This discussion is coming 25 years late and it requires a week discussion to thoroughly analyse this issue.
When we break down the issues, we’ll see that what we are suffering from in this country is very deep level ignorance.
In the course of the evolution of the country, we got our educational system wrong. So you have a system of education that doesn’t teach people what they should be asking for. They don’t even know what their rights are. You can go through primary, secondary school and university today without knowing that it is important to have a clean environment. You could go through this whole process and not realize that government owes you anything. You could go through these without knowing that it is fundamental to building a society that we all learn to tell the truth and you say you want to develop infrastructure. Where do you start from?
Last week, I had a meeting somewhere in Surulere on Ajao Street. I got there at about 1:30pm. The water level was about one and a half feet and I saw students returning from school rolling up their trousers and wading through the water. I saw mothers doing the same thing and they were smiling all the way because really, they don’t believe it’s anybody’s responsibility to ensure that the place is drained. They believe it is their lot that they found themselves there and God can by miracle take them out and they would not look back. They would expect the other people too to go and pray to God to take them out of the situation.
When you have that level of lack of demand or any form of entitlement, how do you begin to drive the system? How do you start?
When we were commissioning the Murtala Muhammed Airport Terminal 2 (MMA2), which was built against the run of play, those who gave us the project did not want the project completed. So we completed the project against the run of play and from the first day, they took away 60% of our revenue against our agreement.
I said the major challenge we’ve had there was ignorance but somebody came up and said no, there were two other challenges that I did not mention. He said they were deliberate refusal to understand and malice. How do you cope with that? The man has an idea but he’s determined he will not understand because he wants to put you in difficulty because you have embarrassed the system by completing this project. It’s been 12 years since we completed MMA2 and no government, including the state government, has done anything comparable. This is because infrastructural development is not about money. It is about serious commitment and a lot of intellectual rigour. A few terminals have been built but they are not workable. There is no proper movement.
At the new International Airport in Lagos, I’m told there’s no link between the car park and the terminal building. There is no apron. You have to taxi to the old terminal to board. $600 million has gone down the drain. The Chinese are asking for another $400 million to make it workable and you tell me that that is infrastructure.
With 10% of that as support from the government and encouragement, we will do ten times better and we are willing to, but we’ve been stopped and blocked. If we didn’t have a strong law firm behind us, we’ll be bankrupt.
It has taken 10 years to win the case that we were never indebted on MMA2. The Supreme Court only ruled on April 5 that government was owing us N132b. Where were the bankers since 10 years? They were nowhere to be found. As soon as there was a hitch, they surrendered us to be consumed by the system. We had a clear agreement on where the money was going to come from and when somebody breached the agreement I expected them to file behind me to address the issue, but they didn’t do so. They just abandoned us.
And at every credit committee of bankers, the discussants, which had never tried to make a matchstick before and had no understanding of the issues, were making uninformed decisions on major projects. We could have gone begging but we didn’t. If we had, you won’t know that 10 years after, we have a credit of N132b, we never owed a dime because we had a well-structured agreement that was done by a good team including fantastic lawyers.
I better warn you, if you are going to investor in infrastructure in Nigeria, you better have that sort of team because you will not be managing a project. You will be managing crisis from the beginning to the end.
Somewhere along the line, they came up with a concept called AMCON. I’m hoping that the Chartered Institute of Bankers (CIBN) , will organize a session on AMCON because I believe strongly that the idea of AMCON could have been good but the implementation was archaic, unconstitutional and an embarrassment for those of us who were born into the law.
Giving such powers to anybody without a process was unthinkable. We had 3 issues before AMCON. In one of the transactions, we knew we didn’t owe money and we called their bluff. It was in the witness box that the lawyers of AMCON first realized that we were never given a loan. It was the peak of mental laziness. It’s the Federal Secretariat case. We sold 240 flats upfront. We were paid some money to develop them on the understanding that when the project was completed, the 240 flats would be the payment for our liability. The balance for 240 flats would be ours to deal with as at when due. When we got to the court, my lawyer asked for the loan agreement and there was no loan agreement to present to the judge. He asked what the interest rate was for the loan and there was no interest rate. He asked what was the fee payable and there was no fee. He asked for the duration of the loan and there was no duration. It was obvious that the case had collapsed and the court ruled that there was no debt and awarded N3 billion against AMCON for libel and damages because they had published our name as debtors. We didn’t owe any money and had been maligned. How can you sell equity as debt to another institution? Anywhere in the world, the Central Bank would sanction that bank to an extent that it may not survive, but it had taken 7 years of our time. How many people have been in this position that didn’t have the strength to fight and in the process were ruined and declared bankrupt because bankers did not stand up for them? How many Nigerians were destroyed in the process?
The Lagos-Ibadan expressway project is unthinkable. We signed the contract in 2009 to design, build, operate and transfer. We had a team of 50 people, including foreigners, working on the project. The team got the road design ready within a month but it took the government over 21 months to approve it because somebody on the other side either did not understand or was not willing to understand.
Finally, on the 23rd month, they terminated the concession for lack of performance without disclosing to the public that they had held us down for 22 months. We told them funding was ready if they were ready to make some adjustments but we never heard from them.
Before the concession was terminated, all the stakeholders, including our financiers, met with the then President Goodluck Jonathan and he gave us the go ahead to continue with the project, only for it to be terminated 2 and a half weeks later. Our saving grace was that we didn’t borrow any money.
It is sad that seven years after the project was cancelled, the road is only 40% ready. They are building 40% of what we wanted to build and the project has no design. It is just a repeat resurfacing of the 1977 road. The architecture of that place has changed phenomenally since 1977 and our design accommodated all the changes. We had 7 overhead bridges along the road. There is no projection for any overhead bridge there now. Our total cost was N112b. Now, over N350b has been spent on 40% of what we planned to build and they are still at 40%.
I urge bankers to form the intellectual bulwark to help the financing of projects in Nigeria because the Nigerian system today is still very pedestrian. We haven’t started the race. Even the education system is deteriorating.
· Babalakin, a Senior Advocate of Nigeria, shared his thought last Thursday at the 2019 annual lecture of the Chartered Institute of Bankers (CIBN) in Lagos