Nigeria Government and waste

Why President Buhari got a VIP Invite to White House
Nigeria Donated Cash to the United States on Aircraft Purchase


To ,many Nigerians, the recent VIP invitation extended to President Buhari by the President Trump was a recognition of Nigeria's leadership role in the continental Africa and a way to
further develop a bilateral relationship between the two countries.
But reason for that VIP urgent invitation nonetheless has no connection to the above reasoning as
alluded to by a columnist in the New York Post of today May 1st 2018. The short but very
obscured write up actually caught my attention because its says "Nigeria" hence I decided to
quickly read it.
The columnist was praising President Trump's dodged business acumen and wizardry in getting
Nigerian Government to over pay for the Purchase of 12 Military Aircraft from the United States
at a whopping cost of $600 Million dollars. The Columnist cited the confirmation of the
remittance of the sum of $465 Million dollars into the United States Treasury by the Central
Bank of Nigeria on behalf of the Federal Government for the Purchase of these Aircraft as
something that generated huge interest by Mr Potus hence he immediately requested President
Buhari to visit White House and lined up more over bloated contracts for the US Companies for
Nigeria since Nigeria is so rich to dish out free money in over-spending for a Military Aircraft.
Mr. Potus is obviously a businessman with niche for cutting deals and making huge advantage
over predators business partners. He was amazed that Nigeria could pay so much money to
acquire those 12 Aircraft without adequate negotiation and just simply wire CASH to the US for
a machine and Aircraft that US does not even manufacture.
As an Economist and someone in the finance field, I have reason to worry about such a
development which has become another problem in Nigeria. The syndrome of Contract and
Project over bloating and ridicule cost expenditure in Nigeria compare to other places. This is
precisely what has transpired in the purchase of this Military Aircraft unknown to many
Nigerians. Mr. Potus immediately invited President Buhari as Businessman and as a Philosopher
of American FIRST project. The Contract for the Military Aircraft was signed off since the US is
smiling to the Bank for excess profits from over payment from Nigeria and they immediately
lined up several other projects for other US Companies that want a piece of the action from
Nigeria - Agric, , Power, Railway are projects included in the details of the White House
meeting between the two Presidents. See details in the link below:
https://www.naija.ng/1166906-president-buhari-sends-important-message-nigerian-youths-issues�promise.html?source=notification#1166906
Again, this dimension instigated my curiosity and I decided to spend the night to conduct a
research and find out why the NY Post Columnist insinuated that Nigeria Government is
wasteful and imprudent. Why did the Columnist just concluded that the Nigerian Government
spent money wastefully and why did he come to the conclusion that proper negotiation and right
prices were not paid by Nigeria for the acquisition of those Aircraft. He thought it was a blind
transaction for Nigeria and a huge win for Mr. Potus for his American FIRST campaign slogan.
What I discovered was mind- bugling and intriguing. It did not actually make any sense to me as
well and I thought I should share my ignorance and docility with other Nigerians especially those of us in the Diasporas. What I have discovered does not make any economic sense and it’s yet
unknown who in the Nigeria Government circles negotiated or took the decision to overpay by
so much margin to acquire those Aircraft from the United States for a product US itself do not
produce in the first place.
I have personally expressed frustration or perhaps most of us have at various times expressed
outrage on how the Government circles in Nigeria has distrusted the capacities of its vibrant and
highly knowledgeable Diaspora population to get things done. Nigeria Government seldom or
very sparsely involved its Diaspora in the process of getting project negotiated or acquired
around the world. This is what most smart countries does, working with their in- country
Diasporans to obtain firsthand information that assist in negotiation and getting to know facts
and hiding details in dealing with foreign Vendors, Contractors and Project-Companies and even
dealing with Government to Government businesses. In Nigeria, its Diasporas are treated with so
much distrust, disdain and carry no valuable respect from the Governments in Nigeria. Forget
that the Diaspora remits an average of over $20 Billion dollar annually to Nigeria which
incidentally is almost equal to the total Federal Government Budget in any given year. The 2018
total Federal Government Budget of Naira 8.2 Trillion is just $26 Billion dollars.
Now let us revert to the issue of the Aircraft purchase and why the Columnist instigated my
thought processes. Unknown to most of us, the fact that Nigeria Government agreed to pay a
whopping sum of $600 dollars to acquire 12 of these Aircrafts -The Embraer EMB 314 Super
Tucano or A-29 Aircraft as rebranded by the United States companies was the major reason why
Mr. Potus invited President Buhari to the White House to enable him get more over bloated contracts
and projects from Nigeria to enable him find money to build the walls along the US-Mexico
borderline or to compliment his American FIRST projects. Who is this Country so rich to offer Free
Money to the United States………they surely must deserve our attention. That’s the deal here!
From research and investigation online, those Aircraft never cost so much money Nigeria just spent
on it. It is even very curious why Nigeria may have chosen to purchase the Aircraft from the US
when the machine itself is not produced by the United States. Of course, some US companies have
signed several acquisition agreements with the original manufacturer to retool the Aircraft and re
brand it, but the US Government actually purchased these Aircraft itself with contract to upgrade its
reconnaissance and agility capacities to withstand the tough terrain in the war in Afghanistan.
Now let take a look at the facts and the reality surrounding this project to determine why anybody in
Nigeria will think this is a good deal for the Nigerian Government or the Nigerian people in all
ramifications. Let us assume the Government of Nigeria was relatively under severe pressure to
acquire these Aircraft in view of the recent disastrous nationwide insecurity in Nigeria, the
perspective of the transaction expenditure is still not justifiable in terms what the Nigeria Government
paid for the 12 Aircrafts we should have gotten some few for Free in the first place.
1. The Embraer EMB 314 Super Tucano is a product of Brazil. Everyone looks on to Brazil to
purchase or acquire this Aircraft. Of course like any other military hardware and Machine, most
countries will also customize the original equipment and fitted it with additional tactical tools and
mechanism to suit their individual use. For instance, the US Military acquired these Aircraft from
Brazil and re-fitted it to suit it operations in Afghanistan. It is not an Aircraft the US Military will ever
need within its territory so, much of the Aircrafts purchased by the US Government were actually
deployed for foreign operations and mostly as gifts on bilateral recognitions.
2. Research showed that virtually every other country that have acquired or purchased these Aircraft
have approached Brazil, its original manufacturer to cut good deals and buy the equipment. The
salient and pertinent question is why did Nigeria decided to acquire its own from the United States
and at the end at an outrageously expensive prices?.

3. Here is the table of some few Countries around the World that have at various times acquired or
purchased this same Aircraft from Brazil and the prices paid for the Aircraft compare to what Nigeria
just recently paid to the United States to purchase the same equipment:
PURCHASED
FROM
COUNTRIES NUMBER
OF
PURCHASE
TOTAL
CONTRACT
PRICE
YEAR OF
PURCHASE
Brazil/US
Company
USA- Pentagon 20 $427 Million 2016
Brazilian
Manufacturer
Brazil Military ( for
Internal Use)
99 $218 Million 2001-2012
Brazil Chile 12 $120 Million 2008 -2010
Brazil Colombia 25 $234 Million 2006-2008
Brazil Dominican
Republic
10 $93 Million 2001-2010
Brazil Ecuador 18 $270 Million 2009-2012
Brazil Indonesia 16 $284 Million 2010-2012
Brazil Guatemala 6 $166 Million 2011-2013
Brazil Angola 6 $170 Million 2013
Brazil Burkina Faso 3 $107 Million 2013
Brazil Ghana 5 $88 Million 2015
USA Nigeria 12 $600 Million 2018
Sources: Wikipedia
It is very clear from the above what the NY Post Columnist was alluding to and why he considered
Nigeria a wasteful Nation. These figures are just on the surface. We do not know what actually led to
the decision to approach the United States to purchase these Aircraft which with all intent and
purpose may be cheaper if the equipment has been acquired directly from the Manufacturer Brazil
instead of the US.
If Ghana is reported to have purchased 5 of this same Aircraft in 2015 for the sum of $88 Million,
then who actually negotiated the Nigerian transaction for 12 Aircraft at the whopping sum of $600
Million. If you do the maths, at the average cost per each Aircraft, the price paid by Ghana would
have given Nigeria 34 Aircraft instead of 12. The question is whoever negotiated this transaction
from the Nigerian side may not have done a good research or conduct critical market research to get
Nigeria the most practicable, expedient and cost-saving deal. It is not known if President Buhari was
adequately briefed and advised before this transaction was consummated and how was it vetted in
Government circle before approval and controversial hurry disbursement of the advance payment of
$496 Million dollars to the US Treasury which is currently generating ripples in the NASS due to the
Presidency unilateral decision to spend so much money without the NASS consideration
and informed.
Again, with the benefit of hindsight, it could be argued that the purchase from the USA may be
accountable to other invisible reasons, but on the surface of it, it is generally a transaction that does
not favor Nigeria in all ramifications. Again, based on the above analysis, it is extremely an outrage
price paid by Nigeria for this equipment. That is the main reason why Mr Potus immediately invited
President Buhari to seal the transaction and sign off on it probably due to the call in the NASS circle
that the Federal Government should recall the advance payment and channel the transaction
through appropriate route via the NASS review and approval. Who will blame Mr. Potus who
considers America FIRST in all transactions and he has not waiver on this policy even threatening
and challenging the World's superpower such as China, Germany, Japan, etc

I have taken this pain to put this out not to underscore anybody capacity including the US
Government that seems to have profited tremendously from this transaction or to instigate a
discord on the part of the Federal Government of Nigeria circle that may have failed to really conduct
a verifiable and thorough investigation before consenting to the negotiation for the purchase of this
Aircraft from the USA and perhaps not giving opportunities to public purview to examine this
transaction and proffer useful suggestions to the Government before proceeding to shortchange the
Nigerian Nation. In fact, I am personally willing to offer a known Nigerian with powerful connections
with the US Congress that could assist get the balance sum of $104 Million on the transaction
canceled for this reason if the Nigerian Government needs such help.
The goal here is to reiterate and reecho the need for the Nigerian Government to take its
Diasporas population seriously and engage them in issues of this nature. The chances are that they
will be more patriotic and determined to assist uncover any hiding details since they are residence in
those countries and they can always get the most information to the Government and/or alert the
Government of any possible undermining issues with the Project or transaction. Well we have paid
for this and Mr. Potus has assured President Buhari that those Aircraft shall be delivered ASAP
before anybody in the Nigerian circles starting to raise an eyebrow and call for the refund of the
advance payment. I am sure if some Diasporans have been involved in this, this nature of analysis
would have been generated to appropriately advise the Federal Government hence saving Nigeria
so much money.
I am equally very sympathetic to this current Administration but not necessarily a fan. It is instructive
that this Aircraft delivery Contract should have been handled in a manner favorable to Nigeria if
some cognate steps have been considered in the permutation. First, the US Government has been
reported to have donation or gifted these equipment outrights to several Countries including Yemeni
and largest gift to the Afghanistan. I insisted that and I personally know of some power members of
our Nigerian Diaspora residence in the United States that are so close to the members of the US
Congress and the Government Officials that could have coordinated efforts to get the US to donate
or send some few of these Aircraft to Nigeria on gift. This is what you call bilateral consultation and
maneuvering or International lobbying in Politics. The US has indicated interest in helping Nigeria
fight the menace created in the Northeast Nigeria by Boko Haram. The immediate past Secretary of
State was just recently in Nigeria; in fact that was his last officially known assignment. It was
reported that the Nigerian Government bluntly rejected offer of help from the United States from him
to help fight Boko Haram disguising as Fulani Herdsmen. We instead preferred to pay high premium
prices for equipment that some other Countries got for Free. Where is the Nigeria’s Tax Payer
interest given surmountable consideration in this transaction? Why equally our Government does
continues to ignore the powerful resources of our Diasporas around the world.
I am personally interested in knowing the details of the widely publicized Railway Nationwide Link
project in which we understand the President has signed an MoU deal with the General Electric to
build, develop and construct 3,400 Kilometers of Railway lines in Nigeria just yesterday. We want to
know the dynamics of this transaction. What is it worth, what is GE bringing to the table? What is the
GE general determination of the Cost Coefficient per Kilometer of Rail line. What kind of
technology are we looking at to be delivered by GE. What is the basis of the decision to give GE that
colossal amount of wide- huge project rail line project? What is the competitive basis of this business
decision? Could any other Manufacturer or companies around the world provide a better deal? What
are the potential cost-inflation parameters that may be imported into this project considering the
advantaged foreign exchange matrix in favor of the United States dollar against our Naira? There
are so many issues that should be given consideration before deciding on engaging on such a huge
and gigantic project. Hopefully we would not end up donating hard earned CASH to America and GE
again just as the case of this Aircraft purchase has indicated.
Thank You all for your attention
Dr. Kazeem Bello