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Nigeria-usa Aircraft Purchase..... A Hit Or Miss by Mdaz(m): 6:07am On May 14, 2018 |
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 |
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