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September 2, 2012 (TSR) – Stolen oil money totalling US$400 billion since independence in 1960, President Goodluck Jonathan’s pledge to fix the economy by 2013 and the sudden resignation of Power Minister Barth Nnaji dominated newspapers in Nigeria this week. The nation’s Sovereign Wealth Fund (SWF), designed to secure a stable economic future, the 250 villages washed away by floods from Cameroon, and the rare feat by Nigerian power lifters at the London Paralympics were also in the news.
‘US$400b oil money mismanaged by govt., says Ezekwesili,’ was the screaming headline in The NATION on Wednesday.
The paper said former World Bank Vice President for Africa Oby Ezekwesili Tuesday said about US$400 billion of Nigeria’s oil revenue had been stolen or mismanaged since independence in 1960.
Presenting a paper entitled “Corruption, National Development, The Bar and The Judiciary”, at the 52nd Annual General Conference of the Nigerian Bar Association (NBA), she said oil accounts for 90 per cent of Nigeria’s exports.
The former education minister, however, lamented that over 80 per cent of the money ended up in the hands of one per cent of the population.
To check the trend, she suggested that the fight against corruption and demand for good governance be made a collective effort of government and citizens.
The VANGUARD ran the same story under the headline ‘Nigeria loses $400bn to oil thieves – Ezekwesili’, while the SUN said ‘$400bn oil revenue misappropriated – Ezekwesili’.
On Jonathan’s pledge to fix the economy, the SUN headlined its story, ‘I will shock Nigerians by 2013 – Jonathan’.
The paper quoted the president as saying he would prove critics of his administration wrong by 2013 when the dividends of new policies introduced would begin to manifest.
Declaring open the 52nd Annual General Conference of the Nigerian Bar Association (NBA) in Abuja, Jonathan said his critics would have the cause to praise him at the end of his tenure, when his Transformation Agenda would have yielded the expected dividends.
The PUNCH’s headline on the story was ‘My campaign promises will manifest in 2013 – Jonathan’.
The story said Jonathan repeated his pledge Thursday in Onitsha, in South-east Anambra State, where he inaugurated a number of government and private-sector projects.
“By next year, most of our campaign promises will begin to manifest,” he told his audience.
But by far the hottest news during the week was the sudden resignation of Nnaji.
The GUARDIAN’s headline on the story was ‘Drama as Nnaji quits, Obasanjo explains failure to fix power’.
Nnaji lost his job, reportedly to the fierce power play by investors bidding for plants and distribution companies.
According to the paper, ‘On a day that former President Olusegun Obasanjo reviewed his eight-year rule from 1999 to 2007 and regretted his inability to fix the power sector during the period, the Minister of Power, Prof. Barth Nnaji, Tuesday announced his resignation from President Jonathan’s cabinet.
Nnaji’s resignation may not be unconnected with revelations at last Friday’s meeting of the National Council on Privatisation (NCP) that companies allegedly owned or linked to the former minister made bids for the Afam Generation Company Limited and Enugu Distribution Company Limited. Consequently, the Federal Government directed that the bid be revaluated.
The NATION, with the headline ‘Conflict of interest: Power Minister Nnaji forced out’, reported that Nnaji waved a final bye to the job he did with great passion.
He was forced to resign, the paper reported, adding ‘President Goodluck Jonathan pushed Nnaji to throw in the towel, following an alleged conflict of interest between his office and the ongoing privatisation of the power sector – the government’s antidote to the epileptic supply that has held Nigeria down, industrially.’
The alleged abuse of office was in conflict with the Performance Contract Agreement which ministers signed last Wednesday and the Oath of Office to which they swore at inauguration.
Nnaji therefore becomes the first victim of the Agreement.
A company, Geometric Power, in which the former Minister allegedly has interest, was involved in the bids for the privatisation of Afam Generation Company Limited and Enugu Distribution Company Limited.
The PUNCH reported the story under the headline ‘Powerful interests forced me out – Nnaji’, saying that barely 24 hours after his sudden exit from President Jonathan’s cabinet, Nnaji on Wednesday said he resigned because some “powerful vested interests” were bent on tarnishing his image.
Nnaji added that he left the cabinet in order to save the Jonathan administration from the “spill over” of the attacks by the “powerful vested interests”.
But the former minister said he was proud that he left at a time that power generation and supply had improved.
And the SUN quoted President Jonathan as saying Nnaji did not commit any offence, under the headline: ‘Nnaji didn’t commit any offence – Jonathan’
The papers also reported that the nation’s buffer, the Sovereign Wealth Fund (SWF), Tuesday got a decisive spur to secure a stable economic future for the country as the Federal Government named officials that would manage the scheme.
The Board and Management of the Nigerian Sovereign Investment Authority (NSIA), which is to manage the SWF, is headed by a former Deputy Governor of the Central Bank of Nigeria (CBN), Alhaji Mahey Rasheed as Chairman.
Heading the management is Mr. Uche Orji, a former Managing Director of JP Morgan and currently Global Co-ordinator and Head of the United States (U.S.) Semiconductor Research and also Co-Head of the U.S. Technical Sector Research at a prominent global investment bank, UBS.
The NSIA Act establishes the fund for which US$1 billion has been set aside as take-off sum from the Excess Crude Account of the Federation Account was assented to by President Jonathan 27 May.
It is to be operated as an independent statutory corporation with the mandate to among other things: Build a savings base for future generations of Nigerians; enhance the development of Nigerians; promote fiscal stability for the country in times of economic stress and carry out such other matters as may be necessary in furtherance of these objectives.
This mandate will be operated under three windows, namely: Future Generations Fund; Nigerian Infrastructure Fund and the Stabilization Fund. Each of the windows is to attract 20 per cent of the fund for investment.
The GUARDIAN headlined its story on flood from Cameroon as ’18 die, 250 villages submerged as Cameroon’s dam floods Adamawa’.
The paper said ‘each time Cameroon releases water from its Lado Dam, parts of (northern) Adamawa State go under with little damage. But the incident of last Sunday has brought unmeasurable harm. Some 250 villages have been submerged with yet-to-be ascertained human casualty. As at Monday, only 18 bodies had been recovered from the Benue River.’
Also during the week, criticisms of the plan by the Central Bank of Nigeria (CBN) to introduce the 5,000 naira note into the system continued, but the apex bank, apparently having made up its mind, dismisses inflation fears and said it would press ahead with the plan.
And on a happy note, the papers reported the rare feat by Nigerian power lifters at the current London Paralympics, the games for disabled athletes.
Reports from London said the medal that eluded Team Nigeria during the London 2012 Olympics came tumbling Thursday, as Nigeria’s Paralympians began their quest for medals and also to redeem the image of the country as a super power in sports. Team Nigeria’s outing at the main Olympics was colourless.
Nigeria has so far won two gold medals in powerlifting at the Games.
He resigned as Minister of Power last Tuesday. But it has emerged that the leadership of the Peoples Democratic Party (PDP) actually encouraged President Goodluck Jonathan to remove Prof. Bart Nnaji.
THISDAY is in possession of a damning memo by PDP to President Jonathan and Vice President Namadi Sambo, where the party called for Nnaji’s removal. Sambo is also the Chairman of the National Council on Privatisation (NCP).
The memo detailed a harvest of infractions allegedly committed by the former minister in the course of the ongoing privatisation of the power sector.
The letter obtained from a presidency source was written by PDP National Chairman Bamanga Tukur and dated July 22.
In the letter, Tukur highlighted the problems facing the power sector in the country, but indicted Nnaji for alleged complicity in some of the problems and conflict of interest in the privatisation process.
The PDP chairman called for his immediate sack in order for the country to make headway in the ongoing power sector reforms.
Tukur blamed the challenges of power generation on the alleged “Conflict of interest between the office of the Hon. Minister of Power, Prof. Barth Nnaji, who has put personal interest above national imperatives of providing an urgent solution to the gross insufficiency in power generation in Nigeria.
“The minister is known to own large interest in Geometrics, a power company that has been taken over by the Asset Management Corporation of Nigeria (AMCON) for an unserviceable loan of N25 billion.”
The party chairman said he suspected the former minister also own proxy interests in some of the new independent power plants (IPPs) “hurriedly put together to benefit from Power Purchase Agreement (PPAs) even though such companies have not met the expected milestone that will put them in the position to generate electricity in the foreseeable future, while the other IPPS with ready-to-go practice (who have not met the necessary criteria and are in a position to generate electricity within the next six to 18months) are frustrated from getting approval for the PPAs because they are perceived as competitors to the minister’s self-made list of IPPs.”
This, according to the PDP chairman, is essentially one of the reasons why ready-to- go independent power projects are stunted.
Raising the issue of nepotism in the selection of companies for the power purchase agreement, he alleged that, “The Chief Executive of Bulk Purchasing Trading Company, Mr. Rumundaka Wonodi, was a staff of Geometrics and promotes the same hurriedly-put- together projects with personal interest for the PPAs. These projects, among other things, do not receive even concrete gas supply commitments from the international oil companies (IOCs) since they are not ready-to-go projects. “Meanwhile, ready-to-go IPPs, which secure a concrete gas supply commitment from IOCs, having fulfilled necessary criteria and are in position to generate power immediately, are denied PPAs approval and nominations for World Bank guarantee by the Bulk Trader because they are not on the minister’s favoured list. The consequence of this is that no Power Purchase Agreement is being signed and no IPP project can come on stream in time to fulfill our programme in the power sector.”
According to the memo, “The non-signing of PPAs for ready-to-go projects by the Bulk Trading company hampers the good work done by the gas aggregation company, the IOCs, indigenous oil and gas companies and the Ministry for Petroleum Resources who have put in place a robust plan for ‘Gas for Power’ arrangement. This is because when no PPA gets signed, no gas purchase agreement gets concluded. PPA in essence triggers the securitisation of payment for supply and consequently acts as impetus for investment in substantial gas supply in the value chain.”
He also added, “The indebtedness of the Hon. Minister’s company to Diamond Bank and AMCON is a pressure point that affects an honest and objective discharge of his duties when the reform process is at its infancy”.
In view of these weighty allegations, the PDP chairman said there was “an urgent need to remove all stumbling blocks threatening the fulfilment of our promises. Any further promises to Nigerians on any issue of our national life by the PDP-led administration will be discountenanced if we fail to deliver on the power sector”.
The party called for a far-reaching measure, challenging President Jonathan to: “Relieve the Hon. Minister of Power from his position for his conflicting interest as a regulator and participant in the power sector; reconstitute the management of the Bulk Trading Company; invite the leadership of international energy companies like General Electric of USA, Siemens and Credible IPPs who have ready-to-go projects and have signed Engineering, Procurement and Construction (EPC) contracts for their power plants for discussions”.
He maintained that “the international energy companies have already established these ready-to-go projects and would be in a better position to provide a guide. This will be the new momentum to rescue the industry. It is the IPPs that are the engines of power sector participation in the electricity industry, just as privatisation is transfer of existing monopolies to private hands.”
Nnaji eventually resigned his appointment last Tuesday, citing undue pressure from some vested interests in the power sector as the reason for throwing in the towel.
He said he took the decision to save the privatisation and reform programme from people who might want to use ulterior motives to jeopardise it.
His resignation was inevitable after it was discovered during the meeting of the National Council on Privatisation (NCP) a fortnight ago that companies reportedly owned or linked to him made bids for the Afam Generation Company Limited and Enugu Distribution Company Limited.
This runs contrary to the Code of Ethics of the privatisation process, which bars staff of the Bureau of Public Enterprises (BPE) and members of the National Council on Privatisation (NCP) from buying shares in companies being privatised.
Speaking further on why he quit, Nnaji said that rather than drag President Jonathan and the entire privatisation process through the mud, he chose to quit.
He, however, said he reminded the president that he had brought it to his attention two weeks earlier that a company he owned was part of a bidding consortium which submitted bids for Enugu Distribution Company.
The former minister further said that his time as a government official, first as special adviser to the president, and then as power minister, had been fraught with all sorts of efforts to bring him down.
He felt that rather than allow the naysayers destroy the entire process, it was better for him to leave.
President Jonathan, however, gave Nnaji an official clearance, saying he accepted his resignation to protect the privatization process. Speaking at a town hall meeting in Onitsha, Anambra State during his visit to the state on Thursday, the president said the former minister did nothing wrong.
Between Barth Nnaji, President Jonathan and the alleged memo by PDP Chair, Bamanga Tukur, someone is hiding the real reasons behind the power minister’s resignation and until the speculations are laid to rest, we might not have a truly transparent privatization process of the power sector.