Galaxy Backbone Plc – Nigeria’s paradox of Privatization policy?
By Abubakar Atiku Nuhu-Koko
Sunday, October 7 2007

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There are many problems with this initiative. Some of these problems have been highlighted in my previous write-ups¹ regarding the muddling up of the nation’s telecommunications and information technology policies. The defunct Obasanjo’s regime in its hurried but flatfooted efforts to leap-frog Nigeria into the fast lane of modern information and communication technologies (ICT) world, got itself into all manners of uncoordinated ICT programmes and projects, some which can rightly be regarded as grand scams. The incorporation of the GalaxyBB Plc and its activities (and NIGCOMSAT Ltd, among others), fall into this category to say the least. Yet the paradox is that Nigeria, while pushing for blind privatization of anything that government has a hand in it in fulfilment of the Washington Consensus’s economic reform roadmap, continues paradoxically at the same time to incorporate new public-owned enterprises, which more often than not, replace the privatized ones. Even more puzzling is the way and manner the Nigerian authorities seem to continue to circumvent their own established due process procedures and rule of law while creating these new entities. Added to this public policy muddling is the issue of the failure of the government to recognize these duplications of agency functions and mandates and take appropriate corrective effort to eliminate and harmonise them. 

The question then is why the Nigerian government continue to champion and claims to be pursuing the nationally detested World Bank/IMF liberalization and privatization of the economy? If anything, Nigeria in the last eight years created an “oligopoly” economic structure, where the likes of Transcorp plc, Dangote, Otedolas etc and the few selected most favoured oligarchs hold sway instead of a liberalized and open competitive economic structure. 

The rapid transformation of Nigeria’s telecoms and ICT sectors began with all the good intentions by the Obasanjo’s regime (1999-2007). Paradoxically however, the eight years of his administration recorded its best legacy in this sector but, this was not without a number of controversies and the usual Nigerian factor – corruption, ineptitude and what have you. For example, as mentioned above, there are at present, a number of questionable ICT programmes and projects scattered in several federal government ministries, departments and agencies (MDAs). Some of these programmes and projects duplicate one another and some are working at cross-purposes to say the least. One of such questionable initiative is the controversial Galaxy Backbone Plc (GalaxyBB Plc), our subject of analysis. 

The GalaxyBB Plc if we remember, came to the public limelight only when the embattled Vice President Atiku Abubakar exposed the then President Obasanjo’s sleaze in the affairs of the Petroleum Technology Development Fund (PTDF). Vice president Atiku Abubakar himself was then the subject of vicious attack by his traducers in and outside the Presidency; he was alleged to have mismanaged the PTDF when it was supervised by his office between 2000-2004 periods. But while defending himself against the wild allegations of financial improprieties, which were labelled against him by his traducers, Vice President Atiku Abubakar exposed to the shocking Nigerian public that, a whooping payment of the sum of N250m was authorized by Obasanjo to his very close lawyer friend’s law firm for the incorporation of an unknown information technology (IT) company that goes by the name GalaxyBB Plc. The money was charged to the accounts of the PTDF. This was done at the time when the federal government, through the Bureau for Public Enterprises (BPE), completed the sale of Nigeria’s flag ship public-owned telecoms and IT companies – the Nigerian Telecommunications Limited (NITEL Ltd)/M-Tel Ltd, among other state-owned enterprises. 

This chilling exposé by Vice President Atiku Abubakar also revealed that the conception and incorporation of the GalaxyBB Plc were never presented before the Federal Executive Council (FEC) for deliberation and approval. Furthermore, the project was never an item in the federal fiscal budget for the year in question. In addition, the activities for which the GalaxyBB Plc was incorporated to implement are not within the mandate of the PTDF, the federal agency which was directed by president Obasanjo to fund the activities of the new company. Again, the contract for the incorporation of the company was not advertised for competitive bidding as required by the government. But rather, the contract was simply awarded to president Obasanjo’s Lawyer friend’s Law firm. All these alleged improprieties were said to have been secretly unilaterally endorsed authorized by president Obasanjo. The main beneficiaries were the shadowy promoters of the initiative in and out of the Presidency and the federal ministry of science and technology. 

Apart from these alleged misdeeds perpetrated by president Obasanjo, another mystery about the so-called GalaxyBB Plc that was not clarified to the public up till now is the relationship between Obasanjo’s GalaxyBB Plc and the one established by the former Jigawa State Governor, Ibrahim Saminu Turaki – that is, the Jigawa State Government’s owned Galaxy Information Technology and Telecommunications Limited (GalaxyITT Ltd). Governor Saminu Turaki’s GalaxyITT Ltd has its Abuja office located at 22 Adetokumbo Ademola Crescent Wuse II, Abuja, Nigeria. It has the following listed Telephone number 09-5233897, 5235044 and Website address as: http://www.galaxyitt.com. 

These two ICT companies though separately owned by the Federal and Jigawa State Governments respectively, they were all incorporated to principally provide similar and related ICT services – broadband internet access amongst other ICT services. While the federal government owned GalaxyBB Plc has its chairman as the Director General of National Information Technology Development Agency (NITDA), Prof. Cleopas Angaye and its Managing Director/Chief Executive Officer (MD/CEO) in the person of Mr. Gerald Ilukwe, the Jigawa State owned Galaxy ITT Ltd, Alhaji Yusuf Kazaure as its MD/CEO. 

However, the latest information that filtered out from the Corporate Headquarters of the controversial GalaxyBB Plc shows that there has been either a merger of the two hitherto separate companies or a takeover/acquisition of the Jiagawa State-owned company by the federal government’s owned GalaxyBB Plc. As a result of this new development, Alhaji Yusuf Kazaure, the erstwhile MD/CEO of Jigawa State GalaaaxyITT Ltd is now the Business Operations Manager of the Federal government-owned GalaxyBB Plc. Now, the pertinent questions arising from this new twist are: 

1. When were the two companies merged and or when did the GalaxyBB Plc acquire GalaxyITT Ltd?

2. Under whose authorities did the merger and or acquisition took place?

3. What were the financial terms and conditions for the merger and or acquisition?

4. When and where was the public disclosure for the merger and or acquisition announced, published and or displayed for public consumption?

Furthermore, the public needs to know who the shareholders of the GalaxyBB Plc are and what is the percentage of the authorised and paid up share capital of the company belongs to the federal government of Nigeria. Being a public company, the public needs to know when the Initial Public Offer (IPO) of the company was carried out and what was the result of the IPO. All these information should be made public in the spirit of transparency and accountability. 

Nevertheless, on the issues of corporate/statutory mandate, jurisdictional outreach, technical wherewithal and competence, the federal government need to do reality checks and provide explanations regarding the statutory mandates of the following existing federal government agencies and the ICT initiatives associated with each:

1. The Nigeria Communication Satellite Limited (NIGCOMSAT Ltd), under the federal ministry of Science and Technology/The National Space Research and Development Agency (NASRDA) (www.nasrda.org); 

2. The National Information Technology Development Agency (NITDA) (www.nitda.gov.ng) - under the federal ministry of Science and Technology; 

3. The National e-Government Strategies Limited (NeGSt); 

4. The National Information and Communication Infrastructure Backbone (NICTIB).

The information regarding the respective statutory mandates of these federal agencies is necessary in order for the general public to know which agency and or company amongst them is responsible for what. This has become necessary because almost all of the above listed agencies (NIDTA and NICTIB) and companies (NIGCOMSAT Ltd and NeGSt Ltd) respectively do claim to offer/provide the same products and services that the GalaxyBB Plc offers/provides (you may wish to check their respective Websites, please)! For example, each and every one of these entities has some or all of the following functions listed below as part of its mandate and or Article of Association:  

To  build a single nation-wide broadband internet connectivity - the desire is to be able to have consumer broadband services to private homes, corporate bodies and public institutions as obtained abroad; build ICT infrastructure to provide network services to all federal government ministries, departments and agencies; integrate all Federal Government owned ICT networks; elimination of duplication and proliferation of networks owned by  government; establish Data Center, application and management; Network management; provide world class facilities to enable internet hosting industry to evolve and flourish; internalise e-mail traffic, bridging the Digital Divide by championing affordable and qualitative telecommunication services to un-served and or underserved rural and urban centres; internet Service Provider (ISP) to the general public, to primary, secondary and tertiary institutions all over the country;  VPN services; VoIP services; Video Conference; IPTV; e-government; e-commerce; e-mail education; e-health and e-everything amongst others. 

NIGCOMSAT Ltd and Galaxy Plc for example, seem to share similar functions - they both claim that they were established to provide among others, a national ICT backbone/infrastructure for deployment of internet, GSM and other forms of wireless telecoms services as their main core businesses areas (see, for example their respective Articles of Associations). Similarly, NITDA, NICTIB, GalaxyBB Plc and NeGst Ltd all claim to exist to: integrate all Federal Government’s owned ICT networks; elimination of duplication and proliferation of networks owned by the government; establish Data Center, application and management; promote e-government, e-commerce, e-mail; e-education, e-health and e-everything amongst others.  

Therefore, President Yar Adua needs to order for an urgent review of the statutory mandates, Articles of Associations and even, the public ownership of these entities. Some of them need to be scrapped altogether and the others need to be privatized. For example, the very reasons advanced for privatizing NITEL Ltd/M-Tel Ltd and NIGCOMSAT Ltd should also apply to the GalaxyBB Plc as well as NIGCOMSAT Ltd. The retention of these two companies by the federal government amounts to backdoor reincarnations of the privatized NITEL Ltd/M-Tel Ltd. Nevertheless, a special Unit should be created within the NITDA to provide the functions and services that GalaxyBB Plc, NeGSt Ltd and NICTIB were establish to do. 

Therefore, this is where the contentious issues regarding NIGCOMSAT-1 and NIGCOMSAT Ltd come into play here. For example, some months ago, the bosses of NIGCOMSAT Ltd hinged their arguments for the company to be allowed by the Nigerian Communications Commission (NCC) to acquire an operating from it on the basis that the company has all it takes to provide very cheaply, all our national needs for Satellite wireless services, telecoms and 3G GSM services with robust national and continental coverage without recourse to patronizing foreign commercial satellite service providers. The other argument advanced by the bosses at the NIGCOMSAT Ltd was that the over $300m federal government investment in NIGCOMSAT-1 and NIGCOMSAT Ltd will face serious capacity underutilization and lingering debt overhang should it be denied to venture into both wholesale and retail commercial marketing of its services to the Nigerian consumers. It is in the light of these developments that it is curious know why on earth should the federal government venture into wasting colossal sums of money again, to incorporate yet another public company in the mould of GalaxyBB Plc that will out source from a third party facilities to deploy very expensive second-best solutions when paradoxically we already have NIGCOMSAT-1 and NIGCOMSAT Ltd to provide world-class services at least cost? 

President Yar Adua needs to take urgent action to stop this madness before another monumental waste of public resources is committed. I remind us of a similar vanity project that gulped billions of naira during Obasanjo’s administration in the name of establishing Virtual Digital Libraries for our federal universities under the auspices of the National Universities Commission (NUC). However, our moribund Universities ended up with having invincible rather than virtual digital libraries; with all the money gone down the drains and yet no one has been held accountable for that. Also, there were the INEC’s and Nigeria Police nationwide VSAT network projects meant for the 2007 general election which cannot be traced anywhere in the cyberspaces of our 774 local government councils! 

Let the Nigerian government use our scarce resources to fight poverty and provide other basic human needs and necessities of life for the people instead of pursuing wasteful vanity programmes and projects that are beneficial only to a few cabals. By the way, how many Nigerians own (or can afford to own) and know how to operate a personal computer? More than 80 percent of the so-called educated and literate Nigerians are not computer literate and cannot afford a personal computer. A similar percent cannot even surf the internet even if they are given a free computer connected to the web! Therefore, let the Nigerian government concentrate for now, on revamping our decayed educational sector in particular; start nationwide grassroots computer literacy campaigns, computer appreciation programme and build a modern knowledge-based economy and society along the way using the money earmarked for these vanity projects and programmes. Let the private sector takes care of building our nationwide commercial ICT backbone. The Nigerian private sector has proved its mettle in past eight years or so by creating impressive GSM infrastructure and network in Nigeria since 1999. Therefore, the time to put a stop to this senseless GalaxyBB Plc project is now. The vibrant Nigerian and foreign private investors (Transcorp, MTN, Globacom, Dangote, etc) are up to the task of establishing nationwide broadband internet backbone (ICT) for the country, given the right enabling environment.