TORRID tales of massive looting
perpetrated through the Nigerian National Petroleum Corporation and the
stupendous wealth allegedly accumulated by Diezani Alison-Madueke have
gripped a global audience...
Investigations into the murky deals that
enriched the former petroleum resources minister and a clutch of
wheeler-dealers while draining billions of dollars from the treasury are
ongoing in three continents. Unless the Nigerian state immediately
dismantles and replaces the system that allowed abuses on such a massive
scale, the looting spree will persist.
The rottenness of that system,
the opaqueness, the wide discretionary powers given to the president and
the minister facilitated that massive fraud, kept the country
under-developed and the majority of the people poor. President Muhammadu
Buhari should move now and reform the oil industry. We restate our
position that the reforms should start with the dismantling of the NNPC,
a cesspool of fraud and corruption and a veritable cash dispensing
machine for successive administrations since the mid-1980s. Also ripe
for the chopping-board is the Ministry of Petroleum Resources and its
Department of Petroleum Resources, the ineffective and compromised
industry regulator.
Revelations over the years show
how terrible the NNPC and the ministry have become. In London, the
United Kingdom National Crime Agency in August froze £10 million worth
of property linked to Alison-Madueke. In the United States, authorities
have launched a process to recover $144 million worth of assets
allegedly purchased for her by two businessmen who are being sought for
questioning. Back home, courts have ordered the forfeiture of various
sums of money and property in millions of dollars and billions of naira,
including real estate she allegedly paid $37.5 million in cash for in
Ikoyi, Lagos; 58 other houses in Lagos, Abuja, Port Harcourt and Yenagoa
and N9 billion traced to some banks to which no one laid claim.
Authorities in the three countries cite these as proceeds of graft, a
claim denied by the former minster from her London home. In the latest
twist, EFCC is said to have traced $1.5 billion in Swiss banks and
property in Dubai worth N7billion linked to her.
The Acting Chairman of the
Economic and Financial Crimes Commission, Ibrahim Magu, says assets
found so far represent no more than 15 per cent of what Alison-Madueke
acquired during her stint as minister.
In his report on the 2015
Federation Account, the Auditor-General for the Federation detailed how
the minister allegedly withdrew N59.44 billion from the NNPC accounts at
the Central Bank of Nigeria and in foreign banks in violation of the
rules. The report specifically cited how she and the then president,
Goodluck Jonathan, authorised $289.2 million to be sent in cash directly
to the director-general of the National Intelligence Agency ostensibly
for “urgent national security challenges”.
In 2013, the then CBN Governor,
Lamido Sanusi, said discrepancies between oil production/sales data and
remittances to the NNPC and government accounts showed a shortfall of
$11 billion (down from initial summation of $49 billion and $20
billion). A later audit by PricewaterhouseCoopers was damning: though it
found $1.48 billion unremitted to the government, it declared its
findings unreliable as NNPC refused to avail it of all the necessary
information for a proper examination. Three other reports – by the Idika
Kalu panel; the Nuhu Ribadu panel and the Nigerian Extractive
Industries Transparency Initiative audits – detailed a litany of abuse,
fraud, impunity and active collusion by the Presidency.
The NNPC spends money as it
deems fit, runs secret accounts, withholds dividends, bonuses and oil
sales proceeds and pays itself subsidy that it unilaterally calculates.
Up to $21.7 billion and N316 billion were withheld from the Federation
Account and unaccounted for from 2000 to 2014, said NEITI. A joint
parliamentary committee found that between 2014 and 2011, NNPC failed to
remit N3.08 trillion due to the federation account and $3.67 billion
false claims made on behalf of multinationals. NEITI said $12.9 billion
dividend from NNPC’s 49 per cent holding in Nigerian Liquefied Natural
Gas was not remitted in 2004-2013.
The system that allowed the
dubious joint venture agreements with unqualified firms in the award of
oil blocks and oil lifting contracts by the president and the minister
using discretionary powers without foolproof checks should end. Buhari
should fulfil his campaign promise of breaking up the NNPC into two
entities: one to serve strictly as a holding company and another as an
investment firm with substantial private sector equity. Government
should exit the mid-stream and downstream oil and gas sectors and
initiate liberalising reforms embedded in the original Petroleum
Industry Bill, a distorted version of which was passed by the decadent
National Assembly. There should be an accelerated programme to privatise
NNPC’s 14 subsidiaries.
Corrupt officials, as done
elsewhere, should be identified and flushed out of both the NNPC and the
ministry. A long-running scandal at Brazil’s state-owned Petrobras and
other bribe cases had by August 2015 produced 117 criminal indictments
and have since embroiled a former president, caused the impeachment of
another, while the incumbent now faces indictment. A former head of
China’s biggest oil firm, Jiang Jiemin, was among many officials jailed
for corruption in 2015. Mexico launched major reforms in 2013 after
years of scandal at state-owned Pemex, culminating in a widely applauded
bid round in 2015 that saw greater transparency and private sector
participation.
Refineries and petrochemicals,
retail services like depots and filling stations should be immediately
privatised. NNPC’s track record of losses of N197 billion in 2016 and
N39.3 billion in the first four months of this year will change to
profitability when loss-making assets are sold and replaced by
professionally structured investment in profitable ventures to raise
investible funds.
Reforms should be preceded by a
fresh round of audits; returning long-serving apparatchiks to run the
NNPC is counterproductive: it needs a new broom to sweep the filthy
system clean. With less than two years to new elections, Buhari should
get cracking today while the EFCC should step up its investigations.
Ultimately, Alison-Madueke should be brought to justice, no matter where
this takes place.
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