The Great Reversals
By Louis Brown Ogbeifun | March 8, 2008
A leader without a good successor is deemed to be a failure irrespective of his/her achievements. Having a prodigal son as a successor is a bad dream because he would destroy any legacy left behind. If this happened, the essence of bequeathing good structures to future rulers would have been defeated. I am a firm believer in the “systems’ continuity concept” especially if the system is fluid, efficient, effective, transparent and ensures accountability. But I abhor a system that exploits the masses for the good of a few. I detest a non transparent leadership. I would be stupid not to reverse unwholesome policies that were built on unfairness, injustice and selfishness.
When Chief Olusegun Obasanjo (OBJ) became the President of Nigeria in 1999, the oil and gas sector was a shame to the entire nation. There were shortages of petroleum products across the country. Nigerians queued endlessly to buy petroleum products at gas stations, illegal bunkering was a thriving business, stealing of crude was at its peak, the downstream sector was worse than those of other countries at war and the spate of vandalism of petroleum products’ pipelines was horrifying. This prompted the Government to begin the oil and Gas reforms. One cannot but agree that he did well to have had the initiative to clean up the stable but just like most laudable projects in the past, the reforms were eaten up by the Nigerian disease (corruption, greed, selfishness and poor implementation).
As the President of the Petroleum and Natural Gas Senior staff Association of Nigeria (PENGASSAN) our Central Working Committee and the National Executive Council had commended Obasanjo for deeming it fit to address the decay in the oil and gas sector through series of reforms but went ahead to plead caution, human face and the need to follow due process in the implementation process. The emergence of OGIC (Oil and Gas Reforms Implementation Committee) inaugurated to critically look at the oil and gas sector and re-structure it for efficiency was an aspect we thought would be used to address the deficiencies in the sector. We expected that the spring board for the reforms that will catalyze the activities for the good of all was here. It never was.
Rather than stick to long term plans, the Government started on what it perceived as the quick wins relying on the “tions”; (deregulation, privatization and liberalization). No matter the alternatives proffered, the mantra of the tions was too attractive to ignore. The implementation soon fired up at top gear and in rapid sequence.
The real agenda of the Government soon crystallized as the implementation process of the reforms especially in the deregulation and privatization of the downstream operations were fraught with sharp practices, imminent transfer of public monopoly to a three man private monopoly. There were uncomfortable under-currents, lack of respect for due process, breach of agreements and the take or leave it attitude of the Government.
Tried as we did to call attention of Nigerians to the evil designs, the spin doctors and the cohorts of the ruling class called us anti progressives who were out to sabotage the well intentioned privatization programme. We came out several times to explain to Nigerians that we were not averse to the reforms but that we were against the implementation process, which was ill conceived and manipulated to benefit only a handful of those close to the corridors of power. We opined that the sales if allowed to stand will further pauperize Nigerians. We fore saw the skewing of the final results of the privatization exercise against the interest of the masses, which if not checked would lead to an unprecedented resistance and revolution in no distant time. It was a time bomb waiting to explode. The government kept surging ahead like a moving train ready to crush any folks that crossed its rail tracks. But for the intervention of the Yar’Adua administration, the strike that ushered in his tenure in 2007, would have spelt doom for the country.
Deregulation
If the deregulation was genuinely done, it would have bred multiplicity of players, efficient pricing mechanisms, decentralization of the structures of buying and selling, products availability and allowing the consumer who is the king a platform for alternative choices. Unfortunately, the government’s deregulation targeted only price reform. This left the turf with the same players and restricted consumer choices.
We had suggested that for deregulation to succeed, certain interventions in the sector would be necessary. We canvassed the need to review the waiting period of vessels, transhipment process, which transfers huge cost to consumers because of demurrage, refurbishing of Atlas Cove facilities among other things, strengthening of the naira and the provision of social safety nets to cushion the effects of possible fuel price increases on the masses. We called for the sanction of those that were involved in the failed turn around maintenance (TAM) contracts; Niger Delta crises to be holistically addressed without which the country cannot have a peaceful oil and gas sector; optimal functioning of the refineries to provide home based production for appropriate benchmarks, and the provision of power that will galvanize the manufacturing sector into existence, etc; (www.pengassan.org).
The government kept surging ahead like a moving train ready to crush any folks that crossed its rail tracks. It was unwilling to address the structural reforms that will on the long run support the price reform. The President and his wise men and women were unwilling to do any of the above because the perpetrators were political heavyweights. We did ask at that point why a government of due process would claim to have spent so much money on the refineries and the energy sector without any appreciable improvement, yet no panel set up to probe the failed contracts or sanction the contractors. No answer till date. The only attempt made by the last House of Representatives to ask questions on the TAM projects ended abruptly when some of the key players threatened to spill the beans.
When government realised that we were unrelenting, it decidedly agreed to one of the suggestions. It directed the release of funds for the refurbishing of the refineries, which worked optimally from 2005 to February 2006 when the Chanomi Creek pipeline was blown off.
However, barely five months into the life of the Yar’Adua’s administration, the issues were given prominence. Thisday newspaper of Wednesday, October 3, 2007 in its front page wrote “To prevent further heavy financial losses due to demurrage – as well as put an end to incessant fuel crisis in the country – the Federal Government has directed the Energy Ministry to ensure that all facilities for receiving and offloading petroleum products were fully restored”. This was one of the positions we canvassed, which was consigned to the dustbin of history by OBJ and his economic team. This is a welcome development and it shows that the government is going back to the basics. The major gain of this if implemented, is that reduction in demurrage charges will also reduce the charges passed on to the consumer. I firmly believe that the masses should not be made to pay for the inefficiency of any government system.
The great sales and the reversals
Steel Sector
The government decided to sell 80% equity of Delta Steel to an Indian firm that bided as Global Infrastructure Holdings Ltd at $30million instead of the $31million dollars offered by BUA Nigeria Limited; a Nigerian firm. The Indian firm also went ahead to win the concession rights to complete, commission and operate Ajaokuta steel plant. The House of Representatives in probing the sales opined that due process was not followed and consequently ordered the handover of Delta steel Company (DSC) to the initial preferred bidder, BUA International, thereby reversing its sale to Global Infrastructures (GIH) by Bureau of Public Enterprises (BPE) (Front page of Vanguard Newspapers, Wednesday, January 16 2008).
Refineries
As at 1999, the refineries had become a national embarrassment. Like any other subserviced engine, the refineries, which were neglected for decades were in a sorry state. When we appraised the operations of the refineries, we found that the government and its cronies deliberately rendered the refineries prostate. In order to forestall the sales to the same people that plotted the demise of the refineries, we had no option than to suggest the 51%-49% core investor/government participation (NLNG structural model). This was to remove the hands of government and political office holders from the affairs of the refineries in order to bring them back to life. We resisted the wholesale privatization of the refineries because we know that the workers are efficient. This was confirmed at the start up of Eleme Petrochemical Limited after it was sold to Indorama.
The Presidency started the privatization with the giving away of Eleme Petrochemical Company Limited to Indorama. The Unions alleged that the asset was under priced and that as at 1999, EPCL assets were said to be worth $11.8billion but sold to the company at $250million minus the liabilities and with 30% down payment even after the 180days grace period. Government was to pay the liabilities of EPCL. Instead of 49%-51% equity stake as contemplated, 75% stake was ceded to Indorama.
Investigation is currently on going to determine the true owners of Indorama. There is the speculation that two former Heads of the Federal Republic of Nigeria and one ex-governor of Rivers’ State are the true beneficiaries. More revealing is the fact that the same NNPC staff; branded as dead woods by government were used by Indorama to revive the plant. Up till now, there are NNPC staff working in EPCL as secondees. This again vindicated our stand that we have a work force in the downstream sector that can make the refineries and petrochemical companies work if only the invisible hands were severed. Let us hope that the truth will come to light soon.
At the inception of the branding of the refineries as scrap, the Unions also found out that government’s overbearing influence in the affairs of the refineries and the refusal to adequately fund NNPC and empower its management were largely responsible for the inability of the NNPC to run the refineries optimally. For instance, the Managing Directors of the Refineries have less than $35,000 (5Million Naira) approval limit when the Managing Directors of less complex plants have between $1-2millions approval limits. In addition, any approval in excess of $35,000 is processed through the Headquarters. The approval for TAM needs Mr. President’s approval because he is the Board Chairman and the Minister of Petroleum. Therefore the decision to replace any faulty parts and determine what constitutes a priority rested on a superior authority outside the confines of the refineries. This delay in administrative process was and is still a major challenge. Under this bureaucratic stricture, no company can optimally perform and achieve the desired level of efficiency expected of the refineries.
In order to reverse this malaise, the Unions agreed to the aforementioned NLNG partnering model in terms of ownership structure. In this model, though
Furthermore, at a every forum we also made it known that except the Niger Delta issues were addressed, any privatization done would be meaningless. The Chanomi creek pipeline was dynamited in 2004, repaired in 2005 and barely a year after the repair work was completed, the same pipeline was destroyed in February 2006. This time, the locals refused to allow any repair work until certain conditions were met. It took two years for that line to be made available for crude transportation. For those years, there was no crude to service Warri and
Rather than seek genuine solutions that will ensure that the refineries work in the best interest of
Politics
In all the states of the Federation, most of the winners were accused by the other parties of rigging the elections. The annulments so far witnessed from the election tribunals cut across party lines. Since most of the cases are in the appellate court one cannot be too sure of the outcome but from the look of things, not less than 20% of the states will likely conduct governorship elections and all the states will conduct one form of election into the lower or higher houses. The election tribunals have annulled and therefore reversed the victories of the following governors: Alhaji Ibrahim Idris (Kogi), Nasamu Dakingari (Kebbi), Omehia (Rivers), M. Nyako (Adamawa), Sullivan Chime, (
Others are in the appeal court. If the parameters used in reaching the final decision at the appeal courts in Kogi and Adamawa are anything to go by, then more governors, some speakers of States’ Houses of Assemblies, some members of the National Assembly should start doing their homework on how to go back to the field for fresh elections. Of all the governors, it seems to me that only Governors Peter Obi of
With these reversals, five scenarios are likely to play out at the end of the day.
First, INEC would not want to be so rubbished again on point of technicalities, thus it is expected to strictly adhere to the rules and allow all eligible candidates to go to the field for trials. It will strive to produce a re-run election results that will be credible. If this happens, many of the incumbents who will only depend on their popularity and money may not return to their beats because the masses are wiser and the judiciary is watching.
Secondly, the opposition and the aggrieved will team up against the incumbents whose elections were annulled to produce new office holders. Some may take it with a pinch of salt while others may whip up ethnicity sentiments, which are the usual antics of bad-loser-politicians. If this path is taken, it will be costly and catastrophic for our democracy.
Thirdly, the incumbents may resort to the power of incumbency by using coercion and indulge in rigging. The masses and the opposition in some states will vehemently resist this. This might lead to severe agitations, breakdown of law and order, and bloodshed. Except we handle this with care, it may prove fatal to our nascent democracy. The impact would be socially, economically and politically expensive.
Fourthly, the call for Professor Maurice Iwu to resign will be deafening in the next few weeks. If I were, I will honourably throw in the towel. This is a more honourable thing to do and the way it is done elsewhere where integrity matters. As a respected academician, he has a constituency waiting to utilise his skills. He is unlike the political jobbers who after losing battles at the election fields have no where to return. So, why hang on to a job that has attracted so much outcry against his actions and done so much damage to his credibility?
Fifthly, when politicians lose or cheat at elections they set the masses against each other using tribe or religion as the reasons for their losses. We are likely to see this play out in some states.
Any politician or religious bigot promoting or calling for violence in the name of tribe or religion must not be allowed to have his/her way this time. Let us tell them in clear terms that 2011 is around the corner for another trial and thus should wait to try again. Where they refuse our wise counsel and still want to ginger the rest of us to foment trouble, we must insist that they and their children should take the frontline positions before any one can follow. Enough of the attitude of lose, psyche us into destroying ourselves and our shanties, take the next available flight out of the country and return to lord it over us when the ashes of war settle. For once, the masses of this nation should let the elites know that they are powerless without the masses.
OTHER SECTORS
No sector has been spared of the reversals. The controversies surrounding the sales of AP shares, ALSCON, NAFCON, NITEL, NICON Insurance and the two hundred million shares in Transcorp to OBJ holdings and the PENTASCOPE deal also vindicated our stand that the Privatization process did not follow the laid down guidelines in the Privatization of the enterprises in question. It is an incontrovertible fact that because of the frosty relationship between the President and Vice President Atiku Abubakar, the overall decisions in most of these cases were taken at the whim of OBJ. This cannot be due process. The Nitel sale was revisited and partially reversed on Friday 15th February. This led to the temporary suspension of Transcorp by security exchange on Monday 18th February 2008 because of ownership tussle. However, it would seem that government and Transcorp have found the middle course to allow another core investor into the business.
Estate
The green area in the high brow of
The revelations from the Senate committee looking into the affairs of Federal Capital Development Authority (FCDA) confirms that due process was not followed in the allocation of houses, retrenchment of public officers and the private/public partner initiative during the tenure of El-rufai. For instance, there is ample evidence to prove that several workers were victimized and thrown into the unemployment market because on their roles in the strike action that was embarked upon by the Health workers in the FCDA. Many people were thrown out of their homes and allocated to friends of those at the helms of power. The then Permanent Secretary, Ministry of Labour and Productivity Dr (Mrs) Timiebi Koripamo-Agarry was representing
Education
The past government had scrapped the national diploma education and did a pseudo privatization of the unity schools. These have also been reversed
Health
The Local Government (LG) health centres to be built by the Federal Government with direct debit from LG accounts have also been reversed because of breaches to the autonomy clauses in the constitution.
While these reversals are desirable in view of the serious breaches to lay down privatization procedures and the lopsidedness of the sales, the Government must do more than just reversals. It must do the proper thing to reposition these enterprises by ensuring that they run like typical commercialized entities. The pre-1999 rot of the steel and petroleum sectors and the queuing for petroleum products is simply unacceptable. The reforms in the oil and gas sector are unavoidable, a must and should not be jettisoned. PENGASSAN and NUPENG went on a 2 day strike in June 1993 to canvass for an autonomous Petroleum Inspectorate Commission among others. We were wiser 15 years ago and what we fought for that time, OGIC has recommended in 2008. this is cheering but step taken must follow laid down rules and procedures. The people of this nation must own the process, not the other way round. This is the only way we can have confidence in the system.
If the last government had taken time to set its agenda on the respect for the rule of law and genuine counsel, followed due process, which it sermonized; we would have been out of the woods. It would have taken credit for revitalizing the ailing concerns and spared itself the can of worms being spewed now for public consumption.
The polity, education, energy and health sectors are in dire need of genuine reforms. Every effort must be channelled towards a proper restructuring of these important sectors for the betterment of
On the whole, the reversals should not just end the matter. All major actors in the privatization and election scams should be thoroughly and fairly investigated. Those found culpable at the end of the day should be sanctioned to serve as a deterrent to other government officials.
Weep not OBJ because I foresee President Yar’Adua arriving at the same conclusions as you in some of the cases. You should count yourself lucky for having a worthy successor who is building on former structures you built rather than destroy the legacies handed over to him. Take pride as the beginner of the reforms especially the OGIC, after all, the teacher prays for his/her students to be better materials.
The only difference between both of you is the approach and implementation, doing it right, being more democratic, ensuring that the process is more people friendly, ensuring that due process and the rule of law are followed in the reformation processes and that the assets to be privatized will attract the right prize for the benefit of the nation. At the end,