When president Muhamadu Buhari won the nigerian presidency two years ago it seemed like africas most populous nation had turned a corner. A first ever peaceful democratic transition bought a promise of cleaner, better governance and Major Economic reform. Hows it going . Well, my guest today is emmanuel ibe kachikwu, minister of state for petroleum resources. Can Oil Dependent nigeria transform itself into a modern, Trading Economy . Emmanuel ibe kachikwu, welcome to hardtalk. Thank you, stephen. I guess the lesson of the last two years or so, with president Muhamadu Buhari in power, is that nigeria remains dangerously overreliant upon oil. Well, yes. Clearly over reliant. I dont know if its dangerously. Look at the positive sides of oil, in terms of what it has done to the country over the years. When the price slumps, its dangerous. Oh yes. We would love to see, obviously, a lot more diversification, a lot of effort is going into that, emphasis on agriculture, tourism areas, emphasis on services, which have done substantially well in the economy. But obviously weve neglected for quite some years the need to diversify. We need to go at it full steam. Well talk about the degree to which you are having success in diversification, but if we stick with the impact of the slump in oil prices over the last couple of years, i mean, youve actually, despite your growing population, despite all the talk of nigeria becoming a new global powerhouse economy, youve actually been in recession. Yes, over the last three quarters, yes. The numbers are getting better. Quarter to quarter were beginning to slide back out of it. The 2016 Fourth Quarter numbers have moved from about negative 2 point something percent to about 1. 63. I havent seen the ist quarter figures released, which are meant, due to be released by the National Bureau of statistics, to be able to confirm. As i understand, the imf is saying that at best you will grow byjust under a full percent over 2017. So its very sluggish. Yes, but thats not unexpected. The reality is that almost a 60 decline in oil income, we have been substantially dependent, and over the years it will have impact. Add that to all other manners of uncertainties in the nigerian economy itself and inefficiencies happening there. Were going to talk plenty about inefficiencies. Here is a fascinating quote. High oil prices spoilt us, and weve messed it all up. Do you know who said that . I dont know, the president . You did thats true. I think for us, for me certainly, i look at the difficulties that come with the slump as an opportunity to get serious. There were about 30 years where we just kept postponing the evil day. Spoiled by oil price and oil money. At the time i was concerned to find it, what can we do in the absence of Global Oil Prices . Youre not going to have that happen again. So everybodys getting conscious of that. And theres a very conscious effort by the president and his team to focus on what we need to do is to be less reliant on oil. More efficient in terms of how we spend what we have. Interesting you say there is very close focus from the president on this. One thing the president has been identified with in his first two years or so in office is trying to maintain, against all odds, a very strong currency. Now, many people inside and outside nigeria say that is insane. First of all, you develop your own currency black market, which is never a good thing in an economy. But also your undermining the confidence of foreign investors, who simply dont believe it is sustainable. Are you going to change that policy . I think we are working progressively towards getting out of that. If you look at the differences in prices, Foreign Exchange official versus the black market, it has moved from 520, high point of 530, in the black market took about 360 370. The strong policy was a mistake, wasnt it . Im not a central bank governor, so i hate to call it a mistake. But really, were faced with difficulties. The reality is we have very little Foreign Exchange in our hands, we have a lot of massive demands for it, a lot of it going to very luxury goods, which we really couldnt afford as a growing nation. What i believe central bank was, in the first one or two years, trying to force people away from that consumption culture. And they succeeded quite substantially. And now that they have, theyve begun to release Foreign Exchange, loosen the market and that of it. I will leave the fiscal and monetary policies to the economists, in terms of how they decide. What i see as a growing trend is the central bank is creeping out of the very aggressive control that it had initially and losing conservative factors in the slide between the black market trade. Ok, i put that policy at president buharis door. And before we get into a discussion of the future of the oil industry and this diversify the economy you want to see in your country, i need to stick with president Buhari A Little Bit longer. 0k. Not least because he is clearly seriously ill. Now, we speak here in london. Youre a minister in the government. You tell me, because most nigerians have no idea what is going on, what is the state of his health today . We understand that he is undergoing Hospital Treatment here in london. Have you seen him . Have you any idea whats going on . Yes, hes in london, undergoing Hospital Treatment. I dont know the details of that. I obviously wouldnt know. Medical information is confidential. I wouldnt disclose that on tv. Let me say this, he returned back from his first trip in london, he walked full steam. The doctors had advised some rest. He is back to london, is continuing some levels of meetings, hes been able to place some rules. He has a very efficient Vice President , who is sitting in for him in his absence. It really hasnt made much of a difference. You know what . He came to power promising a different, much more disciplined, transparent, open and Efficient Government in nigeria. One of your main newspapers carried an editorial today saying he is guarding details of his health as carefully as donald trump guarded details of his tax affairs. What kind of transparency is this . The nigerian public deserve and have a right to know what is going on with their nominal leader and Chief Executive . Nigerians generally know the fact hes not well. What is wrong with him . I dont know. Where is the transparency in that . Lets face it, who in the world goes around giving everybody what their medical status is. The doctors have got to be able to release something official. He is working through it, its not become a major problem. If he gets to incapacity level, well begin to worry a lot more. You know what the rumours are, dont you . You know the rumours in nigeria are that he is desperately ill and, frankly, he may not be capable of leading nigeria for very much longer. Well, weve seen rumours about sick president s often, most of them sometimes not quite correct. Will he be able to lead nigeria . I think looking at the sort of conversations ive had with him, i had a lot of interactions with him when he came back, he was Strong Enough to do his work. He struggled in terms of trying to fully recover. Nobody plans an illness, it happens. If it happens. Nobody is suggesting any fault involved, the issue is about transparency and informing people what is going on. Yes, but he has an efficient number two man. The system works, thats the whole essence of democracy. Hes on top of his abilities to be able to issue policies, to approve what he needs to approve. Its partly about certainty and stability. The chief of your armed forces has just issued a statement in this somewhat febrile, rumour filled atmosphere, telling those in uniform not to engage in politics. I. E not to begin any process of meddling, interfering in politics, when there is no, frankly, there is a vacuum of leadership at the very top of your country. This is an extremely worrying. No, no, no, ithink the press is taking it out of context. They think what the chief of the army was saying, look its something they have rhetorically said all the time, the new army that we have, subject itself to civilian democracy. And that is the opinion every Chief Of Army Staff will give. Its not related to the president s circumstances. It is an ongoing education by the military forces. Back to the Direction Of Travel of your government. You are the minister of state for petroleum. You are a former, Senior Executive in exxon, and i think you directed the National Petroleum corporation for some time, so i cant think of a man more steeped in the oil business than you. Absolutely. What on earth has gone wrong, when you see that your output levels today, roughly 2 Million Barrels per day, are miles away from your grand ambition of 3 Million Barrels a day . In fact last year you sunk so low in terms of production you were overtaken by angola in african output. Its a disastrous story. Short and long term. The short term answer, the militants in nigeria disrupted production. And got us the slump that you saw, from 2. 2 Million Barrels all the way down to 1. 2. And its taken a lot of work from myself and the niger delta Vice President to get that back on track. When you say a lot of work, you mean buying off the militants . No, no, no. You fed them hundreds of millions of naira to stop them attacking the infrastructure. They dont have the money to feed anybody. Its been simple engagement. Ive always said that. What the situation demands is simple respect and engagement. Ive been very intensive about engagement since i was appointed. The Vice President joined me in that recently. The president has authorised it. That was a dramatic about face, that we did that. What had happened previously, the militants got the impression that nobody was taking them seriously. Nobody was listening to their problems. And im going to be doing that engagement continuously in terms of trying to provide some economic blueprints of direction. So that was the short reason why we have declined. In terms of meeting our National Goals of 3 million, 3. 5 Million Barrels, to which i am very committed, the problem had been i think we had no focus and no long term plans. Long term investment. Long term infrastructure. We now need to begin to do that. Even though this is a difficult time to do that. Well talk about that, because you do have big plans, the question is whether you can deliver them. One more point on the niger delta. Ill be honest with you, you are the ultimate insider. You know, i just described your career. Are you ashamed of what has happened in the niger delta . A fairly recent Un DevelopmentProgramme Report on the region, your Oil Producing region, says this is a region suffering from administrative neglect, crumbling social infrastructure and services, high unemployment, social deprivation, abject poverty, filth, squalor and endemic conflict. That is the region that generates the cash cow which keeps nigeria afloat. It is shaming, is it not . It may be shameful, but you look at every Oil Producing country in the world, you have the same similar neglect. I dont know why that happens, i think we take it for granted. That once you leave the oil, you can go off. And we need to begin to address that. Notjust the national government, the Oil Companies that are also there. Because they mind, quite frankly, about 80, 80 of our oil, established Oil Companies. Weve got to begin to require some level of transparency and engagement by them of the local workforce also. Notjust the government. Yes, weve not done well in the past on this. I think we could do better. Some of the money, over the period were talking about, over the last ten years, over a0 billion has also been sunk into those areas. But where is the money . A lot of it went to corruption, a lot of that was siphoned out. So moneys even meant for the local population. Billions, over the last 50 years, hundreds of billions of dollars have been siphoned out of the oil business. Yes, yes, so. And somebody has taken it. People have taken it, that is why the president s main focus when he came here was fighting corruption and fighting it aggressively. And i think that if there was one area he is focused immense attention on, it has been dealing with corruption. You are pushing this Petroleum Industry bill. As i understand, one of the key pillars of that bill is that more of the revenues that come out of the Oil Business Stay in the region from which they come. The rest of your country doesnt like that one little bit. There are indicators senior politicians in your parliament are not going to allow you to steam roll through this bill in the way you would like. Actually, the current bill that you have is actually a members bill, senate bill, not even from the executive. The executive, including myself, have cooperated as much as we can in terms of giving data that is required to get a signed bill. Yes, there is an intent to try and put a bit more in the niger delta area. Yes, they are obviously given the final discussed results, there were obviously grumblings in terms of how it is applied. But when i meet with them, i see a commonality of purpose. I hear the History Of Niger Delta has Hit Everybody and everybody is trying to find a solution. 0ne quick way of that is to enhance the ability of other component states, to be able to stand economically. And including findings of oil in the north. So i think i see a lot of collaboration, despite the disagreements in terms of what the percentages of the Water Numbers would be, but im still a lot more focused on governance. How do you use what eventually get into the territories well . How do we get the government to take responsibility for money that gets there . How do we get local governments, how do we get the citizens themselves . How do people who make a lot of money from oil pay enough tax to the government . Nigerias probably the least taxed nation in the world so everybodys focused on. It would help if you actually delivered on some of your promises to clean up the corruption endemic, notjust in the sector but across all economic sectors, by actually putting some very senior people, both public figures and fat cat businesspeople, into a court of law, and saying, no more of this. And here are the figureheads and were going to take them through the courts. Well, stephen, to a court of law we have. I think this president has put a whole lot more people than all successive governments collectively put together. Im talking about the top people. Absolutely. Name me a few. The ministers of the. Defence chiefs, who have been tried. Governors who have been tried. Its not happened before. Even thejudiciary. Your carefully saying being tried. How many convictions of these top people have you actually seen . Just like in any system in the world including yours, you dont re route judiciary. You have agreed with me that hundreds of millions of dollars has been taken out of the nigerian economy, somebodys taking it, and youre telling me, unfortunately, a lot of these people who we take to trial we cant convict. Somebody is responsible. Somebodys responsible. Whoever is responsible, were putting them into court. The Court Process has got to work. One of the, and im a lawyer, i studied to pg level in law, one of the difficulty sometimes of corruption is that the cost as much as there ought to be the bastion of justice, take the time. The Common Law System is grinding at a slow pace. So again, if the president was to turn around and say anybody that had any suspicion, yank them into jail, we have an opera in the world. Whats going on . Until they are found guilty, theres not too much we can do. What is important, investigations are going on, it is very active, people are being picked up, they are not respecters of person. All the big names are being locked up where they can. And put through the Trial Process. But the Trial Process must take its time, theres not too much you can do about that. Lets get back to what you can do something about personally, and that is the reshaping of the oil business. You talked about diversification, and we can talk about taking diversification way beyond oil to other sectors, transportation, agriculture, etc. But on oil, one of the fundamental problems is that you have this wonderful resource but you dont do anything with it. What you do is ship it out and much of the value is then given to others, they refine it, then you buy it back. Youve got the most extraordinary system where, i think im right in saying, youre Refined Petroleum imports were highly in march 2017 than theyve ever been before. I mean, your industry is totally dysfunctional. No, no, steve not quite that. Let me say this. Yes, it is wrong. We ought to process, rather than ship out crude. If you look at all the efforts are made in the last few months, including measures for working with investors to begin to reshape the refineries that have been comatose for very many years. And actually came. Comatose . How can, in an ambitious modern state, how can you have refineries lying comatose . It is what it is, the president is there for two years. The refineries went down before he came. Since coming