In line with its anti-corruption drive, the Federal Government has been challenged to recover over N7.1trillion, being all the outstanding sums trapped in among individuals and operators in Nigeria’s petroleum industry.
The charge comes as the President Muhammadu Bahari’s administration is desperately looking for ways and means, including borrowings from offshore to fund its N6.01 trillion National Budget for 2016.
The sum comprises misappropriated and unremitted funds withheld by the respective parties, which should have been paid into government coffers.
Sources of losses
· Illicit payments/withdrawals N2.5 trillion
· Foreign Exchange $1.03 million
· Marketers’ violation N423 billion
· Unpaid Royalties $3.03 billion
· Domestic crude lifting N1.2 trillion
· Signature bonuses $755 million
· Differences from Swap N117 billion
· Concession payment $756 million
· Payments to 38 mktrs’ 128 accounts N999 million
· NNPC’s Kerosene subsidy claims N332 billion
· Subsidy double payments N848 billion
· PPPRA Admin charges N313 billion
The charge was made in Abuja, Wednesday, by the Nigerian Natural Resource Charter, NNRC, in collaboration with an international governance watchdog, Natural Resource Governance Institute, NRGI, during the review of the recommendations of various executive and legislative committees with regard to the outstanding sums.
The groups argued that if the recommendations of the various audit reports on the oil and gas industry are implemented, the Federal Government would recover all the N7.1 trillion from the repayments of illicit transactions, fines and refunds for overpayment.
Reasons for misappropriation
NNRC and the NRGI, in a report presented at a workshop, titled: ‘Policy Dialogue on the Implementation of Key Recommendations of Past Oil Sector Investigative Reports’, traced the sums to corruption; poor record keeping; and manual and analogue data storage in the petroleum sector.
The report stated that poor record keeping in the oil industry stems from record disparities, unverifiable data in the sector and inter-agency discrepancies. For instance, a one per cent error margin due to wrong data is equal to a loss of $700 million annually.
To guard against future malfeasance the report advocated the provision of a centralised portal for collating and disseminating revenue inflows across the various government agencies.
They added that efforts should be made to institute automated system that would support the use of standardised formats such as cloud storage and other file types.
Commenting on the findings of the report, former Chairman, Nigerian Extractive Industries Transparency Initiative, NEITI, Prof. Humphrey Asobie, accused past administrations of participating in corruption in the oil sector, saying that almost all the past leaders from 1973, had been indicted of one form of malfeasance or another in the petroleum sector by various reports.
He also accused political parties of complicity in the rot in the petroleum industry and other sectors of the economy, saying that over the years, the Nigerian National Petroleum Corporation, NNPC, had been a source of funding for political parties.
He argued that although political parties included fight against corruption in their manifestoes, the truth of the matter is that they actually fund themselves through stealing public funds.
“And that is the major problem. In other words, if you look at the NNPC, it has been the source of funding for political parties all along, and where they are not getting from NNPC, they are getting from other sources,” he said.
Explaining further, he said: “in fighting corruption anywhere in the oil and gas sector, the assumption is that there are principals that are above corruption, and who, therefore, have an interest in implementing anti-corruption measures. That theory is wrong in the Nigerian case, because historically, it has been found through ad-hoc committees’ reports and so on, that the very head of state, himself, is involved in the process, and that makes it even more difficult for the head of state himself to lead the fight.”
He maintained that for Nigeria to be able to address the fraud in the oil sector, it should address the conflict of laws, and conflict of policies in the sector, especially in the disparities between the laws guiding the activities of the NNPC, and the constitution of the Federal Republic of Nigeria.
He further criticised that using ad-hoc committees to investigate malfeasance and malpractice in the oil and gas sector is not healthy, particularly as the committees are dissolved after the investigation is concluded and the report submitted, which ensures that in most cases, the reports are not implemented.
In his own view, Prof. Jibrin Ibrahim, Babcock University, noted that recommendations of most of the audit reports in the petroleum sector were not implemented because of political complicity, which involved people in power, who exploited the system for their own benefits.
He called on civil societies and organised labour to increase their citizen engagement, ensuring that issues raised in the various reports are understood by the generality of Nigerians, so that they can call for action and the implementation of the reports.