Obsession With Oil
YES! All eyes are on Nigeria’s oil money. Hardly one minute passes without stories of stolen billions and how to recover them. Fine and good; but we don’t see the same energy channeled towards making new money and opening up other sectors of the economy, as replacement for the thinning and tired oil money.
All eyes in the new administration are on the Nigeria National Petroleum Corporation (NNPC) and the malfeasance that takes place there, especially in the last six years. But no serious thought has been spared to do a critical assessment of the fallen textile industry and how to quickly revive it. Or the abandoned agriculture sector and how to quickly diversify. Everything seems about oil and only oil revenue.
Early in the life of this administration, we are seeing signs that it might just be business as usual, in terms of overreliance on oil resource. The average Nigerian politician does not think of anything else apart from earnings from oil. This government is yet to unveil any economic blueprint apart from getting fixated and embarking on a manhunt for stolen funds, both real and imaginary.
Some persons had feared that if care were not taken, issues of the petroleum industry would preoccupy this administration of PMB. For along time, our politics has shifted from addressing Nigeria’s serious developmental challenges to how to access oil money and use it for geo-political power play. After the military disbanded the First Republic and collapsed the once vibrant regional economies into one federal purse, economic ingenuity took flight; everyone trooped to Lagos, and later, Abuja, to feast on free oil money. Agriculture that used to sustain the regions was abandoned and the proceeds from oil were never applied to transform the country into a technologically competitive global player.
Since that time, the petroleum ministry is seen as the preserve of those who are in power. They appoint persons into choice positions who would help them divert revenues into private pockets. All through the military regimes, perhaps worse, after Gen. IBB and his gang had overthrown Buhari in 1985, the petroleum industry was clandestinely run, and the revenues brazenly stolen and no former leader was held accountable until Gen. Abacha died. Courtesy of his untimely death, there were revelations of what the man and his family did to Nigeria’s oil wealth.
After about just five years in office, the Abacha loot was put in the region of $2.2 billion, which are still being ferreted from bank accounts in foreign countries.
In March last year, the US said it had ordered a freeze on $458 million in assets stolen by Abacha and his accomplices. He was labeled at that instance, “one of the most notorious kleptocrats in memory.” But were Abacha to be alive, he too would be a statesman, perhaps, given a clean bill of health on corruption matters. Without forensic investigation, it is difficult to imagine the level of sleaze that took place in the petroleum ministry under Abacha, especially at the downstream. But the good thing is that the majority of the loot, which is traceable to the man, is still being recovered.
Between 1983 and 1999, the petroleum industry under four military heads of state and one Interim civilian government, did not experience any remarkable transformation to position it for today’s challenges. Neither was the revenue accruing from oil used to diversify the economy, in preparation for major recessions like the one we are witnessing. People in government and their loyalists helped themselves lavishly to the national cake.
When Obasanjo was elected president in 1999, apart from the huge debts left behind for him to service, the three refineries managed by government were in a mess. He decided to put the petroleum portfolio under his pillow, so that he would monitor it closely and ward off those who want to steal. If he succeeded in plugging any loopholes, he was limited upstream, where oil theft remained largely unchecked. Some big people in high places engaged in bunkering and other illegal activities that denied the country revenue.
In 2000, Obasanjo’s government constituted the Oil and Gas Reform Implementation Committee (OGIC), to provide a blueprint for the reform of the sector. With good counsel from western countries, Nigeria signed on to the Extractive Industries Transparency Initiative (EITI), which encouraged full disclosures in extractive revenues and how they are administered to impact the lives of citizens. Oil had become a curse to many countries and if there were no urgent interventions, those in leadership would continue to loot and the masses could become atrophied, leading to huge social disequilibrium and angst. Transparency in revenues was seen to be useful in accountability and tracking of resources. But there were still serious challenges because the political system thrived more on non-disclosures.
Despite Obasanjo’s pretext at keeping petroleum issues close to his chest, there were still social and economic leakages, like unverifiable fuel import subsidies, pipelines vandalism, fuel queues and general disenchantment in host communities over the manner the national cake is administered. Militancy then was at its height. Then it was realised that government needed to handover the industry to private investors. The hurried sale of the refineries in the twilight of OBJ’s administration was a way of kick-starting the process.
The late president Yar’Adua, however deviated a bit from that vision. He reversed the sale of refineries and reconstituted OGIC under his former adviser on Petroleum, Rilwan Lukman. The over-flogged Petroleum Industry Bill has its roots in OGIC. Yar’Adua was sensitive to the deprivations in the Niger Delta. He tapped on some groundwork being carried out by some group and proclaimed amnesty for former militants. Substantial peace returned and production improved. Revenue was also good and transparency monitors were in place.
During the first year of the Jonathan administration, it was realised that sustaining subsidy on petroleum imports was no longer economically correct. But the attempt to deregulate at 100 percent was resisted. However, government continued to manage and keep fuel queues at bay. Amnesty was consolidated and production peaked. But as the international market reacted negatively to Nigeria’s crude, government’s fiscal policies became hostile to overspending. The red flag had been raised, that in a matter of years, Nigeria would be in trouble, except urgent steps were taken. But state governments did not want to hear that. When revenues plummeted and loans were deducted at source, states cried foul and the conversation became that revenues were stolen, instead of being shared. The opposition harped on it and that is what the APC government is still chorusing.
President Buhari in the United States alleged that some $150b oil money had been stolen, just the same way Fela sang of some N2.8billion missing oil money of those days. Fela’s allegation was never resolved, just as allegations concerning disbursement of PTF funds under Abacha have not been cleared.
Also, Buhari alleged that some 250,000 barrels of crude are stolen everyday, with the profits going into individual bank accounts. We also hear that former military officers have benefitted hugely from oil bunkering. It goes far beyond the Jonathan days. Nigeria’s oil industry is riddled with tales of fraud and no effort should be spared to investigate and bring to book all that have culpability established against them. It is not just the last four or five years. Buhari should investigate the history of oil blocs’ allocation and tell Nigerians who owns what.
A lot of groundwork had been done to remove government participation in the oil industry, apart from providing the ground rules. The stages of unbundling NNPC had been laid out, just as the Jonathan administration had partially freed Nigerians from the old and evil NEPA. This is what Nigerians expect Buhari to quickly do to the oil industry. Nigerians do not want him to come and play ethnic politics with the petroleum ministry.
Recent effusions about how NNPC will kill Nigeria are statements emanating from quarters that have closed their minds to the immense possibilities in agriculture, mining, tourism and manufacturing. The Northern region of yore did not depend on petrol dollars to perform wonders. The Western region too did not depend on the oil industry to set the stage for a robust economic growth. The Southeast wouldn’t be where it is today if not for that unfortunate civil war.
So, let NNPC die today and let Nigeria live. NNPC can only kill those who have rented the totality of their existence to economic slavery and overreliance on the Federal Government for survival. Let APC think of restructuring Nigeria in order to return regional competitiveness in agriculture, industry and entrepreneurship. It is very good to chase after stolen funds, but it is better to think of newer sources of revenue. It is better to declare a state of emergency in agriculture and return the cotton farms in the north. It is better to remind Edo and Osun governments that once upon a time, those states where run without oil money. And
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1 Comments
Nice piece
We will review and take appropriate action.