For partaking in suspicious foreign exchange transactions, Nigeria has in the last few weeks incurred the wrath of South Africa. The latest is about a $5.7 million arms deal, which the Office of the National Security Adviser (NSA) insists is a legal transaction. The reaction of the NSA throws up issues that remind many of the sweet-sour relationship between the two nations, writes OLUKOREDE YISHAU
Walk the streets of Lagos, Abuja and other big cities and towns in Nigeria and chances are that on two of ten houses will hang a satellite dish with the inscription ‘DSTV’. Ask two in 10 Nigerians what GSM service provider they are hooked on to; the probability is that they will say MTN. These two companies are of South African origin. It is believed they make more money in Nigeria than anywhere else in the world. National Security Adviser (NSA) Col. Sambo Dasuki made reference to what these two companies and, by extension, South Africa, have gained from Nigeria in his reaction to the country’s seizure of $5.7million arms’ cash deposited in a bank.
The South African authorities seized the money on the basis that the transaction was illegal. This was the second in less than one month. The first was $9.3 million – stashed in several suitcases and airlifted through the Lanseria Airport, north of Johannesburg, in September.
The latest seizure made public on Monday was done by the country’s Asset Forfeiture Unit of the National Prosecuting Authority. The money was frozen for allegedly being the proceeds of illegal transactions.
A South African newspaper Rapport reported that it gathered that the deal was approved by the Federal Government. The NSA issued the end-user certificate for the transaction. It was meant for the supply of helicopters, unmanned aircraft, rockets and ammunition.
The transaction was between Cerberus Risk Solutions, an arms broker in Cape Town, and Societe D’Equipments Internationaux, a Nigerian company based in Abuja. Societe paid R60m into Cerberus’ account at Standard Bank.
“Cerberus was previously registered as a broker with the National Conventional Arms Control Committee, but the registration expired in May this year. The marketing and contracting permits also expired at the same time,” reports City Press.
Col. Dasuki’s reaction to the latest seizure depicted some anger. First, he said there was nothing illegal about the deal and wondered why the money should be seized. He reminded South Africa of how Nigeria has provided a beneficial environment for MTN, DSTV and a host of other South African businesses to thrive unhindered.
His words: “It is our hope that South Africa would reciprocate this noble gesture. We want to state clearly that a business transaction actually took place between a legitimate company in Nigeria and another legitimate one in South Africa through the bank.
“In the course of events, the South African company could not perform and decided to refund the money. What is illegitimate in this transaction done through the bank?”
The NSA obviously had his eyes on MTN’s profits when he made the veiled threat. MTN Nigeria reported revenues of N793.614 billion in the 2013 business year. The amount was a 5.31 per cent rise from the N753.578 billion recorded in 2012 and 4.70 per cent above revenues posted in 2011.
Since inception in 2001, MTN has paid N1.23 trillion or $7.07 billion to governments in taxes and other levies.
A breakdown of some of the payments shows that in the 12 years to December 2013, MTN paid company income tax of N330.235 billion to the Federal Inland Revenue Service; N224.439 billion in Value Added Tax (VAT); N191.087 billion as withholding tax, and N44.845 billion as education tax.
In a statement earlier in the year, MTN Group, which operates in 22 countries, said revenues in Nigeria rose 24.5 per cent. It added that South Africa and Nigeria are the largest contributors to its income. The two countries accounted for 77.9 percent of data revenue growth.
DSTV, which enjoys a near monopoly in the pay-Tv sector, also enjoys huge patronage in Nigeria. Save competition from StarTimes and CONSAT, which is relatively new, DSTV has a cashcow in Nigeria.
Col. Dasuki’s call on South Africa, coming on the heel of the first seizure, will only appeal to a few. Not many Nigerians will be willing to take sides with the Federal Government, given the fact that no satisfactory answer has been given for the cash earlier seized. Unlike now when the NSA issued a statement, it was only through the grapevine that Nigerians got to know that the cash belonged to the Federal Government.
The All Progressives Congress (APC) said it was embrassing the $5.5m seizure came at a time the circumstances surrounding the seizure of $9.3 million were still hazy. The party slammed the Federal Government for issuing “childish and immature threats against South Africa threatening its investments in the country, instead of addressing the pertinent questions surrounding the illegal arms procurement deals”.
It said: “Mr. President, you cannot threaten another country when your administration is willfully breaking the laws of that country. In this case, your administration stands on a weak moral ground, as its hands have been caught in the cookie jar. Therefore, issuing infantile threats is laughable, unacceptable and wrong.
“Mr. President, if the funds involved in the latest seizure were sent through bank transfer, can the government explain why Oritsejafor’s plane was stuffed with cash and transported to South Africa? Can your administration’s embarrassing explanation that it is customary for other country’s security agencies, including with MOSSAD, KGB and CIA, to cart plane loads of cash across the world to purchase black market weapons hold any more water now? These are some of the questions Nigerians are asking, not an untenable spin by untruthful government officials,” the party said.
Senior lawyers, who spoke with The Nation yesterday, described the latest seizure as shameful.
Former Nigerian Bar Association (NBA) President Oluwarotimi Akeredolu (SAN), activist-lawyer Festus Keyamo, former NBA Ikeja Branch chairman Monday Ubani, Constitutional lawyer Ike Ofuokwu, and Lagos lawyer Ike Ibe called for the prosecution of all those involved in the shady deals.
Akeredolu said the government’s admission of being involved in what he called cross border crime is an indictment of the current leadership.
Keyamo said the cash seizures are not only embarrassing, but are a disgrace to the country.
“These transactions are highly suspicious; they smack of illegality, and it is embarrassing and very shameful that the Federal Government can be linked one way or the other to these shady deals.”
Ubani urged Nigeria to unite and ensure the matter is not swept under the carpet.
This is not the first time the country and South Africa are having a spat, but unlike in the past when many Nigerians took sides with the government, the government may have to do this battle alone.
Many Nigerians will easily recollect the 2012 spat over the deportation of 125 Nigerians from Johannesburg over vaccination. The then Foreign Minister Olugbenga Ashiru said the deportations represented something more than a vaccination concern. Ashiru said it represented the ongoing “xenophobia” faced by Nigerian immigrants living in South Africa who face rampaging police who arrest them without cause.
The country followed up by reciprocating the gesture with the deportation of South Africans. It only ended when South Africa apologised to Nigeria. The current situation, however, is a different one, meaning South Africa may not apologise and with Nigerians not with their government on this case, it is to your tent o’Israel for the Federal Government.
