Consortium alleges hijack, breach in transfer of National Theatre to CBN

ACASE OF HI JACK AND BREACH of agreement has been levelled against Lai Mohammed, the minister of information and culture, over the unilateral transfer of the National Arts Theatre in Lagos and its 150 hectares of land on which it sits to the Central Bank of Nigeria (CBN) and the Bankers’ Committee.

The controversy, which refuses to go away, dates back to 2002 when an initial concessioning process was initiated by the Bureau for Public Enterprises, the outcome of which is the source of the accusation of breach of agreement against the minister.

Yetunde Aina, chief executive officer, Jadeas Trust Consortium, a firm with strong involvement in cultural and entertainment matters, said the transfer of the national monument to the Central Bank of Nigeria and the Bankers’ Committee, was shocking considering the fact that the minister co-facilitated a pact between it and another company, Topwide Apeas, which emerged as preferred bidders through bidding processes conducted by the Bureau of Public Enterprises and the Infrastructure Concession Regulatory Commission respectively, to work together for the concession management of the National Theatre.

On the concession management of the monument, the Jadeas Trust Consortium executive said its interest in the concessioning dates back to 2002, when it first participated in a BPE bidding process and emerged as the reserved bidder. She said because the process was not conclusive then and in the spirit of transparency, the Nasir El-Rufali led BPE decided to carry out another bidding process in 2007, when it also participated

THE EXCHANGE RATE UNIFICA TION PROJECT that the Central Bank of Nigeria (CBN) appears to have begun is a move that ought to be determined by the operational strength of the performances in the downstream petroleum industry of the Nigerian state. Practically speaking, if things were done the right way, it was the core function and the primary duty of the downstream services, to refine crude, and to sell refined petroleum products (either in the domestic market or at the international market). But, in our own economic clime, this model is completely ignored and has been abandoned for too long. Hence, the repercussion of the heavy financial burdens presently felt on our foreign reserves.

On Wednesday the 22nd July 2020; the exchange rate of Naira to US Dollar recorded a saddening free fall to 477/$! In 1980; 40 years ago, one recalls that the exchange rate of Naira to US Dollar was 80 kobo or N0.80/$. Today, it’s multiplied by 600% over! How do we explain that? The downstream sector (which was completely ignored and abandoned for the frenzy of upstream activities on sales of crude), which was far more productive then than today, in terms of installed capacity efficiency, daily consumption of refined petroleum products, recorded self sufficiency for the economy, as well as a net exporter of the same refined petroleum products.

Thereafter, as Africa’s leading crude exporter (for petrodollar); we are today shamefully, Africa’s largest per capita importer of refined products. Why wouldn’t our economy be going down by constantly recording a weakened local currency without a matching sustainable productivity through operations in the downstream sector of the oil industry?

Refreshing our minds first, on the core duties and responsibilities of the three strata in the oil industry, vis-à-vis the upstream (exploration and production/drilling of crude), the midstream (transportation and marketing/sales at the International oil market); and the downstream (refining of crude and the sales of refined products at both the domestic and the international markets). The Downstream sales operations could either be as the economy desired (domestic sales alone, or combined with the export sales as well). Self sufficiency (domestically) first, plus being a net exporter of refined products (to international markets to attract and generate foreign exchange earnings in the nation’s foreign reserves).

It ought to be expected in a domesticated manufacturing process that, a complete focus on the downstream operations (by adding value to our crude within the economy than mere exports of the crude), makes the sector the “game changer” in the economy; whenever the issue of foreign exchange monetary policy is raised. All these while (since 1958), Nigeria has been actively making “movements without visible motion” in the oil industry because, there’s basically and absolutely nothing to show for it (with all the busy activities of the extractive operations in the upstream), when compared with other oil rich countries (in terms of tangible economic growth in our foreign reserves) instead, its financial back and forth transactions on our foreign reserves, has been an embarrassing “rise and fall figures’ syndrome” on the nation’s current account; over the decades.

This unfortunate scenario has been instituted by the leadership and those in authority running the affairs of the oil industry, through the sales of crude for foreign exchange earnings, and at the same time, these public officers in charge (including political office holders, I must say) rundown the reserves by spending same on imports of refined products. Over the period, they created all sorts and manners of policies (the likes of fuel subsidy regime and etcetera); leveraging on them as windows to syphon funds, drain the economy and run it dry! This unpatriotic act is done and perpetrated over the ages, without thought of being a self sufficient economy on the refined petroleum products consumed locally on a daily usage; while the rest of the excess crude could then be handled at the upstream export market.

To be discussing the downstream sector and deregulation in Nigeria today, is like “crying over spilled milk”. The system and its economy have been badly run, poorly handled and recklessly mismanaged by our leaders (without making a long term sustainable plan in the industry). Deregulation is not an issue at all, to be discussed! It ought to be a prerequisite for downstream operations (anyhow it is viewed or looked at).

Today, the CBN joggles policies called “unification of exchange rate” and what have you because, we had bungled our opportunities in the past that would have kept the foreign reserves growth rate on a steady rise. Imagine if it were not the observed mirage effect of “movement without motion” in our external savings account? If value had being added to our crude through the oil value chain all these decades, and we keep conserving every petrodollar that hits that account, while at the same time, we still satisfy our daily local consumption needs of the locally refined products. How can Nigeria be in want of funds of any magnitude, that will warrant going a borrowing these days?

We didn’t put the horse before the cart first! We didn’t set up the needed infrastructure that ought to be spinning money and conserving foreign exchange in the economy, in the light of our abundant oil and gas resources. This is our clear identified problem that now haunts the economy financially. A savings surplus economy that is rich in crude oil and gas resources, with sound financial prudence for reserves, would scarcely have cause to dip hands into the forex earnings saved under soverign wealth fund (SWF) or in the excess crude account (ECA). Such status alone would automatically put the economy in a top financial rating, based on the fact that the growing external reserve figures and values will directly strengthen the local currency, which invariably would be gaining strength by the day, at the exchange rate market. Presently in our own clime and in the present situation, the opposite is the case. Quite unlike in the 60’s, and the 70’s when Nigeria hosted the National Festival of Arts and Culture, popularly known as “FESTAC 77”; when we had excess cash in our foreign reserve based on the figures being recorded in the nation’s balance of trade. Then, our total annual spendings was always less than its total inflows/income.

This aspect of finance is what our leaders and those in the financial system know much about. Actually, the problem in the economy is that the present economic challenge demands a total turnaround in our institutional structure, by reengineering our national operational plan and financial projections, especially with specific focus on the oil sector (in particular); for a sound long term sustainable plan. This will be achieved through an optimized hybrid export operations in both our upstream and downstream hydrocarbon business (simultaneously) in that sector of the Nigerian economy. The targeted and envisaged financial spike in the national productivity plan of course, will definitely rub off positively on the nation’s Gross Domestic Product (GDP); plus enormous job creations for the teeming unemployed youths in the job market.

I will keep stressing on this singular, and presently dysfuntional economic pillar and its hurting position on Nigeria’s economy, particularly about our oil industry (with serious emphasis); until we get it right! It is never late though, if we today make a complete u-turn from the status quo. If only our political leaders will repent, with political will and forsake their selfish, corrupt ambitions, for good governance, that shall be sustainable for the economic growth and development the country deserves. Otherwise, it is already a known fact that we are our own economic enemies; killing the nation’s economy!