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Former President Olusegun Obasanjo has revealed that Nigeria was on the brink of losing a lucrative $280 million telecommunications deal, which could have been sold for a mere $3 million to associates of then Head of State, General Abdulsalami Abubakar (retd) during the transition from landlines to mobile phones.
Obasanjo said the intervention of his administration to auction the deal instead, paved the way for competition and financial gains that spurred the growth of the telecom industry in Nigeria.
Speaking at the launch of The Catalyst: Nigerian ICT Evolution through a Journalist’s Lens, a book authored by former PUNCH Newspapers Editor, Mr Dayo Oketola, in Lagos yesterday, Obasanjo revealed that his predecessor, General Abdulsalami Abubakar (retd), had been on the verge of awarding the contract for just $3 million.
“The story of telecommunications, particularly mobile telecommunication, is a very interesting one,” Obasanjo said.
“Before mobile telecommunication, we had spent a lot of money, we had all sorts of companies invited from America, France, and even from Britain, but we did not get more than 500,000 lines.
“People had to queue at the telephone kiosk to call their loved ones abroad. And then, of course, the mobile telephone age came in.”
Obasanjo explained that as Nigeria prepared to introduce mobile phone services, major telecommunications companies were keen to enter the market.
However, the deal was at risk of being handed to close associates of General Abdulsalami for a fraction of its value.
He described how his administration’s decision to auction the contract saved the country from losing out on the full potential of the opportunity.
“When we came in, my predecessor in office was trying to give it away, I think, to their friend for $3 million. Then we said, what we would do was to auction it.
“The three that came in first, I think, paid $280 million for the line. $280 million for something about to be given away for $3 million. That was the first thing we did. Not only that, we achieved competition,” he stated.
Obasanjo credited the auction with fostering healthy competition in the industry, as major telecom companies like MTN, Glo, and Econet (now Airtel) began to dominate the Nigerian market.
He further noted that the entry of Etisalat (now 9mobile) into the market came with an even higher price tag of $450 million.
“When Etisalat came, I told them the last one we did was $280 million. We told Etisalat to pay $450 million. They did,” Obasanjo said.
“That was how we got money to do what we did at the time we did it. That opportunity can still be made available.”
The former president emphasised that Nigeria has the potential to attract significant foreign investments, but only if the government creates a conducive environment and demonstrates integrity.
“The money to develop Nigeria is out there, but that money will not come in unless we create a conducive atmosphere for that money to come in,” he added.
“What Nigeria has done in the good days when things were going well, are still there and can still be done today only if we put ourselves and we are honest to ourselves. We have to show character and attitude.”
