The Looting Of Nigeria By Moses George

The activities of the Bureau of Public Enterprises (BPE) on the privatization and commercialization of federal government owned public enterprises in Nigeria from 1999 to date were opened up with the inauguration of a seven-man ad-hoc probe committee headed by Senator Ahmed Lawan (ANPP, Yobe North). Other members of the committee were Senators  Babafemi Ojudu (ACN, Ekiti), Alli Ndume (PDP, Borno), Philip Aduda (PDP, FCT), Infeayi Okowa (PDP, Delta), Hope Uzodima (PDP, Imo) and Mohammed Magoro  (PDP, Kebbi).
               The whole scenario started sequel to a motion sponsored by Senator Ahmad Ibrahim Lawan (ANPP, Yobe North) and adopted by the Senate pursuant to its resolution No. S/Res/004/01/11 passed on 19th July, 2011. Senator Lawan and 25 other senators had sought to open a comprehensive investigation of the privatization and commercialization of government companies undertaken by BPE since 2000. Lawan had argued that privatized or commercialized government companies had failed with huge consequences on the nations economy.
         Privatization is a phenomenon that is a necessary concomitant to the principle of liberalization. What this involves is the transfer of control in terms of ownership and management from the government to private investors. The principle of privatization has come to be embraced as a way of eliminating inefficiency in the public enterprises sector. The phenomenon gained worldwide support following the privatization of British Telecom in 1984 under the Telecommunications Act. Several other privatizations took place in that country. Soon,  other countries, particularly, in Africa embarked on the practice.
               Nigeria was not left out of the frenzy as it  embraced privatization as a cardinal principle of the state’s economic policy. Since the oil boom years in the 1970s, Nigeria has developed a large public sector investing over100 billion dollars from that period to 2005 and getting as meager 0.5 percent annually as returns.  Unfortunately, as the years rolled by, these establishments suffered recession. As a result of this, in 1988, the federal Military Government under a programme of privatisation and commercialization embarked on a major reform of its public enterprises.
                 Privatization was formally introduced in Nigeria by the Privatization and Commercialization Act of 1988, which later set up the Technical Committee on Privatization and Commercialization (TCPC) chaired by Dr. Hamza Zayyad (who died on March 12, 2002)  with a mandate to privatize 111 public enterprises and commercialize 34 others. In 1993, having privatized 88 out of the 111 enterprises listed in the decree, the TCPC concluded its assignment and submitted a final report. Based on the recommendation of the TCPC, the Federal Military Government promulgated the Bureau for Public Enterprises Act of 1993, which repealed the 1988 Act and set up the Bureau for Public Enterprises (BPE) to implement the privatization program in Nigeria.
      In 1999, the Federal Government enacted the Public Enterprise (Privatization and Commercialization) Act, which created the National Council on Privatization chaired by the Vice President, Alhaji Atiku Abubakar.
         A Decree promulgated in July 1988 specified a total of 110 enterprises to be privatized and another 35 to be wholly or partially commercialized. Before that Decree came into being, a total of 36 public enterprises were privatized through public offers in the privatization exercise that took place then. Among them are the four biggest banks in Nigeria which were formerly under government control and ownership.
                  However, investigations conducted by National Mail has revealed facts that the Nigeria’s Privatization and Commercializations programme, from 1999 by the Bureau of Public Enterprises, has  some rather serious issues that undermined the scheme. The ongoing privatisation process in the country, has  certainly not attained the expectations of Nigerians. It is disheartening that some companies that had been privatized for over 10 years have not been working as almost all of them are moribund .
        Vice president  Namadi Sambo – who heads the National Council on Privatization, said 80 per cent of sold government companies have failed. He attributed this ugly trend to lapses in the privatisation process.  Senator Abdul Ningi from Bauchi state, on the other hand, described the whole process as the biggest fraud the nation has witnessed.
      It is pathetic to know that from 1970 to 1999, the Federal government invested over $100 billion in building enterprises, but earned only 0.5% return on its investments. These companies were costing the government a whopping N265 billion annually to maintain. While a total of 146 billion was realized from the  sales of over 122 privatized companies under review. That is more than a hundred times their market value.
         One of the major impediments against the initiative, is the issue of high profile  impropriety of directors and management of the privatisation scheme, in collaboration with highly placed personalities in the society.  
          With the facts emerging  from the sales and concessions of public enterprises, compared with their actual value and collateral investment made by years of public funding, one has no doubt to the fact that  Nigeria has  indeed been pillaged  by unscrupulous elements for far too long.  
                 The Nigerian public have been taken for a ride in the whole  scheme as politicians connived with wealthy businessmen both at home and abroad to loot the nation’s common wealth in the name of privatization.
     The privatization process, according to the former Director General of the Bureau of Public Enterprises, Dr. Julius Bala, lacked transparency and accountability between 1999 and 2003.
            Accusing fingers are being pointed at different directions as Nigeria  makes efforts to get to the root of the matter. Without any doubt, the entire process was infested with high profile corruption involving the BPE executives on one hand, top government functionaries and businessmen on the other hand.
          A former Deputy Director of the Bureau of Public Enterprises, Mr. Charles Osuji, was said to have collected bribe from Globalcom Chairman, Mike Adenuga for Mallam Nasir El-Rufai, after the sale of National Oil. Osuji, who was   eventually dismissal from the BPE by Rl-Rufai claimed that his boss actually directed him to get the undisclosed sum from Adenuga.
       In his reaction, Mallam Nasiru El-Rufai admitted that Osuji first brought a N25m Zenith Bank cheque to him.    He said after he ordered Osuji to return the money to Adenuga, who had already acquired National Oil, Osuji subsequently returned with $100,000 cash which he did not accept. El-Rufai further claimed to have reported the matter to Alhaji Atiku Abubakar, who as Vice President was the Chairman of the National Council on Privatization, and also to the then Attorney General, late Bola Ige. Both of them ordered that Osuji should be prosecuted. But he said that he couldn’t  prosecuted Osuji because Ige died shortly after that, but the NCP directed that he should be dismissed.
      The Ajaokuta Steel Plant is the largest integrated steel complex in black Africa. The steel complex, built by a Russian firm, was Inaugurated on September 16, 1979.  The complex was initially expected to produce 1.5m tones of long steel products per annum. Its capacity was, however, expanded to between 3.6m and 6m tonnes.
       Obviously from all indications, the steel company has not met its objectives. To turn around the company and make it attain its production capacity, the Federal Government decided to invite investors to run the place profitably.
.                  Some corrupt  Nigerian businessmen saw an ‘opportunity’ and brought in  Indian investors as fronts. A concession agreement  was hurriedly put in place in May 2007.The Indian firm, Global Infrastructures Limited paid about $300m for a steel complex that was valued at  about $5billion.
              According to the Minister of mines and steel development, Architect Mohammed Musa Sada, former President Olusegun Obasanjo was the one who approved the concession of the Ajaokuta Steel Complex to Global Infrastructure Limited against due process.
            Cases of corrupt  Indian businessmen  kept coming up every now and then. These class of entrepreneurs come to Nigeria with nothing, but their briefcases. Their equally corrupt Nigerian partners lead them to our banks to take loans and use our assets as collaterals.
                      It is only in Nigeria that such is practiced. In other countries where there has been privatization, an investor  brings in capital to refuel the economy. But that is not what they do here. This practice  has made Nigeria vulnerable to corrupt foreign investors  who collaborate with their Nigerians partners to steal billion of dollars and ferry them to be lodged in foreign accounts leaving the nation dry and broke.
           The federal government spends  N3.6 billion annually on the wages a the moribund Ajaokuta Steel Complex, that is about N300 million monthly, while only N650 million is required to bring the company up to a production level where it can generate enough funds to sustain itself.
            Investigations revealed that the concession of the company to  Global Infrastructure Limited  was an arrangement of some corrupt Nigeria to to use the gigantic project as a vehicle to steal public funds. This becomes even more glaring against the background of the fact that the Indian firm lack the technical capacity to manage the complex.
          The   firm had to had re engage about 50 Russians and Ukrainian experts, who built it. As if that is not enough, the Indian company has reportedly stripped the complex  of all valuable equipments and machineries. Alarmed, he federal government decided to the cancel the deal.
             Former President Olusegun Obasanjo  reportedly  breached due process in the sale of some public assets, especially, the multi- billion dollars Ajaokuta Steel complex. The former Director General of the Bureau of Public Enterprises, Nasir El-Rufai. Mallam El-Rufai who supervised the privatization of 23 of the 122 enterprises that have been privatized to date (about 18% of the total), accused the former president of overbearing interference. He said that he repeatedly disagreed with Obasanjo when he made moves to dictate to him. He said he also disagreed with Atiku Abubakar when he (Rufai) insisted that the laws must be followed, even as he said that former President Obasanjo also blocked the successful privatization of Nigeria Airways following the stories he received from former Minister of Aviation, Chief Kema Chikwe.
          Another public enterprise that has suffered similar fate is the  Aluminum Smelter Company at Ikot Abasi in Akwa Ibom State. The company which was worth $3.2 billion was auctioned to a Russian Company for $250 million. Curiously, the Russian  firm was asked to pay only $130 million. The balance of $120 million to  was said be used to dredge the Imo River for the company to ferry its equipments. Up till the time of writing this report, work on that project is yet to commence many years after the ‘sale’. where did all that money go ?
     The case of the risk giant NICON, reportedly acquired illegally by businessman Jimoh Ibrahim’s Global Fleet at over N18 billion is worrisome. Curiously, even the 5 per cent equity holding of the federal government was sold in  that deal thereby contravening the Public Enterprise Act 1999.
        The brazenly fraudulent manner in which the National Insurance Corporation of Nigeria (NICON) was sold, and the asset-stripping that followed should  stir every responsible government towards taking concrete legal actions against those involved.
          But Barrister Ibrahim   dismissed this allegation, saying he injected N17.5 billion and met no money in NICON’s account when he acquired the company.
        However, allegations by KPMG and Assurance Acquisition Limited (AAL) disclosed that the Global Fleet chief used forged documents to acquire. It claimed that Ibrahim withdrew 20 million pounds from NICON’s foreign account in London and stripped the company of N6.37 billion.
      The funds were categorized into; Investment in NICON Investment Limited, N2.484 billion proceeds from closure of HSBC Bank 1-Day call and Euro currency accounts, N1.739 billion, balance in the Oceanic Bank Plc domiciliary Account, N1.623 billion, investment in NICON Airways Limited, N350 million. Expenses incurred on behalf of NICON Airways Limited, N192 million; erstwhile GMD’s drawings, N12.9 million; expenses incurred on behalf of NICON properties Ltd, N12.5 million; expenses incurred on behalf of NICON investment Ltd, N10.2 million and liquidation of placement with NICON Investment Ltd, N51 million.
          
        These revelations and many more that are unfolding paint a grim picture of the reality of the corruption among politicians and public office holders in Nigeria. The question is: what can be done about it? Does the government of President Jonathan possess the political will, to deal with this national tragedy?
       The probe by the Senate is timely because it is shedding some light into the massive pillage of Nigeria’s national patrimony by officials that were sworn to protect it.
         It is also suggestive that it is time the government revisited the argument that the private sector does better in the management of utilities and businesses. Argument for this review is strengthened against the backdrop of the inability of practically all those who benefitted from the auction of various government companies have failed to  make any one of them successful. The extent of collusion between those in  positions of authority and a band of well-connected speculators in shattering the prospect of having a veritable private sector that can support growth and development is astonishing.
         Nigeria is witnessing a situation where its common wealth has fallen into the hands of privileged few who are gradually establishing a strong economic base that may that  could bring the entire nation on its knees before them..
    According to Dr Harold Chukwuma, a public comensator,  “ we know these people. We even fondly call them the new kids on the block. It is this same guys that are being used by our politicians to loot this country. Now that we now what transpired, relevant government agency should go after  them  and  get all that they have stolen back. Concerning the Senate probe panel, I wish that for the first time         something tangible should emerge from this probe by the Senate in order to send the right signals to those who may wish to take the nation for such a nasty ride in the future. It is also important that such inquiry is extended to other sectors of the economy with a view to recovering the enormous looting that some privileged members of the society have perpetrated against Nigeria. Those who stole the nation’s wealth must be shamed in public”.
            As  Nigerians wait to see appropriate action taken  against those who  created financial empires with stolen money, this administration should demonstrate some muscle in dealing with these issues. Nigeria should be a sacred cow and any person who connived to steal its wealth should not be spared.

 

 

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About newsmailonline
Moses George is a versatile journalist/prolific writer.His career as a journalist dates back to over 10 years. During this period, he has worked for several media organizations across the country. His reports and writings serve as references to credible newspapers, magazines and web sites. His passion for investigative journalism has revealed dark secrets involving high level corruption in both the private and public sectors.He covers high profile events for corporate organizations and individuals. Moses George is the Editor-in Chief of National Mail, a general interest magazine that circulates across Nigeria. He is also the Editor of News Mail, an online publication that features people, events and issues. George can be reached on 234 080 6672 2600 or at nationalmailonline @yahoo.com

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