Ladies first and last (2)

March 24, 2021

President Muhammadu Buhari, GCFR

President and Commander-In-Chief

Federal Republic of Nigeria

State House

Aso Villa,

Abuja- FCT.

Your Excellency,



Here is an extract from “The Punch” newspaper of July 12, 2020.

Ned Nwoko:

“Since 2005, I have been at the forefront of the campaign to exit Paris Club. The then-President Olusegun Obasanjo bought into the idea because we had overpaid and there were many questionable debts and projects that needed to be unravelled and stopped.

With the support of the Finance Minister at the time, Ngozi Okonjo-Iweala, we took the step to exit. But even at that point, the Federal Government’s figures were wrong, which meant that states and local governments were hugely indebted to loans that they didn’t take or that they had already paid off. And that was where my role became very important. How does one tell a state like Abia that had paid off its debts that it owed over $700m? It is either the records were deliberately not kept or they were intended to mislead people. Yet, their money was being used to service foreign debts.

Again, it was the listening ears of Obasanjo that made it possible to ensure the right things were done. He was the one that authorised my company along with the old Gongola State (now Adamawa and Taraba states) to be used as a test case with the support of the Ministry of Justice, Ministry of Finance, Debt Management Office, Accountant-General’s office, and Central Bank of Nigeria. Of course, they realised we were saying the right thing and with that, refunds became mandated. Many ministries sat with us almost on a daily basis for three months and came up with the same conclusion, so it was a big revelation.

It was actually during President Buhari’s administration that refunds were made to the various states and local governments. Though it was President Obasanjo that began the process of reconciliation, the actual refunds were made in President Buhari’s government. So, we must also acknowledge the fact that if they (Buhari’s administration) did not want it to happen, it wouldn’t have happened. They agreed to refund over $5bn to states and local governments.”

It is the consultants (from the U.K. and the U.S.) who worked with us on these sensitive matters who are entirely baffled that regardless of our efforts and independent assessment of the issues, Nigeria was bamboozled. Some of the debts with which Nigeria was burdened and thereafter hoodwinked go back to the days of the “cement armada” scandal when our nation was nearly choked to death with imported cement which would have taken us twenty-seven years to consume !!

Besides, two decades thereafter, the undersigned was part of the port decongestion committee which was mandated to physically examine the containers that had cluttered up our ports. Alas, some of the containers when opened yielded nothing but sawdust.

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Tragically, the entire episode of Nigeria’s debts has been redolent with massive documentary frauds.

In the belief that we have a sacred responsibility to correct the false narrative, we are obliged to dig into our archives and retrieve our records of what actually transpired. The documents will be made available.

First and foremost, way back in 1993 when I was chairman and chief executive of KPMG Nigeria, I was seated next to the managing director of Warburg Merchant Bank, McKenzie at a dinner in London. In the course of our conversation, he revealed that he would be retiring in a matter of weeks. However, he was somewhat in anguish over the fact that his bank had been appointed to manage Nigeria’s London and Paris Club debts but all his reports to the Nigerian government were ignored entirely. Nobody seemed to care. I assured him that upon my return to Lagos I would take up the matter with the Government.

Incidentally, at another dinner, the chairman of Standard Bank, Lord Anthony Barber pulled me aside to inform me that his bank had a huge amount (about £100 million) which had been languishing with his bank in a deposit account for several years but nobody seemed interested in knowing what the money was doing in his bank or the terms thereof.

That was what prompted me on my return to Nigeria to alert the then Minister of Finance, Anthony Ani about these developments. I also forwarded the documents which McKenzie had handed over to me. It was a huge mess and it was self-evident that dollar transactions had been jumbled up with pound (sterling) transactions and thereafter co-mingled with French Francs and Deutschmarks by the creditors. Besides, there were two worrying features – first and foremost, debts owed by the Nigerian government and its agencies had been mixed up with private sector debts.

Secondly, interest (at compound interest!!) was being charged on accrued interest payments that were alleged to be in default.

It was against this background that the Minister of Finance set up a committee consisting of Akinlose S. Arikawe and Thelma A. Iremiren (who at various times were Permanent Secretary in the Ministry of Finance) and Stephen Oronsaye who was the Minister’s Special Assistant. They travelled all over the world, visiting the various creditors. Although I was not privy to their reports, I understand that they achieved considerable success in reconciling the debts.

As for the deposit lying fallow at Standard Bank, what became of it has always been a matter of speculation.

Anyway, I maintained a professional interest (as the chairman and chief executive of KPMG Nigeria) in the trajectory of Nigeria’s escalating debts. Perhaps, I should add that the facts were correctly stated by Aare Afe Babalola, SAN:

“The origin of Nigeria’s external debt dates back to 1958 when a loan of US$28 million was obtained from the World Bank. The funds, which were made available to the Nigerian Railway Corporation, were for a five-year tenor to improve Nigeria’s rail system and to build a new line into the North-eastern province for the purpose of expansion in production and trade. Later in 1964, the country obtained a loan of US$13.1 million from the Paris Club of creditor nations for the building of the Niger dam. Subsequently, the much talked “jumbo loan” of $1 billion was obtained from the International Capital Market (ICM) in 1978, thereby setting the slippery slope of the resort to huge foreign loans in motion and consequently changing the structure of Nigeria’s debts from mainly concessional loans to loans with harsher repayments terms.

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