and supervision of the organization, a threat that he made good soon after. In March 2000, only six months since it was appointed, the Bello Sulaiman management team was sacked. In a nation wide broadcast on 14th March, 2000 the president conveyed his regret that his administration which had promised an open, transparent and effective administration had apparently failed at least in the case of power supply. The president lamented the declining situation in NEPA and shamelessly blamed it on the incompetence of the 6 months old NEPA management team. He extended the period in which the epileptic power supply would end to the end of 2001. This was the first of the several extensions. A nine - member technical board was thereafter appointed to run the affairs of NEPA. The board was to assume total executive power over the affairs of NEPA and the implementation of emergency directive to rescue the dire situation. The technical board would report directly to the president. The president ended his speech with his characteristic empty boast by saying and I quote "Let me reiterate the essence of the covenant implicit in my taking oath of office: My word is my bond. If I tell you I will deliver, by the grace of God I will use everything within my power not to let you down. And so be it with NEPA/' The gullible public cheered, and the sleight of hand went undetected.
It is instructive to note that the head of the so called technical board, Mr. Liyel Imoke, the current governor of Cross River State, is a lawyer. Most of the members had no relevant technical background which clearly betrayed the president's sinister motives. The Minister of Power was rendered redundant and decided to resign. Apparently the president got wind of his plans and decided to preempt him by redeploying him to the Justice Ministry. He did not live to tell his story as he was assassinated so after. The person accused of masterminding his murder would go on to contest and win a senatorial election under the president's party, the POP, from prison, in an act akin to dancing on the grave of the dead, the president accused his friend in a veiled attack, of not knowing his left from his right. My translation is that Chief Bola Ige did not know how to assist the president to steal from the power Ministry.
The first action of the technical board was the unbundling of NEPA which was now renamed PHCN. Its greatest achievement was the appointment of Obasanjo's cronies as PHCN revenue collectors. All other power sector reforms which resulted in the unbundling of the organization have so far proven to be mere paper tigers. Faced with the embarrassing reality of the failure of this technical board the president embarked on another trick. He sacked the technical board, and appointed a new MD. In appreciation of his personal loyalty to Mr. President, the failed technical board chairman was rewarded with the appointment of minister of power. This appointment clearly conveyed the president's sinister motives. Ministry of power was now prepared for the worst form of financial profligacy. To cut the long story short, the Obasanjo power sector reforms guzzled about $16 billion but succeeded in reducing PHCN power generation from a capacity of 2600mw in May 1999 to 2300mw in 2007, afar cry from the 10.000mw promised. It is also to be noted that not a single transmission line was added to the existing ones. Both transmission and distribution systems suffered further degradation. As president Obasanjo observed of NEPA's poor performance in his 14th March, 2000 national broadcast, there has been a total collapse in the power supply system to the country on many occasions. The impact was devastating on the lives of the vast majority of Nigerians who depend on public power supply to eke out a living. By his exit on 29th May, 2007 after this huge expenditure, the only major achievement he made was to change the name of NEPA into PHCN.
Again, to borrow Obasanjo's submission there can only be one verdict: Obasanjo's power sector reforms have failed and failed woefully. Left behind after eight years of experimentation with inept policies, mismanagement and misappropriation are mere monuments of waste and fraud. The most obvious are the National Independent Power Projects NIPP, projects which need elaboration.
NIPP PROJECTS. These are new thermal stations started in 2006 at virgin sites. The seven stations were expected to add 2560mw to the generation system. And to quote the cerebral This Day columnist, Ms. Ijeoma Nwogwugwu, "when Obasanjo's government conceptualized and proceeded to blow money on the NIPP, it promised to generate 1Q,OOOmw of electricity. Unfortunately, when NIPP was conceived no thoughtful planning was put into the process. No feasibility studies were carried out, procurement fell short of best practices and project management was non existent. More significantly, a key component of the integrated programme - the NNPC and its gas subsidiary, Nigerian Gas Company - that required to supply the critical feed stock needed to power the new plants was completely left out. It was as if the NIPP was set to fail".
But in actual fact, the Obasanjo administration planned the NIPP project and succeeded in achieving its principal aim, which was to enrich the president and his business associates through those dubious contracts. No one could fail to realize the non-viability of the NIPP projects in view of the epileptic supply of Gas from the crisis ridden Niger Delta. If not for selfish interests, why would the government pay fully for the supply of turbines when civil works had not commenced in most of the sites. The civil works will take at least two years to complete. In the meantime, the turbines are wasting at the ports. Some of them may never reach their destinations due to lack of accessibility to the sites. Why did the government not consider repairing the many existing unserviceable thermal stations and their expansion? Why were the repairs and expansion of the Hydro-stations not considered? The only explanation is that the NIPP contracts were comparatively more lucrative. It was all about personal interest and wickedness. After an expenditure of over $3bi lion, the NIPPs will almost certainly turn out to be mere white elephant projects. The nation has once again been duped by a man who claims to have direct communication link to God Almighty. The federal Government must review the NIPP contracts just as it must review the Gurara and Mambilla hydro contracts awarded about a week to Obasanjo:s departure.
WATER RESOURCES The plan of the Obasanjo's Administration to deploy huge resources for the provision of drinking water and irrigation was welcomed by Nigerians. Over N400 billion was spent on the various water resources projects in the eight years of Obasanjo administration. Unfortunately less than 20% of such projects were completed. Federal Government may wish to probe the Gurara to lower Usuma Dam water transfer project and the Azare water scheme to have an idea of the fraudulent nature of the ministry's contracts. It will interest Nigerians to know that Obasanjo Holdings company, the former president's company, was a major player in the ministry's projects. For example most of the borehoe hand pumps used by the Ministry's borehole contractors were supplied by Obasanjo Holdings. The collection point was Obasanjo's farm in Ota.
WORKS AND HOUSING In his first year alone, Obasanjo released over N300 billion for the emergency rehabilitation of roads. It was estimated that well over N900 billion was spent on road projects by the end of his administration in May 2007 with very insignificant improvement in the state of our roads. Obasanjo himself had cause to express dissatisfaction with the performance of the works ministry. So, what happened to all the money. Why will Nigerians be satisfied with Obasanjo's hypocritical expression of dissatisfaction when, given his antecedents, we know that he is the main beneficiary of this scam".
TRANSPORT On the corruption index, this Ministry ranks third after the Petroleum and Power ministries. A probe of the parastatals under this ministry, particularly the Nigerian Ports Authority, Railways and Aviation will clearly demonstrate this. NPA. The Federal Government may wish to look into the report of the investigation panel that probed the Bode George - led Board of the NPA. It will be recalled that the report was submitted directly to president Obasanjo. !t is said to have contained revelations of contract scam, on the basis of which the president fired the board. Further investigations were ordered by the president in reaction to public outcry. The EFCC which was charged with the investigation presented a damming report to the president who threw it back to the anticorruption agency on the ground that its findings were not specific in identifying the real culprits. The EFCC Chairman was forced to publicly exonerate the NPA Board Chairman on the pretext that he could not be held accountable since he had no executive powers over NPA. This is as if the EFCC Chairman was ignorant of the superior powers of the- board to those of the management in contract award. In this way the president's sacred bull. Chief Bode George and the other members of the NPA Board escaped sanctions, it is reported that over N60 billion was lost to NPA contract scam. In a show of gratitude to his mentor Chief Bode George remains the most zealous defender of the Obasanjo purposeless and evil regime.
Under Obasanjo administration the NPA became very
notorious in the seizure of private
jetties from legal owners and
transferring
then; to the president's business cronies on very
frivolous
charges
of non conformity with
contract provisions. The case
of Dantata Holdings limited
jetty is an example. The jetty site was leased to
this company in the late
1970s. With the permission of NPA the company
invested over
AVIATION
The
neglect faced by this industry
resulted in the high incidence of plane crashes
which occurred between 1999
and 2006 with heavy loss of lives. To add to the nation's pain
President
Obasanjo decided to capitalize
on the aviation mishaps to
enrich himself and his cronies. After the Bellview plane crash in 2006
which claimed over 100 lives including that of the Sultan of Sokoto, the
president saw an opportunity
to reward his most overzealous defender, Femi Fani Kayode. He appointed
him the minister of
aviation in a cabinet
reshuffle. He handed over the sum of
RAILWAYS. The Obasanjo administration embarked on the modernization of the nation's rail system to the standard gauge. It is of course the right thing to do to ease the problem of land transportation in a large country like Nigeria. The plan was a welcome development to most Nigerians. The feasibility of the project was enhanced by the huge oil revenue that accrued to the government due to the astronomical rise in oil prices. But as in the power sector, that opportunity was lost to Obasanjo's fraudulent motives. Two highly inflated contracts were signed with a Chinese firm CCECC for the construction of the Lagos -Kano standard gauge lines at the cost of $8.3 billion and the Maiduguri - Port Harcourt line at the cost of $9 billion. The projects were to be financed with a so called concessionary loan of $1.28 billion from China and illegal deductions from the Federation account. The Obasanjo administration has hurriedly released the sum of $250 million to the contractor before the take off of the project. The Federal Government must probe the contract pricing, procedure of award and the wisdom of financing the project with a non concessionary loan when the nation is said to have over $50 billion in its foreign reserve.
PRIVATISITAION This is one of the core elements of the economic structural adjustment programme started by the General Ibrahim Babangida administration in 1986 and for which it faced strident opposition for what critics condemned as Babangida's ploy to transfer public assets to his business friends. General Obasanjo was prominent among those opposed to SAP and missed no opportunity to voice his opposition to the programme. It therefore came as a great surprise to many observers to witness Obasanjo's total conversion to the SAP ideology. The much vaunted Obasanjo Economic Reforms for which he was given undue credit for originating are the same as the SAP policies started by president Babangida. Under the so called Obasanjo Economic Reforms, privatization was conducted in an accelerated and opaque manner. The motive was soon discovered to be selfish. At the end of the day, this programme succeeded in doing exactly what Obasanjo and his fellow critics
accused president Babangida of attempting to do. Public assets were sold at ridiculously low prices to Obasanjo, members of his family and business associates, i will use a few examples to prove the point.
COMMUNICATIONS. The worldwide revolution in the communication technology which resulted in huge improvements in communication particularly in the GSM system was a feature that the Obasanjo administration stumbled on by sheer accident for which it received undue credit as the author of the event in Nigeria. The establishment of the GSM communication system had reached advance stage before the advent of the Obasanjo administration. Credit is however due to his government for accelerating the process. Licences were issued to companies to operate some of the most exploitative and inefficient GSM services any where in the world. In appreciation of the very lucrative business potential of the telecommunications industry, president Obasanjo and his business friends planned a systematic scheme to take over total control of the country's telecommunication industry through the acquisition of the National telecomm carrier, NITEL. To buy it cheap, a strategy had to be put in place to devalue the assets of the parastatal and convey the impression of its non viability to the general public.
It was with that aim that the Pentascope management contract was signed. This contract required the company to roll out 600,000 fixed lines above NITEL's estimated 500,000 functioning fixed lines then. It was also to put on service additional one million GSM lines above the 118,000 lines within the three year period. Pentascope was also expected to improve the operational efficiency of NITEL to achieve 95% call completion rate while faults per 100 lines were to be reduced to 50. None of these contractual obligations was achieved by Pentascope due in part to its lack of technical expertise and also its fraudulent background. It comes as a rude shock to Nigerians to discover that Pentascope address was traced to an abandoned Church building in Holland. When the contract was finally terminated
after just one year of mismanagement, Pentascope was discovered to have fritted away over N60 billion of NITEL's funds and saddled the organisation with a debt burden of N10 billion.
This appeared to be the milestone they wanted to reach. Not long after, the government handed over NITEL/MTEL to TRANSCORP a company in which the president has substantial shares. To do so another trick was devised. A mock bidding was conducted in which an Egyptian telecommunication company, ORASCOM, emerged the winner with a price of $280 million. The president made the right noise in condemning the very low price offered. The motive of this exercise was not lost on Nigerians which was to undervalue NITEL/MTEL so that it could be sold below value to the president's company. TRANSCORP offered and was sold 51% shares at S750 million as against an earlier offer of $1.3 billion by IILL. Even at this low price, TRANSCORP couldn't fulfill its contractual obligations because president Obasanjors promises to assist the company in other areas to raise the funds did not materialize as he was hurriedly forced to relinquish power. Had he succeeded in getting a third term through the attempted constitutional amendment, TRANSCORP would have taken NITEL free of charge. TRANSCORP now is a majority share holder of NITEL/MTEL as well as NICON HILTON HOTEL and a number of oil blocks.
STEEL INDUSTRY. If any justification is needed to support the privatization of public enterprises on account of their failure to justify the huge investments in them, such can be found in Nigeria's Steel Industry. Billions of Dollars have so far been invested in this enterprise with very poor results. The decision to handover the management of Ajaokuta Steel company and National Iron Ore manufacturing company and sell off Delta Steel company and the various rolling mills was welcomed by the general public. Unfortunately, both the management concessions and the sale were characterized by fraud.
First it was the Ajaokuta Steel Mill that was concessioned out through a management contract to an obscure company, SOLGAS. Despite its inability to meet most of the contractual requirements the National Council on Privatization NCR went ahead to sign the agreement under orders from president Obasanjo who introduced the chairman of the company. After about two years of dismal performance the Federal Government was forced to unilaterally .terminate the contract, for which SOLGAS instituted legal action against the government in a London court demanding damages worth billions of dollars.
The Ajaokuta management contract was handed over to Global Infrastructure Holdings Ltd (GIHL) in August 2004. This arrangement was based on initial management but later to be converted to share sale and purchase agreement. GIHL is a company owned by Indian Investors. Although it specializes in steel production it had no intention of engaging in any serious steel production business in Nigeria. This can be discerned from its method of entry into Nigerias Steel business and its subsequent conduct. The chairman of the company Mr. Mittel was introduced to Obasanjo by one of the president's sons. He convinced the president that he could resuscitate Nigeria's steel industry and cause it to work on the following terms.
a) The sale of Delta Steel company to GIHL - incidentally the sale of the company had virtually been concluded with a Nigerian company BUA emerging as the winner at the final bid price of $20.5 million - Mr. Mittel offered $30 million. b) With the purchase of Delta Steel company GIHL would be given the management contract of both Ajaokuta Steel company and Nigeria Iron Ore manufacturing company at Itakpe (NIOMCO) c) Concession of NPA port facility at Warri for the exclusive use by GIHL.
All these terms were met by the Federal Government. NCR was instructed to ask BUA to stand down and sell Delta Steel company to GIHL. Both the Ajaokuta Steel company and NIOMCO at Itakpe were handed over to GIHL on management contract basis. The Federal Government decided to make GIHL business environment more conducive. Julius Berger was given the contract for the construction of a 25km rail line between Agbarbo to Delta Steel jetty and Warri port. The contract was to be completed by April 2007 just before Obasanjo's departure. A contract was also awarded for the dredging of parts of Warri river and removal of oil pipelines to create lanes for the movement of goods by GIHL. This clearly indicates president Obasanjo's personal interest in the business.
GIHL went to work on both Ajaokuta Steel company and NIOMCO. It started the massive stripping of the steel company. Major components were carted to its Delta steel company site. The French contractors at Ajaokuta found it necessary to report the nefarious activities of GIHL to the presidency without any reaction. Worker's protest were silenced by the use of the police and the settlement of some of the senior staff. Iron Ore worth over N15 billion was also stolen and exported out of the country.
It will also interest Nigerians to know that GIHL did not bring in any investment fund into the country, Instead, it engaged in huge borrowing from Nigerian Banks, using Ajaokuta assets as collateral. Presently, it has a debt burden of about N24 billion which it claims to have invested in the development of Ajaokuta. Its total investment in Ajaokuta is put at $250 million just $50 million short of the current value of Ajaokuta, mutually fixed by GIHL and Obasanjo's government. It is very clear that GIHL had planned with the total conspiracy of the Obasanjo's administration to take over Ajaokuta Steel company free of charge. It is note worthy that 90% of the borrowed capital was repatriated by GIHL.
As things stand, Ajaokuta steel company has been severely degraded to the extent that its economic viability is in doubt. The company is mortgaged to Nigerian Banks. Workers salaries and allowances are in arrears running into billions of naira. It is not clear whether GIHL has fully paid for Delta Steel company. Who authorized the evacuation of the Iron Ore from N1OMCO site at Itakpe and on what terms'? What is certain is that Nigeria's steel industry is finally dead.
The Federal Government must immediately terminate the management agreement with GIHL and sell off the steel companies' scraps and sites.
ALSCON, The Aluminium Smelter Company at Ikot Abasi was sold to a Russian company RUSAL at less than half the price offered by an American company BFI. The only reason for this was the persona! interest of the Obasanjo family. Nigeria lost about $230 million in this deal. The concessions extended to RUSAL after the sale amount to handing over the smelter for free.
REFINERIES The Obasanjo administration promised to ensure the speedy restoration of our ailing refineries for which about $1 billion was released. There is still no evidence to suggest that the funds were properly utilized. Instead, the refining capacity of those facilities worsened. With this failure, the Federal Government decided to privatize them. Of course it was to the Obasanjo company TRANSCORP that the refineries were sold. To improve the viability of the refineries, the president decided to wickedly increase the price of fuel a few days before his exit from the presidency to his business empire.
EXTERNAL DEBT SETTLEMENT Heavy debt burden has been the bane of third world development. In fact debt has been a veritable tool with which western powers have retained political influence and control over the third world since the end of the colonial era. As the Japanese had observed in the late 19th century any country that aims to remain independent and embark on meaningful development must free itself from foreign indebtedness. Therefore, the decision by the Obasanjo administration to free Nigeria from this imperialist yoke was hailed as a most patriotic act and highly desirable. Government apologists characterized the decision as the second independence of Nigeria.
But as in all Obasanjo patriotic acts dressed in messianic garb, this was motivated by the president's personal interest. How can (One interpret the decision to handover about $17 billion (N2.5 Million) to our external creditors while Government internal debts of about N2 trillion remain unpaid. How can any serious Government settle such unverified debts while its country's infrastructure is collapsing. Where is the wisdom of this settlement while signing new non-concessionary external loans'?
The answer could be found in president Obasanjo's desire to impress our western creditors so as to secure their support for his self perpetuation in office. Despite the opposition of some of the western countries the plot would have materialized but for the patriotic stand against it by majority members of the National Assembly and civil society groups. There is also the desire for pecuniary gain. It has been discovered that the sum of $121,022,881.89 was mysteriously paid as commission. This irregularity was queried by the RMFAC as being too exorbitant considering the debt management office consultants' charges of 5110.000 per month. So going by this estimate, a maximum of $600,000 fee was payable for the six months duration of the transaction. The RMFAC was of the opinion that our creditors should have been responsible for the fees. This is only part of the story of the financial scam in the external debt settlement. Further investigation may expose more.
CONCESSIONS AND DUTY WAIVERS So callous had president Obasanjo become in his resolve to transfer as much public assets as he could lay his hands on to his business associates that he ordered huge wavers in import taxes to their companies. Ministry of finance was directed by the presidency to issue duty waivers. Generous concessions were also extended to such companies. Such preferential treatment enabled those companies to drive out competitors by charging much lower prices for their goods. Those competitors who stubbornly tried to remain were hounded out by the use of the Federal Government's anticorruption and security agencies. The deportation of the Vaswanis and investigation of Chief Mike Adenuga attest to this.
PRESIDENTIAL LIBRARY President Obasanjo's strange appetite for wealth became so insatiable that he exploited every avenue to enrich himself. His persona! library project was aimed at extorting money from Federal Government contractors and public institutions. The library project is yet to take off almost three years after N7 billion was collected in a most scandalous and unconstitutional act of extortion by a serving president. It is note worthy that one of the most generous donors Chief Mike Adenuga was arrested so soon after the event on charges of fraudulent business conduct. It was thought that the president would return his donation or keep as exhibit in the chiefs trial but greed would not allow Obasanjo to take this honorable decision. In the meantime the indigent presidential candidate in 1999 has built himself a befitting palace at his Ota farm. He is also building a five star hotel in Abeokuta. Many are wondering whether these are annexes to the library.
Police Equipment
Fund:
The decision to set up the police Equipment fund (PEF)
was in line with the president's plan to use good public causes to
enrich himself and members of his extended
family. The PEF started as a
presidential committee on
police equipment in 2006. Funds were
initially sourced from local governments and federal government
contracts.
OBASANJO'S GAINS AND THE NATION'S LOSS The inauguration of Obasanjo as the president of Nigeria on May 29, 1999 was hailed as the coming of a messiah by most Nigerians. And why not. General Chief Mathew Okikiola Aremu Obasanjo enjoyed what amounted to a mythical image which portrayed him as a nationalist, the only civil war hero and a great achiever. He was the most trusted former military head of state who voluntarily relinquished power by handing it over to an elected civilian administration. He was a southerner trusted by northerners, a Christian trusted by Muslims and a soldier trusted by civilians. A former Nigerian leader admired and respected by the international community. In retirement Obasanjo became the conscience of the nation on account of his enviable service record, his sharp and fearless criticisms of all his successors who in most cases showed such servile deference to this maestro for their self preservation in office.
Who else was better qualified to pull this nation back from the precipice where years of mismanagement had pushed it. Obasanjo's election was perceived as a divine rescue act for this lost nation. Obasanjo missed no opportunity to remind us of his divine inspiration and sometime operated a system akin to theocracy. The letter I addressed to president Obasanjo in January 2004 titled "The Devil is it Mr. President" was aimed at checking this irritating blasphemous claims by a president who was definitely not in tune with the Lord. The nation soon discovered to its deep regret that it was saddled with a false messiah. A man who belongs to those people mentioned in the Bible as "these people who come near to me with their mouth and honour me with their lips, but their hearts are far from me. Their worship of me is made up of rules taught by men".
All the promises in his May 29 1999 inaugural speech have been observed in the breach. It is said that Nigeria earned more revenue in Obasanjo's eight year reign than all the remaining period of its existence since amalgamation in 1914. In spite of this none of his 18 point agenda has been successfully completed. The only evidence of this stupendous national wealth is the presence of a few bunch of billionaires created by the Obasanjo's economic reform policies. Those who rose from rags to scandalous riches through cronyism. It was through a business environment which enabled them to steal public assets, win contracts without recourse to due process and evade payment of taxes.
The evidence is also seen in Obasanjo's metamorphosis from a near bankrupt farmer to the richest African living or dead and one of the richest persons in the world with an estimated personal fortune of over S20 billion, a far cry from the N20)000 he declared on the eve of his first election in 1999. To verify the above claims Nigerians should consider the following assets owned by the former president.
As far as the country is concerned president Obasanjo's eight year malevolent dictatorship has resulted in its near collapse. His personal gain and those of his cronies have thrown the nation into socio economic and political mess. Nigeria bequeathed to the Yar'adua administration can be defined as a failed state. Obasanjo's conquest, as it were, has had the following negative impact. ECONOMIC IMPACT. All the huge investments intended to create a conducive environment for meaningful development have been mismanaged and wasted. Nigeria's infrastructure have been further degraded. Over $16 billion invested in the power sector has resulted in decreasing its generation capacity from 2600mw in May 1999 to 2300mw in May 2007. Both transmission and distribution have also suffered similar decline. Our transport infrastructure has also worsened, Such infrastructure decay continues to militate against the growth of the real sector. For example over 60% of our industries have been forced to shut down with the remaining operating below 45% installed capacity. Inflation rate has been galloping at an annual rate of over 20% in the eight years. We can only speak of employment in the crime industry. Our educational system is facing imminent collapse due to the administration's failure to adequately invest in the sector. Less than 10% of the total annual budget has been allocated to this sector in eight years, far less than the 26% recommended by UNESCO. There is also serious decline in private sector investment in education which drives the elite to seek alternatives abroad including places like Malaysia, Ghana. Togo and Benin republic.
SOCIAL IMPACT This economic decline has led to serious social dislocations. The purported restructuring of the economy has thrown many people out of work. Over 70% of Nigerians have fallen below the poverty line i.e. earning less than $1 a day just as Obasanjo bragged about creating more billionaires than all past governments put together. Under such condition crime rate has risen sharply. There has been serious escalations of violence in the Niger Delta. Inter ethnic and religious violence have claimed tens of thousands of lives and displaced many more.
Corruption had reached its zenith with the Obasanjo presidency serving as the role model for Governors and other senior public servants. The Nigerian civil service has never been as corrupt. It is safe to say that Nigeria has been gripped by a state of anomie. It has descended into the Hobbesian state where life is solitary, nasty, poor, bruitish and short.
POLITICAL IMPACT One of the true tests of democracy is the level of observance of the rule of law by its operators. Unfortunately, Obasanjo showed total disregard to this guiding principle. He refused to recognize or respect the separation of powers between the three arms of government, He, as the president and chief executive, usurped the powers of both the legislative and judicial arms. He defied the courts by refusing to accept and implement their judgments. He treated the legislature as an appendage of the executive. He exercised full oversight function on the legislature to the extent of deciding its leadership.
We cannot talk of the existence of democracy when the freedom of choice through the regular conduct of free and fair election is absent. Most elections under Obasanjo's eight year rule were characterized by fraud and rigging. It is a measure of the perversion of our electoral system under Obasanjo that the elections of seven state governors, eighty six members of state and national assemblies including that of the Senate president have so far been overturned by election tribunals and appeal courts. The worst act of subversion occurred when president Obasanjo attempted to have the constitution amended so as to perpetuate himself in office. Most of those patriotic and courageous legislators who voted against that amendment were prevented from being re-elected either through illegal disqualification or rigging. This has deprived the nation of the services of some of the most distinguished and honourable politicians. It has also stunted the growth of our democracy.
CONCLUSION An investigation and documentation of the excesses of the Obasanjo administration appears to be in the best interest of the Yar'adua government, president Obasanjo and Nigerians in general. The Yar'adua administration stands to gain greater legitimacy by distinguishing itself from the Obasanjo administration and charting a new course. It will also provide it with justification for reversing some of the bad policies of that administration, saving it from the accusation of witch hunt and betrayal. A probe will give a clearer picture of the serious damage inflicted on the nation by Obasanjo's misrule. It will also cause Nigerians to appreciate the onerous task of cleaning up the mess.
A probe will also give president Obasanjo the opportunity to redeem himself. Whether the former president knows it or not, whether he acknowledges it or not the general perception is that he is guilty of monumental acts of financial and economic crimes which have made him the richest African living or dead. Obasanjo has betrayed the trust of Nigerians and he is not
trusted even if he still refers to himself as the Chairman Board of Trustees of the ruling party. Rather than work to change the pariah status of Nigeria in the comity of nations, as he promised at the beginning of his administration in 1999, he is now a pariah himself among his former friends both at home and abroad. His many acts of impropriety have punctured his claim to piety. What does it benefit Obasanjo that he sits atop these stolen riches while majority of his former subjects go to bed hungry having no access to good drinking water, health care and education. There is no better way for this administration and the nation to show gratitude to president Obasanjo than to avail him with the opportunity to redeem himself through a probe.
Before this happens I will advise the former president to avoid the limelight. His current struggle to remain politically relevant while still bearing the corruption cross is akin to dancing naked at the village square. He should be content with enjoying his ill-gotten wealth in this land which he has laid waste till such time when he is called to account either by a temporal power or the good Lord whom I have always known Chief Obasanjo misunderstood.
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