Uganda Rural Community Support USA

The disarmament, demobilisation and reintegration into society of
the estimated 45,000 ex-combatants in Sierra Leone has taken longer than
originally envisaged, partly because of logistical problems, fear and mistrust,
government and UN sources say.

However, efforts to encourage former fighters to disarm, the deployment of
UN peacekeepers along with moves to increase their strength, and financial
support from the international community are expected to speed up the process.

Under the terms of the peace agreement the government and the rebel
Revolutionary United Front (RUF) signed on 7 July 1999 in Lome, the
disarmament, demobilisation and reintegration (DDR) programme was to start
within 6 weeks (ie by 18 August) but it was not officially launched until 20
October.

At the launch, the deadline set for the end of the disarmament phase was 15
December. However, as at 23 January only about 13,100 ex-combatants had been
disarmed, according to the National Committee for Disarmament, Demobilisation
and Reintegration (NCDDR), the government body responsible for managing the DDR
process.

This figure includes 3,804 “loyal Sierra Leone Army (SLA)”, a term which, an
NCDDR source told IRIN, “refers to those who fought alongside ECOMOG up until
the time that the Lome Agreement was signed”.

It also includes 1,414 “Phase One” ex-combatants - people disarmed and
demobilised before the programme was officially launched. These are mainly SLA
soldiers who served under the Armed Forces Revolutionary Council (AFRC) junta
that overthrew President Ahmad Tejan Kabbah in May 1997, but who surrendered
when troops from ECOMOG - Economic Community of West African States (ECOWAS)
Peace Monitoring Group - restored Kabbah to power in February 1998.

In addition, over 5,000 weapons and 63,000 rounds of ammunition had been
collected, NCDDR said.

Division of responsibilities

To date, ECOMOG’s responsibilities have included the provision of security
at the DDR sites and the disarming of ex-combatants at the sites - witnessed by
the UN Mission in Sierra Leone (UNAMSIL). ECOMOG also guards the weapons and
ammunition retrieved during the disarmament process and helps to destroy them.

ECOWAS decided to repatriate its peacekeepers but later suspended their
withdrawal. UNAMSIL will eventually take over ECOMOG’s tasks providing the UN
Security Council approves UN Secretary-General Kofi Annan’s proposal to
increase the number of UN peacekeepers from 6,000 to 11,100.

The NCDDR, assisted by the World Bank, is responsible for managing the
demobilisation camps, which includes determining policy and administration. The
physical infrastructure of the camps is maintained by the Emergency Response
Team (ERT), which is funded by the British Department for International
Development. “ERT is responsible for the provision of water, sanitation, food,
shelter and health care,” Gillian MacLean, first secretary for development at
the British High Commission in Freetown, told IRIN.

Reasons for the delay

Logistical problems are among the reasons for the delay in the DDR
programme, according to government, UN and ECOMOG sources.

“We located the demobilisation camps on the front line in areas which were
previously inaccessible,” NCDDR Executive Secretary Francis Kaikai told IRIN,
“and we did not know troop strengths in these locations.” He said the various
armed groups - the Civil Defence Force (pro-government militias), the RUF and
the ex-SLA/AFRC - had still not said exactly what their military strength was,
which meant that the figure of 45,000 remained an estimate.

Demobilisation camps have been established at Lungi, just outside Freetown,
at Kenema and Daru in the east, and at Port Loko, some 60 km north of the
capital.

In a report dated 11 January, UN Secretary-General Kofi Annan said: “The
discharge of ex-combatants from the camps has been delayed as a result of
logistical problems, including the preparation of identification cards” This
delay creates problems as the two demobilisation camps at Port Loko are already
congested, according to Lieutenant Colonel Chris Olukolade, ECOMOG’s spokesman
in Sierra Leone.

“We cannot tell newly-arrived ex-combatants to go back to the bush,”
Olukolade told IRIN, “but we also do not like to have them hanging around for
too long for security reasons.”

Alimamy Koroma, general secretary of the Council of Churches in Sierra
Leone, told IRIN: “I have heard reports of people in the bush who want to come
into the camps at Port Loko but are unable to do so because the camps are
saturated.” Kaikai told IRIN on 25 January: “We are trying to transfer some of
the ex-combatants to Lungi but we are having difficulties convincing them to
move.”

The ex-combatants can stay in the demobilisation camps for any time period
between 3 weeks and 3 months, according to MacLean. “The registration process
usually takes about a week and the ex-combatants also have to go through the
pre-discharge training which takes two weeks,” MacLean told IRIN. “After that
they are free to go but some are reluctant to do so as they come from insecure
areas.”

Nevertheless, the UN Humanitarian Assistance Coordination Unit (HACU) noted
in a 5-16 January report that the number of discharged ex-combatants in Port
Loko District was on a “slow, steady rise”.

HACU also reported that in the Kabala area in the far north of the country,
hundreds of armed RUF and ex-SLA/AFRC were harassing civilians and creating a
very insecure environment. “It is critical that the DDR process be extended to
Kabala as soon as possible,” HACU said.

Holding back because of fear and mistrust

Mistrust between the different armed groups has also been a cause of delay,
according to Kaikai. He cited differences between the ex-SLA/AFRC, who have a
base in the Occra Hills, north of Freetown, and the RUF in Lunsar, northeast of
the capital. He also mentioned mistrust between the RUF and the CDF in the
east. A diplomatic source in Freetown told IRIN “the RUF are unhappy that some
of the loyal SLA have not yet been disarmed and are still providing security in
some parts of the north, particularly Kambia and Kabala”.

Apprehension over their future is cited as another reason why some ex-
combatants are reluctant to enter the DDR programme. “Some have committed the
most unspeakable atrocities and they are not convinced that they will be
forgiven if they turn themselves in,” Kaikai told IRIN.

Peter Hain, minister of state in the British Foreign and Commonwealth
Office, said in Freetown on 13 January that efforts needed to be made to
explain the DDR programme to both ex-combatants and the communities to which
they were to return.

“We must explain that DDR is a lifeline,” Hain said. “It gives former
combatants the chance to turn away from violence for ever; the chance of food
and shelter From to reestablish themselves in civilian life, and to learn a
trade, so that they might put something back into the communities they have
helped to destroy.”

In addition, more needs to be done to reassure former combatants that the
needs of their families will be met, according to Florian Fichtel, who
represents the World Bank in Freetown. Fichtel told IRIN this was a concern
commonly expressed by ex-combatants and that while some families were being
looked after in the Port Loko camps, in other areas they were not.

Renewed sensitisation drive

In the past month the campaign to sensitise former fighters to the DDR
programme has intensified. In early January a sensitisation team including
Sankoh, Deputy Defence Minister Hinga Norman and Major General Gabriel Kpamber,
ECOMOG’s force commander, urged ex-combatants in the eastern towns of Bo,
Kenema and Tongo Field to hand in their weapons.

Norman also heads the Kamajor militia - the main force in the CDF - and is
credited with transforming it from a group of traditional hunters into the
effective fighting force that rose to Kabbah’s defence after he was ousted by
the AFRC. The towns of Bo and Kenema, which were never captured by the RUF, are
Kamajor strongholds.

“The Kamajors have been reluctant to disarm at the Kenema DDR site, mainly
through mistrust,” a political analyst in Freetown told IRIN. “The appearance
of Hinga Norman and Foday Sankoh side by side should bolster their confidence.”

On 15 January, a team including Sankoh, Kpamber, the government minister for
the Eastern Region and journalists went to the diamond-rich Kono district, some
250 km east of Freetown, to continue the sensitisation process. This was the
first time Sankoh had appeared in Kono with ECOMOG and government
representatives, something many saw as symbolically important in an area which
has frequently changed hands since the start of the rebel war in 1991, even
though it has been under RUF control since 1998.

Bockarie no longer an excuse

Sankoh’s dismissal of his former right hand man, Sam Bockarie, and
Bockarie’s departure for Liberia on 18 December should also boost the DDR
programme.

Bockarie openly defied Sankoh by refusing to disarm to ECOMOG or Nigerian
soldiers and reportedly detained two MSF staff members for a week at the
beginning of December, apparently to register his dissatisfaction.

According to Annan the situation in the eastern area of Kailahun, Bockarie’s
former zone of operations, has calmed down since his departure and most RUF
commanders in the area - and in the north - have reaffirmed their commitment to
Sankoh. “The pressure is now on the RUF in the east to demobilise,” a source
with close links to the area told IRIN. Another source added: “Bockarie can no
longer be used as an excuse.”

Asked on 27 January why RUF members were not going into the DDR camp in Daru
- southwest of Kailahun - Sankoh told IRIN that the “necessary structures” were
not there. “There are no ceasefire committees and no logistics,” he added.

Increased donor support

The international community, which has long advocated the importance of DDR
to peace, is providing increased financial support. In December the World Bank
approved a US $25-million credit for a Community Reintegration and
Rehabilitation Project in Sierra Leone. Of this amount, about US $8 million
will go to DDR.

“This will finance training and employment programmes for ex-combatants, the
provision of technical assistance and the operational costs of the government’s
DDR programme,” Fichtel told IRIN in mid-January. “The project will be
effective by the end of January or beginning of February.”

A World Bank-administered multi-donor trust fund in support of the
government’s DDR programme now has US $12 million in firm pledges and cash.
Britain is the highest contributor - US $5.6 million - while Norway, Germany
and Canada have also contributed, Fichtel said. Italy and the Netherlands have
made pledges, he added.

UNAMSIL deployment speeds up process

The arrival of more than 4,500 UNAMSIL troops in Sierra Leone and their
deployment in much of the country has helped to restore “public calm”, Annan
said. It will also enable UNAMSIL to execute a key part of its mandate: helping
the government to carry out its DDR plan.

“Now that we are a proper force we will be stepping up the drive to create
more demobilisation camps,” UNAMSIL’s Force Commander, Major General Jetley,
told IRIN. “We hope that the demobilisation camps at Makeni and Magburaka (both
northeast of Freetown) will be established within a month.”

Jetley also told IRIN that while UNAMSIL faced logistical and equipment
constraints in some areas, that would not hinder its efforts with regard to the
DDR programme.

One of the UN Security Council’s preoccupations in December, according to
its then president, Jeremy Greenstock, was the need to avoid a possible
“security vacuum” if ECOMOG’s withdrawal was completed before an expanded
UNAMSIL was fully deployed. However, Olukolade rejected this possibility. He
told IRIN he believed the disarmament of ex-combatants would be “substantially
accomplished” before ECOMOG left Sierra Leone. “The problems are exaggerated,”
he told IRIN. “We are highly optimistic that the programme will succeed.”

DDR good for humanitarian aid

Successful completion of the DDR programme will have enormous benefits for
the delivery of humanitarian assistance to populations in need.

The joint implementation committee of the Lome Peace Agreement said on 24
January that illegal roadblocks mounted by suspected ex-combatants had
prevented aid agencies from gaining access to vulnerable populations. “The
successful implementation of the DDR programme will help to remove these
impediments and thereby ensure that relief is provided more efficiently and
quickly to war-affected populations,” a relief worker told IRIN.

Andrew Cox of the UN Office for the Coordination of Humanitarian Affairs in
Sierra Leone, gave an example of how successful disarmament and demobilisation
benefit relief programmes.

“Lunsar used to be an RUF base and it is now no longer there,” the HACU
humanitarian affairs officer told IRIN. “We used to pass through more than ten
RUF checkpoints on the road from Lunsar to Makeni. Now there are only two
checkpoints left, closer to Makeni town. This facilitates the delivery of
humanitarian assistance.”

This item is delivered by the UN’s IRIN humanitarian information unit (e-
mail: irin@ocha.unon.org; fax: +254 2 622129; Web:
http://www.reliefweb.int/IRIN), but may not necessarily reflect the views of
the United Nations. If you re-print, copy, archive or re-post this item, please
retain this credit and disclaimer.

26 paramount chiefs from all parts of the country are to begin a
three week tour of Guinea starting Thursday. The delegation would be led by P.C
Samuel Momoh Soluku of Toli Chiefdom in Kono district.

Organised by DFID, the paramount chiefs are to be receive by Ambassador S.B.
Saccoh and Watertight Guinea Security will be accorded the delegation
throughout their stay.

The team of paramount chiefs is to tour Guinea especially refugee camps
where Sierra Leoneans are found in order to explain the Lome Peace Accord to
Sierra Leonean refugees.

Among the places that the delegation will visit include Faranah,
Kissidougou, Nogowa, Massadou, Forecariah and Nyindou.

It is estimated that there are about 800,000 Sierra Leonean refugees in
Guinea and this trip by paramount chiefs is speculated to pave the way for
their return.

Most refugees however insisted that they will only return home after
disarmament.

After fasting for 30 days, the Muslim Community has been asked to
repeat the month of fasting. Mohamed Fajah Barrie of Concord Times who recently
observed the fasting from December 9 to January 7 says that he would never
repeat the month of fasting “It is against the laws of Islam” Mohamed
reiterated.

The call for Sierra Leone Muslims to fast for another month is said to have
originated form Sanda where an angel recently appeared top a woman in the form
of a snake.

Reports say the woman who was terrified took her hills but was stopped by
the “angel”. “Don’t run away, I have a message for the people of Sierra Leone.”

Makeni youth Brima Jalloh (BJ) told Concord Times that he will not repeat
the month whether an angel instructs or not.

According to sources form Sanda, the angel said that the very difficult
circumstance in which thee month of fasting was observed made it almost
impossible for most Sierra Leoneans to observe it according to the teachings of
Islam.

In what clearly is a bigious story, the angel also told the woman to inform
the people of Sierra Leone to make sacrifices by cooking food and eating it
themselves after offering prayers for peace.

Kono youth Sahr Komba Sansie describe the episode as the work of a devil.
“Na lie lie angel appear to da woman” Komba said.

In some parts of Sanda, the sacrifices has been observed but with regards to
the repeating of the month of fasting, there is a loud silence over it
observers.

It could be recalled that during the heat of the war many money-eating
prophets emerged with all sorts of false promises about the end of the war.

“If that angel really means business, let him appear to president Tejan
Kabbah and pass on his message ” commented a devoted muslim youth Osman Benk
Sankoh.

The Minister of Education, Youths and Sports, Dr. Alpha Wurie,
has formerly launched the Young Gbinti Descendants’ Union. Speaking during the
launching ceremony at the British Council, the Minister admonished the people
to be united, adding that the people of Gbinti have a strong tradition of peace
and unity, which has been completely shattered by the rebel war.

Amidst thunderous applause he said in spite of its devastation, “Gbinti must
rise again. It only requires fortitude and determination, we can rebuild the
town,” he emphasised.

Earlier, the Chief of the Young Gbinti Union, Mr. Failu Dainkeh, gave a
short account of the achievements of the Union, which was formed six months ago
and the Secretary General Serray M.O. Jarr highlighted the Mission statement.

Mr. M.L. Sidique launched the rehabilitation and development fund.

Local residents of Bonthe Island are disgruntled with Ministers
in the Tejan Kabbah’s government of national unity, Concord Times can
authoritatively reveal. The residents say that Ministers have virtually
abandoned their district.

“But we know that they would remember the people of Bonthe come next
elections,” a 32-year old woman said.

Government officials in the town are making efforts to calm down Bonthe
Island people who have already resolved not to vote for any Minister who they
consider as having abandoned them.

During his last Wednesday unofficial visit to Bonthe, locals reportedly
refused to welcome the Resident Minister -South, Foday Sesay, on grounds that
he had not visited his own home town for several months.

“I have never seen Foday Sesay in Bonthe since he was made Minister,” said a
fisherman Albert Kaindoneh, adding, ” we have been fooled for too long by
Ministers. This time we will not allow politicians to misuse us”.

Bonthe born Alfred Youngkay Kargbou said that in addition to a feeling of
disappointment that has gripped the people of Bonthe, they are warning
politicians to handle leadership with care.

The cry of Ministers abandoning their people has also come from other parts
of the country including Pujehun.

This is one reason why the electorates have said that they do not want the
Proportional Representation System for next parliamentary elections.

Government had also stated that constituency election would replace the PR
system.

The World Bank yesterday approved a credit of US$28.5 million to
support an ongoing decentralization effort by the Senegalese government. The
National Rural Infrastructure Project (NRIP) will reinforce the capacity of
rural local governments to deliver public services to their populations on a
sustainable basis.

The program will support the ongoing administrative and fiscal
decentralization process, strengthen the capacity of communities and their
governments to prioritize, plan, implement and maintain community-based
infrastructure, and provide funding to local governments for rural
infrastructure and services. Funds will be transferred directly to local
communities which will have the responsibility for their proper use.

“The central objective of this project is to contribute to revitalizing the
rural economy, reducing rural poverty and improving the living conditions of
rural populations in Senegal,” said Mahmood Ayub, Country Director for Senegal.

The project will have four components:

* Support for decentralized rural development, including reforms of the rural
fiscal and financial management system, and strengthening the monitoring,
evaluation and analytical capacity of local governments;

* A local investment fund that will serve as the mechanism for transferring
financial resources to local governments to fund public infrastructure micro-
projects identified in local development plans;

* A community roads program that will contribute to improvements of access
roads in some 60 Rural Communities, pilot community roads management and
maintenance mechanisms, and provide support to the Department of Rural
Engineering in the Ministry of Agriculture;

* Support for project coordination and financial management and the
establishment of a system for monitoring and evaluation of the project.

Susanne Holste of the project team pointed out that “the project will help
improve local governance and financial management as well as, strengthen and
operationalize the national framework for administrative and fiscal
decentralization. The project will also improve the community road network and
pilot rural mobility initiatives.”

She also pointed out that “this is the first Bank project in Senegal that
would incorporate the Bank’s strategy for fighting HIV/AIDS and give communities
the opportunity to provide community care and prevention at the local level.”

The National Rural Infrastructure Project will be financed by a US$28.5
million equivalent credit from the International Development Association (IDA),
the World Bank’s lending arm for the poorest countries. The IDA credit is on
standard terms of 40 years maturity, including 10 years grace.

To obtain project documents please contact the World Bank’s Infoshop at tel:
(202) 458-5454, fax: (202) 522-1500, email: pic@worldbank.org

Media Contacts: Sharon Cox (202) 473-2035 (Washington) Sambagor Gueye (221)
233 630 (Senegal) Operational Contacts: Susanne Holste (202) 473 2128

For over two months now, the Nigerian up per legislative arm, the
Senate, has se curely locked the year 2000 Appropriation Bill in its cabinet
in Abuja. The action, the legislators claimed, was in protest against President
Olusegun Obasanjo’s noncompliance with the spirit of the 1999 Supplementary
Appropriation Bill.

“If there were two Supplementary Bills, it will be irresponsible for us to
pass them without proper scrutiny,” says Senate President, Chief Chuba
Okadigbo, who insisted that legislators would not “trade our people for a mess
of porridge. We shall take good care of their interest.”

The delay in passing the bill, many believe, will render all the lofty
economic and social programmes in the Federal budget useless. Relying on
Section 82 of the 1999 Constitution which empowers him to draw from the
treasury up to six months but not exceeding the approved figure for the
previous year, in anticipation of the National Assembly approval, Obasanjo
warned last week that if the document was not approved, he would commence its
implementation from February.

Although, the senate backed down on its hardstance on the year 2000
Appropriation Bill with the commencement of the second reading last week,
experts are in agreement that the legislators, action so far has only succeeded
in holding the economy hostage. According to Mr. Dayo Lawuyi, Managing
Director, Dunlop Nigeria PLC, if it took months for legislators to pass a
budget, the essence of whatever caution they are taking may be of little value.
To him, the delay would manifest during the implementation of both the fiscal
and monetary policies which will also have implications for the operations and
performance of the manufacturing sector and indeed the economy at large.

Sam Obaze, Equity Bank chief executive agrees with Lawuyi. To him, the delay
is unhealthy, especially as the ailing economy needs special attention at this
time. He believes that the delay “could have been avoided if the legislators
were as responsible enough as the executive”. The economy, he predicted, may
not perform too well because of the delay since it will not operate for the
mandatory 12 full months. “It is therefore certain that it will not perform as
well as an economy that has operated for 12 full months,” he averred.

The same position was canvassed by Mr. Lawrence Adekunle, Director General,
National Association of Chambers of Commerce, Industries, Mines and Agriculture
(NACCIMA). In his opinion, the delay would create a lot of uncertainties as
nobody is sure of the direction of the economy. “The delay is too bad as it
sends wrong signal to all other economic factors. It is even worse for an
ailing economy like Nigeria’s. It does not make room for proper planning in the
private sector, he said. While noting that the legislators might not have
deliberately wanted to strangulate the economy, he added that the delay could
not vindicate them.

Engineer Hassan Wehbe, Foam Manufacturers Group Chairman of the
Manufacturers Association of Nigeria (MAN), however, believes that the delay
could have both positive and negative recovery process as critical expenditure
and total commercial volumes may be whittled down because of uncertainties
associated with budget delay. But he was quick to stress that the delay could
afford everyone the opportunity to reappraise the budget, an exercise which may
be beneficial on the long run.

In spite of the public criticism, majority of the legislators did not agree
with the belief that the decision not to pass the bill would draw back the
economy. Honourable Chidi Duru, House of Representatives’, chairman on
privatisation and commercialisation and Senator Udo Udoma, captured their
colleagues’ perception of the whole drama. To them, rather than hold the
economy to ransom, its eventual adoption of the bill will bring a new lease of
life to all Nigerians. ‘The approved budget, ‘give and take, should be ready by
the end of February. But Nigerians must be reassured that the lack of passage
of the budget now will not hold the country to ransom,” Duru said.

Publication date: February 7, 2000

In December 1999, at a seminar organised by the Nigerian
Philosophical Association and the Goethe Institute at the University of Lagos,
the guest speaker, Professor Karl-Siergbert Rehberg said that Nigeria’s
economic development depended on the formulation of new initiatives and
structures to improve economic performance and enhance the performance of small
enterprises. Rehberg’s statement is instructive, the more so as Small and
Medium Scale Enterprises, SMEs, have been identified as the pivot of economic
activities in any nation.

The hypothesis holds worldwide. Developed economies in Europe and North
America sufficiently used SMEs as the springboard of international trade. The
result is that SMEs have been supporting their cities by providing jobs for
inhabitants. For example, Japan’s industrial strength was built on SMEs which
employ 37.2 million workers or 81.4 per cent of the total manufacturing value-
added. In China, 60 per cent of the total output of fertilisers and another 57
per cent of the total cement output are produced by the small-scale industrial
sub-sector. Again, in the United Kingdom Canada, Italy, South Korea and
Indonesia, SMEs account for a greater percentage of jobs.

However, in Nigeria, the reverse is the case. The small-scale industrial
sub-sector is yet to be developed and its advantages yet to be tapped by the
government and the citizenry. As undeveloped as SMEs are in Nigeria, over 70
per cent of the productive activities in the country are attributable to the
sub-sector that equally provides a corresponding high percentage of employment
in the economy.

Definitely, the problem is not that of indifference of government or the
organised private sector, OPS, to the development of the sub-sector.

Over the years, the OPS, has spoken glowingly of the sub-sector’s power to
move the economy forward. Government, on its part, has rolled out policies and
set up financial institutions to fund SMEs. As far back as 1964, the Federal
Government established the Nigerian Industrial Development Bank, NIDB, to
provide soft loans to industrial enterprises including SMEs. The bank’s
assistance to the small and medium scale industries cover 17 sub-sectors as its
loan disbursements between 1980 and 1988 totalled N174.6 million with the
largest allocation of N25 million or 14 per cent of total granted to the
chemical and petrochemical sub-sector.

In 1973, the Nigerian Bank for Commerce and Industry, NBCI, was set up to
fund SMEs, grant credit from funds received from the Federal Government and
administer the Federal Ministry of Industries Special fund for small scale
enterprises. As at the end of 1989, NBCI had approved 760 SMEs projects valued
at N878.6 million. Between 1981 and 1988, it disbursed N142 million or about 37
per cent of what was approved. The difference between approvals and
disbursement was mainly due to the inability of SMEs to meet the minimum
prepayment requirements for loan disbursements. In spite of that, the bank
still approved 805 investment projects in 1990, 15.1 per cent higher than the
previous year’s approval. Thus, the institution’s loan and equity disbursements
totalled N87.7 million in 1990, representing a 65.2 per cent rise when compared
with the amount disbursed the preceding year.

Government, in a bid to enhance the spread and efficiency of SMEs,
established some specialised credit schemes. They include the World Bank-
assisted scheme; Export Stimulation Loan Scheme, ESL; Rediscounting and
Refinancing Facility, RRF and the National Economic Reconstruction Fund,
NERFUND, set up vide Decree 2 of 1989 to act as a catalyst for the spontaneous
rise of small and medium scale real production enterprise. Between 1989 and
1997, approval had been given to over 240 manufacturing projects with a total
investment outlay of $93.77 million.

By March 1997, a total of $107.3 million had been given as loans through the
World Bank assisted SMEs projects. The loans were to be repaid at the pre-
autonomous foreign exchange market rate of N22 to a dollar. Aggregate external
lending to SMEs over the years till March 1997 amounted to $1.58 billion, with
World Bank loans accounting for $270 million while African Development Bank,
ADB, loans totalled $106.5 million, just as NERFUND loans amounted to $187.67
million.

By their nature, SMEs are not too capital intensive. For small scale
enterprises, net asset is usually in the region of N250,000 while annual turn
over is about N500,000. A medium scale enterprise, on the other hand, would
usually have net assets of about N1 million and an annual turnover of N2
million. In order to assist the financing of SMEs, therefore, the Nigerian
Stock Exchange, NSE, introduced the Second-Tier Securities Market, SSM in 1984
with less stringent listing requirements that encouraged SMEs to take advantage
of the capital market to expand the scope of fund generation and spread the
attendant risks.

Over the years, however, the number of listed SMEs has dropped even as
unlisted SMEs too have continued to bite the dust.

Other developing nations like India did not spend as much on SMEs as Nigeria
before achieving results. In the opinion of the managing director of Afribank
(Nigeria) PLC, Chief Raymond H. Ihyembe, any attempt at running away from
resolving the problem of SMEs is like postponing the evil day. Reason: SMEs are
central to the project of poverty alleviation in the country. The President of
Manufacturers Association of Nigeria, MAN, Chief Rufus Giwa also shared
Ihyembe’s fears. According to Giwa, only virile SMEs can make for “healthy and
balanced industrial development”, in Nigeria.

The chairman of the National Association of Small Scale Industrialists,
NASSI, Lagos Branch Mr. Kayode OkanRende told The News Business last week that
inclement business environment, inconsistency of government policies; poor
implementation and non-patronage of SMEs by government are some of the problems
of SMEs. According to him, there is more to assisting SMEs than just voting
money for the sub-sector, as done by government, adding that most of the
financial assistance ever provided for SMEs usually find their way into the
private pockets of portfolio entrepreneurs.

He noted that NERFUND, for example, was set up when corruption was
prevalent. “NERFUND was dollar domiciled, given at the official rate of N22 to
a dollar. It was easy for some people to collect the loan and make a lot of
money from it. The money did not get to industrialists,” he asserted.

The chairman’s statement is perhaps buttressed by the fact that none of the
33 small scale industrialists in the Lagos State Small Scale Industrialists
Estate, Matori, Lagos ever received any loan from government except a few which
benefited from the National Directorate of Employment, NDE programme. Alhaji
A.O. Adewunmi who started his business, Adrosy Group in 1974, said he had never
received a kobo as loan from the government but had heard of all sorts of loans
for small scale industrialists which never got to them. “Nobody has ever
benefited from any loan in this estate (small-scale estate). The money was
shared at the top,” he said. Noting that the problems of SMEs are finance and
energy, he enjoined the government to encourage banks to give loans to SMEs so
that they can grow. Adewunmi was irked that banks do not give loans to Nigerian
entrepreneurs who sincerely want to develop indigenous technology.

Another small-scale industrialist, Mr. Akinlua Abiodun told this magazine
that since he started his plastic manufacturing business in March 1996, he had
not received any financial help from any quarters. He said that he applied for
NERFUND loan through First Bank but it was not approved. He advised government
to be sincere in future programmes by reaching the SMEs through their
association. “Today, we hear of N10 billion; tomorrow, we may read in the
newspapers that the money has been given out as loans to SMEs that are non-
existent,” he said, adding that government must assess the viability of each
SME with a view to knowing the kind of assistance needed.

Mr. J.O. Odunaike, an NDE loan beneficiary said that since he finished
paying the loan he had not received any other assistance in spite of several
applications for such. He told The News Business that things have been rough
but he has been managing to survive. He also said the problems his garment
manufacturing company face are notably, inadequate financing, irregular power
supply and a market policy which does not protect local manufacturers.

Another small scale entrepreneur, Ms Moji Abass, stated that “government
should move closer to the people; not to form committees mostly constituted by
civil servants.”

The claim of small-scale industrialists that they did not receive any loan
is supported by the contention of the president of NASSI, Mr. Micah Okonkwo,
who swore in 1996 that: “None of our members has benefited from the scheme
(NERFUND) since inception.” If identifiable small scale industrialists have not
benefited from all the different credit schemes established by government, does
it mean that the $1.58 billion meant to assist them went to wrong hands.

Reginald Ibe, NERFUND’s spokesman, does not think so, insisting that the
body has been funding only small scale projects owned by Nigerians. “If they
(NASSI members) have not benefited from the fund, it means that either they
have not applied at all or they have but could not meet the required
conditions,” Ibe said.

Investigation by The News Business showed that the response of SMEs to
sourcing fund from the capital market is very poor. In fact, only 16 SMEs are
listed for now. The number rose to 23 in 1993 before it dropped to 16 last
year. Only a few, if any, of this number have heeded the call by the President
of the Exchange, Mr. Goddie Ibru, that SMEs should seek alternative sources of
funding for their projects given the “failure of the rural banking scheme and
the inability of the development financing institutions (DFI) like NACB and
NBCI to deliver their mandates.” Ibru said that it had become imperative for
all and sundry to encourage the growth of SMEs to spur employment generation.

But OkanRende said that the apathy developed by SMEs to the capital market
may be due to its complexity. “It is such a cumbersome task and at times you
have to engage consultants to help in the exercise which means you spend a lot
of money,” he noted.

However, he said that his association is now enlightening its members on the
advantages of accessing the capital market because they have realised that it
is an avenue for getting cheaper funds, especially now that stock managers
fully appreciate SMEs and their peculiarities.

Apart from the twin problem of shortage of funds and energy besetting the
SMEs, their production processes are still characterised by high stock levels,
lengthy production time, low product diversification and low quality. These are
problems usually faced by small scale industries. In 1994, Honduras invited the
United Nations Industrial Development Organisation, UNIDO, to help organise its
SMEs. UNIDO organised the small enterprises to form cooperative clusters which
were able to respond to the threat of imported goods. Thirty-two groups of
micro and small enterprises representing a total of 293 firms in the different
industrial sectors were involved. The result was flexible forms of production
and growth in sales of these enterprises.

This magazine asked NASSI secretary, Mr. Akinola Ogunyode if such a
cooperation cannot be formed in Nigeria. He said that it was possible in
Honduras because there was a facilitator. But OkanRende’s position is
different. For him, both countries have different prevailing situations and, as
such, what was successful in Honduras may end up being a failure here. Said he:
“In the case of Honduras, they don’t have our own kind of problems where there
is no regular electricity and water -two basics for any business to grow.”

However serious the situation of SMEs may be, there is the popular belief
that if government stopped playing politics with the subsector, there is hope
in the horizon.

Reiterating the need to have SMEs as the focus of the Obasanjo’s poverty
alleviation programme, Okon-Rende said that in spite of the odds against SMEs,
the subsector is still the biggest employer of labour, arguing that all the so-
called drop out and Nigerians who could not have university education are
employed by SMEs. Aside this, he maintained that SMEs provide economic
sustenance for the rural areas and have the responsibility of developing
indigenous technology.

While information on the N10 billion poverty alleviation programme is still
sketchy, all other things being equal, it is hoped that President Obasanjo’s
transparency and anti-corruption slogan will come to bear on the administration
poverty alleviation programme. Or will it be the same old story of empty
slogans.

Publication date: February 7, 2000

In Akure, the Ondo State capital, Justice Rasheed Fawehinmi’s
judicial commission of enquiry currently looking into financial mismanagement
by past military administrators has become the butt of jokes at the
secretariat.

Civil servants often ask one another whether the Ondo State-born judge has
not become a toothless bulldog in view of the refusal of past rulers and
commissioners of the state to appear before the probe panel and the body’s
seeming helplessness in compelling them to do so despite glaring evidence of
plundering and looting of the state treasury. In fact, on 30 December 1999, the
commission advertised in The Guardian and Hope newspapers a series of hearing
notices on Navy Captain Anthony Onyearugbulem and Col. Moses Fasanya. Two ex-
commissioners, Dr. Paul Ogunro and Hajia (Mrs.) Khaliat Fawehinmi were also
listed in the public notice.

The panel was constituted by Governor Adefarati few months ago with Justice
R.O. Fawehinmi as chairman and Mr. Toyin Akinkuotu, a lawyer and civil servant
as the secretary. The panel is to determine the extent of financial
mismanagement by the past administrators of the state and make recommendations
accordingly.

So far, the panel has investigated the regimes of the two naval men as well
as that of Col. Ahmed Usman and their civilian collaborators. Usman was found
to have engaged in lumbering in the state’s forest reserves. At such reserves,
Usman’s business partners felled vital economic trees like teak, obora and
mahogany. All these were reportedly taken to a sawmill he owned in his village
in Kogi State.

Usman who was reputed for reprimanding contractors over shady deals
successfully stonewalled the move by Justice Fawehinmi’s commission to make him
account for his stewarship. The Igarra-born ex-army officer through his lawyer,
Chief Afe Babalola (SAN), went to court and got an injunction against the panel
on the ground that he could not get fair hearing. The erudite lawyer got a
similar restraint against the Oyo State Government which is probing his
administration.

Onyearugbulem’s case was more interesting as he left his foot prints of
corruption at the Water Corporation (World Bank assisted water project), and
the Ministry of Health where Dr. Paul Ogunro, the commissioner was said to be
his accomplice. The commissioner for agriculture under Onyearugbulem, Mr. Wumi
Fasonu, testified at the panel on how N60 million that was meant for major
projects in the state was misdirected in 1995. He said when he refused to co-
operate with the MILAD by not releasing the money, Usman summoned him and
warned him on the consequence of his action. “He told me that he would send my
name to Abuja to be included in the list of the 1995 coup plotters as an
accessory after the fact of treason,” the ex-commissioner told the panel.
Fortunately for Onyearugbulem, it was the season of madness when people were
being framed up over phantom coups. The commissioner succumbed immediately.

Another case in the looting spree was the inflation of prices of
agricultural equipment by a director in the ministry from N2.5 million to N6.5
million. This was the practice too in the Ministry of Health where Ogunro, in
collaboration with Onyearugbulem inflated computers costs from N750,000 to N2.5
million. Another sum of N6 million meant for immunization vaccines disappeared
into thin air. In all, the panel learnt, the medical doctor and Usman could not
account properly for N140 million public funds. The medical doctor, after his
appointment, suddenly became a proud owner of state-of-the-art cars and
mansions in Lagos, Akure and his home town, the panel was told. He has since
reportedly flown to Ghana.

A top civil servant in the state told TheNews that anytime Onyearugbulem
wanted anything done illegally, the civil servants were always compelled to toe
the line. “Many civil servants were forced to co-operate. He would threaten to
label you a saboteur, or NADECO agent if you refused to co-operate,” a source
said. Imagine a situation where you were sleeping and soldiers barged in rudely
in the wee hours of the day and ask you to sign a document. What can you do?” A
source at the panel told The News that efforts to get Onyearugbulem to appear
before the panel proved abortive.

“He gave us a fake address in Owerri. When we sent invitation by courier, it
was returned to us as the address was non-existent,” the source said. Col.
Fasanya also gave his address as Beteye Street, G.R.A, Ikeja. “On getting
there, we discovered it was a government house,” the source said.

Fasanya always appeared like a preacher in a state, clutching the Holy Bible
in one hand and his swagger stick in the other. But the panel unearthed
evidence of corruption against him. Some documents exhibited at the panel
showed that the contract sum for the, Akure-Idanre road project was inflated by
about N18 million. There was also the scandalous N15 million afforestation
deal. The Ministry of Education was another gold mine where civil servants in-
charge of the collection of some dues made away with N2 million. The then
education commissioner allegedly inflated prices of computers.

An accountant in the government house, the panel was told, released N4.5
million, in two instalments, to a ghost contractor. Part of the evidence before
the panel was the case of a protocol officer who mismanaged N10 million
purportedly allocated to the state’s first lady, Mrs. Fasanya, for costumes and
other unexplainable items.

The top official in the ministry of agriculture, told the panel that there
was a privately-owned truck used for carting away money by one of the
directors. This was confirmed by the evidence given by a payment officer in the
same department. But one interesting thing is that all the key actors in the
looting exercise still remain in the services of the state till date.

The chief press secretary to the state governor, Mr. Paddy Dare said that
there would be no sacred cows in Governor Ade Adefarati’s anti-corruption
crusade. “It is still premature to take any action now. The panel is still
sitting. Until we get the panel’s recommendations, all these things you are
talking about are mere allegations,” he said.

On the charge that the governor asked the suspected looters to return any
amount they could and avoid prosecution because he desperately needs money to
execute his government’s plans, Dare dismissed it as mere blackmail. But a
source confirmed that the panel contacted some people to return stolen money if
they did not want prosecution. About N30 million has reportedly been returned.

There was a mild drama over Mrs. Khaliat Fawehinmi’s case at the Babafunke
Ajasin’s auditorium, venue of the panel’s sittings when Justice Fawehinmi
disqualified himself from hearing the case on the ground that the woman was his
in-law. Another judge was appointed to hear the case. Mrs. Fawehinmi was
alleged to have inflated prices of some contracts while she was the
commissioner for women affairs in the state. Incidentally, one of such projects
is the auditorium, where she was to be tried. Mrs. Fawehinmi was absent at the
trial as she was said to be currently in the United States of America.

Although, the style of looting the treasury in Ekiti State was similar to
Ondo’s, the embezzlement was less in magnitude. Ecological fund and Federal
Government’s intervention allocations were diverted by itchy-fingered officials
in the nascent state. For instance, it was revealed before Justice Edward
Ojuolape’s panel probing past administrations in the state, that Navy Captain
Atanda Yussuf (rtd.) did not disclose N275 million ecological fund granted the
state. The chairman of the State’s Environmental Protection Agency (SEPA),
Chief Bisi Kumapaiyi, told the panel how the N275 million ecological fund was
misappropriated. He revealed that out of N75 million released to the Yussuf
administration, not a kobo was given to SEPA. He, however, admitted that
Yussuf’s predecessor, Colonel Inuwa Bawa, released N10 million out of N200
million allocated, the state.

As at press time last week, it was not clear how much was stolen through the
state’s Water Corporation. But the panel barred Engineer Babatunde Fakoyede,
the state’s former commissioner for works and housing, from travelling out of
the country because he has some clarifications to make especially on the
purchase of chemicals by the corporation.

Bawa and Yussuf were also alleged to have spent a total of N100 million on
travelling within three years. While Bawa was said to have wasted N38.2 million
in two years, Captain Yussuf poured N58 million down the drain in nine months.
The state’s pioneer Director of Protocol, Mr. Oluwole Ariyo gave this evidence
at the panel.

Bawa was accused of inflating contracts of the state’s television and radio
stations projects. For instance, nine14-inch colour monitor were bought for
N95,000 as against the going rate of N20,000; 14 colour monitors (studio) were
bought for N110,000 instead of N20,000. An analogue satellite television
receiver, recorder monitors and stabilizer costing N250,000 were purchased at
N1.68 million while a VHS recorder whose real price was N20,000 cost the state
N650,000.

There was also a drama at the venue of the panel when a former finance
commissioner in the state under Col. Bawa, Mr. Gbenga Fakile swore to an
affidavit that he gave Colonel Bawa the sum of N2 million cash as kickback. He
alleged, inter-alia, that sometime in February 1998, Bawa called and gave him
instructions that he should do a memorandum on the purchase of equipment and on
mobilization to the tune of N8.12 million.

The ex-commissioner stated that the former MILAD told him that he intended
to distribute gifts to those who made it possible for the state to source $1.5
million, being part of the $ 3.07 million meant for the execution of the
proposed television station at the official rate of N22.22 to $1 instead of the
market rate of N86 to a dollar. Mr. Fakile further averred in the affidavit
that, in compliance with the governor’s directive, cheque number 3051/6 dated
20 February 1998 for the sum of N6.12 million was issued. Also, Fakile said
other drafts were processed in favour of several ghost contractors who were to
supply various gift items to the individuals involved in the transactions. Out
of the N8.2 million Fakile alleged that he gave Bawa the sum of N2 million in
cash.

When Bawa was confronted with the allegations at the panel, he only said
that he would check his records about it. Later, on 4 November, last year, he
swore to an affidavit at a Jos high court in Plateau State in which he admitted
approving the sum of N8.12 million as down payment for the purchase of
equipment and mobilisation to the ministry of finance. He denied ever
collecting the sum of N2 million or any sum as kickback from the money.

The former MILAD also denied authorising the release of any money for the
purpose of public relations. Mr. Fakile was detained briefly. After he swore to
the affidavit, Bawa refused to appear before the panel. Disappointed, the panel
wound up its business on 31 December last year. Justice Ojuolape, while
submitting the panel’s report to the state governor, Otunba Niyi Adebayo,
complained bitterly of lack of time to do a thorough job.

But the chief press secretary to the Governor, Mr. Gbenga Ogunremi told The
News that it was not true that the time was not enough, “Initially, they were
given six weeks. They kept on asking for extension of time. We gave them six
months. They were to find out the extent of financial mismanagement of the past
administrations and recommend to the government, so that the government would
do what is appropriate,” the chief press secretary said.

Last week, indigenes of the two states were worried that the former military
administrators successfully frustrated the panelists. While Col. Usman used the
instrumentality of law to prevent his trial, Onyearugbulem, Fasanya and Bawa
simply boycotted the panels as well as gave it fake addresses. In Ekiti, too, a
source at the panel revealed that although the panel established that N300
million was embezzled or misappropriated, not a kobo was recovered because the
panel was not empowered to recover money.

Publication date: February 7, 2000

For inhabitants of Evwreni, an oil-producing community in Ughelli
North Local Government Area of Delta State, the past two months have been a
season of harvest of deaths. Between last year December and 22 January, not
less than four sons of the community including its traditional ruler, Ovie Owin
Kumane have lost their lives in the violent protests that have engulfed the
town.

For weeks, angry youths rummaged the town for the Ovie who had gone into
hiding following his dethronement for allegedly embezzling oil royalties paid
the community by the Shell Petroleum Development Company.

In the ensuing protests, two youths lost their lives. Yet, they were
undeterred. On Thursday, 20 January, they got the Ovie in his hideout, dragged
him out and killed him. Since then, peace has eluded Evwreni. His supporters
invited policemen who rather than restore sanity, killed another prominent
indigene, Chief James Fashe on Saturday, 22 January.

That day, armed policemen from Ughelli reportedly stormed the town in search
of the Ovie’s murderers. “It was in this process that they met my father on 21
January, shot him in the leg, locked him up in their car boot and drove him to
Ughelli police station,” narrated Kingston, Fashe’s eldest son. “He cried for
help but he was not attended to. He died the following day.” (see box)

The battle over oil royalties accruing to the community, before his murder
last month, had pitched the Ovie against prominent sons of the town. Indeed,
six elders of Evwreni including the Otota (spokesman), the women leader,
leaders of the youths and representatives of the Ovie’s traditional council of
chiefs have called for his dethronement with the withdrawing of the staff of
office which, they said, was hurriedly ‘dashed’ him by Navy Captain Walter
Feghabo on the eve of his exit as the military administrator of Delta State.

The call was contained in a petition detailing atrocities committed by the
Ovie against the community. It was dated 27 December, 1999 and copied President
Olusegun Obasanjo, Delta State governor, Chief James Ibori, the state’s chief
judge, the House of Assembly, the Senate, House of Representatives and the
Police Inspector-General.

The petitioners warned against inviting anti-riot policemen to their
community in the guise of quelling violent demonstrations by youths as it could
further exacerbate the crisis.

TheNews learnt that Evwreni has about 14 oil wells, glow and compressor
stations operated by the SPDC, which produces 15,000 barrels of crude daily
from the area since 1966.

Sensing that Evwreni has suffered neglect and marginalisation in the hands
of SPDC as far as community development was concerned, the Evwreni Youths
Association (EYA), in a letter dated 27 August, 1999 to the SPDC, Warri office
gave the oil company a 21-day ultimatum to build a cottage hospital, civic
centre, borehole water supply systems, drainage channels and tar some major
roads in the town.

The youths further demanded that a fence be built round the Ovie’s palace,
payment of homage and royalties to him for the Evwreni clan Improvement Union
and installation of phone lines at the Ovie’s palace.

SPDC offered to pay homage and royalties to the Ovie in cash and kind. Also,
it offered some jobs and scholarships to EYA . But this information was kept
from the majority of EYA members. When the SPDC learnt of this and that youths
were not pacified, it employed five men from another list sent by EYA.

The youths had hardly started work when they were stopped by their president
in concert with the Ovie. By this time, tension had risen in the town. The
youths casting aspersions on the Ovie and their president threatened mayhem
unless justice was done.

To drive home their point, the youths led a peaceful protest to the palace
of the Ovie but got a hostile reception as armed palace guards shot at them
allegedly killing one of them, Lucky Asekevwe in the process. Nine others
sustained bullet wounds.

Avwariemu Emarhivwe Benjamin one of those who sustained injuries said the
youths thereafter decided that for killing Lucky, the Ovie deserved to be
dethroned.

In a petition seeking the removal of Ovie Owin, the youths and traditional
elders of Evwreni listed several “un-royal” activities against him. They
accused him, among other things, of operating an illegal arms depot inside the
palace with such sophisticated weapons as AK 47 rifles; hand grenades and
dynamites in store. Also they said he refused to account for the N6 million
royalties he had received from SPDC.

Will the murders of Ovie Kumane and Chief Fashe last month end the war over
oil royalties? Time will tell.

Additional report by Seyi Oduyela.

Publication date: February 7, 2000