Laws are instituted to serve as compass for the relationship of man with fellow humans and his environment. Upon these legal frameworks are built social, political and economic policies for the advancement of societies and the human race. When development eludes a society, it is more often due to the failure to effectively enforce laws and implement policies rather than the absence of same.
Corruption thrives when those entrusted with the tasks of upholding the laws that guide accountability and transparency in public finance are either themselves compromised or just lack the balls to perform their duties. This trend exemplifies the culture of crony capitalism that has defined port administration and management in Nigeria for several decades through the Nigerian Ports Authority (NPA).
Since her appointment in July 2016 as the youngest and first female Managing Director of the NPA, Hadiza Bala-Usman has attracted global commendation for setting in motion various reforms geared at improving the efficiency and profitability of the maritime agency. However, deserving of even greater commendation are the courageous efforts of this renowned human rights activist in terminating a fleet of cronyistic port contracts engaged over the years by parochial interests in connivance with political influences.
The latest in Hadiza Bala-Usman’s due process reforms at the NPA is last week’s termination of the Joint Venture Agreement between the authority and a consortium led by Niger Global Engineering and Technical Company Limited for failure to comply with Nigeria’s Public Procurement Act. The contract, which was entered into in January 2013 for the purpose of dredging the Calabar channel was flagged by the Bureau of Public Procurement for blatant disregard of laws applicable to award of contracts by government agencies.
Government-private partnerships that are not defined by established procurement procedures and global best practices stifle corporate competition, a prerequisite to efficiency and growth. When government under whatever guise gets in bed with private special interests as exemplified in crony capitalism, the product is seldom a catalyst for economic development and equitable distribution of wealth and resources to the benefit of the public. The duly terminated joint venture contract between the NPA and Niger Global Ltd has not proved to be an exception to this rule.
As contained in the letter conveying the decision of NPA management to terminate the contract, the selection of the consortium led by Niger Global Ltd as a party to the Joint Venture Agreement failed to comply with provisions of the Public Procurement Act 2007, continued maintenance of the agreement is therefore inconsistent with the extant law of Nigeria and in breach of public policy.
As investigation by journalists into the issue has revealed, Niger Global Ltd managed to win the N26 billion contract in spite of its failure to bid for it, opting instead to use political influences to secure a presidential approval mandating the NPA to truncate an ongoing selection process through which six reputable international and local companies were shortlisted. A former Chairman of the company, who now chairs a powerful Senate committee is alleged to have used his relationship with the then Transport Minister to obtain the illegal overriding presidential approval.
The enormity of case prompted the Director-General of the Bureau for Public Procurement as then, Emeka Ezeh, to write a memo to the President pointing out the illegality of the arrangement. He also highlighted the fact that the contract contained terms that were skewed and disadvantageous to the financial interest of the NPA and advised that the contract be terminated.
Crony capitalism as perpetuated in form of preferential government interventions and approvals such as obtained by Niger Global Ltd for the dredging of Calabar channel come at a cost. In this case, the contract already cost Nigerian taxpayers $12.5 million in direct payment collected by Niger Global Ltd from the NPA. It could have cost another $22 million before last week’s termination but for Hadiza Bala-Usman’s insistence on playing by the book. But the cost of the failure to properly dredge the Calabar channel since 2012 to Nigeria’s economy is even greater.
Crony capitalism in hitherto operations of the NPA has also brought about unquantifiable loss of revenue for the Nigerian economy. Take for instance the fact that Nigeria’s seaports, which 75 percent of exports and imports pass through, generated N11.9 billion in revenue in 2015 out of which the NPA was able to collect N6.9 billion. This contrasts sharply with the N118 billion collected as revenue by the NPA in the first quarter of 2017.
The average Nigerian is short-changed when multi billion Naira contracts are dashed out to cronies like candies to kids at a Christmas party. This is why the termination of this joint venture agreement between the NPA and Niger Global Ltd is a welcome development. According to Hadiza Bala-Usman, the NPA management is working on terminating other similar cronyistic contractual obligations within the nation’s port operations.
Singapore’s maritime industry contributes about 7 per cent to the country’s $300 billion Gross Domestic Product, if Nigeria is to attain a similar level of economic diversification which the immense revenue potentials of its seaports, the ongoing war against all forms of crony capitalism as championed by Hadiza Bala-Usman at the NPA must be sustained.
Arenyeka Peter is a public health consultant based in Port Harcourt.
