“AMCON’s intervention in Transport and Allied Sector; Achievements, Challenges and Prospects.”

This is the full text of a paper presented by Mr. Ahmed Kuru, Managing Director/Chief Executive Officer, Asset Management Corporation Of Nigeria (Amcon) at the 6th Nigeria Transport Awards And Lecture On Thursday April 26, 2018 At Sheraton Hotel Ikeja, Lagos

I will not bore you with the long story that led to the creation of AMCON because we are all familiar with the history of the economic downturn that brought about AMCON. However, I must state that for us at AMCON, we believe that forums like this should be encouraged and supported because our country needs all the developmental discussions, financial and technological wisdom in the world to enable us steer the economy of Nigeria to the very top where it belongs. 

In doing so, we cannot overemphasize the critical role of transportation. We are also convinced that there is no better vehicle to deliver this messages of hope to the doorstep of every Nigerian than the media, which is the fourth estate of the realm; mirror of the society and the voice of the voiceless.  

It is on that note that I commend the Management and Staff of TransportDay Newspaper for coming up with this lecture series, which they have sustained for six years.  

AMCON’s intervention in Transport and Allied Sector; Achievements, Challenges and Prospects.

Having said that, I want to let you know that the transport sector is perhaps one of Nigeria’s most challenging sectors; especially in the light of the massive need for infrastructure in rail, road, sea and air transport to ensure seamless movement of people and cargo. 

The transport sector is a known catalyst for the economic development of nations. It is the wheel that drives economic activities. 

Particularly, the air transport sector facilitates trade, tourism, boosts productivity in the economy, improves efficiency in the supply chain, it is an enabler for investments, can spur innovation, facilitate commerce and provide fast and reliable delivery of cargoes and services. 

A look at major airport hubs in the world like New York, Tokyo, Beijing, Rio de Janeiro, London, Delhi, Frankfurt, Dubai, Bangkok, Singapore reveals that air transport has been a major driving force in those economies. 

 Nigeria seats at a strategic geographic position in Africa. It is like the pipe stand of a gushing fountain. It is perfect for a hub. It is large and has a growing, mobile population potentially making it comparable to New York, Dubai, etc. 

It is therefore gratifying to note that various governments, at state and the Federal levels are investing massively in rail, airport infrastructure, roads and bridges. 

Some of these include the Airport road to the MMIA, Lagos; the new terminal and upgraded runway at the Nnamdi Azikwe International Airport, Abuja; Upgrading of the Asaba Airport and various ongoing rail projects. 

Towards realizing the potentials of our great nation, the FGN has announced plans to concession some airport facilities. As a people, we should reject backwardness by supporting the policy thrust. 

Let companies with systems and capital come into the transport sector. 

 AMCON was created to be a stabilizing and revitalizing tool in the Nigerian economy. Towards achieving our mandate, we purchased non-performing loans of about N181 billion from various banks. Over 90% of this was in the aviation sector. 

To place the companies in a position to recover and generate adequate cash flow, we gave additional un-lending facilities (in collaboration with CBN and BOI) of almost N40billion on very good terms. 

Unfortunately, notwithstanding this support, the companies could neither pay the old nor new loans. 

We have therefore been compelled to appoint Receiver Managers over a lot of the companies, the biggest being Arik and Aero.

AMCON’s intervention through the instrumentality of Receiver Management was first to stabilize the operations of the airlines, put them in a position to generate positive cash flow, then resolve their debt situation through either the owners paying the debts or the sale of the companies/underlining assets.  

Specifically, our intervention in Arik and Aero were intended to be value adding and non-destructive. 

It is noteworthy that the Corporation has adopted a similar approach to the revitalization of Peugeot Automobile of Nigeria (PAN), which today is back to operation and assembling vehicles for the road transport sector.  

Achievements

At the point of intervening in Arik, the company was witnessing  a high spate of flight cancellations of up to 40% , on-time performance (OTP), which measures the promptness of schedule flights had fallen to as low as 15%. Staff, including pilots were owed salaries, in some cases for up to six months. 

Staff morale was therefore understandably low. Several service providers including fuel marketers, maintenance and spare part companies were withdrawing services or were unwilling to extend credits. 

There were indeed significant concerns at various governmental cycles for safety and the possible impact of the collapse of the company on the economy. We are glad to report that this position has been largely arrested. 

Cancellations are down to 4%, OTP is over 60%, all owed salaries of current staff are fully paid, suppliers are now  being paid as at when due. 

This of course has come at a cost to AMCON and not without with the unparalleled support of the Central Bank of Nigeria and local banks. 

At Aero, we succeeded in ensuring that the airline remains a going concern. And with the strengthening of its management, we have seen a refocus on the strengths and capabilities of the airline. 

The Maintenance Repair and Overhaul (MRO) licence has been made active. 

The airline in February succeeded in completing a c-check on a Boeing 737; a huge feat with a potential for savings in foreign exchange demands by local airlines.  

The intervention in the sector has ensured that Nigerians are offered choices, there is an enhanced positive competition leading to improved service offering for the flying public,  

As a major policy drive of this government, we were able to save over 3,000 direct jobs, and hundreds of indirect jobs in the airline industry. We are indeed proud to have played this important role. 

Challenges  

Expectedly, the intervention has not come without its challenges. These include shareholder actions, lack of support by some trade creditors, some foreign lenders, and increased union demands. These were not unexpected and have been professionally and transparently handled. 

The new management in Arik had to take bold decisions to downsize its operations, especially cutting down all the long haul flights, due to the losses being sustained on those operations, and the lack of equity capital to absorb the losses. 

Generally there was the need to reassure the traveling public. AMCON is an asset management company, not a consultancy firm to run airlines. So we got professionals to do the job. They are the ones running the airlines. 

There were scepticism in some quarters earlier on but the narrative has changed. Nigerians are happy with our intervention in the transport sector. However, a lot still needs to be done. 

 Prospects 

With a population currently estimated to be 180 million and with the abundant human and natural resources of Nigeria, the prospects in the transport sector of Nigeria is huge. 

Nigeria is naturally endowed geographically to be a global hub. And with the abundance of water and land mass we are able to create a harmonious rail, sea, road and air transport sector to the benefit of our people and economy. 

In 2017, in nominal terms, the transport sector contributed N1.787 trillion to GDP accounting for 1.57% of total GDP; while the aviation sector contributed N105.86 billion of this number representing 5.92% of the sector. 

According to the National Bureau of Statistics (NBS) the storage and transport sector controls 3.21% of the labour force. We can build on this.

The aviation and transport sector requires solid capital to make it deliver for the good of the Nigerian people. It will require a measure of policy consistency and governmental support to thrive. 

However, from our experience, no matter the capital thrown at the sector, if corporate governance is not strengthened, it will still fail. 

The absence of governance or quality governance and sound financial risk management systems is at the heart of the failures that are common in the sector. I urge regulators to act with courage by insisting on proper governance in airlines. 

I recommend they look at the work being done by CBN and Financial Reporting Council to improve the practice in airlines. 

I will not end this paper without reiterating the fact that AMCON does not wish to be in the airline business or indeed any business apart from its legal mandate. So, AMCON will be willing to exit the firms if the owners of the companies pay the debts owed. 

Where this does not happen, the Corporation will seek to strengthen the intervened companies and undertake a responsible exit in a manner that reinforces the sector. 

Ahmed Kuru, FIoD, FCIB.

U.N. agency urges mandatory training to combat human trafficking on flights

Airlines should offer mandatory training to prevent human trafficking, the United Nations’ aviation agency said in a new document that could further empower cabin crew on the front lines of global efforts to combat such trafficking.

Civil aviation authorities should “require” carriers to teach staff to identify and respond to trafficking, the International Civil Aviation Organization (ICAO) said in new training guidelines for cabin crew co-published on Monday with the Office of the United Nations High Commissioner for Human Rights.

Montreal-based ICAO cannot impose rules on governments, but wields clout in civil aviation through standards that are followed by its 192-member countries.

While the United States already requires mandatory training for flight attendants, it was not known whether other countries that don’t have similar rules would follow suit.

Combating human trafficking, estimated as the world’s second most profitable trans-national crime according to the document, has emerged as a growing concern for global aviation. 

Airline trade group International Air Transport Association is eying ways to strengthen the training efforts its members are already doing “which should be announced later this year,” an IATA spokeswoman said.

“It (airline involvement) is starting to spread,” said Martin Maurino, safety, efficiency and operations officer with ICAO’s air navigation bureau. However, training programs offered by airlines like Emirates [EMIRA.UL] and budget carrier AirAsia are done voluntarily.

Canada’s Sky Regional is the first airline globally to train its pilots and flight attendants using the new UN guidelines on the identification and response to trafficking, Maurino and the carrier’s in-flight director, Mikaela Dontu, said.

Training advocates argue that countries should make such programs mandatory for airline flight attendants, pilots and ticket agents. 

“It’s excellent if they can do it voluntarily but the airlines weren’t doing that,” said Nancy Rivard, a former flight attendant and president of the non-profit Airline Ambassadors International. 

Flight attendants, who can spend hours with suspected traffickers and their victims in the air, have been credited with multiple rescues. While the guidelines apply to cabin crew, ICAO also recommends training pilots and ticket agents. 

“The issue of trafficking and combating this issue involves several stakeholders,” the guidelines say. The UN guidelines advise flight attendants not to confront traffickers or try to rescue the victim themselves. 

More than 70,000 U.S. airline staff have been trained to spot smugglers and their victims under the Blue Lightning initiative, launched in 2013 with the support of JetBlue, Delta Air Lines and others.

@reuters

BREAKING NEWS: BUHARI TO RUN FOR SECOND TERM

Nigeria’s President Muhammadu Buhari has officially declared his intention to run for second term in office.

The President made his intention known at a closed door meeting of the National Executive Committee of Nigeria’s governing party, the All Progressives Congress, APC.

The Governor of Plateau State, Simon Lalong revealed this while speaking to journalists on the proceedings of the meeting at the party’s Headquarters in Abuja.

He also said the party has resolved to hold congresses and elections to elect new party executives at both the national, state and local levels.

F.G RELEASES UPDATE ON TREASURY LOOTERS

The Minister of Information and Culture, Lai Mohammed on Easter Sunday released more names of alleged treasury looters.

Mohammed said the previous names announced a few days ago were based on verifiable facts.

Those in Mohammed’s fresh list are:

Former NSA Sambo Dasuki: Based on EFCC investigations and findings alone (this is beside the ongoing $2.1 billion military equipment scandal), a total of N126 billion, over $1.5 billion and 5.5 million British Pounds was embezzled through his office. A good number of these monies were simply shared to persons and companies without any formal contract awards.

“Former Petroleum Resources Minister Dieziani Alison-Madukwe: In just one of the cases the EFCC is investigating involving her, about N23 billion is alleged to have been embezzled. She is also involved in the Strategic Alliance Contracts of the NNPC, where the firms of Jide Omokore and Kola Aluko got oil blocks but never paid government taxes and royalty. About $3 billion was involved. The Federal Government is charging Omokore and Aluko and will use all legal instruments local and international to ensure justice.

“Rtd. Lt.-Gen. Kenneth Minimah: N13.9 billion. N4.8 billion recovered by EFCC in cash and property.

“Lt.-Gen. Azubuike Ihejirika: N4.5 billion. N29m recovered by the EFCC so far.

“Alex Barde, former Chief of Defence Staff: N8 billion, and EFCC recovered almost N4 billion in cash and property already.

“Inde Dikko: former CG Customs: N40 billion, and N1.1 billion in cash recovered in cash and choice properties.

“Air Marshal Adesola Amosun: N21.4 billion. N2.8 billion recovered in cash. 28 properties and 3 vehicles also recovered.

“Senator Bala Abdulkadir, former FCT Minister: N5 billion. Interim forfeiture order on some property secured.

“Senator Stella Oduah: N9.8 billion. Interim forfeiture order on some property secured.

“Former Niger State Governor Babangida Aliyu: N1.6 billion – from NSA.

“Senator Jonah Jang, former Plateau State Governor: N12.5 billion.

“Bashir Yuguda, former Minister of State for Finance: N1.5 billion. $829,800 recovered.

“Senator Peter Nwaboshi: N1.5 billion.

“Aliyu Usman: Former NSA Dasuki’s aide: N512 million.

“Ahmad Idris: Former NSA Dasuki’s PA: N1.5 billion.

“Rasheed Ladoja: Former Oyo Governor: N500 million.

“Tom Ikimi: N300 million. Femi Fani-Kayode: N866 million.

“Hassan Tukur, former PPS to President Goodluck: $1.7 million.

“Nenadi Usman: N1.5 billion.

“Benedicta Iroha: N1.7 billion.

“Aliyu Usman Jawaz: Close ally of former NSA Dasuki: N882 million.

“Jonah Jang, former Plateau State Governor: N12.5 billion.
“Godknows Igali: Over N7bn

Mohammed, also said those complaining that the first list was too short apparently did not understand that it was strategically released as a teaser.

“What was the PDP expecting when it challenged the FG to name the looters of the public treasury under the party’s watch? Did the PDP actually believe that the massive looting under its watch was a joke? Did they think it is April Fool?” he said.

The Minister said the PDP’s reaction to the looters’ list has shown that its recent apology is an election-induced act, contrived to deceive unsuspecting Nigerians to vote for the party in the 2019 general election, even when it has not come clean on its looting spree during its time in office.

“The hysterical and panicky reaction from the PDP has shown that the party is not at all sincere about its choreographed apology. Were it not the case, the party would have followed in the footsteps of one of its leaders, Senator Ibrahim Mantu, who simply owned up to his role in the party’s rigging in the past elections and said he had turned a new leaf. ”It is said that a true confession is done in humility with an attitude of repentance. It is clear that the PDP does not know this, hence its resort to hubris instead of humility and genuine penitence,” he said.

Alhaji Mohammed said the Federal Government will neither be intimidated nor blackmailed into silence, adding that it will also not rest until all those who looted the public treasury have been brought to justice.

 

Bill Gates says Nigeria has potentials for growt

CNN) - Bill Gates traveled to Nigeria to publicly give its leaders some tough talk. It was a highly unusual move but the tech billionaire believes the country is facing a critical moment.

"While it may be easier to be polite, it's more important to face facts so that you can make progress," the philanthropist told a room of Nigeria's government elite that included the president.

In an exclusive television interview with CNN, Gates said he wanted to speak out to implore Nigerian politicians to focus on human capital and its large youth population.

"The current quality and quantity of investment in this young generation in health and education just isn't good enough. So I was very direct."

The tech billionaire and founder of the Bill and Melinda Gates foundation feels that he has earned the right to speak.

Gates says he has traveled to Nigeria for more than a decade and the foundation is spending $1.6 billion on programs here -- most of it his own money.

Their primary focus is health and their work has been incredibly successful in mitigating the threat of polio, particularly in the crisis-hit northeast of the country.

Gates feels, along with many others, that it is time for Nigeria's government to do better. The continent's largest economy is moving out of a recession caused by a tanking oil price and moving towards a closely watched presidential election in 2019.

In many ways, the country is transforming, with gleaming hotel towers on Lagos Island competing for real estate and the wealthy fighting in the notorious traffic in ubiquitous black SUVs.

But dig a little bit deeper and the statistics are alarming. As Gates points out, Nigeria is still one of the most dangerous places to give birth and the country's very young face chronic malnutrition.

University of Washington modeling, commissioned by Gates, estimates that if investment isn't increased in health and education, then the per-capita GDP, rising steadily for decades, will flatline.

Gates says he wanted to spark action and debate and he certainly has.

Predictably, some see the tough talk as a rebuke of Muhammadu Buhari, Nigeria's president, who has been struggling to get the economy on its feet and stamp out the persistent threat of Islamist group Boko Haram in the northeast.

On the street, many just want support from their government -- whoever is in charge -- because right now there often isn't much.

"These people are just trying to survive, they aren't being helped," said banker Moses Uchendu, while grabbing lunch at the popular Obalende market in Lagos.

It's a bustling market where vendors sell delicacies such as efo riro, a spicy Yoruba stew. Power outages are frequent and the only contact with officials is when they visit for bribes, say residents and traders.

Nigeria is routinely rated as one of the most corrupt nations on the globe. Although the country recently moved up 14 places on the World Bank's ease of doing business ranking, most of its businesses remain in the informal sector where there is little help and loans are hard to come by.

Few businesses pay their taxes and all these factors have hindered Nigeria from meeting its true potential, says Gates.

Uchendu hopes Nigerians are listening.

"I told my friends... that Bill Gates is saying the truth. It is better we are told the truth about Nigeria's economy. It is better we say the truth."

But Gate's message isn't a new one. Activists say they have been making frequent calls to invest in people, and end rampant corruption, all which have been ignored.

"These are not new topics. These are the issues that we have been discussing with the government. We have been engaging with them for so many years now," says Timothy Adewale, a human rights lawyer with one of Nigeria's largest NGOs.

"Nobody will listen. You know, actually, if they are sincere about the best interest of the people, they should listen. It has always been said that the greatest test of your commitment is your actions."

But Gates believes, together with Aliko Dangote, Africa's richest man and a close partner of the Gates Foundation, that if the Nigerian government does a few things differently, then the country is poised for liftoff.

"I really think that of all the countries I have seen, it really hangs in the balance. If they can get health and education right, they can be an engine of growth, not just for themselves but for all of Africa," said Gates.

Shell Suspects Ex-Executive Committed Crime in Nigeria

Royal Dutch Shell Plc referred a former vice president for sub-Saharan Africa Peter Robinson to the Dutch authorities, suspecting he may have committed crimes related to an asset sale in Nigeria.

The allegations of criminal misconduct by one of its employees come at a difficult time for Shell. 

Europe’s largest energy company and several former executives, including Robinson, are already facing a criminal trial in Milan over an alleged bribery scheme related to the separate purchase of a Nigerian oil block called OPL 245.

Shell denies any wrongdoing in that case. However, while investigating those charges Shell began to suspect that accounts in Switzerland and a company in the Seychelles in Robinson’s name were used to take kickbacks from the sale of another block called OML 42, said a person with direct knowledge of the matter, who asked not to be identified because the information isn’t public.

“Based on what we know now from an internal investigation, we suspect a crime may have been committed by our former employee,” Shell said in an emailed statement. “We were stunned and disappointed when we learned about this.”

Robinson worked in Nigeria for Shell from 2008 to 2011 as vice president for commercial in the sub-Saharan Africa region, part of a more-than-30-year tenure with the company. 

His lawyer in the Milan case, Chiara Padovani, wasn’t immediately able to respond to a request for comment. 

She said last week that her client denies accusations of corruption made by Italian prosecutors.

Nigerian Deals

Oil block OML 42, located in the Niger Delta, was sold by Shell in 2011. It produces about 100,000 barrels a day according to Neconde Energy Ltd., now the operator of the block. The deal came into focus after prosecutors in Milan alleged that in the same year Shell and Italian oil company Eni SpA paid more than $1 billion for OPL 245, knowing that much of the money would go to pay bribes to Nigerian officials.

The criminal trial in Milan also involves Shell’s former upstream director Malcolm Brinded and Eni’s current Chief Executive Officer Claudio Descalzi. Both men deny any wrongdoing.

The criminal referral against Robinson was filed last week, said the person with direct knowledge of the matter. It appears he acted alone and took strong measures to avoid detection within Shell by failing to report companies and accounts registered in his name that fell outside the company’s protocols on eliminating conflicts of interest, the person said. Some of the emails Shell is scrutinizing are encrypted, the person said.

Swiss Account

Prosecutors in Milan, as part of their investigations into whether part of Shell and Eni’s payment to the Nigerian government for OPL 245 was funneled to other individuals, have been looking at links between Robinson and a Seychelles-based company called Energy Venture Partners Ltd., court documents show.

A bank account linked to Robinson was frozen by the Attorney-General in Switzerland after requests for legal assistance from the Dutch and Italian authorities, people familiar with the matter said last week. Several hundred million Swiss francs were in the account, the Tages-Anzeiger newspaper reported, citing people it didn’t name.

Shell’s own investigation has so far concluded those accounts weren’t linked to the OPL 245 transaction, but instead may have been used for kickbacks from the sale of OML 42, the person said.

“On OPL 245, we continue to believe, from our review of the prosecutor of Milan’s file and all of the information and facts currently available to us, there is no case to convict Shell or its former employees,” Shell said by email.

source: Blomberg

DEFENCE: Nigeria to manufacture Polish Assault Rifle

Nigerian soldiers armed with Beryl M762 rifles. Source: Fabryka Broni

The Polish Armaments Group (PGZ) holding company and Defence Industries Corporation of Nigeria (DICON) signed a letter of intent on 26 March covering the production of Beryl M762 assault rifles in Nigeria, the rifle’s manufacturer Fabryka Broni announced.

Signed by PGZ president Jakub Skiba and DICON director general Major General Bamidele Ogunkale, the memorandum determines three phases of technology transfer: initial assembling, partial manufacturing, and finally full production of the assault rifles at the Ordnance Factory Complex in Kaduna.

It was not announced how many rifles will be produced in Nigeria.

Nigeria’s 2017 federal budget proposal allocated NGN364 million (USD1 million) and NGN390 million respectively to establish production lines for the Beryl M762 and AK-47 assault rifles, the latter possibly being a reference to the OBJ-006, a Kalashnikov derivative unveiled by DICON in 2006.

The Beryl M762 is an export variant of the Polish military’s 5.56 mm Beryl wz. 96C service rifle that is chambered in 7.62×39 mm. It has accessory rails, uses standard AK-47 magazines, and has a fire selector with single shot, three-round burst, and full-automatic modes.

Nigeria Is World’s Largest Petrol Importer – NNPC

Nigeria is the only member country in the Organisation of Petroleum Exporting Countries (OPEC) that imports petrol and is currently the largest importer of Premium Motor Spirit (PMS) in the world, Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, said in Abuja yesterday.

Baru, who spoke through NNPC’s Chief Operating Officer (COO), Upstream, Alhaji Bello Rabiu, at the 2018 Oloibiri Lecture Series (OLEF) while responding to questions from delegates, said the country had reached such import level because the refineries had not worked to their maximum capacity.

The OLEF, organised annually by the Society of Petroleum Engineers (SPE), Nigeria Council, in commemoration of the first oil well drilled in Nigeria at Oloibiri in Bayelsa State in 1956, brings together key industry players to chart the right path for the oil sector.

“As we speak today, Nigeria is the only OPEC country that imports petrol and we are the largest importer of PMS in the world,” Baru said.

“We actually import one million tonnes of PMS every month into a country that produces oil and gas and has refinery. It is a shameful thing, it doesn’t make sense and that is what we are trying to address,” he added.

 He said the refineries have not been operating at maximum capacity, but that the NNPC was working to address these challenges with the imminent announcement of investors who would bring in funding for the repair of the plants.

“Upgrades of our refineries from the current name plate capacity of 445,000 barrels of crude oil per day (bpd) to at least 1million bpd is the focus. Discussions with relevant investors and financiers are ongoing. The expectation is that the refineries will be fully back on stream by December 2019,” he said.

The Chairman of SPE Nigeria Council, Mr. Chikezie Nwosu said the SPE-OLEF now in its 18th year, had become a forum that brought together key industry players to discuss on topical issues in the energy industry with a view to influencing the right policy direction to enable the growth of the industry and the economy.

Earlier, in an oil industry address, the GMD announced that Nigeria had seen the most aggressive drop in gas flaring from a peak of 2.5 billion standard cubic feet per day few years ago to about 700 million standard cubic feet per day.

@footprint africa

President Buhari prevents foreigners from taking Nigerian jobs via Executive Order

President Muhammadu Buhari on Monday in Abuja signed Executive Order 5 to improve local content in public procurement with science, engineering and technology components.

The Executive Order is expected to promote the application of science, technology and innovation towards achieving the nation’s development goals across all sectors of the economy.

The president, pursuant to the authority vested in him by the constitution, ordered that all ‘‘procuring authorities shall give preference to Nigerian companies and firms in the award of contracts, in line with the Public Procurement Act 2007.’’

The Executive Order also prohibits the Ministry of Interior from giving visas to foreign workers whose skills are readily available in Nigeria.

It, however, notes that where expertise is lacking, procuring entities will give preference to foreign companies and firms with a demonstrable and verifiable plan for indigenous development, prior to the award of such contracts.

In the proclamation entitled ‘‘Presidential executive order 5 for planning and execution of projects, promotion of Nigerian content in contracts and science, engineering and technology,’’ the president also directed Ministries, Departments and Agencies to engage indigenous professionals in the planning, design and execution of national security projects.

It adds that ‘‘consideration shall only be given to a foreign professional, where it is certified by the appropriate authority that such expertise is not available in Nigeria.’’

In Saudi Arabia, Where Family and State Are One, Arrests Over Corruption May Be Selective

King Salman’s close relatives not only rule Saudi Arabia. They are also in business with it.

But the Saudi Arabia's Crown Prince Mohammed bin Salman, is leading a sweeping crackdown against what he has labeled “corruption” that has swept up at least 11 princes from the House of Saud. But his immediate family’s complicated and mostly undisclosed business interests are raising questions about what that accusation means in a kingdom where the law has so far included little or no regulation of what other countries have labeled and outlawed as self-dealing.

Saudi laws, issued by royal decree or derived from Islamic law, have so far included little or no regulation of the sprawling royal family and its closest clients. The family has never disclosed the sources of its income, how much its members might take from the country’s oil revenues, how much they earn from state contracts or how they afford their lavish lifestyles.

King Salman has never explained where he got the money to buy as much as $28 million in London luxury homes, just as his son, Crown Prince Mohammed, has never said how he was able to plunk down more than $500 million for a 440-foot yacht he spotted one day and decided he had to own.

The kingdom, an absolute monarchy, has also never attempted to create an independent court system to adjudicate claims. And if corruption is defined as private profit at the public expense, the practice is so pervasive that any measures short of revolutionary change may appear to be selective prosecution.

“It is straight out of the autocrat’s playbook,” said Katherine Dixon, a researcher at Transparency International who has studied the Saudi defense industry. “Using state resources for your own ends is still O.K. if you are part of the right faction or clique, but because corruption is what people care about, it is used as a public rallying cry to justify a crackdown.”

She and others compared Prince Mohammed’s campaign to anti-corruption drives by President Xi Jinping in China or President Vladimir V. Putin in Russia, where prosecutions are often politically motivated.

As many as 500 people have now been detained on allegations of corruption as part of the crackdown. Many are being held at Riyadh Ritz-Carlton in what may be theworld’s most luxurious prison.

The Saudi Council of Ministers said Tuesday that all arrests were “based on specific evidence of criminality and acts that were intended criminal transgressions and resulted in unlawful gain.”

Prince Mutaib bin Abdullah, right, the former chief of the national guard, is among those detained.CreditHassan Ammar/Agence France-Presse — Getty Images

“The rights of the accused and the facts relating to the offenses are protected by law at all stages during the investigation and judicial process,” the council added.

But the government had not disclosed any specific charges or evidence, or even the names of those arrested. The first wave began just hours after a royal decree created an investigating committee under Prince Mohammed, leaving little time for inquiry. The courts are under the effective control of the king and crown prince. And it was unclear which branch of the court systemmight hear the cases — the main Shariah court system or the more specialized board of grievance courts that handle administrative complaints.

“This is a Pandora’s box to start having anti-corruption trials,” said David Ottaway, a Middle East fellow at the Wilson Center, a nonpartisan research center. “Where does it stop within the royal family? Are there any princes that can show clean hands?”

“The law is not meant to govern the ruling family in any meaningful way, or to govern the relations between the ruling family and the state,” said Nathan J. Brown, a scholar at George Washington University who studies Arab legal systems.

“Ultimately, the king and some high members of the royal family can do what they want and make it legal later,” he said, and the lack of regulation over royal self-dealing “opens the door wide to what would be considered corruption in other systems.”

Many Saudis appear to have applauded the crackdown. Two-thirds are under 30, many are frustrated by high unemployment, and some may take a certain satisfaction at even an arbitrary comeuppance for so many of the rich and powerful.

“It’s going to be popular with the commoners who see important parts of the al-Saud family as a rent-seeking, unaccountable caste,” Steffen Hertog, an associate professor at the London School of Economics and the author of a book on the Saudi bureaucracy. “Saudi businesses have been complaining about royal encroachment for decades.”

Some cases may be clear-cut.

One area that the official Saudi media say Prince Mohammed intends to investigate is flooding in the city of Jidda that killed more than 100 people in 2009. In that case, a Saudi businessman was accused of absconding with millions of dollars allocated for a Jidda sewage system and never installing any pipes.

“We all knew, and we never reported on it,” Jamal Khashoggi, then the editor of a major Saudi newspaper and now living in exile,wrote this week in The Washington Post.

Beyond that case, only a few anonymously sourced reports of the potential charges have emerged. A professionally coordinated social media campaign, which appears to be organized by the government, has accused the most important prisoner, Prince Mutaib bin Abdullah, the former chief of the national guard and a son of the previous king, of enriching himself at public expense by diverting funds from the national guard. Citing unnamed sources, news reports have suggested that he would be accused of hiring ghost employees and paying inflated contracts to companies he owned for equipment like walkie-talkies and bulletproof military gear.

His brother, Prince Turki bin Abdullah, the former governor of Riyadh, will reportedly be accused of paying inflated contracts to companies he owned for a subway under construction in the capital.

But in a country named for its ruling family, the line between public and private money can be hard to discern.

Prince Mohammed’s corruption committee “can basically detain anyone for anything they choose to call corruption,” said Robert Jordan, the former United States ambassador to Saudi Arabia. “That’s part of how this web was spun.”

The most famous detainee, Prince Alwaleed bin Talal, had no apparent need for graft. He was well known as an investor in international stock markets and as one of the world’s richest people; the sources of his wealth were more transparent than most princes.

Prince Alwaleed had been a critic of the kingdom’s closed economy and pervasive corruption. A secret 1996 diplomatic memorandum said that Prince Alwaleed told the American ambassador how a handful of senior princes controlled billions of dollars in off-budget programs, revenue roughly equal to one million barrels of the country’s oil per day. According to the memo, the Two Holy Mosques project and the Ministry of Defense’s strategic storage project, were “highly secretive, subject to no ministry of finance oversight or controls.”

The memo, disclosed in the trove of State Department documents released by WikiLeaks seven years ago, provided a detailed blueprint of the varied ways that money flows to members of the royal family either from state coffers or through private business in an otherwise opaque system.

An embassy official received an unprecedented glimpse into royal finances when he visited the Ministry of Finance Office of Decisions and Rules in 1996, where servants came to pick up stipends for their royal masters. Sons of the founding king received as much as $270,000 a month, while a great-great-grandchild collected $8,000 a month. On top of those payments, bonuses of $1 million to $3 million were handed out to, say, construct a palace.

Princes were known for borrowing money and simply never paying it back, which nearly led to the collapse of the National Commercial Bank. Royals were also known to act as the exclusive agents for foreign companies in the kingdom. When they founded their own businesses, they often relied on either government spending or state subsidies.

“The government, specifically the Ministries of Finance and Municipal and Rural Affairs, often transfers public land to princes, who in turn sell it at huge profit to real estate developers,” another diplomat wrote in a2007 memorandum, noting that Prince Bandar bin Sultan, the longtime ambassador to the United States, and Prince Abdulaziz bin Fahd, the favorite son of King Fahd, profited to the tune of hundreds of millions of dollars by selling land for a centrally planned megacity north of Jidda.

Perhaps the most famous statement on corruption in Saudi Arabia was made by Prince Bandar. In an interview with PBS in 2001, he said: “If you tell me that building this whole country, and spending $350 billion out of $400 billion, that we had misused or got corrupted with $50 billion, I’ll tell you, yes. But I’ll take that anytime.”

Weapons contracts have long been a source of wealth. British media reported that Prince Bandar received well over $1 billion in secret payments from BAE Systems, the leading British military contractor, over the course of a decade. The son of founding King Abdulaziz’s personal doctor, Adnan Khashoggi, became a billionaire as an arms dealer and go-between for weapons makers and members of the royal family.

“In other countries we talk about petty bribes,” said Ms. Dixon of Transparency International. “In Saudi Arabia, it is theft on a grand scale.”

source:New York Times

Former Governor Uzor Kalu says Obasanjo lacks moral right to criticise Buhari

By Lawani Mikairu

Former Abia State Governor, Dr Orji Uzor Kalu on Friday said he will write a comprehensive reply to former President Olusegun Obasanjo letter to President Muhammadu Buhari criticizing his poor handling of the economy and urging him not to contest the 2019 presidential election after consulting the international intelligence community , adding that  the ex- president lacks the moral right to write such letter.

Kalu who made this known  in an interview at the Murtala Muhammed Airport Terminal Two ( MMA2), in Lagos alleged that the former President  is the cause of many of the things that are happening in the country today.

And that PDP plundered the NNPC and CBN  at will , insisting that the APC will open the books to show the level of rot, it inherited from the PDP.

He also said Buhari has recorded some achievements  in his two and half years tenure , which should necessitates his re- election listing the commencement of work on the Second Niger Bridge and other interventions in the economy.

Kalu said :” I am not going to talk about former President Obasanjo’s letter because I am going to make some consultations with the United States, Germany, China and the United Kingdom, then  I will come back and speak on that letter. I think Obasanjo’s letter is not in the best interest of Nigeria. I don’t want to reply him now because I have given you example time without number”.

“There are three express roads Obasanjo refused to build when he was the President of Nigeria. Port Harcourt, Okigwe, Umuahia, Enugu expressway.
It is being built now by the Buhari administration. Another one is the Enugu, Awka, Onitsha expressway.
It is being built now by the Buhari administration. Obasanjo did not build it. Then there is the Onitsha, Owerri and Aba expressway. The Buhari administration is building it now”.

“Between Obasanjo and Buhari who should I call my friend in real terms? It is Buhari who is developing our region. With the roads, trailers loaded with manufactured goods in Aba will be able to get to their various destinations from the city. So Buhari is my friend; so he is a better President”, he said.

He added that ,”I don’t wish to reply that letter now because the former President has no morals that should qualify him to write that letter. This is because he is the cause of many of the things that are happening in this country today. I will make consultation with  the intelligence community of the countries I have mentioned before I will reply Obasanjo’s letter”.

Kalu  also said it will be unfair to the South East , South South and South Westerns part of Nigeria not to support the second term bid of Buhari, given the need to return power to the Southern part of the country after the completion of his two terms.

He however called on Buhari to speak up on the challenges of insecurity affecting the country , especially as it affects the attack of some section of the country by Fulani herdsmen.

source:vanguard