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Frontline: Problems with Privinvest
One July day in 2014 Ngozi Okonjo-Iweala received a call from President Goodluck Jonathan asking her to come to Aso Rock immediately for a meeting with Chief of Naval Staff Admiral Usman Jibrin, a presidential adviser and two representatives of a shipbuilding company based in Abu Dhabi.
When she arrived the meeting was already under way and Admiral Jibrin explained the problem to her: “He had boats, ships to be repaired and a dockyard that wasn’t working.” This meant the navy was unable to patrol and protect Nigeria’s coastal waters.
The proposal from the shipbuilding company looked attractive to the admiral: the company, known as Privinvest, would take over the naval dockyard and then re-equip and refurbish it. New vessels could be built and old ones could be serviced and rebuilt.
Okonjo-Iweala butted in, as she recounts in her new book, Fighting Corruption Is Dangerous: “When I asked about how large this investment needed to be, how it would be made, where the resources would come from, what types of revenue streams would be needed to underpin cost recovery and how long the agreement would be for, the company representatives looked baffled and irritated.”
They responded that Privinvest was a major shipbuilder and would find banks willing to syndicate some $2bn of loans, which would be borrowed in the name of their company but would be guaranteed by the Nigerian government. Amazingly, they had brought no business plan with them to the meeting.
Okonjo-Iweala came back sharply, asking how they expected an investment proposal that left Nigeria taking all the risks to be taken seriously. She told them a $2bn guarantee would have to be approved by the national assembly.
Despite this, Jibrin wanted to continue negotiations. A plan for a joint venture between the company and Nigeria’s navy foundered when Privinvest again insisted the government must guarantee the borrowings of the joint venture to the tune of $1.8bn.
It was the right conclusion, writes Okonjo-Iweala: “The reality of what we had saved the government by rejecting the Privinvest proposal was made clear […] after I learned of the problems faced by Mozambique […] through a contract with none other than Privinvest.”
Asked to comment about Okonjo-Iweala’s account of Privinvest’s dealings in Nigeria, a company representative told The Africa Report: “We disagree with a number of the purported facts in that book, see no criticism and the relevant agreement precludes us from discussing this project further.” P.S.
This article first appeared in the June 2018 print edition of The Africa Report magazine