US embassy cable - 02ABUJA3390

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