It all began as a singlehanded alteration to the terms of contract with INTELS to remit all revenues, including the revenue that should accrue to the company, into the Treasury Single Account, TSA. Then it transmuted into media campaign against the company accusing it of running an unhealthy monopoly in the oil and gas services industry in Nigeria. The tempo kept increasing, and now we have the last straw aimed at breaking the camel’s back.
Following a Presidential approval, Mr. Malami, the Attorney-General of the Federation wrote to the Managing Director of the Nigerian Ports Authority, NPA, Hadiza Bala-Usman directing her to terminate the boats pilotage monitoring and supervision agreement between INTELS Nigeria Limited and the NPA, which allowed the company to receive revenue on behalf of the government and retain a certain percentage of the revenue collected.
As reported in some dailies, the AGF in response to a letter from the NPA boss, stated that the agreement should be terminated because it is illegal and contravenes Sections 80(1), 162(1) and (10) of the constitution of the Federal Republic of Nigeria. This contravention is further heightened by the resolve of the current administration to implement the Treasury Single Account (TSA). En passant, it is imperative to establish here that the government will always find a constitutional basis for whatsoever it is determined to do. So there is probably no point in attempting to scrutinise the spirit of the sections of the constitution the decision is predicated on.
As a background, the Managing Director of the Nigerian Ports Authority had written to INTELS earlier this year proposing a review of the existing contract, among other things, between the two parties. The proposal also requested INTELS to respect the new policy of the federal government, TSA. INTELS provided reasons why it would not be able to adjust its financial process to accommodate TSA at the time.
The company rightly stated that the TSA policy was not part of the contractual agreement it had with NPA; as a result, the company had already used its account to secure loan facility that can only be serviced by retaining its percentage of revenue collected. After series of correspondences between the two parties, the NPA issued a threat that it would terminate the agreement with INTELS if the company refused to comply with the TSA policy. That threat has now been fully executed.
However, many have described the on-going crisis as a political witch-hunt targeted at the former Vice President, Atiku Abubakar who is a major shareholder in the company and a possible presidential aspirant in the next election. Inasmuch as one would prefer to reason otherwise, how do you prove the point that this is not a witch-hunt when all the handwriting on the wall clearly suggests it is? It is more difficult to think otherwise considering that the former VP, during the formal launching of his Presidential bid for the 2015 elections, had publicly pronounced INTELS as his most successful business.
In the first instance, the reference made to the constitution in the letter written by the AGF to the MD of NPA does not in any manner forbid the government from entering into agency agreements with private entities. Or is there a part of the law that says government cannot engage in contractual agreement with private companies in the collection of revenue? INTELS is not the only private organisation that collects revenue on behalf of the government and remits same into the government’s coffers.
This is replicated in many other sectors of the economy. For instance, many companies deduct withholding tax from contractors and remit the same to the government. I would like to believe that is a form of agency arrangement that allows the private entities to collect revenue on behalf of the government.
The same model is employed at the State levels. This model has been beneficial to both the government and the citizenry in many ways. It is common knowledge that government performance in the country is marred by bureaucratic bottlenecks that eventually takes its toll on the overall output of any endeavour. The model is not peculiar to Nigeria.
It is the same that is employed in other developed nations such as the United States, United Kingdom and South Africa where they have Private Collection Agencies. In other words, it is international best practice; agency arrangement is a normal phenomenon. It is therefore worrisome that the government could terminate a contractual agreement on the premise that it was in contravention of the constitution. Maybe, we will require professors of law to further enlighten Nigerians on the issues at stake. Until then, the only logical summation to all of this is political witch-hunt.
But what is more alarming is the preference of the government to take on a company that employs over 20, 000 Nigerians for political reasons. It is common knowledge that politics is a dirty game that sometimes thrives on the survival of the fittest theory. That said, is it then appropriate to allow politics determine the fate of innocent Nigerians? Likewise, when government agents revoke an agreement with another corporate entity without recourse to due process, the signal it sends to the international community and other prospective investors is not palatable in any way.
Government is a going concern, a continuum that demands respect for existing agreements. And in that regard, it is difficult to believe that the previous administrations respected the agreement with INTELS despite its illegality. More so, the TSA issue is a recent development that was never in the picture when the agreement with INTELS was signed. If the government wants the other party to embrace the TSA, that has to be agreed at the table of negotiations not by revocation of agreements. The government cannot just issue a directive to a partner in a contract when the terms of the contract did not support such.
It is dangerous to play politics with the livelihood of Nigerians, very dangerous. According to data from the National Bureau of Statistics, Nigeria currently has an unemployment rate of about 15% of the population. It appears we are more interested in increasing that percentage than we are in reducing it. The ripple effect of revoking INTELS’ contract is the attendant job loss. The only way to fully understand the impact of INTELS on Nigeria and the possible effect of the witch-hunt is to visit Onne community and have a conversation with the king of Onne.
The whole community practically survives on the company as it employs many of the youths and continues to provide both direct and indirect jobs for the people. To attack INTELS is to attack the Onne community and further plunge thousands of young men and women into the labour market. Is it really worth it? Politics is meant to be in the interest of the people not against the people.
In the same way, the continued persecution of INTELS also has a negative colouration on the country’s image. The image we are gradually building is that of an unreliable partner in a Public Private Partnership arrangement. This is evident in how we have handled other PPP arrangements. If we continue like this it may be difficult to have investors that will be eager to invest significant funds in Nigeria.
Maybe, they will come in and take advantage of whatever we have to offer in the immediate. However, they will be wary of engaging in long term business relationship with the federal government as a result of the experiences of companies like INTELS. Since no one knows what the future holds with a different government.
It is important for the government to listen to the voice of wisdom and bring INTELS to the negotiation table for an amicable resolution to the current impasse. Terminating contractual agreement with the company on the basis of illegality is petty to say the least. The contract is a form of Public Private Partnership and there is absolutely nothing illegal about that. We all understand the need for every political gladiator to strategise for the coming elections.
We understand the need to outsmart political opponents to corner some political advantages. It is normal in politics but there is always a red line we must not cross. When political moves have the potential of eliminating the livelihood of thousands of Nigerians, it is a red line that must not be crossed. Let us embrace options that will be beneficial to all Nigerians and to the nation at large.
By the way, if INTELS is attacked today for political reason, who will be attacked after 2023? Power is transient; no one really knows where power will swing to tomorrow. It is not smart to kill the future of thousands of people for the expediency of today. There are certainly other ways to fight politics; not by attempting to kill a company that has been socially responsible throughout its existence in Nigeria. Let us play politics that pays all not politics that pays some and plagues others.
Isiaka, a Business Analysts, writes from Abuja.