Nigeria's Privatization Czar Plans to Bow Out

C O N F I D E N T I A L ABUJA 003390

SIPDIS


E.O. 12958: DECL:12/16/2012
TAGS: PGOV ECON EFIN NI
SUBJECT: Nigeria's Privatization Czar Plans to Bow Out


CLASSIFIED BY CDA ANDREWS. REASON: 1.5 (D).



1. (C) Summary: Nasir El-Rufai, Director-General of the
Bureau for Public Enterprises, Nigeria's agency for the
privatization of state-owned firms, told the Ambassador and
DCM on separate occasions that he plans to resign early
next year and return to the private sector. El-Rufai said
that President Obasanjo lack of commitment to economic
reform was the principal reason. El-Rufai also shared a
copy of a development plan for the Nigerian economy he
prepared for Vice-President Abubakar and hinted that he
might return to government service if a new government were
serious about economic reform. End Summary.



2. (C) In separate conversations with the Ambassador and
DCM in December, El-Rufai said he had offered his
resignation to Vice President Atiku Abubakar and intended
to leave in February 2003. El-Rufai said Abubakar was
astonished and asked, "What will you do?" "Before I came
to BPE, Sir, I had another life in the private sector, and
I intend to return to it," El-Rufai told Atiku. However,
El-Rufai continued, he was very interested in spending some
time, perhaps six months, in an academic setting in the
United States. Doing so would allow him to re-emerge in
the private sector more quietly than if he went directly
from BPE into business.



3. (C) El-Rufai said the VP (chair of the National Council
on Privatization, the policy-making body that oversees BPE)
had pressed for further information on why he wanted to
return to the private sector. El-Rufai responded that
President Obasanjo's commitment to privatization and
greater transparency had collapsed under the pressures of
politics. Trying too hard to please those who could never
be placated, Obasanjo was sacrificing the precepts of a
sensible economic agenda in the interest of getting re-
elected. Once lost in the current electoral cycle, the
momentum behind economic reform would not be readily
restored



4. (C) El-Rufai said he told Abubakar that Nigerian
leaders, when they finally get around to economic issues,
become fixated on grandiose development projects and do not
devote sufficient thought to formulating a sound economic
vision for the country. He went on to say that, as a result
of this imbalance, the country now faces its worst fiscal
crisis since independence. That fiscal crisis, and the
overall economic malaise of which it is symptomatic, was
the root cause of recent violence in Kaduna, according to
El-Rufai. "The riots were not about the Miss World
Pageant," he said, "They were about economics."



5. (C) El-Rufai reports one part of the political
compromise to keep Abubakar on Obasanjo ticket as VP for
the 2003 election was Obasanjo pledge to let Abubakar run
the economy during the next term. With that in mind, he
says Abubakar asked him to prepare a blueprint for
Nigeria's economic growth. El-Rufai said he had told
Abubakar that a re-elected Obasanjo would be too chastened
to re-start the process, and any other winner (including
Abubakar) would likely do no better. Nigerian politicians,
El-Rufai said, were simply too preoccupied by the politics
of dividing the pie to think about the policies required to
make the pie bigger.



6. (C) Nonetheless, he prepared an economic plan for the
VP, "Breaking the Vicious Circle: An Agenda for the Reform
of the Nigerian Economy for the Twenty First Century." The
plan focuses on better management of government resources,
the need for improved regulation of the economy, and the
development of human capital -- all with a view toward
increasing the role of the private sector in the economy.
(Note: A copy of El-Rufai plan will be forwarded to AF/W.
End Note.)



7. (C) In addition, El-Rufai left open the possibility of
returning to government after a stint in academia, but not
until well after the upcoming elections, so that he could
judge from a distance whether commitment to true economic
reform was present. He was hopeful that Abubakar might
broker a ministerial position for him if Obasanjo were re-
elected. However, he emphasized he would only take such a
position if there were a real opportunity to implement the
reforms needed to put the Nigerian economy on track.



8. (C) Comment: El-Rufai represents the next generation of
economic leadership in Nigeria. His development plan is the
best concise articulation of how to fix what is wrong with
the Nigerian economy. We are hopeful that the next
President will reward his vision with a ministerial
position, but due to El-Rufai's frankness and relative
insensitivity to political considerations we think it more
likely that he will be offered a less-political job. End
Comment.
ANDREWS