NNPC, Buhari and the missing trillions

By Olusegun Adeniyi

An old man was walking through a village when he saw several children gathered around a man of about his own age who was being rough-handled by them. The old man enquired from the children what the matter was and they explained that the man was caught stealing a chicken which he put in his pouch. They added that if the pouch was searched, their allegation would be proved.

The old man moved closer to the alleged chicken thief and asked for his defence. The man looked straight at the intercessor and said, “Please, I want you to use the eyes that old men use to look at things to examine my pouch. If you do that, I am sure you will find out that there is no chicken inside it and that these children don’t know what they are talking about.”

After peeping into the pouch and seeing the chicken, the old man looked at the embattled fellow old man, shook his head and then turned to address the accusers: “My children, because you are young, there are many things you cannot understand. That is the way life is. As for the chicken, all I will say is that you are looking for what is not lost. I will therefore advise you to allow this man to go.”

The moral of the story is that life is replete with perplexing situations that sometimes require common sense to deal with even when justice may not have been served.

That perhaps is the best way to situate the report of the PricewaterhouseCoopers (PwC) forensic audit into the activities of the Nigerian National Petroleum Corporation (NNPC) released on Monday. Whatever the findings in the report, it should not be lost on Nigerians that in its introductory letter to the Auditor General of the Federation, PwC stated that the “procedures we performed did not constitute an examination or a review in accordance with generally accepted auditing standards or attestation standards.”

Notwithstanding that caveat, the report has nonetheless reaffirmed the general perception that NNPC operations are lacking in transparency and accountability while highlighting the urgent need for the corporation to put its house in order. A major highlight of the 199-page report is that from the financial years 2012 and 2013 crude oil sales receipts of $69.34 billion, the NNPC only paid $50.81 billion into the federation account. The outstanding balance of $18.53 billion, according to the report, was spent on various operational costs, many of which were considered frivolous and wasteful. “We therefore recommend that the NNPC model of operation must be urgently reviewed and restructured, as the current model which has been in operation since the creation of the corporation cannot be sustained,” the report stated.

It could not have been a coincidence that the presidential order to release the report came 24 hours after the president-elect, Major General Muhammadu Buhari (rtd), promised to probe the allegation by former governor of the Central Bank of Nigeria (CBN) and current Emir of Kano, Muhammadu Sanusi II, that oil revenues to the tune of about $20 billion (trillions when converted to Naira) were unremitted to the Federation Account by the NNPC. The PwC report seems to have vindicated the Emir who never really claimed that the said money was stolen but rather that it had not been accounted for.

However, in the light of current revelations, many Nigerians are already excited about the prospect of a coming probe by Buhari. But such an exercise would be no more than a needless distraction for an administration that has so many things on its plate.

For the avoidance of any doubt, I want to make it clear that I am not in any way canvassing amnesty for those who perpetrated the recent heist in the oil and gas sector who must be made to face the law. But if Buhari’s primary goal is to reform the oil and gas sector and rid it of the current abuses, all that he needs to do is to put together a small team of industry experts and respected accountants to collate and examine the several reports (mostly self-indicting) by the Jonathan administration. Allegations of corruption which are criminal matters can then be handled by the appropriate security agencies and the office of the Attorney General of the Federation.

Right now, there are enough materials to work with regarding the rot in our oil and gas sector. From the Aigboje Aig-Imoukhuede Ministerial Verification Committee which metamorphosed into a Presidential Committee to the Dotun Suleiman Committee on Governance and Control Task Force to the Petroleum Revenue Special Task Force headed by Nuhu Ribadu to recent NEITI audit reports, the revelations are not only damning, the conclusions of all of them are that both the upstream and downstream operations of our oil and gas sector are in trouble. And they all contain strong recommendations, assuming the Buhari administration is more interested in finding solutions than in muck-raking.

I have read the PwC audit report which, even in its limited scope, is quite revealing and I have also read several other reports. While I intend to come up with my own suggestions for Buhari, hopefully before his inauguration on May 29, I want to make a quick point: Even when Buhari comes with a reputation of personal integrity, I am not expecting too much change from him in the oil and gas sector because he will ascend the presidency with his own crowd, some of them very broke and hungry. These new men (and women) in town will most likely also want to play in the sector that is founded on political patronage and rent. Probing NNPC is therefore the easy bit, reforming the sector is a different ballgame altogether and I am not yet convinced Buhari can muster the requisite political will to do that. I sincerely hope he does but I am not very sure it will happen.

Ever since my stint in the Nigeria Extractive Industry Transparency Initiative (NEITI), I have paid special attention to our oil and gas sector and it is so easy to understand why the NNPC is the “ATM” from which succeeding political authorities dispense easy money–from the military era to date; all without exception. That also explains why the corporation has for decades ran a system that is almost impossible to properly audit and it did not start with Jonathan though I make no excuses for the monumental abuses of recent years.

Tragically, we are not even talking about the leakages that come from oil theft.For instance, a 2012 report by the International Energy Agency (IEA) said the Federal Government and local and international oil companies (IOCs) operating in Nigeria were losing an estimated $7 billion annually to oil theft.“Information about Africa’s biggest oil industry is an opaque myriad of numbers. No one knows which ones are accurate; no one knows how much oil Nigeria actually produces. If there were an authoritative figure, the truly horrifying scope of corruption would be exposed,” The Economist magazine wrote in a piece published in October of the same year.

All said, it is important to stress that what Nigerians require of the Buhari administration is not another rash of probes that would throw up more heat than light and only serve to entertain the people. We have had enough of that. What I consider important is for him to come up with clear strategies for reforming the oil and gas sector so that it can begin to work for all Nigerians rather than a few rent seekers and their collaborators in the corridors of power.

If Buhari does that, then he would be on the way to repositioning our country for peace and prosperity.

Endangered ‘Spare Tyres’!

A few days to the end of their administration in May 2007, then Deputy Governor of Lagos State, Mr. Olufemi Pedro, resigned his appointment. But Governor Bola Ahmed Tinubu refused to accept the letter. The goal was to ensure that the impeachment proceedings then already commenced against Pedro by the State House of Assembly ran its full course.

Pedro’s ‘sin’ was that, against the dictates of his boss, he decided to seek the post of Governor of Lagos State, first in the defunct Action Congress (AC) and when that door was closed, through the Labour Party. At the election, Pedro predictably failed woefully. But Tinubu felt his “disloyal” deputy should be punished. That was how the state House of Assembly came in. Within a matter of days, a panel was inaugurated by then State Chief Judge, Justice Ade Alabi, a verdict of guilt was reached and the state lawmakers completed the rest by impeaching a man who had resigned from office!

Pedro’s case is not too different from that of Alhaji Ali Olanusi who was until Monday the deputy governor of Ondo State. Because Olanusi decamped to the All Progressives Congress (APC) on the eve of the presidential election, Governor Olusegun Mimiko’s men in the State House of Assembly met and passed a resolution asking the State Chief Judge to set up an impeachment panel. Before anybody knew what was happening, the “panel” had been constituted, it had sat, found Olanusi guilty and had submitted its report to the lawmakers. All within 48 hours! On Monday, the lawmakers impeached Olanusi and almost immediately, a letter arrived the assembly from Mimiko nominating Alhaji Lasisi Oluboyo as replacement. The letter was approved and the man (who almost prostrated before Mimiko while being sworn in) is now the Ondo State Deputy Governor!

Unfortunately, this is a familiar story across the country where governors dispense with their deputies as casually as most people dismiss their drivers and the charge always is that of “disloyalty”, not to the system but to their persons. And it is so easy to do because members of the states’ Houses of Assembly are no better than errand boys for governors. At the last count, no fewer than 18 deputy governors have lost their jobs under the current dispensation because of differences with their governors.

Never in the history of our country, not even during the worst of military rule, has public conversation been more in need of dissent. Yet, what we witness in the states are tyrants who govern more or less as sole administrators and who see their deputies as mere appendages.

Against the background that the right to disagree follows directly from the right to hold independent opinions, tolerance for dissent is an important sign of political maturity. It therefore also follows that rewriting the rules to ensure subservience to one key figure is not only disgraceful, it is antithetical to the promotion of rule of law. The truth must be told: our democracy is imperilled if we continue with a situation in which lawmakers in the states merely rubberstamp the whims of governors and where any deputy governor who disagrees with his boss is removed from office without following due process.

– this piece was written by Olusegun Adeniyi/thisday