The Etisalat Example...
The Abu Dhabi Government that owned Etisalat pulled the company out of
Nigeria last week and gave the Nigerian ex-partners 7 days to change its
name and drop its Trade name. That has been complied with. Etisalat Nigeria
changed the name this past week. The news information about this I
monitored on my travel to Dubai on the local news which indicated that the
Nigerian Etisalat claimed it invested over $20 billion on equipment and
facilities in Nigeria. The news Analyst from Dubai Business New Network TV
insisted that it is not possible. The parent company invested $13 billion in
Gulf Area to attract over 40 milllion subscribers, with high world class
services , how can Etisalat Nigeria invest $20 billion for 22 million
subscribers with epiletic services and a debt ridden company?
The Abu Dhabi home office is struggling to remove the negative effect of the
news on the company's stock market performance. It is being very difficult
becuase the numbers are not adding up. The questions in Abu Dhabi is what
does Etisalat Head quarters know about the mammoth fraud that prevailed in
Etisalat Nigeria? How can the company claim to have spent so much in
investment and infrastructure and yet come out with huge debts?
While Etisalat Group is facing serious backlash at home over this monumental
fraud, in Nigeria, our CBN is not even asking any question to unravel why the
company suddenly went bankrupt. Instead, our CBN and Ministry of Finance
from the above are stuggling to take over the company's debts and pass it to
the unsuspecting tax payers under the umbrella of the debt ridden AMCOM.
The Chairman of the Board and all Board members of the defunct Etisalat
Nigeria resigned and walked away free leaving Nigerians with another private
sector mismanaged debt ridden company.
Actaully, the major reason for my worried contribution here is on the Banking
System in Nigeria and the financial mess we may have found ourselves in.
Many Nigerians may not know this for a fact because the authorities will
never tell you the truth, just like it took several years of noise for the NNPC to
admit that the corporation is debt ridden and bankrupt. The Government of
Nigeria will not admit it that the CBN of Nigeria is currently running at a
Deficit Financial Model. This is called a DEF Model operations in Central
Banking structure and practice. For references, you can google " Greece
Monetary Collapse" and also the great fall in Brazilian financial system in the
90's. The CBN is almost at those crescendo from all indications going by
several body languages, utterances and news from the international financial
circle.
The CBN may not be able to cover import bills for more that 15 days from now
as we speak which is a huge red flag! The CBN is currently not in any position
to bail out the Government in any form due to distress in its liquidity-money
creation matrix. CBN cannot perform its role as lender of last resort to the
Government of Nigeria as we speak, a major function of Central Banking
system. This may be the reason why last week, the Hon Minister of Finance
addressed a press conference to tell Nigerians that they are in trouble but
most Nigerians just did not understand how to interpret her unspoken words.
She said clearly that Government will have to aggressively borrow money
from abroad to implement the 2017 budget. Her reason was predicated on the
wrong and super inferior analysis that Nigeria has a low debt-capital ratio
hence there are rooms for more external debts. We better find a way to stop
her from running a huge debt that OBJ was able to clear up during his regime
but was kept low during Jonathan's regime due to oil windfall which makes
borrowing unnecessary then.
Now with dissapointing and falling oil prices, low income-revenue generation
by Government, NNPC totally broke running at huge deficits, CBN's inability to
bail out Government, we seem to have no choice than to go back to external
borrowing at premium at all cost.
Something is pathologically wrong with the Nigerian system. I have written
about this in early December 2016 when the budget estimates came out. I
pointed to the totally wrong budget appropriation and tagged it a budget of "
Economic Contractions". I mentioned that by 3rd quarter of the year, the
bubble will burst if something is not done and the Economy may slide into a
full blown depression far worse than recession. It is not known what the facts
are right now because there are various attempts to hide facts and give
erroneous figures to the unsuspecting public. The situation is really bad
based on International Analysts facts and figures especially with perceived
unadmitted dire financail crises at the CBN. We may see an Econimic
Emergency Bill very soon showing up at the desk of the Senate President but
with the current face off between the Acting President and the Senate
leadership, it is doubtful if such required bill will ever come to surface. That
will be an instrument for the " hawks" in the Senate to roast the Acting
President and blackmail him further of incompetence. In the fight between two
giant elephants, the grass will have to pay dearly and suffer for it. Nigerians
will grow in more poverty, no power, no infrastructure, high inflation, and low
economic activities and no salaries for work done.
Back to the Etisalat case, this is the fact of the matter and CBN has not
deemed it fit to raise any probe on the huge bank lendings to one single
company without adequate collateral. Indeed what asset does Etisalat own
aside from its license that will be worth the amount of debts being cited? I
don't live in Nigeria but at least on my visits, I have not seen any such
assets except power masts all over the place.
The same Nigerian Banks gave billions to all the debt ridden GENCOs AND
DISCOs with no collateral and yet we have no power. Again, I have written on
this issue before. How the power system in Nigeria was defrauded by the
collusion of the so-called investors, Nigerian Banks and some officials in the
defunct FGN. Nigerians are very prayerful people, we are still trooping to the
worship places to pray for steady power supply when some are swimming in
billions from the fraud in the sector. Our dream for steady power supply is
daily becoming a mirage, to say the least.
The other day, I was having a discussion with a Chinese group of investors on
telephone and internet network projects. They mentioned that with about $5
billion dollars in investment in highly powerful telecom equipments and
satellite infrastructure, they will supply over 120 million in Nigeria with highly
efficient phone and internet network service with super easy, small and latest
technology. So why is Etisalat with $20 billion in investment not able to
supply good phone and internet network service in Nigeria? Yet poor
Nigerians are paying for poor services and will again pay the company's debt
through our taxes.
Nigeria needs a fix!!!

you can't compare Dubai framework and Chinese framework when it comes to telephone and telecom services
The Nigerian telecom market is a unique market and I don't know how you got $20 bn but unless Dubai etisalat publishes that act detail it is just hearsay.
The possibility of etisalat running into debt is likely considering a lot of factors but the debts were in the form of Nigerian banks which is understandable what happened