Revealed: How NEITI Audit Uncovered Looted Billions in Diezani’s NNPC

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  • Concerned Nigerians call for the      resignation of Diezani, Iweala and Maku for their alleged roles in the      messy oil subsidy saga
  • Senators accused of receiving      excess largesse in dollars two weeks before the removal of fuel subsidy

By OHIA ISRAEL

One major worry in Nigeria today is that poverty is rising at an alarming rate with almost 100 million people living on less than $1 a day despite the nation’s oil wealth.  The percentage of Nigerians living in absolute poverty – those who can afford only the bare essentials of food, shelter and clothing – has risen to around 60 percent. Keen watchers of negative times are quick to blame it all on flagrant corruption in high places especially in the oil sector, the mainstay of the economy.

Two recent audits by Nigeria Extractive Industry Transparency Initiative (NEITI) of the oil industry show how corrupt officials looted billions of dollars through irregular payments, despite years of government promises by the authorities to clean up the monumental rot in the industry.

“Right now, no one can tell you exactly how much of our crude is extracted from our soil,” said Orji Ogbonnaya Orji, one of the directors of NEITI, adding that “We depend on records from the oil companies. That clearly has to change.”

The NEITI audit shows some startling gaps: $540 million missing from $1.675 billion in signature bonuses – these are advance payments to develop fields, a standard producer country demand. Then there’s 3.1 million barrels of oil missing from NNPC declarations about its joint ventures compared with the figures released by NNPC’s international partners. That equates to 0.25 percent of the output. NNPC also received $3.789 billion in dividends from Nigeria LNG, a liquefied natural gas venture over the 2006-2008 periods, but there is no record of those dividends being paid into the federal accounts.

The report says foreign oil majors may have underpaid royalties of $2.33 billion arising from subjective interpretation of volume, pricing, and grading variables. Queried Orji: “We are questioning the basis of those calculations; they are not calculated on the basis of empirical fact. And there is connivance by officials.”

Since foreign firms also seemed to have underpaid petroleum profit tax by over $1 billion, the report recommended a review of the tax returns of Chevron and Exxon Mobil. Exxon officials were not immediately available to comment. A Chevron spokesman disclosed that the firm complies with all laws and regulations in the locations where we operate, as a matter of long-standing policy Chevron does not release specific financial details.

There are fears that NEITI audit report recently delivered to the government contains unanswered questions which could lead to another fuel price hike. According to a communiqué made available by the United Action for Democracy (UAD) at the end of meeting of National Coordinating Council (NCC) in Lagos, the “intensive mobilization in preparation for mass revolutionary action” against further federal government hiking of the price of petrol next month and other anti people policy and for system change was in the works” The body is insisting that the pump price of petrol must be reversed to N65 per litre. “The NCC in session analyzed the attempt by the Federal Government through some of its officials such as Ngozi Okonjo Iweala, the Minister of Finance to incorporate segments of civil society into some ‘consensus’ supposedly reflecting ‘consultations’ by mid March on the intent of the state to further hike the price of petrol.

“UAD considers this as dishonest and as efforts to hoodwink Nigerians since the Federal Government has made it clear that it is still bent on confronting the Nigerian people.  The NCC in session thus resolved that the UAD and its officials will not be part of such ‘negotiations’. We insist that petrol price be reversed to N65 per litre”, stated the communiqué.

UAD described last January’s revolt as a well-liked cataclysm of the poor and suffering Nigerians against the calamitous and aggravation state of poverty, corruption and impunity in high places and disenchantment with the ruling elite in Nigeria which was ignited by the hike in fuel price.

However, the NCC reviewed the revelations that were made at recent probe by House of Representatives on ‘Subsidy Regime Management,’ saying they confirmed the position of UAD and the mass of Nigerians that it was the corrupt enrichment of a minority and not the affordability of fuel for the vast majority of Nigerians that was being subsidized. Just like the Power probe, UAD also called for the prosecution of all individuals and corporate bodies found to have been the beneficiaries of the supposed ‘subsidy’. Moreover, President Jonathan’s scrapping of the hastily-conceived SURE programme was another demonstration of the bad faith and utter disdain of the Nigerian people by this regime in particular, and the ruling political elite in general.

“Considering the facts that monies accrued from January with the increase of N32 per litre over the amount appropriated in the 2011 budget that will not lapse until March 31st 2012; with the revelations of mismanagement of ‘subsidy’ funds; Nigerians cannot but be suspicious of how the funds generated from January are being spent,” UAD said. The body called on Nigerians to be ready for a new phase of the struggle for self emancipation from the corrupt, treasury looting, clueless and directionless ruling elite as regard to other issues such as the forthcoming hiking of electricity tariffs.

It went on: “Realizing that the Nigerian State is still committed to further hiking the price of petrol by April 2012 (according to PPPRA, the expected market opening price for petrol as at end of February is 165 Naira), the UAD shall henceforth commence intensive mobilization in preparation for mass revolutionary action against this and other anti people policies and for system change.”

We call for the immediate resignation or sacking of Dr. Ngozi Okonjo Iweala, Diezani Allison- Madueke and Labaran Maku ministers of Finance,Petroleum and Information respectively, for demonstrating culpability by acts of omission or commission in the fuel subsidy, the anti people hike in the price of petrol and the conscious promotion of lies to cover up the truth.” UAD stated.

DESERT HERALD gathered that two weeks before the Federal Government announced the removal of fuel subsidy on Petroleum products, leading to a hike in petrol price, Nigerian Senators allegedly got an unexpected largesse, in mid December when the President of the Senate, David Mark,was said to have  distributed fresh-mint notes of U.S. dollars to each of the country’s 109 Senators.  There is no evidence that any Senator rejected the largesse. Even activist members who got elected on the platform of opposition parties, promising to expose corruption in parliament, were said to have quietly got and pocketed their shares.

“Each Senator got sixty thousand dollars and principal officers even got more, I think between seventy and eighty thousand dollars,” one of our sources, a top Senate official, said. The source maintained that the dollar notes were so crisp that “one of us (a Senator) joked that the money could only have come directly from the (American) Federal Reserve Bank.”

However, the report went on to say that the Senators were not told the source or purpose of the largesse, but it was learnt that the money originated from elements and departments in the federal government pushing the proposed deregulation programme of the administration.

“I think the money came from the executive,” said a top legislative aide, whose boss also benefited. “Even though it was not stated then, I believe it was meant to calm the Senate in preparation for the fuel subsidy removal.” The funds, tucked in envelopes and paid out after the Senate commenced its recess on December 20 last year saw many Senators collecting on behalf of their colleagues, as they claimed that the aides were not allowed to receive the payment on behalf of their bosses.

A social media report indicated that the Central Bank of Nigeria (CBN) denied releasing the hard currency to the Senate. Senator Adullah Mohammed was said to have furiously spoken thus: “That is nonsense! Senate to do what with dollars?” Mr. Abdullahi explained that the only time the CBN could sell dollars to public officials is when they travel on official foreign trips and deserve estacodes, adding, “And that is after presenting all necessary approval by his ministry or institution.”

Paul Mumeh, Senator Mark’s spokesman said such allegations could only be blackmail. “Even if you break CBN vault, you won’t get that kind of money. Such things (allegations) can only be blackmail,” he said.

“I am not aware of any such thing,” said Ita Enang, a People’s Democratic Party Senator from Akwa-Ibom State. “I am not aware. I will go and ask him (Mr. Mark).” Nigerian lawmakers are reputed for arbitrarily increasing their emoluments, and are among the highest paid in the world. Their salaries and allowances are a hugely guarded secret, even as they receive an average of N50million quarterly in “office running cost”. They are never made to account for the payments. Yet they lay claim to the so-called anti-corruption stance of government.

6 COMMENTS

  1. i don’t think there is any truth in the fact that the minister of finance is trying to build a consensus among the activist in order to hike the fuel price again. i believe this is just another attempt to incite Nigerians against the minister.

  2. i don’t think there is any truth in the fact that the minister of finance is trying to build a consensus among the activist in order to hike the fuel price again. i believe this is just another attempt to incite Nigerians against the minister.

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