Can the NNPC come clean?

NNPC-Towers10 February 2014, Lagos – The revelation made last by the Governor of the Central Bank of Nigeria, Lamido Sanusi, that $20bn was missing from oil sales between January 2012 and July 2013 has led to a division of opinion among many Nigerians. Beyond the sheer politics and partisanship that have been inherent in the discussions in the Senate Committee and in the public media, it is important for Nigerians to once again think through the good side of the revelation. In requesting us to sit back and think through, we escape the “muddling through approach” that has been the hallmark of recent socio-economic discourses and analyses. This revelation offers serious lessons and opportunities for the improvement of the fiscal governance of the oil sector. It also brings to the fore the docility of Nigerians who pretend that they are helpless in the face of the looting spree.

It will be easy and cheap to dismiss the allegations as coming from one with an interest to discredit the administration especially in the light of his previous allegation. It will be recalled that the CBN governor had alleged that over $48bn was missing from crude oil sales. After “reconciliations” by a barrage of government agencies (who did not deem it fit to reconcile the figures until the allegation), the figure that was unaccounted for was reduced to between $10bn and $12bn. The NNPC sought unsuccessfully to explain away this huge sum of money as having been expended in its routine and mundane operations. Indeed, it was ridiculous for the NNPC to tell Nigerians that it imported fuel, calculated the due subsidy and withdrew it all by itself without reference to any other institution or authority. And all these are happening in a purported constitutional democracy where there are supposed to be checks and balances.  In a straight language, the NNPC just told us that it mismanaged our money and challenged us to go and hang if we are not happy.

Now, with this second allegation focusing on $20bn, a lot of issues and facts are beginning to emerge. Again, the NNPC through its managing director, Andrew Yakubu, has loosely tried to divert attention from the specific allegation by calling the specifics “unsubstantiated claims” which showed “little understanding of the technicalities of the oil industry”. He further stated that the CBN is not an auditing outfit. “But what it is doing now is auditing. We have no problem with auditing, but let the professionals, the certified bodies and agencies that are charged with this responsibility of auditing, do their work”. But these same professionals have been auditing the NNPC for years and returning a clean bill of health when there are several barely hidden cans of worms.

The first major issue being brought back to public discourse through the revelation is the purported subsidy on kerosene. The NNPC claims to be importing the product at N150 per litre whilst selling to middle men at N40.90k per litre thus subsidising the product by about N100 per litre. But the truth is that no one can verify that he has bought kerosene at the controlled price or any price less than N170 per litre. The clear posers include; why is the Federal Government subsidising a product but the subsidy is not getting to the targeted beneficiaries? Who are these traders and companies through which the NNPC delivers the product? Who is supposed to monitor and police the companies to ensure that they deliver the subsidised product at the right price? Can the NNPC vouch that it is selling to these companies at a price that enables them to deliver the product at the official price? If the NNPC can vouch that it is selling at the appropriate price, why has no one been held responsible and prosecuted for buying a product at about N50 and selling it over N170. Who has ever seen this margin of profit in a sane society?

There is a straightforward message to the NNPC, the Minister of Petroleum Resources and indeed the President, on whose table every buck stops: Nigerians are not interested in the technicalities of the oil industry. Do not bore us with “nonsensicals” which make no meaning to the average Nigerian. Every trade and profession have their technicalities which I am sure, all of you do not understand. The question is straight forward and the expectation is for reasonable explanations of how the monies entrusted to their care have been managed. Indeed, if as the NNPC boss claims, the industry is riddled with technicalities which actually allow him to get away with blue murder, then we are bound to believe that the allegations are true until he brings credible facts to the contrary. Since these are facts and circumstances peculiarly within his knowledge, the burden of proof is overturned and the experts should come and tell us how our monies have been disappearing.

The second major issue is the fact that it is very easy to steal public resources and get away with them. Cheap explanations and making very simple transactions sound esoteric and complicated will do the magic. The first time, the excuse was about subsidy, repair of pipelines and now, what else will we hear? It is the position of this discourse that this revelation is in the public interest because government owes Nigerians a duty to inform us about the state of public finances. Section 48 (1) of the Fiscal Responsibility Act was unequivocal when it stated that the Federal Government shall ensure that its fiscal and financial affairs are conducted in a transparent manner and accordingly ensure full and timely disclosure and wide publication of all transactions and decisions involving public revenues and expenditures and their implications for its finances. Why has the NNPC and the Ministry of Petroleum Resources not briefed Nigerians about the use to which their monies have been put? Will the heavens fall if NNPC on a quarterly basis briefs us through publications in the print and electronic media of the actual output of crude oil and gas, the income that accrues from the sales and other activities and the expenditure that yielded the income?

Access to information is a precondition for informed public discourse and participation in civic life. Therefore, when the NNPC deliberately designs extremely opaque procedures and processes that can give it the temerity to accuse the CBN of ignorance about its operations, it is an admission of a crime against the people. It is an act of economic sabotage considering that oil is the mainstay of the economy and funds over 70 per cent of the budgets of the three tiers of government. Indeed, it is an admission that the NNPC deliberately sabotages efforts by oversight institutions to monitor its transactions.

It is clear that the kerosene subsidy is not reaching the intended beneficiaries and the political will to stem the leakage is not available in government. The subsidy only enriches the men and women in the corridors of power. Two options are therefore available. The first is to stop the subsidy and the second is to enforce the rules. I would have voted for enforcing the rules. But who will bell the cat? For now, we can stop the bleeding by removing the subsidy. Finally, we can start a multi-pronged campaign for the thieves to be sent to jail and for the eventual passage of the Petroleum Industry Bill into law.


– The Punch

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