Emmanuel Ibe Kachikwu - Nigerian Minister for Petroleum Resources HARDtalk

Now on BBC News it's time for HARDTALK.

Welcome to HARDtalk, I'm Stephen Sackur.

When President Muhamadu Buhari won the Nigerian presidency two

years ago it seemed like Africa's most populous nation had turned a

corner.

A first ever peaceful democratic transition bought a

promise of cleaner, better governance and major economic

reform.

How's it going?

Well, my guest today is Emmanuel Ibe Kachikwu, Minister

of State for petroleum resources.

Can oil dependent Nigeria transform itself

into a modern, trading economy?

Emmanuel Ibe Kachikwu, welcome to HARDtalk.

Thank you, Stephen.

I guess the lesson of the last two years

or so, with President Muhamadu Buhari in power, is that Nigeria

remains dangerously overreliant upon oil.

Well, yes.

Clearly over reliant.

I don't know if it's dangerously.

Look at the positive sides of oil, in terms of what it

has done to the country over the years.

When the price slumps, it's dangerous.

Oh yes.

We would love to see, obviously, a lot more

diversification, a lot of effort is going into that, emphasis on

agriculture, tourism areas, emphasis on services, which have done

substantially well in the economy.

But obviously we've neglected for quite some years they need to

diversify.

We need to go at it full steam.

We'll talk about the degree to which you are having

success in diversification, but if we stick

with the impact of the slump in oil prices over the last couple of

years, I mean, you've actually, despite your growing population,

despite all the talk of Nigeria becoming a new global powerhouse

economy, you've actually been in recession.

Yes, over the last three quarters, yes.

The numbers are getting better.

Quarter to quarter we're beginning to slide back out of it.

The 2016 fourth quarter numbers have moved from

about negative 2 point something percent to about 1.63.

I haven't seen the 1st quarter figures

released, which are meant, due to be released

by the National bureau of statistics, to be able to confirm.

As I understand, the IMF is saying that at best you will grow by just

under a full percent over 2017.

So it's very sluggish.

Yes, but that's not unexpected.

The reality is that almost a 60% decline in oil income,

we have been substantially dependent, and over the years it

will have impact.

Add that to all other manners of uncertainties and

the general economy itself and inefficiencies happening there.

We're going to talk plenty about inefficiencies.

Here is a fascinating quote.

"High oil prices spoilt us, and we've messed it all

up."

Do you know who said that?

I don't know, the president?

You did!

You did!

That's true.

I think for us, for me certainly, I look at the

difficulties that come with the slump as an opportunity to get

serious.

There were about 30 years where we just kept

postponing the evil day.

Spoiled by oil price and oil money.

At the time I was concerned to find it, what can

we do in the absence of global oil prices?

You're not going to have that happen again.

So everybody's getting conscious of that.

And there's a very conscious effort by

the President and his team to focus on what we need to do is to be less

reliant on oil.

More efficient in terms of how we spend what we have.

Interesting you say there is very close

focus from the president on

this.

One thing the president has been identified with in his first

two years or so in office is trying to maintain,

against all odds, a

very strong currency.

Now, many people inside and outside Nigeria

say that is insane.

First of all, you develop your own currency black

market, which is never a good thing in an economy.

But also your undermining the confidence of

foreign investors, who simply don't believe it is sustainable.

Are you going to change that policy?

I think we are working progressively towards

getting out of that.

If you look at the differences in prices, foreign

exchange official versus the black market, it has moved from 520, high

point of 530, in the black market took about 360-370.

The strong policy was a mistake, wasn't it?

I'm not a central bank governor, so I

hate to call it a mistake.

But really, we're faced with difficulties.

The reality is we have very little foreign exchange in our

hands, we have a lot of massive demands for it,

a lot of it going to very luxury goods, which we really

couldn't afford as a growing nation.

What I believe central bank was, in the first one or two years,

trying to force people away from that

consumption culture.

And they succeeded quite substantially.

And now that they have, they've begun to

release foreign exchange, loosen the market and that of it.

I will leave the fiscal and monetary policies to

the economists, in terms of how they decide.

What I see as a growing trend is the central bank is

creeping out of the very aggressive control that it had initially and

losing conservative factors in the slide

between the black market trade.

OK, I put that policy at President Buhari's door.

And before we get into a discussion of the

future of the oil industry and this diversify the economy you want to

see in your country, I need to stick with President Buhari a little bit

longer.

OK.

Not least because he is clearly seriously ill.

Now, we speak here in London.

You're a minister in the government.

You tell me, because most Nigerians have no idea what is

going on, what is the state of his health today?

We understand that he is undergoing hospital treatment

here in London.

Have you seen him?

Have you any idea what's going on?

Yes, he's in London, undergoing hospital treatment.

I don't know the details of that.

I obviously wouldn't know.

Medical information is confidential.

I wouldn't disclose that on TV.

Let me say this, he returned back from his first trip in

London, he walked full steam.

The doctors had advised some rest.

He is back to London, is continuing some

levels of meetings, he's been able to place some rules.

He has a very efficient vice president, who is

sitting in for him in his absence.

It really hasn't made much of a difference.

You know what?

He came to power promising a different, much

more disciplined, transparent, open and efficient government in Nigeria.

One of your main newspapers carried an editorial today saying he is

guarding details of his health as carefully as Donald Trump card

details of his tax affairs.

What kind of transparency is this?

The Nigerian public deserve and have a right

to know what is going on

with their nominal leader and Chief Executive?

Nigerians generally know the fact he's not well.

What is wrong with him?

I don't know.

Where is the transparency in that?

Let's face it, who in the world goes around giving everybody what their

medical status is.

The doctors have got to be able to release something

official.

He is working through it, it's not become a major problem.

If he gets to incapacity level, we'll

begin to worry a lot more.

You know what the rumours are, don't you?

You know the rumours in Nigeria are that

he is desperately ill and, frankly, he may not be capable of leading

Nigeria for very much longer.

Well, we've seen rumours about sick presidents often, most of them

sometimes not quite correct.

Will he be able to lead Nigeria?

I think looking at the sort of conversations

I've had with him, I had a lot of interactions

with him when he came back, he was strong enough to do his

work.

He struggled in terms of trying to fully recover.

Nobody plans and illness, it happens.

If it happens...

Nobody is suggesting any fault involved, the issue is about

transparency and informing people what is going on.

Yes, but he has an efficient number two man.

The system works, that's the whole essence of

democracy.

He's on top of his abilities to be able to issue

policies, to approve what he needs to approve.

It's partly about certainty and stability.

The chief of your Armed Forces has just issued

a statement in this somewhat febrile, rumour filled atmosphere,

telling those in uniform not to engage in politics.

I.e - not to begin any

process of meddling,

interfering in politics, when there is no, frankly,

there is a vacuum of leadership at the very top of your

country.

This is an extremely worrying.

No, no, no, I think the press is taking it out of context.

They think what the chief of the army was saying,

look it's something they have rhetorically said all the

time, the new army that we have, subject itself to civilian

democracy.

And that is the opinion every chief of army staff will give.

It's not related to the President's circumstances.

It is an ongoing education by the military forces.

Back to the direction of travel of your government.

You are the Minister of State for petroleum.

You are a former, senior executive in

Exxon, and I think you directed the National

Petroleum Corporation for

some time, so I can't think of a man more steeped in the oil business

than you.

Absolutely.

What on earth has gone wrong, when you see that

your output levels today, roughly 2 million barrels per day, are miles

away from your grand ambition of 3 million barrels a day?

In fact last year you sunk so low in terms of

production you were overtaken by Angola in African output.

It's a disastrous story.

Short and long-term.

The short term answer, the militants in Nigeria

disrupted production.

And got us the slump that you saw, from 2.2 million

barrels all the way down to 1.2.

And it's taken a lot of work from myself

and the Niger Delta vice president to get that back on track.

When you say a lot of work, you mean buying off

the militants?

No, no, no.

You fed them hundreds of millions of naira

to stop them attacking the infrastructure.

They don't have the money to feed anybody.

It's been simple engagement.

I've always said that.

What the situation demands is simple respect and engagement.

I've been very intensive about engagement

since I was appointed.

The vice president joined me in that recently.

The president has authorised it.

That was a dramatic about face, that we did that.

What had happened previously, the militants got the impression that

nobody was taking them seriously.

Nobody was listening to their problems.

And I'm going to be doing that engagement continuously in

terms of trying to provide some economic blueprints of direction.

So that was the short reason why we have declined.

In terms of meeting our national goals of 3 million, 3.5

million barrels, to which I am very committed,

the problem had been I

think we had no focus and no long-term plans.

Long-term investment.

Long-term infrastructure.

We now need to begin to do that.

Even though this is a difficult time to do that.

We'll talk about that, because you do have

big plans, the question is whether you can deliver them.

One more point on the Niger Delta.

I'll be honest with you, you are the ultimate

insider.

You know, I just described your career.

Are you ashamed of what has happened in the Niger Delta?

A fairly recent UN development programme report on the region,

you're oil-producing region, says this is a region suffering from

administrative neglect, crumbling social infrastructure and services,

high unemployment, social deprivation, abject poverty, filth,

squalor and endemic conflict.

That is the region that generates the

cash cow which keeps Nigeria afloat.

It is shaming, is it not?

It may be shameful, but you look at every

oil-producing country in the world, you have the same similar neglect.

I don't know why that happens, I think

we take it for granted.

That once you leave the oil, you can go off.

And we need to begin to address that.

Not just the national government, the oil companies that

are also there.

Because they mind, quite frankly, about 80, 80% of our

oil, established oil companies.

We've got to begin to require some level of transparency and engagement

by them of the local workforce also.

Not just the government.

Yes, we've not done well in the past on this.

I think we could do better.

Some of the money, over the period we're

talking about, over the last ten years, over 40 billion has also been

sunk into those areas.

But where is the money?

A lot of it went to corruption, a lot of that was

siphoned out.

So money's even meant for the local population...

Billions, over the last 50 years, hundreds of billions of dollars have

been siphoned out of the oil business.

Yes, yes, so...

And somebody has taken it.

People have taken it, that is why the

President's main focus when he came here was fighting corruption and

fighting it aggressively.

And I think that if there was one area he

is focused immense attention on, it has been dealing with corruption.

You are pushing this petroleum industry bill.

As I understand, one of the key pillars of that bill is

that more of the revenues that come out of the oil business stay in the

region from which they come.

The rest of your country doesn't like

that one little bit.

There are indicators senior politicians in

your parliament are not going to allow you to steam-roll through this

bill in the way you would like.

Actually, the foreign bill that you have is actually a members Bill,

Senate Bill, not even from the executive.

The executive, including myself, have cooperated as much as

we can in terms of giving data that is required

to get a signed bill.

Yes, there is an intent to try and put a bit more

in the Niger Delta area.

Yes, they are obviously given the final discussed results, there

were obviously grumblings in terms of how it is applied.

But when I meet with them, I see a commonality of purpose.

I hear the history of Niger Delta is heated,

and everybody is trying to find a solution.

One quick way of that is to enhance the ability of other

component states, to be able to stand economically.

And including findings of oil in the north.

So I think I see a lot of collaboration, despite the

disagreements in terms of what the percentages

of the water numbers would be, but I'm still a lot more

focused on governance.

How do you use what eventually get into the

territories well?

How do we get the government to take responsibility

for money that gets there?

How do we get local governments, how do we get

the citizens themselves?

How do people who make a lot of money from

oil pay enough tax to the government?

Nigeria's probably the least taxed nation in the world so

everybody's focused on...

Well, it would help if you actually delivered on some of your promises

to clean up the corruption endemic not just in the sector

but across all economic sectors, by actually putting some very senior

people, both public figures and fat cat businesspeople,

into a court of law, and saying, no more of this.

And here are the figureheads and we're going to take them

through the courts.

Well, Stephen, to a court of law we have.

I think this president has put a whole lot more people

than all successive governments collectively put together.

I'm talking about the top people.

Absolutely.

Name me a few. The ministers of the...

Defence chiefs, who have been tried. Governors who have been tried.

It's not happened before. Even the judiciary.

Your carefully saying "Being tried".

How many convictions of these top people have you actually seen?

Just like in any system in the world including yours,

you don't re-route judiciary.

You have agreed with me that hundreds of millions of dollars has

been taken out of the Nigerian economy, somebody's taking it,

and you're telling me, unfortunately, a lot of these people

who we take to trial we can't convict.

Somebody is responsible.

Somebody's responsible.

Whoever is responsible, we're putting them into court.

The court process has got to work.

One of the, and I'm a lawyer, I studied to PG level in law,

I wonder the difficulty sometimes of corruption is that

because as much as there ought to be the bastion of Justice,

take the time.

The common law system is grinding at a slow pace.

So again, if the president was to turn around and say anybody

that had any suspicion, yank them into jail,

we have an opera in the world.

What's going on?

Until they are found guilty, there's not too much we can do.

What is important, investigations are going on, it is very active,

people are being picked up, they are not respecters of person.

All the big names are being locked up where they can.

And put through the trial process.

But the trial process must take its time, there's not too much

you can do about that.

Let's get back to what you can do something about personally,

and that is the reshaping of the oil business.

You talked about diversification, and we can talk about taking

diversification way beyond oil to other sectors,

transportation, agriculture, etc.

But on oil, one of the fundamental problems is that you have this

wonderful resource but you don't do anything with it.

What you do is ship it out and much of the value is then given

to others, they refine it, then you buy it back.

You've got the most extraordinary system where, I think I'm right

in saying, you're refined petroleum imports were highly in March 2017

than they've ever been before.

I mean, your industry is totally dysfunctional.

No, no, Steve not quite that.

Let me say this.

Yes, it is wrong.

We ought to process, rather than ship out crude.

If you look at all the efforts are made in the last few months,

including measures for working with investors to begin to reshape

the refineries that have been comatose for very many years.

And actually came...

Comatose?

How can, in an ambitious modern state, how can you have

refineries lying comatose?

It is what it is, the president is there for two years.

The refineries went down before he came.

Since coming, we've been able to get them back,

to begin to produce several million litres versus zero.

That's not the 90% complete.

We're now refurbishing the refineries, I've just signed

an agreement to build a new refinery in Nigeria.

We're focused on multinationals, focusing on an processes.

May I say, you're very good at setting out targets,

you know, more than 3 million barrels a day of production,

you say by 2020 we want to eliminate petroleum import.

Wonderful ambitions, but you give no sign

of being able to deliver.

Steve, I've delivered on everything I promised when I came into office.

First, I took an NMPC and made it into a profit-making organisation.

First time in history.

I reshaped the organisation.

I removed cash deficits of over 6 billion, OK?

Everything I've promised I've delivered.

I will deliver an the refineries, and I'm committed to that.

I will also deliver a future for oil that makes sense for Nigeria.

But bear in mind, one has been there for one and a half years,

the president has been there for two years.

I can't pretend that we're going to solve in one day

all the problems that happen in Nigeria in the past.

We'll solve the Niger Delta militancy problem.

It was there, we sorted it after one and a half years.

And when I say solve, listen, I'm not saying it has gone away.

When is Nigeria going to be self-sufficient in terms

of refined petroleum?

I have targeted 2019, that is the target I gave.

2019?

Yeah.

You're running out of time because you're nowhere

near right now.

No, Steve, don't worry, I put the date, I'll work it.

And if you don't achieve it, you'll walk?

Yes, of course, that's the reason why you're in government.

That's called accountability, isn't it?

Yes, absolutely.

Will their's not much of that in the Nigerian government

at the moment.

Well, we're trying to put it in place.

Do you wonder, and it goes back, in a sense, to Mr Buhari

and his ability to impose his leadership on the Cabinet,

on the country, do you worry that, you know, he is not in a fit state

right now to knock heads together and deliver on the promises

of better government, economic diverse a vacation.

Democracy's not a case of knocking heads, it's a business of persuasive

ability to lead.

He does possess that ability.

He also has his leadership qualities, he does have

the discipline, he's an incorruptible leader.

Those other that we need.

My underlying is, Mandela in his last days, these last years,

was not the" go do it" individual and he was a leader,

a perceptive leader.

And that's what we need.

And so I think he's able to deliver on that as of now.

And we're happy with the job that he's doing and we're

going to work around that.

We just, you just powerfully said, I believe in accountability,

and you said you would walk if you didn't achieve

what you promised.

A significant anti-corruption organisation in Nigeria has looked

at the state of Buhari's promised to clean up government

in your country.

They've asked a series of interesting questions,

I wonder if you can answer them for me.

One, why does - the Nigerian government budget asks -

need 11 different aircraft for ministerial use?

In a recession, just coming out of recession.

There isn't any budget, let there isn't an aircraft

for ministers, ministers don't use aircraft.

We travel, we travel public.

There are some presidential jets, some of which have been put

up for sale.

I don't have quite the details.

But I think he's down from an initial 11-12,

down to something like about seven, and only two or three really proper

conditions for usage.

And he has given, I know he has given some authorisation for some

to be sold.

In terms of numerical accountability, he has

reduced that substantially.

Ministers try to travel in business class by commercial airlines.

One other thing, we can go from the specific to the board,

how can the government release 400 billion naira for capital

expenditure, giving no proper detail of how this money

is going to be spent?

That's not true, there is a proper detail on how the money's

going to be spent.

Budgets are just not resilient in the air.

There are specific ministries who provide details.

They are vetted and approved.

I know that the biggest chunk of that is going to capital spend,

in terms of infrastructure, rail roads taking up quite a bit

of that, roads are taking quite a bit of that.

The whole idea was, given the deficit position

with the economy, we need to spend our way, in difficult times

come out of it.

So a lot of capital expenditure has gone into construction.

Right, we must end, I think, reflecting on the biggest

pitch of all.

The tragedy of Nigeria.

Which is that while you focus on trying to reinvigorate

the economy and your sector, the oil industry, the fact

is in the north of your country, according to the UN,

there are nearly half a million children in grave

danger of starvation.

A result, in one way or another, of the Boko Haram insurgency.

Isn't that the ultimate condemnation of Nigeria today?

You are a country, oil-rich, half a million kids they starve to death.

Steve, come on.

Are you going to say that the attacks in London

by terrorists is the fault of London?

No.

Boko Haram isn't the fault of Nigeria.

It's the happenstance we've found.

Buhari has been able to deal with it very effectively.

When he came into position, we had literally about 28

of our local governments in the hands of Boko Haram.

Today it's zero.

Now there is fallout from some of this, some of those are social.

We need to do better.

But there is a lot of work going into funding provision,

we have a lot of international support, international assistance.

But clearly we inherited problems that were major,

nobody better, quite frankly, at that time, in terms of security

imperatives, to deal with this issue than Buhari.

I think he's dealt with it effectively.

Innovate...

We have to end...

In a way you're saying Buhari's promised to eliminate Boko Haram.

He's going to deliver on it?

Yes, he's working very hard at it.

Does anybody promised on 100% basis?

To eliminate militants or eliminate terrorism?

Nowhere in the world has that been achieved.

The key thing's that taken back the territories.

That is key.

That is the first control.

Now when somebody explodes a bomb somewhere you can't

prevent, potentially, yes.

We're going to keep working at that.

We have to end there.

Emmanuel Ibe Kachikwu, thank you very much.

Thank you very much.

For being on HARDtalk.

Thank you.

Hello there.

The weather has been warming up over the past couple of days,

and that warming trend is set to continue through much