TheNigerianVoice Online Radio Center

THE BIG BLACK OIL HOLE

By NBF News
Listen to article

You haven't done well with your oil money - Former US president Bill Clinton

Incurably romantic and idealistic. That has to be the reason why I still think Nigeria can be great despite the best intentions of the past and current drivers of the country's affairs. Constantly looking for solutions, after watching the closing scene of an episode of Newsroom two days ago, I thought: how do we make integrity and honesty attractive in Nigeria?

In the past month, three things have dominated the news: politics, the economy and insecurity. However, the NEITI 2009-2011 Oil & Gas Report has not received the attention it deserves, not even when it is linked to all three issues. The NEITI audit of the financial flows during the period under review has revealed the locations of what can only be described as bottomless oil pits into which money flows and is never again seen or used for public good. The first hole is the Nigerian National Petroleum Corporation (NNPC) which allegedly owes the FG N1.3trillion ($8bn) and, in addition, was the last place N768billion ($4.8bn) was seen, arriving from the NLNG en-route to the FG. According to the Stakeholder Democracy Network (SDN), this collective debt of $12bn is 'well above the annual income of most West African countries and more than twice Ghana's 2011 estimated income'. Never mind that, as the cherry on the oil sundae, the NNPC has had to structure a syndicated loan of $1.56 billion because its debt is likely to trigger off a banking crisis.

The second hole is the Niger Delta Development Commission (NDDC) where, for example, in 2011, NDDC received $703m from government with an additional $334m directly from oil companies, making it 'almost certainly Nigeria's only billion dollar parastatal agency'. If the story of how a former chairman of NDDC, Sam Edem, spent N800m on sorcery was not enough to strengthen accountability in the NDDC, then, probably nothing else will.

According to SDN, the NEITI Report raises several questions: Will there be accountability and answers over the disbursement and use of the massive sums raised in this report? Will a final version of the Petroleum Industry Bill have the safeguards necessary to make sure that these things never happen again? Why is the NNPC making direct payments to the military – without receipts or invoices for over $600m in payments? Unfailingly predictable, NNPC released a statement on February 4, 2013, soon after the NEITI Report was published, saying the report about the N1.3tr being owed is inaccurate. According to NNPC, N928 billion was paid in the first quarter of 2012, right after the period under review, and that the delay is simply as a result of its accounting processes which provide a 90-day moratorium for the payment of domestic crude, which means every year the NNPC can have outstanding three-month balances.

As far as NNPC is concerned, the explanation is probably the end of the issue, raising another question: when will Nigerians get a report on the oil and gas sector that will be accurate? Within the last year, the FG, NNPC and associate agencies and ministries have found inaccuracies in all major reports on the oil and gas sector including the House's Fuel Subsidy Report, Ribadu's Taskforce Report and even the report of the Aig-Imoukhuede Committee set up by the finance minister and coordinating minister for the economy.

Meanwhile, money continues to flow nowhere with no sense of concern from a government which gets 91 per cent of its income from price-sensitive oil and gas revenue. Yet when the Action Congress of Nigeria (ACN) raised the alarm about the stability of the economy heavily reliant on oil revenue, we got the usual knee-jerk denial of anything the 'opposition' says. In response to the issues raised by ACN such as the rising cost of oil production, massive corruption in the oil sector, oil theft and sabotage costing Nigeria $6billion annually, the sharp fall in the discovery of new oil and gas reserves due to the low investment in the sector, and the challenge posed by alternative sources of global supply of oil and gas which will result in prices dropping, the Ministry of Finance and the presidency insist the economy is doing fine. And while the presidency concedes nothing, the Ministry of Finance admits that there has been an increased loss of revenue due to an upsurge in the incidence of illegal crude oil bunkering and oil theft. Yet, nothing sustainable and effective is being done to reduce or halt the oil theft. Instead, just yesterday, Shell announced that they might be forced to completely shut down the Nembe Creek pipeline because, 'The situation in the last few weeks is unprecedented. The volume being stolen is the highest in the last three years.'

Using the real-life shooting of Rep. Gabrielle Gifford, the main characters in the Newsroom are faced with the dilemma of reporting Gifford dead because other networks are doing the same when the veracity of that story has not been determined. They are berated for not 'following' and they refuse to budge, insisting that their news has to be verified. A few minutes later, they receive confirmation that Gifford is still alive, being prepped for surgery and they can be the first to report that news. Rarely has doing the right thing been made to look so glorious as in those few minutes. Nothing stops us from doing the same thing in Nigeria - from re-learning to remove sentiments, personal interests, ethnicity and religion from calling bad by its name and insisting on things being done right. The magnitude of mismanagement of public funds is unprecedented; we cannot afford it and, for the sake of future generations, it has to stop.