President Medvedev and Prime Minister Putin

The Government of Georgia on the 12th of August 2008 filed a complaint at the International Criminal Court in The Hague, against the Russian Federation for alleged acts of ethnic cleansing, conducted on Georgian sovereign territory (South Ossetia, Abkhazia and adjacent areas within Georgian territory) between 1993 and 2008. The case comes against the backdrop of the humiliating defeat Georgia suffered in its attempt to seize the former territory of South Ossetia by force.

As far back as 1989 South Ossetia was already at odds with its Georgian neighbour over its demands for increased autonomy, and by 1991 had made clear its intention to secede. Following the collapse of the Soviet Union in 1991, the people of South Ossetia in 1992 and again in 2006, voted overwhelmingly in favour of independence. The 1992 vote provoked a level of violence between Ossetians and Georgians in the territory that required Russian intervention in support of an armistice, and led to the creation of a tripartite peacekeeping force which had managed a fractious peace until the night of 7.8.08.

The linguistically and historically distinct South Ossetia and Abkhazia, have been autonomous Russian protectorates or regions since 1810. Over the last sixteen years, South Ossetia has had its own constitution, parliament and president. The Russian rouble has been the preferred currency, and the possession of Russian passports seen as a guarantee of their freedom. Russia was content to let this stalemate with Georgia persist but the blundering arrogance of American foreign policy has contrived to force its hand.

A policy of encirclement has seen the North Atlantic Treaty Organisation (NATO) needlessly expand its membership up to the borders of the Russian Federation. NATO’s expansion, first proposed under the Clinton administration has reawakened Russian fears about encirclement by antagonistic forces. It seemed that America was pursuing a strategy of ‘containment’ to ensure that Russia would effectively be neutralised as a ‘threat’ to its ambitions in its new position as the world’s only super power.

Further aggravation came in the form of the ‘missile shield’ to be situated in Poland and American sponsorship of the Kosovo declaration of independence both of which Russia opposed vociferously. Spain’s Prime Minister Zapatero was a solitary voice in stating that acceptance of the Kosovo declaration was illegal under international law. Many Russians already felt that the west had a little too gleefully celebrated the demise of the USSR, and was deliberately slow and ineffective in helping Russia transform itself. It is no surprise that Putin remains the most popular politician, credited as he is with restoring order, strength and pride, to a nation that was once floundering. American policy has managed to ensure that a now capitalist and increasingly prosperous Russia remains acutely suspicious of its intentions around the globe.

It is difficult to understand the motivation of the Georgian president Mikhail Saakashvili. It may be that his many internal political difficulties required the diversion a war provides. If his many lunches with the lame-duck president of the United States had persuaded him that Georgia was of such vital and strategic importance that U.S. personnel would actively intervene, with the ultimate threat whispered down the hotline to Moscow, he was to be proved tragically wrong. On the night of 7.8.08, Georgian troops in a surprising move, stormed the territory of South Ossetia, seized its capital Tskhinvali and unleashed a barrage of shells and rockets on its residents. Human Rights Watch, claims there is much evidence of inappropriate and indiscriminate use of force against the civilian population, evidence suggestive of war crimes. Their estimate of casualties is between 3-400. With the parliament building destroyed, the city centre in flames, and the Russian peacekeepers in disarray the Georgian forces had reason to think success was at hand.

The impassioned appeals of the South Ossetians dominated the news cycle, showing as they did, a people overwhelmed and put to flight by a neighbours aggression. The people of North Ossetia and Abkhazia were outraged and vowed to send irregulars to aid the resistance. Across Russia there was a determination that this attack by a former constituent part of the empire demanded a swift and unequivocal response. Prime Minister Putin cut short his attendance at the opening ceremonies of the Beijing Olympics to take charge of the situation and within five days of initiating the counter-offensive, South Ossetia was free and Russia was in control of vast swathes of Georgia. With the crippling of Georgia’s military infrastructure, its ability to threaten and intimidate its neighbours has been significantly curtailed.

Low-level criticism from nameless American officials describe the offensive as “ill-prepared and ill-conceived”, while Britain’s Foreign Minister David Miliband has admitted that Georgia was “reckless”. The strongest criticism has been reserved for Russia whose response has been characterised as “excessive” and an “overreaction”. The columnist William Pfaff puts it well when he says, “this response evades acknowledgement that the real damage President Mikhail Saakashvili of Georgia has done has been to the United States and NATO, and to Georgia itself, which for the foreseeable future will be a nation of limited sovereignty, and an awkward embarrassment to its Western allies”.

Georgia is a troubled nation stumbling seemingly perpetually in crises. Mikhail Saakashvili presides over an increasingly repressive state where dissenting voices are not tolerated and critics now find themselves followed, bugged, threatened, and often assaulted. The oxygen is slowly being sucked out of Georgia’s pretence at democracy. A base nationalism now taints all discourse as Saakashvili uses every means to preserve himself in power and suppress the opposition. His preposterous claim is that a scheming Russia beguiled Georgia into attacking South Ossetia.

It is hard to imagine how the Abkhazians and South Ossetians could once more live within the borders of Georgian state. Their independence has been hard won, and the blood shed over the last two decades will not easily be forgotten or forgiven. The new republics of Abkhazia and South Ossetia are not immediately concerned with western recognition of their independence. The Russian Federation is a more relevant guarantor of their status and security. Georgia’s allegation of ethnic cleansing has no foundation and only serves to heighten tensions in the region.

It would serve the best interests of the U.S. and international security if Georgia were to withdraw the case against Russia and act to re-establish good relations with its neighbours. The International Criminal Court should not become the stage for post-war theatrics if it is to preserve its reputation. In as much the U.S. considers the independence of Kosovo irreversible, Russia will prove similarly inflexible where Abkhazia and South Ossetia are concerned. In the middle of the current global financial crisis, and with the burden of Iraq and Afghanistan, the Western alliance has little inclination or strength to expend in support of Georgia’s hubris.

The minister explained that the details of the ‘revocation’ remained to be worked out but it appears that Transcorp will be compelled to sell-down its 51% holding to a maximum of 10% with the government also reducing its 41% stake. Once again the search for a transparent process and an experienced core investor for the failed telecoms company begins.

The sale of NITEL/Mtel to Transcorp came after three failed attempts by the Bureau of Public Enterprises (BPE) to sell of 75% of the governments shares in the under-performing telecoms company. In 2001, International Investors of London Limited (with the prescient acronym IILL) failed to make timely payment for its winning bid and thus forfeited its 10% deposit of $131m. The bid was largely funded by First Bank of Nigeria Plc. whose chairman at the time, Mr. Bernard Longe, paid the price of failure by being removed by the board. He was later to emerge briefly, as an executive of Transcorp Plc. In December 2005, the government rejected the highest bid to emerge for NITEL/Mtel made by Orascom Telecoms of Egypt to the tune of $256m. A 51% holding in the company was eventually sold to Transcorp Plc. by
negotiation for $750m in July, 2006.

Transcorp Plc. while publicly hailed as an attempt to stem the flow of
major enterprises into the hands of foreign interests, and a spark that
could ignite greater industrial development in Nigeria by virtue of its
breadth of interests and the collective strength of it founding members
with the cream of Nigerian Industry listed as participants and promoters.

Chief Olusegun Obasanjo (former President of Nigeria)
Prof. (Mrs) Ndi Okereke-Onyiuke (DG, Nigeria Stock Exchange/Chairman, Transcorp)
Mr Bernard Longe (Group Managing Director/CEO, Transcorp)
Mr Nicholas Okoye(Group Executive Director, Operations Transcorp)
Mr Chukwunoye Ofili (Executive Director, Finance Transcorp)
Mr Tony Elumelu (Managing Director, United Bank For Africa)
Mr Jim Ovia (Managing Director, Zenith Bank)
Mr Jacob Ajekigbe (Managing Director, First Bank of Nigeria Plc)
Jim Ovia – Zenith Bank Plc.
Mr. Fola Adeola – Former Chairman of the National Pension Commission and Group MD of Transcorp
Alhaji Aliko Dangote – Dangote Group of Companies
Mr. Femi Otedola – Zenon Oil
Mr. G.U Okeke

However the problem with Transcorp was that it was widely perceived to be a collective of disparate interests close to the former President with an interest in profiting from the disposal of government assets. The bulk of Transcorps assets are constituted by properties purchased from the federal government. It began with the acquisition of the of NICON Hilton Hotel, Abuja, for $105m in 2005, through NITEL/Mtel, and oil blocks. In all it acquisitions there were suspicions of government bending over backwards to
accommodate the company. After winning the bid for NITEL/Mtel, Transcorp was unable to meet the one week deadline for payment of 50% of the bid price, raising only 10% ($75m). In a seminal analysis of the company’s prospects, Ms. Ijeoma Nwogwugu of This Day newspaper wondered how the corporation was going to pay dividends and service the interest on the debt it had already raised to finance the refurbishment of the now renamed Transcorp Hilton, and the debt it would need to raise for the development of its oil blocks and the refurbishment and expansion of NITEL/Mtel (the latter two projects being long-term in nature) when it had only the hotel to produce cash flow, NITEL/Mtel being hardly able to cover its own costs.

Transcorp Plc. has transparently failed to effect any noticeable change at NITEL/Mtel, and instead stands accused of cannibalising the company, retrenching workers contrary to its agreement with the BPE, attempting to cede the SAT-3 service to third parties, scrapping medical facilities for NITEL staff and owing staff salary arrears of up to six months, this in spite of its having raised N20bn from the investing public in 2007. President General of the Senior Staff Association of Communication, Transportation and Communication (SSACTAC), Mr. Adetunji Adesunkanmi, said that without the right back-up, financially and technologically, Transcorp cannot manage the telecommunications outfits. The allegation is made that substantial portions of land belonging to NITEL/Mtel have been sold off and there is little evidence of the proceeds of the public offer being applied to revive the company. It is estimated that NITEL now has less than 80,000 functional lines and Mtel, 30,000.

There is little doubt that many of the initial investors had a timescale within which their investments in Transcorp were scaled back, and since the public offer, the share price of the company has languished leaving participants in the offering facing significant write-downs and outright losses. With the sale of NITEL/Mtel revoked and the purchase of the Transcorp Hilton now under investigation, it is uncertain what remains of the the corporation and what might be salvaged. It might be harsh to say
that Transcorp was a stock market bubble promoted by political interests for political reasons and not business reasons. With the head of the Nigerian Stock Exchange also acting as the chairperson of the company it remains to be seen if the internal processes of the company will be investigated effectively, or indeed if Mrs. Okereke-Onyiuke will do the honourable thing and resign her position at the Exchange.

NOTE: The original investors in Transcorp, including former President Olusegun Obasanjo who had 200 million shares in his so-called ‘blind-trust’, bought into the company at N1 per share. The failed public offer was priced at N7.50 per share with only 36% of the IPO taken up. The company’s shares which have traded as high as N12 and as low as N2.90, closed last Friday at N4.42.

M. Schneider GMBH and Co., in August, 2007, petitioned the Presidency and the Economic and Financial Crimes Commission (EFCC) accusing Mrs. Iyabo Obasanjo-Bello of sharp practices. The claim is that while still a commissioner in Ogun State, she travelled to Austria to sign contract papers for the floating of M. Schneider Energy, which bid for and won, power project contracts during the Obasanjo administration, claiming to be Mrs. Damilola Akinlawon. The firm further alleges that the contract was packaged by Prince Albert Awofisayo of VAMED Engineering Limited with Akiya Nig. Limited, a company allegedly owned by Obasanjo-Bello and one of her siblings.

The aspects of the contract deal, which border on illegality relate to the allegation that Mrs. Obasanjo-Bello broke the law by impersonating one Mrs. Damilola Akinlawon and breached the Code of Conduct rule by engaging in active business practice as a public officer. Section 1 of the Code of Conduct states that a public officer shall not put himself in a position where his personal interest conflicts with his duties and responsibilities and, Section 2(b) clearly states that except where he is not employed on full time basis, a public officer shall not engage or participate in the management or running of any private business, profession, except farming.

The rot in the former first family family is further exposed very publicly in the divorce petition filed by the first son Gbenga Obasanjo, who has claimed that the former President on several occasions slept with his wife, who was so obviously also, his daughter-in-law. Gbenga Obasanjo expresses serious concern as to the paternity of the children born in the course of the marriage. It may be that persistent rumors regarding the relationship between the former President and several of his former female ministers cannot be publicly substantiated, but the character of a man is quite rightly called into question when his first son finds it necessary to make such allegations public.

The claims by Gbenga Obasanjo and his estranged wife, as well as the ‘Iyabogate’ affair, make it clear that relations and quite possible those who found their way into the former President’s bed (or family) did profit handsomely from government patronage. These revelations while not new for many with their ears open in Abuja, demonstrate the personal inconsistency of the ever moralising Obasanjo who has just recently completed an Open University course in Christian Theology. It may be that hypocrisy is an integral part of public life in Nigeria, but incest in the Presidential household surely plumbs the depths.

The former President, has a controlling interest in a university and remains in situ as chairman of the Board of Trustees of the Peoples Democratic Party. He continues to fight for relevance in deciding the future direction of the party and the preservation of his discredited legacy. It seems that there is a notable failure in our society with regard to the effective sanctioning of elders and prominent persons who so brazenly violate the trust reposed in them. It ought to be a thing of shame to the people of Ijeshaland (and all other places that freely dish out titles with little regard as to character of recipients) that one of their traditional title holders is a person whose very own household seems riddled with the vices that have brought the country to its knees. The Owa Obokun, Oba Adekunle Aromolaran, who received Obasanjo in his palace, noted that the hallmark of leadership was selfless service, which he said Obasanjo gave the country. I trust his opinion remains unchanged.

Ibori faces further complications in the efforts of the Delta Elders Forum led by former Minister of Information, Chief Edwin Clark who insist that he must account for N159 billion controversial supplementary budgets during his tenure. They allege that Ibori passed separate supplementary budgets for five years in one day. They are currently in discussions with lawyers with a view to seeking an order from the Federal Court of Appeal to compel an investigation of the alleged “looting”.

The charges prepared by the EFCC cover the period of 2003-7 (Ibori was sworn in in 1999) and seem to involve a rather limited number of companies. It is interesting to note that there is little indication of where the money actually went from the said accounts, especially as all banks are required by law to report transactions in excess of N1m and the EFCC would certainly have all the information regarding money flows from the suspect accounts in its possession.

The charges also carefully avoid the oil industry and political associations in a way that beggars belief. Delta State primary business is oil, with politics a close second. There is no indication of how sufficient funds came to be accumulated outside the country to fund the cash payment of $40m for the Nigerian operations of Wilbros, or the Bombardier jet and luxury properties that are at the root of his legal troubles in London. Observers must be concerned that the bulk of the charges indicate that money ‘sat’ in different accounts and that seemed sufficient for the EFCC.

If Ibori is indeed to be charged with stealing from the public treasury, then surely those who received all or a part of such funds should have a case to answer. The tax authority should also make its own separate case if it can establish that Ibori had undeclared income, and did not pay the proper taxes personally or in his many corporate guises.

Now the outcome of the EFCC investigation, its thoroughness and credibility will be put to the test in the court. Pressure from public opinion has brought the proceedings thus far and what is expected is that the trial will be fair, the evidence convincing, and the outcome … satisfactory!

The news confirms speculation about radical changes coming to the anti-corruption agencies and their collective strategy early in the New Year. The EFCC, ICPC and CCB have overlapping responsibilities as exemplified in the prosecution of Diepreye Alamieyeseigha, former governor of Bayelsa State who was convicted in a case brought forward by the ICPC and still faces similar charges before the Code of Conduct Bureau.

The duplication of investigations and prosecutions has been unhelpful and has to a large extent undermined the reasons for the existence of the Serious Fraud Unit of the Police. It has also been wasteful from a resources point of view, especially in a situation where the EFCC has been largely funded and trained by external sources.

There will be speculation as to what the new structure will be and if the high profile Chairman of the EFCC, Nuhu Ribadu will preserve his current status but it is certain that the AGF will be looking to separate the anti-corruption cusade from political interference while seeking greater professionalism in the investigative and prosecuting arms of the new structure.

Relying on Section 174 of the constitution, Andoakaa sought to bring the prosecutorial powers of the EFCC, ICPC and other law enforcement agencies under his direct control contrary to a reasonable interpretation of the Supreme Court judgment in FGN vs. Osahon, which had made it clear that law enforcement agents can initiate criminal proceedings although the AGF, under Section 174 of the 1999 Constitution, and the state attorneys-general, under Section 221, have the powers to discontinue or take over such cases at any stage.

The AGF was also quick to slap down proposals by the Central Bank of Nigeria (CBN) for a new naira policy, redenomination, planned for 2008. The policy announcement by the governor of the CBN, Professor Charles Soludo, caught the government unawares, as he pushed at the very limits of the autonomy granted by the CBN Act of 2007. The government was not briefed in advance and was glaringly ill prepared to comment when the media came calling for clarification. The AGF announced the suspension of the plan because the CBN had not obtained the written consent of the President, and Yar’adua also not convinced of the merits of the policy, added that the CBN published the policy proposal “without appropriate regard for the present administration’s insistence on due process and the rule of law.” Many analysts are of the opinion that the governor of the CBN should have tendered his resignation at that moment, facing so public a rebuke.

The AGF’s war of attrition with the EFCC has continued publicly with his intervention in the Orji Kalu case and the letter to counsel for James Ibori (both former Governors) drawing heated attacks from sections of civil society. Chief Gani Fawehinmi who said he was appalled and disturbed by the “negative and unconstitutional role” being played by the AG with regards to the anti-corruption war, noted that since Aondoakaa’s assumption of office on July 26, 2007, he had given the “unmistakable impression” that the crusade against corruption in the country was not in his agenda and that the activities of the institutions engaged in the war against corruption do not have his support.”

Chief Aondoakaa comes to his present position with an interesting history. In his private practice, he has recently been counsel for Chief Audu Ogbeh, former chairman of the People’s Democratic Party (PDP) accused of embezzling the party funds after he fell out with the former president Obasanjo in his bid to bring sanity to the ruling party. The corruption charges were widely interpreted as an effort by the government to silence yet another high profile critic of executive lawlessness. He also represented George Akume, former governor of Benue State in his travails with the EFCC.

Most pertinent of all is the part he played at the beginning of the former vice president’s challenge of the result of the last presidential election. Alhaji Abubakar Atiku fought a hard legal battle to ensure his participation in the elections and is now challenging the results that produced Yar’adua as President. It is a certainty that all this information was made available to the president before his appointment was settled.

The AGF Aondoakaa is a man of strong opinions and he has declared that he would not be intimidated by the attacks. In remarks at the start of the Federal High Court legal year the he criticised legal practitioners who condemned court decisions on the pages of newspapers. “Once there is a valid decision of a court, the government will obey. It is a dangerous precedent to condemn the decision of a court on the pages of newspapers.” He insisted that “orders of the courts must be obeyed. Even if the order is reckless, I will still obey it, though I will go to a higher court to appeal against it and I will ask for stay”.

On the EFCC he described the invasion of the residence of Chairman of Globacom, Dr. Mike Adenuga, by policemen acting on the orders of the EFCC in the course of an investigation as “a sheer act of intimidation” lacking regard for the rule of law. “If agencies of government are used for political ends, there are bound to be problems. In Adenuga’s case, how do you carry 40 policemen or so to arrest a harmless Nigerian without a court warrant? It is unjust and unconstitutional. It is rascality and a breach of the law to say you will arrest a man before looking for evidence to prosecute. You do not arrest a man before looking for evidence to prosecute him. It is the other way round.”

In the midst of all the controversy it seems that the AGF has the firm support of the Nigerian Bar Association and the ear of the president. It may be that his tenure will witness the beginning of a revolution in the attitude of government with regard to the legality of its actions. For his insistence of on defending the rule of law, he places the government on a higher moral platform than the former regime, a differentiation that Yar’adua has been steadily working to achieve. Lagos based lawyer, Festus Keyamo perhaps sums it up with his comments in support of the AGF.

“All the man has done is to insist on rule of law. Some people feel the era of impunity must continue. He has not withdrawn any charge against anybody. They are just trying to blackmail him”. Keyamo also argued that those who alleged that the anti-corruption war had slowed down were saying so because there have not been indiscriminate arrests since then. “What they consider as ‘slow down’ is because they are no longer arresting people indiscriminately. Nobody is arrested with impunity any longer”.

On July 17, 2007 the Director-General of the Bureau of Public Enterprises (BPE), Mrs. Irene Chigbue, was still insisting that due process was observed in the concluded sale of both the Port Harcourt Refinery Company and Kaduna Refining and Petrochemical Company. Her comments, made during a courtesy call by a delegation from the United States Department of Energy, came at a time when she must have known that that particular transaction had been terminated. She had after all represented her department at the meeting in the Presidency where the decision was taken, and was also under suspicion regarding the untimely leakage of the deliberations to Blue Star Oil Services Limited, a consortium owned by billionaire businessmen Aliko Dangote and Femi Otedola.

In a face-saving gesture the consortium released a letter dated 17 July, claiming it was withdrawing from the USD721 million deal due to the vilification of the consortium by organised labour and some vested interests in the state-run Nigerian National Petroleum Corporation (NNPC). This may prove to a very costly gesture because while the Presidency was inclined to refund all monies obtained for the refineries where the government itself reverses the transaction, the situation is less clear where the bid winners themselves indicate their intention to withdraw.

Mrs. Chigbue may maintain that the privatisation of the nation’s refineries was in fact “the result of a complex five-year transaction process conducted subject to international best practice and following the adoption of a multiple-bidder competitive tender process” but the overwhelming opinion of Nigerians was that the process was lacking in clarity and transparency and seemed designed to reward ‘friends’ of the outgoing President in the twilight of his influence.

This flawed transaction is just one of many examples of the haphazard implementation of the governments privatisation policy. The sale of Apo Legislative Quarters under the guise of the monetisation program, the ‘concessioning’ of the National Theatre, Lagos International Trade Fair Complex and the Tafawa Balewa Square are also issues of great concern to the public. There is the suspicion in all these cases that the public interest has not been served due to the lack of consultation and transparency of the policy implementation.

Privatisation in the ordinary sense is the policy implemented by the state whereby State-owned companies are transferred or sold out to private individuals or private corporate entities. Until the 1980s international policy tended to favour state planning and state ownership to lever investment and capital accumulation as part of economic development. By the 1990s, however, sentiment had changed in donor agencies and a number of governments in the face of developments in economic theory and mounting evidence of ‘state failure’ (World Bank, 1995). This was reflected in the collapse of the USSR and the ‘socialist’ eastern block and its subsequent restructuring along more capitalist lines.

The theory is that inefficient State-owned industries suffer because agents within government have a tendency to pursue their own interests, or the interests of special groups at the expense of the public. Such agents lacked motivation and incentive to perform adequately. Private capital with its profit driven motive would act more decisively to ensure the health and growth of an enterprise. For a newly privatised entity this might entail a period of streamlining of the cost structure of the business, with a predictable impact on the labour force, but in the medium to long term, there is a freeing up of government funds for other purposes, and as the business prospers, more labour may be required and tax revenues to the government increase as well.

So much for theory. It is acknowledged that over the years billions of dollars have been spent on public enterprises like NEPA, NITEL, Health and educational institutions, recreational facilities like the Stadia, National Theatre, among others. President Olusegun Obasanjo announced the new privatisation programme in July 1999 shortly after becoming the country’s first elected head of state in 15 years. He was scathing in his criticism of the unwieldy public sector, where some of the more than 1,000 state-owned enterprises were losing millions of dollars annually. “State enterprises,” he said, “suffer from fundamental problems of defective capital structure, excessive bureaucratic control or intervention, inappropriate technology, gross incompetence and mismanagement, blatant corruption and crippling complacency.”

The Nigerian public knows and has suffered greatly from the widespread incompetence of the management of these institutions but it is also very much aware that the Management Boards of these enterprises are appointed by the government, and the inadequate funding was also determined by the same government. And of course, the bulk of officials-cum-policy makers of the past also occupy the present government. In other words, the criticism is a self-indictment on the ruling elite and other government personnel, past and present.

The failure of the privatisation policy and its monetisation branch rests squarely on the shoulders of the Obasanjo regime. The main policy makers of government have had various comments to make about the process that show there was incoherence and bad faith at the highest levels, from the beginning. The most damning evidence was provided by former Vice President, Atiku Abubakar, who chaired the National Council on Privatization between 1999 and 2005. He was quoted thus:

“The well-conceived and well-intentioned privatization programme, which was designed to, transparently, transfer state-owned assets to private hands to ensure better service delivery, has gradually been personalized and our prized economic assets and choice enterprises have been cornered and auctioned off to a tiny cabal of private sector interests closely associated, or in full partnership with those in the corridors of power, with little or no pretence at due process or transparency … (They) used the privatisation programme to auction our crowned jewels to themselves at rock-bottom prices” (The News, March 5, 2007). Even Senator Ahmadu Ali, chairman of the ruling Peoples Democratic Party felt free to weigh in on July 4, “This is an age when they sell off everything including the family silver. I don’t encourage all these things. I don’t see why my Federal Government Colleges should be sold. I don’t see why certain things that are of national security should be sold”.

The perception that the privatisation process has been taken advantage of primarily by residents within the corridors of power and their loyalist is amply demonstrated in the sale of the “government-owned non-essential houses” where choice presidential guest houses ended up in the hands of serving public officials.

1. Mallam Nasir el-Rufai, former Minister in the Presidency and Chairman of the Federal Capital Territory Administration (FCTA) who in that capacity was also the chief auctioneer in the sale of federal government houses in the Federal Capital Territory (FCT), bought the presidential guest house at No. 16 (now No.12), Mambilla Street, Off Aso Drive, Maitama, Abuja;

2. Dr. Andy Uba, former Special Assistant to the President on Domestic Matters, dethroned as governor of Anambra state by a Supreme Court judgement which reinstated Peter Obi, bought the property at No. 19 Ibrahim Taiwo Street, Aso Rock, Abuja;

3. Mrs. Remi Oyo, Senior Special Assistant to the former President on Media bought the property on Yakubu Gowon Crescent, inside the Presidential Villa;

4. Dr. Mohammed Hassan Lawal, former Minister of Labour and Productivity bought the property on Suleiman Barau Street, Asokoro, Abuja;

5. Mr. Akin Osuntokun, former Managing Director of the News Agency of Nigeria (NAN) and, later Honorary Political Adviser to the former president, bought the presidential guest house at No. 2 Mousa Traore Crescent, Abuja;

6. The sale of the official residence of the Inspector General of Police (IGP) to Mr. Sunday Ehindero, the immediate past IGP.

Another major concern is the fate of Apo Legislative Quarters, Abuja. It was reported that new lawmakers became stranded in Abuja because the housing units originally built for the MPs had been sold to former legislators. Over N25bn has been realised from the sale of the Legislative Quarters but the nation now faces an immediate bill of N3bn as Legislators accommodation allowances for the next one year, raising questions about the long term benefit of disposing of this particular asset. The propriety of Mallam el-Rufai participating in a process he is meant to supervise, and the sale of guest houses within the Aso Villa security zone is not apparent to the public and that all these ‘transfers’ took place in the closing phase of the former government raises many questions.

The residents of Transit Village Adetokunbo Ademola Street, Victoria Island, Lagos have also raised their voices over the manner in which their estate of about 110 units, ended up in the hands of the Bank of Industry, a government parastatal with Senator Ahmadu Ali, chairman of the ruling Peoples Democratic Party, and a political appointee as its chairman. The Estate’s residents are senior public servants of the Federal Government and assumed they were among those who government by its circular reference No SGF 191549/C1/11/37 of 27 June, 2005, promised to give the first option to buy their official quarters and would only sell to the highest bidder if they declined to exercise that option.

Co-ordinating Chairman of the Transit Village Resident’s Association, Mr Chioma Abara, has raised questions about how the estate came to be described as “fallow” (as in, unoccupied, without human presence) in a government advertisement of October 21, 2006. The Implementation Committee which in April 2006 undertook the physical verification of Federal Government properties in Victoria Island had, as part as its task verified 1004 Estate but somehow overlooked Transit Village next door. Residents notified the committee in writing of this oversight, and met a wall of silence. When occupants of Federal Government Houses in Lagos were asked to collect forms to bid for their residences, they were collectively rebuffed and told they were not included in the arrangement. Now they find their homes effectively belong to the Bank of Industry, whose remit can only by ridiculous contortion, be said to include property development.

Such is the fate of the powerless in Nigeria. A laudable policy is put forward and on the face of it the benefits are obvious, but the intentions of those in charge of implementation can only be characterised as deceitful, and the process, lacking in credibility, accountability and transparency. Specifically, the government and the BPE in particular stand accused of the following:

- A failure to explain the purpose and the benefits of the privatisation policy to the population. An increase in social and political tension caused by the
widespread perception that the policy and its application is intrinsically unfair actually deters overall investment in the economy. Unions are right to be concerned about job losses and Nigerians should be concerned about foreign ownership of major sectors of the economy. The government has distinctly failed
to persuade most sectors from academia, the unions, women’s societies, voluntary organisations etc. that it is acting in the common interest and its actions indeed provide much evidence to the contrary.

- A failure to clarify the backgrounds of potential investors with regard to personal and corporate character, financial credibility and industry experience, as well as their detailed intentions regarding the enterprises offered for sale. This would prevent situations like the failed IILL bid for NITEL where funds to cover the purchase of NITEL could not even be raised, or the situation with the National Theatre concession, where the bid winners Infrastructica start shopping for $500m after they have won the concession. This sum represents the total investment the company has outlined for the refurbishment of the National Theatre and the redevelopment of the site into a cultural district. The signs are clear that Infrastructica will invest none of its funds beyond those already expended in winning the concession. The Committee for Relevant Art (CORA), has effectively challenged the BPE on its own lack of definition of ‘concessioning’ and that the fact that there was no consultation with strategic groups within the culture sector and the fact that Infrastructica has no history in this area and its plans remain unclear. Then the case of the Lagos Trade Fair Complex whose N40 billion concession was won by Aulic Nigeria Ltd, a company with a paid up share capital of N185,000! When one considers that Nigeria Airways under Mrs. Kema Chikwe, was almost sold to a U.K. based shell company with a share capital of just a thousand pounds, perhaps this is not so surprising.

- A failure to monitor and encourage the expansion of privatised sectors to ensure there is competition and an increase in the supply of goods and services to the market. There is a high bar to entry into many industries the government is divesting from such as hotels, vehicle assembly plants, the electricity and telecommunications sectors, oil refining, cement and fertilizer production. It is clear that the price of hotel accommodation, transportation, cement, fertilizer etc. have all risen giving the public grounds for criticism. Only in the communications sector can there be said to have been a significant increase in services but still fully 60% of the population remains without this basic utility. It is indeed unfortunate that many public monopolies seem destined to end up in private hands as private monopolies.

- A failure to act ethically and consistently in the pursuit of public policy. Only perhaps in Nigeria can the Director-General of the Nigeria Stock Exchange (NSE), Dr. Ndi Onyiuke-Okereke – a public official no less – head an organisation called Corporate Nigeria whose sole purpose was to raise funds (N2 billion approx.) for the Obasanjo/Atiku campaign organisation of 2003, even going as far as to solicit funds using NSE stationery. While still occupying the same office, she emerged as the chairperson of Transcorp (Transnational Corporation), a company in which President Obasanjo held betwen 200-600 millon shares, and ended up purchasing NITEL, the Abuja Hilton Hotel and two oil blocks from the same government they both serve. Transcorp (now Plc.) was also floated on the NSE under her careful watch. Board meetings are reported to have been held at Aso Rock. There is no life to Transcorp Plc outside the properties it has acquired from the Federal Government and when it missed the deadline for payment of the first $500 million of its $750 million winning bid for a 75% equity stake in NITEL on July 13, 2006 this is what the BPE had to say: “Transcorp failed to meet the deadline. We will communicate this to the National Council on Privatisation, which will decide either to revoke the deal or grant them an extension.” With the National Council on Privatisation and the BPE effectively under Presidential control, there could only be one possible outcome.

Privatisation can indeed bring great benefits to the economy and the population but only when it is complemented by policies that promote competition and where there is effective state regulation in a broader process of structural reform. The government for its part has failed to appreciate this and has neglected to provide the basic infrastructure that would encourage private enterprise.

Rail and road networks are failing and after eight years, the Obasanjo regime has left us with even less electricity being generated. The education sector is in constant crisis and is incapable of producing the basic manpower this country needs now and in the foreseeable future. The GSM companies have protested that the government has not provided the enabling environment it promised when the first set of licenses were auctioned. Now they are wholesale importers of generators and consumers of diesel. Lafarge WAPCO in its half year report disclosed that it lost 200,000mt of cement production (valued at N400 million) due to the poor supply of electricity and gas to its plants.

Every Nigerian has to make his own private arrangements for water, stand-by electric power, transport and every basic necessity while the government spends freely on projects that have no impact on ordinary lives. It is no wonder that they are sceptical of the rhetoric coming not just from Aso Rock, but from all the state houses across the federation. President Yar’adua has a golden opportunity to prove he is a new beginning. So far, his words have been thankfully few but so indeed have his actions. He must remember that the French President Nikolas Sarkozy, was elected at about the same and has already taken positive and striking steps to resolve the Libyan-Bulgarian Nurses imbroglio, EADS-Airbus troubles and is now working on a better relationship with the American establishment. The French Presidency makes ours look sluggish and indecisive at a time when the country despairs for a new direction. President Yar’adua needs to act firmly to correct the serious anomalies of the immediate past, and the reversal of the refineries transaction while a positive sign is not enough. The sale of Apo Legislative Quarters needs to be revisited and the management of the entire privatisation and monetisation process overhauled to bring it in line with standard international practice. Then his government has to focus on providing credible solutions for the electricity, transport and education sectors or else Nigeria will forever be condemned to exist as a paid-up member of the “third-world”.

The privatisation of public enterprises is not a panacea for our many problems. It has its critics and will certainly cause some pain in the short term, but the telecommunications industry shows all too eloquently that given a choice, the Nigerian public would rather do business with private enterprises who are more focussed on their needs. The best that government can do is provide the basic infrastructure and regulatory framework for Nigerians to operate in. There is a huge resource of skill and entrepreneurial ability that is being choked by the gross inefficiency of government. At every turn Nigerians are frustrated by the inadequate provision of basic necessities and now tend to see the government as the monkey on their backs, forever demanding and giving very little satisfaction in return. After eight years under Obasanjo, there is little evidence of any real structural change, and it is frightening to imagine that the next eight years might be a reprise. Of course, President Yar’adua has time on his side, time enough to lay the foundation of a more sound economic regime. Time enough indeed to prove the sceptics wrong.