Economic Confidential, March 2008

FEATURES

Raising the Dead Industries in the North

By Gen. T. Y. Danjuma

I will like to thank the management of LEADERSHIP Newspapers Group for putting together this conference that seeks to find a way out of the darkness that is de-industrialisation of Northern Nigeria.

Since its inception over three years ago, LEADERSHIP has been a source of pride to me. Its exceptional display of courage has been most commendable. The paper's consistent support for what is right in a democracy at all times and the very bold and fearless way it goes about it has made it one of the most influential newspapers in the country within the very short period of its existence. As everyone in this hall will agree, LEADERSHIP has been putting up a very brave fight against tyranny, abuse of power, executive lawlessness, and against the enemies of the nation. For a young newspaper to be so brave in a battle where most other older newspapers have been found wanting is, to me, quite commendable.

Before I address the issue of the day, I wish to use the opportunity provided by this gathering to explain why I turned down the offer, and resisted the monumental pressure on me, to take over the chairmanship of the Arewa Consultative Forum (ACF). I think anyone who turns down an offer to lead owes the people an explanation. Unknown to many, the late Chief Sunday Awoniyi had, about two months before we lost him, requested General Yakubu Gowon to talk me into taking over the chairmanship of the organisation from him since he had served out his term. General Gowon called me and I met him at his guest house in Lagos. He explained to me why I should accept the offer. I gave him two reasons why I had to reject the offer: The first, I told him, is that the generation to which I belong had failed and we should politely leave the stage for the younger generation to take over. Nigeria is totally messed up today and nothing appears to be working. There are many things that sadden me about our nation today. I have all along been associated with the Middle Belt Forum (MBF), which is an older organisation. At about the time Gowon was making the ACF offer to me, I was also contemplating relinquishing my sponsorship of the Middle Belt Forum whose bills I practically underwrote over the years. I had made up my mind to resign and also to persuade Chief Solomon Lar and Hon Isaac Shaahu to vacate leadership because we had failed to influence events and change things positively in the states where we belong. As such, I thought it inappropriate, after we had failed in one organisation, to spread the virus to another.

The second reason I gave was that the ACF itself had failed in influencing events in the North positively. That was why I reasoned that, perhaps, we should allow a new generation of younger, smarter people to take over from us. I remember that General Gowon pressured me for about an hour on that day, but I spent the time trying to convince him about why our generation must give way. As if that was not enough, I read several articles from members of this same young generation I am talking about from all over the North, making their own case for me to take the chairmanship. A few of them came to my house to present their case and I also received several calls. I appreciate and understand some of their points, but I admonished them against insisting on pulling people out of their grave to lead. Geriatric leadership is the bane of Africa today.

I see the role of organisations like the ACF and MBF as those of opinion leaders who should influence especially elected chief executives of states and legislators to improve the level of governance, economic and social development. I couldn't understand why the ACF and MBF had in their areas of responsibilities some of the worst governors in Nigeria. There is no need to name them because you all are in possession of the performance details of your predecessors. Given the level of poverty prevailing in the North, if we as leaders of the two organisalions could not call political leaders like these to order, we had no reason to continue to exist. Furthermore, as if to add insult to injury, the next attempt was to draft me to become chairman of the ACF's Board of Trustees, an organisation for pensioners. I accept the fact that I am a pensioner but persuading me to join the ACF Board of Trustees amounted to rubbing my nose in it.

Let me illustrate the reason we are here with the story of Lazarus in the Bible. Lazarus died and, when Jesus appeared, his sisters ran to Jesus and said, "Master, if you had been here, our brother would not have died." Jesus went ahead to perform the miracle of raising Lazarus from the dead. Ladies and gentlemen, we are here assembled to perform a miracle, the miracle of raising the dead - our dead industries in the North. It is the belief of LEADERSHIP Newspapers that if your current governors and legislators had been in power in our recent past, these mills would not have died.

As you are aware, agriculture contributes the largest share to our Gross Domestic Product (GDP), about 4.0%. Before the Nigerian civil war, agriculture's contribution to our GDP was more than 80%. It was in order to add value to our agricultural products that our founding fathers, with foreign partners, went into cotton ginning, Spinning and weaving. In its heyday, the textiles manufacturing sub-sector alone employed about 1.3 million people directly and indirectly. Today, the UNTL, Arewa Textiles, Kaduna Textiles, Chellco, Bagauda Textile Mills, Holborn, Gaskiya Textiles, Universal Spinners, Kano Textile Industries, Dangote Textiles, Nortex, Supertex, Zamfara Textiles and several others spread across the 19 Northern states have effectively shut down. And with them have gone hundreds of thousands of jobs directly and indirectly. Most of the cotton fanners have been laid off together with the labourers that helped in harvesting the product; our ginnery plants are idle and so are the traders, agents and distributors that used to provide employment to thousands. Textile is only one example. By one estimate, in Kano alone, about 700 different factories have shut down in the last decade. There was a time Kano competed with Lagos for having the larger number of industries. Today, only the carcasses of those factories remind us of their existence once upon a time.

Regrettably, the greatest economic failing of our time has been our inability to use our oil money to modernise and transform agricultural production. I therefore commend mostly highly, President Umaru Yar'Adua for addressing this issue early in his administration. But I must sound a word of caution. We now have a globalised economy foisted upon us by western countries on their own terms. These western nations have pushed poor countries to eliminate trade barriers, preventing developing countries from exporting their agricultural products and so depriving them of desperately needed income. The Nigerian government must now modernise and subsidise agriculture and many aspects of agro-allied industrial processes. Subsidy is not an economic crime as it is sometimes projected to sound. The United States of America, the chief promoter of globalisation, subsidises cotton and wheat heavily, so that American farmers can compete favourably with others around the world. The EU and Latin American countries subsidise agriculture. All sensible countries around the globe do it. We do not stand a ghost of a chance of competing in a globalised economy if we do not subsidise our agriculture. Furthermore, we must restore and even create our own new trade barriers to protect ourselves against unfair competition from abroad. We are called a developing country because we are assumed to be developing. But what we have today is that while other developing countries in Asia and Latin America are indeed developing especially with regards to industrialisation, Nigeria is a de-developing country. Even if we successfully refurbish our textile mills, unless we subsidise and assist our long-suffering farmers to produce raw materials cheaply, our manufactured products cannot compete in the globalised market.

I think it is clear to most people that the cost of energy and the ever flourishing business of smuggling at the northern borders are the main reasons for the demise of our manufacturing industry. Resulting from energy crisis, there was a time the authorities asked North-based industries to re-tool to enable them use products of our local refineries to power their plant. The factories duly complied. But instead of the NNPC authorities allocating these products to local factories that needed them, they had to obey orders from above to allocate the products at domestic prices to crony companie1, which in turn sold them at export prices, to the detriment of both local industries and the nation at large. It says a lot about the nature of the problem we are facing: some of these companies are North-owned. Four companies were beneficiaries of this corrupt allocation between 30th September, 2002, and the middle of May 2003. MRS Oil and Gas Ltd alone received• a total of 908,823 111etric tonnes of fuel oil from NNPC at the domestic price of $68.09 per ll1etric tonne and sold it at the export price of $277.27 per metric tonne. This figure was 58,822 metric tonnes in excess of its allocation. At about the same period, Haske Enterprises Ltd was allocated 50,000 metric tonnes, Nuel Energy Ltd received 100,000 metric tonnes and Ocean & Oil Ltd got 200,000 metric tonnes. The cumulative loss to the nation from these irresponsible allocations and lifting of the nation's fuel oil was N17 billion. The loss from MRS alone was about N14 billion. So now you have an idea of where some of the problems came from.

The tragedy of our steel mills under the Obasanjo administration is even more upsetting. The Ajaokuta Steel Mill was meant to be the biggest employer of labour in the North. Together with other steel mills, it was also supposed to create the basis for the real industrial take-off of the country. We all know the pivotal role of steel in the industrialisation of any country. The government of Obasanjo handed over Ajaokuta Steel Mill, lock, stock and barrel, in addition to the National Iron Ore Mining Company and Delta Steel Company, to a certain Indian commission agent who goes by the name Mr. Primod K. Mittal. This economic terrorist, obviously working as an agent of some of Nigeria's corrupt leaders, has not only used our national assets to reap billions where he and his corrupt collaborators did not sow but is also currently cannibalising the entire steel mills and stealing valuable equipment and machinery and shipping them out. This act is not just criminal but an insult. The government of President Umaru Yar'Adua should unleash EFCC on this man tomorrow, and all those involved in taking that anti-Nigeria decision to hand over the Ajaokuta complex to the man should be punished immediately. The government should set up a probe panel to investigate the entire transaction of handing over three major national assets to one foreign entity.

Smuggling is also a major cause of de-industrialisation because it is much easier to smuggle goods through the northern borders than it is through the Lagos borders, for example. This problem can only be solved whenever the government makes up its mind to do so. Many of the big-time smugglers are well known and are even known to be cronies of leaders in power. Even the developed countries of the West protect themselves these days from cheap dumps from China that kill local industries. We cannot afford to continue to pretend on this matter. The Federal Government must act at once.

LEADERSHIP is proving to be not only a faultfinding medium but an organisation that is providing good leadership where and when it matters. With this conference, we can see that the newspaper is also interested in playing a positive role in identifying important national problems and attempting to solve them openly and transparently. I thank and salute LEADERSHIP for this initiative. My gratitude also goes to the speakers and discussants of this all-important topic. It is my hope that, at the end of the day, both the people and governments of the North will be better informed about the collapse of manufacturing industry in the region so that we can design a regional agenda for action within the context of Nigeria.  

Gen. T. Y. Danjuma delivered this speech as the Chairman at the LEADERSHIP conference held in Abuja