Mr. Luis Prazeres is a foundation member who served as chairman of the board of Nigeria-Sao Tome Joint Development Authority (JDA) for six years. In this exclusive interview with Daily Trust, Prazeres, who recently resigned his position to pursue a political career in his country, speaks about the ups and downs in the over 15 year-old organization. Excerpts.
Daily Trust: We understand that you have voluntarily resigned as chairman of the Nigeria-Sao Tome and Principe Joint Development Agency Board and you are about to go back to your country. What informed your decision to throw in the towel?
Luis Prazeres: I think after staying here for many years I made my contribution to the development of the JDA and I think it is time for me to go back to my country. I am now 61 years old and I also have other projects to pursue. I also think it is time for the Sao Tome authorities to appoint other people to come and have this very good experience in the JDA. It was indeed, a wonderful experience in Nigeria having first trained as a pilot in Zaria back in 1976 – 1979 before joining the management of the JDA in 2002.
DT: How true is it that you want to go back and pursue your political ambition to run for the governorship of the Island of Principe?
Prazeres: Yes, you know in Sao Tome and Principe, we have two Islands- Sao Tome is a bigger Island and it is the capital but we also have a smaller Island-Principe- where I hail from. According to our constitution, we have an autonomous government with its own assembly. So I decided to go back to Principe and invest the experience that I have garnered over the years. I was Minister for Infrastructure, Natural Resources and Environment in my country for three years. In fact I was the minister that negotiated the JDA treaty in 1999 to 2001. I also have experience in the JDA which is an international organization and I am so lucky to have had this exposure. So I think it is time I go back to my country, especially to Principe where elections are coming up very soon and I hope to contest as governor of Principe.
DT: As a foundation member of the JDA who participated in the negotiations, can you highlight the key elements of the 2001 JDA Treaty that led to the establishment of the Joint Development Zone (JDA)?
Prazeres: First of all, we started negotiations in December 1999 and finished on February 21, 2001 when the treaty was signed in Abuja-what we call the Abuja Treaty. The two heads of state were President Obasanjo and President Miguel Trovoada of Sao Tome and Principe. The treaty was a document that was very well negotiated and the key element says that the two countries should in a friendly and amicable way come together to create a Joint Development Zone. This was because Nigeria and Sao Tome and Principe had a dispute over maritime boundary. You know boundary issues are very sensitive but we managed to have a very good negotiation which was tough but amicable. So the key point was the establishment of the JDZ and a Joint Ministerial Council (JMC) to have the overall political responsibility and oversee the JDA. The treaty also provides that the benefits and obligations of the state parties would be in the ratio of 60: 40 (60 for Nigeria and 40 for Sao Tome and Principe). It also said we should develop and manage the exploration and exploitation of petroleum and other natural resources in the zone. It also provides for the two countries to establish a military commission to help oversee the security and policing of the zone. The treaty is valid for 45 years but provides that after 30 years the two countries would sit down and review. These are the main key points of the treaty.
DT: Looking at the vision of the JDA which is the attainment of regional and African cooperation and integration through the development of economic resources, to what extent would you say this has been achieved after more than 15 years of its existence?
Prazeres: I think it has been achieved greatly. First of all let’s look at the political side of it, you know we are talking about two different countries with different cultural backgrounds who had a dispute but came together to create a development zone. We did not have to go to the International Court to resolve the problem so politically this is a great achievement. Let me also tell you that the Nigeria- Sao Tome and Principe JDZ is considered by the United Nations as one of the best in the world. This is based on the fact that we did it peacefully and friendly and this is a fundamental achievement. The second achievement is the economic aspect of it. Like I earlier said concerning the exploration and exploitation of natural resources so far let me tell you that we have achieved a total of $300 million with signature bonuses that were shared by the two countries. The sharing was in the ratio of 60 percent for Nigeria and 40 percent for Sao Tome and Principe. We did two licensing rounds, one in 2003 and another in 2004. We have six petroleum blocks awarded. Out of this petroleum exploration, the companies started the exploitation. We found oil even though some major oil companies left because the quantity of the oil found, according to them, was below the benchmark. But today we have the independent companies that came in and with this development of the blocks; there is what we call contract agreement and out of that the companies did an investment in six blocks totaling $415 million. We also have the social responsibility projects worth over $5 million. We had scholarships in the amount of $2 million. In all we executed 40 social projects that have been commissioned in Nigeria under the JDA and 25 others in Sao Tome and Principe. As far as the scholarships are concerned, 2004 Nigerians benefitted from post graduate scholarships while in Sao Tome and Principe there were 970 beneficiaries. So you can see that we have achieved a lot economically and another important achievement is the cordial relations between the two state parties. Because of this development today we have a lot of Nigerian investments in Sao Tome and Principe. In fact NICON Insurance is the leading market in insurance in our country. Energy Bank is also doing very well in Sao Tome and Principe. This is in addition to several other small scale businesses by Nigerians such spare parts dealers. Indeed, the JDZ/JDA opened an avenue of friendship between our two countries.
DT: In terms of financial obligations, how responsive have the state parties been in terms of the funding of the JDA?
Prazeres: I must tell you that for the past 3 to 4 years we have been having serious challenge with regard to the funding of the JDA. First of all the JDA was over staffed, it was forced to recruit too many people leading to overstaffing. So we started having this funding challenge since 2014 when the two countries stopped funding the JDA. In 2015 the situation became worse and we wrote to the two countries saying that the state parties should continue funding the JDA. We also stressed the need for the two countries to sit down and look at the JDA. We had an overstaffed organization and funding problem. Consequently in 2016 we had to send some staff on administrative leave; about fourteen Nigerians and eleven Sao Tomeans were affected because we could no longer cope financially. The expenditure on staff in the JDA two years ago was 60 percent of our budget; including salaries and allowances and we could no longer cope. This was why we embarked on restructuring in the JDA. The Joint Ministerial Council during its last meeting in March 2014 decided that the JDA should start restructuring because that time the state parties said they would no longer be funding the JDA. Consequently in 2015 we did restructuring at management level and the JMC said it should be a continuous process. We wrote through the ministries of Foreign Affairs of both countries but while Sao Tome endorsed the restructuring the Nigerian government said we should not proceed with it till both countries sit to decide on that. Sao Tome has been writing to Nigeria to enable them have a meeting to that effect but the meeting has not been held till date. I remember last December when I was in Sao Tome and the Prime Minister during an end of year press conference was asked about the relationship between Nigeria and Sao Tome and Principe and the JDA. The Prime Minister responded by saying the relationship is dormant because in the last two years Sao Tome was trying to have a meeting with Nigeria but with no positive response. Therefore our opinion in the JDA Board is that the two countries must sit down together and discuss the funding of the JDA as well as address the issue of restructuring once and for all. We have to downsize in order to cope with the funding. Let me tell you one thing; from January 2017, the Board took a decision that those in the system now from executive directors to other staff would be receiving half salary. There are also some allowances that we have stopped paying because that is the only way we can survive.
DT: I understand that you recently signed a new Production Sharing Contract (PSC). What is the significant of this new contract which is coming a long time after the last one?
Prazeres: It is very important because it is a block that was left since 2013. Now it is going to be active and the company is going to pay the necessary fees. It is this kind of fees that is keeping the JDA to keep surviving. So this is very important because even the JDA is going to pick up again, especially now that we have three blocks (block 1, 5 and 2).
DT: Sometime ago there was this controversy over the construction of the JDA headquarters in Abuja over allegations of corruption due to contract inflation. Consequently, a probe panel was put in place, what is the current status of the JDA headquarters project?
Prazeres: The Joint Ministerial Committee set up an independent investigative committee that exonerated the Board of any wrongdoing because we did what we were supposed to do. The problem is with the contractor that failed to fulfill its obligation. But three months ago we renegotiated the contract and now the company is preparing to return to site.
DT: With the prospects and challenges you have highlighted, how do you see the future of the JDA going forward?
Prazeres: The future is bright but it is necessary that the two countries should sit down to address issues of the JDA such as funding and restructuring. For me these are two main issues that must be resolved. And I believe it is possible because having resolved so many difficult issues in the past I believe this can also be resolved and the JDA still has a bright future.
