President Muhammadu Buhari, yesterday, ordered an inquest into processes leading to the sale of moribund national carrier, Nigerian Telecommunications, NITEL, and its mobile arm, Mobile Telecommunications, M-TEL by the government of his predecessor, Dr. Goodluck Jonathan.
Speaking to State House Correspondents after briefing President Buhari on the activities of the sector, Permanent Secretary, Federal Ministry of Communication & Technology, Dr. Tunji Olaopa said that the President has directed him to raise a memo on the whole transaction to ascertain if there were any underhand dealings. Continue..
He also stated that the President was equally concerned about the quality of services rendered by the telecom operators in Nigeria.
“The President was concerned about the liquidation of NITEL. He is not opposed to its privatization but he wants to know and he wants us to bring a memo on how the whole transaction was undertaken so that he would know whether Nigeria was short-changed.
“The President was concerned by the quality of service of telecom operators. The President is very concerned about the whole issue of privatization that is hindering investments in ICT infrastructure and that he will personally champion this. The President talked about the potentials of the ICT sector in generating employment,” Olaopa said.
Buhari, however, said the probe was not an indication he was opposed to the sale of the national carrier but to ensure there were no underhand practices in the process of the deal.
Failed sell-off bids
In December 2014, the Bureau of Public Enterprises, PBE, after several failed attempts, announced fresh acquisition of the national carrier by a consortium of investors known as NATCOM.
Director-General of PBE, Benjamin Dikki, explained that NATCOM was a consortium of seven Nigerian companies, which emerged new owners of NITEL and MTEL by offering to pay the sum of $252 million, an amount said to have met the BPE’s bid price .
Dikki explained that the privatization process was a guided liquidation that would help bring back the two entities which had lain prostrate for more than two decades.
According to him, NATCOM emerged the successful bidder in both technical and financial commitment from the array of up to 17 firms that keenly contested for the two companies.
Dikki said: “It is our fervent hope and desire this time around we have succeeded in procuring a technically and financially qualified bidder that will not only meet the deadline for payment of the purchase consideration but more importantly deploy the required resources to rehabilitate and grow these companies to play a significant role in the Nigerian telecoms sector”.
Former Minister of Communications Technology, Dr. Omobola Johnson had to confess that: “We faced numerous challenges in packaging this transaction, including outstanding unpaid terminal benefits of ex-staff of NITEL and MTEL; arrears of salaries of the retained staff and outsourced security and huge accumulated unpaid licence and other dues to NCC.”
Corroborating the BPE boss, Johnson said that the consortium beat 14 other bidders at the primary stage and one other bidder at the secondary stage to emerge winner of the bidding process.
She described the privatisation as the last segment in a well-thought out reform of the Nigerian telecommunications sector, which commenced since 2000.
Develop revenue generation potential
Meanwhile, Vanguard gathered reliably that the President also charged the ministry to work harder to fully develop the revenue-generation potential of Nigeria’s information technology sector.
According to the Senior Special Adviser, SSA, Media, to the President, Garba Shehu, after receiving a briefing from Dr. Olaopa, President Buhari also directed the Ministry to bring forward for his consideration and approval, all pending proposals for the development of the country’s ICT sector which require the approval of the Federal Executive Council.
Shehu said that Buhari told the ministry: “Where you don’t need exco approval and you are not in breach of the law and will not lose money, you can go ahead. Now that oil costs less and we are contending with its theft, we have to move to areas where we can realize revenue quickly.”.
President Buhari welcomed the plan by the ministry to use post-offices across the country for IT and financial transactions especially in the rural communities, saying that he was happy to hear that the post offices are being recovered from rats and rodents.
“The Ministry’s presentation to the President dwelled heavily on the potential of the IT sector which, Dr. Olaopa said, contributes 10 per cent to the country’s Gross Domestic Product, GDP, but could grow to 20 per cent if some proposals by the ministry are approved and implemented.”
NITEL: From Pentascope to NATCOM
Meanwhile, the privatisation history of Nitel did not begin with the sale in 2014. It actually began in 2001 when the government through the Bureau for Public Enterprises, BPE, initiated a process once considered as having the powers to transform Nitel to a modern organization, expose its workers to standard global practices and arm them with new and competitive technologies. After a heavily criticised bid process, Pentascope which was partly funded by a consortium of Nigerian banks, acquired 51 percentage of equity in Nitel.
It managed to raise the estimated meager 400 lines which Nitel had before privatisation, to about 440,000 and took the mobile arm of the company, Mtel which also competed and won GSM license same year, to a little over a million connected lines.
Barely three years after, the deal snapped. Government felt Pentascope was too slow for its liking and may have exhausted all its magic, since it was only struggling with just a million mobile lines at a time when other telecom companies like MTN and Zain (then Econet wireless and later Vmobile) which took off same time with Pentascope Nitel and Mtel, were crossing the 5 million mark .
However, Pentascope also blamed the government for being too interested in the running of Nitel, saying that its contributions rather impaired every good moves it (Pentascope) made as a core investor, to reviving Nitel.
Nevertheless, the government was determined to sell Nitel, again. This time, according to it, to a more serious investor. So, in 2006 Transnational Corporation, Transcorp, acquired 51 per cent of Nitel for $500m. But since November 14 of that year when it officially became the core investor in Nitel, Transcorp seemed to be struggling to keep a standing position. It allegedly reduced the workforce by 70%, disengaging about 7,000 staff out of the 11,000 left by Pentascope. The fortunes of the company, further deepened as the 440,000 Nitel lines and above 1 million Mtel lines left by Pentascope, nosedived to miserable 40,000 and 200,000 lines respectively under Transcorp.
While the government through the Ministry of Information and Communications was to quickly point out again that Transcorp has failed, Transcorp says government was responsible for its fate in the whole affair. Such is the blames and counter blames that have kept the true position of things away from Nigerians and left Nitel, Mtel at a grind. But arguments notwithstanding, the Federal government in July voided the sale of Nitel to Transcorp and appointed a technical board to manage the carrier.
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