Aluko told Saturday Sun that the deregulation of the Naira, civil service and oil is an impeachable offence for which the President could be impeached. He quoted a section of the constitution, which stipulates: “The state shall manage and operate the major sectors of the economy.” According to him, Chapter Two, section 16 of the constitution made it clear, among other things, that the state shall control the national economy.
The professor argued that since the National Assembly, governors and ministers swore to uphold the constitution, steps should be taken to correct the violation of the constitution or action taken against the violators. He also called on Nigerians to challenge the government in court over deregulation, saying that the government does not know the meaning of deregulation.
Aluko spoke on how he checkmated the forces pushing for deregulation during Abacha era. He also spoke on several other issues.
Nigerians can’t understand the need for deregulation and the need for the removal of subsidy when the country has crude oil. Could you please explain?
It is not only Nigerians who don’t understand deregulation. The government itself doesn’t understand what it means when it talks about deregulation. Deregulation means lack of government control. This means a free-for-all economy. Nobody leaves its economy to be free-for-all. Nobody leaves the vital sector of its economy free-for-all. Petroleum is the most vital sector of the economy today. If you talk of deregulation of the oil sector, which means down-stream, it is to deceive the people. The upstream is not deregulated. Government controls the upstream.
What is upstream and downstream?
Upstream is the exploration and allocation of oil blocks. You cannot just go and pick oil blocks. Government controls it and regulates it. They are talking of deregulating the downstream sector. That is what the public buys. The public doesn’t buy the blocks. The public buys petrol, diesel, kerosene and the gas. Instead of saying that they want to increase price, they are talking of deregulation. There is no relation between deregulation and price. China increases and decreases price and controls the economy. Cuba increases and decreases price and controls the economy. Russia was increasing and decreasing price and it controls the economy. Talking of price is not the same thing as deregulation.
Deregulation itself came into economic vocabulary through Britain and America. In those days, the economy of Britain was virtually nationalized. The public dominated the economy. Then came Margaret Thatcher in Britain and Ronald Reagan in America. They said they want the private sector to be dominant and they were talking of deregulation. Even in the circumstance, it was deregulation with strong police might, strong government control to ensure that the private sector does not misbehave and the government was able to police the private sector. It is unlike here where the government cannot even police itself. So, it is a misnomer for government to talk of deregulation. It is sacrilege against the country. It is highly contemptuous.
This is a country where we are the sixth largest producer of petroleum in the world. We should be producing, refining and exporting our excess produce. The price we are paying now for any oil product is higher than we should be paying. The cost of a litre of petrol, from exploration to the refinery, is about N12. I mean if we refine it here; from mining till the pomp price. It should be about N12.That is the cost per litre. But when you import from Britain or America or other countries, 66 per cent of the price of that import is tax put by those countries. More than two third of what we are importing is tax being paid to those countries.
It is not the cost of production there.
In Britain or America, the cost of fuel is about one third of what they are charging. The remaining two third is tax they collect from the community to finance their own government. So, when you go and import there, you are paying tax to the British government. When you come and tax us here on what you are importing, we are paying double tax. We are not only paying tax to America, Britain and all those countries, from where we are importing, we are now paying tax to the government that really should not be collecting tax. When they talk of subsidy, I have always said there is no subsidy given to petrol in this country. You have subsidy when the cost of production is higher than the selling price. The cost of production per litre, if we refine it in Nigeria, is about N12 per litre. So, if you are charging N67, it means that the consumer is paying about N55 per litre.
We are supposed to have four refineries in Nigeria. Why are they not functioning? Why do we have to import?
Really, there should not be four refineries in Nigeria. There should be 14 or more refineries in Nigeria. We have four now that are not working. They are not going to work as long as we continue to import because the importers will not allow it to work. The government itself doesn’t want the refineries to work. Before Babangida came, the NNPC engineers and staff maintained the refineries adequately and perfectly. When Babangida came and introduced SAP and said he wanted to deregulate the economy, he wanted private sector to take over the economy, he took the maintenance of the refineries from the NNPC and started awarding contract to fake people-politicians, army people who have no skill to maintain the refineries. Those people will take the contract, award the contract to some other people until the final man will not have enough money to repair the refinery. That was when the refineries went into liquidation. If only Babangida did not take the management of the repairs and the turn-around of maintenance of the refineries from the NNPC, they will not only have been maintaining the four refineries very well, they would have built four, five, 10 or more refineries by now.
At that time, Babangida introduced a system whereby he will compel the NNPC to give potential refinery builders to export the crude oil, make profit and invest their profit in building refineries. They would export two ships, make their money and disappear into thin air. That is what has been happening since Babangida time till today.
Why didn’t you correct it when you were in government during Sani Abacha era?
We corrected it. That was why, during the Abacha era, there was no question of deregulation. This is because I told them exactly what I am telling you now. When I told the Provisional Ruling Council, which was the cabinet, that for every ship-load of fuel being imported into Nigeria the profit of the importer was N110, 000 dollars, they were aghast. I said we must make the refineries work and that was why at that time, the refineries were working. In fairness to Abacha, he was a listening Head of State. Abacha would say Professor is saying something that made more sense to me than what all these people – the CBN, Ministry of Finance, and National Planning – are saying. All of them are involved in the conspiracy against this country by saying that we must deregulate, we must privatize and government must do nothing. That was why, at that time, Abacha wanted to stop importation of fuel by saying that we must make the four refineries work.
There was a time when the then minister of works, I don’t want to mention his name, but he is dead now, wanted to import bitumen. It was to be 550 million dollars worth and he went to Abacha to get permission to import. Abacha gave a covering approval. But Abacha said look, I will refer this matter to the National Intelligence Committee (NIC) chairman by Professor Aluko. He referred it to me and said I should advise him on what to do before giving a final approval.
I then called the MD of the Kaduna Refinery and told him my committee wanted to see him on Saturday about the possibility of him producing bitumen. Kaduna produces bitumen but government was not encouraging it. We went to Kaduna and asked what could we do about this. He said instead of giving them 500 million dollars to import, if we gave them 50 million dollars he would not only produce more bitumen for the refinery, but also produce for other states.
We made the recommendation to Abacha. Abacha then summoned a meeting and said they should give the money to Kaduna Refinery to produce the bitumen for the ministry of works, contractors and all those making our roads. Abacha then withdrew the provisional approval earlier given to the minister of works. The minister of works was furious because he thought of the money he would make. Abacha then removed him and asked me to nominate somebody to replace him. So, I nominated my secretary at the Economic Intelligence Committee at that time. He was then a soldier. He became the minister of works. His name is Garba Mohammed; he was a Major General in the Army at the time. Really, if we want to work, there are capable people in our system to work. But they will not let them work. That is why they keep on saying government can do nothing, government would do nothing. They say government has no business with business.You gave the example of bitumen. What went wrong after Abacha era?
During Abacha era, the four refineries were working. They were not only working, they were also producing bitumen. Warri Refinery was working and producing. Port Harcourt was also working. Importation was reduced. At that time, the importation of bad fuel was in our refineries. When I reported to Abacha that we were importing bad fuel, he was furious. After his death, I heard that it was Abacha who imported bad fuel. It was not true because he was very furious and he summoned the minister and the GMD and said they should remove their bad fuel and stop paying them.
Another example is that the government wanted to devalue the currency. We fixed currency at that time at N21 to a dollar. People said that you cannot fix, that we must allow the market to determine the rate and I said that no civilized country allows the market forces to determine the rate of exchange, especially in a developing economy like our own. We must control it and we must regulate it. We must also regulate the rate of interest between what a bank can charge and what it can pay to the depositors. So, we fixed the rate of interest between depositors rate and every rate at four. In other words, if I put my money in the bank and they pay me 10 per cent, they must not charge more than 14 per cent to a lender.
That four per cent will be the margin for the bank. The ministry of finance went behind our back and told Abacha and the Provisional Ruling Council that it was better to allow market forces to take its place and that our naira was over valued and so on and so forth. Abacha and the Provisional Ruling Council, in their wisdom, gave approval that they should go and deregulate the exchange rate, which is what they are doing now. Instead of N21 they were using N60 per dollar. My wife was the chairman of the National Commission for UNESCO. She had a meeting with minister for education and she heard that it was N60 to a dollar for the budget of 1996. When I heard, I got in touch with the Secretary to Government of the Federation and started to speak with the head of state about the exchange rate. I told them that I was going to resign as Chairman of the Economic Intelligence Committee if government maintained the stand.
Abacha summoned a meeting of the Provisional Ruling Council and the cabinet and he said the CBN, minister of finance, National Planning Commission, the presidential advisory council came to him and said it was a good thing to deregulate and that he gave them approval. He thereafter asked them to make their case. They were all present at the meeting. After they spoke, I told the meeting that the people were deceiving government. I told the meeting that if we made it 60 dollars to the naira, our cost would also be 60 to the naira because cost would rise, and we gain nothing. I also told them that prices would rise faster than depreciation in our currency and I gave examples. I said once we moved the lead, the Naira could land anywhere. It could go to N70, N80, N90 or N500 and they said no, it wouldn’t be so.
Abacha said: ‘Professor said it could go N60, N70 or N80. To what do you say it will go?’ They said it depends. He then said: ‘Professor has made a point. I cancel the approval I gave to you.’ He said he couldn’t do it alone because the Provisional Ruling Council gave the approval because the members were misled. One of the Generals said: ‘Why do we have to go to a meeting? We have heard the two sides and we are all here. Let us vote and see if we support what these people are saying as against what the National Intelligence Committee is saying.’ They voted 24 to 0. The exchange rate remained at N21 to a dollar until Abaca died in 1998.
During Abacha period, he did not allow IMF, World Bank, which were the regulation, to talk to him at all. I told him that the people were enemies of a developing economy and would always tell him not to act. Throughout the four years we were with him, it was N 21 to one dollar. The CBN and others tried to manipulate things to sell to the banks. But, officially, it was N21 to a dollar. In the award of contract, official foreign exchange, it was N21 until the coming of General Abdulsalami in 1998. He told me later that one mistake he made was to listen to the institutions on the deregulation of foreign exchange.
Abdulsalami Abubakar regretted the action after leaving office?
He regretted it after leaving office. He told me that he was sorry to have done that. When Obasanjo came, I had a quarrel with him. We were friends and we are still friends. I still like him. I was one of those who used to brief him when he was military Head of State. When the military was about to hand over power to him in 1999, I was one of those who briefed him. We had about two weeks to brief him. I was the only one brought to the Provisional Ruling Council meeting to participate in the briefing. So, he invited me to have a close discussion with him. I had a whole evening with him in Abuja, two days before he assumed office. I told him that the refineries would not work as long as he allowed the importation of fuel. I said during his regime as military head of state, he built three of the four refineries in Nigeria.
He almost completed the Kaduna Refinery, which was concluded by the Shagari regime in 1981. I told him that during his second coming, he must build at least four five or six more. I told him that our population had increased and that the consumption pattern had increased and people were importing and they didn’t want the refinery to work. He assured me that he would not allow any importation of fuel. I told him that the export terminal he built in Port Harcourt area was being turned into import terminal. It is trite because there was no logistics for the importation of fuel. Why must we allow export terminals to be turned to import terminals? He said he would not allow that. But you could see that during his term, there was more importation than ever before and the refineries did not work.
Why?
It was simply because his political party hierarchy got control of him. Left to him alone, in his heart of heart, he would not do that. But he was a prisoner of his political party. And the party is still there. The PDP is one of the greatest enemies of this country.
When you saw him later, did you discuss it with him as you did with Abdulsalami?
Of course, I discussed it with him. I said it openly that the Abacha regime was better than his own and he said I was senile. Later, he apologized. I am sorry for him because at the end of his eight years, the refineries were worse than the beginning. Three years of his reign as military head of state, he built three refineries and made them work and as civilian president, he could not even make those three refineries work. Something must be wrong. It must be the political machine and the political machine is still there. They are saying that the president can rule from Saudi Arabia. Can Saudi Arabia President be ruling from Nigeria? Can American president rule from Japan? You can see the kind of people they are.
Deregulation is a fraudulent use of our resources. There is nothing like that. If we have a government, we should be having today more than 10 to 15 refineries. After 1999, I wrote to all the governors along the coast and told them they can’t build refineries alone. I advised that two or more governors could come together and build a refinery. Lagos alone consumes more than 30 per cent of the total consumption of refineries in the country. Lagos should be able to build a refinery either in Ikorodu or in Badagry or even on Lagos Island. None of them replied. That is because they too were involved and gaining from the importation.
Venezuela is about 38 million people and that is about one third or one quarter of Nigeria. They have eight refineries and they are building four more. The Venezuela ambassador to Nigeria recently was telling our minister of information that in their country less than N400 fill the tank of his car. He had to spend about N3, 000 to fill his tank in Nigeria.
So, deregulation is not limited to fuel?
The naira has been deregulated. Even the civil service has been deregulated. All the things that the civil service should do have been contracted to private people. Our roads have been deregulated. Our ports have been deregulated. Our road from Lagos to Ibadan has been given to a company whose chairman is a lawyer. The ports have been commissioned to private people. There is congestion there because the private people are using the ports for their interest. Almost all sectors of our economy have been deregulated. And it is contrary to our constitution. The fundamental objective of our constitution provides that the major sectors of our economy would be in the hands of the government. That is what our constitution provides.
What section of the constitution talks about this?
Chapter two. The president, Vice president, governors, deputy governors, ministers and National Assembly members swore to uphold and to respect the constitution. Section 16 of that chapter two provides: “The state shall, within the contest of the ideals and objective from which provisions are made in this constitution. That is the economic objective. The state shall harness the resources of the nation and promote national prosperity on an efficient, a dynamic and self-reliant economy. The state shall control the national economy in such a manner as to secure the maximum welfare, freedom and happiness of every citizen on the basis of social justice and equality of status and opportunity. Without prejudice to its right to operate or participate in areas of the economy, the state shall manage and operate the major sectors of the economy.”
That is the area of the constitution that is against deregulation. So, they are violating the oath to which they swore.
What is the consequence of the executive violating the constitution?
A breach of the constitution attracts punishments. I expect Nigerians to challenge the action of government on deregulation in court. The governors, ministers and the National Assembly members swore to the oath of office. They must defend the constitution. It is an impeachable offence. The president should be impeached.
Was the Central Bank of Nigeria (CBN) right to take the steps it took with regards to restructuring in the banking system?
Although we say we run a democracy, our leaders behave like czars. They behave like the feudal lords. It is the same thing when Chukwuma Soludo said for a bank to be a bank in Nigeria it must have N25 billion. The former governor of the CBN, who opposed that was retired. Soludo was put in his place. I said at that time that it was not proper for every bank in Nigeria to have N25 billion. In economics, we have large industries, small industries and medium industries. There are large enterprises, medium enterprises and small enterprises. Why must we not have large banks, medium banks and small banks? But nobody listened. Before then, banks looking for five billion naira, which was the original target given to them. They were still looking for that and it was moved it to N25 billion and they gave them only two years to raise the money. They had to play all sorts of tricks and that is what landed us where we are.
What does it portend for the economy of Nigeria?
It portends that we have to be dishonest. When you are looking for N5 billion and it is raised to N25 billion, you have to play some special pranks to get the N25 billion. They compelled so many banks to come together. That created not only boardroom problem but also managerial problems. That is what led to the problem that occurred when Sanusi came. It wasn’t strange to those of us who knew what was happening. When they were declaring all sorts of bogus profits, I asked from what economy did they make it. The economy is not functional. Therefore, what did these banks do to declare such profit? They were buying and selling dollars. They will buy dollar at a lower rate from the CBN, sell at black market rate and pocket the gain. They were doing fraudulent banking. They were not doing banking. It is not the fault of the bankers. They were compelled to do so.
You remember when Moses was caught in Egypt, when he was trying to save Israelites from the Egyptians; he said he was compelled to do it because he was an Israelite. He said he saw his people being maltreated. He said even if people thought he was an Egyptian, he was an Israelite – a Jew. Equally, the banks were compelled to do hanky- panky things. You cannot blame the new governor of CBN, who was also a victim of that system. He was in First Bank and he knew the problems that the bank had, much more than Soludo who was never a banker. When Soludo was appointed, I was very pleased. I said well, he would now take an economist rather than the view of bankers on the economy.
I thought he was going to be neutral. He was worse than even the banker. So, when this banker came and discovered what he himself has experienced within the system, he was able to expose it.
The only problem that I have is that the CBN is a banker’s bank. If I have a problem, I should report to my bank for solution and assistance. If the bank feels that I have problems, it is not for the bank to expose that problem to the public. I would have expected the CBN to call these erring banks and find out what was going on. I expected the CBN to tell them that what they were doing would not help banks, rather than expose them to ridicule. That has a lot of bad effect on the banking system. Banks are run on confidence. If somebody goes to a bank and discover the bank is collapsing, they will quickly withdraw their money. It exposes the banking system to a lot of danger.
Was the arrest of the CEO’s justified?
That is what I am saying. That you don’t just go and arrest top executives of banks. You know I was in government with Abacha. One day, General Abacha called me and said the then governor of Central Bank was misbehaving and he was going to remove him. I told him he should not remove him; that it was wrong to remove governor of the CBN. I told him he would be like Idi Amin and would destroy the financial system. I told him that if he had any problem with the CBN governor, he should call him and that if he found out that there was anything wrong, he should set up a committee to look into it. He agreed with me. He asked me to set up a committee secretly and not let the CBN governor know. I refused and told him it should not be done secretly. I told him that if I was going to investigate the CBN, I must tell the governor of the CBN, and outline the terms of reference so that he would prepare to defend himself.
I set up a committee and made one or two bankers, First Bank and other bank’s MD, part of my committee. When we looked into the matter, we discovered that it was all lies. The CBN governor had done nothing wrong. It was just a rumour because people didn’t like them. Abacha was happy and he retained the man until he died. So, you see, there are a lot of things that you cannot see from outside and you think that it is true and they might not be all true. I am not justifying the bankers, because they were not financing industries and they were not doing real banking. But I don’t think they are as fraudulent as the nation now makes them to look. They have some honour.
The way you spoke about General Abacha contradicts the impression people have about him.
You see, I am always sorry for people in government. I have a little soft spot for them. There is nobody ruling this country that will want the country to be in bad shape. But he may take some actions and react in some manners that people don’t understand. As I told you, apart from Chief Obafemi Awolowo, who I was very close to, and who listened to advice, I don’t know of other leaders who listen to advice more than Abacha. Not one. I gave you some examples. When the wife started the empowerment programme, she (Mariam) made herself the chairman of the programme to be able to run the finances, sign cheques and so on and so forth. During the 1995 budget, all the places, where the programme was mentioned, they said, accounting officer, first lady. It was in about 28 places. When I saw the budget, I called the minister of finance and asked how the first lady could be an accounting officer. The first lady was not a member of government. Even the head of state was not an accounting officer; how could his wife be accounting officer for a programme? My committee deleted anywhere first lady was written and replaced it with the permanent secretary and the director general, as the accounting officer.
I then wrote a memo on behalf of our committee to Gen. Abacha saying that I just discovered that the first lady was made accounting officer. I told him that neither him nor the first lady could be accounting officer. I told him that even he, as head of state, cannot be accounting officer. I wrote that his wife cannot be accounting officer for any programme. I wrote that we had substituted every place his wife was made accounting officer, with the director general or the permanent secretary.
Immediately Abacha saw the letter, he sent for me. He thanked me and confessed that he had raised objection to that. You can imagine what Obasanjo would have done to Mrs. Abacha if she were to be the accounting officer. He would have said Mrs. Abacha stole billions and billions of naira. The money they said Abacha stole was not true.
What of the money recovered, known as Abacha loot?
Anybody who served in government knew that Abacha controlled our budget so much that nobody could steal out of it.
Not even himself?
Not even himself. He had no right to take money. No head of state can go into the treasury and take money.
What Nigerians were told was that he commanded the CBN to bring cash.
It was a lie. Nobody can tell the CBN to bring money. He could take bribe. No CBN governor would agree to do that.
Are you saying on your honour, sir that Abacha never ordered for cash from CBN?
If Abacha were to be alive, nobody would talk of recovered loot. It is because Abacha is dead. Where is he now to come and defend himself? What happened really was that all of them were rich. Those that awarded illegal contracts are rich.
Are you saying that Abacha made his money before he became head of state?
He made a lot of the money before he became head of state. Even the Swiss ambassador told me that a lot of the money was made before Abacha became head of state. Look at Obasanjo. Obasanjo didn’t steal, but he is very rich. He is rich now. He is a member of Transparency International.
Did Abacha ever offer you money?
No. He never did. During one Christmas, I was going to my office and I discovered that they were carrying big bags. So, I asked, ‘at this time of night, what are you carrying about?’ They said they were bags of money. I said for what? And they said from the CBN. And I said for what? They said it was for Christmas bonus and Sallah. It was a time Sallah and Christmas coincided. The second day, we had a meeting and I said I wanted to raise a matter of national importance. I said Mr. Head of State and the cabinet, where, in our budget, did we put Christmas bonus or Sallah bonus? I said I saw a large number of people carrying all sorts of sack of money and they said it was official bonus they withdrew from the CBN. Abacha said the money should be returned to the CBN. That is how we stopped it. You find some people who will be going about abusing Abacha and they would come to me to see how they could get oil block, oil lifting and so on.
I always told them that I didn’t know anything about it. I have never seen a crude oil in my life. That was how we operated. A lot of my members were working so hard for government and never asked the head of state to give anything. I never asked and I will never ask. Even all this talk of severance allowance, I never got any. I was the economic adviser for four years and I did not take a kobo.
I was earning allowance as chairman, EIC. My allowance was N15, 000 a month. The government gave us a flat each and we fed ourselves. It was a part-time job. I never used government car. I had my driver.
Would you say that Abacha was a good head of state
Oh yes. After he died, I made a public statement that Abacha’s economic policy was better than that of Obasanjo. People are saying it now. Petrol was N17 per litre during Abacha era. He increased it from N14 to N17 and set up Petroleum Trust Fund (PTF). Obasanjo increased petrol 12 times in eight years. Abacha increased only once by N3. Obasanjo took it from N18 to N70.
I don’t approve of all that Abacha did because no military is perfect. I don’t buy the idea that a bad civilian is better than a good military. If the military comes to power today many Nigerians would jubilate.
You spoke so well about Abacha. Can you compare him with Awo?
No. Nobody can be compared to Awo. You can’t compare any military with Awo. Awo was a democrat. I was very close to him and I was one of the closest to him in our party. Immediately he died, I stopped membership of any party.
Why?
Because he was the only one who was willing to listen to common sense. If we were in a meeting, until he listened to some of us from the university, he will not take a decision. But this set of politicians would say it is theory. But I told them that people who went to the moon are by theory. It was not by magic, it was by theory.
What is the truth about your turning down a political appointment by Chief Obafemi Awolowo in the 1960s?
It has always been my own policy because I went to a school – London School of Economics, where I was given scholarship for the MSc by the Western Nigerian government. The London School of Economics gave me scholarship for PhD. So, when I finished, I came back and I was employed as a lecturer in Nigerian College. I earned 950 pounds at that time. Then, the government, of which Chief Obafemi Awolowo was the premier, offered me the post of economic adviser on 2, 050 pounds when I was earning 190 pounds at the university. I worked harder in government than I did at the university. I was ready to take the job if they would let me earn 950 pounds so that when I disagree with them, I could come back to my job. I was not sure that the job I was going to do warranted 2, 050 pounds. We were in an economy where per capital income was less than 300 pounds. The gap between the rich and the poor at that time was so much I did not want to be part of it. It was exploitative. So, I turned it down. I was ready to take it if they would let me earn my 950 pounds. The government said no. I turned it down.
What was the stand of Awolowo?Of course, he was quite happy with me. We still continued to write papers for him. That was one of the factors that endeared me to him. He said I was somebody you could rely upon. When we were at the university, our condition of service was that we could not take extra pay. Any money we earned was paid to the university. That time, we devoted our time fully to the university.
Was Awolowo a listening leader?
He was a listening leader. The difference between Awolowo and Abacha was that Awolowo would have done his homework and would say: ‘Look, this is what I think.’ He would then ask you: ‘What do you think about what I think?’ But Abacha would ask you, ‘what do you think?’ And we would say: ‘You should not do this, it is not right.’ Most of the time, he would say: ‘Professor, you know I am a soldier. I didn’t go to school. But what you are saying look more reasonable to me than what these other people are saying. So, it was easier really to get Abacha to do certain things than for Awolowo to do certain things. Awolowo would have had his own original thinking. He would have done his own homework. But most of the soldiers in position don’t do any homework. Abacha knew a lot about the country, but by his own training, he was a soldier. He wasn’t an economist or a technocrat. Awolowo was an economist, a lawyer and a politician. He had the quality that no soldier has.
0 comments:
Post a Comment