Nigeria Content Online

When
the story of the Obasanjo years is written, one bit that will stand out
is his alleged and much-debated tenure-extension bid. Not much has been
documented about it, due to the fact that it existed mostly in the
murky realms of conjecture, allegation, and strident denial. It will
however be impossible not to see the attempt in a new light after
reading a recent report by the international think-tank, Chatham House.
The report, “Thirst for African Oil – Asian National Oil Companies in
Nigeria and Angola”, published in 2009, and launched last Thursday at
the Nigerian Institute of International Affairs (NIIA), Lagos, examines
why Asian National Oil companies (ANOCs) largely failed in their
initial foray into Nigeria’s oil industry, while managing to succeed in
Angola. The report sheds light on the unprecedented strategy utilised
by former President Obasanjo in dealing with the Asians. Mr. Obasanjo
offered unprecedented ‘oil-for-infrastructure deals’ – characterised by
preferential, and sometimes discretionary, allocations of oil blocks in
exchange for investment pledges – to the Chinese, South Koreans,
Indians, Taiwanese, and Malaysians.

The Chinese for example signed a
deal to construct a double-track, standard gauge railway from Lagos to
Kano, and to construct a hydroelectric complex in Mambilla, Adamawa
state. “The concept of the ‘oil-for-infrastructure’ deal was novel but
its introduction compromised the much-proclaimed transparency of the
oil licensing rounds of 2005, 2006 and 2007,” the report states in its
introduction. “There is a widespread perception in Nigeria that the
timing of the deals had a strong political undertone… The unspoken
need to generate funds for President Obasanjo’s (ultimately
unsuccessful) bid to change the Constitution to allow him to run for a
third term is seen as the key to the unravelling of the deals.”
According to the report, the oil-licensing rounds of those three years
were manipulated to favour the Asians.

Relying on interviews with
“several cabinet ministers of the Obasanjo Government” the report
reveals that “oil matters were never discussed in cabinet.” Mr
Obasanjo’s role as petroleum minister guaranteed this utter lack of
transparency. On assumption of office, Mr Obasanjo’s successor, Umar
Yar’Adua ordered a comprehensive review of many of the Obasanjo-era
deals with the Asians, and eventually revoked most of them.

Asian investments in West Africa

The launch was
accompanied by a public lecture, “Asian Investments in West Africa:
Impacts and Opportunities.” The lecture was delivered by three
speakers: Markus Weimer, one of the authors (the others were Alex
Vines, Lillian Wong and Indira Campos), Charles Dokubo, research fellow
at the NIIA, and Tom Burgis, West Africa correspondent of the Financial
Times. In his introduction, the moderator, Osita Agbu, noted that in
the face of rising demand for energy in its various forms, Nigeria and
other resource-rich countries “must insist on the maximization of our
national interest.” Mr. Weimer, in his remarks, restated the report’s
findings regarding the mismanagement of the ‘oil-for-infrastructure’
scheme by the Obasanjo administration. In addition he blamed the “lack
of predictability” that characterises policy-making in Nigeria, as well
as the dismal security situation in the delta, which saw Nigeria
briefly lose its place as Africa’s largest producer of crude oil, to
Angola. He quoted a South Korean government official as saying (this
quote is included in the report): “In Nigeria we found that a change of
government results in a change of business partners… It’s more
difficult to get a foothold in Angola, but we now believe safer and
more profitable in the long term.”

The report chronicles the Angola
success story, highlighting the fact that oil-for-infrastructure deals
with China succeeded impressively enough in the country for the World
Bank to christen them “Angola-mode.” It also attributes the success of
China-Angola oil dealings to the familiarity that China built with
Angola in the aftermath of the civil war. China, according to it “has
played a particularly important role” in the Angolan post-war
reconstruction effort. Mr Weimer went on to confront the “emotional
image of Africa being recolonised” by Asia. “It is wrong to assume that
African states are weak; actually African countries are very much in
control of the relationship with ANOCs,” he said. He also noted that
China has “injected a sense of pragmatism” into the relationship
between the West and Africa.

In his remarks, NIIA researcher Charles
Dokubo, highlighted the problems that foreign investors have to deal
with in Nigeria. “The political terrain of Nigeria is not
straightforward,” he said; adding that it is an environment
characterised by “personalisation of authority”, “concentration of
power”, and “institutional problems.” Mr. Dokubo said that despite
Angola’s extensive civil war, its institutions are “a bit firmer on
ground” than Nigeria’s. Journalist Tom Burgis dismissed the ongoing
wave of “China-bashing” – accusations by Western governments and media
that China does not have the interest of African countries at heart- as
“complete nonsense.” Mr. Burgis pointed to the French record in Gabon
and Niger, and BP’s legacy in Libya as evidence that the West lacks the
moral standing to criticize the Chinese. “Everyone has primarily
interests, not friends,” he said, adding that “the Western-Eastern
standoff is exactly like the Cold War.” He suggested that African
countries take advantage of the rivalry to extract commitments from
both partners and “rewrite the rules for the benefit of the African
economy, not [the] elite.” A question and answer session followed. How
have we fared with our so-called traditional partners?” queried Ngozi
Ugo, Professor of International Law at the NIIA. “The time has come:
out of two evils we should expand our scope… I think we have been
used long enough.”Bolade Eyinla, International Relations expert and
Professor of History at the University of Ilorin, asked a pointed
question: “When the price of oil collapses again will this interest
still be there?” Mr. Eyinla also wanted to know why the Nigerian
‘oil-for-infrastructure’ deal failed with the Chinese but worked in the
case of the Germans, reminding the audience that much of Nigeria’s
Federal Capital Territory, Abuja was built by German construction firm
Julius Berger in exchange for oil concessions. Olubunmi Martins of
Petroland, an oil and gas industry consultancy, suggested the creation
of a Nigeria Oil and Gas Chamber of Commerce to serve as a “business
pressure group to articulate Nigeria’s interests” and to “drive private
sector engagement.” Ejike Onyia, pioneer Managing Director of the
Nigerian Liquefied Natural Gas (NLNG) Limited, called for a radical
reform of the Nigerian oil industry. “The problem we have starts and
ends in Nigeria.”

The Chatham House report essentially corroborates
this view. In the concluding part of the section on Nigeria, it states:
“The oil-for-infrastructure concept has succeeded elsewhere in Africa.
But in Nigeria it was poorly conceived and poorly implemented – and
above all, it was distorted by political considerations. What should
have been a ‘win-win’ situation turned into a ‘lose-lose’ situation,”
an apt description of a nation’s penchant for squeezing defeat from the
jaws of triumph.