Diezani Alison-Madueke
This
is a deep analysis of the cancer of corruption in the oil and gas
industry with a former Minister of Petroleum, Alison Madueke in the eye
of the storm.
Torrid tales of massive looting perpetrated through the Nigerian
National Petroleum Corporation and the stupendous wealth allegedly
accumulated by Diezani Alison-Madueke have gripped a global audience.
Investigations into the murky deals that enriched the former
petroleum resources minister and a clutch of wheeler-dealers while
draining billions of dollars from the treasury are ongoing in three
continents. Unless the Nigerian state immediately dismantles and
replaces the system that allowed abuses on such a massive scale, the
looting spree will persist.
The rottenness of that system, the opaqueness, the wide
discretionary powers given to the president and the minister facilitated
that massive fraud, kept the country under-developed and the majority
of the people poor. President Muhammadu Buhari should move now and
reform the oil industry. We restate our position that the reforms should
start with the dismantling of the NNPC, a cesspool of fraud and
corruption and a veritable cash dispensing machine for successive
administrations since the mid-1980s. Also ripe for the chopping-board is
the Ministry of Petroleum Resources and its Department of Petroleum
Resources, the ineffective and compromised industry regulator.
Revelations over the years show how terrible the NNPC and the
ministry have become. In London, the United Kingdom National Crime
Agency in August froze £10 million worth of property linked to
Alison-Madueke. In the United States, authorities have launched a
process to recover $144 million worth of assets allegedly purchased for
her by two businessmen who are being sought for questioning.
Back home, courts have ordered the forfeiture of various sums of
money and property in millions of dollars and billions of naira,
including real estate she allegedly paid $37.5 million in cash for in
Ikoyi, Lagos; 58 other houses in Lagos, Abuja, Port Harcourt and Yenagoa
and N9 billion traced to some banks to which no one laid claim.
Authorities in the three countries cite these as proceeds of graft, a
claim denied by the former minster from her London home. In the latest
twist, EFCC is said to have traced $1.5 billion in Swiss banks and
property in Dubai worth N7billion linked to her.
The Acting Chairman of the Economic and Financial Crimes
Commission, Ibrahim Magu, says assets found so far represent no more
than 15 per cent of what Alison-Madueke acquired during her stint as
minister.
In his report on the 2015 Federation Account, the Auditor-General
for the Federation detailed how the minister allegedly withdrew N59.44
billion from the NNPC accounts at the Central Bank of Nigeria and in
foreign banks in violation of the rules. The report specifically cited
how she and the then president, Goodluck Jonathan, authorised $289.2
million to be sent in cash directly to the director-general of the
National Intelligence Agency ostensibly for “urgent national security
challenges”.
In 2013, the then CBN Governor, Lamido Sanusi, said discrepancies
between oil production/sales data and remittances to the NNPC and
government accounts showed a shortfall of $11 billion (down from initial
summation of $49 billion and $20 billion). A later audit by
PricewaterhouseCoopers was damning: though it found $1.48 billion
unremitted to the government, it declared its findings unreliable as
NNPC refused to avail it of all the necessary information for a proper
examination. Three other reports – by the Idika Kalu panel; the Nuhu
Ribadu panel and the Nigerian Extractive Industries Transparency
Initiative audits – detailed a litany of abuse, fraud, impunity and
active collusion by the Presidency.
The NNPC spends money as it deems fit, runs secret accounts,
withholds dividends, bonuses and oil sales proceeds and pays itself
subsidy that it unilaterally calculates. Up to $21.7 billion and N316
billion were withheld from the Federation Account and unaccounted for
from 2000 to 2014, said NEITI. A joint parliamentary committee found
that between 2014 and 2011, NNPC failed to remit N3.08 trillion due to
the federation account and $3.67 billion false claims made on behalf of
multinationals. NEITI said $12.9 billion dividend from NNPC’s 49 per
cent holding in Nigerian Liquefied Natural Gas was not remitted in
2004-2013.
The system that allowed the dubious joint venture agreements with
unqualified firms in the award of oil blocks and oil lifting contracts
by the president and the minister using discretionary powers without
foolproof checks should end. Buhari should fulfil his campaign promise
of breaking up the NNPC into two entities: one to serve strictly as a
holding company and another as an investment firm with substantial
private sector equity. Government should exit the mid-stream and
downstream oil and gas sectors and initiate liberalising reforms
embedded in the original Petroleum Industry Bill, a distorted version of
which was passed by the decadent National Assembly. There should be an
accelerated programme to privatise NNPC’s 14 subsidiaries.
Corrupt officials, as done elsewhere, should be identified and
flushed out of both the NNPC and the ministry. A long-running scandal at
Brazil’s state-owned Petrobras and other bribe cases had by August 2015
produced 117 criminal indictments and have since embroiled a former
president, caused the impeachment of another, while the incumbent now
faces indictment. A former head of China’s biggest oil firm, Jiang
Jiemin, was among many officials jailed for corruption in 2015. Mexico
launched major reforms in 2013 after years of scandal at state-owned
Pemex, culminating in a widely applauded bid round in 2015 that saw
greater transparency and private sector participation.
Refineries and petrochemicals, retail services like depots and
filling stations should be immediately privatised. NNPC’s track record
of losses of N197 billion in 2016 and N39.3 billion in the first four
months of this year will change to profitability when loss-making assets
are sold and replaced by professionally structured investment in
profitable ventures to raise investible funds.
Reforms should be preceded by a fresh round of audits; returning
long-serving apparatchiks to run the NNPC is counterproductive: it needs
a new broom to sweep the filthy system clean. With less than two years
to new elections, Buhari should get cracking today while the EFCC should
step up its investigations.
Ultimately, Alison-Madueke should be brought to justice, no matter where this takes place.
Source: Punch Editorial Team
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