Last Macabre Dance of an Ex-President - The Questionable Sales of Public Assets & Hike of Fuel Price

The recent wave of hasty sales of government shares and interests in various business entities in Nigeria by the out-gone Olusegun Obasanjo administration is raising a lot of furor not only within the country but also amongst economy watchers worldwide. More worrisome is the fact that these shady transactions do not appear to have followed due process as the Bureau of Public Enterprises (BPE), the organ set up by law to privatize public enterprises, seem not to have been appropriately positioned to carry out these transactions in the national interest.

The National Association of Seadogs (NAS) queries this late hour rush by the ex-President to sell off these assets literally days before he handed over to an in-coming administration. The fact that beneficiaries of these transactions are cronies and acolytes of President Obasanjo directly or indirectly, overtly or covertly as well as the ludicrously low prices at which these lucrative deals were concluded at the twilight of the last administration seems to supply the motivation.

It is our view that these transactions are shady and faulty on several fronts. One, they were not conducted by the BPE and apparently did not follow due process by not conforming to competitive open bidding. Secondly, these assets were grossly undervalued. Thirdly, all the Stake-Holders (employees, creditors and minority shareholders) were not consulted before the transactions were consummated. We wish to highlight a roll call of these transactions as follows:

  • The Port Harcourt Refinery was sold to Blue Star Oil at the cost of $561 million. Blue Star is a subsidiary of Dangote Group of Companies, an organization owned by one of the biggest financiers of the ruling party the Peoples Democratic Party [PDP]. The Chairman of Zenon Oil, Mr. Femi Otedola [son of a past governor of Lagos state], is another big financier of the ruling PDP.

  • The Onigbolo Cement Company was grabbed by the Dangote Group at a ridiculous sum of $1.78billion.

  • The National Arts Theatre was almost sold but a deafening uproar made the auctioneers settle [in the mean time] for an arrangement whereby private companies would operate the national edifice at the cost of N35.8 billion.

  • The Lagos International Trade Fair Complex went to a company called Aulic Nigeria Limited for N40 billion.

  • The Tafawa Balewa Square (TBS) went to a relatively unknown business group called BHS International for N9.5 billion.

  • Another company with federal government substantial investment, Ayip-Eku Oil Palm Company was sold to Wingsong M-House Palm Oil Investment Limited for N527million.

  • The sale of the Kaduna Refinery could not go through initially because the only bidder then, the Chinese National Petroleum Corporation's offer of $102 million was said to be less than the expected amount for the sale. The Dangote Group is still in line.

  • The Ajaokuta Steel Company Limited was sold to Global Steel Holdings Ltd (GSHL) in what can be best called national tragedy. Global Steel Holdings Ltd is believed to be owned by Obasanjo’s first son, Gbenga, with Liyel Imoke current Governor of Cross Rivers state as down the line partner.
  • The Egbin Power Plc went to Korea Power Corporation [KEPC] at $280million.The Musa Yaradua government is said to have revoked this particular sale.

Apparently President Olusegun Obasanjo did not only sell the aforementioned federal government assets, he also granted hundreds of lucrative Mining Leases and Exploration Licenses. On May 23, a spokesman of the solid minerals ministry confirmed in a statement that the former president had granted 50 Mining Leases and 952 Exploration Licenses to international and local firms. Majority of these Leases and Licenses from all indications went to individuals and entities with ties to President Obasanjo and the ruling PDP.

A Deregulation Law, which was hurriedly passed to accommodate the new Solid Mining Regulations, was explained, as “an attempt to attract much needed private investment to develop the neglected sector.” The National Association of Seadogs (NAS) can confirm that Nigeria, the world's eighth biggest oil exporter, has commercial deposits of over 34 mineral resources including gold, tin, tantalite, kaolin and barites.

As an organization we are aligned and agree with the Chairman of House of Representatives’ Committee on Budget, Farouk Lawan that these transactions were all mischievous and "in bad faith… Such major decisions should be left to the incoming administration, so that due process is followed and it is done in the overall interests of the country… hurried sale of the country's largest oil refinery, a cement factory, 18 oil exploration contracts and up to 1,000 mining concessions, among other assets, in two weeks is unprecedented and smacks off suspicion of foul play, and therefore should be reviewed by Yar'Adua”.

Chairman of Senate committee on Downstream Petroleum, Senator David Brigidi while expressing surprise at the ‘last minute’ increase in the pump price of petrol, insisted that Due Process was not followed and that the management of the Petroleum Product Prices Regulatory Agency (PPPRA), the federal department responsible for fuel pricing, was not qualified to effect a unilateral increase without the consent of representatives of the board including Labour.

Nigerians are generally puzzled, alarmed and shocked by the ex president’s last minute parting-gifts of N75 per liter fuel hike, up from N65,increase in the Value Added Tax (VAT) from 5 per cent to 10 per cent on all goods and services commencing from the week his successor, Musa Yar Adua would assume office. The latest fuel increase was Obasanjo’s sixth in his eight years rule. While the pump price of the Premium Motor Spirit (PMS) popularly known as petrol stood at N75, Dual Purpose Kerosene [DPK] was moved from N50 per liter to N60 per liter. Depot price of PMS at the NNPC depot is now N67.50k, N10 up from the previous N57.51 while the same product will sell for N71.50 at the private fuel depots.

The Nigeria Labour Congress (NLC) and the Petroleum and Natural Gas Senior Staff Association (PENGASSAN) denounced the last minute fuel increase by former President, describing it as a “wicked parting-gift from an insensitive government.” vowing to reject and resist the new prices and called for the immediate reversal to the old pump by the new government.

At his inauguration as President, President Musa Yar'Adua promised to prove to Nigerians that the trust they reposed in him by “electing” him president was not misplaced. Nigeria now awaits his reaction to this affront to our collective sensibilities and hope that the new administration would have the resolve to dismantle the legacy of institutionalized corruption which President Obasanjo had deposited at the doorstep of the Presidency. Nothing short of swift revocation of this last minute sweet deals and reversal of these fuel and tax hikes will satisfy the Nigerian people. The revocation of the sale of the Egbin Power station by President Yaradua on his first day in office is a welcome development.

NAS joins the organized labour and the plurality of Nigerians in demanding that the Yar'Adua administration makes a bold and decisive move to checkmate other last minute efforts by ex-President Olusegun Obasanjo and his cohorts to plunder the nation’s precious assets. Only such a selfless and patriotic move will endear the new President and his administration to Nigerians, and, set in motion the right climate to heal the painful wounds inflicted by the April 2007 electoral fraud.




NAS Capone
National Association of Seadogs (NAS)

June 1, 2007