This booklet is very essential to the analysis of the problems of Nigeria because it attempts to demonstrate how important it is for Nigerians to understand the unique interdependency of nations. It also brings to the fore the underlying philosophy that informs international global relations, the result of the refusal of the colonialist of yesterday to let go completely of their empires, the fraud and the deceit going on in the name of global peace and development and the essential collaboration, collusion and co-operation of our elite in the international scam going on in the name of trade and globalisation.
This writer feels there is no point moaning when our sons and daughters are the principal agents in the reformed slavery going on all over the world between the ‘First’ and the ‘Third’ world. This booklet is an attempt to draw attention to this vile game and to stimulate discussion and thinking on what Nigeria can do to be truly free from our supremacist white brothers. The debt burden of Nigeria is the core issue of analysis. How did we come into this massive debt? What is the role of our oil sector in the economy? Has our so-called leaders applied some common sense in the management of the economic affairs of Nigeria?
II. International Trade And The Oil Sector
The Underlying Philosophy
The catalogue of ineptitude described in To Your Tents O! Nigerians did create winners and losers. The winners were the foreign racially conditioned nations that have forever seen the African race as fools and strongly believed that Africans are nonentities. They do not only see Africans as such, they also deal and treat each African they come in contact with like that. It was Montesquieu in The Spirit of Laws in relations to commerce, who says, “The greatest part of the people on the coast of Africa are savages and barbarians…. They are without industry or arts. They have gold in abundance… Every civilised state is therefore in a condition to traffic with them to advantage, by raising their esteem for things of no value, and receiving a very high price in return.”1This statement was recorded in 1748 and, of course, it formed a part of the background theoretical moral and philosophical materials that influenced European trade policies and political programmes in Africa in the eighteenth century.
This writer has no quarrel whatsoever with that statement or what the colonial empire builders did with it as they explore, exploit and rape Africa to their heart’s desire. But my greatest disappointment comes from the realisation that after declaring our nation independent from those colonial overlords who claimed to be racially superior, our so-called leaders wittingly and thoughtlessly dragged us back into the commercial slavery, which was the main issue of the nationalist struggle. Nigeria, of all the African countries, had the wherewithal to free herself from this international chicanery by the virtue of the wealth nature has bestowed on her.
However, the paucity of brilliant and selfless men and women in Nigeria since 1960 who could stand firm on the foundation of true knowledge and as a result enamoured with courage to defend the honour and integrity of the black man has further made the racist slave masters more blunt, more cruel and more reckless in their pillaging endeavours. Nigeria, through the errors of omission and commission of her charlatan leaders, has failed the black race everywhere in the world.
This is so because of the abundant human and natural resources at the disposal of Nigeria that was just begging for a judicious management. This is all that was missing and this is what, to the eternal shame of all Nigerians, Nigeria as a people could not provide.
The international trade relations and all other international relations for that matter are built around the principle of clever-dog-eats-the-dumb-dog. From Baron de Montesquieu’s, Alfred Marshall’s, Albert Schweitzer’s, and other European writers of the seventeenth through nineteenth centuries, the seed of the belief was sown that black Africans are as dumb as they come.
Elizabeth Isichei’s work on the History of Nigeria captured some of the memorable quotes on the nature of trade between Europe and Africa before 1900. It was recorded that the Europeans traders in Africa deliberately exported and exchanged shoddy industrial materials of very poor quality to Africa. One of the quotes was that of Isaac Newton, the celebrated English scientist and mathematician, in his reminiscences as one who was directly involved in the slave trade business.
Newton remarked that, “Not an article that is capable of diminution or adulteration is delivered genuine or entire. The spirits are lowered by water. False heads are put into the keg that contains the gunpowder so that, though the keg appears large, there is no powder in it, than in a much smaller. The linen and cotton cloths are opened, and two to three yards, according to the length of the piece, cut off, not from the end but out of the middle.”2Another valuable quote in Isichei’s came from a well informed observer in Birmingham who said, “immense numbers of guns were made, with the knowledge and certainty, that if they were ever fired out of, they were certain to burst in the discharge. These guns were made for one market – that of the coast of Africa.”3The idea of exchanging a bottle of worthless gin for the possession of the land mass of a country or of supplying fake but colourful bright metals as original gold in exchange for pure gold or other valuable mineral resource or of exchanging a whole human being for a packet of adulterated gunpowder and antique fire arms were the order of the day as a result of this belief.
Still, this writer has no quarrel with that since these godless white men were using the advantage of mere literacy skill not education over their illiterate superstitious African partners. The calibre of white people that have found a profitable niche on the coast of Africa all these years can never be called educated.
To be educated means a person is cultured, principled and civilised with respect to cherished humane virtues. These are virtues that carry in their trails justice, mercy, fair play and respect for other persons. It does not matter whether the person is weak or strong, king or common, white or black. But the dumb servitude, the stupid greed, the foolish subservient relationship found between the Nigerian prodigal sons, the political gangsters, the unconcerned professionals, the uncivil servants and their equally morally depraved white partners since independence is what makes this writer very uncomfortable, very sad and very furious indeed.
The prodigal sons who mismanaged the Nigerian economy and bastardised the social values, norms and culture of the Nigerian nations were mere stupid accessories in the international trade scam called global economy of free market.
When we look at the debt profile of Nigeria, currently put at $38billion as at 1998 (This figure depends on who you believe), we find that the leading identifiable national creditors are owed $17.7billion. This is distributed among them as follows: United Kingdom $4.9billion, Germany $3.8billion, Japan $3billion, France $2.8billion, Netherlands $1.2billion, Italy $1billion, and United States of America $1billion.4The question is how did Nigeria come about this debt in spite of the mouth-watering wealth that accrued to it from oil since the 1950s?
To fully understand the calamity facing Nigeria is to look at the level of ineptitude and profligate careless abandon with which these foolish boys handled the goose laying the golden eggs on which their greed, gluttony and debauchery depended.
Nigerian National Petroleum Corporation
The economy of Nigeria since the 1970s depends solely to the tune of between 70-90 per cent of annual budget on revenue from oil. The Nigerian National Petroleum Corporation (NNPC) that was established in 1971 handles this all-important operation. The Corporation is the economic soul of the Nigerian nation. But because of the level of corruption, distrust and political instability, this company has never had a stable management.
Therefore, the absence of management continuity at NNPC ensures there was no “coherent petroleum policy”. It is on record that between 1971 and 1995, the corporation was practising a musical-chair management strategy whereby 15 different chief executives occupied the glamorous seat of the Managing Director of NNPC. THISDAY reckoned that, there was “an average of one chief executive every 13 months.”5 Not bad at all.
This singular carelessness on the part of the Federal Government of Nigeria becomes a veritable instrument in the hands of the sharks and pirates vigilantly floating about in the international waters of global trade. The Shell Petroleum Development Company (SPDC-Nigeria) is the largest oil-producing venture in Nigeria. It is owned 100 per cent by Shell, a British company. Shell D’arcy was the first company on the scene in 1930s when geological surveys confirmed that Nigeria had oil. By the virtue of its national origin and favourable connection with the British Colonial Nigeria, Shell did not only get the first licence to explore and exploit for oil in Nigeria but also had access to all the intelligence reports of best locations of oil before any other company.
As at 1995, Shell’s exploration and production division generated 43 per cent – ($2.947 billion) of Shell International’s total earning of $6.85 billion with only 16 per cent of Shell’s total labour force. Within the exploration and production sector of Shell’s international portfolio, Nigeria is the third most important venture for Shell, only beating by operations in the USA and the UK.6 “It is estimated that Shell makes $170 – 190 million in profits out of Nigeria every year.”7
Definitely, this amount will be higher. According to Jedrizei George Frynas, in ‘Political Instability and Business: Focus on Shell in Nigeria’, secrecy within oil companies and lack of data have often hindered researches in the oil sector and “even financial data, at first glance the most neutral of all sources, may be manipulated.”8
As a result of lack of reliable data from the oil industry, the best anyone can do is to draw inferences from the scanty available information. Also flowing from the political instability in the country and the resulting management instability in NNPC, the actual regulatory and policing function of the oil companies by NNPC has been totally absent. SPDC virtually became a law on to itself.
As a matter of fact it became the sole financier of the central government and therefore the clandestine behind-the-scene policy maker or the Grand Puppeteer of the successive military governments.
By its central and dominant position in the economy of Nigeria, Shell has evolved the necessary political clout and the management experience to influence the policy direction of every Military Administration in the country. It is therefore not surprising to find that key personnel of NNPC and Shell seem to be moving from a management position in Shell into political appointment in NNPC and other government posts or from senior position in NNPC to management position in Shell.
This formidable symbiotic relationship between NNPC and Shell is at a great cost to the Nigeria-nation. Among other things, it ensures that Nigeria has no iota of control whatsoever over its only source of revenue and life-blood. Ernest Sonekan, Nigerian Head of State in 1993 and Edmund Dankoru, the Group Managing Director of NNPC in 1992, are two examples of some notable employees of Shell who have made this important and valuable transition.
According to a former Managing Director of NNPC, “proper cost monitoring of their operations has eluded us and one could conclude that what actually keeps these companies is not the theoretical margin but the returns they build into their costs.”9
Now we shall try to unravel the inglorious game going on in the Nigerian oil industry as much as can be understood by a lay man.
I have to confess, I am not in any way conversant with the jargons of this sector but from a common sense perspective, we shall make attempt to understand what the experts are trying to hide from common Nigerians.
The Inglorious Partnerships
NNPC has a joint venture arrangement with each of the following oil companies operating in Nigeria: Shell, Mobil, Agip, Elf, Texaco, Ashland, Pan Ocean and Others. NNPC holds the controlling share of between 55 percent and 100 percent in the various ventures.
There are two types of contract NNPC signs with the oil companies, either production-sharing contract or joint venture contract. The production-sharing contract entails that the oil company ‘advances all funds towards running costs’ while in joint venture, NNPC is legally binding to contribute the appropriate percentage of the running cost as per the proportion of the share held by NNPC in the joint venture and as at when required by the technical junior, but dominant, partners.
The production-sharing contract policy actually came into effect in the 1990s as a result of cash flow problem facing NNPC or in a layman’s language, when NNPC had become technically bankrupt.
This is where the story becomes interesting. NNPC, the major share holder, does not make any expert contribution to the preparation of the oil company’s capital budget plan neither does it have any knowledge of the cost parameters adopted for drawing up the production cost. The corporation merely gets a fait accompli in form of a letter or a fully prepared glossy document stating the cost of the next capital venture and a deadline for the release of fund.
Since the management of NNPC is unstable, there is no incentive for any official of the Nigerian government to participate in the technical planning, to monitor over time the past projects and to make intelligent in-put to the oil company’s capital venture proposals and plans.
Therefore, it is quite easy for the oil companies to double or triple-charge and over-invoice their cost expenditure claims.
Of course, by the level of corruption in the Nigerian Civil Service and at the political level, a common knowledge to the oil companies, officials and political office holders are always willing and are ever-ready, without much prodding, to co-operate favourably or to collude with the companies in this game of figures.
Every international contractor knows that the Nigerian contract of any services is the most profitable cost-wise because of the juicy officially sanctioned built-in frivolous expenses to cover the cost of all visible and invisible kickbacks.
Who says, Nigerian Civil Service officials and political office holders do not have planning foresights? They sure do where it matters.
As a result of the dirty corrupt games going on between NNPC and the Oil companies, by 1994, Nigeria owed $800 million in arrears to oil companies under its joint venture agreements. Of this amount Shell was owed $380 million in cash-calls by the NNPC.10 In order to recover the arrears of production-cost funds, the oil companies ‘whitemailed’ the government through non-payment of local contractors fees and workers’ salaries.
This covert strategic device contributed immensely to the oil workers’ strike of 1994, even though and for maximum effect, the Oil Workers’ Unions wrapped it up with the June 12 democracy propaganda.
However, the Oil Workers’ demand, that the Federal Government should release $800 million owed to the oil companies, let the cat out of the bag.
If you remember, we quoted that Shell makes between $170-190 million profit every year in Nigeria but surprisingly, its major partner, the NNPC cannot afford to contribute parts of its share of capital project venture costs.
Does it mean NNPC has no reserve or it makes no savings if not profit from the exorbitant investments made over the years in partnership with the oil companies?
Does it mean that while the junior partners in the venture were declaring profit, the major shareholder was declaring losses?
What then is going on in the most important sector of the Nigerian economy?
Apart from the inability to monitor production cost, the bulk of which is funded by NNPC, Nigeria is equally unable to monitor production out-put as well. The actual amount of barrels of oil produced per day is only known to expatriate employees. No Nigerian has access to this important information except to the figures handed out in writing by the oil companies to the government officials who were expected to monitor and record in person the flow of oil out of the wells.
As at 1960s, stories were doing the rounds about the frustration experienced by young university graduates seconded to the oil companies under the management-training scheme of the Ministry of Mines and Power. These junior officers were not allowed to go beyond the outer office of the oil companies.
The trainees reported, among other things, on the practices where the oil companies cleverly quarantine them away from the heart of the exploration, exploitation and production.
Of course, the oil companies made adequate and elaborate arrangement to provide for the pleasure and comfort of these young Nigerians. But as regards the purpose of their secondment, they were not allowed to get near the measuring gauges and other instruments to read and record the data and statistics they were mandated to collect.
At the end of each week, the oil companies would hand out typed sheets of paper containing all the data and recordings the Inspectorate Officers were expected to monitor. This clever ploy ensured that the oil companies exploring and exploiting in Nigeria have technically made the Nigeria’s oil exploration one of the most lucrative in the world, at least to the oil companies.
This is why, according to Frynas, despite the high level of risk involved in investment exposure to the unstable political climate of Nigeria, the oil companies are unable to pack up this exceedingly profitable region of their global business.
The Consequences of Mismanagement
Then, if annual reports of oil companies cannot be relied on to give accurate statistics of operations; if published data on barrels of oil lifted per day are all cooked up; if NNPC, the eye, hear and brain of the Federal Government, does not have direct access to actual production cost and production out-put; if the oil companies deliberately and technically blacked out Nigerian workers and government officials from important aspect of their operations; if local villages and communities, like the Ogoniland, have no control whatsoever over their land or what is taken out of it or could not ask for redress over pollution and environmental degradation of their land, where is the check and balances that would ensure that Nigeria as a country enjoy the most favourable deals from this natural God-given exhaustible wealth?
Lest we forget, it should be mentioned that the oil wells are not inexhaustible resource. Even if they are inexhaustible, the spade of technological development will ensure that the future demand of oil will be negligible, if not nil. What then is Nigeria going to do when the whole oil sector collapses? Bearing in mind the level of environmental damages the oil companies have caused, bearing in mind that the agricultural sector has long died and buried, bearing in mind that Nigeria has no reserve or savings of any kind from all the mammoth wealth it derived from this sector since the 1950s, and bearing in mind that our creditors are greedily waiting by the borders to cart away every assets at their reach in case of a final default, what then shall become of the unity of Nigeria and her teeming population? Would those political hawks and wolves that are arguing that the unity of Nigeria is the only thing worth keeping still be around when the oil well dries up?
This is why every thinking Nigeria should be furious and be filled with moral outrage at the careless manner the affairs of this country have been handled by the prodigal sons and the political gangsters. This is what draws out the anger in Obafemi Awolowo against the white colonial government when he wrote the following, “The history of British rule in Nigeria…is characterised by a policy of aimlessness, drift and want of imagination. It is dangerous to behave irresponsibly with the political destiny and general well-being of a people.” Is there any sign of bitterness among Nigerians today against the charlatan class of Nigerians who still go about the country parading themselves as leaders of the people? Or is it that we are all bereft of shame, anger, bitterness, moral outrage and all other human emotions that should be brought to the fore when a sane person finally discovered the cause and source of his/her misery?
III. The Race Dynamics
In spite of the massive rip-off by these oil companies, over the years, it is now on record that Nigeria owes the mother countries of these companies to the tune of $38 billion. How far shall our clever Caucasian friends go in exploiting the foolishness and stupidity of their dumb African partners? This is like the case when a stronger and clever man took everything of value in the home of a rich but not so wise friend who came into wealth through inheritance. Not only did his so-called friend under the disguise of helping him to manage this wealth cart away everything of value but also afterwards left him with an outrageous mountain of debt in return for the ‘good services’ he had rendered to a dear friend.
Nigeria has become a classic case of a casino-type. Nigeria is like Las Vegas or Monte Carlo where the casinos Moguls lure in wealthy but stupid clients. The casino operators would ply the rich client with drinks and other pleasure in good measure before deliberately setting him up on the black jack or whatever they fancy in the casino. At the end of the night, it is usually a night affair, the wealthy client would have exhausted every credit facilities in his bank accounts, would have put down his limousine in the packing lot as betting chips, and would have signed off his palatial house and other assets as guarantees for money borrowed for betting. When the casino operators have done with him, after first stripping him off his gold wrist watch, chains and other paraphernalia of wealth around his persons, he is pushed out of their premises, penniless and alone.
Don’t be surprised by the suggestion of the heading of this section that seems to imply that the issue at stake here is a white man-black man prejudice. Of course it is, at least from the perspective of the white race. This is the conceptual frame on which the international global relations are erected. They are built on a white-superior and black-inferior philosophy. The atypical white man is still having the opinion and belief as well, that he is brighter, stronger, cleverer and mightier than his black counterpart. In a nutshell, he sees himself as very much far superior to the black man. As a result of this fallacy, in the design of all relationships with the black race, the white man assumes the leading role as a matter of course. If challenged by an enlightened black person, he takes it as a serious unforgivable affront to his person and to his divine authority.
The case of Professor Bolaji Akinyemi, the Minister of Foreign Affairs during the Ibrahim Babangida’s era, is a good example of this kind of egocentric myth. Bolaji Akinyemi during his tenure in office was a man who was cocksure of his personal worth as a human being. He carried (I hope he still does) himself as a man who truly believed he had every right to be the equal of every other human being on the planet earth. He allowed this reality to inform and to encapsulate his official responsibility and the policy direction of his ministry as the Minister of Foreign Affairs for Nigeria. This type of air, this type of refinement, and this type of manners coming from a black man and belonging to a debt-ridden country was strange to his counterpart in London and Washington. Their discomfort with this Minister soon became apparent within a short time. Two examples would suffice to demonstrate the nature of the international relationships African countries are subjected to by the racially motivated developed countries.
First, at the height of this quiet cold war, the United States Assistant Secretary of State for Africa Affairs set up meetings with Babangida, the then self-styled President of Nigeria. Washington brazenly set aside the niceties of protocol, which entails going through the office of his counterpart in Lagos, that is, the Minister of Foreign Affairs for such intergovernmental meetings. It was a quiet diplomatic manoeuvring that seemed to be suggesting to FGN that the United States of America does not wish to and cannot do business with the man Nigeria has appointed to be her spokesperson in Foreign Affairs. Secondly, the diplomatic imbroglio that arose because of the actions of the officials of the British High Commission in Lagos while setting up a new Visa Office in Lagos at the edge of Dodan Barracks. The British officials attempted to take the law into their hands without seeking official permission from the office of the Minister knowing fully well that Dodan Barracks was the residence and office of the President and Commander-in-Chief of Nigerian Armed Forces. It was quite clear that London and Washington could not just stand the intellectual dispositions and the self-assured manners of this unusual Nigerian.
What did Akinyemi do wrong to offend the sensibilities of these ‘friends’ of Nigeria? Nothing much. Akinyemi was astute in his duties. His personal integrity as an incorruptible Nigerian was just too much for them to swallow. He was conscious of his rights and confident of his worth as a person who is equal to all other persons on earth. He understands the culture, the philosophy and the thinking of his white colleagues and so they had no hiding place whenever they planned to play the diplomatic fuddy-duddy game. He was therefore seen as proud, lacking in manners and without respect for his superiors. For these sins, London and Washington nearly burnt him alive with all kinds of innuendoes, evil machinations and diplomatic ‘whitemail’ of all sorts. A British official from the British High Commission in Lagos, at an unguarded moment or maybe deliberately let it slip that, at the next cabinet reshuffle Akinyemi would be removed from office and replaced. It never happened though at the time envisaged by this official but it sure did happen eventually at a later date.
If you are still in doubt as to the depth of this belief among our white business partners or diplomatic and expatriate colleagues, let us quote from Albert Schweitzer (1875-1965), a German Christian priest, scholar, musician and medical doctor who is on record to have done so much laudable work in Africa for Africans but still had this to say about his African friends,
“A word about the relations of the whites and the blacks. What must be the general character of intercourse between them? Am I to treat the black man as my equal or my inferior? I must show him that I can respect the dignity of human personality in everyone, and this attitude in me he must be able to see for himself; but the essential thing is that there shall be real brotherliness. How far this is to find complete expression in the sayings and doings of daily life must be settled by circumstances. The negroid is a child, and with children nothing can be done without the use of authority. We must, therefore, so arrange the circumstances of daily life that my natural authority can find expression. With regards to negroes, then, I have coined the formula: ‘I am your brother, it is true, but your elder brother’.”11Akinyemi’s type is the missing link in the Nigerian establishment – the type that blatantly refused to accept any white man as an elder brother but rather as an equal. He refused to behave to type as expected by the big powers. They saw him as a small man throwing his weight around on the international scene without permission. They were irritated by his manners that seem to suggest that he fears no king or power. This was too much for them to swallow. They cleverly set about dictating to his boss, as diplomatically as possible, that Akinyemi should be replaced. Another man who came close to this type is Professor Tam David West who had similar experience with his counterpart in the Organisation of Petroleum Exporting Countries (OPEC), an association dominated by the Arab imperialists. He ended his political career under Babangida as Minister of Petroleum Resources almost tainted with the tar of corruption and nearly lost his life in addition. He became by the warped conventional wisdom of Babangida’s administration, the only corrupt official of that government who was arraigned before a Tribunal on charges of corruption.
The point one is trying to make is that in the design of the philosophy that informs both the structure and the super-structure of international relations of diplomacy, trade, business, economics, banking, insurance, law, science and technology, Africans have remained totally inconspicuous. Africans are yet to make any significant contribution whatsoever to the defining of the character of any of these relationships. And from all practical observations, Africans have remained mere passengers that seem to be very comfortable with just hiking a ride on the global journey of life. Collectively, Africans have neither influence on the political and economic drivers nor on the purpose or the destination of the journey.
SAM ABBD ISRAEL
17 August 1999
1. Charles De Secondant, Baron de Montesqueiu, ‘The Spirit of Laws’ Translated by Thomas Nugent, revised by J. V. Prichard in The Great Books of the Western World. Vol. 38. Chicago: Encyclpaedia Britannica. 1952 p.153.
2. Elizabeth Isichei, A History of Nigeria. London: Longman. 1983 p. 102 (Quoted from J. Newton, Thoughts Upon the African Slave Trade. London, 1788. & Extract in C. Fyfe, Sierra Leone Inheritance. London. 1964, pp.73-74.)
3. ibid. p.101.
4. International Herald Tribune, ‘Nigeria Battles Plagues of Corruption and Chaos’. 24 August 1998. p.2.
5. Jedrizei George Frynas, ‘Political Instability and Business: Focus on Shell in Nigeria’ in Third World Quarterly, Vol 19, No 3, pp 457-478, 1998.
6. ibid. (Quoted from Der Spiegel, 35, 1996)
9. ibid. (Quoted from Cyril Obi & Kayode Soremekun, ‘Oil and the Nigerian State: An Overview’ in Perspective on the Nigerian Oil Industry, Lagos: Amkra Books, 1995, p.22.)
11. Charles R. Joy: Albert Schweitzer: An Anthology. p.85. (Quoted from Ndabaningi Sithole, African Nationalism. Oxford. 1959. p.121.