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A scam that must not happen


NNPC tower

Even if endowed with the noblest of intentions, the directive by the National Petroleum Investment Management Services (NAPIMS), a subsidiary of Nigerian National Petroleum Corporation (NNPC), compelling operators in the oil and gas sector of the economy to make a USD100 million contribution each to the Internally Displaced Persons Intervention Fund (IDPIF) for the Boko Haram-ravaged North-Eastern zone of Nigeria was wrong.

Apart from the fact that too many things are opaque in the plan, it reeks of blackmail, blatant arm-twisting and seems a veritable ground for corruption. It must not stand.

According to reports, the Fund, requested to be contributed ‘urgently’ by the operators, has nothing to do with the intervention fund for the same North-East being anchored by the Presidential Committee on the North-East Initiative set up by the Federal Government with Lieutenant General Theo Yakubu Danjuma as chairman. In other words, the oil and gas sector is contemplating its own intervention fund specifically for the same IDPs in the North-East.


The intended use of the fund as reported is “to construct resettlement facilities that can be replicated at various locations”. The facilities specified are to be: units of 2 bedroom twin bungalows-50 units per settlement (expected to house 100 families); primary and secondary schools; health care centres/cottage hospitals; market stalls; provision of portable water; and electrification as well as roads, drainage channels and waste disposal systems.

NAPIMS then promised to avail the operators “a soft copy of the bill of quantities and cost structure,” an indication it has an idea of the amount of money required to accomplish the projects being imposed on the operators to finance. NAPIMS, however, neither indicated the total amount of money being targeted nor the basis of apportioning a whooping USD100 million per operator.

It is not clear whether the targeted companies by NAPIMS had not been approached by and had already made donations to the Danjuma-led Committee. It is also not clear whether any of the companies that had made donations to the Danjuma Committee is exempted from the NAPIMS’ order or such donations would be discountenanced, in other words, some of the operators would be contributing more than once and above USD100 million. Perhaps, most puzzling is NAPIMS’ and, of course, NNPC’s silence on why the contributions are made compulsory for operators within their regulatory and supervisory jurisdiction, on a matter that simply falls within the ambit of voluntary corporate social responsibility (CSR).

Since NAPIMS had purportedly done the ground work and produced ‘bill of quantities and cost structure’ on what is required in the area, should it not have been better to have sent those details to the companies to allow each of them decide whether it would like to get involved and the extent of such involvement, rather forcing them to contribute USD100 million each? Of course, NAPIMS’ directive suggests/assumes that all the operators have the same size of business turnover and profit. Unfortunately, this is unlikely to be the case. So, what were the criteria used in apportioning the monetary contribution? How equitable and justifiable is this? Under good corporate governance principles and practices, is compulsory donation right and how sustainable is it? Wouldn’t this type of regulatory imposition breed moral hazards?


In summary, there are too many cogent questions that ought to be raised regarding this NAPIMS/NNPC directive. For instance, if the “JVs/IOCs, under their trade group, OPTS, voluntarily agreed to assist the IDPs”, as claimed by the national oil company, did the companies agree that each must urgently contribute $100 million? Was the idea of oil and gas operators compulsorily contributing such money presented, discussed and agreed to at the meetings of the NNPC Board of Directors or that of the Federal Executive Council of the country? Who gave approval for the levy on the companies? Also, does NAPIMS/NNPC have the requisite legal powers to impose such levy on the operators?

Given consideration to the foregoing, it is apparent that NAPIMS and NNPC stepped beyond their legitimate regulatory boundaries. As President Muhammadu Buhari would say, they crossed ‘the red line’ and indeed, over-reached themselves.

This intervention fund qualifies as another form of multiple-taxation, even extortion, by the government. It is bound to increase the cost of doing business in the country with the masses bearing the burden. It is also a potential ground for endless agitation from other parts of the country where citizens have been displaced from their homes for various reasons, for NAPIMS/NNPC to do a similar fund-raising for them.

The national oil corporation may have meant well in attempting to ensure that operators under its regulatory jurisdiction assist IDPs in the North-East, but compelling operators is a form of blackmail and arm-twisting. It is in fact arbitrary, faulty, illegal and unsustainable. It will set a bad precedent capable of polluting the polity. It must, therefore, not be allowed to stand.

Most, if not all compassionate and rational persons in this country share the pains of the people of the North-East and, indeed, others like them in Bakassi, Ogoni, Niger Delta, Middle Belt as well as other places where citizens have been forcefully displaced. Many who have the capacity have voluntarily contributed via the Presidential Committee on the North-East or other channels such as religious bodies and non-governmental organizations (NGOs). Corporate entities in the oil and gas sector should be left alone to decide for themselves if and what they want to donate towards assisting Nigerians in the North-East and elsewhere for that matter.


Lastly, it is very important that this NAPIMS/NNPC levy is thoroughly investigated by relevant government authorities. It could be another means of perpetrating corruption hiding under the IDPs intervention fund. With the directive, who knows how much money would be generated and whether all of it would ever be deployed for the intended purpose!

Besides, the suggestion that the money would be deposited in a ‘’dedicated account’’ the location of which and the signatories to were not stated is a ringing alarm that something disgraceful may happen therefrom. Everything seems shrouded in mystery.

Whatever the intentions, this is just a potential scam that must not be allowed to happen.

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