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Etubom Anthony Ani, former Minister of Finance and Minister of Foreign Affairs during the administration of General Sani Abacha speaks to the editorial team of TheEconomy comprising Chris Ajaero, Dike Onwuamaeze, Pita Ochai and Michael Otogo on the alleged  Abacha loot, the privatisation policy, why the Ajaokuta Steel Mill has remained a drain pipe, and how to restructure the Nigerian Stock Exchange to avoid its collapse. Excerpts:

How is life after public service?

Well, it has been very wonderful. Don’t forget I have also retired several times. I was first of all practising as a chartered accountant. I led one of the biggest chartered accounting firms south of the Sahara and I retired in 1992 at the age of 55 to give opportunity to the younger ones. And then I went into politics.  In 1993 I became a minister till 1998 when Abacha died and I had to go back, not necessarily to my profession, but to find something else to do. So, I have been in another type of business – quarrying and mining, which is quite different from politics. So, I have been busy but not as I used to.   I am very happy to be a free man and to talk to you.

 How are you getting on with the business of quarrying?

I have never been into quarrying or mining. I just wanted something different and decided to explore how things are done in that area. I had done a lot of work in the oil industry, and I had written books on petroleum taxation. I know a lot about petroleum but nothing about mining of solid minerals. So, I decided to go into it and so far, it has been very interesting. The rock you see every day, there is something in it. I found that if you work hard, there is everything to gain in Nigeria, not necessarily in politics.  You can break rocks and sell them and make a lot of money. This is what I have found out. There are different types of rocks. I deal in granite and marble and I don’t regret going into that. The only thing is that it is capital intensive, but it enables you to be properly fit. In going to the mines, you trek and you have to be strong to do that.  And you have to move around and climb the mountain and the hills. By the time you finish, you are properly fit.  But I am getting older and that is not the type of job for me, so I leave it for the younger ones, but it is good that I tried it.

 What is a typical day in the life of retired person like you?

Nowadays, I wake up, say my prayers, have my breakfast, read the newspapers, and then  go to bed again and interact with friends. If I want to go to the mines, I do so. Nothing disturbs me having given up politics. I don’t go around moving from place to place to do campaign as I used to. I have left that for the younger ones and I am prepared to stay behind and advice.

 You served as a minister in the late General Sani Abacha’s regime, which governed the country under one of its most difficult and trying times. With the benefit of hindsight, how will you situate the Abacha regime, the goals it set for itself and the manner it pursued them?

Well, I don’t regret working with Abacha. Before 1993, I had never met him in my life. I had never seen him other than on television or shaken hands with him even though one way or the other I was in politics in the Eastern states. I was a founding leader of the National Republican Convention (NRC) not only in Cross River State but also in Rivers and Akwa Ibom States. I supervised and financed the NRC in those states.  So, I was known in Rivers State which then included the present day Bayelsa State and Akwa Ibom State. I just found myself appointed a minister on the 17th November, 1993. I did not lobby for it. We were sworn in on the 19th of November 1993.  That was the first time I ever met Abacha. But I found him a very conscientious man, a man who was prepared to die for you; a man who is peace-loving but if you take advantage of his peaceful disposition, he would fight you to the end. He was the kind of man that   if he trusts you, he can go to bed with his two eyes closed. He trusted me and this was what strengthened the relationship between us.

I served him first as the Minister of State for Foreign Affairs.  In 1994, a Christian had to organise the Muslim pilgrimage for the first time. There was a lot of opposition from the Muslims but he stood firm and maintained that if Muslims have been organising the Christian pilgrimage, he did not see anything wrong in a Christian organising the Muslim pilgrimage. I handled the pilgrimage in 1994 very successfully with accolades from the Saudi Arabian government. I also handled the Bakassi affair at the Ministry of Foreign Affairs and a few other things that he entrusted to me. But what impressed him most was the manner I discussed the 1994 budget.  On the first day of January 1994, we were discussing the budget. I spoke and criticised the budget as presented. The whole budget was discarded and a committee was set up under Lateef Jakande to produce a new budget.

I was a member of that committee. From then onwards, Abacha did not do anything on finance without consulting even though I was then in the foreign affairs ministry. That was where the trust started. When Idika Kalu left, I was asked to become the acting Minister of Finance and Minister of State for Foreign Affairs. Subsequently, I became Minister of Finance and Minister of Foreign Affairs. The trust had been built and he relied on me. At the end of the day, he left everything on the economy to me.  I was at the Ministry of Finance but I was virtually doing what Okonjo-Iweala is doing now. I was the coordinating minister.  As a matter of fact, I did more because ministers were coming to me for advice and to defend their budgets. You can see the extent of the reliance he had on me. So, we had very good rapport and I have no regret working with him.

 Let’s talk about the economy under Abacha. What kind of economic blueprint did the Abacha administration have for the country?

When the National Republican Convention (NRC) was formed, I was asked by Chief Tom Ikimi, who was then the national chairman of the party, to prepare the economic blueprint for the NRC. I prepared what was called the Republican Agenda, which was a blueprint of how we wanted to get the economy moving. When Dr Idika Kalu left, he did not leave any handover note for me. Besides, the economy was down as inflation was going at the rate of 88 percent, the budget deficit was 14 percent of the GDP, the exchange rate was going yoyo, and we had instability in the economic system. The interest rates were very high and nobody knew what was going to happen. I was appointed on the 17th of October 1994 as acting minister of finance, but I did not resume till on the 19th of October 1994. Then, I had never been to the World Bank but in my capacity as the Senior Partner of KPMG Nigeria, I was internationally known. I had done a lot of work on Nigeria’s Fiscal Policies and I had written books on Nigerian taxation.

I was very well known internationally.   If any investor was coming to this country, his government will tell him, after seeing your embassy and your bank, don’t come back until you have seen Ani because I was an expert on Fiscal Legislation. So what did I do? I took the Republican Agenda which I prepared and started to implement it. This is why I tell people that if you are going into politics or government and you don’t have agenda of your own, you are wasting your time because you have nothing to implement. I had something to implement. I reduced inflation from 88% in 1994 to 8.5% by the time Abacha died.  Exchange rate was maintained at N82 to a dollar all the years till Abacha died. The budget deficit of 14% was turned to a surplus of three percent in 1995. We had 1.5% negative growth in gross domestic product (GDP) and by the time I took over, it was 3.5%  positive growth in GDP in the first year because I was implementing something.

I implemented reforms and sanitised the oil sector. I stopped oil dedication and monetised all capital expenditure. I stabilised the foreign exchange mechanism by introducing the Autonomous Foreign Exchange Market. I changed the tax system to exempt money brought into Nigeria from taxation. This enabled Nigerians in Diaspora to remit money to Nigeria through Western Union and Moneygram. Thus the exchange rate mechanism was stabilised at N82 to the dollar throughout our stay in office. Also, throughout my stay at the Ministry of Finance we did not borrow internally or externally. By 1994, nobody knew how much our debts were. But we were able to analyse our debt to establish how much of the original dollar or yen we had borrowed and this was very little. The bulk of our debts were interest, interests upon interests, reschedulement interest, fines and penalties.

These accounted for 75 percent of our debts. We reconciled our debts with each creditor and then visited the project sites. We found that a lot of those projects were not on ground and that the money borrowed had been shared between the borrowers and the lenders. I reported this in my budget statement of 1997. In so far as our government was concerned, General Abacha had approved that we should go to court and that we should not repay those loans. Unfortunately, when President Obasanjo came to power, he brought the World Bank and negotiated with them on Nigeria’s behalf and all the loans were repaid. When I took over as the finance minister the nation’s reserves stood at $750 million, and, by the time Abacha had died we had $9.3 billion as reserves. We successfully built the largest housing estate in Africa, the Gwarimpa Estate, and none of us owned a single house in the estate.   I co-drafted the Nigerian Investment Promotion Act which we are now using and supervised the drafting of the Nigerian Investment and Security Act. I also co-drafted the AFEM Decree.

The privatisation of government enterprises under the Public Enterprises (Privatisation and Commercialisation) Decree 1998 would have been implemented to the letter if Abacha had not died. It would have made a lot of impact. What they are calling privatisation now is fraudulent.  I mean you have 10 people buying up the whole assets of this country. This is not worth it. This draft law says that the privatisation programme should be for everybody. We were even prepared to give the common man money to buy shares in the companies that we were going to privatise. But we have today a situation where only about 10 people have bought the whole assets belonging to Nigeria and this is most unacceptable. When I left the Ministry of Finance, this draft law was there; I did not carry it away. The lawyer who co-drafted it with me was there; why didn’t they implement it? They went and did something else because they knew their intention which was to enrich a few people to the detriment of Nigerians. I am sure one day someone shall revisit the scandalous privatisation.

Could you give us an insight into the privatisation policy of the Abacha’s administration? What did it intend to achieve?

First of all, in privatisation, we were looking at competition against the government. We felt that the private sector should be able to compete with government enterprises. Secondly, we believed that all the assets being privatised belong to Nigerians.  Therefore, we felt that every Nigerian had a right to participate in it, not only in its ownership but also to benefit from the privatisation. Thirdly, we decided that if we sold the privatised assets, we should be able to use the proceeds for the benefit of the whole society.  This was why we established what we called the Nigerian Trust Fund so that all the proceeds of privatisation will be kept therein and this was to be administered by seven trustees of whom four would be former presidents. You can see that we were taking it to the highest level. We had also established the excess crude account with the federal government having the share of 52.9%. Of this, 50% would go into the Nigerian Trust Fund. The Trust Fund was to be used in settling our debts and intervening in the education, health, agriculture sectors and rural infrastructure.

The Trust Fund was to be used to uplift the quality of life of all our citizens and that was the philosophy.  We had prepared the groundwork for all these things.  The reason the decree was not promulgated was due to unforeseen circumstances. When I was asked to choose the Director-General of this Trust Fund, the person who came to my mind was the former Vice President, Dr Alex Ekweume and Abacha agreed.  He asked me if I thought Dr Ekwueme would like to do it, and I said yes; Ekwueme is well-read and well-educated, and would be a trustee of the Nigerian Trust Fund and also its Director-General. The amount involved was to be $100 billion and that was quite sufficient for anybody in Nigeria to manage for the benefit of all Nigerians. Buhari was in charge of the Petroleum Trust Fund and I felt Ekwueme is one of the very few Nigerians who can manage the Trust Fund. Abacha asked me to take the decree to Ekwueme for his input, after which we would finalise it. But unfortunately before I met Ekwueme, Abacha had died, so that ended it.

 Since his demise, General Sani Abacha has received so much criticism because of the methods his regime used to solve national problems and the allegations of corruption against him. How justified are these criticisms?

First of all, from the time immemorial after military conquest of a country, they devastate, lay waste, loot, steal, and carry the people from one place to another. It has happened before. If you read your Bible, it is captured in the Babylonian captivity.  Even during the Nigerian Civil war, we had people carrying money in coffins, from the Mid-west to the North. We know these things. I see coups as a defeat of democracy by the military and the soldiers would do what they know best: loot the treasury. Abacha was not the first and will not be the last.

Coming specifically to Abacha, I have said it over and over again that based on all the budgets that I prepared, Abacha did not steal or loot from any of these budgets. I still have copies of all the budgets with me.  The budgets were very transparent, but in trying to solve his own problems because the Western world had regarded Nigeria as a pariah state,   he worked closely with Aliyu Ismaila Gwarzo (the National Security Adviser) and Paul Ogwuma, who was then the Central Bank Governor and they were taking money from the Central Bank of Nigeria (CBN) in form of security votes which was very substantial.  I was not aware of it because when I came in, the Central Bank was not under me until 1997.  It was in that year that I sent Mr Steve Oransaye who was my Director, Special Duties to reconcile our reserves with the Central Bank. In November 1997, he came to me and drew my attention to certain withdrawals that were not authorised by my ministry. I asked him to investigate all withdrawals for the whole year. The amount withdrawn in 1997 was about $1 billion and I had to query General Abacha on the withdrawals since I did not authorise them.

Of all the ministers in Abacha’s time, I believe I was the only one who can stand and query the Head of State.  When I went to see Abacha, I said, Sir, I got this information from the Central Bank and I did not authorise it. Are you aware of these payments? It was $1 billion. He told me to leave the document that he would look at it. When I did not hear from him, I went back to see him and said, “Sir, I brought you some papers the last time.  What have you done with it? He replied that $1 billion is not too much for the security of Nigeria. I believed him that it was for the security of Nigeria because we were fighting in Liberia and Sierra Leone, and in the Bakassi Peninsula. There was no specific provision in any of the budgets for those wars, so my thought was that the man must have used the money for fighting those wars.  He also needed some money for security because we knew that we were not popular; we were regarded as a pariah nation.  They wanted to remove him at all cost.  The international community was not happy with him, so he needed to use money to shore up his position. So, I believe that $1 billion was not too much for the security of Nigeria as he had said.

However, in February 1998, I wrote him, advising against using any money for security as the oil price was going down fast. I told him I was not going to agree to extra-budgetary expenditure or allocating this type of money for security vote.   Unfortunately, I discovered, when he died in June 1998 that he had gone the same way, and I reported to General Abdulsalami Abubakar, when he succeeded Abacha as Head of State. The money involved this time was about $460 million.

 Did you serve under Abubakar?

Yes, for a month. When Abacha died, we stayed for one month. I brought the matter of security vote before Abubakar. So, as far as I am concerned, the total withdrawal was about $1.46 billion and out of which I got back $1 billion from Abacha’s children and paid it into Number 3 Account of Bank of International Settlement by the end of July 1998. I believed that the balance of $460 million could have been used for security purposes because I knew that neighbouring governments were coming to Nigeria and each time, Abacha will send them to collect money from the CBN with my approval. Some of them will just park their planes at the airport and they do not even have money to go back home until I released the funds to them. So, I knew that he was spending some of the money on the governments of our neighbouring countries because I gave the money to those governments. When he died, I helped to repatriate part of the money and the big question now is: where is the $1 billion that we got back? Nobody knows what they did with the $1 billion I got back from Abacha’s children.

 How would you compare the economic management styles of the military and civilian regimes in Nigeria?

Well, as I said, Abacha gave me a free hand and it was then left for me to manage the economy. But I was not operating alone. If you look at any of my budgets, you find that there were inputs from the Ministry of Planning and the Central Bank. Three of us formed the triumvirate that managed the economy. I was the chairman. We formed what we called the Fiscal and Monetary Policy Committee and we met every month to review the economy. I do not know whether the present budgets have inputs from the Ministry of Planning or the CBN. Growth and job creation can effectively be created when there is cooperation between the Ministry of Planning, Ministry of Finance and the CBN but when each of these bodies goes its own way, there is bound to be difficulty. I believe currently the Ministry of Finance is focusing on budget performance but if we want growth and job creation, we should concentrate on implementation of economic policies which is what the fiscal and monetary policy committee was supposed to achieve.

During Babangida’s regime and the first year of Abacha’s regime, all the budgets were wrong. While preparing the 1995 budget we found that from 1985 to 1994, we were double counting the Petroleum Profit Tax and Royalties in respect of our equity crude. This means that the budgetary revenues for those years were overstated by about 30% and we were budgeting expenses against non-existent income. This had a destructive effect on the economy in areas of high inflation, high budget deficits, internal and external borrowings, exchange rate mechanism and economic instability. It also led to adoption of bogus economic policies such as oil dedication account and sales of oil at massive discount.  This mistake coupled with the Structural Adjustment Programme (SAP) had a serious negative impact on Nigerians’ wellbeing. No wonder General Babangida was quoted to have said that “Nigerian economic problems have no known solution.”

I believe if someone was reviewing the budget performance of those years, he would have found a solution. In any case, I had to solve the problem from 1995.

When I became the Minister of Finance, I discovered there was no economist in the ministry. They were all civil servants and administrators. My first Permanent Secretary majored in history, the second in library studies and the third in Islamic Studies and these were all sound administrators but not suited for the Ministry of Finance. My Director-General, Budget was an administrator while my directors of Revenue and Expenditure majored again in history. So, what did I do? I went to the Nigerian Economic Society (NES) where we have the best brains in economics.  I made the Ministry of Finance a member of the Nigerian Economic Society and we also financed the Nigerian Economic Society. After I conceptualise and formulate the economic policy, I will send such policies first to the Nigerian Economic Society for simulation.

When they are through with the economic simulation, we then sit to evaluate it before adopting the policy for implementation.  So, by the time we come out with any policy, we are 90% certain of success. So we had this body advising me.  Besides, the Nigerian Economic Society provided me with a permanent Ministerial Advisory Committee made up of four brilliant economists who were always there to solve economic problems. I was not running the economy alone. I am a chartered accountant specialising in public finance but I am not an economist, hence I had to seek the assistance of the best brains in economics. As a Minister of Finance, you should work very closely with Governor of the CBN and the Minister of Planning if you want to achieve success.

 How would you describe an ideal finance minister for Nigeria?

A finance minister must be a technocrat who is very versed in Public Finance.  He may not necessarily be an economist, though; I would agree that he needs to understand when the economist speaks. He must be versed in budget planning, debt management, fiscal legislation, taxation and exchange rate management.  I won’t want to define who an ideal finance minister will be.  He could be a businessman.  Okotie-Eboh was a good finance minister.  Awolowo was a practical man and a good finance minister. But even then, Okotie-Eboh had Abdul-Azeez Attah as Permanent Secretary while Awo had Alison Ayida as his Permanent Secretary. Both were economists.

What should be the ideal relationship among the Ministry of Finance, the Ministry of National Planning and the Central Bank?

They have to work together. Monetary policy and fiscal policy have got to work in tandem.  Fiscal policy is “the senior brother” of monetary policy.  They cannot work in isolation.  I was able to bring the fiscal policy, monetary policy and planning under one umbrella, and we were able to get on very well.  But, I have never seen Dr. Okonjo-Iweala and Mallam Sanusi Lamido Sanusi working together.  It is not good for Nigeria.  The three of them – minister of finance, minister of national planning and the CBN Governor – must be meeting and reviewing situations every month to identify the problems and help one another to solve them.  For example, there was a time General Buhari deposited N40 billion in one of the banks when he was the head of the Petroleum Trust Fund (PTF) at four percent interest rate per annum.  The money he deposited was causing liquidity problem for the Central Bank. The CBN governor and I went to meet Buhari and requested him to transfer this money to the CBN at 12% as against 4% PTF was receiving.  He asked us to put it in writing, which we did.  At the end of the day, he refused.  But I wondered if he would have rejected the 12 percent offer if it had been his own money. There must have been something fundamentally wrong. But this shows the kind of relationship Paul Ogwuma, the then CBN governor and I had. We were doing things together for the good of the economy.  So, if the Minister of Finance and the Central Bank Governor do not cooperate, it will not work well for the country’s economy and if the Minister of Finance does not cooperate with the Minister of Planning, she cannot talk of growth and job creation.

Nigeria has failed in its bid to have a viable steel industry. What actually happened to the Ajaokuta Steel Complex which appears to have been abandoned after so much money was sunk into the project?

Sometime in 1995, my economic team met to work out how to industrialise the country.  We found out that we had the petrochemical industry. We also had Ajaokuta Steel Company that was moribund, with billions of dollars of debts. We came to the conclusion that without a viable steel industry, Nigeria’s industrialisation is nullity. You cannot industrialise without a steel industry. But here we have Ajaokuta and we had spent $4.5 billion to $5 billion on Ajaokuta and it was not working. We had coal in Ajaokuta but Ajaokuta’s coal could not on its own give you steel industry.  We still had to go to Australia to get coke from Australia to build the steel industry in Ajaokuta. We visited the complex and I understood the whole problem. So, we decided that we should revitalise the steel industry. My job was to free Ajaokuta of its external and internal debts and then provide funds for its revitalisation. By that time, we were owing the Russians sovereign loans and management fees. We were owing them both in dollars and in naira.  The sovereign debts amounted to about DM2.5 billion and management fees and other assets to be taken over were DM450. Russia was in financial doldrums after 1990 and they needed money by any means.  There were some Nigerians and foreigners who were ready to buy the Ajaokuta debts from the Russians and then sell them to the country at huge profits.

But they had one thing in common. All of them wanted Abacha to be their partner but the General was his own man; he ditched them.  The unfortunate thing was that we could not negotiate with Russians on government- -government basis. Early in 1996, Abacha instructed me to negotiate with Alhaji Bagudu for the debt buy-back.  I was always aware that under the Enhanced Toronto Terms, the World Bank would grant 69% discount on any debt buy-back. Our Par Bonds and Promissory notes were trading between $53 and $40 per $100 at Wall Street then. Baguda proposed the buy back at $53 per $100 of the face-value of the debt. I insisted on $40. A buy-back at $40 would have given us a discount of 76% while that of $53 would have resulted in 65% discount. Abacha supported Baguda and I had to insist that he signed a memorandum to that effect which he did.

Based on $53 per $100 face-value, the total cost of the debt buy-back was DM 974 million or $450 million. This is what we paid for the debt of DM 2.95 billion. The consideration was further reduced by DM 300 million in 2000 when Obasanjo brought an action in English Courts seeking a refund for overpayment of $13 being the difference between Par Bonds and Promissory Notes prices. Thus, after Lord Justice Rix allowed this further discount, the new consideration for the Debt Buy Back was DM 674 million or $300 million. The effective discount Nigeria received on the Russian debt buy-back was 76% as against World Bank Maximum of 69%. Having cleared Ajaokuta of all encumbrances, it was necessary to provide funds for the revitalisation of the steel complex. The Presidency had been discussing with an Austrian company – Voet Aspine – on the rehabilitation of Ajaokuta Steel and they put the cost at $550 million. This amount was provided for in the 1997 and 1998 budgets and it was kept by the Accountant General of the Federation. In November 1998, Mr Mohammed Haruna, who was the Chief Press Secretary to  the Head of State, Abdusalami Abubakar, announced at 9 o’clock News that Abacha, I and Alhaji Dalhatu, Minister of Steel had withdrawn $2.5 billion ostensibly to pay for Ajaokuta Steel debt buy-back but had paid only $500 million and pocketed $1billion. This was headline news for the next one year. No matter how hard I protested, the news would not go away. I was arrested, detained, humiliated with most of the newspapers jeering at me. At the end, the Senate in 1999 set up a committee on Local and Foreign Debt to investigate the Ajaokuta debt buy-back. During the hearing, Mr Mohammed Haruna, a seasoned journalist, confessed under oath that he told lies and misled the nation and that his story of $2.5billion was unfounded. But the damage had been done. My reputation had been dented. I was exonerated on all counts by the Senate. The tragedy was that all the newspapers that accused me of embezzlement refused to publish the Senate’s findings which exonerated me but came down heavily on Mr Haruna. This is Nigeria for you. We always want to destroy our leaders and we cannot apologise when we find that we are wrong. As I said earlier, by 1998 we had provided $550 million to revitalise Ajaokuta Steel Company. The money was in the custody of the Accountant General of the Federation. Up till today, Ajaokuta has not been revitalised and the $550 million has not been accounted for.

 You were once quoted by the TIME magazine in 1998 to have said that Nigeria had spent $4.5 billion on the Ajaokuta Steel Mill project, and 4.3 billion Deustche Mark on the Aluminium Smelter Project, Ikot Abasi but I doubt whether such a colossal amount of money could not produce three steel mills in Germany and Russia. Why are we not getting it right with our steel industry?

I have explained it partly to you.  If you go to India, you will see a lot of steel industries producing the same quality that Ajaokuta is meant to produce. The amount used to build each of them is about $1.5 billion and they are producing steel, but we have spent over $6.5 million on Ajaokuta and there is nothing to show for it.  It appears to me that it was just a drain pipe, a bottomless pit for corruption. In the privatisation exercise, we sold Ajaokuta Steel which cost us $6.5 billion for princely sum of $650 million – 10% of the cost.  This means that either the original cost was overinflated considerably or we just decided to give the steel complex to a crony.

As regards the Aluminium Smelter, it was started during Babangida’s regime when we paid DM 2.8 billion. In 1995, we paid another DM 1.5 billion for the second phase and in 1998/99, another $270 million was paid to our technical partners for the same project, all amounting to DM 4.9 billion or about $2.8 billion. During the privatisation exercise, we sold the complex for $325 million.  Even our technical partners who collected $2.8 billion as cost of the project were bidding at $300 million during the privatisation exercise. Our technical partners know that the Aluminium project was riddled with corruption and the price of the project was over-inflated.

Privatisation of public assets is largely viewed as a good model for the country to accelerate its economic development but it has turned out to be an exercise by some influential Nigerians to “personalize” the nation’s wealth.  Why is it so?

It is a mistake to think that there is a private sector in this country. A private sector that depends solely on government patronage is not worth its name. In Nigeria, any quarter that government does not release its capital budget, the private sector is dead. We cannot entrust the economic destiny of this country to some private individuals at the expense of 99.9% of other Nigerians. The private sector in Nigeria cannot be the engine for growth without government’s intervention on behalf of Nigerians. The intervention must be in form of policy as well as the ownership of enterprises. This is what obtains in France and that is why the country was the least affected during the world economic meltdown from 2008 to date. There is always a conflict of interest in the private sector even in developed countries, how much less in developing countries.

Abacha’s privatisation programme was participatory involving the government, the core investors, and Nigerians. The government would hold 40% and all Nigerians 20% and we were willing to lend money to Nigerians to buy shares of the privatised enterprises at the Stock Exchange. The core investor was to import capital to buy his interest in the entity. This means that a core investor cannot borrow money from Nigerian banks for the purpose of privatisation. There will be international consortium to oversee the privatisation exercise and those Nigerians involved in the privatisation process will not buy shares to avoid conflict of interest. All the proceeds of privatisation will be held in trust for Nigerians to cater for education, health, agriculture and rural infrastructure.

Obasanjo’s privatisation programme was World Bank-inspired. He merely looked for about 10 people whom the Russians would call Oligarchs and transferred the nation’s assets to these people at a give-away price. Ajaokuta Steel project which cost $6.5 billion was sold for $650 million while the Aluminium Smelter Company which cost $2.9 billion was sold for $325 million. The blue chip companies like NOLCHEM and AP Petroleum were sold to themselves. They even attempted to sell all the refineries for $750 million had President Yar’ Adua not intervened. Obasanjo’s privatisation programme was a disaster; it was riddled with corruption. You will recall the Obasanjo library saga where some young men made donations of over N1billion each. These young men were the major beneficiaries of the privatisation programme. I pray that one day, someone will revisit this give-away programme.

 Nigeria appears to be in a dilemma over the issues of oil subsidy and the privatization of refineries.  What would you suggest as the panacea to these challenges?

Alhaji Aminu Saleh and I drafted the law establishing the Petroleum Trust Fund (PTF) and I operated the Petroleum Trust Fund.  There was no subsidy in my time.   We were selling petrol to the Nigerian public at N11 per litre from 1995 to 1998.  Out of the proceeds from the sale of fuel at N11 per litre, we were giving the PTF N30 billion to N40 billion for its projects.  There was no subsidy in my time and so I do not agree that there is subsidy now. The fact is that we have never taken the transfer cost of our by-products into consideration in the determination of the cost of our petroleum products. The realised value of the by-products per barrel of crude is quite substantial but these are transferred to the petrochemical at zero value. Thus Nigerians are subsidising petrochemical products. If those by-products are appropriately priced, it would be found that there is no subsidy in Nigeria.

In my view, certain people just wanted to steal money and in their imagination, they brought the idea of subsidy. These people buy fuel from our local refineries and from those processing our domestic crude at cheap rates and sell to Nigerians and make claims. Some bought one ship load of fuel and colluded with officials and shipped the same load in and out of the country five times for one ship load. They also made subsidy claims five times. Altogether we lost about $20 billion to subsidy scam. I maintain that our petroleum products prices are not subsidised.

How were you able to maintain the pump price of fuel at N11 per litre throughout Abacha’s regime?

We made sure that all the refineries were working. Alhaji Bayero was then the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC) and we worked very closely.  We gave the refineries 450,000 barrels of crude per day.  We made sure that those crude were refined here in Nigeria and if at any particular point in time there was going to be refinery maintenance, we would look for a refinery abroad that has excess capacity and send our crude to be refined.  They will refine the crude and ship the fuel to us.  They equally sent money back to us because they sell the by-products. After collect their processing fee and  the cost of shipment, they still send a lot of balance to us here.  So, why can’t they do the same thing now?  Why should there be swap? We did not do any swap.  All we did was to send part of our 450,000 barrels to them and say please, refine it for us, collect your own fee and send us fuel and the balance.  We, however, made sure our refineries were in top form.

 For sometime now, there has been a controversy over the $49.8 billion (later reduced to $10.8 billion) unremitted crude oil export proceeds into the Federation Account. Before his suspension as   CBN governor, Sanusi had alleged that NNPC was yet to remit $20 billion to the Federation Account.  How can this be resolved?

Well, there is no controversy.  Firstly, I don’t see any business of the NNPC holding the money meant for the Federation Account.  In my time, we were reconciling all shipments and receipts on monthly basis. If you look at my budget briefings, you will see the monthly crude oil sales and the Petroleum Profits Tax. I personally participated in the reconciliation. I did it first for about six months, then I later asked Mr Steve Oronsanye and a Director from the DPR and a Director from the Central Bank to be reconciling it.  So, we knew exactly at any time how much we made.  So, the NNPC has no business holding or withholding any money.

Secondly, the NNPC was saying that they used the money to pay subsidy.  That is not their business. Who authorized that?  The business is that of the Ministry of Finance.  All the monies collected must first go to the Central Bank and the authority for any amount of money spent must come from the National Assembly.  It must be presented in form of a budget to the National Assembly.  The NNPC has got no business whatsoever in withholding any money from the sale of crude oil.  I don’t know what is happening now but if you look at it properly, they said the subsidy is for kerosene.  How much is kerosene? How much kerosene do we consume? Of that consumption, how much is from the local refineries?  Are they getting subsidy from our own refineries as well? These are the issues.  When they open their mouths and talk, they talk as if we are all not intelligent or that we don’t know what they are doing.  But they should be very careful because we have people who have dealt with this type of thing before.  So, the NNPC has got no business withholding the money and it is left for Mrs Okonjo-Iweala to come out and tell Nigerians exactly what is happening.  Sanusi has said that this amount was not authorised, was not paid; then it must be hanging somewhere.  It is not a question of expenditure.  You don’t spend what you don’t have authority to spend. If you investigate this money probably, it has to do with swap and sale of domestic crude which is not remitted to the CBN and is not accounted for.

 Another area of controversy is the management of Excess Crude Account, particularly the mode of sharing it among the various tiers of government.  What would you suggest as the best way to handle this?

Excess Crude Account (ECA) was introduced in January 1996. Then, our reserves were low and inflation was high. The oil price was $19 per barrel and we had fixed the budget benchmark at $16 per barrel. We therefore decided to create an Excess Equity Crude Reserve Account being the difference between the benchmark price and the realised value in respect of the nation’s 60% equity holding of crude oil. We also created Excess Petroleum Profits Tax and Royalty being  the difference between royalty and tax at the benchmark rate and the rate of realised value in respect of Joint Venture Partners’ crude oil holding. The two excess crude accounts form part of the nation’s reserves and form part of the Federation Account. They were owned by the three tiers of government in the ratio of 52% for federal, 28% for states and 20% for local governments. Excess Crude Account was to be utilised by way of supplementary budget if there was a permanent dimunition in the selling price of crude oil or if production capacity resulted in reduced volume than was budgeted. As at 8th June 1998, there was a balance of $3 billion in the Excess Crude and Excess PPT Accounts but Obasanjo told the world that by the time he took over, the   balances were NIL. The Excess Crude Account started by Obasanjo became the drainpipe with no accountability. It has been used to repay the nation’s debt, augment state and local governments’ allocations, build power stations, pay oil subsidies and pay other expenses as the President deems fit. It is the Presidential cash cow but it still belongs to the Federation Account.

 In the past 10 years, the price of crude oil has been above $100 per barrel yet Nigeria’s external reserve has remained below $50 billion.  Does this not represent an anomaly?

I am not sure whether we still calculate Excess PPT in respect of Joint Venture Partners’ share of crude oil. If we do, I expect the total excess account to be about $150 billion for the last 10 years. If, on the other hand, we are talking of Excess Equity Crude Account, I put the amount at between $100billion and $120 billion. But we are told that the balance on this account is only $3 billion. There is a lot of accountability to be done.

 What will you suggest as the appropriate strategy to accelerate the economic development of Nigeria? 

Well, we are in a situation where government claims that we have growth, but there is no job.  Any growth that does not make a dent on joblessness is useless growth.  We need to look at things critically.  In 2007, we had the collapse of the capital market in Nigeria.  The market capitalisation came down from N15 trillion to less than N5 trillion.  We lost about N10 trillion ($70 billion) which was about 25 percent of our GDP.  And it was all about manipulation in the stock exchange.

We also had the Nigerian Breweries debacle where the shares in the company were manipulated in the Stock Exchange. When it came crashing, many people lost their money and lives. And if you look at the number of people involved in these deals, they were not more than 5,000.  So, 5,000 people gained 25 percent of the country’s GDP.  In the fuel subsidy; it is the same people that were involved.  We lost about 12.5 percent of our GDP there, which went to the same set of people. When you look at the Asset Management Corporation of Nigeria (AMCON), it used Nigeria’s money to bail out the same 5,000 people.  So, when you look at the whole thing, and they are talking about growth, you wonder what they are saying. The whole growth is going to the same 5000 people out of 160 million. So, we need to find a way of extricating ourselves from this trap we have found ourselves.  If you look at privatisation, it is the same people.  So, when they talk about growth and jobs, they are not talking about the growth of 160 million Nigerians but of the 5000 people.  When we stop using Nigeria’s money to help the elite, the already rich people, instead of spending Nigeria’s money to help the people in the rural areas, then there will be real economic development.  We must open up and finance the rural economy.

 What should be Nigeria’s relationship with international agencies like the International Monetary Fund (IMF), the World Bank, and the AfDB?

Our relationship with the World Bank and the IMF has been like that of a master and servant.  The Structural Adjustment Programme (SAP) was imposed on us. Various reforms were forced on us. The negotiations for the extinguishing of our debt with the Paris Club was one sided and was done by the World Bank. The World Bank forced us to pay billions of dollars in respect of debts for which there were no considerations and which we had previously decided not to pay.

Are you saying that the World Bank and IMF policies are not working for Nigeria?

The World Bank/IMF policies reduced Nigeria to penury through the Structural Adjustment Programme which has not worked. In 1996, Mr Michel Camdessus, the MD of the IMF wrote, asking us to again privatise, monetise, devalue, remove subsidy, downsize. But we were not ready for privatisation as the laws, institutions and policies were not ready. We refused to monetise as this was not in the best interest of Nigeria and we did not want to sell the nation’s assets. We refused to devalue again as we thought that what Nigeria needed was increased production to boost our exchange rate. We had by 1996 quietly removed fertiliser subsidy and there was no subsidy on petroleum products and as regards downsizing of our public service, we refused to do this as we had not provided alternative employment and had not opened up the rural economy. When Obasanjo came to power, he rushed to implement the World Bank/IMF policies and they were a failure.

Nigeria is confronted with infrastructural challenges in terms of power, the railway, roads, hospitals and schools.  Yet in the 2014 budget, the recurrent expenditure is 23.7 percent.  Even when you look at the revenue, more than 90 percent will go to debt servicing.  So we are now left with about seven percent to service the capital projects.  What is the implication of this for the Nigerian economy and the infrastructural challenges facing the nation?

Based on the budget, we are earning N3.76 trillion and spending N3.5 trillion as recurrent, which is 93% of our earnings. I believe that Mrs. Okonjo-Iweala should look into that again because it is not rational.  It is not rational for you to use almost all your income as your recurrent expenditure and yet we refer to the 2014 budget as budget for job creation and inclusive growth. One of the fundamental flaws of our budgets is the transfer of funds to excess crude account and then ending up in budget deficits and leading to external/internal borrowing at high interest rates. At the end of the day, we spend the money transferred to Excess Crude Account through the back door and without reference to the National Assembly. In the 2014 budget, we are borrowing to finance capital budget and at the same time transferring money to excess crude account at zero interest. This does not make sense. In the budget from 1995 to 1998, there were no borrowings. Oil and gas revenue accounts for about 69 percent of the Federation Account inflows. We should endeavour to bring oil and non-oil revenue to parity. And at the rate we are borrowing and paying interest there would be no revenue to meet our daily needs should the oil price fall to $50 per barrel. Also the National Assembly budget is a first line charge and is shrouded in secrecy. The National Assembly has no justification to carry out oversight check on the Executive if its own budget is a national secret. For the purpose of accountability, the Executive should indicate in the nation’s budget what is expected to accrue to excess crude account and in fact should show the movement of that account.

The crude oil revenue is predicated on a production of 2.388 million barrels per day at a price of $75 per barrel at an exchange rate of N160 to the dollar. There is no assumption for gas revenue so I assume that no gas revenue has been taken into consideration in the preparation of the budget. The Bonny LNG Limited is 49% owned by the Federal Government and the oil majors (excluding Mobil), 51%. It started production in 1996/97. According to The Economist of 5th April, 2014, the company produced and exported 25 billion cubic metres of liquefied natural gas (LNG) in 2012. It must have been exporting LNG from 1997 to 2012. It exported in 2013 and it is likely to export at least 25 billion cubic metres of LNG in 2014.

I do not know the price of LNG per cubic metre of gas but it appears that the value of the exported gas has not been included in the 2014 budget and neither has it been taken into account since 1997. This issue was raised by some members of the National Assembly but it was glossed over by the management of Bonny LNG Limited. The question is, what is the Petroleum Profits Tax and royalties from our gas exports and why have these not been accounted for in the nation’s budgets? Other major exporters of LNG include Trinidad and Tobago, Malaysia, Indonesia, Qatar, Australia, Oman and Algeria. I am sure that the gas revenue is part of their national budget and is properly accounted for.

You audited the Nigeria Stock Exchange from the beginning in 1964. You also were reported to have recommended the restructuring of the exchange to avoid its collapse, which it nearly did in 2008 and 2009. Have we been able to carry out restructuring of the exchange and what lessons can we learn from the recent capital market crises?

Well, when the Stock Exchange was a small outfit, I was the first auditor of the Stock Exchange in 1964 and I advised them the way things are being drone, that having the stock broker and the jobber as one and the same person will bring manipulation to the Stock Exchange. I advised that they should separate the buyer from the seller to create a market but nothing was done.

In 1996/97, we incorporated the Abuja Stock Exchange where the buyer is distinct from the seller and there is the commodity called shares. It was registered and was in operation but Obasanjo and the Lagos Stock Exchange killed it. If the Abuja Stock Exchange was in existence, the manipulation-propelled crash of 2007 would never have happened. Our crash happened before the world crash of 2008. What they call the Nigerian Stock Exchange today is known in law as the Lagos State Exchange. Things were so bad in the governance of the Lagos Stock Exchange that Dr. Zayyad was invited to look into it. He found conflict of interest as the major problem and recommended that no director or a major shareholder of a quoted company must sit in the Council of the Stock Exchange. This was accepted and he as well as others in the council resigned. Later things changed and the stock exchange went back into bad governance. Directors whose shares were quoted at the Stock Exchange became members of the council of the Stock Exchange. They manipulated the Stock  market and took over the control of the exchange. They divided Nigerian economy into their own spheres of influence and then when you move from one sphere to the other, there was a fight to finish. The director general of the exchange became chairman of a quoted company, banks and insurance companies introduced market makers at the floor of the exchange. These people created artificial market and bought the shares of these companies thereby reducing their share capital. The stockbrokers were not left out. They joined in the melee until the stock market crashed in 2007. Later the stockbrokers asked for government bailout and they were given. This should never have been done. There must be serious reform at the stock exchange. Abuja Stock Exchange must be resuscitated to compete with the Lagos Stock Exchange.


You were once quoted as saying that only a Niger Delta man can understand and solve the problems of the Niger Delta. President Goodluck Jonathan has been on the job as an executive president since 2010. Has he been able to understand and solve the problems of the Niger Delta?

President Jonathan knows what the problems are but they don’t allow him to solve them. In 2008,  I was appointed as a member of the Technical Committee on the Niger Delta. We were asked to look at all the commissions of inquiry starting from the Willinks Commission. We made very far-reaching recommendations, which, if they were implemented, would solve the problems of the Niger Delta. Willinks had forecasted that unless certain things were done, there would be war and bloodshed in the Niger Delta within 50 years. We updated Willinks recommendations and submitted them to the late President Yar’Adua. Unfortunately, until today, there has not been any white paper on our report. Niger Delta has a population of about 20 million people, not 40,000 militants.  So, the 20 million people of Niger Delta are still waiting for Jonathan and he has not done anything to improve their lot.  The same thing that we had in Willinks’ time is still there. The only thing he is doing now is to give N65, 000 a month to the militants. The poverty and underdevelopment inherent during Willinks’ time are still there.  Until he implements the recommendations made by the Technical Committee on the Niger Delta, he has not done everything for Niger Delta people. And I can forecast that the place would go into flames again. President Jonathan is the only hope of Niger Deltans because if somebody else comes to power, he will tell us, “look your man was here, what did  he do for you people? Let me do things for my people.” And that will be the end. So, for the few months he still has, let him attempt to improve the lot of the Niger Delta people, otherwise posterity will judge him badly.

 Could you expatiate on the alleged Abacha’s loot? Was the Abacha loot real? There is a school of thought that believes Abacha was misunderstood and that he didn’t steal the money as alleged but kept the money in an account to ensure that the country survives any possible financial clampdown by the US and its allies against his regime?(cuts in)

No, don’t go beyond that. I have explained to you the position I found myself in 1997 and how I recovered about one billion dollars from the Abacha family. There might have been some money taken before my time as security vote but I would not know as I did not look into that. He did not keep money for anybody. It is a lie. Abacha was not keeping money for anybody. The point is this: we had a situation where this money was withdrawn,  authorised by him, initiated by Gwarzo and paid by Paul Ogwuma. The money would be taken out of the Central Bank and Ogwuma would take the money back as cash swap to pay out money abroad. I discovered that in June 1998. That was why I was able to tell the Abacha children to bring the money back because I discovered there was cash swap. So, it was not a question of keeping the money in safe custody for anybody. If they tell you so, it is a lie.

The other money that must have been taken before my time was also part of the security vote. It was taken from the Central Bank. It was not taken from the budget. The budget is here with me; no money was taken from the budget. I said this and some papers attacked me. They don’t want people to say the truth but I will keep saying the truth; Abacha did not take money from the budget. Prof. Aluko buttressed this and they said Aluko was senile. At least, I who is talking to you is not senile. In any case, from the total amount of money that they said the man looted, how much was it? It cannot be more than three or four billion dollars of which some money has been brought back. And where is all the money that was returned? What did we do with it?


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