allAfrica.com: Nigeria: Obasanjo's Troubles Mount Over Controversial Bank (Page 1 of 1)

The Nigerian Labour Congress (NLC) members marched through the Abuja streets at the weekend, ending at the National Assembly where members of the umbrella workers union threatened: "Probe former President Olusegun Obasanjo now or face a people's uprising".

Members of the Nigerian Labour Congress march through the streets of Abuja recently to demand investigations into the role of former Nigerian President Olusegun Obasanjo in the establishment of a controversial bank.

In September 2002, the same organisation organised a similar march, but in Obasanjo's support after the legislators threatened to impeach him for breaching the constitution.

For a while now, Obasanjo has been a villain of first choice in Nigeria, but none of the accusations against him has rankled like the allegation that he wanted to undermine the African Development Bank (AfDB) by floating a parallel body named the African Finance Corporation (AFC).

Perhaps stung that Nigeria lost the contest to produce AfDB's president during its 2005 summit in Abuja, where voting for the topmost post was deadlocked, and was shifted to Tunis, where Rwandan Donald Keberuka won, Obasanjo began a quiet plan to reduce AfDB's influence and springing up a rival body that Nigeria would control. As the name implies, it was to be a continental organisation, ostensibly dreamed up to help finance Africa's infrastructural development.

When the founding of AFC first became public, incredulity greeted the disclosure as the public was largely unaware of its existence. Not even the National Assembly had okayed Nigeria's investment there.

Central Bank of Nigeria governor Charles Soludo retorted to this charge though that it was well within his powers to invest money in the apex bank's vaults in profitable ventures.

Startling disclosures

Yet, a report of an investigation President Umaru Yar'Adua ordered into the matter has just turned up startling disclosures - that the CBN spent some $17 on consultancy and travel while putting together the $462 million (Sh28 billion) financial house.

Reports say AFC managing director Austine Ometoruwa, who was accused of taking away $1,000 (Sh61,000) daily in hotel accommodation charges for one year in connection with the investment, and a petition filed by a director in the office of the federal Attorney General and Justice Minister.

According to the report, AFC's board of directors is hardly different from that of the behemoth private enterprise Trans-National Corporation (Transcorp), Obasanjo put together before he left office, and granted oil blocks as well as cherry-picking of publicly owned strategic establishments such as the former Abuja Hilton, now renamed Transcorp Hilton and the landline telephone monopoly, the Nigerian Telecommunications (NITEL), which were sold to Transcorp at ridiculous prices, that made Yar'Adua rescind the NITEL sales.

Foreign account

According to the report, CBN transferred millions of dollars to the foreign account of the AFC in November 2007, and more millions in March 2008 - through Citibank in London.

If Yar'Adua is questioning such transactions, it could only mean that even he was unaware of the transactions, though Obasanjo handed over the presidency to him at the end of May, 2007.

Moreover, the report said: "The CBN governor (Chukwuma Soludo's) appointment as chairman of the AFC in his personal capacity is a clear violation of Section 9 of the CBN Act 2007, which bars principal officers of the CBN from holding any office by virtue of their respective offices".

For now AfDB can rest assured that its would-be rival would be removed; the report recommended that "the funds invested in AFC be returned to CBN forthwith."

A source close to the panel said that Austine Ometoruwa was arrested for allegedly "shuffling funds around without due process."

The petition alleged that Austine moved $100 million into a subsidiary called AFC Asian Holdings and that he was trying to use it to commit fraud.

He went and established a mining company, Costelor, as an AFC subsidiary in Ghana. Who are those behind a sudden $50 million invested in the AFC by an anonymous company? How come no project has been approved and financed after one year of operations by the AFC and Austine as chief executive officer?"

Facing the panel last Wednesday, Soludo said the $462 million the CBN invested was sourced from the Autonomous Foreign Exchange Market (AFEM) introduced by the CBN in 1995 following the liberalisation of the Foreign Exchange Market (FEM). CBN sells foreign exchange AFEM through authorised dealers at market rates.

He further disclosed that some private Nigerian banks invested $551 million in AFC. He had told the House Committee on Banking and Currency on April 30 that the banks included United Bank for Africa ($101 million), First Bank ($100 million), Zenith ($50 million), Union Bank ($50 million), Intercontinental ($50 million), Oceanic ($50 million), and Access ($50 million).

Two unnamed Chinese firms invested $50 million, he added. Demonstrating against this and other disclosures last week, thousands of workers walked through the streets of Abuja, asking that Obasanjo be put on trial.

Already, he has been mentioned in the several probes of his administration going on simultaneously at both chambers of the national legislature. Then, on Thursday, the Speaker of the House of Representatives vowed that anybody indicted in any of the probes would be handed over to the Executive for trial. That same day the federal attorney-general explained that there would be no cover-up as anyone indicted would be promptly arraigned in a court.

Meanwhile, Obasanjo and his deputy, Vice-President Atiku Abubakar have been invited to face the House of Representatives public hearing on the power and energy sector, where some $16 billion was spent, yet Nigeria's electricity supply has dipped from 3,000 Megawatts to about half of that.

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