Why I declined ministerial appointments, accepted to draft PIB
Oil and gas expert, Dr. Emmanuel Egbogah, speaks with News Editor MARCEL MBAMALU
CONTINUED FROM TUESDAY 3/11/2015
WE hope that this policy will greatly improve the management of government revenue. If it is properly implemented, it will pave way for timely payment and capturing of all revenue going into government treasury without the intermediation of multiple banking arrangements.
Besides, the system will likely reduce the mismanagement of public funds by revenue-generating agencies. For example, the NNPC, it is reported, have never remitted their money. They say they were entitled to deduct at a point before any payment, but that was against the law, because sections 80 and 162 of the Constitution directed that they must remit the monies first. So, what reason did anybody have not to do that?
Previous governments have allowed this non-implementation, thereby leaving loopholes for corruption. We hope that, this time around, it is going to be implemented because we know that the present president is a man of steel.
The measure is expected to help check excess liquidity, inflation, high interest rates, round tripping of government deposits, and the sliding value of the Naira; we will accomplish a lot of things. When a system is organised and is working according to the law, value increases, the recognition of the naira increases and its value will increase.
I can assure you that when the policy takes full effect, the exchange rate will not be N200 to $1. It will begin to come down, because people will begin to see stability in currency management. The fact that we have never had the discipline to manage our resources in this way is one of the reasons the Naira does not add but continues to decrease in value. Once it is recognised by the international community, properly managed and organised, we will see that the correct foundation has been laid.
What, in your opinion, were the banks going to lose materially in 2005 when, according to you, they frustrated the effort to implement the TSA?
Banks stand to lose a great deal because most of these funds that are not being paid into the Federation Account were being paid into banks. And the multiple accounts that were opened allowed them to do all sort of deals.
Funds in many of these accounts were never retrieved because government did not know where the money was. When we say someone did not remit N9.6 billion to the Federation Account, the money is not hanging in the air; it is in the banks. When a Governor or a Minister, for instance, steals some amount, where is the fund lodged? It is in banks, which help them to steal and hide.
In fact, why does a company need to have 10 accounts in one bank? It is just to stash money away, and many of these accounts are never activated in favour of government; they are forgotten. So it becomes the property of the depositor and the banks.
It is argued that TSA implementation does not entail that the funds will be deposited directly with the CBN, they will still have to pass through commercial banks; what roles do you see the banks playing in all of these?
The money will pass through commercial banks but they are under a microscope. It is only passing through; it is not being deposited there. That is what is going to happen.
All money must go into this single account managed by the CBN. The central bank is the government’s bank, to manage its resources. That is why it is called central bank; so, everything must go through. Whatever the banks get must be channeled to the account. Therefore, if you know that money has been deposited in a particular bank today and it has not been deposited in the Central Bank, you can check. That is why the number was given out. That is what we mean by openness and transparency. But one couldn’t do that in the past, when you didn’t know where the money was, and who was keeping it.
Would it be fair enough to say that corruption is the single factor that drives operation of multiples accounts by public officials; are there no other legitimate compelling circumstances, where there could be need to create special accounts, like the controversial Excess Crude Account?
It is the governors that say the Excess Crude Account is unconstitutional because they want money to share. How can it be unconstitutional when you are trying to take care of citizens of your state? The role of government is to take care of citizens, to provide for them today not allow it to go through the normal channel? They (the governors) don’t want the money to be saved; they say ‘we need it now.’ If you prepare for your children’s future, how can anybody say that is bad parenting? It is an obligation you owe your children.
But there are rules and procedures guiding the implementation of fiscal policies, in terms of managing funds accruing to the three tiers government and it would appear that Excess Crude Account defies the 1999 Constitution as amended…
It was something new, which government definitely needed to seek the consensus and agreement before it was done. I would agree that they didn’t do so, and that is what is called bad governance.
So it means the governors were right; are you saying so?
The governors were right. The Federal Government was not right. As a matter of fact, the Federal Government was not treating the governors and the local government as partners. It was as if they were saying, ‘whatever we say you take; whatever we give you, you take.’
No, that is not proper governance. And that is the trademark of many of our leaders, who actually are dictators; they do not like to obey the rules.
In fact, they say they are playing according to the Rule of Law, but, in essence, they are not. For example, when we wrote the Petroleum Industry Bill (PIB), I told the president we needed to sell the idea to Nigerians — to our citizens — and I designed what I called a ‘road show,’ to go to all parts of Nigeria to sell this reform agenda.
But the president said, ‘no, we don’t need any of these; we just tell them this is the Bill and they will pass it.’ And you see that till today, the Bill has not been passed because it has not been sold to the people. So, that is the same way our president or leaders or governments perform; they don’t do things in accordance with what is expected of them; they do things by imposing their will on others; that is the status quo.
What were the challenges while serving under a former president, who was also seen to have a heart of steel, if I may use your words?
President Umaru Musa Yar’Adua was a good president. Nigeria didn’t enjoy his tenure because he was brought down by his illness, which constricted his ability to do many good things. He was my boss. And, proudly, I would say he was the first man, who respected me more than anyone else in the world.
He was so overwhelmed by the fact that I agreed to work for him; he wanted me to be the petroleum minister. But I said, “No sir, I don’t do anything political.”
In fact, the story is that former President Obasanjo, who asked Yar’Adua to call me, told him that he was not lucky because I refused to work for him, but that the late president should talk to me and if I agreed to be in his team, he could go home and sleep, knowing that everything would go well in the oil industry.
But you finally worked for him… not as petroleum minister?
Yes, I did. He called me in August of 2007 and told me what my predecessor said and that the country and his administration needed my help. I asked him in what way was I supposed to help and he said he wanted me to serve as Minister for Petroleum and Energy. I told him I could not work as minister. He asked why, and I said it was because I couldn’t take up a political appointment — the same reason I gave Obasanjo.
He said ‘everybody wants to do this kind of thing and you are saying you cannot.’ I said I wouldn’t work as a political appointee because my wife wouldn’t allow me; she believes that it is a political role. She has the impression that, in the past, whenever there was a coup, ministers get killed, and she doesn’t want to be a widow. So, Yar’Adua asked in what capacity I would like to help. I said I would prefer being a technical adviser since I was a consummate technocrat. ‘This is what I know best how to do; I do it without fear and favour.’ He agreed and appointed me his Special Adviser on Petroleum.
He then said he was curious about my decision because I refused to work for his predecessor, but agreed to work for him. I told him that I like to work in an environment of openness and transparency and that though his predecessor was a personal friend, I didn’t think that kind of candidness existed in his time. I said though I didn’t know what obtained in his administration — because we were just starting out— I had an innate feeling that the environment was going to be different. He was happy and said he wished I could write this as a testimonial for him, as it was the greatest accolade he had gotten from anybody.
The man could have done great things for Nigeria, but he had his hand tied to his back because his illness was very serious, and people, who actually never allowed him to do anything, surrounded him. It was what we called the Katsina Mafia; they did things he didn’t want, but because he was so sick, he couldn’t stand up to them. That was why. But I think he was a man that has a lot of goodwill towards Nigeria and for the Nigerian people.
How would you really describe your relationship with Obasanjo now and in the past?
We have a very good relationship. In fact, I am in Nigeria today because of Obasanjo. He brought me back to the country. During one of the Executive Council meetings, he said in all his travels to more than 40 countries, before he became president, in at least 35 of them, a Nigerian’s name was always mentioned as someone that could fix things if he got into the oil industry.
He said people told him that this person was based in Canada. At the council meeting, he mentioned the name and asked if anybody knew the ‘mystery Nigerian.’ Nobody did, except the then governor from Ondo State, Adefarati, who said he had met the person.
In what circumstances did you meet the governor?
At a time, Ondo State was travelling around the world in search of help in developing their bitumen resources. Everywhere they went, from Brazil to Venezuela, the talk was about a certain Nigerian, Dr. Egbogah, who lived in Canada. They were asked to go and meet him, that he would solve their problems because he was extremely recognised, respected and regarded in the oil industry.
The Venezuelans talked about the magic this person did for them and other people. That’s how the governor got to know about me and sent an emissary to get me in Canada. When I got the message, I told him not to come because it was too cold at the time in Canada, but I could come to London to meet with him. We eventually met in London; he told me what they wanted me to do, I agreed and we set to work.
When he was told this story, Obasanjo said since Adefarati was the only one, who had seen and known me, he should go and bring me.
Adefarati called to tell me that the president wanted him to bring me to Nigeria. I asked what crime had I committed that the president would want to arrest me like that. He said it was not an offence but the president wanted to ask a favour from me. So, I told him that they didn’t need to worry because I could come on my own to see the president. So, that is how I met the president.
We discussed but I refused to be Minister. I think that is reason he continues to respect me till today. We are good friends. And Obasanjo brings me to the center of any cerebral work he does.
But that experience connects you more to Obasanjo than to the late Yar’Adua; did you get to work under his (I mean, Obasanjo’s) government n any ‘private’ capacity?
No, I didn’t. But, at that time, I was assisting him. Anything that Obasanjo wanted to do, he would ask his aides to consult me…that he took my opinion as the gospel truth. Obasanjo respects age and knowledge. That is why we remain good friends till today and he respect me. Besides me, I don’t think he has ever met a more courageous individual to tell him to his face that he would not work for him. But I didn’t give him the reasons for my decision.
And he didn’t ask either…
It was a very interesting scenario when we met that morning. It was Audu Ogbeh who actually led me to the meeting and he complained that I didn’t look like a Nigerian because I always wore shirts. Ogbeh gave me the national outfit I wore to meet the president. And Obasanjo said he was glad that I looked like a Nigerian that morning. So, we are good friends and we continue to maintain a healthy relationship.
For instance, during Easter celebrations every year, my wife, Emeka Anyaoku and I spend the night with Obasanjo; it is a fixed meeting every year.
Why is it so?
My wife was born in Abeokuta, when her father was a Postmaster-General, and as such, Obasanjo regards my wife as his daughter. Every time I go to visit him, he will insist that I pay dowry because one does not ever stop paying dowry for an Abeokuta woman for life. So we have a very good relationship. He respects me, and I do likewise, but I don’t agree with a lot of things he did.
One wonders why you did not get a mention in My Watch — Obansanjo’s book; I don’t think your name was there or is it because you are not a politician?
My name wasn’t mentioned, but if you look at his other book, The Obasanjo Years in Government, you would find me among those who wrote the book, because he insisted that I write about his achievements in the Nigerian oil and gas industry.
Why, you might ask? He said it is because I was someone without fear; whatever I wrote would be the truth about him and that I wouldn’t write anything to favour anyone. That was why he chose that I be the one to write on his achievements in the industry. Go and get the book and see for yourself.
Obasanjo was the substantive petroleum minister for almost four years, an idea that appears to have received the blessing of the present administration; what do you make of that idea?
I wouldn’t say that it is entirely right because the president has a lot to oversee. To add a Ministry to his responsibilities, he won’t do justice to both roles. It’s not possible to have a helicopter view of things happening and still guide others in running the country. He wouldn’t work well; there is no way you can give adequate time to both, no matter how best one tries. So, it is not something that I would have promoted.
But former President Obasanjo apparently, did that…
He took the role because that is the most important thing in the country. If you get the oil and gas industry right, you get Nigeria right, because oil provides over 90 per cent of our revenue in this country.
Therefore, it is very important and should be given the most and best attention. If it goes well, other things will be much better than they are. That is why he assumed the position, to direct it personally, like a general leading the direction of his Army.
That’s what he did, but as I said, it takes too much to be done; you have a lot of things to do that cannot allow you give attention to details.
What then would be your advice for the current president?
It is about to happen because the president has said he would assume the position himself, because, as I said, the industry bears huge importance and significance for Nigeria.
President Buhari wants to do it himself. And, as far as I know, he would probably want to give attention to the oil and gas industry from 18 to 24 months or for half of his term before he hands it over to a Minister. He wants to lay a strong foundation for his administration to build upon. I am fully behind him in his decisions.
People are murmuring about him being president for months without ministers and all of that. But the President says the situation is so bad that if you appoint anyone now, the old process will continue. He wants to clean the floor and lay a foundation, not on sand that will be swept away but on a deep-rooted structure, upon which governance will grow. I am fully in support of that.
For the oil sector, he may continue with it, because of its importance and significance. And after 18 months to two years, he would turn it over, believing that he has laid the foundation upon which it would grow.
What would you say is the major challenge for the sector now?
I think you cannot say just one thing is bad. The oil industry has not grown, developed in the right way in the country. When we discovered oil, foreign companies wrote the rules on how to operate the industry. We knew nothing about oil at the time. We simply took them in and, as time went by, we found out that this is not the way to do things, because, looking at what other people are doing, we needed to change the way we do things. And a lot of the things we had done and the steps we took had not been in the right direction from the setup to when we joined the Organisation of Oil Exporting countries (OPEC).
There is a condition that you must setup a national oil company and work with the international oil companies to limit exploitation. Your people should be major participants in the development of the oil and gas industry. You should be in control of the major stakes in the assets.
But we didn’t setup the NNPC the right way. We made it a government agency, which is involved in policy-making, regulation, commercial services and all, everything rolled into one. And today, none of these things is done properly, correctly.
That is why NNPC has grown to be a sorry case of rot and corruption. Nothing goes well because people, who have diverse interests, are directing it. That is where the problem is, and that is why Obasanjo himself, in his wisdom, said we needed to reform the oil and gas industry. The reforms started in 2000, when he became president.
That was the case until we came in to write the Petroleum Industry Bill (PIB), which is the legal and regulatory frame.
TO BE CONTINUED
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