National Fertiliser Company: $500m + 22 years= $66m!

Quants looking at the above equation will be surely surprised. The strange equation is both prosaic and quantitative and there are none of these frightening mathematical signs, which they use to oppress and supress those that are not initiated.

Well, I am not a quant and that is why the equation which I created is not ‘quantful’! In the recent past, there has been a lot of figures flying around, in their trillions: unknow ‘ways and means’ advances, multi-trillion stamp-duties missing in action, the dingdong between the CBN governor and DSS, the ‘mild’ revelation of Atiku’s former associate and the ‘Tarka-Daboh’ exchange between PDP and APC( read Atiku & Tinubu) about SPV, SVP and drugs. As I have always been saying, it has always been like this. I am reproducing hereunder, an article I wrote on 9/4/03 (23 years ago) about the management of our privatisation process under Atiku, who has always boasted about his economic and financial wizardry as depicted by his clean management of the privatisation process.

It also shows how our resources were intentionally and criminally mismanaged, a tradition that continues to this day. If in doubt, go and check out the NDDC Read on and bear in that this is not an article written in this season of political mudslinging and brickbat!

It was discovered that the factory built for $500m in 1981 could actually be built for $300m as at this period

In 1981, the Federal Government of Nigeria, in pursuit of its import-substitution based industrialisation strategy and a no-shaking commitment to the control of the commanding heights of our economy, committed $500m to construct the first and largest nitrogenous complex in West Africa, which was NAFCON. The managers of NAFCON were expected to operate a world-class firm ghat would add value to our natural gas by the production of fertiliser, train Nigerians to manage the firm and transfer full ownership to the people and government of Nigeria. These were noble objectives indeed and there must have been chest-thumping and glass-clinking when NAFCON went into operation on 15/7/87. That was the end of Act1, Scene1!

On Thursday, 13/3/03, Sino-African Petrochemicals Co Ltd, the only company (out of 7) that was kind enough to go through with the BPE midwifed privatisation bid, ‘magnanimously’ offered $66m for 100% equity in NAFCON. This $66m was indeed magnanimous because they had earlier made a $100000 (one hundred thousand Dollars, only) ‘bag and baggage’ offer for NAFCON plus its estimated N15bn debts or $46.1m without the debts. So, a N500m investment in 1981 yielded a gross return (principal, dividend, interest, capital appreciation) of either $100,000 or $66m, depending on which package is being considered.

It is also interesting to note two facts that emerged during this privatisation process which started in 2002. During the process which involved appointment of advisors, diagnostic analysis expression of interst, pre-qualification, due diligence, and technical and financial bids, it was discovered that the factory built for $500m in 1981 could actually be built for $300m as at this period. It was also revealed that the firm has been out of operation since 1997 but has been paying the salaries of its 3000 staff since then!

For sure, Nigerians have become shock-proof and that was why not much reactions followed this scandalous tale from NAFCON. It is this kind of thing that made Babangida, the self-styled evil-genius, to wonder publicly why Nigerian economy had not collapsed. Of course, he was (is) in a better position to know because he certainly knew the type of irredeemable damage he inflicted on the country. The same goes for others who have ruled( or RUINED) our country, especially, our militicians.

Read also: Farmers want FG to check substandard fertiliser production

And if care is not taken, cases worse than NAFCON abound. Look at ALSCON, where $120m turnkey was signed with the technical partner, FERROSTAL, while it has been estimated that $25m was enough to turn the key. Reynolds, a 10% shareholder got a suspicious 10-year marketing contract while the FGN spent about $1.2bn monthly to keep the comatose company from June 1999 to November 2022! For NITEL, every item bought from 1974 to 1994 was reported to be 11 times overpriced (1000% mark-up); the railways pays salaries of N190m monthly as against N30m revenue generating capacity while NEPA spends $1bn for maintenance annually( BusinessDay, 20/3/03, pp1+4.

So, why should Nigerian economy not be in distress? If Nigeria invested $100bn in parasitic parastatals between 1975 and 1995, and if Like NAFCON most of them are worth 10% of the original investment (or worse), how then do we expect to move forward? And to think that this criminal mismanagement was executed or brokered by full-blooded Nigerians. It is good that some of these things are happening and that we are seeing how our economy has been run aground by unknown Nigerians. And whenever such mindboggling frauds are exposed, some questions come to mind. Who did this to our country? Why did they do it to us, our children and generations yet to come? What happened (happens) to those who did this? Are worse things not happening now? And what do we do to such people both now and in future? We have to answer these questions sincerely because that is the only way we can move forward!

This was written in 2003!