Special Report: Update On Corruption Scandals In Extractive Sector

Special Report: Update On Corruption Scandals In Extractive Sector

Special Report: Update On Corruption Scandals In Extractive Sector

In the last quarter of 2016 and the first quarter of 2017, Nigeria media have reported corruption cases in the extractive sector, bothering on corruption and lack of  accountability. Large funds alleged to have been stolen by operators in the Nigerian extractive sector present a huge task for Publish What You Pay (PWYP) Nigeria as the current regime steps up its fight against corruption. Since the  core mandate of PWYP Nigeria is to promote transparency and accountability in the extractive sector  – majorly in oil and gas as well as solid minerals, members across the country are therefore faced with the onerous task of mobilizing citizens to bring accountability sanity in this very important sector to Nigeria’s economy and present survival. The extent of corruption reported around the extractive sector validates the existence and mission of Publish What You Pay in the current country’s effort to fight corruption. .

The media reports between the last quarter of 2016 and first quarter of 2017 show that corruption, lack of transparency and accountability is a major obstacle to extractive sector and Nigeria’s economy growth. In all the NEITI audit reports, some glimpse of what has been reported recently as stolen public funds, were contained in these reports, yet, government has not demonstrated a clear political will to address the leakages with lasting reforms. The key government agencies and companies have demonstrated their unwillingness to lead in public accountability. The recent survey of organizations that comply with FOI provisions shows that many extractive agencies are still lagging behind except NEITI, which is a multi-stakeholders platform.

Media reports of key corruption cases in the extractive sector:

Vanguard of 10th February 2017 reported how the Economic and Financial Crimes Commission (EFCC) had on February 3rd, 2017 discovered the sum of $9.8m in Mr.  Andrew Yakubu’s house at Kaduna. Mr Andrew is the former NNPC Group Managing Director. Also, Premium Times had on February 16, 2017, reported the court verdict on the forfeiture of N34 billion linked to Mrs. Diezani Alison-Madueke, the former Nigeria’s Minister of Petroleum.  The anti-graft agency had, on January 6th, 2017, filed an application seeking an order for the interim forfeiture of $153.3 million allegedly belonging to Mrs. Alison-Madueke to the Nigerian government. Out of the funds, N23.4 billion was kept in Sterling Bank Plc, N9.08 billion in First Bank Plc, and $5 million in Access Bank Plc.

In the same vein, Independent Newspaper of December 14th, 2017 reported that the Senate accused the Nigeria National Petroleum Corporation (NNPC) and its exploration and production subsidiary, Nigerian Petroleum Development Company (NPDC), of refusing to remit $3.487 billion to the Federation Account. It was reported that the Senate also accused NPDC of lifting crude from divested oil wells – Oil Mining Leases (OML) to the tune of $1.847 billion, of which it paid an insignificant $100 million to the Federation Account. It further accused the NPDC of lifting crude amounting to $344.442 million without following due process.

In a related development, Vanguard on January 26th, 2017, reported Ugo-Ngali 10 years imprisonment for oil subsidy fraud. Mrs. Adaoha Ugo-Ngadi, Managing Director Ontario Oil, and Gas Limited was convicted by the Lagos State High Court, Ikeja for N754m oil subsidy scam.

Furthermore, Mr. Waziri Adio, the Executive Secretary, Nigeria Extractive Industry Transparency Initiative, (NEITI) was reported by Sweet Crude to have said, 90 per cent of the corrupt practices in Nigeria is being perpetrated in the oil and gas sector. This report is a wakeup call for all CSOs and citizens to begin to beam serious and sustained searchlight on the extractive sector. Mr. Adio made the disclosure at the International Anti-Corruption Day in Abuja. According to him, Nigeria earned N70 trillion from oil between 1999 and 2014, therefore Nigerians should not have business with poverty or recession.

Again, it was reported that about $12.9 billion was paid by the Nigeria Liquefied Natural Gas, NLNG, to the Nigerian National Petroleum Corporation, NNPC, but it was not remitted into the Federation Account he confirmed at the event.

From the above frightening media reports, it is certain that there is a unparalleled credibility issue in the extractive sector. For Nigeria’s cashcow sector to have serious credibility question goes to show why earnings from the extractive sector are not reflecting in the lives and livelihood of citizens and even government itself.  Addressing the corruption and lack of accountability in the extractive sector is the most crucial task facing every citizen, now. No matter ones ideology or political affiliation, it is difficult to oppose the entrenchment of accountability in the extractive sector in other to ride Nigeria’s extractive sector of corruption.

Solving the corruption challenge in the extractive sector, will amount, like Mr Adio inferred, solving 70% of Nigeria’s corruption problems. Being faced with these huge corruption presence in the extractive sector, PWYP Nigeria is poised to approach the transparency and accountability challenge in the extractive sector from citizen’s approach. This will include mobilizing and empowering them to be vigilant and hold public officers more accountable than ever before.

Nigerians can take complete control of the running of their oil, gas and solid minerals sector by monitoring and demanding critical changes using the citizen’s participatory mechanism and Freedom of Information law. Nigerian at the moment must take the current opportunity of anti-corruption war, no matter how they view the administration’s strategy, to hold the government and its partners to its commitment to openness, accountability and good governance.

There is no doubt that the organic link between anti-corruption campaign, Open Government Partnership and the existing Freedom of Information Law provides PWYP-Nigeria and other organizations on extractive sector transparency and accountability, the best opportunities to push for more and more openness in the sector that is currently the mainstay of Nigeria’s economy.

The evidence of media reports on corruption and numerous court cases as shown, beckoned on Nigeria’s CSOs to partner with government to ensure that it matches its promises to fight corruption with corresponding political will to win the war. Thus, citizens must demand collective action against corruption in the extractive sector. The reason for collective action is clear. The total amount reported to have been stolen can provide over twenty federal universities with the best state of theater equipment, transform over 500 health centre to world class standard and provide water to over 50% of all the LGAs in Nigeria.

As citizens review daily media reports on corruption in the extractive sector, it is important to take an action that will promote accountability and transparency so that few individuals, who have been paid to work for citizens, will not end up working for themselves and putting citizens in harm’s way. Let’s read beyond the corruption reports and save Nigeria from total collapse.

Emeka Ononamadu and Audu Liberty Oseni