Annex 2 To Yar'Adua Essay By Nasir El-Rufai: Briefing Memo On FG's Policies And Programs

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Preparing To Be President


Briefing Memo No. I On Policies and Programs of the Federal Government of Nigeria For Governor Umaru Musa Yar Adua, Presidential Candidate of the PDP. January 2007

Background

Why Umaru Yar'Adua is the Next President

The title to these series of briefs plagiarizes Richard Neustadt's classic of the same name, because we can think of no better title. Neustadt was an aide of US President Harry Truman, who went on to become America's foremost scholar on the Presidency. He was requested, on behalf of President-Elect John F. Kennedy to prepare some memos to assist his transition in 1960. We know you are yet to be elected, and you did not ask for these briefs.

We offer them voluntarily because we believe that with the PDP in control of 28 states, and needing majority votes in just about 20 states, and at least 25% of the votes in 24 states to win, your election to President of Nigeria is a mere formality to occur in time only. Furthermore, we do not see how the leading opposition candidate can win in the other parts of Nigeria where this election will be won, conceding the worst case scenario of evenly splitting the votes in the Northern States irrespective of our clearly greater strength – full control of 12 out of 19 Northern States.

The PDP's stronger organizational ability, firmer structures and easier access to human and material resources relative to the other political parties, virtually guarantee the Party's overall victory, and by God's Grace your smooth election. What is needed is just to manage public perception that we shall win the elections legitimately, through our track record, hard work in the campaign and better policies and programs.

Presidential Burdens and Qualities

We learnt that you were reluctant to run for President. It is quite understandable. No normal person who understands the burdens of the office will be eager to aspire to the Nigerian Presidency. But it is vital that decent people run for the office so that the nation is not destroyed by some of the vagabonds that ran around the country ‘aspiring' and annoying the sensibilities of the people. Most of the eager and early aspirants saw only an expanded domestic treasury and foreign reserves ready for looting, rather than the heavy responsibilities of running a country containing one out of every 40 human beings on earth. And in a positive sense Nigeria needs the very best leadership if we are to become a great country; you have the opportunity to provide this leadership.

We were therefore relieved when you joined the race. You have emerged clearly as probably the most honest state governor in the country. John Steinberg (1966) in writing about the American Presidency said "The President must be great, but not better than all". As Governor, you are probably better than all the governors, so what remains is for you to become a great President.

Early in this process, some of us - Tanimu Yakubu included got into real trouble because we made suggestions that you should be the sort of person to be drafted to run for President. We were essentially guided by lessons learnt at the Georgetown Leadership Seminar 2000, wherein Paul Begala, an aide to President Bill Clinton listed four qualities of a good President:

1. Possession of broadly curious intellect – ability to read, inquire, pursue strands of knowledge – i.e. a great mind.

2. First class temperament – strong interpersonal skills, charm, ability to build bridges across the nation, etc.

3. Strong communication skills because media influence is pervasive, otherwise every good idea dies on arrival. When the President speaks, he speaks for the entire nation. Technique, humility, and brevity in communications are vital. 4. Psychological and Political Resilience – broad, wide reach, and thick skin. An ability to focus on the big issues and not on every small issue.

We believe that you possess many of these qualities and believe that this was what informed Mr. President's invitation to you to run for the Presidency. With the solid foundation laid by President Obasanjo, you represent the best hope of our generation of Nigerians to show that we are capable of running a country fairly, democratically, efficiently and effectively.

Purpose of the Briefs

It therefore became imperative for some of us as direct participants in the Abdussalami Abubakar Transition and witnesses in Abuja, to the challenges faced by the Federal Government in the 1998, 1999, and 2003 changes of baton to forward these series of briefs to inform you, on a preliminary basis, of what we consider to be:

  • Current situation of key policies and programs in the areas of governance, economic growth and human capital development.
  • Issues and challenges being faced in the particular sectors, sub-sectors and agencies as applicable, related to the above, and
  • Recommendations for further consideration, including possible sources of additional information, persons that may be contacted, etc., wherever possible.

The purpose of this first brief is to update you very rapidly on the history, reasoning and thinking behind some of the broad policies and programs of the Government of the Federation.

Subsequent briefs will examine the foundations laid for our nation's sustainable growth in key sectors, and identify the superstructure that the incoming Administration needs to construct to achieve the Vision 20-2020 so well articulated by the current Obasanjo Administration. This we hope you will receive to digest before the end of January 2007.

Fundamental Challenges

The fundamental objectives of your leadership should be to deepen democracy – its tenets, foundation and pillars at all levels of government. You have to work hard to strengthen institutions and mechanisms which will grow democratic norms, culture, attitudes and ways of life within the constraints of the constitution and the rule of law. The key institutions for your attention are the executive at all levels, the legislature, the judiciary, the political parties, civil society, media, labour unions and similar bodies.

There cannot be good democratic governance unless you further develop institutions and processes which control human craving for power, greed, and inclination to graft and corruption. These unfortunately are what we have witnessed as common characteristics of the rational persons that have ruled most of the Nigerian nation in the last four decades.

The ordinary Nigerian has come to accept that politicians generally, and the majority of public servants are greedy, love power and want to be free to exercise it whimsically and capriciously. Very few leaders at all branches and tiers of government, (and this applies to the private sector as well), are good.

Good governance can be achieved only if we have institutions and mechanisms which work independently and across the board to check, control and sanction waywardness, misconduct and the abuse of the rights of others.

This philosophical anchor should remind us all, and particularly you as our future president - of some basic precepts:

  1. Deception is a norm in military action, and to some extent in politics, but only nominally so in public affairs. Indeed, it must be avoided in governance.
  2. Subterfuge and double standards have very limited efficacy in leadership of human beings. Even then, the benefits are short-lived.
  3. There are ample lessons in history and in recent times here in Nigeria for the next Administration to appreciate the above, and minimize, and indeed eliminate deception and subterfuge in governance.

President Obasanjo stabilized the nation, reducing but not eliminating feelings of ethnic and regional bitterness or the mistrust in government and its leaders. Your task will be to build the nation above its current foundations, eliminate the bitterness and mistrust – both old and new, and revitalize state institutions.

Let us start with where we were in 1999 to see how far we have laid the foundations.

Nigerians are quick to forget the state of the nation that was bequeathed to President Obasanjo on 29th May 1999. It is important to list some of the development challenges the President faced that warm afternoon after being sworn in:

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  • Post-conflict nation characteristics; arising from fifteen years of military rule, with political tensions, international pariah status, and inter-ethnic suspicions. The endless and deceptive transitions had led to total distrust and cynicism in governments. Incompetent and corrupt military rule became synonymous with the North, leading to calls for secession.
  • High poverty levels: an estimated 75 million Nigerians lived on less that US $1 per day – or average total annual consumption of less than N30,000! This translated into about 70% national poverty incidence and as high as 90% in some states.
  • Economic and Productivity Decline: consistently low investments in education and health had led to depleted human capital within the country. Many Nigerian professionals left the country for Europe, USA and the Middle East. For instance in 1999, the Association of Nigerian Physicians in America (ANPA) had some 29,000 members. These were mostly Nigerian-trained doctors that had left for greener pastures!
  • Infrastructural Deficiencies: Investments in power, petroleum refining, water supply, railways and seaports were virtually halted in the decades of military rule. Only the Port Harcourt Refinery was expanded in 1989, and Shiroro Power Station commissioned in 1991. Some roads were built but maintenance floundered until Petroleum Trust Fund was established in the mid-1990s. Industrial capacity utilization had fallen to about 20% and the nation was running literally on standby generators!
  • Institutional Decay: The systematic deterioration of institutions – civil service, the Police and Judiciary, social services, and even the military itself was the most damaging consequences of prolonged military rule. Our tertiary educational institutions were viewed as the enemy of the ruling juntas, and targeted for destruction. Our traditional values – cultural, religious and family, were assaulted to near destruction. The systems of sanctions that imposed some moral standards in communities were almost wholly destroyed, as the military regimes promoted bad people who praised and attacked good people that criticized them! The list of victims was endless, with President Obasanjo being one of the lucky survivors of that evil system!
  • Poor Economic Management: High inflation, deteriorating exchange rates, criminally-incompetent debt management and capricious management of the domestic treasury and foreign reserves characterized the period. President Obasanjo inherited reserves of some USD 3.5 billion, domestic debt of N800 billion and external debt of about US $30 billion. Per capita GDP had fallen from US $1,200 in 1983 to less that $270 in 1999. Virtually every economic indicator was at its lowest level in the nation's history!
  • Corruption and Culture of Impunity: Corruption was so widespread, the exercise of official discretion so common that the only certain rule in the conduct of government business was to know a general or "connected" person to the ruling military elite. The incentive structure was distorted – indeed made upside-down such that we had a generation of Nigerians who believed that:
    o Hard work did not pay, rent seeking behavior is what paid: you could get rich overnight by not being productive.
    o Honesty was not the best policy, corruption was rewarding, and o There were no sanctions for any misconduct. You could get away with anything as long as you knew important people.
  • Low Investor Confidence: Apart from the oil and gas sector, there was virtually no investment by foreign or domestic companies. Indeed, some foreign partners were divesting. Capital flight was rampant, indicative of low confidence of Nigerians in their own economy!
  • Failing State, Weak Institutions Nigeria in 1999 was a country without a virile public service, but in its place; a rapacious, self-serving elite that had nearly destroyed all institutions. This power elite had entrenched itself in the economy, politics and social psyche of our people. We had virtually no institutions that functioned well, reminding one of this 200 year old piece of wisdom from Napoleon I of France (1815):"Men are powerless to secure the future; institutions alone fix the destiny of nations"

The problem with institutions is that we have to build them, work on them and sustain them before the day we would need them – otherwise unmitigated disasters recur! President Obasanjo's overriding priority in 1999 therefore, was to keep a fragile entity, without strong traditional and modern institutions. This challenge was further exacerbated by the absence of strong political parties and legislative tradition.

Obasanjo's Many Battles

The political strategists that surrounded President Obasanjo in 1999, led by Chief Tony Anenih persuaded him that he was elected on a platform he did not control. The battles that needed to be won by the President should be the control of the leadership of the Party, the Legislature and the Executive branch. The first institution for control was the National Assembly. The unnecessary confrontation between the camps that wanted Dr. Chuba Okadigbo as Senate President and the supporters of Evan(s) Enwerem was the result of this advice. The early signs of Atiku and Obasanjo's uneasy alliance and capacities for subterfuge began to surface then.

Next was the constitution of the cabinet. Out of government for 20 years, and in prison for the three years before election as PDP's flag bearer, President Obasanjo relied on the political elite to nominate decent, knowledgeable and experienced persons to be Ministers of the Government of the Federation. This was a mistake, even if an unavoidable one – because a President must rely on others – trusted aides, family and friends to identify a few good men and women that make up his team. The result was a mixed bag of some competent people, corrupt politicians, sycophantic businessmen and technocrats. Little was achieved by this mixed bag – as a Cabinet is generically more effective when selected largely and directly by the President himself.

The final battle was for the control of the PDP in preparation for the 2003 re-election of the President and Governors. The PDP was a hurried-up contraption arising out of the ashes of the G18 and G34 resistance to the Abacha regime, and even the junta's collaborators in the UNCP and the four other ‘political parties' that the regime decreed into existence. The political elite – the good (G18, G34), the Bad (UNCP, DPN, et al), and the Ugly (the Military Boys') all came together – largely to push the soldiers out and grab power for themselves and without any internal coherence or common worldview.

As the 2003 Re-Elections approached, it was clear that the PDP, never at anytime a single coherent entity had been privatized at various levels – local government chairmen had taken over funding the party at their level, and this was replicated at state levels. Previous loci of political attention had been marginalized as the piper that paid for three years dictated the tune. At Federal level, Vice President Atiku Abubakar had acquired greater influence as he was the center of dispensing patronage and making pay-offs to evergreedy politicians – something the President just refused to be part of. The rest is now history. Today, PDP is a franchise of 28 State Governors, and 8 Ministers that funded Party activities and ‘structures' from 2003 to date. Recreating a unified party with a single command and control structure is the most important challenge for the next Administration.

A lot has been achieved in the last eight to improve the state of the Nigerian economy, politics and social services, but we have not scratched the surface. Wrong attitudes and negative orientation among the ruling class remain endemic. You have enormous challenges, but by Allah's Grace, a good heart, great mind and a dedicated team, you will succeed. We hope this will help refresh your memory of the lessons of 1999-2007, shorten your learning curve on the Federal Government structure, policies and programs, point you in the direction of areas needing institutional reform and narrow your attention on the big issues, as you go into the campaign proper in a week or more.

How Do Nations Grow?

The Simplicity of Economic Miracles

In April 2003, President Obasanjo directed a small team of officials to meet with the chairperson of his Honorary Investor Council, Baroness Chalker in London to review a draft governance strategy for his second and final term as President of Nigeria. The draft strategy was fine-tuned, and with the appointment of Dr. Ngozi Okonjo-Iweala as Minister of Finance, the Presidential Economic Team (PET) was formed. The PET fleshed out the Chalker paper, debated robustly to identify what has made Indonesia – a huge nation (250 million people) with many ethnic groups, ran for decades by the corrupt Suharto military regime, and recorded rapid economic development while our Nigeria stagnated.

Where did we go wrong? What did other nations do right? Our discussions entailed examining data from nearly a dozen countries, x-raying the Washington Consensus, and introspectively factoring in Nigeria's reform experiences in the last few decades.

The findings were both interesting and depressing. Interesting because we found that there was no magic wand economic success. It is not rocket science either. As President Obasanjo constantly says, quoting his friend Lee Kuan Yew of Singapore "Just do a few things right, and keep doing them right for decades, you will develop". We identified six characteristics found in common in all the successful nations we studied. What was depressing was the finding that the nations that failed – like Nigeria, were inconsistent in the observance of, or totally ignored compliance with these six golden variables presented in Figure 2 below.

This formed the basic philosophy of our Economic Strategy document, NEEDS and influenced policy thinking since 2003. NEEDS will need updating and NEEDS-2 is under preparation. You can get more information from the National Planning Commission and the Minister of Finance who is the head of the PET.

Some of the findings we have already shared at the PDP Retreat earlier in the month, but a few issues need to be raised not just for emphasis, but to highlight the opportunities lost, and why it is vital that we never lose this "change of a generation" which you so aptly referred to during the commissioning of your campaign office earlier in January of 2007.

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(i) China has, since the reforms initiated by Deng Xioping began in 1978, recorded the fastest rates of economic growth in world history, lifting 400 million people out of poverty in the last three decades. However, as recently as 1980, most nations in Sub-Saharan Africa were better than China. See Figure 3 below.

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(ii) Malaysia and Nigeria were at the same levels of economic development up until 1967, and indeed Nigeria even caught momentarily up by the mid-1970s. Today, Malaysia is almost an industrialized nation. See Figure 4 below.

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(iii) Ghana was as well off as Singapore in 1960. See Figure 5 below.

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It is therefore not surprising why our country has failed to grow as well as others, but it appears to be a continental trend – most countries of Sub-Saharan Africa, except Botswana and Mauritius simply messed up.

Nigeria Vision 20-2020

Nigeria has without doubt made remarkable progress since 1999. The achievements of this Administration particularly from 2003 have not only brought some changes in perception of our country by the international community, but within the domestic polity as well.

Goldman Sachs, Inc, is the most prestigious and successful investment bank in the world. In a landmark report published in December 2005, ("How Solid are the BRICs" – see http://www.gs.com) Goldman predicted that Nigeria will be the 11th largest economy in the World by 2050, and will be among the top 20 economies by 2025

President Obasanjo formed his Vision 20-2020 from the Goldman Research Report. The data on which Goldman based their predictions are largely based on 2002-2004 records of performance.

Nigeria has done much better since then. We believe that NEEDS-2 or any other economic strategy you adopt for the next Administration must focus on creating an environment for job creation and wealth generation by domestic and international private sector. Goldman's predictor of future of future economic performance is the GrowthEnvironment Score (GES).

Growth Environment Score

The GES aims to capture the principal factors that are know to affect an economy's ability to grow, and made up of 5 groups of determinants which translate into 13 variables. Suitably adjusted to Nigeria's peculiarities like the challenges of the environment and societal breakdown in the Niger Delta and extreme poverty in the North, the GES can be a veritable tool for formulating economic policy goals for the next Administration. The original 13 variables proposed by Goldman Sachs are explained hereunder:

(1)Political Conditions:

  1. Political stability – stable political regimes promote confidence and therefore attract higher investment which leads to growth.
  2. Rule of Law – property rights, contract enforcement and human rights: well-defined property rights and generally well-functioning institutions are conducive to higher investment and growth.
  3. Anti-Corruption Strategy: fighting corruption reduces distorting incentives, enhances confidence and leads to higher productivity and growth.

(2)Macroeconomic Stability:

  1. Inflation - high inflation discourages investment, erodes growth performance and exacerbates poverty.
  2. Government Deficit - high budget deficits can hurt economic stability and push up domestic borrowing costs.
  3. External Debt - large foreign borrowing raises the risk of external sector imbalances, and tends to push up real interest rates.

(3)Macroeconomic Conditions:

  1. Investment rates - high investment rates encourage capital accumulation and growth, though the investment must be in productive sectors – in education, healthcare, transportation, electric power and telecommunications.
  2. Openness of economy to trade (exports), investment (extent of government participation in direct economic activities), etc. – many studies have shown that more open economies have tended to show greater tendency for ‘convergence'.

(4)Human Capital:

  1. Education as measured by average years of secondary education - Higher levels of education aid the growth process, with secondary education most consistently identified.
  2. Healthcare as measured by life expectancy – a healthy workforce is a sine qua non for economic growth. Higher life expectancy is positively correlated to strong growth performance.

(5)Technological Capabilities:

  1. Penetration of telephones – Telephone density is a basic proxy for technology adoption. Communications technology helps transfer broader technology and techniques that aid growth.
  2. Penetrations of personal computers – estimates of PCs per 1,000 people are another dimension of human capital and communications technology.
  3. Penetration of the Internet – Like PC usage, Internet penetration provides another important measure of technology adoption and connectedness.

As you reflect on the components of GES, making adjustments to concerns about internal security, the poor state of our Police Force and the justice system, the challenges of the Niger Delta, and endemic poverty and rent-seeking attitude of many in the North, you have to design and implement policies that build the state superstructure, strengthen institutions and improve governance nationwide.

Indices of Government Effectiveness

In the classic, "The Trouble with Government" (2001) Derek Bok, the President Emeritus of Harvard University referred to an early 1960s survey of areas of concern to citizens in America. He identified five policy areas with seventy-five objectives. I will recommend the book to you for closer study, but will summarize his principal and relevant points for your consideration as you think through areas of focus for the next eight years to measure government effectiveness:

I. PROSPERITY

1. The Economy

  1. Per capita income
  2. Productivity per worker
  3. Rate of productivity increase
  4. Controlling inflation
  5. Minimizing unemployment
  6. Net investment in plant and equipment (As percent of GDP)

2. Research and Technology

  1. Number of scientists and engineers per 100,000 people
  2. Number of articles per year in refereed Journals
  3. Number of patents per year issued
  4. Share of GDP devoted to civilian R&D
  5. Share of worldwide high-tech exports

3. Education

  1. Percent graduating from secondary school
  2. Percent graduating from university
  3. Student achievement in reading
  4. Student achievement in mathematics and science

4. Labour Market Policy

  1. Percent of workforce trained by employer
  2. Range of vocational courses available in secondary school and university
  3. Amount of government-sponsored training

II. QUALITY OF LIFE

1. Housing

  1. Percent of dwellings with serious defects
  2. Percent of population owning home
  3. Affordability for renters

2. Neighbourhoods

  1. a. Concentration of poverty in urban neighbourhoods
  2. b. Degree of segregation by ethnic groups
  3. c. Percent of population living in a neighbourhood of choice
  4. d. Fear of crime/insecurity

3. Environment

  1. a. Amount of air pollution
  2. b. Amount of water pollution
  3. c. Percent of drinking water purified

4. The Arts

  1. a. Number of arts organizations
  2. b. Size of audience for plays, concerts, etc.
  3. c. Public and private funding for arts (other than ticket sales)
  4. d. Consumer spending on the arts (percent of disposable income)

III. OPPORTUNITY

1. Children's well-being
  1. a. Rate of infant mortality
  2. b. Availability of childcare
  3. c. Extent of prenatal care
  4. d. Percent of children living in poverty
  5. e. Parental leave policy
  6. f. Percent of infants vaccinated

2. Ethnic Equality

  1. a. Voting rights
  2. b. Housing discrimination
  3. c. Ethnic segregation
  4. d. Quality of education for minorities

3. Equality of Opportunity

  1. a. Access to preschool
  2. b. Access to universities
  3. c. Extent of racial discrimination in employment
  4. d. Extent of gender discrimination
  5. e. Overall equality of opportunity

IV. PERSONAL SECURITY

1. Health Care
  1. a. Technical quality
  2. b. Life expectancy
  3. c. Percent of population covered by health insurance
  4. d. Cost as percent of GDP

2. Job Security

  1. a. Percent of workforce with some form of legally sanctioned representation
  2. b. Protection from arbitrary discharge
  3. c. Retraining and other help in case of layoffs
  4. d. Unemployment insurance (percent of Unemployed receiving)

3. Violent Crime

  1. a. Incidence of homicides per 100,000 people
  2. b. Rapes and assaults per 100,000 people
  3. c. Success in solving violent (clearance rates)

4. Old Age

  1. a. Average retirement income (as percent of prior wages)
  2. b. Percent of elderly living in poverty
  3. c. Percent covered by healthcare insurance
  4. d. Financial assistance for long-term care

5. Likelihood of Accidental Death

  1. a. All accidental deaths (per 100,000 people)
  2. b. On the highway (per 100,000 people)
  3. c. At work (per 100,000 workers)

V. VALUES

1. Personal Freedom

  1. a. Degree of freedom guaranteed by law

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2. Personal Responsibility

  1. a. Violations of criminal law (per 100,000 people)
  2. b. Percent of children born out of wedlock
  3. c. Percent of income given to charity
  4. d. Community service
  5. e. Voting rates
  6. f. Cheating in exams

3. Providing for the poor and disadvantaged

  1. a. Incidence of poverty
  2. b. Severity of poverty (Aggregate poverty gap as percent of GDP)
  3. c. Effectiveness of government transfer programs

The foregoing indices, suitably modified are good guides for measuring government effectiveness, and we suggest that regular research, polling and citizen surveys should be instituted during the next eight years to measure your progress on these fronts.

Nigeria – Outlook for 2007-2011

The PDP Manifesto

The manifesto of the PDP – Policies and Programs has outlined a seven-point policy thrust for the next Administration. This policy thrust focuses the party and its leadership on some areas that will lead to improvements in governance, economic growth and human capital development.

The Policies and Programs are detailed in a colourful, statistics-filled, 52 page booklet. The Policy Thrusts identify the fundamentals of the Manifesto and are reproduced below:

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Figure 6: PDP Policy Thrust 2007-2011 (Source; PDP Natl HQ)

In addition, the current PDP Manifesto contains at least one set of innovations applicable to every tier of government – the Irreducible Minimums. These are policies and programs that all PDP administrations at local government and state levels must achieve or face expulsion from the Party. These are detailed in the Manifesto and extracted in Figures 7 covering human capital development - education and health minimums, some of which are excerpted below:

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The irreducible minimums for physical infrastructure sectors – rural development, water supply, roads and ICT infrastructure are excerpted in Figure 8 below:

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Figures 7 & 8 – Irreducible Minimums (Source: PDP Natl HQ)

The future of Nigeria will be more secure if all tiers of government in the components of the Federation implement the key policies and programs in the PDP Manifesto.

Epilogue

Writing is tedious for quantitatively-defined people like us. And when a brief is longer than 20 pages, it becomes difficult to approach by a really busy person like you. We will pause here. The next couple of briefs will cover the real sector, development of human capital, improving the business environment and markets.

Thanks for your patience.

Abuja, Nigeria

20th January, 2007