Saddam buried some of his WMDs after 1991 as insurance. He also ordered lots of the necessary agents to be literally dumped into the ground so the US couldn't find anything, followed by the intentional destruction of all records about his weapons programs. That may be why some American troops developed horrible health problems from their deployments: they were possibly exposed to toxic chemicals the Iraqis dumped years prior.
Saddam wanted to resume his WMD programs, but most evidence suggests he was going to wait for Bush and the UN to fuck off before fully resuming. He had the capability for sure. His mistake, besides being insane, was projecting as if he still had WMD capabilities to spook neighboring countries. He also hosted a ton of terrorist groups, which is why the US thought he had something to do with 9/11. He hosted countless other Middle East terrorist groups, so him swearing Al-Qaeda wasn't one of them was met with eye rolling.