Emmanuel Ibe Kachikwu - Nigerian Minister for Petroleum Resources HARDtalk


Emmanuel Ibe Kachikwu - Nigerian Minister for Petroleum Resources

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Now on BBC News it's time for HARDTALK.

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Welcome to HARDtalk, I'm Stephen Sackur.

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When President Muhamadu Buhari won the Nigerian presidency two

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

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corner.

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A first ever peaceful democratic transition bought a

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promise of cleaner, better governance and major economic

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reform.

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How's it going?

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Well, my guest today is Emmanuel Ibe Kachikwu, Minister

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of State for petroleum resources.

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Can oil dependent Nigeria transform itself

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into a modern, trading economy?

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Emmanuel Ibe Kachikwu, welcome to HARDtalk.

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Thank you, Stephen.

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I guess the lesson of the last two years

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

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remains dangerously overreliant upon oil.

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Well, yes.

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Clearly over reliant.

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I don't know if it's dangerously.

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

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has done to the country over the years.

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When the price slumps, it's dangerous.

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Oh yes.

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We would love to see, obviously, a lot more

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

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

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substantially well in the economy.

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

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diversify.

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We need to go at it full steam.

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

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success in diversification, but if we stick

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

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

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despite all the talk of Nigeria becoming a new global powerhouse

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economy, you've actually been in recession.

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Yes, over the last three quarters, yes.

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The numbers are getting better.

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

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The 2016 fourth quarter numbers have moved from

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about negative 2 point something percent to about 1.63.

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I haven't seen the 1st quarter figures

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released, which are meant, due to be released

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

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

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under a full percent over 2017.

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So it's very sluggish.

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Yes, but that's not unexpected.

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

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we have been substantially dependent, and over the years it

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will have impact.

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Add that to all other manners of uncertainties and

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the general economy itself and inefficiencies happening there.

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We're going to talk plenty about inefficiencies.

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Here is a fascinating quote.

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

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up."

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Do you know who said that?

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I don't know, the president?

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You did!

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You did!

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That's true.

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

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difficulties that come with the slump as an opportunity to get

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serious.

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There were about 30 years where we just kept

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postponing the evil day.

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Spoiled by oil price and oil money.

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

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we do in the absence of global oil prices?

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You're not going to have that happen again.

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So everybody's getting conscious of that.

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And there's a very conscious effort by

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

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reliant on oil.

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

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Interesting you say there is very close

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focus from the president on

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this.

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One thing the president has been identified with in his first

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two years or so in office is trying to maintain,

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against all odds, a

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very strong currency.

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Now, many people inside and outside Nigeria

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say that is insane.

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First of all, you develop your own currency black

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

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But also your undermining the confidence of

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

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Are you going to change that policy?

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I think we are working progressively towards

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getting out of that.

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If you look at the differences in prices, foreign

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

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

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

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I'm not a central bank governor, so I

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hate to call it a mistake.

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But really, we're faced with difficulties.

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The reality is we have very little foreign exchange in our

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

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

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couldn't afford as a growing nation.

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

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trying to force people away from that

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consumption culture.

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And they succeeded quite substantially.

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And now that they have, they've begun to

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

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I will leave the fiscal and monetary policies to

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the economists, in terms of how they decide.

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

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

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losing conservative factors in the slide

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between the black market trade.

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

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And before we get into a discussion of the

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

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

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longer.

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OK.

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Not least because he is clearly seriously ill.

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Now, we speak here in London.

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You're a minister in the government.

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

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

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We understand that he is undergoing hospital treatment

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here in London.

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Have you seen him?

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Have you any idea what's going on?

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

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I don't know the details of that.

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I obviously wouldn't know.

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Medical information is confidential.

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I wouldn't disclose that on TV.

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

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London, he walked full steam.

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The doctors had advised some rest.

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He is back to London, is continuing some

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

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He has a very efficient vice president, who is

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sitting in for him in his absence.

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It really hasn't made much of a difference.

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You know what?

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He came to power promising a different, much

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

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

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guarding details of his health as carefully as Donald Trump card

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details of his tax affairs.

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What kind of transparency is this?

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The Nigerian public deserve and have a right

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to know what is going on

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with their nominal leader and Chief Executive?

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Nigerians generally know the fact he's not well.

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What is wrong with him?

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I don't know.

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Where is the transparency in that?

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

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medical status is.

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The doctors have got to be able to release something

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official.

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

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If he gets to incapacity level, we'll

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begin to worry a lot more.

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

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You know the rumours in Nigeria are that

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

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Nigeria for very much longer.

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

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sometimes not quite correct.

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Will he be able to lead Nigeria?

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I think looking at the sort of conversations

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

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

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work.

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He struggled in terms of trying to fully recover.

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Nobody plans and illness, it happens.

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If it happens...

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Nobody is suggesting any fault involved, the issue is about

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transparency and informing people what is going on.

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Yes, but he has an efficient number two man.

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The system works, that's the whole essence of

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democracy.

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

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policies, to approve what he needs to approve.

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It's partly about certainty and stability.

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The chief of your Armed Forces has just issued

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a statement in this somewhat febrile, rumour filled atmosphere,

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telling those in uniform not to engage in politics.

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I.e - not to begin any

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process of meddling,

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interfering in politics, when there is no, frankly,

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

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country.

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This is an extremely worrying.

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

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They think what the chief of the army was saying,

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look it's something they have rhetorically said all the

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

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democracy.

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

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

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It is an ongoing education by the military forces.

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Back to the direction of travel of your government.

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You are the Minister of State for petroleum.

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You are a former, senior executive in

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Exxon, and I think you directed the National

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Petroleum Corporation for

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

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than you.

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Absolutely.

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What on earth has gone wrong, when you see that

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

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

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In fact last year you sunk so low in terms of

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production you were overtaken by Angola in African output.

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It's a disastrous story.

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Short and long-term.

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The short term answer, the militants in Nigeria

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disrupted production.

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

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barrels all the way down to 1.2.

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And it's taken a lot of work from myself

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

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

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the militants?

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No, no, no.

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You fed them hundreds of millions of naira

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to stop them attacking the infrastructure.

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They don't have the money to feed anybody.

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It's been simple engagement.

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I've always said that.

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What the situation demands is simple respect and engagement.

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I've been very intensive about engagement

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since I was appointed.

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The vice president joined me in that recently.

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The president has authorised it.

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

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What had happened previously, the militants got the impression that

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nobody was taking them seriously.

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Nobody was listening to their problems.

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

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terms of trying to provide some economic blueprints of direction.

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So that was the short reason why we have declined.

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

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million barrels, to which I am very committed,

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the problem had been I

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

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Long-term investment.

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Long-term infrastructure.

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We now need to begin to do that.

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Even though this is a difficult time to do that.

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We'll talk about that, because you do have

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

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One more point on the Niger Delta.

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

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insider.

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You know, I just described your career.

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

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A fairly recent UN development programme report on the region,

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

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administrative neglect, crumbling social infrastructure and services,

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high unemployment, social deprivation, abject poverty, filth,

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squalor and endemic conflict.

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That is the region that generates the

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cash cow which keeps Nigeria afloat.

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It is shaming, is it not?

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It may be shameful, but you look at every

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

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I don't know why that happens, I think

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we take it for granted.

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

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And we need to begin to address that.

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Not just the national government, the oil companies that

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are also there.

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

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oil, established oil companies.

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

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by them of the local workforce also.

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Not just the government.

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

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I think we could do better.

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Some of the money, over the period we're

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

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sunk into those areas.

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But where is the money?

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

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siphoned out.

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

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

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been siphoned out of the oil business.

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Yes, yes, so...

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And somebody has taken it.

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People have taken it, that is why the

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

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fighting it aggressively.

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And I think that if there was one area he

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

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You are pushing this petroleum industry bill.

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

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

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region from which they come.

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The rest of your country doesn't like

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that one little bit.

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There are indicators senior politicians in

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

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bill in the way you would like.

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

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Senate Bill, not even from the executive.

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The executive, including myself, have cooperated as much as

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we can in terms of giving data that is required

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to get a signed bill.

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

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in the Niger Delta area.

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

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were obviously grumblings in terms of how it is applied.

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

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I hear the history of Niger Delta is heated,

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and everybody is trying to find a solution.

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

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component states, to be able to stand economically.

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And including findings of oil in the north.

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

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disagreements in terms of what the percentages

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

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focused on governance.

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How do you use what eventually get into the

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territories well?

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How do we get the government to take responsibility

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for money that gets there?

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How do we get local governments, how do we get

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the citizens themselves?

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How do people who make a lot of money from

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oil pay enough tax to the government?

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

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everybody's focused on...

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

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to clean up the corruption endemic not just in the sector

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

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people, both public figures and fat cat businesspeople,

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

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

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through the courts.

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

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I think this president has put a whole lot more people

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than all successive governments collectively put together.

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I'm talking about the top people.

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Absolutely.

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

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

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It's not happened before. Even the judiciary.

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Your carefully saying "Being tried".

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

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Just like in any system in the world including yours,

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you don't re-route judiciary.

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

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

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

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who we take to trial we can't convict.

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Somebody is responsible.

0:15:580:15:58

Somebody's responsible.

0:15:590:15:59

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

0:15:590:16:01

The court process has got to work.

0:16:010:16:03

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

0:16:030:16:07

I wonder the difficulty sometimes of corruption is that

0:16:070:16:09

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

0:16:090:16:13

take the time.

0:16:130:16:13

The common law system is grinding at a slow pace.

0:16:130:16:16

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

0:16:160:16:20

that had any suspicion, yank them into jail,

0:16:200:16:22

we have an opera in the world.

0:16:220:16:24

What's going on?

0:16:240:16:27

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

0:16:270:16:30

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

0:16:300:16:33

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

0:16:330:16:36

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

0:16:360:16:39

And put through the trial process.

0:16:390:16:41

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

0:16:410:16:44

you can do about that.

0:16:440:16:48

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

0:16:490:16:51

and that is the reshaping of the oil business.

0:16:510:16:54

You talked about diversification, and we can talk about taking

0:16:540:16:57

diversification way beyond oil to other sectors,

0:16:570:16:59

transportation, agriculture, etc.

0:16:590:16:59

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

0:16:590:17:03

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

0:17:030:17:05

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

0:17:050:17:09

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

0:17:090:17:12

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

0:17:120:17:15

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

0:17:150:17:18

than they've ever been before.

0:17:180:17:20

I mean, your industry is totally dysfunctional.

0:17:200:17:25

No, no, Steve not quite that.

0:17:250:17:29

Let me say this.

0:17:290:17:31

Yes, it is wrong.

0:17:310:17:35

We ought to process, rather than ship out crude.

0:17:350:17:37

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

0:17:370:17:41

including measures for working with investors to begin to reshape

0:17:410:17:44

the refineries that have been comatose for very many years.

0:17:440:17:46

And actually came...

0:17:470:17:49

Comatose?

0:17:490:17:50

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

0:17:500:17:53

refineries lying comatose?

0:17:530:17:54

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

0:17:540:17:57

The refineries went down before he came.

0:17:570:17:59

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

0:17:590:18:01

to begin to produce several million litres versus zero.

0:18:010:18:04

That's not the 90% complete.

0:18:040:18:05

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

0:18:050:18:07

an agreement to build a new refinery in Nigeria.

0:18:070:18:10

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

0:18:100:18:16

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

0:18:160:18:18

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

0:18:180:18:21

you say by 2020 we want to eliminate petroleum import.

0:18:210:18:24

Wonderful ambitions, but you give no sign

0:18:240:18:26

of being able to deliver.

0:18:260:18:27

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

0:18:270:18:31

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

0:18:310:18:34

First time in history.

0:18:340:18:35

I reshaped the organisation.

0:18:350:18:36

I removed cash deficits of over 6 billion, OK?

0:18:360:18:38

Everything I've promised I've delivered.

0:18:380:18:40

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

0:18:400:18:48

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

0:18:480:18:52

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

0:18:520:18:56

the president has been there for two years.

0:18:560:18:58

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

0:18:580:19:01

all the problems that happen in Nigeria in the past.

0:19:010:19:04

We'll solve the Niger Delta militancy problem.

0:19:040:19:06

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

0:19:060:19:09

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

0:19:090:19:12

When is Nigeria going to be self-sufficient in terms

0:19:120:19:15

of refined petroleum?

0:19:150:19:16

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

0:19:160:19:18

2019?

0:19:180:19:24

Yeah.

0:19:240:19:24

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

0:19:240:19:27

near right now.

0:19:270:19:28

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

0:19:280:19:31

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

0:19:310:19:33

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

0:19:330:19:35

That's called accountability, isn't it?

0:19:350:19:37

Yes, absolutely.

0:19:370:19:38

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

0:19:380:19:40

at the moment.

0:19:400:19:41

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

0:19:410:19:44

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

0:19:440:19:47

and his ability to impose his leadership on the Cabinet,

0:19:470:19:50

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

0:19:500:19:54

right now to knock heads together and deliver on the promises

0:19:540:19:57

of better government, economic diverse a vacation.

0:19:570:19:59

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

0:19:590:20:02

ability to lead.

0:20:030:20:07

He does possess that ability.

0:20:070:20:09

He also has his leadership qualities, he does have

0:20:090:20:11

the discipline, he's an incorruptible leader.

0:20:110:20:13

Those other that we need.

0:20:130:20:14

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

0:20:140:20:17

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

0:20:170:20:20

a perceptive leader.

0:20:200:20:21

And that's what we need.

0:20:210:20:22

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

0:20:220:20:26

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

0:20:260:20:29

going to work around that.

0:20:290:20:30

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

0:20:300:20:33

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

0:20:330:20:36

what you promised.

0:20:360:20:38

A significant anti-corruption organisation in Nigeria has looked

0:20:380:20:40

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

0:20:400:20:43

in your country.

0:20:430:20:43

They've asked a series of interesting questions,

0:20:430:20:45

I wonder if you can answer them for me.

0:20:450:20:48

One, why does - the Nigerian government budget asks -

0:20:480:20:50

need 11 different aircraft for ministerial use?

0:20:500:20:52

In a recession, just coming out of recession.

0:20:520:20:55

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

0:20:550:20:57

for ministers, ministers don't use aircraft.

0:20:570:20:59

We travel, we travel public.

0:20:590:21:00

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

0:21:000:21:03

up for sale.

0:21:030:21:04

I don't have quite the details.

0:21:040:21:05

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

0:21:050:21:08

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

0:21:080:21:11

conditions for usage.

0:21:110:21:12

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

0:21:120:21:16

to be sold.

0:21:160:21:22

In terms of numerical accountability, he has

0:21:220:21:23

reduced that substantially.

0:21:230:21:24

Ministers try to travel in business class by commercial airlines.

0:21:240:21:27

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

0:21:270:21:30

how can the government release 400 billion naira for capital

0:21:300:21:33

expenditure, giving no proper detail of how this money

0:21:330:21:35

is going to be spent?

0:21:350:21:40

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

0:21:400:21:43

going to be spent.

0:21:440:21:45

Budgets are just not resilient in the air.

0:21:450:21:47

There are specific ministries who provide details.

0:21:470:21:49

They are vetted and approved.

0:21:490:21:50

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

0:21:500:22:06

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

0:22:060:22:09

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

0:22:090:22:11

The whole idea was, given the deficit position

0:22:120:22:13

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

0:22:140:22:17

come out of it.

0:22:170:22:18

So a lot of capital expenditure has gone into construction.

0:22:180:22:21

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

0:22:210:22:23

pitch of all.

0:22:230:22:24

The tragedy of Nigeria.

0:22:240:22:25

Which is that while you focus on trying to reinvigorate

0:22:250:22:28

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

0:22:280:22:31

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

0:22:310:22:34

there are nearly half a million children in grave

0:22:340:22:36

danger of starvation.

0:22:360:22:37

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

0:22:370:22:40

Isn't that the ultimate condemnation of Nigeria today?

0:22:400:22:42

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

0:22:430:22:46

Steve, come on.

0:22:460:22:48

Are you going to say that the attacks in London

0:22:480:22:51

by terrorists is the fault of London?

0:22:510:22:52

No.

0:22:520:23:03

Boko Haram isn't the fault of Nigeria.

0:23:030:23:05

It's the happenstance we've found.

0:23:050:23:07

Buhari has been able to deal with it very effectively.

0:23:070:23:09

When he came into position, we had literally about 28

0:23:090:23:12

of our local governments in the hands of Boko Haram.

0:23:120:23:15

Today it's zero.

0:23:150:23:22

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

0:23:220:23:25

We need to do better.

0:23:250:23:26

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

0:23:270:23:29

we have a lot of international support, international assistance.

0:23:290:23:32

But clearly we inherited problems that were major,

0:23:320:23:34

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

0:23:340:23:37

imperatives, to deal with this issue than Buhari.

0:23:370:23:39

I think he's dealt with it effectively.

0:23:390:23:41

Innovate...

0:23:410:23:42

We have to end...

0:23:420:23:43

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

0:23:430:23:46

He's going to deliver on it?

0:23:460:23:48

Yes, he's working very hard at it.

0:23:480:23:50

Does anybody promised on 100% basis?

0:23:500:23:51

To eliminate militants or eliminate terrorism?

0:23:510:23:53

Nowhere in the world has that been achieved.

0:23:530:23:55

The key thing's that taken back the territories.

0:23:550:23:57

That is key.

0:23:570:23:58

That is the first control.

0:23:580:23:59

Now when somebody explodes a bomb somewhere you can't

0:23:590:24:02

prevent, potentially, yes.

0:24:020:24:03

We're going to keep working at that.

0:24:030:24:05

We have to end there.

0:24:050:24:06

Emmanuel Ibe Kachikwu, thank you very much.

0:24:060:24:08

Thank you very much.

0:24:080:24:09

For being on HARDtalk.

0:24:090:24:10

Thank you.

0:24:100:24:25

Hello there.

0:24:390:24:41

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

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and that warming trend is set to continue through much

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