By Odua Clement T. Ofuani
MON, JULY 17 2017-theG&BJournal– I was asked recently by a very influential personality about my assessment of the state of our nation given my background in public service at the State and Federal levels and in the private sector. I thought a bit about it and wished that I could answer like President Bill Clinton even at the height of the Monica Lewinsky scandal, when he reported in his State of the Union address to Congress that “the state of the Union is strong”, but, slowly and sincerely, I replied that the state of our union is very weak and fundamentally flawed. I further told him, that as a chartered accountant, if I were to audit the financials of corporate Nigeria at this point in time, I will qualify my opinion on the accounts on the grounds that the entity is doubtful as a going concern. Of course I am conscious of the fact that the implication of such a qualified opinion is a red flag to potential investors.
Pressed on why I would take such a position, I replied that it is really a non-partisan assessment. For a good corporate organization, its performance is always certainly linked to the strength of its internal control system encompassing its corporate governance. When an auditor evaluates a corporate organisation’s internal control system as weak, he will place little reliance on the accounts produced by such an entity which will influence his opinion. In very similar terms, a nation with weak institutions is like a corporate entity with weak internal control systems. Nigeria’s governance institutions have been particularly notoriously weak and rather that heed President Barack Obama’s admonition that Africa needs strong institutions and not strong men, Nigeria, incidentally with the active connivance of the west, opted for a ‘strong man’ in 2015.The result has been far worse than could have been predicted by the most prescient citizens.
Essentially, while I do not hold President Muhammadu Buhari entirely responsible for the sorry state of the nation, his parochial political choices and uninformed and rustic economic policies have exacerbated and accelerated the decline and descent of the nation to the current parlous state. Bad as the economic situation is though, the more troubling situation is the insecurity and uncertainty hovering over the nation’s political landscape that leads to the inescapable conclusion that Nigeria, as a going concern entity is doubtful. This is a direct result of the parochial policy of favouring those that gave him 97%electoral support over those that gave him 5% pronounced by President Buhari at the US Institute of Peace on July 22, 2015 to an astounded global audience and which was later reflected in his political appointments and national resource allocations in clear and flagrant breach of the provisions of the Constitution of the Federal Republic and his oath of office. It is little wonder that under his administration, the clamour for secession and disintegration of the nation assumed a fierce urgency reaching a crescendo in the Arewa Youth ultimatum to Igbos to vacate the North by October 1, 2017.
Back to our conversation, I told the influential personality of my deep concerns over the effect of such a qualified audit opinion of the accounts of corporate Nigeria on investment decisions about Nigeria since, typically, investors are averse to risky environments, and my qualified opinion indicates that Nigeria’s investment climate is not just risky but that it’s future is uncertain, which is worse. It is not surprising that our hunt for foreign investors has been meeting with unmitigated failures. ‘How come Chinese investors are falling over themselves in Nigeria?’, he queried further. I had to smile at this question first before responding. After exiting the external debt trap of the Paris Club, one would have thought that Nigerian leaders would learn a lesson from our sordid past but we refused to heed the admonition of George Santayana, philosopher, essayist, poet and novelist that, “those who cannot remember the past are condemned to repeat it”.
The Chinese, brimming with huge external reserves and concerned about their future are apparently falling over themselves to sign investment deals with Nigeria but a careful evaluation of their propositions would reveal that they are far shrewder than their Nigerian counterparts. First, while the Chinese come to the table as businessmen concerned about maximising profit and minimising risks, Nigerians approach the table with the mentality of beggars looking for charity. Realizing this, the Chinese package their proposals as help to the glee of their Nigerian counterparts but a quick assessment of any of the proposal would reveal the naivety of our people. For instance, in June 2006, the Obasanjo administration awarded CCECC, a Chinese company, the contract for rehabilitation of the Lagos-Kano rail line using Chinese loan. This is a narrow gauge line constructed a century ago. The rest of the world has abandoned the narrow gauge and narrow gauge locomotives are no longer in production anywhere in the world. The Chinese gleefully accepted and were ready with their loans to supply us refurbished and repainted scrapped locomotives. The contract is still on-going, a decade after.
Enter the Jonathan administration and the Chinese signed memorandum of understanding to build petroleum refineries on a Public Private Partnership (PPP) basis and we celebrated the promise except that a cursory review of the PPP showed that the entire risks associated with the projects were to be borne by Nigeria. Little wonder the Chinese asked us to choose the project locations and a mini war erupted in Kogi State, one of the proposed project sites even though the Final Investment Decision had not been made. The Chinese were not interested in the economic considerations that should underpin the decision on location because, by shifting the commercial risks to Nigeria, they had inoculated themselves against the risk of failure to leave Nigeria with the short end of the stick.
And now under the ‘change’ administration of President Buhari, Nigeria rushed to negotiate a multi-billion dollar loan for the construction of the East – West rail line even though, no study had been carried out to determine the feasibility of such a project which would have forced us to determine the exact route of the line and the associated costs of such an undertaking. So, how did Nigeria decide on the amount of the loan to take from the Chinese for this project? That question was considered irrelevant because we are convinced that the Chinese are here to help us notwithstanding the fact that the population of poor people in China exceeds even Nigeria’s exaggerated population. Indeed, a report Facts about China: RICH, POOR and INEQUALITY states that nearly 500 million Chinese people live on less than $2 a day but this information does not matter to our leaders to moderate our expectations of ‘charity’ from the Chinese in business matters.
So, to answer the question about the rush of Chinese investors to Nigeria, my answer is that they are here to enslave Nigeria and we are willingly walking into the slavery.
As if these were not enough, in the last few days, Volvo announced that it would discontinue the production of internal combustion engine cars from 2019 as it migrates to production of electric cars just as France announced that from 2040, it would ban the use of diesel or gas fired automobiles. In the same week, Billionaire Elon Musk announced the building of the World’s largest lithium battery system expected to provide South Australia’s energy grid with clean, affordable and reliable electricity. Over the next decade, all these will spell disaster for Nigeria with 70% of its fiscal revenue and about 90% of its foreign exchange derived from crude oil. Clearly, if Nigeria does not disintegrate as a result of the current deepening political and ethno-religious fault lines, surely the loss of crude oil revenues will accelerate it given that we are not prepared to allow a proper census and documentation of Nigerians for purposes of tax collection that would also expose the lie about our demography that has underpinned Nigeria’s politics since amalgamation in 1914.
Therefore, yes, I am deeply worried about the state of our union today and you should be too.
Ofuani is the DIRECTOR GENERAL, DELTA STATE CAPITAL DEVELOPMENT AGENCY, ASABA