“Why I Started War Against Subsidies”- Sanusi Lamido Sanusi

. What He Told Street Journal

. How Obasanjo Subverted Due Process

In an e mail sent to Street Journal by the Governor of the Central Bank, Sanusi Lamido Sanusi, the nation’s number one banker took time to explain his role and why he started the war against subsidies. He also explained the rot in the petroleum sector and the frauds perpetrated in order to benefit from fuel subsidy. Below are excerpts from the mail:

“If you will patiently read this mail to the end you will understand my position. I won’t be able to repeat everything I have said over the past few years on fuel subsidy, but in summary; Fraud like theft thrives not only because of the existence of greed and benefit but of opportunity. Place yourself in the shoes of the average Nigerian “businessman” or “entrepreneur”-polite euphemisms for rent seeking parasites. You establish an elcee for importing 20,000MT of PMS and the PPPRA says this is at a landed cost of N145 for example per litre. So you know that for every litre in that vessel you will get at least N85 as subsidy. Now you have a number of “possibilities”: 1. You can offload 5,000 MT and bribe customs and other officials to sign papers confirming you offloaded 20,000 MT. Then do the same across the chain with a paper trail showing you delivered 20,000 MT to a tank farm, and maybe even that you transported it to Maiduguri entitling you to a share of the price equalization fund. Maybe for N20-N30 per litre you bribe all those who sign the papers. The 15,000 MT you take to Benin or Ghana or Cameroun and sell at market price thus making an additional “profit” of N55/ltr on 15,000MT! 2 you can just forge documents and have them stamped without bringing in anything and collect the subsidy-PPPRA pays based on DOCUMENTS. 3 you can bring in the fuel, load on tankers, sell some at N65N some at 80 some at 100 some across the land borders. You can do all this and no one can catch it or prove it because somebody was paid to sign off on documents. And with a high enough margin, there is too much temptation to be resisted and firepower for bribing officials. When I spoke to the House of Reps I told them why I was suspecting fraud. It starts from PPPRA “allocations” based on “capacity”. You will find a company like Mobil with capacity for say 60,000 MT and a relatively unknown name with a capacity of say 90,000 MT. Red alert number 1. Although PPPRA is supposed to give license only to marketers with a national distribution network you see names of companies where you have never seen a filling station in their name. I was a Chief Risk Officer in UBA and in FBN for many years approving loans so I know the name of every big player in every industry that Nigerian banks lend to as these are among the biggest banks in the country. I see names on the list I don’t recognise either from portfolios. I looked at or industry studies over the years. Red alert number 2. I studied the papers presented to PPPRA in a short period in 2010 (I won’t tell you how I got them!). And I was surprised that on some days over 10 vessels are said to have discharged cargo in Lagos on the same day-clearly the same officers stamping and “verifying” that the vessels were SEEN. Is it really realistic that on the same day 13-15 vessels can discharge in Lagos? Red alert number 3. Why was I interested in fuel marketing. Because the two sectors that led to the near collapse of the banking industry were capital markets and oil marketing. I am not giving any confidential info out as AMCON MD has already disclosed publicly that two companies alone-Zenon and AP-owned by the same businessman owed the Nigerian banking industry N220b. And we all saw the amount of subsidy paid to those companies published by BusinessDay. So money had been taken, subsidy had been collected but loans were not repaid, and we couldn’t see the money either as product in tank farms or in fuel stations or credit sales. So I became obsessed with trying to understand how that industry operated and the more I saw the more I hated it and I started the war against subsidies. It is actually better So yes, I am willing to take all the criticism and labels and be unpopular but this has to stop and govt can find other ways of alleviating pain. Iran removed subsidies and started cash transfers directly to the poor. It is up to fiscal authorities to figure out safety nets but from where I sit and what I know this decision is not only correct but necessary and overdue. I also confirm that I have revealed nothing here I haven’t spoken about before in public and it is just that Nigerians never listen! I am not complaining about insults I am used to that. I just believe that an insult is not an argument and when people resort to personal abuse they have run out of logic.  But to then go beyond me and extend it to my dead grandfather and his “descendants” ie my late father his siblings etc I think goes beyond the pale. As a Nigerian-and as an economist- I can take a position on economic matters and this position is one I have had for years even before coming in to the Central Bank.  I have also explained the position on several occasions and criticised government for not doing this before. In 2010 at a public hearing in the House of Reps on the 25% saga I alerted the nation of what I considered a potential big scam around subsidies and urged for its removal. No one paid attention. The economics is very clear to me. That it is unpopular is also understandable.  The British public is unhappy with Tory budget cuts. The Greeks went on riot over austerity. Italian parliamentarians came to blows before Berlusconi was thrown out of office. The US congress is yet to approve Obama’s tax increases. Economic decisions-by definition-ALWAYS must involve a cost or an opportunity cost since for them to qualify as economic they must involve a choice in resource allocation among competing uses. An enlightened debate is one that weighs the pros and cons of removing subsidy and continuing with it. So I became obsessed with trying to understand how that industry operated and the more I saw the more I hated it and I started the war against subsidies. I started the war against subsidies. It is actually better to do a direct cash payout or add a line item to salaries called petroleum support or transport allowance capped at say N300b p/a than to keep paying it. It goes to pay middle men, rent-seekers and corrupt officers and there is no amount of preaching that will stop this fraud so long as the policy is so badly defined. Every time oil price goes up and every time the naira is devalued and every time the quantity of imports increases the “subsidy” and thus the “rent” increases and there is more gravy to go round. So every year we “import” more and more and deplete our reserves, and the government borrows more and more to pay for subsidy and the beneficiaries are a small group of marketers, govt officials and neighbouring countries which get fuel without losing forex! And while a person who applies intelligence can see what is happening, you can’t prove it in a court of law. If the man says he sighted the vessel and it was 20,000MT you have to accept it. It was a year ago! So for two years I have been convinced that this thing is a scam and that it cannot be stopped because the entire controls have been compromised. NNPC sells domestic crude, pays whatever subsidy PPPRA says and then gives the balance after JVC to the Federation Account. And while Fani Kayode is right to speak up, the truth is that it was Obasanjo who first subverted the process by allowing NNPC to make the deductions before paying into Federation Account. Because once money goes into that account it is to be shared among 3 tiers of government so strictly speaking the deductions have always been unconstitutional as the FG was paying subsidy on behalf of itself and state and LGs without their approval. So yes, I am willing to take all the criticism and labels and be unpopular but this has to stop and government can find other ways of alleviating These are all valid issues that are to be taken IN ADDITION to and not in place of subsidy removal.  Since someone has decided to make insinuations about my grandfather I owe it to him to defend his record. It was my grandfather as emir that repealed an obnoxious rule started from the days of Emir Usman that disenfranchised women from inheriting property. It was Sanusi that built the groundnut pyramids to the point where Kano NA was contributing 40pct of the revenues of the northern region. It was Emir Sanusi who built the Bompai Industrial Estate, and turned Kano into the industrial nerve centre of the north. He was Acting Governor of the Northern region, Minister for Pilgrim Affairs, Chief Imam of Friday mosque, judge and leader of the Tijjaniya order. As for his “descendants” my father was one of the very first batch of 12 Nigerians recruited by the British to set up the foreign service in 1957 and he remained in public service and rose to be Permanent Secretary before retirement. He set up in the 60s the Research Department of the Ministry- the present NIA so he was the first external intelligence officer in Nigeria. As Permanent Secretary, he was the architect of Murtala Mohammed’s policy on decolonisation of Africa and oversaw the independence of Mozambique and Angola and the final push to liberate Zimbabwe and South Africa. So yes Sanusi was not perfect. He was a feudal aristocrat. And my father was not perfect. He was also a prince and privileged to go to Oxford and LSE. But please if you want to abuse my grandfather and father kindly tell us what contributions your own grandfather and father made to the people.”
Sent from my BlackBerry® wireless handheld from Glo Mobile.

Author: NewsAdmin

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FLASHBACK: April 22, 1990 – Gideon Orkar’s Coup Speech. Fellow Nigerian Citizens,

On behalf of the patriotic and well-meaning peoples of the Middle Belt and the southern parts of this country, I , Major Gideon Orkar, wish to happily inform you of the successful ousting of the dictatorial, corrupt, drug baronish, evil man, deceitful, homo-sexually-c­­entered, prodigalistic, un-patriotic administration of General Ibrahim Badamosi Babangida.

We have equally commenced their trials for unabated corruption, mismanagement of national economy, the murders of Dele Giwa, Major-General Mamman Vasta, with other officers as there was no attempted coup but mere intentions that were yet to materialize and other human rights violations.

The National Guard already in its formative stage is disbanded with immediate effect. Decrees Number 2 and 46 are hereby abrogated. We wish to emphasize that this is not just another coup but a well-conceived,­­ planned and executed revolution for the marginalized, oppressed and enslaved peoples of the Middle Belt and the south with a view to freeing ourselves and children yet unborn from eternal slavery and colonization by a clique of this country.

Our history is replete with numerous and uncontrollable instances of callous and insensitive dominatory repressive intrigues by those who think it is their birthright to dominate till eternity the political and economic privileges of this great country to the exclusion of the people of the Middle Belt and the south.

They have almost succeeded in subjugating the Middle Belt and making them voiceless and now extending same to the south.

It is our unflinching belief that this quest for domination, oppression and marginalization­­ is against the wish of God and therefore, must be resisted with the vehemence.

Anything that has a beginning must have an end. It will also suffice here to state that all Nigerians without skeleton in their cupboards need not to be afraid of this change. However, those with skeleton in their cupboards have all reasons to fear, because the time of reckoning has come.

For the avoidance of doubt, we wish to state the three primary reasons why we have decided to oust the satanic Babangida administration.­­ The reasons are as follows:

(a) To stop Babangida’s desire to cunningly, install himself as Nigeria’s life president at all costs and by so doing, slowpoke the progress of this country for life. In order to be able to achieve this undesirable goals of his, he has evidently started destroying those groups and sections he perceived as being able to question his desires.

Examples of groups already neutralized, pitched against one another or completely destroyed are:

(1) The Sokoto caliphate by installing an unwanted Sultan to cause division within the hitherto strong Sokoto caliphate.

(2) The destruction of the peoples of Plateau State, especially the Lantang people, as a balancing force in the body politics of this country.

(3) The buying of the press by generous monetary favors and the usage of State Security Service, SSS, as a tool of terror.

(4) The intent to cow the students by the promulgation of the draconian decree Number 47.

(5) The cowing of the university teaching and non-teaching staff by an intended massive purge, using the 150 million dollar loan as the necessitating factor.

(6) Deliberately withholding funds to the armed forces to make them ineffective and also crowning his diabolical scheme through the intended retrenchment of more than half of the members of the armed forces.

Other pointers that give credence to his desire to become a life president against the wishes of the people are:

(1) His appointment of himself as a minister of defense, his putting under his direct control the SSS, his deliberate manipulation of the transition programme, his introduction of inconceivable, unrealistic and impossible political options, his recent fraternization with other African leaders that have installed themselves as life presidents and his dogged determination to create a secret force called the national guard, independent of the armed forces and the police which will be answerable to himself alone, both operationally and administrativel­­y.

It is our strong view that this kind of dictatorial desire of Babangida is unacceptable to Nigerians of the 1990’s, and, therefore, must be resisted by all.

Another major reason for the change is the need to stop intrigues, domination and internal colonization of the Nigerian state by the so-called chosen few. This, in our view, has been and is still responsible for 90 percent of the problems of Nigerians.

This indeed has been the major clog in our wheel of progress.

This clique has an unabated penchant for domination and unrivalled fostering of mediocrity and outright detest for accountability,­­ all put together have been our undoing as a nation.

This will ever remain our threat if not checked immediately. It is strongly believed that without the intrigues perpetrated by this clique and misrule, Nigeria will have in all ways achieved developmental virtues comparable to those in Korea, Taiwan, Brazil, India, and even Japan.

Evidence, therefore, this cancerous dominance has as a factor constituted by a major and unpardonable clog in the wheel of progress of the Nigerian state. It is suffice to mention a few distasteful intrigues engineered by this group of Nigerians in recent past. These are:

(1) The shabby and dishonorable treatment meted on the longest serving Nigerian general in the person of General Domkat Bali, who in actual fact had given credibility to the Babangida administration.

(2) The wholesale hijacking of Babangida’s administration by the all-powerful clique.

(3) The disgraceful and inexplicable removal of Commodore Ebitu Ukiwe, Professor Tam David-West, Mr. Aret Adams and so on from office.

(4) The now-pervasive and on-going retrenchment of Middle Belt and southerners from public offices and their instant replacement by the favoured class and their stooges.

(5) The deliberate disruption of the educational culture and retarding its place to suit the favoured class to the detriment of other educational minded parts of this country.

(6) The deliberate impoverishment of the peoples from the Middle Belt and the south, making them working ghosts and feeding on the formulae of 0-1-1- or 0-0-0 while the aristocratic class and their stooges are living in absolute affluence on a daily basis without working for it.

(7) Other countless examples of the exploitative, oppressive, dirty games of intrigues of its class, where people and stooges that can best be described by the fact that even though they contribute very little economically to the well-being of Nigeria, they have over the years served and presided over the supposedly national wealth derived in the main from the Middle Belt and the southern part of this country, while the people from these parts of the country have been completely deprived from benefiting from the resources given to them by God.

(8) The third reason for the change is the need to lay a strong egalitarian foundation for the real democratic take off of the Nigerian state or states as they circumstances may dictate.

In the light of all the above and in recognition of the negativeness of the aforementioned aristocratic factor, the overall progress of the Nigerian state a temporary decision to excise the following states namely, Sokoto, Borno, Katsina, Kano and Bauchi states from the Federal Republic of Nigeria comes into effect immediately until the following conditions are met.

The conditions to be met to necessitate the re-absorption of the aforementioned states are as following:

(a) To install the rightful heir to the Sultanate, Alhaji Maccido, who is the people’s choice.

(b) To send a delegation led by the real and recognized Sultan Alhaji Maccido to the federal government to vouch that the feudalistic and aristocratic quest for domination and operation will be a thing of the past and will never be practiced in any part of the Nigeria state.

By the same token, all citizens of the five states already mentioned are temporarily suspended from all public and private offices in Middle Belt and southern parts of this country until the mentioned conditions above are met.

They are also required to move back to their various states within one week from today. They will, however, be allowed to return and joint the Federal Republic of Nigeria when the stipulated conditions are met.

In the same vein, all citizens of the Middle Belt and the south are required to come back to their various states pending when the so-called all-in-all Nigerians meet the conditions that will ensure a united Nigeria. A word is enough for the wise.

This exercise will not be complete without purging corrupt public officials and recovering their ill-gotten wealth, since the days of the oil boom till date. Even in these hard times, when Nigerians are dying from hunger, trekking many miles to work for lack of transportation,­­ a few other Nigerians with complete impunity are living in unbelievable affluence both inside and outside the country.

We are extremely determined to recover all ill-gotten wealth back to the public treasury for the use of the masses of our people. You are all advised to remain calm as there is no cause for alarm. We are fully in control of the situation as directed by God. All airports, seaports and borders are closed forthwith.

The former Armed Forces Ruling Council is now disbanded and replaced with National Ruling Council to be chaired by the head of state with other members being a civilian vice-head of state, service chiefs, inspector general of police, one representative each from NLC, NUJ, NBA, and NANS.

A curfew is hereby imposed from 8 p.m. to 6 a.m. until further notice. All members of the armed forces and the police forces are hereby confined to their respective barracks.

All unlawful and criminal acts by those attempting to cause chaos will be ruthlessly crushed. Be warned as we are prepared at all costs to defend the new order.

All radio stations are hereby advised to hook on permanently to the national network programme until further notice.

Long live all true patriots of this great country of ours. May God and Allah through his bountiful mercies bless us all”.
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