Former USA Diplomat, Amb. Herman Cohen Speaks

Ambassador Herman Cohen 82, former Assistant Secretary of State for African Affairs under George Bush (Snr.), is the President of Cohen & Woods, a Washington based Nigerian focused consortium helping US companies doing business in Africa, including Contour Global a US power company that provides Coca Cola Nigeria with its CHP. A founding member of the Corporate Council for Africa, Cohen says Contour Global and many American power companies are keen on partnering with Nigerian investors in the power sector with increased availability of gas.

Known as the Dean of African Affairs for helping African governments and businessmen navigate Washington, Cohen who is a board member of Hyperdynamics Corporation makes regular appearances as an analyst on Al-Jazeera, the BBC, the CBC, PBS News Hour, NPR, Radio France Internationale, and the Voice of America. He spoke with NDUKA NWOSU on why he believes Nigeria has a great future ahead, his relationship with African governments and leaders and his book, 'The Mind of the African Strongmen. Cohen: Conversations with Statesmen, Dictators and Father Figures,' appearing on the bookstands February 2015.

What is the track record of Cohen and Woods in Nigeria?

My major client in Nigeria is a US power company called Contour Global and they are private investors in power. So far in Nigeria Contour Global major client in Nigeria is Coca Cola Bottling Company with its 18 bottling plants. They provide Coke's CHP (Carbon Dioxide, Heat and Power. The Tri-Gen and Co-Gen innovation we pioneered in Europe is now active at three sites in Nigeria – Ikeja, Benin, and Apapa. As the country's exclusive provider of non-alcoholic beverages and the continent's second largest Coca-Cola bottler, the Nigerian Bottling Company Ltd. (NBC) is using combined heat and power plants to power three of their 13 bottling plants. The Co-Gen approach across the three plants produces energy that is reliable and cost-effective while also reducing the environmental impact of operations. The multinational company also has power plants in Togo, Rwanda and Senegal.

The big picture however, is to build power plants in different parts of the Nigeria; we are waiting for gas to be made available. We are waiting to supply power to the national grid and other companies and once the gas issue is settled, we will come into the scene. The Minister of Petroleum's recent assurance is that the volume of gas coming from the oil companies will be increased.

Can you lead us more into your advocacy for private sector investment flows to Africa?

I believe that foreign aid to Africa has reached its maximum capacity to bring about development. African countries have been growing between three and five percent a year, which is good to keep up with population growth but it is not good enough to really take off like the South East Asian countries. In the 1950s when I began my career as a diplomat, African countries were richer than South East Asian countries like South Korea, Indonesia and Malaysia. They were wealthier, had greater market share for products but since the 1980s, South East Asian countries have pushed further ahead and I believe the reason for that is because of lack of private sector investment and when I say private sector investment I do not mean foreign investment flows, the key is not foreign investment flows; I am talking about local people including the small guys engaged in small scale business, not necessarily the big names-the Dangotes and Adenugas, engaged in investment, which is the way to bring about rapid growth; it cannot be done through foreign investment. Nationals of these countries are not investing as much as they should. The World Bank says there are $900 billion of African money taken out of Africa waiting. My purview is we can encourage private investors who have money both foreign and local to invest; that is the key way to bring about rapid growth; it cannot be done through foreign aid.

How much have you achieved bringing other American companies to Africa till date?

I have helped a number of American companies go to Africa including Nigeria and other places but there is a reluctance investing in these countries, in entering the markets and the opportunities because there are problems of investing in these countries. It is not easy to invest in these countries. Our current entry into Africa is a Texas based oil company called Hyperdynamics, which is exploring for well in offshore Guinea. It has done one well and is exploring for a second well.

What's your impression of Nigeria's current rating and the investment climate?

The investment climate is good in the sense that investors can feel safe, that a contract can be honoured, which is the first priority for investors, that a contract with the Nigerian government or some private sector organisation will be honoured, which is not true of many African countries. Should that make it a good investment destination? The problem for many potential investors is the absence of infrastructure in many parts of Nigeria. For example if you have a factory in Lagos, this is good especially for quick imports and exports but as an investment destination, there is an absence of infrastructure development in many parts of the country. The transport system such as rails and roads is poor and the ports can be overcrowded; the power distribution is very poor. So infrastructure is a big problem for many investors in Nigeria. The good side is that the investment climate is good but infrastructure is a big impediment. Power in particular is inhibiting investment. The national grid is very weak and needs to be upgraded; there is a shortage of gas while the distribution and transmission system needs to be upgraded. A national grid such as Nigeria's calls for increased capacity in all directions; you have to bring power lines to communities that don't have it and you have to bring the power to individual consumers and you have to arrange for people to pay for their consumption of power and you need to fix consumer meters.

Privatisation is absolutely the right thing to do. The companies before privatisation were not performing; now the new owners are not just taking over the various components of the power sector but are bringing in their capital for improvement and expansion and it will take their raw planning to do that.

So you believe the absence of gas is affecting the turn-around of the power sector?

Absence of gas distribution to the national grid and the power plants is a major problem in powering the country. Nigeria remains one of the biggest countries flaring its gas. So whenever you produce gasoline, gas is also produced and if you are not going to use it, you then burn it. Nigeria is still burning a lot of gas. That gas needs to be harnessed and sent through the land for distribution by pipelines but Nigeria is not doing that.

It calls for a huge investment profile; is this happening with the participation of external partners?

I saw one Nigerian company called Total bringing its offshore oil fields gas in through the pipelines. This is a good beginning but it is a question of price and the National Gas Company is paying too low a price for gas; so there is no incentive for oil companies to bring this gas in. There is need to raise the price of gas.

How is your country assisting beyond President Obama's Power Africa project?

Power Africa means there is a lot of money available for private investors to get loan guarantees or to get loan support for investments in the power sector in Africa but the host country must set the right environment where investors will be willing to invest. For example Contour Gloval has many possible investments in the Gulf of Guinea area but it is waiting for gas to come. This problem persists in the entire West Coast-Cote D'Ivoire, Togo, Republic of Benin; Ghana should be getting a lot of gas now because of its oil but the question is how gas is transported to the land and brought to power plants; it should not be turned in to LNG and exported and sold abroad.

One of the biggest mistakes made by Nigeria was to allow the oil companies invest in LNG production and have it exported elsewhere when the gas is needed in Nigeria. Nigeria is exporting liquid financial gas all over the world when there is a big shortage of gas back home. This is a mistake made 50 years ago. Now I am not saying Nigeria should stop exporting LNG overseas; no, they can't do that because the production of LNG is such a big investment but they should provide incentives for the oil companies by raising the price of gas to bring the gas to the land at a good price. This is a big investment with the set-up of pipelines. This will reduce or eliminate gas shortage.

How do pipelines come into the solution?
The pipelines are central to the solution because they bring the gas offshore from the oil fields. It is a big investment but very profitable. Investors are not tapping into this because the gas price is very low. There should be a political decision to raise the price of gas so that the oil companies will invest in pipelines to bring the gas in just as the Nigerian investors should invest in pipelines to transport the gas on shore to various parts of the country and for power companies to have gas to produce power.

What is your rating of the Jonathan administration?

President Jonathan has started very important initiatives that will pay off in the future. An example is the privatisation of power plants. There is government support in new agricultural initiatives like cassava and sugar production; these are products that will help alleviate the shortage of food, and stop so much revenue wasted on food imports. Cassava will definitely add value to the economy. Cassava starch is important to many end users. Five percent of the cattle feed imported by the European Union consists of cassava starch and it provides a tremendous value of revenue; do you know who has a monopoly of that now? Thailand. African countries should be able to compete with Thailand. I see a good future for Nigerian cassava which is a normal product for Nigerians.

Do you see a rosy future for tropical Nigerian products in the international market?

In the 1950s to just after independence, Nigeria was a power house for tropical product exports-palm produce, groundnuts, cocoa, rubber and pine apples; they were the leading tropical export producer in the world but declined because of the degradation of infrastructure and maintenance and too much dependence on oil and less dependence on agriculture. The country was overtaken by Brazil and Malaysia. It can regain its position by investing on roads, irrigation, warehouses and other storage facilities, railways et al. Oil revenue can be divested into investments in those areas; then agriculture will come back as a power house. Nigeria can regain its position as a power house for tropical agriculture.

What is your relationship with General Ibrahim Babangida?

I was assistant secretary 1989 to 1993, that is the top person in the State Department for African policy and he was President throughout that period and my main issue with him was the war in Liberia. He was very important to our policy because he was central to the creation of ECOMOG and we provided very strong assistance to them, which intervened in the war in Liberia. Apart from that we did not deal with the internal affairs of the country; we stayed out of that and focused on the security of West Africa. We left office about the same time. I joined the World Bank and was for five years until 2000, responsible for the promotion of good governance in Africa, it was an intra-governmental organisation and I had them all over Africa. The members were all governments from Africa and donor countries. I had contact with him and General Olusegun Obasanjo who made frequent presence in my conferences on good governance

What book are you writing connecting General Babangida?

I have finished writing a book on my relationships with African leaders I knew personally when I was in the US government. The title of the book is 'The Mind of the African Strongman. Cohen: Conversations with Statesmen, Dictators and Father Figures.' That should be coming out February next year. I knew many of these leaders personally because of my high position in the State Department; I had private meetings with them. I was recounting what they said to me. I was trying to show the African approach to development and relations with the rest of the world. French speaking, I had Houphet Boigny, Obiango, and Senghor of Senegal; in the military I had Mobutu, Babangida and Siad Barre of Somalia. English speaking, I had Kaunda, Mandela, Mugabe and de Klerk.

What principal role did Babangida play in the book?

I reckon as military leader he administered the country quite well, which was unusual of a military leader. He also brought about a very good election also unusual of military leaders.

Are you referring to the June 12 1993 election, which was presumed won by MKO Abiola?

Yes.
Don't you think you will have a problem there? How did you handle that?

If it is because the election was cancelled, well, I never had a conversation with him to tell me why the election was cancelled but I pointed out that in April 1993 during my last month in office in Washington, I was visited by two Nigerian Generals whose names I cannot mention because they are still alive, who told me that the two candidates-Abiola and Tofa were unacceptable to the military because they were a couple of jokers. That is the record.

So how was the election good when it was cancelled?

It was good up to the point the votes were counted and one of them was the winner. A winner emerged. It was clear nobody said there was cheating or that the election was rigged.

But the result was only leaked because the electoral authority was not allowed to declare a winner? At that point it was a bad election. My conclusion from what the generals told me was that the military wanted to stay in power even without General Babangida. That was the signal I got. I was frustrated at that point because I did not know what to do with the information. I assumed from then the military was planning not to allow the election to be implemented.

Did you discuss corruption among African leaders with emphasis on Nigeria?

Yes I did and I categorised the many forms corruption was executed or encouraged by these leaders. I said some foreign observers are fooled by different forms of corruption. A man like General Mobutu Sese Sekou of Congo was very open about his corruption. He was flamboyant on how he took people's money to spend on himself and his family whereas in many countries it was subtle. President Kenneth Kaunda of Zambia for example, may not have been corrupt, he lived a simple life and people admired him for that. If you visited him, he poured the coffee for you whereas his party was very corrupt and sat on a lot of money made available to the party, the officers and members of the party. Zambia operated a one party system that tolerated no opposition. United National Independence Party (UNIP) of Zambia was very corrupt and the President never said anything about this. The same thing happened in Tanzania. Julius Nyerere was a great statesman, an intellectual admired throughout the world. He translated Julius Caesar to Swahili but his party the CCM was very corrupt and stole a lot of money. So corruption exists in Africa in varied styles.

What's your take on Nigeria?
I think the greatest source of corruption in Nigeria has been the oil sector and this is typical of most oil producing countries like Angola and Equatorial Guinea and only a privatised oil sector will minimise the problem. In the US there are very little government owned businesses. The oil sector is private sector driven. A lot of oil is produced in the Gulf of Mexico, Texas, Louisiana, Oklahoma and these companies produce oil and gas. They publish how much they produce and on the basis of those statistics backed with verifiable audit, they pay taxes and royalties to the state and federal governments.

At 82, what is the secret of your success?
The secret is that based on my career in government I made many contacts in Africa, made many friends and therefore when a company wants to go to Africa or has problems in Africa, I have ways of helping them. A very recent example, Countour Global was negotiating to build a new power plant in Dakar Senegal and the negotiations were going very slowly, different ministries were disagreeing with each other, different ministers had different ideas and these were not going anywhere. The city of Dakar really needed more power because it was subject to many blackouts. So I intervened and was able to get the US Embassy in Dakar, the Senegalese Embassy here in Washington DC, the state Department and friends in the Senegalese government to work together and come to a final conclusion and the final contract was signed during the US African Leaders Summit

What's the secret of your good health?
My wife Suzanne is French and gives me very healthy food. My wife is a gourmet cook from France. She gives me healthy gourmet food. Suzanne and I got married in 1957 while I was working in France for my first overseas posting. We remain happily married with two nice children Marc, 51 and Alain 47. They had a business for 26 years and the company was known as Opnet Technologies with a worldwide connection and 726 employees at the time it was sold. It started out in 1986 with three people and at the time it was sold it had 726 employees. They are both electrical engineers.

As an example of my contact, they made a big sale to South African Telecom and were not paid. They were not used to asking me for a favour but they asked me if I could help. I stepped in and found out the CEO was a former guerilla leader attacking South Africa from Mozambique. At that time, I made frequent contacts with him in Mozambique. I lost contact with him and it must have been 15 years since I met him. Dikang Museneki is his name. I called him and said: “Museneki, you are a terrorist, what are you doing here as the CEO of a telecom company?” We both laughed and he got the money paid. So that's one of the ways I help clients.

What was the networth of Opnet Technologies when it was sold?

It was quoted on the stock exchange and all the shareholders got paid. My two sons got a sizeable percentage of the shares; they started out with a capital of $100,000.00 and the company was sold for $1 billion in 2012, 26 years later. They have started a new company Bublup dealing with new telecommunications products to be launched next year after perfection.