Archive for the ‘Nigeria’s Fuel Subsidy Scam’ Tag


Much as Nigeria has always been noted for extreme corruption, thus far in 2012, corruption has run amok, prompting Transparency International (TI) to state that “the political situation in Nigeria is more of criminality than governance.” Indeed, in a May 4 letter to President Jonathan, a group of lawyers representing TI decried “the rate and scale of scams and corruption probes coming out of Nigeria in 2012,” noting that “the scope and speed of corruption in [the] country this year is beyond anything our client has ever dealt with.”

TI is right. From January, Nigerians have witnessed a stream of corruption scams involving plenty of stolen state funds. Intriguingly, almost every scam has come with wild accusations and counter-accusations of malfeasance.

The first major corruption scandal in 2012 was that which saw the director of Nigeria’s sports commission, Patrick Ekeji, summoned by the House of Representatives for questioning over misappropriated funds, including ₦1.2mn to create a Facebook account! Closely following that, on February 14, the Senate appropriation committee chairman, Ahmed Maccido, said ₦1tn worth of projects had been smuggled into the 2012 budget by some ministries and departments.

Both cases above were nothing compared to the big three corruption scandals that were soon to roll. These are the capital market scam, the police pension scam and the jumbo fuel subsidy scam.

Firstly, during a March 23 public hearing on the Securities and Exchange Commission (SEC), the body charged with regulating Nigeria’s capital market, SEC director, Arunma Oteh, accused Herman Hembe, the house committee chairman, of demanding a ₦44mn bribe from the institution. Oteh also said that Hembe had not returned the estacode he collected for an abortive SEC-sponsored trip. Hembe countered that SEC generated an internal memorandum to “support” the public hearing with a donation of ₦30mn. Hembe since resigned as chairman of the committee on account of the allegations.

When the dust on those bribery allegations settled, on May 7, Oteh said that the former director of the Nigerian Stock Exchange (NSE), Ndidi Okereke-Onyiuke, spent a whopping ₦1.3bn on business travels during her tenure. She also said a report handed over to her when she assumed office showed that “the NSE spent ₦186mn on 165 Rolex wristwatches as gifts for awardees,” out of which only “73 were presented to the awardees while the outstanding 92 watches valued at ₦99.5mn remain unaccounted for.” A day later, Okereke-Onyuike refuted Oteh’s allegations, rather blaming the capital market’s crash on poor regulation by the SEC and Nigeria’s Central Bank.

Enter the Police Pension Scam. On February 14, former permanent secretary at the Police Pension Fund, Atiku Kigo, admitted to investigators that ₦32.8bn was pilfered from the fund by public officials under his watch. He acknowledged that they deliberately ignored the mechanism put in place to prevent the looting of government funds. On April 2, the senate committee probing the management of the pension fund announced another illegal police pension account with ₦3bn.

Next to surface was the former governor of Nigeria’s Delta State, James Ibori, who pleaded guilty in a British court on February 27, to stealing $250mn of state funds, $50mn more than what China exclusively spent on constructing the new and ultra-modern AU headquarters! Ibori, a sybarite, who had been mysteriously exonerated of similar charges in Nigeria, was sentenced on April 17, to 13 years in prison and is still making money through his companies in Delta State as he either owns or has a major share in a leading construction firm handling several juicy government projects in the state such as that of the new governor’s office and a demolition contract at the Asaba International Airport awarded at ₦7.4bn.

Then came the biggest one – the Fuel Subsidy Scam! Following the widespread public protests that greeted the removal of the fuel subsidy in January, Nigeria’s House of Reps set up a committee to probe the management of the subsidy regime. The committee submitted its report on April 18, with startling revelations of gargantuan fraud of more than ₦1tn between 2009 and December 2011. The report laid much of the blame for the subsidy absurdities on Nigeria’s national oil company, the NNPC, whose board is chaired by Petroleum Minister Diezani Alison-Madueke, and other top former and current federal officers, as well as related agencies like the PPPRA. On the whole, the committee found that ₦2.6tn was spent on the subsidy in 2011 – 900% more than the appropriated sum of ₦245bn! Also, evidence garnered suggests that a huge chunk of the 2011 subsidy funds was paid to select oil marketers during the period immediately preceding and following the April 2011 presidential elections [February to April 2011 and April to August 2011]. Even prima-facie, the sudden quantum-leap in the fuel subsidy payments was not a mistake. Fake submissions for the payments were approved and disbursements were made – and used to finance President Jonathan’s 2011 election. This begs the question about what Jonathan knew concerning the fraudulent subsidy payments and credits allegations that Jonathan put pressure on the Lawan subsidy probe committee to water down its report in the “interest of the nation”. It also supposes that Jonathan perfunctorily removed the fuel subsidy in January to keep his friends off the hook.

It is very shameful, still, that Jonathan, whose government maintains a 72% recurrent expenditure for 2012 as against a paltry 28% for capital, allocated ₦857mn to feed himself in one year. This, in itself, is corruption!

Reacting to the mind-boggling proportions of corruption, Nobel laureate, Prof. Wole Soyinka said: “One can no longer use words like disdain and contempt. We are being dehumanized. Just as we thought we had recovered from the pension scam, along came a humongous, material assault on the resources of the ordinary people.”

Lamenting that “The fuel subsidy [probe] revealed an organised banditry which, in the words of Farouk Lawan, “can hardly be rivalled in the history of a warped budget management of any nation anywhere in the world,” Pastor Tunde Bakare, a paladin for justice, and his Save Nigeria Group, on May 14, instituted a legal action against Nigeria’s government for disbursing ₦2.5tn for subsidy payments instead of the approved ₦245bn, promising that it would not allow the probe reports to be swept under the carpet like others in the past, and calling on Nigerians to be vigilant.

In all, a situation in which the Petroleum Minister claimed that “the NNPC no longer imports petrol” and the Customs countered that “the NNPC still does; they imported petrol in December,” as well as where Nigeria’s Central Bank on January 24 put the “actual” total subsidy payments on fuel imports in 2011 at ₦1.7tn, an excess of ₦300bn above the ₦1.4tn figure given a week before by the Finance Minister, Ngozi Okonjo-Iweala, speaks volumes of the systemic laxity that makes frugality to be farfetched, and aids and abets corruption, to the benefit of Nigeria’s putrid and ignoble oligarchs.

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