FOR public officials and their
cronies stealing the country blind through the Nigerian National
Petroleum Corporation, the day of reckoning beckons. The thumping
victory of Muhammadu Buhari in the March 28 presidential election was
followed last week by the World Bank’s backing for his resolve to
closely scrutinise the corporation. With persistence, the reign of
impunity and unbridled looting will, hopefully, soon be over at the
state-owned oil company. The incoming government must ensure that
everyone involved in corrupt practice in the corporation is detected,
investigated, prosecuted and punished.
Having coasted to victory on the
promise to halt the pervasive corruption that defines the current
administration and on his own reputation for accountability, Buhari has
no choice but to, first, undertake a detailed probe and audit of the
NNPC operations and account and, thereafter, break the corrupt monolith
into a lean holding company. The executives, petroleum ministry and
Presidency officials that have for so long gorged on the treasury
through the NNPC should not get away with their loot. The World Bank’s
backing should also put paid to some misguided calls that the in-coming
administration should not “waste” time on probes. We disagree.
The magnitude of NNPC’s
malfeasance demands one. Corruption is encouraged by both the incentives
and opportunities to be corrupt. And so, the World Bank’s Chief
Economist for Africa, Francisco Ferreira, said, “One norm that has to
change is the norm of impunity.” A series of audits and reports has
uncovered horrendous graft, unauthorised spending, alleged secret
accounts and brazen theft. Described by The Economist of London
as one of the world’s “most opaque” national oil companies, the NNPC
unilaterally determines how much subsidy and other items it is entitled
to and simply deducts. Global audit firm, KPMG, reported that between
2007 and 2009, for instance, it over-billed the government by N28.5
billion in subsidy deductions. In 2013, Switzerland-based
non-governmental organisation, Erklarung von Bern, alleged that $6.8
billion was siphoned in crude revenues. The Finance Ministry complained
in September 2007 that the corporation failed to remit $5.2 billion to
the government.
For a company responsible for the
country’s interest in the oil and gas sector that provides over 70 per
cent of government revenues and 90 per cent of export earnings, this
corporation must be made accountable. The NNPC has become a law unto
itself and, as noted by Democracy Network, an NGO, “it is accountable to
no one.” The veracity of this was confirmed by Petroleum Resources
Minister, Diezani Alison-Madueke, who pointedly told a parliamentary
committee that the NNPC had the right under law to spend part of its
revenue without recourse to the parliament despite the constitutional
provision that all revenues accruing to ministries, departments and
agencies of the government must be remitted to the Federation Account.
An organisation rated by the
Economist Intelligence Unit in 2007 to be “a source of corruption and
national shame” and in March this year, to be “among the most secretive
oil groups in the world,” can only continue to be so only with
presidential and ministerial complicity. Successive Nigerian presidents
have, according to an analyst, turned the NNPC into their “personal
ATM.” A former presidential media adviser, in his memoirs, detailed how
the then President would simply demand money from the NNPC group
managing director for activities that should normally be funded by MDAs.
There are allegations that the NNPC partly funds the re-election
campaigns of sitting presidents.
The scale of the impunity
perpetrated by public officials is simply awesome. What Nigeria needs is
a holding company to manage her interests in the oil and gas industry,
not a corporate behemoth that oils the machinery of graft. The reform
should begin with a total withdrawal from the downstream oil sector –
pipelines, refineries, depots and retail outlets should be privatised
within six months of the new administration taking office. Its
production arm, the NPDC, should also be privatised. Let the private
sector run things, while the government strengthens regulation and sees
to the passage of the Petroleum Industry Bill.
As the late Singaporean
leader,Lee Kuan Yew, put it,“Singapore is what it is today because of
its system of transparency and integrity.” The new government should
break quickly with the inertia, impunity and complicity of the President
Goodluck Jonathan administration and exhume the panel and audit reports
on the NNPC. Arising from the 2011 petrol subsidy scam where N2.53
trillion was paid in unbudgeted payments, four reports and committee
reports to review them have not been acted upon. The latest report by
the Nigerian Extractive Industries Transparency Initiative on the period
2009-11, said N4.42 billion, N3.71 billion, and $1.7 billion in
over-recoveries from marketers and use of expired memorandum of
understanding with joint venture partners were still outstanding. This
is a firm that, according to EvB, sells all of its crude through third
parties, which creates room for kickbacks and shady contracts.
Nigerians want to know how much
is really missing from the NNPC: is it $20 billion as alleged by the
former CBN governor, Lamido Sanusi, or $10.8 billion as the NNPC itself
once admitted only to later say it paid itself for kerosene subsidy? We
need details of the refund of $1.48 billion recommended by PWC. What
kind of accounting does NNPC operate that the CBN, the government’s
banker, cannot unravel and one where the Finance Ministry, the
Accountant-General and the apex bank have conflicting figures?
But if ever the argument that a
fine toothcomb needs to be run through the NNPC is in doubt, Buhari
needs only remember that despite producing 2.3 million barrels of crude
per day, Nigeria imports refined petroleum products, the victim of
NNPC’s incompetent, corruption-ridden monopoly in local refining.
The overall strategic approach to
fighting corruption should apply across the board, with no distinction
made on whether it is petty corruption or high level corruption. No
exception is made for anyone and there are no “black areas” or “sacred
cows” the law cannot deal with.
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